Court Opinion

ID: 6328999
Source: CourtListenerOpinion
Date Created: 2022-04-01 05:05:44.720379+00
Date Added: 2024-06-11T09:22:46.747639
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                           STATE OF MICHIGAN

                            COURT OF APPEALS

ALAN BERGMANN,                                                       UNPUBLISHED
                                                                     March 31, 2022
               Plaintiff-Appellant,

v                                                                    No. 357181
                                                                     Ingham Circuit Court
MAESTRO HEALTH and GROUP ASSOCIATES,                                 LC No. 20-000640-CB
INC.,

               Defendants-Appellees.

Before: O’BRIEN, P.J., and SHAPIRO and BOONSTRA, JJ.

PER CURIAM.

       Plaintiff appeals by right the trial court’s order granting summary disposition in favor of
defendants under MCR 2.116(C)(8). We affirm.

                   I. PERTINENT FACTS AND PROCEDURAL HISTORY

        On June 30, 2015, plaintiff and defendant Group Associates, Inc. (Group Associates)
executed an employment agreement (the agreement) by which plaintiff retained his employment
as Group Associate’s Business Development Director following its acquisition by defendant
Maestro Health. Relevant to this appeal, section 2 of the agreement (entitled “Term”) provided
for a three-year initial term of employment expiring on the third anniversary of the effective date
of the agreement. It also provided for annual one-year automatic renewals, unless either party
provided the other with a 30-calendar-day written notice of an intention not to extend the term of
the agreement. Like the initial term of employment, any such renewal was expressly “subject to
earlier termination . . . under Section 5” of the agreement. The parties do not dispute that the
effective date of the agreement was June 30, 2015, and that after the close of the initial three-year
term of the agreement (on June 30, 2018), it automatically renewed for additional one-year terms
ending on June 30, 2019 and June 30, 2020.

        Section 5 of the agreement, entitled “Termination,” provided for compensation in the form
of a severance payment in the event plaintiff was terminated without cause during the term of the
agreement. The provision stated in relevant part that “[i]f the Executive [Plaintiff] is terminated

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by the Company without Cause during the Term, then the Executive shall be entitled to receive”
specified additional compensation as a severance payment.

        In November 2020, plaintiff filed a complaint alleging a single breach-of-contract claim.
The complaint asserted that “[d]efendant unilaterally decided and informed plaintiff he would not
be paid/and [sic] or employed by defendants after June 30, 2020” and that plaintiff had “not been
paid what is owed him.” Plaintiff attached a copy of the agreement to his complaint, as well as an
affidavit in which he stated that in late 2019, Maestro Health appointed a new CEO and “began
the wholesale firing of employees,” and that in January 2020, plaintiff’s supervisor informed him
that he, too, was being fired and that his termination was “without cause.” Plaintiff further stated
that defendants later “augmented” that statement “to include that [his] employment contract was
not being renewed.”

       In lieu of an answer, defendants moved for summary disposition under MCR 2,116(C)(8),
arguing that plaintiff had failed to state a claim upon which relief could be granted because the
unambiguous language of the agreement indicated that defendants had not terminated plaintiff
without cause, but rather had chosen not to renew the agreement for another year. The trial court
agreed and granted the motion, dismissing plaintiff’s complaint without prejudice. This appeal
followed.

                                  II. STANDARD OF REVIEW

        This Court reviews de novo a trial court’s ruling on a motion for summary disposition,
Pugno v Blue Harvest Farms LLC, 326 Mich App 1, 11; 930 NW2d 393 (2018), and issues
involving contract interpretation, Wilkie v Auto-Owners Ins Co, 469 Mich 41, 47; 664 NW2d 776
(2003). Summary disposition under MCR 2.116(C)(8) is appropriate when “[t]he opposing party
has failed to state a claim on which relief can be granted.” Such a motion “may only be granted
when a claim is so clearly unenforceable that no factual development could possibly justify
recovery.” El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 160; 934 NW2d 665 (2019).
When deciding a (C)(8) motion, the “trial court must accept all factual allegations as true, deciding
the motion on the pleadings alone.” Id. A party may not use documentary evidence such as
affidavits or depositions to support a motion for summary disposition under MCR 2.116(C)(8).
Bodnar v St John Providence, Inc, 327 Mich App 203, 212; 933 NW2d 363 (2019). “However,
when an action is premised on a written contract, the contract generally must be attached to the
complaint and thus becomes part of the pleadings.” Id.

