Court Opinion

ID: 6800611
Source: CourtListenerOpinion
Date Created: 2022-07-22 06:05:24.905898+00
Date Added: 2024-06-11T16:03:11.552606
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

JASMIN ADILOVIC,                                                     UNPUBLISHED
                                                                     July 21, 2022
               Plaintiff-Appellant,

v                                                                    No. 357342
                                                                     Kent Circuit Court
MONROE, LLC,                                                         LC No. 20-003233-CZ

               Defendant-Appellee.

Before: SAWYER, P.J., and LETICA and PATEL, JJ.

PER CURIAM.

       In this employment action, plaintiff appeals as of right the trial court order granting
defendant’s motion for summary disposition. We affirm.

                      I. BASIC FACTS AND PROCEDURAL HISTORY

        On May 4, 2020, plaintiff filed a complaint alleging that he was wrongfully terminated
from his employment in retaliation for requesting benefits under the Michigan Worker’s Disability
Compensation Act (WDCA), MCL 418.101 et seq. Specifically, plaintiff alleged that he was hired
by defendant as an inventory auditor on March 15, 2017. On April 27, 2017, plaintiff claimed that
he was working when he placed totes on the ground and straightened up only to experience pain
in his back that radiated down to his left leg and into his toes. Plaintiff asserted that he made his
claim for worker’s compensation benefits on April 27, 2017, “and [in] the days following.”
Nonetheless, defendant “terminated or otherwise ceased Plaintiff’s employment” on May 8, 2017.
It was alleged that the termination was in retaliation for making the disability benefits claim.
Plaintiff further alleged that he suffered damages “as a result of Defendant’s discrimination against
him.”1

1
 Plaintiff did not label his claim (i.e., Count I–wrongful termination), but made general statements
of “retaliation” and “discrimination.” The gist of plaintiff’s complaint is that he was wrongfully

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        Defendant filed a motion for summary disposition under MCR 2.116(C)(7) and (10).
According to the dispositive brief, defendant’s plastic manufacturing business began operations in
Kentwood, Michigan in 1971. On March 15, 2017, it hired plaintiff as an inventory auditor to
work the first shift in the molding department. When hired, plaintiff submitted an application and
signed a supplement acknowledging the terms and conditions of his employment. This supplement
expressly limited any claim or lawsuit to be filed no more than six months after the date of the
challenged employment action and further provided that there was a free and knowing waiver of
any statute of limitations to the contrary.

        According to defendant, the dates pertaining to plaintiff’s employment indicated that he
signed the supplemental agreement on March 15, 2017, claimed to suffer injury on April 27, 2017,
and was terminated on May 8, 2017. Nonetheless, plaintiff did not file his complaint until May 4,
2020, two years and 361 days after his termination. In his requests to admit, plaintiff
acknowledged that he signed the supplement and that the document reflects his signature.
Although the period governing the underlying cause of action was three years, defendant alleged
that plaintiff contractually agreed to a lesser period of limitations of six months. It was also
asserted that a shortened statute of limitations will be enforced unless it violates law or public
policy. Furthermore, an individual who signed an agreement was deemed to know its contents and
could not claim ignorance of the contractual terms. Therefore, defendant submitted that plaintiff
could not preclude enforcement of the supplement terms by claiming that he did not read or
understand the terms particularly when the supplement unambiguously barred any cause of action
beyond six months of the date of accrual. Accordingly, defendant claimed entitlement to summary
disposition.

