Sanctions for signature by an attorney who is not an attorney of record.

In Thorne v Thorne, Unpub Per Curiam Opinion (#308382, 11/15/2012) the Court of Appeals affirmed the trial court’s order awarding attorney fees to the plaintiff as a sanction for a non attorney of record signing a subpoena for the defendant's attorney of record without including language ‘for’ or ‘with permission’ in violation of MCR 2.114.

MCR 2.114 requires that every document of a party represented by an attorney shall be signed by at least one attorney of record. A party who is not represented by an attorney must sign the document.  If a document is signed in violation of this rule, the court, on the motion of a party or on its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the document, including reasonable attorney fees. The court may not assess punitive damages.  In addition to sanctions under this rule, a party pleading a frivolous claim or defense is subject to costs as provided in MCR 2.625(A)(2). The court may not assess punitive damages.

Under the circumstances of this case, the Court of Appeals could not say that the trial court clearly erred when it found that the one attorney’s act of signing her own name and not indicating that her signature was made “for” or “with permission of” the attorney of record was more than a mere clerical error. “Clerical error” can be defined as, “An error resulting from a minor mistake or inadvertence, esp. in writing or copying something on the record, and not from judicial reasoning or determination.”  In that MCR 2.114, by its plain language requires the pleading to be signed by the attorney of record, an act of certifying the document by an attorney who was not an attorney of record is not a clerical error because the non attorney of record clearly did not inadvertently or mistakenly sign the subpoena.

MCR 2.116(3)(a) provides that a pleading, appearance, motion, or other paper filed by a law firm on behalf of a client is deemed the appearance of the individual attorney first filing a paper in the action.  Subsection (b) provides that the appearance of an attorney is deemed to be the appearance of every member of the law firm.  Any attorney in the firm may be required by the court to conduct a court ordered conference or trial.

Destruction of evidence (Spoliation) allowing for an inference/presumption

In Doko v Jablonowski & AAA of Michigan, Unpub Per Curiam Opinion, (#306082, 11/15/2012) the Court of Appeals held that the trial court did not err by failing to conclude that AAA intentionally renewed an insurance policy with knowledge of the policy holder’s death. However, AAA should have preserved any files related to the 2003-2004 policy, rather than allow them to be purged from its computers after six years. AAA’s own record retention policy allowed for a “litigation hold” to be placed on information when it was informed of pending litigation. The underwriting files, if any, should not have been purged.

MCR 2.313(B) permits a trial court to impose sanctions for failure to comply with a discovery order. The court rule is inapplicable “in the absence of a discovery order.” Brenner v Kolk, 226 Mich App 149, 159 (1997). Nonetheless, “[a] trial court has the authority, derived from its inherent powers, to sanction a party for failing to preserve evidence that it knows or should know is relevant before litigation is commenced.” Bloemendaal v Town & Country Sports Ctr, Inc, 255 Mich App 207, 211; 659 NW2d 684 (2002), citing MASB-SEG Property/Casualty Pool, Inc, 231 Mich App at 400.

Spoliation can occur in the absence of a discovery order. Brenner, 226 Mich App at 160. Spoliation of evidence occurs when a party either deliberately or accidentally destroys or loses crucial evidence, or when a party fails to preserve such evidence when it is under a duty to preserve evidence that it knows or reasonably should know is relevant to the action. Id. The litigant is under such a duty “[e]ven when an action has not been commenced and there is only a potential for litigation[.]” Id. at 162.

An appropriate consequence for a party’s failure to preserve evidence may be “an instruction to the jury that it may draw an inference adverse to the culpable party from the absence of the evidence.” Brenner, 226 Mich App at 161. There is, however, a procedural and substantive difference between the drawing of an inference and a presumption in favor of the aggrieved party.

The presumption that unproduced evidence would have been adverse can be applied only “where there is evidence of intentional fraudulent conduct and intentional destruction of evidence.” Lagalo v Allied Corp, 233 Mich App 514, 520 (1999). An adverse presumption, if unrebutted, requires the fact finder to “conclude that the unproduced evidence would have been adverse.” Id. at 521. An adverse inference, by contrast, merely permits the fact finder to conclude that the unproduced evidence would have been adverse, the fact-finder is still “free to decide for itself.” Id. at 521.

