In a case successfully argued by Demorest Law Firm, PLLC for the appellant, the Michigan Court of Appeals recently held in HRT Enterprises v. GRS Corporation, unpublished per curium opinion of the Court of Appeals, issued June 13, 2019 (Docket No. 341735), that Michigan trial courts need to interpret contracts according to their plain language and meaning when awarding attorney fees and costs.
In March 2013, plaintiff and defendant GRS entered into an agreement, under which GRS was to perform demolition services at property owned by plaintiff. After GRS failed to perform, plaintiff filed suit. On July 25, 2015, plaintiff and defendants entered into a consent judgment, which provided in part that “if any motion or action is brought to enforce the consent judgment, the non-prevailing party shall pay the reasonable costs and attorney’s fees incurred by the prevailing party.”
After GRS breached the consent judgment, plaintiff filed a motion to show cause as to why GRS should not be held in contempt on June 30, 2017. On September 11, 2017, the court found GRS in contempt.
On November 10, 2017, plaintiff filed a motion for attorney fees on the basis of the consent judgment, seeking $25,918.22 for attorney fees and costs. Based on an erroneous reading of the attorney fee provision in the consent judgment, the trial court awarded only $1,750.00 of the fees incurred by the plaintiff.
Using the “plain and ordinary meaning rule,” the Court of Appeals first addressed the disputed meaning of “any motion or action” as used in the consent judgment. The Court held that while an action includes the process of doing something, plaintiff was not entitled to recover attorney fees for all efforts expended by their counsel to enforce the consent judgment. Rather, the plaintiff was entitled to recover only those fees incurred in bringing a successful action or motion to enforce the consent judgment.
Based on this holding, the Court of Appeals found that the plaintiff brought a successful motion on June 30, 2017 and November 10, 2017. However, despite being entitled to attorney fees, the trial court only awarded attorney fees for the hearing that took place on September 11, 2017. This decision, the Court of Appeals held, fell outside the range of reasonable and principled outcomes because the consent judgment did not limit the award to just the hearing at which the party prevails.
Finally, the Court of Appeals held that the trial court abused its discretion by failing to determine whether the attorney fees requested were reasonable. As the consent judgment stated, the prevailing party was limited to recovering “reasonablecosts and attorney’s fees.” Therefore, it was the trial court’s duty to determine the amount of reasonable costs and attorney fees.
The Court of Appeals reversed and remanded the judgment so that the trial court could reanalyze its award of fees.
A link to the opinion can be found here: https://law.justia.com/cases/michigan/court-of-appeals-unpublished/2019/341735.html
This article was written by Emily Honet, Law Clerk
