Court Opinion

ID: 4177279
Source: CourtListenerOpinion
Date Created: 2017-06-14 10:11:47.147017+00
Date Added: 2024-06-11T14:39:03.829577
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

TEREES WILLIAMS,                                                     UNPUBLISHED
                                                                     June 13, 2017
               Plaintiff-Appellant,

v                                                                    No. 332274
                                                                     Muskegon Circuit Court
FANNIE MAE,                                                          LC No. 15-050177-CK

               Defendant-Appellee.

Before: GADOLA, P.J., and TALBOT, C.J. and GLEICHER, J.

PER CURIAM.

       Plaintiff, Terees Williams, lost her home to foreclosure. This Court found no error in the
foreclosure proceedings, but defendant, Fannie Mae, nevertheless tried to work out a plan
whereby plaintiff could keep her home. Unfortunately, the negotiations failed and no agreement
was reached. Plaintiff filed the current action in an attempt to force a contract with defendant.
The circuit court summarily dismissed plaintiff’s complaint and we affirm.

                                       I. BACKGROUND

        The dispute between these parties has a serpentine history. “Plaintiff began experiencing
financial difficulties when she became disabled in 2010” and fell behind in her mortgage
payments. Williams v Fannie Mae, unpublished opinion per curiam of the Court of Appeals,
issued July 16, 2015 (Docket No. 321677), unpub op at 1 (Williams I). Plaintiff’s lender
attempted to assist her and offered two separate trial payment plans. Plaintiff failed to accept the
first and did not make timely payments under the second. The lender foreclosed and bought the
property at the sheriff’s sale, but then transferred its interest to defendant. Plaintiff did not
redeem the property, but held over on the land. Plaintiff “filed a circuit court ‘complaint to
cancel sheriff’s deed sale’ against defendant, alleging that ‘irregularities existed with the loan
servicing, including improper inflation of the loan balance’ and that the foreclosure sale ‘was
executed contrary to the National Mortgage Settlement Agreement.’ ” Id. at 2. The circuit court
summarily dismissed the complaint as plaintiff failed to create any genuine issue of material fact
and denied as futile plaintiff’s request to amend her complaint “to add claims of fraud,
defamation, and intentional infliction of emotional distress.” Id. at 3. Plaintiff appealed as of
right to this Court.

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       At oral argument, defendant indicated that the parties were negotiating a settlement. The
panel agreed to delay issuing its opinion for 60 days to allow continued negotiations. When this
period ended, this Court issued Williams I, affirming the circuit court’s judgment.

        The parties were unable to reach an agreement. Plaintiff then filed the current action,
alleging (1) breach of contract or implied contract, (2) fraud in the inducement, (3) breach of
implied covenant of good faith and fair dealing in violation of the Michigan consumer protection
act, MCL 445.901 et seq., (4) “violation of promissory estoppel,” and (5) intentional and
negligent infliction of emotional distress.1 Plaintiff generally asserted that defendant agreed to
resell her the home as part of a settlement offer, she planned to use funds from Step Forward
Michigan to accomplish the purchase, and defendant breached its part of the agreement by
failing to provide Step Forward with the necessary documentation for her to obtain the funding.
Having not received an answer to the complaint, plaintiff filed a motion for default judgment,
which the circuit court eventually denied because defendant was never properly served.
Defendant sought summary disposition, which the circuit court granted. Plaintiff now appeals.

                                     II. DEFAULT JUDGMENT

         Plaintiff alleges that given her filing date, defendant was required to answer by
November 2, 2015. Defendant did not answer by that date and plaintiff filed a motion for default
judgment on November 5. The circuit court declined to enter a default judgment because
defendant had not been properly served, and thereafter denied plaintiff’s motion for
reconsideration. We review that decision for an abuse of discretion. Barclay v Crown Bldg &
Dev, Inc, 241 Mich. App. 639, 642; 617 NW2d 373 (2000). “An abuse of discretion occurs when
the trial court’s decision is outside the range of reasonable and principled outcomes” or when the
court “makes an error of law.” Ronnisch Constr Group, Inc v Lofts on the Nine, LLC, 499 Mich.
544, 552; 886 NW2d 113 (2016). “The construction and interpretation of [underlying] court
rules is a question of law that we review de novo.” Barclay, 241 Mich. App. at 642.

