ARCHIE A VAN ELSLANDER V THOMAS SEBOLD & ASSOC INC
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STATE OF MICHIGAN
COURT OF APPEALS
ARCHIE A. VAN ELSLANDER,
UNPUBLISHED
December 2, 2008
Plaintiff-Appellant,
v
THOMAS SEBOLD & ASSOCIATES, INC.,
DANIEL S. FOLLIS and MARY ELIZABETH
FOLLIS,
No. 272396
Oakland Circuit Court
LC No. 2003-051583-CZ
Defendants-Appellees,
and
HOME INSPECTORS NORTH, INC., and
LINCOLN WOOD PRODUCTS, INC.,
Defendants.
ARCHIE A. VAN ELSLANDER,
Plaintiff-Appellee/Cross-Appellant,
v
No. 274966
Oakland Circuit Court
LC No. 2003-051583-CZ
THOMAS SEBOLD & ASSOCIATES, INC.,
Defendant-Appellee,
and
DANIEL S. FOLLIS and MARY ELIZABETH
FOLLIS,
Defendants-Appellants/CrossAppellees,
and
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HOME INSPECTORS NORTH, INC., and
LINCOLN WOOD PRODUCTS, INC.,
Defendants.
Before: Schuette, P.J., and Borrello and Gleicher, JJ.
PER CURIAM.
These consolidated appeals involve breach of contract, breach of warranty, and
negligence claims related to the purchase and performance of repairs to a residence in Emmett
County, “Unit No. 6, The Shores in Bay Harbor, Michigan.” In Docket No. 272396, plaintiff
appeals as of right, challenging several Oakland Circuit Court orders that ultimately dismissed all
counts of plaintiff’s complaint against defendant Thomas Sebold & Associates, Inc. (TSA).
Plaintiff also challenges a circuit court order awarding TSA case evaluation sanctions.
In Docket No. 274966, after a jury trial, defendants Daniel S. Follis and Mary Elizabeth
Follis appeal as of right from a circuit court order entering judgment in plaintiff’s favor in the
amount of $706,465.30. The judgment effectuated the jury’s finding that the Follises breached a
contract with plaintiff. Plaintiff cross-appeals, raising various grounds in support of the
judgment.
In Docket No. 272396, we affirm the circuit court’s orders granting summary disposition
in favor of TSA, and its order granting TSA case evaluation sanctions. In Docket No. 274966,
we reverse and remand.
I. Introduction
Unit 6 is a six-bedroom, approximately 9,000-square-foot home on the shore of Lake
Michigan, in Bay Harbor. The Follises contracted with TSA to construct Unit 6, most of which
occurred in 1996 and 1997, as a vacation residence and potential retirement home. In 1998,
plaintiff purchased Unit 6 from the Follises for $3 million. In July 2002, powerful storms swept
across Lake Michigan, and a tremendous quantity of water entered Unit 6. Plaintiff subsequently
discovered that the home had extensive water damage and widespread mold. Significant
portions of the home ultimately were removed and rebuilt, at great expense, and this lawsuit
followed.
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II. The Complaint
Plaintiff commenced this action on August 1, 2003, by filing a complaint against TSA,
the Follises, who are husband and wife, and Home Inspectors North, Inc. (HIN).1 On October
10, 2003, plaintiff filed a substantially similar first amended complaint that added two counts
against defendant Lincoln Wood Products, Inc., which manufactured the doors and windows
installed in Unit 6.2 The first amended complaint recounted that on August 14, 1998, plaintiff
entered an agreement to pay the Follises $3 million to purchase Unit 6. Count I of the first
amended complaint averred that TSA breached its contractual duty to the Follises to construct
Unit 6 in conformity with “architectural plans and specifications, applicable codes and other
regulations and industry practice,” and that plaintiff, “as a subsequent owner of” Unit 6, qualified
as “an intended third-party beneficiary” of TSA’s contractual guarantees. According to Count I,
TSA or its subcontractors breached its warranty by utilizing “methods or materials” that rendered
the work defective. Plaintiff identified 12 specific defects, including, by way of illustration,
failures to (1) “install appropriate flashing and weep holes in the masonry walls on the exterior of
the Residence”; (2) “properly install appropriate waterproofing behind the masonry walls, around
windows and under thresholds”; and (3) “construct the exterior masonry wall with the proper and
required air space between the masonry wall and the sheathing.” The complaint further alleged
that TSA “[i]mproperly installed most, if not all, of the windows,” “[i]mproperly damp proofed
masonry below grade,” and “[i]mproperly installed and flashed the roof and chimneys.”
Count III set forth a separate breach of contract claim against TSA, asserting that in 1998
TSA had “agreed to repair those items set forth on [a] Schedule executed by Mr. Follis and Mr.
Van Elslander at closing,” that plaintiff “was an intended and/or foreseeable third party
beneficiary to” this agreement, and that TSA’s inadequate repairs proximately caused plaintiff to
“expend . . . considerable sums of money to repair the construction defects . . . and to repair or
replace damaged items . . . .” Lastly regarding TSA, Count II alleged that TSA committed
negligence arising from (1) its unreasonably poor original construction of Unit 6, and (2) its
inadequate correction of defects that it undertook to repair (a) around the time of the closing in
1998, and (b) after Unit 6 endured storm damage in July 2002.
Count VI3 maintained that the Follises breached their agreement with plaintiff to “utilize .
. . $25,000 placed in escrow, and additional money if necessary, to repair the items set forth on
the Schedule attached” to the purchase agreement. Count VII alleged that the Follises engaged
in silent fraud because they “knew of many of the defective and adverse conditions prevailing at”
Unit 6, but failed to disclose them to plaintiff either “in the written Seller’s Disclosure Statement
[or] at the time their agent provided responses to specific questions posed by [plaintiff’s]
representative [after] reviewing” HIN’s inspection report.
1
The parties later acknowledged that HIN’s correct name was Home Inspections North, Inc.
2
Both HIN and Lincoln Wood Products were dismissed from the case before trial, and neither
party raises issues in these appeals.
3
Counts IV and V involved defendant HIN.
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Counts VIII and IX concerned defendant Lincoln, and alleged defects in the home’s
windows and doors. These defects allegedly required plaintiff to replace the doors and windows,
and to “expend[] considerable sums of money to repair or replace damage to the Residence
and/or personal property damaged as a result of the defective windows.”
III. Summary Disposition-Related Issues in Docket No. 272396
During the more than two years of pretrial proceedings, TSA filed several motions for
summary disposition of plaintiff’s breach of contract, breach of warranty, and negligence claims.
A. Standards of Review
This Court reviews de novo a circuit court’s summary disposition ruling. Kisiel v Holz,
272 Mich App 168, 170; 725 NW2d 67 (2006). TSA sought summary disposition of plaintiff’s
third-party beneficiary and breach of warranty claims pursuant to MCR 2.116(C)(7) (period of
limitation) and (8).4 “A motion for summary disposition under MCR 2.116(C)(8) tests the legal
sufficiency of the complaint. The motion should be granted only if the claims are so clearly
unenforceable as a matter of law that no factual development could justify recovery.” Kisiel,
supra at 170. “Only the pleadings may be considered when the motion is based on subrule
(C)(8) . . . .” MCR 2.116(G)(5).
In this case, however, both TSA and plaintiff supplied documentary evidence in support
of their respective positions, and in granting summary disposition the circuit court plainly
considered evidence beyond the pleadings. Although the circuit court “did not specify the basis
for its ruling, [the court] apparently denied [TSA’s] motion pursuant to MCR 2.116(C)(10),
which tests the factual support of a plaintiff’s claim.” Walsh v Taylor, 263 Mich App 618, 621;
689 NW2d 506 (2004). “In reviewing a motion under MCR 2.116(C)(10), this Court considers
the pleadings, admissions, affidavits, and other relevant documentary evidence of record in the
light most favorable to the nonmoving party to determine whether any genuine issue of material
fact exists to warrant a trial.” Id.5
To the extent that the circuit court’s summary disposition ruling involved issues of
statutory construction and contract interpretation, this Court also considers these questions de
novo. Schmalfeldt v North Pointe Ins Co, 469 Mich 422, 426; 670 NW2d 651 (2003); Rakestraw
v Gen Dynamics Land Systems, Inc, 469 Mich 220, 224; 666 NW2d 199 (2003).
4
We do not address subrule (C)(7) because the circuit court rejected this ground, and the parties
do not raise on appeal any challenge to court’s period of limitation reasoning.
5
“A trial court is not necessarily constrained by the subrule under which a party moves for
summary disposition. It is well-settled that, where a party brings a motion for summary
disposition under the wrong subrule, a trial court may proceed under the appropriate subrule if
neither party is misled.” Computer Network, Inc v AM Gen Corp, 265 Mich App 309, 312; 696
NW2d 49 (2005). Here, the circuit court’s apparent ruling pursuant to subrule (C)(10) misled
neither party, given that both TSA and plaintiff appended documentary evidence to their
summary disposition briefs.
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In interpreting a statute, our obligation is to discern the legislative intent
that may reasonably be inferred from the words actually used in the statute. A
bedrock principle of statutory construction is that a clear and unambiguous statute
leaves no room for judicial construction or interpretation. When the statutory
language is unambiguous, the proper role of the judiciary is to simply apply the
terms of the statute to the facts of a particular case. [Rakestraw, supra at 224
(citations and internal quotation omitted).]
Similar principles guide this Court’s interpretation of contract language.
Under ordinary contract principles, if contractual language is clear,
construction of the contract is a question of law for the court. If the contract is
subject to two reasonable interpretations, factual development is necessary to
determine the intent of the parties and summary disposition is therefore
inappropriate. If the contract, although inartfully worded or clumsily arranged,
fairly admits of but one interpretation, it is not ambiguous. The language of a
contract should be given its ordinary and plain meaning. [Meagher v Wayne State
Univ, 222 Mich App 700, 721-722; 565 NW2d 401 (1997).]
B. Plaintiff’s Breach of Contract & Breach of Warranty Claims Against TSA
1. Plaintiff’s Third-Party Beneficiary Claim Arising from 1996 Construction Contract
In TSA’s first motion for summary disposition, it contended that as a matter of law under
MCL 600.1405, plaintiff did not qualify as a third-party beneficiary of the March 6, 1996
construction agreement between TSA and the Follises. Plaintiff responded that he did constitute
a third-party beneficiary of the March 1996 agreement because the contract objectively applied
to every “Owner” of the home, a class to which he belonged. The circuit court granted TSA’s
partial motion, explaining in relevant part as follows:
In this case, the [construction] contract clearly provides that it does not
create a contractual relationship of any kind between anyone, other than the
owners, Follis and the contractor TSA.
[Plaintiff] argues that the reference to owners creates a class of individuals
of which he is a member. However, the owners are described or designated as
Mr. and Mrs. Daniel Follis. The agreement does not describe or designate
subsequent owners as owner. . . .
In MCL 600.1405, the Legislature has defined, in relevant part as follows, who may
claim third-party beneficiary status with respect to an agreement entered by other parties:
Any person for whose benefit a promise is made by way of contract, as
hereinafter defined, has the same right to enforce said promise that he would have
had if the said promise had been made directly to him as the promisee.
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(1)
A promise shall be construed to have been made for the benefit of
a person whenever the promisor of said promise has undertaken to give or to do or
refrain from doing something directly to or for said person.
(2) (a) The rights of a person for whose benefit a promise has been made,
as defined in (1), shall be deemed to have become vested, subject always to such
express or implied conditions, limitations, or infirmities of the contract to which
the rights of the promisee or the promise are subject, without any act or
knowledge on his part, the moment the promise becomes legally binding on the
promisor, unless there is some stipulation, agreement or understanding in the
contract to the contrary.
(b)
If such person is not in being or ascertainable at the time the
promise becomes legally binding on the promisor then his rights shall become
vested the moment he comes into being or becomes ascertainable if the promise
has not been discharged by agreement between the promisor and the promisee in
the meantime. . . .
The Michigan Supreme Court has summarized that “the plain language of this statute reflects
that not every person incidentally benefited by a contractual promise has a right to sue for breach
of that promise, but rather only if the promisor has ‘undertaken to give or to do or refrain from
doing something directly to or for said person.” Brunsell v City of Zeeland, 467 Mich 293, 296;
651 NW2d 388 (2002) (emphasis in original). “By using the modifier ‘directly,’ the Legislature
intended ‘to assure that contracting parties are clearly aware that the scope of their contractual
undertakings encompasses a third party, directly referred to in the contract, before the third party
is able to enforce the contract.’”6 Schmalfeldt, supra at 428, quoting Koenig v South Haven, 460
Mich 667, 677; 597 NW2d 99 (1999).
On several occasions, the Michigan Supreme Court has explained the interplay between
the limited category of directly identified third-party beneficiaries described in MCL
600.1405(1), and the broader category of potential beneficiaries enumerated in subsection (2)(b),
on which plaintiff relies in this case.
Subsection 1405(2)(b)’s recognition that a contract may create a class of
third-party beneficiaries that includes a person not yet in being or ascertainable
6
As this Court recently summarized,
Only intended, rather than incidental, third-party beneficiaries may sue
when a contractual promise in their favor has been breached. More specifically,
an incidental beneficiary has no rights under a contract. A third person cannot
maintain an action on a simple contract merely because he or she would receive a
benefit from its performance or would be injured by its breach. . . . [Kisiel, supra
at 170-171.]
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precludes an overly restrictive construction of subsection 1405(1). That is, it
precludes a construction that would require precision that is impossible in some
circumstances, such as would be the case if there were a requirement in all cases
that a third-party beneficiary be referenced by proper name in the contract. This
is simply to say that the Legislature, in drafting these two provisions, apparently
wanted to strike a balance between an impossible level of specificity and no
specificity at all. This means that there must be limits on the use of subsection
1405(2)(b) to broaden the interpretation of subsection 1405(1) because otherwise
the result is to remove all meaning from the Legislature’s use of the modifier
“directly.” [Brunsell, supra at 296, quoting Koenig, supra at 677.]
In determining whether MCL 600.1405 applies to a purported third-party beneficiary, “a court
should look no further than the form and meaning of the contract itself,” and should view the
contract objectively. Schmalfeldt, supra at 428 (internal quotation omitted).
After reviewing the language employed in the March 6, 1996 construction contract
between TSA and the Follises in light of the governing legal principles, we have located no
support for plaintiff’s contention that he qualifies as a third-party beneficiary of this agreement.
The front page of the agreement lists the parties as follows:
BETWEEN the Owner:
Mr. and Mrs. Daniel S. Follis
(Name and address)
72 Touraine Rd
Grosse Pointe Farms MI 48236
and the Contractor:
Thomas Sebold & Associates, Inc.
(Name and address)
950 N. Hunter Blvd.
Suite 3
Bloomfield Hills MI 48304
The contract nowhere contains any reference whatsoever to plaintiff or anyone acting on his
behalf.
Plaintiff does not dispute that the 1996 construction contract fails to address or refer to
him specifically, but instead contends that consistent with MCL 600.1405(2)(b) the contract
creates a class of third-party beneficiaries of TSA’s promises, specifically the current and future
owners of Unit 6, to which he belongs. But we find unpersuasive plaintiff’s suggestion that TSA
made promises to future owners of Unit 6 because (1) the contract consistently refers throughout
to the singular term “the Owner,” which the agreement specifically identifies as “Mr. and Mrs.
Daniel S. Follis,” nowhere making reference to a plural group of potential contract beneficiaries,
and (2) the plain language of the construction contract expressly restricts the scope of the
relationships and obligations formed by the agreement:
12.2 The Contract Documents shall not be construed to create a
contractual relationship of any kind (1) between the Architect and Contractor, (2)
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between the Owner and a Subcontractor or (3) between any persons or entities
other than the Owner and Contractor. [Emphasis added.]
