PRENTIS FAMILY FOUNDATION V BARBARA ANN KARMANOS CANCER INSTITUTEAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
THE MEYER AND ANNA PRENTIS FAMILY
February 10, 2005
April 19, 2005
Oakland Circuit Court
LC No. 00-024848-CK
BARBARA ANN KARMANOS CANCER
HONIGMAN, MILLER, SCHWARTZ AND
THE MEYER AND ANNA PRENTIS FAMILY
Oakland Circuit Court
LC No. 00-024848-CK
BARBARA ANN KARMANOS CANCER
Official Reported Version
HONIGMAN, MILLER, SCHWARTZ AND
Before: Markey, P.J., and Fitzgerald and Owens, JJ.
Plaintiff appeals by right an order summarily dismissing Honigman Miller Schwartz and
Cohn (HMSC) as a defendant. Plaintiff also appeals an order granting summary disposition of
its claim for legal damages against defendant Barbara A. Karmanos Cancer Institute1 formerly
known as the Michigan Cancer Foundation, which merged with the Comprehensive Cancer
Center of Metropolitan Detroit (the center). Karmanos Cancer Institute appeals by right an order
finding that it breached its agreement with plaintiff. This case arose out of a 1985 endowment
agreement in which the donees agreed to rename the center the Meyer L. Prentis Comprehensive
Cancer Center of Metropolitan Detroit (MLPCCCMD). We affirm in part and reverse in part.
Plaintiff first argues the court should not have dismissed HMSC as a defendant because
HMSC owed plaintiff a duty where plaintiff relied on HMSC, and HMSC engaged in a conflict
of interest by representing multiple parties in the 1985 contract. We disagree.
A trial court's grant of summary disposition pursuant to MCR 2.116(C)(10), on the
ground that there is no factual support for a claim, is reviewed de novo. Dressel v Ameribank,
468 Mich 557, 561; 664 NW2d 151 (2003). A grant of summary disposition pursuant to MCR
2.116(C)(8) for failure to state a legally sufficient claim is also reviewed de novo. Adair v
Michigan, 470 Mich 105, 119; 680 NW2d 386 (2004). And a grant of summary disposition
pursuant to MCR 2.116(C)(7) is likewise reviewed de novo. Id., citing Maskery v Univ of
Michigan Bd of Regents, 468 Mich 609, 613; 664 NW2d 165 (2003). Questions of law are
subject to review de novo. Sills v Oakland Gen Hosp, 220 Mich App 303, 307; 559 NW2d 348
When a fiduciary relationship exists, the fiduciary has a duty to act for the benefit of the
principal regarding matters within the scope of the relationship. Teadt v Lutheran Church
Missouri Synod, 237 Mich App 567, 581; 603 NW2d 816 (1999), citing Melynchenko v Clay,
152 Mich App 193, 197; 393 NW2d 589 (1986). Whether a duty exists is a question of law for
the court to decide. Harts v Farmers Ins Exch, 461 Mich 1, 6; 597 NW2d 47 (1999). "[A]
fiduciary relationship arises from the reposing of faith, confidence, and trust and the reliance of
Because of the potential confusion with two defendants, all references to "defendant" will refer
to the Karmanos Cancer Institute, while the law firm will be referred to as HMSC.
one on the judgment and advice of another." Teadt, supra at 580-581, citing Vicencio v Ramirez,
211 Mich App 501, 508; 536 NW2d 280 (1995). However, the placement of trust, confidence,
and reliance must be reasonable, and placement is unreasonable if the interests of the client and
nonclient are adverse or even potentially adverse. Beaty v Hertzberg & Golden, PC, 456 Mich
247, 260-261; 571 NW2d 716 (1997).
