Court Opinion

ID: 9925241
Source: CourtListenerOpinion
Date Created: 2024-01-19 06:06:10.239658+00
Date Added: 2024-06-11T09:19:47.456248
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

SUSAN J. SILLS, Trustee of the SUSAN J. SILLS                           UNPUBLISHED
TRUST, also known as SUSAN J. SILLS-LEVEY,                              January 18, 2024
Trustee of the SUSAN J. SILLS-LEVEY TRUST,
and SUSAN J. SILLS,

                Plaintiffs-Appellants,

v                                                                       No. 363557
                                                                        Oakland Circuit Court
KAPLAN MERZLAK, P.C. and JEFFREY                                        LC No. 2022-194410-NM
KAPLAN,

                Defendants-Appellees.

Before: GLEICHER, P.J., and BORRELLO and SHAPIRO, JJ.

PER CURIAM.

         This case involves an attempt to recover for alleged accounting errors regarding a limited
liability corporation (LLC) created to manage property of plaintiff Susan J. Sills and her former
husband during their marriage, as well as for the failure to file an amended tax return. Plaintiffs—
the Susan J. Sills Trust (the Trust) and Sills, individually and as trustee of the Trust—sued
accountant Jeffrey Kaplan and his accounting firm, Kaplan Merzlak, P.C., for accounting
malpractice and breach of fiduciary duty. Plaintiffs appeal the trial court’s order granting
defendants summary disposition pursuant to MCR 2.116(C)(10) (no genuine issue of material
fact), arguing that Sills’s divorce settlement does not bar plaintiffs’ claims, Sills’s ability to amend
her 2018 tax return does not defeat the element of causation, and summary disposition was
prematurely granted because discovery had not commenced.

        First, the trial court correctly concluded that plaintiffs failed to establish a genuine issue of
material fact regarding causation for defendants’ claims concerning the LLC. Specifically,
causation is lacking as a matter of law because the LLC agreement did not require that unequal
contributions be recorded as loans to the LLC, Sills was not compelled to settle with the former
husband but did so anyway, and the agreement provided for no division of the LLC’s assets other
than an equal division between the members. The trial court also did not err by granting summary
disposition in favor of defendants on plaintiffs’ accounting malpractice claim arising from the

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2018 tax return because Sills herself failed to file an amended return despite being able to do so.
Finally, the trial court did not err by granting summary disposition in favor of defendants before
the completion of discovery because extensive discovery was available from the earlier divorce
action and consolidated civil action, and plaintiffs failed to offer independent evidence in support
of their claim that summary disposition was premature. Therefore, we affirm.

                                       I. BACKGROUND

       Sills married Michael Levey in 2008. Before they married, they signed a premarital
agreement that defined their marital property and separate property and provided that, if they
divorced, they would retain their separate property and receive a share of the marital property
based upon the contribution of their separate property to the purchase of the marital property.

       In January 2013, Sills and Levey formed Mr. & Mrs. Holdings, LLC (the LLC), to hold
and manage real and personal property, investments, artwork, and collectibles acquired during
their marriage. They signed an amended operating agreement (AOA) for the LLC on April 8,
2015, designating Sills, as trustee of her personal trust (the Trust), and Levey, as trustee of his
personal trust, as the only two members of the LLC.

       The AOA required the LLC to maintain a separate capital account for each member.
Paragraph 2.3 of the AOA stated:

       Each Member’s Capital Account shall be increased by the Member’s capital
       contributions and the Member’s share of any Profits and items of income or gain
       of the Company. Each Member’s Capital Account shall be decreased by
       distributions made to the Member and the Member’s share of any Losses and items
       of expense or loss of the Company. In accordance with Section l.704-1(b)(2)(iv)(q)
       of the Treasury Regulations, each Member’s Capital Account shall be adjusted in a
       manner that maintains equality between the aggregate of all of the Members’
       Capital Accounts and the amount of capital reflected on the Company’s balance
       sheet as computed for book purposes.

