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S T A T E O F M I C H I G A N

C O U R T O F A P P E A L S

CINDY WHITNEY,

Plaintiff,

and

AMERICAN SURGICAL CENTERS I, INC., and 

AMERICAN SURGICAL CENTERS II, INC.,

Intervening-Plaintiffs,

UNPUBLISHED

December 6, 2018

v No. 338094

Wayne Circuit Court

COURTNEY SCHULTZ, JOHN DOE, and 

AMERICAN COUNTRY INSURANCE 

COMPANY,

LC No. 12-009385-NI

Defendants,

and

ALLSTATE PROPERTY AND CASUALTY 

INSURANCE COMPANY,

Defendant/Third-Party PlaintiffAppellee,

and

DENNIS KAWECKI and TIMELY 

TRANSPORTATION LLC,

Third-Party Defendants,

and

CARLA AIKENS,

Third-Party Defendant-Appellant.

Before: M.J. KELLY, P.J., and MARKEY and FORT HOOD, JJ.

FORT HOOD, J. (concurring in part and dissenting in part).
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I agree with the majority that the trial court’s December 12, 2016 order should be 

affirmed to the extent that it determines that Carla Aikens should be sanctioned. However, I 

would vacate the portion of the trial court’s order requiring Aikens to pay $23,897.78 in 

Allstate’s attorney fees as a sanction and remand to allow the trial court the opportunity to 

reconsider the reasonableness of the amount of the attorney fees imposed as a sanction against 

Aikens. I therefore dissent on that basis. 

Under the circumstances of this case, I agree with the majority that the trial court 

correctly utilized its inherent authority to sanction Aikens, an officer of the Court, for her 

misconduct and wrongdoing in this case. However, Aikens also challenges on appeal the amount 

of the sanctions imposed against her, the $23,897.78 in attorney fees that Allstate alleges it 

incurred as a result of her misconduct. This amount is nothing short of outrageous. My review 

of the record evidence demonstrates that the sanctions that the trial court ordered are not just, fair 

or proportionate, particularly under the circumstances of this case, where the record reflects that 

Aikens was not solely responsible for (1) the dismissal of plaintiff’s claim against American 

Country Insurance Company (American County) and (2) Allstate having to defend this litigation 

against plaintiff. Instead, the record confirms that the actions and inactions of others involved in 

the lower court proceedings contributed to and resulted in these outcomes. Therefore, on the 

basis of the analysis set forth below, I would remand to allow the trial court the opportunity to 

fashion a more proportionate and just award of sanctions against Aikens. 

In the context of the award of discovery sanctions, this Court has cautioned that an award 

of sanctions must be “proportionate and just[.]” Hardrick v Auto Club Ins Ass’n, 294 Mich App 

651, 662; 819 NW2d 28 (2011). Moreover, the Chambers Court recognized that “[b]ecause of 

their very potency, inherent powers must be exercised with restrain and discretion.” Chambers v 

NASCO, Inc, 501 US 32, 44; 111 S Ct 2123; 115 L Ed 2d 27 (1991). Similarly, in the context of 

MCR 2.114(E),1 this Court has observed that the plain language of the court rule does not allow 

for “punitive damages.” Kaeb v Kaeb, 309 Mich App 556, 565; 873 NW2d 319 (2015); see also 

Vittiglio v Vittiglio, 297 Mich App 391, 408; 824 NW2d 591 (2012) (recognizing that attorney 

fees awarded as a sanction pursuant to MCR 2.114(E) must be “reasonable.”) 

During the December 10, 2015 evidentiary hearing, Allstate provided the trial court with 

its invoices for services rendered from November 19, 2012 until March 6, 2014, asserting that all 

such fees were attributable to Aikens’s actions in not tendering Timely Transportation’s proof of 

insurance coverage. Notably, the record reflects that Aikens tendered the correct requested 

certificate of insurance to Allstate’s counsel on May 20, 2013. This followed Aikens providing a 

certificate of insurance to Allstate’s counsel on February 20, 2013, which was for the wrong 

year, with the policy period ending in 2012, as opposed to 2011. 