Because the construction contract nowhere provides or suggests that either plaintiff or a class of
subsequent homeowners should receive the benefit of TSA’s promises, we conclude that “[a]t
best, plaintiff is an incidental beneficiary of the . . . contract,” who has no rights thereunder.
Kammer Asphalt Paving Co, Inc v East China Twp Schools, 443 Mich 176, 190; 504 NW2d 635
(1993).
Consequently, pursuant to MCR 2.116(C)(10), the circuit court correctly granted TSA
summary disposition of plaintiff’s breach of contract claim in Count III arising from the 1996
construction contract between TSA and the Follises.
2. Plaintiff’s Third-Party Beneficiary Claim Arising from Repairs of 1998 Escrow List Items
Remaining in Count III of the first amended complaint, but moving beyond the 1996
construction agreement, plaintiff also asserted with respect to his breach of contract claim that in
early September 1998, the time of the closing on the Follises’ sale of Unit 6 to plaintiff, he and
TSA entered a separate agreement to repair items identified on an escrow list. The circuit court
rejected plaintiff’s claim pursuant to the following logic:
As to Plaintiff’s assertion that he entered into a separate contract with
TSA, the only evidence in support of this argument is reference to interrogatory
no. 9. In the response to that interrogatory, TSA refers to the escrow agreement.
The escrow agreement was between the Follises and [plaintiff]. Any work that
TSA did in that regard was based upon contractual obligations to the Follises. . . .
Plaintiff has not identified a separate contract between him and TSA.
Our review of the record reveals that the agreement to repair 16 items of concern came
into existence on September 3, 1998, when plaintiff and David Follis signed an escrow
agreement and a two-page “Schedule” identifying the items requiring attention. Neither TSA nor
any agent of TSA signed the schedule, and the schedule makes no reference whatsoever to TSA.
Because the record is devoid of any evidence that plaintiff and TSA entered an agreement in
September 1998, the circuit court correctly dismissed plaintiff’s claim that TSA owed him a
direct contractual obligation to repair the 16 escrow list items.
Plaintiff further insists in his brief on appeal that he at least qualifies as a third-party
beneficiary of the “separate agreement ‘Contract 2’ which TSA made at the time [plaintiff]
purchased the home to repair the items on the escrow Schedule executed at the closing . . . .”
Plaintiff’s argument confuses the question, however, because the evidence presented, in support
of and opposition to TSA’s motion for summary disposition of plaintiff’s breach of contract
claims, fails to substantiate that when plaintiff purchased Unit 6 in 1998, TSA and the Follises
entered a new, distinct contract to repair the escrow schedule items.
TSA became involved in repairing the items appearing on the schedule at the request of
the Follises. Daniel Sebold, TSA’s president, recalled during his deposition that “the Follises
requested that I take care of” “some items . . . for the closing on their home.” In an affidavit,
Sebold averred that he “represented to the Follises on behalf of TSA that TSA would repair or
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cause to be repaired those items on the inspection summary that require repair.”7 In additional
deposition testimony, Daniel Follis expressed his understanding that Sebold had agreed to make
the necessary escrow repairs “based on some warranty.” Mary Follis offered similar deposition
testimony, recalling her belief that Sebold had agreed to remedy “a list of [minor] things”
“because our house was under warranty with” TSA. The Follises both denied ever suggesting to
plaintiff that he would have any benefits or rights under the TSA warranty.
Plaintiff hinges his third-party beneficiary claim primarily on isolated statements in the
depositions of Daniel Follis and Sebold. When questioned whether he took any measures to
facilitate the ultimate release of the $25,000 held in escrow pending the listed repairs, Daniel
Follis replied, “No, other than talking to Dan Sebold about getting things taken care of to the
satisfaction of Van Elslander.” Sebold testified that he understood “that each of those [escrow]
items was being addressed for the benefit of Mr. Van Elslander.” Plaintiff additionally refers
this Court to the first interrogatories he directed to TSA, “Number 9” of which urged, “Identify
and produce all documents which refer, relate to or concern any repair or alterations made by
TSA to the Residence from the date the Certificate of occupancy was issued through the present .
. . .”; TSA responded, “Attached is correspondence from Debbie Van Elslander to Dan Sebold
dated March 3, 1999 which lists a number of items to be completed for escrow release.
Although defendant cannot now reconstruct precisely what was done in response to various
requests, all issues were attended to.”
The relevant deposition testimony and other evidence agrees that TSA undertook minor
repairs comprising the escrow agreement list on behalf of the Follises pursuant to a warranty that
TSA supplied the Follises concerning the original construction of Unit 6. The warranty
purportedly derived from the original construction contract, to which plaintiff was neither a party
nor a third-party beneficiary. TSA’s repairs pursuant to the warranty primarily benefited the
Follises by facilitating their sale of Unit 6 to plaintiff. And irrespective whether TSA performed
home repairs pursuant to a warranty related to the original construction of Unit 6, or a second
and distinct agreement with the Follises, the record simply reveals no reference to plaintiff in the
terms of either type of agreement. Schmalfeldt, supra at 427-428. The deposition testimony of
Sebold and Daniel Follis referencing plaintiff reflects that he would derive some enjoyment from
TSA’s escrow agreement repairs, but plaintiff at most qualifies as an incidental beneficiary of
TSA’s undertaking of repairs pursuant to its agreement with the Follises. Kammer Asphalt,
supra at 190; Kisiel, supra at 170-171.
In summary, even viewing the record in the light most favorable to plaintiff, he has
produced no objective evidence tending to substantiate (1) any specific agreement between
plaintiff and TSA, with respect to the escrow agreement items or otherwise, or (2) that he
qualified as a third-party beneficiary of any agreement between TSA and the Follises. Under
subrule (C)(10), the circuit court correctly granted TSA summary disposition of these claims.
7
Sebold testified that he instructed construction supervisor Randy Moyer to address the escrow
list items, and that Moyer reportedly did so.
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3. Plaintiff’s Warranty Claims Arising from 1996 Construction Contract
In its initial motion for summary disposition, TSA further challenged that plaintiff could
benefit from either an express warranty in the original construction agreement, to which plaintiff
was neither a party nor a third-party beneficiary, or an implied warranty, which extended solely
to the original purchaser of a newly constructed residence. The circuit court agreed: “Further,
there being no third-party beneficiary status, any claim for breach of express warranty would
also fail. There’s no express warranty provision in the agreement. An implied warranty for a
residence only applies to the first purchaser of the home.”
Contrary to the first amended complaint’s contention that plaintiff “is an intended third
party beneficiary to the warrant[ies]” made by TSA in the 1996 construction contract (Count I,
¶ 28), for the reasons discussed immediately above plaintiff constituted at most an incidental, not
an intended, third-party beneficiary of the 1996 agreement between TSA and the Follises.
Because plaintiff has no right to any express warranties in the 1996 construction contract, the
circuit court properly granted TSA summary disposition concerning plaintiff’s express warranty
claim pursuant to subrule (C)(10).
Furthermore, to the extent that plaintiff suggests he should benefit from an implied
warranty by TSA concerning newly constructed Unit 6, we find his contention plainly
contradicted by consistent Michigan case law. Plaintiff criticizes and attempts to distinguish
Weeks v Slavick Builders, Inc, 24 Mich App 621; 180 NW2d 503, aff’d 384 Mich 257; 181
NW2d 271 (1970), on which TSA relied in support of the proposition that no implied warranties
extend from a builder to anyone beyond the original owner of a newly constructed home. But
plaintiff ignores that this Court has favorably cited Weeks, in decisions binding pursuant to MCR
7.215(J)(1), as reflected in the following applicable passage:
Plaintiffs next argue that the trial court erred in dismissing their claim of
breach of an implied warranty of fitness and habitability. We disagree. Such
warranties run only to the first purchaser of a home. Weeks[, supra.] Plaintiffs
were not the first purchasers of the house in question. Therefore, summary
disposition of this claim was proper. [McCann v Brody-Built Constr Co, Inc, 197
Mich App 512, 516; 496 NW2d 349 (1992).]8
Plaintiff offers no authority supporting his general assertion that the 1994 enactment of the Seller
Disclosure Act, MCL 565.951 et seq., somehow should affect the above implied warranty of
habitability analysis. Because plaintiff undisputedly did not purchase newly constructed Unit 6
8
More recently, this Court has favorably cited Weeks in concluding “that the implied warranty of
habitability that accompanies the sale of new homes applies only to the sale of new homes by a
builder-vendor as part of a real estate transaction.” Smith v Foerster-Bolser Constr, Inc, 269
Mich App 424, 430-431; 711 NW2d 421 (2006); see also Kisiel, supra at 173 (reaffirming Smith
and holding that “[a] general contractor that agrees to construct a new home on land already
owned by the purchaser is not a builder-vendor”).
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from TSA, we conclude that the circuit court also correctly granted TSA summary disposition of
plaintiff’s implied warranty claim under subrule (C)(10).
C. Plaintiff’s Three Negligence Claims Against TSA
With respect to plaintiff’s negligence claims in first amended complaint Count II, TSA
filed multiple motions for summary disposition. Because the parties submitted documentation
concerning each of TSA’s motions, it appears that the circuit court decided them pursuant to
MCR 2.116(C)(10).
“It is well-established that a prima facie case of negligence requires a plaintiff to prove
four elements: duty, breach of that duty, causation, and damages. The threshold question in a
negligence action is whether the defendant owed a duty to the plaintiff.” Fultz v UnionCommerce Assoc, 470 Mich 460, 463; 683 NW2d 587 (2004). “Whether [a] defendant . . . owed
a duty to [the] plaintiff is a question of law” that an appellate court considers de novo. Id.
In Count II of the first amended complaint, plaintiff raised three distinct allegations of
negligence against TSA. First, that TSA breached a duty to plaintiff “to exercise due care in the
construction of” Unit 6 (¶ 32); complaint ¶ 33 listed 12 nonexclusive manners in which TSA had
breached this first duty. The second and third duties alleged by plaintiff, and their manners of
breach by TSA, appear in the following less-detailed complaint paragraphs:
34. In September 1998 and July 2002, TSA was requested to investigate
certain conditions at the residence and to repair those conditions. TSA had a duty
to Mr. Van Elslander to exercise due care in investigating and repairing these
conditions.
35. TSA breached its duty to Mr. Van Elslander, as set forth in paragraph
No. 34, above, in the following ways, among others:
a. TSA failed to conduct a reasonable and proper investigation of the
conditions identified;
b. TSA failed to report to Mr. Van Elslander the true nature of the
construction defects and other adverse conditions at the Residence; and
c. TSA failed to repair the construction defects and adverse conditions.
1. Plaintiff’s Negligence Claims Arising from 1996 & 1998 Contractual
Obligations to the Follises
The circuit court initially disposed of the first and second negligence subgroups, those
complaining that TSA negligently executed or performed its obligations under the original 1996
construction contract with the Follises, and the repairs it performed for the Follises pursuant to
the 1998 escrow agreement. The circuit court explained as follows:
The original contract for construction between TSA and the Follises
required that the work be performed in the “best way.” TSA made repairs in 1998
as required by the warranty between it and the Follises. With regard to the
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construction of the home and the repairs made in 1998, Plaintiff has failed to
demonstrate how the relationship between TSA and Plaintiff gave rise to a duty
distinct from the contractual duty. The duties alleged by . . . Plaintiff in the First
Amended Complaint relating to the original construction of the home arise from
the contract between TSA and [the] Follis[es], the Complaint does not allege a
separate distinct duty in that regard. Fultz v Union-Commerce Assoc, 470 Mich
460 (2004). However, the Complaint does allege a separate duty relating to the
subsequent repairs performed in 2002. The alleged duty to investigate and repair
did not arise out of the contractual relationship between TSA and Follis. Rather,
TSA assumed this duty with regard to Plaintiff.
Accordingly, the motion is granted with regard to the allegations related to
the original construction and warranty work, however, denied with regard to
subsequent repairs that were not required under the warranty.
In plaintiff’s appellate brief, he maintains that TSA owed him a “common law duty to
exercise due care in constructing the house and in undertaking to investigate and repair certain
adverse conditions at the residence on [plaintiff’s] behalf.” Plaintiff and TSA, in the circuit court
and this Court, focus their arguments on the Michigan Supreme Court’s analysis in Fultz, supra.
In Fultz, the Supreme Court summarized as follows the relationship of the parties:
Plaintiff fell and injured her ankle while walking across defendant Comm
Co’s snow- and ice-covered parking lot. Defendant [Creative Maintenance
Limited] CML had previously entered an oral contract with defendant Comm-Co
to provide snow and salt services for the lot. At the time plaintiff fell, CML had
not plowed the lot in approximately fourteen hours and had not salted the parking
lot. [Id. at 462.]
At the outset of the analysis, the Supreme Court described the nature of the plaintiff’s claim,
which bears similarity to plaintiff’s instant claims against TSA:
Plaintiff does not claim that any statute or ordinance imposes a duty on
CML to maintain the parking lot where she was injured, nor does she claim that
she was a third-party beneficiary of the contract between defendant CML and the
premises owner. She contends instead that defendant CML, by contracting to
plow and salt the parking lot, owed a common law duty to plaintiff to exercise
reasonable care in performing its contractual duties. Plaintiff further alleges that
defendant’s failure to plow or salt the parking lot breached that duty under the
common-law tort principles expressed in Restatement Torts, 2d, § 324A . . . . [Id.
at 463-464 (emphasis added).]
The Supreme Court reviewed some basic negligence principles recognized under Michigan law:
If one voluntarily undertakes to perform an act, having no prior obligation
to do so, a duty may arise to perform the act in a nonnegligent manner. Home Ins
Co v Detroit Fire Extinguisher Co, Inc, 212 Mich App 522, 529; 538 NW2d 424
(1995); Osman [v Summer Green Lawn Care, Inc, 209 Mich App 703; 532 NW2d
186 (1995)] . . . .
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We described this common-law duty in Clark v Dalman, 379 Mich 251;
150 NW2d 755 (1967):
“Actionable negligence presupposes the existence of a legal relationship
between the parties by which the injured party is owed a duty by the other, and
such duty must be imposed by law. . . .
***
“Such duty of care may be a specific duty owing to the plaintiff by the
defendant, or it may be a general one owed by the defendant to the public, of
which the plaintiff is a part. Moreover, while this duty of care, as an essential
element of actionable negligence, arises by operation of law, it may and
frequently does arise out of a contractual relationship, the theory being that
accompanying every contract is a common-law duty to perform with ordinary
care the thing agreed to be done, and that a negligent performance constitutes a
tort as well as a breach of contract.” [Fultz, supra at 465, quoting Clark, supra at
260-261.]
The Supreme Court noted in Fultz that “[i]n defining the contours of this common-law duty, our
courts have drawn a distinction between misfeasance (action) and nonfeasance (inaction) for tort
claims based on a defendant’s contractual obligations.” Id.
The Supreme Court in Fultz rejected “the ‘slippery distinction’ between misfeasance and
nonfeasance,” however, because it “obscures the proper initial inquiry: Whether a particular
defendant owes any duty at all to a particular plaintiff.” Fultz, supra at 467. The Supreme Court
then offered the following analytical guidance for ascertaining whether a duty exists:
Accordingly, the lower courts should analyze tort actions based on a
contract and brought by a plaintiff who is not a party to that contract by using a
“separate and distinct” mode of analysis. Specifically, the threshold question is
whether the defendant owed a duty to the plaintiff that is separate and distinct
from the defendant’s contractual obligations. If no independent duty exists, no
tort action based on a contract will lie.