         Plaintiff filed a responsive brief in opposition to defendant’s motion for summary
disposition. Plaintiff alleged that he obtained a four-year degree in electronics, served in the army,
and was a police officer while living in Bosnia. Following the war in Bosnia, plaintiff emigrated
to Germany and then to the United States where he became a United States citizen. When he
applied and interviewed for the job with defendant on March 10, 2017, plaintiff alleged that he
advised the human resources director and molding manager that he “did not speak or understand
English well.” On March 13, 2017, plaintiff was offered the job of inventory auditor at an hourly
rate of $13.00. On March 15, 2017, he reported to work and believed that the office manager gave
him paperwork to sign. Plaintiff alleged that he advised the office manager that English was not
his first language, and he would need help understanding some words in the paperwork. However,
she merely wrote inventory auditor on the form and directed him where to sign. Consequently,
plaintiff filled out the application to the best of his ability without assistance. He did not
understand the terms “waive” or “statute of limitations” but “believed and relied on the Officer
Manager’s statement that the Application for Employment and Supplement I were paperwork that
he had to sign for his employment, and proceeded to sign Supplement I.” On April 27, 2017,
plaintiff allegedly suffered a work-related injury and made a worker’s compensation claim.

terminated from his employment for seeking disability benefits. Plaintiff did not raise a claim
addressing fraudulent or innocent misrepresentation or fraud in the inducement.

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Defendant informed plaintiff that he was terminated for incidents that occurred between April 27,
2017, and May 8, 2017.

         Plaintiff alleged that the waiver of the three-year statute of limitations did not apply
because there was a lack of consideration and mutuality of agreement to support it. He claimed
that defendant’s human resources director was required to aver that defendant provided plaintiff
with consideration for the signing of the supplement because the document did not contain the
assertion. It was alleged that because plaintiff was hired on the phone two days before he signed
the supplement, plaintiff received consideration for the verbal contract but not the supplement,
thereby lacking mutuality of obligation. Plaintiff also claimed that the waiver was unenforceable
because it was not knowingly and voluntarily executed, citing federal caselaw. Finally, plaintiff
claimed there was a factual issue regarding whether the office manager committed fraudulent or
innocent misrepresentation by having him sign paperwork without explaining the document,
failing to offer a written version in his native Bosnian language, or offering to provide a translator.
Plaintiff asserted that summary disposition should be denied.

        In its reply brief, defendant asserted that well-established Michigan law applied and
plaintiff’s reliance on nonbinding federal authority to avoid summary disposition was
inappropriate. Defendant submitted the offer of employment and payment of wages was sufficient
consideration and mutuality of obligation was unnecessary to enforce a contract. Further, in
Michigan, the unambiguous language of a written agreement to shorten the application statute of
limitations in employment relationships did not violate law or public policy. The fact that plaintiff
failed to read the agreement did not render it invalid or unenforceable; rather, plaintiff had to show
fraud or mutual mistake. An individual who signs a contract is presumed to know and understand
the terms. Consequently, defendant sought summary disposition of plaintiff’s complaint.

        After the parties argued their respective positions, the trial court granted defendant’s
motion. The trial court noted the contract’s unambiguous language had to be enforced as written
and that private parties had the right to contract for shorter limitations periods than those specified
in general statutes absent a traditional defense to the contract or a violation of public policy. The
trial court found the six-month period of limitations was enforceable. From this decision, plaintiff
appeals.

                                  II. STANDARDS OF REVIEW

       A trial court’s ruling on a motion for summary disposition is reviewed de novo. Houston
v Mint Group, LLC, 335 Mich App 545, 557; 968 NW2d 9 (2021). Under MCR 2.116(C)(7),
summary disposition is proper if a claim is barred by the statute of limitations. Sabbagh v Hamilton
Psychological Servs, PLC, 329 Mich App 324, 335; 941 NW2d 685 (2019). When examining a
motion premised on MCR 2.116(C)(7), all well pleaded allegations are accepted as true and
construed in the light most favorable to the nonmoving party. Id. at 335-336. Additionally, all
documentary evidence submitted by the parties is examined when the motion is brought under
MCR 2.116(C)(7). Id. at 336.

       Summary disposition is appropriate pursuant to MCR 2.116(C)(10) where there is “no
genuine issue as to any material fact, and the moving party is entitled to judgment or partial
judgment as a matter of law.” MCR 2.116(C)(10). When reviewing a motion for summary

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disposition challenged under MCR 2.116(C)(10), the court considers the affidavits, pleadings,
depositions, admissions, and other admissible documentary evidence then filed in the action or
submitted by the parties in the light most favorable to the nonmoving party. MCR 2.116(G)(4),
(G)(5); Buhl v City of Oak Park, 507 Mich 236, 242; 968 NW2d 348 (2021).

