Court Opinion

ID: 9721972
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:13:39.612922+00
Date Added: 2024-06-11T18:24:29.695934
License: Public Domain

White, J.
(concurring in part and dissenting in part). I concur in the majority’s affirmance of the trial court’s denial of sanctions under MCR 2.114(E). I dissent from its reversal of the denial of attorney fees under MCR 2.405. Rather than reversing, I would remand the case to the trial court for reconsideration in light of Gudewicz v Matt’s Catering, Inc, 188 Mich App 639; 470 NW2d 654 (1991).
After trial, defendant moved for costs and attorney fees pursuant to MCR 2.405 and 2.114. The *280trial court awarded defendant $1,216.98 in routine fees and costs, but denied the request for $12,410.07 in attorney fees under both court rules. The court stated:
Recalling this case very well and remembering the facts of it, the emotion that was involved in it, the Court is of the opinion that both parties proceeded to trial and made their rejections in good faith and this Court is of the opinion that Ms. Butzer should not be penalized to a point of having to pay over ten thousand dollars in attorney fees for seeking her day in court.
I believe that the assessment of attorney fees is discretionary with the Court and under the circumstances of this case, the Court is not going to assess attorney fees in the bill of costs, but will assess the one thousand, two hundred and six dollars and ninety-eight cents.
Defendant argues that MCR 2.405 is unambiguous and requires imposition of reasonable attorney fees except in very limited circumstances. Defendant asserts that this case is unremarkable and presents no special circumstances to justify the court’s decision not to award attorney fees.
In Sanders v Monical Machinery Co, 163 Mich App 689, 693; 415 NW2d 276 (1987), this Court affirmed the trial court’s award of attorney fees to the defendant under MCR 2.405. The Court stated that the purpose of MCR 2.405 is to encourage parties to settle matters before trial. If an offer to settle is made and the offer is not patently frivolous, the rule creates an obligation to accept, make a counteroffer, or reject. A litigant who rejects or fails to respond and goes on to lose before a jury is at risk of paying costs and attorney fees as provided in MCR 2.405.
In Stamp v Hagerman, 181 Mich App 332; 448 *281NW2d 849 (1989), this Court affirmed the court’s refusal to award attorney fees to the defendant under MCR 2.405(D)(1). The Court said:
However, MCR 2.405(D)(3) provides that the "court may, in the interest of justice, refuse to award an attorney fee under this rule.” In Sanders, supra, this Court concluded that the trial court’s decision to allow attorney fees under this subrule is discretionary, although the grant of attorney fees was thought to be preferred under the subrule as indicated by the language requiring that the trial court’s refusal to grant the attorney fees be in the "interest of justice.” The Sanders Court went on to uphold the trial court’s grant of attorney fees to the defendant as a reasonable exercise of discretion where the plaintiffs failed to respond to the defendant’s offer of judgment of $5,000 and a jury subsequently returned a verdict of no cause of action. The Sanders Court rejected the plaintiffs’ claim that the discretionary language "in the interest of justice” only permits attorney fees in exceptional circumstances where there has been bad faith or unreasonable conduct. Finally, the Sanders Court expressed its opinion that attorney fees should be routinely granted under this subrule.
In the instant case, by contrast, the trial court refused to award attorney fees for the reason that plaintiffs had not rejected either of the mediation evaluations and thereafter negotiated reasonably and in good faith in an effort to reach a settlement. The trial court concluded that these facts did not indicate that the discretionary sanction against plaintiffs in the form of attorney fees was appropriate. Hence, on its face, the trial court appeared to apply the very standards of good faith and reasonable conduct that the Sanders Court suggests would not preclude an award of attorney fees to the opposing party.
We are, however, of the opinion that what constitutes "in the interest of justice” must be decided on a case-by-case basis. While not controlling, a *282trial court may properly consider the good faith or reasonable conduct of the parties in resolving whether attorney fees are appropriate. [181 Mich App 338-339.]
