Nathaniel E Chapman v. Zaki Jamil Alawi ( 2018 )

STATE OF MICHIGAN
COURT OF APPEALS
NATHANIEL E. CHAPMAN, UNPUBLISHED
January 18, 2018
Plaintiff-Appellant,
v Nos. 331750, 334164, 334948
Washtenaw Circuit Court
ZAKI JAMIL ALAWI, MICHIGAN RENTAL, LC No. 14-000068-CZ
and 1129 S. STATE, LLC,
Defendants-Appellees.
MICHIGAN RENTAL, ZAKI JAMIL ALAWI,
and 1129 S. STATE, LLC,
Plaintiffs/Counter-Defendants-
Appellees/Cross-Appellants,
v No. 332711
Washtenaw Circuit Court
NATHANIEL E. CHAPMAN, LC No. 14-000729-CZ
Defendant/Counter-Plaintiff-
Appellant/Cross-Appellee,
and
GEORGE KELLY, CATHERINE RADOVICH,
and STEPHEN SYKES,
Defendants,
and
N. KULA RACKIC, GARRICK ROEMER, and
TOM SULLIVAN,
Defendants/Counter-Plaintiffs.
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NATHANIEL E. CHAPMAN,
Plaintiff-Appellee,
v No. 333259
Washtenaw Circuit Court
ZAKI JAMIL ALAWI and 1129 S. STATE, LLC, LC No. 14-000068-CZ
Defendants-Appellants,
and
MICHIGAN RENTAL,
Defendant.
MICHIGAN RENTAL, ZAKI JAMIL ALAWI,
and 1129 S. STATE, LLC,
Plaintiffs/Counter-Defendants-
Appellees,
v No. 334165
Washtenaw Circuit Court
NATHANIEL E. CHAPMAN, LC No. 14-000729-CZ
Defendant/Counter-Plaintiff-
Appellant,
and
GEORGE KELLY, CATHERINE RADOVICH,
and STEPHEN SYKES,
Defendants,
and
N. KULA RACKIC, GARRICK ROEMER, and
TOM SULLIVAN,
Defendants/Counter-Plaintiffs.
Before: CAVANAGH, P.J., and METER and M. J. KELLY, JJ.
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PER CURIAM.
These six consolidated appeals arose from a highly contentious landlord-tenant dispute
that encompasses two lower-court actions. In one of the underlying cases, the tenant sued the
landlords, and in the other, the landlords sued the tenant.
In Docket No. 331750, plaintiff, Nathaniel E. Chapman (Chapman), who was the tenant,
appeals as of right a final order dismissing his fourth amended complaint against defendants,
Zaki Jamil Alawi (Alawi), Michigan Rental, and 1129 S. State, LLC (referred to collectively as
the Alawi parties because Alawi is the principal of the two business entities), who were the
landlords.
In Docket No. 332711, defendant/counterplaintiff Chapman appeals as of right an order
denying Chapman’s motion for entry of a default judgment, granting Chapman’s motion for
leave to amend his affirmative defenses to allow a defense based on a release, granting
Chapman’s motion for summary disposition based on the release with respect to claims asserted
by the Alawi parties, granting the Alawi parties’ motion to dismiss Chapman’s counterclaims
and to dismiss Chapman’s affirmative defenses except for the affirmative defense based on the
release, and dismissing Chapman’s counterclaims (subject to the disposition of the security
deposit held by the Alawi parties). Plaintiffs/counterdefendants the Alawi parties cross-appeal
the same order.
In Docket No. 333259, Alawi and 1129 S. State, LLC, appeal as of right an order denying
their motion for sanctions against Chapman and his counsel.
In Docket Nos. 334164 and 334165, Chapman appeals as of right an order denying his
motion for case-evaluation sanctions against the Alawi parties and an order granting in part and
denying in part Chapman’s motion for costs.
In Docket No. 334948, Chapman appeals as of right a judgment in favor of the Alawi
parties and against Chapman in the amount of $54,378.56.
All six appeals were consolidated to advance the efficient administration of the appellate
process. See Chapman v Alawi, unpublished order of the Court of Appeals, entered October 5,
2016 (Docket No. 334948).
We affirm in Docket Nos. 331750, 332711, 333259, 334164 and 334165. In Docket No.
334948, we reverse and remand for entry of an order denying the Alawi parties’ request for
taxable costs and expert-witness fees.
I. DOCKET NO. 331750
Chapman argues that the trial court erred in granting summary disposition to the Alawi
parties on Chapman’s claims under the Michigan Consumer Protection Act (MCPA), MCL
445.901 et seq., regarding the Alawi parties’ failure to comply with certain provisions of the
landlord and tenant relationships act (LTRA), MCL 554.601 et seq. We disagree.
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“This Court reviews de novo a trial court’s decision on a motion for summary
disposition,” including in an action for a declaratory judgment. Hackel v Macomb Co Comm,
298 Mich. App. 311, 315; 826 NW2d 753 (2012); Farm Bureau Ins Co v Abalos, 277 Mich. App.
41, 43; 742 NW2d 624 (2007). This issue concerns the Alawi parties’ first motion for summary
disposition, which was brought under MCR 2.116(C)(8) and (C)(10). Although the trial court
did not articulate under which subrule it was granting summary disposition, it appears that each
subrule could be applicable to some aspects of the trial court’s decision on this issue, and we will
thus articulate the standard under each subrule.
