Court Opinion

ID: 4247160
Source: CourtListenerOpinion
Date Created: 2018-02-22 08:12:42.777503+00
Date Added: 2024-06-11T14:44:21.364750
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

CITY OF LANSING,                                                     UNPUBLISHED
                                                                     February 20, 2018
               Plaintiff-Appellant,

v                                                                    No. 336273
                                                                     Court of Claims
DEPARTMENT OF TECHNOLOGY                                             LC No. 16-000220-MK
MANAGEMENT AND BUDGET,

               Defendant-Appellee.

Before: MURPHY, P.J., and O’CONNELL and K. F. KELLY, JJ.

PER CURIAM.

       Plaintiff, the City of Lansing (the City), appeals as of right the Court of Claims’ order
granting summary disposition to defendant, the Department of Technology Management and
Budget (the State), under MCR 2.116(C)(8) (failure to state claim) and (C)(10) (no genuine issue
of material fact). We affirm.

                                       I. BACKGROUND

        This case arises from the exchange of property and a subsequent lease between the
parties. In 2001, the parties began a development project to provide parking to certain State
employees. To facilitate the project, the Legislature authorized a property exchange between the
parties in 2001 PA 92. Section (3)(6)(a) of 2001 PA 92 required the property conveyed to the
City to “be used for a project that will include city owned parking.” Section (3)(6)(b) provided:

               The city of Lansing shall cause to be provided to the state of Michigan,
       within the parcel of property described in subsection (1), not less than 400 or
       more than 500 reserved parking spaces for senate employees for a period of not
       less than 50 years. Senate employees who are designated to park in these spaces
       shall pay a rate of not more than $40.00 per month, adjusted annually by the
       Detroit consumer price index.

        The City made an offer to purchase the property pursuant to 2001 PA 92. The offer
proposed that the City and the State exchange quitclaim deeds for the properties to be exchanged.
The offer provided that each party’s delivery of its quitclaim deed fully discharged its contractual
obligations unless otherwise stated. Paragraph 11 of the offer memorialized the legislation’s
mandate that the City use the property to provide parking to the State:

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       Upon completion of the project on the site, [the City] and [the State] agree that
       [the City] shall cause to be provided to the State of Michigan, within the Property,
       (1) not less than 400 or more than 500 reserved parking spaces for senate
       employees for a period of not less than 50 years; (2) The State of Michigan shall
       pay $100.00 per month for each space, with the non-debt service portion of that
       rate adjusted annually by the Detroit consumer price index[;] (3) Senate
       employees who are designated to park in these spaces shall be made third party
       beneficiaries under said agreement and shall pay the State of Michigan a rate of
       not more than $40.00 per month, adjusted annually by the Detroit consumer price
       index. This paragraph shall survive the closing, and shall only be satisfied and
       extinguished by a valid recordable document or binding contract that runs with
       the land that sets forth essentially the same terms.

       The State then executed a quitclaim deed transferring the State’s property to the City.
The quitclaim deed also contained a provision repeating the terms of the City’s obligation to
provide parking.

        The City and Boji Group of Lansing, LLC, a private development group, entered into a
lease agreement with the State in December 2001. The City agreed to lease 400 parking spaces
to the State with the option to reserve up to 100 more parking spaces for the lease term. Each
year, the State had the option to lease an additional 500 spaces, if available. The lease agreement
delineated ten five-year terms, spanning the 50 years from January 1, 2004 through December
31, 2053, increasing the rent each year by 3% and giving the State the option to extend the lease
every five years. The lease agreement permitted the State to cancel the lease “during any period
of possession” with 90 days’ notice. The lease agreement contained an integration clause stating
that the agreement represented “the entire agreement between the parties with this regard to this
transaction . . . .” The agreement also stated that it met the requirements of 2001 PA 92.

        In July 2015, the State notified the City that the State did not intend to extend the lease
for an additional term. The City subsequently filed a complaint against the State in the Court of
Claims, alleging a breach of contract and an anticipatory breach of contract because the lease, the
offer to purchase, and 2001 PA 92 required the State to lease 400 to 500 parking spaces for 50
years. The State responded by moving for summary disposition under MCR 2.116(C)(8) and
(C)(10). The State argued that the lease permitted the State not to renew the lease. The City
maintained that the lease permitted the State to cancel the lease only with respect to the
additional 500 parking spaces beyond the 400 to 500 spaces specified in 2001 PA 92.

        The Court of Claims granted the State’s motion for summary disposition under MCR
2.116(C)(8) and (C)(10). The Court of Claims determined that the lease agreement permitted the
State to cancel the lease at any time. The Court of Claims rejected the City’s argument that 2001
PA 92 or the offer of purchase imposed a rental obligation on the State; rather, the City was only
required to make those spaces available for rent if the State chose to rent them. The Court of
Claims described 2001 PA 92 and the offer of purchase as foreshadowing a future agreement,
which was the lease agreement the parties ultimately signed. The Court of Claims ruled that the
State did not breach the terms of the lease.

