Court Opinion

ID: 4365881
Source: CourtListenerOpinion
Date Created: 2019-02-08 10:08:00.674061+00
Date Added: 2024-06-11T13:29:45.991626
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

WILLIAM VOGEL, COLLEEN VOGEL,                                   UNPUBLISHED
KENNETH VOGEL, EMILENE VOGEL,                                   February 7, 2019
VOGEL FARMS PARTNERSHIP, WILLIAM &
COLLEEN VOGEL LOVING TRUST, and KEN
& EMILY VOGEL LOVING TRUST,

              Plaintiffs/Counter-Defendants,

and

THOMAS H. ANTHONY,

              Appellant,

v                                                               No. 339763
                                                                Isabella Circuit Court
BART DESAEGHER, ELISABETH                                       LC No. 2015-012758-NM
DESAEGHER, TOM DEVOS, and KATRIEN
DEVOS,

              Defendants/Counter-Plaintiffs-
              Appellees,

and

COW PLEASANT DAIRY INC, DOUBLE D
DAIRY LLC, MATTHEW ROMASHKO, and
MARTINEAU HACKETT O’NEIL & KLAUS,

              Defendants/Counter-Plaintiffs.

Before: CAMERON, P.J., and BECKERING and RONAYNE KRAUSE, JJ.

PER CURIAM.
        Thomas H. Anthony, the attorney who represented plaintiffs in underlying litigation,
appeals by right the trial court’s order awarding a total of $86,386.71 in attorney fee sanctions
pursuant to MCR 2.1141 in favor of defendants. The trial court’s earlier order determining that
appellant was required to pay sanctions is not at issue in this appeal, 2 but rather only the amount
of attorney fees awarded. We affirm.

                     I. BACKGROUND AND PROCEDURAL HISTORY

       In its order determining that sanctions were warranted, the trial court set forth the
following summary of the underlying litigation to date:

               On October 23, 2015, plaintiffs filed a complaint against defendants. This
       action arises out of transactions between plaintiffs and defendants involving
       plaintiffs’ dairy farm. In 2009, plaintiffs entered into a contract with defendants
       DeSaegher, DeVos, Cow Pleasant Dairy, and Double D Dairy. On March 17,
       2009, the parties executed a purchase agreement, pursuant to which plaintiffs
       received $410,000.00 in exchange for their interest in the dairy farm and related
       real estate. The transaction closed on July 28, 2009. The parties retained attorney
       Matthew Romashko to provide representation to all parties in connection with the
       transaction, and all parties executed consent agreements to waive the potential
       conflict of interest.

               Plaintiffs allege legal malpractice and breach of fiduciary duty against
       defendant Romashko and Martineau, Hackett, O’Neil & Klaus PLLC, and breach
       of contract against the other defendants. On October 22, 2013, the parties met
       with the same counsel and executed amendments to their previous agreements.
       Plaintiffs also allege legal malpractice and breach of fiduciary duty against the
       attorney and law firm defendants arising out of the October 2013 agreements.

               On February 19, 2016, defendant Cow Pleasant Dairy filed a counterclaim
       against plaintiffs alleging breach of contract and requesting injunctive relief
       requiring plaintiffs to abide by the 2009 agreement. Plaintiffs did not object to
       entry of a preliminary injunction, and on February 24, 2016, this court entered a
       preliminary injunction and ordered this case to mediation. The mediation order
       required the parties to submit their respective claims to mediation within 90 days
       and to cooperate in the selection of a mediator. The parties failed to submit the

1
  MCR 2.114 was repealed, effective September 1, 2018. However, the language previously
found in MCR 2.114(D) has been retained identically at MCR 1.109(E)(5), and the language
previously found in MCR 2.114(E) has been retained identically at MCR 1.109(E)(6). Because
MCR 2.114 was in effect at all relevant times below, we will refer to MCR 2.114.
2
  Appellant attempted to claim an appeal by right of the earlier order, but this Court dismissed
that portion of the appeal for lack of jurisdiction. Vogel v Desaegher, unpublished order of the
Court of Appeals, entered September 27, 2017.

