Court Opinion

ID: 4162470
Source: CourtListenerOpinion
Date Created: 2017-04-24 07:12:02.077195+00
Date Added: 2024-06-11T14:24:00.243965
License: Public Domain

STATE OF MICHIGAN

                              COURT OF APPEALS

RODNEY MCCORMICK,                                                     UNPUBLISHED
                                                                      April 20, 2017
                 Plaintiff-Appellant,

v                                                                     No. 330174
                                                                      Genesee Circuit Court
ACE AMERICAN INSURANCE COMPANY and                                    LC No. 14-102783-CK
ACE PROPERTY & CASUALTY INSURANCE
COMPANY,

                 Defendants-Appellees.

Before: FORT HOOD, P.J., and JANSEN and HOEKSTRA, JJ.

PER CURIAM.

       Plaintiff appeals as of right the order granting the motion of defendant ACE American
Insurance Company (ACE) for reconsideration and granting summary disposition in favor of
ACE. We affirm.

                         I. FACTS AND PROCEDURAL BACKGROUND

        This case arises from injuries sustained by plaintiff while he was working as a truck
loader at a General Motors (GM) plant. Plaintiff sued his employer, Allied Automotive Systems
(Allied), for third-party no-fault benefits.1 ACE was Allied’s liability insurer. Plaintiff entered
into a settlement agreement and signed a release. One concern for plaintiff during facilitation of
the settlement was the fact that he was just short of the 20 years of service credit required in
order to receive increased pension and health care benefits. He contended that he missed the 20-
year threshold because his injuries prevented him from working. Plaintiff received $217,500 in
the settlement agreement, and ACE paid this amount to plaintiff. The settlement agreement
provided, in relevant part, “This settlement is contingent upon Plaintiff being granted 20 years of
service for purposes of his pension and related benefits.” The release included ACE as a
released party and stated, in relevant part, “The Plaintiff is hereby granted 20 years of service for
purposes of his pension and related benefits.” Ultimately, the pension fund denied plaintiff
increased benefits for 20 years of service, taking the position that plaintiff’s employer could not

1
    Plaintiff initially sued GM, but Allied replaced GM as the defendant in the underlying lawsuit.

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credit plaintiff with 20 years of service. Plaintiff then sued defendants, contending that
defendants were liable for breach of contract, innocent misrepresentation, and unjust enrichment.
Plaintiff filed a motion for summary disposition with regard to his innocent misrepresentation
claim. Defendants filed a counter-motion for summary disposition on all three counts. The trial
court granted summary disposition in favor of defendants with regard to the unjust enrichment
claim and dismissed defendant ACE Property and Casualty Insurance Company,2 but granted
summary disposition in favor of plaintiff with regard to the innocent misrepresentation claim.
After ACE filed a motion for reconsideration, the court reconsidered its decision and granted
summary disposition in favor of ACE on all three counts.

                                 II. STANDARD OF REVIEW

        We review de novo a motion for summary disposition. Auto-Owners Ins Co v Seils, 310
Mich. App. 132, 145; 871 NW2d 530 (2015). Under MCR 2.116(C)(10), “[s]ummary disposition
is proper if the evidence, affidavits, pleadings, and admissions viewed in a light most favorable
to the other party demonstrate that there is no genuine issue of any material fact and the moving
party is entitled to judgment as a matter of law.” Id. We also review de novo the issue whether a
plaintiff can maintain a claim for unjust enrichment. Karaus v Bank of New York Mellon, 300
Mich. App. 9, 22; 831 NW2d 897 (2012). “In addition, the proper interpretation of contracts and
the legal effect of contractual provisions are questions of law subject to review de novo.”
DeFrain v State Farm Mut Auto Ins Co, 491 Mich. 359, 366-367; 817 NW2d 504 (2012).

                                III. BREACH OF CONTRACT

       Plaintiff argues that the trial court erred by granting summary disposition in favor of ACE
with regard to his breach of contract claim. We disagree.

        “A party asserting a breach of contract must establish by a preponderance of the evidence
that (1) there was a contract (2) which the other party breached (3) thereby resulting in damages
to the party claiming breach.” Miller-Davis Co v Ahrens Constr, Inc, 495 Mich. 161, 178; 848
NW2d 95 (2014). A settlement agreement constitutes a contract and is governed by the
principles applicable to construction and interpretation of contracts. Kloian v Domino’s Pizza,
LLC, 273 Mich. App. 449, 452; 733 NW2d 766 (2006). “Courts generally apply principles of
contract law to disputes involving the terms of a release.” Mich Head & Spine Institute, PC v
State Farm Mut Auto Ins Co, 299 Mich. App. 442, 448; 830 NW2d 781 (2013).

