ARMEN BOLADIAN V GEORGE CLINTON
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STATE OF MICHIGAN
COURT OF APPEALS
ARMEN BOLADIAN, BRIDGEPORT MUSIC,
INC., SOUTHFIELD MUSIC, INC., NINE
RECORDS, INC., and WESTBOUND
RECORDS, INC.,
UNPUBLISHED
November 22, 2005
Plaintiffs/CounterdefendantsAppellees/Cross-Appellants,
v
GEORGE CLINTON, MALBIZ MUSIC, INC.,
and OCCUPANTS OF 839 KNAPP HIGHWAY,
No. 261746
Lenawee Circuit Court
LC No. 96-007197-CK
Defendants/CounterplaintiffsAppellants/Cross-Appellees.
Before: Whitbeck, C.J., and Saad and O’Connell, JJ.
PER CURIAM.
In this landlord-tenant dispute involving a Lenawee County farm located at 839 Knapp
Highway near Brooklyn, defendants George Clinton, a composer and musician, his corporate
entity Malbiz Music, Inc., and the cotenants of the farm (collectively, Clinton) appeal as of right
from the trial court’s order granting plaintiffs summary disposition of defendants’
countercomplaint on the basis of laches. The counterclaims essentially alleged that plaintiffs
Armen Boladian, with whom defendant Clinton had a longstanding business relationship, and the
corporate entities formed by Boladian for conducting business, Bridgeport Music, Inc.,
Southfield Music, Inc., Nine Records, Inc. (collectively, Boladian), and Westbound Records,
Inc., breached various agreements of the parties and fraudulently claimed ownership of title to
the farm and large amounts of royalties earned by Clinton.
Boladian’s cross appeal similarly challenges the trial court’s summary disposition order,
which also dismissed on the basis of laches Boladian’s second amended complaint seeking
unpaid rent and alleging defamation by Clinton. We affirm in part, reverse in part, and remand.
I. Basic Facts And Procedural History
On May 24, 1996, Boladian commenced a landlord-tenant summary possession action in
Lenawee District Court 2-1 against Clinton and “[a]ll occupants of 839 Knapp Highway [in]
Brooklyn, Michigan.” Boladian alleged that he owned the farm and that Clinton occupied the
farm but had not paid rent since 1985. According to Boladian, Clinton, who owed unpaid rent
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totaling $1,117,000, had ignored repeated “Notices to Quit and a Demand for Possession.”
Boladian requested that the district court evict Clinton from the farm and enter judgment against
him in the amount of the unpaid rent.
In November 1996, after a two-day summary possession trial, the district court entered a
judgment, finding that “plaintiff has a right to possession” and ordering Clinton and any
cotenants off the farm. In February 1997, Clinton appealed the district court’s judgment to the
circuit court. On May 20, 1997, the circuit court entered an “[o]rder denying appeal and
affirming district court judgment,” which Clinton did not further appeal.
Proceedings then continued in the circuit court concerning Boladian’s claim for unpaid
rent, which the district court had transferred to the circuit court. Boladian filed a motion for
summary disposition premised on collateral estoppel, and the court granted the motion. The
court explained that in the prior possession proceeding, it already had made findings that “the
lease was valid, . . . there was no oral contract, and that that was [Clinton’s] signature on the
lease, and that . . . [Boladian] was the owner of the property,” as well as that Boladian had
provided Clinton proper notices to quit. On November 18, 1997, the circuit court entered a
judgment for Boladian in the amount of $1,193,500.
Clinton appealed to this Court, which dismissed the appeal for lack of jurisdiction
because the circuit court had not entered a final judgment at the time Clinton filed his claim of
appeal.1 In December 1998, Clinton filed a delayed application for leave to appeal, which this
Court granted.2 In February 2001, this Court held that the circuit court erred in granting
Boladian summary disposition concerning the issue of monetary damages.3 This Court
explained:
Prior to bifurcation, defendant filed affirmative defenses, including one
that stated that there was an oral agreement under which plaintiff advanced money
to pay the land contract vendor on behalf of defendant and plaintiff was to be paid
from royalties. Plaintiff moved to strike this affirmative defense, along with the
others, arguing that it was outside the scope of the district court’s jurisdiction.
The district court granted the motion and the affirmative defenses were stricken.
