Court Opinion

ID: 3158425
Source: CourtListenerOpinion
Date Created: 2015-11-26 08:05:28.183361+00
Date Added: 2024-06-11T11:56:53.736819
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

FMG II DEVELOPMENTS LLC,                                            UNPUBLISHED
                                                                    November 24, 2015
               Plaintiff/Counter-Defendant-
               Appellee,

v                                                                   No. 322943
                                                                    Livingston Circuit Court
KRISTINE R. DEYO,                                                   LC No. 14-027863-CK

               Defendant/Counter-Plaintiff-
               Appellant.

Before: METER, P.J., and BORRELLO and BECKERING, JJ.

PER CURIAM.

       In this breach of contract action, defendant/counter plaintiff Kristine R. Deyo appeals by
right a July 7, 2014, judgment entered in favor of plaintiff/counter-defendant FMG II
Developments, LLC (FMG) following a bench trial. For the reasons set forth in this opinion, we
reverse and remand for further proceedings.

                                       I. BACKGROUND

       In 2005, FMG sought to develop approximately 66 acres of former farmland in Milford
Township owned by Kristine and her late husband Ken Deyo (“Deyo property”). Specifically,
FMG planned to develop the Crossings of Milford, a residential site condominium that was to
have 22 separate residential lots. To facilitate the land transaction, FMG entered into a five-year
land contract with the Deyos on July 18, 2005. Under the terms of the land contract, FMG was
required to pay the Deyos a principle of $1,202,580 with $300,645 down, with semi-annual 6-
percent interest payments for the entire five-year term.

         In addition, before the Deyos conveyed deeds for any of the individual lots, FMG agreed
to improve the site by constructing roads and utilities and installing storm sewers. FMG was
also responsible for paying the property taxes on all of the lots (a combined total of nearly
$40,000 per year); FMG agreed to insure the property and pay any assessments. Following the
initial prep-work, on FMG’s request, the Deyos agreed to release warranty deeds for individual
lots upon FMG’s payment of approximately $64,423.93 per lot (i.e. 1/14th of the beginning
principle balance on the land contract, hereinafter “release price”). Following the release of a
lot, FMG would convey the lot to a purchaser who would in turn obtain a construction loan and
hire a builder to construct a residential home. The release payments were to be deducted from
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the principle balance due and the Deyos were required to pay the transfer taxes on each
conveyance. The principle balance was due July 18, 2010 (five years after the contract was
executed) and “[t]he final deed in fulfillment of the land contract shall be described as that
portion which has not been previously released and consideration shall be the original selling
price less the consideration on any previously released Units [i.e. lots].”

         Paul Elkow testified that, originally, FMG had four corporate members, but at the time of
trial, he was the only remaining member. Elkow testified that, at about the same time that FMG
signed the land contract with the Deyos, FMG also entered into a contract with a neighboring
landowner Elkow referred to as “Mr. Schimmel.” Schimmel owned property that abutted lots 3
through 8 on the Deyo property and FMG agreed to pay Schimmel $25,000 per lot to merge the
properties into the site condominium.

         By March 3, 2006, FMG was able to start marketing lots for sale following the initial
infrastructure work. FMG paid the full release price for Lot 3 and Lot 7, one of which was used
to construct a model home. However, FMG was unable to generate further sales. Elkow
explained that the real estate market “turned on a dime,” and from 2006 to 2010 FMG was
unable to generate interest in the development. According to Elkow, FMG made four semi-
annual interest payments to the Deyos, but stopped paying interest on July 20, 2007. Elkow
testified that, sometime around the time he stopped paying interest, he discussed the market
conditions with Ken, a long-time acquaintance. Elkow explained to Ken that he was “not able to
generate anything” and he gave Ken the following three options: (1) Elkow could return the
entire parcel of land to Ken, (2) Elkow and Ken could negotiate the release price of the lots to
market value, or (3) Elkow would do the best he could to repay every dime of the principle, but
if Ken demanded the interest payments, Ken would have to take the property back. Elkow could
not recall when he spoke with Ken about modifying the land contract and he did not have
anything in writing to show that the parties modified the contract, but Elkow stated that he had
multiple conversations with Ken about the market and the development.

