In Sunflower Village Homes Assn v Lacy, an unpublished Michigan Court of Appeals opinion, the homeowners association filed suit against the homeowners for unpaid assessments together with interest, late fees, and attorney fees pursuant to the bylaws. The court entered a default against the defendants and Plaintiff moved for a default judgment, supporting the request for attorney fees with an exhibit of the work done by plaintiff’s attorney and a brief walking through the factors which the Michigan Supreme Court has held a court must analyze in determining an award of attorney fees.
The defendants opposed the motion and requested that the defaults be set aside, claiming as a defense that the defendants were not properly served with notice of the assessments. The court denied the request to set aside the defaults, entered a default judgment, but only awarded $500 of the requested attorney fees of over $3,000. Both sides appealed.
The appeals court held that the association bylaws only required notice to be mailed to the defendants, not actually received by them; thus, the claim they did not receive notice was not a meritorious defense.
The court also held that the case had to be remanded to the trial court for consideration of the Smith/Pirgu factors in deciding a reasonable attorney fee. The Michigan Supreme court has ruled that a trial court must “comprehensively review and state its findings with respect to all the factors in the Smith/Pirgu framework” in deciding attorney fees; failure to do so is an abuse of discretion.