The issue that appears to have been argued in the district court was that the
royalty payments were intended to serve as a purchase price for the property.
Plaintiff argued alternate grounds for rejecting defendant’s purchase argument,
both that the oral agreement did not exist and that a written agreement was
necessary to meet the statute of frauds. The district court did not necessarily
1
Boladian v Clinton, unpublished order of the Court of Appeals, entered November 2, 1998
(Docket No. 208256).
2
Boladian v Clinton, unpublished order of the Court of Appeals, entered June 3, 1999 (Docket
No. 216153).
3
Boladian v Clinton, unpublished opinion per curiam of the Court of Appeals, issued
February 23, 2001 (Docket No. 216153).
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determine that the oral agreement did not exist. Where the affirmative defenses
were stricken in the district court action, plaintiff failed to establish that the issue
of rent was actually presented. The trial court erred in granting summary
disposition where there was no showing that the issue was actually and
necessarily litigated.4
This Court reversed the summary disposition order and remanded to the circuit court “for further
proceedings consistent with this opinion.”5
On remand, Boladian filed two amendments to his initial complaint and Clinton filed an
answer to Boladian’s amended complaints and a counter complaint. The counts in the parties’
pleadings, as amended, included breach of contract, fraud, and defamation, among others,
premised on the parties’ business relationship from the 1970s to the 1990s. Clinton primarily
challenged Boladian’s claim for unpaid rent on the basis that the parties had entered an April
1985 oral agreement pursuant to which Boladian would pay for the farm on Clinton’s behalf
using royalties earned by Clinton. The parties also filed several motions for summary
disposition based in part on grounds of collateral estoppel, res judicata, and law of the case in
light of prior federal actions involving the parties and the district court possession proceedings,
as well as the relevant periods of limitation and the statute of frauds. Contentious discovery also
occurred over the course of more than three years.
In December 2004, the circuit court held a hearing to address the parties’ motions for
summary disposition. Early during the hearing, the circuit court expressed its view in light of the
case history and the parties’ many briefs.
I can tell you where I’m leaning to. I can summarize what I have looked
at here.
***
And I know there is a lot more to it than what I will probably summarize
perhaps. But from what you folks provided for me for the history of this thing,
Mr. Clinton entered a land contract with the Sinacolas for the purchase of this
farm for $450,000. That occurred back on October 10th of 1980, if I am not
mistaken. On May 10th of 1984 they foreclosed on the land contract and got a
judgment against Mr. Clinton for that property. On July the 13th of 1984 Mr.
Clinton filed for Chapter 7 bankruptcy and he listed the farm and its foreclosure in
the bankruptcy.
The bankruptcy discharge was July 30th of 1985. There were agreements
and addendums that were entered into on 3/4 of ’82. There is a writer’s
agreement and an addendum on 12/2 of ’83. There was a preliminary joint
4
5
Id., slip op at 2.
Id.
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venture agreement on 12/2 of ’83. And again he filed for bankruptcy on 7/13 of
’84.
The Florida case was filed in 1999. That was after the action was filed
here. The judgment in the Florida case occurred on January 30th, 2001. Mr.
Boladian entered into a land contract with the Sinacolas to purchase the property
for $425,000 and that occurred on April 1st of ’85.
On April the 4th of 1985, three days later, Mr. Clinton signed a lease
agreement with Mr. Boladian for $8,500 a month. The lease term was April 1st,
of 1985 to April the 1st of 1989. At that time he paid $5,000.
The lease provided that anything after would turn into a month to month
lease. On the very same day as the lease agreement Mr. Clinton and Bridgeport
Music by Mr. Boladian signed an exclusive song writer’s agreement and
addendum, an exclusive executive production action agreement between Mr.
Clinton and [Nine] [R]ecords also by Mr. Boladian, all of this to be paid to [sic]
by Mr. Clinton for the exclusive song writer’s agreement or agreed to be paid to
Bridgeport Music instead of Mr. Clinton for a valuable consideration which was
not specified in the agreement. Okay.
And there is where the problem starts. That was done after the bankruptcy
was filed. It took care of all the other matters but not this matter.
So Mr. Boladian then filed a complaint on May the 22nd of ’96 for
possession of the farm and unpaid rent in Lenawee County District Court, some
11 years and five months after this agreement for lease was entered into and this
agreement between Clinton and Bridgeport was entered into.