        Elkow testified that at the time he approached Ken he could not continue to make the
interest payments on top of the $40,000 per year in property taxes FMG was paying for the lots.
Elkow explained that property values in the area dropped by at least 40-percent and there were
other lots that he could purchase at a far lower price such that it made no sense to keep making
the interest payments to the Deyos for a project with no profit potential. Elkow explained that if
Ken had not agreed to waive the interest payments, he would have walked away from the
Crossings of Milford project leaving the Deyos to pay the property taxes on the unsold lots.
According to Elkow, when he gave Ken the three options to modify the contract, Ken responded
by stating that Elkow needed to find a way to keep the property taxes paid.

        At trial, Elkow testified that in consideration for Ken’s concessions on the interest
payments, Elkow agreed to keep paying the property taxes and to aggressively market the lots.
In addition, according to Elkow, Ken was concerned that if Elkow walked away from the project,
the Deyos would be stuck with the Schimmel land contract and the remaining $75,000 to release
Schimmel’s lots. Elkow agreed that the Deyos were not a party to the Schimmel contract and
that only FMG owed Schimmel duties under the contract. Nevertheless, according to Elkow, as
part of the consideration for the Deyos waiving the interest payments, Elkow arranged a

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transaction to pay off Schimmel thereby relieving Ken of any future liabilities if FMG walked
away from the Crossings of Milford project.

       Sometime after speaking with Elkow about market conditions, Ken drafted two letters
dated December 14, 2007, and April 5, 2009, and sent them to Elkow regarding the land
contract. The trial court admitted the letters into evidence. The December 2007 letter read as
follows:

       Dear Paul:

       Per our telephone conversation on Monday, December 10, 2007, we discussed
       options that would help alleviate the financial burden of both the interest payment
       of $23,192.55 due on [January 15, 2008] to me and property taxes due February
       [2008].

       I have agreed to defer the January 15, 200[8] interest payment of $23,192.55.
       This interest payment must be paid up between January 15, 2007 and July 15,
       2010. This continues the balance of our land contract as of January 15, 200[8] in
       the amount of $773,085.07. The land contract will continue as normal with the
       next interest payment due July 15, 200[8].

       Kristine testified that when she typed the letter she mistakenly used the year 2007 in
place of 2008 for some of the dates. Elkow testified that the letter contradicted what Ken had
said during their conversations.

       The April 5, 2009, letter read as follows:

               During an informal meeting on April 3, 2009 between Paul Elkow and me,
       Paul requested a reconsideration of the land contract, due to the depressed
       building industry and the failing economy. We discussed several different
       possibilities to help stimulate sales at the Crossings of Milford. As noted to Paul,
       I have not seen any signs or advertising that indicate this particular piece of
       property has lots for sale. As I desire to help and have already helped in this
       economic hardship. Paul and I have come to the following understanding on
       “four (4) lots only.” This understanding does not in any way change the land
       contract terms or conditions. “Only the payoff of four (4) lots.”

               The following understanding pertains to the payoff of four (4) lots only . .
       . this understanding does not change any part of the land contract or any clause
       therein and interest will continue to be added to the land contract:

              That the lots involved will be of mutual agreement before building
              processes will begin, and these four (4) lots only will be considered to be
              of a less desirable nature. Consideration will be given as to there [sic]
              location, size, topography and any other factor necessary to determine
              there [sic] individual value.

                                                -3-
               I will agree to accept payment of $51,539.14 for each of the four (4) lots
               only. Deed will then be granted for each of these four (4) lots only. This
               reflects a discount on each of the four (4) lots only.

