Lavene v. Winnebago Industries

• Decision Date: 03 August 2005
• Docket Number: Docket No. 251933.
• Citation: 702 N.W.2d 652,266 Mich. App. 470
• Parties: Clare Lee LAVENE and Leanna M. Lavene, Plaintiffs-Appellees, v. Volkswagen of America, Inc. and Bill Cook Imported Cars, Inc., Defendants-Appellants, and WINNEBAGO INDUSTRIES, General Trailer Mfg., Inc., and General Trailer RV Center, Defendants.
• Court: Court of Appeal of Michigan — District of US

702 N.W.2d 652

266 Mich. App. 470

Clare Lee LAVENE and Leanna M. Lavene, Plaintiffs-Appellees, v. Volkswagen of America, Inc. and Bill Cook Imported Cars, Inc., Defendants-Appellants, and WINNEBAGO INDUSTRIES, General Trailer Mfg., Inc., and General Trailer RV Center, Defendants.

Docket No. 251933.

Court of Appeals of Michigan.

Submitted May 10, 2005, at Detroit.

Decided May 24, 2005, at 9:05 a.m.

Released for Publication August 3, 2005.

Liblang & Associates, P.C. (by Dani K. Liblang), Birmingham, for the LaVenes.

Bowman and Brooke LLP (by Andrew S. Pride and Jenny L. Zavadil) Birmingham, for Volkswagen of America, Inc.; and Bill Cook Imported Cars, Inc.

Before: NEFF, P.J., and OWENS and FORT HOOD, JJ.

PER CURIAM.

Defendants Volkswagen of America, Inc.; and Bill Cook Imported Cars, Inc., appeal as of right an order of the trial court that awarded plaintiffs attorney fees and costs of $41,648.47 following the parties' settlement of plaintiffs' claim for breach of warranty.¹ We affirm, but remand to the trial court for a determination of an award of plaintiffs' appellate attorney fees.

I. Facts

Plaintiffs filed a breach of warranty and consumer protection action against defendants after the 2001 Winnebago Rialta motor home they purchased in September 2001 required repeated repairs and left plaintiffs stranded out-of-state for more than a month. Plaintiffs alleged several claims, including liability under the Magnuson-Moss Warranty Act (MMWA), 15 USC 2301 et seq., and the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq.

On the eve of trial, the parties reached a settlement in which defendants agreed to repurchase the motor home and pay plaintiffs attorney fees and costs to which they were entitled by statute or court rule. The settlement provided that if the parties could not reach agreement on the amount of fees and costs, the trial court would decide the matter. When they could not resolve the issue of fees and costs, the parties submitted their dispute to the trial court for decision. Following an evidentiary hearing, the court awarded plaintiffs attorney fees of $37,016.52, deposition fees and costs, including out-of-state deposition costs of $3,256.95, and witness fees totaling $1,375.

II. Issue

At issue is whether the costs² awarded by the trial court were legally recoverable. Defendants do not dispute that, in their settlement with plaintiffs, they agreed to pay legally recoverable costs to be determined by the trial court. They argue, however, that the costs awarded by the trial court are not recoverable under Michigan law. Plaintiffs claim that the costs at issue are authorized by the MCPA and the MMWA, whose specific cost-shifting provisions take precedence over the applicable Revised Judicature Act (RJA) provisions for the taxation of costs.

The question then is whether the cost-shifting provision of the MMWA, 15 USC 2310(d)(2), authorized the award of costs regardless of whether they are taxable under the RJA. We hold that the trial court properly awarded costs pursuant to the MMWA.

III. Standard of Review

This Court reviews an award of costs for an abuse of discretion. Kernen v. Homestead Dev. Co., 252 Mich.App. 689, 691, 653 N.W.2d 634 (2002). However, the power to tax costs is wholly statutory, and "costs are not recoverable where there is no statutory authority for awarding them." Portelli v. I R Constr. Products Co., Inc., 218 Mich.App. 591, 605, 554 N.W.2d 591 (1996). Accordingly, this issue entails a question of statutory interpretation, which is reviewed de novo on appeal. Morrison v. East Lansing, 255 Mich.App. 505, 522, 660 N.W.2d 395 (2003).

IV. Taxation of Costs

As an initial matter, defendants argue generally that plaintiffs were not entitled to tax costs because they were not a "prevailing party" under MCR 2.625³ given that there was no judgment against any defendant, but only a mutually agreed settlement. Contrary to defendants' suggestion, MCR 2.625(B), entitled "Rules for Determining Prevailing Party," is not limited to entry of a judgment. Rather, MCR 2.625(B)(2) provides that if a single cause of action is alleged, "the party who prevails on the entire record is deemed the prevailing party." Moreover, MCR 2.625(H) recognizes that the issue of taxation of costs may be reserved in a settlement: "Unless otherwise specified a settlement is deemed to include the payment of any costs that might have been taxable." (Emphasis added.)