Discovery in Criminal Cases--criminal records

In People v Sluck, Unpub Per Curiam, (#302215, 11/1/2012) the Court of Appeals held that a prosecutor can be compelled to compile a list of its own witnesses’ criminal records by a review of its own files. In Sluck the defendant had relied on MRE 6.201(A) and requested, in part, that the prosecution disclose the complainant’s criminal history; the prosecuting attorney indicated at the motion hearing that her office had the information in its possession.

Discovery in criminal cases is governed by MCR 6.201.  

MCR 6.201(A), titled “Mandatory Disclosure,” provides in relevant part: [i]n addition to disclosures required by provisions of law other than MCL 767.94a, a party upon request must provide all other parties . . . * * * (4) any criminal record that the party may use at trial to impeach a witness; [and] (5) a description or list of criminal convictions, known to the defense attorney or prosecuting attorney, of any witness whom the party may call at trial . . . . [Emphasis added.]  Because disclosure under MCR 6.201(A) is mandatory, when a party requests information under the court rule, that information must be provided to the requesting party. People v Laws, 218 Mich App 447, 454-455 (1996).

This includes the possibility of juvenile adjudications.  Although not generally admissible at trial, records of juvenile adjudications of a witness other than the accused may be admissible at a criminal trial under MRE 609(e) if “conviction of the offense would be admissible to attack the credibility of an adult and the court is satisfied that admission is necessary for a fair determination of the case or proceeding.” Crimes “admissible to attack the credibility of an adult” are covered by MRE 609(a), and are defined as those crimes an essential element of which is dishonesty or false statement, or those crimes an essential element of which involves theft, are punishable by over a year in prison, and which have “significant probative value on the issue of credibility.” People v Parcha, 227 Mich App 236, 241-242 (1997).   And, necessarily, a trial court must have access to criminal records or juvenile adjudications in order to perform its gate-keeping function to determine if they are admissible under MRE 609. Laws, 218 Mich App at 452 (a trial court may conduct an in-camera review to determine if evidence is discoverable); People v Small, 467 Mich 259, 264 (2002), quoting MCL 768.29 (“[i]t shall be the duty of the judge to control all proceedings . . . and to limit the introduction of evidence . . . to relevant and material matters . . .”).

On appeal the people argued in Sluck that Elkhoja II, infra and the LEIN statute prohibited the people from conducting a lien search in behalf of the defendant.  In People v Elkhoja, 658 NW2d 153 (2003) (Elkhoja II), the Supreme Court issued an order that adopted the dissent in People v Elkhoja, 251 Mich App 417 (2002) (Elkhoja I) that in conjunction with MCL 6.201(A)(5), and the LEIN statute a prosecutor cannot be compelled to conduct a LEIN search on behalf of a defendant.  However, the Court of Appeals in Sluck held that this does not prevent the trial court from compelling a prosecutor to compile a list of its own witnesses’ criminal records by review of its own files without resorting to an independent search of the LEIN database. Records of criminal convictions, unearthed by the prosecution in prior cases, are “known” to the prosecution for purposes of MCR 6.201. To hold otherwise would allow prosecutors to remain willfully ignorant of valuable impeachment evidence to which defendants are otherwise entitled.

Supreme Court Briefs Filed in US Airways, Inc. v. McCutchen---Guest blog by Emily Hootkins.

November 9, 2012 | Posted by Emily Catherine Hootkins, ERISA Litigation Group, Alston & Bird.

