UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

NORTHERN DIVISION

BRAUN BUILDERS, INC.,

Plaintiff,

Case Number 09-11534-BC

v. Honorable Thomas L. Ludington

VIVKEKANAND KANCHERLAPALLI, 

SHARON KANCHERLAPALLI, THUMB

NATIONAL MORTGAGE, LLC, and

U.S. INTERNAL REVENUE SERVICE,

Defendants, 

and

VIVKEKANAND KANCHERLAPALLI 

and SHARON KANCHERLAPALLI, 

Third-Party Plaintiffs,

v.

CLINT BRAUN, 

Third-Party Defendant,

and

VIVKEKANAND KANCHERLAPALLI

and SHARON KANCHERLAPALLI,

Counter-Claimants, 

v. 

BRAUN BUILDERS, INCORPORATED, 

Counter-Defendant.

______________________________________ /

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OPINION AND ORDER GRANTING PLAINTIFF’S SUPPLEMENTAL MOTION FOR

ATTORNEY FEES, DENYING DEFENDANTS’ MOTIONS FOR A STAY AND FOR A

PROTECTIVE ORDER, AND DENYING PLAINTIFF’S MOTION TO COMPEL

On June 3, 2010, a eight-member jury returned a unanimous verdict in favor of Plaintiff

Braun Builders, Inc. for $172,500 on its breach of contract claim against Defendants Vivkekanand

and Sharon Kancherlapalli. On Defendants’ motion, the Court reduced the verdict to $142,953.67,

but added $7,989.69 in prejudgment interest and $35,612.50 in attorneys fees for a total judgment

of $186,555.86. The case is now before the Sixth Circuit on appeal, but Plaintiff’s motion for

supplementary attorney fees, Defendants’ motions to stay and for a protective order, and Plaintiff’s

motion to compel must be resolved by this Court. For the reasons explained below, Plaintiff’s

supplemental motion for attorney fees will be granted, but the other motions will be denied.

I

The Court has already determined that Plaintiff is entitled to attorney fees under Michigan

law because Plaintiff was the “prevailing party” on a Construction Lien Act claim. Mich. Comp.

Laws § 570.1118(2). The Court has also determined that $185 per hour is an appropriate rate for

Plaintiff’s counsel. [Dkt. # 120]. The only issues raised by the supplementary motion for attorney

fees are (1) whether the Construction Lien Act provides for post-judgment attorney fees and (2)

whether 32.75 hours is excessive. 

The Michigan Construction Lien Act provides that a trial court “may allow reasonable

attorneys’ fees to a lien claimant who is the prevailing party.” Mich. Comp. Laws § 570.1118(2).

The Michigan appellate courts have interpreted that language broadly. See Vugterveen Sys., Inc. v.

Olde Millpond Corp., 459 Mich. 119 (1997); Solution Source, Inc. v. LPR Assocs. Ltd. P’ship, 652

N.W.2d 474, 478 (Mich. Ct. App. 2002) (noting that the Construction Lien Act “is to be construed

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liberally to ‘secure the beneficial results, intents, and purposes of this act.’ ”) (quoting Mich. Comp.

Laws § 570.1302(1)). In Solution Source, Inc., for example, the Michigan Court of Appeals upheld

an attorney fee award of more than $25,000 following more that five years of litigation over a

$15,000 lien. Id. The court compared the attorney fee provisions of the Construction Lien Act to

similar provisions in the Michigan Consumer Protection Act, Mich. Comp. Laws § 445.901–.922,

noting that the Lien Act is “designed to protect the rights of lien claimants to payment for expenses

. . . .” Id. at 478–79. Quoting a Consumer Protection Act case, the court emphasized that the

“underlying purpose” behind such attorney fee provisions “is to afford an indigent client the

opportunity to seek protection and obtain a judgment where otherwise precluded because of

monetary constraints.” Id. (quoting Smolen v. Dahlmann Apartments, Ltd., 186 Mich. App. 292,

297–98 (1990)).

Although the Construction Lien Act has been interpreted broadly by the Michigan Courts,

the Michigan Supreme Court has never directly addressed whether post-judgment attorney fees are

available and the statute itself does not provide a direct answer. 

