Littrell Williams-Inner v. Liberty Mutual Insurance Company

STATE OF MICHIGAN
COURT OF APPEALS
LITTRELL WILLIAMS-INNER, UNPUBLISHED
May 12, 2015
Plaintiff-Appellant,
v No. 319217
Wayne Circuit Court
LIBERTY MUTUAL INSURANCE COMPANY, LC No. 11-003613-NI
Defendant-Appellee.
LITTRELL WILLIAMS-INNER,
Plaintiff-Appellant,
v No. 320677
Wayne Circuit Court
LIBERTY MUTUAL INSURANCE COMPANY, LC No. 11-003613-NI
Defendant-Appellee.
Before: TALBOT, C.J., and CAVANAGH and METER, JJ.
PER CURIAM.
In these consolidated appeals,1 Littrell Williams-Inner appeals as of right from two orders
of the trial court. In the first order, the trial court, as a discovery sanction, ordered that Williams-
Inner could not present expert opinion testimony at trial. In the second order, the trial court
awarded Liberty Mutual Insurance Company (“Liberty”) $149,711 in attorney fees. For the
reasons discussed below, we vacate the trial court’s award of attorney fees and remand for
redetermination of the award. In all other respects, we affirm.
1
Williams-Inner v Liberty Mutual Ins Co, unpublished order of the Court of Appeals, entered
November 12, 2014 (Docket No.’s 319217, 320677).
-1-
I. BACKGROUND
On November 26, 2010, Williams-Inner was a passenger in a vehicle that was struck by
another motorist. On March 25, 2011, Williams-Inner filed a complaint alleging that Liberty, her
no-fault insurer, unreasonably refused to pay her personal protection benefits for injuries arising
out of the accident. Approximately one month before trial was scheduled to begin, the trial court
granted Liberty’s motion to preclude Williams-Inner from presenting the opinions of expert
witnesses as a discovery sanction. The matter proceeded to trial. The jury found that Williams-
Inner was not entitled to benefits and that her claim against Liberty was at least partially
fraudulent or excessive. Liberty then filed a motion seeking attorney fees and costs of
approximately $190,000. A hearing was held, at which the trial court expressed some concern
over the hourly rates sought by Liberty for its lead counsel, Karen Magdich, and a paralegal,
Kristen Kairys. The trial court asked Liberty to submit a supplemental brief with reduced hourly
rates for these individuals. Liberty did so, and after a second hearing, the trial court accepted
Liberty’s new calculations and entered an order awarding Liberty $149,711 in attorney fees. The
trial court did not award Liberty its requested costs.
II. DISCUSSION
A. DISCOVERY SANCTION
Williams-Inner first argues that the trial court abused its discretion when it precluded her
from presenting expert witness testimony at trial. We disagree. “Discovery sanctions are
reviewed for an abuse of discretion.”2 An abuse of discretion occurs when the trial court’s
decision falls outside the range of principled outcomes.3
In a discovery request served on Williams-Inner in April 2011, Liberty asked Williams-
Inner to “[s]tate the names and addresses of any and all proposed expert witnesses and the names
and addresses of all witnesses you intend to have testify in [sic] your behalf in this case[,]
whether in person or by deposition.” Liberty also requested that Williams-Inner disclose the
qualifications of proposed experts, the subject matter of any expert’s testimony, the substance of
their opinions, the facts upon which these opinions were based, and the identity and location of
any reports prepared by each expert. When Williams-Inner did not timely respond to its
interrogatories, Liberty filed a motion to compel her responses. The trial court then entered a
stipulated order requiring Williams-Inner to respond to the requests “on or before July 21, 2011.”
Despite stipulating to this order, Williams-Inner did not provide her responses until July 28,
2011. In response to Liberty’s request for information regarding her expert witnesses, Williams-
Inner stated only, “Plaintiff will file [a] Witness List in accordance with the Court’s Scheduling
Order.” On April 17, 2012, the day her witness list was due, Williams-Inner filed a witness list
2
Dean v Tucker, 182 Mich. App. 27, 32; 451 NW2d 571 (1990).