                                                -2-
       claims to mediation consistent with the court’s order. Defense counsel indicates
       that he provided the name of a mediator to plaintiffs’ counsel but received no
       response.

               Plaintiffs’ counsel alleges that he was under the impression that plaintiffs
       were going to retain new counsel. As a result, plaintiffs’ counsel did not file a
       timely answer to defendant’s counterclaim. Default was entered against plaintiffs
       as to the counterclaim on March 28, 2016. Plaintiffs’ counsel also failed to file
       timely responses to defendants’ requests for admissions. On April 20, 2016,
       defendants filed a motion for entry of default judgment on the counterclaim.
       Defendants also filed a motion for summary disposition of Count IV of plaintiffs’
       complaint, and defendants Romashko and Martineau, Hackett, O’Neil & Klaus
       PLLC filed a motion for summary disposition. Plaintiffs’ counsel did not file
       timely responses to any of these motions.

               On June 9, 2016, one day prior to the scheduled motion hearing, plaintiffs’
       counsel filed untimely motion responses and an untimely answer to the
       counterclaim. On that date, plaintiffs’ counsel also filed an untimely motion to
       set aside default judgment, noticing it for hearing the next day. On June 10, 2016,
       the day of the motion hearing, plaintiffs’ counsel filed an untimely brief in
       support of plaintiffs’ position regarding defendants Romashko and Martineau,
       Hackett, O’Neil & Klaus PLLC’s motion for summary disposition.

               A motion hearing was held on June 10, 2016. Defense counsel objected to
       the untimely responses to the motions and the counterclaim. Defense counsel
       stated that multiple unsuccessful attempts were made to contact plaintiffs’ counsel
       since the last hearing in this matter. However, defense counsel never heard from
       plaintiffs’ counsel until late afternoon on June 9, 2016. Plaintiffs’ counsel
       indicated that he believed plaintiffs were going to retain new counsel, but counsel
       failed to inform defense counsel of this fact and did not file a motion with the
       court to withdraw as counsel.

              At the motion hearing, the parties agreed on the record that the DeSaegher
       defendants should be dismissed. Both the DeSaegher defendants and the DeVos
       defendants request[ed] sanctions pursuant to MCR 2.114.

In addition to granting defendants’ motion for summary disposition, the trial court then
determined that plaintiffs failed “to meaningfully participate in this litigation,” that appellant
himself “completely failed to communicate or meaningfully participate in this action,” and that
the complaint had been signed in violation of MCR 2.114(E). In relevant part, the trial court
ordered appellant to “pay to the DeVos and DeSaegher defendants the costs and reasonable
attorney fees incurred because of the filing of this action.” As noted, the above order is not
challenged in this appeal.

       Defendants submitted a proposed order for appellant to pay $59,790.08, accompanied by
supporting affidavits and documentation from two of defendants’ attorneys. Appellant objected
to the proposed order and requested an evidentiary hearing. However, appellant filed an

                                               -3-
emergency motion to adjourn shortly before the scheduled hearing. The trial court agreed to the
adjournment but ordered the matter to mediation. The parties failed to agree on a mediator, so
the matter was referred to the Resolution Services Center. The mediation did eventually occur,
but the parties were unable to resolve their dispute regarding the fees.

        Meanwhile, appellant filed an extensive brief challenging the fees sought by defendants,
and also filed a motion for relief from judgment. The day before the scheduled hearing on those
motions, the trial court rescheduled, apparently due to its own conflict. The parties then
stipulated to a further adjournment. When the hearing was actually held, appellant was not
present and could not be reached. The transcript is not entirely clear, but defendants either
agreed or offered to stipulate to a reduced hourly billing rate of $223 an hour, which was a
reduction from the amounts actually billed. Attorney Kevin O’Dowd subsequently clarified that
they had offered a variety of hourly-rate reductions for different attorneys, but those offers had
not been accepted. Although the hearing had been intended to address both the motion for relief
from judgment and the reasonableness of the attorney fees, appellant’s absence and his counsel’s
lack of preparedness precluded the reasonableness issue from being addressed. The trial court
rescheduled a hearing on the reasonableness of the attorney fees.

