in Re Robert Winfield Cederquist Revocable Trust ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
In re Estate of ROBERT WINFIELD
CEDERQUIST.
BONNIE K. ROWAN, Personal Representative of UNPUBLISHED
the ESTATE OF ROBERT WINFIELD February 16, 2017
CEDERQUIST, and RANDAL T. LEWIS,
Appellants,
v No. 330518
Montcalm Probate Court
SUSAN BILLINGTON a/k/a SUSAN LC No. 2011-030951-DE
CEDERQUIST, ROBERT J. CEDERQUIST,
REBEKA LEWIS a/k/a REBEKA CEDERQUIST,
and MICHELE H. ROSS a/k/a MICHELE H.
CEDERQUIST a/k/a MICHELE DAVID-ROSS,
Appellees.
SUSAN BILLINGTON a/k/a SUSAN
CEDERQUIST, ROBERT J. CEDERQUIST,
REBEKA LEWIS a/k/a REBEKA CEDERQUIST,
and MICHELE H. ROSS a/k/a MICHELE H.
CEDERQUIST,
Plaintiffs-Appellees,
v No. 330519
Montcalm Probate Court
BONNIE K. ROWAN and RANDAL T. LEWIS, LC No. 2011-031015-CZ
Defendants-Appellants.
In re ROBERT WINFIELD CEDERQUIST
REVOCABLE TRUST.
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BONNIE K. ROWAN, Trustee, and RANDAL T.
LEWIS,
Appellants,
v No. 330520
Montcalm Probate Court
SUSAN BILLINGTON a/k/a SUSAN LC No. 2011-030951-ML;
CEDERQUIST, ROBERT J. CEDERQUIST, 2011-030951-TV
REBEKA LEWIS a/k/a REBEKA CEDERQUIST,
and MICHELE H. ROSS a/k/a MICHELE H.
CEDERQUIST,
Appellees.
Before: MURPHY, P.J., and SAWYER and SWARTZLE, JJ.
PER CURIAM.
In these consolidated cases, appellants appeal as of right the November 17, 2015 order
denying their motion for attorney fees and costs. We affirm.
The now-decimated estate at the heart of this suit has been the subject of extensive
litigation in the probate court, on appeal to the circuit court, and before another panel of this
Court on interlocutory appeal. The facts underlying that litigation—which set the stage for the
issues now before us—are set forth in one of our prior opinions in this matter, Billington v
Rowan, unpublished opinion per curiam of the Court of Appeals, issued October 15, 2013
(Docket No. 311196), pp 1-3. For the purposes of this appeal, it is sufficient for us to note that
the decedent’s children—Susan Billington, Robert J. Cederquist, Rebeka Lewis, and Michele
Cederquist (appellees)—instituted a variety of legal proceedings challenging the decedent’s
bequests to Bonnie Rowan and Randal Lewis (appellants) as the product of appellants’ undue
influence on the decedent. After extensive discovery, the probate court granted appellant’s
motion for summary disposition, dismissing the appellees’ complaints.
After dismissal, appellants moved for sanctions solely under MCL 600.2591(3)(a)(i),
claiming that appellees’ “primary purpose in initiating the action[s] . . . was to harass, embarrass,
or injure” appellants, specifically by engaging in unnecessarily extensive discovery to increase
appellants’ attorney fees and drain the estate of its entire worth—approximately $500,000.
Specifically, appellants assert that, in discovery, appellees “served 159 interrogatories (with 312
sub-parts), 231 requests to produce, and 69 third party document subpoenas, generating over
12,000 documents and 10,000 computer files.” Appellants sought an assessment of $635,755.18,
which appears to be the entirety of their attorney fees and costs in the matter (and which well
exceeds the value of the estate).
The probate court denied this motion on two grounds. First, the probate court concluded
that appellants’ failure to file for a protective order from unwarranted discovery precluded the
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court from awarding attorney fees and costs. Second, the probate court found that, although
some harassment may have occurred during discovery, appellants were not entitled to relief
under MCL 600.2591 because appellees’ lawsuit was not frivolous from the outset of the case.
On appeal, appellants challenge both the legal and factual bases of that decision.
“A trial court's findings with regard to whether a claim or defense was frivolous, and
whether sanctions may be imposed, will not be disturbed unless it is clearly erroneous.” 1300
LaFayette East Coop, Inc v Savoy, 284 Mich. App. 522, 533; 773 NW2d 57 (2009). A “trial
court’s decision is clearly erroneous when, although there is evidence to support it, the reviewing
court is left with a definite and firm conviction that a mistake has been committed.” Holton v
Ward, 303 Mich. App. 718, 734 n 20; 847 NW2d 1 (2014) (quotation marks and citation omitted).
