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The Meisner Law Group PC v. Weston Downs Condominium Association

Court of Appeals of Michigan

October 24, 2017

THE MEISNER LAW GROUP PC, Plaintiff-Appellant,

         Oakland Circuit Court LC No. 2015-149199-CB

          Before: Beckering, P.J., and Markey and Riordan, JJ.

          PER CURIAM.

         Plaintiff brought this action for attorney fees in circuit court asserting that "[t]he amount in controversy exceeds $25, 000." Plaintiff alleged three theories for relief: (1) quantum meruit or unjust enrichment under an unexecuted, proposed contingent fee agreement, (2) breach of an existing written retainer contract, and (3) that defendant misrepresented it would fairly compensate plaintiff for the work it would perform. The circuit court entered an order on February 24, 2016, granting defendant's motion for summary disposition under MCR 2.116(C)(4), finding that neither plaintiff's complaint nor any evidence that plaintiff submitted created a question of fact that plaintiff's claims might exceed $25, 000. The circuit court also determined that plaintiff's claims were frivolous, ruling it would award defendant its attorney fees in an amount to be determined at a later hearing.[1] The circuit court entered an order denying plaintiff's motion for reconsideration. Plaintiff now appeals by right. We affirm.


         On May 24, 2013, plaintiff and defendant entered a general retention agreement (GRA) whereby defendant retained plaintiff as legal counsel to provide legal services at an hourly rate range for attorneys and lesser hourly rate range for the law firm's other employees. The GRA provided that plaintiff would send defendant statements containing "an itemized description of services rendered" and defendant agreed to pay the statements within 15 days of receiving them. The GRA provided that defendant would be given 15 days of notice regarding any change in the hourly rates stated in the agreement and also provided that "[e]xcept for the change in hourly rates and flat fees, the terms and conditions of this retention agreement shall remain in effect, unless superseded by another fee agreement." The GRA contemplated that a separate agreement regarding fees might be required for work on a "major claim, " providing:

The rates quoted in this letter are with respect to general work performed on behalf of the Association. Should a major claim in behalf of or against the Association arise, a separate fee agreement would be established.

         On May 13, 2015, defendant sought plaintiff's counsel regarding its concerns that the developer of the condominium, Mondrian Properties Weston Downs, LLC, had sold or transferred the last three remaining condominium units to its three principal members, who intended to use the units as rental properties. Defendant sought to amend the condominium bylaws and other documents to limit or prevent rentals and to review potential claims defendant may have against the developer regarding ownership of the units and liability for association fees. Plaintiff provided advice regarding potential legal claims against the developer and drafted necessary documents concerning amending the condominium's by-laws. Defendant paid plaintiff's invoices for these services under the GRA in the amount of $5, 667.

         Believing that the matters regarding the developer concerned a "major claim, " plaintiff, through Robert Meisner, wrote via email to defendant's president on May 15, 2015, "enclosing a proposed fee agreement for consideration by the Board of Directors exclusively in regard to the Developer suit." This transmittal letter asked defendant's board to review the proposal "at your earliest convenience and presuming it is satisfactory, please have it signed and return it to me together with the initial retainer so that we can begin obtaining experts and otherwise preparing the claim." A second letter of the same date containing the proposed retainer agreement began by stating that "[t]his letter will serve to set forth this firm's fee arrangement and proposal in connection with our representation of Weston Downs Condominium Association regarding the prosecution of a claim and/or commencement of a lawsuit against those persons or entities responsible[.]" The proposed retainer agreement specified hourly rates slightly less than the GRA and in addition to the hourly rates, provided that "the Association shall pay the following contingency fee with respect to the litigation: fifteen (15%) percent of the value of all . . . benefits of any kind realized, paid to, and/or received by the Association . . . whether by way of settlement, agreement, case evaluation award, arbitration award, judgment, alternative dispute resolution, or otherwise . . . ."

         The proposed retainer agreement also stated that "[i]f the contents of this agreement are satisfactory to the Board of Directors, please have two (2) representatives authorized by the Board of Directors date and sign the Agreement on behalf of the Association in the spaces provided below as well as the representative claimant . . . ." The next paragraph of the proposed retainer agreement stated: "The effective date of this Agreement shall be upon receipt of this signed agreement by the Board of Directors of the Association, and receipt of a retainer in the amount of $5, 000." It is undisputed that defendant's board never authorized the proposed agreement, no authorized board members ever signed the proposed agreement, and defendant never paid plaintiff the required $5, 000 retainer.

         In an email exchange between defendant's board member, Rick Bonus, and plaintiff attorney Dan Feinberg, on June 1, 2015, defendant posed nine additional legal questions concerning potential claims the Association may have against the developer. Feinberg responded with answers to the questions posed in an email of June 4, 2015. It is undisputed that although defendant's representatives repeatedly invited plaintiff to invoice defendant for these services so that they could be paid, plaintiff never did so. It is also undisputed that the work to prepare the June 4, 2015 email was the last legal services plaintiff performed for defendant.

         Through June and July 2015, representatives of plaintiff queried defendant's representatives concerning the status of defendant's intent regarding potential claims against the developer. Defendant's representatives responded that the Board was still considering its options. Plaintiff responded in a letter of June 11, 2015 by its principal, Robert Meisner, stating that defendant had taken plaintiff's valuable advice and proceeded on its own. Meisner noted that although defendant had not signed the proposed retainer agreement, plaintiff expected that it would be compensated for the "fair value" of its services. Meisner wrote in an email on August 7, 2015 to one of defendant's board members requesting clarification of defendant's position. Meisner stated that if he received no response within 7 days, he would assume that defendant no longer desired plaintiff's services, and that plaintiff would "notify the developer that we retain an attorney's lien on any [recovery and] . . . we are entitled to the fair value of our services."

