EVELYN KHALIL V SAMIER KHALIL
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
EVELYN KHALIL, individually and as trustee of
the MONIER KHALIL LIVING TRUST,
MELANIE KHALIL as trustee of the Monier
Khalil Living Trust, MIKHAIL KHALIL, and
TOMMY KHALIL,
UNPUBLISHED
April 6, 2001
Plaintiffs-Appellees/CrossAppellants,
v
SAMIER KHALIL and KHALIL BROTHERS,
INC.,
No. 215267
Wayne Circuit Court
LC No. 95-521498-CZ
Defendants-Appellants/CrossAppellees.
EVELYN KHALIL, individually and as trustee of
the MONIER KHALIL LIVING TRUST,
MELANIE KHALIL as trustee of the Monier
Khalil Living Trust, MIKHAIL KHALIL, and
TOMMY KHALIL,
Plaintiffs-Appellees/CrossAppellants,
v
SAMIER KHALIL and KHALIL BROTHERS,
INC.,
Defendants-Appellants/CrossAppellees.
Before: Whitbeck, P.J., and McDonald and Collins, JJ.
PER CURIAM.
-1-
No. 215269
Wayne Circuit Court
LC No. 95-521498-CZ
Defendants bring this appeal as of right, arguing that the acts of Samier Khalil (“Samier”)
were not oppressive and that the trial court’s remedy was improper. Plaintiffs cross appeal as of
right, arguing that the trial court erred in finding valid the ten-share transfer that made Samier a
majority shareholder. In these consolidated cases, plaintiffs brought claims alleging that
defendants improperly asserted that Samier was the majority shareholder of Khalil Brothers, Inc.
and that his acts oppressed the minority shareholder. Samier and his brother, Monier, originally
owned equal, fifty-percent shares in the company, but Monier apparently transferred ten of his
shares to Samier three days before Monier died. The trial court found that Samier validly
obtained a majority of Khalil Brothers Inc.’s shares through the transfer but that he had oppressed
plaintiff trust, the minority shareholder. The court ordered the ten shares returned to the trust to
restore the historical fifty-fifty ownership, ordered plaintiff Evelyn to be reinstated as a director,
and ordered $50,000 paid to Evelyn to remedy underpayments.
The validity of the ten-share transfer is critical to the resolution of this case. We review
de novo equitable determinations of a trial court, while the court’s factual findings are reviewed
for clear error. Forest City Enterprises, Inc v Leemon Oil Co, 228 Mich App 57, 67; 577 NW2d
150 (1998). A valid contract requires mutual assent on all essential terms. Eerdmans v Maki,
226 Mich App 360, 364; 573 NW2d 329 (1997). Where parties do not explicitly manifest their
intent to contract by words, their intent may be gathered by implication from their conduct,
language, and other circumstances attending the transaction. Featherston v Steinhoff, 226 Mich
App 584, 589; 575 NW2d 6 (1997). The trial court found, as a matter of fact, that the ten-share
transfer was a piece of an incompletely negotiated, larger transaction. The court found that the
contract the parties intended was never finalized on all essential terms. The court based this
conclusion on three points: (1) the inherent implausibility of Monier’s accepting $3,000 for
control of the company, effectively disinheriting his family, (2) Samier’s own deposition
testimony that the transfer was temporary until a buyout could be arranged in the future, and (3)
Swad’s letter of April 14 indicating that the price did not reflect the value of the company and
that a buy and sell arrangement of type would be considered in the future. These facts provide
sufficient evidentiary support for this result, and we find no clear error in the trial court’s
reasoned determination that more was intended by the parties than a simple sale of ten shares for
$3,000.
However, after establishing this fact, the trial court incorrectly severed that transaction
from the whole and held it valid and complete on its own. The court’s subsequent application of
the doctrine of “assumption of the risk of impossibility” was incorrect under either circumstance,
because either there was no contract or else the contract was completed. Although the trial court
found the ten-share transfer to be “an agreement to agree,” such a contract can fail for
indefiniteness if the trier of fact finds that it does not include an essential term to be incorporated
into the final contract. Opdyke Investment Co v Norris Grain Co, 413 Mich 354, 359; 320
NW2d 836 (1982); Scholnick’s Importers-Clothiers, Inc, v Lent, 130 Mich App 104, 109; 343
NW2d 249 (1983). Clearly the material terms of the later agreement were lacking in this case;
the “two parts” identified by the trial court cannot be severed here because there is simply no
known substance to the future agreement. City of Lansing v Lansing Twp, 356 Mich 641, 658;
97 NW2d 804 (1959).
-2-
Next, the trial court applied the “supervening impossibility” and “assumption of the risk”
doctrines to the incompletely negotiated contract. Plaintiffs correctly point out that Bissell v LW
Edison Co, 9 Mich App 276, 284; 156 NW2d 623 (1967), upon which the trial court relied in its
discussion of “supervening impossibility,” clearly applies that doctrine only to contracts already
in existence when the condition imposing impossibility arises. Likewise, Rogers Plaza, Inc v SS
Kresge Co, 32 Mich App 724, 743; 189 NW2d 346 (1971), makes it clear that “assumption of
the risk” of impossibility applies where the parties contemplated the possibility of risk of nonperformance at the time the contract is made. Thus if no contract has been agreed on by the
parties, neither doctrine can apply. Once the trial court determined that the entire contract was
not yet negotiated, it was precluded from applying these doctrines to the parts of the agreement
that had been articulated by the parties.
