DARYL ROBERT BEGGS V KAREN VITORI
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STATE OF MICHIGAN
COURT OF APPEALS
DARYL ROBERT BEGGS,
UNPUBLISHED
May 5, 2011
Plaintiff-Appellant,
v
No. 295768
Wayne Circuit Court
LC No. 07-731776-NM
KAREN VITORI and CRAIG TANK,
Defendants-Appellees.
Before: SERVITTO, P.J., and HOEKSTRA and OWENS, JJ.
PER CURIAM.
Plaintiff appeals as of right from a circuit court order granting defendant Vitori’s motion
for summary disposition pursuant to MCR 2.116(C)(7) (collateral estoppel) and (8) (failure to
state a claim), and granting defendant Tank’s motion for summary disposition pursuant to MCR
2.116(C)(4) (lack of jurisdiction) and (7) (claim barred by the statute of limitations). We affirm
in part, reverse in part, and remand for further proceedings.
Defendants are attorneys who represented plaintiff in criminal proceedings. Defendant
Tank represented plaintiff at a district court hearing that concluded on October 18, 2005.
Plaintiff later discharged Tank and signed a retainer agreement with Karen Vitori, P.L.L.C., on
November 30, 2005. Defendant Vitori represented plaintiff at a trial where plaintiff was
convicted of domestic violence. Plaintiff subsequently hired a new attorney who filed a motion
for a new trial in district court on the ground that Vitori provided ineffective assistance of
counsel. The district court denied the motion. Plaintiff then filed an appeal to the circuit court.
On April 3, 2007, while the appeal was pending, the district court entered a stipulated order that
dismissed the appeal with prejudice and set aside the conviction. The order further provided that
plaintiff would plead no contest to a charge of disorderly person.
Plaintiff filed this action on November 30, 2007, alleging claims for legal malpractice
and breach of contract against defendants Tank and Vitori. Defendants filed separate motions
for summary disposition. Plaintiff filed a response to Vitori’s motion, but not to Tank’s motion.
The trial court determined that the legal malpractice claim against Vitori was barred by collateral
estoppel based on the district court’s rejection of plaintiff’s ineffective assistance of counsel
claim in the criminal proceeding. The trial court granted summary disposition to Vitori with
respect to the breach of contract claim because the retainer agreement was between plaintiff and
Karen M. Vitori, P.L.L.C. The trial court determined that plaintiff’s legal malpractice claim
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against Tank was barred by the applicable statute of limitations because Tank’s undisputed
affidavit indicated that he was discharged on November 29, 2005, which was more than two
years before this action was filed on November 30, 2007. Lastly, the trial court granted Tank
summary disposition with respect to plaintiff’s breach of contract claim for lack of jurisdiction
for failure to meet the $25,000 jurisdictional threshold. Plaintiff filed a motion for
reconsideration, which the trial court also denied.
Plaintiff first argues that the trial court erred in concluding that collateral estoppel barred
his legal malpractice action against Vitori. We agree.
This Court reviews a trial court’s decision on a motion for summary disposition de novo.
Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). In addition, this Court reviews
de novo questions of law, including the application of legal doctrines such as collateral estoppel.
Estes v Titus, 481 Mich 573, 578-579; 751 NW2d 493 (2008).
“Collateral estoppel, or issue preclusion, precludes relitigation of an issue in a
subsequent, different cause of action between the same parties or their privies when the prior
proceeding culminated in a valid final judgment and the issue was actually and necessarily
determined in the prior proceeding.” Ditmore v Michalik, 244 Mich App 569, 577; 625 NW2d
462 (2001). Collateral estoppel “requires that (1) a question of fact essential to the judgment was
actually litigated and determined by a valid and final judgment, (2) the same parties had a full
and fair opportunity to litigate the issue, and (3) there was mutuality of estoppel.” Estes, 481
Mich at 585.
Where the effectiveness of a criminal defendant’s attorney is decided in a criminal case,
collateral estoppel bars the criminal defendant from relitigating the issue in a civil suit for legal
malpractice. Barrow v Pritchard, 235 Mich App 478; 597 NW2d 853 (1999). Where a
judgment has been set aside, however, the former adjudication is not a “final judgment” for
purposes of collateral estoppel. This point is recognized in the Restatement Judgments 2d, § 13,
comment f, which states:
A judgment otherwise final for purposes of the law of res judicata is not
deprived of such finality by the fact that time still permits commencement of
proceedings in the trial court to set aside the judgment and grant a new trial or the
like; nor does the fact that a party has made such a motion render the judgment
nonfinal. This is the case even when a statute or rule of court provides that the
judgment cannot be executed upon or otherwise enforced during the period
allowed for making such a motion and the further period until the motion if made
is decided. The judgment ceases to be final if it is in fact set aside by the trial
court, as it would be upon the granting of a motion for a new trial. [Emphasis
added.]