Applying that analysis here, the Court of Appeals erred in affirming the
jury verdict and in holding that “evidence suggested that (CML) engaged in
misfeasance distinct from any breach of contract.” . . . In truth, plaintiff claims
CML breached its contract with defendant Comm-Co by failing to perform its
contractual duty of plowing or salting the parking lot. She alleges no duty owed
to her independent of the contract. Plaintiff thus fails to satisfy the threshold
requirement of establishing a duty that CML owed to her under the “separate and
distinct” approach set forth in this opinion. [Id. at 467-468 (emphasis added).]
***
To summarize, if defendant fails or refuses to perform a promise, the
action is in contract. If defendant negligently performs a contractual duty or
-13-
breaches a duty arising by implication from the relation of the parties created by
the contract, the action may be either in contract or in tort. In such cases,
however, no tort liability arises for failing to fulfill a promise in the absence of a
duty to act that is separate and distinct from the promise made. [Id. at 469-470.]
We do not contest plaintiff’s argument that a duty of reasonable care may arise from a
building company’s undertaking to construct a residence, specifically a duty to use due care in
constructing the residence. But pursuant to the analysis promulgated in Fultz, allegations that
TSA negligently constructed Unit 6 would constitute both a breach of its construction contract
with the Follises, and a breach of the concomitant duty it owed to the Follises to use reasonable
care in constructing their house. Because only the Follises contracted with TSA to build Unit 6,
TSA’s allegedly negligent performance of the contract would violate the common law duty that
TSA owed exclusively to the Follises to use reasonable care in constructing Unit 6.
Furthermore, plaintiff does not allege any statutory duty that TSA purportedly owed him
in constructing and repairing Unit 6. And plaintiff offers no authority in support of the general
proposition that a home construction company, under contractual obligation with an owner to
build a residence, may owe a common law duty of care to a potential subsequent purchaser of the
home for allegedly negligently performing its contractual duties to the owner. Woods v SLB
Prop Mgt, LLC, 277 Mich App 622, 626-627; 750 NW2d 228 (2008) (observing that a party’s
failure to support an assertion with “citation to an appropriate authority” “constitutes
abandonment of the issue”).
We additionally observe that in Kisiel, supra at 168, this Court applied our Supreme
Court’s holding in Fultz in a manner that tends to undercut plaintiff’s position that TSA owed it a
duty in this case. The plaintiff in Kisiel contracted with Holz Building Company to build a
residence. Id. at 169. Holz subcontracted with GFA Development to excavate and pour
concrete, which subsequently developed cracks. Id. The plaintiff sued GFA for, among other
things, breaching its subcontract with Holz and negligently performing its subcontract. Id. at
169-170. This Court initially rejected the plaintiff’s position that he qualified as a third-party
beneficiary of the subcontract between Holz and GFA. Id. at 170-172. The Court next
considered the viability of the plaintiff’s negligence claim against GFA:
Plaintiff next argues that he has stated a claim for negligence based on
GFA’s alleged failure to perform its duties under the subcontract. We disagree.
The failure to perform a contractual duty cannot give rise to a tort action
unless the plaintiff alleges a violation of a duty “separate and distinct” from the
underlying contractual obligation. This rule applies to a plaintiff who is not a
party to the contract but alleges that a contracting party failed to perform its
obligation under that contract. Fultz [, supra at 469-470.] In this case, plaintiff’s
negligence claim fails as a matter of law because plaintiff does not allege that
GFA owed him a duty “separate and distinct” from the contractual obligation
-14-
owed to Holz. Summary disposition was properly granted on plaintiff’s
negligence claim. [Kisiel, supra at 172-173 (citation omitted).]9
The two cases cited by plaintiff on appeal, in support of his assertion that “Michigan law
recognizes that a building contractor has a common law duty to exercise due care in constructing
a building,” Johnson v A & M Custom Built Homes of West Bloomfield, PC, 261 Mich App 719;
683 NW2d 229 (2004); Baranowski v Strating, 72 Mich App 548; 250 NW2d 744 (1976), were
decided before the Supreme Court decided Fultz, and Baranowski otherwise is distinguishable
from this case on the basis that the contractors in Baranowski, supra at 550, had entered a home
construction contract with the plaintiffs.10
To reiterate, plaintiff had no contractual relationship, as a contracting party or a third
party beneficiary, to TSA concerning the original construction of Unit 6 or the 1998 escrow list
of repairs undertaken by TSA for the Follises. And plaintiff simply has failed to satisfy “the
threshold question . . . whether [TSA] owed a duty to . . . [him] that is separate and distinct from
[TSA’s] contractual obligations.”11 Fultz, supra at 467. Because TSA owed no independent
9
In two brief orders, the Michigan Supreme Court has similarly invoked Fultz in holding against
different plaintiffs who failed to allege the defendants owed them any duty “separate and
distinct” from the defendants’ contractual obligations to third-parties. Mierzejewski v Torre &
Bruglio, Inc, 477 Mich 1087 (2007); Banaszak v Northwest Airlines, Inc, 477 Mich 895 (2006).
10
In Johnson, the plaintiff conservator filed suit on behalf of Daniel Johnson, who had suffered a
construction site injury while employed by Wimsatt Building Materials, a subcontractor at the
construction site. Id. at 720. Johnson “slid off the roof after a toe board installed by another
subcontractor . . . dislodged . . . .” Id. This Court recognized “the general rule of law in
construction site injury cases . . . that only the injured person’s immediate employer—and not
another subcontractor—is responsible for job safety.” Id. at 721. The Court held, however, that
this general rule did not “absolve a subcontractor—or anyone on a construction job—of liability
under the common law theory of active negligence,” explaining that “where a subcontractor
actually performs an act, it has the duty to perform the act in a nonnegligent manner.” Id. at 722.
Johnson has no application here.
11
Plaintiff’s suggestion that TSA admitted it owed an independent duty to him entirely lacks
merit. Plaintiff relies on first amended complaint ¶ 32, which states the following:
As a general contractor for the Residence, TSA owed a duty to Mr. Van
Elslander, as a foreseeable subsequent purchaser of the Residence, to exercise due
care in the construction of the Residence.
Plaintiff also invokes TSA’s answer to first amended complaint ¶ 32, which provides as follows:
Defendant admits the existence of certain duties but neither admits nor
denies the duties asserted or implied in this paragraph, in the manner and form
alleged, same being untrue, and/or plaintiff being left to his proofs. [Emphasis
added.]
(continued…)
-15-
duty to plaintiff, the circuit court properly determined as a matter of law under subrule (C)(10)
that plaintiff could not maintain a tort action against TSA arising from either its original
construction of the home or its escrow list repairs, both of which it undertook pursuant to its
contractual agreement with the Follises alone.
2. Plaintiff’s Negligence Claims Arising after July 2002 Storms
The parties did not dispute that shortly after a severe storm in July 2002 caused
substantial water intrusion into Unit 6, Sebold investigated to some degree potential sources of
water intrusion. While TSA characterized the investigation as very limited, plaintiff insisted that
TSA had agreed to expansively investigate and make recommendations or repairs to prevent
water intrusion into any area of the residence, and that TSA breached its obligation.
Ultimately, the circuit court found that TSA had assumed a limited duty of investigation,
but that plaintiff had failed to present any evidence that TSA breached its agreement.
All right. I have before the Court Thomas Sebold and Associates’ Motion
for Summary Disposition as to the remaining claims against it, negligence arising
from the work performed in ’02.
The Court previously ruled that . . . plaintiff alleged that TSA assumed
certain duties in ’02. The evidence reflects that the duty that TSA assumed was to
look at three specific areas, that being the [F]rench doors, the drain, and the
[window] well.
. . . [P]laintiff has not established that TSA agreed or was asked to do a
more extensive investigation. The evidence does not support a genuine issue of
material fact that TSA breached the duty that it assumed.
The circuit court thus entered a brief order granting TSA’s motion for summary disposition and
dismissing with prejudice plaintiff’s “remaining claims against” TSA, and also denied a
subsequent motion for reconsideration filed by plaintiff.
a. Evidence Regarding TSA’s 2002 Duty
In connection with TSA’s negligence-related summary disposition motions, the parties
presented two written documents specifically referring to TSA’s post-July 2002 water intrusion
investigation. The primary document constituted an August 14, 2002 memorandum prepared by
TSA construction manager Doug Maddelein. The August 14 2002 memorandum, which
Maddelein directed to Jason Kelley, plaintiff’s property manager, identified three primary areas
of concern, providing specifically as follows:
(…continued)
The plain language of TSA’s answer italicized above reflects that TSA expressly denied the
complaint’s allegation that it owed any duty to plaintiff.
-16-
1. Water coming through the French doors:
We water tested two scenarios, the first was with the screen doors open.
Using a hose and sprayer we could not get water to come into the house. There
was enough drainage through the weep holes in the doorsill to allow water to flow
freely off the threshold. With the screen doors closed, the weather seal on the
bottom of the door seals tight to the threshold. This creates a dam and the water
builds up to over 2” deep; then it overflows the wood door threshold and flows
into the house.
We recommend the screens be removed and the glass panels remain
installed on the storm doors.
2. Basement bedroom escape window well:
This was constructed down to the same footing depth as the foundation
wall. There is over 2’ of drain stone and a drain that connects to the footing drain.
The steel grate cover on top used to also have a solid Plexiglas cover to help keep
out the rainwater. The footing drains for the house connect to the storm drain in
the driveway. From this storm drain, there is a 10”-12” diameter pipe going out
to daylight on the beach. The 10”-12” drainpipe is now buried on the beach and
will not drain properly. It has 4” of water in it now. This creates a backup in the
footing drains. During heavy rain, the water flowing off the roofs on the west
side of the house pools in the bushes between the sidewalk and the house and
flows into the escape hatch well, where it cannot drain because the drain tile is
full of water.
Solutions: a) Clean out 10”-12” of beach—daylight the storm drain.
b) Put a lid on the steel grate at the escape hatch.
c) Make sure the water will drain out of the shrub area
before filling up the escape hatch. If it will not flow out fast enough, raise the
wall of the escape hatch 8” or so.
d) Add gutters to this area of the house.
3. Stone chimneys:
Besides the loose and missing shingles needing to be replaced, and the
chimney flashings maintained annually, the stone on the chimneys and the caps
should be sprayed every year or two with a clear sealant made for stone masonry
applications. This can be purchased from Western Concrete or Emmet Brick and
Block.
With the above items complete, this home should stay dry. Please feel
free to call at any time if you have any more concerns or questions.
-17-
The second document was an October 30, 2002 invoice that Concrete Paving Systems gave TSA,
which summarized the basis for the invoice as Concrete Paving Systems’s “[r]epair of iron grate
for rain deflecting. Mortar set bricks, raise grate and water proof. Repair cost $250.00.”
In explanation of the circumstances leading to the August 2002 memorandum’s creation,
TSA supplied portions of Sebold’s deposition testimony. Sebold recalled that in response to a
phone call he received in July 2002 from realtor Wally Kidd advising him “that there was a flood
at the Van Elslander home,” he paid a visit there. Sebold summarized that after “[re]introducing
myself to Mr. and Mrs. Van Elslander,” “[t]hey showed me some of the damage and we talked
for a few minutes and I showed him . . . . how to secure the [French] doors, talked about what
happened, and I . . . may have recommended a company that may be able to help him with
cleaning up the water.” During the 10- to 15-minute visit, Sebold noticed “[a] lot of water,”
“[m]ostly in the living room,” but also in “the garage and basement area[s].”
When Sebold was questioned about “any additional involvement in regards to the . . .
storm damage,” he testified, “I was there a couple times at the request of Jason Kelley. I had
contact with Art Van’s daughter on a couple of occasions. She asked for help and some research
and some direction.” Sebold recalled that he and Debra Van Elslander discussed “three things,”
“the drain to the beach, French doors and the [window] well,” although he could not remember
whether a representative of plaintiff or TSA raised these specific concerns.
Plaintiff attached to his subsequent motion for reconsideration an affidavit of Debra Van
Elslander, in which she disputed Sebold’s recollections as follows concerning the genesis and the
scope of TSA’s 2002 investigation:
4.
At no time did I, nor anyone else acting on behalf of my father,
limit in any respect those areas of the home which TSA was to investigate to
determine the causes of water intrusion to the residence.
5.
. . . At no time did I identify these three areas [in the August 14,
2002 Maddelein memo] for TSA; limit TSA to investigating these three areas or
request that TSA investigate water intrusion in these three areas. Rather, TSA
identified on its own these three areas of water intrusion to the home. Dan Sebold
represented to me that the repairs recommended in the Memorandum would stop
water intrusion at the residence.
***
7.
Investigation by others at the residence . . . has identified numerous
additional areas of water intrusion to the home which were never identified by
TSA.
We find that, viewed in the light most favorable to plaintiff, the evidence submitted in
support of the summary disposition-related filings and plaintiff’s motion for reconsideration
establishes that TSA obligated itself, through the actions of Sebold and Maddelein, on a limited
basis by assuming a duty to investigate several discrete potential sources of water intrusion into
Unit 6. The relevant deposition testimony, primarily supplied by Sebold, and the August 14,
2002 Maddelein memorandum, agree that, irrespective whether TSA or plaintiff, through an
-18-
agent, made the specific selections, TSA assumed a duty only to consider and to make
recommendations concerning potential sources of water intrusion into Unit 6 through the home’s
(1) exterior French doors, (2) the residence’s stone chimneys, and (3) the basement bedroom
window well, which apparently led to discovery of the related, clogged drain to the beach. The
limited evidence provided by the parties does not support a reasonable inference that TSA
undertook the more expansive duty that plaintiff seeks to impose, specifically to perform an all
encompassing assessment of the property and to identify and propose recommendations
concerning any potential sources of water intrusion. There is simply no evidence that TSA
undertook the duty to perform an in-depth investigation of all sources of water intrusion.
Once TSA came forward with evidence delineating its limited duty after the July 2002
water intrusion episode, to avoid summary disposition it became plaintiff’s obligation to present
some evidence reasonably tending to suggest that TSA undertook a more extensive investigation
obligation, but plaintiff simply failed to satisfy his obligation. MCR 2.116(G)(4). To the extent
that plaintiff emphasizes the statement at the bottom of the August 14, 2002 memorandum,
“With the above items complete, this home should stay dry,” we reject plaintiff’s suggestion that
this statement implies a more broadly undertaken duty of investigation by TSA. When read in
context with the preceding portions of the memorandum, the penultimate sentence simply refers
to the duty undertaken with respect to “the above [three] items.” We conclude that the circuit
court properly found that TSA assumed a limited post-July 2002 duty of inspection and
recommendation, but that the court erred to the extent that it omitted chimneys from the scope of
TSA’s limited duty, which also included the French doors and window well/drain to the beach.
b. Evidence Concerning TSA’s Alleged Breach of the Limited Duties Assumed in 2002
In its motion for summary disposition, TSA insisted that no negligence occurred in the
manner of the minor window well modification in October 2002, and that apart from the invoice
relating to the window well, no documentary evidence existed tending to establish any of the
remaining negligence elements (breach, causation, damages) relating to the August 14, 2002
memorandum.
Plaintiff’s well-appended brief in opposition included an excerpt of Debra Van
Elslander’s deposition testimony, which mentioned that in the summer of 1999 plaintiff had
hired a landscape company to place additional quantities of sand on the beach in front of the
house, and that on an unspecified date thereafter, property manager Kelley had advised Debra
“there was a blockage in the drain that went from the driveway down to the beach,” which
Kelley or Sebold remedied by hiring a different landscaping company to clear out the drain.
