Preview:

STATE OF MICHIGAN
COURT OF APPEALS


DONALD F. EBY and DIANE M. CREASY, Plaintiffs-Appellants, v A & M CUSTOM BUILT HOMES, INC. and BILTMORE BUILDING COMPANY, Defendants-Appellees, and WYNDHAM POINTE DEVELOPMENT, CO., L.L.C. Intervening Defendant-Appellee.

UNPUBLISHED May 15, 2001

No. 218826 Oakland Circuit Court LC No. 97-001062-CK

Before: Bandstra, C.J., and Griffin and Collins, JJ. PER CURIAM. Plaintiffs Donald Eby and Diane Creasy appeal as of right from an order granting summary disposition in favor of defendants A & M Custom Built Homes, Inc., ("A & M") and Biltmore Building Company ("Biltmore"), and intervening defendant Wyndham Pointe Development, Co., L.L.C., pursuant to MCR 2.116(C)(10). We affirm. Defendants A & M and Biltmore entered into an agreement with plaintiffs to sell lots in the first two phases of Wyndam Pointe subdivision. A written letter pertaining to the agreement provided, in pertinent part: Please recognize this letter as a commitment from A & M Custom Built Homes and Biltmore Building Company for the Wyndham Pointe sales position. This sales position will encompass all aspects of the building process from greeting new customers to selections and closings. The compensation will be based on the following breakdown: A straight 1.5% commission rate will be applied to the base price of the house plus any lot premium and if applicable a walk out or a look out premium. A straight 5% -1-

commission rate will apply to all other extras that were included in the sales contract and/or added or installed during the construction process via work orders. The letter did not contain a specific integration clause. During their tenure of employment, plaintiffs sold three homes for defendants. Plaintiffs also obtained 18 lot reservations during this time; however, six of the reservations were lost. In September 1997, defendants' representatives expressed their concerns about the limited sales progress and decided to bring in another person, Shelton Rott, to assist with the sales. Although plaintiffs allege that Rott "replaced" them, defendants maintain that Rott's appointment did not affect plaintiffs' compensation schedules. According to defendants, Rott's appointment made plaintiffs "antagonistic" and they "refused to work with Mr. Rott." Therefore, defendants terminated plaintiffs' employment on October 1, 1997. Plaintiffs subsequently commenced this action, alleging claims for breach of contract, fraud, implied contract and unjust enrichment, promissory estoppel, and quantum meruit. Defendants filed a motion for summary disposition under MCR 2.116(C)(10), arguing that plaintiffs' employment was terminable at will. The trial court granted the motion, holding that the written letter agreement failed to establish a just-cause employment relationship and that plaintiffs were barred from introducing parol evidence of previous or contemporaneous discussion to contradict the letter agreement. The court also held that plaintiffs could not prevail on their fraud claim because plaintiffs failed to allege fraud in the inducement and there was no evidence that defendants knowingly made false representations to support an action for fraud. Plaintiffs filed a motion for reconsideration, requesting in the alternative that they be allowed to amend their complaint to allege fraud in the inducement, which the trial court denied. A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim. Spiek v Dep't of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). When considering such a motion, a court must consider the pleadings, affidavits, depositions, admissions and other documentary evidence submitted by the parties in a light most favorable to the nonmoving party. Ritchie-Gamester v City of Berkley, 461 Mich 73, 76; 597 NW2d 517 (1999). The party opposing the motion must, by documentary evidence, set forth specific facts showing that there is a genuine issue of material fact for trial. MCR 2.116(G)(4); Maiden v Rozwood, 461 Mich 109, 120-121; 597 NW2d 817 (1999); Quinto v Cross & Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996); Detroit v GMC, 233 Mich App 132, 139; 592 NW2d 732 (1998); State Farm v Johnson, 187 Mich App 264, 267; 466 NW2d 287 (1990). On appeal, plaintiffs argue that the trial court erred in refusing to consider parol evidence of pre-employment discussions concerning the nature of their employment relationship with defendants. We agree that the trial court erred in failing to consider plaintiffs' parol evidence. In Romska v Opper, 234 Mich App 512, 516 n 3; 594 NW2d 853 (1999), this Court stated: The parol evidence rule excludes evidence of prior contemporaneous agreements, whether oral or written, which contradict, vary or modify an unambiguous writing intended as a final and complete expression of the agreement. Ditzik v Schaffer -2-

Lumber Co, 139 Mich App 81, 87-88; 360 NW2d 876 (1984), citing NAG Enterprises, Inc v All State Industries, Inc, 407 Mich 407, 410; 285 NW2d 770 (1979). Thus, where two parties have entered into a written contract and have expressed their intention that the writing constitutes the complete and accurate integration of that contract, such as when the parties use an explicit merger provision, parol evidence of previous or contemporaneous understandings and negotiations is not admissible for the purpose of varying or contradicting the writing, with the very narrow exceptions of fraud and the rare situation where a written document is obviously incomplete on its face. See NAG, supra at 409-410; Michigan National Bank v Laskowski, 228 Mich App 710, 714; 580 NW2d 8 (1998); UAW-GM Human Resource Center v KSL Recreation Corp, 228 Mich App 486, 492-93; 579 NW2d 411 (1998). A prerequisite to the application of the parol evidence rule is a determination that the parties intended the written instrument to be a complete expression of their agreement concerning the matters covered. Farm Credit Services of Michigan's Heartland, PCA v Weldon, 232 Mich App 662, 669; 591 NW2d 438 (1999). As this Court observed in UAW, supra at 492-493: [P]arol evidence of prior or contemporaneous agreements or negotiations is admissible on the threshold question whether a written contract is an integrated instrument that is a complete expression of the parties' agreement. In re Skotzke Estate, 216 Mich App 247, 251-252; 548 NW2d 695 (1996); NAG, [ supra at 410411]. The NAG Court noted four exceptions to the parol evidence rule, stating that extrinsic evidence is admissible to show (1) that the writing was a sham, not intended to create legal relations, (2) that the contract has no efficacy or effect because of fraud, illegality, or mistake, (3) that the parties did not integrate their agreement or assent to it as the final embodiment of their understanding, or (4) that the agreement was only partially integrated because essential elements were not reduced to writing. NAG, supra at 410-411. See also 4 Williston, Contracts,

Download DONALD F EBY V A&M CUSTOM BUILT HOMES INC.pdf

Michigan Law