A motion under MCR 2.116(C)(8) tests the legal sufficiency of the
complaint on the basis of the pleadings alone to determine if the opposing party
has stated a claim for which relief can be granted. A reviewing court must accept
all well-pleaded allegations as true and construe them in the light most favorable
to the nonmoving party. The motion should be granted only if no factual
development could possibly justify a recovery.
* * *
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. Summary disposition
is appropriate if there is no genuine issue regarding any material fact and the
moving party is entitled to judgment as a matter of law. A genuine issue of
material fact exists when the record, giving the benefit of reasonable doubt to the
opposing party, leaves open an issue upon which reasonable minds might differ.
[Bank of America, NA v Fidelity Nat’l Title Ins Co, 316 Mich. App. 480, 487-488;
892 NW2d 467 (2016) (quotation marks and citations omitted).]
Questions of statutory interpretation are reviewed de novo. Polkton Charter Twp v
Pellegrom, 265 Mich. App. 88, 98; 693 NW2d 170 (2005). Unambiguous statutory language
must be applied as written. White v Harrison-White, 280 Mich. App. 383, 387; 760 NW2d 691
(2008). This Court also reviews de novo the application of a court rule to the facts. Kaeb v
Kaeb, 309 Mich. App. 556, 564; 873 NW2d 319 (2015).
MCL 445.903(1), a provision of the MCPA, provides, in relevant part:
Unfair, unconscionable, or deceptive methods, acts, or practices in the
conduct of trade or commerce are unlawful and are defined as follows:
(n) Causing a probability of confusion or of misunderstanding as to the
legal rights, obligations, or remedies of a party to a transaction.
* * *
(s) Failing to reveal a material fact, the omission of which tends to mislead
or deceive the consumer, and which fact could not reasonably be known by the
consumer.
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(t) Entering into a customer transaction in which the consumer waives or
purports to waive a right, benefit, or immunity provided by law, unless the waiver
is clearly stated and the consumer has specifically consented to it.
(u) Failing, in a consumer transaction that is rescinded, canceled, or
otherwise terminated in accordance with the terms of an agreement,
advertisement, representation, or provision of law, to promptly restore to the
person or persons entitled to it a deposit, down payment, or other payment, or in
the case of property traded in but not available, the greater of the agreed value or
the fair market value of the property, or to cancel within a specified time or an
otherwise reasonable time an acquired security interest.
The MCPA defines “trade or commerce,” in relevant part, as
the conduct of a business providing goods, property, or service primarily for
personal, family, or household purposes and includes the advertising, solicitation,
offering for sale or rent, sale, lease, or distribution of a service or property,
tangible or intangible, real, personal, or mixed, or any other article, or a business
opportunity. [MCL 445.902(1)(g).]
Another provision of the MCPA, MCL 445.911, provides, in relevant part:
(1) Whether or not he seeks damages or has an adequate remedy at law, a
person may bring an action to do either or both of the following:
(a) Obtain a declaratory judgment that a method, act, or practice is
unlawful under [MCL 445.903].
(b) Enjoin in accordance with the principles of equity a person who is
engaging or is about to engage in a method, act, or practice which is unlawful
under [MCL 445.903].
(2) Except in a class action, a person who suffers loss as a result of a
violation of this act may bring an action to recover actual damages or $250.00,
whichever is greater, together with reasonable attorneys’ fees.
As a remedial statute meant to prohibit unfair practices in trade or commerce, the MCPA
is to be liberally construed to advance its intended goals. Brownlow v McCall Enterprises, Inc,
315 Mich. App. 103, 125; 888 NW2d 295 (2016). Also, a violation of the LTRA may constitute a
violation of the MCPA in certain circumstances. Hovanesian v Nam, 213 Mich. App. 231, 237;
539 NW2d 557 (1995); Lesatz v Standard Green Meadows, 164 Mich. App. 122, 129; 416 NW2d
334 (1987). MCL 554.603, a provision of the LTRA, provides, in relevant part:
A landlord shall not require a security deposit unless he notifies the tenant
no later than 14 days from the date a tenant assumes possession in a written
instrument of the landlord’s name and address for receipt of communications
under this act, the name and address of the financial institution or surety required
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by section 41 and the tenant’s obligation to provide in writing a forwarding
mailing address to the landlord within 4 days after termination of occupancy.
MCL 554.608, another provision of the LTRA, provides, in relevant part:
(1) The landlord shall make use of inventory checklists both at the
commencement and termination of occupancy for each rental unit which detail the
condition of the rental unit for which a security deposit is required.
* * *
(4) The checklist shall contain the following notice in 12 point boldface
type at the top of the first page: “You should complete this checklist, noting the
condition of the rental property, and return it to the landlord within 7 days after
obtaining possession of the rental unit. You are also entitled to request and
receive a copy of the last termination inventory checklist which shows what
claims were chargeable to the last prior tenants.”.