Mr. Clinton would have [the court] believe that the agreement which paid
all of his royalties and production and so forth was to be applied to the rent and in
fact was to be used to pay for the purchase of that property.
Mr. Boladian allowed Mr. Clinton to live there for 11 years and five
months without collecting one dime of rent. Okay.
The court of appeals [sic] remanded this matter back on –They made their
decision to remand it back in February of 2001. And here is what I think I am left
to determine: If in fact there was an oral agreement, which there certainly is.
When you look at the sequence of events on the same day after the bankruptcy
and the $8,500 a month lease was entered into, an agreement which turned over
everything he had for a valuable consideration, which was not mentioned by
anybody certainly would have been helpful at the time—If it had we probably
wouldn’t be here today—was entered into. And was the agreement to pay for the
rent? Was the agreement to pay for the purchase price of this land?
Remember this is in 1985. Okay. And what all of you would like to have
this court . . . decide is what took place 19 years ago, having basically done
nothing for 11 and a half years, either one of you to enforce your rights. Okay.
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Mr. Boladian would like to have a million some odd dollars in back rent.
Mr. Clinton would like to have the court say that this property is his. Okay. And
it is my opinion that you both slept on your rights and that the doctrine of laches
applies and there should be no rent and there should be no land. And that’s what
I’m going to rule.
***
No rent owed to Mr. Boladian because he slept on his rights. The doctrine
of laches apply [sic]. When you leave somebody stay on your property for 11 and
a half years and do nothing to enforce your rights you get nothing.
And when you claim that the property is yours and you sleep on your
rights for 11 and a half years, you get nothing.
***
I have in this case, I think, you will agree have given you extremely wide
latitude when it comes to discovery to go through all of these issues. And as a
result I have all this. And I have done my best to distill this down to what has
transpired here.
And what it is is fairly simple. I don’t think Mr. Boladian is owed any
rent because he slept on his rights for a long time. And I don’t think Mr. Clinton
is owed that property because he slept on his rights for a long long time.
The circuit court acknowledged that some questions of fact existed, including with
respect to the existence and nature of the alleged oral agreement between Clinton and Boladian,
but reiterated that Clinton could not proceed because “he has done nothing to protect his rights.”
The circuit court next rejected the following contention of Clinton that questions of fact
existed concerning the applicability of laches:
Defense counsel: It is with respect to that specific issue of waiver of [sic]
laches that I believe there are still questions of fact before Your Honor.
Let me briefly describe what I think they are. We have a [sic] 1985, as the
Court noted, all of these agreements being signed. If we accept . . . Clinton’s
contention that the oral agreement was that royalties generated from Mr. Clinton’s
works . . . were to be applied towards the purchase of the property and $100,000
and whatever amounts were otherwise owed to Armen Boladian and his
companies, there is a question of fact as to when that oral contract would have
been breached. Because there was never an understanding that Mr. Boladian was
instantly going to convey title in 1985. The understanding was that over a period
of time royalties would be generated. And after that then Mr. Clinton would be
entitled to receive title to the property.
We contend that millions of dollars in fact were generated. But as the
court is well aware we have tried like the dickens to get an accounting and get the
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financial records from Mr. Boladian to show when the funds were generated and
what they are offset against.
The Court: These are funds that your client paid income taxes on, I take
it?
Defense counsel: No.
The Court: That’s correct.
Defense counsel:
agreement. And so—
Because they were going to Mr. Boladian per the
The Court: If they were going to Mr. Boladian per the agreement and they
were payment for land on the land contract your client would owe income taxes
on that.
Counsel, you better be careful about what you are representing on behalf
of your client. If that’s the claim that you are making the Internal Revenue
Service may come back and decide that he owes taxes on millions of dollars.
The problem here, Counsel, is nobody has done anything. He hasn’t
placed a lien on that real estate. He hasn’t filed a memorandum of a land contract
or an agreement. He didn’t file a copy of this agreement that he had with the
plaintiff in this case with the registar [sic] of deeds as a representation of the land
contract to protect that property. Mr. Boladian hasn’t done a thing to collect the
rent.
Now, all of these representations you could be correct. All I’m telling you
is that the doctrine of laches applies because neither party did anything to protect
their rights. And now you come to this court 11 and a half years later and ask me
to protect your rights. And I will not do it because you haven’t protected your
own rights.
