TERRY LEE JEBB V MASTER MORTGAGE & FINANCIAL CORP
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STATE OF MICHIGAN
COURT OF APPEALS
TERRY LEE JEBB,
UNPUBLISHED
February 12, 2002
Plaintiff-Appellant,
V
No. 227012
No. 227762
Bay Circuit Court
LC No. 98-004094-CK
LC No. 98-004094-CK-B
MASTER MORTGAGE & FINANCIAL
CORPORATION,
Defendant-Appellee.
Before: Fitzgerald, P.J., and Hood and Sawyer, JJ.
PER CURIAM.
In these consolidated cases, plaintiff appeals as of right the order granting summary
disposition pursuant to MCR 2.116(C)(7),(8), and (10), and the judgment awarding costs and
attorney fees as sanctions under MCR 2.405. We reverse.
This case arises out of an alleged oral employment agreement between plaintiff and
defendant. Plaintiff was involved in the mortgage industry for a number of years. She had her
broker’s license and operated her own mortgage business with the assumed name “Master
Mortgage” before associating with defendant. Defendant’s founders sought her assistance in
incorporating because they needed an individual on the board of directors with experience in the
mortgage business. In consideration for her employment, plaintiff allowed the company to use
the name “Master Mortgage” as part of defendant’s name.
Plaintiff had no written employment contract. Rather, she allegedly negotiated the terms
of her employment with Mark Doriean, married to Amy Brennan. Brennan was to be the
president and sole shareholder of the new company. Doriean was not going to be on the board of
directors because he was subject to a non-compete agreement from another mortgage company.
Plaintiff claimed that Doriean promised her a number of different considerations for her
employment, including salary, a ten-percent share of the Michigan profits, commissions, and part
of the underwriting fee for the loans processed by the company. She also asserted that he agreed
that the name “Master Mortgage” was hers and that if she ever left defendant’s employ she could
take the name with her. Moreover, plaintiff alleged that Brennan was present for many of the
negotiation meetings and approved the representations. Defendant was incorporated, with
plaintiff’s knowledge and approval, under the name “Master Mortgage and Financial Lending
Corporation.” Brennan was president, plaintiff was vice-president, and JoAnn Brennan, Amy’s
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mother, was secretary. Plaintiff testified that Doriean ran the day-to-day operations of the
business, including hiring and employment decisions.
After the business was operational for approximately six months, Doriean and plaintiff
began an extra-marital affair. In late March 1998, Amy Brennan terminated plaintiff’s
employment. Plaintiff filed suit, claiming that defendant owed her a raise promised by Doriean
before her termination, commissions on a number of loans, and ten percent of defendant’s net
profits from the Michigan branch of the company. She also sought the right to use the assumed
name “Master Mortgage.” The trial court granted summary disposition on a variety of grounds
and imposed approximately twenty thousand dollars in mediation sanctions on plaintiff.
Plaintiff first argues that the trial court erred by granting summary disposition pursuant to
MCR 2.116(C)(7), holding that plaintiff’s claims were barred by the statute of frauds. MCL
566.132. We agree.
We review de novo the trial court’s decision to grant summary disposition pursuant to
MCR 2.116(C)(7). Diehl v Danuloff, 242 Mich App 120, 123; 618 NW2d 83 (2000). When
reviewing a motion for summary disposition under MCR 2.116(C)(7), the court must accept the
nonmoving party’s well-pleaded allegations as true and construe the allegations in the
nonmovant’s favor to determine whether any factual development could provide a basis for
recovery. Id. The court must consider any pleadings, affidavits, depositions, admissions, or
other documentary evidence that has been submitted by the parties. Id. If there are no facts in
dispute, whether the claim is statutorily barred by immunity is a question of law. Id.
The statute of frauds, MCL 566.132, states that certain contracts and agreements are void
unless the agreement is in writing and signed with an authorized signature. The statute renders
void: “an agreement that, by its terms, is not to be performed within one year from the making of
the agreement” and “an agreement, promise, or contract to pay a commission for or upon the sale
of an interest in real estate.” MCL 566.132(a) and (e). Neither section applies to plaintiff’s
claims.
Application of the statute of frauds to mortgage or real estate sales commissions is
limited to situations where a broker deals directly with the real estate owner. Real Estate Co, Inc
v Curis, 169 Mich App 378; 425 NW2d 559 (1988), citing Thompson v Carey’s Real Estate, 335
Mich 474; 56 NW2d 255 (1953). The statute of frauds does not apply to oral agreements
between a broker and the broker’s employees. Id. at 384-385. Plaintiff claims a commission
allegedly due from her employer, defendant; therefore, MCL 566.132(e) does not bar her claim
for commissions.
To determine if claims are barred by the one year limitation of the statute of frauds, the
court must determine whether the oral contract is capable, by any possibility, of performance
within one year of the agreement. Dumas v Auto Club Insurance Assn, 437 Mich 521, 533; 473
NW2d 652 (1991); Bullock v Automobile Club of Michigan, 432 Mich 472, 523; 444 NW2d 114
(1989). Plaintiff’s alleged agreement related to the return of her business name could have been
performed within one year if she left defendant’s employment during that time. Therefore, the
claim was not barred by the statute of frauds. Dumas, supra at 533. In addition, plaintiff’s claim
for a percentage of net profits was not barred, despite the fact that annual profits could not be
calculated within one year, because the services could have been rendered within the year.
