Ayotte v. Dep't of Health & Human Servs.

Decision Date22 April 2021
Docket Number350666
Citation337 Mich.App. 29,972 N.W.2d 282
Parties Joseph AYOTTE, Plaintiff-Appellee, v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant-Appellant.
CourtCourt of Appeal of Michigan — District of US

Dana Nessel, Attorney General, Fadwa A. Hammoud, Solicitor General, and Brian K. McLaughlin, Assistant Prosecuting Attorney, for the Department of Health and Human Services.

Allegiant Legal, PLLC, Marshall (by Paula A. Aylward ) for Joseph Ayotte

Before: Murray, C.J., and Markey and Letica, JJ.

Per Curiam.

In this case involving Title IV-E1 foster-care funding, defendant appeals by leave granted2 the circuit court's order awarding plaintiff $29,097.50 in attorney fees and $521 in costs under the Administrative Procedures Act (APA), MCL 24.201 et seq. On appeal, defendant advances three arguments for why the circuit court erred by awarding attorney fees and costs to plaintiff: (1) the circuit court did not have jurisdiction to award attorney fees and costs under the APA when the administrative law judge (ALJ) was not asked to make a determination regarding such fees and costs; (2) the circuit court erred by finding that defendant's arguments were vexatious under MCR 7.112 and MCR 7.216 ; and (3) the circuit court erred to the extent that it sanctioned defendant under the court's inherent authority. We agree and, therefore, reverse.

I. PROCEDURAL HISTORY

The underlying facts are not in dispute and are set forth in Ayotte v. Dep't of Health & Human Servs. , 326 Mich. App. 483, 486-488, 927 N.W.2d 730 (2018) :

Plaintiff, 16 years old at the time, engaged in domestic violence, see MCL 750.81(2), on November 10, 2014, and Arenac Circuit Court Judge Richard Vollbach entered a temporary detention order on November 11, 2014. Plaintiff admitted to assaulting his mother and entered a plea of admission to a delinquency petition on November 12, 2014. Judge Vollbach ordered plaintiff to serve three days in the Roscommon Juvenile Detention Center (RJDC), after which he would be "placed on intensive probation under the supervision of the juvenile officer" in the home of his mother.
However, later in the day on November 12, defendant filed a child-protection petition seeking plaintiff's removal from his mother's home, citing, among other things, her problems with substance abuse. After a plea by the mother, the court assumed jurisdiction over plaintiff on November 13, 2014, and specified a removal-from-the-home date of November 13, 2014. In an amended order of adjudication signed on November 14, 2014, the court ordered that plaintiff be placed with defendant for care and supervision after his "release[ ] from the [RJDC] on Friday, November 14, 2014[.]"
Initially, defendant determined that plaintiff was eligible for Title IV-E foster-care funding for his placement outside his mother's home. See 42 USC 670 et seq. Thereafter, in November 2015, Tiphanie Charbonneau, a Title IV-E specialist with defendant, conducted an annual review of Title IV-E funding, and plaintiff's case was chosen at random for a specific review. Charbonneau concluded that plaintiff, "in fact, was not supposed to be IV-E eligible" because the delinquency order removing plaintiff from his home did not contain language indicating that it was contrary to plaintiff's welfare to be removed from his home.
Plaintiff's guardian ad litem sought an administrative hearing....
* * *
Relying on 42 USC 672(a)(2)(A)(ii) and 45 CFR 1356.21(c), the ALJ found that "while the finding of contrary to the welfare was made in the Order After Preliminary Hearing [in the child-protection matter], the order was not a removal order as the child was already removed as clearly documented in the Order to Apprehend and Detain ...." The ALJ concluded that defendant "acted in accordance with Department policy when it denied continuing Title IV-E funding ... because the Court's Order to Apprehend and Detain did not have the requisite contrary to the welfare findings."
Plaintiff appealed in the circuit court, which concluded that the ALJ committed clear legal error. The circuit court entered an order reversing the ALJ's decision "[f]or the reasons stated on the record ...." The court concluded on the record that the temporary detention order was not the first order of removal but, rather, was an arrest warrant. [Alterations in original.]

Beyond the substantive legal arguments presented in the circuit court, plaintiff requested attorney fees and costs. The circuit court awarded attorney fees and costs under the APA because "the position of the Department is exceedingly unreasonable." The court explained:

I will award attorney fees because I think the position of [defendant] is exceedingly unreasonable. I think they have a duty to appeal these things if they find, if they are audited, they didn't even wait to be audited. I think the finding of ... the Department in the Virginia case[3 ] would have been a good reason to defend this, and I think it is appropriate to award attorney fees. Now the amount of attorney fees could be subject to litigation, I can't just order that you get anything you want. So if there's a further proceeding necessary on that I will hear it if it can't be agreed.

Thereafter, in a motion for attorney fees and costs and various other filings, plaintiff sought an award of $24,308 in attorney fees and $807.85 in costs. Plaintiff argued that the circuit court had the authority to enter such an award under MCL 600.2421d because defendant's position was frivolous, under MCR 7.216(C) because defendant's position was vexatious, and under the trial court's inherent authority to sanction litigants. In response, defendant argued that MCL 24.323(1) of the APA authorized only the presiding officer, in this case the ALJ, not the circuit court, to award attorney fees. Defendant also argued that, even if the APA applied, plaintiff's request for attorney fees should be denied because defendant's position was neither frivolous nor vexatious. Further, defendant did not engage in misconduct before the circuit court to warrant sanctions.

