CLARE LEE LAVENE V VOLKSWAGEN OF AMERICA INCAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
CLARE LEE LAVENE and LEANNA M.
May 24, 2005
VOLKSWAGEN OF AMERICA, INC. and BILL
COOK IMPORTED CARS, INC.,
Oakland Circuit Court
LC No. 2002-041772-NZ
Official Reported Version
WINNEBAGO INDUSTRIES, GENERAL
TRAILER MFG., INC., and GENERAL TRAILER
Before: Neff, P.J., and Owens and Fort Hood, JJ.
Defendants Volkswagen of America, Inc.; and Bill Cook Imported Cars, Inc., appeal as
of right an order of the trial court that awarded plaintiffs attorney fees and costs of $41,648.47
following the parties' settlement of plaintiffs' claim for breach of warranty.1 We affirm, but
remand to the trial court for a determination of an award of plaintiffs' appellate attorney fees.
Plaintiffs filed a breach of warranty and consumer protection action against defendants
after the 2001 Winnebago Rialta motor home they purchased in September 2001 required
Defendants Winnebago Industries; General Trailer Mfg, Inc.; and General Trailer RV Center
tendered payment of their share of the judgment and award of fees and costs and are not
participating in this appeal.
repeated repairs and left plaintiffs stranded out-of-state for more than a month. Plaintiffs alleged
several claims, including liability under the Magnuson-Moss Warranty Act (MMWA), 15 USC
2301 et seq., and the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq.
On the eve of trial, the parties reached a settlement in which defendants agreed to
repurchase the motor home and pay plaintiffs attorney fees and costs to which they were entitled
by statute or court rule. The settlement provided that if the parties could not reach agreement on
the amount of fees and costs, the trial court would decide the matter. When they could not
resolve the issue of fees and costs, the parties submitted their dispute to the trial court for
decision. Following an evidentiary hearing, the court awarded plaintiffs attorney fees of
$37,016.52, deposition fees and costs, including out-of-state deposition costs of $3,256.95, and
witness fees totaling $1,375.
At issue is whether the costs2 awarded by the trial court were legally recoverable.
Defendants do not dispute that, in their settlement with plaintiffs, they agreed to pay legally
recoverable costs to be determined by the trial court. They argue, however, that the costs
awarded by the trial court are not recoverable under Michigan law. Plaintiffs claim that the costs
at issue are authorized by the MCPA and the MMWA, whose specific cost-shifting provisions
take precedence over the applicable Revised Judicature Act (RJA) provisions for the taxation of
The question then is whether the cost-shifting provision of the MMWA, 15 USC
2310(d)(2), authorized the award of costs regardless of whether they are taxable under the RJA.
We hold that the trial court properly awarded costs pursuant to the MMWA.
III. Standard of Review
This Court reviews an award of costs for an abuse of discretion. Kernen v Homestead
Dev Co, 252 Mich App 689, 691; 653 NW2d 634 (2002). However, the power to tax costs is
wholly statutory, and "costs are not recoverable where there is no statutory authority for
awarding them." Portelli v I R Constr Products Co, Inc, 218 Mich App 591, 605; 554 NW2d
591 (1996). Accordingly, this issue entails a question of statutory interpretation, which is
reviewed de novo on appeal. Morrison v East Lansing, 255 Mich App 505, 522; 660 NW2d 395
IV. Taxation of Costs
Defendants did not challenge the award of attorney fees.
As an initial matter, defendants argue generally that plaintiffs were not entitled to tax
costs because they were not a "prevailing party" under MCR 2.6253 given that there was no
judgment against any defendant, but only a mutually agreed settlement. Contrary to defendants'
suggestion, MCR 2.625(B), entitled "Rules for Determining Prevailing Party," is not limited to
entry of a judgment. Rather, MCR 2.625(B)(2) provides that if a single cause of action is
alleged, "the party who prevails on the entire record is deemed the prevailing party." Moreover,
MCR 2.625(H) recognizes that the issue of taxation of costs may be reserved in a settlement:
"Unless otherwise specified a settlement is deemed to include the payment of any costs that
might have been taxable." (Emphasis added.)
