DYNA GRIND SERVICES LLC V CITY OF RIVERVIEW
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STATE OF MICHIGAN
COURT OF APPEALS
DYNA GRIND SERVICES, LLC, and MARCO
FUSCO,
UNPUBLISHED
May 4, 2006
Plaintiffs/Counter-DefendantsAppellees,
No. 255825
Wayne Circuit Court
LC No. 01-135578-CK
v
CITY OF RIVERVIEW,
Defendant/Counter-Plaintiff/ThirdParty Plaintiff-Appellant,
and
TIM DURAND, RANDY ALTIMUS, ROBERT
BOBECK, DAVID SUPUTA, and JOHN MENNA,
Defendants/Counter-Plaintiffs,
v
RLI INSURANCE COMPANY,
Third-Party
Plaintiff,
Defendant/Third-Party
v
MV CONSTRUCTION,
UNLIMITED, LLC,
INC.,
and
CANS
Third-Party Defendant.
Before: Cooper, P.J., and Jansen and Markey, JJ.
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PER CURIAM.
Defendant City of Riverview,1 appeals as of right from the trial court’s order entered on a
jury verdict in favor of plaintiffs Dyna Grind Services, LLC, and Marco Fusco.2 The jury found
that defendant had breached its contract with plaintiff, and awarded plaintiffs $1,350,000. The
trial court denied defendant’s requests for a directed verdict, judgment notwithstanding the
verdict (JNOV), new trial, and remittitur. We affirm.
I. Basic Facts
Fusco owned Cans Unlimited, LLC, MV Construction, Inc., and Dyna Grind Services,
LLC. A portion of plaintiffs’ business involved reducing trash volume by grinding garbage.
Defendant had limited space available in its landfill. Thus, Fusco or one of his employees
approached defendant with a proposal to grind defendant’s trash. Plaintiffs represented that the
waste-grinding operation would achieve significant reductions in the volume of trash deposited
in defendant’s landfill. After negotiations, plaintiff and defendant entered into a trash-grinding
contract, to commence in July 2000 and end in July 2005. The contract provided that defendant
would pay plaintiffs based on the actual tonnage of waste ground in any given month.
Plaintiff began grinding defendant’s garbage under the terms of the contract in October
2000. Fusco testified that he had made substantial investments in plant and equipment before
beginning operations. Plaintiff billed defendant for 2,054 tons of waste in October 2000, 3,155
tons in November 2000, 8,154 tons in December 2000, and 1,021 tons in January 2001. By
February 2001, plaintiffs asserted that they had begun to lose money. Plaintiffs met with
defendant in an effort to obtain assurances of more grindable waste or to receive more money per
ton. Plaintiffs estimated that they needed 250 tons of grindable waste per day just to break
even.3 Defendant refused to pay more money per ton, and apparently indicated that it could not
send plaintiff any additional grindable trash. Plaintiffs stopped operating in May 2001,
attributing the shutdown to the loss of money.
1
Throughout this opinion use the of the singular term “defendant” will refer to the City of
Riverview only. The remaining defendants are not involved in this appeal. We note that David
Suputa’s real name is David Sabuda; however, for purposes of this opinion, we will refer to him
as Suputa, which is how he is listed on this Court’s docket sheet.
2
Throughout this opinion use of the term “plaintiffs” will refer to Dyna Grind Services, LLC,
and Marco Fusco. The singular term “plaintiff” will refer to Dyna Grind Services, LLC, only.
Fusco was the sole owner and member of Dyna Grind Services, LLC.
3
Defendant disputes this figure, contending that plaintiff would not have been able to keep up
with two 250 tons of trash per day. One of defendant’s employees testified that he had observed
problems with plaintiff’s ability to keep up, stating that plaintiff’s operation had been shut down
for a period and that waste had not been ground during that time. He also testified that plaintiff
had occasionally refused to accept grindable garbage from defendant. However, Fusco testified
that defendant was always able to keep up with grinding. Moreover, Fusco testified that he had
knowledge that defendant had not been sending plaintiff all of its acceptable, grindable waste.
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Plaintiffs filed a complaint against defendants in which they alleged, inter alia, (1) breach
of contract, (2) fraudulent misrepresentation with respect to the actual amounts of material to be
ground by plaintiff, (3) tortious interference with contractual relations by directing grindable
material directly to the landfill, (4) bad faith in dealing, and (5) civil conspiracy.4 Defendants
filed a counter-complaint, alleging breach of contract for failure to perform waste-grinding
services as provided in the agreement, and negligent failure to adequately fund and maintain the
grinding operation. Defendants subsequently sued plaintiff’s bonding company, RLI Insurance,
as well.5
Defendants moved for summary disposition, arguing that the breach of contract claim
should be dismissed because the contract did not guarantee that defendant would deliver any
specific minimum amount of grindable waste to plaintiff. Plaintiffs responded that the
agreement clearly contemplated a guaranteed minimum monthly amount of grindable waste.