               Interest will continue to be applied to the land contract balance in the
               normal manner set forth in the land contract before and after such payment
               on each of the four (4 lots) only. It shall be noted that interest
               payments are expected as to the terms of the land contract and an
               attempt should be made to make these payments in a timely manner.

Elkow agreed that Ken sent this letter to him, but he stated that he did not accept its terms.

         After Ken drafted the second letter in April 2009, from 2009-2013, the Deyos released 16
of the remaining 20 lots to FMG for a price lower than the original release-price of about
$64,000. At trial, plaintiff introduced all 16 deeds for these releases. Kristine did not dispute
that she and Ken signed the deeds and released the lots to FMG for less than $64,000. In
addition, contrary to the terms of the land contract, the Deyos did not pay the transfer taxes for
any of these 16 lots. Kristine testified that she did not recall paying any transfer taxes and Elkow
testified that FMG paid the transfer taxes. Furthermore, although the land contract was to
terminate on July 18, 2010, the parties continued to release lots under the terms of the contract
after 2010 and the Deyos did not send a notice of default or foreclosure to FMG. At the time of
Ken’s death in February 2012, the land contract remained in effect in that the Deyos had not
released all of the lots and FMG had not requested a payoff amount.

        To recap, by December 2013 the Deyos had released 18 of the 22 lots to FMG, 16 of
which were released for less than $64,000. In December 2013, Kristine continued to hold the
remaining lots. It appears that in December 2013, Elkow requested that Kristine release the final
four lots by requesting a payoff amount on the land contract. According to Elkow, Kristine
refused to release the lots or provide a payoff amount and she did not respond to his inquiries.

        When Kristine refused to release the final four lots, FMG commenced this lawsuit
alleging breach of contract. FMG alleged that the Deyos agreed to modify the land contract to
eliminate the 6-percent semi-annual interest payments, that FMG had paid the Deyos an
aggregate amount of $1,120.494.90 for release of the 18 lots and for the down payment, that
there was a total of $82,085.10 remaining on the principle balance of the land contract, and that
payment of the $82,085.10 was all that was required to compel Kristine to release the final four
lots. FMG alleged that, despite its offer to pay the $82,085.10, Kristine refused to release the
final four lots in breach of the land contract. FMG requested monetary damages and an order
requiring Kristine to convey fee simple title of the final four lots to FMG.

        The trial court held a one-day bench trial on June 25, 2014. In addition to Elkow’s
testimony discussed above, FMG offered the testimony of Paul Harmon, a real estate broker, and
Patrick Hanniford, a Certified Public Accountant (CPA). Harmon testified that he prepared the
deeds for the 18 lots that the Deyos released. He was familiar with the Crossings of Milford
project and he was aware that FMG made some interest payments in accord with the terms of the
land contract. However, Harmon was not aware of any interest that FMG paid during the

                                                 -4-
transfer of the final 15 deeds and he was not aware of any modifications to the Deyo’s
responsibility for paying the transfer taxes.

        Hanniford testified that as of August 25, 2014, the balance due on the land contract was
$73,872.89. Hanniford arrived at this figure after reviewing FMG’s payment history less the
transfer taxes that the Deyos were required to pay and he calculated the amount on the
assumption that interest ceased as of January 2, 2007. Hanniford explained that he did not
calculate interest because that was FMG’s theory of the case

        Kristine testified at trial and her testimony showed that Ken was more involved with the
land contract than she was. Kristine testified that Elkow called Ken in December 2007 and
indicated that he could not afford to pay property taxes and the interest payments. Kristine
explained that she knew about the subject of the telephone call because Ken told her about it.
Kristine testified that she discussed with Ken the subject of helping Elkow through tough times,
but never discussed reducing the interest payments to zero. Kristine explained that after Ken
died in February 2012, Elkow told her to retain a lawyer because they needed to renegotiate the
terms of the land contract. However, according to Kristine, Elkow never informed her that he
thought the interest was at zero.

