TECHNICAL AID CRYSTAL INC V VOLKSWAGEN OF AM INC
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STATE OF MICHIGAN
COURT OF APPEALS
TECHNICAL AID CRYSTAL, INC. d/b/a TAC
AUTOMOTIVE GROUP,
UNPUBLISHED
June 10, 2008
Plaintiff-Appellant,
v
No. 278908
Oakland Circuit Court
LC No. 2007-080656-CK
VOLKSWAGEN OF AMERICA, INC., DAKO
SERVICES, INC., and TTI,
Defendants-Appellees.
Before: Zahra, P.J., and Cavanagh and Jansen, JJ.
PER CURIAM.
Plaintiff appeals by right the circuit court’s grant of defendants’ motions for summary
disposition. We affirm.
I
Plaintiff is a contract employer agency, also known as a “staffing company.” In
September 2004, plaintiff contracted with defendant Volkswagen of America (VW), agreeing to
temporarily assign certain of its employees to VW. Paragraph 7 of the contract between plaintiff
and VW, entitled “DIRECT HIRE POLICY,” provided:
Assignments are made with the understanding that [VW] shall neither
employ nor otherwise utilize directly or indirectly [plaintiff’s] assigned personnel
who were identified and recruited by [plaintiff] until the individual’s current
assignment to [VW] exceeds one hundred eighty (180) days of employ. After one
hundred (180) days of employment [VW] is free to hire assigned personnel
without costs or penalty.
Paragraph 9 of the contract provided that “[e]ither party may . . . terminate this Agreement in
whole or in part at its convenience by written notice that is effective thirty (30) days from the
date of said notice.”
Under the parties’ contract, plaintiff placed approximately 55 of its employees at VW as
independent contractors. In September 2005, VW sent correspondence to all these employees,
notifying them that there had been “an immediate change in business direction with regard to
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contract staffing labor,” informing them that VW would begin contracting exclusively with Dako
rather than with plaintiff for staffing services, and requesting that they consider working for
Dako instead of plaintiff. Further correspondence sent by VW to plaintiff’s employees stated
that “effective February 1, 2006, all employees provided by [plaintiff] to [VW] will be offered
employment as [VW] temporary employees. If you choose to remain with [plaintiff], which you
certainly may do, please contact [plaintiff’s] representative regarding other employment
opportunities, as [plaintiff] will no longer be supplying employees to [VW].”
The
correspondence went on to state, “Please understand that the current plan, (which of course may
change), is to assign you to another contract employer agency after 6 months.”
Effective February 2006, VW hired all of plaintiff’s employees that had worked at VW
for at least 180 days. VW employed these employees for six-month periods “and then facilitated
their hire by Dako and TTi.”1
Plaintiff sued defendants VW, Dako, and TTi. Plaintiff set forth a claim of breach of
contract against VW. Plaintiff also set forth claims of “conspiracy” and “tortious interference”
against VW, Dako, and TTi. Plaintiff acknowledged that VW had been entitled to hire its
employees after 180 days in accordance with ¶ 7 of the parties’ contract, but alleged that VW had
not truly “hired” its employees in this case because they were employed only temporarily before
being “sp[u]n off” to Dako and TTi. Plaintiff alleged that VW had engaged in “a sham hire” and
that VW’s actions constituted a “sham transaction.” Plaintiff asserted that all three defendants
had tortiously planned and conspired to steal its employees through this alleged “sham hire”
process.
VW answered the complaint and moved for summary disposition pursuant to MCR
2.116(C)(8). Defendant TTi filed a companion motion for summary disposition, seeking
dismissal under either MCR 2.116(C)(8) or (C)(10).
The circuit court heard oral argument on the motions for summary disposition. The court
examined ¶ 7 of the parties’ contract and observed that VW had been entitled to “hire” plaintiff’s
employees after 180 days. Plaintiff argued that the word “hire” in the parties’ agreement was
ambiguous and susceptible to multiple interpretations. Plaintiff’s counsel argued:
I’m going to give you some authority and I’m going to tell you what hire doesn’t
mean. Hire doesn’t mean that you can take [plaintiff’s] employees, park them on
your payroll for six months and flip them over to Dako on a preconceived plan.