The only ground plaintiff gave for finding that its trust, confidence, and reliance was
reasonable was that a representative of plaintiff was a board member of the center. However,
when an attorney is hired to represent a corporation, his client is the corporation rather than the
shareholders. Scott v Green, 140 Mich App 384, 400; 364 NW2d 709 (1985) (Kirwan, J.,
concurring) (explicitly adopted by the majority at 386), citing Fassihi v Sommers, Schwartz,
Silver, Schwartz & Tyler, PC, 107 Mich App 509, 514; 309 NW2d 645 (1981). See also
Macomb Co Prosecutor v Murphy, 233 Mich App 372, 386; 592 NW2d 745 (1999) (citing
MRPC 1.13[a]), reversed on other grounds 464 Mich 149 (2001). Although an attorney must
necessarily communicate with a corporation's human agents to effectively represent the
corporation, Diversified Industries, Inc v Meredith, 572 F2d 596, 602 (CA 8, 1977), the purpose
of the communication is representation of the corporation, not the agents themselves.
While a corporation and a shareholder may be treated as one entity for certain purposes
when there is a complete identity of interests, Kline v Kline, 104 Mich App 700, 702-703; 305
NW2d 297 (1981), a complete identity of interests did not exist here. Plaintiff 's purpose for
entering the endowment contract was to memorialize the Meyer L. Prentis name, while the
center's purpose was to obtain financing for cancer research. There is no indication that failure
to legally change the center's name injured the center. Therefore, plaintiff 's interests diverged
from those of the center, and plaintiff failed to point to an action on HMSC's part that might
signify HMSC was representing plaintiff rather than the center. Scott, supra at 400-401
(Kirwan, J., concurring). Moreover, HMSC's relationship with the center was one of agency,
and "[a]gency agreements do not create rights in third parties." Uniprop, Inc v Morganroth, 260
Mich App 442, 446; 678 NW2d 638 (2004), citing Koppers Co, Inc v Garling & Langlois, 594
F2d 1094 (CA 6, 1979). Thus, plaintiff failed to demonstrate that HMSC owed it an independent
fiduciary duty. See Beaty, supra at 260-261.
Plaintiff next argues that the court erred in granting HMSC summary disposition on the
ground that the period of limitations had expired because MCL 600.5855 operated to toll any
period of limitations where HMSC fraudulently concealed the fact that the center's name was
never changed and where plaintiff properly pleaded fraudulent concealment.2 We disagree.
Plaintiff also argues that the trial court improperly required plaintiff to diligently investigate
the fraudulent concealment. Plaintiff cites Lewis v Jacobs, 153 Mich 664, 666; 117 NW 325
(1908), quoting Smith v Werkheiser, 152 Mich 177, 180; 115 NW 964 (1908), for the proposition
An affirmative defense does not deny the allegations of the plaintiff 's complaint; rather it
claims—"on some ground not disclosed in the plaintiff 's pleadings"—that the plaintiff is not
entitled to recovery. Stanke v State Farm Mut Automobile Ins Co, 200 Mich App 307, 312; 503
NW2d 758 (1993). An assertion that a claim is barred by a statute of limitations is an affirmative
defense. MCR 2.111(F)(3)(a).3 Which statute of limitations applied, whether the statute was
tolled, and when the limitations period ended are questions of law. Wickings v Arctic
Enterprises, Inc, 244 Mich App 125, 147; 624 NW2d 197 (2000).
that "'[a] defrauded party does not owe to the party who defrauds him an obligation to use
diligence to discover the fraud.'" However, the Michigan Supreme Court has also stated, "We
recognize the general rule that the running of the statute will not be postponed if the defrauded
person may discover the fraud from public records." Heap v Heap, 258 Mich 250, 263; 242 NW
252 (1932) (discussing a former statute, 1929 CL 13976, 13983). Although the Court found in
that case that the general rule did not apply because a fiduciary relationship existed and there
was nothing indicating the need for investigation, no fiduciary relationship existed here between
HMSC and plaintiff. This would indicate that if the failure to obtain the name change were
discoverable from public records, then MCL 600.5855 would not operate to toll the period of
More recently, our Supreme Court indicated that whether a plaintiff should have known
about the cause of action was determined by an objective standard when it stated:
"The statute was not designed to help those who negligently refrain from
prosecuting inquiries plainly suggested by facts known, and the plaintiff must be
