EVERGREEN HOME HEALTH CARE LLC V DANIELLE WILSON
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STATE OF MICHIGAN
COURT OF APPEALS
EVERGREEN HOME HEALTH CARE, LLC and
EVERGREEN PERSONAL SERVICES, LLC,
UNPUBLISHED
October 20, 2009
Plaintiffs-Appellants-CrossAppellees,
v
No. 286893
Wayne Circuit Court
LC No. 06-624423-CZ
DANIELLE WILSON and SARA ELLENA,
Defendants-Appellees-CrossAppellants,
and
AARON GOLDFEIN, M.D., ROBERT
MCPHERSON, CRYSTAL HOME HEALTH
CARE, INC, and TRI-CITY MEDICAL
CENTERS, P.C.,
Defendants.
Before: Fort Hood, P.J., and Sawyer and Donofrio, JJ.
PER CURIAM.
Plaintiffs Evergreen1 appeal as of right from the trial court’s order closing the case and
awarding defendants sanctions. Defendants Wilson and Ellena2 cross-appeal, contesting the
reduced amount they were awarded. We affirm the trial court’s determination that the suit was
1
Although they are separate entities, the same facts apply to both plaintiffs. Thus, for ease of
reference we will refer to both plaintiffs collectively as “Evergreen.”
2
Goldfein and Evergreen reached a settlement agreement. McPherson, Crystal, and Tri-City
were dismissed by stipulation. Because these defendants are not part of this appeal, “defendants”
refers only to Wilson and Ellena.
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frivolous, and remand for a reasoned determination of the amount of attorney fees awarded. This
appeal has been decided without oral argument pursuant to MCR 7.214(E).
The only issues presented here are whether the trial court erred in awarding sanctions and
whether it erred in reducing the amount of attorney fees awarded. The facts underlying the
original lawsuit concern plaintiffs’ treatment of patients in its care. Evergreen provides home
health care services and is set up in several apartment buildings in the state. Wilson is a
registered nurse and Ellena is a nurse’s aid. Evergreen employed both Wilson and Ellena in
2005. Defendants allegedly became unhappy with the treatment Evergreen was giving patients.
Wilson quit and Evergreen terminated Ellena’s employment allegedly because there was not
enough work for Ellena. Evergreen sued, making numerous allegations against defendants.
Count I alleged that defendants breached a noncompete covenant in their contracts by going to
work for Crystal Home Health Care; Count II alleged Crystal intentionally interfered with
Evergreen’s contractual relationships; Count III alleged defamation resulting from defendants’
statements to patients and patients’ family members that Evergreen was “killing patients,”
illegally administering prescription drugs, and providing substandard care; Court IV alleged that
defendants intentionally interfered with Evergreen’s contracts by giving Crystal the names and
addresses of Evergreen’s patients; and Count V alleged civil conspiracy among all defendants.
Defendants made an offer of settlement of $500 each, which Evergreen rejected. The
case went to mediation, and the panel unanimously awarded $100 to Evergreen for each of the
two defendants. Defendants accepted. Evergreen rejected the award.
Defendants characterized this as a “spite” suit, filed in retaliation for defendants’
involvement in Evergreen being reported to the Attorney General. According to them,
Evergreen was involved in administering prescription medication to a patient (“Patient X” in the
record), despite the fact that the treating physician, Dr. Goldfein, would not prescribe it because
it was contraindicated for that patient. Patients and their families got upset as word spread, and
over a dozen patients left Evergreen for Crystal. Evergreen, in contrast, asserted that defendants
had been reprimanded for attendance and other employment matters. Evergreen complained that
it was defendants who were acting out of vengeance by spreading lies about Evergreen and
luring patients away.
In deciding defendants’ motion for summary disposition, the trial court first observed that
Evergreen never produced the noncompete agreement Wilson had allegedly signed. Regarding
Ellena’s agreement not to compete, the trial court found the provision unreasonable because
employers do not need that kind of protection when the employee has no special skill or
knowledge. The court found no “significant, material statements that amount to defamation,”
and no “significant, material evidence” supporting either the tortious interference claim or the
civil conspiracy claim. The trial court therefore granted defendants’ motion for summary
disposition.
Defendants then brought a motion for costs and fees based on Evergreen’s rejection of
mediation and on MCL 600.2591 and MCR 2.625(A). Defense counsel requested $27,000 in
fees at a rate of $200 per hour, and $1,755 in costs. Counsel noted that defendants had actually
paid over $17,000 to date. Evergreen argued that the suit was not frivolous because the suit had
valid factual grounds, and that this was no different from any other suit where the other party
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was successful. Evergreen also argued that the court should not decide the amount of fees
without holding an evidentiary hearing because the billing appeared excessive as far as number
of items.
