If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.

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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

NICOLAS SULAKA,

Plaintiff

- Appellee, UNPUBLISHED February 25, 2020

v No. 344400 Wayne Circuit Court SAMUEL FORGACIU, LC No. 16

- 010301

- CZ

Defendant

- Appellant.

Before: S HAPIRO

, P .J., and J ANSEN and M. J. K ELLY , JJ.

PER CURIAM

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This action involves an alleged joint venture agreement between plaintiff, defendant, and nonparty Alan Rayis with regard to commercial real property in Detroit. The property was purchased solely in the name of defendant, and the parties did not have an e xpress written agreement regarding the project. Following a bench trial, the trial court found that the parties formed an enforceable joint venture agreement to develop, operate, or sell the property. The court found that upon a sale of the property, pla intiff was entitled to one

- third of the net sales proceeds, less $30,000 in expenses already advanced by defendant. After t he trial court denied defendant’s

motion for a new trial , he appealed the judgment in favor of plaintiff. For the reasons stated in this opinion, we affirm.

I. BACKGROUND

Plaintiff testified that i n 2015, he learned from a friend that a large commercial property

on Hoover Road in Detroit was for sale for $20,000 . According to plaintiff, he talked to defendant and Rayis about purchasing the property and they discussed possible uses. Plaintiff considered leasing the property as a warehouse for his own business and t hey also discussed using it as a
location for a medical

- marijuana facility. Plaintiff explained that the t hree of them decided to purchase the property and jointly operate or sell it for a profit. H e contributed $5,000 toward the purchase price

, and defendant and Rayis each contributed $7,500

. They were each to have a one

third interest. Plaintiff testified that although he contributed less cash, he was to receive an equal share because he found the property. At the time of the purchase, the seller executed a quitclaim
deed conveying the property to defendant only. According to plaintiff, the ir plan was to have the- 2

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property held by a new entity in which they would each have a one

- third interest, but the entity had not been organized at the time the property was purchased, so the property was placed solely
in defendant ’ s name , with the intent of transfer ring ownership to the new entity after it was formed. Rayis later sold his interest to defendant, giving defendant a two

- thirds interest.

Plaintiff explained that they wanted defendant involved in the project because he had experience rehabilitating and re modeling properties. Per plaintiff’s testimony , it was expected that defendant would initially assume the cost of securing and rehabilitating the property, but plaintiff acknowledged that he would remain liable for one

- third of the expenses. Soon after t he property was purchased , defendant performed work to secure , clean, and repair it. Defendant estimated that he spent about $30,000. During that time, the parties still had not agreed on how to use the
property . P laintiff showed it to one potential buyer.

In 2016, plaintiff prepared documents, including a proposed o perating a greement, for the formation of a new entity , Sanick Holdings, LLC, that would hold title to the property. However, defendant refused to sign the documents and the p arties were unable to work out their difference s

. Plaintiff testified that defendant mentioned that plaintiff had not paid any money toward the work performed on the building, but that defendant did not respond to plaintiff ’ s requests for
documentation o f the work . P laintiff said he was leery about paying money to defendant until
the ir disagreements were resolved. Eventually, after not being able to resolve their disputes, plaintiff filed this action.

Defendant denied that plaintiff ever acquire d any interest in the property . Defendant
claimed that the $5,000 payment plaintiff made at the time of purchase was actually repayment of
a debt that plaintiff owed to Rayis , which in turn Rayis applied toward the purchase price as part of Rayis ’ s contributio n. According to defendant, plaintiff was only interested in a business that they might operate at the property

, and it was contemplated that plaintiff would receive a one

- third
interest in that business entity, but not the property. Defendant testified t hat p laintiff promised to assist in locating funding for a new business, but that never materialized. Defendant spent time and money upgrading the property, and plaintiff contributed nothing to ward that work. Defendant agreed that i f plaintiff had made payments toward that work, defendant would have treated him as a partner. But b ecause plaintiff did not contribute to ward the project, defendant advised him that
he was going ahead with the project on his own. At the time of trial, d efendant had located a buyer who was willing to purchase the property for $265,000.