Alternatively, plaintiffs argued that if the contract was ambiguous, a jury should decide whether
it guaranteed a minimum amount of grindable waste. Defendants responded that the language
granting “exclusive rights” did not obligate it to send all grindable waste to plaintiff. Defendant
maintained that there was no required minimum amount contemplated by the contract.
Defendants filed a motion in limine to exclude evidence regarding their construction of
additional landfill space. Defendants contended that it was irrelevant that the landfill had been
expanded. Defendants also argued that any evidence of landfill expansion would confuse the
jury. Plaintiffs responded that evidence of the landfill expansion was relevant and admissible to
prove defendants’ willful breach because the expansion negated the need for plaintiffs’ trashgrinding services. The trial court denied the motion in limine, finding that the jury would
understand the evidence of landfill expansion.
In September 2003, the trial court denied defendants’ motion for summary disposition.
The court found that the contract’s language was ambiguous and that a question of fact existed as
to whether the agreement required defendants to deliver a minimum monthly amount of
grindable waste to plaintiff. In December 2003, defendants again moved for summary
disposition. In February 2004, the trial court dismissed the claims against defendants Bobeck,
Menna, and Suputa, but denied the remainder of defendants’ motion for summary disposition.
At trial, defendant argued that a letter it had written to RLI was not admissible. The letter
had suggested that the contract anticipated a minimum of 5,500 tons of grindable waste per
month. Plaintiffs argued that the letter was integral to a proper understanding of the contract
because it showed that defendant understood the contract to contain a monthly minimum.
Defendant responded that the 5,500-ton amount mentioned in the letter and the contract was
4
In December 2002, an order was entered dismissing the claims against Durand and Altimus.
5
Defendant filed a third-party complaint against RLI, contending that plaintiffs had failed to
perform under the contract. RLI then filed a third-party complaint against MV Construction,
Inc., and Cans Unlimited, LLC. In December 2003, a stipulated order was entered dismissing all
claims against RLI. RLI, MV Construction, and Cans Unlimited are not parties to this appeal.
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merely a projected amount, and was not a guaranteed minimum. Defendant also argued that the
letter was not admissible under MRE 408 because it was compiled for use in settlement
negotiations. The trial court ruled that the letter was admissible. Defendant also disputed the
admissibility of another letter, containing projected amounts of grindable waste, which was
written by its finance director at the direction of defense counsel. Defendant contended that the
letter and attached numerical figures were protected by the attorney-client privilege. Plaintiffs
argued that the documents should be admitted for purposes of interpreting the contract, and that
the attorney-client privilege had been waived. The trial court ruled that the letter and attached
figures were admissible.
On the third day of trial, defendant moved for a directed verdict. The trial court indicated
that it had already dismissed all claims except the breach of contract claim.6 However, the court
denied the motion for directed verdict with respect to the breach of contract claim. The trial
court indicated that it would let the jury decide the issue of contract interpretation, noting that
there were remaining questions of fact with respect to the contract’s meaning.
At the close of trial, the court instructed the jury. Among other things, the court
instructed the jury that if it determined that the contract was ambiguous, the “ambiguity must be
construed against the drafting party, that is [defendant].” The jury determined that defendant had
breached the contract, and that plaintiff had sustained economic damages in the amount of
$1,350,000. The trial court entered an order on the jury verdict awarding plaintiff a total
judgment of $1,579,454.45, including interest, costs, and attorney fees. Defendant then moved
for JNOV, or alternatively a new trial. Defendant also sought remittitur. The court denied
defendant’s motions for JNOV, new trial, and remittitur.
II. Summary Disposition, Directed Verdict, JNOV, and New Trial
Defendant first argues that the trial court erred in denying its motions for summary
disposition, directed verdict, JNOV, and new trial. We disagree.
A. Standard of Review
We review a trial court’s decision on a summary disposition motion de novo. Spiek v
Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). If a contract is subject to
two reasonable interpretations, factual development is necessary to determine the intent of the
parties, and summary disposition of the contract claim is inappropriate. Meagher v Wayne State
University, 222 Mich App 700, 722; 565 NW2d 401 (1997). We also review a trial court’s
decision to grant or deny a directed verdict de novo. Id. at 708. “Directed verdicts are
appropriate only when no factual question exists upon which reasonable minds may differ.” Id.
