JOHN SHAWAY V HAZEL PARK RACING ASSOCIATION INC
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STATE OF MICHIGAN
COURT OF APPEALS
PHILLIP M. SCHULTZ,
UNPUBLISHED
November 17, 2000
Plaintiff-Appellee,
v
HAZEL PARK RACING ASSOCIATION, INC,
No. 212980
Oakland Circuit Court
LC No. 96-532026-CZ
Defendant-Appellant.
JOHN SHAWAY,
Plaintiff-Appellee,
v
HAZEL PARK RACING ASSOCIATION, INC,
No. 213514
Oakland Circuit Court
LC No. 95-532024-CZ
Defendant-Appellant.
Before: Hoekstra, P.J., and Cavanagh and White, JJ.
WHITE, J. (concurring and dissenting).
The circuit court initially determined that Shaway’s action was frivolous. The Court
stated:
Having reviewed the file, the Court finds that the plaintiff’s action was
frivolous because his legal position was devoid of arguable legal merit. First,
plaintiff failed to file a timely response to the defendant’s motion. Second, plaintiff
expressly withdrew the late response with the direction that the Court not consider
it in ruling on the defendant’s dispositive motion.
Third, a review of the response reveals that the plaintiff did not cite one case
supporting its position that the defendant was obligated to pay on the tickets under
any of the theories pled in the complaint. In fact, in his motion for reconsideration
the plaintiff acknowledged that the issues of law and fact raised in a late response
were, quote, “novel,” end of quote.
-1-
Fourth, both this Court and another judge of this circuit found no legal merit
in any of the claims alleged, albeit on different grounds. Footnote one.
Footnote. Another bettor, Phillip Schultz, placed several bets on winning
horses in the first race in Hollywood Park after the race was over and filed a
complaint identical to the one filed by Shaway. That case, 96-532026-CZ, was
assigned to Judge Schnelz, who granted defendant’s motion for summary
disposition about a month after this Court had ruled on its motion in this case.
Accordingly, the Court finds the defendant is entitled to costs.1
When defendant sought to enter an order assessing the costs and fees against counsel as
well as Shaway, relying on MCL 600.2529(1); MSA 27A.2591(1), the court heard argument and
stated that it would examine the statute at the next break in proceedings. Later, the court returned
to the record and stated:
The Court has examined the Court Rules, examined the pleadings and the records
and files in this case. It would appear to the Court that the lawyer who filed the
lawsuit on behalf of his client at the time that he filed the lawsuit only knew what
his client had told him and that was that his client presented the lawyer with
winning race track tickets that were not honored and, therefore, filed suit on
behalf of this client and did sign the Complaint believing at the time in good faith,
that his client had a valid cause of action. A lawyer acting in good faith who
reasonably believes that his client has a legitimate basis in fact for filing a lawsuit
acts in good faith and should not be sanctioned. Motion denied.
Plaintiff’s counsel had earlier submitted a brief detailing counsel’s efforts to investigate
the claim before filing suit.
Plaintiff’s counsel argues that the court’s statement at the last hearing regarding counsel’s
good faith reveals that the court reconsidered the matter and revised its earlier assessment that the
action was frivolous. Counsel argues that because the court ultimately found that the action was
filed in good faith, sanctions should not have been assessed against Shaway or counsel, and
therefore the court did not err in refusing to assess sanctions against counsel. I find it impossible
to reconcile the court’s initial statements and its statement at the last hearing. The finding of
frivolousness was based on the conclusion that the action was devoid of arguable legal merit, a
matter involving counsel’s judgment.2 Yet, at the subsequent hearing, the court appears to have
reviewed the file and to have concluded based on that review that counsel commenced the action
1
The court denied the actual motion without prejudice because defendant failed to substantiate
the amount requested. Defendant renewed the motion with supporting material and, at a hearing
held two weeks after the initial hearing, the court awarded costs or expenses of $1279.69 and
attorney fees of $16,580.
2
In its initial ruling, the court made no findings regarding Shaway’s purpose in initiating the
action or his belief in the truth of the facts underlying the action.
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in good faith, in reliance on the information given him. Shaway has not filed a cross-appeal3 and
therefore the award of sanctions against him stands uncontested. However, counsel raises the
issue that the predicate for awarding sanctions against him, i.e., that the action was frivolous, is
belied by the court’s comments at the last hearing. Rather than order the imposition of sanctions
against counsel based on a finding of frivolousness, I would remand for clarification of the
court’s seemingly inconsistent findings.
In all other respects, I concur with the majority.
/s/ Helene N. White
3
Shaway has filed bankruptcy.
-3-
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