Rivertown Development Group v. West Congress Street Partners ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
RIVERTOWN DEVELOPMENT GROUP, LLC UNPUBLISHED
and RIVERTOWN HOLDINGS, LLC, September 14, 2017
Plaintiffs/Counter-Defendants,
and
THOMAS J. RYAN,
Intervening Plaintiff,
v No. 330728
Wayne Circuit Court
WEST CONGRESS STREET PARTNERS, LLC, LC No. 14-005496-CZ
Defendant/Counter-Plaintiff-
Appellee,
and
LAWRENCE R. WALKER, PC,
Petitioner-Appellant,
and
TODD PERKINS,1
Petitioner.
Before: O’BRIEN, P.J., and JANSEN and MURRAY, JJ.
PER CURIAM.
1
Although Todd Perkins is a listed party, he had no part in the dispute in the trial court and has
taken no part in this appeal.
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Petitioner, Lawrence R. Walker, PC,2 appeals as of right the trial court’s order enforcing
an attorney’s charging lien in the amount of $18,889.62. We affirm.
On May 7, 2014, petitioner was retained as counsel for defendant, West Congress Street
Partners, LLC, in what turned out to be a litigious landlord-tenant dispute with plaintiffs,
Rivertown Development Group, LLC and Rivertown Holdings, LLC. In November 2014,
petitioner’s relationship with defendant deteriorated to the point that petitioner filed a motion to
withdraw as defendant’s counsel. However, the trial court denied the motion and petitioner
continued representing defendant. Nonetheless, on January 29, 2015, a new attorney filed an
appearance on behalf of defendant. Eventually, on March 11, 2015, the trial court entered an
order permitting petitioner to withdraw as counsel for defendant. The order further provided:
IT IS FURTHER ORDERED that [defendant], its attorneys, agents and
assigns hereby acknowledge that [petitioner] claims an attorneys’ charging lien
for $35,094.14 as the amount of the outstanding balance of attorney fees and costs
due and owing to [petitioner] for legal services rendered. The accuracy of said
fees and costs may be later determined by the Court by separate motion.
On April 14, 2015, after petitioner withdrew as counsel, defendant’s underlying lawsuit with
plaintiffs was settled after both parties agreed to a case evaluation in the amount of $125,000 in
favor of defendant.
On May 15, 2015, following resolution of the underlying matter, petitioner filed a motion
to enforce the charging lien of $35,094.14 on the settlement proceeds. Defendant objected to the
charging lien and requested that the trial court schedule an evidentiary hearing. At the
conclusion of the two day evidentiary hearing, the trial court determined that petitioner was
entitled to $18,889.62 on the charging lien. To reach this figure, the trial court first considered
petitioner’s billing statement, the parties’ testimonies, and its knowledge of billing in general,
and concluded that petitioner reasonably worked 167 hours on defendant’s case. The trial court
multiplied this number by $300 per hour, the agreed upon rate by the parties, and determined that
petitioner was entitled to $50,100 in attorney fees (167 hours x $300/hour). Based on
petitioner’s billing statement, the trial court found that petitioner was entitled to an additional
$2,833.62 for out-of-pocket expenses. It then deducted $34,044 for payments already made by
defendant, resulting in $18,889.62 as the final amount owed on the charging lien. This appeal
followed.
Petitioner raises two challenges to the trial court’s decision to reduce the amount owed on
petitioner’s charging lien. Specifically, petitioner argues (1) that the trial court made a
mathematical error when it found that defendant had made prior payments totaling $34,044.14,
and (2) that the trial court abused its discretion by reducing the number of billable hours from
217 hours to 167 hours. We disagree. Although a client may discharge its attorney at any time,
2
“Petitioner” will be used to refer to both attorney Lawrence Walker and his law firm, Lawrence
R. Walker, PC.
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or an attorney may withdraw for cause, the attorney remains entitled to payment for the services
rendered before the separation. Reynolds v Polen, 222 Mich App 20, 27; 564 NW3d 467 (1997).
Once discharged, the attorney may obtain a charging lien, which “is an equitable right to have
the fees and costs due for services secured out of the judgment or recovery in a particular suit.”
George v Sandor M Gelman, PC, 201 Mich App 474, 476; 506 NW2d 583 (1993). This Court
reviews a trial court’s award of attorney fees and costs secured on a charging lien for an abuse of
discretion. Souden v Souden, 303 Mich App 406, 414; 844 NW2d 151 (2013). “An abuse of
discretion occurs when the decision results in an outcome falling outside the range of principled
outcomes.” Keinz v Keinz, 290 Mich App 137, 141; 799 NW2d 576 (2010).
