Court Opinion

ID: 9738408
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:52:25.610724+00
Date Added: 2024-06-11T07:24:05.980022
License: Public Domain

*261M. J. Kelly, J.
(dissenting). This case comes to our Court on stipulated facts. Two claims for damages were consolidated for trial in the Huron County Circuit Court. Both appellant, Durand Milling Co., Inc. and appellee, Farm Bureau Services, Inc., were parties defendant in the consolidated cases. Since this appeal involves only one of the two cases, reference will be in the singular hereafter. Appellant first brought appellee into the lawsuits by third party complaint. Later, after certain discovery proceedings, the plaintiff added appellee as a "direct defendant”.1 The essence of the claim of appellant Durand Milling Co., Inc., against Farm Bureau Services, Inc., was for indemnification alleging that if the feed were defective, it was defective because of faulty ingredients supplied by appellee, Farm Bureau Services, Inc.
Proceedings in these matters were begun in early December of 1972, actual trial started October 25, 1973, but it was not until sometime between December 5th and December 13th, 1973, that Farm Bureau attorneys admitted that the feed was defective by reason of methionine deficiency or the use of feathermeal which it supplied.
It seems to me that the rationale followed in State Farm Mutual Automobile Insurance Co v Allen, 50 Mich App 71; 212 NW2d 821 (1973), can be adhered to and a reasonable clarity afforded the bench and bar in determination of future matters *262involving disputed claims for attorneys’ fees. It seems to me that the principal litigation between G & D Company, plaintiff, and Durand Milling Co., Inc., logically and reasonably qualifies as prior litigation under the exception recognized in State Farm v Allen, supra, at 78:
"Finally, reasonable attorneys’ fees incurred in prior litigation with 'a third party — not with the defendant’ may be recoverable. See 22 Am Jur 2d, Damages, § 166, p 235-236.”
The Am Jur quotation beginning at page 235 is as follows:
"§ 166 — Litigation against third person as result of defendant’s wrongful act.
"It is generally held that where the wrongful act of the defendant has involved the plaintiff in litigation with others or placed him in such relation with others as makes it necessary to incur expense to protect his interest, such costs and expenses, including attorneys’ fees, should be treated as the legal consequences of the original wrongful act and may be recovered as damages. In order to recover attorneys’ fees under this principle, the plaintiff must show: (1) that the plaintiff had become involved in a legal dispute either because of a breach of contract by the defendant or because of defendant’s tortious conduct; (2) that the dispute was with a third party — not with the defendant; and (3) that the plaintiff incurred attorneys’ fees connected with that dispute. If the attorneys’ fees were incurred as a result of a breach of contract between plaintiff and defendant, the defendant will be deemed to have contemplated that his breach might cause plaintiff to seek legal services in his dispute with the third party.
"Whether the fees were incurred as a result of defendant’s breach of contract or defendant’s tort, they must be the natural and necessary consequences of the defendant’s act, since remote, uncertain, and contingent consequences do not afford a basis for a recovery. They *263must also have been reasonably incurred. Hence, the costs of attempting to establish as marketable a title which under known rules of law is not so are not recoverable. The recovery is limited to a reasonable amount, but in some cases the reasonableness of the amount paid may be inferred from the circumstances in evidence, although its reasonableness is not shown by testimony.
"In actions of indemnity, brought where the duty to indemnify is either implied by law or arises under a contract, reasonable attorney fees incurred in resisting the claim indemnified against may be recovered as part of the damages and expenses. According to some of the cases, a person who has by false representations procured the execution of a contract is liable to the party defrauded, in an action of deceit, for the expense of unsuccessful litigation to enforce the contract or otherwise incident to it; but there is also authority to the contrary.” pp 235-237.
In the case of Dassance v Nienhuis, 57 Mich App 422; 225 NW2d 789 (1975), plaintiffs first commenced a specific performance action against defendant Nienhuis and later, through amendments, commenced a suit against other defendants to accomplish various other objectives. The cases were tried together resulting in (1) cancellation of a certain conveyance, (2) specific performance of a certain contract, and (3) assessment of actual damages in the form of attorney fees and legal expenses against another defendant.
After quoting State Farm v Allen, supra, and recognizing that the general rule in Michigan is that attorneys’ fees in the "present” action are not recoverable but that when the plaintiff has incurred attorney fees in defending previous legal proceedings, recovery may be had therefor, the Dassance court said as follows:
"The above-quoted rule is directly applicable to the *264case at bar. We do not feel that the mere fact that these cases were consolidated for trial efficiency should operate to prevent plaintiffs from recovering the attorneys’ fees incurred in the specific performance action against Emmons, et al. Under the rule stated above, if plaintiffs had separated the suits and obtained the specific performance judgment first, and then brought their tortious interference action against Bennett, the attorneys’ fees incurred in the previous action would undoubtedly have been awarded as damages. Plaintiffs shall not be denied the benefit of this rule simply because these cases were consolidated due to the fact that the same facts controlled both cases.
“The action commenced by plaintiffs against Emmons, et al, was prior litigation within the meaning of this exception, not only because that complaint was filed first, but also because the costs incurred by the plaintiffs in commencing and prosecuting that action were directly attributable to the wrongful conduct of defendant Bennett. Accordingly, any costs of litigation, including attorneys’ fees, incurred by plaintiffs in commencing and prosecuting the specific performance action against Emmons, et al, are recoverable as an element of damages in this proceeding. But for the wrongful conduct of Bennett, the plaintiffs would not have been put to any expense in prosecuting the specific performance action because the deed from Nienhuis to Suzanne Emmons would not have been signed.
"The expenses, including attorneys’ fees, incurred by plaintiffs in seeking damages for Bennett’s 'tortious interference’ were incurred in the prosecution of the present not a prior action and are thus not recoverable. (Emphasis in original.)
“Therefore, the provisions of the judgment awarding attorneys’ fees and other litigation expenses are set aside. We remand for a determination by the trial court of the fees and expenses incurred by plaintiffs in prosecuting the action commenced against Emmons, et al. Upon siich determination, the trial court shall apportion the fees and expenses respectively, and allow as damages only those attorneys’ fees and expenses which represent the amounts incurred in the prosecution of the specific performance action.
*265"Affirmed in part and reversed in part. Remanded for the entry of a judgment consistent with this opinion. No costs on this appeal, no party having fully prevailed. This Court does not retain jurisdiction.” 57 Mich App at 437-438.
In the case at bar, I would hold that the initial complaint, that is the action for damages by G & D Company, a Michigan copartnership, against Du-rand Milling Company, defendant, was previous litigation and I would adopt the remedy chosen in Dassance and remand for a determination of the amount of the $10,000 attorney fee incurred in defending the principal action, as opposed, to the amount incurred in prosecuting the indemnity action. The amount, not to exceed $10,000, related to defense of the principal action I would award to appellant.

 The timetable is this: Complaint was filed and summons issued on December 4, 1972 entitled G & D Company, a Michigan copartnership v Durand Milling Co., Inc., a Michigan corporation and Caro Farmers Co-op Elevator Co., a Michigan corporation, defendants. Durand Milling Co. promptly filed a motion to add Farm Bureau Services, Inc., a Michigan corporation as third party defendant. On December 22,. 1972, order was entered granting that motion. On December 29, 1972, pursuant to said order, a third party complaint was filed and summons issued. It was not until June 15, 1973 that the plaintiff filed a motion to allow it to file an amended complaint adding Farm Bureau Services, Inc., as a party defendant.