3
Maldonado v Ford Motor Co, 476 Mich. 372, 388; 719 NW2d 809 (2006).
-2-
which named over 20 treating physicians by name or description, along with approximately 60
other witnesses. However, this witness list did not identify any witnesses as expert witnesses.
Largely based on a mistaken belief that Williams-Inner had never filed a witness list, on
April 26, 2013, Liberty filed a motion seeking dismissal of the suit.4 This motion also noted that
Williams-Inner had not timely responded to Liberty’s interrogatories or identified any expert
witnesses, and asked that as an alternative sanction, the trial court preclude Williams-Inner from
“calling expert witnesses at trial for [her] failure to disclose potential experts as well as any
opinions they may hold and the basis for said opinions . . . .” Williams-Inner filed a response in
which she asserted that she would supplement any interrogatory responses as needed, but that no
such supplementation was necessary at that time because she had not “identified and/or retained
any experts regarding this matter.” She asserted that she would supplement her interrogatory
responses if any experts were retained.
The motion was heard on May 3, 2013. At the hearing, Liberty acknowledged that
Williams-Inner had timely filed a witness list, but noting that trial was set to begin on June 3,
2013, asked the court to preclude Williams-Inner from presenting expert opinion testimony.
Williams-Inner stated that she had not retained any “outside independent experts,” but argued
that the treating physicians identified in her witness list could be presented as expert witnesses if
the court found them qualified. The trial court ruled that because Williams-Inner had yet to
identify any expert witnesses, she could not present expert opinion testimony at trial. On May
28, 2013, less than a week before trial was scheduled to begin, Williams-Inner provided
complete responses to Liberty’s interrogatory requests.
Under the Michigan Court Rules, “A party may through interrogatories require another
party to identify each person whom the other party expects to call as an expert witness at trial, to
state the subject matter about which the expert is expected to testify, and to state the substance of
the facts and opinions to which the expert is expected to testify and a summary of the grounds for
each opinion.”5 “[T]he purposes of pretrial discovery regarding experts to be used as witnesses
at trial [are] narrowing the issues, preparation of cross-examination[,] and the elimination of
surprise at trial . . . .”6 As this Court has explained:
Pursuant to MCR 2.302(E)(1)(a)(ii), a party has “a duty seasonably to
supplement” his or her responses to discovery requests to include the identity of
additional expert witnesses. The court may, in its discretion, sanction a party
under MCR 2.313(B)(2) for failing to reveal the identity of an expert witness in a
4
This belief was the result of the court clerk having docketed Williams-Inner’s witness list as a
“miscellaneous pleading.” When Magdich and her firm substituted for Liberty’s former counsel
in March 2013, Magdich apparently relied only on the register of actions, and seeing no witness
list filed by Williams-Inner, filed the motion.
5
MCR 2.302(B)(4)(a)(i).
6
Nelson Drainage Dist v Bay, 188 Mich. App. 501, 506-507; 470 NW2d 449 (1991).
-3-
timely fashion. As a sanction under that subrule, the court may prohibit the party
from “introducing designated matters into evidence . . . .”[7]
However, before sanctioning a party for a discovery violation, the trial court must consider
several factors:
Among the factors that should be considered in determining the
appropriate sanction are: (1) whether the violation was wilful or accidental, (2)
the party’s history of refusing to comply with discovery requests (or refusal to
disclose witnesses), (3) the prejudice to the defendant, (4) actual notice to the
defendant of the witness and the length of time prior to trial that the defendant
received such actual notice, (5) whether there exists a history of plaintiff engaging
in deliberate delay, (6) the degree of compliance by the plaintiff with other
provisions of the court’s order, (7) an attempt by the plaintiff to timely cure the
defect, and (8) whether a lesser sanction would better serve the interests of justice.
This list should not be considered exhaustive.[8]
Under the circumstances, the trial court’s sanction was not an abuse of discretion.
