KEVIN ABRAMCZYK V CITY OF SOUTHGATE
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STATE OF MICHIGAN
COURT OF APPEALS
KEVIN ABRAMCZYK, GERALD NORTON,
and DANIEL WLODKOWSKI,
UNPUBLISHED
April 9, 2002
Plaintiffs-Appellants/CrossAppellees,
and
ERIC BLAZ, MICHAEL BOYD, PAUL
DIEDRICH, PATRICK KAKOS, SEAN
LAFOUNTAINE, CHARLES PRATHER,
GERALD SCHULZ, and RICHARD SCHULZ,1
Plaintiffs,
v
No. 224222
Wayne Circuit Court
LC No. 96-640658-NO
THE CITY OF SOUTHGATE, a Michigan
Municipal Corporation,
Defendant-Appellee/CrossAppellant,
and
STEPHEN AHLES, in an individual and official
capacity,
Defendant-Appellee,
and
NORMA WURMLINGER, in an individual and
official capacity,
Defendant.
1
By stipulation of the parties, this Court entered an order on March 1, 2002 dismissing plaintiffs
from this appeal with prejudice and without costs.
-1-
KEVIN ABRAMCZYK, GERALD NORTON,
and DANIEL WLODKOWSKI,
Plaintiffs-Appellees/CrossAppellants,
and
ERIC BLAZ, MICHAEL BOYD, PAUL
DIEDRICH, PATRICK KAKOS, SEAN
LAFOUNTAINE, CHARLES PRATHER,
GERALD SCHULZ, and RICHARD SCHULZ,2
Plaintiffs,
v
No. 224223
Wayne Circuit Court
LC No. 96-640658-NO
THE CITY OF SOUTHGATE,
Defendant-Appellant/CrossAppellee,
and
STEPHEN AHLES, in an individual and official
capacity, and NORMA WURMLINGER, in an
individual and official capacity,
Defendants.
KEVIN ABRAMCZYK, GERALD NORTON,
and DANIEL WLODKOWSKI,
Plaintiffs-Appellees/Cross
Appellants,
and
ERIC BLAZ, MICHAEL BOYD, PAUL
DIEDRICH, PATRICK KAKOS, SEAN
2
See footnote 1.
-2-
LAFOUNTAINE, CHARLES PRATHER,
GERALD SCHULZ, and RICHARD SCHULZ,3
Plaintiffs,
v
STEPHEN AHLES, in an individual and official
capacity,
No. 224260
Wayne Circuit Court
LC No. 96-640658-NO
Defendant-Appellant/CrossAppellee,
and
THE CITY OF SOUTHGATE, a Michigan
Municipal Corporation, and NORMA
WURMLINGER, in an individual and official
capacity,
Defendants.
Before: O'Connell, P.J., and White and Cooper, JJ.
PER CURIAM.
In these consolidated appeals, plaintiffs appeal as of right the trial court’s November 30,
1999, Final Amended Judgment following a jury trial verdict for plaintiffs against defendants
Stephen Ahles and City of Southgate (City).4 Defendant Ahles also appeals as of right from the
trial court’s Final Amended Judgment granting remittitur in favor of defendant Ahles. Defendant
City appeals as of right from the trial court’s October 28, 1997, partial denial of its motion for
summary disposition, the trial court’s April 6, 1999, Judgment, and the trial court’s Final
Amended Judgment. We affirm in part, reverse in part, and remand for further proceedings.
(…continued)
3
See footnote 1.
4
Defendant Norma Wurmlinger is not a party to this appeal.
-3-
I. Background Facts and Procedural History
This case arises out of the tape recording of the business lines at the City of Southgate’s
fire department from the Fall of 1994 until February 1996. According to defendant fire chief
Ahles, he believed that the business lines at the fire department were always recorded. However,
defendant Ahles discovered that the lines were not recorded when he tried to get a copy of a
complaint that was telephoned into the department. To safeguard the fire department against
future complaints defendant Ahles decided to “reinstate” the recording of the business lines. To
accomplish this defendant Ahles connected his personal tape machine to a voice activated
recorder located behind a closed bookcase in his office. This machine was attached to the phone
jack used by the fire department’s business lines. The tape ran on a continuous loop and was
recorded over approximately every two weeks.