The trial court stated that it initially felt the case was frivolous, and when the case
evaluation award of $100 came in, that reinforced the court’s conclusion. But in awarding
sanctions, the court stated:
I’m really not going to give [defense counsel] what he’s asked for. I
probably should, I probably should. But I’m going to reduce the amount
requested, and I’m actually tempted to reduce it down to what he’s indicated his
clients actually paid, but I think I’m gonna reduce it down to $15,000. I’m going
to make it 75 [sic, $7,500] per client.
The court then said that if it held a hearing, as Evergreen asked, the amount would be increased.
It would not hold a hearing, “because I think the amount that I’ve decided on more than
encompasses, even if I cut his hourly rate down a lot more.” Yet, the court also said, given
defense counsel’s thirty-two years of practice, he should probably get more than $200 per hour.
The court also awarded the full amount of costs, $1,755, for a total of $16,755. In its written
order, the court identified MCR 2.625(A)(1), MCL 600.2591, and MCR 2.114 as grounds for
awarding sanctions.
We review a trial court’s decision to grant or deny attorney fees for abuse of discretion.
Taylor v Currie, 277 Mich App 85, 99; 743 NW2d 571 (2007). The trial court has not abused its
discretion if the outcome of its decision is within the range of principled outcomes. Id. A factual
finding that the suit is frivolous is reviewed for clear error. Id.; In re Attorney Fees & Costs, 233
Mich App 694, 701; 593 NW2d 589 (1999).
MCR 2.625(A)(1) allows the court to award costs to the prevailing party unless otherwise
prohibited by statute or court rule. MCR 2.625(A)(2) provides that, “if the court finds on motion
of a party that an action or defense was frivolous, costs shall be awarded as provided by MCL
600.2591.” MCL 600.2591 provides:
(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.
(2) The amount of costs and fees awarded under this section shall include all
reasonable costs actually incurred by the prevailing party and any costs allowed
by law or by court rule, including court costs and reasonable attorney fees.
(3) As used in this section:
(a) “Frivolous” means that at least 1 of the following conditions is met:
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(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.
(b) “Prevailing party” means a party who wins on the entire record.
MCR 2.114 provides in relevant part:
(D) Effect of Signature. The signature of an attorney or party, whether or not the
party is represented by an attorney, constitutes a certification by the signer that
(1) he or she has read the document;
(2) to the best of his or her knowledge, information, and belief formed after
reasonable inquiry, the document is well grounded in fact and is warranted by
existing law or a good faith argument for the extension, modification, or reversal
of existing law; and
(3) the document is not interposed for any improper purpose, such as to harass
or to cause unnecessary delay or needless increase in the cost of litigation.
(E) Sanctions for Violation. If a document is signed in violation of this rule, the
court, on the motion of a party or on its own initiative, shall impose upon the
person who signed it, a represented party, or both, an appropriate sanction, which
may include an order to pay to the other party or parties the amount of the
reasonable expenses incurred because of the filing of the document, including
reasonable attorney fees. The court may not assess punitive damages.
(F) Sanctions for Frivolous Claims and Defenses. In addition to sanctions under
this rule, a party pleading a frivolous claim or defense is subject to costs as
provided in MCR 2.625(A)(2). The court may not assess punitive damages.
The trial court did not abuse its discretion in awarding costs and fees under any of the
cited provisions. The court did not identify which of the grounds it found under MCL 600.2591,
but there is factual support for either (3)(a)(i) or (3)(a)(ii). Defendants argued frequently in the
trial court that Evergreen’s purpose was to harass and embarrass them, and to cause them great
personal expense trying to defend themselves. Even if it is true that patients left Evergreen, no
admissible evidence indicates their reasons or shows that they went to Crystal. The content of
the alleged defamatory statements is left purely to speculation. Given the absence of insurance
coverage in this case, it is difficult to see what financial gain Evergreen hoped to achieve from
suing a nurse and a nurse’s aid. It seems much more likely that the aim was defendants’
financial ruin.
The absence of factual support for Evergreen’s allegations also supports the conclusion
that the suit was frivolous. A suit for defamation must allege:
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1) a false and defamatory statement concerning the plaintiff, 2) an unprivileged
communication to a third party, 3) fault amounting to at least negligence on the
part of the publisher, and 4) either actionability of the statement irrespective of
special harm or the existence of special harm caused by publication. [Rouch v
Evening News, 440 Mich 238, 251; 487 NW2d 205 (1992).]
