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### STATE OF MICHIGAN

COURT OF APPEALS

RIC-MAN CONSTRUCTION, INC.,

Plaintiff/Counter-DefendantAppellee, UNPUBLISHED January 17, 2017

v No. 329159 Wayne Circuit Court NEYER, TISEO & HINDO LTD. d/b/a NTH CONSULTANTS, LTD., LC No. 11-011315-CZ

Defendant/Counter-PlaintiffAppellant.

Before: T ALBOT , C.J., and J ANSEN and H OEKSTRA , JJ.

P ER C URIAM

. In this dispute between a cont ractor and project engineer, def endant/counter-plaintiff Neyer, Tiseo & Hindo LTD., d/b/a NTH Consultants, LTD. (NTH), a ppeals by leave granted 1 the trial court’s August 14, 2015 opini on and order granting in par t and denying in part its motion for summary disposition. Plaintiff/c ounter-defendant Ric-Man Const ruction, Inc. cross-appeals a portion of the same opinion and order. We affirm in part, reve rse in part, and remand for further proceedings.

I. FACTS

The instant dispute revolves ar ound the rehabilitation of the Oakland-Macomb Interceptor (the OM I). As background:

The OMI is an intercounty drain formerly owned by Detroit. In 2009, the [Oakland-Macomb Interceptor Drai n Drainage District (OMIDDD)] w as formed and purchased the OMI. . . . At the time the OMIDDD acquired th e OMI, the system was in a serious state of disrepair. The OMIDDD was tas ked with rehabilitating the system. An expensive, multi-year rehabilita tion project was

1 Ric-Man Construction, Inc v Neyer, Tiseo & Hindo LTD , unpublished order of the Court of Appeals, entered February 17, 2016 (Docket No. 329159).-2- approved, and is just now nearing completion. The project was funded largely by apportionments paid by 23 communities that connected to the OMI and used it to deliver wastewater to the Detro it Water and Sewerage Department (DWSD). [2]

The dispute in this matter revolves around one portion of the rehabilitation project. Specifically, at issue is the construction of Control Structure 6 (CS-6). Generally speaking, construction of this structure required excavating 75 feet deep underground to install a gate that could be used to facilitate repairs to the sewer system in the future. The project was designed by NTH. NTH’s plans were made available to contractors, who bid o n the project. Ric-Man won the bid, and entered into an agreement that included the constr uction of CS-6. This contract, which actually consists of several documents, is referred to as the Prime Contract. The Prime Contract designated NTH as the O MIDDD’s representative during t he construction phase. NTH would oversee the proj ect, ensuring that Ric -Man’s work conform ed to NTH’s desi gn. NTH was also given responsibility to make determinations regarding prob lems or disputes that might arise during construction.

During construction, Ric-Man encountered two primary issues. First, Ric-Man, on advice of a supplier and several consultants, believed the uppe r temporary earth retention system (TERS) designed by NTH was defective. The TERS is a safety sys tem, made of steel, that is designed to keep earth from collapsing as workers excavate deep er into the ground. Ric-Man believed that the system as des igned by NTH was not sufficient to prevent a collapse. Ric-Man brought its concerns to NTH, but NTH maintained that the system it designed was sufficient. Eventually, Ric-Man constructe d the TERS as it believed was nec essary to protect its workers.

The second issue involves the soil conditions encountered at t he work site. Based on geotechnical reports prepared by NTH, Ric-Man expected to encou nter “stiff silty clay and medium compact to very compact silty sands and silts . . . .” However, as it excavated, Ric-Man found that the soil was materially different. As a result, Ric -Man had to begin an emergency grouting program, incurring additional expenses. Ric-Man sough t a time extension related to this issue, but the request was denied.

In 2011, Ric-Man and the OMIDDD agreed to arbitrate their disp utes. Shortly thereafter, Ric-Man filed the instant suit against NTH. The complaint rais ed five counts: professional negligence, intentiona l misrepresentation, tortious interferenc e with contract, negligent misrepresentation, and defamation. On NTH’s motion, the trial court granted summary disposition on all claims in NTH’s favor, concluding that these claims should be submitted to arbitration along with Ric-Man’s claims against the OMIDDD. Ho wever, on appeal, this Court reversed, holding that NTH coul d not compel arbitration between itself and Ric-Man. 3

2 Marrocco v OMIDDD , unpublished opinion per curiam of the Court of Appeals, issue d June 16, 2016 (Docket No. 326575), unpub op at 2.

3 Ric-Man Const, Inc v Neyer, Tiseo & Hindo Ltd , unpublished opinion per curiam of the Court of Appeals, issued March 26, 2013 (Docket No. 309217).-3- After the matter returned to the trial court, NTH moved for s ummary disposition on all counts. Ric-Man agreed that its i ntentional misrepresentation claim failed as a matter of law, but contested the motion with regar d to the remaining counts. Afte r receiving a multitude of briefs from the parties and hearing thei r arguments, the trial court i ssued its opinion. For the most part, the trial court denied NTH’s motion. The trial court did hold that Ric-Man could not recover the lost profits of a separate company, Mancini Enterprises, LLC, o wned by the same three brothers that own Ric-Man. NTH filed the instant application for leave to appeal, which this Court granted. Ric-Man then filed a cr oss-appeal, challenging the tr ial court’s decision that it could not pursue a claim of lost profits on behalf of Mancini Enterprises

. The issues raised on appeal generally fit into two categories: those challenging the merits of the various counts of the com plaint, and those addressing wh at damages Ric-Man may recover. We begin with the ar guments addressing the viability of the individual counts.

II. DUTY OF CARE – PROFESSIONAL NEGLIGENCE AND NEGLIGENT MISREPRESENTATION

The first issue concerns Ric-Man’s professional negligence and negligent misrepresentation counts. These c ounts allege that NTH neglige ntly designed the TERS and was negligent in reporting the soil conditions at the work site. N TH contends that both claims must fail because neither alleges the existence of a duty of care se parate and distinct from its agreement with the OMIDDD to design the project. We agree that the professional negligence count is barred for this reason. However, we find that the neg ligent misrepresentation count may proceed.

Whether a plaintiff owes a defendant a duty of care is a quest ion of law, reviewed de

novo. 4 This Court also “reviews the gr ant or denial of summary dispo sition de novo to determine if the moving party is entitled to judgment as a matt er of law.” 5 NTH brought its motion pursuant to MCR 2.116(C)(8) and (C)(10). As our Supreme Court has explained:

A motion under MCR 2.116(C)(8) tests the legal sufficiency of the complaint. All well-pleaded factual allegations are accepted a s true and construed in a light most favorable to the nonmovant. A motion under MCR 2.116(C)(8) may be granted only where the claims alleged are “so clearly un enforceable as a matter of law that no factual de velopment could possibly justif y recovery.” When deciding a motion brought under th is section, a court considers only the pleadings.

* * *

A motion under MCR 2.116(C)(10) tests the factual sufficiency of the complaint. In evaluating a moti on for summary disposition brou ght under this subsection, a trial court considers affidavits, pleadings, depo sitions, admissions,

4 Fultz v Union-Commerce Assoc , 470 Mich 460, 463; 683 NW2d 587 (2004).

5 Maiden v Rozwood , 461 Mich 109, 118; 597 NW2d 817 (1999) (citations omitted).-4- and other evidence submitted by the parties . . . in the light most favorable to the party opposing the motion. Where t he proffered evidence fails to establish a genuine issue regarding any material fact, the moving party is entitled to judgment as a matter of law. [6]

The trial court did not identif y under which provision it decid ed the motion. However, the question is whether Ric-Man has pleaded the existence of a duty separate and distinct from the contract between NTH and the OMIDDD. This is a purely legal qu estion that may be decided by reference to the pleadings alone , and thus, is properly decided pursuant to MCR 2.116(C)(8).

Count I alleges a claim of “Professional Negligence.” “To est ablish a prima facie case of negligence, a plaintiff must prove four elements: (1) a duty ow ed by the defendant to the plaintiff, (2) a breach of that duty, (3) causation, and (4) da mages.” 7 Thus, a claim of negligence cannot exist if there is no duty owed by the defendant. “The t hreshold issue of the duty of care in negligence actions must be decided by the trial court as a m atter of law.” 8 “In other words, the court determines the circumstan ces that must exist in order for a defendant’s duty to arise.” 9

The parties rely on a number of cases in an effort to establis h whether NTH owed RicMan a duty of care in this matter. In chronological order, tho se cases are Bacco Const Co v American Colloid Co

, 10 Nat’l Sand, Inc v Nagel Constr, Inc

, 11 Fultz v Union-Commerce Assoc

, 12 Keller Constr, Inc v UP Engineers and Architects

, 13 and finally, Loweke v Ann Arbor Ceiling and Partition Co

. 14 We begin by noting that Bacco and Nat’l Sand are not binding on this Court, as neither case was decided after November 1, 1990. 15 And as an unpublished opinion, Keller also does not bind this Court. 16 Thus, our focus is on Fultz and Loweke , two decisions of our Supreme Court that are dispositive of the i ssues presented in t his appeal.