Plaintiffs, several firefighters with the fire department, testified that they were unaware
that the business lines were recorded and that it was common practice for the firefighters to use
these lines for personal telephone calls. There were no signs posted or any written policy
announcing the recording of the business lines. However, defendant Ahles claimed that the
recording of the business lines was common knowledge. In contrast, plaintiffs unanimously
testified that they were unaware that the business lines were recorded or that this had ever been
the fire department’s policy. The mayor also claimed that she was unaware that the fire
department’s business lines were recorded until the audiotape was discovered.
Defendant Ahles denied ever listening to the tapes. However, testimony revealed that
defendant Ahles knew about the contents of private telephone conversations. Specifically,
plaintiff Kakos testified that he had done some business for defendant Ahles’ wife but that he
underestimated the cost of his work to her. Thereafter, plaintiff Kakos told his own wife, over
the business line at the fire department, the actual cost of the work. Plaintiff Kakos claimed that
he never told defendant Ahles of the correct amount but that shortly after the telephone call he
was paid the correct amount.
On February 3, 1996, a tape was discovered in defendant Ahles’ vehicle that contained
telephone conversations from the fire department’s business lines. Defendant Ahles received a
five day suspension from defendant City for his actions. After the initial complaints were made
against defendant Ahles, plaintiffs claimed that they were retaliated against. Specifically,
plaintiffs testified that defendant Ahles instituted harsh policies, gave unjustified reprimands, and
threatened plaintiffs with the loss of their jobs.
On September 18, 1996, all plaintiffs filed a multi-count complaint against defendant
City and defendant Ahles.5 Thereafter, on August 8, 1997, defendant City filed a motion for
5
The complaint alleged: (1) violations of the Michigan Eavesdropping Statutes, MCL 750.539 et
seq., against both defendants; (2) a violation of the Michigan Constitution right against illegal
search and seizure by both defendants; (3) negligent and intentional infliction of emotional
distress by both defendants; (3) a violation of the Michigan Whistleblowers’ Protection Act
(WPA), MCL 15.361 et seq., against both defendants; (4) a failure to hire, train or supervise the
fire chief on the part of defendant City; (5) a violation of plaintiffs’ privacy rights by both
(continued…)
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summary disposition pursuant to MCR 2.116(C)(7), (8), and (10).6 The trial court granted partial
summary disposition for defendant City on the intentional infliction of emotional distress claim
but found that questions of fact existed on the remainder of plaintiffs’ issues.
After a month long trial, the jury found in favor of plaintiffs and against defendant Ahles
on all claims, except for violations of the Whistleblowers’ Protection Act (WPA),7 and awarded
$115,000 in compensatory damages and $19,250,000 in punitive damages. Conversely, the jury
found for defendant City, and against plaintiffs, on all claims except the violation of public
policy. While the jury was specifically instructed on the verdict form not to award punitive
damages unless it found a violation of the Michigan Eavesdropping Statute, the jury awarded
$110,000 in compensatory damages and $13,750,000 in punitive damages against defendant
City.
On March 30, 1999, defendant City filed a motion for judgment notwithstanding the
verdict, remittitur or new trial. The trial court denied defendant City’s motion for judgment
notwithstanding the verdict or a new trial concerning the public policy tort. The court reasoned
that plaintiffs’ theory of the case, and the jury’s ultimate finding, was that defendant City
permitted a violation of the state policy against eavesdropping. Finding that this theory was
supported by law, the trial court held that there was a tort against public policy. However, the
trial court granted defendant City’s motion for judgment notwithstanding the verdict regarding
the punitive damages awarded against defendant City. In this regard, the trial court stated that
the award of punitive damages was contrary to the court’s instructions and the jury’s findings
that defendant City had not violated the eavesdropping statute.
On April 27, 1999, defendant Ahles filed a separate motion for remittitur or a new trial.
