-1- 

### STATE OF MICHIGAN

COURT OF APPEALS

PRUDENTIAL PROTECTIVE SERVICES, LLC,

Plaintiff-Appellee/Cross-Appellant, UNPUBLISHED March 24, 2015

v No. 318957 Wayne Circuit Court THE NRP GROUP, LLC, LC No. 13-001027-CK

Defendant-Appellant/CrossAppellee.

Before: B OONSTRA , P.J., and S AWYER and O’C ONNELL

, JJ.

P ER C URIAM

.

Defendant appeals as of right a n order granting summary dispos ition to plaintiff in this contract dispute. We affirm the trial court’s grant of summary disposition to plaintiff, but remand for the trial court to provide further explanation regar ding plaintiff’s request for attorney

fees.

On appeal, defendant argues that it is not liable for any amou nt to plaintiff under the contract between the parties be cause defendant was acting as an agent for a disclosed principal. Specifically, defendant contends that there was a genuine issue of material fact regarding whether it was personally liable, because plaintiff was aware t hat it was actually dealing with defendant’s principals. Defendant argues that plaintiff accept ed payments from defendant’s principals, and that it was informed during contract negotiatio ns that defendant was merely an agent for individual property owners. We disagree.

Plaintiff moved for summary di sposition pursuant to MCR 2.116( C)(9) and MCR 2.116(C)(10). This Court reviews a trial court’s decision on a motion for summary disposition
de novo. Hoffner v Lanctoe , 492 Mich 450, 459; 821 NW2d 88 (2012). “A motion for summary disposition brought pursuant to MCR 2.116(C)(9) tests the suffi ciency of the defendant’s pleadings by accepting all well-pleaded allegations as true. S ummary disposition under this rule is proper if the defendant fails to raise a valid defense to a claim.” Wheeler v Charter Twp of Shelby , 265 Mich App 657, 663; 697 NW2d 180 (2005). ‘“If the defense s asserted are so clearly untenable as a matter of law that no factual development could possibl[y] deny th e plaintiff’s right to recovery,’ then summary disposition under this rule is proper.” Id., quoting Dimondale v

Grable , 240 Mich App 553, 564; 618 NW2d 23 (2000). A motion for summ ary disposition pursuant to MCR 2.116(C)(10) “requires this Court to review the pleadings, affidavits, and other-2- documentary evidence submitted, make all reasonable inferences therefrom, and determine whether a genuine issue of material fact exists, giving the non moving party the benefit of
reasonable doubt.” Id. (citations omitted). In order to survive a motion for summary disposition under this rule, the nonmoving pa rty is required to produce evi dence demonstrating a material dispute of fact left for trial. Id.

“Unless otherwise agreed, a person making or purporting to mak e a contract with another as agent for a disclosed principal does not become a party to t he contract.” Riddle v Lacey &

Jones , 135 Mich App 241, 246; 351 NW2d 916 (1984), quoting 2 Restate ment Agency, 2d, § 320, p 67. Further:

Whether or not a person purporting to act as agent for another becomes a party to the contract depends upon the ag reement between such person and the other party. . . . [A] principal is disclosed if, at the time of making the contract in question, the other party to it has notice that the agent is acting for a principal and of the principal’s identity. One who purports to contract on behalf o f a designated person does not manifest by this that he is making a contract o n his own account, and only where he so manifests does the agent become a party to the contract which he makes for the principal. In the absence of other fact s, the inference is that the parties have agreed that the principal is, and the age nt is not, a party. [ Id. at 246-247, quoting 2 Restatement Agency, 2d, § 320, comment a .]

This Court has stated that “an agent may work on behalf of a pr incipal within the scope of the agency agreement as if the agent had stepped into the shoes of the principal without incurring any personal liability.” PM One, Ltd v Dep’t of Treasury , 240 Mich App 255, 266-267; 611 NW2d 318 (2000). However, this Court has also held that where a principal is disclosed and the agent is known to be working on behalf of the principal, the ag ent may still agree to be held personally liable under the terms of a contract. National Trout Festival, Inc v Cannon , 32 Mich App 517, 521; 189 NW2d 69 (1971). Moreover, a “contract must b e interpreted according to its plain and ordinary meaning.” Holmes v Holmes , 281 Mich App 575, 593; 760 NW2d 300 (2008).