6 Id . at 119-120 (citations omitted).

7 Case v Consumers Power Co , 463 Mich 1, 6; 615 NW2d 17 (2000).

8 Riddle v McClouth Steel Prods Corp , 440 Mich 85, 95; 485 NW2d 676 (1992).

9 Id

.
10 Bacco Constr Co v American Colloid Co , 148 Mich App 397; 384 NW2d 427 (1986).

11 Nat’l Sand, Inc v Nagel Constr, Inc , 182 Mich App 327, 330; 451 NW2d 618 (1990).

12 Fultz , 470 Mich 460.

13 Keller Constr, Inc v UP Engineers & Architects, Inc , unpublished opinion per curiam of the Court of Appeals, issued July 8, 2008 (Docket No. 275379).

14 Loweke v Ann Arbor Ceiling and Partition Co , 489 Mich 157; 809 NW2d 553 (2011).

15 MCR 7.215(J)(1).

16 MCR 7.215(C)(1).-5- Fultz involved a plaintiff who fell in an icy parking lot. 17 The plaintiff brought a negligence claim against the snow removal service “based on its alleged failure to plow or salt the parking lot.” 18 The operative question was whether the snow removal service o wed a duty to the plaintiff that could support her negligence action. 19 Our Supreme Court explained that courts “should analyze tort actions based on a contract and brought by a plaintiff who is not a party to that contract by using a ‘separate and distinct’ mode of analys is. Specifically, the threshold question is whether the defendant owed a duty to the plaintiff that is separate and distinct from the defendant’s contractual obligations.” 20 Absent the existence of a separate and distinct duty, “no tort action based on a contract will lie.” 21

Several years later, in Loweke , our Supreme Court explained that courts had, in many cases, misapplied Fultz

. 22 Specifically, our Supreme Cour t explained that “courts have erroneously interpreted this C ourt’s decisions as rejecting acc epted tort-law principles and creating a legal rule unique to Mi chigan tort law, which bars n egligence causes of action on the basis of a lack of duty if a third-party plaintiff alleges a ha zard that was the subject of the defendant’s contractual obligations with another.” 23 The Court further explained the “separate and distinct” mode of analysis:

Under this analysis, an action would lie in contract if it was based solely on a defendant’s failure or refusal to perform a contractual promise . In contrast, an action could lie in either contract or in tort if a defendant negligently p erforms a contractual duty or breaches a duty arising by implication from the relation of the parties created by the contract[. ] In the latter category of c ases, however, no tort liability would arise for failing to fulfill a promise in the a bsence of a duty to act that is separate and distinct from the promise made. [24]

The Court went on to explain:

Determining whether a duty arises separately and distinctly fr om the contractual agreement, therefore, generally does not necessaril y involve reading the contract, noting the obligations required by it, and determ ining whether the plaintiff’s injury was contemplated by the contract. Instead, Fultz ’s directive is to

17 Fultz , 470 Mich at 462.

18 Id . at 461.

19 Id . at 463.

20 Id

.
21 Id

.
22 Loweke , 489 Mich at 163.

23 Id . The Court also explained that Fultz had been “misconstrued to, in e ssence, establish a form of tort immunity that bars ne gligence claims raised by a noncon tracting third party.” Id . at 168.

24 Id . (quotation marks, citati ons, and ellipses omitted).-6- determine whether a defendant owes a noncontracting, third-part y plaintiff a legal duty apart from the defendant’s c ontractual oblig ations to anot her. As this Court has historically recogn ized, a separate and distinct duty to su pport a cause of action in tort can arise by statute, or by a number of preexist ing tort principles, including duties imposed because of a special relationship betw een the parties, and the generally recognized comm on-law duty to use due care in undertakings. [25]

Ultimately, the question before us is whether, under Fultz and Loweke , Ric-Man has alleged the breach of a duty separate and distinct from NTH’s c ontractual obligations. We conclude that Count I of Ric-Man’s complaint fails to allege th e breach of any recognized common-law duty that is separate and distinct from NTH’s contra ctual obligations. Each of the duties alleged by Ric-Man are obligations that NTH agreed to pe rform in its contract with the OMIDDD. Certainly, in performi ng these obligations, NTH would have a duty to “use due care in undertakings.” 26 But the common-law duty to use due care in undertakings is a duty to avoid physical harm to people or propert y; it is not a duty to avoid economic losses to another, which is the only type of harm alleged by Ric-Man.

In Rinaldo’s Const Corp v Mich Bell Telephone Co , a case cited favorably by the Fultz and Loweke Courts, our Supreme Court also examined a claim of negligence b ased on the performance of a contract. 27 As it would in Fultz and Loweke , the Court focused on the concept of duty, and specifically, whether there existed a duty separat e and distinct from the contract. The Court recognized that there ex ists “a duty to exercise reas onable care to avoid physical harm to persons and tangible things.” 28 But the Court explained that “[t]his duty . . . does not exte nd to intangible economic losses.” 29 In this case, one could at l east consider Count I of the complaint as alleging the breach of a duty to use ordinary care in undertakings. But because RicMan alleges only economic harm, not physical harm to persons or property, it fails to allege the existence of a recognized common-law duty separate and distinct from the contract. Much like the plaintiff in Rinaldo , “[w]hile plaintiff’s allegations arguably make out a claim fo r ‘negligent performance’ of the contract, th ere is no allegation that this conduct by the defendant constitutes

25 Id . at 169-170 (citations omitted).

26 Loweke , 489 Mich at 170 (citation omitted).

27 Rinaldo’s Const Corp v Mich Bell Telephone Co , 454 Mich 65, 67-68; 559 NW2d 647 (1997). Specifically, the plaintiff, a construction company, experience d problems with its telephone service after moving to a new address. Id . at 67. The plaintiff sued the defendant telephone service for a loss of business revenue allegedly caused by the inability of customers to contact the plaintiff via telephone. Id . at 68.

28 Id . at 84 (quotation omitted).

29 Id . (quotation omitted).-7- tortious activity in that it caused physical harm to persons or tangible property . . . .” 30 Thus, at least with respect to Count I of the complaint, “there is no co gnizable cause of action in tort.” 31

NTH does not parse out Count IV, and simply asserts that Fultz and Loweke similarly bar Count IV of the complaint. But the two counts are distinct. C ount IV alleges a claim of negligent misrepresentation. “In a negligent misrepresentation action, the plaintiff must prove that ‘a party justifiably relied to his detriment on informatio n provided without reasonable care by one who owed the relying party a duty of care.’ ” 32 “Michigan recognized negligent misrepresentation as a way of imposing third-party liability fo r the negligent performance of a contract.” 33 To further describe a claim for negligent misrepresentation, this Court has relied on the Restatement Torts, 2d, § 552, 34 which states:

(1) One who, in the course of his business, profession or emplo yment, or in any other transaction in which he has a pecuniary interest, supplie s false information for the guidance of others in their business transactions, is s ubject to liability for pecuniary loss caused to them by their justifiable reliance upo n the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

(2) Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss suffered

(a) by the person or one of a limited group of persons for whos e benefit and guidance he inte nds to supply the information or kn ows that the recipient int ends to supply it; and

(b) through reliance upon it in a transaction that he intends t he information to influence or know s that the recipient so intends or in a substantially sim ilar transaction.

(3) The liability of one who is under a public duty to give the information extends to loss suffered by any of the class of persons for whose benef it the duty is created, in any of the transactions in which it is intended to protect them.

30 Id . at 85.

31 Id

.
32 Roberts v Safell , 280 Mich App 397, 406 n 2; 760 NW2d 715 (2008), aff’d 483 Mic h 1089 (2009), quoting Law Offices of Lawrence J Stockler, PC v Rose , 174 Mich App 14, 33; 436 NW2d 70 (1989).

