UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

NOVI PROMENADE ASSOCIATES

LIMITED PARTNERSHIP, and 

LANDON DEVELOPMENT CORP., 

Plaintiffs/Counter Defendants,

Case No. 02-CV-72890

vs. HON. GEORGE CARAM STEEH

TARGET CORPORATION,

Defendant/Counter Plaintiff.

____________________________/

OPINION AND ORDER OF THE COURT FOLLOWING BENCH TRIAL

I. Overview and Procedural Background

The crux of this lawsuit, removed to this court from state court on the basis of

diversity of jurisdiction, is the parties’ dispute over their contractual obligations relating

to the site development for a Novi, Michigan Target store that opened in October 2002. 

Essentially, the developer/landowner plaintiffs seek this court’s determination that

Target improperly took over the site development from plaintiffs, while defendant Target

asks that the court find that Target followed the parties’ agreement, which allowed for

take over of site development only if Target reasonably believed, in good faith, that the

parties’ schedule was not being met. The claims tried by the parties were the parties’

cross-claims for breach of contract, as well as plaintiffs’ claim alleging trespass, and

Target’s counterclaim alleging unjust enrichment.

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 The court notes that neither certain claims contained in plaintiffs’ amended

complaint nor certain counts contained in Target’s third amended counterclaim were

addressed as part of the bench trial. It is the court’s opinion that all claims remaining are

rendered moot or unnecessary as a consequence of this opinion and order. If necessary,

the court would entertain a motion to reopen the case to address any unresolved claims.

2

 Also requiring disposition on the docket of this matter is Target’s motion in limine

concerning the report of Matt Diffin, filed January 28, 2005. That motion was DENIED, as

stated on the record on February 4, 2005, for the reasons there given. 

2

This matter has been pending in this court for little over three years, and the

court has had opportunity to rule on a number of pre-trial matters, including the parties’

cross-motions for summary judgment, and preside over a lengthy bench trial, at which

the parties cumulatively presented hundreds of exhibits. Following the bench trial, for

which the parties prepared trial briefs, proposed findings of fact and conclusions of law,

post-trial briefs, and limited supplemental briefings, the parties presented oral closing

arguments on June 22, 2005. The matter was ripe for decision as of that time.1 2

After considering all of the written and oral argument, as well as the physical and

testimonial evidence, the court herein issues its findings of fact and conclusions of law,

pursuant to Fed. R. Civ. P. 52, as set forth below. Although all of the materials and

evidence contribute to the court’s findings in this matter, due to the bulk of evidence, the

court’s written determinations can incorporate only a portion of the parties’ evidence and

argument.

II. Findings of Fact

It is undisputed that a new Target retail store located in the southeast quadrant of

the intersection of Wixom Road and Grand River Avenue in Novi, Michigan (the “Target

store”), was completed and opened for business in October 2002. At trial, the parties

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 As referenced above, a great deal of evidence was offered at trial concerning the

details of the parties’ relationship from late 1999 until that meeting, which the court finds

unnecessary to discuss in making a determination on the parties’ claims. Specifically,

much of the evidence offered by plaintiffs concerns the decision making concerning an

opening date for the Target store, which, for the reasons set forth below, does not impact

the court’s decision. 

3

offered a great deal of evidence concerning their relationship, negotiations, agreements,

and disputes during the months–and years--prior to the store’s opening. Again, in the

parties’ post-trial summaries and argument, the pre-development relationship is hashed

out in great detail, most, if not all, of which the court finds unnecessary to decide this

case. The court’s factual findings as to the pertinent interaction between the parties to

this case follows. 

It was established at trial that at the beginning of the parties’ relationship, an

affiliate of Landon Development Company, a Michigan corporation, owned

approximately 45 acres of land in Novi, Michigan, concerning which the affiliate had

sued the city of Novi in state court, seeking the right to develop the property. Prior to

resolution of that suit via a consent judgment issued July 19, 2001 (the “Consent

Judgment”), a letter of intent (“LOI”) concerning the Target anchor store was signed by

Landon and Target. That LOI was signed May 30, 2001, the day Landon

representatives met with Target representatives in Minneapolis, Minnesota at a Target

“Capital Project Request” (“CPR”) meeting during which they discussed the project.3

The LOI stated the general economic terms of the transaction, contemplating that the

developer would prepare the pad on which the Target store would be built, and perform

other general site work including roads, utilities, parking lots, and landscaping, and

stated that the “[d]eveloper shall use best efforts to commence the grading of the Target

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property by August 15, 2001 and deliver the Target pad on or before December 1,

2001.” Plaintiffs’ Exhibit 12, ¶ 9. The “CPR Book” discussed at the meeting

incorporated a model schedule reflecting an October 2002 opening, and a requirement

of an October 2002 opening was discussed at the meeting. Plaintiffs’ Exhibit 38, Trial

Testimony of Landon representative Thomas High, Volume 3, p. 15.