        Defendant is a private corporation. See 12 USC 1716b (“Federal National Mortgage
Association[] will be a Government-sponsored private corporation . . . .”). Plaintiff chose to
serve process by mail on defendant’s CEO, a company “officer.” MCR 2.105(D)(1) provides
that service of process on a private corporation may be completed by “serving a summons and a
copy of the complaint on an officer. . . .” This means “personal” service. Bullington v Corbell,
293 Mich. App. 549, 557; 809 NW2d 657 (2011). MCR 2.105(D)(4) permits a plaintiff to serve a
corporate officer by registered mail under certain circumstances, none of which existed here.
Plaintiff did not follow the plain language of the court rule and instead chose to employ only
registered or certified mail to serve the summons and complaint upon defendant’s CEO.

        This Court previously advised plaintiff that to be entitled to entry of a default judgment,
she must first establish that she followed proper service methods. In relation to the prior
foreclosure action, this Court held, “it is axiomatic that a defendant must be properly served in
order to trigger the response timing requirements provided in MCR 2.108.” Williams I, unpub op

1
    Plaintiff has abandoned her negligent infliction claim.

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at 3. We expressly warned plaintiff that “ ‘[t]he court rules simply do not contemplate that a
plaintiff may use certified mail as an initial form of service on corporate entities of any kind.’ ”
Id. at 4, quoting Bullington, 293 Mich. App. at 558. Yet plaintiff again chose to serve defendant
by an improper method and, as a result, the response timing requirements were not triggered.
Accordingly, the circuit court acted well within its discretion in denying plaintiff’s motion for
default judgment.

                                 III. BREACH OF CONTRACT

       Plaintiff contends that a contract was created between the parties when defendant “made
the offer to re-sell [the] house to [her] for fair market value” and plaintiff “accepted the
proposal.” The circuit court summarily dismissed plaintiff’s breach of contract claim,
determining that no “agreement was ever consummated.” In the alternative, the court noted that
any contract related to the sale of land had to be in writing pursuant to the statute of frauds and
no written contract was executed. See MCL 566.106; MCL 566.108; MCL 566.132(1)(e).

       We review de novo a lower court’s grant of summary disposition. Innovation Ventures v
Liquid Mfg, 499 Mich. 491, 506; 885 NW2d 861 (2016). The court granted defendant’s motion
pursuant to MCR 2.116(C)(8).

               A motion under MCR 2.116(C)(8) “tests the legal sufficiency of the
       complaint on the basis of the pleadings alone to determine if the opposing party
       has stated a claim for which relief can be granted.” Begin v Mich Bell Tel Co, 284
Mich. App. 581, 591; 773 NW2d 271 (2009). We must accept all well-pleaded
       allegations as true and construe them in the light most favorable to the nonmoving
       party. Id. The motion should be granted only if no factual development could
       possibly justify recovery. Id. [Zaher v Miotke, 300 Mich. App. 132, 139; 832
       NW2d 266 (2013).]

       There was no contract, written or otherwise, in this case. Rather, plaintiff could only
possibly complain that defendant failed to follow through with steps necessary for her to
complete her end of the contract negotiation process. Specifically, in order to enter a contract to
buy back her former house, plaintiff had to secure funding. In order to secure funding, plaintiff
required certain documents from defendant, which defendant allegedly refused to provide.

