Court Opinion

ID: 9366561
Source: CourtListenerOpinion
Date Created: 2023-01-27 05:04:40.619022+00
Date Added: 2024-06-11T17:15:53.566826
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                  revision until final publication in the Michigan Appeals Reports.

                            STATE OF MICHIGAN

                            COURT OF APPEALS

THORNTON FARMS CONDOMINIUM                                            UNPUBLISHED
ASSOCIATION,                                                          January 26, 2023

               Plaintiff-Appellant,

v                                                                     No. 361569
                                                                      Washtenaw Circuit Court
KELLI B. OUIMET and MARK C. OUIMET,                                   LC No. 2020-000908-CH

               Defendants-Appellees,

and

NATIONSTAR MORTGAGE LLC, d/b/a MR.
COOPER,

               Defendant.

Before: YATES, P.J., and JANSEN and SERVITTO, JJ.

PER CURIAM.

        Defendants Kelli and Mark Ouimet refused to pay their condominium-association fees to
plaintiff, Thornton Farms Condominium Association (Thornton Farms), so plaintiff filed suit and
obtained an order from the trial court directing the Ouimets to pay the fees. Plaintiff then sought
$9,681.45 in attorney fees and costs, but the trial court awarded plaintiff only $1,606. Because the
trial court abused its discretion by failing to follow settled precedent in computing the “reasonable”
attorney fees and costs recoverable by plaintiff, we vacate the trial court’s order awarding plaintiff
$1,606 in attorney fees and costs and remand for further proceedings.

                                  I. FACTUAL BACKGROUND

       Thornton Farms operates its business through an elected condominium-association board,
which acts on behalf of the association of owners of a condominium project located in Washtenaw
County. Kelli Ouimet owns a unit in the condominium project, and Kelli’s husband, Mark Ouimet,

                                                 -1-
was named as a defendant in this case because it was unknown whether he had an interest in Kelli’s
condominium in September 2020 when plaintiff filed the complaint that initiated this case. In the
complaint, plaintiff accused Kelli Ouimet of failing to pay condominium-association assessments
and water bills that she owed.1 Representing themselves, defendants responded to the complaint
by alleging generally that plaintiff had failed to fulfill the duties it owed to defendants.

        The trial court conducted a bench trial that included testimony of Lora Smith, an employee
of the property management company that manages the Thornton Farms Condominium project,
Kelli Ouimet, and Mark Ouimet, among other witnesses. From the outset of the trial, defendants
conceded that they had not paid their association fees, but they contended that they were validly
withholding payment because plaintiff had refused to enforce the condominium–association
bylaws and had engaged in harassment and racial discrimination against them. At the trial, Mark
Ouimet testified about alleged violations of the condominium-association bylaws that he believed
justified the refusal to pay the assessments. Because the board members decided that they were
“not going to enforce the rules or apply the rules or even live by the rules” themselves, Mark
Ouimet decided he was not going to pay the assessments. Kelli Ouimet testified that she is Native
American and that she felt “somewhat” discriminated against by plaintiff. She also testified that
her son fractured his foot in an unrepaired mailbox hole in their front yard.

        After an unsuccessful effort to resolve the case through alternative-dispute resolution, the
parties filed written closing arguments and the trial court issued a written decision. The trial court
found that defendants had not paid the dues, assessments, and fees owed to plaintiff, so defendants
were in default because of that nonpayment. The trial court concluded that the alleged violations
of the condominium-association bylaws committed by plaintiff did not support defendants’ refusal
to pay dues because defendants could not engage in “self-help” by refusing to pay based upon the
perceived violations by plaintiff. The trial court ordered defendants to pay the outstanding balance
of assessments, late fees, and “reasonable” attorney fees, which would be determined at a hearing
scheduled for May 4, 2022.

         At that hearing, the sole witness was plaintiff’s attorney, Melissa Francis, who testified that
plaintiff was requesting $4,394.90 in damages and $320 in late fees. The trial court elected not to
award late fees, so the trial court set the damage award at $4,394 for unpaid assessments. Beyond
that, plaintiff requested $9,681.45 for its attorney fees and costs. Francis testified as to the median
billing rate for attorneys in that geographic area and explained the work that she performed on the
case. At the end of the hearing, the trial court rendered findings of fact and conclusions of law on
the record, explaining that it was bound to follow the analytical framework prescribed in Smith v
Khouri, 481 Mich 519; 751 NW2d 472 (2008). The trial court opened its analysis by determining
the fee customarily charged in that area. The trial court noted that it had not received any evidence

1
 Nationstar Mortgage LLC, d/b/a/ Mr. Cooper was initially named as a defendant because it held
an interest in the property as a mortgagee. Nationstar was later dismissed by stipulated order
after Nationstar and plaintiff agreed that Nationstar had priority over plaintiff’s liens on the
property.

                                                  -2-
that the hourly rate charged in this case differed from what was customary in the area for attorneys.
The trial court also noted that Attorney Francis had 20 years’ experience practicing law.

