If this opinion indicates that it is “FOR PUBLICATION,” it is subject to 

revision until final publication in the Michigan Appeals Reports.

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S T A T E O F M I C H I G A N

C O U R T O F A P P E A L S

CHRISTOPHER KEEFER, KATHERINE KEEFER, 

CASEY KEEFER, LISA KEEFER, JASON 

BROWN, and DARCEL BROWN,

Plaintiffs-Appellants/Cross-Appellees,

UNPUBLISHED

October 6, 2022

v No. 357491

Midland Circuit Court

SCOTT NEAL, LC No. 17-004954-CB

Defendant-Appellee/Cross-Appellant.

Before: M. J. KELLY, P.J., and CAMERON and HOOD, JJ.

PER CURIAM.

Plaintiffs appeal as of right the trial court’s order dismissing their remaining claim against 

defendant, Scott Neal. On appeal, they challenge the order granting in part Neal’s motions for 

summary disposition. In a cross-appeal, Neal contests the order allowing the disputed funds to 

remain in escrow through the pendency of this appeal. We affirm.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY

Plaintiffs Christopher Keefer and Casey Keefer are experienced hunting guides and 

outdoor television hosts. Neal is a wealthy businessman from California. Christopher and Casey 

met Neal around 2008 when Neal traveled to Michigan to hunt white-tailed deer. Some time later, 

Christopher became interested in purchasing the rights to a particular deer feed formula. 

Christopher, Casey, and their father, Charles Keefer, approached Neal about financing a new 

company to produce and market the formula. Neal agreed, and the foursome became partners in 

Rack1, LLC. Neal owned 50% interest in Rack1 and Christopher, Casey, and Charles each owned 

equal parts of the remaining 50%.

Over the years Neal made a number of loans to Rack1 for operating and other expenses. 

Neal demanded payment on the loans, which Rack1 timely made. At some point, it became clear 

Rack1 was, in effect, defunct. Even so, Christopher and Casey made sure to timely pay on the 

Rack1 debt, funded mostly through other businesses they owned. In 2013, Rack1 renegotiated its 
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debt agreement with Neal to include, among other things, the addition of plaintiff Jason Brown as 

an obligor.

Rack1 continued paying on its debt to Neal, however, nearly two years later, in 2014, 

Christopher, Casey, and Jason wanted to move the obligor on the debt to R3 Holdings, another 

company they owned. Christopher signed a “Letter Agreement” which included this 

clause: “Assignment of Membership Interest Agreement. Neal will assign his 50% Membership 

Interest in Rack1, LLC back to the Company for $1.00 and a release by the Company and other 

Members of any and all liability associated with Rack1, LLC.” In the caption below Christopher’s 

signature, it stated: “Christopher Keefer, individually and on behalf of R3 Holdings, LLC, Rusted 

Rooster, LLC, Hatch Marketing Group, LLC, Rack1, LLC, Casey Keefer, and Jason Brown.” 

Neal’s signature line was blank. 

In the summer of 2015, Christopher, Casey, and Jason entered negotiations with a third

party to invest in their other companies, including R3 Holdings (“R3”). The investor apparently 

believed R3 held an interest in Rack1’s debt. To close the deal, R3 would have to be relieved of 

any encumbrances, including the Rack1 debt. Christopher contacted Neal to renegotiate Rack1’s 

debt.

On October 15 and 16, 2015, the parties executed a number of agreements 

titled: (1) Business Loan Agreement (“BLA”), (2) Restated Promissory Note, and (3) Assignment 

of Membership Interest Agreement (“the October 2015 assignment and release”).

1

 The Restated 

Promissory Note included as borrowers Christopher, Casey, Jason, and their respective spouses, 

Katherine Keefer, Lisa Keefer, and Darcel Brown.2 

The October 2015 assignment and release was “made by and among Rack1, LLC . . ., and 

Charles R. Keefer, Christopher Keefer, Casey Keefer, and Scott Neal.” It contained the following 

clause: 

Release. In consideration of, among other things, the benefits set forth in 

this Agreement, the Company and the remaining Members Charles R. Keefer, 

Christopher Keefer, and Casey Keefer, irrevocably and unconditionally release, 

waive, and discharge Scott Neal with respect to and from any and all claims, 

actions, obligations, liabilities, damages, losses, and expenses of any nature 

whatsoever, in law or in equity, which the Company and Members now have, or 

may have in the future, whether known or unknown, based upon or arising out of 

any contract, agreement, circumstance, event, acts, omissions, or facts occurring or 

existing before the signing of this Agreement, related to the Company, its operation, 

its Operating Agreement, or otherwise.

