BRIAN JENICH V ICON BUILDING II CO INC
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STATE OF MICHIGAN
COURT OF APPEALS
BRIAN JENICH,
UNPUBLISHED
March 20, 2003
Plaintiff/CounterdefendantAppellant/Cross-Appellee,
v
No. 236392
Macomb Circuit Court
LC No. 00-004744-CK
ICON BUILDING II CO., INC.,
Defendant/CounterplaintffAppellee/Cross-Appellant.
Before: Whitbeck, C.J., and Griffin and Owens, JJ.
PER CURIAM.
Plaintiff Brian Jenich appeals as of right from an order granting summary disposition
pursuant to MCR 2.116(C)(10) in favor of defendant Icon Building II Co., Inc. (Icon) on Jenich’s
breach of contract claim. Icon cross-appeals the trial court’s dismissal of its counterclaim that
Jenich’s claim was frivolous. We affirm.
I. Basic Facts And Procedural History
On March 17, 1999, Jenich and Icon signed a construction contract under which Icon
would construct a facility for Jenich’s manufacturing business on a vacant lot that Icon owned.
The vacant lot was in an industrial development district, which made the facility eligible for a tax
abatement under the plant rehabilitation and industrial development districts act (PRIDDA).1
The construction contract contained the following provision: “Purchaser to apply for tax
abatement with the Charter Township of Clinton as soon as possible.” The parties entered into a
purchase agreement for the lot and building on April 13, 1999. The purchase agreement
specified that closing would take place within ten days after Icon notified Jenich that the
township issued a final certificate of occupancy, at which point the parties would execute a land
contract.
Construction began in mid-June of 1999. After construction was complete and closing
occurred in April of 2000, Jenich attempted to apply for a tax abatement certificate. However,
an employee in the assessor’s office informed Jenich that tax abatement applications must be
1
MCL 207.551 et seq.
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filed within six months of construction. Accordingly, Jenich’s application was rejected as
untimely.
On November 20, 2000, Jenich filed a complaint against Icon alleging breach of contract
and promissory estoppel on the theory that Icon, as legal title holder during the six-month
application period, had a duty to file the application. Jenich argued that under MCL 207.555(1),
only an owner or lessee may file an application for a tax exemption certificate. Icon filed a
counterclaim alleging that Jenich’s claims were frivolous.
The trial court granted summary disposition in Icon’s favor, holding that Jenich, as
equitable owner under the land contract, had the ability to timely apply for the tax abatement, as
the construction contract specified. The trial court noted that Icon would not have been eligible
for the tax abatement certificate because it was Jenich, not Icon, who planned to establish a
manufacturing operation on the site. However, the trial court denied Icon’s motion for sanctions
because there were few cases interpreting the PRIDDA and there was no evidence of wrongful
conduct or improper motive on Jenich’s part.
II. Application Requirements Under The PRIDDA
A. Standard Of Review
We review de novo the trial court’s decision on a motion for summary disposition2 as
well as questions involving statutory interpretation.3
B. Analysis
To qualify for a tax abatement under the PRIDDA, “the owner or lessee of a facility may
file an application for an industrial facilities exemption certificate with the clerk of the local
governmental unit that established the plant rehabilitation district or industrial development
district.”4 The PRIDDA provides that no industrial facilities exemption certificates will be
granted unless certain requirements are met.5 Among these requirements is that “the
commencement of the . . . construction of the facility occurred not earlier than 6 months before
the filing of the application for the industrial facilities exemption certificate.”6 In this case, the
township approved Icon’s building application on June 22, 1999, and Icon began construction
shortly thereafter.
The trial court rejected Jenich’s argument that only Icon, as the facility’s owner, could
have filed the application timely, concluding that Jenich was the equitable owner as the land
2
Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999).
3
Oakland Co Bd of Rd Comm’rs v Michigan Property & Casualty Guaranty Ass’n, 456 Mich
590, 610; 575 NW2d 751 (1998).
4
MCL 207.555(1).
5
MCL 207.559(2).
6
MCL 207.559(2)(c).
