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### STATE OF MICHIGAN

COURT OF APPEALS

ROBERT GORDON and DEBBIE GORDON,

Plaintiffs-Appellees, UNPUBLISHED March 8, 2016

v No. 324909 Livingston Circuit Court CORNERSTONE RG, LLC d/b/a/ CORNERSTONE RESIDENTIAL GROUP, LLC, and VILLAS OF HIDDEN LAKE, LLC, LC No. 13-027588-CK

Defendants-Appellants, and

DIANE BRAYKOVICH and BECK RD, INC. d/b/a RE/MAX CLASSIC,

Defendants.

Before: S ERVITTO , P.J., and G ADOLA and O’B RIEN , JJ.

P ER C URIAM

. Defendants Cornerstone RG, LLC (Cornerstone) and Villas of Hid den Lake, LLC (Villas) appeal as of right the c ircuit court’s judgment in fav or of plaintiffs in the amount of $74,642, which the court entered after affirming an arbitration award in that same amount. This case concerns a dispute over whet her defendants were contractua lly bound to sell real property to plaintiffs at a certain price. Plaintiffs brought this action seeking specific performance. After entering a settlement with defendants Diane Braykovich and Beck Rd, Inc., plaintiffs agreed to submit their dispute with the remaining defendants 1 to binding arbitration. The arbitrator refused to grant plaintiffs’ request for specific performance, but dete rmined that a contract existed between the parties and that plaintiffs were entitled to damage s in the amount of $74,642 as a result of defendants’ breach of contract. Plaintiffs then move d to confirm this award, which the trial court granted. Defendants appeal as of right. We affirm

.

1 Because plaintiffs settled with Braykovich and Beck Rd, Inc., we use the term “defendants” to refer to Cornerstone and Villas.-2- I. THE ARBITRATION AWARD

The arbitrator made the factual findings in his October 9, 20 14 award, which we recount here. Plaintiffs initially communicated with a realtor, Brayko vich, about purchasing a condominium unit in the Villas of Hidden Lake. Cornerstone and Villas were partner developers for the Villas of Hidden Lake condominium project (the Developm ent). The principals for both defendants testified that Braykovich was the sales agent for th e Development, and the principal for Villas approved any marketing materials that Braykovich cre ated. Plaintiffs obtained marketing materials that included “early bird” pricing for cond ominium units. Braykovich testified that a buyer could loc k in the “early bird” pricing b y placing a $1,000 deposit.

On April 7, 2012, plaintiffs executed a Reservation Agreement with Braykovich, which identified a condominium unit, and provided her with a $1,000 d eposit. Braykovich sent two emails to plaintiffs in April and May of 2012, informing them th at they had locked in the “early bird” pricing and that although unit prices were going up, the price for their unit would not. In May 2013, defendants increased the price for both lots and mode l units and refused to sell plaintiffs a condominium unit at the “early bird” pricing.

The arbitrator concluded that Braykovich was acting as defenda nts’ agent, which meant that her statements and representations were binding on defenda nts. This included the two emails that Braykovich sent to plai ntiffs informing them that th eir purchase price would not go up. The arbitrator concluded that the Michigan Condominium Act (MCA ), MCL 559.101 et seq ., imposed certain requirements that defendants had not met with r espect to the sale of the condominium units. However, the arbitrator determined that def endants could not use their failure to comply with the law as a shield against plaintiffs’ action because, if any statutory violation occurred, it was committed by defendants, not plainti ffs.

The arbitrator then concluded that the marketing documents, e- mails, and Reservation Agreement collectively were sufficient to satisfy the statute o f frauds. Specifically, the arbitrator found that the consideration to be paid for the unit and lot we re set forth in the marketing documents and confirmed by the e-mails sent by Braykovich, and that the e-mails confirmed a meeting of the minds and satisfied the signature requirement. The arbitrator then concluded that “[defendants’] refusal to constr uct and sell a condominium to [ plaintiffs] at the ‘early bird’ pricing constitutes a breach of the contract which was created. ” The arbitrator calculated plaintiffs’ damages at $74,642, which represented the value of the condominium and lot at the time of breach minus the contract price of the condominium and lot, adjusted for a change in circumstances that occurred when the township approved only 20 units as opposed to the originally proposed 24 units.

Plaintiffs then filed a motion in the circuit court to have th e order confirmed and reduced to a judgment. Defendants did not move to vacate the award, no r did they object to plaintiffs’ motion to confirm the award. Acco rdingly, the trial court conf irmed the award and entered a judgment in the amount of the a ward, which defendants now appea l.

