Court Opinion

ID: 3155790
Source: CourtListenerOpinion
Date Created: 2015-11-18 21:05:48.281902+00
Date Added: 2024-06-11T12:47:21.253176
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

POLARIS CONSTRUCTION, INC.,                                          UNPUBLISHED
                                                                     November 17, 2015
               Plaintiff-Appellee,

v                                                                    No. 322094
                                                                     Wayne Circuit Court
NICOLA DELICATA,                                                     LC No. 09-031105-CH

               Defendant-Appellant.

Before: SERVITTO, P.J., and WILDER and BOONSTRA, JJ.

PER CURIAM.

        Defendant appeals by right the judgment entered for plaintiff, following a jury trial, in the
amount of $132,705.45. The jury found defendant liable under both breach of contract and
unjust enrichment theories. We affirm.

        In a prior appeal in this case, this Court summarized the underlying facts and procedural
history to that point in time:

              This case stems from water damage to a commercial building in Detroit.
       Defendant owned the building and leased a portion of it to Confidential, Inc.
       (Confidential), which operated a nightclub and restaurant in the leased space. On
       January 19, 2009, a water pipe in the nightclub burst, causing damage to both the
       nightclub and restaurant as well as to a portion of the building not leased to
       Confidential.    After the water damage was discovered, Peter Arabo,
       Confidential’s president, contacted plaintiff to perform the remediation work.
       Robert Kato, plaintiff’s head of operations, met with Arabo and defendant at the
       building. According to Kato and Arabo, defendant authorized plaintiff to proceed
       with the remediation work.

               Pursuant to the terms of its lease agreement with defendant, Confidential
       maintained insurance coverage that included coverage for water damage to the
       leased premises. Confidential filed a claim with its insurer, Badger Mutual
       Insurance Company, which paid $254,989 to plaintiff and Confidential for the
       remediation work. At issue in this case is whether defendant had a contract with
       plaintiff to perform remediation work on the nonleased portion of the building and
       whether defendant owed plaintiff $120,000, which was the balance of the total
       contract amount of $374,989 for the entire building. Plaintiff filed a claim of lien
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       against the property in the amount of $120,000 and filed a complaint against
       defendant seeking foreclosure of the lien and alleging breach of contract, unjust
       enrichment, and fraud.

               Defendant filed a motion for summary disposition pursuant to
       MCR 2.116(C)(10) arguing that no enforceable contract existed between he [sic]
       and plaintiff for the work performed. Defendant also argued that he did not
       commit fraud because his assurance to Kato that Kato would be paid for the work
       performed was not false at the time that it was made. Regarding plaintiff’s unjust
       enrichment claim, defendant argued that the work that plaintiff performed did not
       directly benefit defendant. Further, defendant argued that plaintiff’s lien
       foreclosure claim failed because plaintiff did not serve a notice of furnishing as
       required by MCL 570.1111(4). The trial court granted defendant’s motion.
       Thereafter, the court denied plaintiff’s motion for reconsideration and granted
       defendant’s motion for attorney fees and costs. The court awarded defendant
       attorney fees and costs totaling $29,183.94. [Polaris Constr, Inc v Delicata,
       unpublished opinion per curiam of the Court of Appeals, issued June 20, 2013
       (Docket No. 308254), p 2.]

In the previous appeal, this Court held that “plaintiff presented sufficient evidence to establish a
genuine issue of material fact with respect to its breach of contract and unjust enrichment
claims” and therefore reversed in part and remanded for further proceedings on those claims
only. Id. at 1.

        On remand, defendant filed a motion in limine to exclude evidence regarding ownership
of the building that was inconsistent with the Wayne County title records, asserting that he does
not own the building at issue and that it is instead owned by his corporation, N.D. Property
Management, Inc. (ND).1 The trial court denied the motion.

        During defense counsel’s opening statement, the trial court sustained two objections by
plaintiff’s counsel to assertions that defendant did not own the building. Outside the presence of
the jury, the trial court stated that defendant could refer to the corporation that owned the
building, but could not argue that defendant was not liable because ND, rather than defendant,
owned the building.

