Court Opinion

ID: 4641905
Source: CourtListenerOpinion
Date Created: 2020-12-11 10:07:20.116164+00
Date Added: 2024-06-11T08:00:25.941498
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

CENTERPOINT OWNER, LLC,                                              UNPUBLISHED
                                                                     December 10, 2020
               Plaintiff-Appellee,

v                                                                    No. 344762
                                                                     Kent Circuit Court
PANAGIOTIS GOULAS,                                                   LC No. 16-009133-CK

               Defendant-Appellant,

and

PANOS XI FOODS, INC.,

               Defendant.

Before: TUKEL, P.J., and MARKEY and GADOLA, JJ.

PER CURIAM.

        Defendant, Panagiotis Goulas, appeals as of right the trial court’s order granting damages
to plaintiff, CenterPoint Owner, LLC. The trial court ordered defendant to pay plaintiff
$240,976.97 for the breach of guaranty claim, $131,145.50 for reasonable attorney fees, and
$531.92 for costs. The trial court determined that defendant owed plaintiff a total of $372,654.39.
This appeal is being decided without oral argument pursuant to MCR 7.214(E)(1). For the reasons
stated in this opinion, we affirm in part and reverse in part the trial court’s findings.

                                     I. UNDERLYING FACTS

       In July 2013, defendant, on behalf of the company Panos XI Foods, entered into a lease for
a space at CenterPointe Mall with CenterPointe Partners. Defendant was part owner of Panos.
Defendant also signed a personal guaranty for the lease.1 In June 2014, plaintiff acquired

1
 The guaranty was attached as Exhibit G to the lease and, therefore, is part of the lease. Thus, the
guaranty is not a separate contract.

                                                -1-
CenterPointe Mall and assumed the leases that CenterPointe Partners had with its tenants at the
mall. This included the lease that CenterPointe Partners had with Panos and the guaranty that
defendant had with CenterPointe Partners.

       In relevant part, the lease provided:

               4.09 Late Charge/Interest. Any rent unpaid for more than seven (7) days
       after such rent is due shall be subject to a late charge of $100.00, and such late
       charges shall be due from Tenant to Landlord as additional rent on or before the
       next rental due date. Any default in the payment of rent shall not be considered
       cured unless and until such late charges are paid by Tenant to Landlord or if Tenant
       shall default with respect to any other payment due under this Lease, Landlord may,
       but shall have no obligation to, make such payment for the account of Tenant, in
       either or both of which event(s) the amount thereof shall be payable as additional
       rent to Landlord by Tenant on the next rental due date together with interest per
       annum at the lesser of the maximum allowable legal rate and the prime rate
       published in The Wall Street Journal, plus two percent (2%) per annum (the
       “Default Interest”) from the date such payment is due to or made by Landlord. On
       default of payment of such late charges and/or Default Interest, Landlord shall have
       the same remedies as on default in payment of rent. Such late charges and/or
       Default Interest shall be in addition to any other rights and remedies Landlord may
       have as provided by this Lease or as allowed by law.

                                               * * *

                17.01 Landlord’s Right to Cure Default of Tenant. In the event Tenant shall
       default in the performance of any covenant or condition of this Lease, Landlord
       may (without notice to Tenant, if in Landlord’s reasonable opinion an emergency
       exists) perform such covenant or condition for Tenant’s account and at the expense
       of Tenant. Landlord shall be reimbursed by Tenant for any reasonable expense
       incurred by Landlord (a) in performing such covenant or condition or (b) in
       instituting, prosecuting or defending any action instituted because of any default of
       Tenant, including, but not limited to, reasonable attorneys’ fees. If Tenant becomes
       obligated to reimburse Landlord hereunder, such sum shall be considered additional
       rent and shall be due within thirty (30) days after written notice to Tenant of such
       expenditure. Should Tenant fail to make such reimbursement when due, Landlord
       shall have all the remedies for default in the payment of rent provided under the
       terms of this Lease. The provisions of this Article shall survive the expiration or
       earlier termination of this Lease.

                                               * * *

              18.01 Default.

              (a) In the event Tenant shall fail to pay the Base Rent, Percentage Rent,
       additional rent or perform any other obligation involving the payment of money
       reserved herein within ten (10) days after notice that the same is due, Landlord

                                                -2-
shall, in addition to its other remedies provided by law, and in this Lease, have the
remedies set forth in subsection (c) below.

