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Michigan Supreme Court 

Lansing, Michigan 48909 

C hief Justice Justices 

Maura D. Corrigan	 Michael F. Cavanagh 

Elizabeth A. Weaver 

Marilyn Kelly 

Clifford W. Taylor Opinion Robert P. Young, Jr. 

Stephen J. Markman 

FILED APRIL 2, 2002
 

WILLIAM C. KITCHEN,


KITCHEN FARMS, INC.,


a Michigan corporation,


and KITCHEN FARMS,


a Michigan copartnership,
 

Plaintiffs-Appellants,
 

v	 No. 116459
 

ROBERT W. KITCHEN and
 

HARRIET ANN KITCHEN,
 

Defendants-Appellees.
 

BEFORE THE ENTIRE BENCH
 

KELLY, J.
 

In this case, we are called upon to resolve whether an
 

oral license for the use of real property can become
 

irrevocable by estoppel alone. We hold that under Michigan
 

law it cannot.
 
The central issue here is whether the principle of
 

estoppel applies to prevent defendants from revoking an
 

alleged license they granted to plaintiffs for use of their
 

property. Plaintiffs contend that (1) the principal defendant
 

promised plaintiffs that part of an irrigation system would be
 

allowed to travel across defendants' property in perpetuity,
 

and (2) plaintiffs relied on that promise.
 

The trial court granted summary disposition for
 

defendants and awarded sanctions of approximately $70,000
 

against plaintiffs for filing a frivolous supplemental
 

complaint. The Court of Appeals concluded that an irrevocable
 

license could not be based on an oral promise alone. It
 

upheld the sanctions against plaintiffs. We affirm the Court
 

of Appeals conclusion that an irrevocable license was not
 

created, but reverse the award of sanctions.
 

I
 

Most of the relevant facts in this case are not in
 

dispute. Brothers William and Robert Kitchen, a plaintiff and
 

defendant respectively, lived in Antrim County and were equal
 

owners of Kitchen Farms, one of the largest potato farming
 

businesses in Michigan. Robert owns and resides on a parcel
 

of property situated on the east side of the Kitchen farm.
 

His property is bordered on the north, west, and south by the
 

Kitchen farm, and his home is located on the south side of his
 

parcel. 


2
 
While the brothers were owners of Kitchen Farms, they
 

farmed the northern section of Robert's parcel. An arm of an
 

irrigation system crossed that property. 


In 1995, a dispute arose between William and Robert,
 

resulting in William filing a complaint for dissolution of the
 

business.1 Thereafter, William and Robert entered into a
 

written agreement to conduct a private auction at which the
 

higher bidder would acquire the other's interest in Kitchen
 

Farms. William, as high bidder, purchased Robert's interest.
 

The agreement did not address the farming of Robert's land or
 

the irrigation system.
 

After the buyout, Robert decided that he did not wish
 

Kitchen Farms to use his land and prevented it from planting
 

crops and using the irrigation system there. As a
 

consequence, plaintiffs William and Kitchen Farms filed the
 

supplemental complaint that is at issue in this case. 


In pertinent part, it asserted that Robert's oral promise
 

gave rise to an irrevocable license by estoppel for the use of
 

the land in question. Specifically, it alleged that Robert
 

orally represented in 1981 that the irrigation system could
 

cross his land in perpetuity.2 The supplemental complaint
 

1The complaint named Robert and his wife, Harriet


Kitchen, as defendants. Harriet had served as a Director of
 

Kitchen Farms since 1981.
 

2It is undisputed that there was no written document in


(continued...)
 

3
 
sought declaratory and injunctive relief allowing Kitchen
 

Farms to continue planting crops on the property and making
 

use of the irrigation system.3
 

Eventually, plaintiffs decided to seek a dismissal
 

without prejudice. Defendants opposed the motion, requesting
 

a dismissal with prejudice, and asking that plaintiffs be
 

sanctioned for filing a frivolous lawsuit. The trial court
 

granted summary disposition for defendants and imposed
 

sanctions against plaintiffs, concluding that their
 

supplemental complaint was frivolous because it had no basis
 

in fact or law.
 

The Court of Appeals affirmed, concluding that Michigan
 

law does not recognize a right to enforce an oral license once
 

the grantor has acted to revoke it. It found no error in the
 

trial court's imposition of sanctions.4 Plaintiffs now appeal
 

to this Court.
 

II
 

We conclude that plaintiffs' claim for an irrevocable
 

2(...continued)


which Robert made such a promise.
 

3Because the irrigation arm operates on an arc, Robert's


decision to prevent the arm from traversing his property


apparently precluded irrigation of thirty-three acres of the


adjacent Kitchen Farms farmland.
 

4239 Mich App 190; 607 NW2d 425 (1999). The Court of
 

Appeals had previously reached an issue unrelated to this


appeal in 231 Mich 15; 585 NW2d 47 (1998).
 

