Sanctions; Costs & attorney fees based on a frivolous action; MCR 2.625(A)(2); MCL 600.2591(1); 1300 LaFayette East Coop., Inc. v. Savoy; In re Costs & Attorney Fees; Amount of costs & fees; MCL 600.2591(2); Reasonableness of costs & fees; Pirgu v. United Services Auto. Ass’n; Smith v. Khouri; Whether an action is frivolous; MCL 600.2591(3)(a); MCL 600.2591(3)(a)(ii) & (iii); Davids v. Davis; Ladd v. Motor City Plastics Co.; Breach of contract; Miller-Davis Co. v. Ahrens Constr., Inc.; Breach of constructive trust; In re Filibeck Estate; CPAN v. MCCA; Conversion; Tillman v. Great Lakes Truck Ctr.

The court held that the trial court did not err by granting defendant attorney fees and costs based on plaintiff’s frivolous action, but did abuse its discretion by failing to follow the proper framework for determining the reasonableness of the costs and fees. Thus, it affirmed the grant of costs and attorney fees, but vacated the amount awarded and remanded “for either an evidentiary hearing to determine reasonable attorney fees or for the trial court to articulate on the record how it determined the reasonableness of the fees awarded.” Plaintiff sued defendant for breach of contract, breach of constructive trust, and conversion. The trial court found plaintiff’s action frivolous and awarded defendant costs and attorney fees. On appeal, the court rejected plaintiff’s argument that the action was not frivolous. First, it noted that “because plaintiff failed to fulfill all of his obligations under the contract, his claim that it was defendant who breached the agreement . . . lacked a reasonable factual basis and was devoid of arguable legal merit.” Next, it found that “plaintiff’s breach-of-constructive-trust claim lacked factual and legal support” when he filed it. Finally, it held that “plaintiff had no basis to believe that the facts underlying his conversion claim were true . . . .” However, the court agreed with plaintiff that the trial court “was required to determine reasonable attorney fees . . . but wholly failed to engage in this mandatory analysis.”