held chargeable with knowledge of the facts, which it ought, in the exercise of
reasonable diligence, to have discovered." [Barry v Detroit Terminal R Co, 307
Mich 226, 232; 11 NW2d 867 (1943) (citations omitted; discussing former statute
1929 CL 13983).]
Therefore, plaintiff was required to exercise reasonable diligence with respect to whether HMSC
failed to legally change the center's name. And this Court helped define reasonable diligence
when it determined that a witness's potential for liability was discoverable from the outset where
the name of the witness to an accident was listed in a police report, and MCL 600.5855 would
not toll the period of limitations notwithstanding the plaintiff 's argument that the witness lied to
police about what occurred. Witherspoon v Guilford, 203 Mich App 240, 248-249; 511 NW2d
720 (1994). Thus, because HMSC's potential liability was discoverable from the outset from
public records, the trial court was justified in finding that plaintiff was required to exercise
diligence in discovering HMSC's failure to obtain the name change.
HMSC did not seek summary disposition pursuant to MCR 2.116(C)(7), the proper rule for
granting summary disposition when a claim is barred by a statute of limitation; however, the trial
court noted that MCR 2.116(C)(7) was the proper rule and indicated that it considered the
argument pursuant to the correct rule.
The trial court found that, whether the applicable period of limitations was two years
under MCL 600.5805(6) or three years, plaintiff 's claims were barred. We disagree with HMSC
that the period of limitations for malpractice under MCL 600.5805(6) should apply. The conduct
required to constitute a breach of fiduciary duty requires a more culpable state of mind than the
negligence required for malpractice. Damages may be obtained for a breach of fiduciary duty
when a "position of influence has been acquired and abused, or when confidence has been
reposed and betrayed." Vicencio, supra at 508.
In Local 1064, RWDSU AFL-CIO v Ernst & Young, 449 Mich 322, 328; 535 NW2d 187
(1995), our Supreme Court, citing the reasoning of Nat'l Sand, Inc v Nagel Constr, Inc, 182 Mich
App 327, 332-337; 451 NW2d 618 (1990), concluded that MCL 600.5805 set forth the periods
of limitations "for traditional common-law torts, regardless of whether the damages sought
[were] for pecuniary or physical injury." In Nat'l Sand, Inc, this Court noted that "injuries to
persons" was broadly interpreted to include invasions of rights such as "loss of consortium, libel,
slander and deprivation of civil rights." Id. at 335. Therefore, plaintiff 's loss of naming rights
was in the purview of MCL 600.5805(10) and was subject to a three-year period of limitations.
Plaintiff filed suit July 27, 2000; thus, plaintiff was barred from bringing suit under MCL
600.5805(10) if plaintiff 's claim accrued before July 27, 1997.
"A claim of breach of fiduciary duty or breach of trust accrues when the beneficiary
knew or should have known of the breach." Bay Mills Indian Community v Michigan, 244 Mich
App 739, 751; 626 NW2d 169 (2001), citing Baks v Moroun, 227 Mich App 472, 493-494; 576
NW2d 413 (1998), which was overruled in part Estes v Ida Engineering & Fabricating, Inc, 250
Mich App 270, 278; 649 NW2d 84 (2002). The "knew or should have known" language
indicates that when a claim accrues is subject to an objective standard. "[A] plaintiff is deemed
to be aware of a possible cause of action when he becomes aware of an injury and its possible
cause." Shawl v Dhital, 209 Mich App 321, 325; 529 NW2d 661 (1995), citing Moll v Abbott
Laboratories, 444 Mich 1, 24; 506 NW2d 816 (1993).4
Here, HMSC presented evidence that plaintiff 's designee on the board of trustees was
present when the merger between the center and the Michigan Cancer Foundation was discussed
in 1994, and was present when the Karmanos gift and renaming was discussed and voted on in
1995. This indicated that plaintiff should have been aware of a possible cause of action at least
by 1995. The "possible cause of action" standard encourages claimants to diligently investigate
and pursue causes of action. Shawl, supra at 327. "Generally, for fraudulent concealment to
postpone the running of a limitations period, the fraud must be manifested by an affirmative act
Although Shawl involved a medical malpractice action, our Supreme Court, in Soloway v
Oakwood Hosp Corp, 454 Mich 214, 222; 561 NW2d 843 (1997), extended the "possible cause
of action" standard to other tort claims that were subject to the discovery rule. Baks, supra at
495 n 10.
or misrepresentation. The plaintiff must show that the defendant engaged in some arrangement
or contrivance of an affirmative character designed to prevent subsequent discovery."
