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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

LAWRENCE M. CLARKE, INC.,

Plaintiff/Counter-DefendantAppellee,

UNPUBLISHED

March 20, 2018

V No. 336481

Ingham Circuit Court

KIM S. DRAEGER, LC No. 08-000227-CZ

Defendant-Appellant,

and

KD EQUIPMENT LEASING, INC., and AIC, 

INC.,

Defendants/CounterPlaintiffs/Third-Party PlaintiffsAppellants,

and

GUARANTEE COMPANY OF NORTH 

AMERICA USA and XL REINSURANCE 

AMERICA, INC.,

Third-Party Defendants-Appellees.

Before: SAWYER, P.J., and BORRELLO and SERVITTO, JJ.

PER CURIAM.

In this contractor-subcontractor dispute, defendant Kim Draeger, and two corporations he 

controls, KD Equipment Leasing, Inc., and AIC, Inc.,1 appeal as of right the trial court’s 

 1 Because of the substantial identity between the individual and corporate defendants, and the 

dismissal from the case of the third-party defendants, we emulate the trial court’s practice and 

use the singular term “defendant” to refer collectively to the defendants-appellants. 
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judgment, on remand from this Court, awarding damages to plaintiff. We affirm in part, vacate 

in part, and remand for further proceedings.

I. FACTS

This case returns to this Court after an earlier decision remanded the case for further

proceedings. Lawrence M Clarke, Inc v Draeger, unpublished per curiam opinion of the Court 

of Appeals, issued January 15, 2015 (Docket No. 316194) (“Draeger I”). This Court’s prior 

opinion contains the following statement of facts:

Plaintiff was the general contractor for construction of a portion of a sanitary sewer system in Billings Township. Defendant had earlier encouraged plaintiff to bid on the project, and provided plaintiff with a unit-price proposal covering all the projected work. Plaintiff accepted the proposal and, after increasing 

the prices by 12 percent for its own profit, submitted it as its bid. Initially 

plaintiff had expected defendant, as its subcontractor, to provide all the materials 

and do all the work, with plaintiff contributing only some general supervision.

Defendant arranged with two subcontractors of its own to work on the project. The parties entered into a written subcontract for work to be performed by 

defendant in two sections of the project. Defendant and its subcontractors worked 

on other sections as well, but no additional subcontracts were executed. Plaintiff 

itself tended to some sections as well, in order to fulfill its obligations to the municipality under the general contract.

But, as the trial court summarized, “the project did not begin, progress, or 

end in a perfect world.” According to plaintiff’s witnesses, defendant and its subcontractors provided less than perfect, competent, or complete work.

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Plaintiff commenced action in 2008, setting forth several theories of 

recovery, including breach of contract and unjust enrichment. Defendants 

counterclaimed, alleging breach of contract and, alternatively, unjust enrichment, 

and initiated a third-party action for payment bond against plaintiff’s two sureties. 

The trial court summarized the evidence concerning deficiencies in defendant’s 

performance on the project, held that the individual defendant should be personally responsible for the corporate defendants’ liabilities in the matter, and

awarded plaintiff over $900,000 in damages, costs, and interest. The court concluded that the question of the existence of attendant contracts, and of performance under them, was “somewhat problematic,” and elected to decide the 

case under the theory of quantum meruit. [Draeger I, p 2.]

This Court concluded that the trial court erred by (1) resolving the case through 

application of the doctrine of quantum meruit, or unjust enrichment, where the court 

acknowledged that a written contract covered at least part of the activities at issue, (2) 

determining what defendant was entitled to collect on the basis of pay estimates without 
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reference to any purported final measurements, and (3) “holding defendant responsible for the 

full amounts of payment bond claims that plaintiff in fact settled for lesser amounts,” but that 

defendant failed to show that the court otherwise miscalculated damages, or erred in deciding to 

pierce the corporate veil. Id., p 12.

On remand, the trial court reviewed the testimony and exhibits from the lengthy bench 

trial, and entertained additional oral and written arguments from the parties. The court recited 

that this Court called for a determination of what aspects of the parties’ relationship actually 

came under contract and for reevaluation of the evidence under contract law where applicable, 

and for use of final measurements in calculating damages by consulting Change Order 4 or better 

documentation for that purpose. The court further noted that this Court held that the trial court 

erroneously awarded plaintiff “back charges in connection with bond claims in amounts greater

than what plaintiff actually paid.”

