-1-

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

MAUREEN FITZGERALD,

Plaintiff/Counter-DefendantAppellee,

UNPUBLISHED

April 24, 2018

v No. 333116

Kalamazoo Circuit Court

DONALD E. OEHMKE and SHANNON L. 

OEHMKE,

LC No. 2014-000343-CK

Defendants/Counter-PlaintiffsAppellants.

Before: GLEICHER, P.J., and M. J. KELLY and CAMERON, JJ.

PER CURIAM.

This dispute arises from an unpaid personal loan and the lender’s actions against the 

debtors when they failed to pay. The trial court summarily disposed of the repayment claim in 

the lender’s favor and subsequently found no cause of action in relation to the debtors’ 

counterclaims. We agree with the debtors that the trial court improperly reformed the interest 

rate on the loan. In that regard, we vacate the trial court’s order and remand for reinstatement of 

the agreed upon rate of 8% simple interest. This relief does not give the debtors their desired 

outcome of avoiding repayment of any interest as we affirm the trial court’s rejection of their bid 

to add a usury defense and affirm in all other respects.

I. BACKGROUND

Donald Oehmke spent four years in federal prison for a securities fraud conviction. 

While he was in prison, Maureen Fitzgerald loaned Donald and his wife Shannon $20,000. 

Donald drafted the note, which included an interest rate of 8%. The Oehmkes promised to pay 

the loan in full upon Donald’s January 2012 release, but Fitzgerald orally agreed to extend the 

deadline until June. The Oehmkes did not meet this deadline and never made any payment 

toward the debt. Fitzgerald testified that she contacted the Oehmkes repeatedly and eventually 

adopted an alias to contact Donald. Fitzgerald also contacted Donald’s relatives and various law 

enforcement agencies, including the attorney general’s office and the FBI, about the Oehmkes’ 

failure to repay the note. When these attempts were unsuccessful, Fitzgerald filed a breach of 

contract action against the Oehmkes in June 2014.
-2-

Upon his release, Donald allegedly made attempts to find new employment. His options 

were limited because he was subject to parole supervision until January 2014. With good 

behavior, however, the supervision would cease in January 2013, permitting him to travel for 

work. Donald claimed that contingent on this earlier release date, Medusa International Corp 

offered to hire him as a business consultant with a monthly salary of $10,000. Medusa allegedly 

withdrew the offer after Fitzgerald made claims against him to federal agencies. In September 

2014, the Oehmkes countersued Fitzgerald for tortious interference with this prospective 

business relationship. A month later, they amended their complaint to clarify their tortious 

interference claim (Count I) and to include additional counterclaims: that Fitzgerald made 

fraudulent representations regarding Donald (Count IV) and that she libeled and slandered him

(Count V). The Oehmkes charged Fitzgerald with extortion by offering to retract her reports if 

Donald repaid the outstanding debt (Count III). They also claimed that Fitzgerald wrongfully 

accessed Donald’s bank account and altered his personal profile, which amounted to identity 

theft, invasion of privacy, and hacking (Count II).

In February 2015, the Oehmkes sought leave to amend their answer to Fitzgerald’s 

breach of contract complaint to add the affirmative defense of usury. They claimed that 

Fitzgerald attempted to collect an interest rate (8% simple interest) that was unlawful under MCL 

438.31. At the hearing on the motion to amend, the trial court elected to reform the note as 

suggested by Fitzgerald to include a lawful interest rate of 7%. The court then denied the 

Oehmkes’ request to amend as the defense no longer applied. Shortly thereafter, the trial court 

granted Fitzgerald’s motion for summary disposition on her contract claim, ruling as a matter of 

law that the Oehmkes had breached the note by failing to repay their debt.

The court held a bench trial on the Oehmkes’ counterclaims in January 2016. After the 

Oehmkes rested their case, the court granted Fitzgerald’s motion for a directed verdict as to the 

tortious interference, fraud, and extortion counts. The court then found in favor of Fitzgerald on 

the remaining claims. After the trial, the court entered a final judgment, awarding Fitzgerald 

$41,318.88 in attorney fees and costs pursuant to MCR 2.405. The court also awarded Fitzgerald 

$26,730.04, the principle and interest due on the loan, but mistakenly labeled this sum as a 

sanction. 