 

1 Collectively, we call these three agreements the “October 2015 agreements.”

2 We refer to plaintiffs Katherine Keefer, Lisa Keefer, and Darcel Brown, collectively, as “plaintiff 

spouses.”
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Plaintiffs continued to pay on the loan, but almost two years later, they filed the complaint 

in this case. The complaint made a number of allegations, including fraud, breach of contract, and 

unjust enrichment. The trial court granted plaintiffs’ motion to remit the debt payments to an 

escrow account through the pendency of the litigation. 

Neal moved for summary disposition against Christopher and Casey under MCR 

2.116(C)(7), (8), and (10), alleging in part that the October 2015 assignment and release relieved 

Neal of liability with respect to his interest in Rack1. Neal moved for summary disposition against 

Jason under MCR 2.116 (C)(8) and (10), asserting there was no evidence of any fraudulent conduct 

by Neal towards Jason. He moved for summary disposition against plaintiff spouses on a similar 

basis. The trial court largely granted the motions for summary disposition, but denied them as to 

plaintiffs’ claims of promissory estoppel. 

Plaintiffs then moved to amend their complaint to add a claim of member oppression, but 

the trial court denied the motion. Plaintiffs moved for reconsideration of the order on the motions 

for summary disposition and the order on the motion to amend. The trial court also denied these 

motions. However, it granted plaintiffs’ motion to dismiss their remaining claim of promissory 

estoppel and to continue the escrow order through the pendency of an appeal. This appeal 

followed.

II. TENDER-BACK RULE

Plaintiffs’ first argument challenges the grant of summary disposition against Christopher 

and Casey’s claims. The trial court granted summary disposition to Neal because Christopher and 

Casey failed to tender back to Neal the consideration received under the October 2015 assignment 

and release before they filed this lawsuit. Plaintiffs contend the trial court incorrectly applied the 

tender-back rule to Christopher and Casey’s claims. They also argue the trial court erred when it 

concluded the October 2015 assignment and release barred Christopher and Casey’s claims 

because, in their view, the assignment and release were invalid. We disagree.

A. STANDARD OF REVIEW

This Court reviews de novo a trial court’s decision on a motion for summary disposition. 

Smith Living Trust v Erickson Retirement Communities, 326 Mich App 366, 380; 928 NW2d 227 

(2018). We also review de novo “the parties’ agreement, and any questions of statutory 

interpretation.” Id. The trial court granted Neal’s motion for summary disposition against 

Christopher and Casey’s claims under MCR 2.116(C)(7). 

A party may support a motion under MCR 2.116(C)(7) by affidavits, 

depositions, admissions, or other documentary evidence. If such material is 

submitted, it must be considered. Moreover, the substance or content of the 

supporting proofs must be admissible in evidence. Unlike a motion under 

subsection (C)(10), a movant under MCR 2.116(C)(7) is not required to file 

supportive material, and the opposing party need not reply with supportive material. 

The contents of the complaint are accepted as true unless contradicted by 

documentation submitted by the movant. [Maiden v Rozwood, 461 Mich 109, 119; 

597 NW2d 817 (1999) (citations omitted).]
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B. ANALYSIS

Michigan jurisprudence favors the binding nature of a release of liability. See, e.g., Radu 

v Herndon & Herndon Investigations, Inc, 302 Mich App 363, 374; 838 NW2d 720 (2013). Where 

a plaintiff seeks to invalidate a release and file a lawsuit against a released party, the plaintiff must 

first tender back their consideration received under the release. See Stefanac v Cranbrook Ed 

Community, 435 Mich 155, 165; 458 NW2d 56 (1990), quoting Niederhauser v Detroit Citizens’ 

Street R Co, 131 Mich 550, 552; 91 NW 1028 (1902) (“[I]f one seeks to rescind a settlement on 

the ground of fraud or mistake, he must, after discovering the fraud, place the other party in statu 

quo.”). Tender back must happen before a plaintiff “may even attempt to repudiate the release.” 