***
What I’m saying, though, is that I don’t believe that this court should have
to determine these [unresolved, underlying] issues [of fact]; that it shouldn’t be a
question of fact for a jury when both parties haven’t done anything for 11 and a
half years. How do you expect a jury or anybody else to try to make a
determination of what your intent was 11 and a half years ago when you have
done nothing to show it?
On March 10, 2005, the circuit court entered an order dismissing Boladian’s claims and
Clinton’s counterclaims on the basis of laches. The order of dismissal further noted that
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“Clinton’s challenges to the pre-1984 contracts are dismissed because those contracts were
adjudicated in Clinton’s bankruptcy, and Clinton does not now claim otherwise.”6
II. Laches
A. Standard Of Review
The parties here challenge the circuit court’s reliance on laches as the basis for dismissing
their claims. Clinton contends that the circuit court (1) violated his due process rights by raising
the issue of laches for the first time at the December 2004 hearing, which did not afford him
adequate time to argue or present evidence contrary to the court’s ruling, and (2) neglected to
find that Clinton’s lack of due diligence prejudiced Boladian. Boladian suggests that Clinton had
waived the defense of laches by failing to raise it in his district court answer to the original
complaint.
When reviewing a trial court’s decision premised on an equitable doctrine like laches, we
consider de novo the trial court’s ultimate application of the equitable doctrine but review for
clear error the findings of fact supporting the trial court’s ruling.7 We also review de novo a trial
court’s summary disposition ruling.8
B. Raising The Defense Of Laches
A party may raise the equitable defense of laches to:
remedy “‘the general inconvenience resulting from delay in the assertion
of a legal right which it is practicable to assert.’” It is applicable in cases in which
there is an unexcused or unexplained delay in commencing an action and a
corresponding change of material condition that results in prejudice to a party.9
“It is the effect, rather than the fact, of the passage of time that may trigger the defense of
laches.”10 “Whether laches applies depends on the facts of the particular case.”11
6
The order also set forth the various issues concerning which questions of fact existed, assuming
that “the Doctrine of Laches did not apply.”
7
Shelby Charter Twp v Papesh, 267 Mich App 92, 108; 704 NW2d 92 (2005).
8
Spiek v Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998).
9
Dep’t of Public Health v Rivergate Manor, 452 Mich 495, 507; 550 NW2d 515 (1996)
(citations omitted).
10
Yankee Springs Twp v Fox, 264 Mich App 604, 612; 692 NW2d 728 (2004) (quotations
omitted).
11
City of Jackson v Thompson-McCully Co, LLC, 239 Mich App 482, 494; 608 NW2d 531
(2000).
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C. The Circuit Court’s Application Of The Doctrine Of Laches
Clinton incorrectly suggests that, at the December 2004 hearing, the circuit court sua
sponte introduced the doctrine of laches as a potential basis for summary disposition. Boladian
expressly set forth laches as an affirmative defense to Clinton’s countercomplaint. Thus, Clinton
had notice that Boladian asserted laches as a defense to the countercomplaint.12
Further, Clinton had a reasonable opportunity to argue against the propriety of summary
disposition of the countercomplaint premised on laches. We initially note that the parties did not
dispute the timing of the several underlying agreements, the date that Clinton began occupying
the farm, or that for many years Clinton neglected to submit to Boladian any rent payments or
pay property taxes on the farm. The voluminous files attest that the parties had ample
opportunity to file many briefs and responses regarding other potential grounds for summary
disposition, including the timeliness of their various claims for relief. At the December 2004
summary disposition hearing, the circuit court permitted the parties to address the question of
laches. Defense counsel took advantage of the opportunity to argue that questions of fact existed
concerning Clinton’s diligence in seeking an accounting of the royalties paid toward satisfaction
of the alleged oral agreement that Boladian would convey the farm to Clinton. Between the
December 17, 2004, hearing and the March 10, 2005 entry of the circuit court’s order granting
summary disposition, as well as during the subsequent 14-day period for filing a motion for
reconsideration,13 Clinton had further opportunities, which he did not exercise, to proffer
argument or evidence showing that the circuit court erred by granting summary disposition.