A trial court’s decision on a motion for JNOV is reviewed de novo. Sniecinski v BCBSM, 469
6
We note that no orders are contained in the record to this effect. However, defendant had
earlier requested dismissal of these claims in a motion for summary disposition. Regardless of
whether these other claims were properly dismissed below, defendant raises only the breach of
contract claim on appeal.
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Mich 124, 131; 666 NW2d 186 (2003). We view the evidence and all legitimate inferences in
the light most favorable to the nonmoving party. Id. If reasonable jurors could have honestly
reached different conclusions, the jury verdict must stand. Zantel Marketing Agency v Whitesell
Corp, 265 Mich App 559, 568; 696 NW2d 735 (2005). Finally, we review a trial court’s
decision to grant or deny a new trial for an abuse of discretion. Kelly v Builders Square, Inc, 465
Mich 29, 34; 632 NW2d 912 (2001). An abuse of discretion occurs when an unprejudiced
person, considering the facts on which the trial court acted, would say that there was no
justification or excuse for the ruling made, Gilbert v DaimlerChrysler Corp, 470 Mich 749, 761762; 685 NW2d 391 (2004), or the decision was so violative of fact and logic that it evidenced a
perversity of will, a defiance of judgment, or an exercise of passion or bias, Bean v Directions
Unlimited, Inc, 462 Mich 24, 34-35; 609 NW2d 567 (2000).
Questions of contract interpretation, including the determination of whether contract
language is ambiguous, are reviewed de novo on appeal. Wilkie v Auto-Owners Ins Co, 469
Mich 41, 47, 159; 664 NW2d 776 (2003). Where the terms of a contract are unambiguous, they
are construed as a matter of law; but where the meaning is unclear or reasonably susceptible to
more than one meaning, interpretation becomes a question of fact, and extrinsic evidence can be
used to determine the parties’ intent. UAW-GM Human Resource Center v KSL Recreation
Corp, 228 Mich App 486, 491; 579 NW2d 411 (1998).
B. Contract Interpretation
Defendant contends that the contract was unambiguous, and did not require defendant to
deliver any minimum amount of grindable waste to plaintiff. The contract language at issue
provided in relevant part:
1. Exclusive Rights: City grants to Dyna-Grind exclusive rights to grind
acceptable waste at the Land Preserve during the term of the Agreement,
excluding clean wood received by the Land Preserve from its own agreement and
prepaid contracts. Dyna-Grind grants to City exclusive rights to grinding
operations of acceptable waste at solid waste facilities licensed by the State of
Michigan and located within the County of Wayne, Michigan. Dyna-Grind, nor
any related entity, will not grind waste at another solid waste management facility
during the term of this Agreement. In addition to other considerations referenced
in this Agreement, Dyna-Grind shall pay City an annual license fee of Five
Hundred Dollars ($500).
***
8. Dyna-Grind’s Equipment and Operation: All waste material deliveries shall
be processed in accordance with normal Land Preserve policy, then transported
to Dyna-Grind’s designated grinding area. Dyna-Grind shall provide all
necessary equipment and personnel to grind waste, maintain the designated site
and compliance with City’s requirements. The grinder . . . must be capable of
grinding over Five Thousand (5,000) tons of acceptable waste per work week.
Dyna-Grind shall make available to City a minimum of Seventy Percent (70%) of
the grinder’s actual throughput for City’s grindable waste streams.
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***
18. Other Operational Covenants:
***
Acceptable grindable waste materials shall be limited to construction and
demolition debris, nonfriable asbestos type roofing, uncontaminated pallets, tree
wood and brush, and other scrap wood. Specifically excluded are waste materials
unacceptable for disposal under federal, state or local regulation as well as
organic or industrial waste, stone, asphalt, brick, concrete and concrete block, and
industrial waste. Tires without rims may be deemed acceptable grindable waste
upon approval of the Riverview City Council.
Acceptable grindable materials includes both materials delivered by Cans
Unlimited, a waste transportation company associated with Dyna-Grind Services,
and other wastes delivered by such other of City’s customers as City directs to the
grinding area that meets the criteria set above. [Emphasis added.]
Further, the contract provided that plaintiff would be paid monthly on the basis of trash weight.
Each month, plaintiff was to receive $9 per ton for the first 5,500 tons of trash, $7 per ton for any
trash in excess of 5,500 tons but less than 8,500 tons, and $6 per ton for any trash in excess of
8,500 tons.
The threshold question in this case is whether the terms of the contract were ambiguous
with regard to the quantity of grindable waste that defendant was to provide plaintiff. “A
contract is ambiguous if its provisions may reasonably be understood in different ways.”
