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STATE OF MICHIGAN 

COURT OF APPEALS 

TIMOTHY LENNON, 

 Plaintiff-Appellant/Cross-Appellee, 

UNPUBLISHED 

April 19, 2016 

v No. 324803 

Oakland Circuit Court 

EDWARD G. LENNON and EDWARD G. 

LENNON, PLLC, 

LC No. 2014-142392-CZ 

 Defendants-Appellees/CrossAppellants. 

Before: JANSEN, P.J., and SERVITTO and M. J. KELLY, JJ. 

PER CURIAM. 

 Plaintiff appeals as of right the trial court’s order granting summary disposition in favor 

of defendants. Defendants filed a cross-appeal on the basis of the trial court’s orders denying 

their requests for sanctions. We affirm the trial court’s order granting summary disposition in 

favor of defendants, reverse the trial court’s order denying defendants’ motion for sanctions for 

the filing of a frivolous action, and remand for a determination of the award of costs to 

defendants. 

I. FACTUAL AND PROCEDURAL BACKGROUND 

 Plaintiff, a nonlawyer, filed a lawsuit against defendants seeking to recover amounts 

owed from defendant Edward G. Lennon (Edward), a licensed Michigan attorney, relating to an 

alleged agreement to compensate plaintiff for a referral through the sharing of the legal fees 

collected. Plaintiff is employed as a private investigator with clientele in the legal field. Edward 

is his brother and has a legal practice in the state of Michigan. Plaintiff received a request from a 

friend and business associate for a referral to a divorce attorney. In his complaint, plaintiff 

alleged that he consulted Edward in the matter, and Edward suggested referral to a colleague of 

his. Plaintiff claimed that Edward assured him that he would receive payment for the referral if 

the client retained Edward’s colleague for the divorce. Plaintiff alleged that he referred the client 

to Edward’s colleague under those terms. Plaintiff asserts that Edward subsequently received 

payment for the referral, but did not share any of the payment with plaintiff. 

 Plaintiff brought suit to recover his share of the fee, under theories of breach of contract, 

unjust enrichment, and fraud. Defendants moved for summary disposition pursuant to MCR 

2.116(C)(8) and sought sanctions against plaintiff under MCR 2.114 and MCL 600.2591 for 
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filing frivolous claims. The trial court ruled that the alleged contract between plaintiff and 

Edward was contrary to the rules of professional conduct precluding a nonlawyer from 

recovering legal fees from a lawyer and violated public policy, and therefore it was 

unenforceable. The trial court granted the motion for summary disposition, but denied the 

motion for sanctions. Subsequently, the trial court denied plaintiff’s motion for reconsideration 

and defendants’ motion for offer of judgment sanctions. 

II. PLAINTIFF’S LAWSUIT 

 Plaintiff contends that he should be able to recover a portion of the referral fee on the 

basis of his agreement with Edward. We disagree. 

 We review de novo a trial court’s grant or denial of summary disposition pursuant to 

MCR 2.116(C)(8). Haynes v Neshewat, 477 Mich 29, 34; 729 NW2d 488 (2007). “ ‘A motion 

under MCR 2.116(C)(8) tests the legal sufficiency of the claim on the pleadings alone to 

determine whether the plaintiff has stated a claim on which relief may be granted. Summary 

disposition under subrule (C)(8) is appropriate if no factual development could justify the 

plaintiff’s claim for relief.’ ” Summer v Southfield Bd of Ed, 310 Mich App 660, 669; 874 

NW2d 150 (2015) (citation omitted). We accept as true all well-pleaded factual allegations and 

construe them in the light most favorable to the nonmovant. Genesee Co Drain Comm’r v 

Genesee Co, 309 Mich App 317, 323; 869 NW2d 635 (2015). 

 Plaintiff also challenges the trial court’s denial of his motion for reconsideration. “We 

review a trial court’s decision regarding a motion for reconsideration for an abuse of discretion.” 

Sanders v Perfecting Church, 303 Mich App 1, 8; 840 NW2d 401 (2013). “A court abuses its 

discretion when its decision falls outside the range of reasonable and principled outcomes.” 

Jenson v Puste, 290 Mich App 338, 341; 801 NW2d 639 (2010). A trial court generally does not 

grant a motion for reconsideration that merely presents the same issues that the court already 

decided. MCR 2.119(F)(3). “The moving party must demonstrate a palpable error by which the 

court and the parties have been misled and show that a different disposition of the motion must 

result from correction of the error.” Id. 