Rinke v Auto Moulding Co, 226 Mich App 432, 436; 573 NW2d 344 (1997). This “tender-back” 

rule has only two exceptions: (1) when a defendant has waived a plaintiff’s duty; and (2) where 

there is evidence of fraud in the execution. Stefanac, 435 Mich at 165. 

Plaintiffs’ complaint challenged whether they, in their individual capacities, were obligated 

to Neal for Rack1’s debt. Neal moved for summary disposition, in part, on the basis of the October 

2015 assignment and release, asserting that Christopher and Casey released Neal from potential 

liability with respect to his interest in Rack1. The trial court found Christopher and Casey were 

barred from filing a lawsuit against Neal because they failed to tender back their consideration 

received under the October 2015 assignment and release—Neal’s membership interest in Rack1 

We agree. 

Plaintiffs filed suit against Neal for actions taken with respect to Neal’s membership 

interest in Rack1. Under the terms of the October 2015 assignment and release, Neal was released 

from liability “with respect to and from any and all claims, actions, obligations, liabilities, 

damages, losses, and expenses of any nature whatsoever” related to his Rack1 membership 

interest. It is undisputed that Christopher and Casey did not tender back Neal’s membership 

interest before filing this lawsuit. Therefore, the trial court was correct in its conclusion the tenderback rule barred Christopher and Casey’s claims against Neal.

Plaintiffs present three arguments contesting the trial court’s application of the tender-back 

rule. First, they contend the October 2015 assignment and release was not the type of agreement 

contemplated by the tender-back rule. Second, they argue Neal “waived” the tender-back rule as 

a defense. Finally, they aver that the exceptions to the tender-back rule apply to this case and it 

was not necessary for Christopher and Casey to have tendered back Neal’s membership interest in 

Rack1 before filing suit. Although we address each argument, we conclude that each is meritless.

1. APPLICABILITY OF THE TENDER-BACK RULE

Plaintiffs argue that the tender-back rule is limited to “settlement situations where the 

parties have agreed to settle or compromise known claims between them to avoid litigation in 

exchange for a monetary payment of not pursuing those claims.” In their view, this case does not 

involve an avoidance of litigation, nor “monetary payment.” Therefore, the tender-back rule does 

not apply.

We disagree with the first assertion that this case does not involve an avoidance of 

litigation. Again, the October 2015 assignment and release states that Christopher, Casey, and 
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Charles “irrevocably and unconditionally release, waive, and discharge Scott Neal with respect to 

and from any and all claims, actions, obligations, liabilities, damages, losses, and expenses of any 

nature whatsoever, in law or in equity, which the Company and Members now have, or may have 

in the future.” Plaintiffs characterize the October 2015 agreements as “debt restructuring.” Yet,

it is clear from the language of the October 2015 assignment and release that they were drafted in 

part to avoid litigation. 

Likewise, there is no merit to plaintiffs’ contention that, for the tender-back rule to apply, 

the consideration received must have some monetary value. In making this argument, it seems 

plaintiffs believe that Neal’s 50% membership interest lacked monetary value. This is untrue. 

During his deposition, Christopher testified that Rack1’s remaining members sold the company to 

a third party for $200,000 sometime after they executed the October 2015 agreements. Thus, it is 

unreasonable to conclude Neal’s membership interest lacked monetary value. To the extent 

plaintiffs believe actual money must be exchanged for the tender-back rule to apply, this is also 

untrue. In Rinke, 226 Mich App at 434-435, for example, the consideration exchanged under the 

release agreement were shares of stock. 

2. WAIVER OF DEFENSE

Plaintiffs next argue Neal “did not at the outset raise the tender-back rule as a defense to 

[p]laintiffs’ claims and thus, the defense was waived.” This argument defies logic. Again, the 

tender-back rule requires a plaintiff to tender back any consideration received under an agreement 

“before he may even attempt to repudiate the release.” Rinke, 226 Mich App at 436. The law 

requires the tender back to occur before a plaintiff files their claim. Plaintiffs seem to argue that a 

defendant should assert the tender-back defense before any tender back occurs. Thus, the 

defendant should assert the tender-back defense while the plaintiff is contemplating—but has not 

yet filed—the lawsuit. This is nonsensical.