To the extent that review of the issue entails the interpretation of a court rule or a statute, “this
Court reviews the issue de novo.” Id.
“In general, a party is not entitled to an award of attorney fees and costs unless such an
award is expressly authorized by statute or court rule.” Kennedy v Robert Lee Auto Sales, 313
Mich. App. 277, 285-286; 882 NW2d 563 (2015). Appellants sought sanctions solely under MCL
600.2591(1), which provides:
Upon motion of any party, if a court finds that a civil action or defense to a civil
action was frivolous, the court that conducts the civil action shall award to the
prevailing party the costs and fees incurred by that party in connection with the
civil action by assessing the costs and fees against the nonprevailing party and
their attorney.
MCL 600.2591(3)(a) then defines “frivolous” as any of the following:
(i) The party's primary purpose in initiating the action or asserting the
defense was to harass, embarrass, or injure the prevailing party.
(ii) The party had no reasonable basis to believe that the facts underlying
that party's legal position were in fact true.
(iii) The party's legal position was devoid of arguable legal merit.
Whether a civil action is frivolous is necessarily a fact-based inquiry. “The factual
determination by the trial court depends on the particular facts and circumstances of the claim
involved.” In re Costs and Attorney Fees, 250 Mich. App. 89, 94-95; 645 NW2d 697 (2002).
Therefore, “[t]o determine whether sanctions are appropriate under MCL 600.2591, it is
necessary to evaluate the claims or defenses at issue at the time they were made.” Id. at 94
(emphasis added). “That the alleged facts are later discovered to be untrue does not invalidate a
prior reasonable inquiry.” Jerico Const, Inc v Quadrants, Inc, 257 Mich. App. 22, 36; 666 NW2d
310 (2003).
Concerning the probate court’s first proffered reason for denying appellants’ motion,
appellants are correct that requesting a protective order is not a prerequisite for a prevailing party
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to obtain relief under MCL 600.2591. MCL 600.2591(1) plainly states that, upon the prevailing
party’s motion, the trial court “shall award” costs and fees when it concludes that an action was
frivolous. MCL 600.2591(3)(a) sets forth three scenarios under which an action is frivolous,
none of which mention, or even allude to, any requirement that the prevailing party seek a
protective order. Indeed, no portion of MCL 600.2591 evidences any intent on the part of our
Legislature to condition relief upon the prevailing party’s filing of any motion, save for the
motion for sanctions itself. “We do not read requirements into [an unambiguous] statute where
none appear in the plain language,” People v Feeley, 499 Mich. 429, 439; 885 NW2d 223 (2016),
and we refuse to do so here.
Moreover, the proper inquiry under MCL 600.2591 focuses on whether the action was
frivolous at the time the party initiates it. In re Costs and Attorney Fees, 250 Mich. App. at 94-95.
While we note that, in an appropriate case, a prevailing party’s failure to seek a protective order
may impact whether the fees and costs sought are reasonable under MCL 600.2591(2) to the
extent that they may have been prevented by that order, a prevailing party’s failure to seek a
protective order after their opponent files an action simply does not change whether that action
was frivolous at the time initiated. Accordingly, we conclude that the probate court erred by
holding that appellants’ failure to seek a protective order prevented them from obtaining relief
under MCL 600.2591.
As to the probate court’s second reason, however, we conclude that the court’s finding
that appellees’ action was not frivolous at the time initiated was not clearly erroneous. Before
the probate court and on appeal, appellants argue that appellees’ litigation conduct demonstrated
that their primary purpose in initiating the claims was to harass, embarrass, or injure appellants.
In opposition, appellees argue that discovery and motion practice throughout the lawsuit are
legally irrelevant to whether a party’s action was frivolous when initiated. While it is certainly
correct that a trial court’s focus must be on what a party intended when initiating the action, it
does not follow that subsequent litigation conduct is necessarily and always irrelevant to that
inquiry. See, e.g., Dep’t of Natural Resources v Bayshore Assoc, Inc, 210 Mich. App. 71, 89-90;
533 NW2d 593 (taking note of post-filing conduct in awarding fees under MCL 600.2591).
Subsequent conduct could be relevant, for example, to show that a plaintiff really did intend to
harass the defendant as opposed to being honestly mistaken about the factual strength of its
claims, as a mistaken plaintiff would likely react much differently in the face of damning
counter-evidence obtained during discovery than would a harassing plaintiff.