4
 
license based simply on an alleged oral promise5 must fail
 

because it is barred by Michigan's statute of frauds, which
 

provides:
 

No estate or interest in lands, other than


leases for a term not exceeding 1 year, nor any


trust or power over or concerning lands, or in any


manner relating thereto, shall hereafter be
 

created, granted, assigned, surrendered or
 

declared, unless by act or operation of law, or by


a deed or conveyance in writing, subscribed by the


party creating, granting, surrendering or declaring


the same, or by some person thereunto by him


lawfully authorized by writing. [MCL 566.106.]
 

Plaintiffs claim they have a permanent and irrevocable
 

license for the use of a portion of defendants' land. Such an
 

irrevocable license would constitute an "interest in lands"
 

that cannot be granted orally in compliance with the statute
 

of frauds, as it would involve a permanent right to use the
 

property. 


Under the statute of frauds, Robert could have granted
 

plaintiffs the claimed interest only through "a deed or
 

conveyance in writing." Thus, the statute of frauds bars
 

plaintiffs' claim for an interest in defendants' land based on
 

an oral promise and reliance by plaintiffs. We hold that an
 

"irrevocable license" by estoppel cannot be created in
 

Michigan on the basis of an oral promise because recognizing
 

5 For purposes of resolving this case, we assume without


deciding, as did the trial court in granting defendant's


motion for summary disposition, that Robert actually made the


alleged oral promise. 


5
 
 

such a conveyance would violate the statute of frauds.
 

Our analysis is consistent with existing Michigan case
 

law. By definition, a license is "a permission to do some act
 

or series of acts on the land of the licensor without having
 

any permanent interest in it . . . ." Sweeney v Hillsdale Co
 

Bd of Road Comm'rs, 293 Mich 624, 630; 292 NW 506 (1940),
 

quoting Morrill v Mackman, 24 Mich 279, 282 (1872). In
 

general, a license is revocable at will and is automatically
 

revoked upon transfer of title by either the licensor or
 

licensee. Forge v Smith, 458 Mich 198, 210; 580 NW2d 876
 

(1998); Sallan Jewelry Co v Bird, 240 Mich 346, 348; 215 NW
 

349 (1927). 


Oral and written licenses, which are terminable at will
 

by the grantor, are valid. See McCastle v Scanlon, 337 Mich
 

122, 133; 59 NW2d 114 (1953). The reason is that these
 

licenses, because of their revocability, do not create an
 

interest in land. Hence, the statute of frauds is
 

inapplicable:
 

"Where nothing beyond a mere license is
 

contemplated, and no interest in the land is
 

proposed to be created, the statute of frauds has


no application, and the observance of no formality


is important." [Id. at 133.]
 

By contrast, Michigan law generally requires that the grant of
 

a permanent interest in land be in writing to be enforceable.
 

Id. at 128.
 

Indeed, the fact that the interest is permanent brings it
 

6
 
within the statute of frauds. Accordingly, this Court has
 

distinguished between licenses and easements, utilizing the
 

statute of frauds rationale as follows :
 

A license grants permission to be on the land


of the licensor without granting any permanent


interest in the realty. While easements constitute
 

an interest in real estate, licenses do not.


Because they are not considered interests in land,


licenses do not have to comply with the
 

requirements of the statute of frauds. [Forge,
 

supra at 210.]
 

Michigan case law makes clear the justification for
 

excluding licenses from the requirements of the statute of
 

frauds: because they are revocable at will, they do not
 

constitute an interest in the pertinent land. By contrast,
 

the "irrevocable license" claimed by plaintiffs would not be
 

revocable at will. Thus, it would not constitute a "license"
 

falling outside the scope of the statute of frauds.
 

Our case law indicates that an interest in land cannot be
 

established on the basis of estoppel, as plaintiffs seek to
 

do. See Penfold v Warner, 96 Mich 179, 180; 55 NW 680 (1893).
 

We stated in Huyck v Bailey, 100 Mich 223, 226; 58 NW 1002
 

(1894):
 

[T]he statute of frauds prevents the passing


of title to realty by parol, and this cannot be


done any more under the guise of an estoppel, in


the absence of fraud, and when the estoppel


consists only of an implied assent, than by showing


a direct parol contract.
 

As these cases reflect, the statute of frauds precludes
 

an oral promise from forming the basis of a claim to an
 

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interest in real property, even when estoppel is alleged. As
 

has been observed, no writing exists in this case to support
 

plaintiffs' contention that they have more than a mere
 

revocable license to use defendants' land. Accordingly,
 

plaintiffs' argument must fail. 


We note that plaintiffs rely heavily on 5 Restatement
 

Property, § 519(4). It provides that a licensee who makes
 

expenditures in reliance on representations about the
 

license's duration may continue to use the license to realize
 

the value of the expenditures. As plaintiffs admit, that
 

Restatement provision is based on the doctrine of estoppel.
 

Because Michigan does not permit an interest in land to
 

transfer only on the basis of estoppel, it follows that
 

§ 519(4) is inconsistent with Michigan law.6
 

We reaffirm that a license may be granted orally, but
 

hold that the oral license is necessarily revocable at the
 

will of the licensor without regard for any promised duration.
 

Neither a written "license" that evidences a promised duration
 

nor the oral conveyance of an intended permanent interest in
 

land is an "irrevocable license." Instead, the grantor of
 

6Plaintiffs rely on numerous Michigan cases for the


proposition that an irrevocable license is recognized by


Michigan law. Those cases are easily distinguished from the


instant case and do not lend support to plaintiffs' position.