Plaintiffs also suggest that by attempting to tender back Neal’s membership interest on 

December 18, 2019—after the trial court issued the opinion and order granting Neal’s motion for 

summary disposition against Christopher and Casey—plaintiffs somehow satisfied their 

obligations under the tender-back rule. But a plaintiff who seeks to invalidate an agreement on 

the basis of fraud must first tender back their consideration under the agreement before they file 

the lawsuit. Rinke, 226 Mich App at 436. By waiting more than two years after they filed the 

complaint to tender back Neal’s membership interest, plaintiffs plainly failed to meet this 

requirement. It appears plaintiffs’ “tender back” of Neal’s membership interest was merely a 

perfunctory move by plaintiffs to address the trial court’s concerns regarding plaintiffs’ failure to 

return Neal’s membership interest.

3. EXCEPTIONS TO THE TENDER-BACK RULE

Plaintiffs next argue that the trial court should not have granted summary disposition 

because Neal “took advantage of Chris[topher’s] and Casey’s belief that they were responsible for 

Rack 1’s debt . . . .” They allege that the claim should have been allowed to proceed because they 

“have raised issues of material fact whether the transaction is void based on [Neal’s] fraudulent 

conduct.” Again, there are only two exceptions to the tender-back rule: (1) “waiver of the 

plaintiff’s duty by the defendant;” and (2) “fraud in the execution.” Stefanac, 435 Mich at 165. 
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Plaintiffs do not explain how either of these exceptions is satisfied. Thus, this argument is

abandoned. See MOSES Inc v SEMCOG, 270 Mich App 401, 417; 716 NW2d 278 (2006) (“If a 

party fails to adequately brief a position, or support a claim with authority, it is abandoned.”).

Because the trial court correctly concluded that the tender-back rule barred Christopher and 

Casey’s claims, we need not address plaintiffs’ arguments regarding the validity of the release.

III. MEMBER OPPRESSION

Plaintiffs next argue that the trial court erred in denying the motion to amend their 

complaint because there was a question of fact whether the proposed member oppression claim 

was barred by the October 2015 assignment and release. Plaintiffs also challenge the trial court’s 

denial of their motion for reconsideration regarding the motion to amend. In their view, the trial 

court abused its discretion in refusing to consider evidence showing Jason was a Rack1 member 

in October 2015. We disagree.

A. STANDARD OF REVIEW

This Court reviews for an abuse of discretion a trial court’s decision on a motion to amend. 

Diem v Sallie Mae Home Loans, Inc, 307 Mich App 204, 215-216; 859 NW2d 238 (2014). 

Similarly, the grant or denial of a motion for reconsideration is also reviewed for an abuse of 

discretion. St John Macomb-Oakland Hosp v State Farm Mut Auto Ins Co, 318 Mich App 256, 

261; 896 NW2d 85 (2016). “An abuse of discretion occurs when the trial court’s decision is 

outside the range of reasonable and principled outcomes.” Smith v Khouri, 481 Mich 519, 526; 

751 NW2d 472 (2008).

B. ANALYSIS

1. MOTION TO AMEND

Under MCR 2.118(A)(2), “a party may amend a pleading only by leave of the court or by 

written consent of the adverse party.” A trial court should “freely” grant leave to amend “when 

justice so requires.” MCR 2.116(A)(2). A motion to amend may be denied only for particularized 

reasons, such as: “(1) undue delay, (2) bad faith or dilatory motive on the part of the movant, 

(3) repeated failure to cure deficiencies by amendments previously allowed, (4) undue prejudice 

to the opposing party by virtue of allowance of the amendment, or (5) futility of the amendment.” 

Lane v KinderCare Learning Centers, Inc, 231 Mich App 689, 697; 588 NW2d 715 (1998). An 

amendment is futile if it is “legally insufficient on its face, and the addition of allegations that 

merely restate those allegations already made . . . .” Wormsbacher v Seaver Title Co, 284 Mich 

App 1, 9; 772 NW2d 827 (2009).

