46th Circuit Trial Court v. Crawford County, No. 246823 (MI 6/18/2004)
| Decision Date | 18 June 2004 |
| Docket Number | No. 251390,No. 248593.,No. 246823,246823,248593.,251390 |
| Parties | 46TH CIRCUIT TRIAL COURT, Plaintiff/Counterdefendant/Third Party Defendant-Appellee, v. CRAWFORD COUNTY and CRAWFORD COUNTY BOARD OF COMMISSIONERS, Defendants/Counterplaintiffs/Third Party Plaintiffs-Appellants, and KALKASKA COUNTY, Intervening Third Party Plaintiff/Counterdefendant-Appellant, and OTSEGO COUNTY, Third Party Defendant. |
| Court | Michigan Supreme Court |
Appeal from Crawford Circuit Court, LC No. 02-005951-CZ.
Howard L. Shifman, P.C. (by Howard L. Shifman), and Kienbaum Opperwall Hardy & Pelton, P.L.C. (by Thomas G. Kienbaum and Noel D. Massie) (Patricia J. Boyle, of counsel), for the 46th Circuit Trial Court. Birmingham, Birmingham, Birmingham
Cohl, Stoker, Toskey & McGlinchey, P.C. (by Bonnie G. Toskey), for Crawford County, Crawford County Board of Commissioners, and Kalkaska County. Lansing
Johnson, Rosati, LaBarge, Aseltyne & Field, P.C. (by Christopher J. Johnson), for Otsego County. Farmington Hills
Amicus Curiae:
Cummings, McClorey, Davis & Acho, P.L.C. (by Jana M. Berger), for Michigan Association of Counties. Livonia.
Before: Sawyer, P.J., and Bandstra and Smolenski, JJ.
In Docket No. 246823, defendants Kalkaska County, Crawford County, and the Crawford County Board of Commissioners appeal by leave granted the lower court's February 4, 2003, order declaring that the three counties involved in this case are responsible for the legal expenses of the plaintiff in this matter, the 46th Circuit Trial Court. In Docket Nos. 248593 and 251390, defendants Kalkaska County, Crawford County, and the Crawford County Board of Commissioners appeal by leave granted the lower court's May 21 and September 22, 2003, orders awarding plaintiff attorney fees and costs in the amount of $ 350,386 and $316,007, respectively. The appeals were consolidated. We reverse and remand.
This case arises out of a funding dispute between the 46th Circuit Trial Court and the three counties—Otsego, Kalkaska, and Crawford—served by that court.1 The Trial Court is a court constituted by the circuit court, district courts, and probate courts in the three counties, "unified" pursuant to a Supreme Court order. See Administrative Order No. 1996-9. The funding disputes giving rise to this appeal largely arise out of the budgeting changes made as part of the unification process.
During the fall of 2000, as part of their responsibilities as the local funding units for the Trial Court, each of the counties approved funding for implementation of a proposed plan to increase retiree health and income benefits for employees of the Trial Court.2 However, approximately one year after the January 2001 implementation of the plan, Kalkaska and Crawford counties formally rescinded their approval of the plan. Although Kalkaska County nonetheless continued to provide its share of the funding for the plan through 2002, Crawford County failed to completely fulfill its funding obligations under the plan and also refused to make the necessary appropriations to fully fund its share of the Trial Court's proposed budget for fiscal years 2001, 2002, and 2003.
In October 2002, the Trial Court filed suit against Crawford County and its board of commissioners under Administrative Order No. 1998-5.3 In count I of the complaint, the Trial Court alleged that Crawford County had breached an express agreement it had entered with the Trial Court regarding implementation and funding for the new retiree health care and pension benefits plan. Count II of the complaint alleged in the alternative that, even if no such agreement was expressly made, there was an implied contract and Crawford County was estopped from refusing to fund the plan, having already received the benefit of various concessions made by Trial Court employees in exchange for increased benefits under the plan. Counts III and IV of the complaint more generally alleged that Crawford County and its board of commissioners failed to provide sufficient funds to enable the Trial Court to operate during fiscal years 2001, 2002, and 2003.