The Consent Judgment, issued some weeks later, allowed for grading of the

shopping center parcel subject to submission of a mass grading plan, but required

Landon to obtain preliminary site plan approval prior to starting work on the building pad

for the Target store, and final site plan approval prior to installation of site utilities and

other site improvements. Defendant’s Exhibit 11, ¶ 6.

Between July 19, 2001 and December 2001, the parties were in communication

regarding Landon’s progress with the permitting process and certain terms of the

agreement. Ultimately, all involved came to realize and accept that site plan approval

would not be forthcoming in the time frame discussed earlier in the year. Nonetheless,

it is the court’s finding that none of the communication referenced showed an

agreement to change the October 2002 opening date, and both parties recognized there

would be a date some days or weeks prior to the opening at which all work had to be

completed, in order to obtain an occupancy permit from Novi. Although Landon has

certainly pointed to evidence showing discomfort on the plaintiffs’ part with the October

2002 date, it is abundantly clear that Landon nonetheless made the decision to go

forward with the deal with that date unchanged. For instance, as discussed by Target in

its Post-Trial Brief, pp. 31-32, notes of Target representative Mr. Struve summarize a 

conversation between the parties discussing the number of weeks necessary from the

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February 1 proposed pad delivery date to create a building ready for installation of

fixtures; also and a note from Mr. High to Mr. D’Amico, who was then expected to be the

contractor on the site, circulating a proposed modification to the schedule in Exhibit C to

be attached to the Site Development Agreement with the October store opening date. 

Defendant’s Exhibit 68. In fact, those notes stated the schedule modified an earlier one,

and further that “[t]his is the schedule that needs to be adhered to by Target. Most of

the dates have moved up only slightly, however items C, D & E are up 1 month and E is

up 2 months. We must do this.” Id. However, the court also credits the testimony of

Tom High concerning conversations High had with Dean Zurmely of Target, in which

Zurmely indicated the dates could be moved if necessary. See, e.g., Trial Testimony of

Tom High, 2/2/05, pp. 49-50. The court, however, does not accept High’s testimony to

the effect that Target agreed the store opening date could be changed. In fact, Mr.

Zurmely himself admitted the only real critical date in the schedule was the turnover

date, to allow for opening the store on time. 

Although final site plan approval had not yet been secured during the month of

December 2001, the parties were working on finalizing the terms of the three separate

agreements, ultimately signed in January: the Site Development Agreement (“SDA”), a

Purchase Agreement, and an Operations and Easement Agreement (“OEA”). In that

December time frame, Landon requested payment of an additional $455,000, reflecting

Landon’s estimated cost for imported fill to complete the pad on schedule (i.e. in the

winter), to which Target would not agree. However, the agreements as signed did

reflect certain changes in the economic deal of the parties. For example, because

Target did not want to close on its portion of the shopping center property prior to

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 Most notable, perhaps, was that the pad delivery date given on Exhibit C was

February 1, 2002, just days after the placement of the documents in escrow. In any event,

the SDA did not become effective until April, 2002.

6

plaintiffs’ receipt of final site plan approval, yet site development had to begin to make

an October 2002 store opening date possible, the parties agreed to the following: Target

would make an immediate payment to Landon of $150,000, to facilitate Landon’s site

work. Target would close on the property so long as plaintiffs obtained final site plan

approval by April 30, 2002. If Target refused to close despite the site plan approval,

Landon would receive $1,000,000 in liquidated damages, against which the $150,000

would serve as a credit for Target. The remaining terms were, largely, what had been

planned by the parties. Under the SDA, Target would pay plaintiffs $3.45 million for the

13.23 acre site for its store. Target further agreed to pay $1.9 million for the

development and improvement of the site; the balance of the development expenses

would be borne by Landon. Landon agreed to develop and improve the site as required

by the City of Novi for Target to obtain its certificate of occupancy by October 2002. 