        Plaintiff contends that the language at issue in the settlement agreement and release is
ambiguous and that there is a question of fact for the jury regarding whether ACE promised to
provide plaintiff with the 20-year pension benefits. “Courts enforce contracts in accordance with
their terms, giving the contractual words their plain and ordinary meanings.” Employers Mut

2
  We note that there is no evidence in the record indicating that defendant ACE Property and
Casualty Insurance Company was involved in the underlying lawsuit. The trial court dismissed
ACE Property and Casualty Insurance Company from the lawsuit, and plaintiff does not contest
this decision.

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Cas Co v Helicon Assoc, Inc, 313 Mich. App. 401, 404; 880 NW2d 839 (2015). The goal of
contract interpretation is to determine the intent of the parties. Id. at 405. If the contract is
unambiguous, this Court will construe and enforce the contract as written. Id. at 404-405.

        Plaintiff points to language in both the settlement agreement and the release in order to
establish his breach of contract claim. With regard to the settlement agreement, plaintiff points
to the following language: “This settlement is contingent upon Plaintiff being granted 20 years of
service for purposes of his pension and related benefits.” The trial court correctly determined
that the plain language of the settlement agreement establishes that the statement did not
constitute a promise made by ACE. First, the parties did not draft the statement as a promise, but
rather, a condition regarding the effectiveness of the contract. Second, even assuming that the
statement constituted a promise, plaintiff fails to show that the statement is attributable to ACE.
ACE was not a party to the underlying lawsuit, and it does not appear as a party on the settlement
agreement. Even assuming that ACE was a party to the settlement agreement, there is no
indication that ACE promised to grant plaintiff 20 years of service for purposes of his pension
and related benefits. Indeed, plaintiff did not submit any evidence in the trial court showing that
ACE had the power to grant plaintiff 20 years of service credit. Instead, Allied was the party that
had the ability to grant plaintiff 20 years of service credit in order for plaintiff to receive
increased pension benefits. Thus, to the extent that the statement constitutes a promise, the
promise was made by Allied, and it cannot be attributed to ACE to establish a breach of contract
action.

        Plaintiff also relies on a statement in the release that “[t]he plaintiff is hereby granted 20
years of service for purposes of his pension and related benefits.” The parties agree that the
release constitutes a contract and that ACE was a party to the contract. However, plaintiff cannot
establish that ACE made a promise in the release that plaintiff would receive the 20-year pension
benefits. The plain language of the statement does not indicate that ACE promised that plaintiff
would receive the 20-year benefits. A representative for ACE did not sign the release, and there
is no other indication in the release that ACE promised to grant plaintiff 20 years of service for
his pension and related benefits. Further, ACE did not have the ability to grant plaintiff 20 years
of service credit. Therefore, we conclude that plaintiff failed to present evidence establishing a
genuine issue of material fact regarding whether ACE breached a contract with plaintiff.

                           IV. INNOCENT MISREPRESENTATION

        Plaintiff next argues that the trial court erred when it granted summary disposition with
regard to his innocent misrepresentation claim. We disagree.

        “ ‘[A] false statement of fact, made without knowledge of its falsity or intent to deceive,
is actionable [under Michigan’s doctrine of innocent misrepresentation] if relied upon by the
other party to the contract to their detriment and the party that made the false statement is
unjustly enriched.’ ” Derderian v Genesys Health Care Sys, 263 Mich. App. 364, 380-381; 689
NW2d 145 (2004) (citation omitted; alterations in original).

              An innocent misrepresentation claim requires proof that (1) the defendant
       made a material representation, (2) the representation was false, (3) the defendant
       made it with the intention of inducing reliance by the plaintiff, (4) the plaintiff

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       acted in reliance on the representation, and (5) the plaintiff thereby suffered an
       injury that benefited the defendant. [Zeremba Equip, Inc v Harco Nat’l Ins Co,
       280 Mich. App. 16, 39; 761 NW2d 151 (2008).]

