MARTIN E LEVIN V THORN APPLE VALLEY INC
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STATE OF MICHIGAN
COURT OF APPEALS
MARTIN E. LEVIN,
UNPUBLISHED
December 1, 1998
Plaintiff-Appellee/Cross-Appellant,
v
No. 200106
Oakland Circuit Court
LC No. 89-380591 CK
THORN APPLE VALLEY, INC., a Michigan
corporation,
Defendant-Appellant/Cross-Appellee.
Before: Griffin, P.J. and Gage and R. J. Danhof*, JJ.
PER CURIAM.
Defendant appeals as of right and plaintiff cross appeals from a second amended final judgment
that granted in part judgment notwithstanding the verdict (JNOV) in favor of defendant on plaintiff's
negligence claim, but awarded plaintiff a total of $782,000 based on a special jury verdict, plus interest
and taxable costs, on claims for breach of contract and tortious interference with an advantageous
business relationship. We affirm the grant of JNOV on the negligence claim, but reverse the denial of
JNOV on the breach of contract and tortious interference claims.
This is an action by plaintiff to recover monetary losses that he allegedly suffered as a guarantor
or creditor of a bankrupt corporation, Haberstroh Farm Products ("Haberstroh"), which plaintiff owned
equally with defendant through their stock ownership of Haberstroh's parent company, ML Holding
Corporation. Prior to bankruptcy proceedings, a lender, Bank of New England (Bank), called its loan
for Haberstroh and filed an action in federal district court against plaintiff, defendant and other entities
affiliated with plaintiff, alleging both contract and tort claims. Cross-claims and counterclaims were also
filed in that lawsuit. The federal district court ultimately was presented with the issue whether it should
retain ancillary jurisdiction over plaintiff's cross-claims against defendant in that lawsuit. It resolved the
issue by splitting plaintiff's causes of actions against defendant, dismissing some cross-claims without
prejudice so that plaintiff could pursue them in state court, holding that plaintiff lacked standing to bring
certain other derivative claims that could be pursued by the bankruptcy trustee (e.g., shareholder actions
where the injury to the shareholder would be secondary to the injury to the corporation), and expressly
* Former Court of Appeals judge, sitting on the Court of Appeals by assignment.
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excepting from its decision any determination whether the dismissed claims could be pursued by plaintiff
in his capacity as a creditor. As part of the decision, defendant's cross-claims were also dismissed
without prejudice. Plaintiff thereafter filed the instant state action in circuit court, but a stay was ordered
pending a decision by the Sixth Circuit Court of Appeals, which ultimately affirmed the district court's
decision.
The original trial judge assigned to this case thereafter granted summary disposition in favor of
defendant on four counts, but allowed plaintiff to proceed to trial on his claims for breach of contract
and indemnification. However, a successor judge modified that decision to allow a trial on all counts,
except a conversion count that was withdrawn by plaintiff. The jury returned verdicts in plaintiff's favor
for breach of contract, negligence, and tortious interference with a business relationship. Defendant was
subsequently granted JNOV on the negligence count, but was denied relief on the other two counts. On
appeal, the parties raise issues concerning plaintiff's contract, negligence, and tortious interference
claims, but do not challenge the jury's finding that defendant was not liable for indemnification or
misrepresentation. Hence, we confine our review to the verdicts on the contract, negligence, and
tortious interference claims.
I
Contract
We initially reject defendant's claim that the federal decisions operated to bar plaintiff's contract
claim because of res judicata. The application of res judicata is a legal question that we review de novo.
Bergeron v Busch, 228 Mich App 618, 621; 579 NW2d 124 (1998), lv pending. Res judicata does
not apply to the contract claim because the federal district court split plaintiff's causes of action and
specifically dismissed the contract claim without prejudice and without being presented with or deciding
the issue whether plaintiff had standing to assert the contract claim in any capacity. The Sixth Circuit
Court of Appeals affirmed on grounds that did not require it to address plaintiff's standing to pursue the
contract claim. See Bergeron, supra.