        The AOA specified that the members’ capital accounts “are as set forth on Exhibit B.”
Exhibit B, in turn, specified that each member held an equal 50% “Percentage Interest.” The AOA
defined “Percentage Interest” as “the Percentage Interest shown next to such Member’s name on
Exhibit B.” The AOA provided that the members could contribute additional capital contributions
as necessary or appropriate to conduct business or carry out the purposes of the LLC, but “[a]ny
such additional capital shall be contributed by the Members pro rata, in proportion to their
percentage interests, or on any other basis agreeable to them.” In addition, allocations and
distributions to the members were to be based on each member’s percentage interest. Upon
dissolution of the LLC, the assets were to “be distributed first to creditors to the extent permitted
by law, in satisfaction of the Company’s debts, liabilities and obligations and then to Members in
accordance with their Percentage Interests.” The AOA included no specific provision for
adjustment of the members’ percentage interests on the basis of disproportionate contributions to
the LLC.

                                                -2-
        Kaplan is a certified public accountant who performed tax accounting services for Levey
before his marriage to Sills, and continued to provide those services to Sills and Levey after they
married. In 2013, defendants began providing tax and accounting services to the LLC. In keeping
the general ledger, defendants equalized the capital accounts of Sills and Levey, even though they
were aware that Sills had contributed significantly more capital than Levey. This equalization of
the capital accounts began in 2013, at Levey’s instruction.

        In June 2020, Levey left the marital home. Sills then hired a firm to conduct an audit of
the LLC, which revealed that Sills had contributed approximately 80% of the LLC’s funding. Sills
then filed a complaint for divorce and, during discovery in that case, learned that defendants had
equalized the contributions she and Levey had made to the LLC. Despite their unequal
contributions, Levey contended in the divorce action that he was entitled to 50% of the assets of
the LLC. Sills also filed a civil action in the Oakland Circuit Court seeking damages and
declaratory relief against Levey and others, including defendants. Sills alleged statutory and
common-law conversion, violations of MCL 450.4515 (governing actions by member of an LLC
against managers or other members), and breach of the AOA against Levey; she also alleged
conversion and breach of fiduciary duty against defendants. In that civil action, Levey contended
that the AOA unambiguously provided that Sills and Levey each held a 50% ownership interest in
the LLC. Sills settled with Levey by agreeing to pay him $1,000,000 more than she believed he
was entitled to receive.

        On June 3, 2022, plaintiffs filed this action against defendants in the Oakland Circuit Court,
asserting Sills had contributed 81% of the assets of the LLC, Levey had contributed just 19%,
defendants were aware of these unequal contributions, and defendants had altered the records of
the LLC to show that Sills and Levey had contributed equally to the LLC. Plaintiffs also asserted
that, because defendants failed to properly account for these unequal contributions, Sills paid
Levey $1,000,000 more than he was entitled to receive in the divorce proceedings. In Count I,
plaintiffs alleged that defendants owed them a fiduciary duty and breached that duty by altering
the LLC’s records to benefit Levey, acting to the benefit of Levey and to the detriment of plaintiffs,
and representing both plaintiffs and Levey. In Count II, plaintiffs alleged that defendants had
committed malpractice by failing to properly apply 26 CFR l.704-1(b)(2)(iv)(q), as required by ¶
2.3 of the AOA. Plaintiffs also asserted that defendants had committed malpractice by altering the
records of the LLC, failing to advise Sills that they were not complying with 26 CFR l.704-
1(b)(2)(iv)(q), and failing to properly prepare the 2018 tax return of Sills and Levey. Plaintiffs
contended that, as a result of these alleged failures, Sills was “forced” to pay Levey an additional
$1,000,000 to resolve her divorce action.

        In lieu of answering the complaint, defendants filed a motion for summary disposition
under MCR 2.116(C)(10). First, defendants asserted plaintiffs were unable to establish causation
for either malpractice or breach of fiduciary duty. Defendants asserted that Sills had full
knowledge of the bookkeeping entries before she settled her divorce action, the issue in the divorce
action was whether Sills and Levey had agreed on any other basis to account for their unequal
capital contributions, and defendants’ handling of the capital accounts had no effect on the
settlement of the divorce action. Defendants also asserted that plaintiffs were unable to establish
causation because the AOA included no provision for adjusting the percentage of ownership on
the basis of unequal capital contributions, but established both percentage interests at 50%. Thus,
defendants contended, plaintiffs were not entitled to more than 50% of the LLC regardless of any

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adjustment of the capital accounts. Next, defendants asserted that plaintiffs could not establish
that they were harmed by any alleged error in the 2018 tax return because they still had time to
amend the return. In addition, defendants asserted that plaintiffs did not allege that the Trust was
defendants’ client, defendants owed no duty to the Trust, and the Trust’s claims should be
dismissed. Finally, defendants contended that Sills could not assert a malpractice claim for
services provided to the LLC because the LLC was a distinct entity and Sills, individually, was
not a member of the LLC.

