CROWN ENTERPRISES INC V CITY OF ROMULUS
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STATE OF MICHIGAN
COURT OF APPEALS
CROWN ENTERPRISES INC,
UNPUBLISHED
May 3, 2011
Plaintiff-Appellee,
V
No. 286525
Wayne Circuit Court
LC No. 05-519614-CZ
CITY OF ROMULUS,
Defendant-Appellant,
and
AMERICAN DIESEL TRUCK REPAIR INC,
RUBEN CHACON, and JUAN MOLINIA,
Defendants.
ON REMAND
Before: BECKERING, P.J., AND MARKEY AND BORRELLO, JJ.
PER CURIAM.
Plaintiff brought this action after the city of Romulus erected barriers to prevent plaintiff
from using an unimproved, vacated street named Harrison Avenue for the purpose of accessing
its truck terminal. The trial court dismissed all of plaintiff’s legal theories except finding a
violation of procedural due process under 42 USC 1983 in the city’s initial action of precluding
plaintiff’s use of the easement without notice or an opportunity for hearing. This Court reversed,
finding that plaintiff had abandoned its easement, and therefore, the city could not have deprived
plaintiff of any property rights without due process. Crown Enterprises, Inc v City of Romulus,
unpublished opinion per curiam of the Court of Appeals issued May 20, 2010 (Docket No.
286525). Our Supreme Court reversed in an order that reads as follows:
[W]e REVERSE the judgment of the Court of Appeals on the issue of the
abandonment of an easement for the reasons stated in the Court of Appeals
concurring opinion and on the issue of the overburdening of a servient estate.
While the Court of Appeals was correct that the plaintiff’s use of the easement
overburdened the servient estate, it provided no support for the proposition that
such an act results in an automatic extinguishing of the easement right when the
owner of the servient estate is not the complaining party. Therefore, we
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REINSTATE the decision of the Wayne Circuit Court that the plaintiff had an
easement right in Harrison Road, that the defendant interfered with that right
without notice and an opportunity to be heard and that, as a consequence, the
plaintiff's due process rights were violated. In addition, we REMAND this case to
the Court of Appeals for consideration of whether the award of attorney fees
under 42 USC 1988 was reasonable under all of the circumstances of this case.
[Crown Enterprises, Inc v City of Romulus, 488 Mich 1025, 1026; 792 NW2d 342
(2011).]
I. STANDARD OF REVIEW
This Court stated the standard for appellate review of a trial court’s award of attorney
fees under 42 USC 1988 in our prior opinion, Crown Enterprises, supra, slip op at 8:
When contemplating an award of attorney fees under 42 USC 1988(b), 2 a
court must employ a two-step analysis. The court must first determine whether a
plaintiff seeking attorney fees is the “prevailing party.” Texas State Teachers
Ass’n v Garland Independent School Dist, 489 US 782, 789; 109 S Ct 1486; 103
L Ed 2d 866 (1989) (“no fee award is permissible until the plaintiff has crossed
the ‘statutory threshold’ of prevailing party status”). Whether a plaintiff is a
“prevailing party” is a question of law appellate courts review de novo. Outdoor
Systems, Inc v City of Clawson, 273 Mich App 204, 209; 729 NW2d 893 (2006);
Radvansky v City of Olmsted Falls, 496 F3d 609, 619 (CA 6, 2007).
_________________________________________________________________
2
42 USC 1988(b) provides in pertinent part: “In any action or proceeding
to enforce [various federal statutes, including 42 USC 1983] . . . the court, in its
discretion, may allow the prevailing party . . . a reasonable attorney’s fee as part
of the costs . . . .”
__________________________________________________________________
Second, an appellate court must review for an abuse of discretion the
reasonableness of an attorney fee awarded to a “prevailing party.” Cramblit [v
Fikse, 33 F3d 633, 634 (CA 6, 1994)]. “Abuse of discretion exists only when a
district court relies upon clearly erroneous factual findings, applies the law
improperly, or uses an erroneous legal standard.” DiLaura v Ann Arbor Twp, 471
F3d 666, 671 (CA 6, 2006) (citations and quotation marks omitted). 3 The degree
of success a plaintiff achieves is the most important factor in determining a
reasonable attorney fees under 42 USC 1988. Farrar v Hobby, 506 US 103, 114;
113 S Ct 566; 121 L Ed 2d 494 (1992). When a plaintiff wins only nominal
damages, a reasonable attorney may be no fee at all. Id. at 115; Cramblit, 33 F3d
at 635-636.
_________________________________________________________________
3
Federal law governs plaintiff’s federal constitutional right to due process
and its 42 USC 1983 claim. Markis v City of Grosse Point Park, 180 Mich App
545, 553; 448 NW2d 352 (1988). An abuse of discretion occurs under Michigan
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law when the trial court’s decision is outside the range of principled outcomes.