As the above-quoted language of MCL 445.911(2) makes clear, a person who suffers
“loss” as a result of a violation of the MCPA may sue to recover actual damages or $250,
whichever is greater, along with attorney fees. By requiring proof of a loss in order to recover
damages, the Legislature incorporated into the MCPA damages remedy the common-law
requirement of demonstrating an injury. Mayhall v A H Pond Co, Inc, 129 Mich. App. 178, 183;
341 NW2d 268 (1983). Proof of such an injury may consist of actual economic damages or the
frustration of the plaintiff’s reasonable expectations. Gorman v American Honda Motor Co, Inc,
302 Mich. App. 113, 130; 839 NW2d 223 (2013); Mayhall, 129 Mich. App. at 183-186. If the
damages consist of the frustration of the plaintiff’s reasonable expectations, “the plaintiff may
recover the difference between the actual value of the property when the contract was made and
the value that it would have possessed if the representations had been true.” Id. at 185. In
contrast to the MCPA damages remedy set forth in MCL 445.911(2), the MCPA provision
concerning an action for declaratory or injunctive relief, MCL 445.911(1), does not require that a
plaintiff have suffered a loss caused by a violation of the MCPA. Therefore, under the plain
statutory language, a plaintiff may obtain a declaratory judgment or enjoin an unlawful practice
without having suffered a loss.
In this case, Chapman asserted violations of the MCPA premised on the Alawi parties’
failure to comply with the above-quoted provisions of the LTRA. Chapman asserted that the
lease failed to include the address of the financial institution that held Chapman’s security
deposit. Chapman also claimed that the Alawi parties failed to provide a move-in condition
checklist in a timely fashion and that the move-in condition checklist that was eventually
provided did not contain the notice language required by MCL 554.608(4). In their first motion
for partial summary disposition, the Alawi parties acknowledged that the lease did not contain
the street address for the bank at which the security deposit was held; the lease identified the
bank as “Michigan Commerce Bank, Ann Arbor, MI 48104.” The Alawi parties asserted
substantial compliance with the statutory requirement because there was only one office of this
bank in Ann Arbor at all relevant times. The Alawi parties argued that the delay in providing the
move-in condition checklist was attributable to the tenants, who delayed in permitting a walk-
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through and inspection of the property. The Alawi parties admitted that the move-in condition
checklist did not contain the statutorily-required notice language. The Alawi parties nonetheless
claimed substantial compliance with the statutory requirement because the checklist was filled
out, signed, and delivered to the tenants on the date of the inspection, thereby obviating the
effects of any omission. The trial court granted summary disposition to the Alawi parties on
these claims because Chapman had failed to identify any harm arising from the purported
violations. The court noted that there was only one Michigan Commerce Bank in Ann Arbor
such that Chapman would have had no difficulty locating the bank if necessary. Chapman had
also failed to articulate how he was harmed by the failure to provide the move-in condition
checklist in a timely fashion or by the failure to include the statutorily-required notice language
in the checklist.
On appeal, Chapman challenges the trial court’s determination that Chapman suffered no
damages arising from the purported violations of the MCPA. Chapman contends that he suffered
damages in the form of lost use of the security deposit funds and that his reasonable expectations
were frustrated. Chapman further contends that he was entitled to declaratory relief with respect
to these claimed violations. We disagree with Chapman’s arguments.
Chapman’s contention that he suffered a loss in the use of the security deposit funds due
to the MCPA violations lacks merit. MCL 445.911(2) requires the plaintiff to establish that he
suffered loss “as a result of” the MCPA violation. See Mayhall, 129 Mich. App. at 181 (“The
core of the controversy is whether the complaint sufficiently states that as a result of the alleged
statutory violations the plaintiff suffered a loss.”). Chapman did not lose the use of the security
deposit funds as a result of the Alawi parties’ purported failure to identify in the lease the street
address of the bank holding the security deposit funds, the alleged failure to provide the move-in
condition checklist in a timely fashion, or the failure to include the statutorily-required notice
language in the lease. Rather, Chapman temporarily lost the use of the funds because he paid
those funds as a security deposit to obtain a lease on the property. Further, Chapman has not
presented any factual allegations or evidence that he held a reasonable expectation that was
frustrated by the Alawi parties’ purported violations of the LTRA. Chapman has not established
any difference between the actual value of the property when the lease agreement was entered
into and the value that it would have possessed if the alleged statutory violations had not
occurred. Mayhall, 129 Mich. App. at 185. Because Chapman has not established that he
suffered a loss as a result of the purported statutory violations, the trial court properly granted
summary disposition to the Alawi parties with respect to Chapman’s request for damages under
the MCPA.
Nor did the trial court err in dismissing the requests for declaratory relief with respect to
these claims. It is true that the plain language of MCL 445.911(1) does not require a plaintiff to
establish a loss in order to obtain a declaratory judgment under the MCPA. Also, MCR
2.605(A)(1) provides: “In a case of actual controversy within its jurisdiction, a Michigan court of
record may declare the rights and other legal relations of an interested party seeking a
declaratory judgment, whether or not other relief is or could be sought or granted.” “The
existence of an ‘actual controversy’ is a condition precedent to the invocation of declaratory
relief. As such, a court may not decide moot questions in the guise of giving declaratory relief,
because moot cases present only abstract questions of law that do not rest upon existing facts or
rights.” PT Today, Inc v Comm’r of Office of Fin & Ins Servs, 270 Mich. App. 110, 127; 715
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NW2d 398 (2006) (quotation marks, citations, and brackets omitted). An actual controversy
exists when a declaratory judgment is needed to guide a plaintiff’s future conduct in order to
preserve his legal rights. Shavers v Kelley, 402 Mich. 554, 588; 267 NW2d 72 (1978). “[B]y
granting declaratory relief in order to guide or direct future conduct, courts are not precluded
from reaching issues before actual injuries or losses have occurred.” UAW v Central Mich Univ
Trustees, 295 Mich. App. 486, 495; 815 NW2d 132 (2012).
