Khaled Sabbagh v. Hamilton Psychological Services Plc

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
KHALED SABBAGH and FRED BERRY, FOR PUBLICATION
August 6, 2019
Plaintiffs-Appellants, 9:00 a.m.
v No. 342150
Macomb Circuit Court
HAMILTON PSYCHOLOGICAL SERVICES, LC No. 2016-002908-CZ
PLC, DENNIS FRENDO, SARAH GUERTIN,
and ULLIANCE, INC.,
Defendants-Appellees.
KHALED SABBAGH and FRED BERRY,
Plaintiffs-Appellees/Cross-
Appellees,
v No. 343204
Macomb Circuit Court
HAMILTON PSYCHOLOGICAL SERVICES, LC No. 2016-002908-CZ
PLC, DENNIS FRENDO, and SARAH
GUERTIN,
Defendants-Cross-Appellants,
and
ULLIANCE, INC.,
Defendant-Appellant.
Before: TUKEL, P.J., and JANSEN and RIORDAN, JJ.
TUKEL, P.J.
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In Docket No. 342150, plaintiffs, Khaled Sabbagh and Fred Berry, appeal as of right
three January 9, 2018 orders, which granted summary disposition to defendants, Ulliance, Inc.
(Ulliance), Dennis Frendo, Hamilton Psychological Services, PLC (Hamilton), and Sarah
Guertin. In Docket No. 343204, defendant Ulliance appeals as of right the trial court’s April 4,
2018 order denying its motion for case-evaluation sanctions against plaintiffs. Defendants
Hamilton and Frendo and, separately, defendant Guertin cross-appeal the same order denying
their motions for case-evaluation sanctions against plaintiffs. For the reasons provided below,
we affirm in part, reverse in part, and remand.
I. DOCKET NO. 3421501
This case arises from defendants’ involvement in psychological evaluations given to
plaintiffs in the course of plaintiffs’ separate applications for employment with the Dearborn
Police Department (DPD).
Sabbagh had been a deputy sheriff with the Wayne County Sheriff’s Department for 26
years and, beginning in November 2015, worked there as a part-time project consultant. Berry
also had been a Wayne County deputy sheriff from 1978 until his retirement. During his tenure,
he also had been an assistant director of the Wayne County Sheriff’s Homeland Security section.
During their careers, no questions ever had arisen regarding their mental health or capacity.
Both plaintiffs applied for a part-time police officer position with the DPD, with Berry
applying in September 2013 and Sabbagh applying in October 2013. As part of the application
process, Berry and Sabbagh each was required to undergo a psychological evaluation to
determine his mental and emotional condition. DPD contracted with Ulliance, a human
resources company, to select licensed psychologists to perform the evaluations. Ulliance, in
turn, selected Hamilton to conduct plaintiffs’ evaluations for DPD.
Hamilton was established by Frendo in September 1994 as a “service-oriented outpatient
independent practice providing a wide range of psychological services to children, families and
adults.” Frendo was a licensed psychologist with a doctorate degree who specialized in
psychotherapy and both neuro-psychological and psycho-educational assessments; he did not
specialize in personalities of individuals in public safety or security.
In September 2013, Hamilton engaged Guertin as an independent contractor to provide
outpatient counseling services at Hamilton’s premises. Guertin was a limited licensed
psychologist (LLP) with a master’s degree. As an LLP, Guertin was required to be supervised
by a fully licensed psychologist, in this case Frendo, who would sign off on all psychological
examinations or evaluations. Guertin began performing law-enforcement psychological
evaluations in December 2013.
1
Because of the procedural posture of the case, for purposes of presenting background
information, we have accepted the allegations in the complaint as true.
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Before Sabbagh’s psychological exam, he had an interview with DPD that was extremely
positive, and he was asked to consider a full-time position with DPD, rather than just part-time
employment. On December 23, 2013, Sabbagh went to Hamilton for the evaluation. Sabbagh
and another man entered the facility at the same time and were greeted by Guertin. The two
men’s appointments had been scheduled for the same time. Sabbagh offered to reschedule his
appointment, but Guertin insisted on conducting both evaluations at the same time and placed the
men in separate rooms.
Sabbagh’s evaluation was Guertin’s first law-enforcement psychological evaluation.
Guertin began Sabbagh’s evaluation by having him complete a questionnaire, participate in oral
exams, and answer questions about his background and employment history. Throughout the
evaluation, Guertin went back and forth between the two rooms every few minutes for extended
periods of time to conduct the other man’s evaluation. At the conclusion of the evaluation,
Sabbagh provided his completed questionnaire to a receptionist and did not see Guertin again.
Frendo did not conduct any part of the evaluation, although he authored Sabbagh’s evaluation
report, dated December 30, 2013. In that report, Frendo found Sabbagh to be “highly defensive”
and concluded that his testing reflected a “number of attitudes and behaviors that reflect
symptomatic depression.” The report continued, “[Sabbagh] worries about his health and his
physical symptoms may be used to manipulate or control others.” Frendo ultimately “ha[d]
concerns regarding [Sabbagh’s] emotional and physical status” and recommended “a complete
physical evaluation to rule out any pre-existing condition that would interfere with his ability to
perform his duties as a Police Officer.”
On January 16, 2014, Berry went to Hamilton for his evaluation. Berry was taken to a
room and interviewed by Guertin. Berry “was surprised to see that the interview conducted was
highly informal, with no recording device in the room,” and Guertin took no notes during the
interview. Frendo did not interview Berry or take part in the evaluation, although he also
authored that report, dated the same day as the evaluation. In that report, he stated that Berry
was “a 59 year old Arab American male” who was “forced into retirement from the Wayne
County Sheriff’s Department” and the “target of an investigation” based on suspicions that he
was well-compensated. Frendo concluded the report with “concerns” about Berry’s “level of
commitment as well as his history while a Wayne County Sheriff” and opined that Berry’s
“pattern of responses indicate[d] concerns regarding his physical health.”
Months after the evaluation was administered, the director of human resources for the
city of Dearborn contacted Berry and informed him that he had not passed his pre-employment
evaluation, at which time Berry requested a copy of the report Hamilton had provided to
Dearborn. Sabbagh heard back from the DPD’s human resources department in April 2014 and
learned the contents of Frendo’s report. Sabbagh and Berry both were shocked by the reports.
Plaintiffs claimed that neither of them had indicated during the course of their interviews that he
was suffering from pain, neurological issues, or medical issues.
Plaintiffs filed their complaint on August 16, 2016. The complaint contained five counts.
The counts at issue in this appeal are Counts II—gross negligence as to defendants Frendo,
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Guertin, and Hamilton; Count IV—negligence and vicarious liability as to defendant Hamilton;
and Count V—negligence as to defendant Ulliance.2 Plaintiffs alleged that Ulliance negligently
selected Hamilton to conduct the evaluations; Hamilton negligently scheduled Sabbagh and the
other, unknown individual for simultaneous assessments; and Guertin carelessly and
unprofessionally continued to leave Sabbagh’s interview to conduct the other evaluation.
Plaintiffs further alleged that Frendo, Guertin, and Hamilton carelessly performed the
psychological assessments; knowingly authored a false psychological examination report; and
failed to verify the contents of the report.
On October 16, 2017, Ulliance moved for summary disposition under MCR 2.116(C)(7)
and (10), arguing that the “professional negligence” count was actually a malpractice claim that
was time-barred and that, in any event, there was no basis for an ordinary negligence claim
because there was insufficient evidence to support a finding of a duty, breach of duty, injury, or
proximate causation. Hamilton and Frendo subsequently filed a motion for summary disposition
under both MCR 2.116(C)(7) and (10), arguing that plaintiffs’ claims sounded in malpractice and
were time-barred and that there was no evidence that Hamilton or Frendo deviated from the
standard of care. Guertin also moved for summary disposition under MCR 2.116(C)(7), (8), and
(10) and argued that the claims sounded in malpractice and were time-barred. Guertin further
argued that even if the claims were not time-barred, plaintiffs had failed to raise a genuine issue
of material fact that Guertin’s alleged actions rose to the level of reckless or wanton conduct
necessary for gross negligence.