                                         III. ANALYSIS

        Plaintiff contends that the waiver of the statute of limitations was improper because there
was a lack of consideration and mutuality of agreement, the waiver was not knowingly,
intelligently, and voluntarily made, and defendant committed fraudulent or innocent
misrepresentation. We disagree.

        “The existence and interpretation of a contract are questions of law reviewed de novo.”
Clark v Progressive Ins Co, 309 Mich App 387, 394; 872 NW2d 730 (2015) (citation omitted).
“A valid contract requires five elements: (1) parties competent to contract, (2) a proper subject
matter, (3) legal consideration, (4) mutuality of agreement, and (5) mutuality of obligation.” AFT
Mich v Michigan, 497 Mich 197, 235; 866 NW2d 782 (2015). “The essence of consideration—
whatever form it takes—is that there be a bargained-for exchange between the parties.” Calhoun
Co v Blue Cross & Blue Shield, 297 Mich App 1, 13-14; 824 NW2d 202 (2012). Generally,
consideration on one side of the contract involves payment of legal tender. Id. The enforceability
of a contract is contingent on consideration, not mutuality of obligation. Timko v Oakwood Custom
Coating, Inc, 244 Mich App 234, 244; 625 NW2d 101 (2001).2 A 180-day period of limitations
may be enforced even if listed in the employment application because the terms of the employment
application become part of the contract of employment. Id. An employer provides consideration
to an applicant to support enforcement of the employment application terms through the
employment and wages. Id.

       When interpreting a contract, the examining court must ascertain the intent of the
       parties by evaluating the language of the contract in accordance with its plain and
       ordinary meaning. In re Egbert R Smith Trust, 480 Mich 19, 24; 745 NW2d 754
       (2008). If the language of the contract is clear and unambiguous, it must be
       enforced as written. Id. A contract is unambiguous, even if inartfully worded or
       clumsily arranged, when it fairly admits of but one interpretation. Holmes v
       Holmes, 281 Mich App 575, 594; 760 NW2d 300 (2008). Every word, phrase, and
       clause in a contract must be given effect, and contract interpretation that would
       render any part of the contract surplusage or nugatory must be avoided.
       Woodington v Shokoohi, 288 Mich App 352, 374; 792 NW2d 63 (2010). [McCoig
       Materials, LLC v Galui Constr, Inc, 295 Mich App 684, 694; 818 NW2d 410
       (2012).]

2
  We recognize that our Supreme Court has ordered that oral argument be scheduled in the
application pending in McMillon v City of Kalamazoo, ___ Mich ___ ; 969 NW2d 10 (2022). The
Court directed supplemental briefing to address whether the Timko decision “correctly held that
limitations clauses in employment applications are part of the binding employment contract”
among other potential issues. Id.

                                                -4-
The bedrock of contract law is that the “parties are free to contract as they see fit, and the courts
are to enforce the agreement as written absent some unusual circumstances, such as a contract in
violation of law or public policy.” Wilkie v Auto-Owners Ins Co, 469 Mich 41, 51; 664 NW2d
776 (2003).

       In Rory v Continental Ins Co, 473 Mich 457, 460; 703 NW2d 23 (2005), the trial court
refused to enforce the one-year contractual limitations period contained in the insurance policy
issued to the plaintiffs by reasoning that the provision was unfair, unreasonable, and an
unenforceable adhesion clause. The Court of Appeals affirmed. Id. at 463-464. Our Supreme
Court reversed, stating:

               A fundamental tenet of our jurisprudence is that unambiguous contracts are
       not open to judicial construction and must be enforced as written. Courts enforce
       contracts according to their unambiguous terms because doing so respects the
       freedom of individuals freely to arrange their affairs via contract. This Court has
       previously noted that “the general rule [of contracts] is that competent persons shall
       have the utmost liberty of contracting and that their agreements voluntarily and
       fairly made shall be held valid and enforced in the courts.

