Court Opinion

ID: 2810076
Source: CourtListenerOpinion
Date Created: 2015-06-19 12:12:48.04963+00
Date Added: 2024-06-11T11:30:15.471583
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

JOHN RUNCO,                                                          UNPUBLISHED
                                                                     June 18, 2015
               Plaintiff-Appellant/Cross-Appellee,

v                                                                    No. 317926
                                                                     Oakland Circuit Court
JOHN FRANCIS, DAN FRANCIS,                                           LC No. 2013-131838-CK
CONTRACTORS EQUIPMENT LEASING,
ENERGY GROUP, INC., UTILITY SERVICE OF
AMERICA, INC., ENERGY GROUP
EQUIPMENT, and ENERGY GROUP
EQUIPMENT LEASING,

               Defendants-Appellees/Cross-
               Appellants.

Before: CAVANAGH, P.J., and METER and SHAPIRO, JJ.

PER CURIAM.

        Plaintiff appeals as of right the trial court’s order granting defendants’ motion for
summary disposition and closing the case. Defendants cross-appeal, challenging the trial court’s
failure to address their request for sanctions under MCR 2.114(E) and MCL 600.2591. We
affirm the order of summary disposition and remand for further proceedings regarding
defendants’ request for sanctions.

                                       I. BACKGROUND

        This case involves plaintiff’s interests in various business entities that plaintiff received
as part of a settlement in a divorce action but that were sold by his former wife, Kimberly Runco,
acting pursuant to a power of attorney, to satisfy plaintiff’s monetary obligations to her under the
divorce judgment. Four of the business entities are defendants in this case, namely, Energy
Group Equipment,1 Contractor’s Equipment Leasing, Inc., Utility Services of America, Inc., and

1
  Although another limited liability company, Energy Group Equipment Leasing, is also a
defendant in this case, plaintiff alleged that this entity is also known as Energy Group
Equipment. The limited liability company is generally referred to as “EGE.”

                                                -1-
Energy Group, Inc. (hereafter collectively referred to as “the Energy Group companies”). The
two individual defendants, John Francis and Dan Francis (“the Francis defendants”), were
involved in various businesses with plaintiff, including the Energy Group companies, and were
members of EGE.

         Kimberly filed the divorce action in April 2007. In March 2009, the circuit court granted
Kimberly a power of attorney to act for plaintiff. The order provided for Kimberly to have full
use of a power of attorney on April 16, 2009, unless plaintiff made full payment to Kimberly of
all amounts due her under the terms of the parties’ settlement agreement and divorce judgment or
there was a signed agreement acceptable to Kimberly with respect to the sale of certain entities
referred to as “Capital Waste and its affiliated entities.” The order provided that if plaintiff
failed to sign the power of attorney, the order itself could be used in lieu of such a document or
the trial court could take further action to obtain a valid power of attorney.

        On April 29, 2009, plaintiff executed a general power of attorney authorizing Kimberly
to act as his attorney in fact with respect to a number of business entities, including certain
Capital Waste entities, EGE, Contractor’s Equipment Leasing, Inc., and Utility Services of
America, Inc. On June 1, 2009, Kimberly, acting as plaintiff’s attorney in fact, entered into an
agreement with the Francis defendants. The agreement addressed both a distribution of funds
involving the Capital Waste entities and an option for the Francis defendants to purchase
plaintiff’s membership interest and stock in three of the Energy Group companies (EGE,
Contractors Equipment Leasing, Inc., and Utility Services of America, Inc.) for $3.5 million.
The agreement required the Francis defendants to exercise the option in writing by August 2,
2010.

         Later in 2010, the Francis defendants filed a complaint against Kimberly, seeking specific
enforcement of the terms of the option agreement on the ground that they had exercised the
option but that Kimberly failed to attend the scheduled closing in November 2010 for their
purchase of the Energy Group companies. This action was dismissed in February 2011 pursuant
to a stipulated order.