The trial court offered findings in connection with contract law, with no mention of 

quantum meruit or unjust enrichment. The court stated that recalculating damages under the 

rubric of contract law instead of quantum meruit did not eliminate the problem that only “in a 

perfect world damages caused by a party’s breach of the contract could be mathematically and 

precisely calculated,” thus underscoring the principle, as reiterated by this Court, that “[w]e do 

not, in the assessment of damages require a mathematical precision in situations of injury where, 

from the very nature of the circumstances, precision is unattainable,” and instead, “[w]e do the 

best we can with what we have.” Hofmann v Auto Club Ins Ass’n, 211 Mich App 55, 111; 535 

NW2d 529 (1995) (quotation marks and citations omitted). On remand, the trial court concluded 

that plaintiff was entitled to a judgment of $696,960.99, plus statutory interest and costs.

On appeal, defendant argues that the trial court failed to follow this Court’s instructions 

on remand in connection with identifying final measurements, and factoring bond claims into 

back charges, and asks that the case again be remanded for further proceedings, this time before 

a different judge.

II. REMAND ORDER

Whether a tribunal complied with a remand order presents a question of law subject to 

review de novo. Kalamazoo v Dep’t of Corrections (After Remand), 229 Mich App 132, 134-

135; 580 NW2d 475 (1998).

A. FINAL MEASUREMENTS

An issue in the prior appeal involved the trial court’s decision to measure the work 

defendant completed by consulting periodic pay estimates as opposed to any documentation 

purporting to indicate final measurements. This Court noted that the subject construction project 

was conducted by way of unit price contracts, and also that plaintiff’s vice president testified that 

the pay estimates were in fact set forth with real care, elaborating that “[e]verybody pulled the 

tape measure when we had an inspector handy,” but admitting that the engineers’ final 

measurement was apt to differ somewhat from the total of the pay estimates and in that event 

payment would properly reflect the final measurement. This Court further summarized the issue 

as follows:
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Article 10 of the subcontract executed for two sections of the project 

covers payment. Section 10.2 calls for “[p]rogress payments, less retainage” for 

work “satisfactorily performed, no later than seven (7) days after receipt by 

[plaintiff] of payment from Billings Township for Subcontract Work,” then adds, 

“Final payment of the balance due shall be made to Subcontractor no later than 

seven (7) days after receipt by [plaintiff] of final payment from Billings Township 

for subcontract Work.” This provision clearly contemplates a series of payments 

that are not deemed to reflect all payment due until a final payment from the 

municipality allows such a reckoning.

The trial court looked to the several pay estimates as reflecting how the 

parties managed the progress payments. Plaintiff suggests that the trial court 

properly looked no further to determine how much defendant had earned, but 

defendant insists that the court should have consulted change estimate 4, which 

sets forth the final balancing in relation to plaintiff’s contract with the 

municipality. Plaintiff argues that defendant is not entitled to claim any benefits 

from change order 4, on the ground that defendants were not parties to the 

contract under which it came into being. The trial court apparently agreed with 

defendant, however, in regarding change order 4 as offering a basis for adjusting 

earlier estimates to reflect actual work accomplished, but stated that it “declines to 

make any adjustment to the amount due [plaintiff] based on change order no. 4, 

on the basis the evidence does not establish which party may have been at fault 

for construction delays that apparently led to the assessment of liquidated 

damages.”

The latter declaration is problematic. Actual work completed, as 

determined by final measurements, is a matter apart from liquidated damages 

resulting from construction delays. Any difficulties in determining responsibility 

for such delays still leaves in plain view change order 4’s detailed listing of work 

done, adjustments made, and amounts due and owing. Further, to the extent that 

plaintiff wished that any adjustments in payments to defendant take into account 

responsibility for liquidated damages resulting from delays, plaintiff bore the 

burden of proving defendant’s liability in the matter. If indeed the trial court was 

not satisfied that the evidence preponderated in plaintiff’s favor in this regard, the 

court should simply have declined to adjust what change order 4 otherwise 

suggested was owed to defendant.

. . . [T]he trial court should have consulted available final measurements in 

calculating the parties outstanding obligations. We instruct the trial court on 

remand to consult change order 4 for this purpose, or some other documentation 

as is determined, or agreed, to reflect final measurements. [Draeger I, pp 7-8.]

On remand, the trial court again consulted the pay estimates, to the exclusion of Change 

Order 4 or any other documentation promising more accurate final measurements, with the 

following explanation:
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In this court’s opinion, the critical question to be resolved before it 

calculates damages is the amount used for the starting point. In this court’s 

opinion, the amount utilized for a starting point cannot be precisely determined. 

While the pay estimates and/or the quantities described in change order no. 4 

produce an exact, though different, amount due under the contract, that amount is 

only accurate if the court is able to find that defendant satisfactorily completed all 

the restoration work, testing and warranty or repair work included in its unit 

pricing.

