Opinion ID: 1939131
Heading Depth: 1
Heading Rank: 3

Heading: Refund of Fees Paid Since Commencement of Suit.

Text: The trial court denied repayment of the fees on the ground that plaintiffs' action was not a proper class suit, because of administrative inconvenience and costs to defendant, and because the court found the school district acted in good faith. Plaintiffs have waived claim of refund for all charges or payments except the refund of general fees collected by defendant since the commencement of this suit. The Court of Appeals found plaintiffs' action to be a proper class suit. The action was treated as a class suit by the trial court. If the class action was properly brought, the fact that the fees to be recovered are small for each member of the class, or that expense may be entailed in making a refund, or that the funds have been used by defendant, ought not to bar recovery. It is in the very nature of a class action that the claim of each individual member of the class may be such as to alone scarcely warrant pursuit of repayment. If an action is successful, the fruits of the action should not be denied to the class unless the reasons for denial are most cogent. We do not perceive here such difficulties as would merit denying recovery. This situation was one peculiarly adapted to a class suit. The claim of each member of the class alone did not warrant an action, all members were affected in like manner by the action of defendant, and the issue was one that demanded legal clarification. As bearing on the question of good faith, on October 16, 1964, the Attorney General rendered an opinion (OAG 1963-1964, No 4376, p 484) in which he ruled that Article 8, § 2, Constitution of 1963, providing for free public elementary and secondary schools, bars boards of education from imposing registration fees as a condition to registration of pupils in elementary and secondary schools of the school district and that a board of education may not lawfully charge fees for participation in courses such as band or for participation in athletic programs. This suit was commenced on September 6, 1966. At that time the plaintiff class sought an injunctive order restraining defendant from assessing or collecting any fees. In an effort to prevent the collection of fees for the 1967-1968 school year, on July 28, 1967, plaintiffs obtained an order to show cause why the collection of fees should not be enjoined. The injunction was denied. In the face of the opinion of the Attorney General, of the action of the plaintiff class in instituting this lawsuit, and of their continued effort to prevent the collection of fees during the two years the suit was progressing through the circuit court, we do not find upon this record such a showing of good faith by defendant as warrants refusal of relief. In Merrelli v. City of St. Clair Shores (1959), 355 Mich 575, plaintiff sued for a declaratory judgment challenging the validity of fees charged for building permits. This Court held that a city may not defray the general cost of government under the guise of reimbursement for special services required in the regulation and control of new buildings. Cf. University Custom Homes, Inc., v. Township of Redford (1959), 355 Mich 606. Following the decision in Merrelli, in Beachlawn Building Corporation v. City of St. Clair Shores (1963), 370 Mich 128, an action was brought to recover excessive fees paid for building permits under the ordinance that had been declared invalid in Merrelli. In holding the payments to have been involuntary, Justice DETHMERS, speaking for a unanimous Court, quoted with approval the following from the early case of City of Detroit v. Martin (1876), 34 Mich 170 (p 174): There is no doubt but that where the parties do not stand upon equal terms, as    where the plaintiff was entitled to a license, and the defendant to grant it, but refused to deliver it except upon payment of a sum of money he was not entitled to    in all such cases, the party pays under compulsion and may afterwards in an action of assumpsit recover back the amount of the illegal exaction. See, also, Beachlawn Building Corporation v. City of St. Clair Shores (1965), 376 Mich 261. The case of Theatre Control Corporation v. City of Detroit (1963), 370 Mich 382, involved an annual demand charge by the City of Detroit for users of water furnished by the city to parties operating air conditioning equipment which did not recirculate the water. This Court found the charges were arbitrary and unreasonable. It was pointed out that plaintiffs could, from a practical standpoint, pursue no other course but to pay the added charges and await a determination of their rights by final disposition of the case. Plaintiffs were held entitled to a return of the unwarranted charges. One of the reasons for requiring a refund of the fees in this case is to provide a fund from which can be paid a reasonable attorney fee to the attorneys for plaintiffs. This action has progressed through three courts of this state. Suit was begun in circuit court on September 6, 1966, and was concluded with judgment filed May 10, 1968. Proceedings in the Court of Appeals ran from May 17, 1968 to August 25, 1969. Proceedings in this Court were begun on August 20, 1969, with application for leave to appeal and conclude with opinion and order of this Court in mid-1970. Plaintiffs' appendix in this Court alone runs to 478 pages. We are not unmindful of the fact that the fees which were exacted were used by defendant or of the relative smallness of each fee. Nevertheless, where the parties are arrayed in a lawsuit, as here, in which both sides undoubtedly conceive themselves to be proceeding in the public interest, some balance must be struck so that the side prevailing is not compelled to bear the burdensome costs of achieving a favorable decision. We remand this cause to the circuit court for the entry of a judgment against defendant for the amount of the general fees collected by it in the sum of $140,862, plus interest from date of collection of same, from which there shall be deducted the fees of plaintiffs' attorneys as shall be set forth in itemized statement of same and approved by the circuit judge, costs of notification and distribution to the plaintiff class, and other non-taxable costs. The trial court shall determine the ratio which the remainder of said judgment bears to the total judgment and such ratio shall be used to determine the proportion of refund to be paid to each individual member of the class for general fees paid by that member to the School District during the school years 1966-1967 and 1967-1968. The court shall designate the county clerk, a referee, or defendant, as its officer for the purpose of making refund to the members of the class. The court shall provide for notice by regular mail to each member of the plaintiff class advising that the demand of such member, as prorated, will be paid upon claim for payment by the member to the designated officer. In addition to notice by regular mail, the court shall provide for notice once each week for three consecutive weeks in a newspaper of general distribution in Washtenaw County. The court shall provide for a cut-off date for the filing of claims, which date shall be not less than six months from the last date of the giving of notice by regular mail and publication. Following the cut-off date for the filing of claims and the payment of all proper claims, the officer designated by the court shall make report of his doings to the court and the judgment rendered by the court shall be deemed satisfied notwithstanding the fact that the total amount of said judgment may not have been paid out. Any funds then outstanding to satisfy the balance of said judgment shall be returned to defendant. The circuit court and the Court of Appeals are affirmed in part and reversed in part in accordance with this opinion. The case is remanded to the trial court for further proceedings in accordance with this opinion. Costs to plaintiffs in all courts.