Opinion ID: 848849
Heading Depth: 1
Heading Rank: 1

Heading: Covenants

Text: Justice Kelly's dissent first concludes that family day care homes are residential in nature. Post at 617. However, as we have already pointed out, the issue here is not whether the operation of a family day care home is a residential use. Rather, the issue is whether such an operation is a commercial or business use. As we explained above, residential and commercial or business uses of property are not mutually exclusive; an activity may be both residential in nature and commercial or business in nature. Therefore, the dissent's assertion that family day care homes are residential in nature simply is irrelevant here, where the issue is whether the operation of a family day care home violates a covenant prohibiting commercial or business uses. [21] The dissent next concludes that family day care homes do not violate restrictive covenants prohibiting commercial and business use. Post at 617. Inherent in this conclusion is that the operation of a family day care home is not a commercial or business use. [22] As discussed above, we disagree. The dissent criticizes us for placing great weight on compensation, post at 617, in determining that the operation of a family day care home is a commercial or business use. However, it provides no explanation as to why this is an inappropriate consideration. In Lanski, supra at 49, 104 N.W.2d 772, in determining that the operation of a nursing home was a commercial use, this Court observed that [a] fee is charged and a profit is made. The same is true here. The intent to make a profit is quite obviously an important element in identifying what constitutes a commercial or business enterprise. [23] The dissent next asserts that land use should be characterized according to how the activity involved there affects the general plan of the area rather than the narrow approach of the majority. Post at 617-18. However, the approach that this majority has adopted is simply that, when parties enter into contracts to prohibit commercial or business uses on their properties, commercial or business uses on their properties will be prohibited. Further, lest the dissent obscure this issue, we point out once more that the covenant before this Court states that the parties' properties are not to be used for any commercial, or business enterprises. It does not state, as the dissent would have us understand, that the parties' properties are not to be used for any commercial, or business enterprises that affect the general plan of the area or has a visible adverse effect on the residential character of the neighborhood. See post at 617, 618. Under the plain language of the covenant before this Court, not the covenant apparently preferred by the dissent, the parties' properties may not be used to operate a commercial or business enterprise. Period. [24] In an effort apparently to improve upon the actual contract created by the parties, the dissent reads words into the covenant that simply are not there. [25] The dissent justifies its amending from the bench by asserting that [t]he absence of a definition in the restrictive covenants of the terms commercial, industrial, or business enterprises leaves these terms ambiguous, and thus opens the terms to judicial interpretation. Post at 618. We find this to be a remarkable proposition of law, namely, that the lack of an explicit internal definition of a term somehow equates to ambiguity  an ambiguity that apparently, in this case, allows a court free rein to conclude that a contract means whatever the court wants it to mean. Under the dissent's approach, any word that is not specifically defined within a contract becomes magically ambiguous. [26] If that were the test for determining whether a term is ambiguous, then virtually all contracts would be rife with ambiguity and, therefore, subject to what the dissent in words mean whatever I say they mean fashion describes as judicial interpretation. However, fortunately for the ability of millions of Michigan citizens to structure their own personal and business affairs, this is not the test. As this Court has repeatedly stated, the fact that a contract does not define a relevant term does not render the contract ambiguous. Henderson v. State Farm Fire & Casualty Co., 460 Mich. 348, 354, 596 N.W.2d 190 (1999). [27] Rather, if a term is not defined in a contract, we will interpret such term in accordance with its commonly used meaning. Id.; Frankenmuth Mutual Ins. Co. v. Masters, 460 Mich. 105, 113-114, 595 N.W.2d 832 (1999). The contract in this case clearly prohibits commercial or business uses on the covered properties. Equally clearly, the operation of a family day care home that makes a profit by providing a service to the public is a commercial or business use. That these interpretations should appear to the dissent to be overly conclusory is only, perhaps, because they involve such simple and unremarkable propositions of law.