Universal Underwriters Ins Co v Kneeland, 464 Mich 491, 496; 628 NW2d 491 (2001). We find
that the “Exclusive Rights” clause and the phrase “[t]he grinder . . . must be capable of grinding
over Five Thousand (5,000) tons of acceptable waste per work week,” when read in conjunction
with the provision setting payment at $9 per ton for the “[f]irst 5,500 tons per month,” render the
contract susceptible to more than one reasonable interpretation. It is possible to interpret this
language as envisioning no monthly minimum amount of grindable waste. However, it is
equally possible to interpret this language as requiring defendant to deliver a minimum amount
of grindable waste to plaintiff. Because the contract was ambiguous with respect to a minimum
amount, interpretation was a question of fact. UAW-GM Human Resource Center, supra at 491.
Thus, the trial court properly denied defendant’s motion for summary disposition. Meagher,
supra at 722. For the same reason, the trial court also properly denied defendant’s motion for
directed verdict. Id. at 708.
The relevant contract language could have been interpreted as (1) requiring no minimum
amount of grindable waste, (2) requiring defendant to deliver at least 5,500 tons of grindable
waste per month, or even (3) requiring defendant to deliver 5,000 tons of acceptable waste per
week. “It is well settled that the meaning of an ambiguous contract is a question of fact that must
be decided by the jury.” Klapp v United Ins Group Agency, Inc, 468 Mich 459, 469; 663 NW2d
447 (2003). Where a written contract is ambiguous, the jury must interpret the contract’s terms
“in light of the apparent purpose of the contract as a whole, the rules of contract construction,
and extrinsic evidence of intent and meaning.” Id., citing 11 Williston, Contracts (4th ed), §
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30:7, pp 87-91. After considering the contract’s ambiguous language and the evidence regarding
the parties’ intent, the jury concluded that the contract provisions at issue contemplated a
minimum amount of grindable waste and that defendant had breached the contract by failing to
deliver this minimum amount to plaintiff. Viewing all evidence in a light most favorable to
plaintiffs, Sniecinski, supra at 131, we conclude that reasonable jurors could have honestly
reached this conclusion, Zantel Marketing Agency, supra at 568. Defendant’s motion for JNOV
was properly denied. Id. In light of the jury’s reasonable and supportable conclusion, the trial
court did not abuse its discretion in denying defendant’s motion for a new trial. Gilbert, supra at
761-762.
III. Breach of Contract
Defendant next argues that the trial court should have concluded as a matter of law that it
complied with the contract. For the reasons stated above, we disagree.
Defendant essentially argues that even if the contract was ambiguous, there was no
breach because it supplied some acceptable waste to plaintiff. However, after finding that the
contract’s language was ambiguous, the jury concluded that the parties had intended a minimum
amount of grindable trash. Despite the fact that defendant delivered some grindable waste to
plaintiffs, the jury necessarily concluded that defendant had not delivered enough acceptable
waste to satisfy the minimum amount intended by the parties. Because the minimum amount of
waste contemplated by the parties was a question properly before the jury, and because the jury
concluded that defendant had failed to deliver this minimum amount, defendant was not entitled
to judgment on the breach of contract claim. We do not disturb the jury’s determination that
defendant breached the contract by failing to deliver the requisite minimum amount of grindable
trash.
IV. Challenged Jury Instruction
Defendant next argues that the trial court erred by instructing the jury that the ambiguous
contract language should be construed against defendant. We disagree.
A. Standard of Review
In general, claims of instructional error are reviewed de novo. Cox v Flint Bd of Hospital
Managers, 467 Mich 1, 8; 651 NW2d 356 (2002). However, factual findings are reviewed for
clear error, MCR 2.613(C), and a trial court’s decision on whether a certain jury instruction is
supported by the evidence and applicable to the case is reviewed for an abuse of discretion,
Klinke v Mitsubishi Motors Corp, 219 Mich App 500, 515; 556 NW2d 528 (1996), aff’d 458
Mich 582 (1998). “We review instructions in their entirety and do not extract them piecemeal.”
Byrne v Schneider’s Iron & Metal, Inc, 190 Mich App 176, 182; 475 NW2d 854 (1991).
Reversal is not required if the theories of the parties and the applicable law have been adequately
and fairly presented to the jury. Id.; Lewis v LeGrow, 258 Mich App 175, 211; 670 NW2d 675
(2003).
B. The Contra Proferentem Instruction
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The trial court gave the following instruction regarding interpretation of the ambiguous
contract in this case:
If you the jury decide that the contract is ambiguous, any ambiguity must be
construed against the drafting party, that is the City of Riverview.