In separate opinions and orders, the trial court granted the three outstanding motions for
summary disposition. The court rejected the argument that plaintiffs’ negligence claims sounded
in medical malpractice. Nevertheless, the court ruled that plaintiffs’ claims lacked evidentiary
and legal support under a common-law tort theory.
This Court reviews de novo a trial court’s decision to grant summary disposition,
Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 Mich. App. 362, 369; 775
NW2d 618 (2009), including whether a cause of action is barred by a statute of limitations,
Collins v Comerica Bank, 468 Mich. 628, 631; 664 NW2d 713 (2003). This Court also reviews
de novo questions of statutory interpretation. Adams Outdoor Advertising, Inc v City of Holland,
463 Mich. 675, 681; 625 NW2d 377 (2001).
Summary disposition under MCR 2.116(C)(7) is appropriate if a claim is barred because
of the statute of limitations. Summary disposition is appropriate under MCR 2.116(C)(8) if the
plaintiffs have failed to state a claim on which relief can be granted. Wade v Dep’t of
Corrections, 439 Mich. 158, 162; 483 NW2d 26 (1992). Under both (C)(7) and (C)(8), all well-
2
The parties had agreed to dismiss plaintiffs’ Count I, which was a claim of violation of the
Elliott-Larsen Civil Rights Act, MCL 37.2101 et seq. And the trial court found that plaintiffs
had waived all of their Count III emotional distress claims for failure to address them in their
responses to the motions for summary disposition; plaintiffs have not challenged that decision on
appeal.
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pleaded allegations must be both accepted as true and construed in the light most favorable to the
nonmoving party. Id. at 162-163. However, under MCR 2.116(C)(7), the court must consider
all of the documentary evidence submitted by the parties, while under MCR 2.116(C)(8), the
court must test the legal sufficiency of the complaint considering only the pleadings. MCR
2.116(G)(5); Wade, 439 Mich. at 162.
A. DO PLAINTIFFS’ CLAIMS SOUND IN MEDICAL MALPRACTICE OR
ORDINARY NEGLIGENCE?
1. WHICH DEFENDANTS HAVE THE LEGAL CAPACITY TO BE HELD
LIABLE FOR MEDICAL MALPRACTICE?
“The first issue in any purported medical malpractice case concerns whether it is being
brought against someone who, or an entity that, is capable of malpractice.” Bryant v Oakpointe
Villa Nursing Center, Inc, 471 Mich. 411, 420; 684 NW2d 864 (2004). Medical malpractice
claims may be made against
a person or entity who is or who holds himself or herself out to be a licensed
health care professional, licensed health facility or agency, or an employee or
agent of a licensed health facility or agency who is engaging in or otherwise
assisting in medical care or treatment, whether or not the licensed health care
professional, licensed health facility or agency, or their employee or agent is
engaged in the practice of the health profession in a sole proprietorship,
partnership, professional corporation, or other business entity. [MCL
600.5838a(1).]
A “licensed health facility or agency” is “a health facility or agency licensed under article 17 of
the public health code . . . .” MCL 600.5838a(1)(a). MCL 333.20106(1) defines “health facility
or agency” as follows:
(a) An ambulance operation, aircraft transport operation, nontransport prehospital
life support operation, or medical first response service.
(b) A county medical care facility.
(c) A freestanding surgical outpatient facility.
(d) A health maintenance organization.
(e) A home for the aged.
(f) A hospital.
(g) A nursing home.
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(h) A hospice.
(i) A hospice residence.
(j) A facility or agency listed in subdivisions (a) to (g) located in a university,
college, or other educational institution.
Because Hamilton is a psychological practice and Ulliance is a human resources company,
neither of which is included in MCL 333.20106(1), they “cannot be directly liable for medical
malpractice in that capacity.” Kuznar v Raksha Corp, 481 Mich. 169, 178; 750 NW2d 121
(2008). Thus, any claims of negligence against Hamilton and Ulliance must sound in ordinary
negligence as opposed to medical malpractice.
A “licensed health care professional” is “an individual licensed or registered under article
15 of the public health code . . . and engaged in the practice of his or her health profession in a
sole proprietorship, partnership, professional corporation, or other business entity.” MCL
600.5838a(1)(b). Frendo and Guertin are licensed and registered under article 15 of the Public
Health Code, with Guertin being a licensed psychologist and Frendo holding a limited
psychology license. MCL 333.18223(1) and (2). Therefore, they are both licensed health care
professionals, MCL 600.5838a(1)(b), and thus “capable of malpractice,” Bryant, 471 Mich. at
420. As our Supreme Court has noted, just because a party is capable of committing medical
malpractice, it does not mean that a claim against that defendant “certainly sounds in medical
malpractice.” Id. at 421. To make this determination, a court must evaluate the nature of the
claims themselves.
2. NATURE OF CLAIMS AGAINST FRENDO AND GUERTIN
“The second issue concerns whether the alleged claim sounds in medical malpractice.”
Id. at 422. To answer this question, courts make two determinations: whether there was a
professional relationship, and whether the claim raises questions involving medical judgment.
Id. at 422-423.
“[M]edical malpractice can occur only within the course of a professional relationship.”
Id. at 422 (quotation marks and citation omitted).
A professional relationship sufficient to support a claim of medical malpractice
exists in those cases in which a licensed health care professional, licensed health
care facility, or the agents or employees of a licensed health care facility, were
subject to a contractual duty that required that professional, that facility, or the
agents or employees of that facility, to render professional health care services to
the plaintiff. [Id. at 422-423.]
In granting summary disposition in favor of Frendo and Guertin, the trial court relied on
and applied Dyer v Trachtman, 470 Mich. 45; 679 NW2d 311 (2004). In Dyer, our Supreme
Court held that in the context of an independent medical examination (IME), while no traditional
physician-patient relationship exists between an IME examiner and an examinee, a limited
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professional relationship does arise. Id. at 49-50.3 Explaining the reasoning behind its
conclusion that a limited relationship exists, the Supreme Court stated:
In the particularized setting of an IME, the physician’s goal is to gather
information for the examinee or a third party for use in employment or related
financial decisions. It is not to provide a diagnosis or treatment of medical
conditions.
* * *
Likewise, other courts, including our Court of Appeals, have apparently
recognized that the general duty of diagnosis and treatment is inappropriate in the
IME setting given the purpose of the examination. [Id. at 51, 52.]
And under this limited relationship, an examiner owes “fewer duties” to the examinee
than would exist in a traditional physician-patient relationship. Id. at 53. But the limited
relationship “still requires that the examiner conduct the examination in such a way as not to
cause harm.” Id. The Court explained:
The patient is not in a traditional professional relationship with the physician.
Nonetheless, he places his physical person in the hands of another who holds that
position solely because of his training and experience. The recognition of a
limited relationship preserves the principle that the IME physician has undertaken
limited duties but that he has done so in a situation where he is expected to
exercise reasonable care commensurate with his experience and training. [Id.
(quotation marks and citation omitted).]
As such, an “IME physician, acting at the behest of a third party, is not liable to the examinee for
damages resulting from the conclusions the physician reaches or reports,” id. at 50 (emphasis
added), in part because “if the duties that arise in a regular physician-patient relationship were
imposed on the IME physician, an unacceptable risk would exist,” id. at 51. The Court
continued, “The examinee, disagreeing with the diagnosis, could sue and recover from the IME
physician.” Id. The Supreme Court reasoned that permitting this type of lawsuit “would make it
impossible to find any expert witness willing to risk a lawsuit based on his testimony as to his
opinions and conclusions before any tribunal.” Id. at 52 (quotation marks and citation omitted).