When this Court granted defendant's application for leave to appeal,4 the circuit court stayed all proceedings pending the outcome of the appeal. On appeal, this Court agreed with the circuit court that the November 11, 2014 detention order was not the first order of removal for purposes of Title IV-E funding. Ayotte , 326 Mich. App. at 494-495, 927 N.W.2d 730. This Court concluded that the "statutory scheme and agency interpretations align with the ruling of the trial court, and we do not find defendant's arguments to the contrary persuasive." Id. at 503, 927 N.W.2d 730.

Following this Court's decision in Ayotte , the circuit court returned to the issue of attorney fees and costs. Defendant argued that MCL 24.325 gave the circuit court authority to review the final action of a presiding officer regarding attorney fees and costs imposed under MCL 24.323, but the circuit court did not have the authority to award attorney fees. Defendant asserted that the procedural posture of the case required the ALJ to first make a determination regarding costs and fees. Citing Grass Lake Improvement Bd. v. Dep't Of Environmental Quality , 316 Mich. App. 356, 891 N.W.2d 884 (2016), Widdoes v. Detroit Pub. Sch. , 218 Mich. App. 282, 553 N.W.2d 688 (1996), and Sherman Pharmacy, Inc. v. Dep't of Social Servs. , unpublished per curiam opinion of the Court of Appeals, issued May 16, 1997 (Docket No. 188114), 1997 WL 33347963, defendant argued that, without a decision by the presiding officer regarding attorney fees, the circuit court could not review the matter.

Plaintiff argued that defendant's interpretation of the caselaw was incorrect and asserted that the cases were distinguishable because they involved review of an ALJ's decision on fees and costs. Plaintiff further argued that MCL 24.323 and MCL 600.2421d clearly provided the circuit court with the authority to award fees and costs, and MCR 7.112 and MCR 7.216 allowed the court to award costs and fees because the court was serving as an appellate tribunal. In any event, plaintiff asserted the court had the inherent authority to sanction defendant for "wast[ing] scarce judicial resources arguing something that was exceedingly unreasonable and untenable under the law ...." Defendant responded by arguing that there was a difference between advancing a legal argument that was devoid of merit and having a difference of opinion on the requirements of the law.

Ultimately, the court said that it agreed with defendant's proposition that an unsuccessful argument is not necessarily devoid of merit, "but I don't agree with it as applied to this case because I think it has been frivolous from day one." The court continued: "What happened here is not foster care, has nothing to do with foster care and I think it was frivolous for [defendant] to not acknowledge that throughout these proceedings. And therefore, my ruling [to impose attorney fees and costs] will stand." The court explained that "the position of [defendant] was exceedingly unreasonable and unsupported ... by the law. I find that to be another description for the word frivolous." Therefore, the court concluded that it had the authority to award fees under MCL 600.2421d, MCL 24.323, and MCR 7.112 :

I find that attorney fees should be awarded under the provisions of MCL [600.]2421d, which turns us to MCL 24.2323 [sic].
I also find that I have authority to award attorney fees under the provisions of [MCR] 7.112, which incorporates the Court of Appeals rules, applies them to this kind of an action, and I find that it was frivolous. I don't think that ... the position of [defendant] is founded in the law. I think their position was ridiculous, and ... I think it showed a callous disregard for finding the right answer to this, and that should not be tolerated, and that's what attorney fees exist for. [Emphasis omitted.]

Plaintiff's counsel said that sh...

To continue reading

Request your trial
4 cases
  • Mansharamani v. Aull (In re Chandu Mansharamani Living Tr.)
    • United States
    • Court of Appeal of Michigan — District of US
    • October 20, 2022
    ... ... See Hegadorn v Dep't of ... Human Servs Dir , 503 Mich. 231, 281; 931 N.W.2d 571 ... appellant had a court order for health treatment, and both ... could handle their own ... Ayotte v Dep't of Health &Human Servs , 337 ... Mich.App ... ...
  • In re McGhee
    • United States
    • Court of Appeal of Michigan — District of US
    • July 20, 2023
    ... ... April 11, 2022, petitioner, the Department of Health and ... Human Services (DHHS), filed a permanent ... plain error affecting substantial rights." Ayotte v ... Dept of Health &Human Servs , 337 Mich.App. 29, ... ...
  • Zuidersma v. Zuidersma
    • United States
    • Court of Appeal of Michigan — District of US
    • July 20, 2023
    ... ... misconduct." Id. at 165. In Ayotte v ... Dep't of Health &Human Servs, 337 Mich.App ... ...
  • Davis v. Wayne Cnty. Election Comm'n
    • United States
    • Court of Appeal of Michigan — District of US
    • May 11, 2023
    ...de novo." Ayotte, 337 Mich.App. at 38. Clear error exists if this Court is left with a definite and firm conviction that a mistake was made. Id. A trial court abuses its discretion when decision is outside the range of reasonable and principled outcomes. Id. But "a trial court's findings wi......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT