MONAGHAN LOPRETE MCDONALD V WILLIAM P FROLING SR
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STATE OF MICHIGAN
COURT OF APPEALS
MONAGHAN, LoPRETE, McDONALD, SOGGE
& YAKIMA, P.C.,
UNPUBLISHED
September 22, 1998
Plaintiff/Counter-Defendant and
Third Party Plaintiff/Appellee,
v
WILLIAM P. FROLING, SR., and HATHERLY
COMMONS, INC., a Michigan corporation, jointly
and severally,
No. 200594
Oakland Circuit Court
LC No. 93-450226 CK
Defendants and Counter-Plaintiffs/
Appellants,
v
BRADLEY E. FROLING,
Third Party Defendant/Appellant,
and
RONALD R. SOGGE and BORIS YAKIMA,
Third Party Defendants/Appellees.
Before: Smolenski, P.J., and White and Markman, JJ.
PER CURIAM.
Defendants William P. Froling, Sr., Hatherly Commons, Inc., and Bradley E. Froling appeal by
leave granted the circuit court’s order1 requiring them to pay $4,890.62 in special mediators’ fees, and
an additional $1,520 for the special mediators having attended court to seek payment of fees. We
affirm.
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I
This case was initiated by the law firm of Monaghan, LoPrete, McDonald and Sogge, P.C.
(Monaghan firm), to collect legal fees allegedly owed by defendants William P. Froling, Sr., (Froling)
and Hatherly Commons in connection with the Monaghan firm’s representation of defendants in an
underlying suit for collection of percentage rent. Defendants Froling and Hatherly Commons asserted
legal malpractice as a defense and counterclaimed for damages.
Defendants Froling and Hatherly Commons joined Sogge and Yakima, the Monaghan firm
attorneys who had appeared in the underlying case, as individual third party defendants. The Monaghan
firm joined Bradley E. Froling, Froling’s son and an attorney who had appeared in the underlying case
and monitored the Monaghan firm’s work, as a third party defendant.
A
On January 22, 1996, pursuant to the parties’ stipulation, the circuit court entered an order for
special mediation that provided:
This matter having come on for hearing on January 10, 1996, and the court having
suggested that the parties agree to a special mediation procedure, the parties having
come to the agreement as set forth below, and the court being otherwise fully advised in
the premises,
IT IS HEREBY ORDERED,
1. That this matter shall be submitted to a special mediation panel in accordance with
the following procedures:
A. Each side shall select two potential special mediators listed in order of
preference and the names shall be submitted to the court for approval within five
(5) days of entry of this order.
B. The court shall contact the two mediators designated by the parties as their
first preference, advise them of their selection by the parties, and ascertain their
availability and willingness to serve as special mediators in this case.
C. In the event that the first selection of a party declines to act as a special
mediator in this case, the court shall then contact the second selection, advise of
his or her selection by the parties, and ascertain his or her availability and
willingness to serve as a special mediator in this case.
D. If either party’s two selections cannot serve as special mediators, this order
shall be null and void and the present mediation of 1/31/96 shall remain in effect.
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E. The two special mediators designated by the parties shall within five (5) days
of agreeing to serve as special mediators, designate a third mediator and contact
him or her regarding the selection, availability, and willingness to serve.
2. Neither the parties nor their attorneys shall have any ex parte contact with the
mediators prior to or after the mediation hearing regarding this matter.
3. The fees of the special mediators shall be reasonable, subject to approval of the
court, and shall be split equally between the law firm of Monaghan, LoPrete,
McDonald, Sogge & Yakima, Ronald Sogge, and Boris Yakima on the one hand and
William P. Froling, Hatherly Commons, Inc., and Bradley Froling on the other.
4. The date, time, and place of the special mediation hearing shall be completed by the
special mediation panel, but shall in no event occur any later than February 29, 1996.
5. The present mediation hearing scheduled for January 31, 1996 shall be canceled
without costs to any party in the event special mediation can be accomplished.
6. The parties shall have the 28 days afforded by MCR 2.403(L) to accept or to reject
the mediation award.