        Kristine introduced a hand-written ledger that Ken used to keep track of payments
received, interest and balance due on the land contract. The ledger indicated that, even after
FMG’s July 2007, semi-annual interest payment—which FMG alleged was its final interest
payment before the Deyos agreed to waive the interest—Ken continued to add accrued interest to
the balance due. Ken continued to add accrued interest to the principle balance through July 15,
2010, which is about the time the land contract was originally set to expire. In addition, Ken
recorded two unidentified payments received in July 2008 and July 2009 in the amounts of
$8,000 and $4,000 respectively. These payments are not identified as interest and they were not
for the release of any lots. Elkow testified that he was “being kind,” when he made the two
payments, but he denied that the payments were interest payments.

        Dennis Siegner, a CPA, testified on behalf of Kristine. Siegner testified that Ken was a
client for over 20 years and Siegner prepared the Deyo’s annual tax statements through 2011.
Siegner was familiar with the payments made under the land contract. Siegner explained that he
recorded as interest some of the money FMG paid for the release of the lots. Siegner explained
that because Ken recorded payments for the release of the lots as “credits,” some of that amount
could represent interest. Siegner testified that as of August 2013, the total outstanding balance
on the land contract was $329,165.72. This figure was prepared under the assumption that the
Deyos did not waive the 6-percent interest payments.

       Following arguments, the trial court entered an oral opinion into the record finding in
favor of FMG in pertinent part as follows:

             I just wanted to confirm that everybody agrees the burden of proof is
       preponderance of the evidence . . . not clear and convincing. . . .

                                              ***

                                               -5-
               I agree with defendant that the down turn in the economy was an event,
       not consideration. I also agree that if the only fact was there was no notice of
       default, notice of forfeiture, forfeiture or foreclosing proceedings, I could not find
       that the land contract was modified, more particularly that interest was waived.
       However, the crash of the housing market was an event that led the parties to
       agree that it was necessary to modify the land contract. Otherwise, as so many
       developers were doing, the defendant would have been left holding the land with
       taxes of approximately $40,000.00 and no one to sell it to. There was a meeting
       of the minds in 2007. It’s not like . . . there was some acquiescence by slice. That
       wouldn’t suffice. There was consideration. If the plaintiff had walked away from
       the development, both – actually Schimmel’s probably would have suffered;
       Deyo would have suffered; and maybe they could have worked together. As I
       said before, that’s speculative. There would have been a cloud on the taxes.
       Deyo apparently was not in the position where he thought he had all the necessary
       money. He didn’t want to pay the real estate taxes. He didn’t want to be left in
       that kind of position. This wasn’t a favor to Deyo as defendant professes that, of
       paying off Schimmel. This is where Mr. Deyo had to work as part of their
       agreement to make sure that Schimmel got paid off. The conveyance of the
       deeds, uh, numerous after interest stopped in ’07 and conveyance of deeds as late
       as August of 2013 is one fact that establishes that there was a meeting of the
       minds.

                I find for the plaintiff. Defendant must execute warranty deeds conveying
       units 18, 19, 20 and 21 to plaintiff in exchange for the sum of $73,872.89 and the
       seller is to pay the transfer tax. I am not convinced that the transfer taxes paid to
       date by the plaintiff was anything other than part of this agreement, part of this
       meeting of the minds that this is what everyone had to do to save themselves.

       The trial court entered a written order reflecting its holding on July 10, 2014, and
dismissing Kristine’s counter-claim. Kristine filed a claim of appeal by right on July 30, 2014.
Subsequently, on August 4, 2014, Kristine moved the trial court to stay proceedings, and
proposed to place executed deeds to the four remaining lots in escrow pending appeal. At a
hearing, the trial court ordered the deeds held in escrow, ordered that an injunctive order be
recorded against the properties, and ordered Kristine to pay a $500,000 bond. Kristine then
moved this Court to amend the order with respect to the bond and this Court granted the motion
and amended the order to eliminate the bond, finding that it was excessive and unnecessary.
FMG II Developments LLC v Deyo, unpublished order of the Court of Appeals, entered August
22, 2014 (Docket No. 322943).

