Attorney fees; The “American rule”; Dessart v Burak; Burnside v State Farm Fire & Cas Co; The prior litigation exception; Brooks v Rose; Comparing G & D Co v Durand Milling Co, Inc; The malice, fraud, or wrongful conduct standard; In re Thomas Estate; Effect of Coats v Bussard & Warren v McLouth Steel Corp

The court held that the trial court did not err by granting defendant-law firm summary disposition of plaintiff-former client’s action seeking attorney fees it incurred defending itself against a former employee’s second litigation. Plaintiff claimed defendants acted negligently when they failed to inform plaintiff of the employee’s threat of additional litigation and offer to settle. The trial court granted defendants’ motion for summary disposition on the basis that plaintiff pled “that defendants acted negligently when the prior litigation exception to the American rule required a pleading of malice, fraud, or other similar wrongful conduct to recover damages.” On appeal, the court rejected plaintiff’s argument that it only needed to plead negligence to state a claim for attorney fees under the prior litigation exception. While plaintiff relied on Coats and Warren, the court noted neither is binding, and that it was bound by its holding in Thomas Estate “that the party seeking attorney fees under the prior litigation exception must plead that the wrongdoer’s conduct was malicious, fraudulent, or similarly wrongful.” The court also rejected plaintiff’s request that it “carve out a mitigation and legal malpractice exception to the prior litigation exception.” It noted that attorney fees “are available in legal practice actions if the party can plead malice, fraud, or similar wrongful conduct. This same logic applies to plaintiff’s argument that the duty to mitigate conflicts with this rule. Mitigation damages in the form of attorney fees are available if sufficiently” pled. Plaintiff “was required to plead that defendants engaged in malicious, fraudulent, or similarly wrongful conduct” to survive summary disposition. However, it pled “only that defendants were negligent.” Affirmed.