         Responding to the motion, plaintiffs asserted that 26 CFR 1.704-1(b)(2)(iv)(q) and ¶ 2.3 of
the AOA required that Sills’s surplus capital contributions be classified as a loan to the LLC, citing
the deposition testimony of Kaplan and accountant Joyce Howe in the divorce action. If defendants
had done so, Sills contended, she would have received $7,000,000 before she and Levey divided
the remaining $4,000,000 equally; instead, defendants’ failure allowed Levey to seek 50% of the
entire $11,000,000 value of the LLC. Plaintiffs asserted that causation was an issue for the jury to
decide and Michigan law is clear that a party forced to settle on unfavorable terms, because of the
malpractice of a professional, is entitled to seek recovery of the difference between the settlement
amount and the amount that would have been received in the absence of the alleged malpractice.
Plaintiffs again contended that if defendants had recorded the excess contributions as a loan under
the terms of the AOA, Levey would have been unable to assert a claim to 50% of the LLC, and
that Sills paid Levey $1,000,000 more than he would otherwise have received in order to mitigate
the risk that he would be awarded 50% of the LLC.

         Plaintiffs briefly addressed their claim regarding the 2018 tax return, asserting that
defendants acknowledged the return was incorrect, and that the cost to amend the return could
exceed the amount of the refund. Plaintiffs also addressed the issue of duty, asserting that
defendants acknowledged they represented the individuals, both Sills and Levey, and their specific
interests, as well as the LLC. Plaintiffs contended that defendants (1) had a duty to treat Sills’s
excess contribution in a manner that was not detrimental to her interests, (2) admitted owing a duty
to Sills individually as well as to the LLC, and (3) acknowledged a duty of care to not take actions
for one client that detrimentally affect another client. Finally, plaintiffs relied on Townsend v
Chase Manhattan Mtg Corp, 254 Mich App 133; 657 NW2d 741 (2002), to argue that the motion
for summary disposition was premature because no discovery was conducted.

         The trial court issued a 21-page opinion and order granting defendants’ motion for
summary disposition. The court found no genuine issue of material fact and ruled that defendants
were entitled to summary disposition on the claims stemming from Sills’s excess contributions to
the LLC because, even assuming defendants improperly applied 26 CFR 1.704-1(b)(2)(iv)(q) and
manipulated the records of the LLC without Sills’s knowledge, those actions did not cause
plaintiffs’ injury. Citing Espinoza v Thomas, 189 Mich App 110, 124; 472 NW2d 16 (1991), the
court explained that Sills knew of those actions before she settled with Levey and chose to settle
to mitigate her risk, but defendants did not compel her to do so, and she could have sought equitable
relief in the divorce action and damages in the consolidated civil action. Moreover, Levey’s claim
to 50% of the LLC was based on the AOA, the court reasoned, and not on the records kept by
defendants. Thus, the court concluded, plaintiffs could not show that defendants caused the alleged
injuries and had not “presented evidence to show a genuine issue of fact for trial.”

                                                 -4-
        Regarding the 2018 tax return, the court, citing Boyle v Odette, 168 Mich App 737, 745;
425 NW2d 472 (1988), ruled that Sills had not suffered any injury because she could still file an
amended return. The court also ruled that the motion was not filed prematurely, noting that
discovery in the divorce action had yielded more than 16,000 pages of documents from defendants
and two depositions, and finding that further factual development would not mitigate the lack of
causation. The court declined to address defendants’ arguments regarding duty, and granted
summary disposition in favor of defendants. The trial court subsequently entered an order denying
plaintiffs’ motion for reconsideration, and plaintiffs now appeal.

                                  II. STANDARD OF REVIEW

        A trial court’s decision on a motion for summary disposition is reviewed de novo. Zaher
v Miotke, 300 Mich App 132, 139; 832 NW2d 266 (2013). Under de novo review, the legal issues
are reviewed independently, with no deference required to the courts below. Wright v Genesee
Co, 504 Mich 410, 417; 934 NW2d 805 (2019).

        A motion brought under MCR 2.116(C)(10) tests the factual sufficiency of the complaint
in light of the affidavits, pleadings, depositions, admissions, and other evidence submitted by the
parties. Joseph v Auto Club Ins Ass’n, 491 Mich 200, 206; 815 NW2d 412 (2012). “Summary
disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any
material fact and the moving party is entitled to judgment as a matter of law.” West v Gen Motors
Corp, 469 Mich 177, 183; 665 NW2d 468 (2003). A genuine issue of material fact exists when
the record reveals an issue upon which reasonable minds might differ. Id.