II. ISSUE PRESERVATION

“Generally, to preserve an issue for appellate review, the iss ue must be raised before and decided by the trial court.” Detroit Leasing Co v Detroit , 269 Mich App 233, 237; 713 NW2d 269 (2005). Defendants failed to object to the arbitration awa rd in the circuit court, either by-3- moving to vacate the award or by responding to plaintiffs’ moti on to confirm the award, rendering their arguments unpreser ved on appeal. Defendants co ntend that they were only required to assert their arguments before the arbitrator, not t he circuit court, because the “trial court” for purposes of arbitrati on proceedings is the arbitrato r. Alternatively, defendants argue that MCL 691.1708 does not allow an appeal from an order denyin g a motion to vacate an arbitration award, but rather on ly from an order confirming or denying an award or an order granting a motion to vacate an a ward. Both arguments are unava iling.

The Uniform Arbitration Act, MCL 691.1681 et seq ., provides that “arbitration in this state confers exclusive jurisd iction on the court to enter judg ment on an award.” MCL 691.1706. MCL 691.1705 states that an award can be “enforced as any other judgment in a civil action.” Further, MCL 691.1708 provides that an appeal can be taken, not from an arbitrator’s award, but rather from an order confirming, denying, vacating, correcting, or modifying the award, or from a final judgment entered. Therefore, the “trial court” for pur poses of issue preservation is the court in which the parties filed the action and which has the p ower to enter enforceable judgments and orders.

MCL 691.1708 states that an appeal may be taken from an order confirming or denying confirmation of an arbitration award or an order vacating an aw ard, and, additionally, it does not state that an appeal may be taken from an order denying a motio n to vacate an award. This is consistent with MCR 7.203(A), whic h provides that this Court ha s jurisdiction to hear an appeal as of right from a final judgment. The Michigan Court Rules de fine “final judgment” as “the first judgment or order that disposes of all the claims and adj udicates the rights and liabilities of all the parties, including such an order entered after reversal of an earlier final judgment or order.” MCR 7.202(6)(a)( i ). An order denying a motion to vacate an arbitration award is not a final judgment because it does not dispose of all of the rights and liabilities of the parties. Contrary to defendants’ contention, a party that files and lose s a motion to vacate an arbitration award is not prevented from filing an appeal as of right from s ubsequent or simultaneous orders confirming or denying the arbitr ation award, which constitute f inal judgments. Further, although defendants correctly note that their decision not to file a mot ion to vacate or to object to plaintiffs’ motion to confirm t he arbitration award does not wa ive their right to appeal a final judgment of the trial court, s ee MCR 7.203(A), defendants’ inac tion does render their arguments unpreserved on appeal.

III. ANALYSIS

Defendants present two arguments in support of their assertion that the circuit court erred by confirming the arbitration award. Defendants argue that the arbitrator’s conclusion that an enforceable contract existed bet ween the parties is contrary to the MCA. Additionally, defendants argue that the arbitrat or erred by finding that an e nforceable contract existed and that the contract satisfied the statute of frauds. Because defendan ts’ claims are unpreserved, we review them for plain error. Kern v Blethen-Coluni , 240 Mich App 333, 336; 612 NW2d 838 (2000). “To avoid forfeiture unde r the plain error rule, three requirements must be met: 1) the error must have occurred, 2) the error was plain, i.e., clear o r obvious, 3) and the plain error affected substantial rights.” Id

. (citation and quotation marks omitted).

“[W]here it clearly appears on the face of the award or the re asons for the decision as stated, being substantially a par t of the award, that the arbit rators through an error in law have been led to a wrong conclusion, a nd that, but for such error, a substantially different award must-4- have been made, the award and decision will be set aside.” Detroit Auto Inter-Ins Exch v Gavin

, 416 Mich 407, 443; 331 NW2d 418 (1982) (citation and quotation marks omitted; alteration in original). Further, “[t]he cha racter or seriousness of an erro r of law which will invite judicial action . . . must be error so mat erial or so substantial as to have governed the award, and but for which the award would have been substantially otherwise.” Id . In reviewing arbitration awards, appellate courts should “focus upon the materiality of the lega l error . . . and not upon the question whether the law was so well settled, widely known, or easily understood that the arbitrators should have known of it.” Id . at 443-444; see also Gordon Sel-Way, Inc v Spence Bros, Inc , 438 Mich 488, 497; 475 NW2d 704 (1991).

A. THE MICHIGAN CONDOMINIUM ACT

The MCA states that a condominium project “shall be establishe d upon the recording of a master deed that complies with this act” and that “a condominiu m unit shall not be sold by or on behalf of the developer before a master deed is recorded.” MCL 559.172(1) and (2). Section 83 additionally provides that a dev eloper and a party can enter in to a preliminary reservation agreement to reserve a condomini um for a future purpose. MCL 5 59.183.