       At trial, Jeffrey Moss testified that he is a licensed public adjuster who represents
policyholders, and that he was engaged by Arabo to represent him in his insurance claim for the
water damage. Moss testified that he met plaintiff’s owner, Kato, on site and observed that

1
  Plaintiff initially had brought claims not only against defendant, but additionally against ND
and Michigan Commerce Bank. As this Court noted in the earlier appeal in this case, the trial
court had dismissed the claims against ND and Michigan Commerce Bank, they were not parties
to the earlier appeal, and this Court’s reference to “defendant” referred to the individual
defendant only. The record in fact reflects that the claims against ND were dismissed by
stipulation of the parties on December 1, 2010.

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plaintiff was doing mitigation work to suck the water up and to dry the wet building materials.
Moss saw plaintiff’s equipment in both the bar area and the common areas of the building; the
common areas included a stairwell and an elevator shaft from which water had to be vacuumed.
During a meeting at the building, Moss was present for a conversation between defendant and
Kato regarding repair of areas not leased to Confidential. Moss testified that at every meeting he
had with defendant, defendant represented himself to be the owner of the building.

        Defendant testified that he purchased the building, which is located at the corner of
Congress and Shelby, in 1996 for approximately $885,000. Defendant said that common areas
of the building included an entranceway, elevator shaft, and stairwells. Defendant denied that he
ever hired plaintiff or had plaintiff do work for defendant in connection with the water loss.
Defendant said that he “never had a contract or verbal or written for Mr. Kato at all personally or
for the building.” Defendant denied that he ever promised to pay Kato for mitigation work on
the building or that defendant had any conversation with Kato authorizing him to do work on the
building. Defendant acknowledged that he saw Kato and people who defendant assumed were
plaintiff’s employees on site doing work on the building for Arabo. Defendant also
acknowledged that plaintiff did some emergency repairs for Arabo but denied that plaintiff was
“contracted at any time for myself or the building.” Defendant testified that he thought that Kato
was working on behalf of Arabo. Defendant denied that he directly benefited from any work
done by plaintiff, and further asserted that plaintiff did not perform the work plaintiff claims to
have done in this case. Defendant testified that neither he nor any of defendant’s entities made
any payments to plaintiff. Defendant stated he used a general contractor called Isle Restoration,
which did mitigation and repair work for defendant related to the water loss.

        Defendant testified that ND is “[t]he company that owns the building[,]” and that
defendant owns ND. When asked whether Globe Midwest was defendant’s adjuster, defendant
stated that Globe Midwest is ND’s adjuster. Defendant explained that ND was the insured on the
insurance policy related to this loss, and was “the building entity” on the lease with Confidential.

       Later, defendant was questioned by his own attorney as follows:

               Q. And there’s been some discussion about what the – Judge, I don’t want
       to run a file [sic] to your prior rulings in this case – but at the time you purchased
       the building, did you form a company to or an entity to buy the building as the
       titleholder?

               A. Yes, I did.

              Q. And what was that company that was formed to hold title to the
       building?

               A. The company’s name is ND Property Management, Inc.

              Q. Was it your testimony yesterday, you’re the sole shareholder of ND
       Property Management, Inc., is that correct?

               A. Yes.

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             Q. Okay. I’m handing you a document that’s been marked as
       Defendant’s Exhibit 6, are you familiar with this document, Nick?

               A. Yes.

               Q. Can you tell me what that document is?

               A. On the top it says warranty deed.

               Q. And what property is that for?

               A. Known as 205/211 West Congress and 555 Shelby.

               Q. And is that the building at issue in this case?

               A. That is correct.

               Q. And can you tell me who is the named grantee on that warranty deed?

             A. Conveys and warrants to ND Property Management, Inc., a Michigan
       Corporation.

              Q. Okay. And has ND Property Management ever conveyed title to the
       property to anybody else since 1996?

               A. No, it has not.

Defense counsel then moved for the admission of the warranty deed as an exhibit, and the court
stated, “You’re doing exactly what I said you could not do.” The court stated that “[t]his case is
Polaris Construction versus Nicola Delicata - . . . – and not his company. And I do not want the
jury to be confused that it is against his company.” Defense counsel asked to lay a foundation
for what he sought to admit, and the court then held a sidebar conference on the matter, after
which the court stated, “My ruling remains the same.”

