O'NEILL v. Home IV Care, Inc.

Decision Date01 May 2002
Docket NumberDocket No. 226428,Docket No. 228162.
Citation249 Mich. App. 606,643 N.W.2d 600
PartiesMary O'NEILL, Plaintiff-Appellant, v. HOME IV CARE, INC., Extended Nursing Care, Inc., and Jeffrey S. Bismack, Defendant-Appellees.
CourtCourt of Appeal of Michigan — District of US

Chapman & Associates (by Ronald W. Chapman and Brian J. Richtarcik), Bloomfield Hills, for the plaintiff.

Miller, Canfield, Paddock and Stone, P.L.C. (by Megan P. Norris and Philip B. Phillips), Detroit, for the defendants.

Before HOOD, P.J., and MURPHY and MARKEY, JJ.

MURPHY, J.

Plaintiff Mary O'Neill appeals as of right from an order awarding her attorney fees, costs, and interest pursuant to M.C.L. § 15.364, § 4 of the Whistleblowers' Protection Act (WPA), M.C.L. § 15.361 et seq. Plaintiff disputes the amount of the award. Plaintiff also appeals as of right from a subsequent order awarding defendants attorney fees and costs as mediation sanctions pursuant to MCR 2.403(O). We reverse and remand for a proper determination of plaintiff's attorney fees and costs pursuant to M.C.L. § 15.364, and we vacate, without prejudice, the award of mediation sanctions to defendants.

Plaintiff was terminated from her job with defendants after she alerted the United States and Michigan Departments of Labor to defendants' wage practices. Plaintiff filed a complaint, and subsequent amended complaints, alleging that she was terminated in violation of the WPA. Plaintiff also alleged retaliatory discharge against public policy and age discrimination in violation of the Michigan civil rights act (CRA), M.C.L. § 37.2101 et seq. The lower court record indicates that both the retaliatory discharge and age discrimination claims were summarily dismissed.

The case was submitted to mediation that resulted in a mediation evaluation of $30,000 in favor of plaintiff.1 Defendants accepted, and plaintiff rejected, the mediation evaluation. A four-day jury trial was held on plaintiff's WPA claim, and the jury found in her favor, awarding plaintiff $20,245 in economic damages.

Plaintiff submitted a proposed judgment under the seven-day rule, MCR 2.602(B)(3), in which plaintiff sought entry of a judgment incorporating the $20,245 jury verdict and awarding her $48,869 in attorney fees and costs pursuant to M.C.L. § 15.364, plus $2,922 in prejudgment interest. Defendants timely objected to the proposed judgment, arguing that the prejudgment interest plaintiff was entitled to amounted to only $1,484. In regards to plaintiff's attorney fees, defendants argued that plaintiff failed to submit documentation supporting the award, that the request was not reasonable in light of the small jury verdict, and that plaintiff was not the prevailing party under MCR 2.625 because two of the causes of action had been dismissed. Further, defendants argued that plaintiff was not entitled to any fees incurred after rejection of mediation and that to award plaintiff the requested attorney fees would defeat the purpose of mediation sanctions that defendants were rightfully entitled to receive.

Subsequently, plaintiff filed a motion to settle the judgment and for an award of attorney fees and costs incurred in litigating the WPA claim.2 Plaintiff argued in the motion that the mediation evaluation should not be considered in determining her attorney fees and costs, and that the amounts requested were assessable costs to be added to the jury verdict under MCR 2.403(O)(3).

Although a judgment on the jury verdict had yet to be entered, defendants filed a motion for taxation of costs and attorney fees, requesting $1,097 in costs and $40,526 in attorney fees on the basis that they were entitled to mediation sanctions under MCR 2.403(O). A hearing on plaintiff's motion to settle the judgment and for an award of attorney fees and costs was held, and the trial court decided, over plaintiff's objection, to also address defendants' motion for taxation of costs and attorney fees based on the mediation evaluation. The trial court rejected plaintiff's argument that it should not consider the mediation evaluation and sanctions until a judgment was entered on plaintiff's motion to settle the judgment, including the calculation of costs and attorney fees to be awarded pursuant to § 4 of the WPA, M.C.L. § 15.364.

The following colloquy occurred at the hearing regarding plaintiff's attorney fees and costs:

Defense counsel. Now, if the Court is inclined to award costs and attorney fees, that [it] not award costs and attorney fees at a point—at a level where [plaintiff is] able to escape the mediation rules, which are clear. If [plaintiff is] given attorney fees, be it a maximum of one-third of whatever the verdict was or whatever number the Court determines is reasonable[,][b]e it [$]6, $7,000, it should not be a number that permits [plaintiff] to be 10 percent better than the jury verdict in this case, which allows [plaintiff] to double dip and escape the mediation rules. Even if the verdict was a dollar, [plaintiff] can still do the same thing and I don't think that is appropriate and defeats the entire purpose of the mediation sanction rules.

