Court Opinion

ID: 9668316
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:09:22.808446+00
Date Added: 2024-06-11T18:15:44.575011
License: Public Domain

M. Warshawsky, J.
By leave granted, defen*753dants Richard S. Ottewell, Julian M. Levant and James R. Nair appeal from a November 10, 1986, Oakland Circuit Court order affirming sanctions imposed by the 52nd District Court, 4th Division.
Defendants Ottewell and Levant are Oakland County attorneys. Defendant Nair is an accountant employed by defendant Ottewell. Both Nair and Ottewell are officers and directors of defendant Northside Cars, Inc.
The underlying action was commenced by plaintiffs Dale Hicks, Clinton Meyering, and Martin Walker, Jr., in district court in July, 1981, to recover $3,000 in past due rent from Ottewell and Northside Cars, Inc. The action was settled by consent judgment entered February 14, 1984. The judgment was in favor of plaintiffs in the amount of $2,400 plus interest to be paid at the time of judgment or upon the settlement of a related action pending in the Oakland Circuit Court. The parties separately agreed that plaintiffs would not seek to satisfy the consent judgment until the circuit court action was concluded.
In spite of that agreement, on April 30, 1985, plaintiffs filed for garnishments and execution against defendants’ assets. Defendants moved to quash the process and, at a hearing on May 23, 1985, plaintiffs’ attorney, David Foster, admitted that the garnishments and execution were improper and contrary to the understanding of the parties. On June 10, 1985, the district court entered an order quashing the garnishments and execution and provided that defendants could tax costs and attorney fees "for the necessity of representation in these post-judgment proceedings.”
The controversy in this appeal began on July 3, 1985, when several documents were filed in district court bearing the signature of Julian M. Levant, attorney of record for defendants, including a mo*754tion for entry of an order allowing costs and attorney fees under MCR 2.114, sanctions, notice of hearing and proof of service. Defendant Ottewell prepared the papers and signed Levant’s name to them, purportedly with Levant’s permission pursuant to a prior agreement between the attorneys. Under that agreement, Ottewell, a defendant in the action and an attorney, was to prepare pleadings for filing while Levant was listed as attorney of record and made court appearances. The agreement was made to reduce Ottewell’s attorney fees to Levant. The pleadings were prepared and filed without Levant’s actual knowledge or signature. Nair, the accountant, prepared the affidavit in support of the motion for costs and the bill of costs. Nair then presented them to Ottewell’s secretary, Marion Hansen, who notarized the signature on the motion, bill of costs, and proof of service.
Weeks later, Levant learned of the motion, believed it was ill advised and notified the court of its withdrawal. On August 1, 1985, the district court judge, on his own motion, directed the sheriff to serve orders to appear at an evidentiary hearing on plaintiffs’ attorney, David Foster, defendant’s attorney, Levant, attorney Ottewell, and Ottewell’s secretary, Marion Hansen.
On August 29, 1985, the attorneys and witnesses appeared before the district court as directed. Clarence Ledwon, the attorney representing Ottewell and Levant, objected that the trial court had not given his clients notice of the nature of the hearing or sufficient opportunity to prepare. Led-won requested an adjournment and that supporting affidavits be filed. The district court judge denied the motion. The court then took testimony and concluded that sanctions would be imposed.
On February 20, 1986, the district court imposed *755sanctions against Ottewell and Nair under MCR 2.114(E). The court imposed costs and a $1,000 attorney fee to be paid to plaintiffs’ attorney, Foster. The court then imposed fines against the three defendants "for the abuse of the system, as a penalty,” at $1,000 each, payable to the court. In addition, on January 23, 1986, the court entered orders directing the Secretary of State to revoke the notary-public commissions of attorney Ottewell and his secretary, Hansen.
Defendants first argue that the district court erred in awarding $1,000 to Attorney Foster pursuant to MCR 2.114(E). The facts produced at the August 29, 1985, hearing show that Levant had not read the pleadings to which his signature was attached and that Ottewell and Nair signed Levant’s name without indicating that they signed in a representative capacity. MCR 2.114(B) requires that every pleading of a party represented by an attorney be signed by at least one attorney of record. MCR 2.114(D) provides that, by signing the pleading, the signer certifies: (1) he or she has read the pleading; (2) to the best of his or her knowledge, information, and belief formed after reasonable inquiry, the pleading 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 pleading is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.