Plaintiff also attached a 17-page report by Western Waterproofing Company, dated July 15,
2003, which elaborated regarding its “probes” of eight different areas of Unit 6 to ascertain
sources of water leakage. Although a thorough report, it simply contains no information
supporting a reasonable inference that TSA negligently made any faulty observations or
-19-
recommendations in the Maddelein memorandum, prepared almost a year before the Western
Waterproofing report.12
12
The 2003 Western Waterproofing report refers almost exclusively to matters beyond the scope
of the August 2002 Maddelein memorandum. That most of the report’s investigation focuses on
matters beyond the scope of the August 2002 memorandum becomes clear when one reviews the
“General Report Findings”:
1.
The water and moisture is entering at various locations throughout the
limestone sill condition and once it has entered in it is trapped with no way out.
2.
There are no weep holes for any trapped water to escape nor is there any
type of flashing detail through out our findings.
3.
There is no joint sealant sealing the top of the limestone sill to the
underside of the metal flashing which is noted on the plans.
4.
The ice and water shield which is manufactured by W.R. Grace . . . is
meant to be a roofing underlayment and not a below grade waterproofing or
flashing material such as that is manufactured by W.R. Grace. The flashing
material would be Perm-A-Barrier Wall Flashing and the below grade
waterproofing would be Bituthene.
5.
There is no tie in between the foundation dampproofing and the stone
ledge itself.
6.
The form work that was used for the ledge was for a 4” brick ledge and
not for a 6”-8” stone ledge that we have on this structure, consequently the stone
is cantilevered out in various ways to compensate for the lack of stone support
leaving the stone susceptible to heaving in a freeze/thaw condition.
7.
The ice and water shield . . . was installed without the proper laps, corner
turnouts, tie ins to the dampproofing, the gaps noted between pieces, pieces
missing, not properly sealed off, and there is no pattern to whether the ice and
water shield was applied directly to the plywood or to the house wrap, in some
cases the house wrap was applied over the top of the ice and water shield and in
some cases it was placed under the ice and water shield. There is no pattern or
consistency with this detail.
8.
The limestone sills are not pinned and in some cases are loose without a
proper bed and head joint of mortar. We have also observed that these limestone
sills are sloping to the structure or are laid level or sloped slightly away from the
structure. Per the note on the drawings, they should be sloped in an extreme
fashion away from the structure.
9.
The door threshold that we observed, the membrane in some cases is
(continued…)
-20-
Plaintiff next attached two pages of Sebold’s deposition describing the manner in which
he and Maddelein water-tested the French doors; Sebold recounted that they “sprayed water
through the screen door trying to emulate a heavy rainstorm” and caused water to build “up
between the panel of the bottom of the screen door and the French door.” When questioned
whether he and Maddelein “in any respect test[ed] at that time whether the limestone sill was
properly installed in that area,” Sebold replied, “Not that I recall. . . . We were looking at the
doors.” Plaintiff additionally included a dozen pages of deposition testimony by Paul Wild, who
prepared the Western Waterproofing report, in which Wild reiterated some of the sources of
water intrusion documented in the 2003 report. Plaintiff also attached between 15 and 20 pages
of deposition testimony by architect and builder Michael Rupert discussing some sources of
leakage reported by Western Waterproofing; Rupert’s testimony did not address any items
contained in the August 2002 TSA memorandum.
(…continued)
missing and does not have a turn up at the backside. Although they did turn it up
at the edges near the jambs, there is no turn up at the backside. The lack of
properly installed materials and the sealing between the units is also lacking.
The only potentially relevant portion of the report, “Probe No. 6,” addresses “The
Window Well.”
The area was probed due to leakage. We observed that once we removed
the pea gravel and sand mixture in the bottom of the window well, approximately
2’ deep, we have found that there is a concrete slab in the bottom with a 4” drain
in the middle which was clogged with sand and debris, there is also a 6” hole in
the foundation wall with a drain tile. We attempted to clean this out but were not
able to completely remove the dirt.
The window itself has a deteriorated wood frame around the base, which
is rotted, and allowing water to enter in. . . .
The report concluded with respect to the window well as follows:
The window well will need to remove [sic] the concrete floor, dig down
approximately 2’, and install pea gravel in the area back up to the old pea gravel
elevation. Others will replace the windowsill. The concrete ledge needs to be
chipped down and sloped away from the window itself, a stainless steel water
shed above the window for any water that comes down into the well, the water
shed removes it out away from the window itself.
The report’s probe into the window well does not cast doubt on the October 2002 window well
modification commissioned by TSA, or the other recommendations concerning the window well
that TSA incorporated into the August 2002 memorandum.
-21-
Lastly, plaintiff included a “Microbial Testing Report” prepared by Sanit-Air, Inc., and
dated “August-December, 2003.” A September 3, 2003 letter to plaintiff summarizes the
following observations:
On August 27, 2003, Sanit-Air conducted an inspection and microbial
testing in your home on Bay Harbor. The purpose of onsite evaluation was to
inspect perimeter walls and floors for signs of unmitigated water damage. . . .
Observations
1.
Significant water staining, delaminating wood, and visible growth
were observed under the bay window at the north wall in the northwest bedroom.
Elevated surface moisture measurements were detected on wood studs, exterior
sheathing, and the sub-floor at the north wall of the bay window. The source of
moisture appeared to be intrusion through the windows.
2.
Water stains were observed on the tack strip at the west wall under
the north-most window in the southwest bedroom. Moderately elevated moisture
was detected on the sill plate and stud under the south corner of the window.
Visual conditions were consistent with prior water intrusion from the windows.
3.
Water stains were observed on the sub-floor and tack strip on the
south wall under the windows in the southeast bedroom. The floor and wall
paneling were dry at the time of testing. Visual conditions were consistent with
prior water intrusion from the windows.
4.
Water stains were observed on the sub-floor and tack strip at the
south wall under the windows in the study. The floor and wall were dry at the
time of testing. Visual conditions were consistent with prior water intrusion from
the windows.
5.
Stains were observed on the marble at the west wall on both sides
of fireplace in the pool room. The observed conditions were consistent with water
intrusion at the roof around the chimney. The observed conditions raised
concerns regarding the west wall cavity.
Another report summary, dated December 22, 2003, offers the following observations:
Site inspections conducted after the first phase of remediation in the
VanElslander home confirmed the presence of hidden water damage. An area of
significant water damage was the exterior sheathing, primarily on the west and
north sides of the home. Additional hidden damage was discovered on the
exterior sheathing of the bay area in the northeast bedroom, and sheathing under
windows throughout the second level.
Source sampling confirmed the presence of fungi that are indicative of
water damage. . . . The results confirmed that hidden fungal amplification sites
-22-
within cavities were sources of airborne contaminants and fungal propagules on
porous contents.
To TSA’s reply brief, it attached deposition testimony of engineer Bruce Clarke in which
he made the following observations:
Item number one, putting the glass panels back in the storm doors, to me it
seems like a very reasonable solution to the French doors opening—or blowing
open. Cleaning out the storm drain, daylighting it, as they refer to it, is practically
a necessity if you want that drain to work correctly. And maintaining the
chimney, it’s just good maintenance, good practice. So no, I don’t see anything
here that I would disagree with.
Clarke added that placement of a waterproof Plexiglas cover over the window well grate “should
be enough” to prevent water buildup in the window well.
In summary, although plaintiff provided abundant evidence with its response to TSA’s
2002-negligence-related motion for summary disposition, none of plaintiff’s evidence tended to
undermine or contradict that TSA agreed to undertake only a limited investigation of the sources
of water intrusion, specifically limited to the French doors, the window well and the chimneys.
Plaintiff failed to present any evidence tending to prove that TSA breached its limited duty to
investigate and repair these areas, or that its payment for the minor modifications to the window
well constituted a breach of a duty to repair that area.
After the circuit court’s summary disposition ruling for TSA, plaintiff moved for
reconsideration, attaching the recent affidavit of Debra Van Elslander, which asserted vaguely
that “[t]he repairs recommended by TSA did not stop water intrusion in these areas of the home,”
but which failed to specifically link any negligent TSA recommendation with consequent water
intrusion. The only other new evidence plaintiff supplied in the motion for reconsideration
consisted of brief portions of property manager Kelley’s deposition testimony, in which he
offered no insight into any faulty conduct attributable to TSA.
In conclusion, plaintiff produced evidence documenting the identification of sources of
water intrusion into Unit 6, made approximately a year or more after Maddelein prepared the
August 2002 memorandum. But we have ascertained nothing in plaintiff’s documentation
attributing some deficiency or fault to the limited August 2002 recommendations of TSA.
Because plaintiff failed to present any evidence tending to link specific fault with any of TSA’s
August 2002 recommendations, the circuit court correctly determined as a matter of law under
MCR 2.116(C)(10) that TSA did not breach the limited duty it undertook after the July 2002
storm-related water intrusion into Unit 6.13
13
To the extent the circuit court erred by omitting the chimneys from the limited duty TSA
assumed in 2002, it nonetheless properly granted TSA summary disposition because no evidence
tends to establish that TSA breached its limited duty. Coates v Bastian Bros, Inc, 276 Mich App
498, 508-509; 741 NW2d 539 (2007) (observing that this Court will not a correct result reached
(continued…)
-23-
D. Amount of Case Evaluation Sanctions
Plaintiff lastly challenges the circuit court’s decision to award TSA case evaluation
sanctions consisting of expert witness fees and attorney fees. Plaintiff does not dispute TSA’s
potential entitlement to “actual costs” under MCR 2.403(O)(1) and (2), in the event that we
uphold the circuit court’s summary disposition rulings. Nor does plaintiff challenge the principle
that “[e]xpert witness fees incurred by [TSA] would be part of their ‘actual costs’ under MCR
2.403(O).” Elia v Hazen, 242 Mich App 374, 379-380; 619 NW2d 1 (2000). Plaintiff criticizes
only the amounts the circuit court awarded as costs and attorney fees, which “this Court reviews
for an abuse of discretion.” LaVene v Winnebago Industries, 266 Mich App 470, 473; 702
NW2d 652 (2005).
We initially decline plaintiff’s invitation that we apply MCR 2.403(O)(11) as a basis for
vacating the award of case evaluation sanctions. According to subrule (O)(11), “If the ‘verdict’
is the result of a motion as provided by subrule (O)(2)(c), the court may, in the interest of justice,
refuse to award actual costs.” This Court has recognized several “unusual circumstances” in
which a court may refuse actual costs “in the interest of justice”: for example, “where a legal
issue of first impression or public interest is present, where the law is unsettled and substantial
damages are at issue, where there is a significant financial disparity between the parties, . . .
where the effect on third persons may be significant,” or where the prevailing party engages in
misconduct, such as gamesmanship. Harbour v Correctional Medical Services, Inc, 266 Mich
App 452, 466; 702 NW2d 671 (2005) (internal quotation omitted).
Here, however, none of these unusual circumstances exist. The case involves no issue of
first impression or public significance, settled law governs the disposition of plaintiff’s issues,
and no significant financial disparity exists between the parties. Furthermore, we detect no hint
that TSA engaged in gamesmanship that unduly prolonged the proceedings. The issues raised by
plaintiff involved different legal claims arising from different sequences of events, and TSA
proceeded without undue delay in raising various motions for summary disposition as discovery
proceeded. We conclude that the circuit court acted within its discretion by rejecting the
applicability of MCR 2.403(O)(11).14
“Expert witness fees are taxable under MCL 600.2164.” Elia, supra at 379. In relevant
part, MCL 600.2164(1) provides as follows:
No expert witness shall be paid, or receive as compensation in any given
case for his services as such, a sum in excess of the ordinary witness fees
provided by law, unless the court before whom such witness is to appear, or has
appeared, awards a larger sum, which sum may be taxed as a part of the taxable
costs in the case. . . .
(…continued)
for a wrong reason).
14
Although we generally review de novo a trial court’s decision to grant or deny case evaluation
sanctions, “because a trial court’s decision whether to award costs pursuant to the ‘interest of
justice’ provision set forth in MCR 2.403(O)(11) is discretionary, this Court reviews that
decision for an abuse of discretion.” Harbour, supra at 465.
-24-
Although plaintiff objects to the bulk of the expert witness fees sought by TSA on the basis that
they were not needed at a trial, the plain “language ‘is to appear’ in § 2164 applies to the
situation at bar in which the case was dismissed before [TSA] had a chance to call its proposed
expert witnesses at trial.” Herrera v Levine, 176 Mich App 350, 357; 439 NW2d 378 (1989).
“Furthermore, the trial court was empowered in its discretion to authorize expert witness fees
which included preparation fees.” Id. at 357-358.
Plaintiff also challenged the amount of the expert witness award on the basis that
pursuant to MCL 600.2461, the circuit court lacked authority to enter the award. According to
MCL 600.2461,
Every officer authorized to tax costs in any court for services rendered in
any proceeding authorized by law, shall examine the bills presented to him for
taxation, whether such taxation be opposed or not, and shall be satisfied that the
items charged in such bill are correct and legal; and shall strike out all charges for
services, which, in his judgment, were not necessary to be performed.
Plaintiff essentially complains that TSA failed to sufficiently document its requested expert
witness fees. As the record reflects, however, TSA attached to its motion for case evaluation
sanctions (1) a plainly captioned request for expert witness fees or expenses that cited MCL
600.2164, and then listed 15 different dates, between October 31, 2003 and June 28, 2005, and
amounts assigned to five different expert witnesses, totaling $20,566.67, and (2) an affidavit of
attorney Christopher J. Scott verifying that the items comprising the bill of costs were “correct
and ha[d] been necessarily incurred in this action.” The transcript of an August 31, 2005 motion
hearing additionally reflects that when plaintiff noted TSA’s purported lack of substantiation of
the expert’s “bills” or “invoices,” attorney Scott proffered the court a “big stack of invoices” he
had used in compiling the fees requested, production of which the court declined. In light of
TSA’s provision of the itemized list of expert witness expenses during the extensive pretrial
proceedings in this case, together with counsel’s affidavit attesting to the accuracy of the
amounts TSA sought to recover, we cannot conclude that the circuit court’s decision to
incorporate into the award of taxable costs all the expert witness expenses claimed, fell outside
the range of principled outcomes. Woodard v Custer, 476 Mich 545, 557; 719 NW2d 842
(2006).15
15
To the extent that plaintiff suggests that TSA had to show that it incurred the expert witness
fees it requested because of plaintiff’s rejection of the case evaluation award, the plain language
of MCR 2.603(O)(6) belies plaintiff’s assertion. Subrule (O)(6) provides in relevant part as
follows:
For the purpose of this rule, actual costs are
(a)
those costs taxable in any civil action, and
(b)
a reasonable attorney fee based on a reasonable hourly or daily rate
as determined by the trial judge for services necessitated by the rejection of the
(continued…)
-25-
With respect to the circuit court’s award of attorney fees, TSA attached to its bill of costs
an attorney fee schedule that itemized 148 billable events between May 11, 2005, the case
evaluation acceptance or rejection deadline, and July 13, 2005, the date on which counsel for
TSA argued in support of its final summary disposition motion; in total, $14,730.16 The court
explained the basis for its attorney fee award as follows:
In regard to the attorney fee, there is a request of $14,730. The fees all
appear to be accumulated after the acceptance rejection date; which is May 11th,
’05. Hourly rate is reasonable, $175, $200 an hour, based on the attorney’s [sic]
professional standing, experience and skill, time and labor involved, and the
questions involved, and the amount of litigation involved in this case.
As far as duplication of services, between counsel . . . there doesn’t appear
to be any that are unrelated to this case, and they all appear to be—everything—
all the services in reviewing the bills appear to be related and necessitated by
plaintiff’s rejection of case evaluation. And there’s nothing that looks improper
and excessive . . . .
On appeal, plaintiff primarily criticizes the circuit court for neglecting to hold an
evidentiary hearing to address his objection that some of TSA’s requested attorney fees were
“duplicative.”
