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### STATE OF MICHIGAN

COURT OF APPEALS

SOUTH KENT RECREATION ASSOCIATION, a/k/a SKRA,

Plaintiff/Counter-DefendantAppellant, UNPUBLISHED April 23, 2015

v No. 320402 Kent Circuit Court CITY OF WYOMING, LC No. 12-004294-CK

Defendant/Counter-PlaintiffAppellee.

Before: M ETER , P.J., and S AWYER and B OONSTRA , JJ.

P ER C URIAM

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Plaintiff South Kent Recreation Association (SKRA) appeals as of right from an order denying its motion for summary disposition and granting summary disposition to defendant city of Wyoming (the c ity). We affirm.

In an agreement dated November 20, 2000, SKRA and the city ent ered into a recreational facilities agreement (RFA) wher eby SKRA agreed to develop certa in recreational facilities, such as baseball fields, within a park owned by the city. The agree ment specified that during the term of the RFA, SKRA (which is not affiliated with the city) could use the park for recreational purposes. The city agreed to “develop and maintain a level and standard of service reflective in all park settings,” such as la ndscaping and trash removal. The RFA also stated, in part:

4. The City hereby grants SKRA a non-exclusive, revocable lic ense, attached hereto as Exhibit A, to use the Park for the purposes provided herein for a period of twenty-five (25) years from the date of the License Agreement, in accordance with the terms of this Agreement.

5. Except by mutual agreement of the Parties, SKRA may not b e divested of the facilities constructed by S KRA in accordance with this A greement.

6. In the event the Parties mutually agree to terminate this Agreement prior to the expiration of the License Agreement, SKRA’s and th e City’s usage rights to each other’s facilities granted in this Agreement sha ll also be terminated. The City shall give written notice to SKRA stating the park imp rovements-2- provided at SKRA’s cost the City wishes to keep. The City shal l pay SKRA the fair market value of these improvements in cash. If the partie s cannot agree on the fair market value within thi rty (30) days, the Parties shal l jointly select an appraiser. The decision of the appraiser shall be binding on b oth Parties. Payment shall be made within forty-five (45) days after the fai r market value is determined. SKRA may remove any property improvements not reta ined by the City within three (3) months after the City gives its notice ab ove. Any improvements not removed by SKRA shall become the property of t he City.

7. Upon expiration of this License Agreement, unless the Part ies agree to an extension of said License Agreement, all improvements made t o the Park by SKRA will become the sol e property of the City.

* * *

15. In return for use and dev elopment of the property, ensuri ng SKRA’s priority of use, and allowing for f acility improvements, SKRA s hall:

a. Provide an annual payment of $12,000, payable in $1,000 in crements monthly, beginning January 1, 2001.

b. Provide a payment of $6000 to retroactively provide for th e use of the facilities and its related impr ovements between July 1, 2000 an d December 31, 2000, due no later than October 31, 2001.

c. Agree to assume the cost of all custodial and development needs for SKRA’s recreation programming. T hese items shall be in parity, to the extent possible, with other similar usage agreements.

d. Designate equipment and supp lies that shall be available t o the City of Wyoming Parks and Recreation Department. If equipment and supp lies are not returned in satisfactory condition, reasonable wear and tear ex pected, the City of Wyoming will be responsible for depreciated replacement value. SKRA and the City shall provide for adequate s torage for City of Wyoming Par ks and Recreation Department & SKRA equipment and supplies.

The license agreement, als o dated November 20, 2000, stated, i n part:

1. SKRA shall have a non-exclusive, revocable license to use the . . . property[.]

2. This License Agreement shall be for a period of twenty-fiv e (25) years and six months, commencing July 1, 2000 and terminating on Dece mber 31, 2026.

3. The License shall be revo cable only in accordance with the terms of the [RFA] which is attached hereto and made a part hereof. All oth er terms of the License shall be in accordance with said Agreement.-3- In an affidavit dated November 12, 2013, the Director of Commu nity Services for the city, Rebecca Rynbrandt, explaine d that the parties’ agreement required approximately $300,000 from the city to provide for the park facilities and approximat ely $150,000 from SKRA. Rynbrandt explained that “[t]he $150,000 to be provided by SKRA was advanced by the Special Assessment Fund of the City of Wyoming and was to be repaid by SKRA under the terms of the provisions of the [RFA] at $1,000 per month.” Rynbrandt averre d that “[a]s of December 31, 2011, SKRA was in arrears to the City of Wyoming in the amount of $12,450.” She stated that “the Wyoming City Council terminated the License Agreement and [RFA] . . . due to the substantial breach of the Agreement by SKRA in failing to make the requirement payments.”