Chapman has failed to articulate any facts establishing that a declaratory judgment
regarding the Alawi parties’ obligations to provide the street address of the bank where the
security deposit was held or to provide a timely move-in condition checklist with the prescribed
notice language is necessary to guide Chapman’s future conduct in order to preserve his legal
rights. Setting aside the fact that Chapman no longer resides at the rental property, there is no
dispute that both Chapman and the Alawi parties are now aware of their pertinent legal rights and
duties, with the Alawi parties having acknowledged their failure to comply with many of these
duties and Alawi having represented in an uncontested affidavit that he has now taken steps to
address the deficiencies with respect to the lease and move-in condition checklist.1 Given these
facts, Chapman does not require guidance regarding his future conduct in order to preserve his
legal rights. Summary disposition concerning the requests for declaratory relief in the MCPA
claims at issue was thus appropriate.2
1
In particular, Alawi’s affidavit states, in relevant part:
40. The following items have been permanently changed in my residential leases,
which leases have been used in all new tenancies and distributed to all affected
tenants;
 All reflect street address information regarding the bank in which that
tenants’ security deposit is located;
 The language required by the Ann Arbor City Charter is in the correct
font, type and contains a black border;
 All leases contain the notice required by MCL 554.601b;
 I have made appropriate changes to the language in the move-in checklist
and have taken steps to correct the timing of the acquisition of that
checklist; and
 I have changed procedure with regard to delivering written heating budget
plan information to all residential tenants.
2
To the extent that the trial court’s reasoning differed in that the trial court referred only to the
absence of harm to Chapman, affirmance is appropriate because the trial court reached the
correct result. See Messenger v Ingham Co Prosecutor, 232 Mich. App. 633, 643; 591 NW2d 393
(1998) (“When this Court concludes that a trial court has reached the correct result, this Court
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Chapman next makes a related argument that the trial court erred in dismissing
Chapman’s various requests for declaratory relief. Chapman challenges the trial court’s
dismissal of several counts requesting declaratory relief in addition to those discussed above. In
particular, Chapman contests the dismissal of the declaratory-relief requests in the MCPA counts
that are premised on alleged violations of the Ann Arbor Housing Code, the Ann Arbor Charter,
and another provision of the LTRA. In Count 1 of his fourth amended complaint, Chapman
alleged a violation of the MCPA arising from the Alawi parties’ failure to provide a written
notice regarding utility charges, in violation of Ann Arbor Ordinances, § 8:524.3 In Count 2,
Chapman asserted a violation of the MCPA premised on an alleged violation of Ann Arbor
Charter, § 19.4, which requires, among other things, certain notice language in leases to be
surrounded by a black border. In Count 3, Chapman alleged a violation of the MCPA premised
on the failure to provide written notice required by a provision of the LTRA, MCL 554.601b(1),
concerning relief from rental-payment obligations of a tenant who reasonably apprehends a
present danger from domestic violence, sexual assault, or stalking.4 Chapman also discusses
will affirm even if it does so under alternative reasoning.”). We also note that the Alawi parties’
first motion for partial summary disposition argued in favor of summary disposition on the same
ground that we have used in affirming the result reached by the trial court.
3
Ann Arbor Ordinances, § 8:524, provides:
No owner of rental property shall lease the property without furnishing to
the tenant, before the time of entering into the lease, a budget plan. As used in
this section, “budget plan” means a projection of monthly utility costs for primary
heating fuel prepared by the public utility company. This section shall apply to
the rental of all dwelling units for which budget plan information is available
from the utility company without charge and in which the tenant is required to pay
the owner or the utility company a utility charge for heating fuel in addition to
rent. The budget plan statement shall be in writing, included as part of the leasing
agreement, but may be prepared by the owner based on information verbally
supplied by the utility company.
4
MCL 554.601b(1) states:
A tenant who has a reasonable apprehension of present danger to the
tenant or his or her child from domestic violence, sexual assault, or stalking while
that person is a tenant shall be released from his or her rental payment obligation
in accordance with the requirements of this section after submittal of written
notice of his or her intent to seek a release and written documentation that the
tenant has a reasonable apprehension of present danger to the tenant or his or her
child from domestic violence, sexual assault, or stalking. Submittal of written
notice shall be made by certified mail. A rental agreement may contain a
provision stating “A tenant who has a reasonable apprehension of present danger
to him or her or his or her child from domestic violence, sexual assault, or
stalking may have special statutory rights to seek a release of rental obligation
under MCL 554.601b.”. If the rental agreement does not contain such a
provision, the landlord shall post written notice visible to a reasonable person in
the landlord’s property management office or deliver written notice to the tenant
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again Counts 4 through 6, which assert MCPA violations premised on the purported LTRA
violations already discussed above; we will not further discuss those counts.