See also 46 Am Jur 2d, Judgments, § 449, p 739 (“[a] judgment that is vacated, reversed, or set
aside on appeal is deprived of all conclusive effect”).
In this case, as in Barrow, the district court in the criminal matter considered and rejected
arguments that Vitori was ineffective. However, the critical distinction between this case and
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decisions such as Barrow is that the conviction in this case was set aside by the district court.
Defendant Vitori argues that collateral estoppel may apply because the district court’s decision
denying the motion for a new trial was not set aside. Thus, Vitori contends that even where a
judgment is deprived of its conclusive effect, other orders that were entered in the case retain
their conclusive effect. Vitori does not cite any authority for this position. We are unable to
conclude that an order denying a motion for a new trial in a criminal case may be considered a
“valid and final judgment” where the conviction itself has been set aside. Thus, we conclude that
the trial court erred in determining that collateral estoppel barred plaintiff’s malpractice claim
against Vitori.
Plaintiff also argues that the trial court erred in dismissing his claim for breach of
contract against Vitori. We disagree. This Court reviews de novo a trial court’s decision on a
motion for summary disposition and issues of law regarding the construction of a contract. Shay
v Aldrich, 487 Mich 648, 656; 790 NW2d 629 (2010).
The retainer agreement that is the basis for plaintiff’s breach of contract claim identifies
the contracting parties as follows:
DARRYL ROBERT BEGGS (Client) employs and retains the law firm of
KAREN M. VITORI, PLLC (Attorney) to represent client in the following matter
....
Thus, the agreement unambiguously indicates that the contracting party is the limited liability
company. “Once a limited liability company comes into existence, limited liability applies, and
a member or manager is not liable for the acts, debts, or obligations of the company.” Duray
Dev, LLC v Perrin, 288 Mich App 143, 151; 792 NW2d 749 (2010), citing MCL 450.4501(3).
Therefore, defendant Vitori is not individually liable for the company’s obligations. MCL
450.4501(4).
On appeal, plaintiff also argues that defendant Vitori may be liable for breach of contract
because she was a partially disclosed agent. Plaintiff did not raise this agency argument below.
An issue not raised before the trial court is not preserved for appellate review. Adam v Sylvan
Glynn Golf Course, 197 Mich App 95, 98; 494 NW2d 791 (1992). Although this Court may
review an issue if the question is one of law and the facts necessary for its resolution have been
presented, id. at 98-99, the existence of an agency relationship is a factual inquiry. Because the
issue was not raised below and the question is not one of law for which the necessary facts have
been presented, appellate relief is not warranted.
Plaintiff next challenges the trial court’s dismissal of his legal malpractice claim against
defendant Tank on the basis of the statute of limitations. “Pursuant to MCL 600.5805(6) and
MCL 600.5838(2), a plaintiff must file a legal-malpractice action within two years of the
attorney’s last day of service to the plaintiff or within six months of when the plaintiff discovered
or should have discovered the claim, whichever is later.” Wright v Rinaldo, 279 Mich App 526,
-3-
534-535; 761 NW2d 114 (2008).1 “Generally, when an attorney is retained to represent a client,
that representation continues until the attorney is relieved of the obligation by the client or the
court.” Id. (citation and internal quotation marks omitted).
Plaintiff’s allegations in counts I and II pertaining to defendant Tank do not refer to the
date that representation was terminated. In count III, the legal malpractice claim against
defendant Vitori, plaintiff alleges that “[o]n or about November 30, 2005, Defendant TANK was
discharged as the Plaintiff [sic] counsel, and Plaintiff retained, hired, and contracted the services
of Defendant VITORI[.]”
In support of his motion for summary disposition, defendant Tank submitted an affidavit
in which he averred:
2.
I was retained by Plaintiff, Darryl Beggs, to represent him in 2005.
3.
On November 29, 2005, Darryl Beggs came to my office in Detroit
and demanded possession of his file, and indicated to me that I was no longer his
attorney, and that he was going to retain new counsel to represent him in the
matter for which he had previously retained me.
4.
I acknowledged his request and expressed to him my
understanding that our attorney-client relationship had terminated, and turned the
file over to him.