        A party seeking summary disposition under MCR 2.116(C)(10) must support its motion
with affidavits, depositions, admissions, or other documentary evidence in support of the grounds
asserted. MCR 2.116(G)(3). If the motion is properly supported, the burden shifts to the opposing
party to establish that a genuine issue of disputed fact exists. Quinto v Cross & Peters Co, 451
Mich 358, 362; 547 NW2d 314 (1996). A reviewing court must consider the pleadings,
admissions, and other evidence in the light most favorable to the nonmoving party. Latham v
Barton Malow Co, 480 Mich 105, 111; 746 NW2d 868 (2008).

                                          III. ANALYSIS

        Plaintiffs first assert that the trial court erred by granting summary disposition in favor of
defendants because Sills’s settlement of the divorce action did not defeat causation concerning
defendants’ improper accounting of the LLC. However, because ¶ 2.3 of the AOA did not require
that unequal contributions be recorded as loans to the LLC, Sills was not compelled to settle with
Levey, and the terms of the AOA provided for no division of the LLC’s assets other than an equal
division between the members, the trial court correctly concluded that plaintiffs failed to establish
a genuine issue of material fact regarding causation.

        A certified public accountant may be liable for civil damages in connection with services
performed for or on behalf of a client. MCL 600.2962(1). To prevail on a claim for accounting
malpractice, the client must show “(1) the existence of a professional relationship, (2) negligence
in the performance of the duties within that relationship, (3) proximate cause, and (4) the fact and
extent of the client’s injury.” Broz v Plante & Moran, PLLC, 331 Mich App 39, 52; 951 NW2d

                                                 -5-
64 (2020). Similarly, “[t]o establish a claim for breach of fiduciary duty, a plaintiff must prove
(1) the existence of a fiduciary duty, (2) a breach of that duty, and (3) damages caused by the
breach of duty.” Highfield Beach at Lake Mich v Sanderson, 331 Mich App 636, 666; 954 NW2d
231 (2020).

        In this case, the trial court ruled that plaintiffs’ claims of malpractice and breach of
fiduciary duty “fail for lack of causation.” The court reasoned, first, that Sills could have continued
to challenge the equalization of the capital accounts in the divorce and consolidated civil action
and, second, that Levey’s claim to 50% of the LLC was based on the AOA, not the records of the
LLC. Thus, the court concluded, plaintiffs could not show that defendants’ wrongful conduct
caused Levey to claim 50% of the LLC or caused Sills “to face an argument that she otherwise
would not have faced.”

        Plaintiffs’ claims against defendants in this case are premised on ¶ 2.3 of the AOA, which
required the LLC to maintain separate capital accounts for each member that would be increased
by each member’s capital contributions, and provided that, “[i]n accordance with Section l.704-
1(b)(2)(iv)(q) of the Treasury Regulations, each Member’s Capital Account shall be adjusted in a
manner that maintains equality between the aggregate of all of the Members’ Capital Accounts
and the amount of capital reflected on the Company’s balance sheet as computed for book
purposes.” Plaintiffs maintain that, under this paragraph and 26 CFR 1.704-1(b)(2)(iv)(q), Sills’s
capital contributions that were made in excess of Levey’s contributions were required to be
recorded as loans to the LLC and repaid to plaintiffs before an equal distribution of the remaining
balance.

        First, we note that plaintiffs base their malpractice and breach-of-fiduciary duty claims
regarding the unequal contributions to the LLC largely on an apparent misinterpretation of ¶ 2.3
of the AOA and 26 CFR 1.704-1(b)(2)(iv)(q). In their complaint, plaintiffs alleged defendants had
failed to properly apply 26 CFR l.704-1(b)(2)(iv)(q), as required by ¶ 2.3, which, plaintiffs
asserted, required that “disproportionate contributions by one Member would be booked as a loan
on MM Holdings’ books and records, which loan would be returned to the holder before dividing
the then remaining assets.” However, there are no references to loans in ¶ 2.3, which provides:
                The Company shall maintain a separate Capital Account for each Member.
        Each Member’s Capital Account shall be increased by the Member’s capital
        contributions and the Member’s share of any Profits and items of income or gain
        of the Company. Each Member’s Capital Account shall be decreased by
        distributions made to the Member and the Member’s share of any Losses and items
        of expense or loss of the Company. In accordance with Section 1.704-1(b)(2)(iv)(q)
        of the Treasury Regulations, each Member’s Capital Account shall be adjusted in a
        manner that maintains equality between the aggregate of all of the Members’
        Capital Accounts and the amount of capital reflected on the Company’s balance
        sheet as computed for book purposes.

