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### STATE OF MICHIGAN

COURT OF APPEALS

COMERICA BANK,

Plaintiff-Appellee, UNPUBLISHED September 17, 2015

v No. 321251 Wayne Circuit Court CHERYL MANIACI and PRICKLES, L.L.C., LC No. 13-005106-CK

Defendants-Appellants.

Before: R ONAYNE K RAUSE , P.J., and G LEICHER and S TEPHENS , JJ.

P ER C URIAM

. Comerica Bank filed suit against defendants Cheryl Maniaci 1 and her company, Prickles, L.L.C., seeking full repayment of Prickles’ business loan, over which Cheryl had issued a personal guaranty. Defendants pr esented evidence that Comerica had permitted Prickles to make interest-only payments for sev eral months before demanding up-t o-date payment on the loan. However, the statute of frauds r equires that loan modifications with financial institutions be in writing and be “signed with an authorized signature.” As the a lleged loan modification was oral, the circuit court properly gran ted summary disposition in Comer ica’s favor. We affirm.

I. BACKGROUND

In 2008, Prickles secured a $277, 500 business loan from Comeri ca. Prickles was required to make monthly payments of $2,356.94, which included interest and principal reduction. Cheryl executed a personal guaranty, promising to c over any payments Prickles was unable to make. The loan matured on October 15, 2013, at which time Prickles would be required to pay off the remaining balance.

In late 2012, “Prickles came upon hard financial times.” Pri ckles did not make its loan payments in October, November, or December that year. Prickles member John Maniaci contacted Comerica representative Mathew Rybinski seeking assis tance. Rybinski orally informed the Maniacis that he had spoken to Comerica officers B ruce Carlton and John Ryan

1 Cheryl Maniaci’s husband John Maniaci played an integral role in the facts underlying this case. For the sake of convenience, we will refer to the Maniac is by their first names.-2- and they had agreed that Prickles could make interest-only paym ents until the Maniacis were able to sell Prickles’ commercial property. After the agreemen t was reached, John contacted Rybinski by email and instructed him to withdraw the interest p ayments for October, November, and December 2012 from Prickles’ Comerica bank account. Comeri ca employee Angela Cherry contacted John via email with information for the January and F ebruary 2013 interest payments. Prickles instructed Comerica t o withdraw those interest payment s from its bank account as well.

On April 2, 2013, Cheryl contacted Cherry and inquired into th e March interest payment amount. Cherry responded that Barbara Utterback would be “resp ond[ing] to your emails going forward[].” Utterback thereafter refused to accept an interest -only payment for March 2013, and Prickles fell into default.

Comerica filed suit against Prickles for breach of the loan co ntract and against Cheryl for breach of her personal guaranty, and sought full payment of the loan. Following discovery, Comerica sought summary disposition in its favor. Defendants c ited Rybinski’s oral promise to accept interest-only payments and the bank’s course of acceptin g five such reduced payments as evidence of loan modification or forbearance barring Comerica’s suit. The circuit court considered defendants’ evidence but ultimately determined that the bank was entitled to judgment because under MCL 566.132, the loan modification had t o be in writing. This appeal followed.

II. ANALYSIS

We review de novo a circuit cour t’s resolution of a summary di sposition motion. Zaher v Miotke , 300 Mich App 132, 139; 832 NW2d 266 (2013).

A motion under MCR 2.116(C)(10) “tests the factual support of a plaintiff’s claim.” Walsh v Taylor , 263 Mich App 618, 621; 689 NW2d 506 (2004). “Summary disposition is appropriate under MCR 2.116(C)( 10) if there is no genuine issue regarding any material fact and the moving par ty is entitled to judgment as a matter of law.” West v Gen Motors Corp , 469 Mich 177, 183; 665 NW2d 468 (2003). “In reviewing a motion under MCR 2.116(C)(10), this Court considers the pleadings, admissi ons, affidavits, and other rele vant documentary evidence of record in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists to warrant a trial.” Walsh , 263 Mich App at 621. “A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ.” West , 469 Mich at 183. [ Zaher , 300 Mich App at 139-140.]

