Court Opinion

ID: 8406332
Source: CourtListenerOpinion
Date Created: 2022-10-28 06:06:38.305177+00
Date Added: 2024-06-11T16:47:11.638445
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

MD HOLDINGS, LLC, JOHN ALESI, JEREMY                                    UNPUBLISHED
STEINER, and EVERWORKS, INC.,                                           October 27, 2022

                Plaintiffs-Appellants/Cross-Appellees,

v                                                                       No. 357462
                                                                        Oakland Circuit Court
R. L. DEPPMANN COMPANY,                                                 LC No. 2020-181300-CB

                Defendant-Appellee/Cross-Appellant,

and

LEE & ASSOCIATES OF MICHIGAN, LLC, and
LARRY KELLY,

                Defendants.

Before: RONAYNE KRAUSE, P.J., and JANSEN and MURRAY, JJ.

PER CURIAM.

        In this dispute arising out of the sale of commercial real estate, plaintiffs challenge the trial
court order granting summary disposition in favor of defendant R. L. Deppmann Company.1
Defendant filed a cross-appeal challenging the trial court’s failure to award it costs and attorney
fees as sanctions. We affirm.

                      I. FACTUAL AND PROCEDURAL BACKGROUND

        In 2018, plaintiffs were seeking suitable commercial property in which to conduct business.
Plaintiffs learned of the subject commercial property in Southfield, which was owned by

1
  In a separate order, the trial court dismissed defendants Lee & Associates and Larry Kelly.
Plaintiffs do not challenge that order on appeal. Because defendants Lee & Associates and Kelly
are not involved in this appeal, we will refer to R. L. Deppmann Company as “defendant.”

                                                  -1-
defendant. On April 30, 2018, the parties entered into a purchase agreement, which was subject
to two amendments. Of significance, the agreement contained the following provisions:

              15. It is understood that the Property is being purchased in its present
       condition and that it will be delivered by the Seller to the Purchaser in substantially
       the same condition as when this Agreement was made reasonable wear and tear and
       damage by the elements excepted.

       ADDITIONAL CONDITIONS:

              16. Purchaser shall have a period (“Inspection Period”) of (60) days from
       the Date of this Agreement to inspect the Property and to satisfy, in Purchaser’s
       sole and absolute discretion, the following conditions:

              a) The obtaining by Purchaser of a satisfactory commitment for mortgage
       financing in such amount and containing such terms and provisions as are
       acceptable to Purchaser.

              b) Purchaser’s satisfaction with all aspects of the physical and structural
       condition of the Property.

              c) Purchaser’s satisfaction with the present zoning of the Property and
       obtaining all governing entities[’] approval to use the property for its intended use.

              d) Purchaser’s obtaining and being satisfied with the results of a Phase I
       Environmental Assessment of the Property.

                                              * * *

              23.    Survival of Representation and Warranties: The representations
       and warranties as set forth in this Agreement shall be continuing and survive the
       Closing.

                                              * * *

                28.     No Knowledge of Proceedings: Seller represents and warrants that
       it has no knowledge of any judicial or administrative proceedings pending or
       threatened against the real estate and Seller is not aware of any facts which might
       result in an action, suit or other proceedings.

                                              * * *

               37.    “As-is” Condition. Purchaser warrants and acknowledges to, and
       agrees with, Seller that Purchaser is a sophisticated purchaser, has a 60 day
       inspection period to satisfy itself, and that Purchaser is purchasing the Property “AS
       IS”, “WHERE IS” and “WITH ALL FAULTS” with no right of set-off or reduction
       in the Purchase Price.

                                                -2-
In the second amendment, the parties agreed to, among other things, an additional two-week
inspection period beyond the 60-day inspection period to address the environmental and appraisal
contingencies. Notably, plaintiffs also expressly agreed that they were “satisfied with all other
conditions of the property.” The parties closed on the sale of the property on July 26, 2018.

        After plaintiffs purchased the property, they encountered difficulty obtaining an occupancy
permit for the premises, principally because the physical state of the property did not match the
approved site plan with the city. For instance, the approved site plan from 1980 showed that the
property had 26 parking spots and approximately 4,000 square feet of office space, but the property
actually had 45 parking spots and approximately 6,000 square feet of office space. The differences
were attributable to improvements that were previously made without obtaining permits or
approvals from the city of Southfield. Plaintiffs’ lawsuit was premised on defendant knowing
about these nonconformances and not disclosing them.

        In lieu of filing an answer, defendant moved for summary disposition under MCR
2.116(C)(8) or MCR 2.116(C)(10). The trial court granted the motion. With respect to the breach-
of-contract claim, the court concluded that there was no evidence that defendant was aware of any
facts at the time of the sale that might result in an action, suit, or other proceedings. Although
defendant’s representatives currently recognized that the 1980 site plan differed from the present-
day physical appearance of the property, they denied being aware that any changes to the property
were made without the city’s approval. The trial court also dismissed plaintiffs’ tort claims
because they were barred by the economic-loss doctrine. In other words, the court ruled that
plaintiffs failed to allege any fraud or misrepresentations that were factually distinguishable from
their breach-of-contract claims. The trial court also concluded that because there were no valid
underlying torts, plaintiffs’ claim of civil conspiracy also failed.