Evidence indicated the engineers “shifted’ quantities from one section of 

the project to another for their own convenience, not necessarily because mistakes 

had been made in the measurements prepared for purposes of the pay estimates.

[Plaintiff’s] on-the-job foreman also testified members of AIC’s crews 

would routinely take materials [plaintiff] had ordered for installation in those 

sections for which [plaintiff] had assumed responsibility.

According to [the evidence], about half of [defendant’s] initial bid would 

have been allocated to pricing “baked in” for the restoration, testing and repair 

work.

According to [the evidence], the final measurements are “about the same” 

as the measurements made during the course of construction.

Again, this court’s finding, based on all the evidence, is that when [defendant] was paid in accordance with the pay estimates as the project progressed, 

he was paid for the installation of the pipe together with all the other restoration 

and testing and repair responsibilities he had contracted to perform.

According to the project engineer, a disinterested witness, [defendant] had 

completed no more than 20 percent and perhaps as little as 10 percent of the 

restoration work in the areas in which he had worked. 

The trial court thus eschewed Change Order 4 in the first instance because of a concern 

regarding liquidated damages, which this Court deemed unsatisfactory, then did so on remand on 

the ground that Change Order 4 might reflect distortions resulting from the engineers’ or 

workers’ disinclination to ensure that all work or materials invested in a given section were 

accurately so reported.

Plaintiff points to testimony from the township’s project engineer indicating that such 

liberties were taken. Defendant, in disputing the trial court’s conclusion in this regard, asserts 

that the project engineer spoke to only a single instance of a quantity shift, involving “25 feet of 

pipe.” However, our review of the record reveals only one instance where the project engineer 

used the figure “25 feet,” and there that witness was offering a hypothetical situation to illustrate 

a common practice. As plaintiff points out, that witness earlier made clear that liberties were 

taken in the attribution of quantities of work or materials as a matter of record-keeping 
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convenience. For these reasons, the trial court did not clearly err in determining that Change 

Order 4 was not a reliable indicator of final measurements.

As noted, this Court suggested consulting Change Order 4 or other documentation 

determined to be a reliable indicator of final measurements. The trial court in fact presented its 

reasons for relying again on the periodic pay estimates, pointing out that the testimony indicated 

that they should be fairly accurate, and suggesting that no better indicator of final measurements 

was available. In arguing otherwise, defendant suggests that an alternative to Change Order 4 

for documentation of final measurements was “the as-built plans,” which took into account “GPS 

measurements” taken “[a]fter substantial completion.” However, defendant neither shows that 

such as-built plans were suggested to the trial court as a source for final measures, nor explains 

on appeal how GPS measurements would have assisted in avoiding the problem of shifting 

quantities.

Because the trial court on remand acknowledged this Court’s directions, and well 

explained why, under contract law, it viewed Change Order 4 as a poor reflection of final 

measures and considered the periodic pay estimates as the best available source of such 

measures, the court’s decision to rely again on the latter instead of the former comported with 

this Court’s remand order.

Defendant additionally argues that the trial court erred in concluding that defendant 

completed only 15 percent of the restoration work for which it was responsible. Defendant 

admits that the township’s project manager testified that defendant performed only that much of 

the restoration work in its sections of the project, and argues that the project manager’s “one 

sentence” to that effect “is contrary to the voluminous documentary record” as defendant 

interprets it. However, defendant cites no authority for the proposition that a voluminous 

documentary record necessarily trumps a sentence of testimony. We remain guided by the wellestablished rule according to which conflicts in the evidence and the credibility of witnesses are 

matters for the fact-finder to resolve. Dawe v Dr Reuven Bar-Levav & Assoc, PC (On Remand), 

289 Mich App 380, 401; 808 NW2d 240 (2010). Therefore, we reject defendant’s claim of error 

with respect to this issue. 

B. BOND CLAIMS

The trial court acknowledged that this Court held that it erroneously awarded plaintiff

“back charges in connection with bond claims in amounts greater than what plaintiff actually 

paid.” On remand, however, the court repeated, and compounded, that error.

A party injured by another’s failure to perform under a contract “is not entitled to be 

placed in a better position than he would have been had the contract not been broken.” Parmet 

Homes, Inc v Republic Ins Co, 111 Mich App 140, 150-151; 314 NW2d 453 (1981). “The 

injured party . . . however, must make every reasonable effort to minimize the loss suffered . . . .” 

Tel-Ex Plaza, Inc v Hardees Restaurants, Inc, 76 Mich App 131, 134; 255 NW2d 794 (1977). 