33 Id ., citing Williams v Polgar , 391 Mich 6, 18-23; 215 NW2d 149 (1974).

34 See Law Offices of Lawrence J Stockler, PC , 174 Mich App at 35-37.-8- Thus, a business does owe a duty of care to those who justifia bly rely on the information supplied by that business. Under Restatement Torts, 2d, § 552( 2)(a), this duty extends to “the person or one of a limited group of persons for whose benefit a nd guidance he intends to supply the information or knows that the recipi ent intends to supply it [.]” Count IV of the complaint contends that Ric-Man was part of a group (bidders) who the OMI DDD knew would rely on the plans drafted by NTH, that these plans were materially incorrec t due to NTH’s negligence, and that as a result of Ric-Man’s reliance on the plans, it suffere d pecuniary loss. Count IV of the complaint sets forth a claim for negligent misrepresentation. Fultz and Loweke do not preclude this claim because Count IV alleges the breach of a duty, recog nized at common law, that is separate and distinct from the contract between the OMIDDD and NTH. Accordingly, while Count I is barred as a matte r of law, Count IV may proceed.

III. EXCULPATORY CLAUSE

NTH argues that an exculpatory clause found within the Prime C ontract bars Ric-Man’s claims, and that the trial court erred by holding otherwise. W e disagree. “Questions involving the proper interpretation of a c ontract or the legal effect of a contractual clause are also reviewed de novo.” 35

The exculpatory clause at i ssue states the following:

Neither Engineer’s authority or responsibility under this Artic le 9 or under any other provision of the Contract D ocuments nor any decision made by Engineer in good faith either to exercise or not exercise such authority or responsibility or the undertaking, exercise, or perfor mance of any authority or respo nsibility by Engineer shall create, impose, or give rise to any duty in cont ract, tort, or otherwise owed by Engineer to Contractor, any Subcontractor, an y Supplier, any individual or entity, or any sur ety for or employee or agent of any of them.

The first question is whether NTH, which is not a party to the agreement containing the exculpatory clause, may nonetheless enforce it. The trial cour t concluded that under the Prime Contract, NTH was an agent of OMIDDD. Because NTH was the OMID DD’s agent, the trial court held that NTH could enforce the exculpatory clause, as we ll as other provisions of Prime Contract. Rather than dispute the trial court’s decision, the parties argue over whether NTH was a third-party beneficiary to t he Prime Contract who could, due to that status, enforce the exculpatory clause. Thus, with respect to the question whether NTH may enforce the exculpatory clause, no one provides any argument questioning th e trial court’s basis for holding that NTH could enforce the exculp atory clause and any other cla use of the Prime Contract. As such, we need not question the tri al court’s decision in this r egard. 36

35 Hines v Volkswagen of America, Inc

, 265 Mich App 432, 443; 695 NW2d 84 (2005).

36 See Derderian v Genesys Health Care Sys , 263 Mich App 364, 381; 689 NW2d 145 (2004) (if an appellant fails to address the basis for the trial court’s r uling, this Court need not even consider granting relief).-9- The remaining question is whether the clause applies to the co nduct at issue in the complaint. The trial court differentiated between allegations of negligence that occurred prior to the construction period, i.e., errors or omissions in the desig n of the project by NTH, and allegations of negligence that occurred during the construction phase, while NTH was to serve as project manager. It held that t he exculpatory clause applied o nly to the latter. We agree that this is the correct interpr etation of the clause.

Clearly, NTH did have two distinct roles. It first designed t he project. Then, under the Prime Contract, NTH served as the OMIDDD’s representative, over seeing construction of the project it had designed. The exculpatory clause is found withi n Article 9 of the General Conditions, one of the various documents that make up the Prime Contract. The entire purpose of this particular article is to describe NTH’s duties during c onstruction. The article itself is entitled, “Engineer’s Status Duri ng Construction.” The paragra phs that precede the exculpatory clause describe NTH’s status as the OMIDDD’s “representative during the construction period .” NTH has a duty to visit the worksite to observe the progress be ing made and whether it is satisfactory. It also has the authority to authorize minor var iations in the work, to interpret the contract and judge the acceptability of the work being performe d, and to reject work it finds defective. The article also references other duties and respon sibilities of NTH by reference to other parts of the General Condi tions. The exculpatory clause is then found in the final paragraph of Article 9.

Based on the context in which it appears, we, like the trial c ourt, conclude that the exculpatory provision applies only to NTH’s conduct during the construction phase. The clause first refers to NTH’ s “authority or respons ibility under this A rticle 9 or under a ny other provision of the Contract Documents” and NTH’s decisions to “exercise or not exercise such authority or responsibility . . . .” Clearly, NTH’s authority and responsib ility under Article 9 is limited to the construction phase. The remainder of the “Contract Documents” similarly describe the construction phase of the proj ect. The remaining portion of th e exculpatory clause describes “the undertaking, exercise, or perfor mance of any authority or respo nsibility by [NTH] . . . .” NTH contends that this portion of the clause must be read broadly t o encompass any authority or responsibility of NTH whatsoever, which would include its respo nsibility to design the project. Such a broad reading is illogical in light of the provisions th at precede the exculpatory clause. We find it clear that by refere ncing “any authority or responsi bility,” the clause refers to any authority or responsibility of NTH provided for by the Prime Co ntract, not any authority or responsibility NTH has ever exe rcised at any point in time.

Further, if we were to adopt NTH’s reading of the exculpatory clause, it would render another portion of the General Conditions nugatory. As is disc ussed in more detail later in this opinion, Paragraphs 4.02 and 4.03 of the General Conditions res trict the scope of damages that Ric-Man could potentially recover in a suit against NTH if the soil conditions p rove different than represented by NTH. Implic it in such a restriction on dam ages is the recognition that the claim itself is viable; there woul d be no need to restrict the damages available for a particular claim if the claim itself is barred. But if we were to agree w ith NTH’s interpretation of the exculpatory clause, NTH could not be liable for erring with reg ard to the soil conditions present-10- at the work site. We must avoid interpreting the contract in s uch a way “that would render any part of the contract s urplusage or nugatory.” 37

NTH presents several additional arguments challenging this con clusion, all of which are without merit. NTH contends that its authority and responsibil ity under the Prime Contract includes its design of the project. It is true that various pr ovisions of the Prime Contract reference NTH’s design or the fact that NTH designed the projec t. But the Prime Contract is not what gave NTH the authority or responsibility of designing the project. That responsibility was created by NTH’s agreement with the OMIDDD. NTH contends that Ric-Man’s complaint does not distinguish between NTH’s des ign role and its supervisory r ole. The allegations of RicMan’s complaint do not change the scope of the Prime Contract, which clearly covers the construction phase of the project. NTH also argues that becaus e the delays occu rred during the construction phase, the exculpatory clause should apply. This argument is meritless because the issue is not when delays occurred, but when NTH’s allegedly neg ligent conduct occurred – i.e., when the duty was breached. Ric-Man alleges that NTH breached a duty when it designed the project, not during the cons truction of the project.

NTH also contends that the tria l court erred when it concluded that the exculpatory clause only applies to errors made in good faith. We agree with this particular position. The phrase “good faith” occurs within the por tion of the exculpatory claus e referring to “decision[s] made by [NTH] . . . to either exercise or not exercise such authorit y . . . .” It is not found in other portions of the clause. A plain reading of the clause leads to the conclusion that the “good faith” language applies only to NTH’s decisions to “either exercise or not exercise” any “authority or responsibility” granted to it under “Article 9 o r under any oth er provision of the Contract Documents . . . .” There is no similar “good faith” language t ied to NTH’s “undertaking, exercise, or performance of any authority or responsibility . . . .” 38

The question that still must be answered is what effect the ex culpatory clause has on the different counts raised in the complaint. As we have explained , Count I fails as a matter of law because it does not allege the existence of a duty separate and distinct from NTH’s contractual duties to the OMIDDD. Thus, there is no need to consider the e ffect of the exculpatory clause with regard to that count. Count II was dismissed by Ric-Man, and thus, is no longer at issue. With regard to Count III, the trial court explained that the ex culpatory clause would not protect

37 Klapp v United Ins Group Agency, Inc , 468 Mich 459, 468; 663 NW2d 447 (2003).

38 The trial court and Ric-Man rely on the Wyoming Supreme Court’ s decision in Excel Const, Inc v HKM Engineering, Inc , 228 P3d 40; 2010 WY 34 (2010), which interpreted the same clause. Id . at 49-50. The Wyoming Supreme Court found that the clause “m eans that the contractor may not recover from the engineer for careless error s which were not made in bad faith, while it does not bar claims involving bad faith . . . . ” Id . at 50. We disagree with that holding, as it ignores the specific context in which the words “good faith” appear in the clause. And of course, Excel Const, Inc is not binding on this Court. See In re Jajuga Estate , 312 Mich App 706, 723 n 7; 881 NW2d 487 (2015) (decisions from other jur isdictions are not binding on this Court).-11- NTH because such a claim requires a showing of an intentional o r malicious conduct, and parties may not contract against liability for gross negligence or will ful or wanton misconduct. 39 Neither party addresses this holding, and thus, there is no nee d for this Court to revisit the trial court’s decision with regard to this count. Count IV, negligen t misrepresentation, alleges negligence in NTH’s design of the project. As discussed, the e xculpatory clause does not reach NTH’s conduct during the desi gn phase. Thus, Count IV survives