In construing questions of state law, the federal court must apply state law in

accordance with the controlling decisions of the highest court of the state. If the

state’s highest court has not addressed the issue, the federal court must attempt to

ascertain how that court would rule if it were faced with the issue. The Court may

use the decisional law of the state’s lower courts, other federal courts construing state

law, restatements of law, law review commentaries, and other jurisdictions on the

“majority” rule in making this determination. A federal court should not disregard

the decisions of intermediate appellate state courts unless it is convinced by other

persuasive data that the highest court of the state would decide otherwise. 

Meridian Mut. Ins. Co. v. Kellman, 197 F.3d 1178, 1181 (6th Cir. 1999). The Michigan Court of

Appeals has interpreted the Construction Lien Act to provide post-judgment attorney fees. Solution

Source, 652 N.W.2d at 477–78. 

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In Solution Source, the prevailing plaintiff sought post-judgment attorney fees and the

defendant argued such fees were not available because they are not provided for by the statute. The

Court, however, concluded otherwise, emphasizing the remedial purpose of a statute designed to

protect the interests of lien holders and property owners alike. Id. at 478. In this case, Defendants

contend that Solution Source was wrongly decided because the state court of appeals went beyond

the plain language of the statute to award attorney fees in a situation were they are not specifically

authorized by the statute. See Rafferty v. Markovitz, 602 N.W.2d 367, 369 (Mich. 1999) (noting that

attorney fees are generally not recoverable in Michigan “in the absence of a statute or a court rule

that expressly authorizes such an award”). 

Indeed, the statute does not “expressly” address one way or the other whether post-judgment

attorney fees are available. Nor, for that matter, does it “expressly” address whether pre-judgment

attorney fees are available. It simply provides that the Court “may allow reasonable attorneys’ fees

to a lien claimant who is the prevailing party” without distinguishing between pre-judgment and

post-judgment fees. Mich. Comp. Laws § 570.118(2). In such a circumstance, the Michigan Court

of Appeals correctly concluded in Solution Source that post-judgment fees are part of the

“reasonable attorney fees” that the Court may award. Defendants’ strained reading of the statute

makes too much of the fact that it does not expressly say “post-judgment attorney fees may be

awarded.” Defendant has not provided “persuasive data” demonstrating that the Michigan Supreme

Court would conclude otherwise. Kellman, 197 F.3d at 1181. As the court emphasized in Solution

Source, unless post-judgment fees are provided, a contractor in Plaintiff’s situation may be forced

to abandon his claim to avoid lengthy and expensive appellate litigation. Solution Source, 652

N.W.2d at 481–82 (“A lien claimant without significant financial resources could end up being

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forced to abandon his valid lien claim if met with resistance from the lienor at every turn.”) (citing

Bosch v. Altman Constr. Corp., 298 N.W.2d 725 (1980)). 

The next question is whether the hours billed by Plaintiff’s attorney for post-judgment work,

including Defendants’ motion for a new trial, Plaintiff’s motion for entry of judgment, and efforts

to enforce the judgment once it was entered, are excessive. Plaintiff contends he is entitled to an

additional 32.75 hours, or $6,058.75. Defendants object to several line items on the attorney’s bill.

Defendants first object to the attorney fees associated with Plaintiff’s efforts to collect on the

personal judgment entered against the Defendants because a Construction Lien Act claim is an

equitable claim enforceable through foreclosure on real property and not a personal judgment. See

Mich. Comp. Laws § 570.1118(2) (noting that attorney fees are available to the prevailing party in

“an action to enforce a construction lien through foreclosure”). In response, Plaintiff emphasizes

that construction liens “can be satisfied by means other than foreclosure.” Solution Source, 652

N.W.2d at 483 (citing Mich. Comp. Laws § 570.1121(1)). 

Plaintiff’s efforts to collect on the judgment arise out of the Construction Lien Act claim.

Accordingly, the attorney fees associated with the garnishment activities are reasonable and may be

charged to the Defendants. Mich. Comp. Laws § 570.1118(2). As an initial matter, the Michigan

Court of Appeals permitted the prevailing party to collect attorney fees arising from garnishment

activities in Solution Source. Id. at 482–83. Defendants have not provided a convincing rationale

for reaching a different conclusion here. Moreover, the statute does provide alternative means of

collecting Lien Act judgments—prevailing Plaintiff’s are not limited to foreclosure as a remedy.

Mich. Comp. Laws §§ 571.1121, .1124. 

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Defendants also object to the 3.20 hours Plaintiff’s counsel billed for preparing for and then

attending a hearing on July 23, 2010 because there was no hearing on that date. There was,

however, a hearing the day before and Plaintiff’s counsel did not identify any time for that hearing.

