Court Opinion

ID: 4125078
Source: CourtListenerOpinion
Date Created: 2017-02-10 12:08:54.606879+00
Date Added: 2024-06-11T14:37:38.297352
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

                                                                    UNPUBLISHED
NORTH AMERICAN BROKERS, LLC, and                                    February 9, 2017
MARK RATLIFF,

               Plaintiffs-Appellants,

v                                                                   No. 330126
                                                                    Livingston Circuit Court
HOWELL PUBLIC SCHOOLS,                                              LC No. 15-028669-CH

               Defendant-Appellee,

and

ST. JOHN PROVIDENCE,

               Defendant.

Before: O’CONNELL, P.J., and MARKEY and MURRAY, JJ.

PER CURIAM.

        Plaintiffs, North American Brokers, LLC, and Mark Ratliff (the Brokers), appeal as of
right the trial court’s order granting summary disposition under MCR 2.116(C)(7) to defendant
Howell Public Schools (the Schools) on the basis that the Statute of Frauds, MCL 566.132,
barred the Brokers’ claim to broker commission. We reverse the trial court’s grant of summary
disposition on the Brokers’ claim of promissory estoppel and remand for further proceedings.

                     I. FACTUAL AND PROCEDURAL BACKGROUND

        The Brokers asserted in their complaint that in late 2013, they worked with defendant St.
John Providence, who is not a party to this action, to develop a concept that required a particular
type of property. The Brokers believed that the Latson School property, which the Schools had
for sale, suited their concept. The property had a for-sale sign that indicated it was “broker
protected.” The Brokers approached St. John Providence about the property. The Schools and
St. John Providence eventually reached a purchase agreement through another real estate agency.
In the end, the Brokers received no commission.

        In August 2015, the Brokers sued the Schools and St. John Providence, alleging a variety
of claims that included a count of promissory estoppel. In lieu of filing an answer, the Schools

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moved to dismiss this action under MCR 2.116(C)(7), arguing that the statute of frauds and
governmental immunity barred the Brokers’ claims.

                                II. STANDARDS OF REVIEW

        This Court reviews de novo the trial court’s decision on a motion for summary
disposition. Odom v Wayne Co, 482 Mich. 459, 466; 760 NW2d 217 (2008). A defendant is
entitled to summary disposition under MCR 2.116(C)(7) if the plaintiff’s claims are barred
because of immunity granted by law. Id. The moving party may support its motion with
affidavits, depositions, admissions, or other documentary evidence that would be admissible at
trial. Id. We consider the contents of the plaintiff’s complaint to be true, unless contradicted by
the documentary evidence. Id.

                                         III. ANALYSIS

       The Brokers contend that the trial court erred by granting the Schools’ motion for
summary disposition because the statute of frauds did not bar their claim for broker commission
on a promissory estoppel theory. We reluctantly agree.

       The statute of frauds requires certain types of agreements to be in writing and signed by
the party against whom it will be enforced. MCL 566.132; Crown Technology Park v D&N
Bank, FSB, 242 Mich. App. 538, 548; 619 NW2d 66 (2000). This includes “[a]n agreement,
promise, or contract to pay a commission for or upon the sale of an interest in real estate.” MCL
566.132(1)(e).

        The for-sale sign on the Latson property is certainly not a signed writing for the purposes
of the statute of frauds. However, the doctrines of “estoppel and promissory estoppel have
developed to avoid the arbitrary and unjust results required by an overly mechanistic application
of the [statute of frauds].” Opdyke Investment Co v Norris Grain Co, 413 Mich. 354, 365; 320
NW2d 836 (1982).

       The elements of promissory estoppel are: (1) a promise, (2) that the promisor
       should reasonably have expected to induce action of a definite and substantial
       character on the part of the promissee, (3) which in fact produced reliance or
       forbearance of that nature, and (4) in circumstances such that the promise must be
       enforced if injustice is to be avoided. [Joerger v Gordon Food Serv, Inc, 224
Mich. App. 167, 173; 568 NW2d 365 (1997).]

In this case, the Brokers alleged that the “broker protected” sign was a promise that induced
them to cultivate St. John Providence as a buyer and otherwise properly pleaded an action for
promissory estoppel.1

1
  While the Schools dispute whether the sign did in fact induce the Brokers’ to act and whether
the circumstances are such that the promise must be enforced, for the purposes of a motion under
MCR 2.116(C)(7), this Court must accept the complaint as true unless contradicted by the

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        The continued validity of the judicially created promissory estoppel exception to the
legislative statute of frauds has been the subject of considerable debate. This Court has rejected
a claim that the promissory estoppel exception applies to claims against financial institutions.
Crown Tech Park v D&N Bank, FSB, 242 Mich. App. 538, 556; 619 NW2d 66 (2000). In Crown
Tech Park, the defendant contended that the trial court erred by finding that the statute of frauds
did not bar the plaintiff’s promissory estoppel claim. Id. at 548. This Court recognized that we
have held that the common-law claim of promissory estoppel may bar application of the statute
of frauds. Id.