The Court went on to discuss cases dealing with the concept of judicial discretion. The Court concluded:
Given the fact that plaintiffs proceeded to trial only after rejecting an offer which was substantially less than the prior two mediation evaluations, we conclude that the trial court did not abuse its discretion in refusing to award attorney fees to defendants. Although an award of attorney fees is favored under MCR 2.405(D)(3), we do not find that a consideration of the "interest of justice” standard precluded the trial court from refusing to award attorney fees to defendants under the circumstances of this case. [Id. at 342.]
In Gudewicz, supra, this Court reversed the trial court’s ruling that under MCR 2.405(D)(3) attorney fees should be denied to the defendant in the interest of justice. The basis for the trial court’s decision was that the plaintiff’s decision to reject the counteroffer was reasonable in view of the mediation.
The Gudewicz Court quoted from 2 Martin, Dean & Webster, Michigan Court Rules Practice (3d ed), pp 455-456:
As to attorney fees, the rule itself gives no guidance as to the kinds of situations in which a court may determine that the interests of justice preclude an award of attorney fees. . . . [S]hould the courts liberally interpret the subrule, and routinely deny the imposition of attorney fees, trial counsel will quickly realize that the cost provisions and monetary sanctions imposed by rule 2.403(0) [mediation sanctions] may be readily ne*283gated by the submission of an offer of settlement under 2.405. See MCR 2.405(D)(6). If the imposition of sanctions under rule 2.403 is mandatory (which it is), but only discretionary under rule 2.405 (which they are), the authors have little doubt as to which rule the parties will elect to control in the action. Unless the imposition of costs under rule 2.405 is equally as certain as they are [sic] under rule 2.403, Michigan’s mediation rule will quickly be rendered useless. [188 Mich App 644.]
The Court discussed Sanders and Stamp, supra:.
Similar concerns were expressed by this Court in Sanders, supra. The Sanders panel concluded that the sanctions provisions of the court rule should be routinely enforced and attorney fees granted, except in the event of an unusually large verdict, or in the event of a defense verdict rendered in the face of catastrophic damages. 163 Mich App 692-693. In Stamp v Hagerman, 181 Mich App 332, 339; 448 NW2d 849 (1989), another panel concluded that, while not controlling, the good faith or reasonable conduct of the parties properly may be considered by a trial court in resolving the question whether attorney fees are appropriate. [188 Mich App 644-645.]
The Court concluded:
In this case, the sole reason given by the trial court for denial of attorney fees was that plaintiffs reasonably refused the counteroffer. This was insufficient justification under Stamp and Sanders, supra, and runs contrary to the policy of Sanders and the commentators which favors the award of attorney fees absent unusual circumstances. [188 Mich App 645.]
While the Gudewicz Court recognized the rule set forth in Stamp, supra, it applied a far more stringent standard for determining when attorney *284fees can properly be denied under MCR 2.405(D) (3).
In the instant case, the trial court’s decision not to grant attorney fees would not constitute an abuse of discretion under Stamp, because the facts are very similar to those in Stamp and the decision apparently was based on plaintiffs good faith and reasonable conduct. The enunciation of the decision on the record in November 1990, after Stamp had been decided but before Gudewicz, would have been sufficient under Stamp. However, Gudewicz, which is controlling under Administrative Order No. 1990-6, requires more.
It is unclear whether the trial court would have awarded or denied attorney fees under Gudewicz. In other words, had Gudewicz been decided before the trial court rendered its decision, it may have granted fees or denied fees, setting forth reasons believed to be sufficient under Gudewicz. Because the trial court did not have the benefit of Gudewicz when it made the decision and because we do not know how it would have applied the Gudewicz standard to the instant case, I think a remand for reconsideration, rather than a reversal, is appropriate. I would remand to the trial court for reconsideration in light of Gudewicz, with instructions that if the trial court continues to be of the view that attorney fees should be denied under MCR 2.405(D)(3) and Gudewicz, it should fully set forth its reasons on the record.