Williams-Inner’s refusal to provide appropriate responses to Liberty’s interrogatories was no
accident. Rather, she agreed to respond by a certain date, filed responses a week after that date
passed, and when she did, answered only that she would file a witness list in the future. Once it
was filed, this witness list identified no witnesses as experts.9 This conduct left Liberty to guess
which witnesses, if any, might be called as experts, and provided absolutely no insight into the
substance of any potential expert testimony. It also prevented Liberty from deposing,
investigating, or otherwise preparing to defend against these witnesses. Williams-Inner only
attempted to cure the error the week before trial was to begin, an effort that was far from timely,
particularly given that the trial court had already ordered that she could not present expert
witness testimony. Moreover, the trial court imposed a narrow sanction. The trial court only
prohibited Williams-Inner’s treating physicians from providing expert opinion testimony. The
witnesses remained free to testify to the existence of Williams-Inner’s injuries and what
treatment she was provided. This sanction was proportionate to Williams-Inner’s failure to
7
Dorman v Twp of Clinton, 269 Mich. App. 638, 655-656; 714 NW2d 350 (2006) (citations
omitted).
8
Dean, 182 Mich. App. at 32-33 (citations omitted).
9
Williams-Inner argues that her identification of witnesses as treating physicians in her witness
list was sufficient to put Liberty on notice that any of these witnesses could be called as experts.
Yet in her response to Liberty’s motion, a response filed a year after she filed her witness list,
Williams-Inner explained her failure to supplement her interrogatory responses by asserting that
she had yet to identify any expert witnesses herself. We fail to understand how Liberty could be
expected to know the identity of Williams-Inner’s expert witnesses during a time when
Williams-Inner apparently did not.
-4-
divulge the existence or nature of any potential expert testimony. Under the circumstances, the
trial court’s sanction was not an abuse of discretion.10
Williams-Inner presents several arguments on appeal, all of which lack merit. She first
argues that the record does not reflect that the trial court gave any consideration to the Dean
factors. With regard to discovery sanctions, “the record should reflect that the trial court gave
careful consideration to the factors involved and considered all of its options in determining what
sanction was just and proper in the context of the case before it.”11 At the motion hearing, the
trial court did not explicitly reference any particular factor. However, it did explicitly deny the
motion to dismiss, demonstrating that the court considered other options with regard to the
appropriate sanction. Given the nature of the discovery violation at issue here, the narrow
sanction imposed demonstrates that the trial court considered the particular circumstances of this
case before determining what sanction was appropriate. Thus, while not explicit, the record
demonstrates that the trial court considered the relevant factors and its options before it decided
the appropriate sanction.
Further, if a trial court fails to adequately address the Dean factors, the proper remedy is
to remand to the trial court for reconsideration.12 Such a remedy would not be appropriate here
because the record reflects that the trial court also considered the relevant factors in response to
Williams-Inner’s motion for reconsideration. Williams-Inner’s motion addressed each of the
Dean factors. The trial court allowed oral argument on the motion, where both parties
extensively discussed Williams-Inner’s discovery responses and whether these responses gave
Liberty an adequate opportunity to prepare with regard to Williams-Inner’s potential experts.
The trial court noted that Williams-Inner had not identified any of her treating physicians as
experts. The trial court stated that this conduct left Liberty to guess which witnesses might be
called as experts, and found that this was “neither fair nor appropriate.” On the whole, the record
reflects that the trial court considered the relevant factors and potential options when deciding
the issue.
Relying on the Federal Rules of Civil Procedure and cases of the federal courts
interpreting these rules, Williams-Inner next argues that identifying her witnesses as treating
physicians was sufficient to put Liberty on notice that she intended to call any of these witnesses
as experts. Under the Michigan Court Rules, when filing a witness list, parties must specify
10
See Dorman, 269 Mich. App. at 654-655 (the trial court did not abuse its discretion by refusing
to allow the plaintiff to present an expert witness not disclosed until two months before trial);
Bellok v Koths, 163 Mich. App. 780; 415 NW2d 18 (1987) (the trial court did not abuse its
discretion by dismissing the plaintiffs’ action as a discovery sanction; the plaintiffs failed to
provide complete responses to interrogatory requests regarding expert witnesses until the day of
the hearing on the defendants’ motion to dismiss for failure to respond to the requests).