. With regard to Count V (defamation), the trial court held that the exculpatory clause did not apply because a claim of defa mation is inconsistent with an act of good faith. As discussed, the good faith portion of the exculpatory clause only applies t o NTH’s decisions to either exercise or not exercise its authority. The defamation claim d oes not involve a decision by NTH to either exercise or not exerc ise its authority, and thus, NTH ’s good faith, or lack thereof, is not relevant with respect to the de famation claim. That said, we f ind it questionable whether the exculpatory clause would reach the defamation claim. As one ex ample, we question whether, by making false statements to the Michigan Occupational Safety and Health Administration (MIOSHA) and others, NTH was ac ting within its authority or res ponsibility granted under the Prime Contract. However, there is no briefing on the topic. R ather than decide the issue, we remand the matter to the trial court to consider whether the ex culpatory clause, as interpreted by this Court, bars Ric-Man’s defamation claim.

IV. TORTIOUS INTERFERE NCE WITH CONTRACT

NTH argues that the trial court erred when it allowed Ric-Man’ s claim of tortious interference with contract to proceed. We disagree.

“To maintain a cause of action for tortious interference, the plaintiff must establish that the defendant was a ‘third party’ to the contract rather than a n agent of one of the parties acting within the scope of its authority as an agent.” 40 It is also settled law that “corporate agents are not liable for tortious interfere nce with the corporation’s con tracts unless they acted solely for their own benefit with no benefit to the corporation.” 41 Hence, when an agent acts solely for its own benefit, and with no benefit to the principal, the agent is not acting within the scope of its authority. Thus, an agent who acts solely for its own benefit and not for the benefit of the principal may be liable for tor tious interference with contract

. On appeal, NTH contends that as an agent, it is not an indepen dent third party to the Prime Contract, and for that reason, cannot be liable for torti ous interference with the contract. The argument ignores the basis of the trial court’s decision. The trial court did not dispute that NTH was an agent; indeed, it had already held that NTH was an a gent of the OMIDDD. The basis of the trial court’s ruling was that the complaint allege d facts sufficient to demonstrate that even though NTH was the OMIDDD’s agent, NTH acted solely for it s own benefit, and thus,

39 Lamp v Reynolds , 249 Mich App 591, 594; 645 NW2d 311 (2002).

40 Lawsuit Fin, LLC v Curry , 261 Mich App 579, 593; 683 NW2d 233 (2004).

41 Reed v Mich Metro Girl Scout Council , 201 Mich App 10, 13; 506 NW2d 231 (1993).-12- could still be liable for tortious interference. Because NTH f ails to dispute the basis of the trial court’s ruling, there is no need f or this Court to revisit the trial court’s decision. 42

V. DEFAMATION

NTH contends that the trial court erred when it allowed Ric-Ma n’s defamation claim to proceed. We disagree.

NTH contends that expressions of opinion cannot form the basis of a defamation claim. But as our Supreme Court has explained:

[A] statement of “opinion” is not automatically shielded from a n action for defamation because “expressions of ‘opinion’ may often imply an assertion of objective fact.” . . . [T]he stat ement “in my opinion Jones is a liar” may cause just as much damage to a person’s reputation as the statement “Jones is a liar.” . . . Thus, a statement of opinion that can be proven to be false may be defamatory because it may harm the subject’s reputation or deter others fr om associating with the subject. [43]

Thus, NTH’s belief that a statement of opinion cannot form the basis of a defamation claim is simply not accurate under Michigan law. Ric-Man cites an email sent by a representative of NTH to a MIOS HA representative as defamatory. The email states:

As we discussed, R[ic-Man] has been engaged in an ongoing campa ign to obtain a change order and increased compensation on the project, and has resorted to a variety of questionable tactics, including (but not limited to) intentional misinterpretation of their own consultant’s statements to you, and concealing the April 29, 2009 meeting from NTH and the [OMIDDD].

This statement can easily be int erpreted as a statement of fact , not simply an opinion. But even if considered an opinion, the statement certainly fits within thos e types of “opinions” that may nonetheless be considered defama tory. Accordingly, summary dis position is inappropriate.

NTH’s only other argument is that its statement was privileged , an argument rejected by the trial court. As this Court has explained:

The determination whether a privilege exists is one of law for the court. The elements of a qualified privilege are (1) good faith, (2) an in terest to be upheld, (3) a statement limited in its scope to this purpose, (4) a pro per occasion, and (5) publication in a proper manner and to proper parties only. [44]

42 Derderian , 263 Mich App at 381.

43 Smith v Anonymous Joint Enterprise , 487 Mich 102, 128; 793 NW2d 533 (2010).

44 Prysak v RL Polk Co , 193 Mich App 1, 14-15; 483 NW2d 629 (1992) (citations omitted ).-13- NTH fails to address any of these elements. It simply cites th e elements and explains that “[b]ecause the purported opinion was made to OMIDDD while actin g as a representative for OMIDDD and to MIOSHA, a government agency responsible for overs eeing safety, NTH’s opinions were privileged.” It is well-established that an appe llant may not simply “announce a position and leave it to this Court to discover and rationalize the basis for the claim.” 45 By failing to properly address the merits of its contention of err or, NTH has waived the issue. 46

VI. DIFFERING SITE CO NDITIONS CLAUSE

The remaining arguments on appeal address what damages Ric-Man may potentially receive if it succeeds on its claims. More to the point, the p arties dispute whether Ric-Man may recover lost profits. These lost profits fall into two categor ies: (1) lost profits on construction projects that Ric-Man alleges it lacked the resources to bid be cause it was addressing problems with CS-6, and (2) lost profits that Mancini Enterprises, a sep arate company owned by the same three brothers that own Ric-Ma n, could have realized from the p urchase of real estate in Florida.

The first argument presented by NTH concerns what the parties refer to as the “differing site conditions” clause. We agree that the trial court’s inter pretation of this clause was

erroneous. 47

Article 4 of the General Condi tions is entitled “Availability of Lands; Subsurface and Physical Conditions; Hazardous Environmental Conditions; Refere nce Points[.]” Paragraph 4.02 specifically addresses “Subsurface and Physical Conditions[.]” This paragraph states:

45 Nat’l Waterworks, Inc v Int’l Fidelity & Surety, Ltd , 275 Mich App 256, 265; 739 NW2d 121 (2007).

46 Id

.
47 In this issue, NTH also asks us to consider the effect of anot her clause, found in Article 12 of the general conditions. We decline to do so for several reason s. First, this particular clause was not cited by NTH in its application for leave to appeal. As or dered by this Court, this appeal is “limited to issues raised in the application and supporting bri ef.” Ric-Man Construction, Inc v Neyer, Tiseo & Hindo Ltd , unpublished order of the Court of Appeals, entered February 1 7, 2016 (Docket No. 329159). Second, the statement of the question pre sented clearly asks this Court to consider a single clause – the “differing site conditions” clau se found in Article 4 of the General Conditions. Because the clause found in Article 12 of the Gene ral Conditions has not been raised in NTH’s statement of the question presented, this Court need not address the effect of that particular clause. Ypsilanti Fire Marshal v Kircher , 273 Mich App 496, 543; 730 NW2d 481 (2007) (issues not specifically raised in the statement of questions presented are abandoned). Finally, despite the extraordinary number of briefs submitted t o the trial court, we have been been unable to find any point at which NTH suggested that this clause was relevant or precluded recovery of consequential damages. “Issues raised for the firs t time on appeal are not ordinarily subject to review.” Booth Newspapers, Inc v Univ of Mich Bd of Regents , 444 Mich 211, 234; 507 NW2d 422 (1993).-14- A. Reports and Drawings: The Supplementary Conditions identify:

1. those reports of explorations and tests of subsurface condi tions at or contiguous to the Site that [NTH] has used in preparing the Con tract Documents;

2. those drawings of physical conditions in or relating to exi sting surface and subsurface structures at or contiguous to the Site (except Unde rground Facilities) that [NTH] has used in prepar ing the Contract Documents.