The trial court issued a written opinion granting remittitur of the punitive damages assessed
against defendant Ahles. After analyzing the factors articulated in BMW of North America, Inc v
Gore, 517 US 559; 116 S Ct 1589; 134 L Ed 2d 809 (1996) and Palenkas v Beaumont Hospital,
432 Mich 527; 433 NW2d 354 (1989), the trial court reduced the punitive damages award from
$1,750,000 per plaintiff to $1,750,000 split amongst the plaintiffs.
II. Legal Analysis
A. Defendant Ahles’ Status as a Licensed Attorney
Plaintiffs first contend that the trial court erred in excluding evidence that defendant
Ahles was a licensed attorney. Essentially, plaintiffs opine that this information would have
increased the culpability of both defendants. We disagree.
(…continued)
defendants; and (6) a violation of public policy by both defendants.
6
Defendant City’s first motion for summary disposition was denied because discovery was
incomplete.
7
For the WPA claim, the jury found in favor of plaintiffs Kakos, G. Schultz, LaFountaine, and
Norton.
-5-
This Court reviews a trial court's decision to admit or exclude evidence for an abuse of
discretion. Barrett v Kirtland Community College, 245 Mich App 306, 325; 628 NW2d 63
(2001). An abuse of discretion is found where the result is so violative of fact and logic that it
evidences perversity of will, a defiance of judgment, or the exercise of passion or bias. Id.
Plaintiff has failed to present any evidence that defendant Ahles was personally aware of
the provisions in the eavesdropping statutes. Without this personal awareness defendant Ahles’
status as an attorney could not have increased his culpability. This Court is not required to
search for a factual basis to sustain or reject plaintiffs’ position. Great Lakes Div of Nat’l Steel
Corp v City of Ecorse, 227 Mich App 379, 424; 576 NW2d 667 (1998). Regardless, defendant
Ahles’ status as an attorney would not impute any greater knowledge on him because knowledge
of the law is presumed. Adams Outdoor Advertising v City of East Lansing (After Remand), 463
Mich 17, 27, n 7; 614 NW2d 634 (2000). Moreover, any error in excluding the evidence would
be harmless in light of the jury’s finding against defendant Ahles and award of substantial
damages.
To the extent plaintiffs argue that defendant Ahles status as an attorney would have
further implicated defendant City, they have failed to provide any nexus between this evidence
and defendant City’s actions. In fact, when defendant City discovered that defendant Ahles’ was
eavesdropping it suspended him. It is unclear how evidence that defendant Ahles was an
attorney could have increased defendant City’s culpability. See Palo Group Foster Care, Inc v
Dep’t of Social Services, 228 Mich App 140, 152; 557 NW2d 200 (1998).
B. Remittitur of Defendant Ahles Punitive Damages
Next, plaintiffs and defendant Ahles contend that the trial court’s award of remittitur was
an abuse of discretion. Specifically, plaintiffs allege that remittitur was unwarranted based on
defendant Ahles’ egregious actions in this case. Conversely, defendant Ahles suggests that the
remitted award was still grossly excessive. We find that the trial court erred by ordering
remittitur without allowing plaintiffs the opportunity to accept or reject the remitted amount.
When the only error in the trial was the excessiveness of the verdict, the trial court may
deny a motion for new trial on condition that the nonmoving party consent to remittitur to the
highest amount the evidence will support. MCR 2.611(E)(1). A trial court’s decision
concerning remittitur is reviewed on appeal for an abuse of discretion. Leavitt v Monaco Coach
Corp, 241 Mich App 288, 305; 616 NW2d 175 (2000). An abuse of discretion exists when an
unprejudiced person considering the facts would find no justification for the trial court’s ruling.
Szymanski v Brown, 221 Mich App 423, 431; 562 NW2d 212 (1997).
The court rule governing remittitur provides:
(1) If the court finds that the only error in the trial is the inadequacy or
excessiveness of the verdict, it may deny a motion for new trial on condition that
within 14 days the nonmoving party consent in writing to the entry of judgment in
an amount found by the court to be the lowest (if the verdict was inadequate) or
highest (if the verdict was excessive) amount the evidence will support. [MCR
2.611(E)(1), emphasis supplied.]