In dismissing Counts 2 and 3 of Chapman’s complaint, the trial court emphasized the
absence of any harm to Chapman arising from the alleged violations. In particular, the trial court
stated that Chapman had failed to articulate any way in which he was harmed by the absence of a
black border surrounding the notice language required by Ann Arbor Charter, § 19.4, and that
Chapman had failed to articulate any way in which he was harmed by the failure to provide the
domestic violence, sexual assault, and stalking notice required by MCL 554.601(b)(1). As
discussed earlier, the plain language of MCL 445.911(1) does not require a plaintiff to establish a
loss in order to obtain a declaratory judgment under the MCPA. Nonetheless, dismissal of the
requests for declaratory relief in Counts 2 and 3 was appropriate because Chapman failed to
articulate facts establishing that a declaratory judgment was needed to guide his future conduct in
order to preserve his legal rights with respect to the requirement of a black border around certain
language in the lease and the required notice regarding domestic violence, sexual assault, and
stalking. See Shavers, 402 Mich. at 588; UAW, 295 Mich. App. at 495; PT Today, Inc, 270 Mich
App at 127. The parties are now aware of their legal rights and duties, with Alawi’s uncontested
affidavit reflecting that he has corrected the deficiencies at issue in these counts. The trial court
properly granted summary disposition to the Alawi parties with respect to Counts 2 and 3.5
In granting summary disposition to the Alawi parties on Count 1 of Chapman’s fourth
amended complaint, the trial court provided the following rationale:
[Alawi] had given as much information as he had regarding the monthly costs for
all the utilities and [Chapman] has not established that the budget plan
information is available from the utility company without charge which is what
triggers the requirement of [a landlord] to include it in the lease.
On appeal, Chapman does not address this basis identified by the trial court for granting
summary disposition to the Alawi parties on Count 1. Because Chapman fails to address or
dispute the basis of the trial court’s ruling regarding Count 1, this Court will not even consider
granting Chapman any relief regarding this count. Derderian v Genesys Health Care Sys, 263
Mich. App. 364, 381; 689 NW2d 145 (2004).
Chapman also notes the trial court’s dismissal of Count 18, which was a separate count
asserting a general request for a declaratory judgment. This count did not allege any additional
substantive claims but merely requested declaratory relief in reference to the purported MCPA
violations and underlying statutory, charter, or ordinance violations asserted in Counts 1 through
6. In granting summary disposition to the Alawi parties on this count, the trial court stated:
when the lease agreement is signed. The content of the written notice shall be
identical to the provision in this section.
5
Again, to the extent that the trial court’s reasoning differed in that the trial court referred only
to the absence of harm to Chapman, affirmance is appropriate because the trial court reached the
correct result. See Messenger, 232 Mich. App. at 643.
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On the declaratory judgments requested by [Chapman], it appears that
what the – I guess I should say that I’m unclear as, are the [Alawi parties], as to
what the declaratory judgments are that are requested by [Chapman]. This is
count 18, I don’t believe that [Chapman] has articulated a cause of action for
declaratory judgment in . . . count 18. So I’ll grant summary disposition as to that
one.
On appeal, Chapman asserts without elaboration that he believes the trial court misinterpreted the
law and dismissed Count 18 without being fully informed. Chapman does not explain how he
reaches this conclusion. “It is not sufficient for a party simply to announce a position or assert
an error and then leave it up to this Court to discover and rationalize the basis for his claims, or
unravel and elaborate for him his arguments, and then search for authority either to sustain or
reject his position.” Wilson v Taylor, 457 Mich. 232, 243; 577 NW2d 100 (1998) (quotation
marks and citation omitted). Failure to adequately brief an issue constitutes abandonment.
McIntosh v McIntosh, 282 Mich. App. 471, 484; 768 NW2d 325 (2009). In any event, as
discussed, the trial court was correct in observing that Count 18 of Chapman’s fourth amended
complaint failed to articulate any cause of action, beyond the claims that Chapman had attempted
to assert elsewhere in the complaint, and we can discern no basis to conclude that the trial court
erred in granting summary disposition to the Alawi parties on Count 18.
Chapman briefly mentions that he requested declaratory relief in Count 25, which
concerns alleged statutory violations related to lead-based paint hazards, but he fails to present
any substantive argument regarding Count 25 in this issue. He has thus abandoned any argument
concerning Count 25 in this issue by failing to adequately brief it. Wilson, 457 Mich. at 243;
McIntosh, 282 Mich. App. at 484. Moreover, Chapman has articulated no basis to conclude with
respect to Count 25 that a declaratory judgment is needed to guide his future conduct in order to
preserve his legal rights.
Chapman next argues that the trial court abused its discretion in awarding costs to the
Alawi parties’ counsel due to the failure of Chapman’s counsel to appear for a motion hearing.
We disagree. A trial court’s award of attorney fees and costs is reviewed for an abuse of
discretion. Smith v Khouri, 481 Mich. 519, 526; 751 NW2d 472 (2008) (opinion by TAYLOR,
C.J.). A trial court abuses its discretion when its decision falls outside the range of reasonable
and principled outcomes. Id. Also, this Court reviews de novo the proper interpretation and
application of a court rule. Kaeb, 309 Mich. App. at 564.
MCR 2.119(E)(4)(b) & (c) provide:
(b) Unless excused by the court, the moving party must appear at a hearing
on the motion. A moving party who fails to appear is subject to assessment of
costs under subrule (E)(4)(c); in addition, the court may assess a penalty not to
exceed $100, payable to the clerk of the court.
