26500 NORTHWESTERN BUILDING LLC V FRIEDMAN REAL ESTATE GROUP INC
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STATE OF MICHIGAN
COURT OF APPEALS
26500 NORTHWESTERN BUILDING, LLC,
UNPUBLISHED
January 29, 2008
Plaintiff-Appellant,
v
FRIEDMAN REAL ESTATE GROUP, INC., and
FINSILVER/FRIEDMAN MANAGEMENT
COMPANY,
No. 273946
Oakland Circuit Court
LC No. 2006-073157-CH
Defendants-Appellees.
Before: Murphy, P.J., and Smolenski and Schuette, JJ.
PER CURIAM.
Plaintiff appeals as of right the trial court’s October 3, 2006, grant of summary
disposition to defendants under MCR 2.116(C)(10). Plaintiff owns a building located at 26500
Northwestern Highway in Southfield, Michigan. Defendant Finsilver/Friedman Management
Corporation (FFMC) is a manager of commercial properties; defendant Friedman Real Estate
Group (FREG) is a commercial real estate broker. This dispute centers on the loss of plaintiff’s
major tenant from its building. Central Corporation Credit Union (CenCorp) did not renew its
lease with plaintiff and relocated to the Travelers Towers building in November 2005, when its
lease expired. We affirm.
I. FACTS
CenCorp leased approximately 25 percent of the building at 26500 Northwestern under a
long-term lease that expired October 31, 2005. The other major tenant, who occupied 50 percent
of the building, was World Wide Financial Services. CenCorp became dissatisfied with its space
in early 2004 because it was on two floors and because the quality of services was declining. It
began to search for another location. Steve Kim, an employee of defendant FREG, contacted
William Walby, the CEO of CenCorp, to determine if the company was interested in relocating.
On March 17, 2004, after several months of discussions, Randy Tarnow, another employee of
FREG, and Paul Winkler, the leasing agent for Kojaian Management Corp (the owner of
Travelers Towers in Southfield), showed Walby office space in Travelers Towers.
After that showing, Kojaian, through FREG, began negotiations with CenCorp for a long
term lease to begin in November 2005. CenCorp and Kojaian exchanged offer and counter offer,
but they could not reach an agreement. Negotiations broke down in late October or early
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November, and FREG stopped working with CenCorp. CenCorp then decided to negotiate with
plaintiff for a renewal of its lease.
In November 2004, Jack Wolfe, the managing member of plaintiff, and CEO of World
Wide Financial Services, learned that CenCorp had been working with FREG to relocate its
offices. By January 2005, he negotiated a renewal lease with CenCorp and submitted it for
approval. In March 1999, the building was mortgaged to GE Commercial Finance Business
Property Corporation on a $9.3 million loan and, as the lender, GE had final approval over
certain leases. Wolfe presented the lease to GE for its approval several times, but GE withheld
approval.
On December 9, 2004, Wolfe met with representatives of FFMC, FREG, and GE
regarding a property management proposal. At the meeting, Wolfe emphasized how important it
was to the profitability of the building that CenCorp be retained as a tenant. Also, Wolfe claims,
“it was agreed” that FFMC would assist plaintiff with the renewal of the CenCorp lease and with
“money issues.” FREG thereafter sent a letter confirming the meeting and noting that it was
“ready to assist” plaintiff in returning the building to profitability. Charles Delaney, the CFO
and COO of FFMC, confirmed that he met with Wolfe in December 2004 to discuss becoming
the property’s manager. Delaney claimed, however, that plaintiff never signed and returned a
management agreement, even though FFMC sent several proposed contracts to plaintiff for
approval. As evidence, plaintiff submitted a copy of a property management contract sent by
FFMC to plaintiff on January 7, 2005; the submitted contract is unsigned. Delaney explained
that FFMC does not work without a contract, so it never performed any work as plaintiff’s
property manager. Wolfe sent a letter outlining plaintiff’s proposed financial reconciliation to
Paul Gawenka, a vice president at GE. The letter indicated that plaintiff had included a copy of
the “proposed management agreement for the building presented by the Friedman Real Estate
Group.”