Briefs have been filed, the date for oral argument is rapidly approaching, and the parties are gearing up to face the Supreme Court in this year’s hot ERISA reimbursement case of US Airways, Inc. v. McCutchen. To briefly recap the facts, in McCutchen the plan sued under ERISA § 502(a)(3) for full reimbursement of medical expenses after a participant recovered limited damages related to injuries sustained in a car accident. The District Court granted summary judgment to US Airways, as plan administrator, based on language in the plan allowing full reimbursement of any monies recovered by the participant. No. 2:08-CV-1593, 2010 WL 3420951 (W.D. Pa. Aug. 30, 2010). On appeal, the Third Circuit vacated and remanded. 663 F.3d 671 (3d Cir. 2011). Citing Amara, the Third Circuit rejected the plan’s claim for full reimbursement by finding that ERISA § 502(a)(3) incorporates traditional equitable defenses. Id. at 678-79. Looking at the facts of the case, the Third Circuit concluded that requiring the participant to provide full reimbursement to the plan (without allowing offset for his attorneys’ fees and expenses) would be “inappropriate and inequitable relief.” Id. at 679.

The Supreme Court granted US Airways’ petition for certiorari on June 25, 2012. The question presented is: “Whether the Third Circuit correctly held--in conflict with the Fifth, Seventh, Eighth, Eleventh, and D.C. Circuits--that ERISA Section 502(a)(3) authorizes courts to use equitable principles to rewrite contractual language and refuse to order participants to reimburse their plan for benefits paid, even where the plan’s terms give it an absolute right to full reimbursement.”

On August 29, 2012, US Airways filed its brief on the merits, arguing “Section 502(a)(3) does not empower courts to use free-floating equitable principles to rewrite benefit plans.” (Pet’r’s Brief p. 4.) US Airways gives three rationales for its position. First, § 502(a)(3) only authorizes appropriate equitable relief to “enforce . . . the terms of the plan” and McCutchen’s approach would improperly “obliterate[]” the plan terms. (Id.) Second, the equitable relief sought by US Airways (an equitable lien by agreement) requires a court to enforce the actual agreement of the parties, which allows full reimbursement, rather than rewrite the parties’ agreement. (Id.) Third, US Airways argues that McCutchen’s approach conflicts with the goals of ERISA by making liabilities unpredictable. (Id.) The Third Circuit’s decision is characterized as a threat to the stability of self-funded ERISA plans, as it would discourage employers from offering benefits yet encourage gamesmanship by plan participants in the structuring of settlements. (Id. at pp. 42-50.)

Respondents address these arguments and others in their brief on the merits filed on October 18, 2012. They argue that U.S. Airways’ approach is “neither ‘appropriate’ nor ‘equitable’” as it ignores principles of unjust enrichment in favor of “rote enforcement of contract terms.” (Resp’ts’ Brief p. 2.) Respondents maintain that the Third Circuit’s approach is consistent with how courts would have treated US Airways’ claim in the days of the divided bench, where an insurer’s subrogation claims were limited to a pro rata share of a recovery. (Id. at pp. 13-25.) Further, in equity, Respondents argue that the common fund rule requires that US Airways pay its proportional share of the fees and costs incurred in obtaining the damages recovery. (Id. at pp. 26-32.)

Responding to policy concerns, Respondents argue “the plans have not offered a scintilla of actual evidence that their apocalyptic vision of life under the Third Circuit’s approach will come to pass.” (Id. at p. 48.) “If anything, there is every reason to believe that Petitioner’s full-reimbursement approach would increase litigation costs by making it less likely that tort claimants would be willing to settle cases.” (Id. at p. 54.)

These contentious briefs confirm that this is a Supreme Court case worth following. Many ERISA plans contain “subrogation” or “reimbursement” provisions, and how the Supreme Court resolves the question of whether “equitable defenses” can limit a plan’s recovery under § 502(a)(3) is likely to have a far-reaching impact on related reimbursement and underlying tort litigation.

Oral argument in this case is set for Tuesday, November 27, 2012.

Attorney Fees--Determining the number of hours reasonably expended.

In Adair v State of Michigan, __ Mich App __ (#230858, 11/6/2012) the Court of Appeals held that Plaintiffs failed to carry their burden of proving the number of hours reasonably expended in the litigating of their claim.

