“Costs will be allowed to the prevailing party in an action, unless prohibited by statute or by these rules or unless the court directs otherwise, for reasons stated in writing and filed in the action.” MCR 2.625(A)(1). “The power to tax costs is wholly statutory, and the prevailing party cannot recover such expenses absent statutory authority.” Guerrero v Smith, 280 Mich App 647, 670 (2008).
B.Rules for Determining the Prevailing Party
“If separate judgments are entered under MCR 2.116 or [MCR] 2.505(A) and the plaintiff prevails in one judgment in an amount and under circumstances which would entitle the plaintiff to costs, he or she is deemed the prevailing party. Costs common to more than one judgment may be allowed only once.” MCR 2.625(B)(1).
“In an action involving several issues or counts that state different causes of actions or different defenses, the party prevailing on each issue or count my be allowed costs for that issue or count. If there is a single cause of action alleged, the party who prevails on the entire record is deemed the prevailing party.” MCR 2.625(B)(2).
“If there are several defendants in one action, and judgment for or dismissal of one or more of them is entered, those defendants are deemed prevailing parties, even though the plaintiff ultimately prevails over the remaining defendants.” MCR 2.625(B)(3).
Because the plaintiff is entitled to plead alternative claims pursuant to MCR 2.111(A)(2), the plaintiff needs to prevail on only one theory when alternative theories are pleaded to be considered the prevailing party. H J Tucker & Assoc, Inc v Allied Chucker & Engineering Co, 234 Mich App 550, 560-561 (1999).
In order to be considered the prevailing party, the party must “show at the very least that he improved his position by the litigation.” Ullery v Sobie, 196 Mich App 76, 82 (1992). Similarly, “[a]n appellant in the circuit court who improves his or her position on appeal is deemed the prevailing party.” MCR 2.625(B)(4).
C.Procedure for Taxing Costs at the Time of Judgment
“Costs may be taxed by the court on signing the judgment, or may be taxed by the clerk . . . .” MCR 2.625(F)(1).
Where the trial court signs the judgment as prescribed under MCR 2.625(F)(1), a party entitled to costs is not required to file a bill of costs under MCR 2.625(H). J C Bldg Corp II v Parkhurst Homes, Inc, 217 Mich App 421, 429 (1996).
When costs are to be taxed by the clerk, the party entitled to costs must present a bill of costs to the clerk “within 28 days after the judgment is signed, or within 28 days after entry of an order denying a motion for new trial, a motion to set aside the judgment, a motion for rehearing or reconsideration, or a motion for other postjudgment relief except a motion under MCR 2.612(C)[.]” MCR 2.625(F)(2).1 “Failure to present a bill of costs within the time prescribed constitutes a waiver of the right to costs.” Id. A copy of the bill of costs must be immediately served on the other party. Id. The clerk is required to review the bill of costs and to be “satisfied that the items charged in such bill are correct and legal; and shall strike out all charges for services, which, in his judgment, were not necessary to be performed.” MCL 600.2461. The clerk’s action on the bill of costs is reviewable by the trial court on the motion of an affected party if the motion is filed within 7 days of notice of the taxing of costs being sent. MCR 2.625(F)(4). Upon review, the court may only consider “those affidavits or objections that were presented to the clerk[.]” Id.
Under MCR 2.625(F), “only the failure to present a bill of costs to the clerk within the time prescribed constitutes a waiver of the right to costs.” Wolfenbarger v Wright, 336 Mich App 1, 31-32 (2021). While a “failure to immediately serve the bill of costs on [the opposing party] undoubtedly constitutes noncompliance with” MCR 2.625(F)(2), “the failure to serve [the opposing party does not] constitute[] a failure to present.” Wolfenbarger, 336 Mich App at 31. “Therefore, because the court rule only provides for a waiver upon the failure to timely present the bill of costs, it should not be read to also allow for waiver for failing to satisfy other aspects of the court rule.” Id. at 31-32 (finding the waiver provision inapplicable where plaintiffs failed to serve the defendant with a copy of the bill of costs but they did timely present the bill of costs to the clerk).
