City National Bank v. Westland Towers Apartments

V. J. Brennan, P. J. This case appears before us on remand from the Supreme Court for reconsider [152] ation. In its order, the Supreme Court stated, "The opinion of the Court of Appeals does not provide an adequate basis for substituting that Court’s judgment for that of the arbitrator and of the trial judge who entered judgment on the award”. 413 Mich 937 (1982). We agree and affirm the arbitrator’s findings and the confirmation of those findings by the trial judge. In this case, Gropman, the appellee, was the attorney at one time for the Granaders, the appellants, and filed a motion in circuit court for $9,020.70 in attorney fees in addition to what the Granaders had already paid to him. The Granaders denied that they owed attorney fees to Gropman. Thereafter, the parties agreed to submit the dispute regarding attorney fees to arbitration. The arbitrator found that Gropman was entitled to an additional $33,000 in attorney fees. The trial judge then entered a judgment for the amount awarded by the arbitrator. On appeal, the Granaders claimed that the arbitrator exceeded his authority. In our previous opinion, City National Bank of Detroit v Westland Towers Apartments, 107 Mich App 213, 234-235; 309 NW2d 209 (1981) (Judge Brennan, dissenting), the majority reduced the attorney fee award to $9,020.70. We now reinstate the arbitrator’s award. An arbitrator’s award will not be set aside unless the one attacking the award offers proof that the basis of the award was without sufficient factual background. In the present case, appellants have not presented evidence that would be sufficient for us to set aside the arbitrator’s findings. Appellants have not sustained their burden. The arbitrator and the trial judge had an adequate factual basis to establish the attorney fees here. [153] "In any dispute regarding costs or fees, the amounts submitted for settlement are usually figures for which the parties are willing to settle without the necessity of litigation or extended hassle. The figures usually represent amounts for less than the party thinks actually is owing. In short, they represent an offer of compromise. "However, once either party decides to reject the compromised settlement offer, and actual litigation becomes necessary to resolve the dispute, these settlement figures cease to be the guidelines for determination of the actual dispute. The trier must now look to the actual value of the services to determine the disputed fee. " 'The reason for the rule is that the law is said to favor peaceful settlements and that to admit unaccepted offers of compromise or ineffective attempts to reach a settlement would reach quite the opposite result and serve to encourage legal war rather than peace in the settlement of claims already in or headed for litigation. Thus the above source [5 Callaghan’s Michigan Pleading & Practice, § 36.507] indicates that evidence of a compromise or settlement offer may not be received * * * as an admission of a disputed fact.’ Thirlby v Mandeloff, 352 Mich 501, 505; 90 NW2d 476 (1958). "My perusal of the record persuades me that this is applicable to the instant case. Upon going to actual arbitration, the earlier figure was rendered nugatory. Instead, the arbitrator was ordered to act 'for the purpose of determining the reasonable value of fees due’. The order provided further that '* * * the Arbitrator shall make his determination of the reasonable value of the legal services based on the arbitrator’s knowledge and experience of these and similar matters’. "Based upon persuasive, competent and undisputed evidence, the arbitrator determined, and the trial court upheld, the reasonable value of the services in setting the disputed attorney’s fees.” Dissenting opinion of Judge Brennan in City National Bank of Detroit v Westland Towers Apartments, supra, pp 235-236. [154] Affirmed as to the arbitrator’s findings and the confirmation of those findings by the trial judge. M. F. Cavanagh, J., concurred.