7. The special mediation shall proceed in all other respects in accordance with MCR
2.403.
8. The special mediation will in no way affect the scheduled trial date of April 22,
1996.
On February 16, 1996, the circuit court entered an order appointing retired Judge T. John
Lesinski (defendants’ choice), Patrick Barrett (plaintiff’s choice) and Robert Best (agreed on by
Lesinski and Best) as special mediators, and set a mediation date of March 22, 1996. The order
further provided that “at the request and agreement of the parties, there shall be no ex-parte
communication between the attorneys of record and the mediators without first obtaining approval from
the Court.” The special mediation did not go forward as scheduled, apparently because of Judge
Lesinski’s death.
Defendants contacted Konrad Kohl and, through predecessor counsel, chose him to replace
Judge Lesinski. Kohl’s selection was apparently communicated to the court, and the court met with
Kohl and Barrett.
On September 12, 1996, the circuit court entered an amended order pertaining to special
mediation that provided:
This Court having met with mediators, Konrad Kohl and Patrick Barrett, on
September 10, 1996, this Court having reviewed this matter with the mediators and the
Court being otherwise fully advised in the premises;
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NOW THEREFORE IT IS ORDERED AND ADJUDGED that the special mediation
panel in this matter consist of Konrad Kohl, Alexander McGarry and Patrick Barrett;
IT IS FURTHER ORDERED AND ADJUDGED that if there are any objections on
the basis of bias or prejudice to any of these three mediators, such objections must be
submitted to the Court, in writing, within ten days to [sic] the entry of this
Order;
. . . that there shall be no contact between the parties themselves and the mediators; . . .
that there may be contact between counsel for the parties and the mediators, but such
contact may take place only for the purpose of scheduling and may only be initiated by
the mediators and not by counsel; . . . that the special mediation in this matter is hereby
scheduled for Friday, September 27, 1996, at 9:00 a.m. at . . .; . . . that there shall be
no live testimony at this mediation; . . . that the parties may each submit an additional
mediation summary, to those summaries already filed and any such supplemental
summary must be provided to the mediators no more than seven days prior to
mediation; . . . that the mediation may be attended by their parties and their counsel
only; . . . that the mediators be compensated for all time put into this matter at
the rate of $250.00 per hour, per mediator and that cost of each mediator be
shared equally between the parties; . . . that the mediators be paid at the time
of the September 27, 1996, mediation in this matter; . . . that trial in this matter
remains scheduled for November 19, 1996. [Emphasis added.]
On September 24, 1996, twelve days after entry of the amended order, defendants filed their “Answer
and Objections to Mediators and Objection to Entry of Order Amending Agreement of Parties.”2
On October 11, 1996, the circuit court entered an order recusing Barrett and appointing J.
Michael Malloy as replacement special mediator:
This matter has come before the Court on the parties’ request for the recusal of special
mediator, Patrick Barrett.
Pursuant to said request the Court hereby recuses Mr. Barrett.
Due to the unavailability or unwillingness of the replacement mediators proffered to the
Court the Court hereby appoints Mr. J. Michael Malloy as replacement special
mediator who was proffered to the Court by the existing special mediators.
On October 23, 1996, defendants filed a motion to vacate the circuit court’s amended order
pertaining to mediation (entered on September 12, 1996), the circuit court’s October 11, 1996 order
recusing Barrett, and the mediation hearing scheduled for November 2, 1996. Defendants argued that
pursuant to the parties’ special mediation agreement (entered by the circuit court on January 22, 1996)
the agreement became null and void if either party-appointed mediator could not serve. Defendants
further argued that mediators Barrett and Kohl had had an unauthorized in camera meeting with the
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circuit court on September 10, 1996, as a result of which the circuit court entered the September 12,
1996 amended order pertaining to special mediation. Defendants argued that the amended order,
without the agreement of the parties and contrary to the special mediation agreement: 1) appointed
Alexander McGarry as the neutral mediator, 2) set a hearing date for September 27, 1996, and 3) set
the mediators’ fee at $250 per hour. Defendants also argued that the circuit court’s October 11, 1996
order directed that special mediation be held on November 2, 1996, thereby infringing on defendants’
right to have twenty-eight days to accept or reject mediation, as trial was set for November 19, 1996.