As an alternative to the defense of res judicata, defendant argues that plaintiff lacked standing to
pursue his contract claim in the state court because it was derivative of Haberstroh's claims and, hence,
should be pursued by the bankruptcy trustee. Further, defendant argues that plaintiff failed to offer trial
evidence sufficient to prove the existence of a contract between himself and defendant.
Initially, we note that defendant's arguments are deficient because defendant does not identify
the particular decision in the lower court upon which its claims are based. Pursuant to MCR
7.212(C)(7), defendant is required to include "[p]age references to the record . . . to show whether the
issue was preserved for appeal by appropriate objection or by other means." Moreover, the failure to
make proper motions in a civil jury trial challenging the sufficiency of the evidence is one of the
circumstances where a court may find waiver of an issue, absent "compelling or extraordinary
circumstances amounting to a fundamental miscarriage of justice." Napier v Jacobs, 429 Mich 222,
237-238; 414 NW2d 862 (1987). This Court may decline to grant relief where a party does not
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address the basis of a trial court's decision. Joerger v Gordon Food Service, Inc, 224 Mich App
167, 175; 568 NW2d 365 (1997).
Despite these deficiencies, we nonetheless will review de novo defendant's arguments, confining
our review to the issue whether defendant has shown error in the trial court's refusal to grant JNOV on
the contract claim. Forge v Smith, 458 Mich 198, 204; 580 NW2d 876 (1998). Only if the evidence
and all legitimate inferences, viewed in a light most favorable to the plaintiff, fail to establish a claim as a
matter of law should a motion for JNOV be granted. Orzel v Scott Drug Co, 449 Mich 550, 557
558; 537 NW2d 208 (1995).
The issues of standing and sufficiency of evidence are related because they both require an
analysis of the capacity in which plaintiff entered into the contract and claimed damages. The existence
of a corporate debtor-in-bankruptcy, namely, Haberstroh, means that the bankruptcy trustee has
exclusive rights in Haberstroh's claims. See In re Van Dresser Corp, 128 F3d 945 (CA 6, 1997)
(guarantor has no standing to bring claims against alleged tortfeasor resulting from his payment of debtor
corporation's loan because the tort claims were the property of the bankruptcy trustee for the debtor
corporation, but could, if Michigan law allowed him, bring an action to recover the costs of defending
collection efforts because this would not be property of the bankruptcy estate). Moreover, even when
there is no corporate debtor-in-bankruptcy, the issue of standing requires consideration whether the
injury claimed is a separate or distinct injury, or one that is merely derivative of the corporation's injury,
and whether an individual shows a violation of duty owed directly to him. See Christner v Anderson,
Nietzke & Co, PC, 433 Mich 1; 444 NW2d 779 (1989); Michigan Nat'l Bank v Mudgett, 178
Mich App 677, 679-680; 444 NW2d 534 (1989). These two considerations may overlap, as was
observed in Cunningham v Kartridg Pak Co, 332 NW2d 881, 883 (Iowa, 1983):
Recognizing that these two concepts will usually, if not always, overlap, we
conclude that the test is best stated in the disjunctive: in order to bring an individual
cause of action for direct injuries a shareholder must show that the third-party owed him
a special duty or that he suffered an injury separate and distinct from that suffered by the
other shareholders.
Although the above test is stated in the context of shareholder claims, we agree with those
jurisdictions that hold that rules of law paralleling the rules for shareholder’s individual actions should be
applied to creditors and guarantors. See Barger v McCoy Hillard & Parks, 488 SE2d 215 (NC,
1997). Accordingly, individual actions may be prosecuted if a creditor or guarantor can show (1) that
the wrongdoer owed a special duty personal to him in his capacity as a creditor or guarantor, or (2) that
the injury suffered is personal to him as a creditor or guarantor and distinct from the injury suffered by
the corporation itself. Christner, supra at 9; Michigan Nat’l Bank, supra at 679.