11
Dean, 182 Mich. App. at 32.
12
Adams v Perry Furniture Co (On Remand), 198 Mich. App. 1, 17-18; 497 NW2d 514 (1993),
overruled in part on other grounds Allied Electric Supply Co, Inc v Tenaglia, 461 Mich. 285, 289
(1999).
-5-
“whether the witness is an expert, and the field of expertise.”13 It is Michigan’s court rules, not
the federal rules, which apply here. Moreover, the federal cases cited do not stand for the
proposition that identifying witnesses as treating physicians is akin to identifying them as
experts. Rather, these cases hold that treating physicians need not file mandatory disclosures
pursuant to FR Civ P 26(a)(2) because, among other reasons, the testimony of a treating
physician regarding the cause of injuries is not necessarily expert opinion testimony.14 Williams-
Inner explicitly asked the trial court to admit the testimony of her treating physicians as expert
opinion testimony. Regardless, even if identifying her treating physicians could be considered
adequate to identify them as experts, Williams-Inner still failed to provide any information
beyond the names of these witnesses, such as their qualifications, areas of expertise, expected
testimony, or basis for their opinions, until the week before trial was to begin. Liberty requested
and was entitled to this information.15 Identifying her treating physicians was an insufficient
response to Liberty’s interrogatory request, and accordingly, sanctions were permissible.16
Williams-Inner points out that Liberty similarly identified her treating physicians in its
witness list without identifying those witnesses as experts. The explanation for this is quite
simple: Liberty did not intend to call Williams-Inner’s treating physicians as expert witnesses.
Rather, Liberty specifically identified over 30 potential expert witnesses in its witness list, as was
required.17 Williams-Inner also suggests that the trial court held Liberty to a different standard
by denying her motion for a default judgment premised on a purported discovery violation, a
motion filed the same day the trial court heard Liberty’s motion. As the trial court noted,
Williams-Inner never filed a motion to compel discovery. Liberty’s failure to respond appeared
to be an inadvertent mistake. Once Liberty was made aware of the problem by the motion, it
provided appropriate responses. Williams-Inner also provided little explanation of how she was
prejudiced by the failure. Indeed, she suggested that the trial court could order Liberty to
provide responses within seven days as an alternative to a default judgment. Williams-Inner has
not demonstrated that the trial court treated the parties differently.
Williams-Inner argues that she was denied a fair opportunity to litigate the issue because,
at the motion hearing, Liberty changed the thrust of its motion from one arguing that no witness
list had been filed to one arguing for exclusion due to the failure to respond to interrogatories.
Liberty’s motion specifically noted that Williams-Inner had not provided complete answers to
13
MCR 2.401(I)(1)(b). Pursuant to MCR 2.401(I)(2), “The court may order that any witness not
listed in accordance with this rule will be prohibited from testifying at trial except on good cause
shown.”
14
See, e.g., McCloughan v City of Springfield, 208 FRD 236, 240-242 (2002). There also
appears to be a split of authority in the federal courts on this issue, with some courts holding that
treating physicians are experts who must file mandatory disclosures pursuant to FR Civ P
26(a)(2). See id. at 241-242 (collecting cases).
15
MCR 2.302(B)(4)(a)(i).
16
Dorman, 269 Mich. App. at 655-656.
17
MCR 2.401(I)(1)(b).
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the interrogatory requests. Williams-Inner responded that her interrogatory responses needed no
supplementation because she did not intend to call any expert witnesses. Williams-Inner was
clearly aware of this issue, and was not denied an opportunity to fairly litigate it. Moreover,
Williams-Inner was given ample opportunity to argue the issue when the trial court heard
arguments on her motion for reconsideration. On the whole, Williams-Inner’s arguments fail to
demonstrate that the trial court abused its discretion.18
B. ATTORNEY FEES19
Williams-Inner next argues that the trial court erred by awarding attorney fees to Liberty.