                                       * * *

       (f) Notwithstanding the foregoing provisions of this Section, in the event
Tenant shall fail to perform or shall default in the performance of any term,
covenant or condition of this Lease on two (2) or more separate occasions during
any twelve-month period, then, even though such failures or defaults may have
been cured by Tenant, any further failure or default by Tenant during such twelve-
month period shall be deemed a default without the ability of Tenant to cure.

                                       * * *

        22.03 Waiver. The delay or failure of either party to enforce its rights or
remedies upon the default of the other party shall not prevent a similar subsequent
default from constituting a default under this Lease and shall not be deemed to be
a waiver by the nondefaulting party of the right to enforce the terms and provisions
of this Lease in the event of the same or any subsequent default.

                                       * * *

        22.10 Accord and Satisfaction. No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly rent herein stipulated shall be deemed
to be other than on account of the earliest stipulated rent, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment as rent
be deemed an accord and satisfaction, and Landlord shall accept such check or
payment without prejudice to Landlord’s right to recover the balance of such rent
or pursue any other remedy provided in this Lease.

In relevant part, the guaranty provided:

        A. The undersigned does hereby guarantee the full, faithful and timely
payment and performance by Tenant of all of the payments, covenants and other
obligations of Tenant under or pursuant to the Lease, to the extent of Tenant’s
obligations thereunder. If Tenant shall default at any time in the payment of any
rent or any other sums, costs or charges whatsoever, or in the performance of any
of the other covenants and obligations of Tenant, under or pursuant to the Lease,
and any cure periods provided for therein have expired, then the undersigned, at its
expense, shall on demand of Landlord fully and promptly, and well and truly, pay
all rent, sums, costs and charges to be paid by Tenant, and perform all the other
covenants and obligations to be performed by Tenant, under or pursuant to the
Lease, and in addition shall on Landlord’s demand pay to Landlord any and all
sums due to Landlord, including (without limitation) all interest on past due
obligations of Tenant, costs advanced by Landlord, and damages and all expenses
(including reasonable attorneys’ fees and litigation costs), that may arise in
consequence of Tenant’s default. The undersigned hereby waives all requirements

                                           -3-
       of notice of the acceptance of this Guaranty and all requirements of notice of breach
       or nonperformance by Tenant.

                                              * * *

               I. In the event that Landlord should institute any suit against the
       undersigned for violation of or to enforce any of the covenants or conditions of this
       Guaranty or to enforce any right of Landlord hereunder, or should the undersigned
       institute any suit against Landlord arising out of or in connection with this
       Guaranty, or should either party institute a suit against the other for a declaration
       of rights hereunder, or should either party intervene in any suit in which the other
       is a party to enforce or protect its interest or rights hereunder, the prevailing party
       in any such suit shall be entitled to the fees of its attorney(s) in the reasonable
       amount thereof, to be determined by the court and taxed as a part of the costs
       therein.

                                              * * *

                N. Notwithstanding anything to the contrary contained herein, the liability
       of the undersigned under this Guaranty shall not exceed (i) the unamortized portion
       of the Improvement Allowance (such amount shall be amortized over the seven and
       one-half (71/2%) year period commencing on the Rent Commencement Date, plus
       (ii) an amount equal to the rental and other charges payable pursuant to the Lease
       with respect to the twelve (12) month period commencing on the date of Tenant’s
       breach of the Lease which gives rise to Landlord’s claim under this Guaranty, and
       (iii) the costs and expenses incurred by Landlord in enforcing this Guaranty.

        The lease stated that Panos was required to begin paying rent on December 1, 2014, but
Panos was only able to make a partial rent payment on that date. In fact, Panos never made a full
rent payment and stopped making even partial rent payments in March 2016. Plaintiff applied
each rental payment that Panos made retroactively to the oldest rental charge. Plaintiff sent Panos
notice in July 2016 that Panos was in default because of its failure to pay rent. In September 2016
plaintiff initiated an eviction action against defendant and filed suit against defendant and Panos
under the theories of breach of contract, conversion, and claim and delivery.