In the instant case, plaintiff and defendant (through alleged corporate agents) occupied a number
of different statuses in relation to Haberstroh and its parent corporation. Viewed in a light most
favorable to plaintiff, the evidence showed that the parties were shareholders of the parent company of
Haberstroh, officers and directors of Haberstroh, and creditors or guarantors of obligations. Plaintiff's
contract claim was based on a theory that he and defendant (acting through an alleged corporate agent
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of the defendant who was also on Haberstroh's board of directors) reached an oral agreement that
required plaintiff to perform certain sales duties for Haberstroh and required defendant (acting through
an alleged corporate agent who was also an officer of Haberstroh) to perform certain management
duties for Haberstroh, subject to plaintiff's right to be consulted about operational changes, and that
liability could be imposed on defendant for breaching its duty to consult. However, the damages sought
by plaintiff for the alleged breach of the duty to consult flowed from an alleged injury to Haberstroh
associated with the operational change. Specifically, plaintiff claimed that the operational change
resulted in Haberstroh's insolvency, which, in turn, caused him financial losses (e.g., plaintiff sought to
recoup moneys he was required to pay because Haberstroh could not pay its debts, as well as attorney
fees allegedly incurred in defending collection efforts brought against him in two lawsuits).
Examined in this context, plaintiff's standing depends on whether he established that defendant
owed a contractual duty that was personal to him, as a creditor or guarantor, and was separate and
distinct from the duty defendant would owe to Haberstroh. Without this contractual duty, the injuries
claimed by plaintiff are properly viewed as derivative of Haberstroh's injury because they flow from
Haberstroh's insolvency. Further, the fact that plaintiff’s claim for attorney fees, assuming that they are
recoverable in contract, could not be pursued by the bankruptcy estate does not save plaintiff's contract
claim because the attorney fees were claimed to have arisen out of plaintiff's status as a guarantor on
obligations that should have been paid by Haberstroh. Under Michigan law, it is a general rule that one
who is not a party to the contract cannot pursue a claim for breach of an agreement. First Security
Savings Bank v Aitken, 226 Mich App 291, 305; 573 NW2d 307 (1997). Hence, the dispositive
question is whether, under the standards for JNOV, plaintiff proved that a valid oral contract was
entered into between defendant and plaintiff, in their respective individual capacities, that would require
defendant to consult with plaintiff in his capacity as a creditor or guarantor, or at least for plaintiff's
benefit as a guarantor or creditor, before making an operational change. 1
A valid contract requires a meeting of the minds, which means "mutual assent" on all essential
terms. Kamalnath v Mercy Memorial Hosp Corp, 194 Mich App 543, 548-549; 487 NW2d 499
(1992). "A meeting of minds is judged by an objective standard, looking to the express words of the
parties and their visible acts, not their subjective states of mind." Stanton v Dachille, 186 Mich App
247, 256; 463 NW2d 479 (1990), quoting Heritage Broadcasting Co v Wilson Communications,
Inc, 170 Mich App 812, 818; 428 NW2d 784 (1988). A distinct problem exists when a contract
contains essential terms, but details of performance are missing. In this situation, the law will supply the
missing details by construction. See Nichols v Seaks, 296 Mich 154, 159; 295 NW 596 (1941). Cf.
Walter Toebe & Co v Dep't of State Hwys, 144 Mich App 21, 31; 373 NW2d 233 (1985) (when a
written contract is silent as to the time of performance, a reasonable time is presumed without reference
to parol evidence).
The enforceability of a contract depends on consideration. Hisaw v Hayes, 133 Mich App
639, 643; 350 NW2d 302 (1984). Valid consideration requires a bargained-for exchange. Higgins v
Monroe Evening News, 404 Mich 1, 20; 272 NW2d 537 (1978). The rule as to consideration for a
contract "seems to be well determined, that there must be a benefit on one side, or a detriment suffered
or service done on the other." WKBW, Inc v Children's Bible Hour, 332 Mich 569, 576-577; 52
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NW2d 219 (1952), quoting Sanford v Huxford, 32 Mich 313 (1875). A contract evidenced by
mutual promises may be valid. Garlok v Motz Tire & Rubber Co, 192 Mich 665, 672; 159 NW 344
(1916). The term "promise" has been defined as follows:
[A] manifestation of intention to act or refrain from acting in a specified way, so
made as to justify a promisee in understanding that a commitment has been made.