                                     II. PLAINTIFFS’ APPEAL

       Plaintiffs challenge the trial court’s grant of summary disposition in favor of defendant on
most of their claims.2 We review a trial court’s decision on a motion for summary disposition de
novo. Odom v Wayne Co, 482 Mich 459, 466; 760 NW2d 217 (2008).

                               A. BREACH-OF-CONTRACT CLAIM

       Plaintiffs argue that the trial court erred by granting summary disposition in favor of
defendant on their breach-of-contract claim. We disagree.

        Although defendant’s motion for summary disposition was brought under both MCR
2.116(C)(8) and MCR 2.116(C)(10), because the parties relied on materials outside the pleadings,
the trial court granted the motion with respect to the breach-of-contract count under MCR
2.116(C)(10). See Silberstein v Pro-Golf of America, Inc, 278 Mich App 446, 457; 750 NW2d
615 (2008) (“Where a motion for summary disposition is brought under both MCR 2.116(C)(8)
and (C)(10), but the parties and the trial court relied on matters outside the pleadings, . . . MCR
2.116(C)(10) is the appropriate basis for review.”). “A motion under MCR 2.116(C)(10) tests the

2
    Plaintiffs do not challenge the dismissal of their breach-of-warranty claim in Count II.

                                                  -3-
factual sufficiency of the complaint.” Maiden v Rozwood, 461 Mich 109, 120; 597 NW2d 817
(1999). “In evaluating such a motion, a court considers the entire record in the light most favorable
to the party opposing the motion, including affidavits, pleadings, depositions, admissions, and
other evidence submitted by the parties.” Corley v Detroit Bd of Ed, 470 Mich 274, 278; 681
NW2d 342 (2004). A motion under MCR 2.116(C)(10) is properly granted if there are no genuine
issues of material fact and the moving party is entitled to judgment as a matter of law. Michalski
v Bar-Levav, 463 Mich 723, 730; 625 NW2d 754 (2001).

       Plaintiffs’ breach-of-contract claim is based on a purported violation of ¶ 28 of the
purchase agreement, which states:

                28.     No Knowledge of Proceedings: Seller represents and warrants that
       it has no knowledge of any judicial or administrative proceedings pending or
       threatened against the real estate and Seller is not aware of any facts which might
       result in an action, suit or other proceedings.

Plaintiffs aver that defendant breached this portion because it failed to disclose facts of which it
was aware that might result in an action, suit, or other proceedings. In particular, plaintiffs contend
that Robert Schmitt, defendant’s vice president of finance, knew as of 2011 that the parking lot
did not conform to the 1980 site plan, which directly contradicts defendant’s assertion in ¶ 28 that
it possessed no such knowledge.3

         There is no factual dispute that the most current, approved site plan is the 1980 site plan.
There also is no dispute that this site plan calls for approximately 30 parking spots on the property.4
Further, there is no dispute that at the time of the sale in 2018, the parking lot actually had 45
parking spots. The parties agree that, at some point, defendant had the extra parking spots added
without obtaining approval from Southfield. However, it is unknown when this revision to the
parking lot occurred. Jan MacDonald, who had been an employee of defendant since 1978,
testified that she was aware that some changes occurred in the north parking lot, but it did not seem
that its condition changed much at all. Indeed, MacDonald thought that the essential condition of
the lot had remained the same since 1980. Finally, there is no dispute that no one ever informed
plaintiffs about any such discrepancies before the sale closed.

3
  The parties have accepted that having knowledge of a condition of the property that differs from
an approved site plan could result in an action, suit, or other proceedings. Because no party has
taken a contrary view, we will accept this premise for purposes of this issue.
4
  Although Schmitt testified that he counted 31 spots on the site plan, the plan itself states that
there are “26” spots. The scanned copy of this 1980 document is not clear and difficult to read.
Indeed, it appears from our review of the document that there may be 29 parking spots (12 in the
southern lot and 17 in the northern lot—one row of six, one row of eight, and an extra three abutting
the northern property line). Regardless, it is undisputed that the 1980 site plan contains
substantially less parking spaces than are currently in existence.

                                                 -4-
       Plaintiffs argue that there is a factual dispute regarding whether Schmitt had knowledge of
the property’s discrepancies from the approved site plan. Schmitt denied knowing that there were
any discrepancies until this lawsuit was filed. He explained that the property remained unchanged
during his entire time with the company.5 The main evidence on which plaintiffs rely to contradict
Schmitt’s asserted lack of knowledge is a May 25, 2011 e-mail Schmitt received from the city of
Southfield that contained as attachments the 1980 site plan and an aerial photograph of the
premises.

        In 2011, Schmitt was responsible for a project that involved tearing up, repaving, and
restriping defendant’s entire parking lot. Because Schmitt thought that the project would require
the pulling of permits, he inquired of the contractor, Alan’s Asphalt, to ensure that permits were
pulled. Although Schmitt did not recall asking MacDonald to do any work on facilitating the
obtaining of a permit, MacDonald received an e-mail from Sarah Mulally, Southfield’s Senior
Planner in the Planning Department, on May 24, 2011, at 3:01 p.m. Mulally’s e-mail contained
no message in the body of the e-mail, but denoted “site plan & aerial photograph” in the subject
line. The e-mail contained two attachments—one was a scanned copy of the 1980 site plan, and
the other was a current aerial view of the premises.