Witherspoon v Guilford, 203 Mich App 240, 248; 511 NW2d 720 (1994), citing Draws v Levin,
332 Mich 447, 452; 52 NW2d 180 (1952). "Mere silence is insufficient." Sills, supra at 310. If
liability were discoverable from the outset, then MCL 600.5855 will not toll the applicable
period of limitations. Witherspoon, supra at 248-249. It was only plaintiff 's lack of diligence in
this case that prevented it from filing suit, and MCL 600.5855 did not toll the period of
Plaintiff next argues that the court improperly granted HMSC summary disposition where
HMSC violated duties owed to plaintiff or others of loyalty, the avoidance of self-dealing,
honesty, and the avoidance of the appearance of impropriety where (a) it failed to disclose its
representation of Peter Karmanos as a client and his identity as the donor for whom the merged
entity would be named, (b) it represented both the MCF and the center in the 1994 merger
without fully informing the parties of the naming facts, (c) it consistently misrepresented the
center's legal name on the center's documents, and (d) one of its members actively worked as the
chairman of the board of trustees for the center on the merger after telling the three institutions
that the chairman would do otherwise. We disagree.
Under common-law agency principles, "A fiduciary owes a duty of good faith to his
principal and is not permitted to act for himself at his principal's expense during the course of his
agency." Central Cartage v Fewless, 232 Mich App 517, 524; 591 NW2d 422 (1998), citing
Production Finishing Corp v Shields, 158 Mich App 479, 486-487; 405 NW2d 171 (1987). See
also In re Runco, 463 Mich 517, 523; 620 NW2d 844 (2001) (an attorney may be subject to
discipline for engaging in self-dealing contrary to the interests of his client); H J Tucker &
Assoc, Inc v Allied Chucker & Engineering Co, 234 Mich App 550, 574; 595 NW2d 176 (1999)
("Under principles of agency, an agent owes his principal a duty of good faith, loyalty, and fair
dealing."). Therefore, under general agency principles, HMSC owed its client duties of good
faith, loyalty, and avoidance of self-dealing.
Nevertheless, plaintiff acknowledged that it never formally retained HMSC. Thus,
plaintiff was merely a third party to HMSC's agency agreement with its client, the center.
"Under long-settled principles of contract law, agency agreements do not
create any rights in third parties, even a party as to whom the principal owes some
performance and for whose benefit the principal has retained an agent to render
it." [Uniprop, supra at 447, quoting Koppers Co, Inc, supra at 1098, citing 4A
Corbin, Contracts, §779E (1951).]
Hence, while the center was owed a duty of good faith, loyalty, and avoidance of self-dealing,
plaintiff was not.
With respect to HMSC's alleged failure to disclose its representation of or the identity of
Karmanos, plaintiff presented a December 23, 1993, letter written by Ralph Kliber to Marvin
Frenkel, the representative of plaintiff who served as a board member for the center, indicating
that the Michigan Cancer Foundation had a donor, which would be recognized by use of the
donor's name. However, the letter merely indicates that the Michigan Cancer Foundation –
HMSC's client – was aware of a donor in December 1993. It does not implicate HMSC in any
type of cover-up. Although the letter does not mention the donor's name, this does not mean that
the Michigan Cancer Foundation was unaware of the donor's identity. Moreover, it establishes
that Frenkel and, therefore, plaintiff were aware of a potential donor before the merger took
On the other hand, HMSC presented letters demonstrating that it disclosed its potential
conflict of interest to both the Michigan Cancer Foundation and Karmanos, and that both parties
consented to HMSC's representation of Karmanos with respect to the gift. This clearly indicated
that the Karmanos representation was adequately disclosed to the Michigan Cancer Foundation,
which, by 1995, had merged with the center. According to an attorney with HMSC, Karmanos
contacted him about making a gift to the Michigan Cancer Foundation about the time the gift
was made, and asked him to work out the details of making the gift. Until Karmanos decided to
give the gift, HMSC had no reason to disclose its representation of Karmanos to anyone.