The Oehmkes now appeal.

II. THE EQUITABLE POWER TO REFORM THE NOTE

We first address the Oehmkes’ claim that the trial court did not have the authority to 

reform the note to lower the interest rate because (1) Fitzgerald did not plead reformation as a 

claim or defense, (2) the court had no authority to correct an error of law, and (3) there was no 

evidence to support reforming the note. We review de novo the interpretation and application of 

the court rules, Brecht v Hendry, 297 Mich App 732, 736; 825 NW2d 110 (2012), as well as 

whether the trial court properly applied equity to the facts of the case. Knight v Northpointe 

Bank, 300 Mich App 109, 113; 832 NW2d 439 (2013). Ultimately, although the court had the 

authority to reform the note, we agree that the evidence did not support the summary reformation 

of the instrument.
-3-

In her response to the Oehmkes’ motion for leave to amend their answer to include the 

defense of usury, Fitzgerald invited the trial court to instead reform the note to include a legal 

interest rate, contending that the note did not express the parties’ true intent. This request was in 

effect a motion for leave to amend the complaint to add a reformation count coupled with a 

motion for summary disposition of that claim under MCR 2.116(C)(10). By offering this 

alternate basis for relief in her responsive brief, Fitzgerald placed the Oehmkes on notice that she 

intended to ask the court to allow her to amend her complaint should the court decide to allow 

the Oehmkes to assert a usury defense. Accordingly, the Oehmkes had adequate notice before 

the hearing to respond to this new position. See Stanke v State Farm Mut Auto Ins Co, 200 Mich 

App 307, 317-318; 503 NW2d 758 (1993) (discussing the role of notice pleading under 

Michigan’s court rules).

At the hearing on the Oehmkes’ motion for leave to add the defense of usury, Fitzgerald

again asserted that she was entitled to reformation of the note. This was, in effect, an oral 

motion for leave to amend to include a reformation count and for immediate summary 

disposition. A motion must ordinarily “be in writing,” but a party may make a motion “during a 

hearing or trial.” MCR 2.119(A)(1)(a). Therefore, the trial court could properly consider 

whether to grant Fitzgerald’s requested relief. The court did so and then determined that the 

record evidence supported that the parties were mutually mistaken about whether the interest rate 

selected for the note was legal under Michigan law. The court granted summary disposition in 

Fitzgerald’s favor by reforming the note to comport with the parties’ purported agreement to 

provide a legal interest rate.

The trial court could in theory use equity to reform the note to conform to the true intent 

of the parties. “Michigan courts sitting in equity have long had the power to reform an 

instrument that does not express the true intent of the parties as a result of fraud, mistake [mutual 

or unilateral], accident, or surprise.” Johnson Family Ltd Partnership v White Pine Wireless, 

LLC, 281 Mich App 364, 371-372, 379-380; 761 NW2d 353 (2008). Although the Oehmkes 

correctly note that courts “will seldom, if ever” correct a mistake regarding “the legal effect of 

the contract actually made,” courts may nevertheless reform an instrument when “there are other 

equitable legal features calling for the interposition of the court.” Id. at 380 (quotation marks 

and citation omitted).

However, this Court has refused to reform an instrument to include a legal interest rate to 

avoid encouraging unscrupulous lending practices:

If we permitted lenders to reform contracts with usurious interest rates, an 

unscrupulous lender would not be deterred from charging a usurious interest rate 

because if the usurious interest rate was not discovered, the lender could retain the 

ill-gotten interest, and if the usurious interest rate was discovered, the lender 

could simply seek reformation of the contract. [Olsen v Porter, 213 Mich App 

25, 29; 539 NW2d 523 (1995).]

In this case, the lender did not draft the promissory note; the borrowers did. Thus, this 

case may involve unscrupulous borrowers who were seeking to avoid repaying part of their debt. 