In any event, we find defendants' argument a moot point, if not disingenuous. In this case, the trial court entered a judgment in accordance with the parties' settlement, in which the parties agreed that defendants would pay "whatever costs [plaintiffs] may be entitled to." Counsel for defendants subsequently acknowledged on the record that defendants had consented to "[r]easonable attorney fees and recoverable costs." For these reasons, we find no merit in defendants' claim that plaintiffs are not entitled to costs because they are not a prevailing party.⁴

Defendants further argue that, even if plaintiffs are a "prevailing party," various costs awarded by the trial court are nonrecoverable costs under MCL 600.2405: deposition transcripts for David Courtad, Gus Pique, and Andrew Haag ($727.45) and related deposition fees ($4,822)⁵; expert witness fees ($563.52); copying, postage and delivery costs ($643.99); and Westlaw research ($30.96). Accordingly, defendant contends that the trial court was without statutory authority to award costs of $6,787.92.⁶

Plaintiffs respond that the trial court properly awarded the costs pursuant to the MMWA and the MCPA. We agree with plaintiffs that the authority relied on by defendants pertains to ordinary civil matters and is inapplicable in this case because the costs and fees were awarded pursuant to remedial fee-shifting statutes.

A

In general, a prevailing party is entitled to recover certain costs of litigation pursuant to MCR 2.625. Items and prescribed fees that may generally be recovered as taxable costs and fees are set forth in the Revised Judicature Act (RJA), MCL 600.2401 et seq. and 600.2501 et seq. J C Bldg. Corp. II v. Parkhurst Homes, Inc., 217 Mich.App. 421, 429, 552 N.W.2d 466 (1996)

. Pursuant to MCL 600.2401, "[w]hen costs are allowed in any action or proceeding in ... the circuit court ... the items and amount thereof shall be governed by this chapter except as otherwise provided in this act." (Emphasis added.) MCL 600.2405 more specifically provides:

The following items may be taxed and awarded as costs unless otherwise directed:

(1) Any of the fees of officers, witnesses, or other persons mentioned in this chapter or in chapter 25, unless a contrary intention is stated.

(2) Matters specifically made taxable elsewhere in the statutes or rules.

(3) The legal fees for any newspaper publication required by law.

(4) The reasonable expense of printing any required brief and appendix in the supreme court, including any brief on motion for leave to appeal.

(5) The reasonable costs of any bond required by law, including any stay of proceeding or appeal bond.

(6) Any attorney fees authorized by statute or by court rule. [Emphasis added.]

Contrary to defendants' arguments, the general provisions of MCR 2.625 and the RJA do not necessarily apply in cases in which fees or costs are governed by more specific statutory provisions. See, e.g., Peters v. Gunnell, Inc., 253 Mich.App. 211, 226, 655 N.W.2d 582 (2002); Cope v. City of St. Clair, 28 Mich.App. 380, 184 N.W.2d 464 (1970).⁷ Various statutes incorporate specific provisions concerning the recovery of attorney fees or costs, which statutes may provide exceptions to the general rule. See, e.g., the Uniform Condemnation Procedures Act, MCL 213.66; the "lemon law," MCL 257.1407; and the Motor Vehicle Service and Repair Act, MCL 257.1336. These cost-or fee-shifting provisions are essential to legal redress in public interest or consumer cases in which the monetary value of the case is often meager. Jordan v. Transnational Motors, Inc., 212 Mich.App. 94, 98, 537 N.W.2d 471 (1995).⁸ As we explained in Jordan:

In consumer protection as this, the monetary value of the case is typically low. If courts focus only on the dollar value and the result of the case when awarding attorney fees, the remedial purposes of the statutes in question will be thwarted. Simply put, if attorney fee awards in these cases do not provide a reasonable return, it will be economically impossible for attorneys to represent their clients. Thus, practically speaking, the door to the courtroom will be closed to all but those with either potentially substantial damages, or those with sufficient economic resources to afford the litigation expenses involved. Such a situation would indeed be ironic: it is precisely those with ordinary consumer complaints and those who cannot afford their attorney fees for whom these remedial acts are intended. [Id. at 98-99, 537 N.W.2d 471.]

The cost-shifting provision of the MCPA, MCL 445.911(2), provides:

Except in a class action, a person who suffers loss as a result of a violation of this act may bring an action to recover actual damages or $250.00, whichever is greater, together with reasonable attorneys' fees.

Although the MCPA does not address costs, under the plain language of MCL 445.911, plaintiffs are entitled to recover reasonable attorney fees. Smolen v. Dahlmann Apartments, Ltd., 186 Mich.App. 292, 295, 463 N.W.2d 261 (1990). The underlying purpose of this provision "is to afford an indigent client the opportunity to seek protection and obtain a judgment where otherwise precluded because of monetary constraints." Id. at 297, 463 N.W.2d 261. Accordingly, the recovery of attorney fees under the MCPA applies to services rendered in appellate proceedings. Id. at 297-298, 463 N.W.2d 261.

Further, the cost-shifting provision of the MMWA, 15 USC 2310(d)(2), provides:

If a consumer finally prevails in any action brought

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