Grimmett v. Dace

Decision Date28 July 2014
Docket NumberCase No. 13–cv–13704.
PartiesMichael C. GRIMMETT, Plaintiff, v. Donald DACE et al., Defendants.
CourtU.S. District Court — Eastern District of Michigan

Donald L. Payton, Kaufman, Payton, Farmington Hills, MI, for Plaintiff.

Matthew J. Mason, UAW–GM Legal Services Plan, Detroit, MI, for Defendants.

OPINION AND ORDER (1) DENYING PLAINTIFF'S MOTION TO REMAND AND AWARD ATTORNEY FEES AND COSTS (ECF # 7) AND (2) GRANTING DEFENDANTS' MOTION TO DISMISS AND FOR SUMMARY JUDGMENT (ECF # 8)

MATTHEW F. LEITMAN, District Judge.

INTRODUCTION

After his condominium flooded in 2009, Plaintiff Michael C. Grimmett (Grimmett) sought legal assistance from the UAW–GM Legal Services Plan (the “Plan”). The Plan is an employee benefit program provided to certain union members pursuant to a collective bargaining agreement. The Plan's attorneys ultimately represented Grimmett in a lawsuit against his condominium association. Grimmett now alleges that the Plan and three of its employees (collectively, the Defendants) committed legal malpractice and/or breached their fiduciary duties in handling his case. Grimmett filed suit against Defendants on August 29, 2013. Defendants removed the action to this Court. Two motions are now pending: (1) Grimmett has moved to remand the action to state court and for an award of attorney fees, and (2) Defendants have moved for dismissal or summary judgment. For the reasons explained below, the Court DENIES Plaintiff's Motion and GRANTS Defendants' Motion.

FACTUAL BACKGROUND
A. The Parties
1. Grimmett

Since approximately 1976, Grimmett has worked at General Motors (“GM”). (SeeTr. Transcript Part 1, ECF # 9–4 at 170, Pg. ID 686.) His current job title is Senior Design Engineer. (See Richelle Hall First Aff., ECF # 8–9 at ¶ 8, Pg. ID 228.) Grimmett is a member of the United Automobile, Aerospace and Agricultural Workers of America (the “UAW”). (See Compl., ECF # 1–2 at ¶ 1, Pg. ID 23.) As a result of his membership in the UAW, Grimmett is a participant in the Plan. (See id. See also Legal Services Plan, ECF # 8–14.)

2. The Plan

The Plan “is a collectively bargained group program” that “was established by an agreement between [GM] and the UAW in order to provide high quality legal counsel to hourly-rated employees represented by the UAW in GM plants across the United States.” (Summary Plan Description, ECF # 8–15 at 3, Pg. ID 267.) The Plan provides certain legal services to covered GM employees at no cost to participants. (Id. at 9, Pg. ID 273.) The Plan is governed by the Employees' Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. (Notice of Removal, ECF # 1 at ¶ 5.)

3. Defendants Richelle C. Hall (“Hall”) and Carol Birnkrant (“Birnkrant”)

Hall is the Managing Attorney of the Plan's office in Pontiac, Michigan. (Hall First Aff. at ¶ 1.) Birnkrant is an attorney employed by the Plan. (See Birnkrant First Aff., ECF # 8–2 at ¶ 1.)

4. Defendant Donald Dace (Dace)

Dace is the Plan's Assistant Director for the Michigan Region. (Dace Aff. at ¶¶ 1, 5.) As an Assistant Director, Dace “is responsible for administering the Plan [in Michigan] under the supervision of [the Plan's Director].” (Id. at ¶ 4 (quoting Legal Services Plan § 2.01, Pg. ID 243).) Dace's job includes reviewing internal appeals brought by Plan participants and recommending decisions to the Director. (Id. at ¶ 5.) Dace has “authority over Plan assets, such as the Plan attorneys assigned to [his] supervision and the authority to authorize Plan expenditures.” (Id. )

B. Grimmett's Lawsuit Against His Condominium Association

In November 2009, Grimmett entered his apartment in the Hidden Hills Condominium Association (“Hidden Hills”) in Rochester Hills, Michigan, and found his basement flooded “with water and raw sewage.” (See Tr. Transcript Part 1 at 173–85, Pg. ID 689–701; Compl. at ¶ 11.) Grimmett asserts that the flooding caused more than $14,000 in property damage. (Compl. at ¶ 11.)

Grimmett sought legal representation from the Plan, and “Birnkrant and Hall ... were appointed” as his attorneys. (Compl. at ¶ 14.) Birnkrant—on behalf of Grimmet—filed suit against Hidden Hills the 52/3 District Court in Rochester Hills seeking damages for the property loss. (Id. )1 Grimmett's complaint alleged that Hidden Hills was responsible for the sewer backup. Grimmett asserted claims for breach of contract, negligence, and breach of the Michigan Consumer Protection Act. (Id. ) Hidden Hills counterclaimed, alleging that Grimmett had breached a confidential settlement agreement arising from litigation related to an earlier sewer backup in Grimmett's apartment. (Pla.'s Br. in Support of Pla.'s Mot., ECF # 7 at 14, Pg. ID 95.)