        After a bench trial, the trial court “render[ed] a verdict of $1,345,127.42 against Panos XI
and $372,654.39 against [defendant].” Specifically, the trial court determined that Panos owed
plaintiff $1,169,650 for the breach of lease claim and $43,800 for the conversion claim. The trial
court held that pursuant to the guaranty, defendant owed plaintiff “one year’s worth of rent and
other periodic expenses beginning on the day that Defendant Panos XI breached the lease,” which

                                                -4-
the trial court determined to be March 2016. Using March 2016 as the month of the breach, the
trial court concluded that defendant owed $133,672.30 for the breach of guaranty claim.2

        The trial court also analyzed the attorney fees and costs that Panos and defendant owed
plaintiff. The trial court determined that plaintiff could collect $131,145.50 in reasonable attorney
fees from defendant and Panos. The trial court also held that plaintiff was “entitled to an award of
$531.92 in costs” from defendant and Panos. The trial court then noted that “[a]ny dollar paid by
Defendant Panos XI reduces Defendant Goulas’s obligation by a dollar, but Panos XI seems
unlikely to pay anything against the obligations imposed by the verdicts.” This appeal followed.

                                II. SCOPE OF THE GUARANTY

       Defendant argues that the guaranty only covered 12 months of rental obligations following
Panos’s first breach of the lease in December 2014. Defendant further contends that he does not
owe plaintiff any damages because Panos’ rental obligations from December 2014 to December
2015 have been paid. We disagree.

                                  A. STANDARD OF REVIEW

        “Following a bench trial, this Court reviews findings of fact for clear error and conclusions
of law de novo.” Florence Cement Co v Vettraino, 292 Mich App 461, 468; 807 NW2d 917
(2011). “A finding of fact is clearly erroneous when no evidence supports the finding or, on the
entire record, this Court is left with a definite and firm conviction that a mistake has been made.”
King v Mich State Police Dep’t, 303 Mich App 162, 185; 841 NW2d 914 (2013). Additionally,
“questions involving the proper interpretation of a contract or the legal effect of a contractual
clause are also reviewed de novo.” Rory v Continental Ins Co, 473 Mich 457, 464; 703 NW2d 23
(2005).

                                          B. ANALYSIS

        “[P]laintiff[s] [are] adequately compensated for a breach of contract when damages are
awarded by reference only to the terms of the contract.” Casey v Auto Owners Ins Co, 273 Mich
App 388, 402; 729 NW2d 777 (2006) (citations and quotation marks omitted). Guaranty contracts
are “a special kind of contract,” Bandit Indus, Inc v Hobbs Int’l, Inc, 463 Mich 504, 511; 620
NW2d 531 (2001), but courts should construe guaranty contracts like they would all other
contracts, Comerica Bank v Cohen, 291 Mich App 40, 46; 805 NW2d 544 (2010).

        “In ascertaining the meaning of a contract, we give the words used in the contract their
plain and ordinary meaning that would be apparent to a reader of the instrument.” Rory, 473 Mich
at 464. “A dictionary may be consulted to ascertain the plain and ordinary meaning of words or
phrases used in the contract.” Auto Owners Ins Co v Seils, 310 Mich App 132, 145; 871 NW2d

2
  As part of the breach of contract claim, the trial court also determined that defendant owed
plaintiff $93,053.01 for the improvement allowance that plaintiff provided Panos in the lease
because defendant personally guaranteed the improvement allowance. On appeal, defendant does
not challenge the trial court’s finding with regard to the improvement allowance.

                                                -5-
530 (2015). “[C]ontracts must be read as a whole,” Kyocera Corp v Hemlock Semiconductor,
LLC, 313 Mich App 437, 447; 886 NW2d 445 (2015), giving “effect to every word, phrase, and
clause,” while taking pains to “avoid an interpretation that would render any part of the contract
surplusage or nugatory,” Klapp v United Ins Group Agency, Inc, 468 Mich 459, 468; 663 NW2d
447 (2003). Accordingly, “[t]he construction or interpretation of written contracts consists in
ascertaining the meaning of the parties, as expressed in the terms of the writing, according to the
rules of grammar.” Pendill v Maas, 97 Mich 215, 218; 56 NW 597 (1893).