On May 10, 2012, SKRA filed what it referred to as a “complain t for compensation for improvements and additions made by plaintiff to a certain facil ity in Wyoming, Michigan[,] and request for injunction against the use of plaintiff’s improveme nts during the pendency of this action.” SKRA stated that the city terminated the RFA and Lice nse Agreement “on or about January 3, 2012 . . . .” SKRA complained that the city had vio lated paragraph 6 of the RFA by not paying SKRA for improvements made to the park. SKRA stated that “during the term of this agreement [it] spent in excess of $300,000.00 on the facility.” SKRA requested compensation, the appointment of an appraiser, rental fees, and an injunction against disposal of improvements made by SKRA.

On June 4, 2012, the city filed a counterclaim, stating that i t had provided SKRA a zerointerest loan “to be paid back at the rate of $1,000 per month over the 25 year period of the [RFA].” The city alleged that it loaned SKRA $256,934 and that , as of December 31, 2011, SKRA was delinquent in payments under the RFA by the amount of $12,450. It stated that “the current amount due and owing to the City of Wyoming is $154,930 .” In response to requests for admissions, SKRA admitted that “as of December 31, 2011 [it was ] delinquent in payments pursuant to the [RFA] in the amount of $12,450.” Various offic ers of SKRA averred in affidavits that there was never any loan made by the city to SK RA.

On July 2, 2012, the court entere d an order stating that the p arties “will attempt to agree on the property that’s claimed by both parties” and “will attem pt to agree on an appraiser” but that “this matter can be br ought back to the court . . . .”

After unsuccessful attempts to settle, the city filed a motionfor summary disposition under MCR 2.116(C)(8) and (10) on November 13, 2013. Among oth er things, the city cited paragraph 7 of the RFA, which stated that “[u]pon expiration of this License Agreement, unless the Parties agree to an extension of said License Agreement, al l improvements made to the Park by SKRA will become the sole property of the City.” The city a lso pointed out that SKRA had admitted to the delinquency in the payments under the RFA. It stated that SKRA “is in material and substantial breach of the [RFA] and is therefore prohibited by law from attempting to enforce the provisions of that Agreement.” It stated that “the contract has expired as of its termination by the City . . . and therefore the City is entitle d to retain all improvements . . . pursuant to paragraph 7 . . . .” In its brief in support of it s summary disposition motion, the city stated that “[although it will be a rgued that the intent of the parties was that expiration meant 25 years, it is also undeniable that the intention of the parties was that SKRA would make the payments required under the terms of that agreement.”-4- In its response to the city’s motion for summary disposition, SKRA stated that the city “by unilateral action terminated the Agreement and barr[ed SKRA ] from the facilities.” SKRA asserted that the city’s action “triggered the relief set forth in paragraph six.” SKRA stated that “[t]he Agreement does not provide for termination based on deli nquent payments . . . and had [the city] wanted a provision which terminated for nonpayment, it should have been a part of the Agreement.” SKRA requested that the court grant it summary dis position under MCR 2.116(I)(2), stating that only the city had breached the RFA an d that the city owed SKRA $235,549.52 plus interest, fees, and costs, for improvements pr ovided. SKRA also stated that there was no evidence of a ny loan between the parties.

Subsequently, the city filed an additional brief in which it a dmitted that the issue of the alleged loan was essentially irrelevant and that the city “term inated the agreement due to [SKRA’s longstanding] failure to make the payments required und er the terms of the RFA.”

At oral arguments on January 17, 2014, the court stated that i t was “satisfied” that SKRA had substantially and materially breached the RFA. The trial c ourt issued an order stating, in part:

The [c]ourt having determined that [SKRA] substantially and ma terially breached the agreement between the parties which was the subjec t of this action and [the city] having stipulated on the record that if the [c]o urt granted [the city’s] Motion for Summary Disposition and denied [SKRA’s] Motion for S ummary Disposition, [the city] would vol untarily dismiss [its counterc laim] . . . IT IS HEREBY ORDERED [that the city’s m otion for summary disposition is granted, SKRA’s motion for summary disposition is denied, and the claim and counterclaim are dism issed with prejudice].