        Kato testified regarding what he claims defendant told him in connection with promising
to pay for plaintiff’s work on the building:

              In my own words, because I can’t remember four or five years ago exactly
       the words he used, but on multiple occasions said we got to get the bar open. I
       got to collect my rent. They have an event. Let’s get this done. On several
       occasions, those are the words that he used to me while I was there working.

Kato testified that defendant told him that he would be paid for the work. Kato denied that all
the work he did was for Arabo. Kato stated that he was called to the site by Arabo on the day
that the loss occurred and that plaintiff commenced work either that night or early the next
morning. There was no written contract with defendant because it was an emergency job. Kato
testified that he met defendant at the building, and defendant was very concerned about the state
of the building. Kato testified that plaintiff did the work that it claimed to have done for the

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nonleased part of the building, including pumping water out of the elevator shaft, blow drying or
removing carpeting, and remediating damage to walls. After the emergency part of the work was
done, Kato wrote up a quote of the mitigation costs and delivered it to defendant’s office in Troy.

         Kato testified that the total amount for the mitigation and repair work was approximately
$374,989 for both the tenant and the building owner. The tenant or its insured paid the tenant’s
share of approximately $254,989. This left an unpaid balance of $120,000. This amount
reflected a combination of unpaid mitigation and unpaid “put back” or repair work. Kato
testified plaintiff began work prior to arriving at an estimate of the damages, and that eventually
an agreement was reached on the total cost of $374,989. Plaintiff received payment from the
tenant for its portion but did not receive anything from defendant or defendant’s insurer.

        On cross-examination, Kato said there were multiple discussions between him and
defendant regarding the terms of the oral contract. He stated that defendant “repeatedly said,
don’t worry about it, let’s just get it done, it will be taken care of. Not in those exact words, but
as I recall, something like that.” When questioned about whether he had asked defendant if
defendant would pay Kato for the work that he performed, Kato testified:

               I would assume just by proposing the original mitigation work and him
       saying let’s get this done and having been in all the meetings with him, by him
       reaffirming every time, let’s get it done, I need to collect my rent, we need to get
       the bar back open, that that was affirmed.

Kato testified that a meeting was held where “everyone” was given the $374,989 figure. There
was also an agreement in the meeting with insurance company representatives and the adjusters,
including defendant’s public adjuster, to allocate 35% to the landlord and 65% to the tenant.
When asked whether defendant said he would pay $120,000 of the $374,989, Kato explained:
“Not specifically because the numbers didn’t come all at one time. As the job was progressing,
[defendant] said, you’ll be paid, just get it done, I need to get it done. The work will get done.”
Kato further stated, “It was a number that was determined by the insurance company and
[defendant’s] representatives.”

       After plaintiff rested, defense counsel moved for a directed verdict and articulated the
following argument:

               Based on the testimony of Mr. Kato the plaintiff’s representative in this
       case, it’s defendant’s position that they cannot establish that any work was done,
       any contract was formed, particularly that there was a benefit conferred on the
       defendant for which the plaintiff has not already been paid. Mr. Kato’s own
       testimony showed that he could not add up the numbers to get to $120,000 in
       benefits conferred on Mr. Delicata. He could not add up the numbers of work he
       performed to get to the 254,000 for which he’s already received payment. Based
       on Mr. Kato’s own testimony, respectfully request a directed verdict in this case

The trial court denied the motion.

       The jury found in plaintiff’s favor on both the breach of contract and unjust enrichment
claims. Concerning the breach of contract claim, the jury found that defendant made a promise
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to pay plaintiff for the repair work on the building, that plaintiff performed the repair work in
reliance on the promise, that defendant breached his promise to pay for the repair work, and that
plaintiff suffered damages in the amount of $120,000 as a result of defendant’s breach of his
promise. With respect to the unjust enrichment claim, the jury found that defendant received a
benefit from plaintiff, that it would be inequitable to plaintiff to permit defendant to retain the
benefit conferred on defendant, and that the amount of damages awarded for this claim was
$120,000.

