Court Opinion

ID: 3194553
Source: CourtListenerOpinion
Date Created: 2016-04-15 14:04:35.207048+00
Date Added: 2024-06-11T14:36:20.966083
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

RJMC CORPORATION, d/b/a BARNSTORMER,                                UNPUBLISHED
                                                                    April 14, 2016
               Plaintiff/Counter-Defendant-
               Appellee,

v                                                                   No. 326033
                                                                    Livingston Circuit Court
GREEK OAK CHARTER TOWNSHIP,                                         LC No. 11-026087-CK

               Defendant/Counter-Plaintiff-
               Appellant.

Before: BOONSTRA, P.J., and WILDER and METER, JJ.

PER CURIAM.

       Defendant appeals as of right from an order denying sanctions for an allegedly frivolous
lawsuit. We reverse and remand.

        This case has been in our Court in the past. Pertinent facts are set forth in this Court’s
prior opinion. RJMC Corp v Green Oak Twp, unpublished opinion per curiam of the Court of
Appeals, issued June 26, 2014 (Docket Nos. 313020 & 313483). Plaintiff operated a bar,
restaurant, banquet center, and nightclub known as the Barnstormer. Id., slip op at 2. The
Barnstormer had numerous fire and construction code violations. Id. Although defendant’s fire
department had earlier approved, through February 2010, a maximum occupancy of over 2,000
persons for the Barnstormer, defendant’s fire chief sent plaintiff’s manager a letter in January
2011 stating, in part, that the building “poses an immediate and serious life safety danger to
everyone who enters it” and indicating that the upper floors of the Barnstormer would be closed
and the first floor would have a 175-person occupancy limit. Id., slip op at 3. On June 6, 2011,
defendant served plaintiff’s manager with notice of a dangerous building hearing pursuant to
MCL 125.540. Id. Plaintiff, in turn, sued defendant on June 13, 2011, alleging that its actions
were unwarranted and had caused plaintiff to lose business. Id.

       Plaintiff noted that as recently as February 2010, defendant repeatedly approved
       occupancy limits in the Barnstormer for over 2,000 people. Plaintiff alleged that
       the fire department’s decision to limit occupancy to 175 people in January 2011
       forced it to cancel scores of events and caused plaintiff to lose “tens of thousands
       of dollars in business.” Plaintiff alleged that defendant was attempting to
       intentionally shut down the Barnstormer and questioned defendant’s motives for

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       alleging the safety and code violations. Among other forms of relief, plaintiff
       sought an injunction to keep the Barnstormer open at the occupancy levels that
       had been approved from 2002 to February of 2010. Plaintiff also sought a
       preliminary injunction for the same. [Id.]

Defendant countersued, requesting, among other things, that the Barnstormer be closed. Id.

        The dangerous building hearing took place and the hearing officer found that plaintiff had
not complied with a July 28, 2011, stipulated order and thus issued another order. Id., slip op at
4. Plaintiff again failed to comply, and on March 29, 2012, defendant’s board met and
determined that portions of the Barnstormer constituted a dangerous building under state law and
that the building would be closed until dangerous conditions were rectified. Id. At defendant’s
request, the circuit court granted summary disposition to defendant and affirmed the township
board’s March 29, 2012, order. Id., slip op at 4-5. The circuit court “denied defendant’s motion
for sanctions pursuant to MCR 2.114 and MCL 600.2591, as well as defendant’s request for
attorney fees pursuant to MCL 125.541. The circuit court granted defendant $27,078.73 in
costs.” Id.

       This Court affirmed the grant of summary disposition to defendant. Id., slip op at 5-8.
With regard to the issue of sanctions for filing a frivolous complaint, this Court stated:

       [T]he trial court denied defendant’s request for sanctions after it concluded, with
       no analysis, “I would not say, and I have never made a determination, that the
       action was frivolous.” The trial court’s subsequent written order gave no
       indication as to why the motion for sanctions was denied. Although this Court
       employs the deferential clearly erroneous standard to the trial court’s
       determination of whether an action was frivolous, the trial court’s failure to afford
       a clear understanding of the basis for its decision makes it impossible to ascertain
       whether the trial court clearly erred in denying defendant’s motion for sanctions.
       Because the trial court failed to make any findings that would facilitate review,
       we vacate the trial court’s order and remand with instructions for the trial court to
       consider and decide defendant’s motion for sanctions, articulating on the record or
       in a written opinion the basis of its ruling. [Id., slip op at 9.]

        On remand, the original trial judge recused himself and a new judge was assigned. The
newly assigned judge stated at the December 9, 2014, hearing that she did not believe she needed
to go through the voluminous record:

       [H]e [the prior judge] clearly didn’t think it was frivolous. So why would I then
       do an analysis as to whether the complaint was frivolous. We already have a
       judge who was there from day one who doesn’t believe it’s frivolous. And the
       Court of Appeals judge doesn’t think he made a review -- or findings. I have
       thought is there a way -- I know that lawyers can ask the Court of Appeals for I
       think a clarification or a ruling on an issue, but I don’t know that a judge can.
       And I wanted to call up those three and say, okay, now that I’m stuck with it what
       do you want me to do. In looking at . . . this file -- and it took a long time. And
       fortunately it’s the kind of work I did for 22 years. ‘Cause I can’t even imagine

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       having to understand all of this and not have done this work. . . . I have no idea
       why [defense counsel] would think -- let’s assume just for the sake of argument
       it’s frivolous -- that by any stretch of the imagination the amount billed is
       reasonable.