[State Bank of Standish v Curry, 442 Mich 76, 85; 500 NW2d 104 (1993), quoting
1 Restatement Contracts, 2d, § 2, p 8.]
When promises and performances to be rendered to each party are set forth with reasonable
certainty, the agreement does not fail for indefiniteness. Nichols, supra at 159.
In the instant case, plaintiff testified that the written stock purchase agreement did not define his
job duties for Haberstroh. Instead, plaintiff testified that he reached a verbal agreement with
defendant’s president Joel Dorfman. Plaintiff could not specify a date of the agreement but testified that
discussions were held after the stock purchase agreement was signed. Plaintiff described the substance
of that agreement as follows:
The agreement that was reached was that Thorn Apple Valley would take over
the operations management of manufacturing operations at the plant, and they would
provide the plan with management from their ranks, and that I would be responsible for
marketing and the diversification of these products, both the Haberstroh products and
other products to be added.
Moreover, at that time my offices were in Kalamazoo. And I was to manage
this business from Kalamazoo by working directly through Ron Guerard who was the
sales manager. And also I was to receive reports from the plant personnel that TAV
would install. And also any changes of an operational nature made in the plant by TAV
would be discussed in depth with me, and that I would have the right to provide input
and if necessary approval of those changes.
However, Dorfman did not recall any consulting agreement and did not feel that it was
necessary because plaintiff was the president of Haberstroh. Defendant’s vice president, Louis Glazier,
similarly testified that there was no consultation agreement.
Viewed in a light most favorable to plaintiff, we find that plaintiff failed to establish a triable issue
whether there was a valid oral contract because plaintiff did not show the express words exchanged by
the parties in forming the alleged contract so that they could be objectively judged by the jury. Rather,
plaintiff explained his own understanding of the oral contract and the status of the parties when entering
into the contract. Plaintiff did not present other corroborating proofs regarding the circumstances
surrounding the formation of the alleged contract, or an actual course of performance from which
reasonable minds could infer contractual duties owed to him, or at least for his benefit, in a capacity as a
guarantor or creditor. Stated otherwise, plaintiff failed to present evidence from which it could be
objectively determined that defendant made a bargained-for promise to perform a service (consultation)
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for plaintiff's benefit as a creditor or guarantor. Accordingly, the alleged contract must fail as a matter of
law for indefiniteness. We therefore conclude that the trial court erred in denying defendant's motion for
JNOV with respect to the contract claim.
We also agree with defendant's argument that JNOV should have been alternatively granted,
even assuming a valid oral contract to consult, because plaintiff did not prove any contract damages. It
is generally held that a "party to a contract who is injured by another's breach of contract may recover
from the latter only those damages which are the direct, natural and proximate result of the breach."
Walter Toebe & Co, supra at 36. See also Kewin v Massacusetts Mutual Life Ins Co, 409 Mich
401; 295 NW2d 50 (1980).
In the present case, the trial court erred in denying JNOV on the issue of contract damages
because a corporation's insolvency does not arise naturally from the fact of an operational change,
regardless of who makes the decision. As this Court stated in Held Construction Co, Inc v Michigan
Nat’l Bank of Detroit, 124 Mich App 472, 477; 335 NW2d 8 (1983):
The failure of a party to make payments due under a contract for work or
services performed by the other party does not usually result in the financial failure of the
performing party or the “financial embarrassment” of its shareholders or officers. The
financial ruin of a contracting corporation or its officers is plainly not a consequence
arising naturally from a breach of the contract. Therefore, absent evidence that a risk of
insolvency was within the actual contemplation of the parties at the time the contract
was made, damages are not recoverable for such a consequence.