Claims for defamation must be pleaded with specificity. Royal Palace Homes, Inc v
Channel 7 of Detroit, Inc, 197 Mich App 48, 52; 495 NW2d 391 (1992). A plaintiff must allege
and identify specifically which statements he considers to be materially false. Id. at 52-53.
Evergreen’s complaint does identify specific statements, alleging defendants told Evergreen’s
patients and others that Evergreen was “killing patients”; that Evergreen illegally administered
prescription drugs; and that Evergreen provided substandard health care services. However, Dr.
Goldfein made the alleged statement about killing patients, and Evergreen provides no evidence
that defendants made any unprivileged, false statements to anyone else. It is not enough that a
plaintiff alleges all the necessary elements. The complaint must be “well grounded in fact” and
filed only after “reasonable inquiry.” MCR 2.114(D)(2).
In short, no factual support exists for Evergreen’s tort claims. The only evidentiary
support is in the form of affidavits and statements made in depositions. While these documents
are admissible, the statements relied on ultimately turn out to be hearsay, unsupported opinion,
or do not actually say what Evergreen claims they say. The trial court was in the best position to
ascertain attitudes and the purpose for inflammatory rhetoric and actions. Thus, we conclude
that the trial court did not clearly err in finding Evergreen’s tort suit frivolous.
As for the breach of contract claims, the trial court also did not err in finding this claim
groundless. A noncompete clause in an employment contract must be reasonable “as to its
duration, geographical area, and the type of employment or line of business.” MCL 445.774a(1).
“To the extent any such agreement or covenant is found to be unreasonable in any respect, a
court may limit the agreement to render it reasonable in light of the circumstances in which it
was made and specifically enforce the agreement as limited.” Id. “To be reasonable in relation
to an employer’s competitive business interest, a restrictive covenant must protect against the
employee’s gaining some unfair advantage in competition with the employer, but not prohibit the
employee from using general knowledge or skill.” St Clair Medical, PC v Borgiel, 270 Mich
App 260, 266; 715 NW2d 914 (2006).
Whether the trial court erred in deciding the clause was unreasonable is not at issue here.
Rather, the question is whether the court erred in concluding that Evergreen’s suit was frivolous,
given that the clause was unreasonable. Certainly, the court did not clearly err in finding
Evergreen’s breach claim against Wilson to be frivolous because Evergreen could not even prove
such an agreement ever existed. Ellena signed a noncompete agreement, but the court found the
entire agreement unreasonable because it could not serve the purpose of protecting the employer
that such agreements are intended to do. We cannot say that the trial court abused its discretion
in finding Evergreen’s decision to enforce the agreement, coupled with the other claims brought
in its suit, was frivolous and intended to harass and financially damage these defendants.
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We next address defendants’ cross-appeal regarding the trial court’s reduction in the
amount of the award sought.3 Defense counsel submitted an accounting of his fees that totaled
around $25,000.4 The trial court indicated that an hourly rate of $200 was reasonable for an
attorney of counsel’s experience. Yet, despite stating it “probably should” award what was
requested and without indicating that any of the items billed were excessive or unnecessary, the
court reduced the fee award to $15,000, providing no reason other than he thought it “more than
encompasses.” The exact meaning of this is unclear and, without more, seems arbitrary,
especially because the court indicated to Evergreen’s counsel that if the court held an evidentiary
hearing on the issue, the award would likely be even higher. Although the two court rules cited
by the trial court as grounds for sanctions are permissive, MCL 600.2591, also cited as grounds,
mandates the court to award all reasonable fees:
(2) The amount of costs and fees awarded under this section shall include all
reasonable costs actually incurred by the prevailing party and any costs allowed
by law or by court rule, including court costs and reasonable attorney fees.
[Emphasis added.]
In light of this, we are unable to determine whether the trial court abused its discretion in
reducing the amount.
We affirm the judgment of the trial court regarding its finding that the suit was frivolous,
and remand for a reasoned determination of the amount of attorney fees awarded. We do not
retain jurisdiction. Costs to defendants.
/s/ Karen M. Fort Hood
/s/ David H. Sawyer
/s/ Pat M. Donofrio
3
Evergreen does not appeal the amount awarded, nor has it responded to defendants’ crossappeal brief. Thus, the only challenge to the amount that is before this Court is whether the trial
court should have awarded more than it did.
4
Defendants sought $27,067.16 in total costs and fees, $1,755 of this was costs.
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