In addition to answering these charges, Crawford County and the Crawford County Board of Commissioners filed a countercomplaint for declaratory relief, alleging that the Trial Court exceeded its authority in implementing the retiree health care and pension benefits plan. Crawford County further alleged that the Trial Court had fraudulently misrepresented the cost of the plan to the local funding units, and that such misrepresentation vitiated any agreement regarding the plan that might otherwise be enforceable. Kalkaska County was permitted to intervene in the suit by filing a third-party complaint containing allegations similar to those filed by the Crawford County defendants in their countersuit against the Trial Court. The Trial Court thereafter filed a countercomplaint against Kalkaska County, which mirrored the claims and allegations made by the Trial Court in its complaint against the Crawford County defendants.
In addition to the countersuit and third-party complaint filed against the Trial Court, Crawford and Kalkaska counties joined in filing a separate suit against Otsego County, in which it was alleged that, as the control unit for the local funding units, Otsego County violated the Uniform Budgeting and Accounting Act, MCL 141.421 et seq., by participating in the implementation of the new retiree health care and pension benefits plan.4 Following consolidation of the various actions and assignment of a visiting judge to preside over the matter, the parties began litigating the issue of responsibility for the Trial Court's attorney fees and other expenses in relation to this matter.
On February 4, 2003, the lower court granted the Trial Court's motion seeking payment of its attorney fees by the counties, but reserved the determination of the amount of those fees until the Trial Court had submitted detailed billing statements.5 In concluding that the counties were responsible for payment of the Trial Court's attorney fees, the lower court relied, in part, on MCL 49.73, which requires that a county board of commissioners "employ an attorney to represent elected county officers" named "as a defendant" in certain civil matters. In finding the statute applicable here, the lower court reasoned that, because Crawford and Kalkaska counties had filed a countersuit and a third-party complaint against the Trial Court, the Trial Court was a "defendant" within the meaning of MCL 49.73. Alternatively, the lower court found that the Trial Court had inherent power to require the counties to pay attorney fees expended to assure an adequate judicial budget.
Pursuant to this order, the Trial Court submitted billing statements for all attorney fees and expenses incurred by it in relation to this matter before February 1, 2003. Following review of the statements, the lower court concluded that counsel for the Trial Court was entitled to be paid the full amount of the statements, "and not at a rate dictated by [the] . . . counties." Accordingly, in an order dated April 29, 2003, but not entered until May 21, 2003, the lower court approved payment of $350,386 in attorney fees and costs, based on rates of between $230 and $300 an hour. It is not disputed that these rates are well over the rate of $130 an hour received by counsel for the various counties. The order further provided that the three counties were each responsible for one-third of the attorney fees and expenses.
Defendants Crawford and Kalkaska counties and the Crawford County Board of Commissioners sought leave to appeal from the lower court's February 4, 2003, and May 21, 2003, orders, arguing that the lower court erred in finding the counties responsible for the entirety of the Trial Court's legal fees, that the fees charged by counsel for the Trial Court were unreasonable and unnecessary, and that paying such fees would put the counties in the position of having to suspend or severely cut back on essential public services. On May 23, 2003, this Court granted defendants' application for leave to appeal, as well as a motion for a stay of the lower court's May 21, 2003, order, which stay was to be continued until resolution of the appeal or further order of this Court.
Notwithstanding the stay issued by this Court,6 the lower court entered, on September 22, 2003, a second order awarding the Trial Court an additional $316,007 for attorney fees and expenses incurred after those covered by the May 21, 2003, order. The lower court again ordered each of the three counties to pay one-third of the amount, and Crawford and Kalkaska counties and the Crawford County Board of Commissioners again sought leave to appeal, which this Court granted after consolidation of these matters. On appeal, defendants Crawford and Kalkaska counties and the Crawford County Board of Commissioners challenge the lower court's award of attorney fees and costs on a number of grounds, each of which is addressed below.7
Defendants first argue on appeal that the lower court erred in concluding that MCL 49.73 applies under the facts of this case. Specifically, defendants assert that the statutory obligation of a county board of commissioners to employ counsel to represent its county officials in certain civil matters is limited to actions wherein the official is a named defendant, and does not extend to situations where, as here, judicial proceedings are initiated by a county official. We agree.
Although this Court typically reviews a trial court's decision regarding attorney fees for an abuse of discretion, Schoensee v Bennett, 228 Mich App 305, 314; 577 NW2d 915 (1998), the question presented here is one of statutory interpretation that we review de novo, Solution Source, Inc v LPR Assoc Ltd Partnership, 252...
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