The party requesting an award of attorney fees bears the burden of proving the reasonableness of the fees requested. Smith, 481 Mich at 528. Smith establishes an analytical framework to guide the lower courts in the methodology of determining what constitutes a “reasonable fee.” In general terms, the Smith framework requires a trial judge to determine a baseline reasonable hourly or daily fee rate derived from “reliable surveys or other credible evidence” showing the fee customarily charged in the locality for similar legal services. Id. at 530-531, 537. Once the trial judge has determined this hourly rate, the judge must multiply this rate by the reasonable number of hours expended in the case. The product of this calculation serves as the “starting point for calculating a reasonable attorney fee.” Id. at 531, 537. Finally, the trial judge may make up-or-down adjustments to the fee based on certain factors enumerated in Rule 1.5(a) of the Michigan Rules of Professional Conduct and Wood v DAIIE, 413 Mich 573 (1982), and any additional relevant factors. Smith, 481 Mich at 529-531, 537.

In determining the number of hours reasonably expended, the party requesting attorney fees has the burden of supporting their claimed hours with evidentiary support, including detailed billing records, which the opposing party may contest for reasonableness. Smith, 481 Mich at 532; Augustine v Allstate Ins Co, 292 Mich App 408, 432 (2011). An itemized bill of costs by itself is insufficient to establish the reasonableness of the hours claimed. Petterman v Haverhill Farms, Inc, 125 Mich App 30, 33 (1983). Indeed, the trier of fact is not required to accept it on its face, id.; nor is the trier of fact required to accept an attorney’s representation that the hours identified in the bill of costs were reasonably expended, Sturgis Savings and Loan Ass’n v Italian Village, Inc, 81 Mich App 577, 584 (1978); see also Augustine, 292 Mich App at 423. Rather, the fee applicant must demonstrate by documentation or specific testimony or both that the time identified as expended on a billable item was actually and reasonably expended. Augustine, 292 Mich App at 432-434; Petterman, 125 Mich App at 33.

Exceeding the sentencing guidelines; objective and verifiable factors

In People v Anderson, __ Mich App __ (#301701, 10/23/2012) the Court of Appeals upheld the upwards departure on the basis of substantial and compelling reasons that were objective and verifiable.

A court may depart from the appropriate sentence range . . . if the court has a substantial and compelling reason for that departure and states on the record the reasons for departure.” MCL 769.34(3). In order to be substantial and compelling, the reasons on which the trial court relied “must be objective and verifiable.” People v Smith, 482 Mich 292, 299 (2008). “To be objective and verifiable, a reason must be based on actions or occurrences external to the minds of those involved in the decision, and must be capable of being confirmed.” People v Horn, 279 Mich App 31, 43 n 6 (2008). The reasons for departure must also “be of considerable worth in determining the length of the sentence and should keenly or irresistibly grab the court’s attention.” Smith, 482 Mich at 299. However, “[t]he trial court may not base a departure ‘on an offense characteristic or offender characteristic already taken into account in determining the appropriate sentence range unless the court finds from the facts contained in the court record . . . that the characteristic has been given inadequate or disproportionate weight.’” Id. at 300, quoting MCL 769.34(3)(b). Moreover, “the statutory guidelines require more than an articulation of reasons for a departure; they require justification for the particular departure made.” Smith, 482 Mich at 303 (emphasis in original). Thus, “the trial court . . . must justify on the record both the departure and the extent of the departure.” Id. at 313 (emphasis in original).

In Anderson the trial court’s upward departure was supported by other objective and verifiable factors that keenly grabbed the court’s attention, including the planning defendant engaged in, the extreme nature of the victims’ injuries, the victims’ unusual level of psychological trauma, defendant’s pattern of escalating violence toward the victims, and defendant’s inability to benefit from counseling. The trial court stated that it thought any one of the reasons it articulated justified an upward departure. Given the court’s comments, the Court of Appeals was satisfied that the court would have departed to the same degree on the basis of the valid reasons alone.

The existence of the victims’ unusually severe burn injuries was objective and verifiable, and the trial court did not abuse its discretion when it determined that the severity of those injuries was a substantial and compelling reason in support of its sentencing departure.