Plaintiffs argue that Dyer is inapplicable in this case because Guertin and Frendo are not
physicians and because the pre-employment psychological evaluation was not an IME. Plaintiffs
3
The IME in Dyer was conducted pursuant to the discovery rules in an unrelated civil lawsuit
between the plaintiff and a third party. Dyer, 470 Mich. at 47. The third party had requested the
IME as part of that litigation. Id. However, the plaintiff alleged that during the course of
conducting the IME, the physician defendant conducting the examination injured him physically.
Id.
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thus contend that Guertin and Frendo should be subject to being held liable for their conclusions
arising from the evaluations.
As an initial matter, plaintiffs are correct that psychologists are not physicians. See
People v Beckley, 434 Mich. 691, 728; 456 NW2d 391 (1990) (recognizing that psychologists are
different than physicians), citing People v LaLone, 432 Mich. 103, 109; 437 NW2d 611 (1989);
see also MCL 600.2157 (identifying physician-patient privilege) and MCL 333.18237
(identifying psychologist-patient privilege). There also is no question that Dyer addressed
physicians conducting IMEs. Thus, the salient issue before us is whether Dyer’s application
properly is limited to physicians.
Plaintiffs note that the Supreme Court in Dyer used the word “physician” many times in
its opinion, and they therefore assert that “[t]he Supreme Court would not have bothered to draw
the distinction between a physician performing an IME and a nonphysician performing an IME
(or, in this case, a psychological evaluation)” unless that distinction was intended to make the
analysis inapplicable outside the context of a physician performing an IME. We disagree with
plaintiffs’ analysis of Dyer.
Contrary to plaintiffs’ arguments, the Supreme Court’s reasons for finding a limited
relationship between an IME physician and an examinee apply equally to all healthcare providers
authorized to conduct IMEs, or their functional equivalent. First, as with a physician conducting
an IME, a psychologist like Frendo or Guertin conducting a pre-employment evaluation does not
have a traditional relationship with the examinee. Further, psychologists in Frendo and Guertin’s
position share the same goal as a physician conducting an IME: “to gather information for the
examinee or a third party for use in employment or related financial decisions. It is not to
provide a diagnosis or treatment of medical conditions.” Id. at 51. And reading Dyer to cover
all healthcare providers authorized to conduct IMEs, or their functional equivalent, provides the
same policy benefit of “obviat[ing] the necessity of attempting to distinguish artificially between
claims of malpractice by an independent medical examiner” and other healthcare providers. Id.
at 53. This is particularly true now that MCL 600.5838a(1) has “expand[ed] the category of who
may be subject to a malpractice action.” Bryant, 471 Mich. at 421. Finally, we see no reason
why a nonphysician expert should not receive the same protections that a physician expert does
with regard to not being liable to an examinee for any conclusions the expert makes. See Dyer,
470 Mich. at 51-52.
Plaintiffs in particular cite a footnote in Dyer limiting its holding “to the relationship
between an examinee and a physician who provides an IME but does not treat the examinee.”
Id. at 49 n 2 (emphasis added). However, when read in context, the clear purpose of the footnote
was to limit the application of the opinion to situations in which a physician examines “but does
not treat the examinee.” Id. (emphasis added). This is readily apparent because immediately
before that footnote, the Dyer Court stated, “The Court of Appeals correctly recognized that this
Court has not yet directly determined what, if any, relationship should be recognized between a
physician performing an IME and an examinee.” Id. at 49. With the footnote, the Supreme
Court left open the issue of the nature of the relationship in situations in which the physician
conducting the IME provided treatment to the examinee, which presumably could give rise to a
traditional physician-patient relationship.
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Because applying Dyer to all healthcare providers authorized to conduct IMEs, including
psychologists, is consistent with (1) the language in Dyer holding that the limited relationship
requires “the examiner” not to harm the examinee, (2) the recognition that statutes expressly
permit other healthcare providers to conduct IMEs, (3) the expanded category of those subject to
medical malpractice actions, and (4) the Dyer Court’s analysis of the Legislature’s expressed
policy objectives, the trial court was correct in applying Dyer in this case.
However, despite applying Dyer, the trial court concluded that “a ‘professional
relationship’ did not exist” between plaintiffs and Frendo and Guertin; this was erroneous
because the holding of Dyer is that, in the context of an IME, a limited duty arises under which
the professional conducting the IME is required to “exercise care consistent with his professional
training and expertise so as not to cause physical harm by negligently conducting the
examination.” Dyer, 470 Mich. at 55. Here, the trial court concluded that there was no
professional relationship because plaintiffs did not allege that defendants’ actions caused a
physical injury. But regardless of whether plaintiffs alleged any particular injury, a limited
professional relationship nonetheless existed, as explained in Dyer.
3. DO PLAINTIFFS’ CLAIMS AGAINST FRENDO AND GUERTIN ALLEGE FACTS
WITHIN THE REALM OF A JURY’S COMMON KNOWLEDGE AND EXPERIENCE?
Having satisfied the professional relationship test, “the next step is determining whether
the claim raises questions of medical judgment requiring expert testimony or, on the other hand,
whether it alleges facts within the realm of a jury’s common knowledge and experience.”
Bryant, 471 Mich. at 423. Here, plaintiffs alleged that Guertin did not properly conduct the
interview and testing necessary for a law-enforcement psychological evaluation and that Frendo
negligently permitted Guertin to perform the evaluation, in spite of being unqualified, and
plaintiffs further alleged that Guertin fraudulently authored the report even though he had not
conducted the evaluation. Claims generally raise issues of medical judgment when “the
reasonableness of the[se] action[s] can be evaluated by a jury only after having been presented
the standards of care pertaining to the medical issue before the jury explained by experts.” Id.
Lay jurors are not familiar with all of the various types and forms of psychological
testing available and could not possibly know what information the various tests provide, how
they compare with other available tests, or which tests were appropriate to give during a pre-
employment psychological evaluation for a law-enforcement applicant. In addition, a jury would
not know, without expert testimony, whether it was appropriate or even usual for a limited
licensed psychologist to proctor psychological testing in which the results would be interpreted
by someone else; nor would a jury know whether it meets professional standards for a
supervising licensed psychologist to interpret testing and notes generated by another
psychologist, and then prepare an evaluation report based on that testing, without having met the
person being tested. Similarly, an expert would need to explain to a jury why psychological
testing for law-enforcement candidates is or ought to be different from more-generalized
psychological testing. Simply put, the question of whether Frendo’s or Guertin’s actions in
conducting the evaluations and drafting the reports were negligent under the circumstances
alleged raised questions of medical judgment, and plaintiffs’ claims therefore sounded in medical
malpractice. See id. at 424.
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B. SUMMARY DISPOSITION ANALYSIS
1. DEFENDANTS GUERTIN AND FRENDO
Having determined that Guertin and Frendo were capable of malpractice, that Dyer
applied to create a professional relationship between plaintiffs and Guertin and Frendo, that
plaintiffs’ claims raised questions of medical judgment, and that the evaluations constituted
IMEs, the trial court ought to have held that plaintiffs’ Count II gross negligence claims against
Guertin and Frendo sounded in medical malpractice. And, because it is clear that plaintiffs’
claims were brought more than two years after the acts alleged, a point which plaintiffs have
never disputed, and thus were outside the two-year medical malpractice statute of limitations, see
Haksluoto v Mt Clemens Regional Med Ctr, 500 Mich. 304, 310; 901 NW2d 577 (2017), citing
MCL 600.5805(6), the trial court ought to have granted summary disposition under MCR
2.116(C)(7) on this basis. However, we will affirm the trial court’s grant of summary disposition
in favor of defendants, as long as it was the correct result, albeit for the wrong reason. See
Gleason v Dep’t of Transp, 256 Mich. App. 1, 3; 662 NW2d 822 (2003).4
Further, because plaintiffs’ claims against Guertin and Frendo could not be sustained,
plaintiffs’ claim against Hamilton based on a vicarious liability theory necessarily fails as well.