The circuit court denied defendants’ motion following a hearing on October 30, 1996, and ruled
that the special mediation was to take place as scheduled on November 2, 1996. At the October 30
hearing, in response to defendants’ arguments, the circuit court noted that none of the parties had
objected to its order recusing Barrett. The circuit court also noted that the case had been filed in 1993.
Special Mediation took place on November 2, 1996 and a non-binding mediation evaluation
was rendered. Defendants did not pay their half of the special mediators’ fees.
On December 10, 1996, the mediators filed a Petition for Payment of Special Mediator Fees
seeking payment for the special mediation and also for the filing of the petition. Defendants responded,
again contesting the circuit court’s authority to enter the September 12, 1996 order, and arguing the
most that the mediators were entitled to was $75.00 each, pending resolution of the issue in the Court of
Appeals. Defendants also argued that the mediators had not stated the amount of fees sought, had not
attached invoices for their services, and had not sought approval of the invoices submitted by each
mediator. However, defendant Bradley Froling’s brief in support of his response to the mediators’
petition stated that Malloy had submitted a bill for $2,100 for 8.4 hours at $250 an hour; Kohl had
submitted a bill for $4,400 “without any support for the time spent”; and McGarry had submitted a bill
for $3,281.25 for 13.125 hours at $250 an hour, plus for $129.86 for expenses for postage, copy
charges, legal research and facsimiles, even though the circuit court’s September 12, 1996 order did not
provide for the reimbursement of such expenses.
At the December 18, 1996 hearing on the mediators’ petition for payment, McGarry noted that
the reason Malloy’s fees were substantially less than the other mediators was that Malloy was
substituted in late in the case and thus spent less time on it. McGarry stated that since defendants had
objected to paying for costs, the mediators sought only payment for their fees. McGarry stated that the
Monaghan firm had paid half of the original figure of $9,911.11, and that the mediators would reimburse
the Monaghan firm for the difference. McGarry requested that each of the mediators be compensated
for two hours in court to attend the hearing, at the mediators’ designated rate, which included the time it
took McGarry to prepare the petition for payment. After defendants’ counsel objected to payment of
the additional $1,500, McGarry noted that it was necessary for the special mediators to attend the
hearing because defendants had not objected to the mediators’ invoices (which had been mailed out on
November 4, 1996) until they responded to the petition for payment by fax the day before the instant
hearing. Thus, the special mediators believed they should be present at the hearing to respond to any
objections defendants might raise or any question the circuit court might have.
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At the hearing, defendants’ counsel3 stated that defendants did not dispute the reasonableness
of the mediators’ bills.
The circuit court concluded the hearing by stating:
Having heard the moving parties [sic] request and finding that it’s not unreasonable since
they never had any written response in objection that might have alleviated the necessity
of all three mediators to be here to answer to the accountability of the fees and their
services, the Court would feel it’s appropriate that all three should be here.
I have no questions to ask. And I recognize that counsel is preserving the record by
being here on behalf of the defendants to preserve this issue about the legality of me
even appointing. And that will be preserved for purposes of appellate review, as all
other matters will be in this case.
As to the fifteen hundred, that is granted as well as the twenty dollars [motion fee], for a
total sum that the Court would so grant as an order against the three defendants jointly
and/or severally in the amount of ten thousand four hundred and one dollars and an
order may enter in that respect.
The circuit court entered an order on January 7, 1997, stating that the special mediators’ fees totaled
$9,781.25, and ordering that defendants pay one half of the special mediators fees, totaling $4,890.62,
plus $1,520 for the mediators having filed the petition and having attended the hearing. It is from this
order that defendants appeal. 4
II
Defendants first argue that the circuit court lacked the power to submit the case to special
mediation in a manner not provided for in MCL 600.4951 et seq.; MSA 27A.4951 et seq. and MCR
2.403. Defendants also argue that the circuit court lacked authority to order that the mediators be paid
$250 an hour. Under the circumstances presented here, we disagree.