Rayis testified that he, plaintiff

, and defendant were all involved in the initial purchase of the property and the ir plan was for the three of them to hold a one

- third interest in the company they intended to form that would hold title to and operate the property. Rayis explained that o nly
defendant ’ s name was listed on the deed because they were all friends and they trusted him. Rayis
denied that the money plaintiff c ontributed at the time the property was purchase d was to pay back a loan from Rayis.

The trial court found that the parties had formed an agreement for a joint venture to own the subject property and form a business. The court held that the joint ventu re agreement was valid as an oral agreement. Because t he parties also contemplated selling the property instead of developing it , t he court found that w hen defendant located a buyer and refused to share the sale proceeds with plaintiff, defendant breached the agreement. The court rejected defendant ’ s- 3

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argument that plaintiff first breached the agreement by failing to timely pay his share of the expenses. The court held that upon a sale of the property, plaintiff was “ entitled to one

- third of the net proce eds less the $30,000 in expenses advanced by [defendant]. ”

I I. STANDING

Defendant first argues that plaintiff lacked standing to bring this action because the action belonged to plaintiff ’ s then

- existing business entity, Savannah Properties, LLC, not pl aintiff individually. The trial court rejected defendant ’ s standing argument because it found that plaintiff was seeking to enforce an agreement that he made in his individual capacity. 1

“ To have standing, a party must have a legally protected interest that is in jeopardy of being adversely affected. ” Dep’t of Treasury, Revenue Div v Comerica Bank , 201 Mich App 318, 329

- 330; 506 NW2d 283 (1993). “ The purpose of the standing doctrine is t o assess whether a litigant’ s interest in the issue is sufficient to ensure sincere and vigorous advocacy.” Lansing Sch Ed Ass’n v Lansing Bd of Ed , 487 Mich 349, 3 55 ; 792 NW2d 686 (2010) (quotation marks and citation omitted). “When a party’ s standing is contested, the issue becomes whether the proper party is
seekin g adjudication, not whether the issue is justiciable. ” Tennine Corp v Boardwalk Commercial, LLC , 315 Mich App 1, 7; 888 NW2d 267 (2016).

Defendant ’ s standing argument is premised on the terms of the proposed operating
agreement that plaintiff had prepa red, which would have named the holder of the one

- third interest associated with plaintiff ’ s $5,000 payment as Savannah ’ s Properties, LLC, which is plaintiff ’ s business entity. However, the proposed Operating Agreement was never executed, and plaintiff

wa s not seeking to enforce an alleged agreement between his business entity, Savannah ’ s Properties, and defendant. Instead, plaintiff was seeking to enforce an alleged joint venture agreement that he personally made with defendant, in which it was contempla ted that the real property would eventually be held by the corporation they were going to create, Sanick Holdings, LLC. The proposed operating agreement , which was never consummated, is not dispositive of whether plaintiff personally formed an agreement w ith defendant. As the trial court found , the evidence showed that plaintiff was acting in his personal capacity when he entered into an agreement with defendant and Rayis to acquire the subject property. Any terms of an agreement related to how that prop erty would later be held and controlled would involve a separate agreement, which would not impact plaintiff ’ s standing to pursue this action to enforce the agreement entered into by him personally. Further, a s the trial court noted in denying defendant ’ s motion for a directed verdict, the fact that the source of plaintiff ’ s $5,000 payment toward the property involved funds from plaintiff ’ s business entity does not prove that plaintiff did not enter into the joint venture agreement with defendant and Rayis in his individual capacity. For these reasons, the trial court did not err by rejecting defendant ’ s argument that plaintiff lacked standing to bring this
action.