Although OV 4 accounts for psychological injuries suffered by victims, it does not adequately consider the ways in which an offense affects familial relationships, see People v Armstrong, 247 Mich App 423, 425-426 (2001), nor does it always account for the unique psychological injuries suffered by individual victims. See Smith, 482 Mich at 302.  Under the circumstances of this case, the trial court did not err in finding that the guidelines did not adequately account for the psychological injuries suffered by the victims. Consequently, this was a substantial and compelling reason to depart upward from the guidelines.

The trial court’s sixth basis for departing from the guidelines was that defendant had a propensity to re-offend and was therefore a threat to public safety. A court’s opinion or speculation about a defendant’s future dangerousness is not objective or verifiable. People v Cline, 276 Mich App 634, 651 (2007). But the trial court may base a sentencing departure on a defendant’s future dangerousness if objective and verifiable facts support the court’s conclusion, such as the defendant’s past failures to rehabilitate or demonstrated obsessive or uncontrollable urges to commit certain offenses. Horn, 279 Mich App at 45. Recurring and escalating acts of violence are objective and verifiable because they are external occurrences that can be confirmed. Id. at 46.  In this case, the trial court based its conclusions on objective and verifiable facts. The court noted that defendant had been “diagnosed with symptoms of oppositional defiant disorder” and had not benefitted from the various forms of counseling he had received from a young age. Defendant had threatened, stolen from, and damaged the property of his parents on “numerous occasions.” The trial court determined that defendant’s “escalation of violence” toward his parents was not adequately addressed by the sentencing guidelines. The trial court did not simply state that it thought defendant had a propensity to re-offend—it supported its conclusion with objective, verifiable, external determinations.

CSC 1st requires lifetime monitoring unless defendant is sentenced to life without parole.

In People v Johnson, __ Mich App __ (#302173, 10/16/2012) the defendant was convicted of three counts of CSC I and sentenced to 17-1/2 to 40 years in prison and lifetime electronic monitoring pursuant to MCL 750.520n.  Defendant argued on appeal that he was erroneously ordered to lifetime electronic monitoring because the victim was not less than 13 years old at the time of the offenses. The Court of Appeals disagreed.

MCL 750.520b(2) provides that Criminal sexual conduct in the first degree is a felony punishable as follows: (a) Except as provided in subsections (b) and (c), by imprisonment for life or for any term of years. (b) For a violation that is committed by an individual 17 years of age or older against an individual less than 13 years of age by imprisonment for life or any terms of years, but not less than 25 years. (c) For a violation that is committed by an individual 17 years of age or older against an individual less than 13 years of age, by imprisonment for life without possibility of parole if the person was previously convicted of a violation of this section or section 520c, 520d, 520e, or 520g committed against an individual less than 13 years of age or a violation of law of the United States, another state or political subdivision substantially corresponding to a violation of this section or section 520c, 520d, 520e, or 520g committed against an individual less than 13 years of age.  (d) In addition to any other penalty imposed under subdivision (a) or (b), the court shall sentence the defendant to lifetime electronic monitoring under section 520n.

This section requires three differing prison sentences for first-degree criminal sexual conduct, depending upon the circumstances: (1) imprisonment for life or any term of years; (2) imprisonment for life or any term of years, but not less than 25 years, if the defendant is 17 years or older and the victim is 13 or younger; or (3) imprisonment for life without the possibility of parole, if the defendant was previously convicted of a criminal sexual conduct offense or another attempted CSC offense. The subsection (d) penalty regarding lifetime monitoring is explicitly required to be imposed in addition to the penalties provided in subsections (a) and (b).

The lifetime monitoring penalty specifically does not apply when a defendant is sentenced to prison for life without parole under subsection (c).  

Accordingly, from the plain statutory language of the statute, regardless of the defendant’s and the victim’s age, MCL 750.520b(2) requires lifetime electronic monitoring for first-degree criminal sexual conduct offenses where the defendant has not been sentenced to life in prison without parole.