Reed v. Breton

• Decision Date: 27 May 2008
• Docket Number: Docket No. 276057.
• Citation: 756 N.W.2d 89,279 Mich. App. 239
• Parties: Lawrence REED, Personal Representative of the Estate of Lance Nathan Reed, Plaintiff-Appellant, v. Frederick BRETON, Personal Representative of the Estate of Curtis Jason Breton, and HB Resort Enterprises, Inc., a/k/a Eagles Nest, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

756 N.W.2d 89

279 Mich. App. 239

Lawrence REED, Personal Representative of the Estate of Lance Nathan Reed, Plaintiff-Appellant, v. Frederick BRETON, Personal Representative of the Estate of Curtis Jason Breton, and HB Resort Enterprises, Inc., a/k/a Eagles Nest, Defendants-Appellees.

Docket No. 276057.

Court of Appeals of Michigan.

Submitted May 6, 2008, at Grand Rapids.

Decided May 27, 2008, at 9:10 a.m.

Dennis Hurst & Associates (by Dennis Hurst), Jackson, for the plaintiff.

Before: JANSEN, P.J., and ZAHRA and GLEICHER, JJ.

JANSEN, P.J.

In this wrongful-death case, plaintiff appeals by delayed leave granted the circuit court's denial of his motion to approve the proposed distribution of attorney fees following a settlement. The circuit court declined to approve the proposed distribution to the extent that it provided for total attorney fees in excess of one-third of plaintiff's net recovery. We affirm.

Plaintiff's son was killed in an automobile accident involving an intoxicated driver. Plaintiff, as personal representative of his son's estate, retained Dennis Hurst & Associates to represent the estate in a wrongful-death lawsuit against the responsible parties. Plaintiff and Hurst entered into a contingency fee agreement whereby plaintiff agreed to pay Hurst "one-third (1/3) of all monies collected." The agreement expressly provided that it did not apply to appeals.

An action was subsequently filed against the intoxicated driver and two dramshop defendants, the Beach Bar and the Eagles Nest. The circuit court granted summary disposition in favor of the Beach Bar and plaintiff appealed that decision. This Court reversed the circuit court's decision and reinstated the claim against the Beach Bar. Reed v. Breton, 264 Mich.App. 363, 364-365, 691 N.W.2d 779 (2004). Upon further appeal, however, our Supreme Court reversed this Court's decision and affirmed the grant of summary disposition in favor of the Beach Bar. Reed v. Breton, 475 Mich. 531, 543-544, 718 N.W.2d 770 (2006).

Because the original contingency-fee agreement did not cover appeals, plaintiff entered into a new fee agreement with the Hurst law firm for representation before this Court. Additionally, plaintiff entered into a separate hourly fee agreement with the law firm of Honigman, Miller, Schwartz & Cohn for representation before the Supreme Court. After all appeals were concluded, plaintiff reached a settlement with the remaining parties for the net amount of $120,065.41.

Plaintiff thereafter filed a motion in the circuit court for entry of a settlement order and approval of the proposed distribution of funds. The motion sought a distribution of total attorney fees in the amount of $82,073.87, consisting of $40,021.80 (one-third of the net settlement) for Hurst's representation in the circuit court, $14,578.29 for Hurst's representation before this Court, and $27,473.78 for the Honigman law firm's representation before the Supreme Court. The circuit court, observing that the total requested attorney fees exceeded one-third of plaintiff's net recovery, refused to approve the proposed distribution.

A circuit court's decision concerning the distribution of settlement proceeds in a wrongful-death matter is reviewed for clear error. McTaggart v. Lindsey, 202 Mich.App. 612, 615-616, 509 N.W.2d 881 (1993). "A finding is clearly erroneous when, although there is evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made." Id. at 616, 509 N.W.2d 881. "[I]nterpretation of a court rule, like a matter of statutory interpretation, is a question of law that this Court reviews de novo." CAM Constr. v. Lake Edgewood Condo. Ass'n, 465 Mich. 549, 553, 640 N.W.2d 256 (2002). The "rules governing the construction of statutes apply with equal force to the interpretation of court rules." Rafferty v. Markovitz, 461 Mich. 265, 270, 602 N.W.2d 367 (1999).

Initially, we note that the Michigan Rules of Professional Conduct address the subject of attorney fees in MRPC 1.5(a), which provides that "[a] lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee," and sets out factors to be considered in determining the reasonableness of a fee. Further, MRPC 1.5(c) refers to MCR 8.121 "for additional requirements applicable to some contingency-fee agreements."

"Under the Michigan wrongful death act, the trial court is required to hold a hearing and approve the distribution of the proceeds of any settlement." In re Guardian Ad Litem Fees, 220 Mich. App. 619, 624, 560 N.W.2d 76 (1996); see also MCL 600.2922(9). MCR 8.121 addresses allowable attorney fees in personal-injury and wrongful-death actions. The rule provides in pertinent part:

(A) Allowable Contingent Fee Agreements. In any claim or action for personal injury or wrongful death based upon the alleged conduct of another, in which an attorney enters into an agreement, expressed or implied, whereby the attorney's compensation is dependent or contingent in whole or in part upon successful prosecution or settlement or upon the amount of recovery, the receipt, retention, or sharing by such attorney, pursuant to agreement or otherwise, of compensation which is equal to or less than the fee stated in subrule (B) is deemed to be fair and reasonable. The receipt, retention, or sharing of compensation which is in excess of such a fee shall be deemed to be the charging of a "clearly excessive fee" in violation of MRPC 1.5(a).

(B) Maximum Fee. The maximum allowable fee for the claims and actions referred to in subrule (A) is one-third of the amount recovered.

(C) Computation.

(1) The amount referred to in subrule (B) shall be computed on the net sum recovered after deducting from the amount recovered all disbursements properly chargeable to the enforcement of the...