        “A fundamental tenet of our jurisprudence is that unambiguous contracts are not open to
judicial construction and must be enforced as written.” Rory, 473 Mich at 468. Contracts are
enforced “according to their unambiguous terms because doing so respects the freedom of
individuals freely to arrange their affairs via contract.” Id. “However, if the contractual language
is ambiguous, extrinsic evidence can be presented to determine the intent of the parties.” In re
Smith Trust, 480 Mich 19, 24; 745 NW2d 754 (2008).

        A “contract is ambiguous when its provisions are capable of conflicting interpretations.
Accordingly, if two provisions of the same contract irreconcilably conflict with each other, the
language of the contract is ambiguous.” Klapp, 468 Mich at 467 (citation and quotation marks
omitted). Furthermore, “courts cannot simply ignore portions of a contract in order to avoid a
finding of ambiguity or in order to declare an ambiguity. Instead, contracts must be construed so
as to give effect to every word or phrase as far as practicable.” Id. (citation and quotation marks
omitted). “[A]mbiguity is a finding of last resort” that “is to be reached only after all other
conventional means of interpretation have been applied and found wanting.” Kendzierski v
Macomb Co, 503 Mich 296, 311; 931 NW2d 604 (2019) (citations and quotation marks omitted).
Accordingly, this Court “will not create ambiguity where the terms of the contract are clear.” Id.
(citation and quotation marks omitted). Thus, permitting a court to make its own determination of
reasonableness and to rewrite a contract accordingly when a contract is unambiguous “is contrary
to the bedrock principle of American contract law that parties are free to contract as they see fit,
and the courts are to enforce the agreement as written absent some highly unusual circumstance,
such as a contract in violation of law or public policy.” Kendzierski, 503 Mich at 312 (citation and
quotation marks omitted).

        When a contract is ambiguous, the ambiguity “may either be patent or latent.” Shay v
Aldrich, 487 Mich 648, 667; 790 NW2d 629 (2010). Patent ambiguities appear “from the face of
the document.” Id. Accordingly, “extrinsic evidence may not be used to identify a patent
ambiguity.” Id. Latent ambiguities, however, do “not readily appear in the language of a
document, but instead arise[] from a collateral matter when the document’s terms are applied or
executed.” Id. at 668. “A latent ambiguity exists when the language in a contract appears to be
clear and intelligible and suggests a single meaning, but other facts create the necessity for
interpretation or a choice among two or more possible meanings.” Id. (citation and quotation
marks omitted). Courts should consider extrinsic evidence to determine whether a contract is
latently ambiguous. Id. “[I]f a contract is ambiguous, then extrinsic evidence is admissible to
determine the actual intent of the parties.” Id. at 667 (citation and quotation marks omitted).
Finally, “[w]here the contract language is unclear or susceptible to multiple meanings,
interpretation becomes a question of fact.” Port Huron Ed Ass’n, MEA/NEA v Port Huron Area
Sch Dist, 452 Mich 309, 323; 550 NW2d 228 (1996).

                                                -6-
         It is undisputed that Panos breached the lease. It also is undisputed that defendant signed
a personal guaranty for the lease between Panos and plaintiff. As stated in ¶ N of the guaranty,
defendant guaranteed to pay plaintiff “an amount equal to the rental and other charges payable
pursuant to the Lease with respect to the twelve (12) month period commencing on the date of
Tenant’s breach of the Lease which gives rise to Landlord’s claim under this Guaranty.”
Defendant’s liability under the guaranty, if any, turns on the meaning of this phrase and specifically
when the 12-month period begins. Defendant argues that the 12-month period began when Panos
first breached the lease in December 2014, but plaintiff argues that the 12-month period instead
began in March 2016 because Panos’s breach of the lease in March 2016 led to these proceedings.
The lease and guaranty fail to define the operative words in this phrase—breach and claim—and,
therefore, we must turn to the principles of contract interpretation to determine when the 12-month
period began.

        The meaning of this phrase is not immediately apparent, but that does not necessarily mean
that it is ambiguous. Rather, “the date of Tenant’s breach of the Lease which gives rise to
Landlord’s claim under this Guaranty” is not ambiguous on its face. Thus, the phrase is not
patently ambiguous. See Shay, 487 Mich at 667. Consequently, if the phrase is ambiguous it can
only be latently ambiguous, or, stated another way, that its words suggest two or more possible
meanings. See id. at 667-668. But before turning to any extrinsic evidence, we must first attempt
to define the phrase based on the language of the guaranty itself, through traditional methods of
contract interpretation such as using a dictionary to define undefined terms. See Auto Owners Ins
Co, 310 Mich App at 145.

