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STATE OF MICHIGAN
COURT OF APPEALS


THOMAS J. BURKE, Plaintiff-Appellant/Cross-Appellee, v BURKE RENTAL SERVICES, INC., THE  BURKE COMPANY, L.L.C., JOHN C. BURKE, MICHAEL C. BURKE, and KEVIN BURKE, Defendants-Appellees/Cross-
Appellants.


UNPUBLISHED March 11, 2008

No. 275828 Macomb Circuit Court LC No. 06-3942-CZ

Before: White, P.J., Hoekstra and Schuette, JJ. PER CURIAM. Plaintiff Thomas J. Burke appeals as of right the circuit court's order granting summary disposition to defendants under MCR 2.116(C)(7). Defendants cross-appeal the circuit court's order denying defendants sanctions under MCR 2.114. We reverse the order granting defendants summary disposition, and affirm the order denying defendants sanctions. The parties executed a settlement agreement in settlement of a prior suit brought by plaintiff. This appeal presents the issue whether the release provision in that settlement agreement bars plaintiff's subsequent suit (instant suit). The circuit court concluded that it did, and granted defendants' motion for summary disposition under MCR 2.116(C)(7). The corporate defendants, Burke Rental and The Burke Company, are in the business of selling and renting construction equipment, and are closely held corporations in which the individual parties are shareholders. Plaintiff's father founded the Burke family businesses in 1920. In 1956, plaintiff Thomas J. Burke and his two brothers, Michael C. and C. John Burke formed Burke Rental. Plaintiff acted as CEO and President of the Board of Directors of Burke Rental from its inception until approximately 2005, at which time, he alleges, his brother, Michael, and his nephews, John C. and Kevin Burke, ousted him. Defendant John C. Burke is the son of C. John Burke, deceased, and defendant Kevin Burke is defendant Michael Burke's son. Plaintiff's son, Thomas P. Burke, worked for the family businesses as well, but resigned in 2005. Plaintiff's first suit

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On March 29, 2006, plaintiff Thomas J. Burke filed a three-count complaint against defendants seeking to enjoin defendants from allowing life insurance policies insuring him to lapse, and to compel defendants to transfer the policies to him, alleging minority shareholder oppression, breach of verbal contract and breach of fiduciary duty. Plaintiff's complaint alleged that he is a minority shareholder in defendant Burke Rental Services and in Cyril J. Burke, Inc, and that plaintiff and defendants had a verbal agreement that the subject life insurance policies would be kept in place for the purpose of buying out the stock of non-participating stockholders who might otherwise inherit stock of defendant corporations from the insured party. Plaintiff's complaint alleged that his employment with defendant companies was terminated as of March 6, 2006, at the behest of the individual defendants, and that around that date, defendants sent plaintiff a letter indicating that defendants were unable to continue making payments on the life insurance policies and that several policies would lapse. The letter further advised plaintiff that "in lieu of any severance and in exchange for execution and return of the attached termination agreement, the companies will give you the referenced life insurance policies." The complaint alleged that the termination agreement referred to "is unacceptable" and "essentially a one-sided document in favor of the Defendants, which would prevent any lawsuits by the Plaintiff against the Defendants, and any entities related to them, and seeks to terminate any pre-existing agreements between" the parties. This suit settled and the parties executed a settlement agreement, agreeing as follows: 1. The life insurance policies, and all rights and obligations associated therewith, that were the subject of Plaintiff's 1st Amended Complaint and Motion in the lawsuit, (hereinafter, "the policies") shall be, within two (2) days from the date hereof, transferred and assigned by Defendants to the Plaintiff, and shall be hand delivered to a place of Plaintiff's choosing. 2. The Defendants shall execute and sign all documents necessary to make Plaintiff the sole policy holder and payor with regard to the policies. 3. Upon timely transfer of the policies, Plaintiff shall be solely responsible for the policies, and shall hold Defendants harmless thereon, and Plaintiff shall have all rights and obligations associated with such policies. 4. Defendants are prohibited from canceling or otherwise interfering with the coverage of life insurance provided to the Plaintiff and his beneficiaries in the policies. *** 6. Upon assignment of each of the policies to the Plaintiff, Plaintiff shall dismiss the lawsuit against Defendants with prejudice. 7. Neither the existence of this settlement agreement nor the assignment of the policies by Defendants to Plaintiff shall constitute or be construed as an admission of liability or wrongdoing by Plaintiff or Defendants. *** -2-


The settlement agreement contained a release provision (

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Michigan Law