The Purchase Agreement, Site Development, and Operations and Easement

Agreement documents were signed by Target and Landon on January 11, 2002. The

SDA and OEA were placed in escrow on January 22, 2002, with an escrow closing

planned, to take place once site plan approval had been obtained. The SDA’s

attachments included an Exhibit C, which outlined deadlines for the site work.4 

Closing occurred on April 19, 2002. Target then paid Landon $3.45 million, and

made payments toward its $1.9 million contribution to the sitework under the SDA.

Between the document signing and the final site approval, preliminary work on the

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Target pad was performed by Landon’s contractor, ET MacKenzie. The pad is the

ground beneath the store itself, which is manipulated and compacted to support the

weight of the building. Landon points out that weather caused significant delays in the

pad construction, and that MacKenzie had to repeatedly manipulate the fill to reach the

required compaction standard, which was ultimately lowered by Target to facilitate

progress on the pad. The parties worked out an arrangement to allow Target to begin

building construction before the entire pad was complete, and the first half of the pad

was delivered to Target on April 18, 2002. About this time, the Operating Engineers

union began picketing at the site, due to MacKenzie’s presence as a non-union

contractor. The court notes that this union problem required attention to resolve, and

may have caused some delay just as the pad was being turned over to Target. Another

cause of delay was the bidding process for site work, undertaken by Landon

representative Brian McCafferty. As quoted in Target’s post-trial brief, the court noted

Mr. McCafferty’s difficulty with the bidding process, and the these inefficiencies led to a

decision to bring Bartow & King on board as a project manager:

The Court: And in relation to the rounds of biddings that you described,

the first being around mid April, the second being around

April 24th, and the third one being in May, at what point

during the solicitation and the receipt of those bids did you

have the idea of hiring Bartow & King?

A: I’m pretty sure, Your Honor, that I began–that I got the ball

rolling on the potential of a [construction manager], you

know, talking with Carolyn and maybe even Dan, I’m pretty

confident I got that ball rolling much earlier like in April when

I got the first nightmare, and I’m like wow.

The Court: By “first nightmare” you are referring toA: The first nightmare of bids that was just so, you know, far

away from each other.

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Trial Testimony of Brian McCafferty, 2/3/05, pp. 109-110. The pad was ultimately

completed by MacKenzie on Friday, April 26, after which Target’s contractor, Conlon,

placed stone on the pad over the weekend. The court agrees with Landon that this

represented Target’s acceptance of the pad. Contrary to Target’s claims at trial, by its

actions it abandoned any right to expect formal certification of the finished pad.

At this point, Landon had the responsibility for the remaining site work it had

agreed to in the SDA. While some of the work had been accomplished by the end of

April, after final site approval was granted, Landon had to seek bids for the remainder. 

As this process was beginning, Landon made an agreement with MacKenzie to install

the storm sewer and fire loop, both of which were necessary before Target could begin

“vertical construction” of its store. The parties dispute the cause of delays in the start of

this particular work, Landon asserting Target’s concern about bringing non-union

workers back to the site, and Target asserting Landon caused the delays. In any event,

this problem was averted when the Fire Marshal allowed vertical construction to overlap

installation of the fire loop. See Trial Testimony of Allan Nagorzanski, 2/10/05, pp. 45-

47. The court thus credits the testimony of plaintiff’s expert and finds that this particular

issue did not present any serious obstacle to Target completing its work on time.

Brian McCafferty, Landon’s on-site representative, testified that he planned to

award the remainder of Landon’s site work to MacKenzie by late May. However, this

again caused a threat by the union, and caused McCafferty to instruct project manager

Bartow & King to rebid the work and give Landon its recommendation by the beginning

of June. Meanwhile, Target’s in-house counsel, Jane Borden, prepared and sent a

letter dated May 28, 2002 stating that Target intended to take over the site work, in part

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 The SDA, with an effective date of April 19, 2002, was admitted into evidence as

a part of Plaintiff’s Exhibit 1, the “Closing Binder.”

9

due to Landon’s failure to meet a number of dates in the schedule, i.e. Exhibit C to the

SDA, as contemplated by section 6(a) of the SDA.5

Section 6 of the SDA provides for Target’s takeover of the sitework if Landon

does not meet dates set forth in the “Master Schedule.” In the event that Target takes

over sitework, Landon remains liable for “Developer’s Costs,” which includes all of the

sitework costs, related permits and related costs, less Target’s $1.9 million Site

Improvement Fee, for which Target remains responsible. 