Taylor v Currie, 277 Mich App 85, 99; 743 NW2d 571 (2007).
_________________________________________________________________
II. FACTS AND PROCEEDINGS
In an opinion and order issued May 30, 2008, the trial court awarded plaintiff an
attorney’s fee of $186,679.58 for work on this case through the issuance of an injunctive order
on February 17, 2006. The court determined that plaintiff was a “prevailing party” under § 1988:
Plaintiff prevailed on its procedural due process claim when the court
ruled that Defendant’s placement of barricades on Harrison Avenue in 2005
constituted a procedural due process violation, providing a basis for a cause of
action pursuant to 42 U.S.C. § 1983 and an award of attorney fees pursuant to
§ 1988. Pouillon v Little, 326 F3d 713, 716 (6th Cir 2003).
***
In the case at bar, the Court’s order enjoining Defendant from interfering
with Plaintiff’s use of Harrison Avenue as ingress to and egress from its truck
terminal resolved the dispute initiated by Defendant’s barricade of Harrison
Avenue and affected Defendant’s behavior toward Plaintiff.
The trial court then determined a reasonable attorney’s fee to award under § 1988. The
trial court discussed Hensley v Eckerhart, 461 US 424; 103 S Ct 1933; 76 L Ed 2d 40 (1983),
and quoting Hensley, opined that “[w]here the plaintiff’s successful and unsuccessful claims are
based on ‘a common core of facts’ and ‘related legal theories,’ the lawsuit cannot be viewed as a
series of discrete claims, and the court should focus on the ‘significance of the overall relief
obtained by the plaintiff in relation to the hours reasonably expended on the litigation.’” The
trial court then parsed plaintiff’s various claims as follows:
Plaintiff alleged related claims seeking relief for the same course of
conduct, Defendant’s barricading of Harrison Avenue to prevent Plaintiff’s use of
the road to access its truck terminal. Plaintiff obtained relief, prevailing on the
federal constitutional claim of a procedural due process violation when the Court
granted its motion for preliminary injunctive relief and found that Defendant’s
placement of barricades to block access was without legal justification. . . . It is
Plaintiff’s success on the due process claim that entitles it to attorney’s fees
pursuant to § 1983 and § 1988.
Plaintiff’s choice to pursue its easement rights under state law after
establishing the due process violation and remedying the course of conduct that
gave rise to this litigation, though successful, removes the easement claim from
the purview of § 1988 attorney fee eligibility. Alternatively, Plaintiff cannot be
considered a prevailing party entitling it to attorney’s fees beyond February 17,
2006.
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Therefore, Plaintiff’s total requested fee of $242,700.41 is reduced by
$54,333.33, the latter figure reflecting all fees, in every category, incurred after
February 17, 2006. Plaintiff’s request for attorney’s fees is granted in the amount
$186,679.58.
Defendant filed a motion for reconsideration on June 13, 2008, which the trial court
denied on June 19, 2008. This appeal followed.
III. ANALYSIS
Applying the Supreme Court’s analysis in Farrar, 506 US 103, we conclude that the trial
court correctly ruled that plaintiff achieved the status of “prevailing party” under § 1988. But we
also conclude that the trial court abused its discretion by misapplying the legal principles
discussed in Farrar and not limiting an award of an attorney’s fee to the very limited success
plaintiff achieved—the removal of the barricade on Harrison Avenue. DiLaura, 471 F3d at 671.
The threshold question regarding the propriety of an award of an attorney’s fee pursuant
to 42 USC 1988 is whether a plaintiff is a “prevailing party.” DiLaura, 471 F3d at 671, citing
Texas State Teachers Ass’n, 489 US at 789. The Supreme Court has explained that the degree of
a plaintiff’s success in relation to its overall goals are relevant to the reasonableness of a fee
award, not the eligibility for a fee award as the prevailing party. Texas State Teachers Ass’n, 489
US at 790. The Court held that “[a] prevailing party must be one who has succeeded on any
significant claim affording it some of the relief sought, either pendente lite or at the conclusion
of the litigation.” Id. at 791. The Court further opined that “[i]f the plaintiff has succeeded on
‘any significant issue in litigation which achieve[d] some of the benefit the parties sought in
bringing suit,’ the plaintiff has crossed the threshold to a fee award of some kind.” Id at 791-792.
In this case, plaintiff received a temporary restraining order (TRO), on July 27, 2005,
ordering defendant to remove the barricades it had placed that prevented plaintiff’s access to and
from its truck terminal by way of Harrison Avenue. The TRO achieved some of the relief
plaintiff sought in its original complaint that requested damages, as well as injunctive and
declaratory relief. In granting the TRO, the trial court concluded that defendant’s actions
displayed “unconstitutional lack of due process taking [plaintiff’s] property.” At the conclusion
of the case, the trial court formally ruled in plaintiff’s favor that the barricading of Harrison
Avenue violated plaintiff’s procedural due process rights.