         Before the dismissal of the Francis defendants’ action, Kimberly, as attorney in fact,
entered into a January 28, 2011, agreement with the Francis defendants, the three Energy Group
companies named in the earlier option, and a fourth entity, Energy Group, Inc., that, according to
the agreement, was wholly owned by Utility Services of America, Inc. This agreement treated
the portion of the transaction involving plaintiff’s membership interest in EGE as a redemption
and an assignment, while the portion involving Utility Services of America, Inc., and Contractors
Equipment, Inc., was treated as a purchase and assignment of stock. As part of the agreement,
plaintiff’s 60 percent interest in EGE and any funds in his capital account were to be assigned
back to EGE. Plaintiff’s stock in Contractors Equipment Leasing, Inc., and Utility Services of
America, Inc., was to be transferred to EGE. The parties also executed mutual releases as part of
this agreement. Kimberly was paid $3.5 million for plaintiff’s membership interest and stock in
the Energy Group companies pursuant to the power of attorney. In addition, an amended
promissory note in the principal amount of $1.8 million owed by Utility Services of America,
Inc., to plaintiff was assigned by Kimberly, under the power of attorney, to EGE.

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        Kimberly died in April 2012. In January 2013, plaintiff filed the instant action against
the Francis defendants and the four Energy Group companies. Plaintiff alleged that the Francis
defendants committed fraud by withholding financial information from Kimberly and that the
undisclosed information affected Kimberly’s decision to accept $3.5 million for plaintiff’s
interests in the four Energy Group companies. Plaintiff alleged claims of conversion against the
Francis defendants and the Energy Group companies based on their alleged wrongful exercise of
dominion over $2,691,738 in net rental income that allegedly belonged to him. Plaintiff also
alleged that the January 28, 2011, agreement was breached because the assets of the Energy
Group companies were not disclosed to Kimberly.

        In April 2013, defendants responded to the complaint by moving for summary disposition
on various grounds, including the January 28, 2011, release executed by Kimberly, and seeking
sanctions under MCR 2.114(E) and MCL 600.2591. In a response to this motion, plaintiff
claimed that all of the defendants, possibly in concert with others, had engaged in a fraudulent
scheme to steal at least $2,145,418 that should have been distributed to him. To support his
claim, plaintiff relied on a federal tax form for the year ending December 31, 2011, which used a
distribution of $2,145,418, to reduce his ending capital account in EGE to zero. At a hearing on
defendants’ motion, plaintiff’s counsel indicated that plaintiff was not challenging the sale of his
interest in the business entities but that he wanted the distribution indicated on the tax form.
Plaintiff requested an opportunity to amend the complaint if summary disposition was granted
under MCR 2.116(C)(8). The trial court granted defendants’ motion pursuant to MCR
2.116(C)(7). The court ruled that the entire complaint was barred by the release executed by
Kimberly pursuant to the power of attorney and plaintiff’s failure to tender back the
consideration received for the release.

                                   II. PLAINTIFF’S APPEAL

        Plaintiff argues that the trial court erred in ruling that the release and the tender back
doctrine applied to his claim predicated on the EGE distribution of $2,145,418 reflected in the
federal tax form for the year ending December 31, 2011. Plaintiff argues that the release does
not apply to this claim because he was entitled to the distribution under the terms of EGE’s
operating agreement. Plaintiff also argues that there is nothing he could tender back because no
consideration was specifically recited in the agreement for the release.

         We review de novo a trial court’s decision regarding a motion for summary disposition.
Titan Ins Co v Hyten, 491 Mich. 547, 553; 817 NW2d 562 (2012). Summary disposition may be
granted under MCR 2.116(C)(7) where “[e]ntry of judgment, dismissal of the action, or other
relief is appropriate because of release . . . .” In reviewing such a motion, a court accepts the
contents of the complaint as true unless contradicted by affidavits, depositions, admissions, or
other documentary evidence submitted by the moving party. Maiden v Rozwood, 461 Mich. 109,
119; 597 NW2d 817 (1999). The evidence is only considered to the extent that the content or
substance would be admissible as evidence. MCR 2.116(G)(6). “If no facts are in dispute, and if
reasonable minds could not differ regarding the legal effect of the facts, the question whether the
claim is barred is an issue of law for the court.” Dextrom v Wexford Co, 287 Mich. App. 406,
431; 789 NW2d 211 (2010). Principles of contract law govern the interpretation of a release.
Mich Head & Spine Institute, PC v State Farm Mut Auto Ins Co, 299 Mich. App. 442, 448; 830

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NW2d 781 (2013). The proper interpretation of a contract is reviewed de novo as a question of
law. Titan Ins Co, 491 Mich. at 553.