See Al-Shimmari v Detroit Med Ctr, 477 Mich. 280, 294-297; 731 NW2d 29 (2007).
2. DEFENDANT HAMILTON
Plaintiffs next argue that the trial court erred in granting Hamilton’s motion for summary
disposition with respect to plaintiffs’ direct claims of negligence against Hamilton. We disagree.
A party is entitled to summary disposition under MCR 2.116(C)(10)5 when there are no
genuine issues of material fact and the moving party is entitled to judgment as a matter of law.
Barnard Mfg, 285 Mich. App. at 369. “[T]he moving party must support its motion with
affidavits, depositions, admissions, or other documentary evidence in support of the grounds
asserted.” Id., citing MCR 2.116(G)(3). When a moving party properly supports its motion, the
4
Because plaintiffs’ claims against Guertin and Frendo fail because of the statute of limitations,
and because no one raised the issue on appeal, we do not decide what the requisite level of
“harm” is, under the limited-duty analysis of Dyer, which would be applicable to justify recovery
here. Medical doctors engage in physical examinations which, as in Dyer, have the potential of
causing physical injury; psychologists do not engage in such examinations and thus do not
expose individuals being examined to physical harm in that manner. Delineation of the scope
and contours of the limited duty as applied to psychologists will have to await future cases.
5
Plaintiffs complain that the trial court failed to specify whether it dismissed their claims against
Hamilton under MCR 2.116(C)(8) or (C)(10). However, given the trial court’s explicit statement
that plaintiffs’ only evidence submitted with respect to proximate causation did not create an
issue of fact, the record makes clear that the trial court decided this issue under (C)(10). See
Silberstein v Pro-Golf America, Inc, 278 Mich. App. 446, 457; 750 NW2d 615 (2008).
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burden shifts to the nonmoving party to establish that a genuine issue of disputed material fact
exists. Id. The trial court may not weigh evidence, make determinations of credibility, or
otherwise decide questions of fact. Bank of America, NA v Fidelity Nat’l Title Ins Co, 316 Mich
App 480, 512-513; 892 NW2d 467 (2016).
In its motion for summary disposition, Hamilton argued, in pertinent part, that plaintiffs
could not prove the essential element of proximate causation. See Ray v Swager, 501 Mich. 52,
64; 903 NW2d 366 (2017) (“Proximate cause is an essential element of a negligence claim.”). In
other words, Hamilton argued that plaintiffs could not demonstrate that the breach of any duty it
owed was the proximate cause of plaintiffs’ purported injury, i.e., not being hired by the DPD.
Hamilton cited evidence that showed that assuming plaintiffs had passed the psychological
evaluation, they would have only been “eligible to continue in the process,” in which there were
many more steps to complete. In other words, Hamilton argued that any causal link was too
speculative. See Skinner v Square D Co, 445 Mich. 153, 164; 516 NW2d 475 (1994) (“To be
adequate, a plaintiff’s circumstantial proof must facilitate reasonable inferences of causation, not
mere speculation.”). In response, plaintiffs did not address this argument. Accordingly,
plaintiffs failed to meet their evidentiary burden in opposing Hamilton’s motion with respect to
their not obtaining employment with the DPD. See Barnard Mfg, 285 Mich. App. at 369.
But plaintiffs assert that their damages were never solely related to the loss of
employment at the DPD, but were for losses of “earning capacity and “career opportunities” or,
as the trial court stated, “employment prospects.” According to plaintiffs, Hamilton’s alleged
breach resulted in this loss of earning capacity and career opportunities “because all potential
police-employers ask if applicants have ever failed a psychological evaluation.” Thus, according
to plaintiffs, because every police application contains this question and because plaintiffs must
now answer affirmatively that they failed a psychological examination and were rejected from
employment because of it, “no reasonable potential law enforcement employer would ever hire
Plaintiffs in light of these obvious liability concerns and because of the questions that will linger
with Plaintiffs forever.”
In support of their theory of causation, plaintiffs provided two unauthenticated pages
allegedly from applications for the DPD and the Wayne County Sheriff’s Department, which
they argue, again without any citation to legal or evidentiary authority, establish that “all
potential police-employers ask if applicants have ever failed a psychological evaluation.”
However, all that these documents show is that both the DPD and the Wayne County Sheriff’s
Department ask this question. There is no evidence from which either the trial court or this
Court could reasonably infer that all Michigan law enforcement agencies, let alone all law
enforcement agencies nationwide, ask this question. Furthermore, both of these pages
purportedly come from jurisdictions from which plaintiffs have either retired or whose denial of
employment forms the basis of the instant claim. Plaintiffs have cited no evidence showing that
they have (1) applied to other law-enforcement departments, (2) been asked the question, (3)
answered affirmatively, and (4) been summarily rejected on the basis of that answer alone.
Given the complete absence of evidence that plaintiffs have applied for or been denied law
enforcement positions other than the one at the DPD, plaintiffs’ claim of lost earning potential
and employment opportunities is purely speculative. See Skinner, 445 Mich. at 164.
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As a result, the trial court properly granted Hamilton’s motion for summary disposition
related to any direct claims of negligence, based on plaintiffs’ failure to show proximate
causation regarding any potential future harm to plaintiffs based on any alleged breach.
3. DEFENDANT ULLIANCE
The trial court granted summary disposition in favor of Ulliance on plaintiffs’ Count V
negligence claim, on the basis of its determination that Ulliance had no duty to plaintiffs because
there was no relationship between them. On appeal, plaintiffs argue that the trial court erred
because it looked “for the existence of a normal relationship to establish third-party tort liability”
when, in fact, “third-party tort liability is established through a ‘special relationship.’ ” We
disagree.
Generally, whether a defendant owes a plaintiff a duty of care is a question of law
determined by the court. Hill v Sears, Roebuck & Co, 492 Mich. 651, 659; 822 NW2d 190
(2012). “[O]nce a party makes a properly supported motion under MCR 2.116, the adverse party
‘may not rest upon the mere allegations or denials of his or her pleading, but must, by affidavits
or as otherwise provided in this rule, set forth specific facts showing that there is a genuine issue
for trial.’ ” Barnard Mfg, 285 Mich. App. at 377, quoting MCR 2.116(G)(4). The burden is on
the party opposing the motion to establish a question of material fact; the trial court need not
search the record for a basis to deny the moving party’s motion. Id.
In its motion for summary disposition, Ulliance argued that it did not owe a duty to
plaintiffs because it had no relationship with them; there was no contract with them; and it and
had never spoken with or contacted them. The burden then shifted to plaintiffs to explain the
legal basis for the relationship it believed imposed a duty on Ulliance and to cite the facts in the
record that established the existence of that relationship. In response, plaintiffs averred that
Ulliance “had a duty to apply the knowledge, skill and ability that a reasonabl[y] careful
professional in the field of human resources would exercise under the circumstances.” With no
explanation or citation to authority, plaintiffs argued that it was foreseeable that injury would
result from breach of this duty. The trial court ruled that without any relationship between
plaintiffs and Ulliance, Ulliance did not owe any common-law duty to plaintiffs.
At common law, the determination of whether a legal duty exists is a
question of whether the relationship between the actor and the plaintiff gives rise
to any legal obligation on the actor’s part to act for the benefit of the subsequently
injured person. The ultimate inquiry in determining whether a legal duty should
be imposed is whether the social benefits of imposing a duty outweigh the social
costs of imposing a duty. Factors relevant to the determination whether a legal
duty exists include the the [sic] relationship of the parties, the foreseeability of the
harm, the burden on the defendant, and the nature of the risk presented. [Hill v
Sears, Roebuck & Co, 492 Mich. 651, 661; 822 NW2d 190 (2012) (quotation
marks, citations, and brackets omitted).]