The May 28, 2002 letter required that Landon send an updated schedule, as

contemplated by the SDA, to demonstrate that the site work could be completed as set

forth in the SDA. Within several business days, Steve O’Mara of Bartow & King sent a

revised schedule, indicating the work could be completed in time for the October 2002

store opening. In the meantime, Target representatives had begun talking to Landon’s

prospective subcontractors about the possibility of Target taking over the site

development work. A meeting was held on site on June 13, 2002, and testimony at trial

showed that Target agreed that the dates provided by Landon could allow an October

2002 store opening. However, the Landon schedule included certain footnotes allowing

Landon extra time in the event of rain or utility delays. It became clear to the court at

trial that it was these footnotes that prevented the parties from agreeing that Landon

would complete the site development work, largely because Target representatives had

simply lost confidence in Landon’s ability and commitment to finish its work on time. 

Target would not agree to keep the status quo with the footnotes, and Landon would not

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 To the extent this section of the opinion discusses facts or makes inferences not

set forth in the “Findings of Fact” section, above, such facts or inferences are incorporated

therein.

10

agree to remove the footnotes. Although Target argued at trial that the Landon

proposed schedule also failed to address certain tasks at all, this complaint was never

even addressed at the meeting and Landon was never given an opportunity, therefore,

to supply these dates.

At the conclusion of the meeting, outside counsel for Landon, Harold Fried,

asserted to Target that Landon could not properly take over the site work. However,

Fried stated that if Target were nonetheless going to take over the work, Target could

use Landon’s site drawings and permits. Several days later, Fried sent Target a draft

amendment to the SDA permitting such a takeover under certain conditions. Target

never responded to the proposal.

Ultimately, Target did take over the remaining site work, bringing on Landon

contractor Bartow & King/Steve O’Mara and contracting (through its prime contractor,

Conlon Construction) with Landon subcontractor MVA to complete the work. 

III. Analysis/Conclusions of Law6

a. The Parties’ Respective Breach of Contract Claims

To establish a breach of contract under Michigan law, it must first be established

that the contract is valid, which the parties do not dispute in this matter. To establish a

breach of that contract, the party seeking to recover on that basis must prove, by a

preponderance of the evidence, what were the terms of the contract, that the other party

breached those terms, and that the breach caused injury to the claimant. In re Brown,

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342, F.3d 620, 628 (6th Cir. 2002), citing Platsis v. E.F. Hutton & Co., Inc., 642 F.Supp.

1277, 1309 (W.D. Mich. 1986).

Both plaintiffs and defendant strenuously argue that the other party/ies breached

the SDA. Much of the argument concerns whether Target, “in its reasonable judgment

and in good faith,” took over the site development work. After prolonged consideration

of the evidence and arguments made by the parties, the court has determined that both

parties committed breaches, although not in Landon’s alleged failure to meet dates nor

in Target’s takeover of the work. For the reasons that follow, it is the court’s

determination that the parties’ breaches were in Target’s failure to pay Landon for its

Site Development Fee, portions of which were invoiced to Target in June and July 2002,

and in Landon’s failure to pay Target Developer’s Costs.

Section 6(A) of the Site Development Agreement reads as follows:

Section 6. Take Over by Target; Reimbursement Rights

If Target determines in its reasonable judgment and in good faith that the

performance of the Site Improvement Work is not in accordance with the

Site Construction Documents and/or is not proceeding so as to be

completed within the Master Schedule (it being understood that time is of

the essence), Target may give notice of such fact to Developer. If

Developer does not present to Target reasonable evidence, within ten (10)

days of receipt of such notice, either that the work will be completed as

required or that an extension of a completion date is permitted under the

terms of Section 10 below, Target shall have the right, but not the

obligation, to assume control of the construction of all or any designated

portion of the Site Improvement Work located on or necessary to operate

the Target Tract and the Permanent Access Drive and which are required

in order to obtain the occupancy permit for the Target Building, and upon

such election Target agrees to proceed to complete the same with all

reasonable dispatch. Target shall have no right to modify the Site

Construction Documents in order to complete the portion of the Site

Improvement Work over which Target has assumed control so as to

accommodate Target’s need to open on schedule. Developer hereby

grants to Target, its contractors, agents and employees a temporary

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 As noted in its ruling on summary judgment, the court again notes that there is no

evidence that plaintiffs provided defendant with a bar chart as set forth in section 4 of the

SDA, which would have addressed details of the development project not mentioned in

Schedule C.