Thus, absent evidence that a risk of insolvency (with a related possible impact on individual
losses sustained as a creditor or guarantor) was within the actual contemplation of the parties when
entering into the alleged oral contract on the division of duties, there was an insufficient basis for
submitting the contract claim to the jury based on plaintiff's theory that a duty to consult was breached.
We find that plaintiff failed to meet this burden of proof. In this regard, we note that plaintiff testified
that the parties did not discuss or contemplate the damages that might flow from one party’s breach of
any agreement; no other evidence was introduced which proved that defendant somehow had agreed to
take on responsibility for plaintiff’s personal obligations. In any event, the actual course of performance
following the alleged breach suggests a contemplated remedy consisting of changes in duties and
personnel. Plaintiff testified that he fired the alleged agent of defendant who was responsible for the
operational change. Considering all of the circumstances surrounding the formation of the alleged
contract and the parties' objective acts, we hold that the evidence, as a matter of law, failed to establish
a triable claim for the damages sought by plaintiff. Orzel, supra at 557-558.
Finally, we note that plaintiff suggests, as he did at trial, that there existed a separate,
enforceable promise by defendant that it would subordinate debt to the Bank. Although the trial court
did not address this theory when denying JNOV on the contract claim, we will briefly do so. Keeping
in mind that this case did not involve a claim based on promissory estoppel, that is, a promise that
should reasonably be expected to induce action and which does induce such action, State Bank of
Standish, supra at 83-84, and that the enforceability of a contract depends on consideration, Hisaw,
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supra at 643, we hold that plaintiff failed, as a matter of law, to establish an enforceable contract
because plaintiff did not present evidence from which reasonable minds could find that the promise was
supported by consideration.
In sum, the trial court erred in denying defendant's motion for JNOV on plaintiff’s contract
claim. In view thereof, it is unnecessary to address the other issues raised regarding this claim.
II
Tortious Interference
As with the contract claim, defendant claims that plaintiff's tortious interference claim is barred
by res judicata, that plaintiff lacked standing to pursue this claim, and that plaintiff failed to prove any
tortious interference. Although defendant has again failed to specifically identify the decision or
decisions of the trial court underlying its arguments, this Court nevertheless will consider these issues,
treating them as a challenge to the trial court's denial of JNOV and reviewing these matters de novo.
Res judicata requires that "(1) the prior action was decided on the merits, (2) the matter
contested in the second case was or could have been resolved in the first, and (3) both actions involved
the same parties or their privies." Bergeron, supra at 621. Here, the federal district court decided an
issue of standing relative to cross-claims made by plaintiff against defendant for claims of tortious
interference with an advantage business relationship and tortious interference with a contract. The
federal district court held that plaintiff and his affiliated entities did not show that defendant had some
special duty with respect to them in particular, or that they suffered a separate and distinct injury from
Haberstroh. Although it is clear from the district court's decision, and the Sixth Circuit’s decision to
affirm, that plaintiff was not precluded from asserting a claim in state court based on the same tortious
interference theory raised in federal court, arising out of his status as a creditor, it is also clear that the
federal court precluded plaintiff from pursuing a cause of action in state court based on an injury that
was derivative in nature of Haberstroh's injury and belonged to the bankruptcy trustee. Thus, it was
necessary that plaintiff establish his own cause of action in his capacity as a creditor of Haberstroh.
Although the federal decisions do not specifically address plaintiff's guarantor status, we note that a
guarantor acquires rights against a principal debtor by subrogation. 38 Am Jur 2d, Guaranty, § 127.
Further, regardless whether subrogation rights arise by contract or by operation of law, a subrogee,
upon paying the obligation owed to the subrogor, is substituted for the subrogor, "thereby attaining the
same and no greater rights to recover against the third party." Citizens Ins Co v American Community
Mut Ins Co, 197 Mich App 707, 709; 495 NW2d 798 (1992).
We do not construe the federal decisions as recognizing a possible cause of action by plaintiff as
a guarantor outside of any rights that he may acquire by being subrogated to the rights of a creditor of
Haberstroh. However, even if plaintiff could pursue a claim in a guarantor status, we would still be left
with an issue of standing and, as we have already held, we apply parallel rules to creditors and
guarantors in determining standing.