 MRPC 5.4(a) provides, in relevant part, “A lawyer or law firm shall not share legal fees 

with a nonlawyer.” A contract that violates the Michigan Rules of Professional Conduct is 

unethical, and as such it violates public policy and is unenforceable. Evans & Luptak, PLC v 

Lizza, 251 Mich App 187, 189; 650 NW2d 364 (2002). In Morris & Doherty, PC v Lockwood, 

259 Mich App 38, 51-52, 58-60; 672 NW2d 884 (2003), this Court refused to enforce a referral 

fee agreement between a lawyer and a lawyer deemed a nonlawyer by inactive membership in 

the State Bar of Michigan because it violated the Michigan Rules of Professional Conduct and 

was, therefore, void as a violation of public policy. 

 Plaintiff attempts to distinguish the facts of this case by asserting that he is a nonlawyer 

and, as such, he cannot be required to have knowledge of the rules of professional conduct and 

his conduct is not governed by the rules. This Court has made no exception for a nonlawyer to 

recover any portion of referral fees paid to a lawyer. Rather, this Court has affirmed the 

established rule under MRPC 5.4(a) that such a fee cannot be shared with a nonlawyer. See 

Morris & Doherty, PC, 259 Mich App at 59-60. In choosing to do business with a lawyer, 
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plaintiff placed himself under the rules that govern the legal profession. Thus, the Michigan 

Rules of Professional Conduct govern the transaction regardless of plaintiff’s knowledge of the 

rules or status as a nonlawyer. Because MRPC 5.4(a) prohibits defendants from fee sharing with 

a nonlawyer, that rule prevents plaintiff from recovering for breach of an agreement to do just 

that. 

 Plaintiff further argues that, even assuming the unenforceability of the fee sharing 

agreement, he remains entitled to recover under the theories of unjust enrichment and fraud. We 

disagree. 

 A claim of unjust enrichment sounds in equity and requires the receipt of a benefit by the 

defendant from the plaintiff and an inequity to the plaintiff from the defendant’s retention of the 

benefit. Bellevue Ventures, Inc v Morang-Kelly Investment, Inc, 302 Mich App 59, 64; 836 

NW2d 898 (2013). However, a contract will only be implied to prevent unjust enrichment if 

there is no express contract on the same subject matter. Belle Isle Grill Corp v Detroit, 256 Mich 

App 463, 478; 666 NW2d 271 (2003). The elements of actionable fraud are: 

(1) That defendant made a material representation; (2) that it was false; (3) that 

when he made it he knew that it was false, or made it recklessly, without any 

knowledge of its truth and as a positive assertion; (4) that he made it with the 

intention that it should be acted upon by plaintiff; (5) that plaintiff acted in 

reliance upon it; and (6) that he thereby suffered injury. [Titan Ins Co v Hyten, 

491 Mich 547, 555; 817 NW2d 562 (2012).] 

In general, a claim for fraud includes a statement involving a past or existing fact. Samuel D 

Begola Servs, Inc v Wild Bros, 210 Mich App 636, 639; 534 NW2d 217 (1995). However, 

“[f]raud in the inducement occurs where a party materially misrepresents future conduct under 

circumstances in which the assertions may reasonably be expected to be relied upon and are 

relied upon.” Id. 

 The remedy for both theories precludes their viability in this case. Plaintiff alleged that 

defendants agreed to pay him “a portion of the referral fee received” if he referred his client, and 

he did not receive the payment. Plaintiff did not claim any damages other than the amount he 

claimed he was entitled to under the referral agreement. Regarding the unjust enrichment claim, 

plaintiff alleged that he “had a good-faith expectation of compensation in the form of a referral 

fee upon completing the referral to [the divorce attorney].” Likewise, regarding the fraud claim, 

plaintiff alleged that Edward “represented to Plaintiff that he would pay Plaintiff a portion of the 

referral fee received if Plaintiff referred [his friend and associate] to [the divorce attorney],” and 

plaintiff “is now owed money for the referral fee paid to” Edward. The trial court dismissed both 

claims, holding that the damages plaintiff sought were “to recover attorney fees in violation of 

public policy.” As the trial court properly ruled, the relief requested is nothing more than 

plaintiff’s expected payment under the unenforceable agreement. Furthermore, as noted by the 

trial court, plaintiff is in the same position that he would have been in regardless of whether the 

referral went to the divorce attorney that Edward recommended or another attorney that plaintiff 

selected since plaintiff would not have been compensated under either scenario. Thus, plaintiff 

is not entitled to recovery for unjust enrichment or fraud since he fails to show an inequity or that 

he relied on Edward’s alleged statements to his detriment. 
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 Furthermore, we find no validity to the new relief articulated in plaintiff’s motion for 

reconsideration. Plaintiff contended that in reliance on Edward’s misrepresentation of future 

payment, he did not refer his client to a different lawyer or lawyers and lost business from that 

lawyer or group of lawyers. Plaintiff’s referral to a different lawyer could only result in the same 

preclusion of fee sharing. In addition, plaintiff’s remedy for a claim of fraud in the inducement 

to enter a contract is to void the alleged contract, which does not provide a cognizable remedy to 

plaintiff. Samuel D Begola Servs, Inc, 210 Mich App at 639. Therefore, plaintiff’s fraud claim 

under the new allegations likewise fails as a matter of law. The trial court did not err in granting 

summary disposition, and it did not abuse its discretion in denying the motion for 

reconsideration. 