Nonetheless, even if certain conduct during the litigation is designed to harass,
embarrass, or injure, an action is still not “frivolous” under the meaning of MCL
600.2591(3)(a)(i) unless the “primary purpose in initiating the action or asserting the defense
was to harass, embarrass, or injure the prevailing party.” MCL 600.2591(3)(a)(i)(emphasis
added). Although we do not condone some of the parties’ discovery conduct, we are unable to
conclude that the probate court clearly erred when it concluded that the appellees’ primary
purpose in initiating the action was not to harass, embarrass, or injure appellants.
In this case, appellants, who were the ex-spouses of two of the appellees, continued their
relationships with the decedent after their divorces from those appellees and after the appellees
and decedent became estranged. As a panel of this Court previously noted, appellees were
“correct that there was evidence that [appellant Bonnie] Rowan schemed to turn decedent against
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his children and that decedent’s relationship with his children soured after Rowan started to
spend more time with decedent.” In re Robert Winfield Cederquist Revocable Trust,
unpublished opinion per curiam of the Court of Appeals, issued July 28, 2015 (Docket Nos.
321290, 321291, 321350), p 3. Moreover, Rowan benefitted from a series of transactions made
by the decedent and “had the opportunity to influence decedent.” Id. at 4. There was also
evidence showing that Rowan was the decedent’s caregiver as well as “evidence of decedent’s
enfeebled health while decedent was signing the beneficiary designations and estate plan
documents.” Id.
These facts support the probate court’s finding that appellees believed that they had a
legitimate claim that appellants unduly influenced decedent with respect to his estate, retirement
accounts, and trust. In turn, the facts similarly support the probate court’s finding that appellees’
primary purpose in initiating the actions was not to harass, embarrass, or injure appellants. As
the probate court acknowledged, “the gravamen of [appellants’ argument for sanctions was] the
extensive and unproductive discovery that resulted in summary disposition.” Even assuming that
discovery efforts during litigation were excessive and designed to increase the cost of litigation,
we are not left with a definite and firm conviction that a mistake has been made with respect to
the probate court’s finding that the primary purpose in initiating the actions was not to harass,
embarrass, or injure. Holton, 303 Mich. App. at 734 n 20. Because the probate court’s conclusion
as to frivolousness was not clearly erroneous, its improper conclusion regarding appellants’
failure to seek a protective order was harmless. MCR 2.613(A); MCR 5.001.
Appellants final argument on appeal is that the probate court rewrote the definition of
“frivolous” by requiring that more than one of the conditions under MCL 600.2591(3)(a) be met.
This argument is not supported by the record. In reference to MCL 600.2591(3)(a)(ii) and (iii),
the probate court stated, “Just because the Court cannot find that Plaintiffs’ cause of action was
devoid of legal merit and/or had no reasonable basis, does not conclude the inquiry whether to
grant cost in attorney fees under the statute.” The probate court then went on to analyze, as
described above, whether the appellee’s primary purpose in initiating the action was to harass,
embarrass, or injure appellants under MCL 600.2591(3)(a)(i). Accordingly, we conclude that the
probate court properly understood that MCL 600.2591(3)(a) sets forth three scenarios under
which an action may be frivolous, any one of which would be sufficient to warrant sanctions.
Thus, appellants’ argument is unavailing.
Of final note, we acknowledge that, during an earlier interlocutory appeal, a previous
panel of this Court expressed frustration at the discovery practice of the parties involved in this
case. While this frustration may have been warranted, no party sought sanctions for that conduct
under MCR 2.302(G) or MCR 2.114. Whether the probate court could have awarded sanctions
under those rules is therefore not before this Court. See Providence Hosp v Natl Labor Union
Health & Welfare Fund, 162 Mich. App. 191, 194; 412 NW2d 690 (1987) (“Generally, this Court
will not review issues that were not raised and decided by the trial court.”). Accordingly, the
appellees’ discovery conduct in the proceeding below is only relevant insofar as it evidenced the
frivolous nature of appellees’ action at the outset. On that question, we conclude that the probate
court did not clearly err in concluding that the appellees’ action was not frivolous.
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Affirmed.
/s/ William B. Murphy
/s/ David H. Sawyer
/s/ Brock A. Swartzle
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