-6-
If a party refuses to consent to remittitur the trial court cannot unilaterally reduce the verdict by
the amount deemed to be excessive. See Kellom v City of Ecorse, 329 Mich 303; 45 NW2d 293
(1951); 3 Dean & Longhofer, Michigan Court Rules Practice (4th ed), p 415.
In the case at bar, the trial court did not offer plaintiffs the opportunity to accept the
remitted amount. The trial court abused its discretion by failing to comply with the requirements
of MCR 2.611(E)(1). Therefore the issue of remittitur is remanded to the trial court to allow
plaintiffs the opportunity to accept the remitted award. If plaintiffs refuse to accept remittitur
then a new trial on the issue of damages should be granted. See Kellom, supra at 308.
However, we do find that the trial court’s ultimate decision to grant remittitur was proper.
According to the factors suggested in Gore, supra, the remitted punitive damages award was
adequate and not overly excessive. While defendant Ahles’ actions were inappropriate, there
was no evidence of violence to merit a higher award. Indeed, this is reflected in the
comparatively lower compensatory damages that were awarded by the jury. Moreover, the ratio
between the compensatory damages and the punitive damages in this case dramatically exceeded
the 4 to 1 ratio that the Supreme Court stated might be “close to the line” of constitutional
impropriety.8 Id. at 581, citing Pacific Mutual Life Ins Co v Haslip, 499 US 1; 111 S Ct 1032;
113 L Ed 2d 1 (1991). Further, the $1,750,000 per plaintiff that the jury awarded in punitive
damages is not comparable to the potential statutory penalties for eavesdropping. Gore, supra at
583-584; see also MCL 750.539 et seq.
The remittitur was also appropriate under the standards set forth in Palenkas, supra.
Clear evidence was presented that defendant Ahles was guilty of illegal eavesdropping.
Defendant Ahles admitted to installing a recording device and there was evidence that he listened
to the tapes. See MCL 750.539 et seq. Moreover, the trial court did not abuse its discretion in
concluding that the jury’s assessed punitive damages were the result of prejudice, passion, or
bias. See Palenkas, supra at 532. Indeed, the trial court could have reasonably determined that
the jury intended to financially ruin defendant Ahles by awarding punitive damages in excess of
$19 million. See id. at 534. Further, in light of the much lower compensatory damages award,
reasonable minds could not consider the jury’s punitive award to be just punishment. We also
find that the remitted award is comparable with awards that have been permitted in other cases.
While defendant Ahles cites cases with lower compensatory and punitive damages ratios,
he fails to argue how the trial court’s remitted amount grossly violated fact or logic. We note
that $2,000 per plaintiff, the amount defendant Ahles requested in his motion as a maximum
punitive penalty, is even below the compensatory damages allotted in this case. Moreover, the
amount awarded by the trial court is between the amounts requested by both plaintiffs and
8
We note that the Supreme Court upheld a ratio between punitive and compensatory damages of
561 to 1 in TXO Production Corp v Alliance Resources Corp, 509 US 443; 113 S Ct 2711; 125 L
Ed 2d 366 (1993). However, the punitive damages in TXO reflected the potential harm that the
defendant’s wrongful conduct could have caused. Id. at 460-461. The Supreme Court in Gore,
supra at 581, found that when considering the potential harm in TXO the relevant ratio was not
more than 10 to 1.
-7-
defendant Ahles. Accordingly, we find that the trial court’s award of $159,090.00 in punitive
damages for each plaintiff was not an abuse of discretion.
C. Reduction of Attorney Fees
Plaintiffs further contend that the trial court abused its discretion in lowering Attorney
Seifman’s hourly rate from $250.00 to $150.00. We disagree.
A trial court’s determination of a reasonable attorney fee award under MCR 2.403 is
reviewed for an abuse of discretion. Michigan Basic Property Ins Assoc v Hackert Furniture
Distributing Co, Inc, 194 Mich App 230, 234; 486 NW2d 68 (1992).