Generally, a trial court should hold an evidentiary hearing when there is a challenge to the reasonableness of the costs requested. Kernen v Homestead Dev Co, 252 Mich App 689, 691 (2002). However, if the parties have created a sufficient record to review the issue, an evidentiary hearing is not required. Id. “Absent any compelling legal authority,“ “the trial court need not hold an evidentiary hearing if it can sufficiently decide an issue on the basis of evidence already presented.” IGCFCO III, LLC v One Way Loans, LLC, ___ Mich App ___, ___ (2024) (holding that “the trial court did not abuse its discretion when it determined an evidentiary hearing was unnecessary” because the “defendants did not present evidence that might have convinced the trial court that an evidentiary hearing was required” or “authority to directly support the argument that they [were] entitled to an evidentiary hearing”).
D.Stay of Collecting Taxed Costs
“The court or the clerk must stay the enforcement of an award taxing costs to a prevailing party under [MCR 2.625(F)] until expiration of the time for filing an appeal in the appropriate appellate court, or if an appeal is filed, while a claim of appeal or application for leave to appeal in the appropriate appellate court is pending.” MCR 2.625(G).
Other than for fees to officers for services rendered, each item claimed in a bill of costs must be particularly specified. MCR 2.625(H)(1). The bill of costs must be supported by a verified2 statement, which indicates that:
“(a) each item of cost or disbursement claimed is correct and has been necessarily incurred in the action, and
(b) the services for which fees have been charged were actually performed.” MCR 2.625(H)(2).
Claims for witness fees must be supported with an affidavit stating the distance traveled and the days actually attended. MCR 2.625(H)(3). The affidavit must indicate the days the party actually testified as a witness if the fees claimed are for a party acting as a witness. Id.
F.Procedure for Taxing Costs and Fees After Judgment
“A judgment creditor considered a prevailing party to the action under [MCR 2.625(B)] may recover from the judgment debtor(s) the taxable costs and fees expended after a judgment is entered, including all taxable filing fees, service fees, certification fees, and any other costs, fees, and disbursements associated with postjudgment actions as allowed by MCL 600.2405.” MCR 2.625(L)(1).3
“Until the judgment is satisfied, the judgment debtor may serve on the judgment creditor a request to review postjudgment taxable costs and fees.
(a) Within 28 days of receipt from a judgment debtor of a request to review postjudgment taxable costs and fees, the judgment creditor shall file with the court a memorandum of postjudgment taxable costs and fees and serve the same upon the judgment debtor. A memorandum of postjudgment taxable costs and fees shall include an itemized list of postjudgment taxable costs and fees. The memorandum must be verified by oath under MCR 1.109(D)(3).
(b) Within 28 days after receiving the memorandum of postjudgment taxable costs and fees from the judgment creditor, the judgment debtor may file a motion to review postjudgment taxable costs and fees. Upon receipt of a timely motion, the court shall review the memorandum filed by the judgment creditor and issue an order allowing or disallowing the postjudgment costs and fees. The review may be conducted at a hearing at the court’s discretion. If the court disallows the postjudgment costs and fees or otherwise amends them in favor of the judgment debtor, the court may order the judgment creditor to deduct from the judgment balance the amount of the motion fee paid by the judgment debtor under this rule.
(c) The judgment creditor shall deduct any costs or fees disallowed by the court within 28 days after receipt of an order from the court disallowing the same.
(d) Any error in adding costs or fees to the judgment balance by the judgment creditor or its attorney is not actionable unless there is an affirmative finding by the court that the costs and fees were added in bad faith.” MCR 2.625(L)(2).
Unless otherwise directed, attorney fees may be taxed and awarded as costs if authorized by statute or by court rule. MCL 600.2405(6).4 Specific statutes and court rules that have special provisions for awarding reasonable attorney fees include MCL 600.2591 (sanctions for frivolous actions), MCR 1.109(E)(6) (sanction for signature violations), and MCR 2.625(E) (costs in garnishment proceedings).