As all agree, the burden of proving reasonableness of the requested fees
rests with the party requesting them. In Michigan, the trial courts have been
required to consider the totality of special circumstances applicable to the case at
hand. Wood [v DAIIE, 413 Mich 573, 588; 321 NW2d 653 (1982),] listed the
following six factors . . . to be considered in determining a reasonable attorney
fee:
“(1) the professional standing and experience of the attorney; (2) the skill,
time and labor involved; (3) the amount in question and the results achieved; (4)
the difficulty of the case; (5) the expenses incurred; and (6) the nature and length
of the professional relationship with the client.” [Smith v Khouri, 481 Mich 519,
529 (opinion by Taylor, C.J.); 751 NW2d 472 (2008).]
In this case, we conclude that the circuit court did not abuse its discretion in awarding
TSA the $14,700 it requested because (1) TSA supplied a thorough and detailed summary of the
legal expenses incurred by its counsel after plaintiff’s rejection of the case evaluation award, (2)
(…continued)
case evaluation. . . . [Emphasis added.]
The court rule thus clearly and unambiguously imposes the causal link between a rejection of the
case evaluation and the attorney fees requested by a prevailing party, but imposes no such
condition or limitation on a prevailing party’s requested taxable costs.
16
The vast majority of the listings identified “CJS,” who earned a rate of $175 an hour, but
several were denoted as provided by “GWS,” who charged $200 an hour.
-26-
the court’s role as presiding judge over the course of the lengthy and involved pretrial
proceedings undoubtedly informed its understanding of the numerous and complex issues in the
case, and (3) the court’s bench ruling plainly reflects its express consideration of nearly all the
Wood elements.17
IV. Jury Verdict Challenges Raised by the Follises in Docket No. 274966
After TSA’s dismissal, the case proceeded to trial solely against the Follises on plaintiff’s
silent fraud and breach of contract claims. Plaintiff sought more than $1.6 million in damages.
After a nine-day jury trial, the jury returned a special verdict rejecting plaintiff’s silent fraud
claim, but finding that the Follises had breached their responsibility to repair the items in the
escrow agreement that plaintiff and Daniel Follis entered in September 1998. The jury awarded
plaintiff $680,838 in damages. In August 2006, the circuit court entered a judgment against the
Follises for the amount of the verdict plus $25,617.30 in costs, for a total of $706,465.30.
A. Standards of Review
The Follises contend that the circuit court should have granted their motion for a directed
verdict at the close of plaintiff’s proofs, or their later motions for JNOV, a new trial, or
remittitur, on the basis that plaintiff presented insufficient evidence entitling him to recover more
than $25,000 in consequential damages arising from the Follises’ alleged breach of the escrow
agreement.
This Court reviews de novo a circuit court’s ruling on a motion for a directed verdict.
Candelaria v B C Gen Contractors, Inc, 236 Mich App 67, 71; 600 NW2d 348 (1999). In
reviewing the circuit court’s ruling, this Court examines the evidence presented and all legitimate
inferences arising therefrom in the light most favorable to the nonmoving party. Farm Credit
Services of Michigan’s Heartland, PCA v Weldon, 232 Mich App 662, 668; 591 NW2d 438
(1998). “A directed verdict is appropriate only when no material factual question exists upon
which reasonable minds could differ.” Candelaria, supra at 71-72. “If reasonable jurors could
honestly have reached different conclusions, neither the trial court nor this Court may substitute
its judgment for that of the jury.” Hunt v Freeman, 217 Mich App 92, 99; 550 NW2d 817
(1996). The “appellate court recognizes the jury’s and the judge’s unique opportunity to observe
the witnesses, as well as the factfinder’s responsibility to determine the credibility and weight of
trial testimony.” Zeeland Farm Serv’s, Inc v JBL Enterprises, Inc, 219 Mich App 190, 195; 555
NW2d 733 (1996).18
17
Furthermore, although plaintiff correctly observes that a trial court “should normally hold an
evidentiary hearing when the opposing party challenges the reasonableness of a fee request,” a
court does “not err in awarding fees without having held an evidentiary hearing” when “the
parties [have] created a sufficient record to review the issue, and the court fully explain[s] the
reasons for its decision.” Head v Phillips Camper Sales & Rental, Inc, 234 Mich App 94, 113;
593 NW2d 595 (1999). We find that both conditions exist here.
18
A similar standard governs an appellate court’s review of a trial court’s ruling on a motion for
(continued…)
-27-
According to MCR 2.611(A),
(1) A new trial may be granted to all or some of the parties, on all or some
of the issues, whenever their substantial rights are materially affected, for any of
the following reasons:
***
(d) A verdict clearly or grossly inadequate or excessive.
(e) A verdict or decision against the great weight of the evidence or
contrary to law.
A court faced with a claim of excessive damages under MCR 2.611(A)(1)(d) must review “all of
the evidence in the light most favorable to the nonmoving party.” Moore v Detroit
Entertainment, LLC, ___ Mich App ___; ___ NW2d ___ (Docket No. 275157, issued May 27,
2008), slip op at 21 (internal quotation omitted). If an award of damages “falls reasonably within
the range of the evidence and within the limits of what reasonable minds would deem just
compensation, the jury award should not be disturbed.” Id. (internal quotation omitted). When a
party challenges a jury’s verdict as against the great weight of the evidence, MCR
2.611(A)(1)(e), this Court may overturn the verdict only if it appears manifestly against the clear
weight of the entire record, and should not set aside a verdict if there is competent evidence to
support it. Ellsworth v Hotel Corp of America, 236 Mich App 185, 194; 600 NW2d 129 (1999).
This Court reviews for an abuse of discretion a circuit court’s ruling on a motion for a new trial.
Moore, supra at 21.
B. Governing Legal Principles
“The party asserting a breach of contract has the burden of proving its damages with
reasonable certainty.” Alan Custom Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379
(2003).
In order to be entitled to a verdict, or a judgment, for damages for breach
of contract, the plaintiff must lay a basis for a reasonable estimate of the extent of
his harm, measured in money. The issue becomes one of sufficiency of proof.
The jury should not be allowed to speculate or guess upon this question of the
amount of loss [of profits]. [Fera v Village Plaza, Inc, 396 Mich 639, 643; 242
NW2d 372 (1976) (internal quotation omitted, emphasis added).]
But “where injury to some degree is found, we do not preclude recovery for lack of precise
proof. . . . We do not, in the assessment of damages, require a mathematical precision in
situations of injury where, from the very nature of the circumstances precision is unattainable.”
Id. at 648 (internal quotation omitted).
(…continued)
JNOV. Garg v Macomb Co Community Mental Health Services, 472 Mich 263, 272; 696 NW2d
646 (2005).
-28-
“It is well settled that the appropriate measure of damages for breach of a contract . . . is
that which would place the injured party in as good a position as it would have been in had the
promised performance been rendered.” Jim-Bob, Inc v Mehling, 178 Mich App 71, 98; 443
NW2d 451 (1989). “The general rule as to damages is stated . . . in the following terms: A party
to a contract who is injured by another’s breach of the contract is entitled to recover from the
latter damages for all injuries and only such injuries as are the direct, natural, and proximate
result of the breach.” Stewart v Rudner, 349 Mich 459, 468-469; 84 NW2d 816 (1957).
In a breach of contract action, “[d]amages recoverable are those which are a ‘direct and
proximate result’ of the party’s breach and were ‘within the contemplation of the parties’ when
the contract was made.” Home Ins Co v Commercial & Industrial Security Services, Inc, 57
Mich App 143, 146; 225 NW2d 716 (1974). Although breach of contract damages need not be
precisely established, “uncertainty as to the fact of the amount of damage caused by the breach
of contract is fatal.” Id. at 147.
In summary,
The damage which a party ought to receive in respect to such breach of
contract may be said to be such as may fairly and reasonably be considered either
as arising naturally—that is, according to the usual course of things—from such
breach of contract itself, or such as may reasonably be supposed to have been in
the contemplation of both parties at the time they made the contract, as the
probable result of a breach of it. [Lawrence v Will Darrah & Assoc, Inc, 445
Mich 1, 7; 516 NW2d 43 (1994) (internal quotation omitted).]
Thus, plaintiff bore the burden of proving damages that directly and proximately flowed from the
Follises’ breach of the escrow agreement.
C. Contract at Issue
The parties do not dispute that they entered an “Escrow Agreement” in early September
1998, pursuant to which the Follises agreed that TSA would repair eight exterior and eight
interior areas of the home. The “Escrow Agreement,” prepared by the Emmet County Abstract
& Title Company, identified the Follises as the “Seller,” and plaintiff as the “Purchaser,” and the
Emmet County Abstract & Title Company as the “Escrow Agent.” In relevant part, the text of
the escrow agreement provides as follows:
Deposited with Escrow Agent: $25,000.00
Terms and conditions for release of above escrow items are: Upon written
request from Art VanElslander funds will be released to Daniel S. and Mary
Elizabeth Follis.
SEE ATTACHED EXHIBIT A
Upon the release of the above referenced Escrow Funds and/or Escrow
Documents, this Escrow shall terminate and Escrow Agent, shall be released from
any further liability. It is expressly understood by Seller and Purchaser, that
-29-
Escrow Agent is acting in the capacity of a depository and is not as such
responsible or liable for the sufficiency, correctness, genuineness or validity of
the Escrow Funds and/or Escrow Documents.
***
This agreement may be amended only by a written agreement signed by
both Seller and Purchaser and accepted by Escrow Agent.
***
Agreed by Seller: [Daniel S. Follis]
[Mary Elizabeth Follis]
Agreed by Purchaser: [Archie A. Van Elslander]
The first page attached to the escrow agreement, which plaintiff and Daniel S. Follis signed on
September 3, 1998, provides in its entirety as follows:
SCHEDULE
EXTERIOR
1)
The furthest stone to the east on the top step of the front entry stairs, on
the flight closest to the road, is loose and needs to be resecured.
2)
A wooden “shim” is present below the exterior threshold of the south
facing dining room entry door. This “shim” can be damaged by the elements or
compressed over time. This could allow the threshold to move and open gaps
around the perimeter, which may allow water penetration. The inspector
recommends that the “shim” be removed and appropriate, permanent support
added.
3)
The inspector also noted significant amounts of standing water in the
“pit.” A sump pump, drain or other means of water evacuation should be
installed. Water that is allowed to accumulate in the “pit” could leak into the
home or cause structural damage, should the water freeze. Mold and mildew can
also be expected. The inspector did note elevated moisture readings on the
basement wall adjacent to the “pit,” however no water stains or other obvious
signs of penetration were noted.
4)
The exterior louvered port for the dryer, on the west wall needs to be
replaced.
5)
The weather strip on the bottom of the side entry door, toward the front of
the home, is torn and needs to be replaced.
6)
The inspector also noted both formal dining room doors bind on their
frames and thresholds and need to be trimmed or adjusted.
-30-
7)
One window in the “library,” closest to the front entry, will not close
completely and needs adjustment. The inspector also noted on [sic] pane of glass,
in the upper “arched” north living room window, is cracked.
8)
The chain drive on the north garage door opener “clatters” while the door
is opening. It appears the chain or rail needs adjustment.
The second of the two pages attached to the escrow agreement lists the following:
INTERIOR
1)
One of the dimmer switches at the bottom of the basement stairs was
“warm to the touch” after the basement lights were on for an extended period.
The switch in question appears to be the second from the left. The client may
wish to have a licensed electrician evaluate the situation to determine if the
dimmer switch is defective.
2)
The wiring in one of the basement rooms has not been completed. A
temporary light is hanging from the ceiling wires and some exposed electrical
junctions are present. An additional basement room also has electrical wires
hanging from the ceiling. It appears this room may be intended for use as a sauna,
however it has not been completed. All electrical wires should be used in
compliance with code, or terminated at their power source and removed.
3)
The 3-way switch for the hanging light above the upper stairway is
defective. The light only activates if switches are in certain configurations. A
licensed electrician should rewire this switch so it can be controlled from all
switches at all times.
4)
The inspector noted several active leaks in the water supply system.
Leaks are present at both shut off valves below the half bath, adjacent to the
laundry room. The hot water supply pipe below the right hand master bathroom
sink leaks, and the cold water supply line leaks beneath the left-hand sink. The
drain plug in the left sink is also not operational.
5)
Both shut off valves below the northeast upstairs bedroom sink have slight
“seeping” leaks, and another leak is present on the cold water shut off valve
below the kitchen “bar” sink.
6)
The dishwasher near the main kitchen sink is not mounted flush within its
opening. Additionally, the cosmetic face piece on the front of the dishwasher is
not properly attached.
7)
The vent system for the clothes dryer is not properly connected and lint,
moisture and warm air are discharged into the laundry room.
8)
The backsplashes behind all sinks should be appropriately caulked to
prevent moisture from entering the seams. Additionally, caulk should be used to
-31-
seal the edges of all tile floors, and around the interior of all shower doors. Any
90-degree joint between tiled surfaces, such as shower wall corners or wall to
floor joints, should be caulked rather than grouted. Caulk will tend to flex,
thereby resisting future cracking. Currently, most of these joints are grouted and
most are cracked.
The bulk of the testimony and documentary evidence presented over the course of six
days during the jury trial related to alleged window and door leakage, improper installation of
waterproofing around doors, windows and elsewhere, and several other irregular or improper
methods of construction. Plaintiff submitted extensive testimony regarding TSA’s failure to
properly construct the home, describing in great detail the bases for the allegations contained in
Count I of plaintiff’s first amended complaint. The voluminous evidence introduced concerning
the original construction of Unit 6 primarily related to plaintiff’s silent fraud claim against the
Follises, which the jury ultimately rejected. This evidence did not concern, however, the 16
items identified in the escrow agreement.
With respect to the jury’s verdict that the Follises breached their escrow agreement
obligation to repair the 16 items listed therein,19 the parties did not dispute the initial element of
the claim, that they in fact had entered this agreement. Furthermore, plaintiff presented
substantial evidence that the Follises breached the escrow agreement, specifically by failing to
ensure that TSA repaired the 16 items set forth on the schedule attached to the escrow
agreement. At trial, Debra Van Elslander testified that according to her investigation, TSA had
failed to adequately repair several escrow list items on the exterior schedule, namely items
number one, “the furthest stone to the east on the top step of the front entry stairs”; number two,
the wooden “shim” “below the exterior threshold of the south facing dining room entry door”;
number three, the window well or egress pit drain; number four, an exterior louvered dryer port
needing replacement; number five, the torn “weather strip on the bottom of the side entry door,
toward the front of the home”; and number seven, a window “in the ‘library,’ closest to the front
entry, [that] will not close completely and needs adjustment,” and a cracked glass pane in an
“arched” living room window. Regarding the interior list, Debra believed that numbers one, two,
six, and seven were fixed, although she did not know about numbers three, four, five, and eight.
Warren Calcaterra, plaintiff’s facilities manager, testified that the Follises, through TSA, had
failed to properly remedy exterior items one through four and interior items four through eight.
The Follises introduced deposition testimony by TSA construction supervisor Randy
Moyer and home inspector Kirk Lieberman confirming that all 16 escrow list items were
remedied. But because we must view the evidence in the light most favorable to plaintiff, we
accept that TSA failed to repair for the Follises exterior items one through five and seven, and
interior items four through eight, thus breaching their contract with plaintiff. Our present
19
We remain cognizant that the circuit court granted the Follises summary disposition with
respect to the breach of contract claim on a limited basis, specifically concerning exterior
schedule item eight, the garage door opener, and interior schedule items one and two, involving a
dimmer switch and basement wiring, and that plaintiff did not seek damages at trial arising from
these items. For the sake of consistency, however, we continue to refer to all 16 listed items.