A party who rejects a case evaluation is subject to mandatory sanctions if the party fails
to improve its position at trial. MCR 2.403(O)(1); Elia v Hazen, 242 Mich App 374, 378; 619
NW2d 1 (2000). Sanctions include actual costs and reasonable attorney fees. MCR 2.403(O)(1)
and (6).
Reasonable attorney fees are not necessarily equivalent to the actual fees charged.
McPeak v McPeak, 233 Mich App 483, 497; 593 NW2d 180 (1999). Rather, to determine a
reasonable hourly or daily rate, a trial court may consider: “[1] the professional standing and
experience of the attorney; [2] the skill, time, and labor involved; [3] the amount in question and
the results achieved; [4] the difficulty of the case; [5] the expenses incurred; and [6] the nature
and length of the professional relationship with the client.” Temple v Kelel Distributing Co, 183
Mich App 326, 333; 454 NW2d 610 (1990). These factors are not all-inclusive and the trial
court may consider other factors in making its determination. See Wood v DAIIE, 413 Mich 573,
588; 321 NW2d 653 (1982). “[T]he trial court need not detail its findings as to each specific
factor considered.” Id.
In this case, the trial court noted that the trial was lengthy, involved several plaintiffs, and
that the jury instructions were somewhat complicated. However, the trial court further stated that
the legal issues were not extremely complex and that mediation sanctions were based on
reasonable attorney fees. Finding that a reasonable attorney fee was not necessarily what
attorney Seifman charged, the trial court reduced his hourly rate to $150.00. We find that this
reduction did not amount to an abuse of discretion. Indeed, the trial court rejected defendant
City’s argument that attorney Seifman should only receive $100 an hour, stating that such a low
amount was unreasonable. Rather, the trial court correctly considered the complexity of the
litigation and attorney Seifman’s experience. While attorney Seifman may legitimately charge
$250.00 an hour, plaintiffs have failed to show that an hourly rate of $150.00 was unreasonable.
D. Public Policy Tort
Defendant City claims that the trial court erred in denying its motion for judgment
notwithstanding the verdict because there was no legal authority to create a public policy tort and
the evidence failed to support such a claim. We agree.
This Court reviews a trial court’s decision on a motion for judgment notwithstanding the
verdict de novo. Morinelli v Provident Life & Accident Ins Co, 242 Mich App 255, 260; 617
NW2d 777 (2000). A motion for judgment notwithstanding the verdict should be granted only if
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the evidence, when viewed in favor of the nonmoving party, fails to establish a claim as a matter
of law. Forge v Smith, 458 Mich 198, 204; 580 NW2d 876 (1998). “If reasonable jurors could
honestly have reached different conclusions, the jury verdict must stand.” Central Cartage Co v
Fewless, 232 Mich App 517, 524; 591 NW2d 422 (1998), quoting Severn v Sperry Corp, 212
Mich App 406, 412; 538 NW2d 50 (1995).
There is a clearly stated public policy against eavesdropping in Michigan. MCL 750.539
et seq. Defendant City has a duty to obey the laws of Michigan and to enforce the provisions in
its charter. In this respect plaintiffs contend that defendant City ignored its charter requirements
to oversee and approve all of the fire department’s policies. According to plaintiffs, defendant
City’s failure to follow its charter inadvertently made defendant Ahles a policy maker for
defendant City. The charter’s language requires the mayor and the Public Service Commission
to approve the fire department’s policies. The testimony of the mayor and defendant Ahles
indicated that, contrary to the charter, fire department policies were not presented regularly to
either the mayor or the Public Service Commission. Consequently, if defendant Ahles instituted
a fire department policy of eavesdropping, defendant City would be liable for the policy.
However, plaintiffs have failed to show that an actual fire department policy condoning
eavesdropping existed in this case. The fact defendant Ahles labeled his eavesdropping activity
as “policy” does not necessarily make it a policy. The evidence shows that defendant Ahles
failed to inform anybody that he was taping the business lines at the fire department. Defendant
Ahles admitted that he did not tell the Public Service Commission or the mayor of his actions.