Although the trial court erred in concluding that the ten-share transfer was valid, its
ultimate remedy was to return the shares to plaintiffs, restoring the fifty-fifty balance of corporate
ownership and directorship. We will not reverse when the trial court has achieved the right result,
even if for the wrong reason. DeHart v Joe Lunghamer Chevrolet, Inc, 239 Mich App 181, 183;
607 NW2d 417 (1999). The remaining problem, as we discuss below, is with how the trial court
attempted to restore the parties to their original positions. Upon remand the trial court should
attempt to restore the parties to the financial and corporate status they would have had as if the
alleged transfer had never taken place, being certain to identify the source of any payments to be
made (e.g., distributions, loan account, gross profits) and to place its reasoning on the record.
Although this conclusion adequately disposes of the remaining issues in the case, we
briefly address defendants’ arguments that Samier’s acts as majority shareholder were not
oppressive and that the trial court erred in ordering the remedy described above.
The Michigan Business Corporation Act requires a director or officer to discharge his or
her duties in good faith. MCL 450.1541a(1); MSA 21.200(541a). The trial court found Samier
did not act in good faith, citing eight specific acts as “especially probative,” but relied ultimately
on the totality of the circumstances. The issue became one of witness credibility; this Court must
give regard to the trial court’s superior ability to judge the credibility of the witnesses who
appeared before it. Hawkins v Smithson, 181 Mich App 649, 651-652; 449 NW2d 676 (1989).
When the entire record is reviewed, this Court is not left with the definite and firm conviction
that a mistake has been committed. Walters v Snyder, 239 Mich App 453, 456; 608 NW2d 97
(2000). There was sufficient evidence in the record to support the trial court’s conclusion of fact
that Samier acted oppressively.
Likewise, defendants’ argument that the trial court was not permitted under the statute to
impose the remedy it ordered is without merit. The trial court’s interpretation of the relevant
statute is reviewed de novo. Michigan Municipal Liability & Property Pool v Muskegon Co Bd
Road Comm, 235 Mich App 183, 189; 597 NW2d 187 (1999). That statute, § 489 of the
Business Corporation Act provides:
(1) A shareholder may bring an action in the circuit court of the county in
which the principal place of business or registered office of the corporation is
located to establish that the acts of the directors or those in control of the
corporation are illegal, fraudulent, or willfully unfair and oppressive to the
-3-
corporation or to the shareholder. If the shareholder establishes grounds for
relief, the circuit court may make an order or grant relief as it considers
appropriate, including, without limitation, an order providing for any of the
following:
(a) The dissolution and liquidation of the assets and business of the
corporation.
(b) The cancellation or alteration of a provision contained in the articles of
incorporation, an amendment of the articles of incorporation, or the bylaws of
the corporation.
(c) The cancellation, alteration, or injunction against a resolution or other
act of the corporation.
(d) The direction or prohibition of an act of the corporation or of
shareholders, directors, officers, or other persons party to the action.
(e) The purchase at fair value of the shares of a shareholder, either by the
corporation or by the officers, directors, or other shareholders responsible for the
wrongful acts.
(f) Award of damages to the corporation or a shareholder. [MCL
450.1489; MSA 21.200(489) (emphasis added).]
The unambiguous language of the statute requires no construction by this Court; a trial court may
fashion any relief it considers appropriate. Stevens v Dep’t of Social Services, 226 Mich App 61,
66; 572 NW2d 41 (1997). The evidence here showed no other way, short of ordering dissolution,
that fairness could be imposed on dealings between Samier and plaintiffs other than returning the
fifty-fifty balance of share ownership and board membership. Samier’s ability to oppress
plaintiffs stemmed from his obtaining majority control; he was then able to vote himself sole
director and sole officer and run the company at his own discretion.
On the other hand, the trial court did not make any findings of fact in support of its award
to plaintiffs of $50,000, and whether it was based on low distributions, the difference between
Samier’s former and current salary, or some combination or other factor. While the evidence
seemed clear that distributions to Evelyn were less than they should have been, no testimony was
received regarding what the payouts should have been and whether they were made up in the
following years. We do not question the fact that reimbursement was proper relief, but only the
basis for the amount of the award. Thus, upon remand, if the trial court concludes that the
reimbursement remains an appropriate remedy, it should explain why reimbursement is proper
and the evidence that supports the amount of the award.
-4-
Affirmed in part, reversed in part and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ William C. Whitbeck
/s/ Gary R. McDonald
/s/ Jeffrey G. Collins
-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.