         Defendant's Board responded to the August 7, 2015 email of Meisner in a letter of August 11, 2015, signed by all three Board members, which stated, in pertinent part, "please be advised that the Board of Directors is not contemplating any legal action at this time against the developer and therefore no longer wishes your firm to provide any future services. Furthermore, as you note in your email, the Association has no[t] signed [the] engagement letter with your firm with respect to any such litigation."

         Plaintiff responded in an August 18, 2015, letter by Meisner to the Board's president, Rose Ann Schmitt. Meisner expressed his shock at defendant's "lack of good faith" and accused defendant's Board of "using our work-product without our knowledge or consent to obtain substantial benefits for the Association." Meisner also "advised that unless you provide this firm with full disclosure as to what has transpired between the Association and the Developer since our email to the Board of June 4, 2015, we will have no choice but to not only file an attorney's lien, but to institute litigation to seek the information through the discovery process[.]" Meisner also threatened that plaintiff would "consider proceeding against [Schmitt] personally for what I consider to be a fraud on this firm."

         On September 18, 2015, plaintiff filed its three-count complaint against defendant in the Oakland Circuit Court. As noted, plaintiff's complaint alleged (1) quantum meruit or unjust enrichment; (2) breach of the GRA; and (3) misrepresentation that defendant would compensate plaintiff for the "fair value" of its work. The essence of plaintiff's unjust enrichment is stated in paragraph 16, "The Board accepted the benefits of the [plaintiff's] advice, and, on information and belief, utilized this special advice and information to leverage a settlement with the developer." Plaintiff never produced any evidence of a "settlement" between defendant and the developer.

         Defendant responded to plaintiff's original complaint on October 19, 2015 with a motion for summary disposition under MCR 2.116(C)(4), (8), & (10), and for sanctions pursuant to MCR 2.114(E) and (F), MCR 2.625(A)(2), and MCL 600.2591. Thereafter, plaintiff filed, on November 2, 2015, a first amended complaint with minor editorial changes from the original complaint. Defendant filed a response to the amended complaint, noting that nothing in the amended complaint "remedied the misdeeds that warrant the imposition of sanctions against [plaintiff] pursuant to MCR 2.114(E) and (F), MCR 2.625(A)(2), and MCL 600.2591, " so, defendant stood on its previously filed motion for summary disposition. That motion, with respect MCR 2.116(C)(4), asserted that plaintiff "has not produced and cannot produce any evidence to support its vacant claim that the 'amount in controversy exceeds $25, 000.' "

         The hearing on defendant's motion for summary disposition occurred on February 24, 2016. At the hearing defendant was permitted to file an affidavit of Joseph Maniaci, a managing principal of the developer. Maniaci averred that no litigation ever existed between defendant and the developer and that defendant had asserted no claims against the developer since May 24, 2013.[2] Otherwise, both parties stood on their written submissions. The circuit court dismissed plaintiff's complaint without prejudice on the basis that plaintiff's claim could not exceed $25, 000. The court ruled that neither plaintiff's complaint nor any evidence that plaintiff submitted created a question of fact that plaintiff's claims might exceed $25, 000. The circuit court also determined that plaintiff's claims were frivolous and ruled that it would determine an award of attorney fees at a later hearing. No further hearings were held in the circuit court. Plaintiff appeals by right.



         Plaintiff preserved this issue for appellate review by presenting it to the circuit court, which addressed and decided it.[3] Walters v Nadell, 481 Mich. 377, 387-388; 751 N.W.2d 431 (2008).


         This Court reviews de novo a trial court's decision to grant or deny summary disposition. Cairns v East Lansing, 275 Mich.App. 102, 107; 738 N.W.2d 246 (2007). "Jurisdictional questions under MCR 2.116(C)(4) are questions of law that are also reviewed de novo." Travelers Ins Co v Detroit Edison Co, 465 Mich. 185, 204; 631 N.W.2d 733 (2001). Similarly, issues of statutory interpretation are questions of law that are reviewed de novo on appeal. Yee v Shiawassee Co Bd of Comm'rs, 251 Mich.App. 379, 393; 651 N.W.2d 756 (2002). A trial court is duty-bound to recognize the limits of its subject-matter jurisdiction and must dismiss an action when subject-matter jurisdiction is not present. Id. at 399; Cairns, 275 Mich.App. at 107.

         MCR 2.116(C)(4) permits a trial court to dismiss a complaint when "[t]he court lacks jurisdiction of the subject matter." A motion under subrule (C)(4) may be supported or opposed by affidavits, depositions, or other documentary evidence. MCR 2.116(G)(2). When affidavits, depositions, or other documentary evidence are submitted on a motion under MCR 2.116(C)(4), they "must be considered by the court[.]" MCR 2.116(G)(5). So, when reviewing a motion for summary disposition brought under MCR 2.116(C)(4) that asserts the court lacks subject-matter jurisdiction, the court must determine whether the pleadings demonstrate that the defendant is entitled to judgment as a matter of law, or whether the affidavits and other proofs show that there was ...

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