In any event, we find defendants' argument a moot point, if not disingenuous. In this
case, the trial court entered a judgment in accordance with the parties' settlement, in which the
parties agreed that defendants would pay "whatever costs [plaintiffs] may be entitled to."
Counsel for defendants subsequently acknowledged on the record that defendants had consented
to "[r]easonable attorney fees and recoverable costs." For these reasons, we find no merit in
defendants' claim that plaintiffs are not entitled to costs because they are not a prevailing party.4
Defendants further argue that, even if plaintiffs are a "prevailing party," various costs
awarded by the trial court are nonrecoverable costs under MCL 600.2405: deposition transcripts
for David Courtad, Gus Pique, and Andrew Haag ($727.45) and related deposition fees
($4,822)5; expert witness fees ($563.52); copying, postage and delivery costs ($643.99); and
Westlaw research ($30.96). Accordingly, defendant contends that the trial court was without
statutory authority to award costs of $6,787.92.6
Plaintiffs respond that the trial court properly awarded the costs pursuant to the MMWA
and the MCPA. We agree with plaintiffs that the authority relied on by defendants pertains to
ordinary civil matters and is inapplicable in this case because the costs and fees were awarded
pursuant to remedial fee-shifting statutes.
In general, a prevailing party is entitled to recover certain costs of litigation pursuant to
MCR 2.625. Items and prescribed fees that may generally be recovered as taxable costs and fees
MCR 2.625(A)(1) provides that "[c]osts will be allowed to the prevailing party in an action,
unless prohibited by statute or by these rules or unless the court directs otherwise, for reasons
stated in writing and filed in the action."
Given these circumstances, we need not consider plaintiffs' argument that under the MMWA,
the standard for determination of a "prevailing party" is whether plaintiffs obtained a substantial
benefit from the litigation.
These costs include $4,675 in fees for attorneys from Mississippi, Louisiana, and Traverse
The actual amount in controversy is apparently only one-half of these costs, $3,393.96, which
is defendants' share of liability because defendants Winnebago and General Trailer paid their
one-half share of liability, including the award of fees and costs, following the settlement.
are set forth in the Revised Judicature Act (RJA), MCL 600.2401 et seq. and 600.2501 et seq. J
C Bldg Corp II v Parkhurst Homes, Inc, 217 Mich App 421, 429; 552 NW2d 466 (1996).
Pursuant to MCL 600.2401, "[w]hen costs are allowed in any action or proceeding in . . . the
circuit court . . . the items and amount thereof shall be governed by this chapter except as
otherwise provided in this act." (Emphasis added.) MCL 600.2405 more specifically provides:
The following items may be taxed and awarded as costs unless otherwise
(1) Any of the fees of officers, witnesses, or other persons mentioned in
this chapter or in chapter 25, unless a contrary intention is stated.
(2) Matters specifically made taxable elsewhere in the statutes or rules.
(3) The legal fees for any newspaper publication required by law.
(4) The reasonable expense of printing any required brief and appendix in
the supreme court, including any brief on motion for leave to appeal.
(5) The reasonable costs of any bond required by law, including any stay
of proceeding or appeal bond.
(6) Any attorney fees authorized by statute or by court rule. [Emphasis
Contrary to defendants' arguments, the general provisions of MCR 2.625 and the RJA do
not necessarily apply in cases in which fees or costs are governed by more specific statutory
provisions. See, e.g., Peters v Gunnell, Inc, 253 Mich App 211, 226, 655 NW2d 582 (2002);
Cope v City of St Clair, 28 Mich App 380; 184 NW2d 464 (1970).7 Various statutes incorporate
specific provisions concerning the recovery of attorney fees or costs, which statutes may provide
exceptions to the general rule. See, e.g., the Uniform Condemnation Procedures Act, MCL
213.66; the "lemon law," MCL 257.1407; and the Motor Vehicle Service and Repair Act, MCL
257.1336. These cost- or fee-shifting provisions are essential to legal redress in public interest
or consumer cases in which the monetary value of the case is often meager. Jordan v
Transnational Motors, Inc, 212 Mich App 94, 98; 537 NW2d 471 (1995).8 As we explained in
But see Morrison, supra at 522 (the Open Meetings Act provision for recovery of court costs
and actual attorney fees, MCL 15.271(4), is limited by the MCL 600.2549 requirements for
See also FMB-First Michigan Bank v Bailey, 232 Mich App 711, 724; 591 NW2d 676 (1998)
"'Fee shifting statutes such as 42 USC 1988 are governed by such specific considerations as
enabling victims of civil rights violations to secure legal representation.'", quoting Kay v Ehrler,