A
MCL 600.4953(2); MSA 27A.4953(2) provides that the procedure for selecting mediation
panel members and their qualifications shall be as prescribed by the Michigan court rules or local court
rules. Defendants argue that special mediation was not permissible under MCR 2.403 because MCR
2.404, which expressly provides for special mediation panels, MCR 2.404(C)(3),5 did not become
effective until July 1, 1997. Defendants argue that an amendment is construed to change the statute
amended, and thus the promulgation of this new court rule specifically providing for special mediation
indicates that special mediation was not permissible under the prior court rules. Defendants assert that
the agreement they entered into regarding special mediation “may or may not have been valid, but that is
not an issue of consequence for this appeal.” We do not agree.
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In the instant case the parties stipulated to special mediation and to entry of the circuit court’s
order for special mediation.
Defendants have cited no case supporting their argument that the circuit
court lacked authority to order special mediation pursuant to the parties’ agreement. Moreover, nothing
in the court rules in effect at times pertinent to this case precluded parties from stipulating to special
mediation or to terms governing a special mediation. We reject defendants’ argument that the
promulgation of MCR 2.404(C) is support for the assertion that special mediation was not permissible
under MCR 2.403. MCR 2.404(C)(3) expressly states that “[n]othing in this rule or MCR 2.403
precludes parties from stipulating to other procedures similar to mediation that may aid in resolution of
the case. [Emphasis added.]” We conclude that the circuit court had authority under MCR 2.403 to
submit the case to special mediation.
B
Defendants also argue that the circuit court’s subsequent orders relating to special mediation
were outside its authority because under the special mediation agreement, once the mediators
designated by the parties could not serve, the agreement became null and void and the case was to
proceed to regular mediation. We reject this argument because defendants did not timely object to the
circuit court’s amended order of September 22, 1996, which provided that objections had to be
submitted within ten days. Further, defendants revived the stipulated procedure when they chose Kohl
as a mediator after Judge Lesinski’s inability to serve.6
C
Defendants next argue that the circuit court lacked authority to order that the mediators be
compensated at a rate of $250.00 an hour. However, the special mediation agreement expressly stated
that the mediators would be paid reasonable fees subject to approval of the court, and the court’s
amended order pertaining to special mediation, dated September 22, 1996, expressly specified that
rate. We conclude that $250.00 an hour was a reasonable rate and was approved by the circuit court.
We also note that the amended order additionally specified that any objections had to be submitted
within ten days of entry of the amended order. Defendants did not timely object to the amended order
regarding special mediation.
D
Regarding defendants’ arguments that the meeting between Kohl, Barrett and the circuit court
was secret or closed, we note that Kohl sent counsel for the parties a letter dated September 4, 1996,
stating that he and Barrett were meeting with the circuit court judge on September 10, 1996 to discuss
the special mediation hearing, and that if there were any comments or requests concerning the hearing,
the parties should contact the circuit court directly. Kohl also advised that the neutral mediator had
disqualified himself, that it would be necessary to select another neutral mediator, and that the mediation
hearing scheduled for September 10, 1996 would be rescheduled at the meeting with the court. The
special mediation agreement provided that “neither the parties nor their attorneys shall have any ex parte
contact with the mediators prior to” the mediation hearing. Under these circumstances, the mediators
could properly meet with the circuit court in a closed meeting.
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We conclude that the circuit court did not exceed its authority by ordering special mediation or
by its subsequent orders regarding special mediation.
III
Defendants next argue that the circuit court lacked legal authority to order that the special
mediators be compensated for the time they spent in court seeking to collect their fees. Under the
circumstances presented here, we disagree.
Defendants do not dispute that the mediators sent invoices to the parties on November 4, 1996,
two days after the special mediation occurred on Saturday, November 2, 1996. Nor do defendants
dispute that they did not in any way respond or object to the invoices until they responded to the
mediators’ petition for payment on December 17, 1996, one day before the hearing set for that petition.