        “A party asserting a breach of contract must establish by a preponderance of the evidence
that (1) there was a contract (2) which the other party breached (3) thereby resulting in damages
to the party claiming breach.” Miller-Davis Co v Ahrens Const, Inc, 495 Mich. 161, 178; 848
NW2d 95 (2014). The first element of this claim is obvious: in order for a party to breach a
contract there must in fact be a contract. “A valid contract requires five elements: (1) parties
competent to contract, (2) a proper subject matter, (3) legal consideration, (4) mutuality of
agreement, and (5) mutuality of obligation.” Bank of America, NA v First American Title Ins Co,
499 Mich. 74, 101; 878 NW2d 816 (2016) (quotation marks and citation omitted). Here, there
was insufficient mutuality of agreement to form a contract. Mutuality of agreement refers to a
meeting of the minds on all of a contract’s material terms. Kamalnath v Mercy Hosp, 194 Mich
App 543, 548-549; 487 NW2d 499 (1992). “A meeting of the minds is judged by an objective

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standard, looking to the express words of the parties and their visible acts, not their subjective
states of mind.” Id.

        Defense counsel advised plaintiff in a June 2, 2015 email to “let [her] know” if plaintiff
was “able to come up with funding to re-purchase the property.” If plaintiff could not come up
with funding equal to the property’s fair market value—$33,000—negotiations would need to
continue, counsel asserted. On July 2, 2015, plaintiff responded by email that the agency from
which she was attempting to secure funding would not continue “without written proof of the
foreclosure being rescinded.” Defendant promptly advised plaintiff that it would not meet this
term. Contract negotiations failed because the parties could not agree to the contract terms. No
contract was formed, let alone reduced to writing, and therefore no contract was breached. The
circuit court properly dismissed this claim.

                                           IV. FRAUD

       The circuit court also summarily dismissed plaintiff’s claim that defendant fraudulently
induced her to truncate her arguments to this Court in Williams I by promising to negotiate a
settlement with her and to resell her the property at fair market value.

        “Fraud in the inducement occurs where a party materially misrepresents future conduct
under circumstances in which the assertions may reasonably be expected to be relied upon and
are relied upon. Fraud in the inducement to enter a contract renders the contract voidable at the
option of the defrauded party.” Samuel D Begola Servs, Inc v Wild Bros, 210 Mich. App. 636,
639-640; 534 NW2d 217 (1995) (citations omitted). But there is no contract in this case that
could be voided. Rather, plaintiff asserts that she was fraudulently induced by the “promise” of a
contract or settlement agreement to abate her appellate arguments in the prior appeal and that
defendant reneged on its promise thereafter. She now seeks to force defendant to enter into the
“promised” contract. We cannot grant that relief. “A court cannot ‘force’ settlements upon
parties or enter an order pursuant to the consent of the parties which deviates in any material
respect from the agreement of the parties.” Kloian v Domino’s Pizza, LLC, 273 Mich. App. 449,
461; 733 NW2d 766 (2006) (quotation marks and citations omitted). As earlier noted, the parties
never mutually agreed on the terms necessary to form a contract to resell the property to plaintiff.
There is therefore no agreement to enforce.

        Moreover, plaintiff’s claim that she abated her arguments in Williams I contradicts the
record. Defendant did not propose settlement until the eve of oral argument. By then, plaintiff
had already filed a 33-page appellate brief and 10-page reply brief with 34 pages of attachments.
Although defendant moved to adjourn oral argument so the parties could continue settlement
negotiations, this Court denied the motion, Williams v Fannie Mae, unpublished order of the
Court of Appeals, entered April 28, 2015 (Docket No. 321677), and plaintiff appeared for
argument. Plaintiff claims that she cut short her statements before this Court upon defendant’s
renewed offer to settle at oral argument. However, the recording of these arguments disproves
this allegation. Plaintiff fully argued her claim, unsuccessfully sought reconsideration of this
Court’s unfavorable opinion, Williams v Fannie Mae, unpublished order of the Court of Appeals,
entered September 3, 2015 (Docket No. 321677), lost her application for leave to appeal to the
Supreme Court, Williams v Fannie Mae, 498 Mich. 899; 870 NW2d 328 (2015), and
unsuccessfully sought reconsideration of that order as well, Williams v Fannie Mae, 498 Mich

                                                -4-
932; 871 NW2d 526 (2015). Accordingly, plaintiff could not establish that she detrimentally
relied upon any fraudulent misrepresentation on defendant’s part.