Further, while defendant Ahles claims that everybody in the fire department knew the business
lines were recorded, plaintiffs provided unanimous testimony that they were unaware of this
practice.
The facts show that defendant Ahles was intentionally trying to keep his conduct a secret
and that he succeeded in doing so for seventeen months. Indeed, defendant Ahles concealed the
recording device behind closed doors in his office bookcase. Defendant Ahles also used his own
equipment to accomplish the eavesdropping. Moreover, defendant Ahles’ professed purpose for
instituting this “policy,” namely to protect the fire department from complaints relating to
telephone communications, was proven suspect. When the fire department received a complaint
over its business lines about a sixteen minute response time defendant Ahles, instead of offering
the tape as a complete record of the event, had a firefighter draft a memorandum recording the
incident. Defendant Ahles not only chose to conceal the recording device, but, when the
opportunity arose to constructively utilize the tapes he elected to keep their existence secret.
Based on the facts in this case there was no fire department policy of eavesdropping.
Rather, the evidence shows that defendant Ahles acted intentionally, unilaterally, and that his
“policy” was never in writing or even orally related to anybody associated with defendant City or
the fire department. Defendant Ahles’ conduct in this case did not amount to policy-making for
the fire department or defendant City, but in reality was a “personal policy” and an intentional
tort. For something to be a departmental policy, and not merely an individual’s course of action,
others need to be aware of the policy’s existence. Absent the existence of a public policy
authorizing eavesdropping there can be no public policy tort against defendant City.
Even if defendant Ahles had established a public policy of eavesdropping, a jury could
not reasonably conclude that defendant City’s actions were the cause in fact or proximate cause
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of plaintiffs’ injuries. The secretive nature and extent of defendant Ahles’ actions makes this
“policy” different from the other policies he had established in the past. For instance, when
defendant Ahles’ enacted the “no napping” policy he issued a memorandum to the department.
The secretive nature of defendant Ahles’ actions shows that he would not have informed
defendant City about his “policy” even if the charter’s provisions were enforced. Moreover,
when defendant City discovered the tapes it suspended defendant Ahles. Indeed, a municipality
cannot create a policy that directly conflicts with a Michigan criminal statute. See Frericks v
Highland Twp, 228 Mich App 575, 585-586; 579 NW2d 441 (1998).9 Thus, a jury could not
reasonably conclude that defendant City’s failure to enforce the provisions of its charter was the
cause of plaintiffs’ injuries.
Because we conclude that plaintiffs failed to establish the existence of a fire department
policy permitting eavesdropping, defendant City is not liable for a public policy tort. Thus, the
punitive damages assessed against defendant City are necessarily dismissed. We do not need to
address the remainder of defendant City’s issues on appeal because our decision on the public
policy tort is dispositive.10
Affirmed in part and reversed in part. We remand this case to the trial court for further
proceedings consistent with this opinion. We do not retain jurisdiction.
/s/ Peter D. O’Connell
/s/ Jessica R. Cooper
9
The Court in Frericks stated that:
A municipality may not enact an ordinance if (1) the ordinance directly conflicts
with the state statutory scheme, or (2) the state statutory scheme preempts the
ordinance by occupying the field of regulation that the municipality seeks to
enter, to the exclusion of the ordinance, even where there is no direct conflict
between the two schemes of regulation. [Frericks, supra at 585, quoting John’s
Corvette Care, Inc v Dearborn, 204 Mich App 616, 618; 516 NW2d 527 (1994)
(citation omitted).]
10
We note that defendant City lacked standing as an “aggrieved party” to raise several of its
issues on appeal. MCR 7.203(A). The jury found of behalf of defendant City concerning any
violation of the Michigan Eavesdropping Statutes, the WPA, or the Michigan Constitution. This
Court only has jurisdiction over appeals filed by an “aggrieved party.” MCR 7.203(A); Kocenda
v Archdiocese of Detroit, 204 Mich App 659, 666; 516 NW2d 132 (1994).
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