Plaintiff filed for bankruptcy in February 2005.1 CenCorp, concerned about the
bankruptcy and about GE’s failure to approve the negotiated renewal lease, discontinued
negotiations with plaintiff and enlisted another broker to find new space. CenCorp again met
with Kojaian on March 2, 2005, to discuss securing space in Travelers Towers.
According to Wolfe, in March 2005, he informed Jim Friedman (a principal of FFMC
and FREG) that plaintiff “would likely retain the companies,” and he asked for assistance in
convincing GE to approve the CenCorp lease. Delaney, however, stated that Wolfe never sought
FFMC assistance in obtaining GE’s approval of the CenCorp lease renewal.
In April 2005, plaintiff defaulted on its loan and GE accelerated the debt. In May 2005,
GE began foreclosure proceedings against plaintiff. During the foreclosure action, GE requested
that FFMC/FREG be appointed as the receiver, and plaintiff agreed on May 11, 2005. Plaintiff
states that the agreement regarding FFMC/FREG’s appointment as receiver was read in open
court on May 11, 2005, but the court did not issue a written order. The trial court noted several
1
The bankruptcy petition was apparently dismissed in March 2005.
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times in its summary disposition opinion that it had not signed an order appointing FFMC/FREG
as receiver. However, the trial court stated in an earlier opinion that it “appointed FFMC as the
Receiver for the Building” on May 11, 2005. Wolfe’s affidavit indicates that he “fully believed
as of May 11, 2005, that the Friedman Companies were the Court appointed receiver for the
Building responsible for all management and leasing activities.” He claimed that he met with
FFMC staff on May 16, 2005, and the next day FFMC staff picked up leasing and operating
information.
On May 17, 2005, CenCorp signed a lease for space in Travelers Towers. On May 20,
2005, GE consented to the renewal lease between CenCorp and plaintiff. Wolfe claimed that on
May 20, 2005, an FFMC employee told him that defendants received a $50,000 payment from
Kojaian as a commission or finder’s fee. FFMC employees later returned plaintiff’s documents.
On June 7, 2005, the trial court appointed Signature Associates as receiver. Wolfe’s September
20, 2006, affidavit references several letters between plaintiff and defendants, but those letters
were not provided with the affidavit. In those missing letters, Wolfe claimed to have “fired”
defendant FFMC as receiver.
Plaintiff filed this action in March 2006. Plaintiff moved the trial court to compel
discovery on July 20, 2006, after defendants refused to allow their employees to be deposed.
Defendants’ answer claimed that plaintiff’s suit was merely a re-filing of the third-party
complaint against defendants that was filed in the original foreclosure action. In that suit, the
discovery period expired in November 2005 with plaintiff conducting no discovery; so,
defendants argued, plaintiff could not “bootstrap itself into a serendipitous re-opening of the
discovery period it allowed to lapse.” Defendants also argued that deposing their employees
would be futile because plaintiff’s allegations were purely speculation and conjecture,
unconfirmed by any of the people allegedly involved.
On August 2, 2006, a hearing was held on the motion to compel discovery. At that
hearing, defendants moved the trial court to grant them summary disposition on plaintiff’s claim.
The trial court did not rule on the motion to compel, but stated that it would allow discovery if
defendants’ motion was denied.
The trial court granted defendants’ motion based on MCR 2.116(C)(10). In reaching its
decision, it noted that the case was predicated on plaintiff’s claim that defendants violated their
duties as receiver and property manger for the building by acting on behalf of Kojaian and GE.
The trial court then noted that it had not appointed defendants as receiver because it had signed
no order and that plaintiff failed to present any evidence that a property management agreement
had been executed. In addition, defendants’ involvement with Kojaian and CenCorp occurred
before their involvement with plaintiff. Defendants did not have a duty to plaintiff that they
could breach, the trial court said, because there was no relationship between the parties. In
making its decision, the trial court noted that credibility determinations should not be made when
deciding a summary disposition motion, but held that there was no support for “plaintiff’s
dramatic characterization of defendants’ actions.” No admissible evidence had been provided to
contradict defendants’ affidavits. Plaintiff’s case rested on “‘information and belief,’ obtained
through unnamed parties, all of which ‘information’ is specifically contradicted by persons with
personal knowledge.”