-32-
analysis focuses on the adequacy of plaintiff’s proof regarding the relationship between the
breaches of the escrow agreement and the damages claimed at trial.20
D. Condition of Window Well, Exterior Item #3 & Related Causation Testimony
At trial, among the unrepaired escrow list items, one that received a great deal of
attention was the window well, or egress pit. Sebold testified that in 1998, he instructed
construction superintendent Moyer to fix all 16 escrow list items, and that Moyer subsequently
reported having done so. With respect to the window well, Moyer described having cleaned
debris out of a drain at the bottom of the well, and then having run a hose into the window well
for two hours to ensure that the drain cleaning remedied the standing water he initially saw in the
bottom of the well.
TSA construction supervisor Maddelein, whose deposition the parties read into the
record, recalled that TSA had placed a Plexiglas cover on the window well “towards the end of
the job. . . . [t]o keep the rainwater out as much as possible,” and denied knowing of water in the
window well at any point before July 2002. Sebold insisted that TSA had placed a drain pipe in
the bottom of the well during the original construction of Unit 6, and that TSA had installed the
Plexiglas shield over the window well “when the Follises owned it.”
Maddelein testified that he accompanied Sebold to Unit 6 the day after the July 21, 2002
storm damage. Maddelein described that the entire “basement had gotten very wet, very wet on
the floor. . . . It . . . looked like the basement had flooded.” Regarding the source of the
basement water intrusion, Maddelein related, “Someone pointed . . . out the window—well . . . at
the west bedroom in the basement, and I think somehow their thought was that . . . some water
may have come in through the garage side of the house.” Maddelein added that “we could tell
the water came in through the window opening” “[b]ecause of the debris that was in—the water
being on the wall and on the window, the fact that everything was wet.”
The parties partially read into the record the deposition testimony of Kelley, plaintiff’s
property manager between summer 2001 and 2003. Kelley recalled that on what “had to be the
20
During closing argument, plaintiff’s counsel downplayed as follows the notion that the failure
to repair several of the escrow list items had injured plaintiff:
I know you were probably a little confused last week because I was
eliciting testimony on items that I concede were insignificant, the face plate on the
dishwasher—I’m trying to remember what other ones th[ere] were. Little items
that weren’t repairs. Are those really significant to our claim, did we occur [sic]
any damages as a result of that? No. I wanted that evidence to come in and I
wanted you to hear it because we believe that it shows that there was never a
sincere effort made to repair any of those items, significant or insignificant.
-33-
second time [plaintiff] called [him],” on July 21, 2002,21 he witnessed water intrusion into the
basement. Concerning the bedroom adjacent to the window well, he reported the following:
I do remember going . . . down in the basement, and there was, David’s
basement room was, there had to be inches of water on the floor. You could look
at the window and see the water to where it was up at. You could tell by looking,
and when the water comes down from the glass, you can see how high it was.
Q: There was water on the glass portion of the window when you were
there?
Kelley: You could tell it was there. Then it went down. David’s
basement room, it was just soaking wet. I believe under [the] ping pong table it
was on the floor as well.
***
That would be in front of the sauna where the theater is.
***
There was [a lot of] water on the floor actually in the kids’ bedroom too.
The kids’ bedroom was across from the bathroom by David’s basement bedroom .
...
Kelley denied that he ever observed a Plexiglas cover over the window well.
Calcaterra, plaintiff’s facilities manager for 18 years at the time of trial, testified that in
December 2002, he first became involved in overseeing remediation efforts at Unit 6. When
Calcaterra first saw the window well in December 2002, it was dry, and covered with a metal
grate, with a “piece of plexiglass [sic]” on top of the grate. Calcaterra recalled that because he
had “heard about water standing” in the window well, in late 2003 he hired a plumber, with
whom he went into the window well, helped pushed aside about 1-1/2 feet of pea gravel, and
observed a 4” drain in concrete in the bottom of the well. Calcaterra related that when the
plumber had reached his hand about 10” into the drain pipe, it terminated in some dirt.
Calcaterra consequently opined that the window well drain “doesn’t go anywhere,” at least not
directly into the drainage system under and away from Unit 6. Calcaterra explained that he and
the plumber repaired the window well drain situation by removing the drain pipe and the
concrete surrounding it, placing more pea gravel into the bottom of the well, and mounting
gutters where two roof lines met directly above the window well, after which no subsequent
water buildup occurred. Regarding Moyer’s purported repair in 1998, Calcaterra felt it
impossible that water would not begin to fill the window well if someone ran a hose into the well
21
Plaintiff called Kelley to report weather-related water intrusion into Unit 6 on both July 17,
2002 and July 21, 2002. The second instance caused the larger amount of water intrusion.
-34-
for two hours, primarily because the 4” drain pipe that he had helped remove had no direct
connection to the drainage system below the house. Calcaterra denied knowing of any
complaints by plaintiff or his agents concerning standing water in the window well at any point
before the July 2002 storms.
Architect Michael Rupert, a 13-year employee of plaintiff’s company, testified that at the
request of Debra Van Elslander and Calcaterra, he visited Unit 6 on one occasion toward the end
of 2002, and that he observed the window well. Rupert recalled seeing a plastic cover on top of
the window well. On the basis of Rupert’s review of a Western Waterproofing report, which
documented that in April 2003 water from a hose began to pool in the well within two minutes,
Rupert opined that the drain TSA placed in the window well had not extended to, and connected
with, the drainage system below Unit 6. Rupert denied awareness, however, of any Van
Elslander complaints about, or any maintenance they may have performed on, the window well
between 1998 and the summer 2002 storms.
Wild, an estimator for Western Waterproofing, where he had worked for 28 years,
recalled that he received a phone call from Calcaterra on December 6, 2002, prompting him to
spend all that day investigating potential sources of water intrusion into Unit 6. Wild testified
that, among other areas, he probed the window well. Wild noted rotten wood in the frame of the
window, which was positioned about two feet from the bottom of the window well; that the
window bore traces of dried tree “seeds” and other debris; and that different roof elements
converged above the well. According to Wild, he placed a running hose into the well, which
began to accumulate water within a few minutes. Wild acknowledged having stated during his
deposition that “we tried to reach our arm in there [a hole in the concrete] and clean out the sand
as far as we could and we did feel a drain tile in there,” but that he made no further probe to
ascertain “where it went, how far it was, what the extent of it was.”
Timothy Wise, part-owner of Service Master Priority Care, a cleaning, restoration and
mold remediation company, testified that he became involved with Unit 6 sometime before
December 2002. After the July 2002 storm-induced water intrusions, plaintiff had contacted
Wise’s brother to assist in drying and cleaning the house, but Wise received a call to assist when
his brother spotted “mold in several locations” inside Unit 6. Wise recalled that on his first visit
to Unit 6, he detected signs of water damage in a basement bedroom and a basement bathroom,
and also observed apparent mold in the basement bedroom adjacent to the window well.
Indoor air quality specialist Connie Morbach, of Sanit-Air, Inc., testified that she first
visited Unit 6 on September 3, 2002, and initially attempted to discover any potential sources of
water intrusion. With respect to “the area of the window well,” Morbach related the following:
Yes, that’s in the bedroom. I had referred to that as the southwest
bedroom in my report. And what I found there were cracks under the window,
water stains under the window, and water stains and visible growth on the floor,
the lower six inches of the drywall under the window.
Morbach further described in some detail as follows the types of mold she located in the
window well area:
-35-
Morbach: There was very high growth of aspergillus and penicillium,
which are both water damage indicator molds.
Q: Is there anything that you found out from those lab reports of your
sampling that would assist you in determining for how long a period of time there
was mold growth in that room?
Morbach: I would say with the lab results, as far as the air samples, the
information told me that there were indoor sources, and that if I didn’t know, I
needed to go look for it. So then I went to the surfaces and looked, and when I
found tertiary colonizing molds, which are the ones that take no moisture and the
longest to grow, such as stachybotrys, I knew that there had been a repeated water
damage in this home.
When asked about the significance, if any, of inspector Lieberman’s August 1998 observation of
“elevated moisture readings” in the window well area, Morbach responded, “If there were
elevated moisture measurements at that time [in August 1998], and the source was not corrected
and the water damaged building materials [were not] dried within 48 hours there would have
been mold in that home.” On cross-examination, Morbach conceded that in light of the 1998
inspection report’s observation of elevated moisture measurements near the window well, she
would have “carefully watched and monitored” that area, had she owned the home.
On redirect, Morbach answered the following hypothetical inquiry from plaintiff’s
counsel involving the 2002 storm and potential window well-related damage:
Q: I’d like you to assume that there was a great big storm in Bay Harbor
in July 2002. I believe someone testified yesterday that the area received three
inches of rain at that time. If water came in through the egress window and
flooded the basement at that time, would that be consistent with the mold findings
that you found the first time you were out there?
Morbach:
adjacent . . . .
In that part of the basement, yes, the bedroom, bathroom
Morbach added, “You can take out the drywall, you can take out the mold, but you still have an
issue of potential ongoing water intrusion if the drain isn’t fixed.”
Viewed in the light most favorable to plaintiff, the testimony of Morbach, Calcaterra,
Wild, Wise and Rupert established that the Follises failed to adequately remedy the “standing
water” problem in the basement window well, exterior item three of the escrow schedule. The
evidence also established that the breach of this contractual provision resulted in natural and
foreseeable consequences, including water leakage and mold in a portion of the home’s
basement.
-36-
E. Condition of “Shim” Under Lake-Facing Dining Room French Door, Exterior Item #2, &
Dining Room Doors, Exterior Item # 6, & Related Causation Testimony
Regarding the “shim,” one of the exterior items needing repair, the escrow list specified
as follows:
A wooden shim . . . present below the exterior threshold of the south
facing dining room entry [French] door. This ‘shim’ can be damaged by the
elements or compressed over time. This could allow the threshold to move and
open gaps around the perimeter, which may allow water penetration. The
inspector recommends the “shim” be removed and appropriate, permanent support
added.
Notably, however, none of the items on the escrow list concerned the ability to properly close,
latch or lock the dining room entry French door, or the master bedroom entry French doors
facing the lake. As we discuss in greater detail, infra, the parties do not dispute that during the
July 2002 storms, a significant quantity of water entered the home through the master bedroom’s
lake-facing French doors, the French doors in the dining room, and the great room doors.
The parties agree that Moyer trimmed the wooden “shim” and caulked around it.
Although Sebold opined that Moyer properly and permanently remedied the “shim” issue,
Calcaterra disagreed because shims “should . . . go[] under the jamb, not under the threshold.”
Rupert similarly believed that Moyer had failed to provide the permanent support contemplated
in exterior item two. Plaintiff’s counsel posed the question to Calcaterra, “Do you have any
knowledge of whether water entered in this area,” to which Calcaterra responded, without further
elaboration, “Yes.” Rupert opined that Moyer’s “repair” possibly could have resulted in water
penetration.
No other testimony at trial specifically referred to the “shim,” although abundant
testimony and evidence concerned water intrusion into the first floor dining room, as well as
several other rooms on the first floor of Unit 6. As noted on the escrow list, the “shim” had been
“present below the exterior threshold of the south facing dining room entry door,” which the
parties agreed faced Lake Michigan. The dining room also had another doorway in the opposite
wall, toward the bay.
Substantial trial evidence established that multiple causes existed for the entry of water
into the first floor living, dining and bedroom areas. Steven Terry, an ArTek Window & Door
service manager, testified that water could have entered the dining room when the storm door
contained screens, and not storm windows. However, Terry could not identify with certainty any
causes of water entry into the dining room.
According to Terry,
The dining room door had never been an issue up until Jason [Kelley]
called me up and said you have major problems with the floors buckling and you
need to come up here and you need to check this out. So I did. I took pictures
and some of these pictures right here are referring to that assessment and I had to
look at it from the exterior as to what’s the real problem. How can a true French
-37-
door affect a floor that is 25 feet long and the floor buckling 25 feet away from
that French door? How can that French door be the culprit?
Q: Okay. I believe you have pictures that showed that the buckling was
not in the vicinity of the door?
Terry: It was in the vicinity of the door, but it was also 20 or 25 feet back
from the door, if I remember correctly. This was a very large dining room.
Terry further testified as follows concerning a document that summarized his response to “a
complaint from the contractor that the French doors were leaking, a complaint that Terry
addressed “over the phone”:
Terry: So we’re speculating. Basically what I’ve done here is speculating
that we need to install the sill extenders to get that done ASAP because we might
be getting a little water in there underneath that sill very possibly. We need to
install the storm doors and the screen doors. We need to caulk the sill and just
double-check the Astragal weather stripping because there is mention of leaks in
the center of the door, but those leaks would have come around the door had the
inactive door panel not been locked down. We would have had the leaks in the
center of that door. That might not have blown that door open at that point, but at
least it would have occurred.
Q: Is it a fair statement sitting here today you don’t know whether it was
the cause of the leaking or not?
Terry: Exactly. This is all speculation is what I’m getting at.
Terry estimated that unspecified doors of Unit 6 “had blown open and they had snow in that
house and rained [sic] and wind in that house prior to them not locking those doors up many
times,” “[p]robably being conservative, six times. . . . over the course of that six-, seven-year
period of time.”
The parties also read into the trial record deposition testimony by ArTek Window & Door
salesperson William Wolfington, IV. The only concern Wolfington remembered involved
the door issue. How to close and make sure they locked the door. [ArTek or
TSA] would get calls on occasion that they weren’t you know, these French
doors, you have to work the handles properly. If they don’t do it, they can come
back and wind can blow the doors open and rain can come in or whatever. That
was the only problems [sic] that I recall.
***
Q: Is it your understanding that someone at ArTek and someone at TSA
knew that the Vans were having trouble operating the [door] latching mechanism?
Wolfington: Yes, yes, on more than one occasion from my recollection,
which what’s so hard? They are door handles.
-38-
Kelley described that after plaintiff hired him in the summer of 2001, he occasionally
spent between a half-hour and one-hour walking through the residence when no one else was
occupying it. Kelley denied recalling any “problems . . . with the [exterior] doors blowing open
prior to July 17, 2002.”
Kelley recounted that he twice reported to Unit 6 in July 2002 because of weather
generated water intrusions. Kelley first responded to a call from plaintiff on July 17, 2002; when
Kelley arrived the next day, he spent about five hours at Unit 6 helping clean up water, which he
believed had entered the house “[u]nderneath the doors, . . . through the doors” in the first floor’s
“dining room,” “master bedroom,” and “the great room.” Kelley also called Great Lakes
Superdry for assistance. And after another storm on July 21, 2002, Kelley spent seven hours
helping attempt to dry water that had entered the house. When Kelley arrived on July 21, 2002,
he noticed that “[i]n the dining room there was standing water. The carpet was wet in the master
bedroom. The great room, I don’t remember.”
During Maddelein’s testimony, he recounted, “I do know that there was water in the
house on different occasions,” “there have been various cases where windows and doors were
open during rain storms and water was flying through the first floor of the house.” Maddelein
recalled that this occurred at least twice when the Follises owned Unit 6, including once during a
storm, and that he twice had gone to the house to demonstrate for Mary Follis how to lock the
French doors. Maddelein also remembered doors and windows blowing open when plaintiff
owned the house. Maddelein testified specifically regarding a conversation he had with
plaintiff’s son-in-law:
Maddelein: He was just talking about how that’s where he used to stay
when he came up, when he had had the Scott Schuptrine store, and he was talking
about forgetting to close windows and doors when he was away and finding that
they were open when he came back.
Q: Do you know how long a period of time that [he] would leave them
open?
Maddelein: It could have been a week or two.