                                         III. ANALYSIS

        Plaintiff argues that the trial court erred by granting defendants’ motion for summary
disposition under MCR 2.116(C)(8) because the complaint stated a valid cause of action for breach
of contract, i.e., that plaintiff was terminated without cause during the term of the agreement, and
that he was therefore entitled to a severance payment. We disagree.

        To assert a breach-of-contract claim, a party must establish by a preponderance of the
evidence that (1) there was a contract, (2) the other party breached that contract, and (3) the other
party’s breach resulted in an injury to the party claiming a breach. El-Khalil, 504 Mich at 164.
When interpreting a contract, this Court must determine the intent of the parties, Barshaw v

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Allegheny Performance Plastics, LLC, 334 Mich App 741, 748; ___ NW2d ___ (2020), which is
“discerned from the contractual language as a whole according to its plain and ordinary meaning,”
Bodnar, 327 Mich App at 220. “If the language of the contract is unambiguous, we construe and
enforce the contract as written.” Barshaw, 334 Mich App at 748 (quotation marks and citation
omitted). In addition, if a contractual term is unambiguous, extrinsic evidence of contractual
negotiations or other contemporaneous agreements that contradict or vary the terms of the written
contract are not admissible. UAW-GM Human Res Ctr v KSL Recreation Corp, 228 Mich App
486, 492; 579 NW2d 411 (1998). “A contract is ambiguous only when two provisions
irreconcilably conflict with each other or when [a term] is equally susceptible to more than a single
meaning.” Bodnar, 327 Mich App at 220 (quotation marks and citation omitted).

         We agree with the trial court that the terms of the agreement and the contents of the
complaint do not support a breach of contract claim. The agreement clearly and unambiguously
distinguishes between a nonrenewal under section 2 and termination without cause under section
5. A plain reading of section 2 demonstrates that the parties intended for the agreement to end
either at the expiration of the initial term—a three-year period after the contract was signed—or at
the end of the automatically renewing successive one-year renewal term(s) if either party provided
at least 30 calendar days’ written notice of an intention not to extend the term. Plaintiff’s complaint
and affidavit both clearly state that plaintiff was informed by defendants that he would not be
employed after June 30, 2020.1

        Although plaintiff argues that section 5(c), not section 2, applies to the cessation of his
employment, that argument is not supported by either the facts as alleged or the plain language of
the agreement. Section 2 states that plaintiff’s employment is “[s]ubject to earlier termination as
provided in Section 5.” Section 5(c) plainly states that it is applicable only if plaintiff’s
employment is terminated during his term of employment without cause. Plaintiff’s complaint
stated, “Defendants unilaterally decided and informed plaintiff he would not be paid/and or
employed by defendants after June 30, 2020.” Further, plaintiff admitted that he continued to work
and was paid through the end of the contractual term. Therefore, taking the facts alleged in
plaintiff’s complaint as true, El-Khalil, 504 Mich at 160, plaintiff’s employment was not
terminated during the term of the contract; plaintiff was merely informed during the term of the
contract that the contract would not be renewed. Accordingly, section 5(c) was not applicable and
defendants had no obligation to pay plaintiff severance. For these reasons, plaintiff’s complaint
did not state a claim for breach of contract and the trial court did not err by granting defendants’
motion for summary disposition under MCR 2.116(C)(8).

1
  Although the complaint does not specifically state that plaintiff received timely written notice,
plaintiff does not argue otherwise, and in fact states in his affidavit that he was informed of
defendants’ decision in January 2020. Defendants attached to their motion for summary
disposition a copy of a February 20, 2020 letter to plaintiff providing written “Notice of Intention
Not to Extend Term of Employment Agreement.”

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       Plaintiff additionally argues that parol evidence demonstrates that defendants fired2 him
before he received his nonrenewal notice, and that when the contract was negotiated, the parties
intended for plaintiff to receive a severance payment if he was terminated. However, such extrinsic
evidence may be considered only when a contract’s terms are ambiguous. UAW-GM Human Res
Ctr, 228 Mich App at 492. Because the terms of the agreement are unambiguous, the trial court
properly did not consider that extrinsic evidence. Id.

       Affirmed.

                                                            /s/ Colleen A. O’Brien
                                                            /s/ Mark T. Boonstra

2
  It matters not whether defendants may have initially used that terminology when describing the
intended cessation of plaintiff’s employment; it is undisputed that plaintiff’s employment in fact
continued through the contractual term.

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