1 We review de novo as a question of law whether a party has standing. In re Gerald Pollack

Trust , 309 Mich App 125, 154; 867 NW2d 884 (2015).- 4

- II I

. BREACH OF CONTRACT

Next, defendant argues that the trial court erred by finding th at he, and not plaintiff, first breached the joint venture agreement that the parties formed. 2

Defendant relies on “[t]he rule in Michigan is that one who first breaches a contract cannot maintain an action against the other contracting party for his subsequent breach or failure to perform.” Able Demolition, Inc v City of Pontiac , 275 Mich App 577, 585; 739 NW2d 696 (2007) (quot ation marks and citations omitted). He argues that plaintiff first breached the ir agreement by failing to provide funds to secure, repair, and rehabilitate the subject property. The trial court rejected this argument because (1) the parties contemplated that defendant would make the initial expense contributions and (2) the parties had not agreed that plaintiff would lose his interest in the venture if he failed to pay his share of the expenses by a specified date. Instead, the trial court reasoned, ther e was only an agreement that plaintiff was required to pay his share of the financial expenses, which he did not dispute. Thus, t he court recognized that defendant was entitled to be reimbursed for his expense contributions before plaintiff could recover f or his interest in the joint venture, and accordingly, it ordered that upon a sale of the property, plaintiff was “ entitled to one

third of the net proceeds less the $30,000 in expenses advanced by [defendant]. ”

While defendant is correct that plaintiff admitted that he had not actually paid any share of the expenses related to securing, rehabilitating, or repairing the property, there was no agreement between the parties as to when plaintiff was to pay his share. When defendant requested payment
for wo rk after experiencing financial problems, plaintiff did not refuse to pay defendant, but rather asked for documentation of the work done, which defendant did not provide. To the extent that this could be considered a breach, it was not a substantial breac h given that plaintiff did not refuse to pay for his one

- third of the expenses and there was no agreement on when defendant was to be
reimbursed. See Able Demolition, Inc , 275 Mich App at 585 (the rule precluding the party who
first breached the contract from maintaining a breach

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- contract action “ only applies if the initial
breach was substantial .”). Accordingly, the trial court did not err by rejecting defendant ’ s argument that plaintiff was the first party to substantially breach the parties ’ agreeme nt such that plaintiff could not maintain his own action for breach of contract.

I V

. JOINT VENTURE

Defendant also argues that the trial court erred by finding that plaintiff had a one

- third interest in the subject real property. This argument miscomprehends the basis of the trial court ’ s decision. The court did not find that plaintiff had a one

- third interest in the real property itself, but rather that the parties had an “ enforceable joint venture agreement whereby they will develop,

2 We review a trial court’s factual findings following a bench trial for clear error, and its

conclusions of law de novo. Trahey v City of Inkster , 311 Mich App 582, 593; 876 NW2d 582 (20 15); MCR 2.613(C). “A finding of fact is clearly erroneous if there is no evidentiary support
for it or this Court is left with a definite and firm conviction that a mistake has been made.” Trahey

, 311 Mich App at 593 (citation omitted). In reviewing th e trial court’s findings, “regard shall be given to the special opportunity of the trial court to judge the credibility of the witnesses who appeared before it.” MCR 2.613(C).- 5

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operate or sell the Hoover real estate. ” The court found that the parties ’ agreement included that
defendant “ would have the deed in his name. ” The court did not award plaintiff an interest in the real property itself, but ruled only that plaintiff had a one

- third interest in the joint venture that pertained to the operation, development, or ultimate sale of the property.

Defendant argues tha t the trial court ’ s decision is unclear and needs to be clarified, because he cannot determine under which theory or theories it granted plaintiff relief. We disagree. It is apparent from the trial court ’ s conclusions of law that it viewed plaintiff ’ s ac tion as one for breach of contract. The court found that the parties formed a joint venture agreement to buy a building to jointly operate a business or sell for profit. The court specifically found that the parties ’ agreement
did not involve a contract for the sale or purchase of land that would be barred by the statute of frauds. As indicated earlier, the court rejected defendant ’ s argument that plaintiff could not maintain this action because he committed the first breach by not reimbursing defendant for his financial contributions to the property. The court ’ s findings are sufficiently clear and definite to
determine that the trial court granted plaintiff relief under a breach

- of

- contract theory. Remand
for clarification of the trial court ’ s findings or decision is not necessary.

