Susan R Fritz v. Sandy Pines Wilderness Trails ( 2014 )

STATE OF MICHIGAN
COURT OF APPEALS
SUSAN R. FRITZ, UNPUBLISHED
November 20, 2014
Plaintiff-Appellant,
v Nos. 317144; 317336
Allegan Circuit Court
SANDY PINES WILDERNESS TRAILS and LC No. 10-046887-CZ
MAX GIBBS,
Defendants-Appellants.
Before: M. J. KELLY, P.J., and BECKERING and SHAPIRO, JJ.
PER CURIAM.
Plaintiff Susan R. Fritz filed a complaint against defendants, Sandy Pines Wilderness
Trails (Sandy Pines) and Max Gibbs,1 asserting claims of breach of contract, breach of quiet
enjoyment, defamation, and invasion of privacy for events that occurred while she was a member
of Sandy Pines. Before trial, a case evaluation panel returned a unanimous award of $21,500 in
plaintiff’s favor; she rejected the award, while defendants accepted. A bench trial ensued, after
which the trial court entered a verdict of no cause of action and dismissed plaintiff’s complaint.
In accordance with MCR 2.403(O), the trial court thereafter granted defendants’ motion for case
evaluation sanctions, i.e., the attorney fees and costs arising from plaintiff’s rejection of the case
evaluation. In these consolidated appeals, plaintiff challenges (1) the trial court’s verdict of no
cause of action with respect to her breach of contract claims2 and (2) the trial court’s award of
defendants’ attorney fees and costs. We affirm.
In 2002, plaintiff entered into a membership agreement to rent a campground site at
Sandy Pines. At the time she signed the membership agreement, plaintiff received the Sandy
Pines handbook, which contained the campground’s rules and regulations, the Sandy Pines
articles of incorporation, and its bylaws. In June 2010, plaintiff received three separate notices
of rule violations (“tickets”) from Sandy Pines. On June 1, she was issued a “10-point”/$100
ticket for failing to remove an old shed on her lot after building a new shed. On June 4, she was
1
Gibbs is the park director of Sandy Pines.
2
Plaintiff does not challenge the trial court’s verdicts with respect to her other claims.
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issued another “10-point”/$100 ticket for failing to obtain an electrical permit for the new shed.
On June 17, plaintiff’s membership was temporarily suspended for “repeated violations of the
rules and regulations of Sandy Pines.”3 Soon after her suspension, plaintiff entered Sandy Pines
without first arranging a time with Gibbs and was issued a ticket for illegal entry. Plaintiff
requested arbitration of each June 2010 ticket. However, before any hearings were held, plaintiff
voluntarily transferred her membership to her daughter and son-in-law on June 30, 2010.
I. BREACH OF CONTRACT
Plaintiff’s breach of contract claim arises out of the manner in which Sandy Pines issued
the shed, electrical permit, and illegal entry tickets, as well as the manner in which Sandy Pines
resolved her appeal of those tickets. Plaintiff argues that the trial court clearly erred by finding
that, even if Sandy Pines breached the membership contract by not allowing plaintiff to arbitrate
her ticket disputes, she failed to establish damages.4
“A party asserting a breach of contract must establish by a preponderance of the evidence
that (1) there was a contract (2) which the other party breached (3) thereby resulting in damages
to the party claiming breach.” Miller-Davis Co v Ahrens Constr, Inc, 495 Mich. 161, 178; 848
NW2d 95 (2014). “Damages are an element of a breach of contract action.” New Freedom Mtg
Corp v Globe Mtg Corp, 281 Mich. App. 63, 69; 761 NW2d 832 (2008). “The proper measure of
damages for a breach of contract is the pecuniary value of the benefits the aggrieved party would
have received if the contract had not been breached.” Ferguson v Pioneer State Mut Ins Co, 273
Mich. App. 47, 54; 731 NW2d 94 (2006) (quotation marks and citation omitted). Thus, “[t]he
party asserting a breach of contract has the burden of proving its damages with reasonable
certainty, and may recover only those damages that are the direct, natural, and proximate result
of the breach.” Alan Custom Homes, 256 Mich. App. at 512. While the amount of damages need
not be determined with mathematical precision, Severn v Sperry Corp, 212 Mich. App. 406, 415;
3
Plaintiff received a “3-point”/$30 ticket in August 2009 for parking her golf cart in a “green
area.” Plaintiff maintains that she did not see the ticket until the seven-day appeal period had
passed and that she subsequently paid that ticket “in the spirit of cooperation.” Thus, after the
second June 2010 ticket was issued, plaintiff had amassed 23 “violation points” within a 12-
month period, which allowed Sandy Pines to temporarily suspend her membership.
