TD LAND CO INC V PHILIP R SEAVER TITLE CO INC
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STATE OF MICHIGAN
COURT OF APPEALS
TD LAND COMPANY, INC., and T & T CONEY
ISLAND, INC.,
UNPUBLISHED
December 27, 2002
Plaintiffs-Appellants,
v
PHILIP R. SEAVER TITLE COMPANY, INC.,
No. 236573
Wayne Circuit Court
LC No. 99-931902-NM
Defendant,
and
CARSON, KIOUSIS & MCKEEVER, P.L.C., and
CHARLES J. CARSON,
Defendants-Appellees.
Before: Whitbeck, C.J., and Zahra and Murray, JJ.
PER CURIAM.
Plaintiffs appeal as of right from the trial court’s order granting defendants’ motion for
summary disposition. We reverse. This appeal is being decided without oral argument pursuant
to MCR 7.214(E).
In approximately 1985, defendant began to represent a coney island restaurant operated
by Costas and Theofonia Dedes. In 1993 and 1994, Theofonia Dedes and Tina Dedes, the
daughter-in-law of Costas and Theofonia Dedes, incorporated plaintiff corporations. Theofonia
was the majority stockholder of both corporations. TD Land Company, Inc. (“TD Land”),
acquired the real property related to the restaurant and T & T Coney Island, Inc. (“T & T”),
acquired the personal property related to the restaurant. Although Tina Dedes became the
president of TD Land for a time, she was removed from office on November 23, 1996.
Theofonia Dedes, as the majority stockholder, then elected her son (and Tina Dedes’ husband),
Vasilios Gus Dedes, to become the president of TD Land. Theofonia Dedes remained the vice
president, secretary, and treasurer of the company.
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On August 29, 1997, Nua Vuljaj offered to purchase the restaurant from plaintiffs for
$390,000 ($370,000 for the real property from TD Land and $20,000 for the personal property
from T & T). Tina Dedes signed a purchase agreement as president of TD Land1 and Theofonia
Dedes signed the agreement as vice president of TD Land. Before the transaction could close,
the restaurant received negative media publicity about its sanitary conditions. As a result, Vuljaj
stated that he wanted to lower the price of the restaurant and its fixtures and offered to buy the
property for a reduced price of $300,000. On October 9, 1997, Theofonia Dedes signed
certificates authorizing the president of TD Land to sell the real property related to the restaurant
for at least $300,000 and authorizing the president of T & T to sell the personal property of the
restaurant for at least $100. Defendants did not inform Vasilios Dedes of the certificates
allowing the property to be sold for at least $300,100. The next day, Tina Dedes, acting as
president for plaintiffs, signed agreements selling the real property for $300,000 and the personal
property for $100.2 Defendants represented plaintiffs through all of these transactions.
Plaintiffs filed a complaint alleging breach of fiduciary duty and legal malpractice against
Carson, Kiousis & McKeever, P.L.C., and Charles J. Carson and alleging civil conspiracy and
slander of title against Philip R. Seaver Title Company, Inc. (“Seaver Title”).3 Plaintiffs’ claims
against Seaver Title were resolved through case evaluation and plaintiffs’ civil conspiracy and
slander claims were dismissed by stipulation. Plaintiffs’ remaining legal malpractice claim
alleged that defendants were not authorized to sell the property for less than $390,000. The trial
court granted summary disposition for defendants, concluding that Tina Dedes was an ostensible
agent for plaintiffs and was specifically authorized to approve a sale of the property for
$300,100.
It appears that the trial court granted defendants’ motion for summary disposition under
MCR 2.116(C)(10). A motion for summary disposition under MCR 2.116(C)(10) tests the
factual sufficiency of the complaint. Veenstra v Washtenaw Country Club, 466 Mich 155, 163;
645 NW2d 643 (2002). A motion for summary disposition may be granted when, except in
regard to the amount of damages, there is no genuine issue in regard to any material fact and the
moving party is entitled to judgment or partial judgment as a matter of law. MCR 2.116(C)(10),
(G)(4); Veenstra, supra at 164. The moving party is entitled to a judgment as a matter of law
when the proffered evidence fails to establish a genuine issue as to any material fact. Id. The
decision whether to grant a motion for summary disposition is a question of law that is reviewed
de novo. Id. at 159.
Plaintiffs argue that the trial court erred in granting defendants’ motion for summary
disposition because Vasilios Dedes’ affidavit shows that defendants knew that Tina Dedes was
not authorized to act on behalf of plaintiffs and that defendants were not authorized allow to the
property to sell for less than $390,000. We agree. In his affidavit, Vasilios Dedes swore that
both he and Theofonia Dedes instructed defendants that all transactions relating to the
corporations had to be approved by Vasilios Dedes and that Tina Dedes did not have any
1
As discussed, Tina Dedes was no longer the president of TD land at this point.
2
Vasilios Dedes was in Pennsylvania at the time and was unable to be at the closing.
3
Theofonia Dedes and Costas Dedes died before the commencement of this action.
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authority to act on behalf of plaintiffs. Vasilios Dedes also told defendants that they did not have
the authority to close the transaction for less than $390,000. In deciding a motion for summary
disposition, the trial court must consider affidavits, pleadings, depositions, admissions, and other
evidence submitted by the parties, MCR 2.116(G)(5), in a light most favorable to the nonmoving
party. Veenstra, supra at 164. The trial court may not engage in factfinding, but must take
affidavits submitted by the nonmoving party at face value. Huron Tool and Engineering Co v
Precision Consulting Services, Inc, 209 Mich App 365, 377; 532 NW2d 541 (1995).
