Pioneer State Mut. Ins. Co. v. Michalek

• Decision Date: 03 October 2019
• Docket Number: No. 344577,No. 344567,344567
• Citation: 946 N.W.2d 812,330 Mich.App. 138
• Parties: PIONEER STATE MUTUAL INSURANCE COMPANY, Plaintiff-Appellee, v. Stephen A. MICHALEK and Barbara M. Michalek, Defendants-Appellants, and Justin B. Agresti, Intervening Plaintiff. Pioneer State Mutual Insurance Company, Plaintiff-Appellee, v. Stephen A. Michalek and Barbara M. Michalek, Defendants, and Justin B. Agresti, Intervening Plaintiff-Appellant.
• Court: Court of Appeal of Michigan — District of US

330 Mich.App. 138

946 N.W.2d 812

PIONEER STATE MUTUAL INSURANCE COMPANY, Plaintiff-Appellee,

v.Stephen A. MICHALEK and Barbara M. Michalek, Defendants-Appellants,andJustin B. Agresti, Intervening Plaintiff.

Pioneer State Mutual Insurance Company, Plaintiff-Appellee,

v.Stephen A. Michalek and Barbara M. Michalek, Defendants,andJustin B. Agresti, Intervening Plaintiff-Appellant.

No. 344567

No. 344577

Court of Appeals of Michigan.

Submitted September 4, 2019, at Lansing.

Decided October 3, 2019, 9:05 a.m.

Schenk, Boncher & Rypma (by Frederick J. Boncher and Tyler E. Osburn ) for Stephen and Barbara Michalek.

RizzoDay, PC (by Devin R. Day ) for Pioneer State Mutual Insurance Company.

LAWFM (by Frank B. Melchiore ) for Justin Agresti.

Before: Murray, C.J., and Meter and Fort Hood, JJ.

Murray, C.J.

These consolidated appeals are from a final order awarding attorney fees to plaintiff, Pioneer State Mutual Insurance Company, in a case where the trial court found after a bench trial that insurance fraud was committed by defendants, Stephen A. Michalek and Barbara M. Michalek. Intervening plaintiff, Justin B. Agresti, appeals the same order by right. We affirm.

I. BACKGROUND

In November 2011, Agresti was injured while riding his bicycle at defendants' (his grandparents) lakefront property in Dowagiac. At the time of the injury, the property was insured pursuant to a homeowner's policy issued by Pioneer. Agresti sued defendants in a separate premises-liability action. Defendants signed a statement in the Agresti litigation in which they stated that members of defendants' family dug a hole on the property on July 4, 2011, to fix a faulty septic pump and then failed to refill the hole upon departing the property. Defendants asserted that the hole remained unfilled in November 2011, when Agresti rode his bicycle into it and injured himself. Pioneer retained counsel for defendants in the Agresti litigation, and counsel advanced a challenge to defendant's duty of care (or lack thereof) by asserting the defense that the hole was an open and obvious danger.

After the trial court denied defendants' motion for summary disposition in the Agresti litigation, Pioneer commenced this action to void coverage under a fraud provision in the homeowner's policy. Pioneer alleged that defendants misrepresented that they dug a hole on their property and left the hole open until November 2011. Following a bench trial, the trial court issued an opinion on March 15, 2017, finding that defendants had made fraudulent representations to Pioneer that voided the policy. Appellants moved for reconsideration of the trial court's decision, but before addressing that motion, the trial court entered a judgment in favor of Pioneer on July 17, 2017. Before the trial court entered judgment, Pioneer filed a motion for attorney fees and costs on June 9, 2017. On August 15, 2017, the trial court denied their motion for reconsideration of the March opinion.

On September 5, 2017, defendants filed a claim of appeal in this Court, appealing the August 15, 2017 trial court order denying their motion for reconsideration. The following day, Agresti also filed a claim of appeal from the trial court's August 15, 2017 order. This Court dismissed defendants' appeal for lack of jurisdiction because the August 15, 2017 order was not a final order under MCR 7.202(6)(a).¹ In doing so, this Court noted that the July 17, 2017 judgment "appears to be a final order." This Court dismissed Agresti's claim of appeal for the same reason.²

Two days after this Court dismissed the appeals for lack of jurisdiction, appellants again moved for a new trial or relief from judgment. Then, before the trial court addressed and decided the motions, defendants filed in this Court an application for delayed appeal of the trial court's July 17, 2017 judgment. On the same day, the trial court held a motion hearing to address appellants' second motions for a new trial or relief from judgment, but it did not rule on the motions.