Where a pleading is signed in violation of MCR 2.114, the court "shall” impose an appropriate sanction, which may include an order to pay the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, including reasonable attorney fees. MCR 2.114(E). MCR 2.113(A) makes the provisions of *756MCR 2.114 applicable to motions and affidavits. Michigan Bank-Midwest v DJ Reynaert, Inc, 165 Mich App 630, 644; 419 NW2d 439 (1988). The rule does not mandate that, before a court may impose sanctions, it must determine whether a party or his attorney had an improper purpose in filing the pleadings. Briarwood v Faber’s Fabrics, Inc, 163 Mich App 784; 415 NW2d 310 (1987). The inclusion of the word "shall” in the subrule clearly encourages the use of the sanction provision. Lloyd v Avadenka, 158 Mich App 623, 628-629; 405 NW2d 141 (1987).
In the present case, the testimony made clear that the court rules had been violated. Thus it was correct for the district judge to order defendants to pay the expenses incurred resulting from the filing of the pleading, including the reasonable attorney fees. The attorney fee awarded to plaintiffs’ attorney Foster is supported by the record. We find no error.
Defendants next contend that punitive damages in the amount of $1,000 payable to the court were improper under MCR 2.114(E). The district court ordered defendants to pay to the court $1,000 "for the abuse of the system, as a penalty.” We agree with defendants. Punitive damages are designed to punish a party for misconduct. In Michigan, punitive damages may not be awarded. Association Research & Development Corp v CNA Financial Corp, 123 Mich App 162, 171; 333 NW2d 206 (1983), lv den 418 Mich 858 (1983). Because MCR 2.114(E) does not expressly provide for punitive damages and because damages may not be awarded as punishment, the district court erred in this case. Accordingly, the district court order is to be modified, striking the $1,000 penalty to the district court.
Defendants next contend that the district court *757lacked jurisdiction to order the Secretary of State to revoke the notary commissions of Ottewell and Hansen. We agree. MCL 55.107; MSA 5.1041 vests the Governor with the power to revoke the commission issued to a notary public upon presentation of satisfactory evidence of official misconduct or incapacity. This power has been delegated to the Secretary of State under the Executive Organization Act, MCL 16.133; MSA 3.29(33). The district court and the circuit court lack jurisdiction to compel a discretionary act by an officer in the executive branch of the government. Const 1963, art 3, § 2; Randall v Meridian Twp Bd, 342 Mich 605, 608; 70 NW2d 728 (1955). We therefore vacate the district court’s order of January 23, 1986, directing the Secretary of State to revoke the notary public commissions of attorney Ottewell and his secretary Hansen.
Lastly, defendants argue that the district court erred by failing to give advance notice of the charges against them and, as a result, the sanctions were imposed without due process of law. We disagree. MCR 2.114 does not provide a procedure to be followed before sanctions can be imposed. However, the fundamental requirement of due process is the opportunity to be heard at a meaningful time in any meaningful manner. Matthews v Eldridge, 424 US 319; 96 S Ct 893; 47 L Ed 2d 18 (1976). With regard to notice, due process requires notice " 'reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’ ” Trussell v Decker, 147 Mich App 312, 323; 382 NW2d 778 (1985), citing Mullane v Central Hanover Bank & Trust Co, 339 US 306, 314; 70 S Ct 652; 94 L Ed 865 (1950).
In this case, defendants were given ample oppor*758tunity at the hearing to question witnesses and present their arguments and were, therefore, not prejudiced by a lack of notice. Moreover, the court rule allows the trial court "on its own initiative” to impose an appropriate sanction for violation of the rule. MCR 2.114(E). The court made it clear that the hearing was not in the nature of a contempt proceeding, but merely a fact-finding proceeding to determine if there was a violation of the court rules. Thus, defendants’ argument that the same procedural due process requirements that apply to contempt proceedings apply here as well is without merit. We find no error.
Affirmed in part, reversed in part, and remanded for entry of an order consistent with this opinion. We do not retain jurisdiction.
Maher, J., concurred.