NORMAN R HUGHES V CHRISTOPHER M HALL
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STATE OF MICHIGAN
COURT OF APPEALS
UNPUBLISHED
July 22, 2003
NORMAN R. HUGHES,
Plaintiff-CounterDefendant/Appellant,
v
CHRISTOPHER M. AND PAMELA J. HALL,
No. 235033
Lapeer Circuit Court
LC No. 96-023073-CH
Defendants-CounterPlaintiffs/Appellee.
Before: Whitbeck, C.J., and White and Donofrio, JJ.
PER CURIAM.
Plaintiff, Norman R. Hughes, appeals as of right from a judgment in favor of defendants,
Christopher M. and Pamela J. Hall in this breach of contract claim.1 We affirm in part, reverse in
part, and remand.
This case arises out of a construction contract. Plaintiff is an architectural engineer and a
licensed builder. Defendants contacted plaintiff about remodeling their basement in November
1995. Plaintiff began work on the basement on December 12, 1995. Plaintiff and defendants
entered into a contract on December 18, 1995 under which plaintiff would make certain
improvements to defendants’ basement in exchange for $18,600. The contract called for plaintiff
to provide and install a sub-floor and finished floor, cabinets and countertops, rough and finish
plumbing, structural reinforcement of the first floor, a ceiling, and to add and modify walls.
Defendants observed plaintiff’s work on a daily basis. Throughout the progress of the
work, defendants and plaintiff agreed to substitute a booth for some of the cabinets, to modify
one countertop, upgrade the ceiling tile, relocate a support column and install a bar sink. In
March 1996 defendants became dissatisfied with the quality of plaintiff’s work specifically
finding the sub-floor, ceiling, and walls plaintiff installed unacceptable. Defendants locked
1
For the sake on efficiency and clarity we refer to plaintiff-counter-defendant/appellant as
plaintiff, and defendants-counter-plaintiffs/appellees as defendants throughout the body of this
opinion.
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plaintiff out of the work site. Defendants had already paid plaintiff $12,400 of the contract
amount.
Defendants hired Peter Neumeyer, an expert in the area of building construction, to
evaluate the quantity of work that plaintiff had completed and compute its value under the
contract. Neumeyer found that the ceiling, sub-floor, wall-framing, door-framing, and beam and
joists installed by plaintiff were either installed poorly or improperly. Also, plaintiff had
installed an unnecessary beam, and unnecessary floor joists. Neumeyer evaluated the value of
plaintiff’s work based on the amount of work completed and the prices stated in the contract and
determined that $9,156.19 of the contract had not been completed, and that as a result,
defendants determined they had overpaid plaintiff by $2,888.84.
Defendants later hired James Brown to complete the remodeling of their basement.
Brown demolished, removed, and replaced the ceiling and sub-floor plaintiff installed. Brown
also corrected the jambs on the door-walls plaintiff had installed. The value of Brown’s contract
with defendants was $7,710. The portion of the money paid to Brown to remedy plaintiff’s work
was $3,150.
Plaintiff brought an action to recover the remainder of the contract amount, and to
recover additional damages. Plaintiff sought additional damages as modifications of the original
contract, or in the alternative, under a theory of quantum meruit. Defendants filed a countercomplaint alleging plaintiff breached the contract and sought damages for the breach plus costs,
interest, and attorney fees. After a protracted discovery period, the case eventually went to a
bench trial. The trial court found that plaintiff’s quantum meruit claim was frivolous and
awarded defendants sanctions of attorney fees and costs. The trial court also awarded defendants
damages for the actual loss they suffered due to plaintiff’s breach of the contract. This appeal
followed.
Plaintiff first argues on appeal that the trial court clearly erred when it found that
plaintiff’s claims were frivolous and violated MCR 2.114(F). We review a trial court’s finding
that a plaintiff’s claim is frivolous for clear error. Cvengros v Farm Bureau Ins, 216 Mich App
261, 266; 548 NW2d 698 (1996). This Court reviews the trial court’s findings of fact for clear
error. MCR 5.974(I); In re Sours, 459 Mich 624, 633; 593 NW2d 520 (1999). A finding is
clearly erroneous when the reviewing court is left with the firm and definite conviction that a
mistake was made. In re Jackson, 199 Mich App 22, 25; 501 NW2d 182 (1993). Moreover, this
Court reviews a trial court’s findings of fact for clear error giving special deference to the trial
court’s findings when they are based on its assessment of the witnesses’ credibility. MCR
2.613(C); H J Tucker & Assoc v Allied Chucker & Eng’g Co, 234 Mich App 550, 563; 595
NW2d 176 (1999).
