Court Opinion

ID: 2711702
Source: CourtListenerOpinion
Date Created: 2014-08-05 20:10:51.509218+00
Date Added: 2024-06-11T13:11:25.253740
License: Public Domain

Order                                                                          Michigan Supreme Court
                                                                                     Lansing, Michigan

  December 20, 2013                                                                   Robert P. Young, Jr.,
                                                                                                 Chief Justice

  145988                                                                               Michael F. Cavanagh
                                                                                       Stephen J. Markman
                                                                                           Mary Beth Kelly
                                                                                            Brian K. Zahra
                                                                                    Bridget M. McCormack
  MAJESTIC GOLF, L.L.C.,                                                                  David F. Viviano,
            Plaintiff/Counter-Defendant/                                                              Justices
            Appellee,
  v                                                        SC: 145988
                                                           COA: 300140
                                                           Livingston CC: 09-024146-CZ
  LAKE WALDEN COUNTRY CLUB, INC.,
          Defendant/Counter-Plaintiff/
          Appellant.

  _________________________________________/

         On order of the Court, leave to appeal having been granted, and the briefs and oral
  arguments of the parties having been considered by the Court, we REVERSE the July 10,
  2012 judgment of the Court of Appeals, and REMAND this case to the Livingston
  Circuit Court for further proceedings not inconsistent with this order.

          On October 7, 2008, Majestic Golf, LLC sent a letter to its tenant, Lake Walden
  Country Club, Inc. asking it to fulfill certain obligations under the parties’ lease
  agreement within thirty days. Lake Walden did not do so. Majestic Golf contends that
  the letter constituted notice under ¶ 26 of the lease, pertaining to defaults, and that Lake
  Walden’s failure to fulfill its obligations within thirty days constituted a default.

         We conclude that there are genuine issues of material fact regarding whether
  Majestic Golf’s October 7, 2008 letter constituted notice under ¶ 26 of the lease, in light
  of the parties’ course of conduct surrounding the letter and the failure of the letter to
  identify itself as such. We further conclude that, if the letter was sufficient to provide
  such notice, there are genuine issues of material fact regarding whether Majestic Golf’s
  subsequent conduct constituted a waiver of its claim of default based thereon. The
  Livingston Circuit Court erred in holding that, as a matter of law, Lake Walden was in
  breach of the lease agreement. The Court of Appeals similarly erred in affirming that
  holding. Accordingly, those portions of the panel’s opinion relying on that holding are
  VACATED.

         MARKMAN, J. (dissenting).

          I respectfully dissent from this Court’s order reversing the judgment of the Court
  of Appeals. Because I believe that the Court of Appeals correctly held that defendant’s
  failure to consent to the road easement constituted a default entitling plaintiff to terminate
  the lease, I would affirm the judgment of the Court of Appeals.
                                                                                           2

        The lease at issue here expressly provides, “Tenant shall permit drainage and
utility easements and road crossings to be developed by Landlord on the Premises as
required to permit development to occur on Landlord’s Other Real Estate.” The lease
also states that the tenant’s failure to perform any of the terms of the lease for “a period
of thirty (30) days after notice thereof by Landlord to Tenant” shall constitute a default
and that in the event of a default the “Landlord shall have the right to cancel and
terminate this Lease . . . .”

        Defendant (the tenant) failed to permit a road crossing to be developed by plaintiff
(the landlord), as required by the lease. On October 7, 2008, plaintiff sent defendant a
letter “request[ing] that [defendant] fulfill its obligation under the lease” by “execut[ing]
the Consent portion of the enclosed Grant of Easement” and “return[ing] the enclosed
Consent within thirty (30) days.” The letter stated that “Section 22 of the golf course
lease obligates [defendant] to permit road crossing easements,” observed that defendant’s
consent had already been requested and “[d]espite the request, the written Consent has
not been received,” and stated that such consent is “urgently required.” This letter clearly
provided defendant with notice that plaintiff was demanding that defendant sign the
consent within 30 days, as required by the lease. Although the letter does not expressly
state that if defendant failed to sign the consent within 30 days, plaintiff was going to
hold defendant in default and terminate the lease, plaintiff was nowhere required to state
that in the notice.