We agree. “This Court generally reviews for an abuse of discretion a trial court’s decision to
award attorney fees and the determination of the reasonableness of the fees.”20 A trial court’s
factual findings are reviewed for clear error.21 “There is clear error when there is no evidentiary
support for the factual findings or where there is supporting evidence but the reviewing court is
nevertheless left with a definite and firm conviction that the trial court made a mistake.”22
The trial court committed several errors in its award of attorney fees. In Smith v Khouri,
our Supreme Court articulated a list of six factors to be considered when making such a
determination (the Wood factors):
(1) the professional standing and experience of the attorney; (2) the skill, time and
labor involved; (3) the amount in question and the results achieved; (4) the
difficulty of the case; (5) the expenses incurred; and (6) the nature and length of
the professional relationship with the client.[23]
In addition, trial courts may rely on the factors provided by the Michigan Rules of Professional
Conduct, some of which overlap the Wood factors:
18
Finding no abuse of discretion in this regard, we also reject Williams-Inner’s contention that
the award of attorney fees must be reversed due to this alleged error.
19
Williams-Inner also argues that the trial court erred by awarding Liberty costs in addition to
the award of attorney fees. Liberty sought $149,711 in attorney fees and approximately $8,500
in taxable costs. The trial court only awarded $149,711 in attorney fees. As the trial court did
not award Liberty any amount in taxable costs, Williams-Inner’s argument is without merit. And
as Liberty has not raised the issue on appeal, we are not faced with the question of whether the
trial court’s decision not to award costs was correct.
20
Augustine v Allstate Ins Co, 292 Mich. App. 408, 424; 807 NW2d 77 (2011).
21
Id.
22
Id. (quotation marks, brackets, and citation omitted).
23
Smith v Khouri, 481 Mich. 519, 529; 751 NW2d 472 (2008), quoting Wood v Detroit Auto
Inter-Ins Exch, 413 Mich. 573, 588; 321 NW2d 653 (1982).
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(1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the
services; and
(8) whether the fee is fixed or contingent.[24]
In Smith, our Supreme Court refined the process required when determining an award of
attorney fees in an effort to “lead to greater consistency in awards.”25 As our Supreme Court
explained:
We hold that a trial court should begin its analysis by determining the fee
customarily charged in the locality for similar legal services, i.e., factor 3 under
MRPC 1.5(a). In determining this number, the court should use reliable surveys
or other credible evidence of the legal market. This number should be multiplied
by the reasonable number of hours expended in the case (factor 1 under MRPC
1.5[a] and factor 2 under Wood). The number produced by this calculation should
serve as the starting point for calculating a reasonable attorney fee. . . . Thereafter,
the court should consider the remaining Wood/MRPC factors to determine
whether an up or down adjustment is appropriate. And, in order to aid appellate
review, a trial court should briefly discuss its view of the remaining factors.[26]
In this case, rather than begin by determining what “fee [was] customarily charged in the
locality for similar legal services,”27 the trial court began with the hourly fees requested by
Liberty, fees that were far above the average fees charged by similarly situated attorneys.28 The
24
Id. at 529-530, quoting MRPC 1.5(a).
25
Id. at 530-531.
26
Id.
27
Id. at 530.