Wild testified regarding his probe of the dining room doors on December 6, 2002,
specifically his investigation of the threshold of the south side French doors. Wild recalled that
he selected this area because he saw “some green algae . . . staining on the stone sill, . . . a sign of
excess water or moisture that is laying . . . in a particular area.” After Wild “cut right through the
center of the sill,” he “observed that underneath the sill they had run some caulking to stop any
water from migrating underneath it. Unfortunately, . . . the type of sealant that was used was not
compatible with the membrane that was underneath the sill.” In part because the sealant had not
adhered to the membrane present, Wild “observed some water droplets . . . on the underside of
the sill.” Wild recounted that he
also looked at how this membrane that I had talked about came up the foundation
wall and it turned in to the . . . where the sill was, but unfortunately through the
probe and through the photographs from that, there is no turn-up on the back side.
-39-
So any water that would come down onto this sill, got underneath it, had a free
rein into the inside of the structure.
Later, Wild added to his conclusion regarding “any condition in the vicinity of the French doors
that would cause water intrusion into the home”; Wild opined “[t]hat in the jamb, meaning the
side of the door itself, that there was no seal between the jamb and the masonry work itself, so
water had a chance to migrate between the frame and the masonry.”
Wild served as plaintiff’s sole expert witness regarding the sources of water intrusion into
Unit 6. Wild identified a number of construction errors that allowed water to leak into the living
areas, including (1) the absence of “joint sealant” between the bottom of the cedar shake shingle
flashing and the top of the limestone sill; (2) the sill’s installation at an improper angle; (3)
employment of the “wrong type of membrane” as a barrier to “keep the structure dry”; (4) the
membrane’s failure to extend all the way to the foundation; (5) construction of the dining room
door sill in disregard of industry standards; (6) the existence of “little recesses” in the mortar
holding the chimney stones together, which permitted water to collect; and (7) the lack of an
adequate membrane in the area of the balcony over the front door, and the presence of two
“scuppers” that did not drain well. Wild also described the repairs accomplished by Western
Waterproofing, which included replacement of the wall membrane, creating weep holes around
the home’s perimeter, and tuck-pointing deteriorated mortar joints.22
22
When requested to describe briefly “what type of repairs” Wild recommended, he summarized
as follows:
Basically, kind of the project in a nutshell, was that the sills—the sill
meaning the stone sill between the cedar shake single and the top of the masonry
wall, needed to be addressed so that water wasn’t getting into the top of it. The
repair that I came up with was to, just like the drawing shows, to tilt that sill so
that water would run off of it, tie in the wall membrane, which was a roofing
material, which was wrong, we cut that all out and removed it and replaced it with
a true waterproofing, and tie in the foundation wall below the ground.
And then we created weep holes, so should any water get into there, it has
a way to weep out and drain. And we did that pretty much around the perimeter
of the structure.
***
[O]ne thing we didn’t talk about . . . , in some cases the foundation . . . . in
this particular case I had observed, and we probed various areas, where instead of
the stone sitting on the seat, the stone was actually out away from the foundation
itself.
And in a situation like that, we talked about freeze/thaw situation, where
heaving can take place because you’re getting the frozen ground under here and
(continued…)
-40-
Regarding potential water intrusion through doors and windows, Wild testified that he
“[c]ertainly” “agree[d] that if somebody leaves the doors and windows open, that could cause
water penetration[.]” Wild further agreed that “if a drain is blocked and water is coming back
toward the home, that that can cause a problem[,]” and “that if you don’t lock the doors and a
huge storm comes up and pours five inches of water into your home, that that is . . . really bad[.]”
Notably, however, neither Wild nor Calcaterra testified that the single door problem
mentioned on the escrow list, a wooden “shim” beneath the south facing dining room entry door,
had remained in place or had contributed in any manner to the extensive water damage.
Wise also testified concerning his observations of dining-room related water damage
during his first visit to Unit 6, on some unspecified occasion before December 2002, when he
began assisting Morbach with remediation efforts. According to Wise, “In the dining room off
the kitchen there appeared to be extensive water damage from two French doors, one facing lake
side, one facing the bay side,” specifically “wood floors that were buckling,” “moisture present,”
and what “appeared . . . to be a large—it looked to be mold underneath the wood floor,” which
Wise revealed by pulling up a couple strips of the floor.23 Wise explained that in an effort to
locate the sources of the apparent water intrusions, he undertook a 10-second, nonscientific test
on the two sets of dining room French doors, “which [wa]s to take a garden hose, simulate rain,
shooting it up in the air onto the doors and onto the siding of the home.” Wise reported the test
results as follows:
Again, it appeared to be either coming in under the threshold, and as
well—actually, the way a door is constructed, you’ve got the bottom plate of a
door, there is glass that is inset into that bottom plate and it really—actually, the
water was coming right underneath the window and down this kick. So it seemed
to be traveling right through a portion of the lower door.
Wise clarified that most of the water entering the house “was below that wood floor,” but that
“some small amounts” of water visibly collected or puddled on the dining room floor.
After Wise’s first visit to Unit 6, he formed the opinion that “it appeared to be a longer
term damage, and I can’t give an exact date of how long it had been there prior to us . . . .” Wise
could offer no opinion precisely when water had entered Unit 6, or whether Unit 6 contained any
mold in September 1998. Wise suggested that plaintiff should consult an indoor air quality
specialist, and assisted in Morbach’s later remediation efforts, which commenced in December
(…continued)
lifting and moving and creating problems above. So, yeah, there was [sic]
conditions where that should have been noted. In the architectural drawings they
show that the stone was supposed to sit completely on the seat and not
cantilevered out, . . . away from the wall.
23
Wise remembered also having seen, as he entered “the master bedroom,” that “there was [sic]
signs of water damage from the French doors . . . in that room as well.”
-41-
2002. Wise estimated that “very close to 70 percent” “of the interior of . . . [Unit 6] needed to be
removed to remove the mold . . . .”24
On cross-examination, Wise discussed as follows the potential for post-storm mold
growth under the circumstances of this case:
Q: You would agree that if the—assume that the storm dumped about five
inches of water into that home—that that can be an incubator for mold in that five
months, from July of ’02 to December of ’02, part of which is during the heat of
the summer.
Wise: Okay.
Q: Do you agree with that?
Wise: I would agree with that.
Q: All right. And you agree that there are lots of things that can cause
mold, and I understand this isn’t exactly your expertise, but you deal with this a
lot, so leaving doors and windows open, a huge storm, water down the chimney, a
drain backing up, changing the doors causing water to pool between the screen
and storm door, those are all things that can contribute to mold, right?
Wise: I would say . . . as long as you have temperature, humidity, the right
conditions, moisture, certainly.
Q: And all the things that I just told you can certainly be causes of mold,
right?
Wise: Yes, sir.
Morbach began summarizing her September 2002 walk through of the main floor of Unit
6 by reporting that she observed significant
areas of water intrusion . . . in the master bedroom . . . along the door walls, or the
French doors facing north . . . . The subfloor in that area was actually
significantly delaminated, which meant it had a lot of water and had swollen up. I
also found oxidation and rust on the nails around the tack strip, and found growth
and significant staining on the plywood subfloor, as well as the tack strip.
24
Wise believed that the original remediation scope eventually expanded to the basement
because as the initial efforts proceeded, workers noticed “there were signs of water going down
to the finished basement,” and confirmed that “the bedroom with the egress window had definite
mold down in the basement,” as well as “some other areas that had grown in the basement.”
Morbach also noted in the basement signs of water intrusion “[i]n the garage area by the doors
coming in. Also in the furnace room and the storage room adjacent to that garage entry.”
-42-
Plaintiff’s counsel then inquired as follows whether Morbach could pinpoint a time frame during
which the damages she saw had taken place:
Q: These observations that you made, is it possible to reach any
conclusions—the jury has heard that there was a storm in July of 2002 where
water entered in this area. Was it possible for you to determine whether that was
the only time there had been water intrusion there?
***
Morbach: Yes. And based on comparisons of other areas where there was
less water damage, this area, as I said was delaminated. This was not associated
with a one-time water damage. Plywood does not become delaminated with a
one-time water damage. You also don’t get the oxidation, rust, on the nails and
the growth that was demonstrated on this subfloor with a one-time water damage.
With respect to the dining room, Morbach testified as follows:
In the dining room area I observed significant contamination under the—
there was one hardwood plank that had been pulled up. The underside of that
hardwood plank, at the north wall, which is the back, at the door, had significant
growth, significant black growth on the underside of that hardwood, as well as on
the plywood underneath. This was—there was actually crumbling of the wood.
This was representative of a chronic long-term water damage.
Morbach saw near the south-, or lake-side, dining room French doors that “the hardwood was
slightly buckling there. Also, there was discoloration on that toe molding there that provided
evidence of water intrusion.”25 Morbach characterized the water intrusion into Unit 6 as very
pervasive. According to Morbach, laboratory testing later identified mold “growth in the dining
room on the floor, as well as on an area by the chimney.”26
Viewing the testimony of Morbach and Wise in the light most favorable to plaintiff, the
testimony of neither witness supports a reasonable inference that the Follises’ failure to repair the
shim under the south-facing dining room French doors resulted in the extensive damage to the
dining room floor, or contributed to the mold in that area.
25
Morbach discussed similar findings of water intrusion near the “windows and doors” in the
sitting room and the great room on the first floor of Unit 6, and that “[o]n the upper level [she]
primarily found signs of water damage on the tack strips and the subfloors at every window.”
26
Morbach returned to Unit 6 on August 27, 2003, after she received photographs “showing . . .
significant gross contamination on the exterior sheathing when the stone was removed. So I
went to the home to further evaluate some areas that had not been previously evaluated because
that growth was basically hidden with[in] the wall cavity.”
-43-
F. Condition of Loose Stone on Front Stairway, Exterior Item #1
Calcaterra averred that, in addition to the various sources of water intrusion, TSA failed
to adequately remedy for the Follises the loose stone “on the top step of the front entry stairs.”
In support of his opinion, Calcaterra testified that “[t]here’s two flights of stairs, steps going up,
and they’re not built properly. There should be drainage underneath . . . the concrete, and it’s not
there.” Calcaterra denied that Moyer’s purported securing of the loose stone constituted a
“permanent repair” of the step drainage condition. Calcaterra explained that he had obtained a
Western Waterproofing estimate to reconstruct the steps with proper drainage at a cost of
$68,000. Wild explained that this estimate encompassed his recommendation “to completely
remove the stair, the foundation of it, so that . . . should any water get in, it has to have a way
out, because standing water in a freeze/thaw condition . . . will . . . continue to . . . become
debonded.”27 Kelley testified that during his tenure as the Unit 6 property manager, “[o]ne of the
steps had loose blue stone ad [sic] we repaired it.”
Viewing the record in the light most favorable to plaintiff, we once again detect no
evidence supporting a reasonable inference that some improper act or omission attributable to the
Follises resulted in damage to the front entry stairs.
G. Conditions of Various Other Escrow List Items
Calcaterra averred that he replaced a dryer vent, exterior item number four, on some
unspecified occasion. Regarding interior items four and five, Calcaterra testified that in late
2002 or early 2003, he “noticed that all the fittings that the valves were hooked up to had been
leaking at one time, because there was calcium around the fitting and around the nut.” Calcaterra
believed the leakage had taken place sometime after March 1999.28
Concerning interior item six, Calcaterra disputed that when he saw the dishwasher it sat
flush in its opening, or that its cosmetic front piece was properly attached. Calcaterra added that
the clothes dryer vent system, interior item seven, also was improperly connected, and that the
caulking identified in interior item eight had not taken place.
27
Wild affirmatively answered plaintiff’s counsel’s question, “[W]ere each of the repairs that
you’ve testified were performed by Western necessary to stop water intrusion into the home?”
Wild disbelieved that either the Follises or plaintiff, at any point between 1997 and 2002, could
have detected the various deficiencies his investigation uncovered. Wild did believe, however,
that “Sebold and his staff” and the “mason who was . . . doing the initial work” should have
recognized the potential sources of water intrusion.
28
Although the transcript is not entirely clear with respect to near which bathroom vanity
Morbach noticed some water staining, she had seen “fairly new” water stains under a vanity “that
could have come from” a nearby burst pipe.
-44-
H. Other General Causation-Related Testimony
On cross-examination, Calcaterra summarized as follows the state of his personal
knowledge concerning escrow list repairs by TSA:
Q: Now, in fact, you have no personal knowledge whether those repairs
were attempted, do you?
Calcaterra: No, I don’t.
Q: Okay. And as far as what really occurred to those items, the eight
interior items and the eight exterior items, between ’98—and . . . . December of
2002. So in this period here, you have no idea what happened with those items,
those 16 items, do you?
Calcaterra: That’s correct.
Q: And you would agree that all of those conditions could have changed
significantly between ’98 and 2000—December of 2002, right?
Calcaterra: No.
***
Q: Well, let’s just talk about the exterior of the house.
Calcaterra: Okay.
Q: Do you agree that the exterior—the exterior of that home, where it’s
located is exposed to a lot of pretty serious weather elements, right?
Calcaterra: Yes.
***
Q: Did anybody—did either Mr. Van Elslander, Debbie, or anybody else
from the family call to complain to you about any of the items on either the
interior or exterior list in the five-year period that, you know, from ’98 until
December 2002?
Calcaterra: No.
Calcaterra further denied ever hearing, between September 1998 and July 2002, that anyone who
occupied Unit 6, or any of plaintiff’s maintenance employees (including Kelley), ever voiced
concerns about any of the construction problems listed in the first amended complaint, including
the window well.
-45-
During Rupert’s testimony, the following exchange summarized his opinions of the
various defective conditions in Unit 6, none of which have any relationship with the 16 escrow
list items:
Q: Now, I believe, and I’m going to just try and summarize this quickly if
I can sort of go through each individually, you’ve testified that the windows were
not properly flashed or installed, the doors were not properly flashed and
installed, there was no masonry on the flashing, there was a problem with the
water barrier flashing, the masonry wall wasn’t built according to plans and specs,
there was [sic] a waterproofing membrane, water came through the improperly
flashed masonry, the doors were not flashed properly, and materials were
misapplied?
Rupert: Right.
According to Morbach, the laboratory analyses of the air samples she took from Unit 6
revealed the presence of “indoor” molds, “which told [her] that there were indoor sources.”
Morbach denied knowing whether anyone had mentioned or seen mold inside Unit 6 before July
2002. Counsel for the Follises elicited Morbach’s agreement that mold “[a]bsolutely” could
have grown inside the drenched house during the six weeks that elapsed between the July 2002
storms and her first visit to the house on September 3, 2002. Morbach denied that the full extent
of the mold damage she saw inside Unit 6 could have resulted individually from a clogged storm
drain, leaving doors or windows open, or improper caulking of the windows during installation.
She did acknowledge, however, that some of these factors could have accounted for some of the
water damage and mold she had observed.
Morbach believed that mold had grown “in the non-bedroom areas” of Unit 6’s lower
level because “it appeared that . . . water had run behind the paneling which would have come
from above at the doorwalls.” Morbach denied that she could pinpoint precisely the ages of the
molds she located inside Unit 6:
Q: Ma’am, can you point on those boards, how many places where you
found mold that you can testify with reasonable certainty that that mold was
growing in 1998, September of 1998[?]
And by the way, ma’am, while you’re thinking, I’m talking about as
opposed to 1999 or 2000 or November of 1998. In other words, I want to know,
with precision, can you testify to that[?]
Morbach: Based on the way you’ve answered (sic) the question, no.
I. Analysis Regarding Sufficiency of Evidence of Breach of Contract Damages
Plaintiff submitted to the jury a claim for all damages resulting from water intrusion into
Unit 6. In exhibits supplied to the jury, plaintiff outlined 13 general categories of damages, some
further broken down into subcategories, all of which together totaled more than $1.6 million.
The damages sought included reimbursement of the following items: (1) $250,000 paid to
Service Master, Wise’s cleaning and mold remediation company; (2) $382,000 for replacement
-46-
of “personal property,” primarily furniture, damaged by mold; and (3) $3,392.54 for services to
dry the home after the July 2002 storms.