        Plaintiff did not present evidence establishing that ACE represented that plaintiff would
receive the 20-year pension benefits. Instead, the evidence presented in the trial court indicates
that Allied, rather than ACE, represented that plaintiff would receive the necessary credit in
order to obtain the pension benefits for 20 years of service. It is unclear on which statement
plaintiff relies to establish his innocent misrepresentation claim. In his motion for summary
disposition, plaintiff relied on the statement in the release that “[t]he Plaintiff is hereby granted
20 years of service for purposes of his pension and related benefits.” However, as noted by the
trial court, this statement cannot be attributed to ACE because ACE did not sign the release, and
there is no other indication that ACE was the party making the statement in the release.
Furthermore, plaintiff cannot show that he was induced into signing the release based on this
statement as the statement appears in the release itself. Thus, plaintiff cannot show that ACE
made the statement in the release or that plaintiff was induced by the statement to enter into the
release.

        Plaintiff argues on appeal that the misrepresentation occurred during the facilitation. He
relies on a statement made in an e-mail from a representative of Allied during settlement
negotiations in order to establish that ACE made a material representation. In the e-mail, the
representative for Allied stated:

              I have confirmed that we can credit Mr. McCormick with the two weeks
       of pension contributions via the grievance process (to the extent that such
       contributions are necessary, since he will receive 12 months of contributions
       following his most recent injury and it is not clear that he has factored those
       continuing payments in), so that issue should be completely off the table.

While the e-mail indicates that plaintiff would receive two weeks of pension contributions in
order to obtain the 20-year pension benefits, a representative of Allied, rather than ACE, made
the statement. Therefore, ACE did not make a representation in the e-mail. In addition, plaintiff
failed to present any additional evidence establishing that ACE made any representation or
promise during the facilitation that plaintiff would receive credit in order to obtain the additional
pension benefits.

        In addition, plaintiff’s claim fails because the alleged misrepresentation related to a future
event, rather than a past or existing fact. Our Supreme Court has concluded that “[a] promise
regarding the future cannot form the basis of a misrepresentation claim.” Forge v Smith, 458
Mich. 198, 212; 580 NW2d 876 (1998). The Court held that the plaintiff must establish that the
defendant made a representation regarding a past or existing fact in order to establish
misrepresentation. Id. See also Derderian, 263 Mich. App. at 381 (“ ‘[T]he misrepresentation
must relate to a past or existing fact and not be promissory in nature.’ ”) (Citation omitted;
alteration in original.) In this case, plaintiff does not contend that ACE made a misrepresentation
regarding a past or existing fact. Instead, plaintiff argues that ACE made a promise regarding a
future event—that plaintiff would receive 20-year pension benefits at a future date. Accordingly,

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the trial court did not err by granting summary disposition in favor of ACE on the innocent
misrepresentation claim.

                                  V. UNJUST ENRICHMENT

      Lastly, plaintiff contends that the trial court improperly determined that ACE was entitled
to summary disposition with regard to his unjust enrichment claim. We disagree.

        “Unjust enrichment is defined as the unjust retention of money or benefits which in
justice and equity belong to another.” Tkachik v Mandeville, 487 Mich. 38, 47-48; 790 NW2d
260 (2010) (citation and quotation marks omitted). “ ‘No person is unjustly enriched unless the
retention of the benefit would be unjust.’ ” Id. at 48 (citation omitted). “The elements of a claim
for unjust enrichment are (1) receipt of a benefit by the defendant from the plaintiff, and (2) an
inequity resulting to plaintiff from defendant’s retention of the benefit.” Bellevue Ventures, Inc v
Morang-Kelly Investment, Inc, 302 Mich. App. 59, 64; 836 NW2d 898 (2013). “However, a
contract will be implied only if there is no express contract covering the same subject matter.”
Belle Isle Grill Corp v Detroit, 256 Mich. App. 463, 478; 666 NW2d 271 (2003).

        Plaintiff’s claim for unjust enrichment fails because the parties agree that there existed a
contract covering the subject matter of the claim. Plaintiff contended in his motion for summary
disposition that the settlement agreement and release both constituted contracts. Defendants also
contended that the release constituted a contract in their response and counter-motion for
summary disposition. Both sides acknowledged during the hearing on the motions that the
release was a contract. The release covered the same subject matter as the unjust enrichment
claim because both involve the settlement of plaintiff’s claim and the award of the 20-year
pension benefits, and both plaintiff and ACE are parties to the release. Therefore, plaintiff
cannot prevail on an unjust enrichment claim because there was an express contract covering the
same subject matter.

       Affirmed.

                                                             /s/ Karen M. Fort Hood
                                                             /s/ Kathleen Jansen
                                                             /s/ Joel P. Hoekstra

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