STATE OF MICHIGAN IN THE 17th CIRCUIT COURT FOR KENT COUNTY

DAVID L. COBB,

Plaintiff,

vs.

VARNUM, RIDDERING, SCHMIDT & HOWLETT, LLP; and VARNUM, LLP,

Defendants.

Case No. 13-10838-NMB

HON. CHRISTOPHER P. YATES

OPINION AND ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY DISPOSITION UNDER MCR 2.116(C)(10)

In May 2008, Plaintiff David Cobb loaned $500,000 to Darin DeClark. That turned out to

be a terrible investment. DeClark defaulted on his obligation to repay the loan, and a dower interest

ofDeClark' s wife complicated the sale of real property that secured the loan. Cobb filed this action

in an effort to recover his loss on the loan from Defendant Varnum, Riddering, Schmidt & Howlett,

LLP ("Varnum"), 1 which provided Cobb with legal advice about the transaction. Specifically, Cobb

contends that Varnum breached its professional obligations to warn him of the dower problem and

to obtain a personal guaranty of the loan from Darin DeClark's father, Bruce DeClark. The Court

concludes, however, that Cobb's legal-malpractice claims are unsustainable because the dower issue

ultimately worked out in Cobb's favor, thereby allowing him to obtain the full value of the property,

and Varnum' s conduct did not deprive Cobb of a personal guaranty from Bruce DeClark. Therefore,

the Court must award summary disposition to Varnum under MCR 2.l 16(C)(10).

1 Plaintiff Cobb has named as defendants "Varnum, Riddering, Schmidt & Howlett, LLP" and "Varnum, LLP." Those two defendants appear to be the same entity, so the Court shall treat the two defendants as one and the same.

I. Factual Background

Defendant Varnum has moved for summary disposition pursuant to MCR 2.116(C)(l 0) . "In

evaluating a motion for summary disposition brought under this subsection, a trial court considers

affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties in the light

most favorable to the party opposing the motion." Maiden v Rozwood, 461Mich109, 120 (1999).

Accordingly, the Court shall set the factual background by discussing the entire record in the light

most favorable to Plaintiff Cobb.

When Darin DeClark and his father, Bruce DeClark, needed capital to expand their business

in 2008, they approached Plaintiff Cobb to ask about a loan. 2 See Defendants' Motion for Summary

Disposition, Exhibit 2 (Deposition of David Cobb at 25). Those discussions culminated on May 15,

2008, in a $500,000 loan from Cobb to Darin DeClark that was memorialized by a promissory note

and a personal guaranty signed by Darin Declark. 3 Id., Exhibits 10-14. Those loan documents came

from Varnum, which had sent them in generic form to Cobb on November 30, 2007. See id., Exhibit

2 (Deposition of David Cobb at 36) & Exhibit 9 (e-mail from Peter Roth to Cobb on November 30,

2007). But Cobb negotiated the terms of the Darin DeClark loan without any input from Varnum.

See id., Exhibit 2 (Deposition of David Cobb at 26, 57).

2 Darin DeClark and his father, Bruce DeClark, apparently owned and operated a company called Superior Manufacturing Group. See Defendants' Motion for Summary Disposition, Exhibit 2 (Deposition of David Cobb at 29). As Plaintiff Cobb explained, "Bruce was the brains behind the business and he had the relationships with the vendors[,]" but "he had the business name in Darin's name[.]" Id.

3 The record includes two versions of both the promissory note, see Defendants' Motion for Summary Disposition, Exhibits 10-11, and the guaranty. See id., Exhibits 12-13. Careful scrutiny reveals that each document was dated May 15, 2008, and signed by Darin DeClark, but not notarized until May 22, 2008. Compare id., Exhibits 10, 12 with id., Exhibits 11 , 13. The check from Plaintiff Cobb to Darin DeClark bears the date of May 15, 2008. See id., Exhibit 14.

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On May 16, 2008, Plaintiff Cobb spoke with Attorney Peter Roth of Defendant V am um. See

Defendants' Motion for Summary Disposition, Exhibit 8 (Varnum billing sheet). To secure the loan

to Darin DeClark, Cobb received mortgages on two parcels of real property- a vacant parcel owned

by Darin DeClark, and a cottage owned by Bruce DeClark. See id., Exhibit 2 (Deposition of David

Cobb at 49). Cobb retained Attorney Roth to draft and record those mortgages. See id., Exhibit 3

(Deposition of Peter Roth at 24). By all accounts, Attorney Roth successfully completed that task,

see id., Exhibits 19-20 (recorded mortgages), but the parties disagree about whether Attorney Roth

had additional obligations to Cobb that Attorney Roth failed to satisfy. Specifically, Cobb contends

that Attorney Roth should have advised him about potential complications arising from the dower

rights of Darin DeClark' s wife with regard to one mortgaged parcel and should have suggested that

Cobb obtain a personal guaranty from Bruce DeClark.