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license to enter upon the Developer Tract for the purpose of performing all

or any part of such construction work. Target shall remain liable for

Developer’s Costs and agrees to periodically pay Developer’s Costs to

Target in the same manner as set forth for payment by Target in Section 5

above. If Developer fails to pay Developer’s Costs when due under this

Section 6(A) and if Target so performs construction work and if a portion

of Developer’s Costs with respect to such work are reimbursable by third

parties, Developer hereby assigns to Target its rights to collect such

reimbursement. In such event, Developer agrees to execute and deliver

to Target any documents required to further evidence such assignment. 

Upon such assignment, Developer consents to Target seeking and

obtaining, at Target’s option, recovery of such reimbursements provided

any funds actually obtained by Target, net of Target’s reasonable costs in

obtaining the funds, shall be applied to Developer’s Costs. 

Site Development Agreement, § 6(A). The definition of “Master Schedule” is found in §

4(C) of the SDA, in which it states that, four weeks prior to beginning the Site

Improvement Work, Developer must submit a bar chart conforming with the Schedule

set forth on Exhibit C, and the bar chart together with the Schedule will be considered

the “Master Schedule7

.” 

As discussed in the court’s ruling on the parties’ cross-motions for summary

judgment:

The terms of the contract obligating plaintiff to make Developer’s Costs

payments contemplate a takeover only after Target’s determination “in its

reasonable judgment and in good faith that the performance of the Site

Improvement Work is not in accordance with the Site Construction

Documents and/or is not proceeding as to be completed within the Master

Schedule.” SDA, section 6(A).

Clearly, there was no “Master Schedule,” which is defined in the SDA to be the

schedule attached thereto along with a bar chart to be provided prior to commencement

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of Landon’s site work under the SDA. There was no evidence offered by Landon that it

prepared or exchanged such a document, and none by Target to show that it demanded

production of such a document. Furthermore, the court finds that by its terms, the SDA

itself became effective only after coming out of escrow, which was long after several

dates in Exhibit C had already passed and had not been met. The actions of the parties

demonstrated clearly to the court a waiver, or disregard, of a particular schedule. The

parties’ actions demonstrated that they were focused solely on getting the work done to

open the Target store in October. As set forth above, the court has credited the

testimony of Tom High concerning Target’s willingness to change dates, and that the

signing of the contract “as is” was a technicality, simply done to get the deal moving and

open the store in October. Despite Target’s assertion that it repeatedly asked Landon

for a schedule such as that contemplated in section 4(c) of the SDA, Target continued

working with Landon, and did not insist on the preparation of a Master Schedule. Thus,

the “Master Schedule” became only the very end dates set out in Exhibit C.

Although the court finds that most of the specific dates given in the SDA were not

set in stone, the court also finds that Target reasonably feared that the project’s

progress (or lack thereof) was not going to allow its October 2002 store opening. 

Likewise, the court finds that the letter, notifying Landon of Target’s intention, was sent

in good faith. Although the face of the document may have included a partially

nonsensical rationale, given the parties’ mutual waiver of many dates in Exhibit C to the

SDA, the letter was written by a corporate attorney without knowledge of the physical

operation of the project. The May 28, 2002 letter merely served to give Landon notice

of Target’s intention to take over the project, to which Landon was able to respond. The

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 The court notes that the number of representatives at the meeting on behalf of

both Target and Landon supports the serious nature of the discussions; had Target been

undertaking the takeover in bad faith, it likely would not have been represented in such

force.

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court credits the testimony of all involved at the resulting June 13, 2002 meeting, to the

effect that the meeting was a serious effort to resolve the dispute.8 The court’s findings,

above, indicated that Landon’s effort to restore the status quo failed due to its insistence

on footnotes granting it extra days for rain delays or utility problems. Although Landon

asserts that such footnotes were merely a reiteration of a Force Majeure clause already

part of the SDA, such that Target’s refusal to accept the footnotes demonstrated that

Target’s takeover was in bad faith, the court finds Target’s discomfort with Landon’s

commitment and ability to complete its work prior to the opening date was reasonable.

As to Landon’s complaint that Target breached its duties by contacting potential

subcontractors, thereby preventing Landon’s completion of the bidding process, the

court acknowledges that the contacts by Target impaired Landon’s ability to

successfully bid the work but did not preclude it. Moreover, the contacts by Target were

reasonable in light of the court’s conclusion that Target had a reasonable apprehension

of failure by Landon to complete its work on time.