Similarly, there are no references to loans in 26 CFR 1.704-1(b)(2)(iv)(q), which provides:
                Adjustments where guidance is lacking. If the rules of this paragraph
       (b)(2)(iv) fail to provide guidance on how adjustments to the capital accounts of
       the partners should be made to reflect particular adjustments to partnership capital
       on the books of the partnership, such capital accounts will not be considered to be

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       determined and maintained in accordance with those rules unless such capital
       account adjustments are made in a manner that (1) maintains equality between the
       aggregate governing capital accounts of the partners and the amount of partnership
       capital reflected on the partnership’s balance sheet, as computed for book purposes,
       (2) is consistent with the underlying economic arrangement of the partners, and (3)
       is based, wherever practicable, on Federal tax accounting principles.

Neither party cites any caselaw applying or interpreting 26 CFR 1.704-1(b)(2)(iv)(q). The focus
of the treasury regulation appears to be to ensure that the aggregate of the capital accounts of the
partners is equal to the total amount of the partnership capital stated in the balance sheet, and
neither ¶ 2.3 nor the regulation addresses whether excess contributions must be recorded as loans.

        The trial court did not decide whether ¶ 2.3 or 26 CFR 1.704-1(b)(2)(iv)(q) applied in this
case; rather, in its ruling, the trial court assumed that Kaplan had improperly applied the treasury
regulation by failing to treat the disproportionate contributions as a loan, and assumed defendants
had manipulated the books and records of the LLC at Levey’s request, without Sills’s knowledge
or consent. Nevertheless, the trial court concluded that neither of those actions caused plaintiffs’
injuries, for two reasons. First, the court, citing Espinoza, 189 Mich App at 124, found that Sills
knew the facts before she chose to mitigate her risk by settling with Levey, but she was neither
compelled to do so, nor left without other recourse. Second, the court found that Levey’s claim to
50% of the LLC was based on the language of the AOA, not on the records kept by defendants,
and plaintiffs could not show that defendants’ conduct caused Levey to make his claim or “caused
her to face an argument she otherwise would not have faced.”

        In Espinoza, a legal malpractice action, the plaintiff retained the defendant to represent him
in an action stemming from severe injuries he received in an attack by striking auto workers.
However, the defendant failed to file an action for assault and battery before expiration of the
statutory limitations period. The plaintiff then hired another attorney, who filed an action alleging
negligence and intentional infliction of emotional distress. This action led to a mediation award
of $16,000, which all parties accepted. The plaintiff filed a malpractice action against the
defendant, which was dismissed on the basis that the plaintiff had been fully compensated by
accepting the mediation award. Espinoza, 189 Mich App at 112-115.

         This Court reversed, concluding that the plaintiff had lost a viable cause of action for
assault and battery, which weakened his remaining claims and resulted in a lower award. Espinoza,
189 Mich App at 119, 124. After reviewing decisions from other jurisdictions, this Court adopted
the reasoning of the Supreme Court of New York County, New York, explaining that when the
underlying action has been terminated by a settlement, rather than a dismissal or adverse judgment,
“malpractice by the attorney is more difficult to establish, but a cause of action can be made out if
it is shown that assent by the client to the settlement was compelled because prior misfeasance or
nonfeasance by the attorneys left no other recourse . . . .” Id. at 124, quoting Becker v Julien, Blitz
& Schlesinger, PC, 95 Misc 2d 64; 406 NYS2d 412 (1977), modified on other grounds 66 AD2d
674; 411 NYS2d 17 (1978). Viewing the evidence in a light most favorable to the plaintiff, this
Court reversed the grant of summary disposition. Espinoza, 189 Mich App at 124.