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Miller v Riata Cadillac Co, 517 SW2d 773, 776-777 (Tx, 1975); Cron v Hargro Fabrics, Inc, 91
NY2d 362, 367-370; 694 NE2d 56, 59-61 (1998).
Plaintiff next argues that the trial court erred by granting summary disposition pursuant to
MCR 2.116(C)(8), holding that plaintiff failed to state a claim. We agree.
We review de novo the trial court’s decision to grant summary disposition pursuant to
MCR 2.116(C)(8). Beaudrie v Henderson, 465 Mich 124, 129; 631 NW2d 308 (2001). “A
motion for summary disposition brought under MCR 2.116(C)(8) tests the legal sufficiency of
the complaint on the basis of the pleadings alone. The purpose of such a motion is to determine
whether the plaintiff has stated a claim upon which relief can be granted.” Id. at 129-130, citing
Spiek v Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). Only if no factual
development could possibly justify recovery should the motion be granted. Beaudrie, supra at
130.
The primary function of a pleading in Michigan is to give notice of the nature of the
claim or defense sufficient to permit the opposite party to take a responsive position. Stanke v
State Farm Mutual Auto Ins Co, 200 Mich App 307, 317; 503 NW2d 758 (1993). We find the
first amended complaint adequate to state claims for unjust enrichment. Unjust enrichment is a
recognized cause of action, although it should be approached with caution. Dumas, supra at 546.
The essential elements of an unjust enrichment claim are: “receipt of a benefit by the defendant
from the plaintiff, and which benefit it is inequitable that the defendant retain.” Id.
Plaintiff’s amended complaint alleged that she was promised certain compensation in
consideration of her employment and that she did not receive that compensation after defendant
terminated her employment. The amended complaint also asserted that although the use of the
name “Master Mortgage” was a condition of her employment with defendant, she never
relinquished or sold the name. She also asserts that the name “Master Mortgage” had value in
terms of reputation and good will when she associated with defendant.
Factual development of these claims could possibly justify recovery. Beaudrie, supra at
130. Moreover, these claims were adequately stated to permit defendant to prepare a defense.
Stanke, supra at 317. Therefore, we conclude the trial court erred by granting summary
disposition pursuant to MCR 2.116(C)(8).
Plaintiff also argues that the trial court erred by granting summary disposition as a matter
of law pursuant to MCR 2.116(C)(10), finding no genuine issue of fact. We agree.
We review de novo a trial court’s decision to grant a motion for summary disposition
pursuant to MCR 2.116(C)(10). Hazle v Ford Motor Co, 464 Mich 456, 461; 628 NW2d 515
(2001). A summary disposition motion brought under MCR 2.116(C)(10) tests the factual
support of a claim. Id. “After reviewing the evidence in a light most favorable to the nonmoving
party, a trial court may grant summary disposition under MCR 2.116(C)(10) if there is no
genuine issue concerning any material fact and the moving party is entitled to judgment as a
matter of law.” Id., citing Smith v Globe Life Ins Co, 460 Mich 446, 453; 597 NW2d 28 (1999).
We find that plaintiff presented evidence demonstrating a genuine issue of fact related to
the existence and contents of the alleged oral employment contract. Central to this conclusion is
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our determination that a question of fact exists whether Doriean was authorized to bind
defendant in employment negotiations. An agent’s authority to bind a principal may be either
actual or apparent. Alar v Mercy Memorial Hospital, 208 Mich App 518, 528; 529 NW2d 318
(1995). Apparent authority arises where the acts and appearances of the principal lead a third
person reasonably to believe that an agency relationship exists. Id. at 528, citing Meretta v
Peach, 195 Mich App 695, 698; 491 NW2d 278 (1992). Actual authority may be implied from
the circumstances surrounding the transaction, showing that the principal actually intended the
agent to possess the authority to enter into the transaction on behalf of the principal. Hertz Corp
v Volvo Truck Corp, 210 Mich App 243, 246; 533 NW2d 15 (1995).
Plaintiff and Doriean testified that he conducted plaintiff’s employment negotiations with
his wife’s express approval. Moreover, plaintiff testified that Amy Brennan told her that Doriean
was the sole controller of the business and that Brennan was present when many of the offers
were made. Viewing this evidence in the light most favorable to plaintiff, we find that a question
of fact exists regarding Doriean’s authority to bind defendant in employment matters. Hazle,
supra at 461. Therefore, summary disposition was improper pursuant to MCR 2.116(C)(10).
Plaintiff also argues that the trial court erred by awarding defendant costs and attorney
fees as sanctions under MCR 2.405. Because we reverse the trial court’s grant of summary
disposition, the issue of sanctions is moot. Alar, supra at 533.
Reversed.
/s/ E. Thomas Fitzgerald
/s/ Harold Hood
/s/ David H. Sawyer
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