         On May 20, 2014, the trial court entered a judgment in favor of plaintiff and against
defendant in the amount of $120,000, plus prejudgment interest in the amount of $12,705.45, for
a total judgment in the amount of $132,705.45. This appeal followed.

                                II. EVIDENCE OF OWNERSHIP

        Defendant argues that the trial court erred in concluding that this Court’s prior opinion in
this case precluded him from contesting his ownership of the building at issue, or from asserting
a defense that any contract was formed with his corporation rather than with him personally and
that any unjust enrichment was bestowed only on the corporation. The application of the law of
the case doctrine is a question of law that is reviewed de novo. KBD & Assoc, Inc v Great Lakes
Foam Technologies, Inc, 295 Mich. App. 666, 679; 816 NW2d 464 (2012). “We review for an
abuse of discretion a trial court’s decision to admit or exclude evidence.” Dawe v Bar-Levav &
Assoc (On Remand), 289 Mich. App. 380, 406; 808 NW2d 240 (2010). An abuse of discretion
occurs when the trial court’s decision falls outside the range of principled outcomes. KBD &
Assoc, Inc, 295 Mich. App. at 677. Any preliminary questions of law are reviewed de novo.
Barnett v Hidalgo, 478 Mich. 151, 159; 732 NW2d 472 (2007).

       We agree with defendant that the law of the case doctrine did not preclude defendant
from asserting such a defense. Nonetheless, the trial court reached the correct result because
defendant should have been barred from challenging his ownership of the building given that
defendant admitted in his pleadings that he owned the building. Further, any error was harmless
because, despite the trial court’s ruling, defendant presented unrebutted testimony that it was his
corporation that owned the building, and he thus presented the very defense that he claims he
was denied.

        “Under the law of the case doctrine, if an appellate court has passed on a legal question
and remanded the case for further proceedings, the legal questions thus determined by the
appellate court will not be differently determined on a subsequent appeal in the same case where
the facts remain materially the same.” Grievance Administrator v Lopatin, 462 Mich. 235, 259;
612 NW2d 120 (2000) (quotation marks omitted). A lower court is likewise bound and “may not
take action on remand that is inconsistent with the judgment of the appellate court.” Id. at 260.
“Thus, a question of law decided by an appellate court will not be decided differently on remand
or in a subsequent appeal in the same case. This rule applies without regard to the correctness of
the prior determination.” Driver v Hanley, 226 Mich. App. 558, 565; 575 NW2d 31 (1997)
(citation omitted). “However, the law of the case doctrine applies only to issues implicitly or
explicitly decided in the previous appeal.” Schumacher v Dep’t of Natural Resources, 275 Mich
App 121, 128; 737 NW2d 782 (2007) (citation omitted).

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        This Court’s prior opinion did not decide as a matter of law that defendant owned the
building. Although this Court did state at one point that defendant owned the building, this
Court was not asked to rule on the issue of whether defendant or ND owned the building, nor did
the prior opinion suggest that defendant was precluded from contesting his ownership of the
building or from asserting any particular defenses, such as by arguing that it was defendant’s
corporation, rather than defendant individually, that was liable to plaintiff. This Court merely
held that issues of material fact precluded summary disposition on plaintiff’s breach of contract
and unjust enrichment claims. Therefore, the trial court erred to the extent it held that the prior
opinion precluded defenses concerning the corporation’s ownership of the building. See
Johnson v White, 430 Mich. 47, 55 n 2; 420 NW2d 87 (1988).