         Plaintiff also points to defendant’s subsequent acts of arranging and paying for an
appraisal of the subject home, informing her of the price to repurchase the home, and then
“[s]pecif[ying] the source in which Plaintiff were [sic] to obtain the funds for said purchase” as
additional fraudulent acts. These acts were taken in the course of negotiating a contract to resell
plaintiff the property. Unfortunately, the parties could not agree on the terms and a contract was
not reached. Plaintiff now attempts to convince this Court that she only “needed a (conditional
statement) verifying that [defendant] would rescind the foreclosure” in order to secure funding to
repurchase the home. She accuses defendant of fraud and other wrongdoing in failing to provide
“the (conditional) written statement saying the foreclosure was going to be rescinded in
exchange for the $30,000,” forcing the end of negotiations. Plaintiff’s evidence reveals that she
never asked for a conditional statement; she requested “written proof of the foreclosure being
rescinded.” Defendant indicated that it was not willing to take the legal step of rescinding the
foreclosure without proof of funding. As a result, no contract was reached and there is nothing
for this Court to enforce or invalidate.

                                 V. PROMISSORY ESTOPPEL

       The circuit court also summarily dismissed plaintiff’s promissory estoppel claim.

       The elements of promissory estoppel are (1) a promise, (2) that the promisor
       should reasonably have expected to induce action of a definite and substantial
       character on the part of the promisee, and (3) that in fact produced reliance or
       forbearance of that nature in circumstances such that the promise must be
       enforced if injustice is to be avoided. [Novak v Nationwide Mut Ins Co, 235 Mich
       App 675, 686-687; 599 NW2d 546 (1999).]

        The Michigan Supreme Court has specifically held that “an interest in land cannot be
established on the basis of estoppel.” Kitchen v Kitchen, 465 Mich. 654, 660; 641 NW2d 245
(2002). This is exactly what plaintiff is attempting to do. Negotiations fell apart and a
repurchase contract was never entered. Plaintiff now wants to hold defendant to conditional
statements made during the negotiation process and force the sale of real estate. Kitchen, 465
Mich. at 660, instructs that as interests in land must be created in writing under the statute of
frauds, alleged oral promises regarding such transactions cannot be enforced under estoppel
theories.

       In any event, defendant never promised to resell the property to plaintiff. Rather,
defendant pursued negotiations in an attempt to resell the property to plaintiff. Negotiations
ended without a contract being entered as the parties could not agree on terms. Defendant cannot
now be forced to enter the contract under the doctrine of promissory estoppel.

               VI. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

       Finally, plaintiff challenges the circuit court’s summary dismissal of her claim that
defendant intentionally inflicted emotional distress upon her by stringing her through a
negotiation process with no intention of reselling her the subject property. Liability for
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intentional infliction of emotional distress arises “when a plaintiff can demonstrate that the
defendant’s conduct is so outrageous in character, and so extreme in degree, as to go beyond all
possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized
community.” Walsh v Taylor, 263 Mich. App. 618, 634; 689 NW2d 506 (2004) (quotation marks
and citation omitted). The allegations in this case in no way rise to this level. Accordingly, the
circuit court properly dismissed this claim.2

       We affirm.

                                                            /s/ Michael F. Gadola
                                                            /s/ Michael J. Talbot
                                                            /s/ Elizabeth L. Gleicher

2
  On the final page of her appellate brief, plaintiff seeks relief connected to her claim that
defendant breached its duty of good faith and fair dealing in violation of the MCPA. Plaintiff did
not include this issue in the statement of questions presented and made no legal argument in this
regard. Accordingly, this issue is not properly before this Court. See City of Fraser v Almeda
Univ, 314 Mich. App. 79, 99 n 4; 886 NW2d 730 (2016).

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