              When a court abrogates unambiguous contractual provisions based on its
       own independent assessment of “reasonableness,” the court undermines the parties’
       freedom of contract . . . .

               Accordingly we hold that an unambiguous contractual provision providing
       for a shortened period of limitations is to be enforced as written unless the provision
       would violate law or public policy. A mere judicial assessment of “reasonableness”
       is an invalid basis upon which to refuse to enforce contractual provisions. Only
       recognized traditional contract defenses may be used to avoid the enforcement of
       the contract provision. [Id. at 468-470.]

        “Michigan law presumes that one who signs a written agreement knows the nature of the
instrument so executed and understands its contents.” Galea v FCA US LLC, 323 Mich App 360,
369; 917 NW2d 694 (2018) (citation omitted). “Moreover, mere failure to read an agreement is
not a defense in an action to enforce the terms of a written agreement.” Id. When a plaintiff fails
to deny signing a document or assert that the document was signed under duress, an argument
precluding enforcement has not been presented. See id.3

3
  We note that plaintiff predominantly cited to federal authority in support of his position.
However, decisions from the federal courts are not binding, but their analyses and conclusions
may be persuasive. Abela v GMC, 469 Mich 603, 607; 677 NW2d 325 (2004). Because the area
of contracts law has been developed in Michigan, we applied the caselaw from our courts in
rendering our decision.

                                                -5-
                         A. THE APPLICATION AND SUPPLEMENT

        According to the employment application prepared on March 15, 2017, plaintiff
successfully wrote out his name, address, and phone number. In response to the question regarding
prior convictions or present criminal charges, plaintiff wrote, “NO.” He further identified his prior
employer and dates of employment. Also on March 15, 2017, plaintiff signed and dated
“SUPPLEMENT 1.” Underneath the document title, it stated in all-capital letters: “READ
CAREFULLY AND SIGN BELOW IF YOU AGREE TO THESE TERMS OF
EMPLOYMENT.” This supplement contained the following paragraphs:

                I agree that I will not commence any action or lawsuit relating to my
       employment with the Company, or the termination of my employment, more than
       6 months after the the [sic] date of the employment action that is the subject of the
       claim or lawsuit, and I agree to waive any statute of limitations to the contrary. I
       understand that this means that even if the law would give me the right to wait a
       longer time to make a claim, I am freely and knowingly waiving that right, and that
       any claims not brought within 6 months after the date of the employment action
       that is the subject of the claim or lawsuit will be barred. I waive any right to a jury
       trial if I ever sue the Company relating to my employment with the Company. I
       understand that this means that even if the law would give me the right to have a
       jury decide my claims, I am freely and knowingly waiving that right and agree to
       have my claims heard and decided by a judge instead.

               I agree to the above terms of employment. I agree that if any of the above
       terms is ever found to be legally unenforceable as written, such invalidity will not
       affect the validity of the rest of this agreement, and such term shall be limited to
       allow its enforcement as far as legally possible. I agree that no one other than the
       president of the Company, by a written directive, has any authority to modify the
       above terms of employment, or to make any exception to them, or to offer
       employment on any other terms.

               I agree that I will be bound by and will adhere to any other rules and policies
       issued by the Company, including all rules and policies contained in the Company’s
       employee handbook.

        The plain language of the supplement provides that plaintiff waived any contrary statute of
limitations and agreed to a 6-month period of limitations “after the the [sic] date of the employment
action that is the subject of the claim or lawsuit.” The bedrock of contract law is that the “parties
are free to contract as they see fit, and the courts are to enforce the agreement as written absent
some unusual circumstances, such as a contract in violation of law or public policy.” Wilkie, 469
Mich at 51. If the language of the contract is clear and unambiguous, it must be enforced as
written. McCoig Materials, LLC, 295 Mich App at 694. Absent a violation of law or public policy,
an unambiguous contractual provision providing for a shortened period of limitations is to be
enforced as written. Rory, 473 Mich at 470. Plaintiff failed to identify a violation of law or public
policy to excuse enforcement of the six-month period of limitations set forth in the clear and
unambiguous language in the supplement he signed.

