Three Lakes Ass'n v. Kessler , 101 Mich. App. 170 ( 1980 )

101 Mich. App. 170 (1980) 300 N.W.2d 485

THREE LAKES ASSOCIATION
v.
KESSLER

Docket No. 45420.

Michigan Court of Appeals.

Decided October 24, 1980.

Jaffe, Snider, Raitt, Garratt & Heuer, P.C., for plaintiff.

Donald J. Berlage, P.C., for defendants.

Before: M.F. CAVANAGH, P.J., and D.E. HOLBROOK, JR., and J.H. PIERCEY,^[*] JJ.

PER CURIAM.

Plaintiff, a nonprofit corporation composed mainly of riparian land owners, brought the underlying suit to enjoin the defendants, new residents on 47 residential lots in White Sands Estates subdivision, Antrim County, from having access to Torch Lake through a 42-foot-wide strip of land.

In an action tried in 1976, the trial court held, contrary to plaintiff's argument, that beneficial use of the access strip could be vested in the subdivision lot owners and also that the plaintiff had failed to sustain its burden of proving an alleged common plan of development which made the defendants' use unreasonable. Its ruling was affirmed in Three Lakes Ass'n v Kessler, 91 Mich App 371; 285 NW2d 300 (1979).

This appeal is from the trial court's order denying to plaintiff an award of attorney fees and costs and from the order denying a rehearing of the argument for fees and costs. This appeal is based upon the following arguments: (1) plaintiff should be awarded reasonable attorney fees and costs pursuant to GCR 1963, 313.3 by virtue of defendants' refusal to admit the truth of matters of fact that were subsequently proven by plaintiff; (2) pursuant to GCR 1963, 111.6, defendants' denial of certain allegations was unreasonable and so plaintiff should be awarded the cost of proving the allegations including reasonable attorney fees; (3) GCR 1963, 526.1 entitles plaintiff, as prevailing party, to recover its costs; (4) the Michigan environmental protection act, MCL 691.1203; MSA 14.528(203), entitles plaintiff to attorney fees and other costs; (5) based on (1) through (4), above, plaintiff's motion for rehearing on the question of fees and costs should have been granted.

We affirm the trial court's order denying plaintiff's reasonable expenses and attorney fees and the order denying a rehearing on the matter.

Plaintiff's requests for admissions came 11 days before the start of the trial. The action had been initiated nearly three years earlier. The defendant responded to the requests before the start of the trial, and it is the defendants' denials of 22 of the 52 requests for admissions upon which plaintiff seeks the costs and attorney fee award.

GCR 313.3 gives reasonable expenses including attorney fees to the party whose requests for admissions of the truth of a matter of fact under GCR 312 are not admitted where the requesting party proves the fact at trial.

The defendants did not strictly comply with GCR 312.1. They made general denials of the requests for admissions, did not claim a lack of knowledge which prevented them from admitting or denying, and did not object to the propriety of the requests. The trial judge ruled that the lack of strict compliance was excused because the requests were served only 11 days before trial, even though the case was filed over two years earlier. The judge may have assumed that, in light of the time frame, the plaintiff already would have prepared the bulk of its case.

In some instances, the plaintiff did not present evidence at trial to prove the statements contained in the requests. In other instances, defendants contested at trial the matters contained in the admission requests. Other requests were not or could not have been within the knowledge of the defendants or were of such a general nature to be irrelevant.

The trial judge denied the plaintiff's request for expenses under GCR 313.3. In denying plaintiff's request for GCR 313.3 expenses, the judge noted that many of the plaintiff's requests for admissions did not involve matters of fact as contemplated by GCR 313.3. He also noted that many of the requests for admissions ran contrary to his ultimate findings of fact so that it was plainly not unreasonable for the defendants to deny these requested admissions.

Fredericks v General Motors Corp, 48 Mich App 580, 588; 211 NW2d 44 (1973), lv den 390 Mich 805 (1973), indicates that GCR 313.3 is only applicable to denials of matters of fact and not to matters of opinion.

Plaintiffs in Greenspan v Rehberg, 56 Mich App 310, 328-329; 224 NW2d 67 (1974), denied that covenants contained in a land contract between the defendants and the plaintiffs were binding on the plaintiffs. The trial court awarded the defendants costs under GCR 313.3 based on the evidence presented at trial that proved that the covenants were binding on the plaintiffs. This Court, in reversing the award of costs under GCR 313.3, stated:

"In 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 27, the author states that such admissions may dispose of matters over which there is no serious dispute, and hence avoid waste of time and preparation and a trial on unnecessary proofs. However, the author also states that unless a matter is completely free of controversy, it is not likely that a formal request for admissions will prove successful * * *.

"An examination of the demands for admission of fact submitted to the plaintiffs discloses that the ``facts' which the defendants sought to have the plaintiffs admit were, in reality, not ``facts' but were elements of the defendants' claim.

"It is stated in 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 234:

"``The mere fact that the matter was proved at the trial does not, of itself, establish that the denial in response to the request for an admission was unreasonable.'"