Our Supreme Court has provided that “[i]n interpreting a contract whose language is
ambiguous, the jury should . . . consider that ambiguities are to be construed against the drafter
of the contract. This is known as the rule of contra proferentem.” Klapp, supra at 470-471
(citation omitted). As the Klapp Court recognized, the rule of contra proferentem
is only to be applied if all conventional means of contract interpretation, including
the consideration of relevant extrinsic evidence, have left the jury unable to
determine what the parties intended their contract to mean. Accordingly, if the
extrinsic evidence indicates that the parties intended their contract to have a
particular meaning, this is the meaning that should be given to the contract,
regardless of whether this meaning is in accord with the drafter’s or the
nondrafter’s view of the contract. [Id. at 471 (footnote omitted).]
Because the parties engaged in negotiations prior to executing the contract, defendant
asserts that it was not the drafter of the document for purposes of the contra proferentem
instruction. Defendant cites Third Horizon Group v Molitor & Molitor, Inc, unpublished opinion
per curiam of the Court of Appeals, issued August 24, 2001 (Docket No. 224058),7 in support of
its contention that a contra proferentem instruction was improper because both parties
participated in negotiating the contract. The Third Horizon Group panel provided:
[T]he trial court erred in construing the . . . provision against defendant on the
basis that ambiguous contract language should be construed against the drafter.
First, the trial court clearly erred in finding that defendant was the drafter of the
addendum. The evidence showed that the final addendum, including the
provision in question, although physically prepared by defendant, was the result
of extensive negotiations between the parties and that both parties provided
material terms. While evidence showed that defendant did provide the disputed
language in the first sentence of the . . . provision, the principle that ambiguous
contract language should be construed against its drafter should not have been
applied here, when the addendum was the product of extensive negotiations
between the parties, and the apparent contradiction in the . . . provision could be
reconciled in light of the evident purpose and language of the provision as a
whole. When considered in its entirety, the . . . provision is most reasonably
construed as proposed by defendant; defendant’s construction harmonizes the
entire provision, while plaintiff’s construction renders a portion of the provision
surplusage.
7
Unpublished opinions are not precedentially binding under the rules of stare decisis. MCR
7.215(C)(1). However, they may be persuasive.
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Thus, in Third Horizon Group, there was specific evidence that both parties had “provided
material terms” to the contract through their initial negotiations. On the basis of this evidence,
the Third Horizon Group panel concluded that the trial court had clearly erred in finding that the
defendant was the drafter of the provision at issue.8
The present case is distinguishable from Third Horizon Group. Here the parties also
engaged in ongoing negotiations prior to executing the contract. Additionally, defendant in the
present case physically drafted the contract in the sense of putting the words on paper. However,
in the case at bar there was no evidence that plaintiffs ever altered or challenged any of the
contract terms initially included by defendant. Thus, unlike the facts of Third Horizon Group,
there existed no specific evidence to indicate that both parties had supplied material terms.
Citing the evidence that plaintiff merely accepted the contract as drafted by defendant, the trial
court determined that defendant was the drafter of the document. The trial court did not clearly
err in making this determination. MCR 2.613(C).
Having determined that defendant drafted the contract, the trial court properly gave the
jury the disputed contra proferentem instruction. It is true that the rule of contra proferentem is
to serve as a last resort, to be applied only after all other means of discerning the parties’ intent
have been exhausted. Klapp, supra at 471. However, the letters and other extrinsic evidence
admitted in this case were largely unhelpful, merely reiterating the contract’s actual language and
providing no additional clues regarding the parties’ likely intentions. Faced with the duty of
determining the intent of the parties, but given little else on which to base its decision, the jury
was properly instructed on the rule of contra proferentem. Id. The trial court did not abuse its
discretion in determining that the contra proferentem instruction was applicable in this case.
Klinke, supra at 515.
V. Admissibility of Evidence Concerning Landfill Expansion
Defendant next argues that the trial court erred in allowing plaintiffs to argue that the
breach of contract was, at least in part, motivated by expansion of the landfill. Defendant asserts
that this information was irrelevant, misleading, confusing, and unfairly prejudicial. We
disagree.
A. Standard of Review
We review a trial court’s decision to admit or exclude evidence for an abuse of discretion.
Craig v Oakwood Hospital, 471 Mich 67, 76; 684 NW2d 296 (2004). An error in the admission
8
Further, as found by the Third Horizon Group panel, there were contextual clues concerning
the parties’ intent in that case. It was thus necessary for the factfinder to rely on these textual
clues before resorting to the principle of contra proferentem, which is a rule of last resort.