The attorney stated that he told Karmanos that he first had to check for conflicts of
interest; when he determined that a conflict existed, he informed Karmanos that HMSC had to
obtain the consent of the Michigan Cancer Foundation before he could represent Karmanos with
respect to the gift. This indicated that HMSC acted promptly once it was aware of Karmanos's
intentions and once it was aware of the conflict. Given the evidence that HMSC did not fail to
disclose its representation of Karmanos or Karmanos's identity as the donor, and the fact that
plaintiff 's evidence did not establish wrongdoing on HMSC's part, plaintiff 's argument is
With respect to plaintiff 's contention that HMSC represented both the Michigan Cancer
Foundation and the center in the 1994 merger, HMSC presented letters indicating that it sought
and obtained the approval of the president of the center and the president of the Michigan Cancer
Foundation in the 1994 merger. Moreover, the letter to the president of the center clearly
advised the center to "consider retaining independent counsel for the purpose of advising [the
center] on whether to consent to our representation of [the Michigan Cancer Foundation] with
respect to the Transaction and to assist [the center] in determining whether separate
representation of [the center] with respect to the Transaction is desired."
Plaintiff 's evidence that HMSC represented the center in the merger consisted of the
signature on the merger documents of an attorney for HMSC who was also the chairman of the
center. However, in his role as chairman, the attorney was the proper person to sign the merger
documents (although the documents could also have been signed by the president, vicepresident, or vice-chairperson). Plaintiff noticeably did not provide minutes of the center's board
of trustees meeting indicating that the attorney participated in the center's decision to approve the
merger, and the certificate of merger did not indicate that it was prepared by the attorney.
Therefore, plaintiff 's evidence was insufficient to establish a genuine issue of material fact
regarding whether HMSC represented both parties in a legal capacity with respect to the merger.
Regarding plaintiff 's allegation that HMSC did not inform the parties of the naming facts, all the
evidence created at the time of the merger indicated that the naming obligation was discussed.
Plaintiff next argues that the trial court erroneously changed its previous opinion to
require plaintiff to prove liability at the jury trial. We disagree.
Plaintiff initially argues that by revising its earlier determination, the trial court violated
the law of the case doctrine. Whether the law of the case doctrine applies is a question of law
subject to review de novo. Ashker v Ford Motor Co, 245 Mich App 9, 13; 627 NW2d 1 (2001).
Under the law of the case doctrine a previous decision of an appellate court should be followed,
even if the previous decision was erroneous, in order to "maintain consistency and avoid
reconsideration of matters once decided" within a single lawsuit. Bennett v Bennett, 197 Mich
App 497, 499-500; 496 NW2d 353 (1991), citing Locricchio v Evening News Ass'n, 438 Mich
84, 109; 476 NW2d 112 (1992). Nevertheless, a trial court has unrestricted discretion to review
its previous decision, Sutton v Oak Park, 251 Mich App 345, 349; 650 NW2d 404 (2002), citing
MCR 2.119(F)(3).5 This Court recently determined that the law of the case doctrine did not
apply to decisions of a trial court and that a successor judge could correct errors made by a prior
judge. Tinman v Blue Cross Blue Shield of Michigan, 264 Mich App 546, 560; 692 NW2d 58
(2004).. Therefore, the law of the case doctrine did not preclude the trial court from reversing its
Plaintiff next appears to argue that a jury trial was not required with respect to
defendant's liability for damages. When a case involves both equitable issues and legal issues, it
is appropriate for a jury to decide the factual issues relating to the damages claim and the court to
decide the factual issues relating to the equitable claim. ECCO, Ltd v Balimoy Mfg Co, Inc, 179
Mich App 748, 751; 446 NW2d 546 (1989).