       At 3:04 p.m., and with no explanatory text, McDonald forwarded the e-mail and
attachments to Schmitt, and at 3:20 p.m., Schmitt forwarded the e-mail and attachments to Chuck
Chambers, a representative of Alan’s Asphalt. Schmitt stated in his e-mail:

              Attached are the plans the City of Southfield sent over to us in the event that
       they would be of any use when you talk to them.

        At his deposition, Schmitt acknowledged that having now examined the aerial photograph
from the 2011 e-mail and the 1980 site plan, he could see there were differences between the two
documents. Most identifiable was the difference in the number of parking spots, with the current
situation exceeding the amount specified in the site plan. But Schmitt maintained that he was not
aware at the time of the sale of any discrepancies between the two versions.

        The trial court properly ruled that there was no evidence to show that Schmitt was aware
of any facts at the time of the sale that might result in an action, suit, or other proceeding. Although
it was undisputed that Schmitt had received a copy of the site plan and a conflicting aerial
photograph in 2011, he testified that he did not notice any discrepancies between the documents.
And importantly, it is evident that any discrepancies between the two documents were not readily
identifiable. Indeed, with the poor quality of the site plan that was contained in the e-mail, it is
difficult to see how anything of substance could have been gleaned from it. For instance, the text
on the left side of the site plan stating the number of parking spots is wholly illegible, and the area
to the right (or north) is washed out, removing any detail, making it virtually impossible to have
been able to count all the parking spots, especially the extra three along the north property line that
plaintiffs’ counsel brought to Schmitt’s attention during his deposition. Importantly, it is this

5
  It is unclear from the record when Schmitt started working for defendant, but it appears from the
testimony of other witnesses that he started at the company sometime between 2004 and 2009.

                                                  -5-
precise document that Schmitt received in 2011, and not any of the other, clearer site plans that
have been submitted in this action.

         Moreover, assuming that the site plan provided to Schmitt in 2011 was legible, plaintiffs
have not offered any evidence to show that Schmitt noticed any discrepancies. Schmitt testified
that he had asked Alan’s Asphalt to procure the necessary permits for the job. Schmitt’s e-mail to
Chuck Chambers at Alan’s Asphalt is consistent with that goal. When Schmitt forwarded the e-
mail to Alan’s Asphalt, just 16 minutes after receiving it himself,6 he stated, “Attached are the
plans the City of Southfield sent over to us in the event that they would be of any use when you
talk to them.”7 (Emphasis added.) This does not show that any serious analysis of the documents
took place and instead just shows that he forwarded them in case Alan’s Asphalt needed them.
Also, none of the e-mail communications from Mulally to MacDonald, or from MacDonald to
Schmitt, mentioned or expressed any concern about any deviations from what was shown in the
aerial photograph and what was specified in the site plan. In short, there is no evidence to show
that Schmitt was aware of any such discrepancies. Merely showing that Schmitt had possession
of the potentially conflicting documents is not enough. While this might be sufficient if the
discrepancies were obvious or patent upon observation, that is not the case with this drawing and
photograph. One has to meticulously examine and compare the documents to discern any
differences; the differences are not apparent upon casual inspection. And there is nothing to
suggest that Schmitt had engaged in anything other than a casual review of the e-mail. Indeed,
had we not known from Mulally’s September 19, 2018 e-mail to plaintiffs that the altered parking

6
  Although Schmitt forwarded the e-mail to Alan’s Asphalt 16 minutes after it was received by
him, it is unknown when Schmitt actually opened the e-mail.
7
  Plaintiffs suggest that Schmitt could not have asked Alan Asphalt’s to procure the permit because
the contract between Alan Asphalt’s and defendant purportedly specified that obtaining the permit
was defendant’s responsibility. But even if such a term existed in their contract, it would not
preclude Schmitt from still asking Alan Asphalt to obtain the permit. At the trial court, plaintiffs
also submitted in response to defendant’s motion for summary disposition an e-mail from Chuck
Chambers to plaintiffs’ counsel in which Chambers stated, “We were not involved in the permit
process and do not recognize, and we were not privy to, anything you provided on this site map or
permit. Permits would have been obtained by RL Deppmann, per our contract general conditions.”
However, this response cannot be considered when ruling on a motion for summary disposition.
It involves Chambers’s direct response to questions posed by plaintiffs’ counsel, and it is not an
affidavit. MCR 2.116(G)(4) provides that when responding to a motion brought under MCR
2.116(C)(10), the opposing party must “by affidavits or as otherwise provided in this rule, set forth
specific facts showing that there is a genuine issue for trial.” Therefore, unsworn statements by a
nonparty made to a party’s attorney, in response to that attorney’s questions, are not properly
considered. See Gorman v American Honda Motor Co, Inc, 302 Mich App 113, 120; 839 NW2d
223 (2013); Liparoto Constr, Inc v Gen Shale Brick, Inc, 284 Mich App 25, 33; 772 NW2d 801
(2009); Marlo Beauty Supply, Inc v Farmers Ins Group of Cos, 227 Mich App 309, 321; 575
NW2d 324 (1998).