B. Limited Reliance by Contractor on Technical Data Authorized: [Ric-Man] may rely upon the general accuracy of the “technical data” cont ained in such reports and drawings, but such reports and drawings are not Con tract Documents. Such “technical data” is identified in the Supplementary Condit ions. Except for such reliance on such “technical data,” Contractor may not rely upon or make any claim against [the OMIDDD] or [NT H], or any of their Related En tities with respect to:

1. the completeness of such reports and drawings for [Ric-Man] ’s purposes, including, but not limited to, any aspects of the means, method s, techniques, sequences, and procedures of construction to be employed by [Ri c-Man], and safety precautions and program s incident thereto; or

2. other data, interpretations , opinions, and information cont ained in such reports or shown or indicated in such drawings; or

3. any Contractor interpretation of or conclusion drawn from a ny “technical data” or any such other data, interpr etations, opinions, or informati on.
Paragraph 4.03 of the General C onditions explains what steps a re to be taken in the event Ric-Man “believes that any subsurface or physical condition . . . is uncovered or revealed” to be different than provided by the “t echnical data” referenced in t he preceding paragraph. Under such circumstances, Ric-Man must provide notice to the OMIDDD a nd NTH and cease work. NTH must then review the condition and determine how to proceed . Under certain circumstances, adjustments to the contract price and contract t ime must be made. Paragraph 4.03(C)(3) provides that:

If [the OMIDDD] and [Ric-Man] are unable to agree on entitlemen t to or on the amount or extent, if any, of any adjustment in the Contract Pri ce or Contract Times, or both, a Claim may be made therefore as provided in Pa ragraph 10.05. However, [ the OMIDDD ] and [ NTH ] shall not be liable to [ Ric-Man ] for any claims, costs, losses, or damages (includi ng but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute re solution costs) sustained by [ Ric-Man ] on or in connection with any other proj ect or anticipated project . [emphasis supplied.]

In this case, one of the disput es involves a claim that the so il conditions were not as represented by NTH in t he project designs. Clearly, the above language applies to that portion of Ric-Man’s claim. Under this clause, Ric-Man’s claimed damages for lost profits sustained in-15- relation to other projects or other anticipated projects are no t recoverable. We disagree, however, with NTH’s belief that this clause applies to the part of the claim stemming from NTH’s design of the TERS. This part of the claim does not conc ern a differing soil condition, but a design defect in a safety system. 48

NTH contends that the language of Paragraph 4.03(C)(3) is not limited to claims involving differing site conditions. And in truth, if one read s this specific paragraph in isolation, it does not speak of differing site conditions. But contracts must be read as a whole. 49 Reading the paragraph as NTH suggests completely divorces the paragraph from the context that surrounds it. Clearly, the type of claims at issue in Paragrap h 4.03(C)(3) are those encompassed by the multitude of provisions that precede it: claims involvin g differing subsurface or physical conditions. NTH’s suggested r eading of the provision must be r ejected.

The trial court erred, however, when it limited the scope of P aragraph 4.03(C)(3) to NTH’s conduct during the construction phase of the project. Ri c-Man believes that Paragraph 4.03(C)(3) must be read “through” the exculpatory clause, which , as discussed, is limited to NTH’s conduct during the constr uction phase of the project. Th ere is absolutely no basis for such a reading of Paragraph 4.03(C)(3). Paragraph 4.03(C)(3) d oes not reference Article 9 or any of its provisions. Nor do the two provisions encompass the same subject matter. The exculpatory clause eliminates liability entirely for certain co nduct. Paragraph 4.03(C)(3) allows for certain claims, but restricts the scope of damages availabl e to Ric-Man.

Further, reading Paragraph 4.03(C)(3) as the trial court and R ic-Man suggest would eliminate the limitations on damages altogether. The entire po int of Paragraph 4.03 of the General Conditions is to address liability in the event that NT H’s reports and drawings regarding subsurface and physical conditions at the work site prove inacc urate. These reports and drawings were, by necessity, prepared before the construction p hase began. Thus, if the limitations stated in Paragraph 4.03(C)(3) apply only to neglig ence occurring in the construction phase, there is no conduct to which these same limitations coul d apply. Contract language must be read in such a way to avoid rendering any language surplusag e or nugatory. 50 Thus, we cannot interpret Paragraph 4.03(C)(3) in the same manner as the trial court and Ric-Man. 51 The paragraph is not limited to NTH ’s conduct during the constructi on phase of the project.

48 NTH fails to explain how any problems with the TERS system res ulted from differing site conditions.

49 Detroit Pub Schools v Conn , 308 Mich App 234, 251-252; 863 NW2d 373 (2014).

50 Klapp , 468 Mich at 468.

51 Ric-Man also contends that NTH was not a third-party beneficia ry to the Prime Contract, and thus, may not enforce the differing site conditions clause. As discussed in Issue III, this argument ignores the trial court’s reason for permitting NTH to enforce clauses of the agreement
– agency.-16- VII. LIMITATIONS ON “CLAIMS”

The second contractual provision cited by NTH as a bar to Ric- Man’s claims for lost profits is found in Article 10 of the General Conditions. Arti cle 10 of the General Conditions is entitled “Changes in the Work; Claims.” Paragraph 10.05 explai ns the process for resolving “Claims,” a term that is specifically defined earlier in the Ge neral Conditions. Pursuant to Paragraph 10.06:

10.06 Certain Limitation on Contract or Claims for Damages

A. [Ric-Man] agrees that in any Claim, its damages will be com puted pursuant to Article 1, and in no case shall its damages exceed the actual c ost incurred to perform the Work plus anticipate d profit arising from the Work.

B. In any Claim or any other suit or proceeding against the [O MIDDD], in addition to any costs excluded by Paragraph 11.02.B, [Ric-Man] waives damages incurred by [Ric-Man] for [other specific areas of damages].

NTH contends that Paragraph 10.06(A) precludes Ric-Man from se eking its claimed consequential damages. This is because NTH believes that the i nstant complaint is a Claim, and thus, the limitations found in Par agraph 10.06(A) apply. Ric-M an’s argument in response is identical to its treatment of th e differing site conditions cla use. For the same reasons discussed in the prior issue, we find Ric -Man’s argument unavailing.

That said, we do not find that Paragraph 10.06 has any applica tion to this matter because a Claim under the General Conditions does not include claims of any sort made against NTH. We reach this conclusion because the process for resolving Clai ms is not compatible with claims made against NTH. Paragraph 10.05, entitled, “Claims,” first e xplains that “[a]ll Claims . . . shall be referred to [NTH] for decision.” NTH then has 30 days to render its decision. NTH’s decision is “final and binding upon [the OMIDDD] and [Ric-Man], unless [the OMIDDD] or [Ric-Man] invoke the dispute resolution procedure set forth in Article 16 within 30 days of such denial.” Under Article 16 of t he General Conditions, any decis ion by NTH is “final and binding 30 days after receipt of written notice of [NTH]’s action or de cision unless, within that time period, [the OMIDDD] or [Ric-Man] gives to the other party writ ten notice of intent to submit the Claim to a process of bilateral negotiations as set forth b elow.” A negotiation process between the OMIDDD and Ric-Man follows. “If the Claim is not r esolved by negotiation, [NTH]’s action . . . shall become final and binding 30 days aft er termination of the negotiations unless, within that time period, [the OMIDDD] or [Ric-Man] agre es with the other party to submit the Claim to another dispute resolution process.”

The procedure described above is clearly aimed at resolving di sputes between the OMIDDD and Ric-Man. It is also entirely incompatible with clai ms raised against NTH. It makes little sense for NTH to serve as the arbiter of claims ag ainst itself. It also makes no sense for the OMIDDD and Ric-Man to engage in negotiations or other a lternative dispute resolution procedures when a claim is made against NTH. The above process makes complete sense, however, if it is understood tha t Claims exist only between Ric -Man and the OMIDDD.-17- NTH contends that claims against it are included within the de finition of a Claim. A Claim is defined as:

10. Claim - A demand, assertion, or legal or arbitration proceeding by [th e OMIDDD] or [Ric-Man] seeking an adjustment of Contract Price or Contract Times, or both, or other relief with respect to the terms or pe rformance of the Contract. A demand for money or services by a third party is n ot a Claim.

The claims at issue in this suit could conceivably fit into th e definition of a Claim under this provision. Ric-Man’s complaint could be described as “[a] . . . legal . . . proceeding by . . . [Ric-Man] seeking . . . other relief with respect to the terms or performance of the Contract.” But the definition of a Claim does not explicitly provide that a claim against NTH is a Claim as defined by the General Conditions. And ultimately, this Court must read the contract as a whole, “giving harmonious effect, if possible, to each word and phrase .” 52 If a Claim includes those made by Ric-Man against NTH, the procedures for resolving such a Claim make little sense. Reading the definition of a Claim in conjunction with the provi sions covering the resolution of such Claims, the only logical, harmonious result is to limit th e definition of a Claim to those brought by the OMIDDD or Ric-M an against each other.