However, “before a duty can be imposed, there must be a relationship between the parties and
the harm must have been foreseeable.” Id. (quotation marks, citation, and brackets omitted). “If
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either of these two factors is lacking, then it is unnecessary to consider any of the remaining
factors.” Id.
Here, plaintiffs did not establish that they had a relationship with Ulliance. Ulliance was
a human resources management company and had a contract with the city of Dearborn.
Ulliance, as part of its contract, referred plaintiffs to Frendo for pre-employment psychological
evaluations. We agree with the trial court that this “relationship” between plaintiffs and Ulliance
was too tenuous to create any type of duty. While Ulliance had a contractual relationship with
the city of Dearborn, and with it an obligation to select adequate providers, it had no such
relationship with plaintiffs and therefore did not owe plaintiffs any duty or obligation.
In addition, plaintiffs’ reliance on any purported failure of Ulliance to adhere to the
guidelines of the Michigan Commission on Law Enforcement Standards (MCOLES) is
misplaced. “Violation of an ordinance is not negligence per se, but only evidence of
negligence.” Stevens v Drekich, 178 Mich. App. 273, 278; 443 NW2d 401 (1989); see also
Hodgdon v Barr, 334 Mich. 60, 71; 53 NW2d 844 (1952). However, although a violation of an
ordinance constitutes evidence of negligence, “[i]f no duty is owed by the defendant to the
plaintiff, an ordinance violation committed by the defendant is not actionable as negligence.”
Johnson v Davis, 156 Mich. App. 550, 555-556; 402 NW2d 486 (1986). As the trial court noted,
if an ordinance violation, standing alone, cannot serve as a basis for imposing a legal duty under
a theory of negligence, then a fortiori, a regulation violation, standing alone, cannot either.
Thus, because we have already held that Ulliance owed no duty to plaintiffs due to the lack of a
relationship between plaintiffs and Ulliance, any purported violation of MCOLES guidelines is
not actionable by plaintiffs as negligence.
Plaintiffs invoke the term “vicarious liability” in their brief on appeal, but it is not clear
how that principle of law applies here. “Vicarious liability is indirect responsibility imposed by
operation of law.” Cox v Bd of Hosp Managers for City of Flint, 467 Mich. 1, 11; 651 NW2d 356
(2002) (quotation marks and citation omitted). As such, “to succeed on a vicarious liability
claim, a plaintiff need only prove that an agent has acted negligently.” Laster v Henry Ford
Health Sys, 316 Mich. App. 726, 735; 892 NW2d 442 (2016) (quotation marks and citation
omitted). But plaintiffs’ complaint does not allege that Ulliance was vicariously liable due to the
acts of Ulliance’s employee or agent; instead, plaintiffs alleged active negligence on Ulliance’s
part. Thus, plaintiffs’ reference to vicarious liability is entirely misplaced.
Consequently, for the above reasons, the trial court properly granted Ulliance’s motion
for summary disposition.
II. DOCKET NO. 343204
On appeal, defendants all argue that the trial court should have awarded them actual costs
as part of case-evaluation sanctions under MCR 2.403 due to plaintiffs having rejected all the
case-evaluation awards and ultimately not bettering their positions, in light of the subsequent
grant of defendants’ motions for summary disposition.
In October 2017, the parties had participated in case evaluation. The evaluation panel
unanimously issued various awards to each plaintiff against each defendant. Defendants had
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accepted and plaintiffs had rejected the respective case-evaluation awards applicable to each of
them.
After the trial court’s grant of summary disposition in January 2018, defendants sought
case-evaluation sanctions and taxable costs against plaintiffs. Guertin sought $3,390 in attorney
fees for approximately 11 hours of work and a $1,500 sanction for plaintiffs’ refusal to dismiss
or defend the emotional distress claims. Hamilton and Frendo sought $8,743.30 in attorney fees
for about 30 hours of work and taxable costs of $70.13 for filing fees. Ulliance sought $7,045.10
in attorney fees for almost 26 hours of work and $4,025.12 in taxable costs for deposition
transcripts and filing fees.
Plaintiffs argued that the trial court should refuse to award attorney fees under the
“interest of justice” exception in MCR 2.403(O)(11) and that defendants were prohibited from
seeking attorney fees incurred pursuing sanctions. With respect to Hamilton and Frendo,
plaintiffs argued that their billing was unreasonable because it included hours for researching and
drafting their motion to dismiss, which was filed in October 2017, well before the November 22
acceptance/rejection deadline. Plaintiffs disputed time billed to speak with codefendants (3.6
hours), asserting that it would amount to triple billing. Plaintiffs also requested an evidentiary
hearing on the reasonableness of the attorney fees Hamilton and Frendo sought.
With respect to Ulliance, plaintiffs argued that Ulliance was not entitled to any time
related to taking depositions. They noted that defendants were seeking $4,025.12 in costs that
were incurred in May 2017, well before the November 22, 2017 acceptance/rejection deadline.
Plaintiffs repeated their complaint regarding attorney fees related to correspondence with
codefendants, noting that Ulliance had two attorneys doing the same task, amounting to
“quadruple billing.” Also, plaintiffs wanted an evidentiary hearing on the matter of
reasonableness in the event the trial court did not elect to utilize the interest-of-justice provision.
With respect to Guertin, plaintiffs challenged the time sought for drafting her motion for
summary disposition, which occurred in late October 2017, before the late November
acceptance/rejection deadline. Plaintiffs disputed that their emotional distress claims were
meritless and asserted that they excluded the issue from their briefing “to save both Defendants
and this Court the effort of arguing it any further.” (Emphasis omitted.) Plaintiffs argued that
Guertin’s claim for a $1,500 sanction was, itself, meritless, and requested that Guertin be
sanctioned “for this wanton attempt at imposing sanctions on Plaintiffs.”
On April 4, 2018, the trial court issued its opinion regarding all three motions for
sanctions. The trial court elected to apply the interest-of-justice exception to Guertin, Frendo,
and Hamilton and thus denied sanctions because it concluded that application of Dyer, 470 Mich.
45, to the facts of this case was an issue of first impression. The trial court also noted a
“financial disparity” between plaintiffs “who were denied employment” and “defendants who are
professionals or established institutions.” Finally, the trial court stated that it was “mindful of
the fact that Plaintiffs possibly suffered harm from poorly conducted or inaccurate evaluations.”
However, the trial court noted that the interest-of-justice exception did not apply to
Ulliance, thereby entitling Ulliance to “actual costs,” including a reasonable attorney fee. The
trial court determined that the unsigned billing summary attached to the attorney affidavit which
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Ulliance submitted was inadmissible as a business record because it was created in anticipation
of litigation. It held that Ulliance was required to submit detailed billing records that the court
could examine and the opposing parties could contest for reasonableness. Because Ulliance had
argued that an evidentiary hearing was unnecessary, the trial court determined that it was not
satisfied that Ulliance had “adequately supported its claim for costs and attorney fees.” Finally,
the trial court held that this Court does not permit parties to recover fees for time spent pursuing
case-evaluation sanctions, so that even if Ulliance had adequately supported its fee requests, the
trial court would have denied any fees which arose as a result of pursuing sanctions.
With respect to costs, the trial court noted that Guertin had not sought any costs, Frendo
and Hamilton sought $70.13, and Ulliance sought $4,025.12. The trial court noted that
deposition fees cannot be included in costs unless they were read into evidence or necessarily
used. Removing those fees, Ulliance had $60 in fees, which the trial court awarded, along with
$70.13 to Frendo and Hamilton.
A. MCR 2.403
MCR 2.403 governs the process for case evaluation and how sanctions are to be awarded.
MCR 2.403(O)(1) provides, in pertinent part, that
[i]f a party has rejected an evaluation and the action proceeds to verdict, that party
must pay the opposing party’s actual costs unless the verdict is more favorable to
the rejecting party than the case evaluation.