In Olsen, this Court concluded that the trial court erred by reforming the instrument because 

none of the parties contended “that the land contract did not express their true intent” and courts 
-4-

“will not reform a contract if the instrument is drawn as intended.” Id. While a court sitting in 

equity has the power to reform an instrument to reflect the true intent of the parties, see Conn 

Fire Ins Co v Monroe Circuit Court, 77 Mich 231, 237; 43 NW 871 (1889), there must be 

evidence of the mistake and the parties’ actual intentions. Such evidence was not present here.

In order to merit summary disposition on her newly raised reformation claim, Fitzgerald 

had to prove mutual or unilateral mistake with the requisite showing of fraud by clear and 

convincing evidence. See Johnson Family Ltd Partnership, 281 Mich App at 379. She also had 

the initial burden under MCR 2.116(C)(10) to establish that the undisputed evidence showed that 

she was entitled to relief. See Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 

Mich App 362, 369-370; 775 NW2d 618 (2009).

Fitzgerald argued that the promissory note showed on its face that the parties intended the 

agreement to have a legal interest rate. Specifically, Fitzgerald argued, and the court agreed, that 

the statement that the note was governed by Michigan law demonstrated that the parties intended 

to include a legal interest rate. That statement does not establish that the parties intended the 

note to include a legal interest rate; it was merely a choice of law provision indicating that the 

parties intended to have Michigan law apply in the event of a dispute. See, e.g., Chrysler Corp v 

Skyline Indus Servs, Inc, 448 Mich 113, 132; 528 NW2d 698 (1995). There was no other 

evidence tending to show that Fitzgerald believed that the 8% interest rate was legal or that she 

did not actually intend to agree to the illegal interest rate. There also was no evidence tending to 

show the Oehmkes’ understanding of the interest rate. Because there was no evidence which if 

left unrebutted showed that Fitzgerald was entitled to equitable relief as a matter of law, the trial 

court erred when it summarily reformed the note to include a legal interest rate of 7%. 

Accordingly, we vacate the trial court’s order reforming the note and remand for reinstatement of 

the original contract, including its provision of 8% interest.

III. AMENDED DEFENSE

The Oehmkes next argue that the trial court erred when it denied their motion for leave to 

amend their defenses to include usury. If granted, the Oehmkes could challenge the newly 

restored 8% interest rate as usurious and potentially avoid paying any interest at all. Under the 

court rules, trial courts have discretion to allow a party to amend his pleadings to state a new 

claim or defense when justice so requires. Ben P Fyke & Sons v Gunter Co, 390 Mich 649, 658-

659; 213 NW2d 134 (1973). The trial court did not abuse its discretion in denying the Oehmkes’ 

motion. As such, the Oehmkes are now duty bound to repay their debt with 8% interest.

Michigan law provides that the parties to an agreement may “stipulate in writing for the 

payment of any rate of interest, not exceeding 7% per annum.” MCL 438.31. A lender “who 

enters into any contract or agreement” that charges an interest rate in “excess of that allowed” 

under MCL 438.31 “is barred from the recovery of any interest, any official fees, delinquency or 

collection charge, attorney fees or court costs and the borrower shall be entitled to recover his 

attorney fees and court costs” from the lender. MCL 438.32. Usury is an affirmative defense 

that “must be stated in a party’s responsive pleading, either as originally filed or as amended in 

accordance with MCR 2.118,” MCR 2.111(F)(3), or it is waived. MCR 2.111(F)(2); Shaw

Investment Co v Rollert, 159 Mich App 575, 580; 407 NW2d 40 (1987).
-5-

The Oehmkes did not list usury as a defense in their answer, let alone “state the facts 

constituting” the defense “[u]nder a separate and distinct heading.” MCR 2.111(F)(3). By 

failing to properly raise their usury defense, the Oehmkes waived it. However, the Oehmkes 

could cure their failure to properly assert the usury defense by seeking leave to amend the 

answer, and the trial court had the general obligation to grant leave: “It is a fundamental rule of 

civil procedure in this state that leave to amend pleadings should be given freely.” Stanke, 200 