-8-
trial court also failed to adequately discuss the relevant factors that would warrant a deviation
from the customary fee in the locality. As this Court has explained:
A meaningful application of the factors is more than a recitation of those factors
prefaced by a statement such as “after careful review of the criteria the ultimate
finding is as follows . . . .” Similarly, an analysis is not sufficient if it consists
merely of the recitation of the factors followed by a conclusory statement that
“the trial court has considered the factors and holds as follows . . .” without
clearly setting forth a substantive analysis of the factors on the record. The trial
court should consider the interplay between the factors and how they relate to the
client, the case, and even the larger legal community.[29]
The trial court did not specifically reference any of the factors discussed above. Rather, it made
only conclusory statements regarding Magdich and her co-counsel, Allison Lazette, that seem to
refer to a few relevant factors.30 Liberty also asserted that 10 other associate attorneys worked
on the case and sought fees for their work. The trial court never discussed any of these attorneys,
yet it accepted Liberty’s request that the hours worked by these attorneys be charged to
Williams-Inner at the same rate as Lazette, $300 an hour. The trial court’s failure to make
specific findings regarding the reasonableness of the hourly fee charged by each attorney was
erroneous.31
The trial court also erred with respect to its determination of how many hours were
reasonably spent by Liberty’s attorneys defending the case. When Williams-Inner challenged
the reasonableness of the number of hours claimed by Liberty, Liberty asserted that its billing
records were protected by the attorney-client privilege. The trial court made no explicit ruling on
this assertion of privilege, but chose to review the billing records in camera. After reviewing the
records submitted by Liberty, the trial court made only a conclusory statement that the number of
hours claimed was reasonable. This procedure was insufficient. As our Supreme Court has
explained:
28
In support of its motion for attorney fees, Liberty attached the State Bar of Michigan’s 2010
Economics of Law Practice Attorney Income and Billing Rate Summary Report. According to
this report, the median hourly rate for managing partners, such as Magdich, was $250, while the
median hourly rate for associates was $195. This same report indicated that the median hourly
rate for attorneys in the field of insurance law was $175. Attorneys in the county where
Magdich’s practice is located had a median hourly rate of $200. The trial court awarded fees
based on an hourly rate of $400 for Magdich and $300 for all other associate attorneys.
29
Augustine, 292 Mich. App. at 436.
30
For example, regarding Magdich, the trial court stated, “you do remarkable work.” With
regard to Lazette’s requested hourly fee of $300, the trial court asked her how long she had been
in practice, and after Lazette stated she had been practicing for 7 years, stated, “Okay. That’s not
unreasonable.”
31
See Augustine, 292 Mich. App. at 439 (directing the trial court, on remand, “to make specific
findings, consistent with Smith, for each attorney whose fees plaintiff sought to recover.”).
-9-
In considering the time and labor involved (factor 1 under MRPC 1.5[a]
and factor 2 under Wood) the court must determine the reasonable number of
hours expended by each attorney. The fee applicant must submit detailed billing
records, which the court must examine and opposing parties may contest for
reasonableness. The fee applicant bears the burden of supporting its claimed
hours with evidentiary support. If a factual dispute exists over the reasonableness
of the hours billed or hourly rate claimed by the fee applicant, the party opposing
the fee request is entitled to an evidentiary hearing to challenge the applicant’s
evidence and to present any countervailing evidence.[32]
The trial court’s in camera review of billing records denied Williams-Inner any meaningful
opportunity to challenge the reasonableness of the hours Liberty claimed. This procedure also
deprives this Court of any meaningful review of the trial court’s finding that the hours expended
were reasonable. Moreover, the trial court’s conclusory finding that these hours were reasonable
was insufficient. The trial court’s analysis must do more than state that it has considered the
issue and made a particular finding.33 For all of these reasons, the trial court’s determination that
the number of hours claimed by Liberty was reasonable was an abuse of discretion.
Moreover, Liberty’s claim of privilege was insufficient to prevent Williams-Inner from
viewing any portion of the billings. The attorney-client privilege is narrow in scope, “attaching
only to confidential communications by the client to his advisor that are made for the purpose of
obtaining legal advice.”34 “Confidential client communications, along with opinions,
conclusions, and recommendations based on those communications, are protected by the
attorney-client privilege because they are at the core of what is covered by the privilege.”35
Those parts of the billing records containing privileged information could be redacted.36
However, the remainder should have been made available to Williams-Inner. “The trial court’s
failure to even entertain such a procedure seems highly unreasonable and therefore an abuse of
discretion.”37
The trial court also erred with respect to its award of paralegal fees. “An award of
attorney fees may include an award for the time and labor of any legal assistant who contributed
32
Smith, 481 Mich. at 532 (citation omitted).
33
Augustine, 292 Mich. App. at 436.
34
Reed Dairy Farm v Consumers Power Co, 227 Mich. App. 614, 618-619; 576 NW2d 709
(1998).
