Court Of Appeals Clarifies Limits On Treble Damages And Proof Requirements In Conversion Case
Opinion Published: November 13, 2025 (Ackerman, Kelly, O’Brien)
COA Docket No. 371459
Wayne County Circuit Court
Holding: The Court of Appeals affirmed the Trial Court’s award of treble damages as to the documented pecuniary losses, reversed the award of trebled investigatory expenses, vacated the awards for investigatory expenses and attorney fees, and remanded for further proceedings. Investigatory expenses incurred in uncovering or responding to a conversion are not actual damages that can be trebled. In addition, Plaintiff failed to adequately substantiate its claimed investigatory expenses and attorney fees with proof.
Facts: Plaintiff hired Defendant as an office manager, and Defendant worked at the firm’s Detroit office until July 16, 2022, when she abruptly resigned. When she resigned, she deleted an array of electronic information, including her email inbox, an Amazon account that she used for firm purchases, and various administrative files. She admitted that she deleted these things out of spite. After Defendant’s resignation, Plaintiff reviewed its records and discovered that Defendant used the firm’s card for personal expenses. In July 2023, Plaintiff sued for conversion, fraud, embezzlement, and trespass to chattels, where a deposition was taken of Defendant. Defendants admitted to making numerous purchases through the firm’s Amazon account that she shipped to her home, including items such as laundry detergent, makeup, sweatshirts, a bra, and sex toys. In addition, she used the firm’s card to subsidize her own independent entrepreneurial efforts.
Following the deposition, Plaintiff moved for summary disposition under MCR 2.116(C)(10). The Trial Court granted summary disposition as to liability and scheduled a hearing on damages six weeks later. Prior to that hearing, Plaintiff identified $33,665.77 in itemized credit card expenses but requested an increase to $50,000 in damages due to Defendant’s deletion of records. In addition, Plaintiff asked the Trial Court to treble that amount to $150,000, to apply that figure to its fraud and embezzlement counts, and to award an additional $50,000 for trespass to chattels, $100,000 in attorney fees, and $150,000 in exemplary damages. The firm’s new office manager testified to the $33,665.77 in credit card losses and stated that the firm had to pay a bookkeeper to do the review with her, as well as IT to create the documents that Defendant deleted; she thus agreed with the estimate of $100,000 for these expenses.
Defendant requested documentation to substantiate these figures. However, Plaintiff refused to produce records regarding the time and costs incurred of the bookkeeper, the IT staff, and the new manager and attorneys in recreating the lost items. The Trial Court held that additional documentation was not necessary because everything was destroyed, and the Trial Court could not base its decision on simple accounting documentation. The Trial Court ultimately found $33,665.77 in credit card losses and $100,000 in investigatory expenses, trebled those amounts, and added $100,000 in attorney fees, which amounted to a judgment of $500,997.31. Defendant then appealed.
Key Appellate Rulings:
MCL 600.2919a(1)(a) authorizes trebling only of actual damages, not costs.
Plaintiff was awarded treble damages under MCL 600.2919a(1)(a), which allows “[a] person damages as a result of . . . [a]nother person’s stealing or embezzling property or converting property to the other person’s own use” to “recover 3 times the amount of actual damages sustained, plus costs and reasonable attorney fees.” Further, MCR 2.625(J)(3) states that “a judgment for multiple damages under a statute entitles the prevailing party to single costs only, except as otherwise specifically provided by statute or by these rules.” Thus, the Court stated that the statute directs that actual damages sustained be trebled, after which costs are added, and that the same reasoning forecloses trebling of attorney fees.
Here, the Trial Court did not award investigatory expenses as costs under MCL 600.2919a. Instead, the Trial Court treated the investigatory expenses as part of the actual damages to be trebled. The Court held that MCL 600.2919a did not create a new measure of damages, and it remains the same as the common law—the value of the converted property at the time of the conversion—then multiplied by three. Thus, the $100,000 in investigatory expenses could not properly be trebled, as these expenses do not fall within the common law measure of damages for conversion.
The amount for an award of investigatory expenses and attorney fees must be adequately substantiated with reasonable certainty.
The Court has held that a party asserting a claim bears the burden of proving damages with reasonable certainty and that although the certainty requirement is relaxed where the fact of damages has been established, relaxed does not mean eliminated. Hofmann v Auto Club Ins Ass’n, 211 Mich App 55, 108 (1995). Further, the Michigan Supreme Court has held that damages must be proven with reasonable certainty but need not be calculated with absolute exactness. McCullagh v Goodyear Tire & Rubber Co, 342 Mich 244, 257 (1955).
Here, the record does not demonstrate reasonable certainty of Plaintiff’s claimed $100,000 in investigatory expenses. The only evidence was the new office manager’s testimony that the firm had to pay a bookkeeper, IT staff, and attorneys to recreate the files that Defendant deleted. Further, the office manager stated that this was an approximation. The Court held that it was not unreasonable to expect supporting documentation for this estimate. Because Plaintiff failed to provide data from which the amount of the loss could be ascertained as a matter of reasonable inference, the $100,000 investigatory expenses award was vacated.
Further, for attorney fees, the party seeking the fees bears the burden of establishing their reasonableness. McCallum v M 97 Auto Dealer, Inc, ___ Mich App ___, ___ (2025) (Docket No. 367630). A trial court must begin its reasonableness analysis by determining the fee customarily charged in the locality for similar legal services and then multiplying that number by the reasonable number of hours spent on the case. Pirgu v United States Auto Ass’n, 499 Mich 269, 275-76 (2016).
Here, the Court found similar deficiencies in the attorney fee award. The Trial Court stated that it was aware that the case required substantial attorney time but did not determine a customary hourly rate or the hours reasonably expended. The Trial Court instead simply settled on $100,000. In addition, Plaintiff’s authorities do not support the award, as Plaintiff did not submit detailed billing reports specifying the tasks performed and the time expended. Thus, because Plaintiff failed to substantiate its claimed attorney fees, the Court vacated the attorney fee award and remanded for consideration consistent with Pirgu.