       Later that year, this Court decided Lowman v Karp, 190 Mich App 448; 476 NW2d 428
(1991), another legal malpractice action stemming from a settlement. In that case, the plaintiff

                                                 -7-
retained the defendant to file suit against three individuals. Two of the individuals were never
served with the complaint and were dismissed from the case. A second complaint against them
was filed, but was dismissed as untimely. They were later added as third-party defendants. As
trial neared, the case was settled. Eight months later, the plaintiff filed a malpractice action against
the defendant, alleging that he had refused to try the case and informed her that if she did not settle
she would have to pay him an hourly rate for the time he had spent on the case. The district court
granted summary disposition in favor of the defendant, concluding that the plaintiff was estopped
by her agreement to the settlement to complain of the defendant’s conduct. The circuit court
affirmed that decision on the basis of the fact that the plaintiff had agreed to the settlement. Id. at
448-450.

         On appeal, this Court reversed, framing the issue as “whether a plaintiff in a legal
malpractice case, having settled with the defendants in the underlying action, is thereafter
precluded as a matter of law from maintaining a subsequent legal malpractice cause of action
against the attorney who represented her in the underlying action.” Lowman, 190 Mich App at
451. Observing that the defendant’s refusal to proceed to trial, on the eve of trial, placed the
plaintiff in a situation in which “settlement was her only reasonable choice,” this Court concluded
that the “plaintiff’s settlement of the underlying action should not act as an absolute bar to a
subsequent legal malpractice action.” Id. at 453. It reasoned that “[t]he matter arose so close to
trial that it would have been very difficult, if not impossible, for [the] plaintiff to obtain another
attorney.” Id.

         Plaintiffs rely on both Espinoza and Lowman, but neither case compels reversal of the trial
court’s order in this case. In Espinoza, 189 Mich App at 120, the plaintiff lost a viable cause of
action because of the negligence of her attorney. In Lowman, 190 Mich App at 453, the plaintiff’s
attorney refused to try the case, leaving the plaintiff with no viable option but to settle. Here, the
trial court correctly concluded that plaintiffs were not compelled to settle and had other recourse.
First, plaintiffs had the opportunity to contest Levey’s claim in both the divorce case as well as the
consolidated civil action. Second, plaintiffs had the opportunity to recover from defendants in the
consolidated civil action, in which plaintiffs alleged conversion and breach of fiduciary duty
against defendants.

        Plaintiffs argue that they had no adequate remedy against defendants in the divorce action
because defendants were not parties to that action, the divorce court had limited equitable
jurisdiction, and equity was not available because MCL 600.2962 provided an adequate statutory
remedy. However, this argument is something of a red herring. In Sparks v Sparks, 440 Mich
141, 159-160; 485 NW2d 893 (1992), our Supreme Court explained that, in a divorce case, a trial
court has broad discretion in determining the division of marital property. One of the factors to be
considered is the “contributions of the parties to the marital estate . . . .” Thus, the divorce court
could have awarded Sills 81% of the LLC; Sills’s settlement with Levey effectively curtailed that
possibility. At no point did defendants make it impossible or even very difficult for Sills to pursue
her argument for 81% of the LLC, nor in any way compelled her to settle with no other recourse.
Rather, as plaintiff’s argument makes clear, Sills voluntarily settled with Levey in an effort to
mitigate risk in the divorce case. Although plaintiffs contend that the divorce court lacked
equitable jurisdiction over defendants, this was mitigated by the consolidated civil action against
defendants, in which the court could have granted the relief Sills sought. And whether MCL
600.2962, governing malpractice actions against certified public accountants, divested the court of

                                                  -8-
equitable jurisdiction is irrelevant because Sills had already named defendants in the consolidated
civil action and could have alleged a malpractice claim in that action.

        Further, the trial court correctly found Levey’s claim to 50% of the LLC was based on the
language of the AOA, not on the records kept by defendants. Although the AOA provided that
“[e]ach member’s capital account shall be increased by the Member’s capital contributions,” the
AOA also specified that the members’ capital accounts were “as set forth on Exhibit B,” and that
each member held an equal 50% “Percentage Interest.” The AOA provided that the members
could contribute additional capital contributions as necessary or appropriate to conduct business
or carry out the purposes of the LLC, but “any such additional capital shall be contributed by the
Members pro rata, in proportion to their percentage interests, or on any other basis agreeable to
them.” In addition, allocations and distributions to the members were to be based on each
member’s percentage interest. Upon dissolution of the LLC, the assets were to “be distributed first
to creditors to the extent permitted by law, in satisfaction of the Company’s debts, liabilities and
obligations and then to Members in accordance with their Percentage Interests.” (Emphasis
added.) However, as the trial court found, the AOA included no provision for adjustment of the
members’ equal, 50% percentage interests based on disproportionate contributions to the LLC.