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contract vendee, thus qualifying him as an “owner or lessee” under the statute. However, our
reading of the facts indicates that the trial court need not have reached this issue. The question
whether Jenich’s application would have been accepted within the six-month period was
rendered moot by the fact that he did not attempt to apply. Jenich acknowledged that he did
“absolutely nothing” relating to the application until July 2000, despite the contractual provision
making the application his responsibility. Although he attributed this dilatoriness to the fact that
he “had no ownership in the building” when construction began, he admitted being unaware that
ownership might have been statutorily required until he attempted to file the application over a
year later.
In any event, Jenich should have been aware that the statute required that an application
be filed within six months of when construction began. Generally, parties to an arm’s length
transaction are “supposed to know the law.”7 Had Jenich begun making inquiries regarding the
requirements for application in a timely fashion, the parties would have discovered that only
owners and lessees could file for the tax abatement while there was still time to explore
alternative options, such as conveying title to Jenich before the facility was completed rather
than after. As it happened, however, Jenich’s delay foreclosed any alternative solutions that
might have been available within the six-month period.
Jenich argues that Icon, as owner of the building during the six-month period, had a duty
to file for the tax abatement. However, the statute provides that “the owner or lessee of a facility
may file an application,” 8 and does not state that the owner “shall” or “must” file. This indicates
that while an owner is permitted to apply for a tax abatement, he or she is not required to do so.9
The only duty to apply for a tax abatement in this case arose from the parties’ contract, which
placed the duty squarely on Jenich. The fact that Jenich failed to take any action respecting his
contractual duty until the statutory period had lapsed in no way shifted his responsibility to Icon.
A motion for summary disposition may be granted when the movant is entitled to
judgment as a matter of law, and the affidavits or other proofs show that there is no genuine issue
of material fact.10 Although the trial court granted summary disposition on different grounds, we
agree that it was properly granted. We will not reverse a trial court’s order if it reached the right
result for the wrong reason.11
7
Cassidy v Kraft-Phenix Cheese Corp, 285 Mich 426, 438; 280 NW 814 (1938).
8
MCL 207.555(1) (emphasis added).
9
See, e.g., In re Chrzanowski, 465 Mich 468, 482; 636 NW2d 758 (2001); State Employees
Ass’n v Liquor Control Comm’n, 232 Mich App 456, 468; 591 NW2d 353 (1998).
10
Morales v Auto-Owners Ins Co, 458 Mich 288, 294; 582 NW2d 776 (1998).
11
Detroit v Presti, 240 Mich App 208, 214; 610 NW2d 261 (2000).
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III. Contractual Interpretation
A. Standard Of Review
We review de novo issues concerning the proper interpretation of contracts.12
B. Analysis
Jenich argues that the trial court improperly granted summary disposition because the
parties’ contract was ambiguous. When deciding a motion for summary disposition in a claim
for breach of contract, a court may interpret the contract only where the terms are clear.13 If the
terms are ambiguous, a factual development is necessary to determine the intent of the parties,
and summary disposition is inappropriate.14 Summary disposition is proper in a claim for breach
of contract when the terms are clear and there is no evidence creating any other issue of fact.15
In this case, Jenich and Icon’s contract provided, in pertinent part, “Purchaser to apply for
tax abatement with the Charter Township of Clinton as soon as possible.” Jenich argues that this
phrase is ambiguous because it is unclear whether the parties intended that Jenich be entitled to a
tax abatement, and whether this intention gave rise to a duty for Icon to file the application.
However, this suggestion is unsupported by the plain language of the clause, which makes no
mention of any entitlement to an abatement. Moreover, regardless of the parties’ possible intent,
Icon was in no position to guarantee that Jenich would receive the tax abatement because, under
the PRIDDA, applications can be approved only by the legislative body of the local
governmental unit16 and the state tax commission.17
The only conceivable ambiguity in the above clause is the phrase “as soon as possible,”
given the fact that Jenich did not become the owner of the building, and therefore qualified to
apply, until April 2000. However, while this ambiguity might have been relevant had Icon sued
Jenich for breach of contract, it has no bearing on this case. The clause at issue unambiguously
placed the responsibility to file the application on Jenich,18 and there is simply no legal basis to
shift this duty to Icon. Therefore, the trial court properly granted summary disposition regarding
Jenich’s breach of contract claim.19
12
Archambo v Lawyers Title Ins Corp, 466 Mich 402, 408; 646 NW2d 170 (2002).