As indicated above, the court also disagrees with Landon’s argument concerning

the appropriate findings resulting from the meeting. It is the court’s finding that as of

June 13, 2002, Target was on the brink of failing to get its store open on time. Target

had made a contract designed to ensure the store would open on time, a fact Target

representatives at trial confirmed is of great importance to Target. It was a fact well

known and understood by the plaintiffs. By definition, Landon could not have had the

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same interest in the store’s opening in October 2002. Moreover, Landon had

demonstrated some frustration with securing bids for the site development work, as

reflected by Brian McCafferty’s testimony upon questioning by the court, set forth

above, which had not yet been resolved at the time Target took over the work.

For the reasons set forth above, Target will not prevail on its breach of contract

claims to the extent those claims assert Landon’s breach on the basis of untimely Site

Development Work. Likewise, Landon will not prevail on its breach of contract claim to

the extent the claim asserts Target’s unreasonable or bad faith determination to take

over the work. Target was in a situation where, the court finds, it was reasonable to

believe the store’s opening date was in jeopardy, and the only way to guarantee an ontime opening was to undertake the work itself. Therefore, the court finds that Target did

not breach the SDA by its takeover.

The breaches that did occur under the SDA were the parties’ respective refusals

to make payments clearly required by the terms of §6(A), i.e. Landon’s Developer’s

Costs and Target’s Site Development Fee. The court is persuaded that each of the

parties has proved, by a preponderance of the evidence, that the other was responsible

for these certain payments, that the other party breached those terms, and that the

breach caused injury to the claimant. Moreover, the court cannot find that either breach

would be material, i.e. excusing the other party’s performance under the contract. The

rule of law in Michigan provides that the party “who first breaches a contract cannot

maintain an action against the other contracting party for his subsequent breach or

failure to perform.” Michaels v. Amway Corp., 206 Mich.App. 644, 650, (1994), quoting

Flamm v. Scherer, 40 Mich.App. 1, 8-9 (1972). However, it must be a substantial first

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 However, as discussed below, this amount will serve as an offset to the judgment

entered for Target, and is accounted for by Target’s own calculation of damages sought.

16

breach for the rule to excuse subsequent performance. Id., citing Baith v. Knapp-Stiles,

Inc., 380 Mich. 119, 126 (1968). In the instant case, Target’s failure to pay the invoices

representing Landon’s third and fourth draw on Target’s capped $1.9 million Site

Improvement Fee is not material in light of the fact that Target took over the work and

could anticipate a significant increase of expenses formerly allocated to Landon. A

discussion of particular damages follows.

 As damages resulting from Target’s breach of contract, Landon claims

entitlement to payment for its third and fourth draw requests presented to Target after

the May 28th letter, in an amount totaling $413,359.81 and unpaid by Target. The court

finds that this is Landon’s injury resulting from Target’s breach and that an award of this

amount is appropriate in connection with its judgment for Landon on this claim.9

Target, on the other hand, asserted at trial and in its post-trial brief that it has

paid a total of $5,159,761 toward the site improvement work, $3,259,761 more than its

agreed-upon $1.9 million Site Improvement Fee set forth in the SDA.

Both sides agree that following its takeover, Target had an obligation to act

prudently in completing the site development work assigned to Landon under the SDA. 

The disputed question is whether Target, in its haste to complete the project,

imprudently agreed to pay excessive sums to contractors in order to meet its schedule. 

Specifically, Landon asserts Conlon approved change orders to its contract with site

development contractor MVA that would not have been approved had Landon had

control of the work, totaling $498,476.55, left unsuitable soils on Landon/Novi

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Promenade property that Landon would not have allowed to be left, and paid MVA for

certain road work Landon will have to redo, at a cost of $56,264.

Concerning the road work, Landon is unable to demonstrate damages in any

amount. It has incurred no repair expenses to date, it sought no repairs during the

warranty period, if any, and it is apparent that the road will now be replaced in

connection with the development of a WalMart. Turning to Landon’s assertion about the

unsuitable soils left on the parcel, Landon complains that Target imported large

quantities of stone unnecessarily at a significantly higher price than necessary or

prudent to construct site improvements, rather than to use less expensive sand,

including on-site materials. The court agrees with Target that its approach to the road,

parking lot, and pad stabilization was all commercially reasonable, including leaving the

“unsuitable” soils on the property, and no damages due as an offset to Landon will be

awarded to Landon as a result.