4
Following a bench trial, we review for clear error a trial court’s factual findings and review de
novo its conclusions of law. Ligon v Detroit, 276 Mich. App. 120, 124; 739 NW2d 900 (2007).
A factual finding is clearly erroneous when, although there is evidence to support it, this Court is
left with a definite and firm conviction that a mistake has been made. Heindlmeyer v Ottawa Co
Concealed Weapons Licensing Bd, 268 Mich. App. 202, 222; 707 NW2d 353 (2005). This Court
gives regard to the trial court’s special opportunity to judge the credibility of the witnesses who
appeared before it. MCR 2.613(C); In re Clark Estate, 237 Mich. App. 387, 396; 603 NW2d 290
(1999). Finally, we review for clear error a trial court’s determination of damages after a bench
trial. Alan Custom Homes, Inc v Krol, 256 Mich. App. 505, 513; 667 NW2d 379 (2003).
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538 NW2d 50 (1995), those based on speculation or conjecture are not recoverable, Berrios v
Miles, Inc, 226 Mich. App. 470, 478; 574 NW2d 677 (1997).
Plaintiff asserts that she suffered the following damages: (1) damage to her boat and golf
cart because she was unable to maintain them during her suspension, (2) payment of at least
$1,035 in annual membership fees for the campground site she cannot use, (3) $475 per year in
insurance for property she cannot access, (4) damages from inability to access and maintain the
deck, patio, and garage that she built on the site, (5) $300 in disputed ticket fines, and (6) daily
rental value for a similar park site of at least $85 a day for four years.
We conclude that the trial court did not clearly err by finding that plaintiff failed to
establish damages.
As a preliminary matter, plaintiff’s membership was temporarily suspended on June 17,
2010 and she voluntarily transferred her membership to her daughter and son-in-law on June 30,
2010, rather than waiting for Sandy Pines to conduct a hearing to review her suspension.
Because plaintiff transferred her membership, any damages are limited to those incurred before
the membership contract between plaintiff and Sandy Pines was terminated by the transfer. See
Miller-Davis Co, 495 Mich. at 178 (recognizing that there must be a contract for there to be a
breach of contract claim).
With respect to plaintiff’s claim of damages for the disputed ticket fines, the trial court
did not clearly err by finding that plaintiff failed to establish damages, Ligon, 276 Mich. App. at
124, because there is no evidence that she was entitled to a refund of the fines, Ferguson, 272
Mich. App. at 54, rendering those asserted damages merely speculative, Berrios, 226 Mich. App. at
478. Plaintiff also did not present any evidence quantifying her asserted damages resulting from
a lack of access to her boat and golf cart for the limited period of time before she transferred her
membership and there is no evidence that she was prevented from removing these items from the
park. Alan Custom Homes, 256 Mich. App. at 512. Consequently, the trial court did not clearly
err by finding that plaintiff failed to establish damages on this basis. Damages related to
plaintiff’s continued membership and insurance fees are also not recoverable. Plaintiff
transferred her membership and there is no evidence that she was thereafter responsible for any
membership payments. Moreover, these claimed damages are speculative because plaintiff
voluntarily decided to abandon her appeal of the temporary suspension; the Sandy Pines board of
directors might have decided to not take action against her, reversed the temporary suspension,
and/or credited any fees. Berrios, 226 Mich. App. at 478. There is also no evidence on the record
to quantify how plaintiff suffered damage related to her lack of access and ability to maintain her
deck, patio, and garage for the 13-day period between the time she was temporarily suspended
and she transferred her membership. Alan Custom Homes, 256 Mich. App. at 512.
Finally, we find no merit in plaintiff’s claim that she is entitled to damages to compensate
her for the amount of money she would have had to spend to stay at a similar park site since the
time she was suspended from Sandy Pines. As noted, plaintiff made the voluntary decision to
transfer her membership on June 30, 2010 before a hearing on the temporary suspension was
held. We recognize that the bylaws and handbook do not specify a time requirement for how
quickly a temporary suspension hearing must be held, but note that it is impossible to know the
results of a hearing never held—for example, plaintiff’s suspension could have been reversed
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and she could have been compensated for her membership dues paid during the period of
temporary suspension. As a result, the trial court did not clearly err by finding that plaintiff
failed to establish these asserted damages because they are speculative at best and, therefore, not
recoverable. Id.
Because plaintiff failed to establish damages, which are a required element in a breach-
of-contract action, New Freedom Mtg Corp, 281 Mich. App. at 69, the trial court did not err by
entering a judgment of no cause of action.5
II. CASE EVALUATION SANCTIONS
Plaintiff challenges the trial court’s award of defendants’ attorney fees and costs.