         Plaintiffs also contend that causation is an issue for the trier of fact. However, “while
causation is generally a matter for the trier of fact, if there is no issue of material fact, then the
issue is one of law for the court.” Holton v A+ Ins Assoc, Inc, 255 Mich App 318, 326; 661 NW2d
248 (2003). Here, the terms of the AOA provided for no division of the LLC’s assets, other than
an equal division between the members. Accordingly, the trial court correctly concluded that
plaintiffs failed to establish a genuine issue of material fact regarding causation.

        Next, plaintiffs contend that Sills’s ability to file an amended 2018 tax return does not
defeat causation on plaintiffs’ accounting malpractice claim arising from the 2018 tax return. We
conclude that because plaintiffs failed to file an amended return, the trial court did not err by
granting summary disposition in favor of defendants.

        The trial court, citing Boyle, 168 Mich App at 745, ruled that “there is no dispute that Sills
can still file an amended return, thereby negating causation,” and found that plaintiffs’ damages
were speculative. In Boyle, the plaintiff was injured in a motor-vehicle accident and retained the
defendant to represent her in claims arising from the accident. After the plaintiff obtained a
settlement against the other driver and his insurer, she hired new counsel to represent her in
additional claims arising from the accident and subsequently sued the defendant for malpractice.
The trial court granted summary disposition in favor of the defendant, and the plaintiff appealed
to this Court, contending that the trial court should have granted her request to amend her
complaint to allege malpractice on the basis of the defendant’s failure to file a social-host action
before expiration of the period of limitations for that action. Id. at 740-743. Affirming the trial
court, this Court ruled that the defendant could not be held liable for failing to file a social-host
action because “he ceased to represent plaintiff and was replaced by other counsel before the
statutory period ran on her underlying action.” Id. at 745.

        Defendants here prepared a draft amended return for Sills and Levey and presented it to
Sills and Levy under cover of a letter dated June 2, 2021, with instructions to sign, date, and return
the document “AS SOON AS POSSIBLE.” Kaplan was questioned in his deposition in the divorce

                                                 -9-
action by Sills’s counsel six days later. The amended return was never filed, and plaintiffs’
complaint was filed one year later in June 2022, with plaintiffs alleging that defendants breached
the standard of care by failing to properly prepare the 2018 tax return and failing to correct the
errors. Plaintiffs assert that Sills wanted defendants to file an amended return, but defendants
refused to sign and file the amended return. In the trial court, plaintiffs asserted both that
defendants “refuse to present a return for the parties to sign” and “have prepared the amended
return, but now refuse to sign it or stand behind it because Plaintiffs have filed this action against
them.” Contrary to plaintiffs’ argument here, it appears that defendants did present an amended
tax return for Sills and Levey to sign on June 2, 2021. Moreover, Sills has provided no evidence
or affidavit to support the assertion that defendants refused to sign it, or stating when they refused
to do so. In addition, Sills failed to provide any support for the assertion that a new accountant
was required to review the 2018 and prepare an amended return, and only speculated that the cost
of doing so “will likely be a large portion of the refund or exceed the refund.”

         Defendants do not contest plaintiffs’ assertion that they refused to sign the amended return,
but instead assert that their professional relationship with Sills ended either when Kaplan was
questioned in his deposition, or one year later, when the malpractice action was filed, and when
Sills still had time to correct the alleged malpractice by filing an amended return, citing Morgan v
Taylor, 434 Mich 180, 189 n 15; 451 NW2d 852 (1990), for the proposition that filing a
malpractice action ends the professional relationship.1 However, Sills sued defendants in the
consolidated action as early as March 12, 2021, yet defendants presented an amended return three
months later, on June 2, 2021. Defendants have presented no evidence that they ever ended the
professional relationship.

        A claim for refund of overpaid federal income tax must generally be filed within three
years from the time the return was filed or two years from the time the tax was paid, whichever is
later. See 26 USC 6511(a). Defendants presented evidence that the 2018 tax return of Sills and
Levey was filed on October 14, 2019. Thus, Sills could have filed an amended return as late as
October 14, 2022. Whether defendants terminated their relationship with plaintiffs does not alter
the fact that defendants presented an amended return to Sills and Levey one year before plaintiffs
filed this action, plaintiffs presented no evidence that defendants “refused” to file an amended
return or of when they refused to do so, and plaintiffs still had time to file an amended return, even
after the trial court granted summary disposition. The trial court did not err by granting summary
disposition in favor of defendants.