The trial court denied plaintiffs’ motion to amend on the basis of futility, relying on its 

earlier reasoning in the motions for summary disposition. Again, there is no error on this basis. 

Plaintiffs sought to add a claim of member oppression, which plaintiffs stated concerned “exactly 

the same facts set forth in the initial complaint”—specifically, Neal’s membership interest in 

Rack1. As discussed, any claim by Christopher and Casey against Neal arising from Neal’s 

membership interest in Rack1 was barred by the tender-back rule. See discussion, supra. 

Plaintiffs’ proposed member oppression claim was futile because it also concerned Neal’s 
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membership interest in Rack1. Thus, the trial court did not abuse its discretion in denying the 

motion to amend.

Plaintiffs’ argument challenging the trial court’s conclusion is meritless. They contend the 

trial court should have considered Jason and Rack1’s tax documents from 2014 and 2015 as 

evidence that there was a question of fact as to the validity of the October 2015 assignment and 

release. In their view, leave to amend should be “freely” given and the trial court abused its 

discretion in failing to consider the tax documents as evidence that the October 2015 assignment 

and release was invalid. 

Plaintiffs’ argument fails to account for the tender-back rule. Again, as a prerequisite to 

their lawsuit, Christopher and Casey should have tendered back their consideration received under 

the October 2015 assignment and release, which the brothers did not do. Plaintiffs’ argument, 

which challenges the validity of the October 2015 assignment and release, fails to explain how 

their lawsuit circumvents the tender-back rule. Moreover, this argument misstates the timeline of 

this case. The tax documents were not produced until after the trial court had already denied the 

motion to amend. Plaintiffs’ counsel alluded to the existence of the documents during oral 

argument on the motion, but they were not produced at that time.

Plaintiffs’ argument also fails to account for the fact that it was plaintiffs who possessed 

the tax documents in question. These documents were from tax years 2014 and 2015, but plaintiffs 

did not file suit until 2017. Presumably, the tax documents were in plaintiffs’ possession 

throughout this case. Plaintiffs cannot fault the trial court’s failure to consider evidence when it 

was plaintiffs who failed timely produce the evidence. Marshall Lasser, PC v George, 252 Mich 

App 104, 109; 651 NW2d 158 (2002) (citation omitted) (“A party is not allowed to assign as error 

on appeal something which his or her own counsel deemed proper at trial since to do so would 

permit the party to harbor error as an appellate parachute.”).

2. MOTION FOR RECONSIDERATION

Plaintiffs’ arguments on appeal also challenge the trial court’s denial of plaintiffs’ motion 

for reconsideration of the denial of the motion to amend. Plaintiffs’ statement of the questions 

presented does not allege that the trial court erred in denying plaintiffs’ motion for reconsideration. 

Thus, this argument is abandoned and we decline to consider it now. See Maple BPA, Inc v 

Bloomfield Charter Twp, 302 Mich App 505, 517; 838 NW2d 915 (2013) (“A party abandons an 

issue when it fails to include the issue in the statement of questions presented in its appellate brief 

and fails to provide authority to support its assertions.”).

IV. PLAINTIFFS’ FRAUD CLAIMS

Plaintiffs argue the trial court erred in granting Neal’s motion for summary disposition as 

to Jason and plaintiff spouses’ claims of actual fraud and fraud in the inducement. They allege 

that Neal made fraudulent statements to Christopher and Casey, which they claim should have 

been imputed to Jason and plaintiff spouses. We disagree.
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A. STANDARD OF REVIEW

The trial court granted Neal’s motion for summary disposition of plaintiffs’ actual fraud 

and fraud in the inducement claims under MCR 2.116(C)(10).

A motion under MCR 2.116(C)(10) tests the factual sufficiency of the 

complaint. In evaluating a motion for summary disposition brought under this 

subsection, a trial court considers affidavits, pleadings, depositions, admissions, 

and other evidence submitted by the parties . . . in the light most favorable to the 

party opposing the motion. Where the proffered evidence fails to establish a 

genuine issue regarding any material fact, the moving party is entitled to judgment 

as a matter of law. [Maiden, 461 Mich at 120 (citations omitted).] 

