Pioneer State Mutual Insurance Company v. Stephen a Michalek
946 NW2d 812
Mich. Ct. App.2019Background
- In Nov. 2011 Justin Agresti (grandson) was injured on Stephen and Barbara Michalek’s lakefront property; the property was insured by Pioneer State Mutual. Defendants earlier stated in the Agresti suit that a hole dug on July 4, 2011 remained unfilled and caused the injury.
- Pioneer, which had defended the Michaleks in the Agresti premises-liability suit, later sued the Michaleks to void the homeowner’s policy under a fraud provision, alleging the defendants misrepresented the hole’s existence/timing.
- After a three-day bench trial the trial court found defendants committed fraud and entered judgment for Pioneer on July 17, 2017; postjudgment, the court awarded Pioneer attorney fees under MCR 2.114(F) and MCL 600.2591.
- The Michaleks and intervenor Agresti sought appeals and delayed appeals; this Court denied the delayed application as "lack of merit on the grounds presented" and limited the present appeals to the postjudgment fee order.
- The Court of Appeals held it lacked jurisdiction to revisit issues beyond the fee award and, on the merits, affirmed the trial court’s finding that defendants’ defense was frivolous and that the fee award was proper; the trial court reduced Pioneer’s requested hourly rate from $240 to $140 but awarded the requested hours.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction / law-of-the-case for challenges to July 17, 2017 judgment | Pioneer: prior denial of delayed appeal was on the merits; law of the case and appellate limits bar relitigation | Michaleks/Agresti: urge reconsideration of July 17 judgment issues | Court: appeals limited to postjudgment fee order; law-of-the-case bars relitigation of issues previously denied on merits |
| Whether defendants’ defense was frivolous (basis for sanctions) | Pioneer: trial findings showed fraud and that defendants knew facts were false but still defended → frivolous under MCL 600.2591 / MCR 2.114(F) | Michaleks: contend trial findings/fraud determination erroneous, so sanctions improper | Court: no clear error in trial findings; defense was frivolous when asserted; sanctions authorized |
| Whether trial court erred by awarding fees without evidentiary hearing on reasonableness | Pioneer: submitted detailed billing, affidavits, and local rate survey; defendants never contested hours/rate below or requested hearing in a timely manner | Michaleks: generally challenged fraud finding and legal objections; requested hearing only in untimely reconsideration | Court: no hearing required because defendants did not timely contest reasonableness; fee applicant met burden; award affirmed |
| Reasonableness / amount of fees awarded | Pioneer: sought hours at $240/hr but supported billed-rate evidence and market survey | Michaleks: did not contest rate/hours in opposition | Court: reduced requested hourly rate to $140 (billed rate), awarded the hours requested; did not abuse discretion |
Key Cases Cited
- Smith v. Khouri, 481 Mich. 519 (2008) (standard for reviewing attorney-fee awards and burden to prove reasonableness)
- Pirgu v. United Servs. Auto. Ass’n, 499 Mich. 269 (2016) (nonexclusive factors for determining reasonable attorney fees)
- Ashker v. Ford Motor Co., 245 Mich. App. 9 (2001) (explaining law-of-the-case doctrine)
- Grievance Admin. v. Lopatin, 462 Mich. 235 (2000) (law-of-the-case applies to issues actually decided in prior appeal)
- Reed v. Reed, 265 Mich. App. 131 (2005) (when requested fees are contested, trial court should hold hearing to determine services rendered and reasonableness)
- Keinz v. Keinz, 290 Mich. App. 137 (2010) (sanctions available where action or defense deemed frivolous under MCL 600.2591)
- Ladd v. Motor City Plastics Co., 303 Mich. App. 83 (2013) (review standard for factual findings underlying fee awards)
- Great Lakes Realty Corp. v. Peters, 336 Mich. 325 (1953) (appellate discretion in reviewing applications for leave to appeal)
- Locricchio v. Evening News Ass’n, 438 Mich. 84 (1991) (law-of-the-case principles on remand and subsequent appeals)