        Black’s Law Dictionary (11th ed) defines “breach” as “[a] violation or infraction of a law,
obligation, or agreement, especially of an official duty or a legal obligation, whether by neglect,
refusal, resistance, or inaction.” Similarly, “breach of contract” is defined as a “[v]iolation of a
contractual obligation by failing to perform one’s own promise, by repudiating it, or by interfering
with another party’s performance.” Id. Furthermore, the phrase “gives rise to” has recently been
defined by our Supreme Court as synonymous with a triggering action that something “originates”
from. See Bauserman v Unemployment Ins Agency, 503 Mich 169, 182; 931 NW2d 539 (2019)
(“[A]n event has “giv[en] rise to the cause of action” when that event “origin[ates]” a “basis for
suing” and “entitle[s] one person to obtain a remedy in court.” In other words, an “event giv[es]
rise to a cause of action” when it triggers a person’s ability to obtain a remedy in court.”) (first
alteration added).3 Finally, “claim” is defined as “[t]he assertion of an existing right; any right to
payment or to an equitable remedy, even if contingent or provisional.” Black’s Law Dictionary
(11th ed). Thus, while a breach occurs as soon as one party violates a contract, a “claim” does not
come into existence until a party takes action to enforce its rights. Additionally, the phrase “the
date of Tenant’s breach of the Lease which gives rise to Landlord’s claim under this Guaranty,”
using less technical language, simply means “the date of Panos’s violation of the lease which
caused plaintiff to assert its known rights under the Guaranty.” Consequently, as relevant to this

3
  We note that the contract addressed a claim, not a cause of action. Thus, we need not address
how the meaning of the phrase would change if the phrase “cause of action” was used instead of
the word “claim.”

                                                 -7-
case, Panos breached the lease in December 2014, but plaintiff’s claim did not arise until it asserted
its existing right to enforce the terms of the lease against Panos.

         Panos breached the lease in December 2014 when it failed to fully pay rent, but plaintiff
did not assert a claim, i.e. take legal action to enforce the lease, at that time. Rather, plaintiff
waited until Panos stopped paying rent altogether in March 2016 before asserting a claim.
Although plaintiff could have brought action to enforce its rights earlier than March 2016, it
permissibly chose to wait until Panos stopped paying rent altogether before taking action to enforce
its rights. Thus, “the date of Tenant’s breach of the Lease which gives rise to Landlord’s claim
under this Guaranty” is March 2016, the date of Panos’s breach of the lease ultimately resulting in
plaintiff’s filing of suit. Consequently, under the plain language of the guaranty, defendant must
pay plaintiff “an amount equal to the rental and other charges payable pursuant to the Lease with
respect to the twelve (12) month period commencing [in March 2016].”4

         Because we find that the language of the guaranty is clear and unambiguous regarding
when the 12-month period that defendant is liable for unpaid rent began, we thus need not consider
defendant’s remaining arguments on this issue. Finally, defendant argues that holding that the 12-
month period beginning at any point other than December 2014 is an absurd result because it
essentially allows plaintiff to choose when the 12-month period began based on when it asserts its
claim. While defendant might not view this result as “fair,” it is not absurd. Rather, this result is
itself a result of the language chosen by the parties to the contract, and thus respects the “freedom
of individuals freely to arrange their affairs via contract.” Rory, 473 Mich at 468. It also is very
common for a plaintiff to have almost unlimited discretion of when to bring an action to enforce
its rights provided it complies with the statute of limitations, which themselves often provide years
in which to do so.5 Thus, even though defendant likely views this result as “unfair” we simply are
called upon to apply the plain meaning of the guaranty as written.

                                      III. ATTORNEY FEES

       Defendant argues that he is not responsible for any attorney fees that plaintiff incurred. We
disagree.

4
 Because the phrase’s meaning is clear from the plain language of the guaranty it is not ambiguous
and, therefore, extrinsic evidence cannot be used to interpret it or to create an ambiguity. See In
re Smith Trust, 480 Mich at 24.
5
  Moreover, the upshot of defendant’s position is that it would have been “more fair” to impose an
obligation on plaintiff to sue immediately upon defendant’s first breach of the contract or lose the
right to collect some portion of the damages, rather than to wait and see if defendant resumed
compliance with the lease, and thereby possibly forgo suit completely. It is not clear why
defendant thinks an interpretation which would have mandated a suit against him is more fair than
one which did not.