Mich App at 321, citing MCR 2.118(A)(2) and Ben Fyke & Sons, 390 Mich at 656. A trial court 

should deny a motion for leave to amend only for particularized reasons, such as “[1] undue 

delay, [2] bad faith or dilatory motive on the part of the movant, [3] repeated failure to cure 

deficiencies by amendments previously allowed, [4] undue prejudice to the opposing party by 

virtue of allowance of the amendment, [and 5] futility.” Weymers v Khera, 454 Mich 639, 658; 

563 NW2d 647 (1997) (quotation marks and citation omitted; brackets in original).

Here, the trial court exercised its equitable power to reform the note to include a legal

interest rate and denied the Oehmkes leave to amend on the ground that the usury defense was no 

longer applicable, i.e., because amendment would be futile. As noted, the court abused its 

discretion by reforming the interest rate in the note where there was no evidence that the parties 

did not intend to agree to an illegal 8% interest rate. As we have reinstated the original contract, 

it is no longer true that the usury defense is inapplicable. However, we affirm the denial of the 

Oehmkes’ motion to add a usury defense on other grounds: the Oehmkes unduly delayed in 

seeking amendment, there is evidence the Oehmkes acted in bad faith, and the late amendment 

would have prejudiced Fitzgerald.

At the hearing on the Oehmkes’ motion for leave to amend, Fitzgerald suggested that the 

Oehmkes knew or should have known that the note was usurious all along. After all, Donald 

personally drafted the note and he did so in order to induce Fitzgerald to lend him more money.1 

The Oehmkes did not mention usury at the time Donald drafted the note. They did not raise the 

usury defense after Fitzgerald sued them or when they countersued for more than $200,000. 

During discovery, the Oehmkes finally contested the interest rate but only asserted that it should 

be simple rather than compound interest. Fitzgerald spent more than $5,000 during discovery on 

this issue only to have the Oehmkes later claim that the interest rate was illegal and therefore

uncollectible. Fitzgerald asked the court to deny leave on the grounds that the Oehmkes could 

have and should have asserted the defense earlier and that their failure to do so prejudiced her.

The Oehmkes responded that the amendment would not prejudice Fitzgerald because she 

could still pursue the principal amount of the note. The Oehmkes denied any bad faith, asserting

that there was no evidence that they knew an 8% rate was usurious when Donald drafted the 

note. And if the parties were mistaken that 8% interest was legal, the Oehmkes asserted that the 

proper procedure would be for Fitzgerald to amend her complaint to state a claim for 

reformation. When the trial court reached a compromise and reformed the contract to include a 

nonusurious interest rate, the Oehmkes back pedaled, claiming there was no evidence of mistake 

 1 The challenged note is an actually an amended document and extended additional funds to the 

Oehmkes.
-6-

so reformation was not permitted. The Oehmkes’ conduct in drafting the note, accompanied by 

their ever changing position before the trial court, suggest that the Oehmkes intended from the 

start not to repay their loan. Even the trial court recognized the Oehmkes’ attempts to “shelter” 

themselves from Fitzgerald’s collection actions. Their belated reliance on usury laws to avoid 

part of the debt suggests bad faith.

Moreover, the delay in presenting the usury defense severely prejudiced Fitzgerald’s 

ability to effectively and efficiently pursue her claims. It is undisputed that the Oehmkes drafted 

the promissory note and selected the interest rate at issue. The Oehmkes knew or should have 

known that the interest rate was usurious before they presented the note to Fitzgerald. If the 

Oehmkes included a usurious interest rate in order to set up a defense to future collection

attempts or to increase the costs of collection, Fitzgerald could establish a claim for fraud. See 

Waldorf v Zinberg, 106 Mich App 159, 167-168; 307 NW2d 749 (1981). She might also be able 

to state a claim for equitable reformation on the basis of mistake accompanied by fraud. See 

Johnson Family Ltd Partnership, 281 Mich App at 379-380. In both cases, Fitzgerald might be 

able to show that she was entitled to reformation of the note or to damages equal to the losses 

caused by the fraud, which would be the lost interest. Waldorf, 106 Mich App at 167-168; see 

also Abeloff v Ohio Finance Co, 313 Mich 568, 578-579; 21 NW2d 856 (1946) (holding that a 

court sitting in equity may require a borrower to pay interest on a usurious note as a condition 

precedent to the grant of equitable relief).