Specifically, the Third Horizon Group panel found that only one interpretation of the disputed
language in that case would have fully effectuated the parties’ intent without rendering any of the
language surplusage. We note that because no such textually based evidence of intent was
present in the instant case, the jury was properly permitted to employ the rule of contra
proferentem.
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or exclusion of evidence will not warrant reversal unless it appears inconsistent with substantial
justice or affects a substantial right of the opposing party. Id. Preliminary issues of law
regarding admissibility, including the proper application of the rules of evidence, are reviewed
de novo. Waknin v Chamberlain, 467 Mich 329, 332; 653 NW2d 176 (2002).
B. Evidence of Landfill Expansion
Generally, all relevant evidence is admissible. MRE 402; Wayne Co v State Tax Comm,
261 Mich App 174, 196; 682 NW2d 100 (2004). Evidence is relevant if it has any tendency to
make the existence of a fact that is of consequence to the action more probable or less probable
than it would be without the evidence. MRE 401; Dep’t of Transportation v VanElslander, 460
Mich 127, 129; 594 NW2d 841 (1999). Under this broad definition, evidence is admissible if
explains an issue at trial. The trial court may exclude relevant evidence “if its probative value is
substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading
the jury.” MRE 403. However, “[e]vidence is not inadmissible simply because it is prejudicial.
Clearly, in every case, each party attempts to introduce evidence that causes prejudice to the
other party.” Waknin, supra at 334.
Defendant argues that evidence of the landfill expansion was irrelevant. However,
plaintiffs presented evidence that the landfill expansion provided defendant more options with
respect to trash disposal. Specifically, plaintiffs suggested that the expansion gave defendant the
option of simply dumping more waste into its landfill instead of first grinding it to conserve
space. Thus, evidence of landfill expansion was relevant to defendant’s possible motivations for
failing to send all of its grindable waste to plaintiff. In addition, defendant presented evidence
that defendant was actively diverting some of its grindable waste from plaintiff. Thus, the
evidence concerning landfill expansion was also relevant insofar as it tended to make plaintiffs’
argument more probable. Contrary to defendant’s position, the evidence concerning landfill
expansion was relevant. MRE 401.
Defendant also asserts that the evidence of landfill expansion was misleading, confusing,
and unfairly prejudicial. However, defendant provides no substantive argument with respect to
these issues, and cites no legal authority in support of its position. An appellant may not merely
announce its position and leave it to this Court to discover and rationalize the basis for its claims.
Ambs v Kalamazoo County Road Comm, 255 Mich App 637, 650; 662 NW2d 424 (2003). Nor
may he give issues cursory treatment with little or no citation of supporting authority. Silver
Creek Twp v Corso, 246 Mich App 94, 99; 631 NW2d 346 (2001). Defendant’s failure to
properly address the merits of these additional arguments constitutes an abandonment of the
issues on appeal. Yee v Shiawassee County Bd of Comm’rs, 251 Mich App 379, 406; 651 NW2d
756 (2002).
VI. Admissibility of Documents
Defendant argues that certain documents, which were allegedly prepared in anticipation
of litigation, were improperly admitted at trial. Specifically, defendant challenges the admission
of a July 2001 letter written by its finance director, and a January 2002 letter written by its
attorney. Again, we disagree with defendant’s argument.
A. Standard of Review
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As noted, a trial court’s decision to admit or exclude evidence is reviewed for an abuse of
discretion. Craig, supra at 76. An error in the admission or exclusion of evidence will not
warrant reversal unless it appears inconsistent with substantial justice or affects a substantial
right of the opposing party. Id. Preliminary issues of law are also reviewed de novo. Waknin,
supra at 332. Whether the attorney-client privilege applies to a communication is a question of
law that we review de novo. Leibel v General Motors Corp, 250 Mich App 229, 236; 646 NW2d
179 (2002). The question of what constitutes a waiver of the attorney-client privilege is also a
question of law that we review de novo. Id. at 240.
B. Evidence of the Parties’ Intent
Defendant first suggests that the letters were improperly admitted for use in establishing
the existence of an ambiguity in the contract. However, the letters were not admitted to prove
the existence of an ambiguity. Rather, they were admitted to help ascertain the parties’ intent in
the event an ambiguity existed. When a contract is ambiguous, the parol evidence rule does not
preclude use of parol or extrinsic evidence to aid in interpretation or construction of the written
agreement. Klapp, supra at 470. “Such evidence is admitted not to add or detract from the
writing, but merely to ascertain what the meaning of the parties is.” Id. Having concluded that
the contract was ambiguous, the jury properly considered the extrinsic evidence to determine the
parties’ intent. The court properly admitted the extrinsic evidence for the purpose of ascertaining
the intent of the parties. Id.