That isn’t what the parties intended, there’s an affidavit from Mr. Cowper[2]
which says that.
1
Defendants Dako and TTi are lower-priced staffing companies that compete with plaintiff.
2
Plaintiff submitted the affidavit of Jim Cowper in response to VW’s motion for summary
disposition. Cowper is plaintiff’s Senior Vice President. Cowper averred that ¶ 7 of the parties’
contract “was intended by the parties to allow VW the flexibility of converting a worker from a
staffing company independent contractor status to a VW full time employment status.” Cowper
(continued…)
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Plaintiff’s counsel went on to argue that parol evidence of trade usage should be admitted to
show that the term “hire” was intended to mean only “[a] good faith intent to employ for bona
fide reasons.” Counsel argued that VW had never intended in good faith to “hire” plaintiff’s
employees, but had intended all along to merely “spin off” the employees to lower-cost staffing
companies.
VW’s counsel pointed to the dictionary definition of the word “hire.” VW argued that it
had “hired” plaintiff’s employees within the meaning of the parties’ agreement, and that it had
consequently not breached the contract. The circuit court ruled from the bench:
The Court understands that the only issue is the interpretation of the word hire and
everything else is built upon or founded upon that . . . .
The Court does find that the word hire is subject to singular interpretation
and notwithstanding the allegations of bad faith, which may or may not indeed be
there, the Court does find that it is constrained and must yield to the definition of
hire and that the defendant Volkswagen did comply with the contract and
everything else falls by the wayside.
Likewise, the Court must dismiss the case as to TTi for the same reasons
without having to address the issue of whether there’s questions of fact about
tortious conduct or not.
That resolves the matter respectfully with respect to [defendants]
Volkswagen and TTi; there’s still a case pending between plaintiff and Dako that
raises questions procedurally, but nevertheless that’s the posture of this case.
Thereafter, the court entered an order granting VW’s and TTi’s motions for summary
disposition and dismissing plaintiff’s claims against those two defendants. Pursuant to a
stipulation of the parties, the court treated Dako as having concurred in VW’s motion for
summary disposition and dismissed the remaining claims against Dako as well.
II
We review de novo the circuit court’s grant of summary disposition. Maiden v Rozwood,
461 Mich 109, 118; 597 NW2d 817 (1999). We acknowledge that VW sought summary
disposition under MCR 2.116(C)(8) only. However, because it appears that the circuit court may
have considered evidence outside the pleadings, we will review the motion as having been
granted pursuant to MCR 2.116(C)(10). Driver v Hanley (After Remand), 226 Mich App 558,
562; 575 NW2d 31 (1997). “A motion for summary disposition may be granted pursuant to
(…continued)
averred that ¶ 7 of the contract “was not intended by the parties to allow VW to ‘hire’
[plaintiff’s] employees on a temporary basis with the inten[t]ion of returning them to a staffing
company independent contractor status with a competitor of [plaintiff].” Cowper averred that
VW’s “scheme” to temporarily hire plaintiff’s employees and then transfer them to lower-cost
staffing companies “does not constitute a ‘hire’ as that term is understood by the parties to
the . . . contract.”
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MCR 2.116(C)(10) when there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law.” Id.
The construction of a contract presents a question of law subject to de novo review.
Klapp v United Ins Group Agency, Inc, 468 Mich 459, 463; 663 NW2d 447 (2003). We review
de novo whether the language of a contract is ambiguous and requires resolution by the trier of
fact, DaimlerChrysler Corp v G Tech Pro Staffing, Inc, 260 Mich App 183, 185; 678 NW2d 647
(2003), and whether extrinsic evidence should be used to interpret the contract, In re Kramek
Estate, 268 Mich App 565, 573; 710 NW2d 753 (2005).
III
Plaintiff argues that the circuit court erred by granting summary disposition of its breach
of contract claim. We disagree.
