Medbury v. General Motors Corp.

119 Mich. App. 351 (1982) 326 N.W.2d 159

MEDBURY
v.
GENERAL MOTORS CORPORATION

Docket No. 51359.

Michigan Court of Appeals.

Decided September 9, 1982.

Frank R. Langton & Associates, P.C., for Frank R. Langton & Associates, P.C.

Zeff & Zeff and Kenneth A. Webb (of counsel), for Seward & Joyce Medbury.

Before: V.J. BRENNAN, P.J., and M.J. KELLY and D.C. RILEY, JJ.

PER CURIAM.

The dispute in this case involves the proper attorney fees due and owing to appellant after it was discharged by appellees. The dissent sets out the facts in this case. Judge KELLY also correctly states the black-letter law which provides that findings of fact are not to be disturbed unless they are clearly erroneous. A trial court's decision is clearly erroneous when, although there is evidence to support it, the reviewing court, on the entire evidence, is left with the conviction that a mistake has been committed. Tuttle v Dep't of State Highways, 397 Mich. 44, 46; 243 NW2d 244 (1976).

When determining disputed attorney fees, there are six factors to be considered by the court. In Crawley v Schick, 48 Mich. App. 728, 737; 211 NW2d 217 (1973), the Court stated:

"Where the amount of attorney fees is in dispute each case must be reviewed in light of its own particular facts. There is no precise formula-for computing the reasonableness of an attorney's fee. However, among the facts to be taken into consideration in determining the reasonableness of a fee include, but are not limited to, the following: (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. See generally 3 Michigan Law & Practice, Attorneys and Counselors, § 44, p 275 and Disciplinary Rule 2-106(B) of the Code of Professional Responsibility and Ethics."

The appellant in this case contends that the trial court substantially relied on only one of the six factors, time. We do not agree. We are convinced that the court's $75 per hour figure was not randomly chosen but was the court's estimation of the Crawley factors. Likewise, the 140-hour figure was the court's estimation of the time required to collect, analyze, and process the case file. While this Court may have concluded that the appellant had spent more than 140 hours during the period it represented its client or that something more than $75 per hour was an appropriate rate, the trial court's determination is supportable. We are not left with the conviction that a mistake has been made.

The appellant also claims that the court abused its discretion in determining that certain evidence sought to be elicited from two of the attorneys for appellees was inadmissible. The dissent clearly sets forth the facts regarding this issue. Errors in the exclusion of evidence will not cause a verdict to be reversed unless the refusal to reverse is inconsistent with substantial justice. GCR 1963, 529.1. The evidence which appellant sought to introduce by questioning appellees' attorneys, and which was excluded, was essentially presented to the court. Need it be noted that the best evidence of the quality of appellant's work was its file which was before the court. Furthermore, inasmuch as appellant was representing itself, it had a second opportunity, as it were, to place before the court evidence of the quality of its work and its skill as an advocate.

The final issue is whether the judge erred by refusing to disqualify himself pursuant to GCR 1963, 912.2(2), on the basis of personal bias or prejudice against appellant. The judge's statements showed his displeasure with appellant's presentation; however, we must determine whether they rose to a level requiring disqualification. Having reviewed the case law in this area, we cannot conclude that the trial judge showed or admitted any personal animus toward appellant. Tyrrell v Tyrrell, 107 Mich. App. 435; 309 NW2d 632 (1981); People v Lobsinger, 64 Mich. App. 284, 285; 235 NW2d 761 (1975), lv den 395 Mich. 802 (1975). Therefore, disqualification was not required.

Affirmed.

Costs to appellees.

M.J. KELLY, J. (dissenting).

Appellant Frank R. Langton & Associates, P.C., appeals from an award of attorney fees of $11,967.50 in its favor, claiming the award was insufficient.

On August 30, 1976, appellant was hired by Seward Medbury, on a contingency fee basis, to recover damages arising out of his July 26, 1976, personal injury accident. During the next three years, appellant performed a number of legal services for Medbury including the filing of a circuit court action against General Motors Corporation, a petition for workers' compensation benefits, and an action against the Home Insurance Company alleging bad faith refusal to pay insurance benefits. Appellant's work product included the complaint against GM, a motion to produce against GM, answers to interrogatories filed by GM, and the collection of medical reports from doctors. According to appellant, the attorneys in the firm spent a great amount of time on Medbury's case.

While representing Medbury, appellant was discharged on three occasions. The first discharge occurred because Medbury did not believe appellant worked fast enough in attempting to acquire physical evidence, consisting of an automobile transmission relevant to the action against GM. The second discharge arose when Medbury became dissatisfied with appellant's handling of the Home Insurance Company action. Mr. Langton, appellant's principal attorney, and Mr. Medbury worked out their differences after the first two disputes. According to Medbury, the final discharge occurred on September 2, 1978. On that date, Medbury sent a letter to appellant discharging it. While appellant disagrees that it was discharged on September 2, 1978, it does agree that it was discharged as of November 29, 1978. The law firm of Zeff and Zeff was retained by Medbury to replace appellant. On January 26, 1979, the trial court ordered the substitution of attorneys and gave appellant a lien on any settlement or judgment resulting on the claim, with the court to hold an evidentiary hearing to determine the amount of the lien.

Zeff and Zeff prepared a mediation summary on Medbury's action against GM, which was submitted to the Wayne County Mediation Tribunal Association on January 16, 1980. The tribunal placed a $1,500,000 valuation on Medbury's damages and both parties accepted the award settling the case.