Instead, the Oehmkes failed to assert usury as a defense in their answer, in their 

countercomplaint, or in their first amended countercomplaint. Indeed, they did not assert the 

usury defense until Fitzgerald filed her motion for summary disposition, which was after she 

incurred months of litigation expenses. By failing to earlier assert the defense, the Oehmkes 

limited Fitzgerald’s ability to assert potential fraud claims. The late addition of the usury 

defense would require additional discovery and the investment of additional attorney time and 

fees to develop the fraud claim. The parties’ discovery had already progressed for months and 

involved disputes that had to be resolved by the court. On this record, the court could have 

found that the Oehmkes’ unreasonable failure to earlier assert the defense prejudiced Fitzgerald 

or amounted to a dilatory tactic designed to increase the strain and expense of the litigation. 

Weymers, 454 Mich at 658. 

Ultimately, the trial court properly denied the Oehmkes’ motion to amend, albeit for the 

wrong reason. The Oehmkes are therefore not entitled to return to the trial court to pursue a 

defense of usury against Fitzgerald’s collection action. The Oehmkes now find themselves in a 

position where they must repay their debt at the interest rate they personally selected.

IV. SUMMARY DISPOSITION

The Oehmkes next argue that the trial court should not have summarily resolved

Fitzgerald’s breach of contract claim because they had valid offsets against the damages due 

under the note. They also argue that Fitzgerald could have mitigated her losses by not interfering 

with Oehmkes’ business relationship with Medusa.

As Fitzgerald correctly notes, the Oehmkes cite no authority for the proposition that a 

trial court must withhold judgment after a properly granted motion for summary disposition until 
-7-

after trial on the opposing party’s counterclaims. They also did not offer any meaningful 

analysis of their claim that Fitzgerald failed to mitigate her losses. As such, the Oehmkes have 

abandoned those claims. See Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959). 

A trial court may grant summary disposition under MCR 2.116(C)(10) when, “[e]xcept as 

to the amount of damages, there is no genuine issue as to any material fact, and the moving party 

is entitled to judgment or partial judgment as a matter of law.” There was no dispute that the 

Oehmkes borrowed money and executed the promissory note. There was also no dispute that 

they had not repaid any portion of the note. Consequently, the trial court correctly determined 

that Fitzgerald was entitled to judgment as a matter of law on her breach of contract claim. 

Additionally, although the summary disposition order provided that “[j]udgment hereby enters in 

favor” of Fitzgerald for $25,396.71, the court did not enter a final judgment in Fitzgerald’s favor 

on her breach of contract claim until after the trial. By that time, it had dismissed or found in 

favor of Fitzgerald on each of the Oehmkes’ counterclaims. As such, the Oehmkes were not 

entitled to any offsets.

V. CLAIMS INVOLVING DISCOVERY, EXPERT WITNESS, AND NEW TRIAL

The Oehmkes also assert various claims of error centered on their assertion that 

Fitzgerald lied when she testified that she did not apply for credit in Donald’s name in order to 

cause a violation of the conditions of his supervised release. They claim that the trial court 

should have stayed or reopened discovery to allow them to obtain the information discovered by 

police officers investigating their claims of identity theft. They also claim that the trial court 

abused its discretion when it refused to allow them to call a police expert on handwriting to 

testify that Fitzgerald may have filled out a credit application in Donald’s name. Finally, they 

claim that the court abused its discretion when it denied their motion for a new trial under MCR 

2.611(A) on the ground that Fitzgerald prevailed at trial only by perjuring herself.

Where a party’s rights cannot be determined until an issue raised in another action is 

resolved, it may be appropriate to stay a second action pending resolution of the first. See Fast 

Air, Inc v Knight, 235 Mich App 541, 548; 599 NW2d 489 (1999). In this case, however, the 

Oehmkes had access to the same documentation that the police used to start their investigation. 