It is clear from the transcript of the hearing on the mediators’ petition for payment that the circuit court
accepted the mediators’ argument that defendants’ failure to respond or object to the mediators’ billings
until the day before the hearing necessitated that the mediators appear for the hearing to address
defendants’ objections or any questions the court might have. Mediator Malloy represented the
mediators at the hearing, and MCR 2.119(E)(4)(b) requires that the moving party appear at a hearing
on a motion. In addition, defendants’ failure to pay the mediators fees was a violation of the circuit
court’s orders, and defendants’ response to the mediators’ petition for payment was untimely filed, in
violation of MCR 2.119(C). We conclude that under these circumstances the circuit court did not
abuse its discretion by ordering defendants to pay the mediators for the time they expended appearing in
court on their petition for payment.
Defendants’ last argument is that the award of $1,500 to the mediators was also improper
because attorney fees for pro se litigants who also happen to be licensed attorneys are not awardable
by Michigan courts. In support of this argument, defendants cite Watkins v Manchester, 220 Mich
App 337; 559 NW2d 81 (1996). Watkins was a breach of contract action in which the plaintiff, whom
the defendant had represented in a divorce action, sued the defendant attorney alleging improper billing
in the divorce matter. Id. at 340-341. The trial court granted a partial directed verdict in the plaintiff’s
favor, and the jury returned a verdict of no cause of action on the plaintiff’s remaining claim. The
plaintiff appealed the trial court’s grant of attorney fees to the defendant as a mediation sanction under
MCR 2.403(O) for that portion of the fee award that reflected the time the defendant had spent
working on the case. This Court vacated the award of attorney fees as a mediation sanction, noting:
The purpose of the mediation sanction rule, MCR 2.403(O), is to encourage settlement
by ‘plac[ing] the burden of litigation costs upon the party who insists upon trial by
rejecting a proposed mediation award.’ This purpose is best served when a party hires
an objective attorney—rather than serving as both litigant and advocate—to provide a
‘filtering of meritless claims.’ Moreover, we believe that to allow litigant-attorneys to
recover compensation for time spent in their own behalf, while not extending such a rule
to nonattorneys would most likely contribute to the widespread public perception that
the courts exist primarily for the benefit of the legal profession. Pro se litigants who are
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not attorneys also may suffer lost income or lost business opportunities as the result of
their time spent in litigation. [Watkins, supra at 344-345.] 7
The instant case is distinguishable from Watkins. The mediators in the instant case were not
parties to the action. Their petition for payment was necessitated by defendants’ failure to comply with
the circuit court’s orders. The circuit court’s award for their time spent in court seeking payment for
their services cannot be said to constitute a windfall for them, nor does it contravene a public policy to
encourage the hiring of an objective attorney to provide a filtering of meritless claims. Defendants do
not argue that they challenged below the propriety of the mediators filing a petition for payment in the
circuit court. Under these circumstances, we conclude defendants’ argument is without merit.
Affirmed.
/s/ Michael R. Smolenski
/s/ Helene N. White
/s/ Stephen J. Markman
1
The circuit court’s order, entered on January 7, 1997, stated in pertinent part:
Alexander B. McGarry, having filed a Petition for Payment of Special Mediator Fees
dated December 10, 1996, and Defendants, Counter-Claim Plaintiffs and Third-Party
Defendant Bradley E. Froling having filed a Response thereto and submitted a
supporting Brief to the Court, and the matter having come on for hearing on December
18, 1996, and for all the reasons stated on the record on December 18, 1996 which
are incorporated herein by reference as if fully contained herein, it is
ORDERED, that Special Mediators fees total $9,871.25,
FURTHER ORDERED, that Defendants and Counter-Claim Plaintiffs, Hatherly
Commons, Inc. and William P. Froling, Third-Party Defendant Bradley E. Froling, shall
pay one-half of the aforesaid Special Mediators Fees which are $4,890.62 to be
divided proportionately between Alexander B. McGarry, J. Michael Malloy and
Konrad D. Kohl, based on their invoices,
FURTHER ORDERED, Petitioner having first requested on December 18,
1996 at the hearing that each of the Special Mediators be paid for attending Court, that
Defendants and Counter-Claim Plaintiffs, Hatherly Commons, Inc. and William P.