The case was tried to a jury. Both parties offered expert witness testimony on the issue of the cause of the backup. (See, e.g., Tr. Transcript Part 1 at 38 (testimony of Jeffrey Dixon) and Tr. Transcript Part 2, ECF # 9–5 at 14, Pg. ID 826 (testimony of Donald Pratt).) On July 25, 2011, the jury found that Hidden Hills was not liable on any of Grimmett's claims. (Jury Verdict Form, ECF # 8–7 at 1–4, Pg. ID 208–211.) The jury also found that Grimmett was not liable on Hidden Hills' breach of contract counterclaim. (Id. at 4, Pg. ID 211.) Accordingly, the jury did not award damages to either party. (Id. )

C. Hidden Hills' Motion for Costs

Following trial, Hidden Hills filed a motion seeking $4,560 in costs—including $4,370 in expert witness fees—incurred defending against Grimmett's suit. (Compl. at ¶ 23.) Birnkrant and Hall did not timely file a response to the motion for costs on Grimmett's behalf. (Compl. at ¶ 22; Def.'s Br. in Support of Def.'s Mot., ECF # 8 at 25, Pg. ID 171.) The court granted Hidden Hills' unopposed motion for costs and ordered Grimmett to pay the full $4,560 that Hidden Hills had requested. (Judgment on Bill of Costs, ECF # 8–22 at 1, Pg. ID 352.)

D. Grimmett's Internal Appeal and Waiver

The Plan has an internal, administrative appeals process for a participant who is dissatisfied with the Plan's handling of his case. Specifically, [a]ny Participant who, for any reason, is dissatisfied with any action or inaction of a Staff Attorney ... has a right to complain in writing to the appropriate Assistant Director,” who may then recommend approval or revision of the Staff Attorney's decision. (Legal Services Plan, § 3.03.) In Grimmett's case, Dace was the Assistant Director to whom he could direct an appeal. (Dace Aff. at ¶¶ 5, 20.)

Consistent with the Plan's internal appeal process, in September 2011, Grimmett appealed Birnkrant's and Hall's handling of his case to Dace. (Appeal Letters, ECF # 8–23 and # 8–24.) Grimmett asserted that Birnkrant and Hall had committed legal malpractice and demanded that the Plan (1) pay the cost award to Hidden Hills and (2) pay him $9,500.2 (Id. )

In response to Grimmett's appeal, Dace called Grimmett and offered that the Plan would “pay one half of the court costs awarded to Hidden Hills” in exchange for a written release of all claims against the Plan related to its representation of Grimmett in his case against Hidden Hills. (Dace Aff. at ¶ 22.) Grimmett alleges that after he spoke with Dace he sent a letter to Hall stating that he felt that he was being “coerce[d] ... to sign the waiver in order for the judgment [of costs against him] to get paid.” (Grimmett Letter to Hall, ECF # 7–5 at 2, Pg. ID 125.)3

At Grimmett's request, Grimmett met with Dace and other representatives of the Plan on October 10, 2011. (Dace Aff. at ¶ 23.) At the meeting, Grimmett presented a written document with arguments in support of his appeal and his claim of malpractice. (See Appeal Meeting Submission, ECF # 8–25; Dace Aff. at ¶ 24.) After the meeting, Dace concluded that although [t]here was no evidence that [Birnkrant or Hall] had committed any acts of professional negligence ... there was a possibility the amount of the award [of costs against Grimmett] could have been reduced.” (Dace Aff. at ¶ 25.) On October 10, 2011, Dace informed Grimmett that “the Plan had decided to propose paying the $4,560 cost award and obtaining a release of claims from [Grimmett] as a resolution of his appeal.” (Id. at 26.)

Thereafter, Grimmett signed a waiver and release (the “Release”), which he submitted to the Plan. (See Release, ECF # 8–27 and ECF # 8–28.)4 The Release provided that Grimmett,

in consideration of the payment by [the Plan] of the cost award of $4,560 ... waive[d] any claims and fully and forever release[d] attorneys Carol Birnkrant and Richelle Hall and [the Plan], and any other of the Plan's employees, agents, supervisors and administrators, from any and all claims and causes of action ... regarding representation provided [in Grimmett's action against Hidden Hills] ... including any claim of negligence or professional negligence, or failure to provide services.
(Release, ECF # 8–27 at 1, Pg. ID 366; ECF # 8–28 at 1, Pg. ID 367.) As provided in the Release, on October 21, 2011, the Plan sent a payment of $4,560 to Hidden Hills' attorneys in satisfaction of the cost award. (Dace Aff. at ¶ 30.) Grimmett has not repaid the $4,560 to the Plan. (See Dace Aff. at ¶ 31.) Nor does the record contain any evidence that Grimmett ever offered to repay the Plan.
PROCEDURAL HISTORY
A. Grimmett's Complaint in This Action

On August 29, 2013, Grimmett filed the instant action in Oakland County Circuit Court. Grimmett's Complaint contains two causes of action: (1) legal malpractice against Birnkrant, Hall, and the Plan; and (2) breach of fiduciary duty against all Defendants. (Compl. at ¶¶ 26–40.)

In the first cause of action, Grimmett alleges that Birnkrant and Hall committed legal malpractice by:

• failing to file a discrimination claim against Hidden Hills, as Grimmett had requested (Compl. at ¶ 28a);
• failing to file a defense to Hidden Hills' counterclaim (id. at ¶ 28b);
• using Jeffrey Dixon (“Dixon”) as an expert witness at trial, despite Grimmett's request that Dixon not be used as
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