For reasons unclear from the record, counsel for Allstate did not contact Aikens regarding 

obtaining the correct certificate of insurance coverage, but on April 19, 2013, Allstate filed a 

motion seeking leave to file its third-party claim against Aikens, Dennis Kawecki and Timely 

 1 MCR 2.114 was repealed effective September 1, 2018. Michigan Supreme Court Order, Adm

File No. 2002-37 (May 30, 2018), 501 Mich cxx, cxxxvii
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Transportation. Third-party defendants subsequently filed a motion for summary disposition of 

Allstate’s third-party claim against them, asserting that plaintiff’s claim for no-fault benefits was 

appropriately directed against American Country. For reasons unclear from the record, plaintiff 

did not take action to amend her complaint to add American Country to the litigation and allege 

claims against it until December 20, 2013. As a consequence, American Country successfully 

moved for summary disposition of plaintiff’s claims against it pursuant to MCR 2.116(C)(7) on 

the basis that the statute of limitations had expired.2 Aside from plaintiff’s statements in her 

deposition and during the evidentiary hearing that she had a conversation with Aikens shortly 

after the November 29, 2011 motor vehicle accident, the record is also relatively unclear with 

respect to what actions plaintiff and her counsel, during the time period of November 29, 2011 

until November 29, 2012, undertook to ascertain whether Timely Transportation was in fact 

insured.3 It is also not clear from the record why counsel for Allstate did not contact Aikens 

regarding its inquiries with respect to the insurance coverage for Timely Transportation before 

November 19, 2012. This is particularly so where counsel for Allstate, Karen Magdich, 

acknowledged at the evidentiary hearing that her firm was aware of plaintiff’s claim against 

Allstate with respect to the November 29, 2011 accident when plaintiff’s complaint was filed on 

July 16, 2012. Magdich went on to testify that her firm did not undertake efforts before 

November 19, 2012 to ascertain the insurance coverage for Timely Transportation because she 

was “trusting [the law firm representing plaintiff] to deal with it.” Aikens testified during the 

evidentiary hearing that aside from a telephone call with predecessor counsel for plaintiff in the 

spring of 2012, she did not receive any telephone or written communication from plaintiff’s 

counsel requesting confirmation of Timely Transportation’s insurance coverage. While the trial 

court stated on the record while rendering its factual findings during the December 10, 2015 

evidentiary hearing that the “expenditures in the bill” submitted by Allstate for its attorney fees 

were not challenged, this is not entirely accurate. My review of the evidentiary hearing 

transcript confirms that counsel for Aikens strenuously challenged whether Aikens should be 

held responsible for the actions or inactions of counsel for Allstate and plaintiff.

Moreover, to the extent that Allstate asserts that the attorney fees it incurred from 

November 2012 until March 2014 arose solely by reason of Aiken’s misconduct, this assertion is 

perplexing where it is uncontroverted that Aikens provided the requested insurance information 

by May 20, 2013. Therefore, as of that date, Allstate was certainly in a position to inform 

plaintiff of her correct recourse against American Country as the insurer in priority to provide 

her no-fault benefits, and it is unclear from the record why plaintiff did not pursue that recourse. 

It is also not clear why it took six months for Allstate, after receiving a copy of the requisite 

insurance policy from Aikens in February 2013, although for an incorrect policy period, to file a 

motion for summary disposition seeking to be removed from the litigation in the trial court.4 In 

 2 The trial court’s order granting the summary disposition motion of American Country was 

entered March 31, 2014. 

3 The trial court observed on the record during the December 10, 2015 evidentiary hearing that 

predecessor counsel for plaintiff certainly “could have taken further efforts” to ascertain the 

requisite insurance coverage but apparently did not do so because Allstate insured plaintiff. 

4 Allstate filed its partial motion for summary disposition on August 15, 2013. 
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any event, where the trial court’s stated reasoning for imposing such significant attorney fees 

against Aikens was based on its conclusion that Aikens alone bore responsibility for (1) the 

dismissal of plaintiff’s claims against American Country and (2) Allstate’s attorney fees in 

litigating this cause of action, this reasoning is not supported by the record. Accordingly, 

whether Allstate’s claimed attorney fees are in fact reasonable hinges on whether they are 

properly attributed to dilatory tactics on the part of Aikens. In its December 12, 2016 order 

requiring Aikens to pay $23,897.78 in attorney fees, the trial court observed, in pertinent part, as 

follows:

Aikens failure to produce the [insurance policy for Timely Transportation] 

forced Allstate to perform further needless investigation, incur costs, expense, 

time and efforts to determine the priority of coverage for the accident. 

* * *

As a direct result of this action [plaintiff] lost her potential lawsuit and 

Allstate was compelled to expend unnecessary time, effort, energy and money 

defending a motor vehicle accident it was not legally obligated to defend. 

I would remand to the trial court with directions that it reconsider its award of sanctions 

against Aikens and in doing so, that it specifically determine whether the attorney fees that 

Allstate claims that it is entitled to as sanctions were in fact caused by (1) Aikens’s failure to 

produce the insurance information for Timely Transportation, or (2) actions or inaction that can 

be attributed to other parties or counsel in the case.

/s/ Karen M. Fort Hood