35
McCartney v Attorney General, 231 Mich. App. 722, 735; 587 NW2d 824 (1998) (quotation
marks and citation omitted).
36
See Augustine, 292 Mich. App. at 421-422 (to allow a meaningful opportunity to contest a
claim for attorney fees, records supporting the claim of fees could be “sanitized” to remove
privileged information).
37
Id. at 422.
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nonclerical, legal support under the supervision of an attorney, provided the legal assistant meets
the criteria set forth in Article 1, § 6 of the Bylaws of the State Bar of Michigan.”38 At the first
hearing regarding attorney fees, Williams-Inner questioned whether Kairys met these
requirements. Lazette stated that Kairys held a degree in paralegal studies and was a certified
paralegal.39 However, Liberty offered no evidence to support this assertion. Because there was
no evidence to support Lazette’s assertion, any factual finding regarding Kairys’s qualifications
was clearly erroneous.40 Liberty also claimed hours for another paralegal that worked on the
case, Thomas Pattee, but provided no proof of his qualifications. As the claimant, Liberty had
the burden of establishing entitlement to the fees it claimed.41 Without evidence that these
paralegals met the qualifications stated in Article 1, Section 6 of the Bylaws of the State Bar of
Michigan, the trial court could not include their hours in its award of attorney fees to Liberty.42
Williams-Inner raises several additional arguments that are without merit. Williams-
Inner did not raise any of these arguments below, rendering the arguments unpreserved.43
Accordingly, our review is limited to review for plain error affecting substantial rights.44 To be
entitled to relief, Williams-Inner must demonstrate that an error occurred, that the error was
plain, and that the error affected substantial rights, meaning that the error was outcome-
determinative.45
Williams-Inner first argues that the trial court’s award must be reversed because it
exceeded the amount Liberty actually paid its attorneys in this matter. We agree that Liberty’s
recovery for attorney fees may not exceed the amount it actually paid.46 However, the record
contains no evidence of what Liberty actually paid in attorney fees. Thus, we cannot determine
whether such an error occurred in this instance.
38
MCR 2.626.
39
Williams-Inner raised the issue again at the second hearing, noting that no proof of Kairys’s
qualifications had ever been presented. Magdich offered no proof, stating only that Kairys was
“the best paralegal” she had “ever seen.”
40
Augustine, 292 Mich. App. at 424.
41
Smith, 481 Mich. at 528-529.
42
MCR 2.626.
43
Hines v Volkswagen of America, Inc, 265 Mich. App. 432, 443; 695 NW2d 84 (2005).
44
Kern v Blethen-Coluni, 240 Mich. App. 333, 336; 612 NW2d 838 (2000).
45
People v Carines, 460 Mich. 750, 763; 597 NW2d 130 (1999).
46
See McAuley v Gen Motors Corp, 457 Mich. 513, 519-520; 578 NW2d 282 (1998) (generally,
an award of attorney fees is compensatory in nature; “Because the purpose of compensatory
damages is to make the injured party whole for the losses actually suffered, the amount of
recovery for such damages is inherently limited by the amount of the loss . . . .”).
-11-
Williams-Inner next argues that paralegal fees are not recoverable at all in this matter
because the recovery of paralegal fees is not specifically authorized by statute. Once the trial
court determined that Williams-Inner’s claim was fraudulent or excessive, it could award Liberty
“a reasonable sum against [Williams-Inner] as an attorney’s fee . . . .”47 Our Legislature did not
define the term “attorney’s fee.” However, the Michigan Court Rules explicitly allow the
inclusion of an award for the time and labor of legal assistants in an award of attorney fees.48
Where their language does not conflict, statutes and court rules relating to the same subject
matter should be read harmoniously.49 The statute and court rule relate to the same subject
matter, attorney fees, and are not in conflict. Reading the statute and court rule in harmony leads
to the inexorable conclusion that paralegal fees are recoverable as attorney fees in this matter,
provided that the requirements of MCR 2.626 are satisfied.