Despite plaintiff’s success regarding defendant’s initial action of barricading Harrison
Avenue, the question remains whether removal of the physical barricade was a “significant”
claim or issue given that, although it was ordered removed, the legal barrier of defendant’s
zoning ordinance, which precluded plaintiff’s use of its Harrison Avenue easement for truck
traffic, remained unaffected by the litigation. The Supreme Court has noted that “a technical
victory may be so insignificant . . . as to be insufficient to support prevailing party status.” Texas
State Teachers Ass’n, 489 US at 792. This might occur when “a legal claim can be characterized
as purely technical or de minimis . . . .” Id. In hearings on this issue, the trial court described
plaintiff’s success as more technical than substantive. “The touchstone of the prevailing party
inquiry must be the material alteration of the legal relationship of the parties in a manner which
Congress sought to promote in the fee statute.” Id. at 792-793. Defendant argues, correctly, that
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the material relationship of the parties remained unaltered by this litigation because the city’s
zoning ordinance precluded plaintiff from using Harrison Avenue for truck traffic. On the other
hand, plaintiff can correctly argue that defendant no longer acts to enforce its zoning ordinance
without notice and an opportunity for a hearing.
In Farrar, the Court held that the civil rights plaintiff who had received only nominal
damages was a “prevailing party” under § 1988 even though the plaintiff’s de minimis success
required that a “reasonable” attorney’s fee award would be no award at all. Farrar, 506 US at
105, 115. The Court explained:
[T]o qualify as a prevailing party, a civil rights plaintiff must obtain at least some
relief on the merits of his claim. The plaintiff must obtain an enforceable
judgment against the defendant from whom fees are sought, or comparable relief
through a consent decree or settlement. Whatever relief the plaintiff secures must
directly benefit him at the time of the judgment or settlement. Otherwise the
judgment or settlement cannot be said to ‘affect the behavior of the defendant
toward the plaintiff.’ Only under these circumstances can civil rights litigation
effect ‘the material alteration of the legal relationship of the parties’ and thereby
transform the plaintiff into a prevailing party. In short, a plaintiff ‘prevails’ when
actual relief on the merits of his claim materially alters the legal relationship
between the parties by modifying the defendant’s behavior in a way that directly
benefits the plaintiff. [Id. at 111-112 (citations omitted).]
Plaintiff satisfies this test because it obtained an enforceable judgment (the TRO), which
modified defendant’s behavior in a way that directly benefited plaintiff by removing the physical
barricade that blocked its access to its property via Harrison Avenue.
Pertinent to this case, the Farrar Court observed that “‘the denial of procedural due
process should be actionable for nominal damages without proof of actual injury.’” Farrar, 506
US at 112, quoting Carey v Piphus, 435 US 247, 266; 98 S Ct 1042; 55 L Ed 2d 252 (1978).
Further, quoting Carey, 435 US at 266, the Court opined that “awarding of nominal damages for
the ‘absolute’ right to procedural due process ‘recognizes the importance to organized society
that [this] right be scrupulously observed’ while ‘remaining true to the principle that substantial
damages should be awarded only to compensate actual injury.’” Farrar, 506 US at 112.
Therefore, the Court held that “a plaintiff who wins nominal damages is a prevailing party under
§ 1988,” which “inquiry does not turn on the magnitude of the relief obtained.” Farrar, 506 US
at 113-114. In this case, because the trial court determined that defendant’s violation of
plaintiff’s right to procedural due process qualified for a nominal damage award, plaintiff
satisfied the threshold query under § 1988 of being a “prevailing party.”
The next question is whether the trial court abused its discretion by awarding plaintiff all
claimed attorney fees through the date the court issued a preliminary injunction on February 17,
2006. Was the court’s award of $186,679 as an attorney’s fee reasonable? “Although the
‘technical’ nature of a nominal damages award or any other judgment does not affect the
prevailing party inquiry, it does bear on the propriety of fees awarded under § 1988.” Farrar,
506 US at 114. “‘[T]he degree of the plaintiff’s overall success goes to the reasonableness’ of a
fee award . . . .” Id., quoting Texas State Teachers Ass’n, supra at 793. Indeed, when
determining the reasonableness of an attorney’s fee award under § 1988, “‘the most critical
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factor[,] . . . is the degree of success obtained.’” Farrar, 506 US at 114, quoting Hensley, 461
US at 436. The Farrar Court further held that when a plaintiff seeking money damages achieves
prevailing party status but wins only nominal damages, the only reasonable attorney’s fee award
may be no award at all. Farrar, 506 US at 115. The Court explained:
In some circumstances, even a plaintiff who formally “prevails” under §
1988 should receive no attorney’s fees at all. A plaintiff who seeks compensatory
damages but receives no more than nominal damages is often such a prevailing
party. As we have held, a nominal damages award does render a plaintiff a
prevailing party by allowing him to vindicate his “absolute” right to procedural
due process through enforcement of a judgment against the defendant. In a civil
rights suit for damages, however, the awarding of nominal damages also
highlights the plaintiff’s failure to prove actual, compensable injury. Whatever
the constitutional basis for substantive liability, damages awarded in a § 1983
action “must always be designed ‘to compensate injuries caused by the
[constitutional] deprivation.’” When a plaintiff recovers only nominal damages
because of his failure to prove an essential element of his claim for monetary
relief, the only reasonable fee is usually no fee at all. In an apparent failure to
heed our admonition that fee awards under § 1988 were never intended to
“‘produce windfalls to attorneys,’” the District Court awarded $280,000 in
attorney’s fees without “considering the relationship between the extent of
success and the amount of the fee award.” [Farrar, 506 US at 115-116 (citations
omitted).]