Comerica’s claims sounded in breach of contract. Prickles’ lo an documents required it to repay its debt in monthly installments of $2,356.94 and to pay the balance on October 15, 2013. Cheryl’s personal guaranty required her to make payments on Pri ckles’ behalf in the event the company failed to do so. The terms of the parties’ contracts a re clear and unambiguous and, as a general rule, must be applied strictly as written. In re Egbert R Smith Trust , 480 Mich 19, 24; 745 NW2d 754 (2008). Prickles and Cheryl clearly breached thei r contractual duties. Prickles-3- had not made a full loan payment since September 2012, and Mani aci never made a payment on Prickles’ behalf.

Defendants nevertheless assert that the loan documents were mo dified when Rybinski orally agreed that Comerica w ould accept interest-only payments until Prickles could sell its commercial property and through Comerica’s course of conduct of accepting interest-only payments for five months. The loan documents and personal guar anty include provisions demanding that loan modifications be in writing. However, our Supreme Court has held that part of the freedom to contract inclu des the right to waive such res trictive-modification clauses and mutually agree to new contract terms. See Quality Prods & Concepts Co v Nagel Precision, Inc

, 469 Mich 362, 372-373; 666 NW2d 251 (2003).

Were the common law the only guiding principle in this case, d efendants may have successfully created a factual question for the jury. In the c ase of financial institutions, however, the Legislature has enacted specific statutes placing certain c ontracts squarely within the statute of frauds. MCL 566.132(2)(b) prov ides that “[a]n action shall not be brought against a financial institution to enforce” “[a] promise or commitment to renew, ex tend, modify, or permit a delay in repayment or performance of a loan” “unless the promise or c ommitment is in writing and signed with an authorized signature by the financial institutio n.” This Court has interpreted the statute to require even defendant s to prove the existence of wr itten, properly signed documents when challenging a financial institution’s lawsuit. See Huntington Nat Bank v Daniel J Aronoff Living Trust , 305 Mich App 496, 508-510; 853 NW2d 481 (2014). Regardless o f which party brings a lawsuit, “the party seek ing to enforce a promise or co mmitment must present evidence that the promise or commitment itself was reduced to writing an d properly signed.” Id. at 510- 511.

Here, the alleged loan modifi cation reached with Rybinski was oral. Although the parties communicated by email regarding the amount, payment, and accept ance of interest-only payments in January, February, and March 2013, those messages w ere not “signed with an authorized signature by the fina ncial institution.” Moreover, those emails do not contain the terms of any alleged loan modification or any statement that Co merica was forbearing on principal-reduction payments. Rather, the messages include onl y directions regarding the amount and withdraw of interest p ayments. As this evidence of a loan modification does not comply with MCL 566.132’s statute of frauds, defendants were ba rred from raising it in defense of Comerica’s contract action. 2

Defendants also assert that Rybinski’s oral promise entitles t hem to raise a promissory estoppel defense to Comerica’s claims. In Crown Tech Park v D&N Bank, FSB , 242 Mich App 538, 550-551; 619 NW2d 66 (2000), however, this Court definitiv ely held that MCL 566.132(2) is inconsistent with a promissory estoppel claim or defense. T herefore, defendants are barred from relying on promissory estoppel. Absent any valid defense to their breaches of the clear

2 Defendants are also barred from citing the oral loan modificat ion in support of its claim that Comerica was the first to breach the parties’ contract by refus ing to accept an interest-only payment for March 2013.-4- requirements of the loan documents and personal guaranty, Prick les and Cheryl could not avoid their responsibilities under the contracts and the circuit cour t properly granted summary disposition in Comerica’s favor.

We affirm.

/s/ Amy Ronayne Krause /s/ Elizabeth L. Gleicher /s/ Cynthia Diane Stephens