The primary goal in the construction or interpretation of any contract is to honor the
intent of the parties. Klapp, supra at 473. A contract is clear and unambiguous if, however
inartfully worded or clumsily arranged, it fairly admits of but one interpretation. Farm Bureau
Mut Ins Co of Michigan v Nikkel, 460 Mich 558, 567; 596 NW2d 915 (1999). “A fundamental
tenet of our jurisprudence is that unambiguous contracts are not open to judicial construction and
must be enforced as written.” Rory v Continental Ins Co, 473 Mich 457, 468; 703 NW2d 23
(2005) (emphasis in original). We acknowledge that the trier of fact must interpret an ambiguous
contract. However, when the language of a contract is clear and unambiguous, construction of
the contract is a question of law for the court, and no factual development is necessary to
determine the intent of the parties. Meagher v Wayne State Univ, 222 Mich App 700, 721-722;
565 NW2d 401 (1997). In such a case, summary disposition should be granted to the proper
party. Rossow v Brentwood Farms Development, Inc, 251 Mich App 652, 658; 651 NW2d 458
(2002).
In general, “[t]he determination as to whether ambiguity exists must be made without
reference to any source other than the contract itself.” 5 Corbin, Contracts, § 24.7, p 33. We
readily concede that parol evidence of trade usage may be admitted to prove the existence of a
latent ambiguity. McCarty v Mercury Metalcraft Co, 372 Mich 567, 575; 127 NW2d 340
(1964). However, this is only true when “some extrinsic fact creates the possibility of more than
one meaning.” In re Woodworth Trust, 196 Mich App 326, 328; 492 NW2d 818 (1992).
Plaintiff argues that the word “hire” as used in ¶ 7 of the parties’ contract was ambiguous
and susceptible to more than one reasonable interpretation. But a contractual word or phrase is
not rendered ambiguous merely because the parties ascribe different meanings to it, see
Henderson v State Farm Fire and Cas Co, 460 Mich 348, 354-355; 596 NW2d 190 (1999), or
because it has more than one dictionary definition, Cole v Auto-Owners Ins Co, 272 Mich App
50, 54; 723 NW2d 922 (2006). To determine whether a contract provision is ambiguous, the
court must give the language its ordinary and plain meaning to see if the words may reasonably
be understood in different ways. Rossow, supra at 658. As defendants correctly observe, the
word “hire” means “to engage the services of for wages or other payment,” or “to engage the
temporary use of at a set price . . . .” Random House Webster’s College Dictionary (1997).
Contrary to plaintiff’s argument, the word “hire” does not explicitly or implicitly contemplate
permanency of employment or employment of a long-term nature. Nor does the word suggest
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only “good-faith” employment or non-terminable employment. There is quite simply no
extrinsic fact that creates the possibility of more than one meaning in this case, In re Woodworth
Trust, supra at 328, and the circuit court therefore properly declined to consider parol evidence
in the interpretation of the contractual term “hire.” Paragraph 7 of the parties’ contract was
unambiguous.
Had the parties wished to state in ¶ 7 that VW was only entitled hire plaintiff’s employees
in good faith3 and for permanent, full-time positions, they certainly could have done so.
However, no such provisions were included in the contract, and we will not read into an
agreement terms that have not been placed there by the parties. Cottrill v Michigan Hosp
Service, 359 Mich 472, 476; 102 NW2d 179 (1960); Trimble v Metropolitan Life Ins Co, 305
Mich 172, 175; 9 NW2d 49 (1943). VW did not breach ¶ 7 of the contract when it “engage[d]
the services of [plaintiff’s employees] for wages or other payment,” or “engage[d] the temporary
use of [plaintiff’s employees] at a set price.” See Random House Webster’s College Dictionary
(1997). The circuit court properly granted summary disposition with respect to plaintiff’s breach
of contract claim.4
IV
Plaintiff also argues that the circuit court erred by granting summary disposition with
respect to its tortious interference and civil conspiracy claims. Again, we disagree.
A
As an initial matter, we note that these arguments have not been properly presented for
appellate review because they were not raised in plaintiff’s statement of the questions presented.