Plaintiff concedes that defendants are entitled to case-evaluation sanctions under MCR
2.403(O).6 Plaintiff claims that the trial court abused its discretion by awarding $75,390 in
attorney fees because the number of hours allowed and the hourly rate utilized in calculating the
award were not reasonable and that the trial court did not discuss all the relevant factors set forth
in Smith v Khouri, 481 Mich. 519, 529-531; 751 NW2d 472 (2008), when calculating the award.7
The burden of establishing the reasonableness of attorney fees is on the party requesting
them. Smith, 481 Mich. at 528-529. In Wood, 413 Mich. at 587-588, the Supreme Court held that
the following six factors should be considered when determining a reasonable fee: (1) the
attorney’s experience and professional standing; (2) the skill, time, and labor involved; (3) the
amount in question and the results achieved; (4) the case’s difficulty; (5) the expenses incurred;
and (6) the length and nature of the professional relationship with the client. In Smith, 481 Mich.
at 528-533, the Court concluded that trial courts should consider both the Wood factors and the
reasonable attorney fee factors listed in MRPC 1.5(a).
5
Because we affirm the trial court’s conclusion that plaintiff failed to the establish damages
necessary to prevail on her breach of contract claim, we need not address whether plaintiff
established the other necessary elements of that claim. See Miller-Davis Co, 495 Mich. at 178.
6
The case evaluation panel returned a unanimous award of $21,500 in favor of plaintiff.
Defendants accepted the award and plaintiff rejected. Because plaintiff, as the rejecting party,
was awarded no damages after trial, i.e., she failed to improve her litigation position by at least
10 percent, defendants are entitled to case evaluation sanctions. MCR 2.403(O).
7
A trial court’s award of attorney fees and costs is reviewed for an abuse of discretion. Wood v
Detroit Auto Inter-Ins Exch, 413 Mich. 573, 588; 321 NW2d 653 (1982). An abuse of discretion
occurs when the trial court’s decision is outside the range of principled outcomes. Maldondo v
Ford Motor Co, 476 Mich. 372, 388; 719 NW2d 809 (2006). The findings of fact underlying an
award of attorney fees are reviewed for clear error. Marilyn Froling Revocable Living Trust v
Bloomfield Hills Country Club, 283 Mich. App. 264, 296; 769 NW2d 234 (2009).
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We conclude that the trial court did not abuse its discretion in awarding defendants
$75,390 in attorney fees. Defendants requested $102,727.84 in attorney fees; plaintiff countered
that a maximum of $25,000 was appropriate. After taking the attorney fee question under
advisement, the trial court issued a lengthy written opinion wherein it properly analyzed the
relevant factors in calculating defendants’ award.
The trial court reduced defendants’ requested hourly rate from $300 to $250. In so doing,
it first reviewed the State Bar of Michigan’s 2010 Economics of Law Practice Attorney Income
and Billing Rate Summary Report provided by plaintiff to conclude that a mean rate of $231 per
hour was a “reasonable starting point” as the fee customarily charged in the locality and then
increased that rate to $250 per hour on the basis of the experience, reputation, and ability of the
attorney performing the services. The base rate and increase were supported by the evidence,
including affidavits of area attorneys and, accordingly, the trial court did not abuse its discretion
in calculating the awarded $250 per hour rate.
The court then concluded that the reasonable number of hours expended by defendants’
attorneys was 301.56. It reviewed defendants’ detailed billing records, affidavits from the
attorneys who worked on the case, and copies of the monthly invoices from November 1, 2011
through trial. The trial court completely rejected defendants’ request for paralegal fees and
deducted the requested 7.4 attorney hours that were associated with motions filed by defendants
at the last minute before trial. While plaintiff argued that a maximum of $25,000 in attorney fees
for 125 hours of work was reasonable, she did not request an evidentiary hearing to challenge
defendants’ evidence and to present countervailing evidence, and, on the record, we conclude
that the trial court did not abuse its discretion in determining the reasonable amount of hours
expended on this case. Wood, 413 Mich. at 588. With respect to the other factors, the trial court
acknowledged that it considered each factor and, after reviewing the record, we are satisfied that
the trial court appropriately considered and commented on the relevant factors sufficient to “aid
appellate review.” Smith, 481 Mich. at 531. Accordingly, we conclude that, after “consider[ing]
the totality of the special circumstances applicable to the case at hand[,]” id. at 529, the trial
court did not abuse its discretion in calculating and awarding defendants’ reasonable attorney
fees.
Affirmed.
/s/ Michael J. Kelly
/s/ Jane M. Beckering
/s/ Douglas B. Shapiro
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