2011-2012 Case Evaluation Case Law Update

Lee Hornberger, an arbitrator and mediator in Traverse City, Michigan, posted a summary of the Michigan Court of Appeals cases regarding case evaluation since January 2011.

There was only one published case during that period, Van Elslander v. Thomas Sebold & Associates, Inc., which was published in June 2012. The parties engaged in a case evaluation on April 13, 2005. Van Elslander was awarded $173,500, which he rejected. Van Elslander eventually won at trial; with costs, the award to Van Elslander totaled $706,465.30. The remaining Defendants in the case, the Follises, appealed, and the appellate court remanded for a new trial to determine whether the Follises had breached their escrow agreement. The jury found no cause of action, and the trial court awarded the trial court awarded the Follises $86,813.98 in taxable costs and attorney fees of $689,262.50 as sanctions, for a total award of $776,076.48.

Van Elslander appealed the sanctions, arguing that since the case evaluation occurred in a separate trial, the penalties for rejecting the award should not follow him. The Court of Appeals rejected his arguments, finding that the fees generated in connection with both trials were necessitated by the rejection of the mediation evaluation because they arose after the rejection.

The Court of Appeals then went on to examine and pick apart what costs the Follises were awarded, remanding issues to the lower court to determine if the costs were appropriate:

• Two of the witnesses that the Follisses identified as expert witnesses were instead lay witnesses, and their costs could not be taxed;
• Whether time spent consulting with the attorneys was included in the true experts' bills, as educating counsel cannot be taxed;
• Costs attributable to a replacement expert witness when the first was dismissed for communication issues;
• The cost of a loan to obtain security for the appeal bond;
• The cost of the transcripts prepared for the first appeal;
• Copies of deposition transcripts and video depositions that were not properly filed with the court;
• Costs for the service of trial subpoenas that may exceed statutory limits; and
• Copying costs for third-party records-only subpoenas.

The Court of Appeals also discussed the award of attorneys fees, stressing that the award must be for reasonable attorneys fees. The trial court awarded each attorney up to two-hundred dollars an hour above what the attorney actually charged the Follises per hour. Additionally, the Follis's attorney son provided legal services to his parents for free, and was awarded $250 per hour by the trial court.

Both parties have filed leave to appeal with the Michigan Supreme Court.

More information about Mr. Hornberger, including the full article, can be found at www.leehornberger.com.