CLAUDE MCMANUS V KEVIN M TOLER
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
CLAUDE McMANUS,
FOR PUBLICATION
July 27, 2010
9:00 a.m.
Plaintiff-Appellant,
and
VALERIE McMANUS-ZOERHOF,
Plaintiff,
v
No. 290249
Kent Circuit Court
LC No. 05-002677-CK
KEVIN M. TOLER,
Defendant-Appellee.
Before: SAWYER, P.J., and BANDSTRA and WHITBECK, JJ.
PER CURIAM.
Plaintiff McManus1 appeals as of right from the circuit court’s final judgment entered on
September 22, 2008. We affirm.
The facts of the case have been summarized in McManus v Toler, unpublished opinion
per curiam of the Court of the Appeals, issued July 1, 2008 (Docket No. 274407). Plaintiff
worked as a financial advisor for American Express Financial Advisors, Inc. (AEFA) franchise.
He employed his daughter and defendant. In 2002, AEFA offered plaintiff a position as field
vice-president, but under AEFA rules he would have to divest himself of any ownership interest
in the franchise. Plaintiff decided to sell the franchise to his daughter and defendant if his
daughter acquired her licenses. This was written in a memorandum. His daughter was not able
to obtain her licenses within the agreed upon time, even though defendant had given her deadline
extensions.
1
Plaintiff Claude McManus is appealing. His daughter Valerie McManus-Zoerhof was a
plaintiff during the lower court proceeding and was a listed party on the final order assessing
attorney fees and costs, but she is not a party to this appeal. Therefore, when “plaintiffs” are
mentioned with regard to the lower court proceedings the reference is to both parties, but when
referring to this appeal, “plaintiff” only refers to Claude McManus.
-1-
The parties ended up in court to determine if the memorandum was an intent to contract
or a legally enforceable contract. The trial court found that there was a valid contract between
the parties and that defendant did not breach the contract. On appeal, this Court affirmed the
trial court’s findings. Plaintiff accepts the facts in the July 1, 2008, opinion, although he does
not agree with them.
On June 23, 2006, defendant submitted an Offer of Judgment to plaintiffs. Plaintiffs
never responded to the offer. On August 15, 2006, the circuit court entered a verdict of no cause
of action against plaintiffs and in favor of defendant. On November 29, 2006, the circuit court
awarded defendant attorney fees in the amount of $50,559.80. On November 10, 2006, plaintiffs
filed a Response in Opposition to defendant’s motion stating that the offer of judgment did not
comply with the requirements of MCR 2.405.
On November 13, 2006, the circuit court held a hearing on defendant’s Motion for
Assessment of Costs. The court granted defendant’s motion and gave plaintiffs an opportunity to
file a motion regarding the reasonableness of the fees. Plaintiffs did not file a motion. On
September 11, 2008, defendant served plaintiffs with a Notice of Presentment. Plaintiffs did not
object. On September 22, 2008, the circuit court entered an order assessing costs under MCR
2.405 and ordered plaintiffs to pay defendant’s attorney fees in the amount of $50,559.80. On
September 25, 2008, plaintiffs filed a Motion for Reconsideration. On January 15, 2009, the
circuit court denied plaintiffs’ motion. The court ordered plaintiffs to pay defendant’s attorney
fees. Plaintiff is appealing the order awarding costs and attorney fees.
Plaintiff first argues that defendant’s offer of judgment was not for a sum certain and,
therefore, did not comply with the requirements of MCR 2.405. Defendant relies on Knue v
Smith, 478 Mich 88; 731 NWd2 686 (2007) as analogous. We disagree.
We review de novo both the trial court’s interpretation of a court rule and its decision to
award sanctions. Ayre v Outlaw Decoys, Inc, 256 Mich App 517, 520; 664 NW2d 263 (2003).
Generally, the rules governing statutory interpretation apply equally to the interpretation of court
rules. Yudashkin v Holden, 247 Mich App 642, 649; 637 NW2d 257 (2001). If the plain
meaning of the language of the court rule is clear, “then judicial construction is neither necessary
nor permitted, and unless explicitly defined, every word or phrase should be accorded its plain
and ordinary meaning, considering the context in which the words are used.” Hyslop v Wojjusik,
252 Mich App 500, 505; 652 NW2d 517 (2002).
MCR 2.405(A) states:
(1) “offer” means a written notification to an adverse party of the offeror’s
willingness to stipulate to the entry of a judgment in a sum certain, which is
deemed to include all costs and interest then accrued. If a party has made more
than one offer, the most recent offer controls for the purposes of this rule.
Few cases have addressed the question of what constitutes a “sum certain” for purposes
of MCR 2.405. In Knue, 478 Mich at 90, the Michigan Supreme Court held that an offer in a
quiet title action where the plaintiffs offered $3,000 to the defendants in return for a quitclaim
deed was not an offer of a “sum certain.” The plaintiffs filed an action to quiet title, stating that
-2-
they had acquired a strip of land through adverse possession. The plaintiffs’ attorney sent the
defendants an offer for settlement under MCR 2.405. The plaintiffs offered to pay the
defendants $3,000 for a quitclaim deed and that the parties would stipulate to a dismissal of all
claims “with prejudice and without costs.” Knue, 478 Mich at 90. The defendants replied that
the offer did not qualify as an offer of judgment under MCR 2.405 and they did not accept it.
The trial court and the Court of Appeals determined that the offer was for a sum certain under
MCR 2.405. Knue, 478 Mich at 91-92.