        But in 1992, the Legislature amended the statute of frauds to add MCL 566.132(2), which
specifically concerns claims against financial institutions. Id. The Crown Tech Park Court
recognized that by stating that the promise must be in writing, “[t]he plain language in this
amendment of the statute of frauds addresses the area of conduct promissory estoppel ordinarily
governs—oral promises.” Id. This Crown Tech Park Court further relied on language in
subsection 2 barring any action to conclude that those actions included promissory estoppel
actions. Id. at 550-551.

        Crown Tech Park does not apply to this case because MCL 566.132(1) does not contain
the mandatory language that MCL 566.132(2) contains. Additionally, the Court in Crown Tech
Park recognized that it was not ruling on application of the promissory estoppel section to MCL
566.132(1), though it questioned the continued validity of the exception. It stated that “the role
of the judiciary is to apply the statute of frauds as written, without second-guessing the wisdom
of the Legislature.” Crown Tech Park, 242 Mich. App. at 548 n 4. However, it also stated that
“[n]otwithstanding our serious concerns . . . legislative amendments of the statute of frauds
enacted in 1992 clearly provide that a viable claim of promissory estoppel cannot be asserted in
the present case.” Id.

        This is not the first time that this Court has questioned the continuing validity of utilizing
a judicially created exception that is inconsistent with the language of the statute. This Court
reluctantly applied the promissory estoppel exception to the statue of frauds to a case involving
MCL 566.132(1). Kelly-Stehney & Assoc, Inc v MacDonald’s Indus Prods, Inc, 254 Mich. App.
608, 613-615; 658 NW2d 494 (2003), vacated 469 Mich. 1046 (2004). Even though the
Michigan Supreme Court vacated this Court’s opinion in Kelly-Stehney on other grounds, Justice
WEAVER noted that “the Court of Appeals sharply criticized the judicially created exceptions to
the statute of frauds . . . ,” and would have determined whether that doctrine remained valid.
Kelly-Stehney & Assoc, Inc v MacDonald’s Indus Prods, Inc, 469 Mich. 1046, 1046; 677 NW2d
838 (2004) (WEAVER, J, dissenting).

       Regardless of the wisdom of using a judicially created exception to a statute, we must
apply it. The Michigan Supreme Court created and has upheld the exception. See Opdyke
Investment Co, 413 Mich. at 365. “This Court is bound to follow decisions of our Supreme
Court.” People v Strickland, 293 Mich. App. 393, 402; 810 NW2d 660 (2011). It is a
fundamental principle that only the Michigan Supreme Court has the authority to overrule one of

moving party’s documentary evidence. Odom, 482 Mich. at 466. Here, the Schools submitted no
documentary evidence in support of their motion and instead also relied on the complaint.

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its prior decisions. Paige v City of Sterling Hts, 476 Mich. 495; 720 NW2d 219 (2006). We do
not have the power to overrule the Supreme Court’s determination that promissory estoppel is an
exception to the statute of frauds.2

        In this case, the Brokers pleaded a claim of promissory estoppel. The trial court granted
summary disposition on the basis that the statute of frauds barred the Brokers’ contract claims
and governmental immunity barred its negligence claims. But because promissory estoppel
remains an exception to the statute of frauds, the trial court erred by granting summary
disposition on the Brokers’ promissory estoppel claim.3

       We reverse the trial court’s grant of summary disposition on the Brokers’ promissory
estoppel claim and remand for further proceedings on that claim. We do not retain jurisdiction.

                                                             /s/ Peter D. O’Connell
                                                             /s/ Jane E. Markey
                                                             /s/ Christopher M. Murray

2
  While we acknowledge that our opinion reaches the correct result under our present legal
framework, it is the wrong result. We urge the Michigan Supreme Court to grant leave to
address the issue presented in this case. The judicially created doctrine of promissory estoppel,
as applied to the facts of this case, subsumes the statute of frauds and makes the statute of frauds
irrelevant.
3
  The Brokers also contend that the trial court erred by granting summary disposition on the basis
of governmental immunity. The trial court granted summary disposition on the Brokers’
negligence claim because of governmental immunity, not the promissory estoppel claim that is
the subject of this appeal. Accordingly, the Brokers’ argument that the trial court improperly
applied governmental immunity to a contract claim lacks merit.

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