[I]n a case such as this where both equitable issues and jury submissible
issues coexist, the proper procedure is to hold trial before a jury and follow
presentation of evidence with two separate factual determinations; court
factfinding on the equitable claims and jury factfinding on the claims of damages.
MCR 2.119(F)(3) provides:
Generally, and without restricting the discretion of the court, a
motion for rehearing or reconsideration which merely presents the same
issues ruled on by the court, either expressly or by reasonable implication,
will not be granted. The party must demonstrate a palpable error by which
the court and the parties have been misled and show that a different
disposition of the motion must result from correction of the error.
. . . Plaintiffs are not bound by the court's factfinding on their claim for
damages and are entitled on remand to a separate jury trial on that claim. [Smith v
Univ of Detroit, 145 Mich App 468, 479; 378 NW2d 511 (1985).]
Thus, it appears that defendant was entitled to a jury trial with respect to liability for
damages. Nevertheless, plaintiff claims that defendant waived its right to a jury trial when it
failed to file a separate jury demand pursuant to MCR 2.508(D)(1). "'The right of trial by jury
shall remain, but shall be waived in all civil cases unless demanded by one of the parties in the
manner prescribed by law.'" Wood v Detroit Automobile Inter-Ins Exch, 413 Mich 573, 585; 321
NW2d 653 (1982), quoting Const 1963, art 1, § 14. MCR 2.508(D)(1) states, "A party who fails
to file a demand or pay the jury fee as required by this rule waives trial by jury." However,
MCR 2.508(D)(3) states: "A demand for a trial by jury may not be withdrawn without the
consent, expressed in writing or on the record, of the parties or their attorneys."
Courts have interpreted these provisions to mean that once it is granted, both parties may
rely on the right to a jury trial. A defendant may rely on the plaintiff 's jury demand, and, once
the right to a jury is secured, the plaintiff must obtain the defendant's consent to waive the right.
Marshall Lasser, PC v George, 252 Mich App 104, 106; 651 NW2d 158 (2002). Absent an
express waiver, a trial court, after a jury demand, must honor the right to a jury trial with respect
to damages. Mink v Masters, 204 Mich App 242, 247; 514 NW2d 235 (1994). A "subsequent
waiver of a properly demanded jury trial can be inferred from the conduct of the parties under a
'totality of the circumstances' test." Marshall Lasser, supra at 108. Where both parties have
actively participated in a lengthy bench trial regarding damages without objection or protest,
they have waived their right to a jury trial and may not claim error on appeal. Id. at 109.
Plaintiff claims that defendant specifically insisted on a bench trial rather than a jury trial,
but does not once cite defendant's comments in the record. Instead, to support its position,
plaintiff cites a portion of the trial court's commentary. The trial court's comments do not
indicate that defendant argued for a bench trial only; they merely indicate that neither party
wanted the bench trial to coincide with the jury trial. Although no transcript of the pretrial
conference was provided on appeal, the final pretrial order indicates that there would be a bench
trial followed by a jury trial. And there is no indication that the only issue for the jury was the
amount of damages. Moreover, at the beginning of the bench trial, the trial court made several
comments signifying that the jury would determine defendant's legal liability. Therefore, the
totality of the circumstances did not demonstrate that defendant waived its right to a jury on the
liability issue. Id. at 108. Thus, the trial court reached the correct result in its written order.
Plaintiff next argues that the second judge erroneously reversed the previous judge's
decision that restitution was an issue for the jury and dismissed the compensatory damages
claim, including restitution, on the grounds that a nonprofit corporation cannot prove damages as
a matter of law because it does not generate profits and the remaining damages requested were
too speculative. We disagree.