II. SUMMARY DISPOSITION
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Plaintiff argues on appeal that the trial court erred when it granted summary disposition
because it presented sufficient evidence to prove that a genuine issue of material fact exists with
respect to its claims of tortious interference with a business relationship or expectancy;
misrepresentation and fraud in the inducement; breach of fiduciary duties of a receiver; and
breach of contract. Specifically, plaintiff argues that summary disposition was inappropriate
because plaintiff had presented sufficient evidence to support a claim that defendants had
tortiously interfered with plaintiff’s business relationship with CenCorp; had breached its duties
as a receiver; and had breached its contract duties. We disagree.
A. Standard of Review
We review a trial court’s decision on a motion for summary disposition de novo. Dressel
v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003). Summary disposition under MCR
2.116(C)(10) is appropriate “if there is no genuine issue regarding any material fact and the
moving party is entitled to judgment as a matter of law.” West v Gen Motors Corp, 469 Mich
177, 183; 665 NW2d 468 (2003). “A genuine issue of material fact exists when the record,
giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which
reasonable minds might differ.” Id.
B. Analysis
1. Tortious Interference
Tortious interference with a business relationship requires (1) the existence of a valid
business relationship or expectancy; (2) knowledge of the relationship or expectancy by the
defendant; (3) an intentional interference by the defendant that induces or causes a termination of
the relationship or expectancy; and (4) damage to the plaintiff. Badiee v Brighton Area Schools,
265 Mich App 343, 365-366; 695 NW2d 521 (2005). Plaintiff must allege that defendant either
performed an intentional, wrongful-per-se act, or a lawful act done “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 CMI Int’l, Inc v
Intermet Int’l Corp, 251 Mich App 125, 131-132; 649 NW2d 808 (2002). If the act is otherwise
lawful, plaintiff “necessarily must demonstrate, with specificity, affirmative acts by the interferor
which corroborate the unlawful purpose of the interference.” Feldman, supra at 370. An
“improper” act is one that is illegal, unethical, or fraudulent. Weitting v McFeeters, 104 Mich
App 188, 198; 304 NW2d 525 (1981). Merely offering a better deal or soliciting another’s
business is not an improper act. Id. at 197-198. Intentionally and actively inducing someone to
breach a contract, however, is an improper act. Feldman, supra at 376.
Plaintiff made two specific factual allegations of affirmative acts, in addition to
generalized accusations of wrong-doing, to argue that defendants interfered with plaintiff’s
business expectancy by improperly encouraging CenCorp to relocate from its building. Plaintiff
first alleges that David Friedman, the principal of the defendants, met with a GE representative,
Paul Gawenka, in Las Vegas, and the two “took actions detrimental to” plaintiff. That
accusation, however, is contained only in plaintiff’s brief on appeal and in the complaint below.
Plaintiff has not offered sworn testimony and has not submitted other admissible evidence.
Conclusory statements that are unsupported by specific factual allegations are insufficient to
create a genuine issue of material fact or state a cause of action. Churella v Pioneer State Mut
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Ins Co, 258 Mich App 260, 272; 671 NW2d 125 (2003). Further, defendants submitted a sworn
affidavit from Paul Gawenka, containing the contrary assertion that he met with Friedman, but
that they did not discuss withholding GE’s approval of the renewal lease. With that sworn
statement, defendants have met their burden to show that no disputed fact exist. Coblentz v Novi,
475 Mich 558, 568-569; 719 NW2d 73 (2006). Plaintiff, as the nonmoving party, bears the
burden of proof on the issue at trial, so it must provide evidentiary materials in addition to its
pleadings to show that a genuine issue of disputed fact exists. Id. at 569; Quinto v Cross &
Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996). It has not done so.
Plaintiff’s second specific allegation is that defendants, after they were appointed as
receivers for the property, circulated the lease for signing between CenCorp and Kojaian
Management Corp, the owners of Travelers Towers, in order to encourage or assist CenCorp in
relocating. Plaintiff offers the sworn averment of Jack Wolfe, the managing member of plaintiff
corporation, that one of defendants’ employees told him that defendants circulated that lease and
would receive a substantial commission for their efforts. The statement in Wolfe’s affidavit is
hearsay, MRE 801, is inadmissible, and does not create a genuine issue of material fact.