(c) If a party violates the provisions of subrule (E)(4)(a) or (b), the court
shall assess costs against the offending party, that party’s attorney, or both, equal
to the expenses reasonably incurred by the opposing party in appearing at the
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hearing, including reasonable attorney fees, unless the circumstances make an
award of expenses unjust.
On July 23, 2014, the Alawi parties’ counsel filed a notice of hearing setting Chapman’s
motion for class certification, which had been adjourned previously, for a hearing on July 30,
2014. On July 25, 2014, Chapman’s counsel filed a notice of objection to this notice of hearing
and filed a re-notice of hearing, scheduling the hearing for August 13, 2014. On July 28, 2014,
the Alawi parties’ counsel wrote the following email to Chapman’s counsel:
Hello Kim. I am in receipt of your objections to my Notice (for July 30)
on your Motion for Certification, and your Re-Notice for August 13. I try to be
sympathetic and cooperative in moving docket items, but I feel my client has been
prejudiced already by the delay in getting this heard.
Why shouldn’t this hearing proceed this week?
Neither Chapman nor his counsel appeared for the July 30, 2014, hearing, and they did not ask
the court to be excused from attending the hearing. The Alawi parties’ counsel appeared for the
July 30, 2014, hearing. The Alawi parties’ counsel claimed that he devoted 3.6 hours to
preparing for and appearing in court for the July 30, 2014, hearing. The Alawi parties’ counsel
averred that his hourly rate was $300 an hour. The trial court awarded to the Alawi parties’
counsel $300 for one hour of costs for the failure of Chapman’s counsel to appear for the July
30, 2014, hearing.
On appeal, Chapman does not contest that his counsel failed to appear for the July 30,
2014, hearing. Chapman contends that the trial court inaccurately characterized the July 28,
2014, email from the Alawi parties’ counsel to Chapman’s counsel. At the August 27, 2014,
hearing, the trial court made the following comments when deciding to award costs:
Okay. I’ll award one hour of costs to Mr. Hopper and his client for the
failure to appear. And I won’t – I won’t take an action that endorses failure to
answer an email saying can I help you, let me know if there’s a problem why
shouldn’t this proceed.
Contesting the trial court’s characterization of the email, Chapman states, “Attorney Hopper’s
email, however, did not say ‘can I help you’ or ‘let me know if there’s a problem.’ ” But the trial
court did not claim to be quoting directly from the email. The trial court accurately described the
gist of the email, in that the Alawi parties’ counsel indicated that, although he tried to be
cooperative in moving docket items, he felt his clients had already been prejudiced by the delay
in hearing the class-certification motion, and he asked why the matter should not proceed that
week. The trial court’s point seems to have been that the Alawi parties’ counsel had essentially
indicated that he wished to proceed with the July 30, 2014, hearing unless Chapman’s counsel
could explain why the hearing should not proceed that week, and that Chapman’s counsel failed
to respond to this inquiry. Chapman does not contest that his counsel failed to respond to the
email. Overall, the trial court’s summary of the email was accurate and is not a ground for
upsetting the costs award.
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Chapman also notes that MCR 2.119(E)(4)(b) requires the moving party to appear at a
motion hearing, and Chapman asserts that he was not the moving party. Chapman contends that
the Alawi parties’ counsel held himself out as the moving party by indicating on the motion
praecipe that he represented Chapman. This argument is devoid of merit. Chapman was the
moving party because he filed the motion for class certification that was scheduled for a hearing
on July 30, 2014, pursuant to the notice of hearing filed by the Alawi parties after the matter had
been previously adjourned. The fact that the Alawi parties filed the notice of hearing for July 30,
2014, does not alter the fact that Chapman was the moving party on the class-certification
motion. Chapman does not present an argument or cite authority to contest the proposition that a
party other than the moving party may file a notice of hearing on a previously-filed motion. Any
such claim has thus been abandoned. Wilson, 457 Mich. at 243; McIntosh, 282 Mich. App. at 484.
The notice of hearing filed by the Alawi parties correctly identified the attorneys for all of the
parties and properly noted that it was Chapman’s motion for class certification that was being
noticed for hearing. Although the praecipe filed by the Alawi parties had their attorney’s
signature in a location designated for the signature of the moving party, this appears to be due to
the limitations of the court form; in any event, the praecipe correctly identified the Alawi parties’
attorney as the attorney for “[d]efendants” and indicated that it was “plaintiff’s motion” that was
being heard. Overall, the language of the notice of hearing and praecipe correctly reflected the
procedural posture of the case and did not alter the fact that Chapman was the moving party.
Chapman further asserts that the failure of the Alawi parties’ counsel to timely serve the
notice of hearing on the attorney for intervening plaintiff Stephen Sykes,6 as well as Chapman’s
re-noticing of the hearing for August 13, 2014, rendered the award of costs to the Alawi parties’
counsel improper. But Chapman does not dispute that his own counsel was properly served with
the notice of hearing. The purported failure of the Alawi parties’ counsel to properly serve
Sykes’s counsel did not alter the obligation of Chapman’s counsel under MCR 2.119(E)(4)(b) to
appear at the hearing on Chapman’s motion. Chapman fails to elaborate an argument on this
point or to cite authority in support of his attempt to avoid the plain language of the rule. Nor
did Chapman’s attempt to re-notice the hearing for August 13, 2014, alter his counsel’s
obligation to attend the July 30, 2014, hearing, given that Chapman’s counsel did not seek to be
excused by the court from attending the hearing and did not respond to the email inquiry from
the Alawi parties’ counsel regarding why the hearing should be adjourned. See MCR
2.119(E)(4)(b) (“Unless excused by the court, the moving party must appear at a hearing on the
motion.”). Overall, then, the trial court did not abuse its discretion in awarding costs.