The Sixth Circuit Court of Appeals has followed Farrar by holding that in civil rights
actions where a plaintiff primarily is seeking monetary damages but obtains only nominal relief
with respect to their claims, a reasonable attorney’s fee award was no fee at all. Pouillon, 326
F3d at 717-718; Cramblit, 33 F3d at 635-636. Under Farrar and its progeny in the Sixth Circuit
Court of Appeals, if plaintiff had obtained only nominal damages on its federal claims, then the
only reasonable attorney’s fee under § 1988 would have been no fee at all. However, as we have
noted already, plaintiff’s case is distinguishable from Farrar, Pouillon, and Cramblit, because
plaintiff obtained more than just nominal relief. Plaintiff also obtained equitable relief in the
form of the trial court’s order to remove the barricade blocking Harrison Avenue. However, this
relief was obtained by the issuance of TRO at the end of July 2005. We conclude that the trial
court abused its discretion by awarding plaintiff attorney’s fees through the subsequent
injunctive relief for ingress and egress because that relief was based on plaintiff’s state law claim
to an easement in Harrison Avenue. Plaintiff obtained relief for the procedural due process
violation in July 2005 when the trial court issued the TRO for the removal of the barricades the
city erected. Procedural due process does not guarantee any particular result on the merits but
only requires “notice of the nature of the proceedings and an opportunity to be heard by an
impartial decision maker at a meaningful time and in a meaningful manner.” Mettler Walloon,
LLC v Melrose Twp, 281 Mich App 184, 214; 761 NW2d 293 (2008). After the trial court
ordered the removal of the barricades, plaintiff was accorded procedural due process regarding
its easement and all other claims either party asserted. To the extent the trial court’s
determination in its February 17, 2006 order, “that placement of barricades by [defendant] to
prevent access from Harrison was without legal justification,” was a finding regarding a violation
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of due process, it resulted in only nominal damages so that “no attorney fee” is a reasonable
attorney fee under § 1988. Farrar, 506 US at 115-116.
The only tangible success plaintiff achieved in this case, apart from the finding of a
procedural due process violation warranting only nominal damages, was the July 2005 TRO
ordering the city to remove the physical barricades it erected on Harrison Avenue. All of
plaintiff’s other state and federal claims were dismissed. Plaintiff initiated this lawsuit to enable
it to use Harrison Avenue for the purpose of daily routing hundreds of commercial trucks to its
truck terminal. Plaintiff succeeded early in the litigation by obtaining an order that the city
remove the physical barrier to its planned use of Harrison Avenue for truck traffic, but the legal
barrier of defendant’s zoning ordinance and the substandard condition of Harrison Avenue
remained unaffected by this litigation. Further, although plaintiff was successful in establishing
its state law claim to an easement, it was unsuccessful in achieving its overall objective of
securing the right to use Harrison Avenue for the purpose of daily routing hundreds of trucks to
its truck terminal via Harrison Avenue without fully complying with defendant’s ordinance.
Consequently, in light of the very limited success that plaintiff achieved, and in light of the fact
that the due process violation caused no real damages to plaintiff, we conclude the trial court
abused its discretion by not limiting a reasonable attorney’s fee under § 1988 to the legal fees
plaintiff incurred through its obtaining the TRO that resulted in the removal of the barricades the
city had erected without notice and an opportunity for a hearing. Such an award of reasonable
attorney’s fees under § 1988 would thus be limited to the “‘degree of success obtained.’”
Farrar, 506 US at 114, quoting Hensley, 461 US at 436.
We reverse in part and remand for further proceedings consistent with this opinion. We
do not retain jurisdiction. No taxable costs pursuant to MCR 7.219 as neither party fully
prevailed.
/s/ Jane M. Beckering
/s/ Jane E. Markey
/s/ Stephen L. Borrello
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