Under these circumstances, we conclude that Clinton had notice and an adequate opportunity to
be heard with respect to the applicability of laches.
Regarding the soundness of the circuit court’s invocation of laches under the
circumstances of this case, the court correctly observed that between April 1985 and 1996,
Clinton never initiated any overt, public action to assert or protect his alleged ownership interest
in the farm, which was contrary to the written lease agreement with Boladian. But even
assuming that the circuit court properly found that Clinton did not act with due diligence to
protect his interest in the farm, the record does not substantiate that the court considered the
requisite prejudice element of the laches doctrine.14 The transcript of the summary disposition
hearing and the order of dismissal fail to disclose that the circuit court ever connected Clinton’s
lack of due diligence with any harm or prejudice to Boladian. We conclude that the circuit court
impermissibly failed to find the mandatory prerequisite to applying the doctrine of laches, that
Clinton’s lack of due diligence caused Boladian prejudice.15
12
But cf. Haji v Prevention Ins Agency, Inc, 196 Mich App 84, 85-86; 492 NW2d 460 (1992)
(reversing a trial court’s grant of summary disposition because the court had “raised the issues
sua sponte on grounds not raised either in the pleadings or in defendants’ previously denied
motion for summary disposition.”) (emphasis added).
13
MCR 2.119(F)(1).
14
See Rivergate Manor, supra at 507.
15
See Yankee Springs Twp, supra at 612; City of Jackson, supra at 494.
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Turning to Boladian’s contention that the circuit court erred by dismissing his claim for
unpaid rent on the basis of laches, we conclude that Boladian incorrectly suggests that Clinton
waived this defense. Clinton did not specifically mention the concept of laches in his original
answer to the complaint, from which the district court struck his affirmative defenses. But after
this Court remanded the rent claim to the circuit court and Boladian amended his complaint,
Clinton filed an answer to the amended complaint that expressly set forth the affirmative defense
that “[a]ll or a portion of Plaintiffs’ claims are barred by the doctrine of laches.”
MCR 2.111(F)(3) contains the following relevant requirement for pleading affirmative
defenses:
Affirmative defenses must be stated in a party’s responsive pleading,
either as originally filed or as amended in accordance with MCR 2.118 . . . .
[Emphasis added.]
The pertinent portion of MCR 2.118(A), in turn, states as follows:
(4)
Amendments must be filed in writing, dated, and numbered
consecutively, and must comply with MCR 2.113. Unless otherwise indicated, an
amended pleading supersedes the former pleading. [Emphasis added.]
Clinton’s inclusion of laches as an affirmative defense in his answer to the amended complaint
thus satisfied the plain language of MCR 2.111(F)(3) and, pursuant to MCR 2.118(A)(4), the
filing of the amended answer containing the affirmative defense of laches superseded the original
answer.16 Because Clinton included the affirmative defense of laches in his answer to the
amended complaint, he did not waive laches as an affirmative defense under MCR 2.111(F)(2).
Boladian does not otherwise challenge the merits of the circuit court’s conclusion that
laches precluded the claim for unpaid rent. Nonetheless, after reviewing the transcript of the
December 2004 summary disposition hearing and the circuit court’s March 2005 order of
dismissal, we find it clear that the circuit court incorrectly granted summary disposition of the
claim for unpaid rent on the basis of laches. Even assuming that Boladian failed to act with due
diligence in seeking rent money from Clinton between 1985 and 1996,17 the circuit court
completely neglected to find that this lack of due diligence resulted in prejudice to Clinton.18
16
Sands Appliance Services, Inc v Wilson, 463 Mich 231, 239; 615 NW2d 241 (2000); see also
Grzesick v Cepela, 237 Mich App 554, 562-563; 603 NW2d 809 (1999) (noting that “[b]y its
express terms, MCR 2.111(F)(3) must be read in conjunction with MCR 2.118(A)(4)”).
17
At the summary disposition hearing, Boladian’s counsel asserted that between 1986 and 1990,
Boladian had sent Clinton “seven or eight letters . . . asking for the payment of rent.”
18
Yankee Springs Twp, supra at 612; City of Jackson, supra at 494.
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D. Other Arguments
Boladian suggests on cross appeal that we could affirm the circuit court’s dismissal of the
countercomplaint on one of the alternate grounds alleged in support of summary disposition,
specifically the claim-preclusion doctrines, the periods of limitation, and the statute of frauds.