                                                -6-
lot had been “cut” into the landscaping at some point, it is doubtful that we would have noticed
that detail.8

        There is also another barrier to plaintiffs’ breach-of-contract claim succeeding. The claim
is based on defendant having knowledge of facts that “might result in an action, suit or other
proceedings.” It is acknowledged that in conjunction with the repaving project in 2011, a permit
was indeed pulled. While it is not clear who actually communicated with the city to obtain it, a
permit nonetheless was obtained. Under the work description, the permit stated, among other
things, “Final Inspection Required.”9 Because the permit was issued by the city and the work was
completed, it is presumed that the final inspection did indeed occur since it was “required.” There
is no evidence of any issues being raised as a result of that inspection. Thus, no one at defendant
company would have had any reason to think that anything was amiss with the present
configuration of the parking lot. Put another way, even if someone knew that there was a
discrepancy between the site plan and the actual configuration of the parking lot, when the property
passed inspection after the 2011 project, a reasonable person would presume that any discrepancies
were acceptable to the city and would not “result in an action, suit or other proceedings.”

        Therefore, with no evidence that Schmitt, or anyone else at defendant company, was aware
of any discrepancies between the approved 1980 site plan and the condition of the property at the
time of its sale, plaintiffs’ breach-of-contract claim based on defendant’s alleged breach of ¶ 28 of
the purchase agreement fails, and the trial court did not err by granting defendant summary
disposition on this count.

        We disagree with plaintiffs’ argument that summary disposition was improper because it
was premature. Because plaintiffs never raised this argument in the trial court, it is unpreserved.
See Glasker-Davis v Auvenshine, 333 Mich App 222, 227; 964 NW2d 809 (2020). Unpreserved
issues are reviewed for plain error affecting substantial rights. See Veltman v Detroit Edison Co,
261 Mich App 685, 690; 683 NW2d 707 (2004). “ ‘To avoid forfeiture under the plain error rule,
three requirements must be met: 1) the error must have occurred, 2) the error was plain, i.e., clear
or obvious, 3) and the plain error affected substantial rights.’ ” Kern v Blethen-Coluni, 240 Mich
App 333, 336; 612 NW2d 838 (2000) (citation omitted).

        “Generally, a motion for summary disposition is premature if granted before discovery on
a disputed issue is complete. However, summary disposition may nevertheless be appropriate if
further discovery does not stand a reasonable chance of uncovering factual support for the
opposing party’s position.” Peterson Novelties, Inc v City of Berkley, 259 Mich App 1, 24-25; 672
NW2d 351 (2003) (citations omitted).

        Plaintiffs have not shown any plain error. Importantly, they never argued in the trial court
that the motion was premature and that it should be denied on that basis. Indeed, plaintiffs took

8
  Even then, it is difficult to identify all of the “cut[ting]” area, which appears to be along the
eastern edge of the northern lot.
9
 Schmitt testified that the project was to repave the parking lot, but with the same striping and
configuration that existed before.

                                                -7-
the position that “Schmitt’s deposition transcript alone defeats [defendant’s] instant Motion on
(C)(10) grounds, let alone when combined with Plaintiffs’ supporting documentary evidence,
attached hereto.” Thus, given plaintiffs’ position, the trial court did not err by failing to sua sponte
address whether there was a reasonable chance that further discovery would uncover factual
support for plaintiffs’ position. See also Blazer Foods, Inc v Restaurant Props, Inc, 259 Mich App
241, 252; 673 NW2d 805 (2003) (“ ‘A party may not take a position in the trial court and
subsequently seek redress in an appellate court that is based on a position contrary to that taken in
the trial court.’ ”) (citation omitted).

        Moreover, plaintiffs have not shown that there was a reasonable chance that further
discovery would uncover factual support for their position. Plaintiffs aver that it was likely that
other officers of defendant company, including Norm Hall, would have known that the existing
condition of the premises was not compliant with the approved site plan. But plaintiffs do not cite
any evidence or testimony to explain why individuals like Hall would have possessed such
knowledge. Merely being an officer in the company, or being involved in the marketing of the
property for sale, is inadequate to show that there was a “reasonable chance” that the person would
have known about any noncompliance issues. In any event, as already discussed, there was
evidence that the parking lot had been in its present state since the 1980s.10 Additionally, with the
city of Southfield not lodging any complaints or objections after conducting a final inspection after
the conclusion of the 2011 repaving and restriping permitted project, it is highly unlikely that
anyone in 2018, the time of the sale, would have thought there were any facts that would give rise
to any potential “action, suit or other proceedings.”

     Accordingly, the trial court did not err by failing to sua sponte deny defendant’s motion for
summary disposition on the basis that discovery had not yet been completed.

                                         B. TORT CLAIMS

      Plaintiffs argue that the trial court erred by dismissing their tort claims on the basis of the
economic-loss doctrine.