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Given the particular posture of this case, we conclude that plaintiff's failure to establish a claim
for tortious interference with an advantageous business relationship as a matter of law, based on his
status as a creditor or guarantor, for the financial losses claimed at trial as a creditor or guarantor, is
dispositive of this appeal.2 The basic elements of this tort are:
[A] valid business relationship or expectancy, knowledge of the relationship or
expectancy on the part of the defendant, an intentional interference by the defendant
inducing or causing a breach or termination of the relationship or expectancy, and
resultant damage to the plaintiff. [BPS Clinical Laboratories v Blue Cross & Blue
Shield of Michigan (On Remand), 217 Mich App 687, 699; 552 NW2d 919
(1996).]
The threshold question under this test is the type of relationship that exists. Feaheny v
Caldwell, 175 Mich App 291, 302; 437 NW2d 358 (1989). Here, the claim is based on plaintiff's
relationship with the Bank. However, because plaintiff dealt with the Bank in a representative capacity
when securing loans for Haberstroh's benefit, the only arguable basis for plaintiff's tortious interference
claim in his individual capacity was his personal guarantee agreement with the Bank concerning loans for
Haberstroh's benefit. See Feaheny, supra at 301 (an advantageous relationship may be based on
contract).
Next, this Court must consider whether plaintiff established that the Bank breached or otherwise
terminated its contractual relationship with plaintiff. Viewed in a light most favorable to plaintiff, we hold
that plaintiff proved neither a breach nor a termination of the contractual relationship. The evidence
showed that the Bank enforced the guarantee and was able to collect from plaintiff by entering into a
settlement agreement in the course of the federal lawsuit on the guarantee and other claims.
Even if the Bank's conduct in enforcing a contract right could be viewed as a termination of an
advantageous business relationship, we hold that plaintiff failed to establish that the Bank's enforcement
action was induced or caused by defendant's interference w that contractual relationship. Under
ith
Michigan law, plaintiff must show the "doing of a per se wrongful act or the intentional doing of a lawful
act with malice and unjustified in law for the purpose of invading plaintiff's contractual rights or business
relationship." Feldman v Green, 138 Mich App 360, 369; 360 NW2d 881 (1984). See also
Feaheny, supra at 305; Bonelli v Volkswagen of America, Inc, 166 Mich App 483, 499; 421
NW2d 213 (1988). Liability is not imposed when actions are not per se wrongful and are "motivated
by legitimate personal and business reasons" rather than a desire to interfere with the contractual or
business relationship. Bonnelli, supra at 499. See also Wood v Herndon & Herndon Investigations,
Inc, 186 Mich App 495, 500; 465 NW2d 5 (1990).
We reject plaintiff's assertion that defendant's conduct in reneging on a promise to subordinate
$1 million in debt constituted the requisite interference with his personal guarantee. While there is
evidence of this promise, the failure to subordinate was not unjustified in the law because plaintiff failed
to prove an enforceable promise. Hisaw, supra at 643.
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Further, while the evidence that defendant removed inventory from Haberstroh in a manner that
permitted the transactions to appear as accounts receivable for lending purposes may constitute
evidence of a breach of the loan agreement executed for Haberstroh's benefit, we reject plaintiff's
argument that this conduct interfered with the personal guarantee. To the contrary, the evidence was
uncontradicted that this particular matter was eventually resolved by defendant's reimbursement to the
Bank on accounts receivable. The evidence did not establish that plaintiff paid the Bank under the
settlement entered into on the guarantee because of defendant's conduct.
Viewed as a whole and taken in a light most favorable to plaintiff, we conclude that the evidence
of defendant's conduct associated with the Bank's relationship with Haberstroh does not establish the
requisite interference with the personal guarantee because plaintiff had no basis for a tortious
interference claim against defendant that was derivative of Haberstroh's advantageous relationship with
the Bank. Further, the evidence that defendant tried placing blame on plaintiff for Haberstroh's demise
does not establish the requisite interference because there was no evidence that this conduct was
directed at plaintiff's status as a guarantor, as distinguished from his duties performed for Haberstroh in
other capacities, such as sales and as president.