We review de novo a trial court’s decision regarding a motion for summary disposition. Maiden v Rozwood , 461 Mich 109, 118; 587 NW2d 817 (1999). We also review de no vo the interpretation of a contract. St Clair Medical

, PC v Borgiel , 270 Mich App 260, 264; 715 NW2d 914 (2006). “The goal of contract construction is to determine and enforce the parties’ intent on the basis of the plain langua ge of the contract itself.” Id

. SKRA admits on appeal that it breached the contract, but argue s that “reasonable minds could differ as to whether the br each of the [c]ontract by [SKR A] warrants rescission.”

We find “rescission” to be a somewhat inapt concept in the pre sent case. The reality is that SKRA initiated its lawsuit to obtain relief under the RFA. Indeed, SKRA, in its complaint, relied heavily on paragraph 6 of the RFA. The salient fact, ho wever, is that once SKRA substantially breached the contract, it was prohibited from mai ntaining an action against the city for the city’s alleged subsequent breach or failure to perform under the contract. Michaels v Amway Corp , 206 Mich App 644, 650; 522 NW2d 703 (1994). There can be no reasonable dispute that SKRA’s failure to make the $1,000 monthly payments such that it was in arrears for $12,450 constituted a substantial breach. Cf. id . at 651. Indeed, the contract made clear that SKRA was to make these payments “[i]n return for use and develo pment of the property, ensuring SKRA’s priority of use, and allowing for facility impr ovements . . . .” The payments-5- were obviously an integral part of the parties’ agreement and the requirement for the payments was worded unambiguously.

SKRA contends that the city lacked the authority to enter into the agreement with SKRA in the first instance because the city charter states that the city cannot “rent or let public property for a period longer than three years” unless certain conditions have been met. It also contends that the trial court’s decision amounted to an illegal taking b ecause the city “took away SKRA’s property and property interest w ithout providing any compensati on.” First, these arguments were not raised below and are not properly before this Court. Polkton v Charter Twp v Pellegrom , 265 Mich App 88, 95; 693 NW2d 170 (2005); Booth Newspapers

, Inc v Univ of Michigan Bd of Regents , 444 Mich 211, 234 n 23; 507 NW2d 422 (1993). At any rate, we find no basis for concluding that the RFA and the licensing agreemen t were leases, and we further note that any loss of property by SKRA was due, simply, to its own breach of the RFA.

SKRA further contends that it should be provided compensation to be restored to the “status quo” in conjunction with a rescission. See, e.g., Grabendike v Adix , 335 Mich 128, 140- 142; 55 NW2d 761 (1952). We do not, however, characterize this action as one involving rescission but rather as one in which SKRA was attempting to en force the terms of a contract that it had first substantially breached. Michaels , 206 Mich App at 650. SKRA also makes an argument that the city, by virtue of the trial court’s decision , is deriving an “unconscionable advantage.” In addressing this a rgument, SKRA states that the city obtained SKRA’s improvements by way of paragraph 7 of the RFA but that this, in turn, violated paragraph 5 of the RFA, which stated that “[e]xcept by mutual agreement of the Parties, SKRA may not be divested of the facilities constructed by SKRA in accordance wi th this Agreement.” Once again, however, we note that once SKRA s ubstantially breached the cont ract, it was prohibited from maintaining an action against the city for the city’s alleged s ubsequent breach or failure to perform under the contract. Id . Lastly, SKRA appears to be making a separate argument that i t is entitled to quantum meruit relief. We decline to address th is argument because it was not pleaded in the complaint or otherwise raised below. Polkton , 265 Mich App at 95. We additionally note that the concep t of quantum meruit was inappl icable in that SKRA relied on the express contract between the parties. See Borisoff v Schatten , 335 Mich 684, 686; 57 NW2d 430 (1953), and Morris Pumps v Centerline Piping

, Inc , 273 Mich App 187, 199; 729 NW2d 898 (2006).

Affirmed.

/s/ Patrick M. Meter /s/ David H. Sawyer /s/ Mark T. Boonstra