And MCR 2.403(O)(6)(b) provides that “actual costs” include “a reasonable attorney fee based
on a reasonable hourly or daily rate as determined by the trial judge for services necessitated by
the rejection of the case evaluation . . . .”
Thus, because plaintiffs had rejected the case evaluations as to all defendants and because
the trial court entered a “verdict” in favor of all defendants when the court granted defendants’
motions for summary disposition, see MCR 2.403(O)(2)(c), defendants were, as a matter of
course, entitled to case-evaluation sanctions. However, with respect to defendants Hamilton,
Frendo, and Guertin, the trial court invoked MCR 2.403(O)(11), which allows a court to decline
to award case-evaluation sanctions “in the interest of justice.” That provision specifically states,
“If the ‘verdict’ is the result of a motion as provided by subrule (O)(2)(c), the court may, in the
interest of justice, refuse to award actual costs.”
B. ULLIANCE’S APPEAL
1. ADMISSIBILITY OF BILLING SUMMARY
Ulliance argues that the trial court erred when it determined that the billing summary
Ulliance provided to support its claim for attorney fees, as part of its “actual costs” under case-
evaluation sanctions, was inadmissible. We agree. This Court reviews for an abuse of discretion
a trial court’s decision regarding the admission of evidence. Zeeland Farm Servs v JBL
Enterprises, Inc, 219 Mich. App. 190, 200; 555 NW2d 733 (1997). A court abuses its discretion
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when it selects an outcome that falls outside the range of reasonable and principled outcomes.
Maldonado v Ford Motor Co, 476 Mich. 372, 388; 719 NW2d 809 (2006).
The party requesting attorney fees bears the burden of proving that they were incurred
and that they are reasonable. Reed v Reed, 265 Mich. App. 131, 165-166; 693 NW2d 825 (2005).
A “fee applicant must submit detailed billing records, which the court must examine and
opposing parties may contest for reasonableness.” Smith v Kouri, 481 Mich. 519, 532; 751
NW2d 472 (2008). “The fee applicant bears the burden of supporting its claimed hours with
evidentiary support.” Id. Therefore, the issue here is whether Ulliance’s billing summary
constituted “a reasonable evidentiary basis” on which the trial court could evaluate and decide
Ulliance’s motion.
Attached to its motion seeking case-evaluation sanctions, Ulliance provided a billing
summary. The summary was six pages long and was presented in a table format. The table’s
four columns described the date on which the work was performed, which attorney performed
the work, a brief description of the work, and how many hours the attorney spent on the task.
Ulliance argued at the motion hearing that given the information it had provided, an evidentiary
hearing was not “required.” Notably, plaintiffs did not argue that the billing summary was not
admissible. Instead, plaintiffs argued that if the court were not to utilize the interest-of-justice
exception under MCR 2.403(O)(11), they were requesting an evidentiary hearing to challenge
the reasonableness and appropriateness of the fees.
Although Ulliance otherwise would have been entitled to the award of actual costs under
MCR 2.403(O)(1), the trial court declined to award any attorney fees because it determined that
Ulliance’s billing summary was not admissible. The court cited Attorney General v John A
Biewer Co, Inc, 140 Mich. App. 1, 17; 363 NW2d 712 (1985), for the principle that documents
created in anticipation of litigation are not admissible as business records. Instead, the court
stated that “detailed billing records” must be submitted in order to support a claim for attorney
fees.
The trial court erred. First, it is important to note that no evidentiary hearing was held.
Although the billing summary might have been inadmissible at an evidentiary hearing in its then-
current form,6 the trial court was not making a decision at an evidentiary hearing. Rather, at this
prehearing stage, the parties merely are trying to show whether there is any evidence, which if
believed, would support the award of fees. The proffered summary, detailing the dates various
tasks were accomplished, the attorneys who completed the work, how much time each task took,
and a description of the work itself, was sufficiently detailed to support an initial request for such
an award. See MRE 1006 (allowing for summaries to be used as long as materials from which
the summaries were gathered are made available for examination); Smith, 481 Mich. at 532
(stating that “[t]he fee applicant bears the burden of supporting its claimed hours with
evidentiary support” and consistent with that obligation, “must submit detailed billing records”).
Assuming a party satisfies that standard and the opposing party objects to the reasonableness of
6
But see MRE 1006, allowing summaries under certain conditions.
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the fees, the trial court could then hold an evidentiary hearing, see Smith, 481 Mich. at 532, at
which time it could make any necessary determination regarding credibility and reasonableness.
Moreover, Ulliance also submitted an affidavit of the lead attorney, in which the attorney averred
that he had personal knowledge of the facts and incorporated the contents of the summary into
his affidavit. Thus, even assuming that the billing summary was inadmissible, per se, the
affidavit, which incorporated the contents of the summary, was admissible at this stage of the
proceedings to support Ulliance’s motion. See MCR 2.119(B).
Plaintiffs’ reliance on Augustine v Allstate Ins Co, 292 Mich. App. 408; 807 NW2d 77
(2011), is misplaced. In Augustine, this Court considered the defendant’s argument that the trial
court erred by admitting, over the defendant’s objection, four letters written by other attorneys
who had litigated similar cases, in which the attorneys discussed their hourly fees. Id. at 430.
This Court determined that the trial court had abused its discretion by admitting the letters
because they were hearsay, i.e., out-of-court statements offered to prove the truth of the matter
asserted, see id. at 430, citing MRE 801(c), and not admissible under MRE 803(6) as business
records, nor MRE 803(24) as an “other exception,” Augustine, 292 Mich. App. at 431. But,
critically, the evidence at issue in Augustine was admitted at an evidentiary hearing, id. at 430,
which is not the case here.
Therefore, we hold that the trial court erred when it determined that the billing summary
was “inadmissible” before the holding of an evidentiary hearing.
2. FAILURE TO HOLD AN EVIDENTIARY HEARING
Ulliance next argues that the trial court erred when it failed to hold an evidentiary
hearing. We note that Ulliance did not seek an evidentiary hearing at the trial court. Instead, it
merely averred that a hearing was not “required,” as the court had all the information it needed to
rule on the matter. “A party may not take a position in the trial court and subsequently seek
redress in an appellate court that is based on a position contrary to that taken in the trial court.”
Blazer Foods, Inc v Restaurant Props, Inc, 259 Mich. App. 241, 252; 673 NW2d 805 (2003)
(quotation marks and citation omitted). However, we decline to view Ulliance’s position at the
trial court as waiving the issue on appeal. At the trial court, Ulliance merely argued that no
hearing was needed because it thought the issue of case-evaluation sanctions could be resolved
with reference to the information provided in its billing summary. Plaintiffs, in response, argued
that a hearing was necessary. We do not think that Ulliance should be penalized under these
circumstances for the trial court’s error in ruling the summary inadmissible. Therefore, the issue
is not waived, and we review “a trial court’s decision that an evidentiary hearing is not
warranted . . . for an abuse of discretion.” Kernen v Homestead Dev Co 252 Mich. App. 689, 691;
653 NW2d 634 (2002).
“Generally, a trial court should hold an evidentiary hearing when a party is challenging
the reasonableness of the attorney fees claimed.” Id. “However, if the parties created a
sufficient record to review the issue, an evidentiary hearing is not required.” Id.
Here, Ulliance supplied a billing summary, which summarized the attorney fees it
thought it was entitled to as part of case-evaluation sanctions. Plaintiffs opposed the request for
attorney fees and argued that (1) the hourly rate Ulliance charged (average of $293 per hour) was
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well above the pertinent average rate for general civil litigators ($227 per hour); (2) Ulliance’s
billing amounted to “quadruple billing”; and (3) Ulliance was seeking recovery for costs which
were not recoverable under MCR 2.403, such as costs associated with the appeal to this Court.
While the last of plaintiffs’ arguments seemingly could have been resolved with the
record as it existed at the time, the resolution of the other two arguments is much more involved.