McCallum v Dep’t of Corrections, 197 Mich App 589, 603; 496 NW2d 361 (1992). Although
this Court is liberal in finding a genuine issue of material fact, Trentadue v Buckler Automatic
Lawn Sprinkler Co, 266 Mich App 297, 306; 701 NW2d 756 (2005), reversed in part on other
grounds sub nom Trentadue v Gorton, 479 Mich 378 (2007), plaintiff must provide documentary
evidence, and the hearsay statement of an unnamed employee is not documentary evidence.2
Conjecture, speculation, opinions, conclusory denials, and unsworn averments cannot satisfy the
court rule; “disputed fact (or the lack of it) must be established by admissible evidence.” SSC
Assoc Ltd Partnership v Gen Retirement Sys of Detroit, 192 Mich App 360, 364; 480 NW2d 275
(1991).
2. Misrepresentation and Fraud In the Inducement
We first note that plaintiff has “made only a brief presentation which can hardly be
classified as an argument” regarding its claim of fraudulent misrepresentation and fraud in the
inducement, and thus, has not properly presented this issue for our review. Goolsby v Detroit,
419 Mich 651, 655 n 1; 358 NW2d 856 (1984). We will not consider this issue. Yee v
Shiawassee Co Bd of Comm’rs, 251 Mich App 379, 406; 651 NW2d 756 (2002).
3. Breach of Fiduciary Duties of a Receiver
Next, defendant FFMC was not appointed receiver by the trial court; thus, it did not have
any fiduciary duties to breach. The trial court ruled that neither of the defendants was appointed
as receiver because the trial court did not execute a written order of appointment. Plaintiff has
not provided an executed order showing that such an appointment was made, and, in fact, it
2
For the first time on appeal, plaintiff names the employee who allegedly gave Wolfe the
information. This Court, in reviewing a summary disposition ruling, only considers evidence in
the record at the time of the lower court hearing. Pena v Ingham Co Rd Comm, 255 Mich App
299, 313 n 4; 660 NW2d 351 (2003).
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concedes that the proposed order appointing FFMC receiver was never signed. A court speaks
through its written judgments and orders and, until an order is “reduced to writing and signed,” it
does not become effective. Tiedman v Tiedman, 400 Mich 571, 576; 255 NW2d 632 (1977).
Thus, plaintiff was not appointed as a receiver and had no duties attendant to being a receiver; if
there is no duty, there can be no breach. Summary disposition on that claim was proper.
4. Breach of Contract
We conclude that the trial court did not err when it determined that plaintiff has not
presented evidence to create a genuine issue of material fact that an oral or written contract was
formed. Where there was no contract, there can be no breach. Plaintiff has not provided a
signed management agreement and does not claim that one exists. The only writings signed by
defendants clearly indicate that defendants did not intend to be bound by any proposed contract
until plaintiff signed it and “[a] contract is made when both parties have executed or accepted it,
and not before.” Kamalnath v Mercy Mem Hosp Corp, 194 Mich App 543, 549; 487 NW2d 499
(1992). There was no evidence of a meeting of the minds of the parties on essential terms;
therefore, there was no contract. Id.
Moreover, plaintiff’s own evidence makes it clear that it did not believe that an oral or
written contract existed before May 2005, because plaintiff’s correspondence in March 2005
discusses that plaintiff would likely retain defendants after or during the bankruptcy proceedings
and describes the agreement in question as the proposed management contract. Negotiations and
discussions are insufficient to create a contract. Eerdmans v Maki, 226 Mich App 360, 364; 573
NW2d 329 (1997). Additionally, plaintiff has failed to present evidence to create a genuine issue
of material fact whether an oral contract existed. Acts that may be sufficient to constitute partial
performance and remove the contract from the statute of frauds are irrelevant because, “[b]efore
a party may assert that its actions constitute sufficient part performance to remove an oral
agreement from the statute of frauds, that party must first show the existence of an oral contract.”