        Shortly before the new date, the trial court entered a “stipulated” order for appellant’s
counsel to withdraw on medical grounds and further rescheduling the hearing. The “stipulation”
did not involve opposing parties, to their irritation. Nevertheless, the hearing was actually held
on the final rescheduling date, and the only witnesses were defense attorneys O’Dowd and Trent
Hilding. As noted, O’Dowd explained that he had previously offered to stipulate to reduced
hourly rates; specifically: $250 an hour for attorney O’Dowd, $223 an hour for attorney Jackson,
$250 an hour for attorney Grashoff, and $223 for attorney Hilding. The trial court accepted
those rates as reasonable, in addition to $220 an hour for attorney Ciullo. Appellant expressly
does not challenge the reasonableness of those rates. The trial court entered a final post-
judgment order awarding $18,658.70 to Hilding, and $67,728.01 to the law firm of Kotz Sanger,
after making some deductions from their billing statements. This appeal followed.

                                 II. STANDARD OF REVIEW

        This Court reviews a trial court’s award of attorney fees and costs for an abuse of
discretion. See Smith v Khouri, 481 Mich. 519, 526, 751 NW2d 472 (2008). “An abuse of
discretion occurs when the trial court’s decision is outside the range of reasonable and principled
outcomes.” Id. The abuse of discretion standard recognizes “that there will be circumstances in
which there will be no single correct outcome; rather, there will be more than one reasonable and
principled outcome.” Maldonado v Ford Motor Co, 476 Mich. 372, 388, 719 NW2d 809 (2006),
quoting People v Babcock, 469 Mich. 247, 269, 666 NW2d 231 (2003). The trial court’s findings
of fact underlying an award of attorney fees are reviewed for clear error, and the trial court’s
determinations of law are reviewed de novo. Hines v Volkswagen of America, Inc, 265 Mich
App 432, 438; 695 NW2d 84 (2005).

                                   III. LEGAL STANDARDS

       The trial court sanctioned appellant under MCR 2.114(E) for a violation of MCR
2.114(D). Specifically, the trial court found the complaint unwarranted and appellant’s

                                                -4-
participation inadequate, and it ordered appellant to “pay to the DeVos and DeSaegher
defendants the costs and reasonable attorney fees incurred because of the filing of this action.”
A violation of MCR 2.114(D) occurs if, in relevant part, an attorney signs a document for an
improper purpose or without a reasonable belief that its contents had legal or factual merit.
Pursuant to MCR 2.114(E), sanctions are mandatory for a violation of MCR 2.114(D). Because
the order finding a violation of MCR 2.114 is not at issue in this appeal, that order is conclusive
on us. Therefore, we take it as established that appellant must be sanctioned. Furthermore, the
trial court’s language of “incurred because of the filing of this action” unambiguously mandates
sanctions for all fees and costs in this matter.

        Therefore, the only issue on appeal is whether the amount of sanctions is reasonable.
“When requested attorney fees are contested, it is incumbent on the trial court to conduct a
hearing to determine what services were actually rendered, and the reasonableness of those
services.” Reed v Reed, 265 Mich. App. 131, 166; 693 NW2d 825 (2005). Ordinarily, the proper
starting point for determining the reasonableness of attorney fees is to determine a reasonable
hourly rate. Smith, 481 Mich. at 530-532. However, as noted, appellant explicitly does not
dispute the reasonableness of the hourly rates. Consequently, the issue of whether the hourly
rates are reasonable is waived. See Roberts v Mecosta Co Gen Hosp, 466 Mich. 57, 69; 642
NW2d 663 (2002); Hodge v Parks, 303 Mich. App. 552, 556-558; 844 NW2d 189 (2014). It is
unnecessary for this Court to address defendants’ attorneys’ hourly rates.