Several statutes require an award of attorney fees. See e.g., MCL 500.3148(1) (actions for overdue personal or property protection insurance benefits) and MCL 600.2961 (actions for unpaid sales commissions).
Several statutes provide examples of fees that may be awarded as taxable costs. See e.g., MCL 600.1990; MCL 600.2405; MCL 600.2421b. Specific examples include:
•Electronic filing system fee. MCL 600.1990.
•Fees of individuals mentioned in MCL 600.2401 et seq. or MCL 600.2501 et seq., unless a contrary intention is stated. MCL 600.2405(1).
•Legal fees for any newspaper publication required by law. MCL 600.2405(3).
•Attorney fees authorized by statute or court rule. MCL 600.2405(6). See also MCL 600.2421b(1)(c).
•Certified mail and federal express fees incurred to send documents to the court clerk for filing. Vanalstine v Land O’Lakes Purina Feeds, LLC, 326 Mich App 641, 655 (2018).
•Fees for deposition transcripts and certified copies of records when filed with the clerk’s office and read into evidence at trial or necessarily used. MCL 600.2549. See also Vanalstine, 326 Mich App at 655 (defendant was not entitled to taxable costs because the depositions were not filed with the clerk’s office or read into evidence); Guerrero v Smith, 280 Mich App 647, 674 (2008) (“[t]he costs of copying the video depositions . . . were properly taxed because the depositions were filed in the clerk’s office and used as evidence at trial”); Herrera v Levine, 176 Mich App 350, 358 (1989) (finding depositions and documents were not taxable because the case was dismissed before the items could be used or read into evidence at trial). The “necessarily used” facet of the statutory provision allows the taxation of costs for deposition transcripts submitted in support of a successful motion for summary disposition, so long as the transcripts were filed in any clerk’s office. Portelli v IR Constr Prod Co, Inc, 218 Mich App 591, 606 (1996).
Fees and expenses that are not taxable as costs include:
•Expenses incurred to enlarge exhibits;
•Traveling expenses of attorneys or parties5;
•Expenses related to the general copying of documents;
•Case evaluation fees;
•Expenses related to the copying of surveillance videos;
•Cost of transcripts prepared for an appeal;
•Expenses related to obtaining a loan as security for an appeal bond; and
•Expenses related to procuring a nonexpert witness’s testimony. Van Elslander v Thomas Sebold & Assoc, Inc, 297 Mich App 204, 217-224 (2012); Guerrero, 280 Mich App at 671-674.
A court’s decision whether to tax costs is reviewed for an abuse of discretion. Guerrero v Smith, 280 Mich App 647, 670 (2008). Whether a particular expense is a taxable cost is a question of law that is reviewed de novo on appeal. Id.
“The determination whether a party is a ‘prevailing party’ for the purposes of awarding costs under MCR 2.625 is a question of law,” which is reviewed de novo. Fansler v Richardson, 266 Mich App 123, 126 (2005). “When costs are denied to the prevailing party for reasons written and filed by the court, the court’s determination should not be reversed on appeal unless [its] written reasons are totally unsupported by the facts involved in the case.” Gentris v State Farm Mut Ins Co, 297 Mich App 354, 365 (2012) (quotation marks and citation omitted).
1 See Section 8.5(E) for additional information on bill of costs.
2 See MCR 1.109(D)(3) for verification requirements.
3 See Section 8.5(H) for more information on what items are allowable as costs/fees.
4 See Section 8.6 for more information on attorney fees.
5 To the extent that MCL 600.2559 provides mileage may be taxed, MCL 600.2559(1) “makes clear that any mileage taxed under MCL 600.2559 must be related to out-of-court service of process or papers[.]” Vanalstine, 326 Mich App at 656 (holding that the defense attorney’s request for mileage to attend depositions, hearings, and court proceedings was not covered by MCL 600.2559).