                                                 -8-
                                   A. STANDARD OF REVIEW

        “This Court reviews the trial court’s decision to award attorney fees for an abuse of
discretion.” Featherston v Steinhoff, 226 Mich App 584, 592-593; 575 NW2d 6 (1997). “An
abuse of discretion occurs when the decision resulted in an outcome falling outside the range of
principled outcomes.” Hayford v Hayford, 279 Mich App 324, 325; 760 NW2d 503 (2008).
Similarly, “[a]n error of law necessarily constitutes an abuse of discretion.” Denton v Dep’t of
Treasury, 317 Mich App 303, 314; 894 NW2d 694 (2016).

                                           B. ANALYSIS

        “As a general rule, attorney fees are not recoverable from a losing party unless authorized
by a statute, court rule, or other recognized exception.” Great Lakes Shores, Inc v Bartley, 311
Mich App 252, 255; 874 NW2d 416 (2015). “Contractual provisions for payment of reasonable
attorney fees are judicially enforceable. In other words, a contractual clause providing that in the
event of a dispute the prevailing party is entitled to recover attorney fees is valid.” Fleet Business
Credit v Krapohl Ford Lincoln Mercury Co, 274 Mich App 584, 589; 735 NW2d 644 (2007)
(citations and quotation marks omitted).

                 1. WHETHER ANY ATTORNEY FEES CAN BE AWARDED

        The trial court analyzed the attorney fees that Panos and defendant owed plaintiff and
determined that reasonable attorney fess amounted to $131,145.50 for plaintiff’s entire claim
against Panos. As stated earlier, the trial court also noted that “[a]ny dollar paid by Defendant
Panos XI reduces Defendant Goulas’s obligation by a dollar, but Panos XI seems unlikely to pay
anything against the obligations imposed by the verdicts.”

         Paragraph A of the guaranty provides that defendant guaranteed to pay “any and all sums
due to Landlord, including (without limitation) all interest on past due obligations of Tenant, costs
advanced by Landlord, and damages and all expenses (including reasonable attorneys’ fees and
litigation costs), that may arise in consequence of Tenant’s default.” Expenses as defined in ¶ A
specifically encompass attorney fees and litigation costs. The guaranty also provides in ¶ I that
“the prevailing party in any such suit shall be entitled to the fees of its attorney(s) in the reasonable
amount thereof, to be determined by the court and taxed as a part of the costs therein.” Paragraph
I clearly states that defendant is responsible for attorney fees that plaintiff may incur in litigation
if plaintiff is the prevailing party.

        Paragraph N, however, states that “[n]otwithstanding anything to the contrary contained
herein, the liability of the undersigned under this Guaranty shall not exceed . . . the costs and
expenses incurred by Landlord in enforcing this Guaranty.” Defendant argues that ¶ N does not
require him to pay attorney fees because attorney fees were specifically included in ¶¶ A and I, but
not in ¶ N.

        “When a document repeatedly uses a term or phrase, we assume that it carries the same
meaning throughout.” Thiel v Goyings, 504 Mich 484, 502; 939 NW2d 152. The guaranty
addressed expenses plaintiff was entitled to receive if Panos defaulted on the lease in ¶ A and, in
creating the guaranty, specifically included attorney fees. When ¶ A expressly addressed attorney

                                                  -9-
fees, they simply effectuated a desire to establish that attorney fees were included as part of the
expenses that defendant guaranteed to pay. Consequently, when ¶ N discussed “expenses” this
necessarily included attorney fees. Additionally, ¶ I stated that the prevailing party was entitled to
attorney fees. Defendant’s proposed interpretation of ¶ N as not requiring him to pay attorney fees
would be contrary to the fact that the plain language of ¶ A specifically included attorney fees as
one of the expenses he guaranteed to pay. Defendant’s proposed interpretation of ¶ N also would
be inconsistent with the plain language of ¶ I stating that the prevailing party is entitled to attorney
fees. Thus, because defendant’s proposed interpretation of ¶ N is inconsistent with the plain
language of ¶¶ A and I, we cannot adopt it as the proper interpretation of ¶ N. See Klapp, 468
Mich at 468; Kyocera, 313 Mich App at 447. Rather, the expenses addressed in ¶ N encompass
attorney fees. Thus, defendant is liable for attorney fees under the guaranty.