The judge expressed displeasure at the bill presented, characterizing the bill itself as “frivolous.”
She further stated, “If [the Court of Appeals] thought it was frivolous, why didn’t they just say
it’s frivolous[?]” Finally she stated that she “might as well” analyze whether the lawsuit was
frivolous.

        On January 30, 2015, the court issued its opinion from the bench, stating that the
complaint had not been frivolous. The court emphasized that plaintiff agreed to negotiate with
regard to the stipulated order, agreed to a dismissal of part of its complaint, and agreed to try to
comply with safety orders; the court claimed these facts showed that plaintiff was not acting
frivolously. The court again mentioned the submitted bill, concluding that that it was too high
and that much of the billing related to the dangerous building hearing, which was separate from
the lawsuit. The court also mentioned that the township had earlier approved a 2,000-person
occupancy level and that “mixed messages were coming from the Township.” The court stated
that plaintiff “had the right to rely on what the Township had done for years, the past actions, the
occupancy being approved, no citations.” The court also mentioned that defendant may have
needed to file an action regardless in order to shut down the building.

     Defendant contends that sanctions were warranted under MCR 2.114 and MCL 600.2591.
MCR 2.114 states, in part:

               (D) Effect of Signature. The signature of an attorney or party, whether or
       not the party is represented by an attorney, constitutes a certification by the signer
       that

               (1) he or she has read the document;

               (2) to the best of his or her knowledge, information, and belief formed
       after reasonable inquiry, the document is well grounded in fact and is warranted
       by existing law or a good-faith argument for the extension, modification, or
       reversal of existing law; and

              (3) the document is not interposed for any improper purpose, such as to
       harass or to cause unnecessary delay or needless increase in the cost of litigation.

               (E) Sanctions for Violation. If a document is signed in violation of this
       rule, the court, on the motion of a party or on its own initiative, shall impose upon
       the person who signed it, a represented party, or both, an appropriate sanction,
       which may include an order to pay to the other party or parties the amount of the
       reasonable expenses incurred because of the filing of the document, including
       reasonable attorney fees. The court may not assess punitive damages.

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MCL 600.2591 states:

                (1) Upon motion of any party, if a court finds that a civil action or defense
       to a civil action was frivolous, the court that conducts the civil action shall award
       to the prevailing party the costs and fees incurred by that party in connection with
       the civil action by assessing the costs and fees against the nonprevailing party and
       their attorney.

               (2) The amount of costs and fees awarded under this section shall 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.

               (3) As used in this section:

               (a) “Frivolous” means that at least 1 of the following conditions is met:

              (i) The party’s primary purpose in initiating the action or asserting the
       defense was to harass, embarrass, or injure the prevailing party.

               (ii) The party had no reasonable basis to believe that the facts underlying
       that party’s legal position were in fact true.

               (iii) The party’s legal position was devoid of arguable legal merit.

               (b) “Prevailing party” means a party who wins on the entire record.

       We review for clear error a court’s decision with regard to sanctions for a frivolous filing.
Schadewald v Brule, 225 Mich. App. 26, 41; 570 NW2d 788 (1997). A decision is clearly
erroneous if it leaves us with a definite and firm conviction that a mistake occurred. Id. We
have considered the trial court’s reasons for finding plaintiff’s complaint to be non-frivolous and
have found them to be clearly erroneous.

        The court mentioned plaintiff’s negotiations with regard to the stipulated order, plaintiff’s
dismissal of part of its claims, and plaintiff’s agreement to try to comply with safety orders, but
these all occurred after the filing of the complaint. The court also mentioned that defendant
might have needed to file an action regardless in order to demolish the building, but that has no
bearing on whether plaintiff’s complaint was frivolous. Nor did the amount or reasonableness of
the submitted bill bear on whether the complaint was frivolous. Finally, while it is true that the
township had earlier approved a 2,000-person occupancy level, the fact remains that plaintiff
submitted no competent evidence to dispute the violations that came to light and that resulted in
the revised 175-person occupancy limit.

        Plaintiff simply did not provide evidence to dispute the well-documented existence of the
violations. Under the circumstances, it is without question that plaintiff’s claims were frivolous.
Accordingly, sanctions were warranted. We thus remand this case for a hearing regarding the
amount of sanctions to be imposed. After reviewing the transcripts, we find a high degree of

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hostility exhibited by the trial judge and thus order this case remanded to a different judge. See,
generally, People v Stevens, 498 Mich. 162, 176; 869 NW2d 233 (2015).

        Reversed and remanded for proceedings consistent with this opinion. We do not retain
jurisdiction.

                                                            /s/ Mark T. Boonstra
                                                            /s/ Kurtis T. Wilder
                                                            /s/ Patrick M. Meter

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