        The next step of the attorney fee analysis is to “determine the reasonable number of hours
expended by each attorney.” Smith, 481 Mich. at 532. The fee applicant bears the burden of
proof and “must submit detailed billing records, which the court must examine and opposing
parties may contest for reasonableness.” Id. Appellant’s argument on appeal pertains largely to
assertions that the multitude of attorneys working for defendants resulted in unnecessarily
duplicative and excessive billing, and that some of the submitted billing records were
insufficiently detailed.

                        IV. REASONABLENESS OF HOURS BILLED

        Appellant’s first argument is that although the trial court did deduct some hours from the
attorneys’ invoices for “block billing” and unnecessary telephone calls, “given the number of
issues raised by [appellant] regarding the unreasonableness of the number of hours billed by
defendants’ attorneys, the amount of time that the trial court deducted was simply not enough.”
In other words, appellant argues that the trial court should have deducted more hours from the
invoices purely because appellant asked it to. We decline to accept that there is necessarily a
correlation between the number of issues raised by a party and the number of those issues a court
is obligated to accept.

        Appellant contends that numerous billing entries by several of the attorneys are
impermissibly vague, which is identical to an argument it presented to the trial court. The trial
court reviewed the billing entries, and it did deduct a number of hours because it could not
determine whether the time expended was reasonable. Appellant has not explained how many
billed hours are covered by the allegedly vague billing entries beyond simply citing to an array of
entries. Because he makes the exact same argument on appeal as he made to the trial court, it is
difficult determine how much of appellant’s requested relief was actually granted by the trial

                                                -5-
court. Furthermore, appellant provides no standard by which to evaluate vagueness, and it is not
immediately clear to us whether entries like “review file materials” or “conference call with co-
counsel” even are improperly vague.3 “It is not enough for an appellant in his brief simply to
announce a position or assert an error and then leave it up to this Court to discover and
rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then
search for authority either to sustain or reject his position. Mitcham v City of Detroit, 355 Mich.
182, 203; 94 NW2d 388 (1959).

        Rather, appellant asserts that “[w]hen faced with vague and redundant billings, federal
courts across the country have reduced the hours billed by 10% to 20%,” citing the federal
decision of Gratz v Bollinger, 353 F Supp 2d 929, 939 (ED Mich, 2005). It is true that the court
in Gratz made such an observation. However, even if Gratz was binding on this Court,4
appellant seemingly believes that examples should be extrapolated not merely to a pattern, but to
a rule. The trial court here reduced the requested number of billed hours by 6%. Gratz
seemingly stands for the proposition that the trial court might not have necessarily abused its
discretion had it deducted even more hours. It does not stand for the proposition that the trial
court was required to do so.

        Although Gratz does suggest some examples of impermissibly vague billing entries,
appellant does not cite to any specific factual determinations regarding his vagueness argument
that are allegedly erroneous. We review the trial court’s factual determinations for clear error,
which is a highly deferential standard. See Hill v City of Warren, 276 Mich. App. 299, 308-309;
740 NW2d 706 (2007). Furthermore, “the burden is on the appellant to persuade the reviewing
court that a mistake has been committed, failing which the appellate court may not overturn the
trial court’s [factual] findings.” Beason v Beason, 435 Mich. 791, 804; 460 NW2d 207 (1990).
We are not persuaded that appellant has shown the trial court to have clearly erred in declining to
deduct more hours on the grounds of vagueness.