A claim is frivolous when the party’s primary purpose in initiating the action was to
harass, embarrass, or injure the prevailing party, or the party had no reasonable basis to believe
that the facts underlying that party’s legal position were in fact true, or the party’s legal position
was devoid of arguable legal merit. MCL 600.2591(3)(a); Cvengros, supra, 216 Mich App 266267. A determination whether a claim is frivolous depends upon the particular circumstances of
each case. Kitchen v Kitchen, 465 Mich 654, 662; 641 NW2d 245 (2002); Dillon v DeNooyer
Chevrolet Geo, 217 Mich App 163, 169; 550 NW2d 846 (1996).
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Here, the trial court found that plaintiff’s quantum meruit claim was devoid of arguable
legal merit and stated as follows:
In this case the Plaintiff argued that under a theory of quantum meruit, it was
entitled to $20,595.42 in damages for the increased benefit it provided to the
“evaluation, resale, enjoyment and use of the [Defendant’s] residence.” (See
Plaintiff’s Complaint at §22.) This argument was based on the Plaintiff’s Time
Sheet, where such costs as postage and correspondence fees were included in the
calculations. The claim wholly ignored the fact that the Plaintiff was under an
express contract to provide the remodeling for a fixed price of $18,600.00. The
express contract said nothing about, nor contemplated payment for, such items as
the cost of Plaintiff’s personal services, mileage, or project reviews.
As a matter of horn book law a contract will not be implied at law where there is
an express contract covering the same subject matter. Thompson v Bronk;
Spartan Asphalt, supra. In this case the Plaintiff’s claims for unjust enrichment
were based on the services it agreed to provide under the express contract. The
modifications which were made to the contract were just that: modifications.
They did not materially alter it’s terms, nor the price the Plaintiff agreed to
provide work for.
For these reasons the Court first finds that the Plaintiff’s claim for $20,595.42 in
damages was frivolous. Given the existence of the express contract, the Plaintiff
had no reasonable basis to believe that it could charge the Defendants for any of
the items described in the Time Sheet. See MCLA 600.2591(3)(a). Pursuant to
MCR 2.114(F), the Court will award the Defendants costs in the amount of
$1,681.40, and attorneys fees in the amount of $15,145.00. The Plaintiff’s claim
for quantum meruit was not made in good faith.
A plaintiff may not bring a quantum meruit claim if it fully performed its services under a
valid express contract. Barber v SMH, Inc, 202 Mich App 366, 375; 509 NW2d 791 (1993). It
is well-settled that “[a]n implied contract cannot be enforced where the parties have made an
express contract covering the same subject matter.” Scholz v Montgomery Ward & Co, Inc, 437
Mich 83, 93; 468 NW2d 845 (1991). In Cascade Electric Co v Rice, 70 Mich App 420, 426; 245
NW2d 774 (1976), this Court recognized that “while an express contract is in force between the
parties, a contract cannot be implied in law which covers the same subject matter.” The Cascade
Court went on to explain that “the rule does not apply in a case such as this one where recovery
is sought for items not contemplated in the original contract.” Id.
In the case at bar, an express contract existed between the parties for construction in
defendants’ basement. Both parties agree that no written modifications were made to the
contract. The trial court expressly found that the modifications that were made to the express
contract were not material, and did not alter the terms of the contract, including the work to be
performed or the price to be tendered under the contract. After reviewing the record we are not
left with a firm and definite conviction that a mistake was made when the trial court made the
factual determination that the “modifications” to the contract were not “extras” outside the scope
of the express contract. In re Jackson, supra, 199 Mich App 25. Therefore, unlike the situation
in Cascade, the present case does not involve extra work performed not contemplated by the
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contract. Rather, plaintiff here merely sought damages in connection with the work he
performed in fulfillment of his obligation under the contract, and thus, plaintiff may not bring a
quantum meruit claim. Scholz, supra, 437 Mich 93; Barber, supra, 202 Mich App 375;
Cascade, supra, 70 Mich App 426.
Despite plaintiff’s vehement and copious arguments in his brief on appeal that his claim
in quantum meruit had at least some “arguable legal merit,” giving the trial court special
deference because of its superior ability to view the witnesses, we find that the trial court did not
clearly err in determining that plaintiff’s claim was devoid of arguable legal merit, and was
therefore frivolous. MCL 600.2591(3)(a); MCR 2.613(C); H J Tucker, supra, 234 Mich App
563; Cvengros, supra, 216 Mich App 266-267.