Chapman next argues that the trial court abused its discretion in denying Chapman’s
motion to compel discovery regarding the Alawi parties’ bank records and in ordering the return
6
Sykes’s attorney signed an affidavit indicating that he was not timely served with the Alawi
parties’ notice of hearing for July 30, 2014. An amended proof of service filed by the Alawi
parties’ attorney indicates that on July 23, 2014, the notice of hearing for July 30, 2014, was
personally served on Chapman’s counsel and served by first-class mail on Sykes’s counsel. In
general, a notice of hearing on a motion must be served by mail at least nine days before the
hearing or by delivery at least seven days before the hearing. MCR 2.119(C)(1).
-13-
or destruction of bank records that had been improperly released and disseminated. We disagree.
A trial court’s decision whether to grant a discovery motion is reviewed for an abuse of
discretion. D’Alessandro Contracting Group, LLC v Wright, 308 Mich. App. 71, 76; 862 NW2d
466 (2014). An abuse of discretion occurs when the trial court’s decision falls outside the range
of reasonable and principled outcomes. Id. This Court reviews de novo the proper interpretation
and application of a court rule. Kaeb, 309 Mich. App. at 564.
MCR 2.302(B)(1) provides:
Parties may obtain discovery regarding any matter, not privileged, which
is relevant to the subject matter involved in the pending action, whether it relates
to the claim or defense of the party seeking discovery or to the claim or defense of
another party, including the existence, description, nature, custody, condition, and
location of books, documents, or other tangible things, or electronically stored
information and the identity and location of persons having knowledge of a
discoverable matter. It is not ground for objection that the information sought
will be inadmissible at trial if the information sought appears reasonably
calculated to lead to the discovery of admissible evidence.
This Court has explained:
It is well settled that Michigan follows an open, broad discovery policy
that permits liberal discovery of any matter, not privileged, that is relevant to the
subject matter involved in the pending case. This is true whether it relates to the
claim or defense of the party seeking discovery or to the claim or defense of
another party. However, Michigan’s commitment to open and far-reaching
discovery does not encompass fishing expeditions. Allowing discovery on the
basis of conjecture would amount to allowing an impermissible fishing
expedition. [Augustine v Allstate Ins Co, 292 Mich. App. 408, 419-420; 807
NW2d 77 (2011) (quotation marks, citations, and brackets omitted).]
Evidence is relevant if it has “any tendency to make the existence of any fact that is of
consequence to the determination of the action more probable or less probable than it would be
without the evidence.” MRE 401.
Chapman moved to compel the Alawi parties to answer interrogatories about the Alawi
parties’ deposit of Chapman’s security-deposit funds as well as the deposit of security-deposit
funds of tenants of other properties owned by the Alawi parties into the same account. Chapman
claimed this information was necessary to prove Chapman’s conversion claim so that Chapman
could know the total amounts required to be in the Alawi parties’ account to cover all security
deposits. Chapman noted that the Alawi parties did not obtain a bond on the security deposits
until March 7, 2014, which was after Chapman had begun his tenancy. In response, the Alawi
parties argued that information regarding the deposit of security-deposit funds from the tenants
of the Alawi parties’ other properties had nothing to do with Chapman’s security deposit, and
that such information was private, sensitive, and irrelevant. The Alawi parties asserted that
Chapman’s request was part of a fishing expedition. The Alawi parties nonetheless agreed to
provide limited discovery regarding the account in which Chapman’s security deposit was
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located, including information regarding the deposit and withdrawal of Chapman’s security-
deposit funds and the monthly balances of the account in which Chapman’s security-deposit
funds were located during the relevant period. At a motion hearing on December 3, 2014, the
trial court ruled:
Okay. I’m going to deny the motion for now. I think that there are other –
there may be other ways to get the answers that you need or to determine that the
answer can’t be had which is, is where I think this inquiry may be headed.
But I’m not going to order – I’m not going to order the discovery until
you’ve tried some other ways to find the answers that you need. Especially given
that the, the account contains operating capital also. And it’s not a matter of
looking for fifty deposits in a year and fifty withdrawals in a year, it’s getting into
the entire banking operation which is – the fact that it’s intrusive is Mr. Alawi’s
fault for comingling those funds with operating funds, but I think it may also be a
wild goose chase if that’s what’s been going on, is that the money is all comingled
so that it’s impossible to tell whether there’s enough money in there.
On the same date, the trial court entered an order denying Chapman’s motion to compel.