13
Michaels v Amway Corp, 206 Mich App 644, 649; 522 NW2d 703 (1994).
14
Id.
15
Workers’ Disability Compensation Bureau Director v Durant Enterprises, Inc, 195 Mich App
626, 628-629; 491 NW2d 584 (1992).
16
MCL 207.556.
17
MCL 207.557(1).
18
Michaels, supra at 649.
19
Id.; Workers’ Disability Compensation Bureau Director, supra at 628-629.
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IV. Icon’s Cross-Appeal
A. Waiver
On cross-appeal, Icon argues that the trial court erred when it sua sponte dismissed its
counterclaim for sanctions without providing it with an opportunity to address the issue. As Icon
acknowledges, the trial court had the authority to render an immediate judgment under MCR
2.116(I)(1), which provides:
(1) if the pleadings show that a party is entitled to judgment as a matter of
law, or if the affidavits or other proofs show that there is no genuine issue of
material fact, the court shall render judgment without delay.
Apart from the fact that Icon did, in fact, have the opportunity to address the issue by virtue of
the filing of its counterclaim, in this case the parties stipulated that (1) no oral arguments would
be presented at the hearing scheduled on July 2, 2001 regarding their respective motions and
pleadings, and (2) the trial court would issue a written opinion. Because Icon stipulated that the
trial court would decide the motions without oral arguments, it may not argue on appeal that to
do so was error.20
B. Frivolous Claim
1. Standard Of Review
We review the trial court’s decision to grant summary disposition de novo,21 and its
conclusion respecting whether a claim was frivolous for clear error.22
2. Analysis
Icon argues that the trial court erred in summarily dismissing its counterclaim because an
issue of material fact existed to support its argument that Jenich’s claim was frivolous. The trial
court concluded that Icon failed to make a proper showing that Jenich filed his claim either with
an improper motive or, given the paucity of caselaw interpreting the PRIDDA, that the claim was
without arguable legal merit.
Icon counterclaimed for sanctions under the statutory rule, which allows the trial court to
award the prevailing party costs and fees if it determines that the action was frivolous.23 An
action is considered frivolous if one of the following conditions exists:
(i)
The party’s primary purpose in initiating the action or asserting the
defense was to harass, embarrass, or injure the prevailing party.
20
See Weiss v Hodge (After Remand), 223 Mich App 620, 636; 567 NW2d 468 (1997).
21
Maiden, supra at 118.
22
In re Attorney Fees & Costs, 233 Mich App 694, 701; 593 NW2d 589 (1999).
23
MCL 600.2591(1).
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(ii)
The party had no reasonable basis to believe that the facts
underlying the party’s legal position were in fact true.
(iii)
The party’s legal position was devoid of arguable legal merit.[24]
In this case, Icon presented no evidence indicating that Jenich filed the claim to harass
Icon, or that Jenich did not have a reasonable basis to believe the facts underlying his claim.
Further, although we resolved the claim on other grounds, Jenich argued, and the trial court
agreed, that the resolution of his claim hinged on the definition of “owner” under the PRIDDA.
Because this is an unsettled issue of law with no published authority addressing it, Jenich’s claim
was not devoid of legal merit.25 Accordingly, the trial court properly dismissed defendant’s
counterclaim.26
Affirmed.
/s/ William C. Whitbeck
/s/ Richard Allen Griffin
/s/ Donald S. Owens
24
MCL 600.2591(3)(a).
25
Traveler’s Ins v U-Haul of Michigan, Inc, 235 Mich App 273, 290; 597 NW2d 235 (1999).
26
MCL 600.2591; MCR 2.116(I)(1).
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