Froling, Third-Party Defendant Bradley E. Froling, shall pay the sum of $520.00 to
Alexander B. McGarry (which sum includes the $20.00 motion fee), $500.00 to J.
Michael Malloy and $500.00 to Konrad D. Kohl.
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2
Defendants’ answer and objections argued that the circuit court’s amended order should be set aside
because it violated both MCR 2.403 and the parties’ agreement. Specifically, defendants argued that
the only means by which mediation is permissible, other than by court rule, is either by agreement of the
parties or after a hearing during which all parties are consulted, neither of which occurred. Defendants’
answer and objections objected to mediators Barrett and Kohl, arguing that a conflict of interest existed
regarding Barrett, because he was, on information and belief, employed by the malpractice insurance
company providing a defense in this case. Defendants further argued t at Barrett and Kohl had
h
expressed reservations about serving as mediators in this matter in a letter to the circuit court, in which
both Barrett and Kohl had expressed a willingness to be relieved of their responsibilities. Defendants
additionally objected to Kohl because, in the letter to the circuit court, Kohl implied that defendants had
engaged in improper conduct, and because Kohl, who had been selected by predecessor counsel for
defendants, had been informed that defendants filed a grievance against the predecessor counsel.
3
Attorney Gordon Becker argued on behalf of all three defendants.
4
The Monaghan firm and Sogge & Yakima, appellees, did not file an appellate brief. By order dated
October 17, 1997, the Chief Judge of this Court granted the motion for oral argument on behalf of the
special mediators, allowing them to intervene as amicus curiae and allowing them to argue as appellees.
5
MCR 2.404(C)(3) provides:
(3) Special Panels. On stipulation of the parties, the court may appoint a panel
selected by the parties. In such a case, the qualification requirements of subrule (B)(2)
do not apply, and the parties may agree to modification of the procedures for conduct
of mediation. Nothing in this rule or MCR 2.403 precludes parties from stipulating to
other procedures similar to mediation that may aid in resolution of the case.
6
Any objection to the selection procedure employed in selecting Malloy would be appropriately raised
by plaintiff, not defendants.
7
The Watkins Court found persuasive the reasoning in Laracey v Financial Institutions Bureau, 163
Mich App 437; 414 NW2d 909 (1987) and Kay v Ehrler, 499 US 432; 111 S Ct 1435; 113 L Ed
2d 486 (1991). This Court held in Laracey, supra, that a pro se plaintiff-attorney could not recover
fees under the attorney fee provision of the Freedom of Information Act (FOIA). The Laracey Court
noted that the purpose of the FOIA’s attorney fee provision was to facilitate the disclosure of full and
complete information regarding governmental affairs, and that lay persons who proceed pro se are not
entitled to a mandatory award of attorney fees since they are not represented by an attorney. 163 Mich
App at 441-442. This Court further noted that the FOIA’s attorney fee provision was not enacted to
provide a windfall for litigants who elect to use the act to recover for legal services not performed by an
attorney, id. at 442, and that both a client and an attorney are necessary ingredients for an attorney fee
award under the FOIA. Id. at 446.
In Kay, supra, the United States Supreme Court held that a pro se litigant who is also an attorney was
not entitled to an attorney fees award under the federal civil rights statute, 42 USC § 1988. The Court
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noted that although § 1988 was intended to encourage litigation protecting civil rights, its more specific
purpose was to enable potential plaintiffs obtain the assistance of competent counsel in vindicating their
rights. The Court also noted:
A rule that authorizes awards of counsel fees to pro se litigants—even if limited to those
who are members of the bar—would create a disincentive to employ counsel whenever
such a plaintiff considered himself to litigate on his own behalf. The statutory policy of
furthering the successful prosecution of meritorious claims is better served by a rule that
creates an incentive to retain counsel in every such case. [499 US at 438.]
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