Trial Court Properly Denied Attorney Fees In Divorce Case

The trial court’s denial of attorney fees in this divorce action was not “outside the range of reasonable and principled outcomes,” the Michigan Court of Appeals has ruled.

The defendant in Foster v Foster (Docket No. 355654) - a case that has been appealed numerous times - argued that attorney fees were appropriate because of the “extensive litigation” in the matter.

The Court of Appeals disagreed.

“Requiring plaintiff to pay defendant’s fees and costs would essentially amount to a punishment for her exercising her appellate rights to fully litigate the issues raised and obtain a final resolution,” the Court of Appeals said.

Judges Anica Letica, Stephen L. Borrello and Michael J. Riordan were on the panel that issued the unpublished opinion.

Background

This case has spanned more than a decade and has been before the Court of Appeals and the Michigan Supreme Court on numerous occasions.

The primary issue in the case has been the division of military benefits as set forth in the parties’ 2008 consent judgment of divorce. The consent judgment reflected that the parties had agreed the defendant would pay the plaintiff one-half of his military retirement benefits.

The Michigan Supreme Court ruled in 2020 that the parties’ consent judgment of divorce was preempted by federal law and unenforceable. Then in 2022, the Supreme Court held that the defendant’s challenge to enforcing an offset provision in the consent judgment of divorce was an improper collateral attack.

 In the present case, the defendant filed a motion for restitution and for attorney fees and costs in the Dickinson County Circuit Court. He claimed the consent judgment of divorce had “illegally required him to pay his CRSC pay to plaintiff in violation of federal law” and sought more than $74,000 in restitution and interest for payments made to the plaintiff between June 2014 and May 2020. The defendant also asserted that attorney fees and costs were proper because of the extensive litigation in the case. The defendant offered documentation, which the plaintiff did not dispute, showing that he incurred $4,038.06 in court costs and $145,650 in attorney fees.

 The trial court awarded the defendant $72,000 in restitution but denied his request for attorney fees and costs. The trial court reasoned that because “[c]osts and attorney fees are different and this Court is of the opinion there is no wrong doing by the Plaintiff to suggest that equity requires her to pay [Defendant’s] attorney fees in this action in addition to her own.”

 The plaintiff appealed, challenging the award of restitution. The Court of Appeals held its decision in abeyance pending the Michigan Supreme Court’s decision in Foster III, which was issued in 2022. After failing to submit a brief, the plaintiff’s appeal was involuntarily dismissed, leaving only the defendant’s cross-appeal for attorney fees and costs pending.

No Inequities

 On appeal, the defendant argued the trial court abused its discretion by not awarding him attorney fees and costs.

“We disagree,” the Court of Appeals said, noting that Michigan follows the “American Rule,” which states that “attorney fees are not recoverable as an element of costs or damages unless expressly allowed by statute, court rule, common-law exception, or contract.”

The Court of Appeals also pointed out that, relevant to this appeal, MCL 552.13(1) says: “In every action brought, either for a divorce or for a separation, the court may require either party … to pay any sums necessary to enable the adverse party to carry on or defend the action, during its pendency. It may award costs against either party and award execution for the same, or it may direct such costs to be paid out of any property sequestered, or in the power of the court, or in the hands of a receiver.”

The Court of Appeals further observed that MCR 3.206(D) provides:

“(1) A party may, at any time, request that the court order the other party to pay all or part of the attorney fees and expenses related to the action or a specific proceeding, including a post-judgment proceeding.

(2) A party who requests attorney fees and expenses must allege facts sufficient to show that:

(a) the party is unable to bear the expense of the action, including the expense of engaging in discovery appropriate for the matter, and that the other party is able to pay, or

(b) the attorney fees and expenses were incurred because the other party refused to comply with a previous court order, despite having the ability to comply, or engaged in discovery practices in violation of these rules. [Emphasis added.]”

Here, the defendant, in support of his request for attorney fees, highlighted the extent of litigation that had occurred since 2014, which included multiple appeals, the Court of Appeals explained. “He argued that this had forced him ‘to incur additional costs, expenses and attorneys’ fees in defending that appeal’ and that he would continue to do so because plaintiff had sought review from our Supreme Court. He submitted that the requested costs and fees were reasonable because of his attorneys’ experience, flat fees, and hourly rate, which plaintiff did not dispute.”

However, the Court of Appeals continued, “noticeably absent was any showing by defendant that (1) he was unable to bear the expense of the action and that plaintiff was able to pay, or that (2) he incurred the fees and costs because plaintiff disobeyed a prior court order or violated some rule during discovery.”

By failing to demonstrate either of these two requirements, the defendant’s request for attorney fees “fell short,” the Court of Appeal said. “Defendant did not attempt to correct this deficiency on appeal. Instead of showing that either of the two requirements of MCR 3.206(D)(2) were met, defendant essentially contends that equity requires that he be permitted to recover attorney fees and costs of this litigation because he was forced to incur them defending an action in which the consent judgment of divorce was ruled to be void.”

The defendant’s argument that the consent judgment of divorce was void has already been “expressly rejected,” the Court of Appeals said. “Although defendant may adamantly disagree, this has no bearing on the issue’s resolution. Furthermore, we have previously held that ‘it is improper to award attorney fees on general equitable principles.’”

Further, the Court of Appeals said it was not persuaded the trial court’s decision would lead to an “inequitable result.” Although this case has spanned many years and has caused both the defendant and the plaintiff to incur fees and costs, “the procedural history … demonstrates the complexity of the issues involved and the uncertainty of the law governing it.”

Therefore, because the defendant did not show the denial of attorney fees “was outside the range of reasonable and principled outcomes,” the Court of Appeals affirmed the trial court’s ruling.