Plaintiff did not respond to defendant Tank’s motion. Relying on defendant Tank’s affidavit, the
trial court granted Tank’s motion with respect to the legal malpractice claim because plaintiff’s
action was filed on November 30, 2007, more than two years after plaintiff terminated the
attorney-client relationship.
On appeal, plaintiff argues that the trial court was required to accept as true all of his
well-pleaded allegations in the complaint and construe them in his favor, and thus was required
to accept the allegation that Tank was not discharged until November 30, 2005, at the earliest.
However, defendant Tank moved for summary disposition of the legal malpractice claim under
MCR 2.116(C)(7). With respect to a motion under MCR 2.116(C)(7), “[t]he contents of the
complaint are accepted as true unless contradicted by documentation submitted by the movant.”
Maiden, 461 Mich at 119 (emphasis added). In light of defendant Tank’s affidavit, plaintiff’s
reliance on the allegations in his complaint is misplaced. Further, because defendant Tank
submitted an affidavit indicating that the representation ended on November 29, 2005, and no
contrary evidence was submitted by plaintiff, the trial court did not err in finding that the legal
malpractice claim was filed beyond the two-year limitations period.
1
Discovery of the claim is not at issue in this case.
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Plaintiff also relies on an affidavit that he submitted in support of his motion for
reconsideration to argue that the legal malpractice claim was timely filed. But because that
affidavit was not filed until after the trial court granted summary disposition, it may not be
considered. See Maiden, 461 Mich at 126 n 9; Quinto v Cross & Peters Co, 451 Mich 358, 366367 n 5; 547 NW2d 314 (1996).
Plaintiff lastly argues that the trial court erred in dismissing his breach of contract claim
against defendant Tank on the ground that the amount in controversy did not exceed the court’s
jurisdictional threshold of $25,000. We disagree.
Subject-matter jurisdiction is a question of law that this Court reviews de novo. Etefia v
Credit Technologies, Inc, 245 Mich App 466, 472; 628 NW2d 577 (2001). A circuit court does
not have subject-matter jurisdiction over civil claims having an amount in controversy of less
than $25,000. Id. at 474-475. In analyzing whether the jurisdictional threshold has been met,
this Court reviews the allegations in the complaint and considers the nature of the damages
available under the claims. Id.
Plaintiff contends that the amount in controversy is greater than $25,000 because he
alleged that as a result of Tank’s breach of contract, he was convicted of a bond violation. He
notes that his complaint alleged that he incurred over $21,000 in legal fees (including the amount
for other attorneys) “to vindicate himself.” He relies on Farm Credit Servs of Michigan’s
Heartland, PCA v Weldon, 232 Mich App 662, 678-679; 591 NW2d 438 (1998), in which the
Court recognized that “[d]amages recoverable for breach of contract are those that arise naturally
from the breach or those that were in the contemplation of the parties at the time the contract was
made” and that “[a] party to a contract who is injured by another’s breach of the contract is
entitled to recover from the latter damages for only such injuries as are the direct, natural, and
proximate result of the breach.”
This Court has recognized that a client may have a viable breach of contract action
against his attorney where, for example, the allegations show a “special contract” by the attorney
that his services would be above the level required by the standard of care. See Brownell v
Garber, 199 Mich App 519, 524-526; 503 NW2d 81 (1993). However, allegations that an
attorney inadequately represented the client generally sound in tort. Aldred v O'Hara-Bruce, 184
Mich App 488, 490-491; 458 NW2d 671 (1990). Assuming arguendo that plaintiff’s allegations
could support a breach of contract claim against Tank, the “direct, natural, and proximate result”
of the alleged breach of the contract for legal representation in the conduct of the bond violation
hearing and the personal protection matter would not include plaintiff’s subsequent conviction,
the negative consequences flowing from it, and the legal fees paid to other attorneys who
represented plaintiff after defendant Tank. Plaintiff’s attempt to meet the circuit court
jurisdictional threshold depends on allegations that sound in tort, not contract. Thus, the trial
court did not err in dismissing plaintiff’s breach of contract claim against defendant Tank.
In sum, we affirm the dismissal of plaintiff’s claims against defendant Tank and the
dismissal of plaintiff’s breach of contract claim against defendant Vitori, but reverse the trial
court’s dismissal of plaintiff’s legal malpractice claim against defendant Vitori on the basis of
collateral estoppel and remand for further proceedings with respect to that claim.
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Affirmed in part, reversed in part, and remanded. We do not retain jurisdiction.
/s/ Deborah A. Servitto
/s/ Joel P. Hoekstra
/s/ Donald S. Owens
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