To the extent that it is evident on the face of the arbitratio n award that the master deed had not been recorded, this does not invalidate the contract th e parties executed. Initially, we acknowledge that MCL 559.172 preclud es condominium developers, like defendants, from selling units before the recordi ng of the master deed, and we a lso acknowledge that contracts created in violation of a statute are void. Mich Mut Auto Ins Co v Reddig , 129 Mich App 631, 634-635; 341 NW2d 847 (1983). However, in determining whether legal error exists on the face of the arbitration award, it is i mportant to examine the langua ge used in the award’s conclusion. It reads that “it is concluded that [defendants’] refusal to co nstruct and sell a condominium to [plaintiffs] at the ‘early bird’ pricing constitutes a breach o f the contract which was created.” Considering this language, we c onclude that the contract that t he arbitrator found in existence between the parties was not a con tract for the sale of a condom inium unit, but was rather an option contract to hold the pri ce of the condominium unit at th e low “early bird” pricing in exchange for a $1,000 deposit. It was not defendants’ refusal to sell plaintiffs a condominium that constituted the breach in the arbitrator’s decision, but r ather their refusal to sell the condominium at the specified price . Nothing in the language of the MCA prohibited the parties from entering into an option contr act to reserve a particular p rice for a condominium unit.

Additionally, MCL 559.183 specifically allows parties to enter into reservation agreements, and, contrary to defendants’ assertions, nothing in the language of the statute precludes such agreements from being binding on the parties. T o overturn the arbi trator’s award, an error must be “evident from the face of the award” and must be so substantial that it was outcome determinative. Gordon , 438 Mich at 497. The face of the arbitration award shows tha t the contract in this case was an option contract , not a contrac t for the sale of a condominium unit. Therefore, the MCA’s prohibition on developers selling condomin ium units before the recording of the master deed does not operate to void the contract.

B. STATUTE OF FRAUDS

Defendants next contend that the arbitrator erred by concludin g both that Braykovich had the authority to bind defendants to the contract and that the c ontract satisfied the statute of frauds. As discussed above, the contract between plaintiffs an d defendants was not a contract for-5- the sale of a condominium unit, which would have conveyed an in terest in real property, but rather was an option contract to purchase the condominium at th e “early bird” price in exchange for plaintiffs’ $1,000 deposit. Under Michigan law, an option contract does not create an interest in land and therefore is not within the statute of frauds. Marina Bay Condos, Inc v Schlegel , 167 Mich App 602, 607; 423 NW2d 284 (1988); Randolph v Reisig , 272 Mich App 331, 338; 727 NW2d 388 (2006). The agreement in this case established the pa rties, the condominium unit at issue, the sales price of the unit, and was supported by valuab le consideration. Accordingly, a valid option contract existed, and the agreement was not requir ed to satisfy the statute of frauds to be enforceable against defendants. 2

Further, the arbitrator’s conc lusion that Braykovich had the a bility to bind defendants to the agreement was not plainly erroneous. “The authority of an agent to bind the principal may be either actual or apparent.” Meretta v Peach , 195 Mich App 695, 698; 491 NW2d 278 (1992). When a principal cloaks an agent with apparent authority to do an act, the principal is bound thereby if the apparent authority is traceable back to the prin cipal. Richards v Lowrie & Webb Lumber Co , 317 Mich 42, 46; 26 NW2d 590 (1947). “Actual authority may b e express or implied.” Meretta , 195 Mich App at 698. Implied authority is the authority that an agent believes he or she possesses. Id . In this case, Braykovich’s authority to bind defendants was supported by the admissions of bot h of defendants’ principals t hat Braykovich had the authority to act as their sales agent and indeed acted in that capacity. Braykovich also testified that she was an agent of defendants and that she was authorized to offer potential customers pricing on the units. Under these facts, the arbitrator did not plainly e rr by concluding that Braykovich had the authority, either actual or apparent, to execute the option contract with plaintiffs. Therefore, the arbitrator’s award in favor o f plaintiffs was proper, and t he circuit court did not err by confirming the award and enteri ng judgment in favor of plaintif fs.

Affirmed.

/s/ Deborah A. Servitto /s/ Michael F. Gadola /s/ Colleen A. O’Brien

2 Although the arbitrator improperly concluded that the contract at issue was a contract for the sale of real property, rather than an option contract that did not create an interest in land, the arbitrator’s misapplication of t he law does not require us to s et aside the arbitration award because the arbitrator reached the correct result. See Gavin , 416 Mich at 443 (explaining that an arbitration award need only be set aside when a legal error “le d to a wrong conclusion”).