        The trial court then considered the reasonable number of hours that should have been spent
on the case and whether adjustments were appropriate under the “Wood2 factors” or MRPC 1.5(a).
Citing factor 2,3 the trial court stated that it “just [does not] really think that this is all that difficult
of a kind of case.” Thus, the trial court ruled that factor 2 “factors down the amount [of attorney
fees] in question.” Analyzing factor 3, the trial court noted that plaintiff had successfully recovered
the unpaid condominium fees, but plaintiff’s attorney had not made it “to the root of the problem”
because she had failed to resolve “some of the issues and concerns [defendants] have raised and
others have raised.” The trial court observed that plaintiff’s attorney had not just failed to “quell”
the situation, she had probably continued the problem and perhaps made it worse. The trial court
concluded that, when reviewing the “large term results,” plaintiff had obtained a judgment, but the
judgment did not achieve “results on behalf of the condominium association.” The trial court later
reiterated that it did not “think the results achieved” were “really very good.” Finally, addressing
factor 4, the trial court reiterated that it did not think the case was that difficult. Consequently, the
trial court determined that the award of “reasonable” attorney fees and costs in this case should be
set at $1,606. The trial court did not explain how it arrived at that amount, but it entered an order
memorializing its decision. Plaintiff now appeals.

                                         II. LEGAL ANALYSIS

        On appeal, plaintiff argues that the trial court abused its discretion when it determined that
$1,606 was a “reasonable” award of attorney fees and costs, despite plaintiff’s request for an award
of $9,681.45. We review a trial court’s award of attorney fees and costs for an abuse of discretion.
Pirgu v United Servs Auto Ass’n, 499 Mich 269, 274; 884 NW2d 257 (2016). Such an “abuse of
discretion occurs when the trial court’s decision is outside the range of reasonable and principled
outcomes.” Id. “A trial court necessarily abuses its discretion when it makes an error of law.” Id.
We review questions of law de novo. Id.

        Ordinarily, “attorney fees are not recoverable from a losing party unless authorized by a
statute, court rule, or other recognized exception.” Great Lakes Shores, Inc v Bartley, 311 Mich
App 252, 255; 874 NW2d 416 (2015). Here, plaintiff could seek its attorney fees under a statute,
MCL 559.206(b), which states that in “a proceeding arising because of an alleged default by a co-
owner, the association of co-owners or the co-owner, if successful, shall recover the costs of the
proceeding and reasonable attorney fees, as determined by the court, to the extent the condominium
documents expressly so provide.” Beyond that, plaintiff could seek its attorney fees under another
exception to the general rule that applies “when attorney fees are recoverable pursuant to a contract
between the parties.” Id. (quotation marks omitted). According to Article XIX, Section 2 of the
condominium-association bylaws:

2
    Wood v Detroit Auto Inter-Ins Exch, 413 Mich 573; 321 NW2d 653 (1982).
3
 The factor numbers used by the trial court correspond to those used in Wood, 413 Mich at 588,
and not those used in MRPC 1.5(a).

                                                     -3-
        Any default by a Co-owner shall entitle the Association or another Co-owner or
        Co-owners to the following relief:

        In any proceeding arising because of an alleged default by any Co-owner, the
        Association or the Co-owner, if successful, shall be entitled to recover the costs of
        the proceeding and such reasonable attorneys’ fees, not limited to statutory fees, as
        may be determined by the court.

“ ‘Such contractual provisions are enforceable.’ ” Great Lakes Shores, 311 Mich App at 255. As
a result, plaintiff’s ability to pursue “reasonable” attorney fees from defendants in this case cannot
be gainsaid.

        Our Supreme Court has refined the procedure for determining a “reasonable” attorney fee,
prescribing a three-step process that trial courts must follow. Pirgu, 499 Mich at 281. “[A] trial
court must begin its analysis by determining the reasonable hourly rates customarily charged in
the locality for similar services.” Id. “The trial court must then multiply that [hourly] rate by the
reasonable number of hours expended in the case to arrive at a baseline figure.” Id. Finally, the
trial court must weigh eight nonexclusive factors to decide whether an adjustment of the baseline
figure is warranted. Id. at 281-282. Therefore, those eight factors must be individually analyzed,
and then “the trial court may consider any additional relevant factors.” Id. at 282. “[T]o facilitate
appellate review, the trial court should briefly discuss its view of each of the factors” on the record
“and justify the relevance and use of any additional factors.” Id. In this three-step process, “the
burden of proving the reasonableness of the requested fees rests with the party requesting them.”
Smith, 481 Mich at 528-529.

        This appeal turns on whether the trial court abused its discretion when it awarded plaintiff
$1,606 in “reasonable” attorney fees and costs. The trial court basically skipped the first two steps
in the process prescribed by Pirgu by failing to set the “baseline figure” for the attorney-fee award.
To be sure, the trial court seemed to accept the hourly rates as reasonable, but the trial court made
no finding about “the reasonable number of hours expended in the case to arrive at [the] baseline
figure.” See Pirgu, 499 Mich at 281. The trial court then moved on to the eight adjustment factors
articulated in Smith, 481 Mich at 529-530, and refined in Pirgu, 499 Mich at 282, making findings
on a few of the eight factors. The trial court’s noteworthy findings include its observations that “I
just don’t really think that this is all that difficult of a kind of case” because the “law is on the side
of the condominium association” and that “I don’t think the results achieved are really very good”
because “they’re going to be more problematic for the association[.]” The trial court then summed
up its awards, stating that damages would be set at $4,394 and that “I am awarding an attorney fee
of $1,606 including costs,” so “the total amount is $6,000 and I wish we had a better result.”