B. ANALYSIS

The term “fraud” is defined as “[a] knowing misrepresentation or knowing concealment of 

a material fact made to induce another to act to his or her detriment.” Black’s Law Dictionary

(11th ed). To sustain a claim of actual fraud or fraud in the inducement, a plaintiff must 

demonstrate:

(1) the defendant made a material representation; (2) the representation was 

false; (3) when the defendant made the representation, the defendant knew that it 

was false, or made it recklessly, without knowledge of its truth and as a positive 

assertion; (4) the defendant made the representation with the intention that the 

plaintiff would act upon it; (5) the plaintiff acted in reliance upon it; and (6) the 

plaintiff suffered damage. [Bank of America, NA v Fidelity Nat’l Title Ins Co, 316 

Mich App 480, 499; 892 NW2d 467 (2016) (citation omitted); see also Belle Isle 

Grill Corp v Detroit, 256 Mich App 463, 477; 666 NW2d 271 (2003).]

Both actual fraud and fraud in the execution require a plaintiff to demonstrate an intent to deceive. 

See Gen Electric Credit Corp v Wolverine Ins Co, 420 Mich 176, 184; 362 NW2d 595 (1984). 

In granting Neal’s motion for summary disposition against Jason, the trial court reasoned 

that it was likely true that Jason was personally liable on the Rack1 debt because Jason signed the 

Amended Promissory note in 2013. The trial court noted Jason’s sworn testimony where he stated 

he signed the amended promissory note to “support [his] business partners.” Thus, the trial court 

concluded that any statement regarding Jason’s personal liability was likely true. It determined

that summary disposition was appropriate as to Jason’s claims because plaintiffs failed to “point 

to any other statements that would have induced [Jason] into signing the 2015 BLA and Promissory 

Note.” Similarly, with respect to the motion for summary disposition against plaintiff spouses, the 

trial court stated, “[t]here is no evidence within the record that shows that [Neal] made any 

representation to Plaintiff Spouses.” 

There is no error in the trial court’s reasoning. When a party moves for summary 

disposition under MCR 2.116(C)(10), they must “specifically identify the issues as to which [they] 

believe[] there is no genuine issue as to any material fact.” Coblentz v Novi, 475 Mich 558, 569; 

719 NW2d 73 (2006), quoting MCR 2.116(G)(4). Once the movant has identified these issues, 

“an adverse party may not rest upon the mere allegations or denials of his or her pleading, but 
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must, by affidavits or as otherwise provided in this rule, set forth specific facts showing that there 

is a genuine issue for trial.” Coblentz, 475 Mich at 569, quoting MCR 2.116(G)(4). The trial court 

is directed to grant the motion for summary disposition if the non-movant’s response is inadequate. 

Coblentz, 475 Mich at 569.

Neal argued in his motions for summary disposition that he never made any 

misrepresentations to Jason or plaintiff spouses and, to the extent Neal did make any 

representations to Jason and plaintiff spouses, these were merely statements of opinion. Plaintiff 

spouses’ response to the motion contained no exhibits or other documents dispelling Neal’s 

assertions. Jason’s response included Neal’s e-mail stating Jason had “a personal guarantee” on 

the loan to Neal. However, this statement could hardly show a genuine dispute of fact because, by 

signing the Amended Promissory Note in his individual capacity, Jason likely was personally 

liable to Neal. In short, Neal satisfied his burden as the moving party, and plaintiffs failed refute 

Neal’s assertions.

On appeal, plaintiffs claim that the trial court nevertheless erred in granting Neal’s motion 

for summary disposition as to plaintiffs’ allegations of fraud. They claim Neal’s statements to 

Christopher and Casey should be imputed to Jason and plaintiff spouses. That is, Neal’s

purportedly fraudulent statements made to Christopher and Casey are presumed to have been

conveyed to Jason and plaintiff spouses, and that Jason and plaintiff spouses acted upon the 

statements by signing the October 2015 agreements. 

It is true a party may be found liable for fraudulent statements made to a third party. See 

Cormack v American Underwriters Corp, 94 Mich App 379, 386; 288 NW2d 634 (1979). 

