Opinion
Docket No. 82000.
Decided April 22, 1986.
Raymond L. Krell, P.C. (by Derek A. Hurt), for plaintiff.
Condit, McGarry Schloff, P.C. (by Michael D. Schloff), for defendant.
Plaintiffs appeal as of right from a November 29, 1984, order of the circuit court awarding plaintiffs $10,000 in attorney fees.
In March, 1983, plaintiffs filed a complaint naming Orion House and Ronald Venticinque as defendants. The complaint alleged that Orion House had served defendant Venticinque intoxicating beverages when he was already visibly intoxicated. The matter was submitted to mediation and the panel evaluated the case at $250,000 for all of the plaintiffs against both defendants jointly. All parties rejected the evaluation. Just prior to trial, Orion House settled for $250,000.
Following a trial, the jury awarded plaintiffs $425,000 in damages. Plaintiffs moved for attorney fees and costs pursuant to GCR 1963, 316.7 and 316.8. Plaintiffs presented detailed documentary evidence in support of attorney fees in the amount of $19,610 and costs of $3,660.
The trial court awarded plaintiffs costs and $10,000 in attorney fees. The court gave two reasons for not awarding attorney fees in the full amount requested. First, the court found that "the full amount claimed by plaintiffs' attorney cannot be reasonably construed as necessitated by the parties' rejection of the mediation award." The court recognized that "the preparation of the within matter was directed as against both defendants." The court went on to note secondly that: "[p]laintiffs in this case would not have been satisfied with the dollars offered unless . . . defendant made a full statement of .. . acknowledgment of wilful and wanton misconduct. . . . The latter request was for purposes of making certain the judgment could not be dischargeable in bankruptcy." The court found that the latter satisfaction sought was not "contemplated by the mediation rule." The court concluded: "In consideration of these factors and thereafter making the appropriate adjustments, the court awards plaintiffs an attorney fee in the amount of $10,000."
For purposes of GCR 1963, 316.8, actual costs include taxable costs and a reasonable attorney fee as determined by the trial judge for services necessitated by the rejection of the panel's evaluation. An award of attorney fees assessed pursuant to that rule will be upheld absent an abuse of the trial court's discretion. Petterman v Haverhill Farms, Inc, 125 Mich. App. 30, 32; 335 N.W.2d 710 (1983). It being apparent that the trial court found $19,610 attorney fees reasonable in amount, see Petterman, supra, p 32, this Court must examine the trial court's reasons for reducing the fee to $10,000 in order to determine if there has been an abuse of discretion.
The policy behind former GCR 1963, 316.8, now MCR 2.403(O), is to place the burden of litigation costs upon the party who insists upon a trial by rejecting a proposed mediation award. See 2 Martin, Dean Webster, Michigan Court Rules Practice (3d ed), p 437. We believe that inherent in this policy is the equitable consideration that a party should not be responsible for costs which accrue through no fault of his own. See, e.g., Burke v Angies, Inc, 143 Mich. App. 683, 693; 373 N.W.2d 187 (1985). As such, defendant Venticinque should not be responsible for costs incurred in preparation of plaintiffs' case against Orion House, which was settled just prior to trial. A substantial portion of the attorney time here was incapable of apportionment between the defendants. Given Orion House's eleventh hour settlement, awarding slightly more than one-half the requested attorney fees for costs incurred in going to trial against Venticinque was reasonable and evidences no abuse of discretion.
We note that a portion of the $19,610 requested by plaintiff was for "secretary time." We do not consider this part of attorney fees.
This Court is somewhat troubled by the trial court's statement that plaintiffs' pursuit of an acknowledgment of wilful and wanton misconduct was not "satisfaction contemplated by the mediation rule." By the obvious purpose of GCR 1963, 316.7, a party is not to be penalized for rejection of a mediation award when the rejection was reasonable, as evidenced by a jury verdict "more than 10 percent greater than the panel's evaluation." Issa v Garlinghouse, 133 Mich. App. 579, 582; 348 N.W.2d 277 (1984). We believe that if the relief sought by a party is outside the purpose of the mediation rule, an objection should be raised to submitting a cause to mediation in the first place. See MCR 2.403(C); see also Michigan Court Rules Practice, supra, pp 437-438. We believe that an after-the-fact inquiry into motivations for rejection and a corresponding equitable reduction of attorney fee awards is improper.
We believe that looking to protect a client's judgment-creditor position from a judgment-debtor's discharge in bankruptcy is good advocacy. We do not believe that it necessarily constitutes the pursuit of relief outside the purpose of the mediation rule, especially where, as here, a large judgment, for damages not readily capable of calculation, is also sought. See Michigan Court Rules Practice, supra, p 438.
Nonetheless, because we find the amount of $10,000 attorney fees reasonable in light of the documentary evidence presented to the court, and the fact of Orion House's late settlement, we decline to reverse based on speculation as to the effect consideration of the improper factor had on the trial court's calculation.
Affirmed.