       Moreover, plaintiffs contend the trial court erred by granting summary disposition before
discovery had even commenced. Because plaintiffs failed to offer independent evidence in support

1
  In this case, the Supreme Court held that the statute of limitations in a medical malpractice case
“begins to run when there is an ‘occurrence’ between visits which indicates that the original doctor-
patient relationship and its ‘accompanying air of trustfulness’ have been terminated.” Morgan,
434 Mich at 189. The Court explained that “[i]n other cases, the facts indicated an occurrence,
such as the plaintiff’s consultation with attorneys concerning a possible malpractice claim or the
plaintiff’s decision to no longer treat the defendant, severed the doctor-patient relationship.” Id.
at 189 n 15.

                                                -10-
of their opposition to the motion for summary disposition, we conclude that the trial court did not
err by granting summary disposition in favor of defendants before the completion of discovery.

        Summary disposition is generally premature if granted before the completion of discovery
on a disputed issue, but may be appropriate “if there is no fair chance that further discovery will
result in factual support for the party opposing the motion.” Mackey v Dep’t of Corrections, 205
Mich App 330, 333; 517 NW2d 303 (1994). A party opposing summary disposition may not
simply allege that summary disposition is premature, but must clearly identify a disputed issue for
which they assert discovery must be conducted, support the issue with independent evidence, and
show that further discovery presents a fair likelihood of providing factual support for the opposing
party’s position. Powell-Murphy v Revitalizing Auto Communities Environmental Response Trust,
333 Mich App 234, 253; 964 NW2d 50 (2020).

        The trial court ruled that summary disposition was not premature because the parties had
been engaged in litigation since 2020, Sills had hired a certified public accountant to audit the
LLC, and Sills had engaged in extensive discovery in the divorce action and consolidated civil
action, which produced 16,000 pages of documents and included the depositions of Kaplan and a
staff accountant from his firm. The court concluded that no amount of discovery would establish
a causal connection between defendants’ conduct and plaintiffs’ alleged injuries or alter the fact
that the time for filing an amended 2018 tax return had not expired.

        Plaintiffs contend the discovery from the divorce case did not include expert testimony and
the issues raised in the divorce action did not focus on breach of duty and malpractice. However,
Kaplan’s deposition in the divorce action was focused extensively on conduct that plaintiffs
alleged constituted malpractice. Moreover, plaintiffs’ allegations of malpractice arising from
defendants’ treatment of the unequal contributions relied almost exclusively on plaintiffs’ claim
that ¶ 2.3 of the AOA and 26 CFR l.704-1(b)(2)(iv)(q) required that unequal capital contributions
be treated as loans to the LLC. However, neither ¶ 2.3 nor 26 CFR 1.704-1(b)(2)(iv)(q) include
such a requirement, plaintiffs failed to produce any expert testimony or argument to support that
interpretation, and there is no likelihood that further discovery will do so. Indeed, plaintiffs failed
to support this argument with any affidavits or evidence regarding expert testimony that might be
offered. While plaintiffs also alleged malpractice and breach of fiduciary duty in connection with
defendants’ equalization of their capital contributions, plaintiffs have not offered any independent
evidence in support of this issue. Regarding the 2018 tax return, there is no likelihood that further
discovery will alter the fact that Sills had until October 14, 2022, to file an amended return.

        Finally, as alternative grounds to affirm the trial court, defendants assert they owed no duty
to plaintiffs’ trust, they owed no duty to Sills related to his services provided to the LLC, and any
duty owed to Sills would not extend to services he provided to the LLC.2 The trial court declined
to address this issue, having granted summary disposition on the basis of lack of causation.

2
 An appellee need not file a cross-appeal to argue alternative reasons affirm a trial court’s decision,
but to properly preserve a claim for appeal, the reasons must first be presented to the lower court.
City of Riverview v Sibley Limestone, 270 Mich App 627, 633 n 4; 716 NW2d 615 (2006).

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Because we affirm the trial court’s order granting summary disposition in favor of defendants, we
likewise decline to address this issue.

       Affirmed.

                                                           /s/ Elizabeth L. Gleicher
                                                           /s/ Stephen L. Borrello
                                                           /s/ Douglas B. Shapiro

                                              -12-