On May 18, 2018, this Court denied defendants' application for delayed appeal of the July 17, 2017 judgment "for lack of merit on the grounds presented."³ Thereafter, the trial court entered an order granting Pioneer's motion for attorney fees and costs. The trial court held that, given its previous finding that defendants committed fraud, attorney fees were warranted under MCR 2.114(F). Defendants and Agresti separately appealed the order by right, and this Court consolidated the appeals.⁴

II. CHALLENGES TO THE JULY 17, 2017 JUDGMENT

Defendants advance several issues in this appeal that are unrelated to the award of attorney fees and that they previously asserted in their application for delayed appeal of the July 17, 2017 judgment. This Court denied that application for lack of merit in the grounds presented. Pioneer argues that consideration of these issues is barred by the law of the case doctrine. Pioneer is correct, but there is an additional jurisdictional ground that precludes us from considering these challenges to the July 17, 2017 judgment.

We first address the jurisdictional issue.⁵ In their claims of appeal, appellants identified the order that they are appealing by right as the June 19, 2018 order regarding attorney fees and costs. In their docketing statements, they noted that the order was a postjudgment order. Under MCR 7.202(6)(a)(iv ), a postjudgment award of attorney fees is a final order from which a claim of appeal can be taken. However, MCR 7.203(A)(1) limits an appeal under MCR 7.202(6)(a)(iv ) "to the portion of the order with respect to which there is an appeal of right," meaning that these appeals only pertain to the award of attorney fees. Consequently, any issue outside those challenging the award of attorney fees goes beyond our jurisdiction over these appeals.

Second, even if we had jurisdiction, Pioneer is correct: the law of the case doctrine would preclude our consideration of the issues arising out of the July 17, 2017 judgment. "The law of the case doctrine holds that a ruling by an appellate court on a particular issue binds the appellate court and all lower tribunals with respect to that issue." Ashker v. Ford Motor Co. , 245 Mich. App. 9, 13, 627 N.W.2d 1 (2001). "Thus, a question of law decided by an appellate court will not be decided differently on remand or in a subsequent appeal in the same case." Id. "The primary purpose of the doctrine is to maintain consistency and avoid reconsideration of matters once decided during the course of a single continuing lawsuit." Id. The doctrine applies "only to issues actually decided, either implicitly or explicitly, in the prior appeal." Grievance Administration v. Lopatin , 462 Mich. 235, 260, 612 N.W.2d 120 (2000).

In exercising the discretion afforded it when reviewing an application for leave to appeal, Great Lakes Realty Corp. v. Peters , 336 Mich. 325, 328, 57 N.W.2d 901 (1953), the Court has numerous options: it can grant the application and hear the case on the merits, deny the application, enter peremptory relief, or take any other action deemed appropriate. See MCR 7.205(E)(2). If the assigned panel determines that an application (late or otherwise) from a final order should be denied, the panel often—as was done here—indicates that it is for "lack of merit on the grounds presented." In contrast to interlocutory applications for leave to appeal from nonfinal orders, where the Court generally does not express an opinion on the merits, applications for delayed appeal address whether to allow an appeal (filed after the 21-day period has elapsed) on a merits challenge to a final order. Hence, when we deny an application from a noninterlocutory order for lack of merit in the grounds presented, the order means what it says—it is on the merits of the case.⁶

Consistent with this conclusion, this Court has previously applied the law of the case doctrine to orders denying applications for "lack of merit in the grounds presented." See People v. Douglas , 122 Mich. App. 526, 529-530, 332 N.W.2d 521 (1983), People v. Hayden , 125 Mich. App. 650, 662-663, 337 N.W.2d 258 (1983), and People v. Wiley , 112 Mich. App. 344, 346, 315 N.W.2d 540 (1981).

The first four issues raised in defendants' and Agresti's appeal briefs were raised in defendants' prior application for delayed appeal from the July 17, 2017 judgment. Additionally, appellants have not shown a change in the material facts or an intervening change in the relevant law. Because this Court previously denied defendants' application for delayed appeal "for lack of merit on the grounds presented," even if we had jurisdiction to address the merits challenge to the July 17, 2017 judgment, we would not address the merits of those issues under the law of the case doctrine.⁷ See id. ; see also Locricchio v. Evening News Ass'n , 438 Mich. 84, 109, n. 13, 476 N.W.2d 112 (1991).

III. ATTORNEY FEES

As to the merits of the final order they did appeal of right, appellants argue that the trial court erred in awarding attorney fees and in the amount of the fees awarded. This Court reviews a trial court's award of attorney fees and costs for an abuse of discretion. Smith v. Khouri , 481 Mich. 519, 526, 751 N.W.2d 472 (2008) (opinion by TAYLOR , C.J.). "An abuse of discretion occurs when the trial court's decision is outside the range of reasonable and principled outcomes." Id. This Court reviews for clear error a trial court's factual findings underlying its fee award, including a finding that a claim or a defense was frivolous. See Ladd v. Motor City Plastics Co. , 303 Mich. App. 83, 103, 842 N.W.2d 388 (2013). "A decision is clearly erroneous when, although there may be evidence to support it, we are left with a definite and firm conviction that a mistake has been made." Guerrero v. Smith , 280 Mich. App. 647, 677, 761 N.W.2d 723 (2008).

A. FRIVOLOUS DEFENSE

Without holding a hearing, but after briefing by the parties, the trial court entered an order granting...