Finally, the court will address the change orders Conlon made to its contract with

MVA, asserted by Landon to be unreasonable. As a general proposition, Landon

complains that Target unreasonably spent too much as a result of its bad faith decisions

in completing the improvements. Landon attempts to establish the difference between

bids it received for work against the contracts entered into by Target as the measure of

unreasonable overpayment. This attempt fails in most respects. First, the bids Landon

had received were not accepted and were subject to revision to better define the scope

of work. Second, the changes necessary following Target’s takeover would have

necessitated most of the change orders and modifications ultimately agreed to by

Target. For example, the use of limestone instead of sand or clay was a reasonable

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choice given the economics and reasons advanced by Target, contrary to the testimony

of Mr. Diffin at trial.

Two exceptions to this general finding, where the court agrees with Landon,

relate to the additional charges paid by MVA in relation to its October 1, 2002 repricing

of storm work (Target’s Exhibit 443) and its payment of $59,915 in overtime. The court

is persuaded that Target acted unreasonably in approving both of these items. The

storm work was grossly overcharged, resulting in overpayment of $5,621.00, and the

agreement to pay overtime was an unreasonable overpayment because Target failed to

demonstrate the necessity of its agreement to pay overtime in order to complete the

work on time. Indeed, the testimony of Mr. Peterson and others persuades the court

that it was commercially unreasonable to agree to pay overtime.

For the foregoing reasons, the court has determined that an award of the total

site work costs incurred by Target of $3,070,114, as represented in Target’s Exhibit

549, less the above, unreasonable overpayments to MVA, of $65,536, for a judgment

amount of $3,004,578, is appropriate. Because the total sitework costs have already

been calculated by Target as a net after deducting Target’s contractual $1.9 million

contribution under the SDA, the judgment for plaintiffs for the unpaid invoices has

already been accounted for as an offsetting obligation. 

b. Novi Promenade’s Trespass Claim

Given the court’s finding above, that Target did not breach the SDA by virtue of

its takeover, it is clear that Target did not trespass on the property of Novi Promenade in

performing the site development work. There is no dispute that a “trespass” in Michigan

requires a finding of an unauthorized entry on the land of another. Target cites to

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Amoco Pipeline Co. v. Herman Drainage Systems, 212 F.Supp.2d 710, 720 (W.D. Mich.

2002) (collecting earlier cases) for this proposition, with which the court agrees. The

Site Development Agreement explicitly states that where the situation arises that Target

has the right:

“to assume control of the construction of all or any designated portion of

the Site Improvement Work located on or necessary to operate the Target

Tract and the Permanent Access Drive and which are required in order to

obtain the occupancy permit for the Target Building...Developer hereby

grants to Target, its contractors, agents and employees a temporary

license to enter upon the Developer Tract for the purpose of performing all

or any part of such construction work.” 

§ 6(A), SDA. 

Given the court’s determination that Target’s takeover was not a breach, there

can be no serious contention that Target trespassed in the context of its site

development work, regardless of whether the owner was Landon or Novi Promenade,

both controlled by Daniel Aronoff. The court agrees that Hunter v. Slater, 331 Mich. 1

(1951) lends support to defendant’s argument. Certainly, as in Hunter, Novi Promenade

had knowledge of the site development and surrounding circumstances, and Target can

be said to have relied to its detriment on the license granting access to the site. See

also Art Van Furniture, Inc. v. Detroit Edison Co., 2000 WL 33521876 (Mich.App. 2000)

(unpublished). The transfer of ownership, itself, did not impact or change the

development of the parcel in question. Moreover, Target was permitted by Landon to

use its permits and plans to develop the site. Novi Promenade thus did not establish at

trial that Target’s entry on the property, under these circumstances, was unauthorized,

and it will not succeed on this claim.

c. Target’s Unjust Enrichment Counterclaim

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As with the trespass claim, the court’s determination on the parties’ respective

breach of contract claims makes it unnecessary to devote much analysis to this claim. 

Target provides the elements of an unjust enrichment claim in its post-trial brief, not

disputed by plaintiffs: 1) receipt of a benefit by the defendant from the plaintiff, and 2) an

inequity resulting to the plaintiff because of the retention of the benefit by the defendant. 