        Defendants accurately assert that plaintiff’s claim predicated on the $2,145,418 reflected
as an EGE distribution in the federal tax form for the year ending December 31, 2011, was not
pleaded in plaintiff’s complaint. Even assuming that net rental income for EGE in one year may
be used by EGE to make a distribution to a member in the next year, we do not agree with
plaintiff’s position that his pleaded claim of entitlement to net rental income of $2,691,738 for
the tax year ending December 31, 2010, is adequate to plead the other claim. Because plaintiff
changed the factual basis of the complaint without having moved to amend the complaint, we
conclude that plaintiff failed to properly present his claim to the trial court. This is especially so
considering that summary disposition was granted under MCR 2.116(C)(7). MCR 2.116(I)(5)
did not require the court to sua sponte offer plaintiff an opportunity to amend the complaint.
Kloian v Schwartz, 272 Mich. App. 232, 242; 725 NW2d 671 (2006). MCR 2.116(I)(5) provides
only that “[i]f the grounds asserted are based on subrule (C)(8), (9), or (10), the court shall give
the parties an opportunity to amend their pleadings as provided by MCR 2.118, unless the
evidence then before the court shows that amendment would not be justified.” While it may be
appropriate to allow a party to amend a complaint to add a new theory or claim pursuant to MCR
2.116(I)(5), Yudashkin v Linzmeyer, 247 Mich. App. 642, 651; 637 NW2d 257 (2001), MCR
2.116(I)(5) does not apply to a motion under MCR 2.116(C)(7).

        Because plaintiff did not attempt to amend his complaint under MCR 2.118(A), his
unpleaded claim predicated on the $2,145,418 reflected as an EGE distribution in the federal tax
form for the year ending December 31, 2011, is not properly before us. We note that plaintiff
does not raise any issue on appeal regarding whether he should be allowed to amend his
complaint. In addition, considering the trial court’s ruling that the complaint was barred by the
release, we find no support for plaintiff’s argument that the trial court considered the unpleaded
claim when granting defendants’ motion pursuant to MCR 2.116(C)(7). Nonetheless, this Court
has discretion to consider any issue that, in this Court’s opinion, justice requires be considered
and resolved. LME v ARS, 261 Mich. App. 273, 287; 680 NW2d 902 (2004). We may also
consider any issue that was presented to but not decided by the trial court, where the record
contains the necessary facts. Hines v Volkswagon of America, Inc, 265 Mich. App. 432, 443-444;
695 NW2d 84(2005). In this case, even if plaintiff had properly pleaded a claim predicated on
the $2,145,418 EGE distribution for the year ending December 31, 2011, it would not provide
any basis for disturbing the trial court’s summary disposition ruling.

        Plaintiff relies on the EGE operating agreement in support of his unpleaded claim that he
was entitled to a distribution from EGE. A court construes a contract by reading it as a whole,
“giving harmonious effect, if possible, to each word and phrase.” Royal Prop Group, LLC v
Prime Ins Syndicate, Inc, 267 Mich. App. 708, 719; 706 NW2d 426 (2005). A court may consult
a dictionary to determine the plain and ordinary meaning of undefined terms in a contract.
Holland v Trinity Health Care Corp, 287 Mich. App. 524, 527-528; 791 NW2d 724 (2010). If the
contract is ambiguous and summary disposition depends on the meaning of the contract,
summary disposition is inappropriate because factual development is necessary to determine the
contracting parties’ intent. See SSC Assoc Ltd Partnership v Gen Retirement Sys, 192 Mich. App.
360, 363; 480 NW2d 275 (1991). A contract is ambiguous where a term is equally susceptible to

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more than one meaning or two provisions irreconcilably conflict. Coates v Bastian Bros, Inc,
276 Mich. App. 498, 503; 741 NW2d 539 (2007).

         On its face, the operating agreement indicates that EGE was organized under the Limited
Liability Company Act (LLCA), MCL 450.4101 et seq. A limited liability company under the
LLCA is an unincorporated membership organization. MCL 450.4102(2)(k). “A member has no
interest in specific limited liability company property.” MCL 450.4504(2). A limited liability
company is generally considered a hybrid business entity “offering all of its members limited
liability as if they were shareholders of a corporation but treating the entity and its members as a
partnership for tax purposes.” 51 Am Jur 2d, Limited Liability Companies, § 1.