Defendant presented no evidence regarding its own contracts, i f any existed, between it and the individual property owners for which defendant managed residential properties. Accordingly, the only evidence included in the lower court reco rd is the parties’ contract itself, Holly Powell’s deposition and a ffidavit, and Theodore Einhorn’s affidavit. Under the terms of the contract, there is no mention of any property owners; defen dant is expressly noted as the “Client” for the purposes of the contract. Further, under the plain terms of the contract, defendant agreed “to pay [plaintiff] . . . fees” based on the s ervices provided. Defendant essentially relies on one piece of evidence to support its asse rtion that plaintiff was aware that defendant was an agent not subject to personal liability: Powel l’s statements that during contract negotiations, plaintiff was made aware that it was actually con tracting with individual property owners, not defendant. Defendant also argues that plaintiff’s practice of accepting payment in the form of checks from the property owners signifies that it k new it was dealing with the property owners as principals.-3- Even though plaintiff accepted checks from parties other than defendant for services provided under the contract, it appears from the record that de fendant was responsible for actually making those payments. Defendant accepted invoices fr om plaintiff, defendant inputted the invoices into its internal computer systems, and defendant actually sent out the checks to plaintiff. Further, when invoices stopped being paid on time, plaintiff sought payment from defendant, and one of defendant’s employees traveled to plainti ff’s offices to discuss having some of the amount due reduced. Based on the language of the c ontract, the only parties to the contract were plaintiff and defendant. There was no evidence p resented that plaintiff ever worked or communicated with any other party relating to the con tract, except for accepting checks emanating from the bank accounts of property owners. Ev en giving defendant the benefit of reasonable doubt, defendant expressly agreed to make payment s for services provided under the contract, without mention of any principal. Accordingly, t he trial court’s decision to grant plaintiff’s motion for summary disposition under MCR 2.116(C)(1 0) was correct because there was no genuine issue of material fact regarding whether defenda nt was personally liable under
the contract.

On cross-appeal, plaintiff argues that the trial court abused its discretion when it denied plaintiff’s request for attorney fees. Specifically, plaintiff contends that the contract expressly provides for defendant to pay pl aintiff’s reasonable attorney f ees in the event of a dispute arising from the contract. Plaintiff argues that the trial court erred when it denied plaintiff’s request for attorney fees without providing any explanation or rationale. We agree.

Regarding an award of attorney fees, this Court reviews underl ying findings of fact for
clear error. In re Temple Marital Trust , 278 Mich App 122, 128; 748 NW2d 265 (2008). Questions of law are reviewed de novo. Id. However, “we review the court’s decision whether to award attorney fees and the determination of reasonableness of the fees for an abuse of
discretion.” Id.

Generally, attorney fees are not recoverable in Michigan as an element of costs or damages unless an express legal exception applies. Fleet Business Credit v Krapohl Ford Lincoln Mercury Co , 274 Mich App 584, 589; 735 NW2d 644 (2007). “The parties to a contract may include a provision that the breaching party will be requir ed to pay the other side’s attorney fees and such provisions are judicially enforceable.” Zeeland Farm Services, Inc v JBL Enterprises, Inc , 219 Mich App 190, 195; 555 NW2d 733 (1996). “However, recove ry is limited to reasonable attorney fees.” Id. at 195-196. The party claiming the right to an award of attorney fees is responsible for introducing evidence of the re asonableness of the attorney fees.

Id. at 196. Attorney fees that are awarded pursuant to a contract ual provision are considered damages, not costs. Fleet Business Credit , 274 Mich App at 589.

In determining what amount of atto rney fees is reasonable, thi s Court considers:

(1) the professional standing a nd experience of t he attorney; ( 2) the skill, time and labor involved; (3) the amount in question and the results achi eved; (4) the difficulty of the case; (5) the expenses incurred; and (6) the nature and length of the professional relations hip with the client. [ Wood v Detroit Auto Inter-Ins Exchange , 413 Mich 573, 588; 321 NW2d 653 (1982).]-4- This Court also considers “the fee customarily charged in the l ocality for similar legal services” which should be “multiplied by the reasonable number of hours e xpended in the case.” Smith v

Khouri , 481 Mich 519, 530-531; 751 NW2d 472 (2008). Under the terms of the contract, defendant agreed to “pay reasona ble attorney and all collection agency and other fees and expenses which may be incurred by [plaintiff] in the collection of unpaid invoices or any part thereof.” Further, in plaintiff’s motion for summary dispositi on, plaintiff specifically addressed
the Wood factors, ultimately requesting $3,500 in attorney fees. Thoug h the trial court stated that plaintiff’s request for attorney fees was denied, it provided n o rationale or explanation, either at the hearing or in its order. Because the parties specifically included language in their contract regarding attorney fees, the trial court abused its discretion when it denied the request without explanation. Accordingly, the ca se is remanded so that the tri al court can provide its reasoning
on the record.

Affirmed in part, but remanded for further proceedings regardi ng plaintiff’s request for attorney fees. We do not r etain jurisdiction.

/s/ Mark T. Boonstra /s/ David H. Sawyer
/s/ Peter D. O’Connell