However, plaintiffs’ argument suffers from the same defect discussed above. In response to Neal’s 

motions for summary disposition, plaintiffs presented no evidence showing that the allegedly 

fraudulent statements were ever made to Jason or plaintiff spouses. In fact, their deposition 

testimonies demonstrated Jason and plaintiff spouses did not talk to Christopher or Casey about 

any statements made by Neal in relation to the Rack1 loans. Because plaintiffs failed to present 

any evidence demonstrating a genuine question of fact, the trial court had to grant Neal’s motions 

for summary disposition as to Jason and plaintiff spouses’ actual fraud and fraud in the inducement 

claims. Coblentz, 475 Mich at 569.

V. UNJUST ENRICHMENT

Plaintiffs argue the trial court erred in dismissing their unjust enrichment claim because 

Neal received payments beyond what was due under the 2015 agreements. We disagree.

A. STANDARD OF REVIEW

The trial court granted Neal’s motion for summary disposition as to the unjust enrichment 

claim under MCR 2.116(C)(8).

A motion under MCR 2.116(C)(8) tests the legal sufficiency of the 

complaint. All well-pleaded factual allegations are accepted as 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 unenforceable as a matter 

of law that no factual development could possibly justify recovery. When deciding 
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a motion brought under this section, a court considers only the pleadings. [Maiden, 

461 Mich at 119-120 (citations omitted).]

“Whether a specific party has been unjustly enriched is generally a question of fact.” 

Morris Pumps v Centerline Piping, Inc, 273 Mich App 187, 193; 729 NW2d 898 (2006). 

“However, whether a claim for unjust enrichment can be maintained is a question of law, which 

we review de novo.” Id.

B. ANALYSIS

To establish a claim of unjust enrichment, a party must show: “(1) receipt of a benefit by 

the defendant from the plaintiff, and (2) an inequity resulting to plaintiff from defendant’s retention 

of the benefit.” Bellevue Ventures, Inc v Morang-Kelly Investment, Inc, 302 Mich App 59, 64; 

836 NW2d 898 (2013). Where these criteria are satisfied, courts will imply a contract between the 

parties. Belle Isle Grill Corp, 256 Mich App at 478. “However, a contract will be implied only if 

there is no express contract covering the same subject matter.” Id. 

In granting Neal’s motion for summary disposition as to the unjust enrichment claim, the 

trial court reasoned that the parties “signed the Business Loan Agreement and Promissory Note 

that made them personally liable for the original loan to Rack 1 [sic]. Those contracts control the 

Parties’ relationship with respect to the Rack 1 [sic] debt. Since those contracts cover the ‘same 

subject matter,’ summary disposition is appropriate.” The evidence presented to the trial court 

shows that, before the parties executed the October 2015 agreements, they completed the Amended 

Promissory Note which was intended to cover “the amount of the original Promissory Note dated 

March 20, 2012” and “the Additional Loan amount of $100,000 . . . give[n] by Scott Neal . . . to 

Rack1, LLC and Jason Brown.” At first blush, it appears summary disposition was appropriate 

because the Amended Promissory Note was an express contract covering the payments predating 

the October 2015 agreements.

However, the trial court decided this issue under MCR 2.116(C)(8). Again, a trial court’s 

decision under subsection (C)(8) may only consider the pleadings. Maiden, 461 Mich at 119-120. 

In granting Neal’s motion for summary disposition as to the unjust enrichment claim, the trial court 

clearly relied on evidence outside the pleadings, which normally would not justify summary 

disposition under subsection (C)(8). Maiden, 461 Mich at 119-120.

Even so, this Court “will not reverse where the right result is reached for the wrong reason.” 

Glazer v Lamkin, 201 Mich App 432, 437; 506 NW2d 570 (1993). Neal also moved for summary 

disposition under MCR 2.116(C)(10), which does not allow the nonmoving party to “rest upon the 

mere allegations or denials of his or her pleading” Maiden, 461 Mich at 120, quoting MCR 

