Court Opinion

ID: 2797332
Source: CourtListenerOpinion
Date Created: 2015-04-29 15:06:55.30499+00
Date Added: 2024-06-11T12:12:13.830772
License: Public Domain

STATE OF MICHIGAN

                             COURT OF APPEALS

CONTROL ROOM TECHNOLOGIES, L.L.C.,                                   UNPUBLISHED
and LANSING FIBER COMMUNICATIONS,                                    April 28, 2015
L.L.C.,

               Plaintiffs/Counter Defendants-
               Appellees,

v                                                                    No. 320553
                                                                     Ingham Circuit Court
WAYPOINT FIBER NETWORKS, L.L.C.,                                     LC No. 10-000274-CK
WAYPOINT TELECOMMUNICATIONS,
L.L.C., R. CHARLES MCLRAVY, G.
WOODWARD STOVER, and PETER EMPIE,

               Defendants,

and

KEPS TECHNOLOGIES, INC., d/b/a ACD.NET,

               Defendant/Counter Plaintiff-
               Appellant.

Before: O’CONNELL, P.J., and FORT HOOD and GADOLA, JJ.

O’CONNELL, P.J. (dissenting).

        I respectfully dissent. In my opinion, the parties’ settlement agreement was sufficiently
definite regarding its material terms to constitute an enforceable contract. Accordingly, the
arbitration provision of the settlement agreement was enforceable, and the trial court properly
dismissed the case for arbitration. I would therefore affirm.

        While the majority ably states the facts in this case, I note that this case does not involve
a three-page contract: it actually involves a contract in excess of 50 pages. The third paragraph
of the handwritten settlement agreement incorporated the parties’ June 15, 2006, Extended IRU

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Agreement by reference1 and provided that “[e]xcept as modified by the definitive agreement to
be subsequently entered into[], the Extended IRU Agreement dated 6/15/06 is binding on the
parties.” Notably, the June 15, 2006 Extended IRU Agreement, like the settlement agreement at
issue, includes a dispute resolution process that provides for binding arbitration.

        In Michigan, a contract to make a contract is as valid as any other contract. Opdyke
Investment Co v Norris Grain Co, 413 Mich 354, 359; 320 NW2d 836 (1982). “To be
enforceable, a contract to enter into a future contract must specify all its material and essential
terms and leave none to be agreed upon as the result of future negotiations.” Heritage
Broadcasting Co v Wilson Communications, Inc, 170 Mich App 812, 819; 428 NW2d 784
(1988). The “material terms which must be established before an agreement becomes
enforceable are generally the identification of the parties, the property, and the consideration.”
Kojaian v Ernst, 177 Mich App 727, 731; 442 NW2d 286 (1989). “When other terms, such as
the time for performance or payment, are missing, courts will presume reasonable terms unless
the parties express a contrary intention.” Id. at 731 (emphasis added). See Opdyke, 413 Mich at
368.

        My primary dispute with the majority’s analysis lies in its determination that the terms
left “to be determined” by the parties’ settlement agreement constitute material terms. The
settlement agreement in this case identifies the parties, the property, and the consideration.
Accordingly, it contains all the material terms necessary for an enforceable contract. The only
terms left “to be determined” are periods of time. Periods of time are not material terms, and
when the parties leave such terms open, courts presume a reasonable time. See Opdyke, 413
Mich at 368; Kojaian, 177 Mich App at 731. The only questionable term is the further
performance terms for splice requests, which the parties left “to be determined.” However,
because the parties’ settlement agreement did not alter these terms, the terms of the Extended
IRU Agreement are valid, and the Extended IRU agreement contains provisions regarding
splicing under its Article 10, and further provides that all work shall be performed according to
ordinary business standards. I conclude that the handwritten settlement agreement did not leave

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  The majority believes that the handwritten settlement agreement does not “successfully”
incorporate the Extended IRU Agreement because the settlement agreement itself is not valid.
The majority is simply wrong. It is well-established that when a contract incorporates another
writing by reference, it becomes part of the contract, and courts must construe the two
documents as a whole. Whittlesey v Herbrand Co, 217 Mich 625, 627; 187 NW 279 (1922).
Where “one writing refers to another, the intention of the parties is to be gathered from the two
instruments taken together.” Id., quoting Bronson v Green, Walk 56, 59 (Mich, 1842). “[I]f the
reference be such as to show that it is made for the purpose of making such writing a part of the
contract, it is to be taken as a part of it just as though its contents had been repeated in the
contract.” Whittlesey, 217 Mich at 628, quoting Short v Van Dyke, 50 Minn 286, 289; 52 NW
643 (1892). The majority’s unique methodology of contract interpretation is contrary to an
extremely long line of Michigan precedent stretching back to chancery proceedings in this state
in 1842. This Court does not view contracts that explicitly incorporate other contracts as
separate instruments.

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open any material terms, and that the settlement agreement contains all the necessary elements of
an enforceable contract.

        In my opinion, the handwritten settlement agreement provided “cursory” treatment of the
parties’ complex issues because the Extended IRU Agreement, which the parties made part of
the settlement agreement by reference, already covered those complex issues unless specifically
modified by the handwritten settlement agreement. In any event, the settlement agreement was a
valid contract because it did not omit any material terms. Under both the settlement agreement
and the Extended IRU Agreement, this dispute should be submitted to binding arbitration.

       I would affirm.

                                                           /s/ Peter D. O’Connell

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