NTH contends that including Ric-Man’s claims against it is con sistent with Paragraph 10.06. NTH explains that subsection (A) of this paragraph plac es limitations on “any Claim,” but subsection (B) places limitati ons only on “any Claim or any other suit or proceeding against the [OMIDDD].” NTH argues that there must be a difference betw een “any Claim,” as discussed in the first subsection, and Claims against the OMIDD D, as discussed in the second. NTH contends that the difference is that “any Claim” includes c laims against the OMIDDD and against NTH.

We reject NTH’s strained reading of paragraph 10.06. Subsecti on (A) describes how Ric-Man’s damages will be calculated with regard to Claims, whi le subsection (B) describes limitations applicable both to Claims and to other suits or pro ceedings. Both subsections, however, refer to issues raised by Ric-Man against the OMIDDD. The additional language “against the [OMIDDD]” found in subsection (B) is necessitated because that subsection describes both Claims and “other suit[s] or proceeding[s] . . . .” This additional language does not recognize different potential defendants, but rather, diffe rent types of actions, all of which may be brought by Ric-Man against the OMIDDD.

VIII. COLLATERAL ESTOPPEL

NTH also contends that Ric-Man is collaterally estopped from s eeking lost profits in this matter because in its arbitration claim against the OMIDDD, the arbitration panel declined to award the same lost profits to Ric-Man. We disagree.

As our Supreme Court has explained:

52 Wilkie v Auto-Owners Ins Co , 469 Mich 41, 50 n 11; 664 NW2d 776 (2003).-18- Generally, for collateral est oppel to apply three elements mus t be satisfied: (1) a question of fact essential to the judgment must have been actually litigated and determined by a valid and final judgment; (2) the same part ies must have had a full and fair opportunity to litigate the issue; and (3) ther e must be mutuality of estoppel. Mutuality of estoppel requires that in order for a p arty to estop an adversary from relitigating an issue that party must have been a party, or in privy to a party, in the previous act ion. In other words, the estopp el is mutual if the one taking advantage of the earlier adjudication would have been bo und by it, had it gone against him. [53]

It is also well established that collateral estoppel “applies t o factual determinations made during grievance hearings or ar bitration proceedings.” 54

In the arbitration proceeding, Ric-Man brought breach of contr act claims against the OMIDDD that sought damages for the problems with the TERS desig n and the soil conditions encountered on the project. The arbitration panel found in fav or of Ric-Man with respect to both claims, and awarded Ric-Man substantial direct damages. It dec lined, however, to award RicMan its claimed lost profits, stating that Ric-Man “failed to m eet its burden that the claimed consequential damages proximately resulted from any breach of c ontract by [the] OMIDDD.” The question is whether this fi nding prevents Ric-Man from seek ing the same consequential damages in this case.

The trial court found that the issue decided by the arbitratio n panel was not identical to that at issue in this case, and thus, collateral estoppel did n ot apply. In doing so, the trial court noted the differences between contract damages and tort damages . And indeed, there is a difference. “In a breach of contract case, the plaintiff must establish a causal link between the asserted breach of contract and the claimed damages.” 55 Only those damages “t hat are the direct, natural, and proximate result of the breach[]” may be recovered

. 56 Contract damages also must meet a standard of foreseeability. The damages available in a breach of contract case are those that arise naturally from the breach, or which can reasonably b e considered to have been within the contemplation of the parties at the time the contract was m ade. 57 The standard is objective; damages that the breaching party either knew or should reasonab ly have known would occur are

53 Monat v State Farm Ins Co , 469 Mich 679, 683-685; 677 NW2d 843 (2004) (quotation marks, brackets, and citations omitted).

54 Porter v Royal Oak , 214 Mich App 478, 485; 542 NW2d 905 (1995).

55 Gorman v American Honda Motor Co, Inc , 302 Mich App 113, 118-119; 839 NW2d 223 (2013).

56 Alan Custom Homes, Inc v Krol , 256 Mich App 505, 512; 667 NW2d 379 (2003).

57 Kewin v Massachusetts Mut Life Ins Co , 409 Mich 401, 419; 295 NW2d 50 (1980).-19- recoverable. 58 This standard is applied when examining “the element of fores eeability to make out a prima facie case for lost profits.” 59

In this matter, however, the relevant claim is one of negligen t misrepresentation. If RicMan prevails on this claim, it is entitled to all damages that “are the legal and natural consequences of the wrongful act and are such as, according to common experience and the usual course of events, might reasonably have been anticipated. ” 60 Ric-Man must establish “both causation in fact and proxima te causation, the latter of which involves the question of whether the defendant should be held legally responsible for th e injury.” 61 The cause-in-fact element requires a plaintiff to “present substantial evidence f rom which a jury may conclude that more likely than not, but for the defendant’s conduct, the plai ntiff’s injuries would not have occurred.” 62 Such evidence must establish at least a reasonable probabilit y that the defendant’s negligent conduct caused the claimed injury. 63 “[T]he legal concept of proximate causation depends in part on foreseeability, that is, whether the risk of harm to the victim was foreseeable and whether the result of that conduct and any intervening caus es were foreseeable.” 64 “Proximate cause is that which operates to produce particular c onsequences without the intervention of any independent, unforeseen cause, without whic h the injuries would not have occurred.” 65 “To find proximate cause, it must be determined that the conn ection between the wrongful conduct and the injury is of such a nature that it is socially and economically desirable to hold the wrongdoer liable.” 66

Thus, while contract damages and tort damages encompass simila r principles, the two are not identical. Our Supreme Court, too, has viewed the two as d istinguishable. 67 “The doctrine [of collateral estoppel] is stri ctly applied in that the issues in both cases must be identical, and not merely similar.” 68 While there are similarities be tween the scope of damages ava ilable in contract and in tort, we cannot s ay that they are identical.

58 Lawrence v Will Darrah & Assoc, Inc , 445 Mich 1, 13; 516 NW2d 43 (1994).

59 Id

.
60 Law Office of Lawrence J. Stockler, PC , 174 Mich App at 33-34.

61 Id . at 34.

62 Skinner v Square D Co , 445 Mich 153, 164-165; 516 NW2d 475 (1994).

63 Id . at 166.

64 Law Office of Lawrence J. Stockler, PC , 174 Mich App at 34.

65 Helmus v Dep’t of Transp , 238 Mich App 250, 256; 604 NW2d 793 (1999).

66 Id

.
67 See Corl v Huron Castings, Inc , 450 Mich 620, 629; 544 NW2d 278 (1996) (“T hus, in the face of this Court’s reluctance to extend tort remedies to cases ple aded and proven in contract, we elect to continue to distinguish be tween tort and contract reme dies.”).

68 Keywell and Rosenfeld v Bithell , 254 Mich App 300, 340; 657 NW2d 759 (2002).-20- Nor is the basis for the arbitration panel’s ruling entirely c lear. The arbitration panel’s decision could be read as a findi ng that the claimed consequent ial damages did not result, as a factual matter, from the problems with NTH’s designs. It could also be read as a finding that the OMIDDD did not foresee, or should not have reasonably foreseen, that NTH’s errors would cause such damages. “Collateral estoppel applies only when the basis of the prior judgment can be clearly, definitely, an d unequivocally ascertained.” 69 That cannot be done in this case.

NTH’s brief primarily addresses whether the breach of contract claims brought in arbitration were identical to the negligence claims brought in this matter. In this regard, we do not disagree with NTH. Clearly, the basis for the breach of co ntract claims against the OMIDDD was the same conduct that Ric-Man alleges was negligent in its suit against NTH. But the relevant inquiry is more specific. The precise issue is causat ion, and specifically, whether NTH’s conduct caused Ric-Man’s damages. Because the concept of causation in the breach of contract context is not perfectly identical to the concept of c ausation in the negligence context, that Ric-Man failed to demonstrate causation in the arbitration proceeding does not collaterally estop it from seeking the same damages here. 70

IX. STANDING AND DUTY TO MANCINI ENTERPRISES

In its cross-appeal, Ric-Man ar gues that the trial court erred when it found that Ric-Man could not pursue a claim of lost profits when those profits wer e lost not by Ric-Man, but by Mancini Enterprises. We find no error in the trial court’s dec ision. This Court reviews “de novo both a trial court’s decision to grant or deny a motion for sum mary disposition and issues concerning the application of the doctrine of collateral estopp el.” 71

We first address whether Ric-Man has standing to recover lost profits on behalf of Mancini Enterprises. 72 “Whether a party has standing is a question of law subject t o review de novo.” 73

69 Ditmore v Michalik , 244 Mich App 569, 578; 625 NW2d 462 (2001).

70 We do wish to note our disagreeme nt with Ric-Man’s position on appeal. Ric-Man argues that mutuality of estoppel is missing in this case, and for that rea son, collateral estoppel cannot apply. This argument is irrelevant bec ause mutuality of estoppel is no t required when co llateral estoppel is asserted defensively, as it is here by NTH. Monat , 469 Mich at 691-692. We find no support for Ric-Man’s belief that this rule does not apply when the pri or proceeding is an arbitration.