Plaintiffs argue that defendants were negligent by allowing Tina Dedes to close the sale
of the property for $300,100 when she did not have the apparent authority to do so. The
authority of an agent to bind a principal may be either actual or apparent. Meretta v Peach, 195
Mich App 695, 698; 491 NW2d 278 (1992). The trial court determined that Tina Dedes had
apparent authority to act on behalf of plaintiffs.
Apparent authority may arise when acts and appearances lead a third
person reasonably to believe that an agency relationship exists. 3 Am Jur 2d,
Agency, § 19, p 524.
Apparent authority must be traceable to the principal and cannot be
established by the acts and conduct of the agent. Smith v Saginaw Savings &
Loan Ass’n, 94 Mich App 263, 271; 288 NW2d 613 (1979). In determining
whether an agent possesses apparent authority to perform a particular act, the
court must look to all surrounding facts and circumstances. Id. [Meretta, supra at
698-699.]
The question in the present case is whether an ordinarily prudent person in defendants’ position
would be justified in assuming that Tina Dedes had the authority to sell plaintiff’s property for
$300,100. See id. at 699. The principal is not bound when the agent exceeds the scope of his
apparent authority and the third party actually knows the limitation of the agent’s authority.
Modern Globe, Inc v Lake Drive Corp 340 Mich 663, 667; 66 NW2d 92 (1954). “Any question
relating to the existence and scope of an agency relationship is a question of fact.” Hertz Corp v
Volvo Truck Corp, 210 Mich App 243, 246; 533 NW2d 15 (1995).
In the present case, Theofonia Dedes signed certificates stating that the board of directors
for TD Land and T & T had approved resolutions allowing the president of the corporations to
sell the property related to the restaurant for at least $300,100. However, the transaction was not
completed by Vasilios Dedes, the president of TD Land, but was completed by Tina Dedes.
According to Vasilios Dedes’ affidavit, defendants knew that Tina Dedes was not the president
of TD Land and knew that Tina Dedes was not authorized to act on behalf of plaintiffs.
Furthermore, defendants knew that they were required to obtain Vasilios Dedes’ approval before
making any transactions and that the restaurant property should not be sold for less than
$390,000. Under these circumstances, we conclude that a question of fact exists regarding
whether a reasonable person in defendants’ position would have concluded that Tina Dedes had
the apparent authority to sell the property for $300,100.
Defendants argue that, even if the trial court erred in granting defendants’ motion for
summary disposition on apparent authority grounds, the trial court should have granted their
motion for summary disposition under MCR 2.116(C)(7) because plaintiffs were judicially
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estopped from claiming that Tina Dedes lacked the authority to approve the property sale. The
trial court rejected defendants’ judicial estoppel argument, concluding that Tina Dedes’
statements in a different suit were irrelevant because she was not a party in the present case.
“[A]n appellee need not file a cross appeal in order to argue an alternative basis for affirming the
trial court’s decision, even if that argument was considered and rejected by the trial court.”
Kosmyna v Botsford Community Hosp, 238 Mich App 694, 696; 607 NW2d 134 (1999).
In reviewing a motion for summary disposition under MCR 2.116(C)(7), this Court must
consider and accept as true the plaintiff’s well-pleaded factual allegations, affidavits, or other
documentary evidence and construe them in the plaintiff’s favor. Jackson Co Hog Producers v
Consumers Power Co, 234 Mich App 72, 77; 592 NW2d 112 (1999). A motion under this
subsection should be granted only if no factual development could provide a basis for recovery.
Skotak v Vic Tanny International, Inc, 203 Mich App 616, 617; 513 NW2d 428 (1994).
The judicial estoppel doctrine was discussed by our Supreme Court in Paschke v Retool
Industries, 445 Mich 502, 509-510; 519 NW2d 441 (1994):
Under this doctrine, a party who has successfully and unequivocally
asserted a position in a prior proceeding is estopped from asserting an inconsistent
position in a subsequent proceeding. Under the “prior success” model, the mere
assertion of inconsistent positions is not sufficient to invoke estoppel; rather, there
must be some indication that the court in the earlier proceeding accepted that
party’s position as true. Further, in order for the doctrine of judicial estoppel to
apply, the claims must be wholly inconsistent. [Citations and emphasis omitted.]
The doctrine of judicial estoppel is an extraordinary remedy that should be applied with caution.
Opland v Kiesgan, 234 Mich App 352, 363-364; 594 NW2d 505 (1999). Judicial estoppel is an
equitable doctrine invoked by the courts to prevent parties from intentionally manipulating the
court system. Id. at 364-365.
In Detroit Edison Co v Public Service Comm, 221 Mich App 370, 382-383; 562 NW2d
224 (1997), this Court held that the judicial estoppel doctrine did not apply to two of the
defendants when an organization, of which the two defendants were members, alleged a possibly
inconsistent position in a previous litigation. The judicial estoppel doctrine did not prevent the
defendants from asserting an inconsistent position in the later litigation because, while the
defendants were members of the organization involved in the previous litigation, they were not
the same party as the organization. Id. at 383.
Tina Dedes was a defendant in the previous suit brought by Vuljaj. However, she is not a
party in the present case. Defendants have not presented any applicable authority indicating that
plaintiffs are estopped from taking a position inconsistent with the position taken by Tina Dedes
in the previous litigation. Therefore, we conclude that the trial court did not err in rejecting
defendants’ judicial estoppel argument.4
4
We do not express an opinion regarding whether the judicial estoppel doctrine would have
applied if Tina Dedes would have been a party in the present case.
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Reversed and remanded. We do not retain jurisdiction.
/s/ William C. Whitbeck
/s/ Brian K. Zahra
/s/ Christopher M. Murray
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