Defendants' denials of the requests for admission were not unwarranted in the sense that they were unreasonable so that the defendants should be liable for the plaintiff's costs of proving these allegations. Accordingly, the trial court, in the instant case, did not abuse its discretion in denying attorney fees pursuant to GCR 1963, 313.3.

Plaintiff's motion for costs and attorney fees under GCR 111.6 was also properly denied.

GCR 1963, 111.6 states:

"Unwarranted Allegations and Denials. If it appears at the trial that any fact alleged or denied by a pleading ought not to have been so alleged or denied and such fact if alleged is not proved or if denied is proved or admitted, the court may, if the allegation or denial is unreasonable, require the party making such allegation or denial to pay to the adverse party the reasonable expenses incurred in proving or preparing to prove or disprove such fact as the case may be, including reasonable attorney fees."

Plaintiff cites Forster v City of Pontiac, 56 Mich App 415; 224 NW2d 325 (1974), in support of its position on this issue. The holding in that case indicates that the decision to award expenses under GCR 111.6 rests within the discretion of the trial juge and that there must be some bad faith to justify the award. See also Lindhout v Ingersoll, 58 Mich App 446, 454; 228 NW2d 415 (1975).

We find no abuse of discretion in the trial court's denial of the motion for expenses and fees under GCR 111.6.

Next, GCR 1963, 526.1 provides that costs shall be awarded as a matter of course to the "prevailing party" in an action. The trial court, in the present case, ruled that neither party substantially prevailed and so neither was entitled to taxable costs pursuant to GCR 526.1.

This Court has indicated in numerous opinions that no costs would be awarded because neither party had prevailed in full. See Lovitt v Concord School Dist, 58 Mich App 593, 603; 228 NW2d 479 (1975), overruled on other grounds in Galli v Kirkeby, 398 Mich 527, 536, 544; 248 NW2d 149 (1976), Eberhard Manufacturing Co v Brown, 61 Mich App 268, 273; 232 NW2d 378 (1975). See also Farr v Farr, 63 Mich App 741, 746; 235 NW2d 31 (1975).

In its decision on plaintiff's appeal on the substantive issues in the present case, this Court awarded "[n]o costs, neither party prevailing fully". Kessler, supra, 378. The Court declined to award costs for appeal when it upheld the right of the defendants to convey riparian rights in the access strip but remanded the case so that the trial court could determine an appropriate means of enforcing the restrictions that had been placed on the use of the access strip.

We decline to follow the Federal cases that would award costs to a party who was successful on only a part of his claims. See United States v Mitchell, 580 F2d 789 (CA 5, 1978). We find that plaintiff in the instant case did not receive all the relief it sought. Because the plaintiff did not substantially prevail, it should not receive a GCR 526.1 expenses award.

Certain portions of this action were brought under the Michigan environmental protection act, MCL 691.1201 et seq.; MSA 14.528(201) et seq. Section 3(3) of that act provides that costs, including attorney fees, may be awarded if the interests of justice require. We agree with the argument that MCL 691.1203(3); MSA 14.528(203)(3) is a statutory exception to GCR 526.1. However, the trial court determined that the interests of justice did not require an award of fees to the plaintiff. The judge noted that there was no indication of great disparity of wealth on the part of the parties and no great disparity in equities. The court went on to state:

"The Plaintiffs tended to look upon the developer as a threat to the environment and particularly to the quality of the water of Torch Lake, and the Defendant viewed the Plaintiff perhaps as persons who attempted or as an organization that attempted to intervene and interefere with the conduct of a lawful business. Certainly while the interests of protecting the environment are laudable, the position of neither party could be or was fully acquitted in the decision of the Court.

"The Court could not and did not find that all land development operations are inherently evil or wrong or that there is any impropriety in a profit motivation. The Court likewise certainly did not find that the plaintiff constituted a meddling group without sincere interests in their — in the water quality of Torch Lake."

Despite evidence on the record as to the insolvency of Three Lakes Association, the judge indicated that he would not alter his decision, particularly in view of the fact that there was evidence that the plaintiff association was composed of persons owning riparian lands from whom the plaintiff could attract contributions.

In Taxpayers & Citizens in the Public Interest v Dep't of State Highways, 70 Mich App 385; 245 NW2d 761 (1976), this Court stated that the award of costs and fees under MCL 691.1203(3); MSA 14.528(203)(3), is within the broad and unfettered discretion of the trial court. This Court, on appellate review, will only look to see if such discretion has been exercised and, if so, abused.

We find that the trial court recognized its broad discretion in ruling on the award of costs. The court did not abuse that discretion by ruling that the equities were not completely with either party, so no costs should have been awarded.

Finally, as there was no showing by the plaintiff that a rehearing on the motion would render a different result, the motion for rehearing was properly denied.

Affirmed. Defendants may tax costs.

NOTES

[*] Circuit judge, sitting on the Court of Appeals by assignment.