Whether the hourly rates that Ulliance was using were reasonable involves an examination of
many factors.7 While some of these factors may have been capable of being addressed without
an evidentiary hearing, some clearly were not. For just one example, the record at the time of the
court’s decision was inadequate to evaluate “the experience, reputation, and ability of the lawyer
or lawyers performing the services.” Smith, 481 Mich. at 530 (quotation marks and citation
omitted). Further, whether certain aspects of the billing constituted “quadruple billing” is not
evident from the materials submitted.8 Thus, it is clear that an evidentiary hearing was
warranted, and the trial court abused its discretion when it failed to hold one.
7
The factors a court should consider when evaluating the reasonableness of an attorney fee
include the following:
(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. [Smith, 481 Mich. at 530 (Opinion by
TAYLOR, C.J.) (quotation marks and citation omitted); see also Augustine, 292
Mich. App. at 435.]
8
It should go without saying that legal expenditures for duplicative work “are properly excluded
when determining what constitutes a reasonable attorney fee.” McAuley v Gen Motors Corp, 457
Mich. 513, 525; 578 NW2d 282 (1998).
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3. ATTORNEY FEES INCURRED IN PURSUIT OF CASE-EVALUATION SANCTIONS
Ulliance also argues that the trial court erred when it ruled that even if the court had
awarded attorney fees, it could not have awarded any fees associated with Ulliance’s pursuit of
case-evaluation sanctions. To the extent that any attorney fees were causally connected to
plaintiffs’ rejection of the case-evaluation award, we agree.
In its opinion and order, the trial court stated:
Additionally, contrary to representations to the Court at oral argument,
[t]he Court of Appeals has disallowed parties from recovering fees for time spent
pursuing case evaluation sanctions. Fraser Trebilcock Davis & Dunlap, PC v
Boyce Trust 2350, 304 Mich. App. 174, 219-220; 850 NW2d 537 (2014)[9]; Allard
v State Farm Ins Co, 271 Mich. App. 394, 405; 722 NW2d 268 (2006). Over half
of the hours Ulliance claims concern case evaluation sanctions. Therefore, the
Court would not have awarded those hours even if they had been properly
supported with documentary evidence.
The trial court’s reliance on Allard and Fraser was misplaced. In Allard, the Court
agreed with the defendant that the plaintiff “was not entitled to the costs and fees associated with
attending case evaluation.” Allard, 271 Mich. App. at 405 (emphasis added). In this case, all
parties agree that fees incurred before the November 22, 2017 rejection notification date are
precluded, which necessarily includes fees associated with attending case evaluation.
Accordingly, the trial court erred by relying on Allard.
With respect to Fraser, both plaintiffs and Ulliance contend that it supports their
respective positions. In Fraser, this Court considered whether the trial court had erred when it
awarded the plaintiff “case-evaluation sanctions for postjudgment activities and by awarding
attorney fees for time spent in obtaining case-evaluation sanctions.” Fraser, 304 Mich. App. at
216. The defendants had taken the position that the requirement in MCR 2.403(O)(8) to file any
motion for case-evaluation sanctions within 28 days after entry of the judgment or order
precluded recovery for costs that arose from proceedings occurring after that 28-day period. Id.
at 216-217. This Court noted that it had previously “held that MCR 2.403(O) permitted attorney
fees ‘for all services necessitated by the rejection of the mediation award,’ which included the
posttrial proceedings that were necessitated by the plaintiffs’ decision to reject the case
evaluation and proceed to trial.” Id. at 218, quoting Troyanowski v Village of Kent City, 175
Mich. App. 217, 227; 437 NW2d 266 (1988). This Court then explained that in Young v Nandi,
490 Mich. 889; 804 NW2d 316 (2011), our Supreme Court issued a peremptory order reversing
the portion of this Court’s decision that had concluded that the plaintiff was entitled to attorney
fees and costs for posttrial work that occurred in the circuit court after the appellate process.
Fraser, 304 Mich. App. at 218-219. The Supreme Court had determined “that the plaintiff failed
9
The trial court did not note it, but this Court’s opinion in Fraser was reversed in part in Fraser
Trebilock Davis & Dunlap, PC v Boyce Trust 2350, 497 Mich. 265; 870 NW2d 494 (2015).
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to demonstrate the requisite causal connection between the postappellate proceedings and the
defendants’ rejection of the case evaluation.” Id. at 219. Considering these cases together, this
Court held “that actual costs arising from postjudgment proceedings that occur more than 28
days after judgment may be awarded as case-evaluation sanctions if the proceedings are causally
connected to the party’s rejection of the case evaluation.” Id.
Reviewing the facts before it, this Court considered the trial court’s award of sanctions
“related both to its opposition to defendants’ motion for a new trial and to its pursuit of case-
evaluation sanctions.” Id. Regarding the proceedings to obtain an award of case-evaluation
sanctions, this Court determined that the case-evaluation proceedings had not been necessitated
by the defendants’ rejection of the case evaluation. Id. Instead, the proceedings had been
“complicated” by the “close issue, not clearly settled by Michigan caselaw,” of whether a law
firm being represented by its own members was entitled to attorney fees at all. Id. at 219-220.
Accordingly, this Court concluded that there was an “insufficient causal nexus between the
defendants’ rejection of the case evaluation and the resources plaintiff expended claiming
attorney fees.” Id. at 220. Importantly, Fraser contains no per se ruling regarding whether
attorney fees incurred for seeking case-evaluation sanctions are recoverable. Instead, this Court
considered all fees against the test of whether there was a causal nexus between the work
resulting in the fee and the rejection of the case-evaluation award to determine if they could be
awarded as part of a reasonable attorney fee. Id.
Based on the foregoing, we hold that the trial court erred as a matter of law when it
concluded that MCR 2.403(O) does not permit the recovery for attorney fees incurred pursuing
case-evaluation sanctions and therefore abused its discretion. See In re Waters Drain Drainage
Dist, 296 Mich. App. 214, 220; 818 NW2d 478 (2012) (“A court by definition abuses its
discretion when it makes an error of law.”). Rather, consistent with both the language and the
purpose of MCR 2.403(O), any postjudgment fees causally connected to the rejection of a case-
evaluation award, including those incurred in pursuit of case-evaluation sanctions, are properly
included in a request of attorney fees. Again, not every fee accrued in the pursuit of case-
evaluation sanctions necessarily will be recoverable. The key is whether the sought-after fee is
causally connected to the rejection of the case-evaluation award. MCR 2.403(O)(6)(b); Fraser,
304 Mich. App. at 219. We therefore reverse the trial court’s ruling that fees that were incurred in
pursuit of case-evaluation sanctions never are recoverable under MCR 2.403(O).
C. HAMILTON’S, FRENDO’S, AND GUERTIN’S CROSS-APPEALS
Hamilton, Frendo, and Guertin argue that the trial court erred when it denied their
requests for case-evaluation sanctions on the basis of the interest-of-justice exception in MCR
2.403.
This Court reviews for an abuse of discretion a trial court’s decision to invoke MCR
2.403(O)(11)’s interest-of-justice exception. Derderian v Genesys Health Care Sys, 263 Mich
App 364, 390; 689 NW2d 145 (2004). The findings of fact underlying the decision are reviewed
for clear error. In re Temple, 278 Mich. App. 122, 128; 748 NW2d 265 (2008). A finding is
clearly erroneous “when, although there is evidence to support it, the reviewing court on the
entire record is left with a definite and firm conviction that a mistake was made.” Solution
Source, Inc v LPR Assoc Ltd P’ship, 252 Mich. App. 368, 381; 652 NW2d 474 (2002).