On appeal, the Michigan Supreme Court reversed. The Court found that the plaintiffs’
offer fell outside the scope of MCR 2.405(A)(1), and no costs or attorney fees were awarded.
The Court determined that the offer of judgment rule does not apply to lawsuits where the offer
would not result in a judgment for a sum certain. In his lead opinion, then Chief Justice
TAYLOR stated:
[T]o be an “offer” the offer must propose to stipulate the entry of a
judgment in a sum certain. There is no latitude given in this rule for offers of
judgment that culminate in something other than a “judgment for a sum certain.”
That is, it is nonconforming for the offer to require a reciprocal exchange of cash
for the execution of a recordable real estate document culminating in a judgment
of dismissal with prejudice and without costs. For such an offer, the offer of
judgment rule is simply inapplicable and no consideration of the distinctions
between equity and law is required to resolve this matter. [Knue, 478 Mich at 93
(emphasis in original).]
The Court determined that the plaintiffs’ offer of a quitclaim deed in exchange for $3,000
and a judgment of dismissal was not for a sum certain because it fell outside the scope of MCR
2.405(A)(1). The Court stated that the offer of judgment rule does not apply to offers that are not
for a sum certain. Because the plaintiffs’ offer did not meet the requirements of the rule, they
were not entitled to sanctions under the rule. Knue, 478 Mich at 93-94.
Justices CAVANAGH and CORRIGAN concurred with Justice TAYLOR. Justices YOUNG,
WEAVER, and KELLY concurred in result with Justice YOUNG stating that because “plaintiffs’
offer required a quit claim deed in addition to the transfer of $3,000, the offer could not be for a
sum certain. Therefore, MCR 2.405 does not apply to this case.” Id. at 97 (YOUNG, J.,
concurring).
Knue is distinguishable from the present case because this case does not involve a
reciprocal exchange or a condition. In this case, defendant served plaintiff with a document
titled “Offer of Judgment.” The footnote in defendant’s offer stated:
As a point of clarification, the $25,000.00 offer of judgment represents an
amount to be paid to the Plaintiffs in addition to the original $300,000.00
purchase price for acquiring certain clients from Mr. McManus. The amount
currently owing on the original purchase price is $200,617.04 and requires
monthly payments bearing interest at the fixed rate of 7% amortized over a ten
year period commencing January 1, 2003 as set forth on the attached amortization
schedule.
-3-
Plaintiff argues that this footnote made the offer “conditional” and not for a sum certain. We
disagree. It is clear from the language of defendant’s offer that the offer was not conditional but
for a sum certain of $25,000. The footnote merely acknowledged the outstanding balance on the
business purchase and that the offer of judgment did not affect the outstanding obligation under
that agreement. We conclude that it is very clear from the language of defendant’s offer that it
was an offer for a sum certain.
Additionally, both parties cite Hessel v Hessel, 168 Mich App 390, 395; 424 NW2d 59
(1988) in their briefs. Hessel is also distinguishable from this case. In Hessel, 168 Mich App at
395, this Court held that, in a divorce proceeding, a proposed property settlement was not a “sum
certain.” The defendant offered the plaintiff real estate, a car, household furnishings, and
certificates of deposit, all of which varied in value. The [d]efendant valued the property he
offered [the] plaintiff at $143,200. The trial court valued the same property at $108,000. The
Court held that a proposed property settlement does not offer a sum certain; it offers a division of
marital property. Id. at 396. The Court reasoned that there was no way that the defendant’s offer
of the items could be equated with a “sum certain.” Id. at 395. The Court noted that even if the
worth of the property were considered a “sum” for purposes of MCR 2.405, it is still not
“certain.” Hessel, 168 Mich App at 395.
In the case at bar, defendant’s offer was for a sum certain. Therefore, it complied with
the requirements of MCR 2.405.
Plaintiff next argues that the circuit court should have determined whether MCR 2.405
applies to actions in equity. Plaintiff claims that in examining the rule, it is clear that the intent
of the rule does not apply in equitable actions and because plaintiff’s claim was wholly in equity,
defendant cannot recover. We disagree.
There is nothing in MCR 2.405 that states that the offer of judgment rule does not apply
to equitable actions. In Knue, the Court did not touch on the issue whether MCR 2.405 applied
to equitable relief. However, in her concurring opinion, Justice KELLY stated, “I would hold that
the offer of judgment rule, MCR 2.405, is inapplicable when equitable relief is sought.” Knue,
478 Mich at 94. To the contrary, in his dissent, Justice MARKMAN stated that “[t]he language of
MCR 2.405 does not differentiate between legal and equitable claims.” Knue, 478 Mich at 97.
In this case, plaintiff claims that the case was wholly in equity. We disagree. Plaintiff’s
First Amended Compliant is for a breach of contract, which states:
WHEREFORE, Plaintiffs respectfully request entry of a judgment in their
favor and against the Defendant that grants to Plaintiffs damages to be determined
by the Court caused by Defendant’s breach of contract along with applicable
costs, interest, and attorney fees.
It is clear from the language of plaintiff’s First Amended Complaint that plaintiff’s claim was not
wholly based in equity. Plaintiff’s complaint asked for monetary damages. The offer of
judgment only offered money damages. Even if the offer of judgment rule does not apply to
purely equitable actions, we conclude that, at the minimum, it does apply to mixed law and
-4-
equity actions where the offer of judgment only offers monetary damages and the equitable
claims are to be dismissed.
Affirmed.
/s/ David H. Sawyer
/s/ Richard A. Bandstra
/s/ William C. Whitbeck
-5-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
