Colegrove v. Oakwood Healthcare Inc.

1

SARAH COLEGROVE, Special Fiduciary for the ESTATE OF JOANNA L. HUBBARD, Plaintiff-Appellee, v. OAKWOOD HEALTHCARE INC., and BELAL F. ABDALLAH, M.D., Defendants, and ANDREW MOXIE, Appellant, and JOHN HUBBARD and JULIE HUBBARD, Intervening Parties-Appellees SARAH COLEGROVE, Special Fiduciary for the ESTATE OF JOANNA L. HUBBARD, Plaintiff-Appellee, v. OAKWOOD HEALTHCARE, INC., and BELAL F. ABDALLAH, M.D., Defendants, and ANDREW MOXIE and SARA K. MACWILLIAMS, Appellants, and JOHN HUBBARD and JULIE HUBBARD, Intervening Parties-Appellees.

Nos. 357997, 359571

Court of Appeals of Michigan

November 9, 2023

UNPUBLISHED

Wayne Circuit Court LC Nos. 16-011622-NO, 16-011622-NO Before: Cavanagh, P.J., and Riordan and Patel, JJ.

Per Curiam.

In Docket No. 357997, interested-party, Andrew Moxie, appeals as of right the trial court's order, entered by visiting Wayne Circuit Court Judge William J. Giovan, dismissing his claim for attorney fees for legal services he provided on behalf of the Estate of Joanna L. Hubbard ("the estate") in a circuit court action against defendants Oakwood Healthcare, Inc., and Dr. Belal F. Abdallah, M.D. In Docket No. 359571, Moxie and his attorney, Sara K MacWilliams, appeal as of right the trial court's postjudgment order awarding intervening parties John and Julie Hubbard sanctions against Andrew Moxie in the amount of $50,350.25, and holding that MacWilliams was jointly liable with Moxie for $42,100.25 of that amount. For the reasons set forth in this opinion, we reverse the dismissal of Moxie's claim for attorney fees, vacate the trial court's judgment of sanctions, and remand to that court for further proceedings.

I. BACKGROUND

These appeals arise from a dispute regarding Moxie's entitlement to attorney fees from the estate of Joanna L. Hubbard. After Joanna's husband, John J. Hubbard, passed away, Joanna filed a lawsuit against Oakwood Healthcare and Dr. Abdallah in 2016, challenging their failure to conduct an autopsy on John's body. Joanna was originally represented by attorney B. A. Tyler, who subsequently withdrew as counsel. In November 2017, Moxie, who is married to Joanna's daughter, Susan Hubbard, filed an appearance on Joanna's behalf. Joanna died approximately a month later. Joanna's son, John D. Hubbard, as personal representative of Joanna's estate, was later substituted as the plaintiff. Tyler re-entered the case as an attorney for the estate, but Moxie also continued to provide legal services for the estate. The parties dispute the nature of any agreement with Moxie to provide legal representation for the estate and whether there was any fee agreement. Although Moxie claims that Tyler agreed to a reduced 25% contingency fee, and that he, Moxie, agreed to an 8% contingency fee, it is undisputed that neither Tyler nor Moxie entered into a written fee agreement with either Joanna or the personal representative of her estate.

In September 2019, following a jury trial, the trial court entered a judgment in favor of the estate against Oakwood, and awarded damages of $1,259,750, prejudgment interest of $117,210.54, taxable costs of $480, and case evaluation sanctions of $135,000, for a total judgment of $1,512,440.54. In November 2019, Moxie filed an attorney charging lien against the estate, claiming that he was entitled to recover his attorney fees against the judgment proceeds for his legal representation of Joanna and her estate. Following an evidentiary hearing in July 2020, the trial court determined that Moxie was not entitled to recover any contingency fee because a written fee agreement was never obtained, but found that he did provide legal services for the estate and was entitled to an award of attorney fees under a quantum meruit theory. The court ordered a continued evidentiary hearing "to determine the total fees and costs."

In August 2020, John D. Hubbard was removed as personal representative of Joanna's estate "due to the acrimony between the interested parties." The court appointed Sarah Colegrove as special fiduciary to "[t]ake possession and control of all Estate assets," and authorized her, in relevant part, "to terminate and or hire independent legal counsel" in the circuit court action and granted her "full power and authority to make any and all decisions, including settlement, which are in the best interests of the Estate including without limitation, the handling of any and all litigation that includes the pending claim of Andrew Moxie for attorney fees and costs pending in the Civil Lawsuit until completion."