Indeed, the Oehmkes provided the evidence to the police. The Oehmkes could have personally 

developed the evidence in support of their civil action simultaneously with the police. They 

could have requested discovery of additional information from the involved banks, just as the 

police did. The record belies the Oehmkes’ assertion that they had no choice but to await the 

conclusion of the police investigation, requiring a stay of the proceedings or the reopening of 

discovery on the eve of trial. See Mich Citizens for Water Conservation v Nestlé Waters North 

America Inc, 269 Mich App 25, 51-52; 709 NW2d 174 (2005) (opinion by SMOLENSKI, J.), aff’d 

in relevant part 479 Mich 280 (2007) (holding that a court may properly refuse to reopen the 

proofs in the interests of finality and where the opposing party would be surprised or

disadvantaged by the reopening).

We further discern no error in the court’s preclusion of the handwriting expert who 

evaluated the credit application during the police investigation. The trial court had the authority 

to preclude this testimony on the ground that the Oehmkes failed to earlier disclose their intent to 

call him. See MCR 2.313(B)(2). 
-8-

Preclusion is a drastic sanction, and a trial court should consider the totality of the 

circumstances before precluding a witness from testifying. Duray Dev, LLC v Perrin, 288 Mich 

App 143, 164-165; 792 NW2d 749 (2010). One factor weighing against preclusion is a party’s 

inadvertent failure to disclose the witness. See id. at 165; Dean v Tucker, 182 Mich App 27, 32; 

451 NW2d 571 (1990). Here, the Oehmkes could have timely secured their own handwriting 

expert without delaying the proceedings.

Prejudice to the other party is a factor weighing in favor of preclusion. See Duray Dev, 

288 Mich App at 165. As noted by the trial court, the Oehmkes should have presented the 

information that they planned to provide to a handwriting analysis expert, asked for an 

adjournment of the trial, and allowed Fitzgerald the opportunity to procure an outside expert to 

review the documents herself so that the court could fully explore the matter at trial. By 

withholding the necessary information, the Oehmkes prevented Fitzgerald from examining the 

issue and forced the court to try and “sort through” the material at trial. The Oehmkes point to a 

notation in the records of Fitzgerald’s attorney that he conducted research on the admission of 

handwriting expert opinions as evidence that their late disclosure of their witness did not really 

prejudice their opponent. Research into the admissibility of a certain type of evidence, however, 

is a far cry from being able to examine the actual evidence to be presented. Such research would 

not have removed the prejudice caused by the Oehmkes’ late disclosure. Moreover, this research 

did not establish that Fitzgerald had “actual notice” that the Oehmkes intended to call the expert 

who analyzed the handwriting samples during the police investigation, it only established that the 

attorney believed the issue might arise as the Oehmkes had accused Fitzgerald of identity theft. 

See id. (holding that “actual notice to the defendant of the witness” is a factor to consider before 

precluding a witness’s testimony).

Even were we to conclude that the trial court abused its discretion in precluding the 

subject testimony, that decision would not warrant relief unless the failure to grant a new trial 

appeared to be “inconsistent with substantial justice.” MCR 2.613(A). To meet that criteria, the 

Oehmkes must show that the error prejudiced their trial. See Henson v Veteran’s Cab Co of 

Flint, 384 Mich 486, 493-494; 185 NW2d 383 (1971) (construing the predecessor court rule to 

MCR 2.613(A)). Here, the trial court found that, even if the Oehmkes had established a link 

between Fitzgerald and the activities that they claimed amounted to identity theft, hacking, or 

invasion of privacy, the Oehmkes nevertheless failed to establish damages caused by these acts, 

and found in Fitzgerald’s favor on that basis as well. The testimony of the proposed expert 

witness had no bearing on the Oehmkes’ damages. Accordingly, even if the witness were 

allowed to testify and established that Fitzgerald applied for credit in Donald’s name, the trial 

court would have found no cause of action for want of damages. Any error in this regard was 

harmless. MCR 2.613(A).