        The trial court granted summary disposition in favor of defendant on plaintiffs’ tort claims
(Counts III-VI)11 under MCR 2.116(C)(8), relying on the economic-loss doctrine. “A motion for
summary disposition brought under MCR 2.116(C)(8) tests the legal sufficiency of the complaint
on the basis of the pleadings alone. The purpose of such a motion is to determine whether the
plaintiff has stated a claim upon which relief can be granted. The motion should be granted if no
factual development could possibly justify recovery.” Beaudrie v Henderson, 465 Mich 124, 129-
130; 631 NW2d 308 (2001).

10
   Plaintiffs’ own communication to Southfield even acknowledges that the parking lot had been
in this very state for “more than twenty-five (25) years.”
11
   The counts were fraudulent misrepresentation, silent fraud, negligent misrepresentation, and
innocent misrepresentation.

                                                  -8-
        “The economic loss doctrine provides that where a purchaser’s expectations in a sale are
frustrated because the product he bought is not working properly, his remedy is said to be in
contract alone, for he has suffered only economic losses.” Sherman v Sea Ray Boats, Inc, 251
Mich App 41, 43-44; 649 NW2d 783 (2002) (emphasis added, quotation marks and citation
omitted). The doctrine “bars tort recovery and limits remedies to those available under the
Uniform Commercial Code where a claim for damages arises out of the commercial sale of goods
and losses incurred are purely economic.” Neibarger v Universal Coops, Inc, 439 Mich 512, 515;
486 NW2d 612 (1992) (emphasis added).

        This doctrine does not apply to the instant case, which does not involve the sale of goods.
See MCL 440.2105(1) (defining “goods” as “all things . . . which are movable at the time of
identification to the contract for sale”). The property involved in this case is commercial real estate
that is not movable. Therefore, the trial court erred by relying on this doctrine, in name, in
dismissing plaintiffs’ claims. Notably, however, although defendant cited the “economic-loss
doctrine” in its motion for summary disposition, it relied in part on our Supreme Court’s decision
in Hart v Ludwig, 347 Mich 559; 79 NW2d 895 (1956).12 In Hart, the Court held: “As a general
rule, there must be some active negligence or misfeasance to support a tort. There must be some
breach of duty distinct from breach of contract.” Id. at 563 (emphasis added). “[T]he threshold
inquiry is whether the plaintiff alleges violation of a legal duty separate and distinct from the
contractual obligation.” Rinaldo’s Constr Corp v Mich Bell Tel Co, 454 Mich 65, 84; 559 NW2d
647 (1997). Further, in arguing for and against the motion, both parties focused on whether
defendant had a separate and distinct duty apart from any contractual obligation. Thus, the
erroneous use of the term “economic-loss doctrine” is not itself controlling. See Adams v Adams
(On Reconsideration), 276 Mich App 704, 710-711; 742 NW2d 399 (2007).

          For plaintiffs’ three misrepresentation claims, they alleged that defendant

          materially misrepresented . . . that the Property had 6,000 square feet of compliant
          office space, that the Property possessed forty-five compliant parking spaces, that
          the Property could accommodate forty-five cars as-built, that the Property was
          ordinance-compliant, and that no occupancy permit would be required for Plaintiffs
          to use and occupy the Property.

Plaintiffs also alleged that these representations were false and that plaintiffs relied on them in
purchasing the property.

      When defendant moved for summary disposition, it did not challenge the sufficiency of the
complaint with respect to any of the elements of fraudulent misrepresentation,13 negligent

12
     Nowhere in Hart did the Court use the terms “economic” or “loss.”
13
     The elements of fraudulent misrepresentation are:
          “(1) the defendant made a material misrepresentation; (2) the representation was
          false; (3) when the defendant made the representation, the defendant knew that it
          was false, or made it recklessly, without knowledge of its truth as a positive

                                                  -9-
misrepresentation,14 or innocent misrepresentation.15 Instead, defendant simply argued that such
tort actions cannot be sustained because plaintiffs failed to allege that any representation was
“extraneous” to any promises in the contract. We agree. Plaintiffs assert that their
misrepresentation claims all alleged that misrepresentations were made before the execution of the
purchase agreement,16 and that these (false) representations induced plaintiffs to enter into the
agreement. Indeed, claims of fraudulent inducement are considered “extraneous” to contractual
promises. See Huron Tool & Engineering Co v Precision Consulting Servs, Inc, 209 Mich App
365, 373; 532 NW2d 541 (1995) (“ ‘Such fraud [not fraud in the inducement] is not extraneous to
the contractual dispute among the parties . . . . This did not induce the plaintiffs to enter into the
original agreement nor did it induce them to enter into additional undertakings.’ ”) (citation
omitted); cf. id. at 371 (“[C]ourts generally have distinguished fraud in the inducement as the only
kind of fraud claim not barred by the economic loss doctrine.”); id. (“ ‘Fraud in the inducement,
however, addresses a situation where the claim is that one party was tricked into contracting. It is
based on pre-contractual conduct which is, under the law, a recognized tort.’ ”) (citation omitted).

