Opinion ID: 2785379
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: The Morettis argue that the district court erred in granting summary judgment because they presented a genuine issue of material fact for trial on their contract claims against Defendants.1 We review de novo a district court’s grant of summary judgment. Vander Boegh v. Energy Solutions, Inc., 772 F.3d 1056, 1059 (6th Cir. 2014). “Summary judgment is properly granted when, viewing the evidence in the light most favorable to the nonmoving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Freeze v. City of Decherd, Tenn., 753 F.3d 661, 664 (6th Cir. 2014). “[F]actual allegations must be enough to raise a right to relief above the speculative level and to state a claim to relief that is plausible on its face.” Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555, 570 (2007)) (internal quotation marks omitted). The Morettis raise arguments in favor of remand under multiple theories of contract law. Their first claim is that, under the principle of contra proferentem, any ambiguity in the contract drafted by Defendants—i.e., the Loan Modification Agreement—must be interpreted in favor of the Morettis. See, e.g., Klapp v. United Ins. Grp. Agency, Inc., 663 N.W.2d 447, 453-55 (Mich. 2003). Under Michigan law, they argue, “if a contract is ambiguous, as the loan modification 1 On appeal, the Morettis have abandoned their claims related to the foreclosure process in light of intervening decisions issued by the Michigan Supreme Court. (Appellant Br. 1; Appellant Reply Br. 4.) -6- Case No. 13-2187, Moretti v. Bank of New York Mellon documents are in the present case, then the meaning of the contract is a question of fact and the fact finder must examine extrinsic evidence to ascertain the intents of the parties.” (Appellant Br. 20.) But by their own admission, the Morettis did not find the Loan Modification Agreement ambiguous: they understood the terms of the contract, agreed to it, and began performance thereunder. (Appellant Br. 8 (“It is clear that Appellants knew the [r]amifications of the loan modification agreement and stood ready and able to make the agreed upon monthly payment of $1,340.47.”).) They acknowledge this issue in part by clarifying that it is the combination of the contract with Defendants’ subsequent communications to the Morettis that “create[d] an ambiguity that must be resolved in favor of Appellants.” (Appellant Br. 18-19.) But they offer no argument or authority under which we might interpret the communications as part of the contract itself, and Michigan’s application of contra proferentem requires that the language of the contract itself be ambiguous. Only with that ambiguity established does the fact finder proceed to contemplate “such extrinsic evidence as the parties’ conduct, the statements of its representatives, and past practice to aid in interpretation.” Klapp, 663 N.W.2d at 454 (quoting Penzien v. Dielectric Prods. Eng’g Co., Inc., 132 N.W.2d 130, 132 (Mich. 1965)) (internal quotation marks omitted). Accordingly, the Morettis present no genuine issue of fact on this claim. Nor do the Morettis present evidence that they are entitled to proceed to trial under the “first breach rule” in contract. It is true that, in Michigan, “one who first breaches a contract cannot maintain an action against the other contracting party for his subsequent breach or failure to perform.” Frost v. Wells Fargo Bank, N.A., 901 F. Supp. 2d 999, 1008 (W.D. Mich. 2012) (quoting Flamm v. Scherer, 198 N.W.2d 702, 706 (Mich. Ct. App. 1972)). It is also true that questions regarding the parties’ credibility are primarily for a jury. See, e.g., Bd. of Cnty Rd. -7- Case No. 13-2187, Moretti v. Bank of New York Mellon Comm’rs of Kalamazoo Cnty v. Bera, 129 N.W.2d 427, 429 (Mich. 1964). But the Morettis do not develop this argument beyond merely quoting legal principle, and it is unclear what issue of credibility or intent they seek to have decided by a jury under this theory. To the extent the Morettis seek to argue that Defendants’ communications in May and July 2009 signify a breach of the Loan Modification Agreement, the claim is too underdeveloped to create a genuine dispute for trial. The core of the Morettis’ case is their claim that Defendants’ communications in May and July 2009 “unilaterally altered” the Loan Modification Agreement to demand increased payment. (Appellant Br. 22.) Per the claim, this constituted a repudiation of the Loan Modification Agreement between the parties, effectively relieving the Morettis of any obligation to continue payment and entitling them to recovery. However, as discussed at length by the district court, repudiation of a contract requires more than confusion or misunderstanding. To repudiate a contract, a party must “unequivocally declare[] the intent not to perform[.]” Appalachian Railcar Servs., Inc. v. Boatright Enters., Inc., 602 F. Supp. 2d 829, 879 (W.D. Mich. 2008) (quoting Skladanowski v. Clear Channel Radio, No. 261004, 2006 WL 3682184, at  n.2 (Mich. Ct. App. Dec. 14, 2006)). The Morettis have put forward no evidence, written or otherwise, wherein Defendants declare an intent not to perform their responsibilities under the Loan Modification Agreement. At best, the Morettis can point to areas of confusion. While Defendants’ letters and statements in May and July 2009 were far from models of clarity, viewed in light of the requirements set out in the note, mortgage, and loan modification, these communications were consistent with the Morettis’ contract. (R.73, PageID #1261-62 (wherein the district court explains that “the written documents from May, I think by the plaintiff’s own admission, don’t repudiate the agreement, don’t pull back the $1,300 -8- Case No. 13-2187, Moretti v. Bank of New York Mellon payment, but rather do what actually some of the other loan documents require. . . . [B]ecause it’s a variable rate, there is something in the note that obligates the lender to present amortization scenarios so that the borrower knows what he or she is getting into if they scroll ahead and don’t increase payments.”).) The verbal communication between John Moretti and Defendants similarly fails to provide sufficient basis for repudiation. The district court discussed this evidence as follows: [W]hen I read the statements from Mr. Moretti, I think he’s being honest in saying he was very confused, that he called the bank and he was clearly very frustrated, didn’t feel like he was getting anywhere, but the common refrain—and it happens in multiple places—the common refrain is, you know, “We’ll look into it and get back to you.” . . . But just hearing that, “Okay, so you’re confused, and I’ll look into it,” that doesn’t repudiate anything. (R.73, PageID #1262.) We agree. Absent any evidence of an unambiguous repudiation of the Loan Modification Agreement by Defendants, the Morettis have not established a genuine issue of material fact to be tried before a jury on this theory. Finally, the Morettis claim that they are entitled to reformation of the Loan Modification Agreement on the basis of innocent misrepresentation. To establish an innocent misrepresentation, a party must show “(1) a representation in a transaction between two parties; (2) that is false; (3) that actually deceives the other party; (4) that the other party relied on; (5) that the other party suffered damage from; and (6) [that] the party making the misrepresentation benefitted from it.” In re Moiles, 840 N.W.2d 790, 797 (Mich. Ct. App. 2013), judgment rev’d in part, vacated in part on other grounds, 843 N.W.2d 220 (Mich. 2014). Despite their subjective confusion regarding the communications with Defendants, the Morettis have not presented evidence that Defendants made any false representation regarding the Loan -9- Case No. 13-2187, Moretti v. Bank of New York Mellon Modification Agreement. Accordingly, this claim also fails to present a genuine issue of material fact for consideration by a jury.