                                         II. ANALYSIS

        On appeal, Kristine argues that the trial court erred in finding that there was mutual
assent to modify the land contract and waive interest.

       We review a trial court’s findings of fact in a bench trial for clear error and its
conclusions of law de novo. Chelsea Inv Grp LLC v Chelsea, 288 Mich. App. 239, 250; 792
NW2d 781 (2010). Whether the evidence supports that the parties modified a contract involves a

                                                -6-
question of fact that we review for clear error. HJ Tucker & Associates v Allied Chucker & Eng
Co, 234 Mich. App. 550, 563; 595 NW2d 176 (1999). However, to the extent that we must
interpret the land contract and determine whether the statute of frauds renders an alleged
modification unenforceable, these issues involve questions of law that we review de novo.
Chelsea, 288 Mich. App. at 250; Kloian v Domino’s Pizza, LLC, 273 Mich. App. 449, 458; 733
NW2d 766 (2006).

        “While the freedom to contract principle is served by requiring courts to enforce
unambiguous contracts according to their terms, the freedom to contract also permits parties to
enter into new contracts or modify their existing agreements.” Quality Products & Concepts Co.
v Nagel Precision, Inc., 469 Mich. 362, 370-371; 666 NW2d 251 (2003). This holds true whether
the original contract is oral or written, Nelson v Witte, 347 Mich. 411, 415; 79 NW2d 906 (1956),
and a contract can be modified notwithstanding anti-waiver clauses or restrictive-amendment
provisions. Quality Products, 469 Mich. at 364. However, a party may not unilaterally alter an
original contract, “[r]ather, a party alleging waiver or modification must establish a mutual
intention of the parties to waive or modify the original contract.” Id. at 372. “This mutuality
requirement is satisfied where a waiver or modification is established through clear and
convincing evidence of a written agreement, oral agreement, or affirmative conduct establishing
mutual agreement to modify or waive the particular original contract.” Id. at 364-365.

        Although a party can generally prove modification through evidence of an oral agreement
or course of conduct, in cases involving the sale of real property, “[o]rdinarily, a subsequent
modification of a contract for the sale of land must be in writing to be legally enforceable.”
Windorf v Ferris, 154 Mich. App. 201, 203; 397 NW2d 268 (1986); see also Reid v Bradstreet Co,
256 Mich. 282, 286; 239 N.W. 509 (1931) (noting that “[i]t is well established that a written
contract may be varied by a subsequent parol agreement unless forbidden by the statute of
frauds. . . .”) This is because Michigan’s statute of frauds provides in relevant part that:

               Every contract for the leasing for a longer period than 1 year, or for the
       sale of any lands, or any interest in lands, shall be void, unless the contract, or
       some note or memorandum thereof be in writing, and signed by the party by
       whom the lease or sale is to be made, or by some person thereunto by him
       lawfully authorized in writing: [] [MCL 566.108.]

       Moreover, MCL 566.1 provides as follows:

               An agreement hereafter made to change or modify, or to discharge in
       whole or in part, any contract, obligation, or lease, or any mortgage or other
       security interest in personal or real property, shall not be invalid because of the
       absence of consideration: Provided, That the agreement changing, modifying, or
       discharging such contract, obligation, lease, mortgage or security interest shall
       not be valid or binding unless it shall be in writing and signed by the party against
       whom it is sought to enforce the change, modification, or discharge. [Emphasis
       added.]