71 Barrow v Pritchard , 235 Mich App 478, 480; 597 NW2d 853 (1999).

72 The theory behind this claim is as follows. Ric-Man explains that it is one of several companies owned by the same three brothers. One of these compa nies, Mancini Enterprises, develops real estate in Florida. According to Ric-Man, profits from Ric-Man may be sent to the other companies, including Mancini Enterprises, to use in that company’s ventures. Ric-Man contends that because of the issues related to its work for the OMIDDD, it did not have profits to send to Mancini Enterprises, wh ich would have been used by Manc ini Enterprises to purchase-21- “An action must be prosecuted in the name of the real party in interest.” 74 “A real party in interest is one who is vested with the right of action on a given claim, although the beneficial interest may be in another.” 75 “This standing doctrine recogni zes that litiga tion should be begun only by a party having an interest th at will assure sincere andvigorous advocacy.” 76

In Michigan, “[i]t is a well-r ecognized principle that separat e corporate entitles will be respected.” 77 Even subsidiaries of a parent company are generally treated a s separate corporate entities; it is only if “a subsidiary [has] become a mere instr umentality of the parent [that] its separate corporate existence will be disregarded.” 78 “The doctrine of standing provides that a suit to enforce corporate rights or to redress or prevent injur y to a corporation, whether arising from contract or tort, ordinarily must be brought in the name o f the corporation, and not that of a stockholder, officer, or employee.” 79 Here, there exist two distinct corporate entities: Ric-Man and Mancini Enterprises. Ric-M an has filed the instant suit, a nd it is the only named plaintiff. In part, Ric-Man seeks damages allegedly incurred by Mancini Enter prises in the form of lost profits. Ric-Man, which is not the real party in interest with regard to these damages, has no standing to recover those damage s. Accordingly, the trial cour t properly held that Ric-Man could not seek to recover the lost profits of Mancini Enterpris es.
Ric-Man first contends that the trial court erred in applying the standards for a motion brought under MCR 2.116(C)(8) because it failed to consider evi dence, in the form of affidavits and testimony, that could have su pported a conclusion that ther e was an inexorable flow of profits between Ric-Man and Mancini Enterprises. A motion brou ght under MCR 2.116(C)(8) is decided by looking only to the pleadings. 80 Assuming (as Ric-Man does) t hat this portion of the motion was decided under MCR 2.116(C)(8), the trial court wouldhave erred had it done as RicMan wishes and considered evidence beyond the pleadings. 81

Ric-Man primarily relies on Mars, Inc v Coin Acceptors, Inc
, 82 a federal circuit court decision, as support for its belief that it may pursue a claim on behalf of a related, but separate
real estate in Florida. Because Mancini Enterprises did not pu rchase this real estate, it lost profits that could have been reali zed from the development of t he property.

73 Groves v Dep’t of Corrections , 295 Mich App 1, 4; 811 NW2d 563 (2011).

74 Mich Nat’l Bank v Mudgett , 178 Mich App 677, 679; 444 NW2d 534 (1989).

75 Id

.
76 Id

.
77 Seasword v Hilti, Inc , 449 Mich 542, 547; 537 NW2d 221 (1995).

78 Id . at 548 (quotation marks and citations omitted).

79 Belle Isle Grill Corp v Detroit , 256 Mich App 463, 474; 666 NW2d 271 (2003).

80 Maiden , 461 Mich at 119-120.

81 In any event, what Ric-Man argues is that there exists evidenc e that its profits inexorably flow to Mancini Enterprises. The tri al court assumed this was true for purposes of its decision.

82 Mars, Inc v Coin Acceptors, Inc , 527 F3d 1359 (CA Fed, 2008).-22- corporation. Mars, Inc involved “standing and damages for patent infringement.” 83 The patent at issue concerned technology used in vending machine coin chan gers. 84 While the plaintiff, Mars, owned the patent, its subsid iary, Mars Electronics Intern ational, Inc. (MEI), produced the coin changers, paying a royalty to Mars. 85 As damages in its patent infringement suit, Mars sought lost profits for lost sales of coin changers. On the mo tion of the defendant, Coinco, the district court dismissed this part of the claim for the reason that Mars itself did not sell coin changers, and thus, had not lost any sales. 86 In doing so, the trial court relied on Poly-America LP v GSE Lining Tech, Inc

, 87 a case in which the federal cir cuit court held that “a patent holder is not entitled to recover under a lo st profits theory as a resultof sales lost by a sister corporation, absent a showing that the patent holder itself had lost profits.” 88 The district court also concluded that “Mars’s arrangement with [its subsidiary,] MEI[, ] was a licensing arrangement, rather than an arrangement wher e profits flowed inexorably from MEI to Mars . . . .” 89

On appeal, Mars argued that “by virtue of the parent-subsidiar y relationship and its consolidated financial statements, all MEI’s lost profits were inherently lost profits of Mars.” 90 Mars sought to distinguish Poly-America on the basis that because of its corporate structure relative to MEI, MEI’s profits flowed inexorably to Mars. 91 The circuit court rejected the argument, agreeing with the district court that the facts prese nted did not establish that, as a factual matter, MEI’s profits flowed inexorably to Mars. 92 The circuit court then explained:

Because we conclude that MEI’s profits did not—as Mars argued— flow inexorably to Mars, we, like the Poly-America court, need not decide whether a parent company can recover on a lost profits theory when profit s of a subsidiary actually do flow inexorably up to the parent. See Poly-America , 383 F3d at 1311 (“[I]t is not clear here whether Poly-America has itself suffer ed lost profits from the infringement, a matter that may be dealt with on remand . . . .”) We hold simply that the facts of this case cannot support recovery unde r a lost profits theory. [93]

83 Id . at 1362.

84 Id

.
85 Id . at 1362-1363.

86 Id . at 1362.

87 Poly-America LP v GSE Lining Tech, Inc , 383 F3d 1303 (CA Fed, 2004).

88 Mars, Inc , 527 F3d at 1365, citing Poly-America LP , 383 F3d at 1311.

89 Id . (quotation marks omitted).

90 Id . at 1367 (quotation marks omitted).

91 Id

.
92 Id

.
93 Id

.-23- Ric-Man contends that Mars, Inc stands for the premise that if one company’s profits inexorably flow up to another company, the latter has standing to seek damages on behalf of the former. As is plain from the final paragraph quoted above, Mars, Inc specifically disclaimed creating such a rule. Mars, Inc is also distinguishable because it is a patent suit and becaus e it involved a parent-subsidiary relationship, neither of which exi sts here. Further, Mars, Inc , as a decision of a lower federal cour t, is not binding on this court

. 94

Ric-Man contends that the prin ciple it believes was recognized by Mars, Inc , is consistent with Michigan law. Ric-Man’s contention is without merit. Ric -Man first compares this matter to agency law. Ric-Man explains t hat it, Mancini Enterprises, and several other companies are all owned by the same three brothers. Ric-Man contends that th ese companies hold themselves out as part of the same enterpris e. Ric-Man then contends that it is an agent of the greater enterprise. Ric-Man explains th at an undisclosed principal may sue for the breach of a promise made to the agent. 95 Ric-Man argues that the reverse should also be true, in that an agent should be able to sue on behalf of the undisclosed principal. Ric-Man contends that it was an agent to the greater enterprise, and as such, should be able to seek los t profits on behalf of Mancini Enterprises.

Ric-Man’s argument contains a variety of flaws. First, it is premised on the existence of an agency relationship, which Ric-Man claims exists here with i t serving as an agent to the collective enterprise. At an absolute minimum, any agency rela tionship must have two parties: an agent and a principal. 96 The collective enterprise for which Ric-Man purports to serve as an agent, however, exists only in R ic-Man’s imagination. The purp orted enterprise does not exist in any legally recognized way. That the three brothers who own Ri c-Man apparently hold out their group of companies as an enterpr ise does not create a legal ent ity. Thus, there exists no principal, and accordingly, no agency.