        “However, a claim of fraud in the inducement, by definition, redresses misrepresentations
that induce the buyer to enter into a contract but that do not in themselves constitute contract or
warranty terms subsequently breached by the seller.” Id. at 375. Plaintiff’s allegations regarding
ordinance compliance and occupancy permits specifically relate to the warranties in the contract
under paragraph 16(c) (“Purchaser’s satisfaction with the present zoning of the Property and
obtaining all governing entities[’] approval to use the property for its intended use.”). Plaintiff’s

       assertion; (4) the defendant made the representation with the intention that the
       plaintiff would act upon it; (5) the plaintiff acted in reliance upon it; and (6) the
       plaintiff suffered damage.” [Bergen v Baker, 264 Mich App 376, 382; 691 NW2d
       770 (2004) (citations omitted).]
14
  “A claim for negligent misrepresentation requires plaintiff to prove that a party justifiably relied
to his detriment on information prepared without reasonable care by one who owed the relying
party a duty of care.” Unibar Maintenance Servs, Inc v Saigh, 283 Mich App 609, 621; 769 NW2d
911 (2009) (quotation marks and citation omitted).
15
   The elements of innocent misrepresentation are similar to fraudulent misrepresentation.
However, innocent misrepresentation does not require proof of a fraudulent purpose or an intent
on the part of the defendant that the misrepresentation be acted upon by the plaintiff. M&D, Inc v
WB McConkey, 231 Mich App 22, 28; 585 NW2d 33 (1998). And it has the added elements that
“an unintendedly false representation was made in connection with the making of a contract and
that the injury suffered as a consequence of the misrepresentation inure to the benefit of the party
making the misrepresentation.” Id. “Finally, in order to prevail on an innocent misrepresentation
claim, a plaintiff must also show that the plaintiff and defendant were in privity of contract.” Id.
16
   Although the complaint alleged that these misrepresentations occurred before closing, because
all well-pleaded factual allegations are to be construed in a light most favorable to the nonmovant,
Mays v Governor, 323 Mich App 1, 56; 916 NW2d 221 (2018), aff’d 506 Mich 157 (2020), and
because the time before the agreement was executed necessarily is a subpart of the time before
closing, the allegations can be considered as alleging preagreement conduct.

                                                -10-
allegations regarding the square footage and number of parking spaces were based on a unilateral
mistake of defendant’s, as discussed above. A unilateral mistake is insufficient to modify or
reform a previously negotiated agreement. Casey v Auto Owners Ins Co, 273 Mich App 388, 398;
729 NW2d 277 (2006); Hilley v Hilley, 140 Mich App 581, 585-586; 364 NW2d 750 (1985).
Moreover, “there cannot be any fraud if the party allegedly defrauded had the means to determine
for him- or herself the truth of the matter.” Alfieri v Bertorelli, 295 Mich App 189, 194-195; 813
NW2d 772 (2012). This rule is not absolute, but rather, applies when the plaintiffs “were either
presented with the information and chose to ignore it or had some other indication that further
inquiry was needed.” Id. at 195 (quotation marks and citation omitted). Here, plaintiffs had access
to the 1980 site plan. Plaintiffs could have discovered the discrepancies in square footage and
parking spaces.

        Therefore, because the misrepresentation claims alleged in Counts III, V, and VI do not
allege conduct extraneous to the contractual obligations, the trial court properly dismissed the
claims under MCR 2.116(C)(8) on the basis that they were indistinguishable from the contract
claims.

        The dissent concludes that summary disposition of plaintiff’s innocent and negligent
misrepresentation claims is improper based on an owner’s affidavit executed by defendant’s
president for the purpose of obtaining title insurance. Although not addressed by the dissent, the
purchase agreement included a “commitment for title policy” clause, requiring defendant to deliver
to plaintiffs “a complete commitment for a policy of title insurance issued by First American”
within 15 days of the execution of the purchase agreement. Thus, the owner’s affidavit is
incorporated by reference into the purchase agreement. See Forge v Smith, 458 Mich 198, 207;
580 NW2d 876 (1998) (“Where one writing references another instrument for additional contract
terms, the two writings should be read together.”)

         As part of the purchase agreement, our analysis regarding the owner’s affidavit remains
the same. The owner’s affidavit warranted that “the use of the Property is in compliance with all
terms, conditions, covenants and/or restrictions affecting the Property . . . and there are currently
no violations of any terms, conditions, covenants and/or restrictions affecting the property[.]” This
is the same as the warranties provided in the purchase agreement, and therefore not extraneous to
the contractual promises. Again, plaintiffs could have obtained the 1980 site plan from the city to
discover any discrepancies. The purchase agreement provided plaintiffs with 60 days to conduct
due diligence and ensure that zoning was proper, and stated that the property was sold “as is.” “An
‘as is’ clause in the parties’ contract constitutes persuasive evidence that the purchaser assumed
the risk of loss.” Coosard v Tarrant, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket No.
357950); slip op at 7. The amendment to the purchase agreement extended the due-diligence
period by two weeks for environmental and appraisal issues, but otherwise stated that plaintiffs
were “satisfied with all other conditions of the property.” Despite the assertion of plaintiff’s
counsel at oral argument, the purchase agreement provided that it was between sophisticated
parties. The owner’s affidavit was not signed until July 26, 2018, the same day as closing. Thus,
based on these facts, plaintiffs could not have reasonably relied on the owner’s affidavit, and their
claims for innocent and negligent misrepresentation still fail. See Foreman v Foreman, 266 Mich
App 132, 142; 701 NW2d 167 (2005) (reliance must be reasonable).