Next, despite plaintiff’s presentation of the issue asserting error in the trial court’s
findings of fact and conclusions of law regarding the contract, quantum meruit, and engineering,
plaintiff’s prolonged and amorphous argument revolves around alleged error in the trial court’s
calculation of the damage award. This issue is not properly presented because plaintiff did not
include the damage claim within the statement of the questions presented. Brookshire-Big Tree
Ass'n v Oneida Twp, 225 Mich App 196, 201; 570 NW2d 294 (1997). The appellant must
identify his issues in his brief in the statement of questions presented. MCR 7.212(C)(5); Grand
Rapids Employees Independent Union v Grand Rapids, 235 Mich App 398, 409-410; 597 NW2d
284 (1999). Ordinarily, no point will be considered which is not set forth in the statement of
questions presented. Caldwell v Chapman, 240 Mich App 124, 132; 610 NW2d 264 (2000).
However, because both parties briefed the issue, we will address it. This Court reviews
the trial court’s findings of fact in a bench trial for clear error and its conclusions of law de novo.
MCR 2.613(C); Chapdelaine v Sochocki, 247 Mich App 167, 169; 635 NW2d 339 (2001).
Where a court following a bench trial has determined the issue of damages, the Court reviews the
award for clear error. Meek v Dep't of Transportation, 240 Mich App 105, 121; 610 NW2d 250
(2000).
The trial court found as follows regarding damages:
Based on the report prepared by Mr. Neumeyer the Defendants suffered $2,888.84
in damages in labor and materials which they paid for but never received. Mr.
Brown’s testimony also supports a finding that of the $7,100.00[2] he was paid,
$3,150.00 was to repair and mitigate Plaintiff’s poor workmanship. The
Defendants did agree to certain modifications in the contract price, including the
cost of the cabinet upgrades ($587.84) and the additional ceiling tiles ($350.00).
Therefore, the actual loss they suffered as a result of the breach was $5,101.00.
Our review of the record supports the following regarding the damage calculation at issue
in this matter. Defendants paid plaintiff $12,400 for the work he performed under the contract.
2
This number should be $7,710. The trial court clearly made a typographical error when it used
$7,100 instead of $7,710, which was the number testified to at trial by both Brown and
Christopher Hall.
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Neumeyer testified that the estimated value of the work performed by plaintiff was only
$9,511.16. Thus, the trial court determined that defendants had suffered $2,888.84 in damages
by paying for work they had not received. Additionally, although mistakenly using $7,100 for
the correct figure of $7,710, the trial court found that defendants paid Brown $7,100 to complete
the remodeling project. Brown estimated that $3,150 represented work he had to do to remedy
plaintiff’s errors due to poor construction work. Hence, the trial court found defendants’ were
owed a total of $6,038.84. The trial court then subtracted $587.84 for cabinet upgrades and $350
for additional ceiling tiles purchased resulting in a total damage award of $5,101 to defendants.
The total contract as found was in the amount of $19,537.84 consisting of $18,600 plus
$587.84 for the cabinet upgrade and $350 representing the additional ceiling tiles. Despite
plaintiff’s breach, defendants ultimately paid only $20,110 ($12,400 to plaintiff and $7,710 to
Brown) for the remodeling project. The trial court found that plaintiff only performed $9,511.16
worth of work resulting in an overpayment at the time of the breach of $2,888.84. “The goal in
awarding damages for breach of contract is to give the innocent party the benefit of his bargain
to place him in a position equivalent to that which he would have attained had the contract been
performed. The injured party, however, must make every reasonable effort to minimize the loss
suffered, and the damages must be reduced by any benefits accruing to the plaintiff as a
consequence of the breach.” Tel-Ex Plaza, Inc v Hardees Restaurants, Inc, 76 Mich App 131,
134-135, 255 NW2d 794 (1977).
In applying these general principles to our case, we find that indeed, the actual cost paid
for the project by defendants was only slightly more than the original contract price.
Nevertheless, plaintiff should not benefit from his willful breach. Therefore, we find that the
trial court should have awarded damages to defendants only in the amount of $2,888.84, the
amount paid to plaintiff for work they had not received. Thus, even according the trial court
special deference because of its unique opportunity to view the witnesses at trial, we are left with
a definite and firm conviction that the trial court made a mistake regarding the damages award.
MCR 2.613(C); Meek, supra, 240 Mich App 121; H J Tucker, supra, 234 Mich App 563; In re
Jackson, supra, 199 Mich App 25.
