Court Opinion

ID: 4188541
Source: CourtListenerOpinion
Date Created: 2017-07-24 07:09:25.643225+00
Date Added: 2024-06-11T14:40:15.877022
License: Public Domain

STATE OF MICHIGAN

                             COURT OF APPEALS

BRENDA HERZEL MASSEY,                                              UNPUBLISHED
                                                                   July 20, 2017
               Plaintiff/Counter-Defendant-
               Appellant,

v                                                                  No. 332562
                                                                   Oakland Circuit Court
MARLAINA, LLC,                                                     LC No. 2015-148623-CH

               Defendant/Counter-Plaintiff-
               Appellee,

and

DAWN MUELLER, STB BROKERAGE, and
COLDWELL BANKER WEIR MANUEL,

               Defendants.

Before: MURPHY, P.J., and TALBOT, C.J., and O’CONNELL, J.

PER CURIAM.

        In this dispute over an agreement to purchase real property, the trial court denied
plaintiff/counter-defendant Brenda Massey’s motion for summary disposition pursuant to MCR
2.116(C)(10) and subsequent motion for leave to file her first amended complaint, with
prejudice. The trial court granted defendant/counter-plaintiff Marlaina, LLC’s request for
declaratory judgment, declaring that the parties’ purchase agreement was valid, and subsequent
motion to dismiss its claim for breach of contract, without prejudice. Massey appeals as of right.
We reverse and remand.

                    I. FACTUAL AND PROCEDURAL BACKGROUND

      Massey owns a parcel of real property. Marlaina executed a real estate purchase
agreement in which it offered to purchase the property.

       Massey accepted the offer, and Marlaina’s agent acknowledged the acceptance on July 2,
2015, the agreement’s effective date. Purchase agreement ¶ 10 stated that the agreement was
contingent upon Marlaina conducting an inspection of the property, including its environmental
condition, within 14 days of the agreement’s effective date. Paragraph 6 stated that Marlaina
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agreed to deposit $195,000 in earnest money with a broker “within 16 days after [Marlaina’s]
receipt of an accepted offer.”

        In a letter dated July 16, 2015, Marlaina indicated that it “accepts the Property after
inspections,” “subject to [Massey] complying with and satisfying all remaining terms of the
Purchase Agreement.” Significantly, Marlaina stated that Massey had an obligation to provide
reports on the property’s environmental condition. Marlaina never deposited the $195,000 in
earnest money.

        Massey informed Marlaina that she was terminating the purchase agreement and filed a
declaratory judgment action against Marlaina, asking the trial court to declare the agreement null
and void. Massey alleged that Marlaina failed to comply with its inspection provision and failed
to pay the required earnest money.

       Marlaina countersued. Marlaina also sought declaratory judgment, asking the trial court
to declare that the agreement should be enforced. Additionally, Marlaina brought a breach of
contract claim, seeking an order that Massey must comply with the purchase agreement.

       Massey moved for summary disposition, arguing that the trial court should declare the
purchase agreement null and void because Marlaina failed to satisfy the agreement’s inspection
provision. Marlaina asked the trial court to deny the motion, enter judgment in its favor pursuant
to MCR 2.116(I)(2), and enter judgment against Massey on her complaint for declaratory relief.

       The trial court entered an order denying Massey’s motion for summary disposition. In a
hearing on the motion, it explained that it also granted Marlaina’s “motion for declaratory
judgment, that the contract is valid.” The trial court later entered an order granting Marlaina’s
claim for declaratory judgment.

                                 II. STANDARD OF REVIEW

        We review de novo a trial court’s decision on a motion for summary disposition. See
Maiden v Rozwood, 461 Mich. 109, 118; 597 NW2d 817 (1999). A motion for summary
disposition pursuant to MCR 2.116(C)(10) tests the factual sufficiency of a complaint. Id. at
120. In evaluating this motion, “a trial court considers affidavits, pleadings, depositions,
admissions, and other evidence submitted by the parties . . . in the light most favorable to the
party opposing the motion.” Id. A trial court must grant the motion if it finds “no genuine issue
as to any material fact” and determines that “the moving party is entitled to judgment or partial
judgment as a matter of law.” MCR 2.116(C)(10).

         We also review de novo whether the trial court properly interpreted and applied a
contractual agreement. See Rory v Continental Ins Co, 473 Mich. 457, 464; 703 NW2d 23
(2005). We interpret an agreement according to its plain and ordinary meaning. Woodington v
Shokoohi, 288 Mich. App. 352, 373-374; 792 NW2d 63 (2010). An agreement is unambiguous if
it “fairly allows but one interpretation.” Morley v Auto Club of Mich, 458 Mich. 459, 465; 581
NW2d 237 (1998). We enforce unambiguous contract provisions as written. See id.

                                III. SUMMARY DISPOSITION

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        Massey argues that the trial court erred when it denied her motion for summary
disposition. We agree.