         Under the LLCA, an “operating agreement” generally means “a written agreement . . .
between all of the members of a limited liability company that has more than 1 member,
pertaining to the affairs of the limited liability company and the conduct of its business. The
term includes any provision in the articles of organization pertaining to the affairs of the limited
liability company and the conduct of its business.” MCL 450.4102(2)(r). Here, plaintiff has not
supported his claim that the EGE operating agreement requires that its profits be distributed to
members. Paragraph 4.2 provides that “[t]he Company may make distributions to the Members
from time to time” (emphasis added). Courts generally give the word “may” its ordinary and
accepted meaning as a permissive term. See Murphy v Sears, Roebuck & Co, 190 Mich. App.
384, 386-387; 476 NW2d 639 (1991). Although this provision also provides that “[t]he
Members shall endeavor to make distributions in cash to the Members at times and in amounts
that enable the Members to pay the tax due on the income of the Company before its due date,”
the term “endeavor” is defined in relevant part as “to attempt earnestly; try.” Random House
Webster College’s Dictionary (1997). Therefore, while the word “shall” generally denotes
mandatory action, Murphy, 190 Mich. App. at 386-387, the phrase “shall endeavor” is properly
construed as mandating an earnest attempt to make a distribution at an appropriate time and in an
appropriate amount to pay taxes. It does not entitle a member to a distribution. Therefore, we
reject plaintiff’s argument that the operating agreement requires distributions.

        Further, plaintiff has failed to establish support for his position that his claim would not
be subject to the release. In considering this issue, we find it unnecessary to apply the terms of
the release that would have been required upon closing under the option set forth in the June 1,
2010, agreement. An option is an enforceable promise not to revoke an offer for a specific
period. In re Egbert R Smith Trust, 480 Mich. 19, 25; 745 NW2d 754 (2008). An option to
purchase may ripen into a binding bilateral contract if the optionee accepts the offer in strict
compliance with the terms of the option. Le Baron Homes, Inc v Pontiac Housing Fund, Inc,
319 Mich. 310, 315; 29 NW2d 704 (1947). In addition, with respect to contracts generally,
parties are free to modify terms of existing contracts or to enter into new contracts. Quality
Prods & Concepts Co v Nagel Precision, Inc, 469 Mich. 362, 370-371; 666 NW2d 251 (2003).
Because Kimberly and the Francis defendants entered into a new contract with additional parties
on January 28, 2011, rather than simply performing any obligations under a ripened binding
contract as a result of the Francis defendants’ alleged acceptance of the option in the June 1,
2010 agreement, it is necessary to look to the January 28, 2011, agreement and the actual release
provided by Kimberly as part of that agreement to determine whether plaintiff’s unpleaded claim
of entitlement to a distribution of $2,145,418 is covered by the release.

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       Plaintiff has failed to establish that the release language in the signed version of the
January 28, 2011, agreement does not apply to his unpleaded claim. Kimberly provided the
following release in the signed version of the January 28, 2011, agreement:

               Runco releases the Energy Group Companies, Capital Waste, Inc. and
       Francis from any and all claims, liabilities, and demands of any kind and nature,
       whether known or unknown, related in any way to his association with the Energy
       Group Companies, Capital Waste, Inc,, [sic] and the companies associated with
       the Capital Waste, Inc, sale, including but not limited to any aspect of operations,
       disclosures, fiduciary duties, contracts, distributions, return of capital, draws,
       repayment of loans, compensation or claims whatsoever of any kind whether
       sounding in statute, tort, contract, law or equity in any way related to The Energy
       Group Companies, Capital Waste, Inc. and specifically includes any issues with
       respect to the distribution of funds in connection with the sale of Capital Waste.
       [Emphasis added.]

        We reject plaintiff’s newly raised argument that the use of the word “sale” in the release
means that the claim, liability, or demand must be connected to the sale of the Energy Group
companies. Plaintiff’s argument is flawed because it fails to consider the recital regarding the
prior sale of Capital Waste, Inc., that took place as part of a transaction involving a number of
companies:

               On June 1, 2010, the [sic] John Runco and Francis executed agreements
       selling their respective interests in Capital Waste, Inc., Detroit Energy Recycling,
       LLC, Capital Express, LLC, and Capital Waste Equipment, LLC, and related
       interests (collectively referred to as “Capital Waste”) to Waste Management of
       Michigan, Inc.