499 US 432; 111 S Ct 1435; 113 L Ed 2d 486 (1991).
In consumer protection as this, the monetary value of the case is typically
low. If courts focus only on the dollar value and the result of the case when
awarding attorney fees, the remedial purposes of the statutes in question will be
thwarted. Simply put, if attorney fee awards in these cases do not provide a
reasonable return, it will be economically impossible for attorneys to represent
their clients. Thus, practically speaking, the door to the courtroom will be closed
to all but those with either potentially substantial damages, or those with
sufficient economic resources to afford the litigation expenses involved. Such a
situation would indeed be ironic: it is precisely those with ordinary consumer
complaints and those who cannot afford their attorney fees for whom these
remedial acts are intended. [Id. at 98-99.]
The cost-shifting provision of the MCPA, MCL 445.911(2), provides:
Except in a class action, a person who suffers loss as a result of a violation
of this act may bring an action to recover actual damages or $250.00, whichever
is greater, together with reasonable attorneys' fees.
Although the MCPA does not address costs, under the plain language of MCL 445.911, plaintiffs
are entitled to recover reasonable attorney fees. Smolen v Dahlmann Apartments, Ltd, 186 Mich
App 292, 295; 463 NW2d 261 (1990). The underlying purpose of this provision "is to afford an
indigent client the opportunity to seek protection and obtain a judgment where otherwise
precluded because of monetary constraints." Id. at 297. Accordingly, the recovery of attorney
fees under the MCPA applies to services rendered in appellate proceedings. Id. at 297-298.
Further, the cost-shifting provision of the MMWA, 15 USC 2310(d)(2), provides:
If a consumer finally prevails in any action brought under paragraph (1) of
this subsection, he may be allowed by the court to recover as part of the judgment
a sum equal to the aggregate amount of cost and expenses (including attorneys'
fees based on actual time expended) determined by the court to have been
reasonably incurred by the plaintiff for or in connection with the commencement
and prosecution of such action, unless the court in its discretion shall determine
that such an award of attorneys' fees would be inappropriate. [Emphasis added.]
Plaintiffs argue that the language "aggregate amount of cost and expenses" authorized the
trial court to award the full amount of legal costs and expenses, unrestricted by the RJA. At
issue is whether this broad language overrides state restrictions on an award of costs when a state
court entertains an action under the MMWA. This is a question of first impression in Michigan.
The Supremacy Clause of the United States Constitution, US Const, art VI, cl 2, provides
that the laws of the United States "shall be the supreme Law of the Land; . . . any Thing in the
Constitution or Laws of any State to the Contrary notwithstanding." The Supremacy Clause
"'provides Congress with the power to pre-empt state law.'" Duprey v Huron & Eastern R Co,
Inc, 237 Mich App 662, 665-666; 604 NW2d 702 (1999) (citation omitted). There is a strong
presumption against preemption. Id. at 665; Walker v Johnson & Johnson Vision Products, Inc,
217 Mich App 705, 711; 552 NW2d 679 (1996). Preemption occurs only under certain
conditions: (1) when a federal statute contains a clear preemption provision; (2) when there is
outright or actual conflict between federal and state law; (3) where compliance with both federal
and state law is in effect physically impossible; (4) where there is implicit in federal law a barrier
to state regulation; (5) where Congress has legislated comprehensively, thus occupying an entire
field of regulation and leaving no room for the states to supplement federal law; or (6) where the
state law stands as an obstacle to the accomplishment and execution of the full objectives of
Congress. Duprey, supra at 665.
