Court Opinion

ID: 9687618
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:39:31.811981+00
Date Added: 2024-06-11T18:18:29.396403
License: Public Domain

Taylor, J.
(dissenting.) I respectfully dissent.
When contractual language is clear, its interpretation is a question of law for the court. When presented with a dispute, a court must determine what the parties’ agreement is and enforce it. Contractual language should be given its plain and ordinary meaning. G & A, Inc v Nahra, 204 Mich App 329, 330-331; 514 NW2d 255 (1994). Our task, *621then, is to determine if the language at issue is ambiguous.
The parties in this ease provided for default remedies in the purchase agreement as follows:
In the event of Default by the Purchaser in any material aspect of any of the terms of this Agreement . . . Seller shall have the option of:
(a) Demanding payment of the total balance due under this Agreement;
(b) Requiring Purchaser to return ownership of the business to Seller, including the lease, all fixtures, furniture and equipment, existing on the date of closing and anything subsequently added by Purchaser up to the date of election of remedies by the Seller. Upon this election by Seller, Purchaser shall execute any and all necessary documents to effect the total transfer of the business and the lease to Seller.
It is necessary to determine if clauses a and b are to be read conjunctively or disjunctively. Because the parties have used common English grammar, reference to the rules that control such punctuation is appropriate. Semicolons are commonly used to separate items in a list when the items themselves are lengthy or contain commas; when so used they act to join, not to contrast. If the choices are to be mutually exclusive, it is customary to place the word "or” after the semicolon. Simply stated, it is proper under these neutral grammatical principles to read an "and,” not an "or,” following the semicolon in clause a. Thus, the remedies in a and b are cumulative, i.e., the seller can use them both.
Much is made in the majority opinion of the doctrine of election of remedies. It is argued, in effect, that the election of remedies language in clause b requires the seller to elect between a and b, and possibly even the remedies in the promissory note. This is incorrect on all fronts.
*622First, underlying the majority’s analysis is a misunderstanding of the doctrine of election of remedies. An election of remedies is not intended to prevent recourse to alternate remedies, but, rather, to prevent double redress for a single injury. Riverview Cooperative, Inc v First Nat’l Bank & Trust Co of Michigan, 417 Mich 307, 312; 337 NW2d 225 (1983). If the alternate remedies are consistent or cumulative, the doctrine never comes into play. Id., pp 312-313; Production Finishing Corp v Shields, 158 Mich App 479, 495; 405 NW2d 171 (1987). The majority’s application of this doctrine depends on the unexplained assumption that "both the promissory note and the default provision in the purchase agreement were intended to provide a remedy for the same underlying harm.” It is not at all certain that this was the intent of the parties and, therefore, unless such intent is proved, the election of remedies is not required.
For example, the damages under clause a of the promissory note might have been intended to remedy unpaid property taxes or waste to the business realty or equipment. Such arrangements are permissible should parties choose to so contract. Indeed, in Ames v Maxson, 157 Mich App 75, 80, 83; 403 NW2d 501 (1987), this Court, interpreting the summary proceedings statute, MCL 600.5750; MSA 27A.5750, held that damages and forfeiture were both allowed. Similarly, in Davis v Louis G Palmer Co, 262 Mich 76, 78; 247 NW 112 (1933), a lessor brought a summary proceeding against a defaulting lessee and was awarded restitution of the premises and rent due. The lessor also kept the lessee’s deposit of $1,250, which the lease provided would be retained as damages in the event of a default. Reversing the trial court’s award of this amount to the lessee, the Supreme Court noted that the lessee’s use of the property as a parking lot had required the demolition of buildings and *623the leveling of the land. Id., p 81. The lessor had small hope of leasing this property again without first making improvements. Thus, the lessor was entitled to retain the deposit to make him whole after the lessee’s default, despite the successful summary proceedings.
There can be no question, then, that such provisions in a private contract to allow forfeiture and damages are permissible and in accord with public policy. The contract should be enforced as written to allow both remedies.
Further, the remedies under the promissory note should not be held to be merged into the purchase agreement because of the express anti-merger language that the parties adopted. Section 13.07 of the purchase agreement clearly states:
This Agreement shall survive the closing and not merge in the documents delivered at the closing.
Section 2.3(d) of the agreement indicates that the promissory note was one of the documents that Lyons and Company was to deliver at the closing. This was done and the instruments should not be merged.
Moreover,- the majority’s assumption that double recovery would result from an award on the promissory note is contradicted by the parties’ stated intent in the note:
This Note made in the State of Michigan, shall be construed according to the laws thereof, and if any provision[s] hereof are in conflict with any statute or rule of the law of the State of Michigan or are otherwise unenforceable for any reason whatsoever, then such provision(s) shall be deemed null and void to the extent of such conflict or unenforceability, but shall be deemed separable from and shall not invalidate any other provisions hereof.
*624This provision precludes a verdict for Orley on the promissory note only to the degree the factfinder determines that a double recovery would result and, even then, only if such recovery is not contemplated by the parties, as evidenced by the language of their contractual agreement.
In my view, then, both provisions in the purchase agreement are cumulatively enforceable and the promissory note was not merged into the purchase agreement and is independently enforceable. Thus, I would reverse the trial court’s decision and remand this case for further proceedings consistent with this determination.
It is important, I believe, to comment upon the unfortunate policy implications of the majority’s handling of this matter. Many entrepreneurial endeavors are undertaken by financially precarious entities or individuals. It is axiomatic that we are all better off because of their efforts, for by such means are jobs, even whole industries, created. Yet, when one contracts with such a fledgling entity, the traditional safeguard for those who provide goods and products, or, as in this case, a building, has been to demand strong, financially secure individuals or entities to guarantee the payments of the entrepreneur. Without such assurances, there will be reasonable reluctance to contract with them. Because we wish to facilitate commerce with struggling, undercapitalized business ventures, the law should encourage arrangements such as the ones at issue. To not do so will only serve to dry up funds and services to start-up businesses.