                                                -6-
                           B. CONSIDERATION AND MUTUALITY

        To avoid application of the 6-month period of limitations, plaintiff submits that he accepted
the offer of employment over the phone on March 13, 2017, and signed the supplement on
March 15, 2017. Therefore, plaintiff asserts that he was not given any consideration in exchange
for the terms of the supplement.

         As noted, consideration is essentially a bargained-for exchange between the parties, and
consideration by one party generally involves payment of legal tender. Calhoun Co, 297 Mich
App at 13-14. The enforceability of a contract is contingent on consideration, not mutuality of
obligation. Timko, 244 Mich App at 244. A 180-day period of limitations may be enforced even
if listed in the employment application because the terms of the employment application become
part of the contract of employment. Id. An employer provides consideration to an applicant to
support enforcement of the employment application terms through the employment and wages. Id.

        In Timko, the plaintiff was 79 years old when he began tool and die work for the defendant
on August 26, 1996. On August 28, 1996, he signed a three-paragraph employment application
which contained a three-paragraph authorization and understanding section. This section provided
that the employment relationship was at-will. Additionally, the agreement delineated that the
plaintiff’s claims had to be brought within 180 days of the event giving rise to his claims or be
barred. On February 7, 1997, the plaintiff was purportedly discharged for unsatisfactory
performance, and on March 3, 1998, he filed suit alleging age discrimination. The defendant
moved for summary disposition, relying on the 180-day period of limitations. Timko, 244 Mich
App at 236-237. The Timko decision was rendered prior to the decision in Rory, and this Court
concluded that there was nothing unreasonable about the 180-day period because it allowed
adequate time for investigation and to file suit. Id. at 238-244.

        In addition to challenging the reasonableness of the reduction of the period of limitations,
the plaintiff also alleged that the defendant could not enforce the reduced time period because it
did not have any obligation in the contract. This Court rejected the challenge, stating:

              “The enforceability of a contract depends, however, on consideration and
       not mutuality of obligation.” This Court previously has recognized that the terms
       of an employment application constituted part of an employee’s and employer’s
       contract of employment. Here, [the] defendant clearly provided [the] plaintiff
       consideration to support enforcement of the terms of the application, specifically
       employment and wages. [Id. at 244 (citations omitted).]

        In the present case, plaintiff alleged that he received a phone call offering employment,
and he accepted. Accordingly, plaintiff submits there was a lack of consideration for the
supplement because there was no additional consideration offered. However, plaintiff’s position
is contrary to the Timko decision which concludes that even terms contained in the employment
application become part of the employment contract. As noted, the supplement commenced with
the all-capital letter notice that the document had to be signed if plaintiff agreed to the terms of
employment. In addition to limiting the period of limitations to file litigation to six months, the
agreement also advised plaintiff that he was an at-will employee, that his office, locker, or desk
were defendant’s property and subject to inspection, that confidential and propriety information

                                                -7-
belonged to defendant, and that he was subject to drug screens. Lastly, the supplement provided
that plaintiff agreed to be bound by the rules and policies contained in defendant’s handbook.
Nonetheless, plaintiff alleges that the supplement cannot be enforced because additional
consideration was not proffered. However, as noted, the supplement contained the terms of
employment. It outlined the responsibilities of plaintiff during the course of his employment.
Thus, additional consideration was not required because the supplement delineated the conditions
that plaintiff would abide by while he was at work and for which he received his hourly wage.
Timko, 244 Mich App at 244.