       Absent any explanation, the majority concludes that “there are genuine issues of
material fact regarding whether [plaintiff’s] October 7, 2008 letter constituted notice
under ¶ 26 of the lease, in light of the parties’ course of conduct surrounding the letter
and the failure of the letter to identify itself as such.” I presume the majority’s reference
to “the parties’ course of conduct” refers to the fact that the parties were involved in
merger negotiations at the time that the letter was delivered. However, there is no
evidence that during these negotiations the parties in any way amended the lease, and
therefore the lease continued to control. Because (a) as defendant conceded in its answer
to plaintiff’s complaint, the “granting of an easement by [defendant] [was] required by
¶ 22 of the Lease,” (b) ¶ 26 of the lease required defendant to grant the easement within
30 days of the notice, and (c) it is undisputed that defendant did not grant the easement
within 30 days of the notice, defendant as a matter of law breached the lease.

        Furthermore, contrary to the majority’s suggestion, there is nothing in ¶ 26, or
anywhere else in the lease, that required plaintiff to label or designate its notice as
comprising the notice required in ¶ 26. Instead, ¶ 26 simply provides that if defendant
“fails to perform” and if that “non-performance shall continue for . . . a period of thirty
(30) days after notice thereof,” this “shall be a default . . . and a breach of the Lease.”
There is no question that plaintiff’s letter constituted a notice of nonperformance, and
was easily identifiable as such, and that defendant’s nonperformance continued for a
period of 30 days after notice. Therefore, there was a default and a breach of the lease.
                                                                                           3

       Finally, the majority concludes that “there are genuine issues of material fact
regarding whether [plaintiff’s] subsequent conduct constituted a waiver of its claim of
default . . . .” I presume by this reference the majority is referring to the October 8, 2008
e-mail from Mr. Crouse (plaintiff’s manager) and his October 13, 2008 letter. I do not
believe that either one of these communications somehow constituted a waiver of the
default. Indeed, Mr. Crouse’s October 8 e-mail clearly indicated that he was demanding
that defendant sign the consent for the road easement and that it do so within 30 days.
This e-mail stated:

              We . . . have previously asked for your concurrence, which has not
       be[en] provided as is required by Section 22 of the Lease. Failure to obtain
       [defendant’s] concurrence was a major reason why we were not able to
       finalize a Master Plan for our property. Now we again request that
       [defendant] promptly fulfill its obligation under the lease.
Given this language, it cannot reasonably be argued that the e-mail waived the default.
And the October 13 letter was simply silent with regards to the consent and thus cannot
possibly be viewed as a waiver of the default.

       This Court has repeatedly held that the straightforward language of a contract must
control. Terrien v Zwit, 467 Mich 56, 71 (2002) (“‘The general rule [of contracts] is that
competent persons shall have the utmost liberty of contracting and that their agreements
voluntarily and fairly made shall be held valid and enforced in the courts.’”) (citation
omitted); Wilkie v Auto-Owners Ins Co, 469 Mich 41, 52 (2003) (“The notion, that free
men and women may reach agreements regarding their affairs without government
interference and that courts will enforce those agreements, is ancient and irrefutable.”);
Quality Prod & Concepts Co v Nagel Precision, Inc, 469 Mich 362, 370 (2003) (“[T]he
freedom to contract principle is served by requiring courts to enforce unambiguous
contracts according to their terms . . . .”); Rory v Continental Ins Co, 473 Mich 457, 461
(2005) (“[A] court must construe and apply unambiguous contract provisions as
written.”); Bloomfield Estates Improvement Ass’n, Inc v City of Birmingham, 479 Mich
206, 212 (2007) (“We ‘respect[] the freedom of individuals freely to arrange their affairs
via contract’ by upholding the ‘fundamental tenet of our jurisprudence . . . that
                                                                                                                4

unambiguous contracts are not open to judicial construction and must be enforced as
written’ . . . .”) (citation and emphasis omitted) (alterations in the original).

       The lease at issue here clearly required that (a) defendant sign the consent for the
road easement, which it did not do, (b) plaintiff provide defendant with written notice of
defendant’s nonperformance, which it did do, and (c) defendant perform its contractual
obligations within 30 days of plaintiff’s notice, which it did not do. Equally clearly, the
lease provides that (a) defendant’s failure to perform within 30 days of the notice
constitutes a default and (b) in the event of a default, plaintiff has the right to cancel and
terminate the lease. Because the Court of Appeals correctly held that the contract means
what it says, I would affirm its judgment.

                          I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
                    foregoing is a true and complete copy of the order entered at the direction of the Court.
                          December 20, 2013
        t1218
                                                                              Clerk