In October 2011 , Darin DeClark defaulted on his obligation under the promissory note. See

Defendants' Motion for Summary Disposition, Exhibit 2 (Deposition of David Cobb at 66-67). In

response, Plaintiff Cobb began exercising his rights as a secured creditor, but he discovered that the

parcel of real estate owned by Darin DeClark had potential dower issues and that Bruce DeClark had

never signed a personal guaranty. See id. (Deposition of David Cobb at 67, 69). Consequently, on

November 15, 2013, Cobb filed suit against Defendant Varnum, claiming professional negligence

with respect to the unreleased dower interest of Darin DeClark's wife and the absence of a personal

guaranty signed by Bruce DeClark. Varnum ultimately moved for summary disposition under MCR

2.116(C)(IO), contending that both aspects of Cobb's legal-malpractice claim are fatally defective.

Therefore, the Court must now determine whether Cobb can proceed to trial on his theories oflegal

malpractice despite Varnum's well-supported motion for summary disposition.

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II. Legal Analysis

Defendant Varnum insists that the Court must resolve this entire case in its favor by awarding

summary disposition under MCR 2. l l 6(C)(l 0). Such relief should be granted if"there is no genuine

issue regarding any material fact and the moving party is entitled to judgment as a matter of law."

West v General Motors Corp, 469 Mich 177, 183 (2003). "A genuine issue of material fact exists

when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue

upon which reasonable minds might differ." Id. Using these well-understood standards, the Court

must decide whether Varnum is entitled to summary disposition on each of Plaintiff Cobb' s theories

of legal malpractice.

To prevail on his claim for legal malpractice, Plaintiff Cobb must demonstrate "the existence

of an attorney-client relationship, (2) negligence in the legal representation of the plaintiff, (3) that

the negligence was the proximate cause of an injury, and ( 4) the fact and the extent of the injury

alleged." Kloian v Schwartz, 272 Mich App 232, 240 (2006). In legal malpractice cases, "an expert

is usually required to establish the standard of conduct, breach of the standard, and causation." Dean

v Tucker, 205 Mich App 547, 550 (1994). To be sure, "[w]here the absence of professional care is

so manifest that within the common knowledge and experience of an ordinary layman it can be said

that the defendant was careless, a plaintiff can maintain a malpractice action without offering expert

testimony." Law Offices of Lawrence J Stockier, PC v Rose, 174 Mich App 14, 48 (1989). But as

our Court of Appeals has noted (albeit in an unpublished decision), such cases are "rare." Passeno

v Hullman, Nos 252486 & 254227, slip op at 2 (Mich App April 26, 2005) (unpublished decision).

Accordingly, a legal-malpractice claim ordinarily cannot survive without expert testimony. In light

of these principles, the Court shall consider Cobb' s two malpractice theories seriatim.

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A. The Dower Issue.

Plaintiff Cobb complains that Attorney Roth - on behalf of Defendant V am urn - neglected

to provide notice of a potential dower problem with respect to the parcel of real estate held by Darin

DeClark. But Cobb's counsel forthrightly conceded at oral argument and in a supplemental brief that

Cobb "recently received a deed releasing the dower interest [that] cured the Defendant's malpractice

error . ... "4 See Plaintiffs Supplemental Brief in Opposition to Defendants' Motion for Summary

Disposition at 1. Because of that development, Cobb no longer faces any cloud on the title that could

impair his ability to exercise his rights under the mortgage on that parcel of real estate. Nevertheless,

Cobb insists that he still can demand damages from V arnurn for its alleged malpractice in failing to

inform him of the potential impact of the dower interest of Darin DeClark's wife. Specifically, Cobb

contends that he can recover the attorney fees and costs that he expended in his effort to clear up the

dower problem. The Court disagrees.

Under Michigan law, attorney fees ordinarily "are not recoverable as an element of costs or

damages unless expressly allowed by statute, court rule, common-law exception, or contract." See

Marilyn Froling Revocable Living Trust v Bloomfield Hills Country Club, 283 Mich App 264, 297

(2009). Plaintiff Cobb has no statute, court rule, common-law exception, or contractual language

to support his demand for attorney fees. Instead, he relies entirely upon the argument that he had to

expend attorney fees in a foreclosure action and in the instant case to clear up the dower problem.

Although that expenditure may evoke some measure of sympathy, the Court cannot simply disregard

Michigan law and award attorney fees to Cobb in the absence of some legal basis to do so. The only

4 A copy of the recorded deed in lieu of foreclosure signed by Darin DeClark and his wife, Debra DeClark, has been provided to the Court as Exhibit 6 to the plaintiff's supplemental brief in opposition to the defendants' motion for summary disposition.