Plaintiff did not attempt to link the alleged breaches of the escrow list contract with
specific damages within the home. Unquestionably, Morbach’s and Wise’s charges for mold
remediation included services provided to areas of the home unrelated to the escrow list items.
Similarly, the lump sum requested for replaced furniture plainly included furniture having no
relationship to any escrow list items. The jury awarded plaintiff the lump sum of approximately
$680,000, without assigning any specific categories of damages to any specific breaches of the
escrow agreement.29
1. Window Well
The record clearly establishes that at the time of Lieberman’s home inspection around
August 24, 1998, the window well had standing water. Although Lieberman detected no water
related damage in the area of the window well in August 1998, he cautioned that water permitted
to accumulate in the well “could leak into the home or cause structural damage,” or generate
mold and mildew. Mold expert Morbach agreed with Lieberman’s report in these respects, that
“you still have an issue of potential ongoing water intrusion if the drain isn’t fixed,” and, “If
there were elevated moisture measurements at that time [in August 1998], and the source was not
corrected and the water damaged building materials [were not] dried within 48 hours there would
have been mold in that home.” Plaintiff theorized that the genesis of mold in the window well,
and its spreading throughout the house, thus amounts to either a direct, natural and proximate
result of the Follises’ breach of the escrow agreement, or at least a consequence reasonably
within the parties’ contemplation when they entered the escrow agreement as a result of the
Follises’ failure to repair the window well.
We reject the notion, however, that in “the usual course of things,” the Follises’ neglect
to properly remedy the window well drainage situation in or around September 1998 “fairly and
29
We respectfully disagree on legal grounds with the dissent’s conclusion that the breach of
contract verdict should be affirmed because “[a] reasonable jury could infer from the expert
testimony of Wise and Morbach that the disrepair of the dining room doors and basement
window well significantly contributed to the resulting mold.” Infra, slip op at 4. Although the
parties could have foreseen that the Follises’ failures to properly perform the escrow list repairs
would result in some water damage and some mold, we reject that the parties could have
contemplated a massive mold infestation throughout this large home arising from the incomplete
repair of a single door sill and a single basement window well. Whether the Follises’ incomplete
repairs “significantly contributed” to the mold might be relevant if the claim at issue were a tort
case. Infra at 4. But in this breach of contract action, plaintiff must prove that his damages
“arise naturally from the breach, or . . . can reasonably be said to have been in contemplation of
the parties at the time the contract was made.” Lawrence, supra at 13 (internal quotation
omitted, emphasis in original); see also 24 Williston on Contracts (4th ed), § 64.13, p 137 (“For a
tort, the defendant becomes liable for all proximate consequences, while for breach of contract
the defendant is liable only for consequences that were reasonably foreseeable, at the time the
contract was made, as likely to result if the contract were broken.”).
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reasonably may be considered” as leading to plaintiff’s ultimate incurrence, in 2002 and beyond,
of more than $1.6 million in water damages, mold remediation, and reconstruction costs. We
conclude as a matter of law that the damages sought by plaintiff for the Follises’ breach of duty
in failing to fix the window well, in accordance with escrow list exterior item number three, were
not recoverable as directly, naturally, and proximately arising from the neglect of, or improper
repairs to, one window well drain, given (1) Wild’s identification of numerous other sources of
water intrusion; (2) the lengthy period of time between the parties’ entry into the escrow
agreement and plaintiff’s discovery of water damages; and (3) the ultimate necessity of
remediating and reconstructing a majority of Unit 6.
The language of the escrow agreement describing the window well issue identified by
Lieberman does tend to support plaintiff’s claim of entitlement to consequential damages arising
from the Follises’ failure to fix the window well drain, to the extent that escrow list exterior item
three explicitly refers to the potential for mold. But an objective leap from some water and mold
damage near the window well to plaintiff’s request for more than $1.6 million in consequential
damages, or even the jury’s award of more than $680,000, remains problematic. As we have
observed, permissible consequential damages constitute those “as may reasonably be supposed to
have been in the contemplation of both parties at the time they made the contract, as the probable
result of a breach of it.” Lawrence, supra at 7. The record in this case, however, reveals several
unrebutted factors that mitigate against a determination that the Follises reasonably could have
anticipated the damages plaintiff sought to recover, and that the jury ultimately awarded.
Objectively viewed, the circumstances of this case, even when viewed in the light most
favorable to plaintiff, do not establish by a preponderance of the evidence that the Follises knew
or should have known in 1998 that a lone malfunctioning window well drain likely would lead to
either $1.6 million or $680,000 in damages to Unit 6—especially in light of the fact that the
parties placed in escrow $25,000 to ensure proper remedy of all 16 escrow list items.
Plaintiff asserts that Dierickx v Vulcan Industries, 10 Mich App 67; 158 NW2d 778
(1968), supports his claim for a full measure of damages caused by the escrow list-related leaks.
The plaintiff in Dierickx contracted with the defendant “to waterproof a certain portion” of the
plaintiff’s basement wall, and warranted its work for five years. Id. at 69-70. Despite the
defendant’s efforts, water continued to seep into the plaintiff’s basement. Id. at 70. Eventually,
the plaintiff hired a different contractor, who successfully controlled the seepage after “breaking
up a portion of plaintiff’s driveway and excavating the outside of the basement wall.” Id. The
plaintiff submitted to the trial court a bill of particulars itemizing each component element of
damage, totaling $4795. Id. at 70-71. The trial court found that the defendant had breached its
contract and awarded the plaintiff only $230, the amount paid to the defendant for its ineffective
waterproofing services. Id. at 71.
This Court reversed. In relevant part, the Court observed that “[t]he proper measure of
damages in this case is the lowest cost of furnishing plaintiff a dry basement for a period of the
warranty.” Dierickx, supra at 75. The Court explained that because the defendant expressly had
guaranteed the effectiveness of its services for a five-year period, the trial court should have
entertained testimony regarding “the costs of the subsequent excavation contract,” and should
have made findings “as to the expected life of the excavation job as well as when defendant’s
warranty began to run and what period remained unexpired.” Id. at 78. Next, in the portion of
Dierickx emphasized by plaintiff, the Court stated,
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Moreover, it is clear that one who contracts to stop a leak under such a
guarantee of success will at least contemplate that if he fails incidental damage
may follow from the continuation of the leak. Plaintiff claims such injury did in
fact follow by virtue of warped paneling, discolored tile and loss of use and
enjoyment of the basement recreation area. Testimony should have been
permitted as to the extent of these damages occurring by virtue of defendant’s
failure, which occurred while the warranty was in effect. [Id. at 78-79.]
The evidence in Dierickx plainly demonstrated a direct causal connection between the
defendant’s breach of its warranty and the entirety of the leakage in the plaintiff’s basement.
Here, although some evidence links the Follises’ failure to repair the window well drain and the
damage to plaintiff’s basement, the evidence does not causally connect the window well problem
to the damages incurred in the upstairs of Unit 6, or even in other areas of the basement.
2. Dining Room “Shim” & Doors
Plaintiff also contended at trial that the failure to repair either the “shim” under the south
dining room threshold or the binding of both sets of dining room doors resulted in water-related
damages. For most of the reasons discussed above, the Follises could not reasonably have
anticipated in September 1998 that the two asserted dining room repair failures in 2002 and
beyond likely would demand repairs of either $1.6 million or $680,000. The following
causation-related concerns mitigate against a finding of consequential damages arising from a
failure to repair exterior items 2 and 6: (1) multiple witnesses identified water damage in the
vicinity of windows and doors throughout the house; (2) Morbach identified some of this water
damage as chronic and repeated, including in the first floor master bedroom, i.e., rooms other
than the dining room; (3) plaintiff’s guests left windows and doors unlocked, and returned to
Unit 6 a week or two later to find doors or windows open to the elements; (4) plaintiff’s own
failure to lock some doors and windows resulted in the July 17, 2002 and July 21, 2002 storm
related water intrusions, which soaked much of the interior of Unit 6 with 3” to 5” of rain; and
(5) after the thorough soaking of Unit 6 in July 2002, including the dining room, the home
remained damp and warm over the summer, enhancing mold growth, before remediation began
in December 2002.
The “shim” and dining room door binding contributions to causation in this case appear
speculative at best because so many other potential causes of water intrusion and damage
existed, and, more importantly, because less than a preponderance of the evidence in the vast
record tends to specifically link the shim to an identified occurrence of water intrusion into Unit
6, and no evidence linked the dining room door binding to any instance of water intrusion.
Kallabat v State Farm Mut Automobile Ins Co, 256 Mich App 146, 151; 662 NW2d 97 (2003)
(“In determining damages for allowable expenses, the jury must not be allowed to speculate
concerning the cost of a particular procedure or service, and a trial court should grant a motion
for judgment notwithstanding the verdict if the jury was permitted to engage in such
speculation.”); Berrios v Miles, Inc, 226 Mich App 470, 478; 574 NW2d 677 (1997) (observing
that “damages based on speculation or conjecture are not recoverable”).
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3. Interior Water System Leakages
Irrespective whether the Follises reasonably may have anticipated some consequential
damages arising from their failure to adequately fix interior items four and five, our review of the
record reveals no evidence whatsoever of any ongoing leaks or water damage arising near the
identified water shut-off valves. Viewed in the light most favorable to plaintiff, the record
established only that, in Calcaterra’s words, “the fittings that the valves were hooked up to had
been leaking at one time, because there was calcium around the fitting and around the nut.” The
only other relevant evidence of water staining near a sink came via Morbach’s testimony
regarding a “recent” but dried water stain under a vanity. The record simply does not connect
the relatively minor 1998 water leakage issues with any resultant mold or other damage requiring
additional repair.
4. Loose Stone on Front Steps
During closing argument, counsel for plaintiff urged the jury to award $68,000 to
properly repair the front steps in the waterproof manner Wild proposed. But the clear and
unambiguous escrow agreement language mandates only that the Follises “resecure[]” the
“furthest stone to the east on the top set of the front entry stairs.” Furthermore, the record does
not support any reasonable supposition by the Follises in 1998 that their neglect to repair one
loose stone on the top step of a flight of stairs probably would cause plaintiff to incur $68,000 to
entirely rebuild the steps. We emphasize that the record reflects no basis for knowledge by the
Follises at any time that the front steps suffered some drainage infirmity.
J. Indecipherability of Jury Award
As we have concluded, the sole potentially appropriate category of consequential
damages for which the Follises legally may have some responsibility constitutes water intrusion
into the window well. From the special verdict rendered, we simply cannot ascertain to what
degree the jury assigned damages to the window well-related breach, and this lone permissible
category of consequential damages does not support the entire $680,000 awarded by the jury.
We thus are constrained to find that the jury’s verdict qualifies as “clearly . . . excessive,”
pursuant to MCR 2.611(A)(1)(d). See Davidson v Gen Motors Corp (On Rehearing), 136 Mich
App 203, 205-206; 357 NW2d 59 (1984) (“Where damages are measured by fixed rules and
principles, as in a contract action, the jury’s verdict may be set aside as excessive where it can be
concluded that the jury must have disregarded such rules and principles.”). Because we find it
plain that the jury disregarded the applicable rules for calculating contract damages, we hold that
the circuit court abused its discretion in denying the Follises’ motion for a new trial.
Our finding that a new trial is warranted here leads us to a further consideration regarding
the scope of the new trial on remand. In MCR 2.611, the Supreme Court has authorized the
granting of a new trial with respect “to all or some of the parties, on all or some of the issues,
whenever their substantial rights are materially affected . . . .” “‘While permitted by rule, we do
not favor partial new trials, limited to damages alone.’” Garrigan v LaSalle Coca-Cola Bottling
Co, 373 Mich 485, 489; 129 NW2d 897 (1964), quoting Bias v Ausbury, 369 Mich 378, 383; 120
NW2d 233 (1963). In Michigan, “[i]t has long been recognized that the questions of liability and
damages are so closely intertwined that they may not usually be separated.” Doutre v Niec, 2
Mich App 88, 90; 138 NW2d 501 (1965). A limited exception to this general rule applies “only .
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. . where the liability was clear.” Trapp v King, 374 Mich 608, 611; 132 NW2d 640 (1965); see
also Lagalo v Allied Corp (On Remand), 233 Mich App 514, 523; 592 NW2d 786 (1999).
In this case, the Follises presented evidence from which a jury could have found that TSA
remedied all items on the escrow lists in an acceptable manner. Because the Follises’ liability
for breaching the escrow agreement does not appear clear, “we cannot order a new trial with
regard to the issue of damages alone.” Lagalo, supra at 523. Therefore, we remand for a new
trial limited in focus to whether (1) the Follises breached escrow schedule exterior item #3
involving the window well, and (2) this breach occasioned any damages that either “may fairly
and reasonably be considered either as arising naturally—that is, according to the usual course of
things—from such breach of contract itself, or such as may reasonably be supposed to have been
in the contemplation of both parties at the time they made the contract, as the probable result of a
breach of it.” Lawrence, supra at 7.
K. Other Questions Presented
We offer the following brief analysis regarding the other questions that the parties raise
on appeal. We first find that the Follises erroneously contend that plaintiff’s release of the funds
held in escrow constituted a release of their potential liability arising from repair of the escrow
list items. No terms in the plain language of either of the relevant documents, the September
1998 escrow agreement or plaintiff’s March 1999 authorization to release the $25,000 in escrow,
purports to shield the Follises from liability. Genesee Foods Services, Inc v Meadowbrook, Inc,
___ Mich App ___; ___ NW2d ___ (Docket No. 274517, issued July 17, 2008), slip op at 4 (“If
the text in the release is unambiguous, we must ascertain the parties’ intentions from the plain,
ordinary meaning of the language of the release.”).
Concerning the Follises’ related waiver and estoppel arguments, we cannot decide these
issues as a matter of law because the record contains evidence suggesting that plaintiff did not
knowingly relinquish his right to the Follises’ repair of the escrow list items, or that plaintiff
accepted partial performance of the escrow list repairs. Sweebe v Sweebe, 474 Mich 151, 156
157; 712 NW2d 708 (2006) (explaining that waiver is the intentional relinquishment of a known
right); Goldblum v United Automobile, Aircraft & Agricultural Implement Workers of America,
Ford Local No. 50, 319 Mich 30, 37; 29 NW2d 310 (1947) (noting that parties may relax
contractual terms by mutual agreement).
The circuit court properly rejected the Follises’ request that the jury consider
apportionment of plaintiff’s damages to nonparty TSA, which had won summary disposition of
all claims that plaintiff asserted against it. Our Supreme Court recently held that “proof of a duty
is required before fault can be apportioned and liability allocated under the comparative fault
statutes, MCL 600.2957 and MCL 600.6304.” Romain v Frankenmuth Mut Ins Co, ___ Mich
___; ___ NW2d ___ (Docket No. 135546, decided July 23, 2008), slip op at 2-3 (emphasis in
original, internal quotation omitted). Because the circuit court decided correctly that TSA owed
plaintiff no duty, “the ‘negligent’ actor could not have proximately caused the injury and could
not be at ‘fault’ for purposes of the comparative fault statutes.” Id. at 4.
Lastly, given our conclusion that the record does not support the jury’s award of
consequential damages, it becomes unnecessary for us to address either the Follises’ contention
that the circuit court improperly denied their motion for summary disposition of plaintiff’s silent
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fraud claim, or plaintiff’s argument that the circuit court erred by denying his motion to amend
the judgment
V. Conclusion
We affirm the circuit court’s orders granting TSA summary disposition. We reverse the
unsupported jury award of damages against the Follises, and remand for further proceedings
consistent with this opinion. We do not retain jurisdiction.
/s/ Stephen L. Borrello
/s/ Elizabeth L. Gleicher
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