Examined in the context of this recital, it is reasonable to construe the phrase “the Capital Waste,
Inc,” as modifying the word “sale.” It does not follow that “the Energy Group Companies” also
modifies “sale.” Rather, it is apparent that the release uses “the Capital Waste, Inc, sale” as part
of the description of certain companies. It is part of the phrase “the companies associated with
the Capital Waste, Inc, sale.” The conjunctive word “and” generally denotes a joinder or union
of terms. Mayer v Credit Life Ins Co, 42 Mich. App. 648, 651; 202 NW2d 521 (1972). As a
whole, the term “and” is used to identify the entities that plaintiff must be associated with for the
release to apply. It would defy common sense to construe the release as being applicable to
plaintiff’s association with the sale of each entity, especially when one considers the types of
claims, liabilities, and demands “of any kind and nature” that are identified in the release through
the phrase, “including but not limited to any aspect of operations, disclosures, fiduciary duties,
contracts, distributions, return of capital, draws, repayment of loans, compensation or claims
whatsoever of any kind whether sounding in statute, tort, contract, law or equity in any way
related to The Energy Group Companies . . . .” These terms encompass plaintiff’s association
with the Energy Group companies, not his association with the sales transaction.

       We disagree with plaintiff’s argument that he could nonetheless establish a latent
ambiguity surrounding the term “distributions.” Although the use of broad encompassing
language, such as “all,” does not preclude a party from demonstrating a latent ambiguity,

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extrinsic evidence must support an argument that the contract language, under the circumstances
of its formation, is susceptible to more than one interpretation. See Shay v Aldrich, 487 Mich.
648, 661-670; 790 NW2d 629 (2010). In this case, we have already rejected plaintiff’s argument
that the operating agreement mandates distributions, and even assuming that a distribution was
declared before January 28, 2011, it clearly would relate to plaintiff’s association with the
Energy Group companies and, in particular, EGE. Had there been an intent to reserve
distributions chargeable to plaintiff’s capital account, it could have been addressed in Kimberly’s
agreement to assign plaintiff’s membership interest, including any funds in his capital account, to
EGE. Because it was not and we find no extrinsic evidence to establish a latent ambiguity, we
reject plaintiff’s newly raised claim of ambiguity. In sum, the release unambiguously applies to
plaintiff’s unpleaded claim because it relates to his association with the Energy Group
companies.

         Having concluded that the release applies to the unpleaded claim, we turn to plaintiff’s
argument that the claim is not subject to the tender back doctrine. Generally, a plaintiff must
tender back consideration received in exchange for a release either before or simultaneously with
the filing of a lawsuit that contravenes the release. Stefanac v Cranbrook Ed Community (After
Remand), 435 Mich. 155, 176-177; 458 NW2d 56 (1990); Rinke, 226 Mich. App. at 436. The
purpose of this rule is to preserve the stability of release agreements, which are intended to avoid
litigation. Stefanac, 435 Mich. at 177. The rule precludes a party from retaining the benefit of an
agreement while at the same time bringing suit in contravention of the agreement. Id.

        The tender back doctrine does not apply where the release for which consideration was
given does not apply to the plaintiff’s claims. Rinke, 226 Mich. App. at 439, citing Taylor Group
v ANR Storage Co, 452 Mich. 561, 565-567; 550 NW2d 258 (1996). Where the release applies to
the claims, the only exceptions to the tender back doctrine are “waiver of the plaintiff’s duty by
the defendant and fraud in the execution.” Stefanac, 435 Mich. at 165. “Fraud in the execution”
occurs where a proponent of an instrument tells the signatory thereof that the instrument does not
really mean what it clearly says, and the signatory relies on this fraud to his or her detriment.
Paul v Rotman, 50 Mich. App. 459, 463-464; 213 NW2d 588 (1973). Stated otherwise, it occurs
when the signatory is led to believe that he or she is signing something other than a release.
Stefanac, 435 Mich. at 166.

        We note, initially, that plaintiff has failed to establish that the release applicable to his
claim was not supported by consideration. Although the January 28, 2011, agreement does not
recite specific consideration for the release, it was part of a larger contract supported by
consideration of $3.5 million. “‘Where there is no specific recitation of separate consideration
for the release, but it is part of a larger contract involving multiple promises, the basic rule of
contract law is that whatever consideration is paid for all of the promises is consideration for
each one . . . .’” Hall v Small, 267 Mich. App. 330, 334; 705 NW2d 741 (2005), quoting Rowady
v K Mart Corp, 170 Mich. App. 54, 59; 428 NW2d 22 (1988).