Even if the purported enterprise was a legally recognized enti ty, Ric-Man’s argument makes little sense. Assuming that Ric-Man could seek redress o n behalf of its principal, RicMan would be entitled to seek redress based on wrongs done to i ts purported principal, the collective enterprise. But that is not what Ric-Man seeks to d o. Rather, Ric-Man seeks to recover the lost profits of Mancini Enterprises. Under Ric-Man ’s theory, Mancini Enterprises is but another agent of the collec tive enterprise. Thus, even acc epting Ric-Man’s argument, all that Ric-Man has shown is that there exist two agents of the same pu rported principal. We are

94 State Treasurer v Sprague , 284 Mich App 235, 241-242; 772 NW2d 452 (2009). The parties do not dispute the fact that Mars, Inc has never been adopted by a Michigan appellate court. We have not found a single Michigan case citing Mars, Inc

.
95 See Socomet, Inc v Detroit , 33 Mich App 626, 632; 190 NW2d 551 (1971) (“[A]n undisclosed principal is entitled, as against third persons dealing with hi s agent, to the benefit of the agent’s acts on his behalf.”).

96 See St Clair Intermediate Sch Dist v Intermediate Educ Ass/MEA , 458 Mich 540, 557; 581 NW2d 707 (1998) (“[I]n its broadest sense agency includes every relation in which one person acts for or represents another by his authority.” (quotation ma rks and citation omitted)).-24- unaware of any authority, and Ric-Man cites none, permitting an agent to seek damages on behalf of another agent.

The second comparison drawn by Ric-Man is to the common contro l doctrine recognized in the context of ERISA and the MPAAA. As explained by the Uni ted States District Court for the Eastern District of Pennsylvania:

ERISA was enacted in 1974 to addr ess the increasingly-apparent insecurity of workers’ vested pension funds. Among its many pr ovisions, ERISA required employers to make contributions that would produce pen sion plan assets sufficient to meet future vested pension liabilities and if a p lan became insolvent, made any employer who had withdrawn from the plan during the pr evious five years liable for a fair sh are of the plan's underfunding.

Under ERISA as originally enacted, therefore, an employer coul d withdraw from an underfunded pension plan without any responsib ility for the underfunding, as long as the plan remained solvent for five yea rs after the withdrawal. This liability structure encouraged an employer to withdraw from a financially shaky plan and risk paying its share if the plan la ter became insolvent, rather than to remain and (if others withdrew) risk having to b ear alone the entire cost of keeping the shaky plan afloat.

To correct this problem, Congress passed the MPPAA in 1980 and imposed a withdrawal charge on all employers withdrawing from a n underfunded plan (whether or not the plan later became insolvent). This wi thdrawal liability represented the pro rata share of the unfunded vested liability remaining in the fund at the time of withdrawal, subject to certain adjustments. The provision of the MPPAA establishing this liability is 29 U.S.C. § 1381(a): “ If an employer withdraws from a multiemployer plan in a complete withdrawal or a partial withdrawal, then the employer is liable to the plan in the amou nt determined under this part to be the withdrawal liability.” [97]

By statute, both the employer and other businesses under the c ommon control of the employer are liable for this withdrawal liability. 98 Ric-Man contends that under this common control doctrine, it may be held liable for any withdrawal liab ility that might be owed principally by Mancini Enterprises. Ric-Man reasons that if it could poten tially be held liable in such a way, it should also be able to seek damages on behalf of Mancini Ent erprises. Simply put, the matter before this Court has absolutely nothing to do with ERISA, the MPPAA, or the federal statute holding those within the common control of an employer liable f or the employer’s withdrawal liability under those statutory schemes. Nor is there any logi cal reason to conclude that because

97 Brown v Astro Holdings, Inc , 385 F Supp 2d 519, 527 (ED Pa, 2005) (quotation marks and citations omitted).

98 29 USC § 1301(b)(1). See also Brown , 385 F Supp 2d at 528.-25- Ric-Man could possibly be liable for Mancini Enterprises’s with drawal liability, it is vested with the right to recover lost profits on behalf of Mancini Enterpri ses. The argument has absolutely no basis in law or logic.

The trial court also rejected Ric-Man’s attempt to seek lost p rofits on behalf of Mancini Enterprises for a second, indepe ndent reason: that NTH owed no duty to Mancini Enterprises. 99 Ric-Man contends that this conclusion is erroneous because “the law of agency imposes a duty upon NTH to an undisclosed principal . . . .” 100 Ric-Man explains that as a general matter, undisclosed principals are common in the construction field, an d because of that fact, NTH should have foreseen that Mancini Enterprises could be harmed b y NTH’s design defects. But there simply is no agency relationship here. As discussed, the re can be no agency relationship with the purported enterprise because there is no such entity. To the extent Ric-Man can be understood as arguing that Mancini Enterprises was an undisclos ed principal in relation to the Prime Contract, this argument clearly fails. Ric-Man contracte d with the OMIDDD purely on its own behalf. Ric-Man was to perform all obligations under the P rime Contract. Mancini Enterprises was in no way a part of the agreement between Ric-M an and the OMIDDD. RicMan fails to demonstrate the existence of any duty owed to Manc ini Enterprises.

X. LEAVE TO AMEND

Finally, Ric-Man asks this Court to either direct the trial co urt to grant its requests for leave to amend its complaint, or to direct the trial court to c onsider the requests, which were made pursuant to MCR 2.116(I)(5). We see no need for such a di rective. “This Court reviews a trial court’s decision regarding amendment of a complaint pursu ant to MCR 2.116(I)(5) for an abuse of discretion.” 101

In its response to the motion for summary disposition, Ric-Man asked that in the event any portion of the motion were g ranted, Ric-Man be allowed an o pportunity to amend its complaint pursuant to MCR 2.116(I)(5). Under this court rule, if a motion is granted pursuant to MCR 2.116(C)(8), (C)(9), or (C)(10), the trial court “shall giv e the parties an opportunity to amend their pleadings as provided by MCR 2.118, unless the evid ence then before the court shows that amendment would not be justified.” The trial court granted summary disposition with regard to the claim of lost prof its incurred by Mancini Enterpr ises, but did not specifically rule on the question of whether Ric-Man would be able to amend its c omplaint. Then, in Ric-Man’s motion for reconsideration, Ric-Man again requested that as an alternative to reconsidering its

99 Whether a defendant owes a plaintiff a duty of care is a quest ion of law, reviewed de novo on appeal. Fultz , 470 Mich at 463.

100 Michigan does recognize that an u ndisclosed principal may “cla im the benefit of a contract, maintain an action thereon, and enforce any remedies which migh t have been pursued by the agent himself . . . .” Grand Rapids Milk Produc ers Ass’n v McGavin , 295 Mich 477, 481; 295 NW 232 (1940).

101 Liggett Restaurant Group, Inc v City of Pontiac , 260 Mich App 127, 138; 676 NW2d 633 (2003).-26- holding, the trial court provide Ric-Man with the opportunity t o amend its complaint to add Mancini Enterprises as a plaintiff. Once again, the trial cour t did not specifically rule on the request. However, at no point d id Ric-Man file a motion seekin g leave to amend its complaint, nor did it present the trial c ourt with a proposed amendment.

Ric-Man now asks this Court to remand the matter and direct th e trial court to either grant leave to amend, or to consider Ric-Man’s “numerous requests for leave to amend its complaint.” We do not see the necessity of such a directive. Ric-Man has n ever filed a motion for leave to amend. It has explained only that an amendment would add Manci ni Enterprises as a plaintiff. Ric-Man states that such an amen dment would cure most or all of the defects with the lost profits claim, but that does not appear to be the case. For example, s imply naming Mancini Enterprises would not change the fact that Ric-Man has yet to identify a le gally recognized duty owed by NTH to Mancini Enterprises. Issues may also arise related to t he statute of limitations. Under the circumstances, it is not at all clear that an amendment to the complaint is warranted.

Nor do we find it necessary to direct the trial court to consi der the requests made by RicMan. The trial court has never indicated that it would refuse to consider a proper motion for leave to amend the complaint. W hen the matter returns to the t rial court, Ric-Man can file such a motion. The parties (and ultimately, the trial court) would th en have an opportunity to explain why leave to amend should or should not be granted. But absent any indication from the trial court that it woul d not consider such a motion, there is no nee d for further ac tion by this Court.

Affirmed in part, reversed in part, and remanded for further p roceedings consistent with this opinion. We do not ret ain jurisdiction.

/s/ Michael J. Talbot /s/ Kathleen Jansen /s/ Joel P. Hoekstra