Accordingly, when awarding damages, “deduction of any saving to the injured party must be 

made.” Goodwin, Inc v Orson E Coe Pontiac, Inc (Supplemental Opinion), 62 Mich App 405, 

413; 233 NW2d 598 (1975).
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Defendant conceded below that as the relationship with plaintiff broke down and AIC 

ceased working on the project, plaintiff attended to some responsibilities that had originally been 

AIC’s. Defendant recognized some of plaintiff’s back charges as legitimate from the beginning, 

and has declined to challenge others as determined by the trial court. But defendants challenged 

other back charges plaintiff claimed as unsupported, inflated, or duplicative.

This Court, in its earlier opinion, rejected most, but not all, of defendant’s challenges 

concerning back charges, stating:

The exception is the trial court’s decision to hold defendant responsible 

for the full amounts of certain of defendant’s creditor’s payment bond claims, 

instead of for the lesser amounts for which plaintiff settled those claims. In 

holding defendant to the full amount, the trial court stated, “It is the court’s view 

that [defendant] should not benefit from plaintiff’s successful efforts to 

compromise amounts claimed to be owed by [defendant] and for which the 

creditors of [defendant] asserted bond claims.” Defendant’s objection to this 

reasoning has merit.

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Defendant reports that plaintiff never requested the full amounts of the 

bond claims below, and we note that plaintiff does not suggest otherwise on 

appeal. . . . [I]t is not clear whether the trial court’s decision to rely on its own 

empirical sense of fairness in this instance, rather than an injured party’s duty to 

mitigate damages, or a court’s duty to adjust awards of damages to reflect 

successful such mitigation, resulted from its decision to eschew contract law in 

favor of the doctrine of unjust enrichment. Regardless, we conclude that the court 

erred in awarding plaintiff back charges in connection with bond claims in 

amounts greater that what plaintiff actually paid. [Draeger I, p 9.]

In its earlier judgment, the trial court noted that the “bond claims presented by creditors 

. . . amounted to $158,465 reduced and compromised through the efforts of counsel for plaintiff 

to $79,500.” The court then calculated “amounts paid by [plaintiff] for AIC’s benefit or to its 

creditors” as $446,424, which included $158,465 as the “gross amount owed by AIC to those 

creditors who submitted bond claims,” which the court set forth with a parenthetical stating that 

defendant “should not benefit from plaintiff’s successful efforts to compromise amounts claimed 

to be owed.”

In calculating damages on remand, the trial court declared itself “comfortable with the 

figure for back charges it set forth in its original opinion, i.e. $446,424,” thus indicating that it 

was adopting its earlier calculation, which itself did not take into account plaintiff’s having 

bargained $158,465 in claims down to $79,500, and this time separately included an “adjustment 

. . . for bond claims paid by [plaintiff], $79,500.” The trial court thus not only repeated the error 

this Court earlier identified of awarding plaintiff back charges reflecting the total original bond 

claims, $158,465, instead of the lesser figure plaintiff actually paid, $79,500, but compounded 

the error by awarding what plaintiff actually paid in addition to the total originally claimed.
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In response to this Court’s instructions on remand, the trial court should have awarded 

only the $79,500 actually paid instead of the $158,465 originally claimed. Having now in fact 

awarded both, the court erred in the amount of $158,465. Accordingly, we vacate that portion of 

the judgment below, and remand this case to the trial court with instructions to reduce the 

judgment by $158,465.

III. REASSIGNMENT ON REMAND

“A trial judge is presumed to be impartial and the party who asserts partiality has a heavy 

burden of overcoming that presumption.” In re MKK, 286 Mich App 546, 566; 781 NW2d 132 

(2009). In determining whether a case should be reassigned to a new judge to hear proceedings 

on remand, this Court considers whether the original judge should be expected to have 

substantial difficulty setting aside earlier views, whether reassignment is needed to preserve the 

appearance of justice, and whether the waste and duplication resulting from reassignment would 

outweigh any benefit to the preservation of the appearance of fairness. In re Foster Attorney 

Fees, 317 Mich App 372, 379; 894 NW2d 718 (2016).

In this case, our reading of the opinions and orders of the judge below in response to this 

Court’s remand does not suggest any disdain for this Court’s judgment, or begrudging of the 

need to conform further proceedings to this Court’s instructions. Although the judge again erred 

in how he factored bond claims into the calculation of back charges, we see no basis for 

ascribing the error to anything beyond mere inadvertence. Further, proceedings on remand 

involve only a specific adjustment in the judgment amount. For these reasons, we decline to 

order that proceedings on remand take place before a different jurist.

Affirmed in part, vacated in part, and remanded for further proceedings. We do not retain 

jurisdiction.

/s/ David H. Sawyer

/s/ Stephen L. Borrello

/s/ Deborah A. Servitto