In Mika Powers v. Kelly Ray Brown, unpublished per curiam opinion of the Court of Appeals, issued June 18, 2019 (Docket No. 343287), the Michigan Court of Appeals held that when determining reasonable attorney fees, trial courts need to apply the Smith/Pirguframework, and consider all relevant factors.
After repossessing and reselling a truck that the Defendant had missed a payment on, Plaintiff filed suit against Defendant to recover the remaining loan balance. Defendant counterclaimed that Plaintiff had wrongfully converted the truck. At a bench trial, the trial court found that Plaintiff had wrongfully converted the truck and awarded a judgment in favor of Defendant for $10,122, plus attorney fees and costs.
Defendant subsequently filed a motion seeking attorney fees of $30,347.50, which the trial court found to be too high. Instead, the court held that because defense counsel had billed on a contingent basis, the more appropriate award was one-third of the maximum amount that could be recovered. Using this calculation, the trial court entered an order awarding reasonable attorney fees to Defendant in the amount of $17,469.54, which the Defendant appealed.
The Court of Appeals held that while the trial court determined reasonable attorney fees pursuant to MCL 600.2919a, the analysis set forth in Smith v. Khouri, 481 Mich. 519; 751 N.W.2d 472 (2008), and later refined in Pirgu v. United Sers. Auto Ass’n, 499 Mich. 269; 884 N.W.2d 257 (2016) also needed to be applied. According to Smith, an analysis of reasonable attorney fees begins with the trial court determining the fee customarily charged in the locality for similar legal services. Next, that number should be multiplied by the reasonable number of hours expected. And lastly, the trial court should consider a number of factors to determine whether an adjustment is appropriate.
According to Pirgu, some of the factors to consider include the experience or reputation of the lawyer performing the service, the difficulty of the case, the amount in question, and whether the fee is fixed or contingent. These factors are not exclusive, and the trial court may consider any additional relevant factors. However, no matter what factors are considered, the trial court should briefly discuss its view on each factor in order to aid appellate review. If this method is not followed, the trial court is deemed to have abused its discretion and a remand is appropriate.
Turning to the trial court’s analysis, the Court of Appeals held that the Smith/Pirguframework had not been applied. While the trial court determined what it believed to be reasonable attorney fees, it did not provide a comprehensive review of all of the factors, but instead focused on the amount in question, the results obtained, and the fact that the fees at issue were contingency fees. Because the required method was not followed, the Court of Appeals held that the trial court abused its discretion in its award of attorney fees and remanded the case, instructing the trial court to reconsider its attorney fee award according to Pirgu.
A link to the opinion can be found here: https://law.justia.com/cases/michigan/court-of-appeals-published/2019/343287.html
This article was written by Emily Honet, Law Clerk
