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STATE OF MICHIGAN
COURT OF APPEALS


KRISTINA MATHIS, Plaintiff/Counter-DefendantAppellant, v CONTROLLED TEMPERATURE, INC., and PATRICIA DREFFS-SCHULTZ, Defendants/Counter-Plaintiffs-
Appellees.


UNPUBLISHED March 25, 2008

No. 275323 Oakland Circuit Court LC No. 2005-068478-CZ

Before: White, P.J., and Hoekstra and Schuette, JJ. PER CURIAM. Plaintiff Kristina Mathis appeals as of right from a judgment awarding defendants Controlled Temperature, Inc. (CTI), and Patricia Dreffs-Schultz (Schultz) $5,200 on their counterclaim for breach of contract. Plaintiff challenges the trial court's order granting defendants' motion for summary disposition of her breach of contract claim under MCR 2.116(C)(10), and her additional contract, tort, and statutory claims under MCR 2.116(C)(7) and (10). Plaintiff also challenges the trial court's order allowing defendants to amend an affirmative defense and file their counterclaim. We affirm. I. Background Plaintiff was employed by CTI between July 2001 and June 2003. Schultz, a partner and vice-president of CTI, was responsible for running the business operations. In July 2003, Schultz, on behalf of CTI, and plaintiff executed an agreement to settle discrimination and retaliation charges filed by plaintiff with the Michigan Department of Civil Rights and Equal Employment Opportunity Commission. The CTI settlement agreement required plaintiff to repay the settlement amount to CTI if she "breaches or attempts to breach" the agreement. In May 2004, plaintiff began receiving temporary work assignments through Accountants Connection. Plaintiff was assigned to work with Dawn Smart, a credit manager at Awrey Bakeries, Inc., (Awrey) until Smart's assistant returned in January 2005 from an extended disability and maternity leave. During plaintiff's assignment, Smart contacted CTI about plaintiff's past employment in an effort to get plaintiff hired by Awrey, but no position was ever

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available or created for plaintiff. A hiring freeze was in place by February 2005, when Awrey began bankruptcy proceedings. Plaintiff applied for an accounting position with the Farbman Group in January 2005. Wolanin & Associates, Inc. (Wolanin), a company that performs background checks of potential employees for its clients, checked plaintiff's former employment on behalf of the Farbman Group. Plaintiff was also interviewed and took accounting and drug tests, but was not offered the position. In March 2005, plaintiff filed the instant action against CTI and Schultz, seeking damages for alleged derogatory and inaccurate information provided to potential employers during background checks of her CTI employment. Plaintiff's amended complaint included counts against both defendants for breach of the CTI settlement agreement, unlawful retaliation for filing the settled discrimination complaint, defamation, intentional interference with a business relationship, intentional infliction of emotional distress, and gross negligence. Among defendants' amended affirmative defenses was an allegation that plaintiff's claims were barred to the extent that they were prohibited by a release contained in the CTI settlement agreement. In April 2006, the trial court granted defendants' motion to amend their affirmative defenses to add an allegation that plaintiff's claim based on her employment application with the Farbman Group was barred by a release contained in the application, and also granted defendants' motion to file a counterclaim alleging plaintiff's breach of the CTI settlement agreement. Plaintiff later withdrew her claims for gross negligence and intentional infliction of emotional distress. The trial court subsequently granted defendants' motion for summary disposition with respect to plaintiff's remaining claims, denied plaintiff's cross-motion for summary disposition, and entered judgment in favor of defendants on their counterclaim. II. Motion to File Counterclaim and Amend Affirmative Defense We first consider plaintiff's challenge to the trial court's decision granting defendants' motion to file a counterclaim and amend their affirmative defenses. An affirmative defense is waived unless stated in a party's responsive pleading, as originally filed or amended under MCR 2.118. See MCR 2.111(F)(3). A counterclaim must be filed with the answer or an amendment under MCR 2.118. See MCR 2.203(E). Because defendants did not file their counterclaim with their original answer, we review both of defendants' motions under the abuse of discretion standard applicable to amended pleadings under MCR 2.118. Weymers v Khera, 454 Mich 639, 654; 563 NW2d 647 (1997); Cole v Ladbroke Racing Michigan, Inc, 241 Mich App 1, 9; 614 NW2d 169 (2000). An abuse of discretion occurs when a trial court's decision "results in a decision falling outside the range of principled outcomes." Barnett v Hidalgo, 478 Mich 151, 158; 732 NW2d 472 (2007). Under MCR 2.118(A)(2), leave to amend a pleading "shall be freely given when justice so requires." A motion for leave to amend should ordinarily be granted absent "any apparent or declared reason, such as undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, or futility of amendment." Cole, supra at 9-10; see also Sands Appliance Services, Inc v Wilson, 463 Mich 231, 239-240; 615 NW2d 241 (2000). Delay alone does not justify denying the motion, but "a -2-