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As noted before, plaintiffs rejected the case-evaluation award, but the verdict was not
more favorable to them, making them responsible for defendants’ actual costs. MCR
2.403(O)(1) and (2)(c). However, under MCR 2.403(O)(11), “[i]f the ‘verdict’ is the result of a
motion as provided by subrule (O)(2)(c)[, i.e., a motion after rejection of case evaluation], the
court may, in the interest of justice, refuse to award actual costs.” The interest-of-justice
exception found in MCR 2.403(O)(11) has been interpreted in the context of the analogous offer
of judgment rule, MCR 2.405(D), because “ ‘both . . . serve identical purposes of deterring
protracted litigation and encouraging settlement.’ ” Haliw v Sterling Heights (On Remand), 266
Mich. App. 444, 448; 702 NW2d 637 (2005) (citation omitted).
“Absent unusual circumstances, the ‘interest of justice’ does not preclude
an award of attorney fees under MCR 2.405. . . .
“The better position is that a grant of fees under MCR 2.405 should be the
rule rather than the exception. To conclude otherwise would be to expand the
“interest of justice” exception to the point where it would render the rule
ineffective.” [Derderian, 263 Mich. App. at 390-391 (citations omitted).]
“Factors such as the reasonableness of the offeree’s refusal of the offer, the party’s ability to pay,
and the fact that the claim was not frivolous ‘are too common’ to constitute the unusual
circumstances encompassed by the ‘interest of justice’ exception.” Id. at 391 (citation omitted).
On the other hand, invocation of the exception might be appropriate if there is an issue of first
impression; if the law is unsettled and substantial damages are at issue; if a party is indigent and
an issue should be decided by a trier of fact; or if there may be a significant effect on third
persons. Haliw, 266 Mich. App. at 448. If a trial court elects to apply the exception, it must
articulate the bases for its decision. Id. at 449.
Here, the trial court gave three reasons for its decision to apply the exception: (1)
plaintiffs presented a question of first impression “because no direct authority addressed
psychological evaluations in the context of a pre-employment screening”; (2) “the financial
disparity between Plaintiffs who were denied employment as part-time public servants and
defendants who are professionals or established institutions”; and (3) “the fact that Plaintiffs
possibly suffered harm from poorly conducted or inaccurate evaluations.” We consider these
reasons in reverse order.
1. HARM
We will ignore for the moment that the trial court concluded that there was only a mere
possibility that plaintiffs were harmed by poorly conducted or inaccurate evaluations. Assuming
that there was solid proof that plaintiffs were harmed by the evaluations, their inability to recover
under the law for that harm is not a reason to deny case-evaluation sanctions to defendants.
Harms have always existed for which there was no recovery under the law. See, e.g., Wesche v
Mecosta Co Rd Comm, 480 Mich. 75, 87; 746 NW2d 847 (2008) (government agencies are
immune to loss-of-consortium claims); Willett v Smith, 260 Mich. 101, 102; 244 N.W. 246 (1932)
(no recovery for injuries caused by ordinary negligence; gross negligence required); Bouma v
Dubois, 169 Mich. 422, 426; 135 N.W. 322 (1912) (under previous rule of contributory
negligence, no recovery for injury even if defendant was negligent if plaintiff also was
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negligent). Thus, suffering a harm for which there is no legal recourse is not uncommon and
does not qualify as an “unusual circumstance” that can justify application of the interest-of-
justice exception. See Derderian, 263 Mich. App. at 391. Moreover, in light of the determination
that most of plaintiffs’ claims were barred by the two-year malpractice statute of limitations,
plaintiffs’ inability to seek redress for any harm they suffered also occurred because of their own
failure to timely file their claims. Circumstances created by the party owing sanctions cannot
constitute a basis for application of the exception that would absolve them of some or all of their
liability.
2. FINANCIAL DISPARITY
The trial court “note[d] the financial disparity between Plaintiffs who were denied
employment as part-time public servants and defendants who are professionals or established
institutions.” However, the standard that this Court held could be considered a sufficiently
unusual circumstance to sustain application of the interest-of-justice exception was “a significant
financial disparity between the parties.” Harbour v Correctional Med Servs, 266 Mich. App. 452,
466; 702 NW2d 671 (2005). We are left with a definite and firm conviction that the trial court
erred when it concluded that there was a financial disparity between plaintiffs and defendants.
Simply put, there is no evidence to support the trial court’s finding. Not only did the trial
court fail to discuss or cite any evidence in the record to support the existence of any financial
disparity, let alone a significant one, but none of the parties cited any evidence either.
Defendants all argued in their motions that this case did not have any unusual circumstances to
permit application of the exception. By way of response, plaintiffs filed three almost identical
responses claiming that the financial disparity was “obvious,” presumably because “[o]ne
defendant is a large corporation and the other two are licensed professionals. The plaintiffs, on
the other hand, are two retirees that must work low-wage jobs to supplement their meager
pensions.” Worse, plaintiffs provide the same three sentences, still without details or record
citation, as their entire argument in all three of their briefs on appeal. On this record, plaintiffs
completely failed to support their position of financial disparity before the trial court, the trial
court erred by adopting that position without any evidence in support, and on appeal plaintiffs
failed to provide any basis on which this Court could uphold the trial court’s determination,
given the complete lack of any such evidence in the pleadings or opinion. Accordingly, the trial
court should not have relied on any supposed financial disparity between plaintiffs and
defendants in declining to impose case-evaluation sanctions.
3. ISSUE OF FIRST IMPRESSION
Defendants insist that this is not an issue of first impression because other state courts
have applied Dyer to individuals other than physicians. Although Michigan caselaw does not
include a published opinion defining what qualifies as an issue or a case of first impression,
Black’s Law Dictionary (11th ed) defines a “case of first impression” as “a case that presents the
court with an issue of law that has not previously been decided by any controlling legal authority
in that jurisdiction.” (Emphasis added.) Given that neither this Court nor our Supreme Court
has answered the question of applying Dyer to nonphysicians in a published decision, this is
appropriately considered an issue of first impression for Michigan. Furthermore, in light of the
conclusion in Part I-B of this opinion that application of Dyer ought to have resulted in the trial
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court dismissing the claims against Hamilton, Frendo, and Guertin, as barred by the statute of
limitations, those defendants’ arguments that the issue of first impression was not dispositive of
the claims against them lacks merit.
Consequently, because the issue of Dyer applying in this context was an issue of first
impression in this state, the trial court did not abuse its discretion in considering this fact in its
application of the interest-of-justice exception contained in MCR 2.403(O)(11) to deny
Hamilton’s, Frendo’s, and Guertin’s requests for case-evaluation sanctions. However, despite,
the trial court appropriately relying on the fact that the case presented an issue of first
impression, the court also relied on two other facts that were not appropriate. Therefore, we
cannot conclude that the trial court would have utilized MCR 2.403(O)(11) to preclude
Hamilton, Frendo, and Guertin from recovering case-evaluation sanctions, and we vacate the
portion of its opinion denying sanctions to Hamilton, Frendo, and Guertin. On remand, the trial
court is to reconsider its position, knowing that of the three reasons it supplied, only the fact that
this presented an issue of first impression is a proper consideration.
III. CONCLUSION
In Docket No. 342150, we affirm the trial court’s grant of summary disposition to all
defendants.
In Docket No. 343204, we vacate the trial court’s denial of case-evaluation sanctions to
Frendo, Guertin, and Hamilton based on the interest-of-justice exception contained in MCR
2.403(O)(11) and remand for the trial court to reconsider its ruling, knowing that two of the three
reasons it had relied upon are not valid. We also reverse (1) the trial court’s ruling that
Ulliance’s billing summary was inadmissible to support its motion for case-evaluation sanctions;
(2) the trial court’s decision to not hold any evidentiary hearing related to plaintiffs’ challenges
to Ulliance’s fees; and (3) the court’s ruling that, as a matter of law, fees that were incurred in
pursuit of case-evaluation sanctions never could be recovered under MCR 2.403(O). We remand
for proceedings consistent with this opinion. We do not retain jurisdiction.
/s/ Jonathan Tukel
/s/ Kathleen Jansen
/s/ Michael J. Riordan
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