Empire Shoe Serv, Inc, v Gershenson, 62 Mich App 221, 225; 233 NW2d 237 (1975). Likewise,
plaintiff’s argument that by meeting with plaintiff and reviewing documents on May 16, 2005,
defendants may have ratified a contract also fails because there was neither an oral contract nor a
receivership to ratify. Finally, plaintiff’s argument that defendants should be estopped from
denying a contract existed also fails because estoppel is not appropriate unless the facts calling
for it are unquestionable and the wrong to be prevented undoubted. Kamalnath, supra at 552.
That is not the case here.
5. Summary Disposition Before Completion of Discovery
Plaintiff next argues that the trial court abused its discretion by granting summary
disposition before discovery was complete. We note again that plaintiff has “made only a brief
presentation which can hardly be classified as an argument,” and thus, has not properly presented
this issue for review. Goolsby, supra at 655 n 1. Nevertheless, generally, a motion for summary
judgment under MCR 2.116(C)(10) should not be granted before discovery on a disputed issue is
complete. Townsend v Chase Manhattan Mortgage Corp, 254 Mich App 133, 140; 657 NW2d
741 (2002). Summary disposition in this case was appropriate, however, because further
discovery does not stand a reasonable chance of uncovering factual support for plaintiff’s
position. Peterson Novelties, Inc, v City of Berkley, 259 Mich App 1, 25; 672 NW2d 351 (2003).
As already discussed, plaintiff has not provided independent factual evidence to support its
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claims, despite a discovery period in the former action and several months of discovery in this
action. Plaintiff argues it should be given more time, but plaintiff has not stated what facts it
may reasonably hope to uncover upon further discovery, Village of Dimondale v Grable, 240
Mich App 553, 567; 618 NW2d 23 (2000), and plaintiff was not entitled to a fishing expedition.
VanVorous v Burmeister, 262 Mich App 467, 477; 687 NW2d 132 (2004). We conclude that the
trial court’s grant of summary disposition was appropriate. Peterson Novelties, Inc, supra at 25.
III. CONSIDERATION OF EVIDENCE
Plaintiff next argues that the trial court erred when it considered the affidavit of Paul
Gawenka, which was filed on the day of the hearing on the motion for summary disposition. We
disagree.
A. Standard of Review
We review the trial court’s decision to consider evidence for an abuse of discretion. Reed
v Reed, 265 Mich App 131, 160; 693 NW2d 825 (2005). A trial court has not abused its
discretion if it selects a “reasonable” or “principled outcome” when more than one correct
outcome is possible. Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006).
B. Analysis
Affidavits in support of a motion for summary judgment must be filed at least 21 days
before the hearing, MCR 2.116(G)(1)(a)(i), but a trial court has the discretion to consider a late
affidavit as evidence. See Prussing v Gen Motors Corp, 403 Mich 366, 370; 269 NW2d 181
(1978). The trial court properly exercised its discretion where the affidavit contained relevant
information, was not unfairly prejudicial, and assisted in a resolution of the motion. In ruling,
we note that plaintiff submitted a late affidavit of its own and missed other deadlines imposed by
the trial court.
We further note that plaintiff’s argument, that the affidavit was “harmful” and thus, was
“unfair,” is without merit. All evidence is prejudicial or harmful to some extent to one of the
parties. People v Mills, 450 Mich 61, 75; 537 NW2d 909 (1995). Damaging or harmful,
however, is not the equivalent of unfairly prejudicial. Bradbury v Ford Motor Co, 123 Mich
App 179, 185; 333 NW2d 214 (1983), mod 419 Mich 550 (1984). Rather, unfair prejudice is
when there is a danger that marginally probative evidence will be given undue weight by the
jury, and it would be inequitable to allow its use. Mills, supra at 75-76. The Gawenka affidavit
was more than marginally probative evidence and was relevant. It made the existence of the fact
that defendants asked GE to decline to approve the CenCorp lease so they could encourage
CenCorp to leave plaintiff’s building, less probable. MRE 401. Further, there is no indication
that the affidavit would be given undue weight. MRE 403. Thus, it was not inequitable to allow
its admission, and the trial court did not abuse its discretion.
Affirmed.
/s/ William B. Murphy
/s/ Michael R. Smolenski
/s/ Bill Schuette
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