Here, the first court indicated that the circumstances did not justify rescission, restitution
was related to rescission so it could not be granted, and general damages were a legal question
for the jury so they could not be granted by the court. With respect to plaintiff 's claim that the
court's grant of summary disposition denied plaintiff its right to a jury trial regarding general
compensatory damages, although a jury determines the amount of damages, it is the court's job to
determine whether a plaintiff is legally entitled to the damages. Phillips v Mirac, Inc, 470 Mich
415, 428-429; 685 NW2d 174 (2004). In granting defendant summary disposition, the trial court
noted that plaintiff had not cited any authority with respect to the value of the loss of naming
rights by a family charitable foundation, found that there was no method to measure damages,
and concluded that plaintiff 's damages were too speculative. Indeed, plaintiff has not cited any
authority to support its claim for damages on appeal. An appellant may not state a position
without citing authority and expect this Court to search for grounds to support the claim. Wilson
v Taylor, 457 Mich 232, 243; 577 NW2d 100 (1998). We decline to address this issue further.
On cross-appeal defendant argues that plaintiff lacked standing, and the trial court erred
in denying its motion to dismiss. We agree.
The question of standing is a question of law subject to review de novo. Lee v Macomb
Co Bd of Comm'rs, 464 Mich 726, 734; 629 NW2d 900 (2001).
It is axiomatic that a party must have standing to bring a lawsuit. Lee, supra at 735. To
have standing in Michigan, a prospective plaintiff must demonstrate three elements:
"First, the plaintiff must have suffered an 'injury in fact'–an invasion of a
legally protected interest which is (a) concrete and particularized, and (b) 'actual
or imminent, not "conjectural" or "hypothetical."' Second, there must be a causal
connection between the injury and the conduct complained of–the injury has to be
'fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e]
result [of] the independent action of some third party not before the court.' Third,
it must be 'likely,' as opposed to merely 'speculative,' that the injury will be
'redressed by a favorable decision.'" [Lee, supra at 739-740, quoting Lujan v
Defenders of Wildlife, 504 US 555, 560-561; 112 S Ct 2130; 119 L Ed 2d 351
Defendant argues that plaintiff was legally barred from bringing suit because a settlor of
a charitable trust may not enforce a charitable trust. Our Supreme Court's decision in Knights of
Equity Mem Scholarships Comm v Univ of Detroit, 359 Mich 235; 102 NW2d 463 (1960),
appears to support defendant's argument. That decision indicated that if a donation was made for
a charitable6 purpose, then a charitable trust was created; the motive behind the gift was
irrelevant. Id. at 242-243. Here, the language of the endowment agreement indicated that the
funds were donated for a charitable purpose. The Attorney General, a co-trustee, or a person
with a special interest may sue for enforcement of the terms of a charitable trust, but not the
settlor or his heirs. St John's-St Luke Evangelical Church v Nat'l Bank of Detroit, 92 Mich App
1, 14-15; 283 NW2d 852 (1979), citing Restatement Trusts 2d, §391, pp 278-280.
Defendant next argues that no consideration existed for the naming provision and the
court erred in denying its motion to dismiss. We agree.
The construction given an unambiguous contract is reviewed de novo. Rossow v
Brentwood Farms Dev, Inc, 251 Mich App 652, 658; 651 NW2d 458 (2002). The primary goal
of contract interpretation is to honor the parties' intent. Klapp v United Ins Group Agency, Inc,
468 Mich 459, 473; 663 NW2d 447 (2003), citing Rasheed v Chrysler Corp, 445 Mich 109, 127
n 28; 517 NW2d 19 (1994). When the contract is unambiguous, the parties' intent is gleaned
from the actual language used. Burkhardt v Bailey, 260 Mich App 636, 656; 680 NW2d 453
(2004), citing Universal Underwriters Ins Co v Kneeland, 464 Mich 491, 496; 628 NW2d 491
(2001). Here, the agreement stated in relevant part:
The fund is established according to the following provisions:
1. The Prentis Foundation hereby agrees to establish the Fund by
contributing to Wayne State University ("University") $1,500,000 in annual
installments of not less than $300,000 over a period of not more than five years.
The first annual contribution shall be made in 1985.
The Fund shall be used solely for the support of cancer research.
2. In recognition of the significant and long-standing commitment of and
leadership and support by the Prentis Foundation in the fields of cancer education,
detection and research and the generous financial contributions made over many
years by the Prentis Foundation in furtherance thereof; and in further
recognition of and appreciation to the Prentis Foundation for the fund it is hereby
creating, the University, Center and the Michigan Cancer Foundation
("Foundation") do hereby agree that Center shall be renamed and henceforth be
"Charitable" is defined as "generous in gifts to aid the indigent, ill, homeless, etc." Random
House Webster's College Dictionary (2001).
