Fraser Trebilock Davis & Dunlap, PC v. Boyce Trust 2350
304 Mich. App. 174
| Mich. Ct. App. | 2014Background
- Plaintiff law firm sought unpaid fees from defendants after a jury trial where plaintiff was awarded $73,501.90.
- Fees arose from representation of defendants in transactions to purchase and redevelop four hydroelectric dams and 200+ real estate parcels.
- Transactions formed Synex-Michigan with Scott Goodwin retaining a 51% interest; Goodwin allegedly controlled funds and payments to defendants.
- A bridge loan was obtained to close the deal before permanent financing; Mueller claimed Goodwin breached duties and siphoned payments.
- Defendants stopped paying in December 2006, leaving an outstanding balance around $74,358.94; plaintiff asserted breach of contract, account stated, and quantum meruit.
- Posttrial, the court awarded case-evaluation sanctions to plaintiff and later addressed reasonable attorney fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the trial court err in not giving a special burden instruction for itemized billings? | Model instructions adequately conveyed proof obligations. | jury should be told to prove each billed item was reasonably necessary and accurately recorded. | No instructional error; model instructions adequate. |
| Was the exclusion of Mueller's rebuttal testimony erroneous? | Countervailing evidence was properly admitted elsewhere; rebuttal not essential. | Defendants should be allowed to rebut witnesses showing client dissatisfaction. | No abuse of discretion; rebuttal testimony properly excluded. |
| Whether a law firm represented by its own attorneys can receive case-evaluation attorney fees under MCR 2.403(O)(6)(b)? | Watkins and related authorities support allowing fees for a firm represented in-house. | Watkins and Laracey require a separate attorney-client relationship; fees to in-house lawyers are improper. | Majority holds law firm represented by its own attorneys is not pro se for purposes of MCR 2.403(O)(6)(b); fees may be awarded. |
| Did the court err in awarding case-evaluation sanctions for postjudgment activities? | Postjudgment activities causally connected to rejection of case evaluation may be sanctioned. | Postjudgment sanctions require direct nexus to rejection; some postjudgment work may lack nexus. | Partially reversed; supplemental postjudgment sanctions not authorized; causal nexus insufficient for those items. |
| Was the hourly-rate determination for Perry reasonable under the Wood/Smith framework? | 75th percentile Michigan rate plus premium reflects Perry’s skill; total hours reasonable. | Rate should reflect Midland/Ingham medians; no premium for reputation; hours excessive. | Rate set at $300/hour reasonable; hours adjusted to reflect reasonableness; award affirmed in principal. |
Key Cases Cited
- Watkins v. Manchester, 220 Mich App 337 (1996) (caselaw on attorney fees for pro se or in-house representations in case-evaluation sanctions)
- Laracey v Fin Institutions Bureau, 163 Mich App 437 (1987) (pro se attorney-fee restrictions under FOIA-like contexts; agency relationship required)
- Kay v. Ehrler, 499 U.S. 432 (1991) (agency relationship presumed; counsel encourages retaining independent attorney)
- Omdahl v West Iron Co Bd of Educ, 478 Mich 423 (2007) (agency relationship required for actual attorney fees; in-house lawyers not automatically eligible)
- FMB-First Mich Bank v Bailey, 232 Mich App 711 (1998) (MCR 2.114(E) vs (F); pro se sanctions distinction; in-house representation discussed)
- Smith v Khouri, 481 Mich 519 (2008) (multifactor approach to reasonable attorney fees; discusses Smith/wood factors and MRPC 1.5)
- Wood v. Detroit Auto Inter-Ins Exch, 413 Mich 573 (1982) (no precise formula for reasonableness; six Crawley factors framing review)
- Haliw v. Sterling Heights, 471 Mich 700 (2005) (trial-oriented nature of case-evaluation sanctions; causal nexus discussed)
- Troyanowski v Village of Kent City, 175 Mich App 217 (1988) (postjudgment sanctions for case evaluation; services necessitated by rejection)
- Young v Nandi, 490 Mich 889 (2011) (postappeal proceedings; causal nexus required for postjudgment sanctions)
- McAuley v Gen Motors Corp, 457 Mich 513 (1998) (double recovery concerns; compensatory nature of attorney fees)