                                                -11-
      Plaintiffs also alleged a tort claim for silent fraud (Count IV). Plaintiffs alleged in their
complaint that defendants had a legal duty to disclose that

       the Property’s square feet was approved by Southfield, that the Property did not in
       fact possess forty-five compliant parking spaces, that the Property could not in fact
       accommodate forty-five cars as-built, that the Property was not in fact ordinance-
       compliant, and that an occupancy permit would in fact be required for Plaintiffs to
       use and occupy the Property.

Plaintiffs also alleged that despite having this legal duty to disclose, defendant did not make the
disclosures, which in turn induced plaintiffs to purchase the property. Plaintiffs asserted that the
failure to disclose was misleading because of defendant’s representation that there were no known
facts that would lead to an action, suit, or other proceedings.

       In order to maintain an action for silent fraud, the plaintiff must show that the
       defendant suppressed the truth with the intent to defraud the plaintiff and that the
       defendant had a legal or equitable duty of disclosure. . . . Thus, while duty is
       irrelevant in a fraud claim, it is relevant in a silent fraud claim and in order for the
       suppression of information to constitute silent fraud there must exist a legal or
       equitable duty of disclosure. [Barclae v Zarb, 300 Mich App 455, 477-478; 834
       NW2d 100 (2013) (quotation marks, citations, and brackets omitted).]

        Summary disposition was proper on this count because there is no duty independent from
the contract to disclose. “Questions about whether a duty exists are for the courts to decide as a
matter of law.” Graves v Warner Bros, 253 Mich App 486, 492; 656 NW2d 195 (2002). The
general rule of caveat emptor prevails in land sale agreements, which provides that there is no
general duty to disclose. See Christy v Glass, 415 Mich 684, 695 n 7; 329 NW2d 748 (1982).17
The only source for such a duty would be the parties’ contract. Indeed, plaintiffs’ complaint for
this count mirrored the language from ¶ 28 of the purchase agreement, in which defendant
represented that it was not aware of any facts that would lead to “an action, suit or other
proceedings.” Consequently, with no independent duty to disclose, apart from any contractual
obligation, this tort claim must fail. See Rinaldo’s, 454 Mich at 84 (“[T]he threshold inquiry is
whether the plaintiff alleges violation of a legal duty separate and distinct from the contractual
obligation.”); Hart, 347 Mich at 563 (“There must be some breach of duty distinct from breach of
contract.”). Therefore, the trial court properly granted defendant’s motion for summary disposition
on this count.

17
   Although not applicable here, the Seller Disclosure Act (SDA), MCL 565.951 et seq., modified
this common law, but only with respect to the sale of residential property. See MCL 565.952. The
property at issue in this case is commercial, not residential, so the SDA does not apply.

                                                -12-
                                C. CIVIL-CONSPIRACY CLAIM

       Plaintiffs also argue that the trial court erred by dismissing their claim for civil conspiracy
because there were valid, underlying torts. Given our resolution of plaintiffs’ other issues, we
disagree.

        “A civil conspiracy is a combination of two or more persons, by some concerted action, to
accomplish a criminal or unlawful purpose, or to accomplish a lawful purpose by criminal or
unlawful means.” Admiral Ins Co v Columbia Cas Ins Co, 194 Mich App 300, 313; 486 NW2d
351 (1992). But “[l]iability does not arise from a civil conspiracy alone; rather, it is necessary to
prove a separate, actionable tort.” Swain v Morse, 332 Mich App 510, 530 n 13; 957 NW2d 396
(2020) (quotation marks and citation omitted); see also Advocacy Org for Patients & Providers v
Auto Club Ins Ass’n, 257 Mich App 365, 384; 670 NW2d 569 (2003), aff’d 472 Mich 91 (2005).
The trial court relied on this latter principle to dismiss the civil-conspiracy count. Because the
court had previously determined that all of plaintiffs’ other tort claims were not viable, it held that
the claim of civil conspiracy must fail as well. Based on our previous discussion, we agree.
Plaintiffs’ tort claims were properly dismissed under MCR 2.116(C)(8) because there were no
other underlying torts.

                              III. DEFENDANT’S CROSS-APPEAL

        Defendant argues on cross-appeal that the trial court erred by failing to award it sanctions
for plaintiffs’ purportedly frivolous complaint. We disagree.

       On appeal, defendant argues that sanctions were warranted under MCR 1.109(E), MCR
2.625(A), and MCL 600.5961. MCR 1.109(E) provides, in pertinent part:

             (5) Effect of Signature. The signature of a person filing a document,
       whether or not represented by an attorney, constitutes a certification by the signer
       that:

               (a) he or she has read the document;

               (b) to the best of his or her knowledge, information, and belief formed after
       reasonable inquiry, the document is well grounded in fact and is warranted by
       existing law or a good-faith argument for the extension, modification, or reversal
       of existing law; and

               (c) the document is not interposed for any improper purpose, such as to
       harass or to cause unnecessary delay or needless increase in the cost of litigation.