In sum, paying the Bank relative to the personal guarantee may give plaintiff subrogation rights
for any claim that the Bank had against Haberstroh for not paying the loan. However, as a matter of
law, plaintiff failed to establish a tortious interference theory that would support a recovery of damages
from defendant arising out of the Bank's enforcement of the personal guarantee. Therefore, the trial
court erred in denying the motion for JNOV based on plaintiff's failure to establish a triable tortious
interference claim.
In view of the foregoing discussion, we find it unnecessary to address the remaining issues raised
by defendant regarding the tortious interference claim.
III
Negligence
Because plaintiff was the party aggrieved by the final judgment of no cause of action, we will
first consider plaintiff's claim that the trial court erred in granting JNOV in favor of defendant based on
plaintiff's failure to establish a duty. A court decides, as a matter of law, what characteristics must be
present for a relationship to give rise to a duty. A factual question may then arise for a jury on whether
the evidence establishes the elements of that relationship. Schanz v New Hampshire Ins Co, 165 Mich
App 395, 402; 418 NW2d 478 (1988). Duty is not sacrosanct in itself, but is only an expression of the
sum total of those considerations of policy which lead the law to say that a person is entitled to
protection. Buczkowski v McKay, 441 Mich 96, 100-101; 490 NW2d 330 (1992). Upon de novo
review of the trial court's decision, Forge supra at 204, we hold that the trial court reached the correct
result in finding no duty because plaintiff failed to establish a relationship with defendant giving rise to a
duty so as to allow him to proceed with his claims for economic losses associated with his status as a
creditor or guarantor of Haberstroh under the theory that defendant negligently operated Haberstroh.
Plaintiff's reliance on the principles in Courtright v Design Irrigation, Inc, 210 Mich App 528; 534
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NW2d 181 (1995), is misplaced because plaintiff did not claim liability for physical harm arising out of
the performance of services. See Rinaldo's Construction Corp v Michigan Bell Telephone Co, 454
Mich 65, 84-85; 559 NW2d 647 (1997).
Because plaintiff has established no basis for vacating the trial court's grant of JNOV, we do not
consider the alternative grounds for affirmance or a new trial raised by defendant.
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IV
CONCLUSION
We affirm the trial court's grant of JNOV in favor of defendant on the negligence count, reverse
the denial of defendant’s motions for JNOV on the contract and tortious interference claims, and vacate
the second amended final judgment of $782,000 plus interest and taxable costs.
Affirmed in part and reversed in part.
/s/ Richard Allen Griffin
/s/ Hilda R. Gage
/s/ Robert J. Danhof
1
We note that the trial court determined in its posttrial opinion to deny reconsideration that principles of
equity could be invoked to disregard the corporate form and treat the parties as partners for purposes
of the alleged oral contract. However, the record does not indicate that plaintiff sought to invoke the
court's equity jurisdiction to pursue a contract claim. See, generally, Anzaldua v Band, 457 Mich 530,
538-539, n 5; 578 NW2d 306 (1998) (discussing a court's authority with respect to equitable claims).
The case was tried entirely by a jury on legal claims. In any event, as a general rule, the corporate
structure is respected, Bitar v Wakim, 456 Mich 428, 431; 572 NW2d 191 (1998), and partnership
law will apply the analogist rules for piercing the corporate veil in determining whether a partnership
should be treated as a distinct legal entity from the individuals who compose it, Chisholm v Chisholm
Construction Co, 298 Mich 25, 30-31; 298 NW 390 (1941). Treating the parties' relationship as a
partnership, thus, does not save plaintiff's contract claim because it is necessary that plaintiff show that
the contract was enforceable by him in his status as a guarantor or creditor.
2
Although plaintiff claimed exemplary damages for the tortious interference claim, the jury's finding that
plaintiff was not entitled to exemplary damages renders any issue on exemplary damages moot.
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