court may deny a motion to amend if the delay was in bad faith or the opposing party suffered actual prejudice as a result." Weymers, supra at 659. Prejudice, in this context, means that the amendment would prevent the nonmoving party from having a fair trial. Id.; Sands Appliance Services, Inc, supra at 239 n 6. Here, after conducting an in-chambers meeting with counsel on April 12, 2006, the trial court indicated that it intended to grant defendants' motion to file the counterclaim based on the rule of liberal amendments. The trial court also expressed agreement with defense counsel, who had argued that the information supporting the counterclaim was not discovered until Smart's deposition was taken in March 2006. Plaintiff has not stated or otherwise demonstrated any basis for concluding that the trial court abused its discretion in granting defendants' motion with regard to the counterclaim. Instead, plaintiff's argument focuses on the trial court's grant of defendants' motion to amend its affirmative defenses to add a defense based on the release in plaintiff's January 14, 2005, employment application with the Farbman Group. We note that the trial court questioned the adequacy of the parties' pleadings with respect to this issue. Following the in-chambers meeting, it indicated that it had instructed the parties to "clean up their pleadings." While we agree with plaintiff that defendants' motion could have been brought earlier, the trial court accommodated plaintiff by revising the scheduling order and assessing costs against defendants related to the amended affirmative defense. Considering that plaintiff's amended complaint did not even mention the Farbman Group, we conclude that the trial court did not abuse its discretion by allowing the amended affirmative defense. III. Awrey Next, we consider plaintiff's challenge to the trial court's decision granting defendants' motion for summary disposition under MCR 2.116(C)(10) with respect to plaintiff's four claims involving her alleged employment opportunity at Awrey. We also consider plaintiff's challenge to defendants' motion for summary disposition under MCR 2.116(C)(10) with respect to its counterclaim for breach of contract. A trial court's decision on a motion for summary disposition pursuant to MCR 2.116(C)(10) is reviewed de novo to determine whether a genuine issue of material fact exists or whether the moving party is entitled to judgment as a matter of law. . . . A court may not make factual findings when deciding a motion for summary disposition. However, when no genuine issue of material fact exists, summary disposition is appropriate. And when the nonmoving party would have the burden of proof at trial, the nonmoving party must establish that a genuine issue of material fact exists by admissible documentary evidence. [Ghaffari v Turner Constr Co, 268 Mich App 460, 463; 708 NW2d 448 (2005) (citations omitted).] A. Defamation In order to establish a claim of defamation, a plaintiff must show: (1) a false and defamatory statement concerning the plaintiff, (2) an unprivileged communication to a third party, (3) fault amounting at least to negligence on the part of the publisher, and (4) either -3-