                        2. WHICH ATTORNEY FEES CAN BE AWARDED

       Finally, defendant argues that if this Court determines he owes plaintiff attorney fees, he
only owes plaintiff attorney fees it incurred when enforcing the guaranty. He claims that he is not
responsible for any attorney fees plaintiff incurred on the eviction, conversion, or claim and
delivery issues. We agree.

        After Panos stopped making rental payments, plaintiff first initiated an eviction action
against Panos, before bringing suit against defendant and Panos based on the legal theories of
breach of contract, conversion, and claim and delivery. The trial court held that Panos breached
the lease and that defendant breached the personal guaranty, and it granted plaintiff damages from
both Panos and defendant. The trial court also concluded that Panos owed plaintiff damages under
the common-law theory of conversion. Finally, the trial court determined that Panos and defendant
owed plaintiff reasonable attorney fees that it incurred from the eviction action and each of the
counts it stated in its complaint. The trial court found support for its decision in ¶¶ A and I of the
guaranty.

        Paragraph A establishes that defendant guaranteed to pay plaintiff’s reasonable attorney
fees incurred by Panos’s default of the lease.6 Similarly, ¶ I establishes that defendant guarantees
to pay plaintiff for attorney fees related to violations of or enforcement of the guaranty. 7 Finally,

6
    In relevant part, ¶ A provides:
          If Tenant shall default at any time in the payment of any rent or any other sums . . .
          then the undersigned, at its expense, shall on demand of Landlord fully and
          promptly, and well and truly, pay all rent, sums, costs and charges to be paid by
          Tenant . . . including (without limitation) . . . all expenses (including reasonable
          attorneys’ fees and litigation costs)[] that may arise in consequence of Tenant’s
          default.
7
    In relevant part, ¶ I provides:
          In the event that Landlord should institute any suit against the undersigned for
          violation of or to enforce any of the covenants or conditions of this Guaranty . . .

                                                  -10-
as noted earlier, ¶ N limits defendant’s liability under the guaranty to just three categories of
payments. Specifically, ¶ N states that “[n]otwithstanding anything to the contrary contained
herein, the liability of the undersigned under this Guaranty shall not exceed (i) the unamortized
portion of the Improvement Allowance,” (ii) rent for the 12-month period addressed earlier in Part
II, and (iii) attorney fees to enforce the guaranty itself. Thus, because defendant is only liable for
this limited set of costs, he is only liable for attorney fees incurred by plaintiff in recovering “the
unamortized portion of the Improvement Allowance” and rent for the 12-month period addressed
earlier in Part II; those are the only costs that defendant actually guaranteed to pay which were
caused by Panos’s default of the lease. Stated differently, plaintiff can only recover actual damages
caused by Panos related to the improvement allowance and the 12-month rental period. Thus, any
other damages caused by Panos fall outside the scope of the guaranty. Consequently, any attorney
fees incurred to recover damages or costs other than the improvement allowance or the 12-month
rental period were not attorney fees incurred to enforce the guaranty. Furthermore, any
contradiction between ¶ N on the one hand and ¶¶ A and I on the other is cured by first clause of
¶ N, which provides that in the event of a conflict, the terms of ¶ N control: “[n]otwithstanding
anything to the contrary contained herein.” Thus, defendant is not liable for attorney fees related
to plaintiff’s eviction, conversion, or claim and delivery allegations; defendant is liable only for
attorney fees related to enforcement of the guaranty: recovery of the improvement allowance and
the 12-month rental period. We reverse this portion of the trial court’s order and remand for the
trial court to reconsider the attorney fees for which defendant is liable.

                                        IV. CONCLUSION

        Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.

                                                               /s/ Jonathan Tukel
                                                               /s/ Jane E. Markey
                                                               /s/ Michael F. Gadola

       the prevailing party in any such suit shall be entitled to the fees of its attorney(s) in
       the reasonable amount thereof, to be determined by the court and taxed as a part of
       the costs therein.

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