After Moxie filed an amended motion for attorney fees, John D. Hubbard and his wife Julie (collectively "the Hubbards") were allowed to intervene. Moxie also filed a motion to disqualify the trial court, visiting Judge Giovan, which both Judge Giovan and the chief judge denied. The Hubbards subsequently filed a motion for summary disposition of Moxie's attorney-lien claim under MCR 2.116(C)(10), and also requested sanctions under MCR 1.109(E)(5) and MCL 600.2591(1). Colegrove, as special fiduciary for the estate, filed a concurrence with the Hubbards' motion. The trial court granted the Hubbards' motion for summary disposition, dismissed Moxie's claim for attorney fees, and also granted the Hubbards' request for sanctions. The court later entered a judgment for sanctions against Moxie in the amount of $50,350.25, and ordered that MacWilliams was jointly liable for $42,100.25 of the $50,350.25 total awarded against Moxie. The court declined to award sanctions to the estate.

II. MOXIE'S CHARGING LIEN

Moxie first argues that the trial court erred by dismissing his claim for attorney fees under MCR 2.116(C)(10). We agree.

This Court reviews a trial court's decision on a motion for summary disposition de novo. Dougherty v City of Detroit, 340 Mich.App. 339, 345; 986 N.W.2d 467 (2021). The Hubbards moved for summary disposition under MCR 2.116(C)(10). In El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 160; 934 N.W.2d 665 (2019), our Supreme Court explained:

A motion under MCR 2.116(C)(10) . . . tests the factual sufficiency of a claim. Johnson v VanderKooi, 502 Mich. 751, 761; 918 N.W.2d 785 (2018). When considering such a motion, a trial court must consider all evidence submitted by the parties in the light most favorable to the party opposing the motion. Id. A motion under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact. Lowrey v LMPS & LMPJ, Inc, 500 Mich. 1, 5; 890 N.W.2d 344 (2016). "A genuine issue of material fact exists when the record leaves open an issue upon which reasonable minds might differ." Johnson, 502 Mich. at 761 (quotation marks, citation, and brackets omitted).

Additionally, the trial court's decision with respect to whether to impose an attorney's charging lien is reviewed for an abuse of discretion. Reynolds v Polen, 222 Mich.App. 20, 24; 564 N.W.2d 467 (1997). When the trial court's decision falls outside the range of reasonable and principled outcomes, it results in an abuse of discretion. Reed-Pratt v Detroit City Clerk, 339 Mich.App. 510, 516; 984 N.W.2d 794 (2021).

"An attorney-client relationship must be established by contract before an attorney is entitled to payment for services rendered." Plunkett & Cooney, PC v Capitol Bancorp Ltd, 212 Mich.App. 325, 329; 536 N.W.2d 886 (1995). Preliminarily, we agree that Moxie cannot establish a valid claim for a contingency fee because an agreement for a contingency fee must be in writing, MCR 8.121(F); MRPC 1.5(c), and Moxie does not dispute that he does not have a written fee agreement with either Joanna, the decedent, or with John Hubbard, who was the personal representative of Joanna's estate at the time Moxie provided his legal services.

Moxie further argues, however, that he is entitled to recover his attorney fees under a theory of quantum meruit. Although Moxie cites Ambrose v Detroit Edison Co, 65 Mich.App. 484; 237 N.W.2d 520 (1975), in support of this argument, that decision is not directly on point. In Ambrose, this Court held that "an attorney on a contingent fee arrangement who is wrongfully discharged, or who rightfully withdraws, is entitled to compensation for the reasonable value of his services based upon [q]uantum meruit, and not the contingent fee contract." Id. at 491. In Reynolds, 222 Mich.App. at 24, this Court similarly recognized that "[a] clear line of authority indicates that when a client wrongfully terminates an attorney or an attorney rightfully withdraws from a matter, recovery of attorney fees on a quantum meruit basis is appropriate." In Reynolds, id. at 24-25, this Court also cited Plunkett & Cooney, 212 Mich.App. at 330, for the proposition that recovery under a quantum meruit theory, rather than the contingency-fee contract, is permissible because a client has the right to discharge their counsel, and will not be held liable under the contract for exercising that right. However, this Court in Reynolds further concluded that there are some circumstances under which recovery under a quantum meruit theory is not appropriate, explaining:

These cases indicate that quantum meruit recovery of attorney fees is barred when an attorney engages in misconduct that results in representation that falls below the standard required of an attorney (e.g., disciplinable misconduct under the Michigan Rules of Professional Conduct) or when such recovery would otherwise be contrary to public policy. [Id. at 26.]

This case is distinguishable from Ambrose in which unlike here, the parties had a written contingency-fee agreement, and the issue involved the attorney's right to recover an attorney fee under a quantum meruit theory where the attorney was wrongfully discharged or rightfully withdrew. That decision does not...