Shafiq Kasham v. Ahmad M Kasham, 331008

Defendant leased a laundromat to intervenor-plaintiffs and sold equipment; lease warranted fee-simple title and granted plaintiffs rights of first refusal.
Title insurance commitment revealed clouds on title: defendant’s deed from Shafiq (a prior owner) listed Shafiq as married but bore only his signature, and multiple defective quit-claim transfers existed in the chain of title.
Intervenor-plaintiffs continued operating under the lease but later alleged fraud and civil conspiracy after discovering title issues; Shafiq separately filed to quiet title, asserting defendant forged the deed.
Court granted intervention to the laundromat operators; November 19, 2014 the court entered default against defendant; on October 26, 2015 plaintiffs moved for default judgment seeking economic damages, attorney fees ($30,000), exemplary damages ($20,000), and costs ($500).
Trial court entered default judgment awarding a total of $92,685.50 (including fees, costs, exemplary damages); defendant moved to set aside the default judgment arguing good cause and meritorious defenses and challenging the inclusion/reasonableness of fees, costs, and exemplary damages.
Court denied the motion to set aside; on appeal the Court of Appeals reversed as to attorney fees and exemplary damages and remanded to vacate those portions of the default judgment, but affirmed the $500 costs and the quiet-title ruling.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Were $30,000 attorney fees in default judgment proper and reasonable?	Fees awarded as part of default judgment for plaintiff’s successful fraud claim.	Fees were not supported by record: no hourly rates, time accounting, or legal basis cited; therefore unreasonable and unauthorized.	Reversed as to fees; trial court abused discretion/legal error by awarding fees without factual/legal basis; vacate fee award and remand.
Was $500 in costs properly awarded?	Costs are allowable to prevailing party and were awarded under MCR 2.625(F)(1).	Costs not authorized by statute or insufficiently explained.	Affirmed; court acted within its discretion to award $500 at time of signing judgment under MCR 2.625(F)(1).
Were $20,000 in exemplary damages authorized?	Exemplary damages compensate humiliation/outrage for willful, wanton misconduct accompanying the fraud.	Facts do not show exceptionally reprehensible or malicious conduct warranting exemplary damages.	Reversed as to exemplary damages; record lacks facts showing conduct justifying exemplary damages as a matter of law.
Were the issues (fees, costs, exemplary damages) preserved for appeal?	Plaintiffs contended defendant’s motion failed to preserve challenges.	Defendant’s motion adequately challenged fees and exemplary damages; appellate review warranted to avoid miscarriage of justice.	Issues preserved or reviewable; court reviewed all and resolved on merits.

Reed v. Reed, 265 Mich. App. 131 (preservation of issues on appeal)
Smith v. Khouri, 481 Mich. 519 (standard for reasonableness of attorney fees)
In re Waters Drainage Dist., 296 Mich. App. 214 (abuse of discretion defined)
Nemeth v. Abonmarche Dev., Inc., 457 Mich. 16 (American rule on attorney fees)
Wood v. Detroit Auto Inter-Ins Exch., 413 Mich. 573 (factors for attorney fee reasonableness)
Brown v. Loveman, 260 Mich. App. 576 (review of unpreserved issues when miscarriage of justice would result)
Barclay v. Crown Building & Dev., Inc., 241 Mich. App. 639 (review standard for costs awards)
Cardinal Mooney High Sch. v. Mich. High Sch. Athletic Ass’n, 437 Mich. 75 (de novo review for legal questions about damages)
McPeak v. McPeak, 233 Mich. App. 483 (nature of exemplary damages for humiliation/outrage)
B & B Inv. Group v. Gitler, 229 Mich. App. 1 (limitations on exemplary damages for statutory causes of action)