Each involves either a license coupled with an interest in


land or a written agreement sufficient to satisfy the statute


of frauds.
 

8
 
 

such an intended interest, in effect, orally conveys an
 

easement.7 Although one can grant an express, irrevocable
 

easement, it must be evidenced by a writing manifesting a
 

clear intent to create an interest in the land. Forge, supra,
 

at 205. As that did not occur here, defendants were free to
 

revoke the oral license.
 

III
 

Turning to the issue of sanctions, we reverse the Court
 

of Appeals decision upholding sanctions against plaintiffs.
 

A trial court's finding that an action is frivolous is
 

reviewed for clear error. In re Attorney Fees & Costs, 233
 

Mich App 694, 701; 593 NW2d 589 (1999). A decision is clearly
 

erroneous where, although there is evidence to support it, the
 

reviewing court is left with a definite and firm conviction
 

that a mistake has been made. Id.
 

Whether a claim is frivolous within the meaning of MCR
 

2.114(F) and MCL 600.2591 depends on the facts of the case.
 

MCL 600.2591(3) defines "frivolous" as follows:
 

(a) "Frivolous" means that at least 1 of the
 

7Because plaintiffs do not claim that their interest in


defendants' property constitutes an "easement by


prescription," we need not address whether such an interest


could have been established under these facts. See Outhwaite
 

v Foote, 240 Mich 327, 331-332; 215 NW 331 (1927); Plymouth
 

Canton Community Crier v Prose, 242 Mich App 676, 684-685; 619


NW2d 725 (2000). We note that, in any event, the use did not


continue for the fifteen-year period generally considered


necessary to establish an easement by prescription. See id.
 

at 679; MCL 600.5801(4).
 

9
 
following conditions is met:
 

(i) The party's primary purpose in initiating


the action or asserting the defense was to harass,


embarrass, or injure the prevailing party.
 

(ii) The party had no reasonable basis to


believe that the facts underlying that party's


legal position were in fact true.
 

(iii) The party's legal position was devoid of


arguable legal merit.
 

The trial court concluded that plaintiffs were subject to
 

sanctions pursuant to MCR 2.114 for filing the supplemental
 

complaint, which it found ungrounded in law or fact.
 

The issue whether plaintiffs should be subject to
 

sanctions is much closer than the Court of Appeals made it
 

appear. Although plaintiffs' claim for an irrevocable license
 

must ultimately fail, plaintiffs presented a sufficient
 

argument grounded in law and fact to avoid a finding of
 

frivolity. The mere fact that plaintiffs did not ultimately
 

prevail does not render the supplemental complaint frivolous.
 

While our decision today is based on the statute of
 

frauds and our prior case law, it was not easily resolved. 


There has been no authority in Michigan that clearly and
 

unequivocally addresses whether an oral license can become
 

irrevocable by estoppel. We now firmly establish that it
 

cannot.
 

Plaintiffs point out accurately that there is support for
 

their position in authorities from other jurisdictions and in
 

10
 
the Restatement of Property. 5 Restatement Property, §
 

519(4). In addition, the pertinent principles of real
 

property law are complex. For example, considerable analysis
 

is needed to determine why a classic license is not an
 

interest in land subject to the statute of frauds and why the
 

rationale for that principle should not extend to a claimed
 

"irrevocable license." Not every error in legal analysis
 

constitutes a frivolous position. Moreover, merely because
 

this Court concludes that a legal position asserted by a party
 

should be rejected does not mean that the party was acting
 

frivolously in advocating its position.
 

We recognize that plaintiffs' argument before this Court
 

is more refined than that made before the trial court.8
 

Nonetheless, we conclude that plaintiffs' initial allegations
 

and legal argument were sufficient to avoid sanctions for a
 

frivolous lawsuit. Thus, the circuit court clearly erred in
 

its award of sanctions predicated on finding the suit
 

frivolous.
 

IV
 

In conclusion, we hold that Michigan law does not permit
 

8There, plaintiffs claimed: (1) there was a prescriptive


easement over the north part of defendants' property; (2)


there was a perpetual noncancelable license to use the north


part of defendants' property; (3) on the basis of plaintiffs'


detrimental reliance on Robert's promise of perpetual use,


defendants were estopped from barring plaintiffs' use of the


north part of defendants' property.
 

11
 
an oral license to ripen into a permanent interest in the use
 

of land on the basis of estoppel alone. Accordingly, in
 

order to constitute a permanent interest, plaintiffs' alleged
 

license would have to have been conveyed through a deed or
 

conveyance in compliance with the statute of frauds. Because
 

the claimed interest is based merely on an alleged oral
 

promise, we affirm the Court of Appeals decision upholding
 

summary disposition for defendants. 


However, because plaintiffs advanced a claim sufficiently
 

grounded in law and fact, we reverse the award of sanctions.
 

CORRIGAN, C.J., and CAVANAGH, WEAVER, TAYLOR, YOUNG, and
 

MARKMAN, JJ., concurred with KELLY, J.
 

12