Although none of these issues qualify as preserved for appellate review, given that the circuit
court did not address them, we have the discretion to consider unpreserved questions of law
when the relevant facts necessary for their resolution appear in the record.19 Because each side
has briefed its respective positions regarding summary disposition of the opposing parties’
claims pursuant to MCR 2.116(C)(7), and have submitted voluminous documentary evidence in
support of its positions, we are able to review the record de novo and make the following
dispositions as a matter of law.
1. Boladian’s Claims
In Counts II and IV of Boladian’s original complaint, he seeks to recover sums due for
Clinton’s alleged breaches of the April 1985 lease agreement and for his failure to pay anything
during the post-lease period of month-to-month tenancies, which stemmed from the April 1985
lease agreement. We conclude, however, that Boladian is precluded from recovering unpaid rent
due more than six years before he filed the original complaint on May 24, 1996.20 To the extent
the remaining unpaid rent claims are not barred by laches, they remain viable and the circuit
court should further address them.
With respect to Count V of the first amended complaint, which alleges that Clinton
defamed Boladian in a VH-1 cablecast on September 2, 1999, Boladian first asserted this claim
on July 6, 2001, more than one year after the alleged defamation occurred. Thus, we conclude
that Count V is time-barred.21
Concerning Count VI, which alleges that Clinton breached a July 1990 loan agreement.
Clinton failed to pay any money by the repayment date in mid-January 1991, breaching the
agreement. Thus, Boladian should have filed suit within six years, i.e., January 1997.22
Boladian waited to raise this claim, however, until July 6, 2001, more than four years after the
period of limitation expired. Thus, we conclude that Count VI is time-barred. Similarly, related
Count VII, in which Boladian maintains that Clinton fraudulently pledged, as collateral for the
July 1990 loan, master tapes that he did not own, is also barred by a six-year period of
limitation.23
19
Bertrand v Mackinac Island, 256 Mich App 13, 21; 662 NW2d 77 (2003).
20
MCL 600.5807(8); MCL 600.5813.
21
MCL 600.5805(9).
22
MCL 600.5807(8).
23
Boyle v Gen Motors Corp, 468 Mich 226, 228-232; 661 NW2d 557 (2003), citing MCL
600.5813 and MCL 600.5827.
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With respect to Count VIII alleging that, at some unspecified time, Clinton breached an
August 31, 1971 agreement of five-year duration between Bridgeport, Clinton, and Malbiz by
writing songs for third parties, we conclude that this claim also falls well outside the six-year
period of limitation applicable to contract-based claims.24
Regarding Count IX, which complains that Clinton breached a December 2, 1983
songwriter’s agreement between Bridgeport and Clinton by composing for third parties or
assigning song rights to third parties, MCL 600.5807(8) once again bars Boladian from raising
these allegations because the writer’s agreement set forth a term of five years with two potential
one-year extensions, and Clinton’s unspecified breach thus must have occurred at the latest by
December 1990. Thus, Count IX, filed in July 2001, is time-barred.
Concerning Count X, which alleges that Clinton breached an April 4, 1985 “Exclusive
Songwriter’s Agreement” between Bridgeport and Clinton by composing songs for other entities,
this claim likewise is barred by the six-year period of limitation applicable to contract-based
actions. The April 1985 exclusive songwriter’s agreement had a term of five years, with two
potential one-year extensions, and Clinton’s breach thus must have occurred by April 1992.
With respect to Count XI, which avers that Clinton tortiously interfered with an April 4,
1985 “Exclusive Executive Production Agreement” between Nine Records, Clinton, and Egmitt
(another Clinton entity) by causing Egmitt to obtain production services from third parties, this
claim is also time-barred. 25 The production agreement provided that it would apply for an initial
term of five years and gave Nine Records an option to extend the contract period for another
five-year term. Clinton’s tortious interference thus must have occurred by April 1995, and
Boladian had three years thereafter to bring this claim, but failed to raise it until July 2001.
Regarding Count XII, which asserts that “[p]rior to entering into the Addendum dated
December 2, 1983,” Clinton fraudulently suggested that he or Malbiz owned “certain copyrights
that had not already been assigned to Bridgeport,” this claim is also time-barred. If Clinton
committed fraud by December 1983, the six-year period of limitation applicable to fraud would
have expired by early December 1989,26 and Boladian’s failed to raise this fraud allegation until
July 2001.