Clearly, the first part of this provision does not constitute consideration because "past
consideration . . . would not constitute a legal consideration for the subsequent . . . agreement."
Shirey v Camden, 314 Mich 128, 138; 22 NW2d 98 (1946).
known as the Meyer L. Prentis Comprehensive Cancer Center of Metropolitan
Our Supreme Court has defined consideration as a bargained exchange involving "'"a
benefit on one side, or a detriment suffered, or service done on the other."'" Gen Motors Corp v
Dep't of Treasury, 466 Mich 231, 238-239; 644 NW2d 734 (2002), quoting Plastray Corp v
Cole, 324 Mich 433, 440; 37 NW2d 162 (1949) (citation deleted). Consideration is required for
a valid contract. Mallory v Detroit, 181 Mich App 121, 127; 449 NW2d 115 (1989). "'As a
general rule, where terms having a definite legal meaning are used in a written contract, the
parties to the contract are presumed to have intended such terms to have their proper legal
meaning, absent a contrary intention appearing in the instrument.'" Conagra, Inc v Farmers
State Bank, 237 Mich App 109, 132; 602 NW2d 390 (1999), quoting Nationwide Mut Fire Ins
Co v Detroit Edison Co, 95 Mich App 62, 64; 289 NW2d 879 (1980). Here, rather than
employing the words "in consideration for" or a similar term indicating that the payment of the
$1.5 million was in exchange for the naming provision, the parties used "[in] recognition of and
appreciation to. . . ." The use of these terms did not indicate a bargained for exchange with
respect to the naming provision.8
Although plaintiff may have expected that the naming provision was bargained
consideration in exchange for the $1.5 million, courts are not permitted to discern the parties'
reasonable expectations and rewrite contracts accordingly. Wilkie v Auto-Owners Ins Co, 469
Mich 41, 51; 664 NW2d 776 (2003). "[T]he unilateral subjective intent of one party cannot
control the terms of a contract." Burkhardt, supra at 656. We note that plaintiff easily could
have provided that if the name never changed the funds would revert to plaintiff, but plaintiff did
not. Therefore, we find that the naming provision was merely a legally unenforceable, gratuitous
undertaking on the part of the donees.
Defendant next argues that the trial court erred in finding that defendant breached the
agreement "because the undisputed facts show that KCI never made a material breach of that
agreement." We agree.
A trial court's factual findings in a bench trial are reviewed for clear error. Alan Custom
Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379 (2003). The agreement provided
that the $1.5 million was to be used solely for cancer research. There is no indication in the
record that the funds were used for an improper purpose. Therefore, defendant did not breach
"Appreciation" is relevantly defined as "gratitude; thankful recognition" while "recognition" is
defined as "the acknowledgement of achievement, service, merit, etc." Random House Webster's
College Dictionary (2001).
HMSC has requested that sanctions be imposed against plaintiff. HMSC sought
sanctions at the trial court level in connection with its motion for summary disposition. Because
HMSC did not raise the trial-level sanctions issue on cross-appeal, the issue is not properly
before this Court. Barnell v Taubman Co, Inc, 203 Mich App 110, 123; 512 NW2d 13 (1993).
Sanctions requested for a vexatious appeal are governed by MCR 7.216(C)(1). MCR
7.216(C)(1) indicates that a motion for sanctions must be filed pursuant to MCR 7.211(C)(8).
And MCR 7.211(C)(8) provides that a request for sanctions must be made by motion; a brief on
appeal is insufficient to request sanctions. There is no indication that HMSC has separately filed
a motion for sanctions at the appellate level. Moreover, no appropriate legal authority was cited
to support sanctions. Therefore, HMSC's request for sanctions is denied.
Affirmed in part and reversed in part.
/s/ Jane E. Markey
/s/ E. Thomas Fitzgerald
/s/ Donald S. Owens