Williams-Inner asserts that Liberty has waived its claim for attorney fees entirely by
failing to support it with detailed billing statements. Waiver is the intentional relinquishment of
a known right.50 It can hardly be said that Liberty waived its claim for attorney fees when it filed
a motion and multiple briefs requesting attorney fees, the trial court held two hearings on the
issue, and ultimately awarded the fees.51
Finally, Williams-Inner raises a novel argument. She asserts that in order to recover
attorney fees, Liberty was required to file a counter-complaint, and a jury was required to decide
the issue. Generally, “every final judgment may grant the relief to which the party in whose
favor it is rendered is entitled, even if the party has not demanded that relief in his or her
pleadings.”52 Because the trial court determined Williams-Inner’s claim was at least partially
fraudulent or excessive, the trial court could award Liberty its reasonable attorney fees.53 Liberty
was not required to file a separate pleading to obtain this relief.54 Nor was a jury required to
determine the issue. Quite the contrary, it was for the trial court to determine whether an award
47
MCL 500.3148(2).
48
MCR 2.626.
49
See Lapeer Co Clerk v Lapeer Circuit Court, 469 Mich. 146, 165; 665 NW2d 452 (2003).
50
Sweebe v Sweebe, 474 Mich. 151, 156-157; 712 NW2d 708 (2006).
51
See Greater Bible Way Temple of Jackson v City of Jackson, 268 Mich. App. 673, 688; 708
NW2d 756 (2005), rev’d on other grounds 478 Mich. 373 (2007) (rejecting an argument that the
plaintiff waived any claim for attorney fees by failing to state such a request in its complaint or
incorporating it into the final order; the issue was “briefed by the parties, a hearing on the issue
took place, and the trial court’s written opinion awarding the fees show[ed] that it thoroughly
considered the matter.”).
52
MCR 2.601(A).
53
MCL 500.3148(2).
54
MCR 2.601(A). See also Greater Bible Way, 268 Mich. App. at 688.
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of attorney fees was warranted and to determine the amount of that award.55 Williams-Inner’s
argument lacks merit.
We vacate the trial court’s award of attorney fees and remand for redetermination of the
award. On remand, Liberty “must submit detailed billing records, which the court must examine
and opposing parties may contest for reasonableness.”56 If the billing records contain
information protected by the attorney-client privilege, this information may be redacted.57
However, Liberty bears the burden of establishing its claim, and “[i]f a factual dispute exists
over the reasonableness of the hours billed or hourly rate claimed by the fee applicant, the party
opposing the fee request is entitled to an evidentiary hearing to challenge the applicant’s
evidence and to present any countervailing evidence.”58 The trial court must first “determin[e]
the fee customarily charged in the locality for similar legal services,” using “reliable surveys or
other credible evidence of the legal market.”59 The trial court must “make specific findings,
consistent with Smith, for each attorney whose fees plaintiff sought to recover.”60 Regarding
paralegal fees, the trial court must determine whether the paralegals meet the requirements of
MCR 2.626, and if they do, must similarly determine the customary fee in the locality for their
services.61 The trial court must then determine the number of hours reasonably expended by
each attorney and paralegal, including whether it was reasonably necessary for multiple attorneys
to attend to the same matter.62 After it has done so, the trial court must multiply the hourly fee
for each attorney and paralegal by the number of reasonable hours billed by that individual to
establish a baseline figure.63 Once this baseline figure has been established, the trial court may
then “consider the other factors and determine whether they support an increase or decrease in
the base number.”64 Affirmed in all other respects. We do not retain jurisdiction.
/s/ Michael J. Talbot
/s/ Mark J. Cavanagh
/s/ Patrick M. Meter
55
See Smith, 481 Mich. at 530-533 (outlining the procedure for a trial court to follow to
determine the amount of an attorney fee award).
56
Id. at 532.
57
See Augustine, 292 Mich. App. at 421-422.
58
Smith, 481 Mich. at 532.
59
Id. at 530-531.
60
Augustine, 292 Mich. App. at 439.
61
Smith, 481 Mich. at 530-531.
62
Id. at 532, 534.
63
Id. at 533.
64
Id.
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