Concerning Counts XIII through XVIII added by the second amended complaint, all of
these counts (defamation, invasion of privacy, infliction of emotional distress, conspiracy and
unjust enrichment) derive from alleged threats to and disparagement of Boladian in the song
“Speed Dreamin,’” which Clinton performed with Warren G and which was published in
December 2001. We conclude that collateral estoppel precludes Boladian from relitigating these
issues against Clinton because Boladian already unsuccessfully litigated in federal court identical
24
MCL 600.5807(8).
25
Blazer Foods, Inc v Restaurant Properties, Inc, 259 Mich App 241, 253-254; 673 NW2d 805
(2003), citing MCL 600.5805(10).
26
MCL 600.5813.
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allegations premised on the “Speed Dreamin’” lyrics against Warren G and several corporate
defendants.27
2. Clinton’s Counterclaims
In Count I of the countercomplaint, Clinton alleges that Boladian committed fraud by
falsely representing in 1985 that he would pay Clinton’s debt on the farm.28 “Under MCL
600.5827 a [fraud] claim accrues when the wrong is done,” and “[t]he wrong is done when the
plaintiff is harmed rather than when the defendant acted.”29 Because a six-year period of
limitation governs fraud actions30 and because Clinton filed his fraud counterclaim on July 30,
2001, any fraud that accrued before late July 1995 is time-barred. Given that Clinton does not
supply specific time frames in which he allegedly suffered damage caused by Boladian’s
promise, and no indication exists that any such damage occurred after July 1995, we find Count I
time-barred.
With respect to Count II, which asserts that Boladian committed fraud by either forging
Clinton’s signature on the April 1985 lease or by misrepresenting the nature of the lease when
Clinton signed it, the period of limitation in MCL 600.5813 likewise bars this claim. Clinton
raised the fraud claim in July 2001, 16 years after the alleged acts of fraud occurred, and he once
again fails to set forth any fraud-induced reliance on or injury to him that occurred after late June
1995, within six years of the time that he filed the countercomplaint. Additionally, despite
Clinton’s testimony in the 1996 summary possession proceeding that he either never signed the
April 1995 lease, or did not knowingly sign the lease, the district court specifically found “that
the Lease dated April 4, 1985 is valid and was signed by the defendant.” Because the parties
previously litigated this issue, collateral estoppel also precludes Clinton from raising the fraud
claim again as Count II of the countercomplaint.31
27
Boladian v UMG Recordings, Inc, 123 Fed Appx 165 (CA 6, 2005); see also Monat v State
Farm Ins Co, 469 Mich 679, 691-692; 677 NW2d 843 (2004) (explaining that a party may
defensively assert collateral estoppel to prevent the opposing party from relitigating an issue that
that party has already had a full and fair opportunity to litigate in a prior action).
28
Despite Boladian’s argument to the contrary, in the Lenawee District Court 2-1 summary
possession action the court did not necessarily hold that no oral agreement or promises existed
between Boladian and Clinton; thus, Boladian incorrectly suggests that the law of the case
doctrine bars reconsideration of this issue. See Boladian v Clinton, unpublished opinion per
curiam of the Court of Appeals, issued February 23, 2001 (Docket No. 216153), slip op at 2
(expressly finding that the “district court did not necessarily determine that the oral agreement
did not exist”). Regarding the existence of an alleged oral promise by Boladian, we fail to see
the relevance of Boladian’s additional contention that Clinton did not list his ownership of any
songs in his bankruptcy schedule of assets, especially when Boladian allegedly made the promise
in 1985, after Clinton had filed for bankruptcy protection.
29
Boyle, supra at 231 n 5.
30
MCL 600.5813.
31
Monat, supra at 682-684.