C. Attorney-Client Privilege
Defendant next argues that the July 2001 letter, prepared in anticipation of upcoming
litigation, was privileged. The attorney-client privilege attaches to direct communication
between a client and his attorney as well as communications made through their respective
agents. Reed Dairy Farm v Consumers Powers Co, 227 Mich App 614, 618; 576 NW2d 709
(1998). The scope of the attorney-client privilege is narrow, attaching only to confidential
communications by the client to his or her advisor that are made for the purpose of obtaining
legal advice. Id. at 618-619. Confidential client communications, along with opinions,
conclusions, and recommendations based on those communications, are protected by the
attorney-client privilege because they are at the core of what is covered by the privilege.
McCartney v Attorney General, 231 Mich App 722, 735; 587 NW2d 824 (1998).
The July 2001 letter and attachments were marked “privileged and confidential.” The
documents were prepared by defendant’s financial director at the direction of defendant’s
attorney. Both individuals were clearly agents of defendant. Moreover, the information
contained in the letter and attachments was generated for use in potential upcoming litigation
against RLI. The documents were clearly the type to which the attorney-client privilege
generally attaches.
However, plaintiffs argue that defendant waived the attorney-client privilege with respect
to the July 2001 documents by voluntarily disclosing them to RLI. As noted, the question of
what constitutes a waiver is a question of law. Leibel, supra at 240. There is no dispute that the
challenged information was voluntarily given to RLI. “Once otherwise privileged information is
disclosed to a third party by the person who holds the privilege, or if an otherwise confidential
communication is necessarily intended to be disclosed to a third party, the privilege disappears.”
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Oakland Co Prosecutor v Dep’t of Corrections, 222 Mich App 654, 658; 564 NW2d 922 (1997);
see also In re Ford Estate, 206 Mich App 705, 708-709; 522 NW2d 729 (1994). The evidence
showed that defendant voluntarily disclosed the essential contents of the July 2001 documents to
either RLI or to plaintiffs’ counsel during the course of certain depositions. Defendant waived
the privilege when the information contained in the July 2001 documents was intentionally
provided to a third party. The trial court properly concluded that defendant had voluntarily
waived the attorney-client privilege with regard to this material.
D. MRE 408
Defendant argues that the January 2002 letter should have been protected by MRE 408 as
part of an offer to compromise the third-party claim against RLI. MRE 408 provides:
Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or
offering or promising to accept, a valuable consideration in compromising or
attempting to compromise a claim which was disputed as to either validity or
amount, is not admissible to prove liability for or invalidity of the claim or its
amount. Evidence of conduct or statements made in compromise negotiations is
likewise not admissible. This rule does not require the exclusion of any evidence
otherwise discoverable merely because it is presented in the course of
compromise negotiations. This rule also does not require exclusion when the
evidence is offered for another purpose, such as proving bias or prejudice of a
witness, negativing a contention of undue delay, or proving an effort to obstruct a
criminal investigation or prosecution.
The January 2002 letter, which was written before the third-party suit against RLI was even
filed, did not offer or promise to offer any valuable consideration in exchange for compromising
any disputed claim. Nor did the letter accept or promise to accept valuable consideration in
exchange for settling any claim. Indeed, there is no indication that the letter was written in an
attempt to dispose of any claim whatsoever. Rather, the letter merely sought to explain to RLI
the possible reasons for plaintiffs’ alleged breach of the waste-grinding contract. It was not an
offer to settle or compromise. The trial court did not abuse its discretion in declining to exclude
the January 2002 material pursuant to MRE 408.
E. Relevance of the Documents
Defendant also argues that the July 2001 and January 2002 documents should not have
been admitted because they contained mere projections, without factual support. Further, one of
defendant’s employees testified that the figures may not have been accurate, and all of the waste
contemplated by the figures may not have been grindable. Thus, defendant contends that the
contents of the documents were irrelevant to the instant lawsuit.
Notwithstanding defendant’s assertions, the estimated figures contained in the documents
were relevant to the instant litigation. Evidence is relevant if it has any tendency to make the
existence of a fact that is of consequence to the action more probable or less probable than it
would be without the evidence. MRE 401; VanElslander, supra at 129. Plaintiffs argued in part
that the contract required defendant to send all acceptable waste material, and the figures
represented defendant’s own estimates of the actual amount of available grindable waste.
