The Victor Firm, PLLC v. Froling , 499 Mich. 899 ( 2016 )

Order Michigan Supreme Court
Lansing, Michigan
April 15, 2016 Robert P. Young, Jr.,
Chief Justice
152885 & (12) Stephen J. Markman
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
THE VICTOR FIRM, PLLC, Richard H. Bernstein
Plaintiff-Appellant, Joan L. Larsen,
Justices
v SC: 152885
COA: 327504
Macomb CC: 2014-003832-AV
WILLIAM P. FROLING and
MARILYN FROLING,
Defendants-Appellees.
____________________________________/
On order of the Court, the motion for immediate consideration is GRANTED.
The application for leave to appeal the November 12, 2015 order of the Court of Appeals
is considered, and it is DENIED, because we are not persuaded that the question
presented should be reviewed by this Court.
ZAHRA, J. (dissenting).
I would remand this case to the Court of Appeals for consideration as on leave
granted. Plaintiff law firm (Victor) 1 filed this collection action in the district court to
collect $4,560 in attorney fees from its former clients, defendants William and Marilyn
Froling. The Frolings had hired Victor to represent them in a federal lawsuit in the
United States District Court for the Eastern District of Michigan. The litigation involved
the Frolings’ longstanding dispute with the city of Bloomfield Hills (City) regarding
flooding of their property. Victor filed a federal lawsuit on the Frolings’ behalf and
successfully defended against a motion to dismiss the complaint. However, the federal
court ordered the Frolings to file an amended complaint. Upon reviewing the amended
complaint, the attorney representing the City, William Hampton, left a voicemail for
Cindy Victor, requesting concurrence in a motion to strike ¶¶ 5 through 74 of the
amended complaint. When the City filed an answer to the amended complaint, it stated
in answer to ¶¶ 5 through 74 of the complaint as follows:
Inasmuch as purported factual allegations Paragraphs 5 through 74
inclusive set forth historical background prior to claims at issue in this
Complaint, the parties agree no answer is required as to said paragraphs.
Simultaneously herein, [the City] has sought concurrence of [the Frolings]
in a Motion to Strike and in lieu of filing such a Motion, a Stipulation has
been agreed to between the parties.
1
“Victor” here refers to both the Victor Firm, PLLC, and its managing member, Cindy
Rhodes Victor.
2
Victor denied having agreed to the stipulation, but the Frolings believed that
Victor had “secretly stipulated” with Hampton in violation of a “Memorandum of
Understanding” between Victor and the Frolings purporting to impose special conditions
on Victor’s representation. According to the Frolings, Victor accepted these special
conditions and accepted a $20,000 retainer. William Froling states in his affidavit as
follows:
Prior to hiring Ms. Victor to perform legal services, I explained that
she would be hired only on the condition that certain promises were made.
First, Ms. Victor would have to agree that I would be an unusual client who
would closely monitor the litigation and who must be informed of any and
all litigation developments, including all communications with the
opposing side. Second, I required Ms. Victor to consent to allowing me to
decide legal strategy, including stipulations that might ordinarily in any
other case be handled exclusively between attorneys. I explained to Ms.
Victor some bad experiences that I had with other attorneys when I allowed
them to exclusively dictate legal strategy. These prior bad experiences
formed the basis for the requirement that Ms. Victor agree to allow me to
control strategy, within legal and ethical boundaries.
At a hearing before the district court, the Frolings’ attorney acknowledged that the
memorandum had not been signed, but claimed that Victor had nevertheless agreed to its
terms. Victor denied signing the memorandum and noted that the unsigned memorandum
provides that
[t]he following items listed below constitute this memorandum made
between Greenstone Development, LLC (Client) and _________________
(legal firm).
According to Victor, the memorandum was drafted for cases in which the client is a
defendant, not a plaintiff as the Frolings were in the federal action. The memorandum
purports to give the clients broad control over litigation strategy. In particular, ¶ 6a says
that all documents must be signed by the clients. Moreover, ¶ 9 says that adjournments
or delays of any kind requested by opposing counsel cannot be granted without the
clients’ approval. Cindy Victor claims that she informed William Froling on numerous
occasions while she was representing him that she would not do some of the things he
requested. The district court granted summary disposition in favor of Victor and entered
a judgment in its favor totaling $4,560, plus taxable costs of $318 and statutory interest.
The Frolings appealed in the circuit court. The circuit court reversed the district
court, noting that the Frolings had “presented evidence that they retained control over the
federal action consistent with a Memorandum of Understanding, the terms of which
3
[Victor] agreed to abide” The circuit court also noted that the Frolings “submitted
additional evidence that [Victor] had agreed to a stipulation in the federal action, without
first consulting [the Frolings], that the City of Bloomfield Hills did not have to answer ¶¶
5-74 of the amended complaint.” The court concluded that the Frolings “obviously lost
faith and confidence in [Victor],” which caused the Frolings to “incur additional expenses
that they would have otherwise not incurred had [Victor] complied with the
Memorandum of Understanding.” On reconsideration, the circuit court affirmed its
decision, noting that there was “a genuine issue of material fact as to whether the parties
had agreed to the terms of the Memorandum of Understanding.” Victor appealed in the
Court of Appeals, but the panel denied leave to appeal for lack of merit in the grounds
presented. 2
I disagree with the panel’s conclusion that Victor’s claim lacks merit. There is no
question that the parties had a contractual relationship. The district court entered
summary disposition on March 3, 2014, in favor of Victor on the basis of invoices that
the Frolings did not genuinely dispute, and the Frolings did not appeal that decision. At
that point, the only remaining question was raised at the previous hearing held on
February 10, 2014, which the district court began by indicating that it had
seen written correspondence that--from [Victor] to [the Frolings] that states
this Retainer Agreement, okay. Now, what I haven’t seen though is this,
the [Frolings] ha[ve] claimed that this representation was bound by a
special condition of control to be vested in the [Frolings], and that was by
agreement of the parties. Is--is there a writing that I’ve missed somewhere,
is there some sort of writing that--that speaks to this special nature of--of
the Retainer?