MCR 7.212(C)(5); Caldwell v Chapman, 240 Mich App 124, 132; 610 NW2d 264 (2000).
Nevertheless, we will briefly discuss the merits of these claims.
B
It appears from the pleadings that plaintiff attempted to set forth a claim of tortious
interference with a business relationship or expectancy.5 “The elements of tortious interference
3
We acknowledge that “the covenant of good faith and fair dealing is an implied promise
contained in every contract . . . .” Hammond v United of Oakland, Inc, 193 Mich App 146, 152;
483 NW2d 652 (1992). However, Michigan does not recognize an independent cause of action
for breach of the implied covenant of good faith and fair dealing. Fodale v Waste Management
of Michigan, Inc, 271 Mich App 11, 35; 718 NW2d 827 (2006).
4
Nor does the self-serving affidavit of Jim Cowper create an ambiguity in ¶ 7 of the contract by
establishing that the word “hire” was susceptible to more than one reasonable interpretation. We
will not distort a contract’s plain language in such a way as to create an ambiguity where none
exists. Michigan Twp Participating Plan v Pavolich, 232 Mich App 378, 382; 591 NW2d 325
(1998).
5
It also appears that count II of plaintiff’s complaint was based on a theory of tortious
(continued…)
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with a business relationship or expectancy are (1) the existence of a valid business relationship or
expectancy that is not necessarily predicated on an enforceable contract, (2) knowledge of the
relationship or expectancy on the part of the defendant interferer, (3) an intentional interference
by the defendant inducing or causing a breach or termination of the relationship or expectancy,
and (4) resulting damage to the party whose relationship or expectancy was disrupted.” Health
Call of Detroit v Atrium Home & Health Care Services, Inc, 268 Mich App 83, 90; 706 NW2d
843 (2005). The intentional interference must be improper, involving “a per se wrongful act or
the doing of a lawful act with malice and unjustified in law for the purpose of invading
the . . . business relationship of another.” Feldman v Green, 138 Mich App 360, 378; 360 NW2d
881 (1985). In this context, “[a] ‘per se wrongful act’ is an act that is inherently wrongful or one
that is never justified under any circumstances.” Formall, Inc v Community Nat Bank of Pontiac,
166 Mich App 772, 780; 421 NW2d 289 (1988).
Plaintiff has not explained how defendants committed a “per se wrongful act” that was
“inherently wrongful or . . . never justified under any circumstances.” Id. As we have already
concluded, VW acted properly under the parties’ agreement and did not breach the contract when
it hired plaintiff’s employees. Moreover, once VW had hired plaintiff’s employees, it was
necessarily free to release those employees and to allow defendants Dako and TTi to hire them.
Defendants’ actions in this regard can hardly be described as “per se wrongful” and “never
justified under any circumstances.” Id. The circuit court properly granted summary disposition
in favor of defendants with respect to plaintiff’s tortious interference claim.
C
“‘A civil conspiracy is a combination of two or more persons, by some concerted action,
to accomplish a criminal or unlawful purpose, or to accomplish a lawful purpose by criminal or
unlawful means.’” Advocacy Organization for Patients & Providers v Auto Club Ins Ass’n, 257
Mich App 365, 384; 670 NW2d 569 (2003), quoting Admiral Ins Co v Columbia Cas Ins Co, 194
Mich App 300, 313; 486 NW2d 351 (1992). But because plaintiff has failed to establish any
actionable underlying tort, the civil conspiracy claim must fail. Advocacy Organization, supra at
384. Summary disposition of plaintiff’s civil conspiracy claim was properly granted.
Affirmed.
/s/ Brian K. Zahra
/s/ Mark J. Cavanagh
/s/ Kathleen Jansen
(…continued)
interference with a contract or contractual relations. “[T]ortious interference with a contract or
contractual relations is a cause of action distinct from tortious interference with a business
relationship or expectancy.” Health Call of Detroit, supra at 89. However, any claim of tortious
interference with a contract or contractual relations was properly dismissed because the evidence
failed to show that defendants had wrongfully instigated a breach of contract. Id. at 90.
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