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STATE OF MICHIGAN
COURT OF APPEALS


KENT TILLMAN, LLC, and KENT COMPANIES, INC., Plaintiffs/Counter-DefendantsAppellees, v TILLMAN CONSTRUCTION CO., Defendant/Third-Party Plaintiff/Counter-PlaintiffAppellant, and ROOSEVELT TILLMAN, Defendant-Appellant, and FIDELITY & DEPOSIT CO OF MARYLAND and ALLEN J. VANDERLAAN, Third-Party Defendants-Appellees.

UNPUBLISHED January 19, 2006

No. 263232 Kent Circuit Court LC No. 02-011862-CK

Before: Whitbeck, C.J., and Bandstra and Markey, JJ. PER CURIAM. Defendants appeal as of right the trial court order granting summary disposition in favor of plaintiffs and from a money judgment entered in favor of plaintiffs. We affirm. Kent Companies (Kent) and Tillman Construction (Tillman) formed Kent-Tillman, LLC (the LLC), for the purpose of bidding on a construction project. Ownership interests in the LLC were 85 percent and 15 percent, respectively. Kent, the majority member, managed the LLC. The LLC submitted a bid for cement work to Erhardt/Hunt, the manager of the construction project, and Erhardt/Hunt awarded a contract to the LLC.

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Plaintiffs initiated this action against defendants after the president of Tillman, Roosevelt Tillman, withdrew over $145,000 from the LLC's bank account without management approval. Defendants filed a counterclaim alleging that a subcontract existed between the LLC and Tillman under which Tillman was entitled to receive, as compensation for furnishing labor for the construction project, a fixed sum of 15 percent of the full contract price as set out in the contract between the LLC and Erhardt/Hunt. Tillman also alleged that the president of Kent distributed a disproportionate amount of money to Kent, in violation of the LLC operating agreement, and that Kent violated the Michigan Limited Liability Company Act ("LLCA"), MCL 450.4101 et seq., by controlling the LLC in a manner that was fraudulent, willfully unfair, and oppressive to Tillman. Plaintiffs moved for summary disposition, which was granted with a money judgment against defendants, jointly. We review de novo a trial court's decision on a motion for summary disposition. Hess v Cannon Twp, 265 Mich App 582, 589; 696 NW2d 742 (2005). A motion for summary disposition under MCR 2.116(C)(10) tests the factual sufficiency of the complaint. Id. When deciding a motion for summary disposition under this subrule, we consider the pleadings, affidavits, depositions, admissions, and other documentary evidence submitted in the light most favorable to the nonmoving party. Id. Additionally, we review de novo the construction and interpretation of a contract. Bandit Industries, Inc v Hobbs Int'l, Inc (After Remand), 463 Mich 504, 511; 620 NW2d 531 (2001). Defendants first contend that there was sufficient evidence from which a fact-finder could conclude that a subcontract existed between the LLC and Tillman under which Tillman was to receive, as compensation, a fixed sum of 15 percent of the price of the contract between Erhardt/Hunt and the LLC. Defendants assert that the subcontract is evidenced by the proposal letter, letter of intent, and certain documents in the record that refer to Tillman as a "subcontractor." We disagree. The LLC operating agreement, which contained an integration clause, provided that any profit or loss would be allocated according to each member's ownership interest in the LLC, as would distributions of cash. Further, members were not to be paid any salary or compensation for services rendered to the LLC. Contract language should be given its ordinary and plain meaning. Lawsuit Financial, LLC v Curry, 261 Mich App 579, 590; 683 NW2d 233 (2004). By the plain language of the operating agreement, the 85/15 percent split referred to losses, profits, and cash disbursements, not to the full contract price. "Parol evidence of contract negotiations, or of prior or contemporaneous agreements that contradict or vary the written contract, is not admissible to vary the terms of a contract which is clear and unambiguous." UAW-GM Human Resource Ctr v KSL Recreation Corp, 228 Mich App 486, 492; 579 NW2d 411 (1998), quoting Schmude Oil Co v Omar Operating Co, 184 Mich App 574, 580; 458 NW2d 659 (1990). Defendants cannot rely on the proposal letter, letter of intent, or other documents to vary the terms of the operating agreement. Defendants contend that, even in the absence of a written subcontract, they are entitled to recover under the theory of promissory estoppel because plaintiffs promised to pay defendants 15 percent of the contract price and defendants relied on that promise in forming the LLC with Kent. We disagree. "The elements of promissory estoppel are (1) a promise, (2) that the promisor should reasonably have expected to induce action of a definite and substantial character on the part of the promisee, and (3) that in fact produced reliance or forbearance of that nature in -2-


circumstances such that the promise must be enforced if injustice is to be avoided." Novak v Nationwide Mut Ins Co, 235 Mich App 675, 686-687; 599 NW2d 546 (1999). Promissory estoppel should be applied cautiously and is appropriate only where the promise is clear and definite. Marrero v McDonnell Douglas Capital Corp, 200 Mich App 438, 442; 505 NW2d 275 (1993). Defendants failed to present evidence of a clear and definite promise. Moreover, the alleged representations made by Kent contradict the express terms of the operating agreement by which both parties are bound. Therefore, defendants' promissory estoppel claim must fail. See Novak, supra at 687. Defendants next contend that the trial court erred when it granted summary disposition in favor of plaintiffs on defendants' fraudulent misrepresentation claim. We disagree. As one element of a claim of fraudulent misrepresentation, defendants were required to prove that their reliance on plaintiffs' representation was reasonable. Foreman v Foreman, 266 Mich App 132, 141-142; 701 NW2d 167 (2005). Because the written contract between the parties contained a merger clause, defendants' alleged reliance on representations not contained in the written contract was unreasonable. See UAW-GM, supra at 504. Defendants next contend that Kent was not entitled to reimbursement for labor or equipment costs as out-of-pocket expenses and that, therefore, in the trial court's money judgment, Kent received compensation in excess of that which was allowed under the LLC operating agreement. We disagree. We review for clear error an award of damages. Triple E Produce Corp v Mastronardi Produce, Ltd, 209 Mich App 165, 177; 530 NW2d 772 (1995). Clear error exists only where, although there is evidence to support the trial court's finding, we are left with a definite and firm conviction that a mistake has been made. Id. at 171. "The primary goal in the construction or interpretation of any contract is to honor the intent of the parties." UAW-GM, supra at 491, quoting Rasheed v Chrysler Corp, 445 Mich 109, 127 n 28; 517 NW2d 19 (1994). "[W]hen the parties include an integration clause in their written contract, it is conclusive and parol evidence is not admissible to show that the agreement is not integrated except in cases of fraud that invalidate the integration clause or where an agreement is obviously incomplete `on its face' and, therefore, parol evidence is necessary for the `filling of gaps.'" UAW-GM, supra at 502, quoting 3 Corbin, Contracts,

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