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Therefore, the figures contained in the documents were relevant to plaintiffs’ argument that
defendant was not sending all of its acceptable waste to be ground. Because the documents
tended to make plaintiffs’ arguments more probable than they would have been in the absence of
the projected figures, the documents were relevant. MRE 401. We note that the trial court
regulated the testimony with regard to the documents in order to limit any unfair prejudice that
may have otherwise resulted. It therefore cannot be said that the documents’ probative value was
substantially outweighed by the potential for unfair prejudice. See MRE 403. The trial court did
not abuse its discretion by admitting for limited purposes the projected evidence of grindablewaste amounts.
VII. Damages
Defendant argues that the trial court improperly denied its request to reduce the judgment
to reflect plaintiffs’ failure to mitigate damages. We disagree.
A. Standard of Review
We review a trial court’s decision regarding remittitur for an abuse of discretion. Grace v
Grace, 253 Mich App 357, 367; 655 NW2d 595 (2002); see also MCL 600.6098(4). An abuse
of discretion exists when an unprejudiced person, considering the facts on which the trial court
made its decision, would conclude that there was no justification for the ruling made. Diamond v
Witherspoon, 265 Mich App 673, 693; 696 NW2d 770 (2005). When reviewing a trial court’s
decision regarding remittitur, we view the evidence in the light most favorable to the nonmoving
party. Id. The trial court is in the best position to evaluate the credibility of the witnesses and to
make an informed decision regarding the correctness of the jury award; we therefore give
deference to the trial court’s ruling. Phillips v Deihm, 213 Mich App 389, 404; 541 NW2d 566
(1995).
B. Mitigation
Defendant challenges the amount of the jury award by contending that plaintiffs did not
mitigate their damages. Defendant had the burden of proving that plaintiffs failed to mitigate
their damages. See Morris v Clawson Tank Co, 459 Mich 256, 266; 587 NW2d 253 (1998). The
testimony indicated that plaintiffs’ grinding operation could not continue to operate profitably,
and that Fusco therefore sold it in an effort to mitigate plaintiffs’ losses. The evidence showed
that certain equipment had already been sold in an effort to mitigate damages as well. Defendant
did not counter this evidence with any significant proof of a failure to mitigate. Defendant did
not meet its burden of proving that plaintiffs failed to mitigate their damages.
C. Speculative Damages
Defendant also contends that the amount of damages awarded was improper because the
damages were merely speculative. In Hofmann v Auto Club Ins Ass'n, 211 Mich App 55, 108;
535 NW2d 529 (1995), this Court stated:
A party asserting a claim has the burden of proving its damages with reasonable
certainty. S C Gray, Inc v Ford Motor Co, 92 Mich App 789, 801; 286 NW2d 34
(1979). Although damages based on speculation or conjecture are not
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recoverable, Sutter v Biggs, 377 Mich 80, 86; 139 NW2d 684 (1966), damages are
not speculative merely because they cannot be ascertained with mathematical
precision. Godwin v Ace Iron & Metal Co, 376 Mich 360, 368; 137 NW2d 151
(1965). It is sufficient if a reasonable basis for computation exists, although the
result be only approximate. McCullagh v Goodyear Tire & Rubber Co, 342 Mich
244, 255; 69 NW2d 731 (1955). Moreover, the certainty requirement is relaxed
where the fact of damages has been established and the only question to be
decided is the amount of damages. Bonelli v Volkswagen of America, Inc, 166
Mich App 483, 511; 421 NW2d 213 (1988).
Defendant’s calculations, which were used in determining damages, had been derived using
actual data regarding the tonnage of available, grindable waste. Regardless of what defendant
now contends, the documents provided what defendant believed at the time to be “tonnage that
was targeted to be ground by [plaintiff].” Although these figures may have been approximations,
they were reasonably calculated by defendant on the basis of actual data. See Hofmann, supra at
108, quoting McCullagh, supra at 255. Because there was a reasonable basis for calculating the
damages in this case, there exists no basis to disturb the jury’s award. The trial court did not
abuse its discretion in denying defendant’s motion for remittitur. Grace, supra at 367.
VIII. Cumulative Error
Finally, defendant argues that the trial was infected by cumulative error. We disagree.
For cumulative error to mandate reversal, consequential errors must result in substantial
prejudice that denied the aggrieved party a fair trial. Lewis, supra at 200. “[A]ctual errors must
combine to cause substantial prejudice to the aggrieved party so that failing to reverse would
deny the party substantial justice.” Id. at 201. In light of our conclusions above, we find no
prejudicial cumulative error in this case.
Affirmed.
/s/ Jessica R. Cooper
/s/ Kathleen Jansen
/s/ Jane E. Markey
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