At this point counsel for the Frolings stated:
There is. I just actually received this today. It’s entitled
“Memorandum of Understanding Between Client and Attorney,” now this,
like the letter, was not signed by both parties, but apparently this was
reviewed with--by Mr. Froling, witnessed by a couple other family
members or individuals in this company and Ms. Victor, and she agreed to
the terms here, which really give him a great deal of control, or at least
feedback before things were filed, before things were negotiated, things of
that nature. Knowing that it was unusual, [Mr. Froling] wanted to put it in
writing.”
2
Victor Firm PLLC v Froling, unpublished order of the Court of Appeals, entered
November 12, 2015 (Docket No. 327504).
4
The district court, obviously frustrated at what it thought was “again . . . 11th hour stuff,
. . . just as [the Frolings’ counsel’s] retention last time . . . was kind of a last minute deal
to [sic] close to--to the hearing date so that the Court felt compelled to grant [Victor’s]
request for adjournment,” the court again adjourned the matter but assessed $500 in costs
against the Frolings.
At the next and final hearing held on March 3, 2014, counsel for Victor pointed
out the obvious deficiencies in the memorandum, including that it was unsigned, was
merely a sample document, and was simply not relevant to the instant case. In response,
counsel for the Frolings claimed that “there’s multiple witnesses to know whether I--they
printed [it] out from their business office or not” and that Cindy Victor had been asked:
“ ‘Do you understand it, do you agree to this?’ And, she did. And, it’s recorded, and it’s
witnessed.”
The district court allowed continued discovery on the Frolings’ recoupment claim,
but the Frolings presented no additional evidence to support their claim that Victor
agreed to the memorandum. No witnesses to the agreement were identified, and there is
simply no basis to conclude that the memorandum supplemented the retainer agreement,
particularly in regard to terms that Victor stated (and the district court agreed) no attorney
would have agreed upon. In sum, Victor has presented a very strong argument that the
memorandum should simply be disregarded as parol evidence. 3
Further, even assuming that Victor orally assented to the terms of the
memorandum, there is no evidence that Victor breached the agreement in the manner
alleged by the Frolings. That is, there is no record evidence that Victor entered into a
3
“ ‘ “[P]arol evidence of contract negotiations, or of prior or contemporaneous
agreements that contradict or vary the written contract, is not admissible to vary the terms
of a contract which is clear and unambiguous.” ’ ” Hamade v Sunoco, Inc (R&M), 271
Mich App 145, 166 (2006), quoting UAW-GM Human Resource Ctr v KSL Recreation
Corp, 228 Mich App 486, 492 (1998), quoting Schmude Oil Co v Omar Operating Co,
184 Mich App 574, 580 (1990).
5
stipulation with the attorney representing the City (William Hampton) with regard to
striking ¶¶ 5 through-74 of the amended complaint. Although Hampton filed an answer
to the amended complaint in federal court stating that “[the City] has sought concurrence
of [the Frolings] in a Motion to Strike [¶¶ 5 through 74] and in lieu of filing such a
Motion, a Stipulation has been agreed to between the parties,” no stipulation was entered
by court order and there is no evidence of an effective stipulation. 4 The circuit court
initially indicated that summary disposition was not appropriate when a disputed issue of
material fact turns on the credibility of an affiant or a deponent. The circuit court, on
reconsideration, also relied on People v Garland 5 for the proposition that a court has no
reason not to accept representations of counsel, who is bound by a duty of candor. The
circuit court failed to appreciate that even assuming the truth of Hampton’s statement, the
stipulation was nonetheless not effective under the applicable court rules because it was
not signed by the parties. 6 Because I believe that Victor’s claim has merit, I would
remand this case to the Court of Appeals for plenary consideration as on leave granted.
VIVIANO, J., not participating due to a familial relationship with the presiding
circuit court judge in this case.
4
Under the Federal Rules of Civil Procedure, a plaintiff may dismiss an action after the
opposing party has filed an answer without a court order by filing “a stipulation of
dismissal signed by all parties who have appeared.” FR Civ P 41(a)(1)(A)(ii) (emphasis
added). See also MCR 2.507(G) (“An agreement or consent between the parties or their
attorneys respecting the proceedings in an action is not binding unless it was made in
open court, or unless evidence of the agreement is in writing, subscribed by the party
against whom the agreement is offered or by that party’s attorney.”).
5
People v Garland, 286 Mich App 1, 8 (2009), citing People v Dunbar, 463 Mich 606,
617 n 13 (2001).
6
FR Civ P 41(a)(1)(A)(ii).
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
April 15, 2016
a0412
Clerk