In its December 20, 2012 opinion in Speicher v Columbia Township Board of Election Commissioners, the Michigan Court of Appeals held that a plaintiff who was entitled by statute to “actual attorney fees” could recover only those attorney fees that were not “clearly excessive” under the Michigan Rules of Professional Conduct. The Court of Appeals also held that the trial court erred by concluding that the fees were “clearly excessive” without giving the plaintiff and his attorney an opportunity to justify those fees. Speicher therefore stands for two important propositions: (1) attorney fees can be scrutinized for excessiveness even when a party is entitled to “actual attorney fees” and (2) a court should conduct an evidentiary hearing before finding fees to be excessive, giving an attorney an opportunity to explain the fees charged.
Although the Speicher court framed the issue as one of statutory construction–as whether the Open Meetings Act itself allowed an inquiry into the excessiveness of fees charged–the panel found its solution in extra-statutory materials. It acknowledged that the governing statute referred to “actual” attorney fees and that, under governing case law, “actual” means “existing in act, fact, or reality; real.”
But the Court of Appeals also held that any fees charged by a lawyer are subject to the Michigan Rules of Professional Conduct and, in particular, to Rule 1.5’s prohibition against “illegal” or “clearly excessive” fees. The Speicher panel held that Rule 1.5 creates an overriding public policy that prohibits a court from awarding excessive fees simply because they are “actual” fees. Consequently, the Court of Appeals agreed with the trial court that the defendant could challenge the $32,000 that the plaintiff’s attorney charged for a straightforward and largely uncontested lawsuit under the Open Meetings Act.
The Court of Appeals disagreed, however, with the manner in which the trial court assessed the reasonableness of those fees. The trial court’s finding that the plaintiff’s fees were excessive was erroneous because the trial court didn’t give the plaintiff and his attorney an opportunity to address whether the fees were indeed excessive under MRPC 1.5. The Court of Appeals therefore held that, on remand, the plaintiff and his attorney were to be given an opportunity to address whether his actual attorney fees were excessive.
The Speicher panel held that the plaintiff and his attorney could only recover fees that were incurred as part of their Open Meetings Act challenge. This conclusion is compelled by the plain language of the Open Meetings Act itself.
Somewhat more surprising, however, is the panel’s decision to prohibit the recovery of fees relating to the attorney’s examination of general election law. Given the panel’s conclusion that the attorney had the right to address the application of Rule 1.5 to his fees, one might have expected the panel to give the plaintiff and his attorney a similar opportunity to explain the need for research into general election law. Instead, the Court of Appeals held that this research, which went beyond the narrow issues raised by the plaintiff’s Open Meetings Act lawsuit, was not a necessary part of that lawsuit.