In this case, not only has a conflict arisen between the state and federal law, but,
moreover, state law stands as an obstacle to the accomplishment and execution of the full
objectives of Congress. The MMWA cost-shifting provision authorizes the trial court to award
plaintiffs the "aggregate amount of cost and expenses" incurred in litigating their claim, while
the RJA authorizes the taxation of some costs, but not others. Accordingly, we conclude that 15
USC 2310(d)(2) preempts the RJA and authorizes the trial court to award costs that may not be
taxable under the RJA.
Our conclusion is consistent with other case law holding that a prevailing plaintiff in a
MMWA action may recover costs under 15 USC 2310(d)(2) that would not have been
permissible under state law. In Universal Motors, Inc v Waldcock, 719 P2d 254, 260 (Alaska,
1986), the Supreme Court of Alaska held that the trial court did not err in awarding the plaintiff
expert witness fees in excess of the maximum amount of $25 an hour permitted by Alaska
Administrative Rule 7(c), because the plaintiff sought recovery under the federal act, and not
state law. The court noted that "15 USC 2310(d)(2) explicitly allows reasonable costs and
expenses to be recovered by successful plaintiffs." Universal Motors, supra at 260.
In Holmes v LG Marion Corp, 258 Va 473, 481-482; 521 SE2d 528 (1999), the Virginia
Supreme Court observed that the recovery of costs under the MMWA was broader than that
under the Virginia Consumer Protection Act (VCPA) because the VCPA permitted recovery of
"court costs" while the MMWA permitted recovery of "cost and expenses . . . ." Thus, "[c]osts
and expenses recoverable under the [MMWA] could include recovery for trial-related expenses
such as expert witness fees, which are not recoverable under the rubric of 'court costs' allowed by
[Va Code Ann 59.1-204(B)]." Id. at 482. In Holmes, the plaintiff sought recovery of filing fees,
service fees, subpoena fees, reasonable costs for depositions taken out-of-state, fees and costs to
secure the services of two witnesses, attorney fees, costs, and expenses incurred for the services
of his automotive expert and to conduct a deposition. The trial court awarded costs based on
reasonableness, which the supreme court noted was the same limitation imposed on litigation
expenses recoverable under the MMWA. The court concluded that because the expenses
requested and recovered by the plaintiff encompassed the same type of expenses he could have
recovered under the MMWA, any error in striking his claim under the MMWA was harmless.
Id. at 482-483.
We conclude that the cost-shifting provision of the MMWA, 15 USC 2310(d)(2),
authorized the trial court to award plaintiffs costs that were not taxable under the RJA, including
costs for depositions, expert witness fees, copying, postage, delivery, and Westlaw research. We
find no error in the trial court's award of the costs sought by plaintiffs in this case.9
VI. Appellate Attorney Fees
Plaintiffs seek recovery of their appellate attorney fees under the MMWA, 15 USC
2310(d)(2). This Court has held that such fees are allowable. Leavitt v Monaco Coach Corp,
241 Mich App 288, 312; 616 NW2d 175 (2000). Accordingly, we remand for a determination of
an award of plaintiffs' actual and reasonable appellate attorney fees. Id.
Affirmed and remanded for further proceedings consistent with this opinion. We do not
/s/ Janet T. Neff
/s/ Donald S. Owens
/s/ Karen M. Fort Hood
Although we conclude that a state court awarding costs under the MMWA is authorized to
award costs that otherwise are not taxable under the RJA, we recognize that neutral state
procedural rules may remain applicable to those awards. Howlett v Rose, 496 US 356, 372; 110
S Ct 2430; 110 L Ed 332 (1990). The only conceivable argument that would implicate this rule
is defendants' argument that the requirements for filing depositions, MCL 600.2549, were not
met. However, the lower court docket sheet indicates that the three depositions at issue were
filed with the clerk on July 9, 2003. Further, we agree with plaintiffs that the documents were
necessarily used, given the repairs at issue and the circumstances of settlement.