        Appellant specifically identifies 4 hours billed by attorney Ciullo and 6.9 hours billed by
attorney O’Dowd that he asserts should have been deducted because the identified billing entries
involved claims pertaining to defendant Romashko, either because Romashko was “not the
represented client” or because the claims somehow did not involve plaintiff’s claims. Although
refreshingly specific, this argument overlooks the fact that the imposition of sanctions was for all
fees and costs incurred as a consequence of the filing of the action. Romashko was a named
defendant in the original complaint. Consequently, we are unable to comprehend how issues
pertaining to Romashko are not “incurred because of the filing of this action.” Appellant
suggests that researching issues of legal malpractice are unrelated to this litigation. However, the
trial court explicitly noted that appellant had crafted the complaint in such a way that it was not

3
  O’Dowd testified that it was not his practice to provide a greater level of detail except in “in the
insurance defense context where some insurance companies will have you itemize each and
every action item, and I know that sometimes is done, but that’s not how we do it.”
4
 Decisions by lower federal courts may be persuasive, but they are not binding precedent on this
Court. Abela v General Motors Corp, 469 Mich. 603, 607; 677 NW2d 325 (2004).

                                                 -6-
immediately clear whether plaintiffs’ malpractice claims would affect all of the defendants, a
conclusion supported by O’Dowd’s testimony. Again, appellant has not shown clear error in the
trial court’s factual findings.

        Appellant next argues that the trial court failed to deduct all instances of “block billing”
and redundant efforts by multiple attorneys. The trial court found that O’Dowd had adequately
explained that “team writing” of documents, in which multiple attorneys work on separate
sections of the same final document, was a common practice to increase efficiency. This finding
is supported by the testimony, and O’Dowd also noted that each lawyer needed to have some
familiarity with certain core materials. Appellant complains of billing instances of conference
calls between attorneys. The trial court specifically accepted O’Dowd’s explanation that such
conference calls were necessary and “real attorney time” for all of the attorneys on the call.
Appellant complains of attorneys expending numerous billable hours across many dates to
prepare documents, but the trial court accepted O’Dowd’s explanation that much redundancy
was caused by appellant’s numerous last-minute requests for adjournments. All of these findings
are supported by the testimony and have not been refuted by appellant. Appellant does not
identify any other specific issues with “block billing.”

        Appellant finally argues that he should not be billed for time defendants’ attorneys spent
driving. However, he simply states that “drive time should not be” compensable, without citing
any authority in support of that proposition. In summary, appellant simply has not established
that the trial court made any mistakes of law or clearly erroneous factual findings.

                 V. ATTORNEY FEES FOR PURSUING ATTORNEY FEES

        As discussed above, the party seeking attorney fees has the burden of proving that they
are reasonable. Smith, 481 Mich. at 528-529. However, as also discussed above, appellant has
the burden of proving on appeal that the trial court committed a mistake of law, an abuse of
discretion, or clear error. See Mitcham, 355 Mich. at 203; Beason, 435 Mich. 804. Appellant
only asserts, without any supporting authority, that the trial court was not legally permitted to
impose attorney fees for any event that occurred after the trial court’s order granting summary
disposition. This failure to cite authority may be considered a violation of MCR 7.212(C)(7). In
any event, appellant once again overlooks the fact that the order imposing sanctions covered all
“costs and reasonable attorney fees incurred because of the filing of this action.” The costs of
seeking the attorney fees are logically a consequence of having filed the complaint.
Furthermore, this Court has explicitly held that “reasonable expenses” imposed under MCR
2.114 may include costs of seeking those sanctions. Maryland Cas Co v Allen, 221 Mich. App.
26, 32; 561 NW2d 103 (1997). Therefore, appellant has not satisfied his burden of showing any
mistake or error committed by the trial court.

                                       VI. CONCLUSION

       The trial court’s award of sanctions is affirmed. Defendants-appellees Bard DeSaegher,

                                                -7-
Elisabeth DeSaegher, Tom DeVos, and Katrien DeVos, being the prevailing parties, may tax
costs. MCR 7.219(A).

                                                      /s/ Thomas C. Cameron
                                                      /s/ Jane M. Beckering
                                                      /s/ Amy Ronayne Krause

                                          -8-