Attorney fees under the Revised Structured Settlement Protection Act (RSSPA) & MCR 3.603(E); MCL 691.1305(b)(ii); Reasonableness of attorney fees; Smith v Khouri; Pirgu v United Servs Auto Ass’n; Res judicata; Vanderwall v Midkiff

The court held that the trial court did not abuse its discretion with respect to the attorney fees it ordered plaintiff-Wentworth to pay. Defendant-Morris created the problem in the underlying lawsuit by double-selling his rights to a $60,000 annuity payment. He first sold his rights to Wentworth and later sold them to defendant-RSL. Wentworth sued and the trial court found it was entitled to the full amount, but ordered Wentworth, RSL, and defendant-Extended to pay costs and reasonable attorney fees to defendants-General American and Integrity. After an appeal and remand, the trial court ordered them to pay significantly more attorney fees. It allocated 30% of the fees to Wentworth, and the remainder to RSL and Extended. On appeal, the court rejected Wentworth’s argument that the trial court did not have authority to assess fees against the company under the RSSPA. “Under the RSSPA’s fee-shifting provision, the trial court did not have discretion to exempt Wentworth completely from payment of attorney fees here. The act states, in relevant part, that ‘[t]he transferee’ (here, Wentworth) ‘is liable to the structured settlement obligor’ (General American) ‘and the annuity issuer’ (Integrity) for the ‘reasonable . . . attorney fees, arising from the structured settlement obligor’s and the annuity issuer’s compliance with the order of the court.’” In this context, it was “clear that ‘is liable’ means is—not may be—liable. Thus, the trial court did not abuse its discretion in concluding that Wentworth was liable for reasonable attorney fees under the RSSPA.” The court also rejected Wentworth’s claim that the trial court abused its discretion by allocating 30% of the fee award to Wentworth instead of allocating the entire fee award to RSL and Extended. “The trial court concluded that, as a factual matter, 30% was a reasonable estimate of the time and resources that General American and Integrity spent specifically on responding to Wentworth’s actions throughout the lawsuit. The estimate was a finding of fact,” and there was no error as to the estimate, “either by the original trial judge who made the determination or the subsequent trial judge on remand who retained it.” As such, it concluded that the trial court “made a reasoned and principled decision, based on the facts and the law, regarding how much attorney fees Wentworth should pay,” and did not abuse its discretion in doing so. Affirmed.