       In this case, the trial court erred as a matter of law in finding that there was consideration
to support the alleged modification of the land contract to eliminate interest. Here, FMG alleged

                                                -7-
that there was consideration to support the modification because it did not walk away from the
project and because it paid-off the Schimmel contract. In essence, FMG alleged that, because it
did not breach its contracts with Schimmel and the Deyos, the Deyos received consideration for
agreeing to waive the interest payments. The trial court essentially agreed with FMG, reasoning
that FMG continued to pay the property taxes and paid-off the Schimmel contract, which in turn,
provided the Deyos with a benefit. This amounted to an error of law. FMG was already required
to pay the property taxes and perform all of its other duties under the terms of the land contract
and Elkow agreed that only FMG had duties under the Schimmel contract. The Deyos were not
required to waive interest to compel FMG to perform its duties under these agreements as it is a
long-standing principle of contract law that “doing what one is legally bound to do is not a
consideration for a new promise.” Puett v Walker, 332 Mich. 117, 122; 50 NW2d 740 (1952)
(quotation marks and citations omitted). Accordingly, because there was no new consideration
for the alleged modification, FMG was required to prove by clear and convincing evidence that
the alleged modification was in writing and signed by the Deyos. MCL 566.1.

        Before analyzing whether there was a written modification, we note that the trial court
erred as a matter of law when it held that plaintiff had the burden to prove modification by a
preponderance of the evidence. As noted above, a party alleging modification has the burden to
prove modification by clear and convincing evidence. Quality Products, 469 Mich. at 364-365.
FMG claims that appellant waived this issue by agreeing with the trial court that FMG had to
prove its case by a preponderance of the evidence.

        Ordinarily, “[a] party who expressly agrees with an issue in the trial court cannot then
take a contrary position on appeal.” Grant v AAA Michigan/Wisconsin, Inc (On Remand), 272
Mich. App. 142, 148; 724 NW2d 498 (2006). Notwithstanding appellate counsel’s legal error in
the lower court, we will address whether FMG proved by clear and convincing evidence mutual
assent to modify the contract because this is the proper legal standard, the application of which is
necessary to a proper determination of the case. See Klooster v City of Charlevoix, 488 Mich.
289, 310; 795 NW2d 578 (2011). Moreover, as discussed below, irrespective of which burden is
applied, the court clearly erred as a matter of law in determining that there was a modification
regarding interest that conformed to the statute of frauds.

       A review of the record indicates that, clearly, the parties agreed to some amendments to
the land contract. Evidence showed that Elkow and Ken engaged in several discussions
regarding the tough economic climate. Sometime thereafter, the Deyos released warranty deeds
to 16 of the remaining 20 lots for less than the originally-agreed upon amount of approximately
$64,000. The deeds showed that there was mutual asset to modify the release-price of the
individual lots, but, contrary to the trial court’s finding and FMG’s argument on appeal, the
deeds do not amount to writings that evinced mutual assent to waive the interest payments.
FMG cannot identify any language within the deeds relative to a modification of the interest
payments. Nor were there any written documents attached to the deeds that shed any light on
whether the parties agreed to modify the interest payments.

        Moreover, contrary to the trial court’s findings, other evidence introduced at trial
supported that there was no mutual assent to waive the interest payments. Specifically, the two
letters that Ken sent to Elkow shortly after their discussions about the market conditions
supported that the Deyos did not agree to waive the interest payments. The trial court found that

                                                -8-
these letters were “difficult for me to work through,” and stated, “suffice it to say that, uh,
they’re unclear.” To the contrary, the language in the letters clearly indicated that Ken agreed to
reduce the release price of some of the lots and agreed to delay some of the interest payments,
but nothing in the letters supported that he agreed to waive the interest payments in their entirety
or reduce the interest rate to zero.