The Court. Well, I agree with Defendant. What I am going to do is this. We're going to award to the Plaintiff[,] attorney fees in the amount of $7,000.

From this exchange, and others during the hearing,3 it is clear the trial court based its decision to award only $7,000 in attorney fees on its concern that too large an award would allow plaintiff to avoid mediation sanctions under MCR 2.403(O). The trial court also awarded plaintiff costs of $2,063, plus $1,499 in interest. Adding those amounts to the jury award of $20,245, the trial court calculated the adjusted verdict to be $30,807.4 After this adjustment, and taking into consideration the $30,000 mediation evaluation, the trial court found that the verdict was not more favorable to plaintiff because $30,807 was less than ten percent above the case evaluation.5 Therefore, the trial court ordered that defendants were entitled to mediation sanctions. Following a subsequent evidentiary hearing concerning the reasonable amount of attorney fees and costs incurred by defendants after the mediation rejection, the trial court awarded defendants attorney fees and costs in the amount of $48,766 pursuant to MCR 2.403(O).

On appeal, plaintiff contends that the trial court erred in determining the amount of attorney fees and costs that she was entitled to under the WPA, and that the court erred in determining the amount of attorney fees and costs defendants were entitled to under MCR 2.403(O).6 Specifically, plaintiff argues that the trial court abused its discretion by failing to award plaintiff all her reasonable attorney fees pursuant to M.C.L. § 15.364, erred in wrongly considering mediation sanctions as a factor in determining the reasonableness of attorney fees requested pursuant to M.C.L. § 15.364, and erred in considering defendants' motion for mediation sanctions before entry of the final judgment. We agree with plaintiff that the trial court abused its discretion by taking into consideration the mediation evaluation and sanctions when determining plaintiff's award of attorney fees and costs under M.C.L. § 15.364. In Phinney v. Perlmutter, 222 Mich.App. 513, 560, 564 N.W.2d 532 (1997), this Court stated that the decision to award attorney fees under the WPA is reviewed on appeal for an abuse of discretion. A trial court abuses its discretion by rendering a decision when an unbiased person would conclude that there was no justification or excuse for the decision after consideration of the facts relied on by the trial court. Miller v. Hensley, 244 Mich.App. 528, 529, 624 N.W.2d 582 (2001).

MCL 15.364 provides, in relevant part, that "[a] court may also award the complainant all or a portion of the costs of litigation, including reasonable attorney fees and witness fees, if the court determines that the award is appropriate." Section 802 of the CRA, M.C.L. § 37.2802, contains language nearly identical to that found in M.C.L. § 15.364.7 The Legislature's use of nearly identical language is meaningful, and we believe it appropriate to consider case law addressing M.C.L. § 37.2802 when analyzing the issues regarding M.C.L. § 15.364 because there is a lack of relevant case law concerning the WPA. See Anzaldua v. Band, 457 Mich. 530, 546-548, 578 N.W.2d 306 (1998).

In Grow v. W A Thomas Co., 236 Mich.App. 696, 714-715, 601 N.W.2d 426 (1999), this Court noted the following factors for consideration when determining attorney fees and costs under the CRA:

Where attorney fees are to be awarded, the court must determine the reasonable amount of fees according to various factors, including (1) the skill, time, and labor involved, (2) the likelihood, if apparent to the client, that the acceptance of the employment will preclude other employment by the lawyer, (3) the fee customarily charged in that locality for similar services, (4) the amount in question and the results achieved, (5) the expense incurred, (6) the time limitations imposed by the client or the circumstances, (7) the nature and length of the professional relationship with the client, (8) the professional standing and experience of the attorney, and (9) whether the fee is fixed or contingent. Wood v. DAIIE, 413 Mich. 573, 588, 321 N.W.2d 653 (1982); Head v. Phillips Camper Sales & Rental, Inc., 234 Mich.App. 94, 114, 593 N.W.2d 595 (1999).

The Grow panel noted that the existence of a contingent fee agreement did not preclude an award of attorney fees under the CRA and that such an arrangement is only one of the factors to be considered in determining a reasonable attorney fee. Grow, supra at 715, 601 N.W.2d 426.

Here, the trial court's focus was on the mediation evaluation and sanctions and not on the relevant factors noted in Grow.8 Moreover, we are of the opinion that the trial court's...

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