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Counts III and IV contain alternate grounds for enforcing Boladian’s alleged 1985 oral
promise that he would use royalties earned by Clinton to pay his debt on the farm, thus saving
Clinton’s title: breach of contract (Count III) and promissory estoppel (Count IV).32 Yet it has
not been definitively determined whether any oral agreement existed. This Court held that the
district court had not necessarily determined the existence of the oral agreement.33 And although
the circuit court at the December 2004 summary disposition hearing expressed its belief that
Boladian and Clinton had made some oral agreement around the time of the April 1985 lease and
the other April 1985 written agreements, the circuit court did not enter an order specifically
finding that an oral agreement did exist and neglected to say what specific terms an oral
agreement might contain. Because the parties continue to dispute the existence of the oral
agreement and because the record does not delineate the scope of the oral agreement, we remand
these factual matters to the circuit court for further consideration to the extent necessary for a
resolution of this issue under the doctrine of the statute of frauds or the statue of limitation.34, 35
Count V, in which Clinton characterizes as unconscionable the March 1982 agreement,
the December 1983 addendum to the March 1982 agreement, the December 1983 writer’s
agreement, a December 1983 addendum to the writer’s agreement, the April 1985 lease
agreement, and the April 1985 exclusive songwriter’s agreement and a rider thereto, is timebarred. When considering the alleged unconscionability of contract provisions, courts look to
the circumstances surrounding the making of the contract, including the contract’s terms at the
time of execution.36 Because Clinton waited until July 2001 to raise the claims of
unconscionability, more than 16 years after the parties entered the most recent agreement that
Clinton characterizes as unconscionable, he has untimely filed these claims.37, 38
32
Contrary to Boladian’s contention, the United States District Court for the Northern District of
Florida did not address the parties’ entire business relationship, or whether the parties entered an
oral agreement in 1985. Therefore, collateral estoppel does not bar Count III and Count IV of
the countercomplaint. Monat, supra at 682-684. Nor does the Florida district court’s judgment
operate as res judicata to bar Count III and Count IV because the alleged 1985 oral agreement in
this case did not arise from the same transaction or events that formed the basis for Clinton’s
complaint in the federal action, i.e., the parties’ pre-1985 recording-related contracts; the federal
action involved no issue concerning the farm in Michigan, and no agreement of the parties even
incidentally related to the farm. See McKane v Lansing, 244 Mich App 462, 466; 625 NW2d
796 (2001).
33
See footnote 28, supra.
34
We reiterate that such fact-finding will be unnecessary if the trial court is able to substantiate a
dismissal based on laches.
35
We need not separately consider Count VI, entitled “Setoff,” because its viability depends on
the existence of the alleged 1985 oral agreement.
36
Clark v DaimlerChrysler Corp, ___ Mich App ___; ___ NW2d ___ (Docket No. 252765,
issued September 13, 2005), slip op at 3; Hubscher & Son, Inc v Storey, 228 Mich App 478, 481482; 578 NW2d 701 (1998).
37
MCL 600.5807(8); MCL 600.5813.
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III. Conclusion
We reverse the circuit court’s March 10, 2005 order of dismissal on the basis of laches,
and remand for (1) the circuit court to make further findings regarding the potential applicability
of laches, or (2) further proceedings to address (a) the amounts of unpaid rent that Boladian may
be entitled to recover from Clinton under Count II and Count IV of the original complaint, taking
into account the applicable period of limitation, and (b) with respect to Clinton’s Count III and
Count IV, (i) whether an April 1985 oral agreement exists, (ii) the terms of the oral agreement,
(iii) whether the period of limitation bars Count III and Count IV, and (iv) whether Boladian
should be estopped from asserting the statute of frauds as a defense to the oral agreement. We
affirm the circuit court’s dismissal of Boladian’s Counts V - XVIII and Clinton’s
countercomplaint Counts I - II and V – VI, albeit pursuant to MCR 2.116(C)(7) (periods of
limitation and collateral estoppel).
Affirmed in part, reversed in part, and remanded for further proceedings not inconsistent
with this opinion. We do not retain jurisdiction.
/s/ William C. Whitbeck
/s/ Henry William Saad
/s/ Peter D. O’Connell
(…continued)
38
Clinton denominated Count V a claim for declaratory relief. Although periods of limitation
generally “‘do not apply to declaratory judgments as such,’” periods of limitation do apply “‘to
the claim on which the [declaratory] relief is based.’” Taxpayers Allied for Constitutional
Taxation v Wayne Co, 450 Mich 119, 128; 537 NW2d 596 (1995), quoting Luckenbach
Steamship Co v United States, 312 F2d 545, 548 (CA 2, 1963).
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