Trial Court Wrongly Shut Down Attorney Fee Request In Divorce Case

The trial court in this divorce action should not have denied the defendant’s request for attorney fees without conducting a hearing and allowing the defendant to support her request for fees, the Michigan Court of Appeals has ruled.

The defendant in Glomb v Glomb (Docket No. 349108) was awarded spousal support by the Calhoun County Circuit Court. However, her request for attorney fees was denied, without a hearing or the ability to support her request. The defendant appealed, arguing the trial court committed reversible error.

The Court of Appeals affirmed the spousal support award but reversed the denial of attorney fees. The appellate court remanded the matter to allow the parties to develop the factual record and permit the trial court to consider the defendant’s fee request.

“By failing to hold a hearing or to allow defendant to support her request for attorney fees, the trial court did not render a decision on the basis of the particular facts and circumstances regarding the parties’ financial situations and the equities involved,” the Court of Appeals wrote.

Judges James Robert Redford, Michael J. Riordan and Jonathan Tukel were on the panel that issued the unpublished opinion.

Facts

The defendant was a stay-at-home mom throughout most of her marriage to the plaintiff. The parties had two children, who were adults at the time of their separation and divorce.

The plaintiff was a 50 percent shareholder in his computer services and product sales business. He earned a base salary and took draws against the profit of the business, totaling an income of approximately $210,000 in 2018. The defendant worked at a grocery store and earned about $22,000 in 2018.

During the divorce proceedings, the trial court equally divided the value of the marital property. The trial court awarded the defendant the marital home, two vehicles, personal property within the marital home, hand tools, the full value of the defendant’s 401(k) account, half of the parties’ trust account and half of the balance of the plaintiff’s individual retirement account (IRA).  The plaintiff was awarded two vehicles, a pontoon boat, the contents of the parties’ barn, the full balance of the plaintiff’s Roth IRA and the value of the plaintiff’s 50 percent interest in his business.

The trial court ruled that the plaintiff owed the defendant $107,112 as a property equalization award. The trial court also ordered the plaintiff to pay the defendant $1,500 per month in spousal support for 10 years, at which time the defendant would become eligible for social security benefits.

After the close of proofs but before the trial court issued its oral opinion, the defendant requested a hearing on attorney fees because “it was impossible to determine, at the time of the trial, the amount of attorney’s fees that were generated by [sic] client and to give the court an understanding as to how much attorney fees my client has paid.” In response, the trial court indicated that proofs were closed, the parties had waived closing arguments and the issue regarding attorney fees had not been addressed during the bench trial. As a result, the trial court denied the defendant’s request for a hearing on attorney fees and declined to address whether the defendant was entitled to fees.

The defendant appealed.

Attorney Fees

On appeal, the defendant argued the trial court abused its discretion by denying her request for a hearing on attorney fees, as well as her request for attorney fees.

“We agree,” the Court of Appeals said.

According to the Court of Appeals, attorney fees are authorized by statute (MCL 552.13) and court rule (MCR 3.206) in a divorce action. “The trial court has authority to order a party’s payment of the other party’s attorney fees during the pendency of the divorce case. … MCR 3.206(D)(1) permits a party to request ‘at any time, … 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.’ However, the party making the request must allege facts sufficient to show that ‘the party is unable to bear the expense of the action, and that the other party is able to pay.’”

Here, the trial court denied the defendant’s request for a hearing on attorney fees and declined to address whether the defendant was entitled to attorney fees, the Court of Appeals explained. “After the trial court issued its oral opinion, defendant requested that the value of her property award be adjusted from $145,000 to $125,000 to reflect her debt of $20,000 in attorney fees. The trial court indicated that defendant failed to raise the issue of attorney fees before the close of proofs and that it would not address whether defendant was entitled to attorney fees. The trial court ordered each party to pay their respective attorney fees.”

The Court of Appeals pointed out that the defendant’s request for attorney fees was timely under MCL 552.13(1) because it was made during the pendency of the divorce proceeding. Further, it was made “before the trial court gave its oral opinion regarding the divorce judgment, rather than after the entry of an order that resolved the last pending claims and closed the case.”

In addition, the defendant’s request for attorney fees was timely under MCR 3.206(D) because a request for attorney fees under this rule can be made “at any time,” the Court of Appeals said. “Therefore, the trial court had authority to award defendant attorney fees at the time of defendant’s request under MCL 552.13(1) and MCR 3.206(D).”

The Court of Appeals noted the defendant testified during the bench trial that she had a credit card balance of $2,000 for legal fees in the case. “Defendant also testified that she borrowed approximately $20,000 from her sister to pay for attorney fees in this case, although there were no loan documents. The lower court record also supports that defendant’s salary was $22,000 per year in 2018 before taxes and payroll deductions and that plaintiff’s income was $210,000 in 2018. Defendant was not required to invade her assets that she relied on for support or to invade the property award in order to pay attorney fees to defend this action. … These facts support defendant’s request for attorney fees on the basis of defendant’s inability to pay to defend the divorce proceeding and plaintiff’s ability to pay.”

However, “the trial court did not give defendant the opportunity to argue and allege sufficient facts to support her request for attorney fees,” the Court of Appeals wrote. “By failing to hold a hearing or to allow defendant to support her request for attorney fees, the trial court did not render a decision on the basis of the particular facts and circumstances regarding the parties’ financial situations and the equities involved. Accordingly, the trial court failed to provide a reasoned basis for its denial of defendant’s request for attorney fees and remand is required to permit the parties to develop the factual record and allow the trial court to consider defendant’s request and to exercise its discretion in the first instance.”

Spousal Support

The defendant also argued the trial court erred in making its findings of fact and weighing the relevant factors when it determined the award of spousal support.

“We disagree,” the Court of Appeals said. The trial court “considered each of the factors for awarding spousal support and did not assign disproportionate weight to any factor. Additionally, the trial court’s findings regarding the past relations and conduct of the parties, the source and amount of property award to the parties, the needs of the parties, marital fault, and the parties’ prior standard of living and support were not clearly erroneous, and the trial court’s decision to award defendant spousal support was not an abuse of discretion.”

Therefore, “[w]e affirm the trial court’s judgment of divorce awarding defendant spousal support. However, we reverse the trial court’s denial of defendant’s request for attorney fees and remand for the trial court to consider the merits of defendant’s request,” the Court of Appeals concluded.