Glen S Morris v. R Judd Schnoor
321925
| Mich. Ct. App. | Aug 11, 2016Background
- Glenn S. Morris sued and pursued civil contempt against attorney David W. Charron and associated entities for transfers of MSG assets; the trial court found Charron in civil contempt in December 2012 and reserved calculation of sanctions for a later evidentiary hearing.
- After a five-day evidentiary hearing, the trial court awarded Morris $349,416 in attorney fees and $14,090.77 in costs as compensatory civil-contempt sanctions.
- Charron moved for reconsideration and a new trial; the trial court denied relief and Charron appealed the sanctions award.
- Charron argued the award improperly included fees outside the contempt trial, improperly included fees related to separate UFTA litigation, improperly included fees for defending the fee application, and used stipulated hourly rates as a ceiling rather than a baseline (thereby overcompensating Morris).
- The trial court applied a prior stipulation setting reasonable hourly rates ($385 for lead counsel, $240 for associate, $130 for legal assistant) and excluded time it found unrelated to contempt or to UFTA, bankruptcy, and mediation activities.
- The Court of Appeals affirmed, holding the trial court acted within its civil-contempt authority and did not abuse its discretion in awarding the fees and costs it did.
Issues
| Issue | Morris's Argument | Charron's Argument | Held |
|---|---|---|---|
| Scope of compensable fees for civil contempt (whether limited to fees from the contempt trial) | Fees incurred "in pursuing civil contempt" and "in connection with this contempt proceeding" (broader than just the trial) are compensable to make Morris whole. | Award must be limited to attorney fees and costs "incurred in the contempt trial" only; broader inclusion exceeds the court's contempt order. | Court held the contempt order used expansive language ("in connection with" and "proceeding") and civil contempt indemnification may include related fees beyond the trial; award proper. |
| Applicability of prior appellate language (law of the case) | Not applicable (Morris) — prior appellate language addressed a different argument and did not fix the sanction calculation. | Prior panel language limited recoverable fees to those "incurred in the contempt trial," creating law of the case. | Court held the earlier opinion addressed a different issue, so law-of-the-case doctrine did not preclude the trial court's broader award. |
| Inclusion of fees related to UFTA and overlapping litigation | Fees related to investigating and remedying contempt (including overlap with UFTA) are compensable if causally related to contempt. | Fees for the 2009 UFTA action should be excluded because Charron was not liable on those claims and they are separate. | Court found the UFTA work arose from the same misconduct, that the trial court excluded time it deemed unrelated, and that compensable overlap was permissible. |
| Use of stipulated hourly rates vs. actual billed amounts (potential windfall) | Stipulated rates reflect parties' agreement on reasonable rates and are enforceable; using them is not necessarily a windfall. | Because actual billed rates were often lower, the stipulation should be treated as a maximum or the award should be limited to actual amounts billed. | Court enforced the stipulation as binding and held the trial court did not abuse its discretion; award was not an impermissible windfall. |
Key Cases Cited
- Detroit Leasing Co. v. Detroit, 269 Mich. App. 233 (appellate preservation rule) (preservation requirement for appellate review)
- Taylor v. Currie, 277 Mich. App. 85 (attorney-fee reasonableness and civil-contempt indemnification scope)
- In re Contempt of Auto Club Ins. Ass'n, 243 Mich. App. 697 (contempt hearing procedures and direct vs. indirect contempt)
- In re Contempt of United Stationers Supply Co., 239 Mich. App. 496 (civil-contempt compensatory sanction principle)
- In re Moroun, 295 Mich. App. 312 (trial court authority to enforce orders and indemnify actual loss)
- Smith v. Khouri, 481 Mich. 519 (factors for determining reasonable attorney fees)
- Wood v. Detroit Auto Inter-Ins. Exch., 413 Mich. 573 (standard of review for attorney-fee reasonableness)
- Maldonado v. Ford Motor Co., 476 Mich. 372 (inherent authority of trial courts to manage proceedings)
- United States v. Loney, 219 F.3d 281 (construction of phrase "in connection with")
- Electric Workers Pension Trust Fund v. Gary's Electric Serv. Co., 340 F.3d 373 (civil-contempt sanctions as compensatory remedy)