The most logical explanation for the discrepancy is a typographical error in the billing records, or,

as Plaintiff suggests in the reply brief, the time for the July 22 hearing was entered the next morning.

In any event, Plaintiff is entitled to attorney’s fees for the hearing. Defendants’ second objection

will be overruled. 

Defendants also object to 1.10 hours billed for “file organization” on October 6, 2010. There

are times when preparing for a case an attorney may be required to personally go through a client’s

file to ensure comprehensive and diligent representation of the client’s interest. Plaintiff’s attorney

could, perhaps, be more specific, but “file organization” is not excluded from reimbursement. 

Plaintiff’s motion for supplemental attorney fees will be granted, and Plaintiff will be

awarded an additional 32.75 hours, or $6,058.75.

II

On December 21, 2010, Defendants filed a motion to stay the enforcement of the judgment

pending their appeal to the Sixth Circuit. Although the motion is captioned “motion for stay of

proceedings with bond and for injunctive relief during appeal,” there is no bond. Rather, there is

a letter indicating that Defendant Vivkekanand Kancherlapalli has access to funds held by American

Diagnostic Medicine, Inc. (“ADM”). Defendants have also included ADM financial statements and

promised to pledge Defendants’ stock in ADM to secure payment of the judgment following appeal.

Defendants claim Vivkekanand Kancherlapalli owns 49.5 percent of ADM and that his share of the

company is worth $3,687,070. 

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 An affidavit attached to Defendants’ reply brief in support of the stay suggests that Mr.

Kancherlapalli attempted to secure an appeal bond but was unsuccessful because of the IRS tax lien.

If banks do not deem Mr. Kancherlapalli creditworthy, neither should Plaintiff be forced to accept

his unsecured promise. 

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It seems that if Mr. Kancherlapalli actually had access to the liquid assets he claims to have

access to, securing an appeal bond for $185,000 would be feasible.1

 More importantly, Defendants

have still not advanced a reason to excuse the bond requirement in this case or provided legal

authority for the proposition that Plaintiff’s proposed arrangement is the equivalent of a bond. See

Dillon v. City of Chicago, 866 F.2d 902 (7th Cir. 1988) (waiving bond requirement in case where

City of Chicago was judgment debtor and listing factors to consider on whether waiver is

appropriate); Fed. Prescription Serv., Inc. v. Am. Pharm. Ass’n, 636 F.2d 755 (D.C. Cir. 1980)

(noting that district courts have the discretion to permit a stay without a bond under Rule 62, but no

obligation to do so). The Court denied an earlier motion to stay, noting that appeal bonds are

“almost always required” and that Defendants have not demonstrated a reason the bond should not

be required here. There is no new information in this motion to suggest a different conclusion is

warranted. 

The final two motions—Defendants motion for a protective order and Plaintiff’s motion to

compel—relate to a debtor’s examination that was scheduled to take place on December 28, 2010.

Defendants filed the motion for a protective order seeking to be excused from the exam, and when

Defendants did not attend the exam, Plaintiff filed a motion to compel their attendance. In light of

the Court’s conclusion regarding Defendants’ motion to stay, there is no legitimate reason for

Defendants to refuse to participate in a debtor’s examination that may be noticed at some point in

the future. Accordingly, both motions will be denied. Plaintiff may notice another debtor’s exam,

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after making every effort to find a date agreeable to all parties, and Defendants will attend. 

Accordingly, it is ORDERED that Plaintiff’s motion for supplemental attorney fees [Dkt.

# 157] is GRANTED.

It is further ORDERED that Defendants’ motion for a stay [Dkt. # 161] is DENIED.

It is further ORDERED that Defendants’ motion for a protective order [Dkt. # 165] is

DENIED.

It is further ORDERED that Plaintiff’s motion to compel [Dkt. # 173] is DENIED. 

It is further ORDERED that the hearing scheduled for February 14, 2011 at 3:00 p.m. was

CANCELED. The hearing was unnecessary because the parties papers provide the necessary

factual information and legal authority to resolve the motion. E.D. Mich. L.R. 7.1(f). 

s/Thomas L. Ludington 

THOMAS L. LUDINGTON

United States District Judge

Dated: February 14, 2011

PROOF OF SERVICE

The undersigned certifies that a copy of the foregoing order was served

upon each attorney or party of record herein by electronic means or first

class U.S. mail on February 14, 2011.

s/Tracy A. Jacobs 

TRACY A. JACOBS

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