        Plaintiff has also failed to establish that the exceptions for waiver or fraud in the
execution apply. To the extent that plaintiff suggests that he could avoid the tender back
doctrine by pursuing a claim that Kimberly signed the release in reliance on a material
misrepresentation with respect to distributions, there is no merit to this argument because
plaintiff’s claim does not involve fraud in the execution.

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        To the extent that plaintiff suggests that he could avoid the tender back doctrine by
challenging the release on the ground that it is unconscionable, this issue is unpreserved because
it was not presented to or decided by the trial court. Hines, 265 Mich. App. at 443. We do not
agree with plaintiff’s position that the “general tone” of his counsel’s argument was sufficient to
raise this issue. “Trial courts are not the research assistants of litigants; the parties have a duty to
fully present their legal arguments to the court for its resolution of their dispute.” Walters v
Nadell, 481 Mich. 377, 388; 751 NW2d 431 (2008). In any event, while a contract or contract
provision may be unenforceable if is unconscionable, Clark v DaimlerChrysler Corp, 268 Mich
App 138, 143-144; 706 NW2d 471 (2005), because the gravamen of plaintiff’s unpleaded claim
concerning distributions is contrary to the release, plaintiff’s unconscionability theory does not
relieve him of the obligation to tender the recited consideration before seeking to repudiate the
release. Stefanac, 435 Mich. at 164-165.

        To the extent that plaintiff suggests that he could avoid the tender back doctrine by
challenging the court’s action in the divorce case that resulted in Kimberly acquiring the power
of attorney, this issue is also unpreserved because it was neither presented to nor decided by the
trial court. Hines, 265 Mich. App. at 443. Although plaintiff’s counsel asserted at the hearing on
defendants’ motion that plaintiff was forced to sign the power of attorney by the judge in the
divorce action, counsel also conceded that “that has nothing to do with this particular case.”

       In any event, a circuit court is empowered to enforce its decrees and effectuate its
judgment in a divorce action. MCL 552.12; MCL 600.611; Draggoo v Draggoo, 223 Mich. App.
415, 428; 566 NW2d 642 (1997); Wiand v Wiand, 178 Mich. App. 137, 143-144; 443 NW2d 464
(1989). Plaintiff has not established any basis for collaterally attacking the enforcement action
taken in his divorce case. Jackson City Bank & Trust Co v Fredrick, 271 Mich. 538, 544-545;
260 N.W. 908 (1935). In addition, any challenge to Kimberly’s capacity to execute the release
would also be subject to the tender back doctrine. See McDonald v Zinn Drywall, 134 Mich. App.
270, 274-275; 350 NW2d 864 (1984).

        Considering plaintiff’ arguments as a whole, we conclude that the trial court reached the
right result in granting defendants’ motion for summary disposition under MCR 2.116(C)(7)
based on the release and the tender back doctrine, even considering plaintiff’s unpleaded claim
predicated on the $2,145,418 distribution for the year ending December 31, 2011.

        Plaintiff also frames this unpleaded claim as one that he should be allowed to pursue
under a theory of constructive trust, which is an equitable remedy. Union Guardian Trust Co v
Emery, 292 Mich. 394, 406-407; 290 N.W. 841 (1940). A court may impose a constructive trust
upon traceable proceeds of converted property where it appears just and equitable to do so.
Detroit Trust Co v Struggles, 283 Mich. 471, 474-475; 278 N.W. 385 (1938); see also Michigan
Nat’l Bank v American Express Co, 307 Mich. 245, 256-257; 11 NW2d 875 (1943). Plaintiff’s
“constructive trust” theory is flawed because a member of a limited liability company has no
interest in specific property. MCL 450.4504(2). In addition, we have already rejected plaintiff’s
argument that his unpleaded claim for $2,145,418 is not subject to the release. Because the
“constructive trust” remedy proposed by plaintiff would also be covered by the release in the
January 28, 2011 agreement, it too is subject to the tender back doctrine. Accordingly, we find
no basis for relief.