Plaintiff also argues that the trial court erred when it awarded sanctions to defendants
when it did not consider equity and failed to conduct an evidentiary hearing regarding attorney
fees and costs. This Court reviews a trial court’s “award of sanctions based on a frivolous
complaint under a clearly erroneous standard.” Lakeside Oakland Development, LC v H & J
Beef Co, 249 Mich App 517, 532; 644 NW2d 765 (2002). However, the trial court’s
determination of the amount of the sanctions imposed is reviewed for an abuse of discretion. In
re Costs & Attorney Fees, 250 Mich App 89, 104; 645 NW2d 697 (2002). An abuse of
discretion exists only in extreme cases where the result is so “palpably and grossly violative of
fact and logic” that it evidences a perversity of will, a defiance of judgment, or the exercise of
passion or bias. In re Nord, 149 Mich App 817, 823; 386 NW2d 694 (1986), quoting Spalding v
Spalding, 355 Mich 382, 384-385; 94 NW2d 810 (1959).
As illustrated, supra, the trial court properly found that plaintiff had pleaded and argued a
frivolous claim before the trial court. MCR 2.625(A)(2) and MCL 600.2591 allow the prevailing
party in an action to recover costs and fees in connection with a frivolous case. Under the court
rule, sanctions under MCL 600.2591 are available only to a prevailing party, which is defined as
a party who wins on the entire record. MCL 600.2591(3)(b), Meagher v Wayne State University,
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222 Mich App 700, 729; 565 NW2d 401 (1997). Here, despite plaintiff’s claims on appeal, the
record supports the fact that defendants won on the entire record and were the prevailing party in
the action. Therefore, sanctions are available to defendants because they were the prevailing
party in the action. Id.
Sanctions which may be imposed under MCR 2.114 include payment to the opposing
parties of the reasonable expenses incurred because of the filing of the pleading, including
reasonable attorney fees. Maryland Casualty Co v Allen, 221 Mich App 26, 32; 561 NW2d 103
(1997). The court may not assess punitive damages under MCR 2.114. MCR 2.114(F). Under
the statute, the court must award the reasonable costs and fees incurred by the prevailing party,
including court costs and reasonable attorney fees. MCL 600.2591(1) and (2), FMB-First
Michigan Bank v Bailey, 232 Mich App 711, 721; 591 NW2d 676 (1998).
Plaintiff filed a motion for an evidentiary hearing and reconsideration that was heard by
the trial court over a year after the judgment was entered in the case. In the motion, among other
things, plaintiff argued that his claim was not frivolous, but that if it was, that defendants should
only be awarded costs associated with defending that specific claim. In an oral ruling, the trial
court denied plaintiff’s motion for reconsideration stating that it stood by its prior opinion but in
regard to attorney fees, would allow plaintiff’s counsel to review the attorney fees in an in
camera hearing.
If the reasonableness of a fee request is challenged, the court must normally conduct an
evidentiary hearing. Head v Phillips Camper Sales & Rental, Inc, 234 Mich App 94, 113; 593
NW2d 595 (1999). Here, the record suggests that the trial court offered in camera review of the
“billings” to plaintiff, who was represented by counsel at the time. However, the trial court
never conducted an evidentiary hearing to determine the reasonableness of the fees and costs or
the proper allocation of fees and costs attributable to the frivolous quantum meruit claim alone.
Therefore, we remand the cause to the trial court for a determination of the reasonableness of the
fees and costs and the amount attributable to the quantum meruit claim. Id.; Maryland Casualty
Co, supra, 221 Mich App 32.
Plaintiff’s next issue on appeal is that the trial court erred when it did not enforce
mediation on the parties. This Court reviews de novo a trial court’s ruling on a motion for
summary disposition. Hinkle v Wayne Co Clerk, 467 Mich 337, 340; 654 NW2d 315 (2002).
On the second day of trial plaintiff made a motion for summary disposition to settle the
matter by mediation. The trial court denied the motion. The contract specifically states:
Disputes, if any, shall be settled by Mediation. Neither Party shall be bound by
Arbitration.
Pursuant to the authority of Salesin v State Farm & Casualty Co, 229 Mich App 346, 356; 581
NW2d 781 (1998), and by analogy, a party may waive the right to have a matter decided by an
alternate dispute resolution model, here, mediation:
A party may waive its right to arbitration, and each case must be decided on the
basis of its individual facts. However, waiver of a contractual right to arbitration
is not favored. A party arguing there has been a waiver of this right bears a heavy
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burden of proof. The party must demonstrate knowledge of an existing right to
compel arbitration, acts inconsistent with the right to arbitrate, and prejudice
resulting from the inconsistent acts. [Burns v Olde Discount Corp, 212 Mich App
576, 582, 538 NW2d 686 (1995) (citations omitted).]