Contrary to the Oehmkes’ contentions, they also were not entitled to a new trial based on 

evidence uncovered during the police investigation. Specifically, the Oehmkes argue that the 

police investigation established that Fitzgerald did in fact apply for credit in Donald’s name. She 

therefore committed perjury at the trial on the Oehmkes’ countercomplaint when she denied 

applying for credit. Eliciting perjured testimony at trial may be grounds for a new trial under 

MCR 2.611(A)(1). Stallworth v Hazel, 167 Mich App 345, 352-353; 421 NW2d 685 (1988). 

The only relief the Oehmkes would have been entitled to in this civil action, however, was a 

declaration that Fitzgerald engaged in identity theft. The Oehmkes did not request that relief at 
-9-

the original trial or in their motion for a new trial. Rather, the Oehmkes sought a financial 

remedy for Fitzgerald’s activities. Yet, the Oehmkes presented insufficient evidence to support 

their claim for damages. Accordingly, even if Fitzgerald perjured herself at trial and the 

Oehmkes had subsequently secured evidence establishing that perjury, a new trial would not lead 

to a favorable judgment. Again, any error was harmless. MCR 2.613(A); Hilgendorf v St John 

Hosp & Med Ctr Corp, 245 Mich App 670, 682-683; 630 NW2d 356 (2001).

VI. ATTORNEY FEES

The Oehmkes finally argue that the trial court erred in several respects when it awarded 

Fitzgerald attorney fees under MCR 2.405(D). We review de novo whether a trial court properly 

selected, interpreted, and applied the relevant court rules. Brecht, 297 Mich App at 736. We 

review for an abuse of discretion the trial court’s decision to award sanctions under MCR 

2.405(D), J C Bldg Corp II v Parkhurst Homes, Inc, 217 Mich App 421, 426; 552 NW2d 466 

(1996), as well as the reasonableness of the award. Smith v Khouri, 481 Mich 519, 526; 751 

NW2d 472 (2008).

As this Court has explained, although attorney fees are generally not recoverable, a trial 

court may award a party his or her attorney fees under MCR 2.405(D), which is often referred to 

as the offer of judgment rule:

Under MCR 2.405, the offer of judgment rule, a party may serve on his or her 

opponent a written offer to stipulate the entry of a judgment. The purpose of the 

offer of judgment rule is to avoid protracted litigation and encourage settlement. 

If the offeree rejects the offer and the adjusted verdict is more favorable to the 

offeror than the average offer, the offeror may recover actual costs from the 

offeree. [Marilyn Froling Revocable Living Trust v Bloomfield Hills Country

Club, 283 Mich App 264, 297; 769 NW2d 234 (2009).]

The Oehmkes complain that Fitzgerald’s motion for costs under MCR 2.405(D) should 

have been denied as untimely. A party must request his or her costs “within 28 days after the 

entry of the judgment” or within 28 days of an “order denying a timely motion” for a new trial, 

to set aside the judgment, or for rehearing or reconsideration. MCR 2.405(D)(6). In this case,

both parties offered to stipulate to a judgment inclusive of all claims and counterclaims. 

Although the trial court granted summary disposition in Fitzgerald’s favor on her breach of 

contract claim in May 2015, it did not complete the trial until January 2016, and did not enter the 

final judgment disposing of all the claims until March 2016. Because it was impossible for the 

court to determine whether the adjusted verdict was more favorable to Fitzgerald until after it 

entered judgment on all the claims involved in the offer of judgment, see MCR 2.405(D)(1), the 

relevant judgment for the purpose of sanctions was the judgment that disposed of all the 

remaining claims involved in the offer. The relevant judgment did not enter until March 2016. 

Consequently, Fitzgerald’s request was timely under MCR 2.405(D)(6).