Between March 31, and April 1, 1980, a hearing was held to determine the amount of appellant's lien. The trial court found that appellant expended about 140 hours in services to Medbury and that the prevailing rate for such services was $75 an hour. The court, therefore, awarded appellant $10,500 in attorney fees plus $1,467.50 in expenses. From this award, appellant appeals.

Appellant argues that the trial court's findings of fact concerning the reasonable value of appellant's services were inadequate. The adequacy of a trial court's findings of fact are governed by GCR 1963, 517.1 which provides that the court's findings of fact will not be set aside unless they are clearly erroneous. Findings of fact are clearly erroneous when, although there is evidence to support them, the reviewing court, on the entire evidence, is left with the definite and firm conviction that a mistake has been committed. Tuttle v Dep't of State Highways, 397 Mich. 44, 46; 243 NW2d 244 (1976).

The law creates a lien of an attorney upon the judgment or fund resulting from his services. Ambrose v Detroit Edison Co, 65 Mich. App. 484, 487-488; 237 NW2d 520 (1975), lv den 397 Mich. 888 (1976). When an attorney withdraws from a case for good cause, he does not lose his right to be paid for his services. Id., 488. Where the attorney who withdraws was on a contingent fee arrangement, he is entitled to compensation for the reasonable value of his services based upon quantum meruit, and not the contingent fee contract. Id., 491. In Crawley v Schick, 48 Mich. App. 728, 737; 211 NW2d 217 (1973), the Court enumerated the factors to be considered when determining disputed attorney fees:

"Where the amount of attorney fees is in dispute each case must be reviewed in light of its own particular facts. There is no precise formula for computing the reasonableness of an attorney's fee. However, among the facts to be taken into consideration in determining the reasonableness of a fee include, but are not limited to, the following: (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. See generally 3 Michigan Law & Practice, Attorneys and Counselors, § 44, p 275 and Disciplinary Rule 2-106(B) of the Code of Professional Responsibility and Ethics."

Applying these factors to the instant case, the trial judge focused his attention on the amount of hours worked by appellant rather than examining all six factors. While the trial court did briefly comment on some of the other factors, the basis of the award was reached by multiplying estimated hours worked by an hourly rate set by fiat for appellant. It is clear from the testimony at the hearing that the amount in controversy and the results achieved were considerable. There was also testimony which tended to prove that the mediation summary was based upon the work product of appellant. However, the trial court failed to consider these factors in its award. Under the facts of this case, I am left with a definite and firm conviction that a mistake has been committed.

Appellant raises a claimed error as to the exclusion of certain testimony. Decisions of a trial court concerning the admissibility of evidence will not be disturbed absent an abuse of discretion. Drouillard v Metropolitan Life Ins Co, 107 Mich. App. 608, 622; 310 NW2d 15 (1981). Relevant evidence means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. MRE 401. All relevant evidence is admissible except as otherwise provided by the constitution or the rules of evidence. MRE 402.

In this case, the trial judge excluded from evidence certain testimony given by Ronald W. Szczesny, a lawyer employed by Zeff and Zeff. During the cross-examination of Szczesny, he was asked the question, "was any work done by Mr. Zeff's office in representing Mr. Medbury to your knowledge up until the order was signed by this court in January, 1979". He was also asked, "Did you personally, yourself, do any work to effectuate the settlement of approximately a million and a half * * *". The trial court also sustained an objection to a question put to Mr. Zeff concerning the use of appellant's work product to perfect the settlement. All these questions were excluded on the ground that they were irrelevant.

The question concerning what work was done by the law firm of Zeff and Zeff prior to the order substituting them as Medbury's attorney was not relevant. It did not have any tendency to make the existence of a fact concerning the fee for appellant's work for Medbury more or less likely. However, the other two excluded questions were relevant. Appellant was attempting to prove that Zeff and Zeff relied exclusively on its work product in connection with the preparation and submission of the mediation summary. Since the mediation summary resulted in a $1,500,000 valuation and ultimate recovery, an affirmative answer to appellant's question would have shown the extent of its own skill and labor in the preparation of Medbury's case. It would have also been relevant because it would have demonstrated that the result reached in the Medbury case was due, in considerable part, to appellant's efforts. Therefore, the evidence should not have been excluded.

Appellant also asked Mr. Zeff if he found any shortcomings concerning the proofs of GM's liability in the Medbury file when he obtained it from appellant. Although the question was objected to as irrelevant, the trial court ruled that Zeff could not answer the question because it would be a "conflict of interest". I am not convinced that in answering the question Mr. Zeff would have been faced with a conflict of interest. If there were no shortcomings in the file, Zeff's answer would have merely established another factor to be considered in awarding appellant attorney fees. Appellant should have been allowed to pursue this line of questioning.

Appellant's final claim of error concerns alleged bias by the trial judge. Since I am in the minority here I decline to examine this issue in depth. It is my observation that appellant poorly served its own cause by an inadequate presentation at the hearing below. I do not find record support for certain of the trial court's observations denigrating appellant's attempts to secure its attorney fees. The proper method for disqualification of a trial judge requires the following of the procedures outlined in GCR 1963, 912. Appellant failed to properly follow the procedures outlined for taking the motion for disqualification before another judge or to the court administrator.

I would reverse the trial court's award of attorney fees and remand for a new hearing leaving to appellant the right to properly pursue a disqualification motion under GCR 1963, 912 if it so desires.