McAuley v. General Motors Corp

In McAuley v. General Motors Corp, 457 Mich 513, 518; 578 NW2d 282 (1998), the Supreme Court of Michigan held that a complete recovery of attorney fees under the Handicappers' Civil Rights Act, MCL 37.1101 et seq.; MSA 3.550(101) et seq., precluded the plaintiff from also recovering attorney fees pursuant to the mediation sanctions rule. The Court explained: We begin by noting that Michigan follows what is commonly termed the "American rule" with regard to payment of attorney fees. . . . Under this rule, attorney fees generally are not recoverable from the losing party as costs in the absence of an exception set forth in a statute or court rule expressly authorizing such an award. . . . It is well established that generally only compensation damages are available in Michigan and that punitive sanctions may not be imposed. . . . Because the purpose of compensatory damages is to make the injured party whole for the losses actually suffered, the amount of recovery for such damages is inherently limited by the amount of the loss; the party may not make a profit or obtain more than one recovery. . . . That an award of attorney fees is typically compensatory in nature is illustrated by the well-established body of law holding that a litigant representing himself may not recover attorney fees as an element of costs or damages under either a statute or a court rule because no attorney fees were incurred. . . . Thus, in order for a party to recover attorney fees under the mediation rule, he must show that he has incurred such fees. . . . Obviously, if the prevailing party has already been fully reimbursed for reasonable attorney fees through the operation of a statutory provision . . . there are no "actual costs" remaining to be reimbursed under the court rule. On the other hand, if the applicable statute limits the recovery of attorney fees to something less than a reasonable attorney fee and there are actual costs remaining, an additional award may be appropriate in some cases. McAuley, supra at 519-521