         The trial court’s truncated analysis is fatally flawed in several respects. First, the trial court
never identified “the reasonable number of hours expended in the case[,]” Pirgu, 499 Mich at 281,
so the trial court never established “a baseline figure” subject to adjustments. Id. Second, the trial
court lumped the requested court costs of $641.95 into the analysis of a “reasonable” attorney fee
subject to adjustments even though court costs may be taxed in full by “the prevailing party” under
MCR 2.625(A)(1) and are not subject to adjustment. Third, the trial court ignored the admonitions
in Pirgu that “the trial court must consider all of the [eight] factors to determine whether an up or
down adjustment is appropriate” and “should briefly discuss its view of each of the factors . . . on

                                                   -4-
the record and justify the use of any additional factors.” Id. at 281-282. Fourth, the trial court did
not explain why it chose a dramatic reduction of the request for $9,681.45 in “reasonable” attorney
fees to an award of only $1,606 in attorney fees and costs. Indeed, it appears from the record that
the trial court chose $1,606 largely because that figure, when added to the damage award of $4,394,
yielded a total award in the round number of $6,000. Because none of that analysis comports with
the requirements established by our Supreme Court in Pirgu, 499 Mich at 281-282, we must vacate
the trial court’s award of $1,606 in “reasonable” attorney fees and costs and remand the case for a
new analysis of the “reasonable” attorney fees and costs to which plaintiff is entitled.4

        Order awarding plaintiff $1,606 in attorney fees and costs vacated and case remanded for
further proceedings consistent with this opinion. We retain jurisdiction.

                                                              /s/ Christopher P. Yates
                                                              /s/ Kathleen Jansen
                                                              /s/ Deborah A. Servitto

4
  In their brief on appeal, defendants appear to raise two challenges of their own to the trial
court’s orders. First, defendants argue that the trial court abused its discretion when it did not
decrease the attorney-fee award further. Second, defendants argue that the trial court erred when
it entered a judgment of foreclosure against Mark Ouimet. Because defendants did not file a
cross-appeal, they are precluded from raising these issues on appeal. See Ass’n of Businesses
Advocating Tariff Equity v Pub Serv Comm, 192 Mich App 19, 24; 480 NW2d 585 (1991) (“[A]n
appellee that has not sought to cross-appeal cannot obtain a decision more favorable than was
rendered by the lower tribunal.”). Defendants also contend that an attorney at the law firm
representing plaintiff engaged in behavior that violated the Michigan Rules of Professional
Conduct. The trial court record leaves no doubt that the requested attorney fees were solely for
work completed by Attorney Francis, and that no other attorney billed for work on this case.
Therefore, any argument put forth by defendants regarding attorneys other than Attorney Francis
is irrelevant to the issue on appeal.

                                                 -5-
                                Court of Appeals, State of Michigan

                                                  ORDER
                                                                                   Christopher P. Yates
 Thornton Farms Condominium Association v Kelli B Ouimet                             Presiding Judge

 Docket No.      361569                                                            Kathleen Jansen

 LC No.          2020-000908-CH                                                    Deborah A. Servitto
                                                                                     Judges

                For the reasons detailed in the opinion issued concurrently with this order, the Court
VACATES the May 9, 2022 order awarding plaintiff $1,606 in attorney fees and costs, and REMANDS
this matter to the Washtenaw Circuit Court for a redetermination of reasonable attorney fees and costs to
which plaintiff is entitled. The redetermination shall be supported by factual and legal findings sufficiently
detailed to allow meaningful appellate review. We retain jurisdiction.

               Upon the expiration of the 42-day period in which to file an application for leave to appeal
in the Supreme Court, MCR 7.305(D)(5), the trial court shall reconsider the attorney fee and costs issues.
The trial court’s findings on remand may be rendered orally from the bench or in a written opinion.
Proceedings on remand shall be given priority until they are concluded. Within seven days after entry of
a new order awarding reasonable attorney fees and costs, appellant shall file with this Court a copy of that
order and the written findings if the findings are memorialized in writing. The transcripts of all
proceedings on remand shall be prepared and filed within 21 days after the completion of the proceedings.

                Either party may file a supplemental brief pertaining to the issues raised on remand within
21 days after entry of the trial court’s order deciding the matter or 21 days after the transcript of the hearing
is filed, whichever is later. The responsive party may file a supplemental brief in reply. Alternatively,
the parties may file a stipulation to dismiss the appeal.

                                                               /s/ Christopher P. Yates
                                                                 Presiding Judge

                                   January 26, 2023