In Re Costs and Attorney Fees

645 N.W.2d 697, 250 Mich. App. 89
CourtMichigan Court of Appeals
DecidedMay 31, 2002
Docket219313
StatusPublished
Cited by64 cases

This text of 645 N.W.2d 697 (In Re Costs and Attorney Fees) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Costs and Attorney Fees, 645 N.W.2d 697, 250 Mich. App. 89 (Mich. Ct. App. 2002).

Opinion

645 N.W.2d 697 (2002)
250 Mich. App. 89

In re COSTS AND ATTORNEY FEES.
Powell Production, Inc. and Powell Leasing Company, Plaintiffs-Appellees/Cross-Appellants,
v.
Jackhill Oil Company, Defendant, and
Phillip Bowen, Neil Juliar, and Conlin, McKenney & Philbrick, P.C., Appellants/Cross-Appellees.

Docket No. 219313.

Court of Appeals of Michigan.

Submitted September 11, 2001, at Grand Rapids.
Decided February 26, 2002, at 9:00 a.m.
Released for Publication May 31, 2002.

*701 Loren, Shirk & Snell (by Kevin G. Shirk and Thomas L. Thompson), Hillsdale, for the plaintiffs.

Buesser, Buesser, Black, Lynch, Fryhoff & Graham, P.C. (by William R. Buesser and Diane M. Buettner), P.C. Bloomfield Hills, for Neil Juliar, Phillip Bowen, and Conlin, McKenney & Philbrick.

Before: GRIFFIN, P.J., and GAGE and METER, JJ. *698 *699

*700 METER, J.

This appeal involves sanctions imposed against Neil Juliar, a former attorney of defendant Jackhill Oil Company, and his law firm for raising a frivolous defense in a suit between plaintiffs and Jackhill. We affirm.

In 1987, plaintiffs sued Jackhill because of a dispute involving an agreement to develop oil interests on land leased by plaintiffs. Plaintiffs contended that under the terms of the parties' agreement, Jackhill owed them money from several wells that had produced oil. A jury eventually sided with plaintiffs and awarded them approximately $1,300,000. Jackhill later sued attorneys Juliar and Phillip Bowen, as well as their firm, for malpractice in conjunction with services rendered in the underlying litigation. While following the progress of the malpractice litigation, plaintiffs learned that a certain document relevant to the 1987 litigation had not been produced by Jackhill or its counsel, even though it was requested in discovery and its existence rendered one of the asserted defenses frivolous. The document, a "letter of intent" dated June 22, 1983, set forth oil-drilling and payment terms favorable to plaintiffs in the underlying lawsuit. The letter had been signed by Neil Clevidence, an officer of plaintiffs, as well as by Joe Savarino, of Jackill. It contained handwritten changes made by Bowen.

In November 1998, shortly after obtaining a copy of the document, plaintiffs moved for sanctions in the 1987 case. They argued that if the document had not been improperly withheld and if misrepresentations to the lower court had not been made, the case would have resolved much faster and perhaps Jackhill would still have been collectible with respect to the jury-produced judgment. The trial court eventually ordered sanctions of $48,177 against Jackhill, Juliar, and the law firm under MCR 2.625(A)(2) and M.C.L. § 600.2591(3)(a)(ii) and (iii).

Appellants first argue that the trial court erred in imposing sanctions because Juliar, in failing to mention the existence of the 1983 letter, did not act unreasonably. When Juliar discovered the existence *702 of the signed letter in 1987, he knew that the letter had been found in the desk drawer of Savarino, who died in 1985. Appellants contend, therefore, that Juliar reasonably concluded that Savarino had never communicated his acceptance of the letter to plaintiffs and that the letter therefore was irrelevant.

This Court will not disturb a trial court's finding that a defense was frivolous unless the finding was clearly erroneous. Szymanski v. Brown, 221 Mich.App. 423, 436, 562 N.W.2d 212 (1997). "A decision is clearly erroneous if this Court is left with a definite and firm conviction that a mistake has been made." Id. We find no clear error here.

MCL 600.2591[1] states:

(1) Upon motion of any party, if a court finds that a civil action or defense to a civil action was frivolous, the court that conducts the civil action shall award to the prevailing party the costs and fees incurred by that party in connection with the civil action by assessing the costs and fees against the nonprevailing party and their attorney.

* * *

(3) As used in this section:
(a) "Frivolous" means that at least 1 of the following conditions is met:
(i) The party's primary purpose in initiating the action or asserting the defense was to harass, embarrass, or injure the prevailing party.
(ii) The party had no reasonable basis to believe that the facts underlying that party's legal position were in fact true.
(iii) The party's legal position was devoid of arguable legal merit.

To determine whether sanctions are appropriate under M.C.L. § 600.2591, it is necessary to evaluate the claims or defenses at issue at the time they were made. See In re Attorney Fees & Costs, 233 Mich.App. 694, 702, 593 N.W.2d 589 (1999). The factual determination by the trial court depends on the particular facts and circumstances of the claim involved. Dillon v. DeNooyer Chevrolet Geo, 217 Mich.App. 163, 169, 550 N.W.2d 846 (1996).

In this case, the trial court found that certain of Juliar's arguments to the court were devoid of arguable legal merit and that there was no reasonable basis for them. Among other things, the trial court specifically took issue with Juliar's representations at a summary disposition hearing in 1988 that (1) the Joint Development Agreement (JDA), a document separate from the 1983 letter of intent, was the only agreement accepted by all the parties, (2) the 1983 letter of intent was a unilateral letter and there was no acceptance of it, (3) lawyers cannot create contracts simply by writing a letter to another lawyer, (4) an unsigned agreement violates the statute of frauds, (5) there was no indication that anyone accepted the letter on behalf of Jackhill, and (6) plaintiffs were trying to convert a unilateral letter into a contract. The trial court pointed out that when Juliar made the above statements, he knew that a signed letter of intent existed but concluded that the letter, although signed, was not an "accepted" agreement because it had not been returned to plaintiffs. The trial court concluded that constituted a frivolous defense because Juliar had no reasonable basis to believe that the facts underlying the legal position about the letter were true or that the contract at issue should be interpreted in the manner advocated.

*703 The trial court's findings that Juliar offered a frivolous defense are not clearly erroneous. Looking at the facts known to Juliar during the litigation, he had no reasonable basis to argue that the letter was unilateral and unsigned and did not constitute an agreement between the parties. He also had no reasonable basis to argue that plaintiffs' interpretation of the parties' agreement was incorrect. Juliar knew that the letter clarified plaintiffs' position regarding the agreement of the parties and that the letter was detrimental to Jackhill. Juliar further knew that the letter contained Bowen's handwritten changes and that the letter was signed by both parties. In addition, Juliar knew that money changed hands shortly after the letter was signed.

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Bluebook (online)
645 N.W.2d 697, 250 Mich. App. 89, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-costs-and-attorney-fees-michctapp-2002.