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       Lastly, given plaintiff’s failure to move for sanctions against defendants under MCR
2.114(E) in the trial court, we decline to consider plaintiff’s argument that defendants should be
sanctioned for including the wrong version of the January 28, 2011, agreement in their motion
for summary disposition. Hines, 265 Mich. App. at 443.

                             III. DEFENDANTS’ CROSS-APPEAL

        Defendants argue in their cross-appeal that the trial court erred by failing to award them
sanctions under MCR 2.114(E) and MCL 600.2591. The record establishes that defendants
repeatedly presented this issue to the trial court, but the trial court declined to decide the issue.
We disagree with plaintiff’s argument that this omission deprives this Court of jurisdiction to
consider the issue on cross-appeal. “The jurisdiction of the Court of Appeals is provided by law,
and its practices and procedures are prescribed by the court rules and our Supreme Court.”
Costa v Community Emergency Med Servs, Inc, 263 Mich. App. 572, 581; 689 NW2d 712 (2004),
aff’d in part on other grounds 475 Mich. 403 (2006). MCR 7.207 governs cross-appeals. This
rule does not restrict a cross-appellant from challenging a trial court’s rulings or other perceived
improprieties that are not contained in the order appealed by the initial appellant. Costa, 263
Mich. App. at 584. In this case, the claimed impropriety is the trial court’s failure to rule on an
issue that was raised in defendants’ motion. The trial court’s omission does not affect this
Court’s jurisdiction. Rather, this Court retains authority to consider issues that were properly
raised below but not decided by the trial court. Peterman v Dep’t of Natural Resources, 446
Mich. 177, 183; 521 NW2d 499 (1994); Hines, 265 Mich. App. at 443-444. Because defendants
repeatedly requested sanctions against plaintiff under MCL 600.2591 and MCR 2.114(E), it is
appropriate to consider this issue.

         MCL 600.2591 mandates an award of costs and attorney fees to a prevailing party if a
civil action is found to be frivolous. Holton v Ward, 303 Mich. App. 718, 734; 847 NW2d 1
(2014). A “prevailing party” is defined as “a party who wins on the entire record.” MCL
600.2591(3)(b). The appropriate time for a party to seek sanctions under this statute is within a
reasonable time after the prevailing party is determined. Avery v Demetropoulos, 209 Mich. App.
500, 503; 531 NW2d 720 (1994). Because the prevailing party in this case was not determined
until after the trial court made its summary disposition ruling, defendants’ request for sanctions
under MCL 600.2591 was premature. However, considering the trial court’s resolution of the
motion for summary disposition, a remand to the trial court to address the request for sanctions is
appropriate; the trial court may entertain a renewed motion for costs and fees before deciding if
sanctions are mandated under MCL 600.2591. Cf. Check Reporting Servs, Inc v Mich Nat’l
Bank-Lansing, 191 Mich. App. 614, 629; 478 NW2d 893 (1991) (remanding for the trial court to
state its reasons for denying a request for costs or to entertain a renewed motion for costs).

        MCR 2.114(E) differs from MCL 600.2591 because it does not mandate any particular
sanction where a document is signed in violation of MCR 2.114(D). Rather, a court has
discretion to fashion an appropriate sanction. FMB-First Nat’l Bank v Bailey, 232 Mich. App.
711, 726-727; 591 NW2d 676 (1998). In addition, MCR 2.114(E) does not require that the party
seeking sanctions be the prevailing party in the lawsuit. To be timely, the party should move for
sanctions before the case is dismissed, Antonow v Marshall, 171 Mich. App. 716, 719; 430 NW2d
768 (1988), but this does not preclude a court from determining the motion at a later date, see
Maryland Cas Co v Allen, 221 Mich. App. 26, 29-32; 561 NW2d 103 (1997). The document

                                                -9-
underlying defendants’ request for sanctions under MCR 2.114(E) is plaintiff’s complaint.
Because defendants timely requested sanctions under MCR 2.114(E) and the trial court failed to
decide the motion, we remand for a decision on the motion.

       Affirmed in part and remanded for further proceedings regarding defendants’ request for
sanctions under MCR 2.114(E) and MCL 600.2591. We do not retain jurisdiction.

                                                         /s/ Mark J. Cavanagh
                                                         /s/ Patrick M. Meter
                                                         /s/ Douglas B. Shapiro

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