In general, “defending the action or proceeding with the trial,” that is defending
an action without seeking to invoke a right to compel arbitration, constitutes a
waiver of the right to arbitration. See North West Michigan Constr, Inc v Stroud,
185 Mich App 649, 651-652, 462 NW2d 804 (1990), and Hendrickson v
Moghissi, 158 Mich App 290, 299-300, 404 NW2d 728 (1987), quoting 98 ALR
3d 767, § 2, pp 771-772.
Our review of the record reveals that plaintiff took part in extended discovery lasting over four
years. The motion to compel mediation during the second day of trial was too late. Clearly the
circumstances of this case squarely display that plaintiff waived his right to mediation. Thus, we
find that the trial court did not err when it did not compel mediation under the contract. Salesin,
supra, 229 Mich App 356.
Lastly, plaintiff argues that the trial court should have disqualified itself. The factual
findings underlying a ruling on a motion for disqualification will be reversed only for an abuse of
discretion, while application of the facts to the law is reviewed de novo. Cain v Dep’t of
Corrections, 451 Mich 470, 503 n 38; 548 NW2d 210 (1996); Armstrong v Ypsilanti Twp, 248
Mich App 573, 596; 640 NW2d 321 (2001).
A motion to disqualify a judge must be filed within fourteen days after the moving party
discovers the ground for disqualification. MCR 2.003(C)(1), Cain, supra, 451 Mich 494.
Untimeliness is a factor in deciding whether the motion should be granted. MCR 2.003(C)(1),
Band v Livonia Assoc, 176 Mich App 95, 118; 439 NW2d 285 (1989). A claim of judicial
disqualification may be waived by the failure to move for disqualification or untimely assertion
of disqualification. In re Forfeiture of $53, 178 Mich App 480, 497; 444 NW2d 182 (1989). A
party’s failure to move for disqualification can constitute tacit approval of the judge and waiver
of the issue of disqualification. Reno v Gale, 165 Mich App 86, 90-91; 418 NW2d 434 (1987).
The final order was issued in this matter on April 9, 2001. Plaintiff moved for
disqualification of the trial court on May 20, 2002. A hearing was held on June 3, 2002 before
Judge Holowka where the trial court denied the motion. At that time the trial court also granted
plaintiff’s request to refer the matter to the State Court Administrator’s Office (SCAO) to have
another judge review plaintiff’s motion to disqualify. After referral from SCAO, Judge Teeple
reviewed the motion for disqualification of Judge Holowka and issued an order denying the
motion for disqualification on November 6, 2002.
The procedural history of the case illustrates that plaintiff did not file his motion for
disqualification until over a year after the conclusion of trial and the issuance of the final order in
the case. Because of the untimely assertion of disqualification, we could resolve this issue
procedurally and find that plaintiff’s claim of judicial disqualification has been waived. MCR
2.003(C)(1), In re Forfeiture of $53, supra, 178 Mich App 497; Band, supra, 176 Mich App 118.
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Again, however, because both parties have briefed the merits of the issue we will review
it. Generally, a showing of actual, personal prejudice is required to disqualify a judge under the
Court Rule. MCR 2.003; Cain, supra, 451 Mich 495; Armstrong, supra, 248 Mich App 597. A
trial judge is presumed to be impartial and the party who asserts partiality has a heavy burden of
overcoming the presumption. Cain, supra; In re Susser Est, 254 Mich App 232, 237; 657 NW2d
147 (2002); Armstrong, supra. A showing of personal prejudice usually requires that the source
of the bias be in events or information from outside the judicial proceeding. Cain, supra at 495496. In some circumstances, such as when the basis for judicial bias is not apparent to the parties
or counsel, the trial judge is required to raise the issue of disqualification. Wayne County
Prosecutor v Doerfler, 14 Mich App 428, 440; 165 NW2d 648 (1968).
Here, plaintiff argues that “long term antipathy and political rivalry” existed between
plaintiff and the trial court without further explanation. Plaintiff also asserts that the trial court
and defendants’ counsel had a certain level of “intimacy” because on occasion they would have
coffee together before hearings, suggesting favoritism. Clearly, a judge is disqualified when he
is personally biased or prejudiced for or against a party or attorney. MCR 2.003(B); Armstrong,
supra, 248 Mich App 596. However, we find that plaintiff has not demonstrated personal bias
on the part of the trial court such that he has established a showing of actual, or personal
prejudice to overcome the strong presumption of judicial impartiality. MCR 2.003; Cain, supra,
451 Mich 495; Armstrong, supra at 597. Thus, the trial court did not err when it did not
disqualify itself.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion.
/s/ William C. Whitbeck
/s/ Helene N. White
/s/ Pat M. Donofrio
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