        Nonetheless, preclusion of evidence or argument challenging defendant’s ownership of
the building was warranted on another ground. In its complaint, plaintiff alleged that defendant
owned the property that is the subject of this litigation. In their answer, defendant and ND
admitted this allegation. Defendant did not thereafter move to amend his answer. Also, in a
countercomplaint filed by defendant and his corporation that was later resolved, defendant and
his corporation alleged that they “are the owners and operators of” the property at issue.
Defendant is bound by his admissions in the pleadings that he owned the building, and therefore,
absent amendment, waived any challenge to that admission. Angott v Chubb Group Ins, 270
Mich. App. 465, 469-472; 717 NW2d 341 (2006); Lichnovsky v Ziebart Int’l Corp, 123 Mich. App.
605, 608; 332 NW2d 628 (1983); MCR 2.111(E)(1). Defendant’s attempts to argue or admit
evidence that he did not own the building should therefore have been rejected as inconsistent
with his admissions in the pleadings. Additionally, defendant in his individual capacity agreed to
the dismissal of ND from the case; further, as the sole shareholder of ND, he directed ND’s
agreement to its dismissal. On that very same day, defendant filed a motion for summary
disposition in which he referred to himself as the owner of the building. Thus, by agreeing to the
dismissal of ND, referring to himself in pleadings and motions as the owner of the building, and
now arguing in effect that plaintiff’s claims are really against ND, defendant was complicit in the
creation of the error he alleges on appeal. See Hodge v Parks, 303 Mich. App. 552, 556; 844
NW2d 189 (2014) (“A party cannot stipulate with regard to a matter and then argue on appeal
that the resulting action was erroneous.”) This Court will not reverse a trial court’s decision if it
reaches the correct result even if for an incorrect reason. Coates v Bastian Bros, Inc, 276 Mich
App 498, 508-509; 741 NW2d 539 (2007).

        Further, even if the trial court erred in precluding evidence on this matter, any error was
harmless because defendant presented unrebutted testimony that ND was the owner of the
building. “A trial court error in admitting or excluding evidence will not merit reversal unless a
substantial right of a party is affected, MRE 103(a), and it affirmatively appears that failure to
grant relief is inconsistent with substantial justice, MCR 2.613(A).” Lewis v LeGrow, 258 Mich
App 175, 200; 670 NW2d 675 (2003) (citations omitted). Despite the trial court’s ruling,
defendant testified that ND owns the building. Defendant also testified that ND was the insured
on the insurance policy related to this loss and that it was “the building entity” on the lease with
the tenant. Although the trial court refused to admit into evidence the warranty deed and other
documents establishing the corporation’s ownership of the building, those documents would
have been cumulative of defendant’s unrebutted testimony that ND owned the building. “Any
error resulting from the exclusion of cumulative evidence is harmless.” Badiee v Brighton Area
Sch, 265 Mich. App. 343, 357; 695 NW2d 521 (2005). The jury was fully apprised of the relevant

                                                -7-
facts concerning this issue and had the option of finding that no contract existed between
plaintiff and defendant, and that plaintiff was not unjustly enriched, by virtue of ND’s ownership
of the building.

       We conclude that the trial court did not err in its evidentiary rulings concerning
defendant’s ownership of the building.

                            III. DENIAL OF DIRECTED VERDICT

        Defendant next argues that the trial court erred in denying his motion for a directed
verdict, because Kato’s recollection of what defendant supposedly promised Kato was too vague,
unclear, and indefinite to comprise an enforceable contractual promise. We disagree. A trial
court’s decision on a motion for a directed verdict is reviewed de novo. Genna v Jackson, 286
Mich. App. 413, 416; 781 NW2d 124 (2009). This Court views the evidence in the light most
favorable to the nonmoving party. Id. “A directed verdict is appropriate only when no factual
question exists upon which reasonable minds could differ.” Roberts v Saffell, 280 Mich. App.
397, 401; 760 NW2d 715 (2008), aff’d 483 Mich. 1089 (2009). “When reviewing a trial court’s
decision on a motion for a directed verdict, this Court recognizes the unique opportunity of the
jury and the trial judge to observe witnesses and the fact-finder’s responsibility to determine the
credibility and weight of the testimony.” Foreman v Foreman, 266 Mich. App. 132, 136; 701
NW2d 167 (2005) (quotation marks omitted). “The existence and interpretation of a contract are
issues of law reviewed de novo.” Dunn v Bennett, 303 Mich. App. 767, 774; 846 NW2d 75
(2014).