              (6) Sanctions for Violation. If a document is signed in violation of this rule,
       the court, on the motion of a party or on its own initiative, shall impose upon the
       person who signed it, a represented party, or both, an appropriate sanction, which
       may include an order to pay to the other party or parties the amount of the
       reasonable expenses incurred because of the filing of the document, including
       reasonable attorney fees. The court may not assess punitive damages.

                                                 -13-
              (7) Sanctions for Frivolous Claims and Defenses. In addition to sanctions
       under this rule, a party pleading a frivolous claim or defense is subject to costs as
       provided in MCR 2.625(A)(2). The court may not assess punitive damages.

Thus, under MCR 1.109(E)(6), sanctions are appropriate when, among other things, the party had
no reasonable basis to believe that the facts underlying the party’s legal position were true or the
party’s legal position was devoid of arguable legal merit. See also Ford Motor Co v Dep’t of
Treasury, 313 Mich App 572, 589; 884 NW2d 587 (2015).

       And MCR 2.625(A)(2) provides:

               In an action filed on or after October 1, 1986, if the court finds on motion
       of a party that an action or defense was frivolous, costs shall be awarded as provided
       by MCL 600.2591.

In turn, MCL 600.2591 provides:

                (1) Upon motion of any party, if a court finds that a civil action or defense
       to a civil action was frivolous, the court that conducts the civil action shall award
       to the prevailing party the costs and fees incurred by that party in connection with
       the civil action by assessing the costs and fees against the nonprevailing party and
       their attorney.

               (2) The amount of costs and fees awarded under this section shall include
       all reasonable costs actually incurred by the prevailing party and any costs allowed
       by law or by court rule, including court costs and reasonable attorney fees.

               (3) As used in this section:

               (a) “Frivolous” means that at least 1 of the following conditions is met:

              (i) The party’s primary purpose in initiating the action or asserting the
       defense was to harass, embarrass, or injure the prevailing party.

               (ii) The party had no reasonable basis to believe that the facts underlying
       that party’s legal position were in fact true.

               (iii) The party’s legal position was devoid of arguable legal merit.

               (b) “Prevailing party” means a party who wins on the entire record.

        Defendant glosses over the fact that it never moved for the imposition of sanctions against
plaintiff under these rules. MCR 1.109(E)(7) relates to sanctions for frivolous claims and
incorporates MCR 2.625(A)(2), which in turn conditions the award of such sanctions on (1) a party

                                               -14-
filing a motion, and (2) the court finding that the action or defense was frivolous.18 Neither of
these things occurred.

       Instead of filing a dedicated motion for the award of attorney fees, defendant made two
references to the recovery of attorney fees in its motion for summary disposition. The first
occurred in its introduction:

       Furthermore, given Plaintiffs’ bad faith, the Court should award [defendant] the
       costs and fees it has been forced to incur in defendant against Plaintiffs’ meritless
       lawsuit.

The other reference occurred in the conclusion:

       For the all foregoing reasons, [defendant] respectfully requests that the Court issue
       an order granting its Motion, thereby dismissing Plaintiffs’ Complaint in its
       entirety, and awarding [defendant] its costs and fees and all other relief that is just
       and proper.

        Without a separate motion, defendant failed to properly invoke any request for sanctions
under MCR 1.109(E), MCR 2.625(A)(2), or MCL 600.2591. Accordingly, the trial court did not
err by failing to sua sponte address the issue.

         Additionally, assuming a party could request sanctions through a different motion, what
defendant “raised” in its motion for summary disposition was wholly inadequate to present the
issue to the trial court. Defendant cited no authority whatsoever for its request for costs and
attorney fees. This is contrary to MCR 2.119, which governs motion practice and provides that
motions are to “state with particularity the grounds and authority on which it is based.” MCR
2.119(A)(1)(b). Additionally, Michigan follows the “American rule” with respect to an award of
attorney fees and costs. Haliw v Sterling Hts, 471 Mich 700, 706; 691 NW2d 753 (2005). “Under
the American rule, attorney fees generally are not recoverable from the losing party as costs in the
absence of an exception set forth in a statute or court rule expressly authorizing such an award.”
Id. at 707. Thus, irrespective of the mandate of MCR 2.119(A)(1)(b), with the default situation
being that no attorney fees are recoverable, it was incumbent upon defendant to cite a statute or
court rule to invoke an exception to the American rule. Because it did not cite any authority in
support of its request for attorney fees, the trial court did not err by failing to award any fees. See
also Walters v Nadell, 481 Mich 377, 388; 751 NW2d 431 (2008) (“Trial courts are not the research
assistants of the litigants; the parties have a duty to fully present their legal arguments to the court
for its resolution of their dispute.”).

18
  MCL 600.2591 also notes that the recovery of any sanctions must be premised “[u]pon motion
of any party.” MCL 600.2591(1).

                                                 -15-
                                     IV. CONCLUSION

         We affirm the trial court order granting defendants summary disposition. We also affirm
the trial court’s failure to address the issue of attorney fees, let alone award them.

                                                           /s/ Kathleen Jansen
                                                           /s/ Christopher M. Murray

                                             -16-