During the evidentiary hearing, the trial court admitted petitioner’s billing statement for
services generated between May 12, 2014, and January 14, 2015. The first section of the billing
statement listed the tasks petitioner performed, the hours worked on those tasks, and the resulting
charge to defendant. At the end of the section, the totals showed that petitioner worked 217
hours and was owed $65,100 “[f]or professional services rendered.” The statement then had a
section labeled “Additional Charges,” which apparently represented petitioner’s expenses. The
total at the end of that section showed $2,833.62. The last section of the billing statement was
labeled “Account receivable transactions. This is the section that petitioner argues that the trial
court incorrectly relied upon in making its calculation of attorney fees. The transactions in this
section were organized in column formatting with the date, payment, and invoices listed in
chronological order. At the bottom of the columns was the phrase “Total payments and
adjustments,” and it listed the amount as “$34,044.14.” Petitioner contends that if the credit
entries in this section are added up, the actual amount paid was $30,155, and the amount due was
$34,044.14, and that the trial court abused its discretion by assuming that defendant paid
$34,044.14.
However, petitioner fails to acknowledge that not only did the trial court assume that
defendant paid this amount, but all of the parties at the evidentiary hearing agreed. Of note,
when the trial court stated that it understood petitioner’s argument to be that defendant had paid
$34,000 on its bill but owed additional sums, petitioner responded that was “[c]orrect.” This
assumption that defendant paid roughly $34,000 was repeated throughout the evidentiary
hearing, but petitioner never corrected the flawed assumption. “[E]rror requiring reversal may
only be predicated on the trial court’s actions and not upon alleged error to which the aggrieved
party contributed by plan or negligence.” Lewis v LeGrow, 258 Mich App 175, 210; 670 NW2d
675 (2003). The trial court’s calculation of defendant’s payments was based entirely on
petitioner’s billing statement. It was not the trial court’s burden to check petitioner’s math when
petitioner’s own documentation clearly stated that payments on the account totaled $34,044.14
and petitioner agreed that defendant paid $34,000. Because petitioner, whether through plan or
negligence, contributed to the purported error, relief is not warranted.
Next, petitioner argues that the trial court abused its discretion when it reduced the
number of compensable hours from 217 hours to 167 hours. “An attorney is entitled to recover
fees for services rendered under the agreement, even if the agreement is later terminated,” but the
“fees must be reasonable.” Souden, 303 Mich App at 415. When determining the
reasonableness of attorney fees, “a trial court must begin its analysis by determining the
reasonable hourly rate customarily charged in the locality for similar services.” Pirgu v United
Services Auto Ass’n, 499 Mich 269, 281; 884 NW2d 257 (2016). “The trial court must then
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multiply that rate by the reasonable number of hours expended in the case to arrive at a baseline
figure,” and then adjust that figure based on factors not relevant to this appeal. Id. at 281-282.
Petitioner contends that the trial court abused its discretion by only crediting petitioner
for 167 hours because that decision was allegedly based solely on the testimony of petitioner’s
former client. However, this argument is meritless. In making its determination, the trial court
explicitly stated that its decision was based on the parties’ testimony, petitioner’s billing
statement, and the court’s knowledge of billing in general. Moreover, the trial court conducted a
two day evidentiary hearing, during which it heard lengthy testimony from both parties and
became familiar with the underlying litigation and the efforts expended by petitioner. After the
hearing, the trial court was in the best position to determine the reasonable hours expended by
petitioner, which it did. See Reynolds, 222 Mich App at 30 (“[A] trial court is in the best
position to assess an attorney’s contribution to a case because trial courts are aware of the
strengths and weaknesses of cases before them, the time and effort expended by the attorneys,
and changes in the parties’ leverage resulting from changes in counsel (e.g., due to attorneys’
skill or reputation).”). Contrary to petitioner’s argument, the trial court did not abuse its
discretion by not crediting petitioner with all of the hours listed in the billing statement. In Smith
v Khouri, 481 Mich 519, 532 n 17; 751 NW2d 472, 493 (2008), the Michigan Supreme Court
noted that, in determining the number of hours reasonably expended, trial courts should “exclude
excessive, redundant or otherwise unnecessary hours regardless of the attorneys’ skill, reputation
or experience.” (Citation and quotation marks omitted); see also Van Elslander v Thomas Sebold
& Assoc, Inc, 297 Mich App 204, 239; 823 NW2d 843 (2012). Based on our review of the
record, it is clear that the trial court did just that. Accordingly, the trial court’s determination that
petitioner reasonably expended 167 hours on defendant’s case falls within “the range of
principled outcomes.” Keinz 290 Mich App at 141.
Affirmed.
/s/ Colleen A. O'Brien
/s/ Kathleen Jansen
/s/ Christopher M. Murray
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