Defendant also argues that the trial court clearly erred by finding that the parties had an enforceable joint venture agreement related to the subject property, but his argument only involves the statute of frauds, which i s addressed in section IV, infra . Defendant does not otherwise challenge the trial court ’ s factual findings in support of its conclusion that the parties formed a joint venture agreement to develop, operate, or sell the property. Accordingly, we affirm t he trial

court ’ s ruling with respect to that issue.

The trial court also found that the parties contemplated selling the property for a profit as an alternative to developing or operating a business on the property. Therefore, the court provided

as a r emedy that if the property was sold, plaintiff would be “ entitled to one

- third of the net proceeds less the $30,000 in expenses advanced by [defendant]. ” Defendant complains that th e

court ’ s decision forces him to work with plaintiff to either continue to develop the property, operate a business, or sell it. The trial court merely decided the nature of the joint venture that the parties agreed to form and held that plaintiff ha d a one

- third interest in that joint venture. The court did
not otherwise dict ate what was to be done with the property or how the parties should handle matters going forward, other than specifying that, should the property be sold, plaintiff would be
entitled to a one

- third share of the net sales proceeds, consistent with the parti es ’ joint venture agreement. We note , however, that the property has since been sold and all that remains is the
distribution of the sale proceeds. Accordingly, defendant ’ s argument regarding the effect of the
trial court ’ s decision on the parties ’ futur e course of conduct is moot.- 6

- V. STATUTE OF FRAUDS

As noted, defendant argues that the trial court erred by rejecting his argument that the alleged agreement between the parties was void under the statute of frauds. We again disagree. 3

MCL 566.106 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, assigning, surrendering or declaring the same, or by some person thereunto by him lawfully authorized by writing.

In Summers v Hoffman , 341 Mic h 686, 689

- 690; 69 NW2d 198 (1955), the Court considered the enforceability of an oral agreement to acquire and develop real estate. The Court held that the statute of frauds did not require a writing for a joint venture that involved the division of prof its from the sale of land. Id . at 692

- 697. It explained that an agreement to share in the profits derived from the sale of reality is not within the statute of frauds and, therefore, need not be in writing. Id . at 697

- 698. See also In re Handelsman , 26 6 Mich App 433, 440

- 441; 702 NW2d 641 (2005) (holding that when an oral agreement relates to money generated by real property, rather than an interest in the real property itself, the statute of frauds is not implicated).

In this case, the trial court did not purport to adjudicate any property interest in the Hoover Road property, but instead found that the parties formed a separate joint venture agreement to develop, operate, or sell the property. Similar to Summers , the trial court did not err by ruling that this type of agreement was not barred by the statute of frauds.

V I

. OPERATING AGREEMENT

Finally, d efendant complains that the effect of the trial court ’ s decision was to enforce the proposed Operating Agreement that plaintiff had prepared, but wh ich the parties never signed. We disagree because t he trial court ’ s decision was not based on the proposed o perating a greement

, but rather was based on other evidence indicating that the parties agreed to form a joint venture to acquire, operate, or sell the business property to earn a profit. Plaintiff offered the proposed operating agreement as evidence that , by presenting the proposed agreement to defendant, he was acting consistently with the parties ’ prior agreement to jointly operate or sell the bu siness property

. T he trial court did not find that this proposed agreement established the basis for the joint venture agreement between the parties, nor did it find that it governed the parties ’ business relationship.

Defendant also argues that the tria l court erroneously ordered him to sell property for which he was the sole record owner. However, the court did not order defendant to sell the property, but

3 We review de novo questions of law, including whether the statute of frauds b ars enforcement of a purported contract.” Zander v Ogihara Corp , 213 Mich App 438, 441; 540 NW2d 702 (1995).- 7

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merely ordered that plaintiff would be entitled to one

- third of the net sales proceeds after
reim bursement of defendant ’ s expense advances if the property was sold. Th at decision is consistent with the joint venture agreement found by the trial court. The evidence supports the
trial court ’ s findings that the parties were ultimately concerned with pr ofiting from the property through the joint venture, whether that meant developing it or selling it.

Affirmed. As the prevailing party

, plaintiff may tax costs. MCR 7.219(A).

/s/ Douglas B. Shapiro
/s/ Kathleen Jansen /s/ Michael J. Kelly