Don't Bet the Business

Courtrooms are places where, at times, very sad stories are told. Examples are far too varied and numerous to describe here. Suffice it to say, the portrayals of tragedy on television or in movies can pale to the drama of true-life events revealed in courtrooms each day.

Despite how attorneys typically are characterized, in truth we are not immune to the impact legal proceeding can have on our clients and those we oppose. We do an important job which our clients depend upon. But, I for one, would be less than honest to say there have been no cases I wished - purely out of a sense of sympathy – I, had not won.

Recently, the Michigan Court of Appeals had the opportunity to address an example of when a court’s sympathy or empathy towards a party is misplaced. In Brown v Real Estate Management Specialists, Inc., Case Nos. 351273, 351663 (Mich App, Feb 11, 2021), Brown filed a lawsuit over a residential eviction and lost. After a judgement against Brown was entered, the defendants sought case evaluation sanctions available under MCR 2.403. Indeed, the applicable rule was that Brown "must" pay the "actual costs," to the defendants, including taxable costs and a reasonable attorney fee.  MCR 2.403(O)(1).

When the defendants sought the costs and fees permitted, the rule provided that the trial court "may, in the interest of justice, refuse to award actual costs." MCR 2.403(O)(11). Citing that exception to the rule, the Brown court refused to award the defendants case evaluation sanctions, citing its disappointment with the request, and empathizing with the plaintiff’s property loss. On appeal, the appellate court vacated that portion of the trial court’s ruling.

Equating the case evaluation sanction rule to the similar rule governing offers of judgment (both seek to deter protracted litigation and encourage settlement), the appellate court concluded that the granting of attorney fees should be the rule rather than the exception. Accordingly, the interest of justice exception, relied upon by the trial court, should not preclude an award of costs and attorney fees absent unusual circumstances.

In particular, the appellate court ruled that unusual circumstances for the purpose of applying the interest of justice exception did “not include the reasonableness of the refusal of the case evaluation, the party's ability to pay, and the determination whether the claim was frivolous.” Rather, the exception applies to negate “gamesmanship,” where the law is unsettled and substantial damages are claimed, when indigent parties are involved or when an award of costs and fees would effect third parties to the case.

In Brown, none of those circumstances were present. Rather, the trial court negated the sanctions rule because it felt badly for Brown. This, the appellate court found, was error.  Simply, the trial court’s “empathy with plaintiff” did not constitute an unusual circumstance sufficient to invoke the interests of justice exception. While the trial court felt that Brown was upset by her circumstances and sought to soften the result, the appellate court ruled that refusing to follow MCR 2.403 constituted an abuse of discretion.

What Brown teaches is that sympathy or empathy should not necessarily be barred at the courtroom door. However, such feelings cannot serve to upset the rule of law. Indeed, laws quickly breakdown when they are not applied consistently and at least to some degree predictably.