4.3Mandatory Compensatory Sanctions
Under MCL 600.1721, compensatory sanctions are mandatory where the misconduct has caused an actual loss or injury to a person. MCL 600.1721 states:
“If the alleged misconduct has caused an actual loss or injury to any person the court shall order the defendant to pay such person a sufficient sum to indemnify him [or her], in addition to the other penalties which are imposed upon the defendant. The payment and acceptance of this sum is an absolute bar to any action by the aggrieved party to recover damages for the loss or injury.”
MCL 600.1721 applies to both civil and criminal contempt. Taylor v Currie, 277 Mich App 85, 100 (2007). “Because MCL 600.1721 does not make a distinction between civil and criminal contempt, but rather requires a trial court to order a contemnor to indemnify any person who suffers an ‘actual loss or injury’ caused by the contemnor’s ‘misconduct,’ we hold that the indemnification sanction mandated by MCL 600.1721 applies even when a trial court imposes a punitive (i.e., criminal) sanction on a contemnor.” Taylor, 277 Mich App at 100. However, because compensation is a type of civil contempt sanction, enforcement under MCL 600.1721 is accomplished by way of a civil contempt proceeding. In re Contempt of Dougherty, 429 Mich 81, 97, 100, 102 (1987).
“[T]he elements necessary to establish entitlement to relief under [MCL 600.1721] are essentially the same elements necessary to establish a tort, i.e., a legal duty, breach of that duty, causation, and injury.” In re Bradley Estate, 494 Mich 367, 390 (2013). “Stated differently, the plain language of MCL 600.1721 requires a showing of contemptuous misconduct that caused the person seeking indemnification to suffer a loss or injury and, if these elements are established, requires the court to order the contemnor to pay ‘a sufficient sum to indemnify’ the person for the loss.” In re Bradley Estate, 494 Mich at 391.
A.Determining the Amount of Loss or Injury
“Where compensation is intended, a fine is imposed, payable to the complainant. Such fine must of course be based upon evidence of complainant’s actual loss, and his [or her] right, as a civil litigant, to the compensatory fine is dependent upon the outcome of the basic controversy.”1 United States v United Mine Workers, 330 US 258, 304 (1947).
The party requesting compensation bears the burden of proving that the contemptuous conduct caused actual loss or injury and the amount of the loss or injury. In re Contempt of Rochlin, 186 Mich App 639, 650-651 (1990) (noting that the trial court erred by failing to make findings relative to the amount of the loss suffered by the plaintiff as a result of the defendant’s criminal contempt and instead accepted the amount proposed by the plaintiff’s counsel without allowing the plaintiff’s counsel an opportunity to explain the basis for the figure; accordingly, the Court held that the compensatory damage award was erroneous, but that on remand, the plaintiff must be given an opportunity to prove the basis for the damages claimed).
The court should employ general principles of damages to determine the amount of the award. See Birkenshaw v Detroit, 110 Mich App 500, 510 (1981) (noting that the trial court “properly applied the legal measure of damages in tort” when reviewing the trial court’s award for damages stemming from the defendant’s contemptuous conduct). See also In re Bradley Estate, 494 Mich at 393 (holding that “a civil contempt petition seeking indemnification damages under MCL 600.1721 seeks to impose ‘tort liability’”).
Compensatory sanctions under MCL 600.1721 “‘may include attorney fees that occurred as a result of the other party’s contemptuous conduct.’” Taylor v Currie, 277 Mich App 85, 100 (2007), quoting Homestead Dev Co v Holly Twp, 178 Mich App 239, 246 (1989). See also In re Contempt of Henry, 282 Mich App 656, 685 (2009).
Recoverable attorney fees include those “related to the prosecution of the contempt, the investigation of the contempt, [the] fashioning [of] a remedy for the contempt,” and those incurred in determining the amount of damages. Taylor, 277 Mich App at 102; In re Contempt of Calcutt, 184 Mich App 749, 764 (1990). “[A]ttorney fees incurred in prior litigation are recoverable as damages if proximately caused by a defendant’s wrongful conduct.” Birkenshaw, 110 Mich App at 510. However, attorney fees incurred in separate proceedings that were “ancillary” to the contempt proceedings were not recoverable under MCL 600.1721, which authorizes only the fees “which resulted directly from the contempt.” Plumbers and Pipefitters Local No 190 v Wolff, 141 Mich App 815, 819 (1985). Similarly, attorney fees awarded in regard to the appointment of a receiver and monitors were not recoverable to the extent that those appointments were related to an injunction that “was primarily based on the plaintiff’s case-in-chief and was only tenuously connected to the contempt[.]” Taylor, 277 Mich App at 102.