actionability of the statement irrespective of special harm or the existence of special harm caused by publication. Mitan v Campbell, 474 Mich 21, 24; 706 NW2d 420 (2005). Here, the trial court determined that plaintiff failed to establish the first of these elements, i.e., an actionable statement. Although plaintiff argues on appeal that she was defamed by a statement that her employment at CTI was unfavorable, she cites no factual support for her argument in the record. In order to properly present a claim on appeal, the facts relied on by a party "must be supported by specific page references to the transcript, the pleadings, or other document or paper filed with the trial court." MCR 7.212(C)(7). We will not search the record for factual support for plaintiff's claim. Derderian v Genesys Health Care Systems, 263 Mich App 364, 388; 689 NW2d 145 (2004). Regardless, even if we were to overlook the deficiency in plaintiff's argument, we would not reverse the trial court's decision. We shall assume for purposes of review that plaintiff's argument is based on Smart's deposition testimony and related documentation concerning her fax communication with CTI. Because defendants' motion for summary disposition was based on MCR 2.116(C)(10), we must examine this evidence in a light most favorable to plaintiff. Maiden v Rozwood, 461 Mich 109, 120; 597 NW2d 817 (1999). Smart testified that she telephoned CTI on January 26, 2005, in an effort to gather information about plaintiff so that she could convince her supervisor to contact the human resources manager about creating a position for plaintiff. Someone at CTI gave her a telephone number to fax the request to "Patty." In response to the request, Smart received a return fax with the dates of plaintiff's employment, the position she held, and a contact person identified as "Jody." Afterward, Smart received a telephone call from someone at CTI, seeking confirmation that she received the fax. According to Smart the caller "apologized that they couldn't answer the rest of [her] questions," indicating that "due to [plaintiff's] unfavorable employment and the legalities of the situation, they couldn't go any further than that." Examined in context, we agree with the trial court that the phrase "unfavorable employment" merely expresses an opinion regarding plaintiff's work performance. Although not all expressions of opinion are protected speech, a statement must be provable as false to be actionable. Ireland v Edwards, 230 Mich App 607, 616; 584 NW2d 632 (1998). "If a statement cannot be reasonably interpreted as stating actual facts about the plaintiff, it is protected by the First Amendment." Id. at 614. The statement of opinion here is vague and subjective. It does not relate any specific facts. Because it cannot be reasonably interpreted as stating actual facts about plaintiff, it is not actionable as a matter of law. Cf. Mino v Clio School Dist, 255 Mich App 60, 77; 661 NW2d 586 (2003) (subjective opinion about a school superintendent's leadership style and management of the school budget was not actionable). We also reject plaintiff's argument that the date information in the faxed document is an actionable statement. All circumstances are considered in determining if a communication is defamatory, but the appropriate context to consider if a written statement is defamatory is the context of the writing itself, as read by a reasonable person. Ireland, supra at 618-619. A defamatory statement is one that tends to so harm the reputation of another as to lower that person in the estimation of the community or to deter third persons from associating or dealing with that person. Id. at 619. Here, while it is undisputed that the document faxed to Smart contained the wrong ending date for plaintiff's employment with CTI, the date statement alone is

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incapable of a defamatory meaning. Therefore, we affirm the trial court's grant of summary disposition with respect to plaintiff's defamation claim involving Awrey. B. Breach of Contract In general, "[t]he party asserting a breach of contract has the burden of proving its damages with reasonable certainty, and may recover only those damages that are the direct, natural, and proximate result of the breach." Alan Custom Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379 (2003). However, even if the damages do not naturally arise from the breach, they may be recovered if the damages were contemplated by the parties at the time that the contract was made. Lawrence v Will Darrah & Assoc, Inc, 445 Mich 1, 6-7; 516 NW2d 43 (1994). The trial court granted summary disposition in favor of defendants with respect to plaintiff's breach of contract claim after considering plaintiff's failure to rebut the evidence that Awrey did not have a position for plaintiff. Accordingly, the trial court found that there was no genuine issue of material fact that plaintiff did not suffer damages. Plaintiff's sole argument on appeal is that she should have been permitted to recover punitive damages by showing that defendants acted recklessly, negligently, or maliciously. Although the trial court did not address this specific issue, plaintiff raised this claim in response to defendants' motion. A party should not be punished for a trial court's failure to rule on an issue that was properly raised. Peterman v Dep't of Natural Resources, 446 Mich 177, 183; 521 NW2d 499 (1994). In considering plaintiff's argument, it is necessary to distinguish punitive damages designed to punish a party for misconduct from punitive damages having a compensatory purpose. Punitive damages designed to punish a party for misconduct are generally not recoverable in Michigan, absent statutory authority. Casey v Auto-Owners Ins Co, 273 Mich App 388, 400; 729 NW2d 277 (2006). Punitive damages serving a compensatory purpose are known as exemplary damages. Kewin v Massachusetts Mut Life Ins Co, 409 Mich 401, 419; 295 NW2d 50 (1980). They may provide compensation for harm to the plaintiff's feelings. Id. "Punitive damages are ordinarily not recoverable for breach of contract." Isagholian v Carnegie Institute of Detroit, Inc, 51 Mich App 220, 222; 214 NW2d 864 (1974). "[T]he goal in contract law is not to punish the breaching party, but to make the nonbreaching party whole." Corl v Huron Castings, Inc, 450 Mich 620, 625-626; 544 NW2d 278 (1996). But exemplary damages in a contract case properly can be regarded as serving a compensatory purpose where "`[t]hey are given as compensation for kinds of harm that cannot easily be estimated in terms of money.'" Kewin, supra at 420, quoting 5 Corbin, Contracts,

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