Argued January 15, 2015.
Fraser Trebilcock Davis & Dunlap, PC, brought an action for breach of contract in the Midland Circuit Court against Boyce Trust 2350, Boyce Trust 3649, and Boyce Trust 3650, after defendants failed to pay plaintiff in full for legal services its member lawyers had rendered. The case was tried by a jury after defendants rejected a case evaluation of $60,000. The jury found in plaintiff's favor, and the trial court, Jonathan E. Lauderbach, J., entered a judgment of $73,501.90. Defendants moved for a new trial, and plaintiff moved for case-evaluation sanctions under MCR 2.403(O), including a reasonable attorney fee under MCR 2.403(O)(6)(b). The trial court denied defendants' motion for a new trial and granted plaintiff's motion for case-evaluation sanctions, awarding plaintiff $80,434 in attorney fees, plus interest, and also allowed plaintiff to seek supplemental fees for time spent litigating the sanctions request. Plaintiff sought $38,566.50 in such fees and the court awarded $21,253.60, plus interest, resulting in a total award of approximately $102,000. Defendants appealed the judgment and both of the sanctions orders, and the appeals were consolidated. The Court of Appeals, FITZGERALD and BORRELLO, JJ. (MURPHY, C.J., concurring in part and dissenting in part), affirmed the judgment for plaintiff and partially affirmed the award of case-evaluation sanctions, but reversed the award to the extent it encompassed services related to the pursuit of case-evaluation sanctions and remanded to the trial court for recalculation of the award amount. 304 Mich.App. 174; 850 N.W.2d 537 (2014). Plaintiff appealed in the Supreme Court, which ordered and heard oral argument on whether to grant the application for leave to appeal or take other peremptory action. 497 Mich. 873, 853 N.W.2d 704 (2014) .
For FRASER TREBILCOCK DAVIS & DUNLAP PC, Plaintiff-Appellee: MICHAEL H. PERRY, LANSING, MI.
For BOYCE TRUST 2350, BOYCE TRUST 3649, BOYCE TRUST 3650, Defendants-Appellants: W. JAY BROWN, MIDLAND, MI.
Chief Justice: Robert P. Young, Jr. Justices: Stephen J. Markman, Mary Beth Kelly, Brian K. Zahra, Bridget M. McCormack, David F. Viviano, Richard H. Bernstein.
[497 Mich. 267] BEFORE THE ENTIRE BENCH
Bridget M. McCormack, J.
Before us is whether the plaintiff law firm can recover, as case-evaluation sanctions under MCR 2.403(O)(6)(b), a " reasonable attorney fee" for the legal services performed by its own member lawyers in connection with its suit to recover unpaid fees from the defendants, former clients of the firm. Contrary to the determinations of the trial court and the Court of Appeals majority, we conclude it cannot. Accordingly, we reverse the Court of Appeals in part, vacate the trial court's award of a " reasonable attorney fee" to the plaintiff under MCR 2.403(O)(6)(b), and remand to the [497 Mich. 268] trial court for further proceedings consistent with this opinion.
I. FACTUAL AND PROCEDURAL BACKGROUND
The plaintiff, Fraser Trebilcock Davis & Dunlap, P.C. (" Fraser Trebilcock" ), is a law firm organized as a professional corporation under the laws of Michigan. Fraser Trebilcock provided legal services to the defendants, a group of trusts, in connection with the financing and purchase of four hydroelectric dams. Dissatisfied with the representation they received, the defendants refused to pay the full sum of fees billed by Fraser Trebilcock. To recover these unpaid fees, Fraser Trebilcock brought the instant suit against the defendants for breach of contract. Pursuant to MCR 2.403, the matter was submitted for a case evaluation, which resulted in an evaluation of $60,000 in favor of Fraser Trebilcock. Fraser Trebilcock accepted the evaluation, but the defendants rejected it. The case proceeded to trial, resulting in a verdict for Fraser Trebilcock and a judgment totaling $73,501.90.
Throughout the litigation of this breach-of-contract action, Fraser Trebilcock appeared through Michael Perry, a shareholder of the firm, and other lawyers affiliated with the firm (collectively, " member lawyers" ). At no point did Fraser Trebilcock retain outside counsel, and there is no indication that the firm entered into a retainer agreement with its member lawyers or received or paid a bill for their services in connection with the litigation. On its pleadings, Fraser Trebilcock identified the firm itself as " Attorneys for Plaintiff."
[497 Mich. 269] After receiving the verdict, the parties filed posttrial motions: the defendants moved for a new trial, and Fraser Trebilcock moved for case-evaluation sanctions under MCR 2.403(O), seeking to recover, inter alia, a " reasonable attorney fee" under MCR 2.403(O)(6)(b) for the legal services performed by its member lawyers--including the litigation of these posttrial motions. The trial court denied the defendants' motion for a new trial, and granted Fraser Trebilcock's motion for case-evaluation sanctions, ruling in particular that Fraser Trebilcock could recover an attorney fee as part of its sanctions. The court recognized that an individual litigant (including one who is an attorney) cannot recover attorney fees for ...