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precedent that offers any assistance to Cobb "allows recovery of reasonable attorney fees incurred

in prior litigation with a third party- not with the defendant." G & D Co v Durand Milling Co, Inc,

67 Mich App 253, 257 (1976). But even that decision conditions the recovery of attorney fees upon

a showing that "the party at fault is guilty of malicious, fraudulent or similar wrongful conduct, not

simple negligence as is claimed here." Id. at 260. Because Cobb has neither alleged nor shown that

V amum engaged in "malicious, fraudulent or similar wrongful conduct" in failing to advise him of

the dower problem, Cobb cannot recover his attorney fees as damages. 5 See id. Therefore, the Court

must grant summary disposition to Varnum on Cobb' s legal-malpractice claim predicated upon the

dower problem.

B. The Personal Guaranty From Bruce DeClark.

Plaintiff Cobb contends that Attorney Roth- acting on behalf of Defendant V amum - should

have pointed out that a personal guaranty from Bruce DeClark would have afforded more protection

to Cobb than the personal guaranty executed by the obligor on the promissory note, Darin DeClark.

Although the Court readily recognizes that a personal guaranty from Bruce DeClark would have been

much more helpful to Cobb than the essentially redundant guaranty from Darin DeClark, the Court

cannot deduce that Cobb necessarily has a viable legal-malpractice claim for that reason. Cobb has

proffered no expert testimony - and has even failed to identify any expert witness - to support that

legal-malpractice claim. That shortcoming, in and of itself, almost certainly forecloses Cobb from

proceeding on his legal-malpractice claim. See, ~. Beattie v Firnschild, 152 Mich App 785, 790-

5 To the extent that Plaintiff Cobb demands costs from the foreclosure litigation as an element of damages in the instant case, he is barking up the wrong tree. Cobb could have sought costs in the foreclosure action ifhe was the "prevailing party" there, see MCR 2.625(G)(l ), but Cobb cannot use the instant case as a vehicle for obtaining costs incurred in that separate matter.

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793 (1986) (requiring expert testimony where attorney "was representing members of this family in

a simple real estate transaction").

More fundamentally, Plaintiff Cobb's legal-malpractice theory impermissibly rests upon pure

speculation that either Attorney Roth (acting on behalf of Defendant Varnum) or Cobb (acting at the

behest of Attorney Roth) could have persuaded Bruce DeClark to sign a personal guaranty. In fact,

Bruce DeClark testified that he would not have agreed to sign a personal guaranty, see Defendants'

Motion for Summary Disposition, Exhibit 6 (Deposition of Bruce DeClark at 16), and Cobb himself

acknowledged that Bruce DeClark never agreed to guarantee the loan. See id., Exhibit 2 (Deposition

of David Cobb at 100). To the extent that Cobb now insists he would have refused to make the loan

to Darin DeClark without a guaranty from Bruce De Clark, the record reveals that Cobb's contention

constitutes unfounded speculation. Cobb did not even investigate the value of the two properties on

which he received mortgages to secure the loan, see id. (Deposition of David Cobb at 49-50), which

reveals Cobb' s willingness to extend the $500, 000 loan to Darin DeClark despite potential concerns

about the extent of Cobb's protection in the event of a default. Moreover, Cobb gave Darin DeClark

the personal check for $500,000 on May 15, 2008, before Darin DeClark had signed the promissory

note or the guaranty, id., (Deposition of David Cobb at 43-45), which bespeaks Cobb's willingness

to furnish $500,000 to Darin DeClark even in the absence of adequate assurance of repayment.

Our Court of Appeals has held, in a legal-malpractice case, that the '"plaintiff must introduce

evidence which affords a reasonable basis for the conclusion that it is more likely than not that the

conduct of the defendant was a cause in fact of the result."' Pontiac School Dist v Miller, Canfield,

Paddock & Stone, 221 Mich App 602, 615 (1997). The "'mere possibility of such causation is not

enough[.]"' Id. Here, Plaintiff Cobb has presented no evidence to establish that any shortcomings

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in Defendant V am um' s representation caused Cobb to lose the protection of a guaranty from Bruce

DeClark or to go forward with a loan that Cobb otherwise would have refused in the absence of that

guaranty. Because this lack of evidence on the element of causation dooms Cobb's claim for legal

malpractice, the Court must grant summary disposition to Varnum on Cobb's claim regarding Bruce

DeClark's personal guaranty.

III. Conclusion

For all of the reasons set forth in this opinion, the Court must grant summary disposition to

the defendants under MCR2. l 16(C)(IO) on every aspect of Plaintiff Cobb's legal-malpractice claim.

Cobb's failure to bolster his claim with any expert testimony, his satisfactory resolution of the dower

problem, and the speculative nature of causation regarding Bruce DeClerk's personal guaranty leave

the Court no other option. 6

IT IS SO ORDERED.

Dated: January 26, 2015 HON. CHRISTOPHERP. YATES (P41017) Kent County Circuit Court Judge

6 Although the Court's ruling appears to be a final order that resolves the last pending claim and closes the case, the Court has chosen not to include that determination in this opinion. Instead, the Court shall conduct a status conference before declaring the case closed.

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