The Oehmkes also argue that the court erred by awarding Fitzgerald costs and attorney 

fees that were not “actual costs incurred in the prosecution or defense of the action.” MCR 

2.405(D)(1). Citing Douglas v Allstate Ins Co, 492 Mich 241, 267-268; 821 NW2d 472 (2012), 

the Oehmkes maintain that costs are not incurred unless there is an expectation that the party 
-10-

providing the service will be compensated. Because there was no evidence that Fitzgerald 

actually paid her legal fees, the Oehmkes contend that there was no evidence that she actually 

incurred the fees. That Fitzgerald had not yet paid her attorney does not mean that her attorney 

did not do the work or was not entitled to payment. A lawyer has the right to compensation for 

his or her services and a client incurs a legal obligation to pay reasonable remuneration to his or 

her lawyer when the lawyer renders the service. See Macomb Co Taxpayers Assoc v L’Anse 

Creuse Pub Schs, 455 Mich 1, 11-12; 564 NW2d 457 (1997). Absent a binding legal agreement 

absolving the client of his or her obligation to pay, “[w]hether the attorney, for any reason, opts 

not to pursue compensation, has nothing to do with the fact that legal fees were incurred.” Id. at 

12. Fitzgerald’s lawyer presented a detailed bill for professional services rendered in support of 

the motion for costs. There is no evidence that counsel absolved Fitzgerald of her duty to pay. 

Accordingly, the Oehmkes’ challenge in unavailing. 

The Oehmkes also state that Fitzgerald failed to assert that the fees she requested were 

reasonable and, for that reason, failed to meet her burden to prove reasonableness. The term 

“[a]ctual costs” is defined under MCR 2.405(A)(6) to mean “the costs and fees taxable in a civil 

action and a reasonable attorney fee.” By requesting an award of attorney fees under that rule, 

Fitzgerald implicitly claimed that the requested fees were reasonable. Additionally, Fitzgerald’s 

lawyer argued at the motion hearing that the fees were reasonable, and the billing summary that 

Fitzgerald submitted in support of her request was sufficiently detailed to meet her initial burden. 

The summary listed the initials of the lawyer who worked on the case, the date of the work, the 

total hours worked per date, the hourly rate for the lawyer, and a brief description of the work 

performed. The trial court had sufficient information to consider the reasonableness of the 

requested fees. See Kernen v Homestead Dev Co, 252 Mich App 689, 692; 653 NW2d 634 

(2002) (providing that a trial court may decide the reasonableness of a request for attorney fees 

solely on the pleadings and documentation when the documentation provides a reasonable 

evidentiary basis to evaluate and decide the request).

Finally, the Oehmkes maintain that the court should have held an evidentiary hearing to 

determine the reasonableness of the fees after their objection. Although the Oehmkes asserted 

that the requested fees were unreasonable, they did not argue that the hourly rates charged were 

unreasonable. Instead, they asserted that Fitzgerald’s lawyer “padded the bill in almost every 

situation.” Similarly, at the motion hearing, the Oehmkes did not contest the reasonableness of 

the hourly rates, instead asserting that certain charges were “excessive” and that if Fitzgerald 

wanted to pursue those costs she would “have to have an evidentiary hearing on that.” The court 

rejected that the charges were excessive; it offered that the billing summary “on the surface 

would appear to cover those expenses necessary, expenditures of time and/or money” incurred 

defending the counterclaims after the Oehmkes rejected the offer of judgment.

Because the Oehmkes did not contest the reasonableness of the hourly rates charged, the 

trial court did not need to hold an evidentiary hearing on the reasonableness of the rates. Smith, 

481 Mich at 532 (stating that an evidentiary hearing is necessary when there is a factual dispute 

over the reasonableness of the hours billed or the hourly rate). Additionally, although the 

Oehmkes maintained that certain charges were excessive as to certain dates, the court had 

sufficient information to determine whether the number of hours expended were reasonable in 

light of the services provided. Considering the actual objections to the charges, the court did not 

abuse its discretion when it refused to hold a full blown evidentiary hearing to consider the 
-11-

specific charges; it had sufficiently detailed information to assess the charges’ validity and 

reasonableness. Kernen, 252 Mich App at 692. Accordingly, we discern no error requiring 

reversal of the attorney fee award.

We affirm in part, vacate in part, and remand for reinstatement of the contract with 8% 

interest. We do not retain jurisdiction. As neither party prevailed in full as required for recovery 

of appellate costs, neither may tax costs pursuant to MCR 7.219.

/s/ Elizabeth L. Gleicher 

/s/ Michael J. Kelly 

/s/ Thomas C. Cameron