Notably, “MCR 3.708(H)(5) explicitly provides different punishments for criminal-contempt cases involving a PPO violation and civil-contempt cases involving a PPO violation . . . .” LAC v GLS, ___ Mich App ___, ___ (2024). “In the case of civil contempt, [MCR 3.708(H)(5)(b)] explicitly adopts the sanctions provided in MCL 600.1715 and MCL 600.1721.” LAC, ___ Mich App at ___ (quotation marks and citation omitted). Additionally, “[b]oth statute and court rule provide a specific punishment for a PPO violation that does not include the assessment of attorney fees.” Id. at ___. “Taxation of costs is generally not allowed absent authority flowing from a statute or court rule.” LAC, ___ Mich App at ___ (quotation marks and citation omitted). “There is nothing in the sentencing scheme in MCR 3.708(H)(5) that expresses an abrogation of this general rule in the case of contempt as a result of a PPO violation.” LAC, ___ Mich App at ___ (quotation marks and citation omitted). “[C]riminal contempt sanctions under [MCR 3.708(H)(5)(a)] do not include the indemnification provisions of MCL 600.1721.” LAC, ___ Mich App at ___ (quotation marks and citation omitted). Thus, “the trial court erred when it ruled that attorney fees may be awarded in a criminal contempt proceeding for violation of a PPO.” Id. at ___.
When a party challenges the reasonableness of the attorney fees requested, the trial court must conduct an evidentiary hearing. B & B Investment Group v Gitler, 229 Mich App 1, 15-16 (1998) (citation omitted). But see Taylor, 277 Mich App at 101 (finding no error in the trial court’s failure to hold an evidentiary hearing where the defendants challenged the reasonableness of the plaintiff’s attorney fees but did not request a separate evidentiary hearing, and where the defendants were afforded ample opportunity to contest the reasonableness of the fees at a hearing on the plaintiff’s motion for attorney fees, the trial court accepted two separate briefings from the parties on attorney fees, and it made general findings concerning the various expenses that were caused by the contemptuous conduct). For a detailed discussion of determining the reasonableness of attorney fees, see the Michigan Judicial Institute’s Civil Proceedings Benchbook, Chapter 8.
The court may order a per diem amount of damages for a continuing contempt. Catsman v Flint, 18 Mich App 641, 651 (1969).2 Once the contempt abates, the court may determine the exact amount of damages caused by the defendant’s failure to comply with the court’s order. Id. (affirming the trial court’s award of $150 per day to cover the cost of hiring a truck to haul away daily sewage until the city complied with the court’s order to hook up the development’s sewer).
An attorney found in contempt of court for failing to appear in court at the scheduled time may properly be ordered to reimburse the county for costs in impaneling the jury under MCL 600.1721. In re Contempt of McRipley, 204 Mich App 298, 301-302 (1994) (authorizing the trial court to order indemnification of the county for its costs of “calling in the jury panel and paying its mileage, in addition to any other penalties that may be lawfully imposed[,]” and rejecting the argument that the costs were part of the fine authorized under MCL 600.1715(1)).3
“[A] party that elects to pursue the statutory remedy available under MCL 600.1721 will be barred from obtaining relief against governmental agencies because those entities are entitled to immunity from “tort liability” under MCL 691.1407(1) of the [Governmental Tort Liability Act]. The logical result of this conclusion is that courts are prohibited from exercising their contempt powers by punishing a governmental agency’s contemptuous conduct through an award of indemnification damages under MCL 600.1721.” In re Bradley Estate, 494 Mich at 394.4
1 The Court uses the term “fine” here to describe what MCL 600.1721 refers to as “damages.”
2 Per diem damages are not the same thing as fines under MCL 600.1715(1). Catsman, 18 Mich App at 651.
3 In McRipley, the Court relied on MCL 600.1721 to find that a contemnor “may properly be assessed costs to indemnify the county for calling in the jury panel and paying its mileage[.]” McRipley, 204 Mich App at 302 (emphasis added). However, MCL 600.1721 mandates indemnification where “the alleged misconduct has caused an actual loss or injury to any person[.]” After McRipley was decided, MCL 769.1f(1)(l) was amended to permit, but not require, reimbursement for the costs of prosecution upon a finding of guilt for criminal contempt for failing to make a court-ordered appearance. See Section 4.2(B)(1) for more information on reimbursement under MCL 769.1f.
4 The Court noted that this holding does not infringe on the judiciary’s inherent power to punish contempt by fine, imprisonment, or both. In re Bradley Estate, 494 Mich at 395-396.