        For example, in the December 2007 letter, Ken stated that he agreed to defer the January
15, 2008, interest payment, but he also noted that “[t]he land contract will continue as normal.”
Similarly, in the April 2009 letter, while Ken discussed reducing the release price for certain lots,
he explicitly stated, “[t]his understanding does not in any way change the land contract terms or
conditions,” and “this understanding does not change any part of the land contract or any clause
therein and interest will continue to be added to the land contract. . . .” Near the end of the letter,
Ken repeated, “[i]nterest will continue to be applied to the land contract balance in the normal
manner set forth in the land contract . . .” and in bold text stated, “interest payments are
expected as to the terms of the land contract and an attempt should be made to make these
payments in a timely manner” (emphasis in original). Thus, on no less than three occasions in
the same letter, Ken indicated that interest would continue to accrue per the terms of the land
contract. This language does not support that there was mutual assent to waive interest in its
entirety. While Ken may have evinced a willingness to afford extra time to make the payments,
he repeatedly stated that the interest would continue per the original agreement.

        In addition, when the letters are considered in conjunction with other written evidence
and Kristine’s testimony, we are left with a definite and firm conviction that the trial court erred
in finding that the parties modified the land contract and that the court erred as a matter of law in
concluding that such modification complied with the statute of frauds. As noted above, other
than the deeds which did not reference interest, FMG did not introduce any writing to support
that the parties modified the land contract with respect to interest. Indeed, the only other
documentary evidence at trial supported that the Deyos did not waive interest. Of particular
note, Ken’s hand-written ledger showed that the Deyos did not assent to waiving the interest
payments. The ledger showed that even after FMG’s alleged final interest payment in July 2007,
Ken continued to add six percent interest to the total amount due on the land contract. The
ledger showed that Ken kept a rolling tally of the total amount due on the land contract and every
six months, Ken made an entry for unpaid interest.

       Specifically, Ken made entries on the ledger on January 15, 2008, 2009, and 2010 and
July 15, 2008, 2009, and 2010. These entries were entitled “INTEREST” and added to the total
balance due and the timing of the entries dovetailed with the terms (i.e. semi-annual payments)
and the duration (i.e. July 2010) of the land contract. Ken’s final entry was recorded on a date
that coincided with the time that the land contract was set to terminate—July 18, 2010.
Following that entry, Elkow agreed that Ken mailed a copy of the ledger to him in November
2010, evincing Ken’s intent that Elkow pay the interest as required under the land contract. The
ledger supports that there was no meeting of the minds regarding a waiver of the interest
payments. Rather, the ledger constitutes clear evidence that Ken expected the interest to be paid
upon expiration of the land contract.

       Furthermore, evidence of the parties’ course of conduct and oral statements does not
support that there was mutual assent to waive interest. At best, Elkow’s testimony showed that

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Ken stated that Elkow needed to find a way to keep the property taxes paid. Elkow did not
testify that Ken explicitly stated that he would waive the interest payments. Rather, Ken’s letters
and ledger supported that there was no mutual assent regarding the interest and evidence that
Elkow made a $4,000 and $8,000 payment to Ken sometime after the discussions supported that
he was aware that interest was due.

        In short, the trial court clearly erred in finding that there was mutual assent to modify the
land contract to waive interest and erred as a matter of law in holding that the modification
complied with the statute of frauds.1 Remand is therefore appropriate for a determination of a
final amount due on the land contract taking into account the contract’s interest provisions. The
court should take note that the interest payments ceased as of July 2010, per the terms of the land
contract and the parties did not enter into a written agreement to extend the interest payments
beyond that point. Additionally, because Kristine has failed to identify any evidence of a written
modification regarding the Deyos’ duty to pay the transfer taxes for the final 16 lots, that amount
should be subtracted from the final amount due on the land contract.

        Reversed and remanded for further proceedings consistent with this opinion. Neither
party having prevailed in full, neither may tax costs. MCR 7.219(A). Jurisdiction is not
retained.

                                                              /s/ Patrick M. Meter
                                                              /s/ Stephen L. Borrello
                                                              /s/ Jane M. Beckering

1
  Given our resolution of this issue, we need not address appellant’s argument concerning the
admissibility of Ken’s and Schimmel’s out of court statements.

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