Keywell & Rosenfeld v. Bithell, 254 Mich.App. 300, 327-28 (2003).

In Target’s post-trial brief, it asserts that its unjust enrichment damages “are the

same as its breach of contract damages,” and that Novi Promenade, the current owner

of the shopping center development area, received a benefit by virtue of the site work

performed by Target equal to that Landon received (i.e. the total cost of the site

development work less the $1.9 million contribution required by Target under the

contract). Plaintiffs’ argument, in its post-trial brief, asserts that Target’s “unclean

hands” prevent it from recovery of unjust enrichment damages, but they do not contest

the asserted amount of damages.

It is the court’s finding that Target has succeeded on its unjust enrichment claim

in the amount requested: i.e. the amount awarded above for Target’s breach of contract

counterclaim, which shall be an obligation shared jointly and severally with Landon.

d. Attorney Fees

Both parties seek costs and attorney fees accrued during the pendency of this

litigation. The pertinent section of the SDA follows:

Section 13. Costs and Attorney’s Fees. If either party brings or

commences any legal action or proceeding to enforce any of the terms of

this Agreement (or for damages by reason of an alleged breach of this

Agreement), the prevailing party in such action shall be entitled to

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recovery of all costs and expenses of litigation, including reasonable

attorney’s fees.

Fed. R. Civ. P. 54(d)(2)(A) states that "[c]laims for attorney’s fees and related

nontaxable expenses shall be made by motion unless the substantive law governing the

action provides for the recovery of such fees as an element of damages to be proved at

trial." In a contract action, where the contract provides for an award of attorney’s fees to

the “prevailing party,” such attorney fees are an element of damages, to be determined

along with the other claims in the case, not by separate motion. Clarke v. Mindis

Metals, Inc., 99 F.3d 1138 (6th Cir. 1996) (unpublished). As discussed in that opinion,

where the term “prevailing party” is not defined in a contractual provision, the term shall

“have the meaning given it by the case law under Fed. R. Civ. P. 54(d)(1).” Id., 1996

WL 616677 at *9. That case law generally states that such costs and fees may be

awarded “even when the successful party is not awarded his entire claim,” see

Zackaroff v. Koch Transfer Co., 862 F.2d 1263, 1265-66 (6th Cir. 1988), but does not

address where each party is successful on certain claims, but neither is successful on

all claims.

Target’s post-trial brief indicates that it will need to update its attorney fees to

date before the court can make a determination on this provision. However, the court

will decline to award attorney fees to any party in this action, for the reasons that,

making further proffers and/or argument unnecessary. Because the court has found for

each of the parties only on some aspects of their claims, and against each of the parties

on the bulk of their respective claims, the court finds that an award of attorney fees

under these circumstances would be inequitable. Where each of the parties has

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committed a breach, there can be no single “prevailing party.” “Prevailing party,” as that

term appears in the SDA, is not defined. In light of the court’s ruling, finding both

plaintiffs and defendant successful on limited claims, it is the court’s determination that

each of the parties is a “prevailing party” to some extent. Although the respective

awards are in largely different amounts, the amount of damages awarded does not alter

the legal concept of a “prevailing party.” Furthermore, even if the court were to find that

Target “prevailed” to a degree greater than Landon, it has not found that Landon was

more culpable than Target, and will not award attorney’s fees in this scenario.

Finally, the court has determined that the equities of the circumstances dictate

against an award of attorney fees. This decision is in large part because it is the court’s

opinion that both sides in this dispute performed their core obligations under the

contract with a good faith effort. Their differences were the result of genuine

disagreement, and each side had some merit to their complaints. Unfortunately, the

parties’ differences blossomed into very expensive litigation that only caused their

positions to become more rigid. To the extent that this court enjoys discretion in

determining this claim, the court, therefore, concludes each party should pay its own

attorney fees.

IV. Conclusion

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For the reasons, and to the extent, stated above, judgment will enter for both

Landon and Target on their breach of contract claims, and for Target on its unjust

enrichment claim. Damages are awarded in the amounts set forth above.

s/George Caram Steeh 

GEORGE CARAM STEEH

UNITED STATES DISTRICT JUDGE

Dated: September 30, 2005

CERTIFICATE OF SERVICE

Copies of this Order were served on the attorneys of record on September 30, 2005, by

electronic and/or ordinary mail.

s/Josephine Chaffee 

Secretary/Deputy Clerk

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