                     C. FREELY, KNOWINGLY, AND VOLUNTARILY

        Next, plaintiff submits that he did not freely, knowingly, and voluntarily waive the three-
year statute of limitations and agree to a six-month period of limitations because he was an
immigrant who did not understand the terms of the supplement. Further, plaintiff alleged that he
was not given a copy of the supplement in his native language and the terms were not explained
to him.

        But Michigan law presumes that one who signs a written agreement knows the nature of
the instrument so executed and understands its contents. Galea, 323 Mich App at 369. The failure
to read an agreement is not a defense to the enforcement of its terms. Id. When a plaintiff fails to
deny signing a document or assert that the document was signed under duress, an argument
precluding enforcement has not been presented. Id. Because plaintiff signed the supplement, it is
presumed that he was aware of the contents and the failure to read the document is not a defense.
This challenge does not entitle him to appellate relief.4

                D. FRAUDULENT OR INNOCENT MISREPRESENTATION

       Finally, plaintiff alleged that summary disposition was inappropriate because the office
manager committed fraudulent or innocent misrepresentation. However, plaintiff did not raise a
claim of fraudulent or innocent misrepresentation in his complaint and did not request the
opportunity to file an amended complaint. See MCR 2.116(I)(5).

      In Custom Data Solutions, Inc v Preferred Capital, Inc, 274 Mich App 239, 242-243; 733
NW2d 102 (2006), this Court delineated the following principles addressing fraud in the
inducement:

4
  Although not raised in the statement of questions presented, plaintiff also noted that the
supplement waived the right to a jury trial. However, even if we assumed, without deciding that
the provision was illegal, the general rule is that illegal portions of a contractual agreement may
be severed. Stokes v Millen Roofing Co, 466 Mich 660, 666; 649 NW2d 371 (2002); AFSCME
Mich Counsel 25 v City of Detroit, 267 Mich App 255, 262; 704 NW2d 712 (2005). And in this
case the supplement provided: “I agree that if any of the above terms is ever found to be legally
unenforceable as written, such invalidity will not affect the validity of the rest of this
agreement . . . .”

                                                -8-
       “[I]n general, actionable fraud must be predicated on a statement relating to a past
       or an existing fact.” Samuel D Begola Services, Inc v Wild Bros, 210 Mich App
       636, 639; 534 NW2d 217 (1995). However, “Michigan also recognizes fraud in
       the inducement . . . [which] occurs where a party materially misrepresents future
       conduct under circumstances in which the assertions may reasonably be expected
       to be relied upon and are relied upon.” Id. To establish a fraud in the inducement,
       a party must show that

       “(1) the defendant made a material representation; (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 and as a positive
       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.” [Belle Isle Grill Corp v Detroit, 256 Mich App 463,
       477; 666 NW2d 271 (2003); M&D, Inc v McConkey, 226 Mich App 801, 806; 573
       NW2d 281 (1997).]

       “Fraud in the inducement to enter a contract renders the contract voidable at the
       option of the defrauded party.” Samuel D Begola Services, supra at 640.

In his affidavit, plaintiff alleged that: “I believed and relied on the Office Manager’s statement that
the Application For Employment and Supplement I were paperwork that I had to sign for my
employment, and proceeded to sign Supplement I.” Plaintiff fails to apply the facts of his
employment to the elements of fraud. Indeed, it is difficult to discern how the office manager
committed fraud because the contention that the office manager told him to sign the agreement for
his employment is consistent with the instructions on the supplement. That is, in order to obtain
the employment, plaintiff had to agree to the terms. Plaintiff fails to identify a specific clear and
convincing statement that the office manager made that induced him to sign the agreement.
(“Fraud is not presumed but must be proven by clear, satisfactory, and convincing proof.” Youngs
v Tuttle Hills Corp, 373 Mich 145, 147; 128 NW2d 472 (1964).) Accordingly, the trial court did
not err in granting defendant’s motion for summary disposition.

       Affirmed.

                                                               /s/ David H. Sawyer
                                                               /s/ Anica Letica
                                                               /s/ Sima G. Patel

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