III. SANCTIONS 

 Defendants argue that the trial court erred in refusing to grant their motion for sanctions 

for the filing of a frivolous pleading. We agree. 

 We review for clear error a trial court’s decision that a claim was not frivolous and thus 

not subject to sanctions. See Kitchen v Kitchen, 465 Mich 654, 661; 641 NW2d 245 (2002). “A 

decision is clearly erroneous where, although there is evidence to support it, the reviewing court 

is left with a definite and firm conviction that a mistake has been made.” Id. at 661-662. 

 On cross-appeal, defendants assert that the trial court should have imposed sanctions 

against plaintiff for filing a frivolous lawsuit or, in the alternative, for rejecting the offer of 

judgment. Regarding legal sanctions, a trial court must impose sanctions if it determines that a 

civil action or defense was frivolous, MCL 600.2591(1), or that a document was signed in 

violation of MCR 2.114(D), Guerrero v Smith, 280 Mich App 647, 678; 761 NW2d 723 (2008); 

MCR 2.114(E). The costs and fees assessed for the filing of a frivolous civil action include “all 

reasonable costs actually incurred by the prevailing party and any costs allowed by law or by 

court rule, including court costs and reasonable attorney fees.” MCL 600.2591(2). The mere 

fact that a party does not ultimately prevail does not mean that the party’s position was frivolous. 

See Kitchen, 465 Mich at 662. Rather, a claim is frivolous when: (1) the party’s primary purpose 

in bringing the action was to harass, embarrass, or injure the prevailing party; (2) the party had 

no reasonable basis to believe that the underlying facts supporting its legal position were true; or 

(3) the party’s legal position was devoid of arguable merit. MCL 600.2591(3)(a); Kitchen, 465 

Mich at 662. The determination whether a claim or defense was frivolous is based on the 

circumstances at the time it was asserted. Hansen Family Trust v FGH Indus, LLC, 279 Mich 

App 468, 486; 760 NW2d 526 (2008). 

 The trial court denied defendants’ motion for sanctions. The trial court noted that 

plaintiff failed to cite caselaw to support his position that he was entitled to share legal fees as a 

nonlawyer merely because he believed he would receive them. It further found that plaintiff 

would not have been compensated for any referral to an attorney regardless of defendants’ 

conduct. However, the trial court did not rule that plaintiff’s action was frivolous. 

 As previously noted, MRPC 5.4(a) prohibits a lawyer from sharing legal fees with a 

nonlawyer. We have ruled that violation of a rule of professional conduct violates public policy 

and voids a contract premised thereon. Evans & Luptak, PLC, 251 Mich App at 189. In 
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addition, we have addressed the validity of a referral fee contract between an attorney and an 

attorney with inactive status, who was deemed a nonlawyer, and concluded that the contract was 

unenforceable as precluded under MRPC 5.4(a). Morris & Doherty, PC, 259 Mich App at 60. 

Therefore, we disagree with plaintiff’s argument that this Court has not addressed the factual 

scenario in this case. There is no question that plaintiff is not a lawyer. Thus, he is not entitled 

to share Edward’s legal fees, and any contract between plaintiff and Edward was void as a matter 

of public policy. We therefore conclude that plaintiff’s claim was devoid of arguable legal merit. 

See MCL 600.2591(3)(a); Kitchen, 465 Mich at 662. Accordingly, defendants are entitled to 

costs. See MCL 600.2591(1). However, we note that, contrary to defendants’ argument in their 

brief on appeal, defendants are not entitled to attorney fees since Edward represented himself in 

this action. See Fraser Trebilcock Davis & Dunlap PC v Boyce Trust 2350, 497 Mich 265, 273-

274; 870 NW2d 494 (2015) (noting that an attorney cannot recover attorney fees for representing 

himself). 

 Defendants further argue that the trial court improperly invoked the “interest of justice” 

exception to the offer of judgment rule to deny their motion for offer of judgment sanctions. We 

need not address this issue as defendants argue for offer of judgment sanctions as an alternative 

to their request for sanctions for the filing of a frivolous complaint, and we conclude that the 

costs incurred in connection with the civil action would include the costs incurred because of the 

failure to stipulate to the entry of judgment. See MCL 600.2591(1) and (2); MCR 2.405(A)(3). 

 Affirmed in part, reversed in part, and remanded for further proceedings consistent with 

this opinion. We do not retain jurisdiction. As the prevailing party, defendants may tax costs 

pursuant to MCR 7.219(A). 

/s/ Kathleen Jansen 

/s/ Deborah A. Servitto 

/s/ Michael J. Kelly