2.116(G)(4). Under subsection (C)(10)’s burden-shifting framework, the movant “must 

specifically identify the issues as to which the moving party believes there is no genuine issue as 

to any material fact.” Maiden, 461 Mich at 120. Once they have done this, “an adverse party may 

not rest upon the mere allegations or denials of his or her pleading, but must, by affidavits or as 

otherwise provided in this rule, set forth specific facts showing that there is a genuine issue for 

trial.” Id.
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Neal alleged plaintiffs’ claim of unjust enrichment was invalid because there was an 

express contract covering the same subject matter. He supported this assertion with documentary 

evidence of the loan agreements that predated the October 2015 agreements. In their brief 

contesting the motion for summary disposition, plaintiffs again argued Neal was unjustly enriched 

by the payments predating the October 2015 agreement. They did not provide any exhibits 

disputing the express contract covering the payments at issue. Had the trial court considered this 

issue under MCR 2.116(C)(10), it would have concluded summary disposition was appropriate 

under MCR 2.116(C)(10) because Neal satisfied his burden by showing that there was an express 

contract covering the payments, and plaintiffs failed to refute this assertion with documentary 

evidence to the contrary. Although summary disposition was granted under MCR 2.116(C)(8), 

which prohibits consideration of evidence outside the pleadings, the trial court reached the right 

result, albeit for the wrong reason, when it concluded plaintiffs’ unjust enrichment claim was 

unsustainable.

VI. ESCROW ORDER

Neal contends the trial court erred when it ordered plaintiffs’ loan payments to remain in 

the escrow account throughout the appeal to this Court. Neal argues he prevailed in the trial court

and, therefore, the trial court’s final order should have triggered the release of the funds from the 

escrow account. We disagree.

A. PRESERVATION AND STANDARD OF REVIEW

An issue is preserved if it is raised in the trial court. Peterman v State Dep’t of Natural 

Resources, 446 Mich 177, 183; 521 NW2d 499 (1994). Neal argues the trial court erred in ordering 

that its earlier escrow order be continued while the appeal was pending before this Court. On 

April 7, 2021, plaintiffs moved the trial court to order the escrow order continue and Neal did not 

challenge this motion. Neal made earlier arguments regarding the initial grant of the escrow order. 

However, Neal’s specific argument—that the trial court erred in granting plaintiffs’ motion to 

continue the escrow order through this appeal—is unpreserved because Neal waited to raise it until 

after the trial court entered the final order in this case. Id.

Generally, our review of this issue is de novo because this issue concerns the interpretation 

of court rules and an award of equitable relief. McDonald v Farm Bureau Ins Co, 480 Mich 191, 

197; 747 NW2d 811 (2008); Bint v Doe, 274 Mich App 232, 234; 732 NW2d 156 (2007). Because 

Neal’s argument is unpreserved, it is reviewed for plain error. Kern v Blethen-Coluni, 240 Mich 

App 333, 336; 612 NW2d 838 (2000). “To avoid forfeiture under the plain error rule, three 

requirements must be met: 1) the error must have occurred, 2) the error was plain, i.e., clear or 

obvious, 3) and the plain error affected substantial rights.” Id., quoting People v Carines, 460 

Mich 750, 763; 597 NW2d 130 (1999). “[A]n error affects substantial rights if it caused prejudice, 

i.e., it affected the outcome of the proceedings.” Lawrence v Mich Unemployment Ins Agency, 

320 Mich App 422, 443; 906 NW2d 482 (2017), quoting In re Utrera, 281 Mich App 1, 9; 761 

NW2d 253 (2008).
-12-

B. ANALYSIS

We do not need to consider Neal’s arguments as to this issue. In the preceding issues, 

plaintiffs make a number of challenges to the trial court’s order on the motions for summary 

disposition. We conclude plaintiffs’ arguments are meritless and the trial court correctly found in 

Neal’s favor by dismissing plaintiffs’ claims. This issue, which concerns the allocation of 

plaintiffs’ payments on their promissory note to Neal during the pendency of this appeal, is moot. 

See Black’s Law Dictionary (11th ed) (Defining the term “moot” as: “[h]aving no practical 

significance; hypothetical or academic.”). Plaintiffs maintain a debt to Neal under the October 

2015 agreements. The trial court “f[ound] it equitable and just the [trial] [c]ourt’s September 17, 

2018 Escrow Order continue while Plaintiffs seek an appeal.” The question of whether the trial 

court erred in granting plaintiffs’ motion to maintain the escrow order is moot because plaintiffs 

no longer have a legitimate claim to the funds. 

Affirmed.

/s/ Michael J. Kelly 

/s/ Thomas C. Cameron 

/s/ Noah P. Hood