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Opinion Date: 04/24/2012
e-Journal Date: 05/07/2012
Full Text Opinion

Practice Area(s):   Litigation

Issues: Attorney fees and costs; MCR 2.405; Application of attorney fees court rule when both parties are offerors; Beveridge v. Shorecrest Lane & Lounge, Inc; MCR 2.405(D)(1) & (2); "American rule" that attorney fees and costs are not recoverable from a losing party; Haliw v. Sterling Heights; "Interest of justice" exception; MCR 2.405(D)(3); Gamesmanship; Luidens v. 63rd Dist. Court; "Actual costs" (MCR 2.405(A)(6); Evidentiary hearing to determine reasonableness and appropriateness of fees; Miller v. Meijer, Inc.; JC Bldg. Corp. II v. Parkhurst Homes, Inc.
Court: Michigan Court of Appeals (Unpublished)
Case Name: Baxter v. Geurink
e-Journal Number: 51456
Judge(s): Per Curiam – Beckering, Owens, and Ronayne Krause

The court held that the trial court properly awarded defendant attorney fees and costs, but that remand was required to determine whether the amount was reasonable and necessitated by plaintiffs' refusal of defendant's offer of judgment. Plaintiffs sued defendant in district court seeking money damages for a vacation they claimed did not meet their expectations. Defendant offered to settle for $1,000, but plaintiffs did not accept. Approximately two years later, plaintiffs offered to settle for $10,000, but defendant did not accept. The district court ruled in defendant's favor and awarded $1,500 in attorney fees, as well as $18,500 in costs. The circuit court found that the district court erred by not awarding the full amount of defendant's request for costs, which was just over $46,000. On appeal, the court rejected plaintiffs' argument that defendant was not entitled to attorney fees and costs under MCR 2.405 because it failed to make a counteroffer to plaintiffs' settlement offer. The court found that under Beveridge, MCR 2.405(D)(2) did not apply because both parties were offerors. The court noted that while it was "uncomfortable" with Beveridge, it was not prepared to declare a conflict. The court concluded that if the Beveridge rule should be excised from the operation of the MCRs, the Supreme Court was the appropriate entity to effectuate the change. The court also rejected plaintiffs' argument that defendant was precluded from recovering attorney fees pursuant to the "interest of justice" exception, which precludes gamesmanship. The court found that the trial court properly relied on the verdict to determine whether defendant's offer was made in good faith. Finally, the court agreed in part with plaintiffs that the circuit court erred when it increased the amount of the award to the full amount requested by defendant. The court found that no court considered any of the factors relevant to a determination of the reasonableness of fees, noting that the appropriate remedy was to remand for such a determination. Affirmed in part, vacated in part, and remanded for further proceedings.

Full Text Opinion

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