        “A party claiming a breach of contract must establish (1) that there was a contract, (2)
that the other party breached the contract and, (3) that the party asserting breach of contract
suffered damages as a result of the breach.” Dunn, 303 Mich. App. at 774 (quotation marks
omitted). “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. The party seeking to enforce a contract bears the burden of proving that the contract
exists.” AFT Mich v Michigan, 497 Mich. 197, 235; 866 NW2d 782 (2015) (citation omitted).
“A unilateral contract is one in which the promisor does not receive a promise in return as
consideration.” In re Certified Question from the United States Sixth Circuit Court of Appeals ,
432 Mich. 438, 446; 443 NW2d 112 (1989). In a unilateral contract, the promisor makes an offer
or promise that the promisee accepts by performing the act upon which the promise is based.
Cunningham v 4-D Tool Co, 182 Mich. App. 99, 106; 451 NW2d 514 (1989). The promisee’s
reliance on the promise is deemed sufficient consideration to render the promise legally binding.
Id. The promisee is not required to “do more than perform the act upon which the promise is
predicated in order to legally obligate the promisor.” Certified Question, 432 Mich. at 446.

       Defendant argues that plaintiff failed to present evidence of sufficiently clear oral
promises to give rise to a unilateral contract. Statements alleged to give rise to an oral contract
must “clearly permit a construction which supports the asserted meaning.” Rowe v Montgomery
Ward & Co, Inc, 437 Mich. 627, 641; 473 NW2d 268 (1991) (opinion of Riley, J.). Additionally,
a promise must be clear and definite to support a claim for liability under an implied oral
contract. See Barber v SMH (US), Inc, 202 Mich. App. 366, 376; 509 NW2d 791 (1993). Here,
defendant fails to articulate precisely why he believes Kato’s testimony does not establish a clear

                                                -8-
and definite promise. Instead, defendant merely asserts in a cursory fashion that Kato’s
testimony was vague, unclear, and indefinite such that it did not comprise an enforceable
contractual promise.

        In any event, we conclude that Kato’s testimony was sufficient to present a factual
question on which reasonable minds could differ concerning whether defendant made a clear and
definite offer or promise to pay plaintiff for its work on the building. See Roberts, 280 Mich
App at 401. Kato testified regarding what he claims defendant told him in connection with
promising to pay for plaintiff’s work on the building:

              In my own words, because I can’t remember four or five years ago exactly
       the words he used, but on multiple occasions said we got to get the bar open. I
       got to collect my rent. They have an event. Let’s get this done. On several
       occasions, those are the words that he used to me while I was there working.

Kato testified that defendant told him that Polaris would be paid for the work it performed on the
building. He testified that there were multiple discussions between him and defendant regarding
the terms of the oral contract, including a meeting with defendant and insurance personnel where
a final bill was negotiated.

        Overall, Kato’s testimony supports the conclusion that a factual question existed on
which reasonable minds could differ regarding whether defendant made an enforceable oral
promise for the purpose of a unilateral contract. Kato testified that defendant repeatedly told
Kato to get the job done because the bar had to be reopened so that defendant could collect his
rent, and defendant told Kato that plaintiff would be paid. This was sufficient to create a factual
question of whether defendant made an offer or promise that plaintiff accepted by performing the
remediation work on the building.

         We also note that defendant does not present an argument on appeal regarding his
entitlement to a directed verdict on plaintiff’s unjust enrichment claim. As the trial court
explained, the breach of contract and unjust enrichment claims were alternative theories of
liability. Therefore, even if the trial court had erred in denying defendant’s motion for a directed
verdict on the breach of contract claim, defendant does not challenge the trial court’s denial of a
directed verdict on the unjust enrichment claim, for which plaintiff was awarded the same
damages. Thus, even if the trial court erred, the error was harmless. See Willoughby v Lehrbass,
150 Mich. App. 319, 329-330; 388 NW2d 1986.

       Affirmed.

                                                             /s/ Deborah A. Servitto
                                                             /s/ Kurtis T. Wilder
                                                             /s/ Mark T. Boonstra

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