                                        II. DISCUSSION

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        The City now contests the grant of summary disposition. This Court reviews de novo a
decision on a motion for summary disposition. Maiden v Rozwood, 461 Mich. 109, 118; 597
NW2d 817 (1999). We also review de novo matters of contract interpretation. Coates v Bastian
Bros, Inc, 276 Mich. App. 498, 503; 741 NW2d 539 (2007).

        Summary disposition under MCR 2.116(C)(8) is proper if “[t]he opposing party has
failed to state a claim on which relief can be granted.” “A motion under MCR 2.116(C)(8) tests
the legal sufficiency of the complaint.” Maiden, 461 Mich. at 119. The trial court properly
grants summary disposition under MCR 2.116(C)(8) if “the claims alleged are so clearly
unenforceable as a matter of law that no factual development could possibly justify recovery.”
Id. (quotation marks and citation omitted). Summary disposition under MCR 2.116(C)(10) is
warranted if there is no genuine issue of material fact when viewing the evidence in the light
most favorable to the nonmoving party. Lakeview Commons Ltd Partnership v Empower
Yourself, LLC, 290 Mich. App. 503, 506; 802 NW2d 712 (2010).

        To establish a breach of contract, the plaintiff must show 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
claim of anticipatory breach is available if “a party to a contract unequivocally declares the intent
not to perform[.]” Stoddard v Mfr Nat’l Bank of Grand Rapids, 234 Mich. App. 140, 163; 593
NW2d 630 (1999). The purpose of analyzing a contract is to determine the parties’ intent.
Quality Prod & Concepts Co v Nagel Precision, Inc, 469 Mich. 362, 375; 666 NW2d 251 (2003).
The unambiguous language of the contract reflects the intent of the parties, so we enforce the
contract as written. Id. When interpreting a contract, we give the “words their plain and
ordinary meanings.” Coates, 276 Mich. App. at 503. We “may not impose an ambiguity on clear
contract language.” Id. A contract is ambiguous if two or more provisions “irreconcilably
conflict with each other or when [a term] is equally susceptible to more than a single meaning.”
Id. (quotation marks and citations omitted; alteration in original).

        In this case, the lease constitutes a valid contract between the parties. The lease states
that the State agreed to rent at least 400 parking spaces from the City at a specified rate for a
five-year term with the option to renew the initial term in five-year increments up to a total of 50
years. The lease also specifies that the State was permitted to cancel the lease at any time by
providing 90 days’ notice to the City. Contrary to the City’s arguments, that cancellation
provision does not create any ambiguity or conflict with the integration clause in the lease or
with 2001 PA 92’s requirements. 2001 PA 92 imposed an obligation on the City to make 400 to
500 parking spaces available for State Senate employees for at least 50 years. The only
reciprocal obligation the legislation imposed upon the State was the requirement to pay a specific
rate for the rented spaces. The lease met those requirements because it required the City to
provide the State with not less than 400 parking spaces at the specified rate and set an initial term
for this obligation. The lease also satisfied the 50-year term requirement by giving the State the
option to renew the initial lease term in a series of five-year terms for up to 50 years. The
cancelation provision in the lease does not conflict with these requirements because 2001 PA 92
did not place any continuing obligation on the State to rent the parking spaces for the entire 50-
year term. Therefore, the Court of Claims did not err by concluding that the lease agreement was
unambiguous and by enforcing the agreement as written.

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        Moreover, the Court of Claims did not err by concluding that the lease satisfied and
extinguished paragraph 11 of the offer to purchase, which repeated the terms of the City’s
obligation to make the parking spaces available to the State. The lease set forth essentially the
same terms as paragraph 11 because both the lease and paragraph 11 required the City to make
400 to 500 parking spaces available to State Senate employees for at least 50 years at the
specified rate. Although paragraph 11 did not contemplate splitting the 50-year term into five-
year renewable terms, that distinction does not defeat the conclusion that the lease set forth
“essentially the same” terms as paragraph 11. Both paragraph 11 and the lease obligate the City
to provide the requisite number of parking spaces to the State for 50 years, and the lease
agreement permits only the State to cancel the lease unilaterally at any time. Nothing in
paragraph 11 prohibits the State from canceling the 50-year parking obligation imposed upon the
City. Therefore, the lease set forth essentially the same terms as paragraph 11, so it satisfied and
extinguished paragraph 11 upon its execution.

        In sum, the lease’s cancellation provision did not conflict with the lease’s integration
clause or the terms of 2001 PA 92, and the lease satisfied and extinguished paragraph 11 of the
offer to purchase. The lease unambiguously permitted the State to cancel the lease at any time
by providing 90 days’ notice to the City. The State cancelled the lease according to its terms, so
the State did not breach, or anticipatorily breach, the lease agreement. The Court of Claims did
not err by granting the State’s motion for summary disposition.

       The City also makes a promissory estoppel claim for the first time on appeal. “This
Court need not address an issue that is raised for the first time on appeal because it is not
properly preserved for appellate review.” Dep’t of Environmental Quality v Morley, 314 Mich
App 306, 318; 885 NW2d 892 (2016). Therefore, we decline to review this issue.

       We affirm.

                                                             /s/ William B. Murphy
                                                             /s/ Peter D. O’Connell
                                                             /s/ Kirsten Frank Kelly

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