       Paragraph 10 of the parties’ purchase agreement states:

       This Agreement is contingent upon the Buyer [Marlaina] examining the property
       for physical condition including, but not limited to, . . . the ‘environmental
       condition’ of the property . . . . This inspection may be conducted by a contractor
       of [Marlaina’s] own choice and expense, and shall occur within 14 calendar days
       after [Marlaina’s] receipt of an accepted copy of this Agreement, ‘the effective
       date.’ If [Marlaina] is satisfied with the results of all said inspections, this
       contingency shall be considered waived at the end of the time period stated above
       and all terms and conditions of the agreement shall be binding. If [Marlaina] is
       dissatisfied with the results of any of the inspections, [it] shall do one or a
       combination of the following within the contingency period stated above:

       1. Present to [Massey] an addendum for mutual agreement that cites a list of
       repairs and/or conditions to be remedied prior to closing.

       2. Present to [Massey] an addendum for mutual agreement with a credit to be
       applied against the purchase price, and/or a price reduction, in full satisfaction of
       the inspection contingency.

       3. In the event [Massey] and [Marlaina] are unable to reach an agreement to
       [Marlaina’s] proposals made under #1 or #2 above, [Marlaina] shall either elect to
       proceed with the transaction by waiving this contingency in writing, or declare
       this agreement null and void, by election of #4 below, failing either of which this
       agreement shall automatically become null and void at the end of the contingency
       period and all earnest money shall be returned to [Marlaina].

       4. Present [Massey] with a Notice of Dissatisfaction with the home inspection
       which shall render this agreement null and void, in which case [Massey]
       authorizes the Broker to return all earnest money to [Marlaina].

        The purchase agreement lists July 2, 2015, as its “effective date.” Therefore, the
agreement required Marlaina to inspect the property by July 16, 2015. On July 16, 2015,
Marlaina sent a letter to Massey stating that it “accepts the Property after inspections . . . subject
to [Massey] complying with and satisfying all remaining terms of the Purchase Agreement.”
Significantly, Marlaina stated that its acceptance was subject to Massey’s “obligation to provide
certain inspection reports and representations . . . particularly as to environmental reports and the
effect of environmental conditions with respect to the Property and as they relate to [Massey’s]
disclosures.”

       This letter demonstrates that Marlaina failed to complete its duty to inspect the property.
The plain language of the agreement unambiguously requires Marlaina—not Massey—to
“examin[e] the property for physical condition including, but not limited to, . . . the
‘environmental condition’ of the property” by July 16, 2015. Marlaina’s July 16, 2015 letter
confirms that Marlaina failed to do so, and the purchase agreement was “contingent upon” this
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inspection. 1   Therefore, the trial court erred in denying Massey’s motion for summary
disposition.

        Further, because Marlaina failed to comply with this condition, Marlaina had no right to
Massey’s performance under the agreement. See Able Demolition v Pontiac, 275 Mich. App. 577,
583-584; 739 NW2d 696 (2007). Therefore, the trial court further erred in granting Marlaina’s
request for declaratory judgment, and Marlaina could not sustain a claim for breach of contract.
See id.

        Additionally, we note that Massey was entitled to declaratory relief because Marlaina
failed to comply with the purchase agreement’s earnest money provision. Massey improperly
raised this issue in her reply brief. See MCR 7.212(G). Nevertheless, we may consider an issue
not properly raised as justice requires. LME v ARS, 261 Mich. App. 273, 287; 680 NW2d 902
(2004). Further, we have the authority to “enter any judgment or order or grant further or
different relief as the case may require.” MCR 7.216(A)(7).

        Paragraph 6 of the purchase agreement states, in relevant part, that

        [Marlaina] is depositing with Broker the amount of $5,000 payable in the form of
        a personal check, money order, cashier’s check or certified funds. An additional
        $195,000 shall be deposited with Broker by [Marlaina] within 16 days after
        [Marlaina’s] receipt of an accepted offer making total earnest money on deposit
        $200,000. All monies shall be deposited by Broker in accordance with rules and
        regulations of the Michigan Department of Licensing and Regulatory Affairs, and
        applied to purchase price at closing.

Marlaina admitted to the trial court that it did not pay the $195,000 sum, but argued that it was
not required to do so until Massey complied with her obligations under the agreement to
maintain the property in a certain condition and the sale closed.2 As shown by the plain,
unambiguous language of ¶ 6, Marlaina’s argument is incorrect. Rather, Marlaina’s failure to
comply with ¶ 6 provided an alternate basis for the trial court to grant Massey declarative relief.

      Because the above analysis resolves Massey’s suit and Marlaina’s countersuit in
Massey’s favor, we do not consider the other issues Massey raised on appeal.

1
 As Marlaina notes on appeal, the parol evidence rule prevents courts from using the letter to
contradict or vary the terms of the parties’ unambiguous agreement. See UAW-GM Human
Resource Ctr v KSL Recreation Corp, 228 Mich. App. 486, 492; 579 NW2d 411 (1998).
2
  We would reject any argument to construe ¶ 40 as suspending Marlaina’s obligation to pay
earnest money until Massey complies with her pre-closing maintenance obligations listed in ¶ 27
because such a construction would render ¶ 6 nugatory. See Woodington, 288 Mich. App. at 374.

                                                -4-
We reverse and remand. We do not retain jurisdiction.

                                                  /s/ William B. Murphy
                                                  /s/ Michael J. Talbot
                                                  /s/ Peter D. O’Connell

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