On December 5, 2014, the Alawi parties filed a motion for an order to show cause, noting
that intervening plaintiff Catherine M. Radovich, as personal representative of the estate of
Garrick P. Roemer, deceased, had served a subpoena on Talmer West Bank, seeking bank-
account statements from November 4, 2012, through March 15, 2014, for Alawi doing business
as Michigan Rental. Although the Alawi parties had filed a motion for a protective order seeking
to quash the subpoena and forwarded a copy of that motion to Talmer West Bank with written
instructions not to release any documents pending an agreement of the parties or a decision on
the motion, Talmer West Bank released the bank records to Radovich’s counsel. The records
were then copied and disseminated to counsel for the other parties in this case, including the
Alawi parties and Chapman. According to the Alawi parties, these records contained
voluminous and detailed financial information of both a personal and a business nature that was
not relevant to this case, and the trial court had previously entered a protective order in March
2014 prohibiting the disclosure of such records when they were requested through a subpoena
issued by Chapman to the same bank. The Alawi parties therefore requested an order requiring
the return of these records.
The trial court entered the requested order to show cause. In response to the Alawi
parties’ motion, Chapman argued that the banking records were relevant to the issues in the case
and the Alawi parties should not be shielded from producing records concerning the account in
which Chapman’s security-deposit funds were located. Chapman contended that the Alawi
parties lacked a reasonable expectation of privacy in bank records.
At a December 17, 2014, motion hearing, the trial court stated, in relevant part:
So the bank made a mistake. The bank should not have supplied the
records to you but you took advantage of the mistake and despite the fact that
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there was a motion for protective order pending and a valid objection to the
subpoena you did whatever you wished to do with those records anyway.
* * *
Mr. [Mark A.] Hopper [the Alawi parties’ counsel] your motion is granted.
The defendant – I’m sorry the Plaintiffs will return to Mr. Hopper all copies of the
– the subpoenaed records and Mr. Chapman if you have another argument about
why you should have those records than [sic] you bring it properly before the
Court. I’m not gonna hear it today.
On December 18, 2014, the trial court entered an order providing that the released bank records
were protected against disclosure, prohibiting the further use or dissemination of the bank
records, and requiring Chapman and intervening plaintiffs to forward to the Alawi parties’
counsel all copies of the bank records and to delete all electronic versions of the records.
On appeal, Chapman again argues that the Alawi parties lacked a reasonable expectation
of privacy in their bank records that would give them standing to challenge the subpoena issued
to the bank. Chapman contends that the alleged intrusiveness of the discovery request was not a
ground for denying discovery. According to Chapman, the trial court failed to articulate a valid
reason to deny discovery, such as that the bank records were privileged or irrelevant. Chapman’s
argument is unavailing.
Chapman fails to present arguments contesting the true bases for the trial court’s
decisions on this issue. In denying Chapman’s motion to compel, the trial court did not
definitively rule out granting the requested discovery; instead, the court stated it would not order
discovery until Chapman tried to find other ways to obtain the answers that Chapman needed
regarding whether the Alawi parties maintained sufficient funds to repay Chapman his security
deposit. The trial court noted that discovery regarding the account may amount to a “wild goose
chase” given that the Alawi parties comingled the security-deposit funds with operating capital
such that it may be impossible to determine whether there were sufficient funds in the account.
On appeal, Chapman fails to address this rationale. That is, Chapman does not explain (1)
whether he attempted, in accordance with the trial court’s comments, to find other means of
getting the information he needed without obtaining the bank records; or (2) how discovery of
the records would have led to useful information in this case given the comingling noted by the
trial court. Chapman’s inadequate briefing on this point amounts to abandonment of the issue.
McIntosh, 282 Mich. App. at 484. And because Chapman has not contested the basis of the trial
court’s decision, he has not established entitlement to relief. Derderian, 263 Mich. App. at 381.
Chapman also fails to adequately address the trial court’s rationale for granting the
protective order barring the further use or dissemination of the improperly-released bank records
and requiring the return or destruction of those records. It is apparent that the trial court was
understandably concerned about the actions of counsel for Chapman and intervening plaintiffs in
taking advantage of the bank’s mistaken release of the records when a motion for a protective
order and an objection to the subpoena were pending. See MCR 2.305(B)(2) (stating that if an
objection is made to a subpoena for the production of documents, “the party serving the
subpoena is not entitled to inspect and copy the materials without an order of the court in which
-16-
the action is pending”). The trial court’s order requiring the return or destruction of the records
was a reasonable effort to enforce the trial court’s authority to control the discovery process. See
generally, Maldonado v Ford Motor Co, 476 Mich. 372, 375; 719 NW2d 809 (2006) (noting “the
control necessarily vested in courts to manage their own affairs so as to achieve the orderly and
expeditious disposition of cases”). Whether the banking records were ultimately discoverable is
a separate question from the propriety of the trial court’s attempt to address the behavior of
counsel for Chapman and intervening plaintiffs in exploiting the mistaken release of the bank
records. By failing to address the trial court’s true rationale, Chapman has abandoned the issue
and is not entitled to relief regarding this issue. McIntosh, 282 Mich. App. at 484; Derderian, 263
Mich. App. at 381.
Chapman next argues that the trial court erred in granting summary disposition to the
Alawi parties on Chapman’s conversion claim. We disagree.
“Under the common law, conversion is any distinct act of dominion wrongfully exerted
over another’s personal property in denial of or inconsistent with his rights therein.” Aroma
Wines & Equip, Inc v Columbian Distribution Servs, Inc, 497 Mich. 337, 346; 871 NW2d 136
(2015) (quotation marks and citations omitted). “Conversion may occur when a party properly
in possession of property uses it in an improper way, for an improper purpose, or by delivering it
without authorization to a third party.” Dep’t of Agriculture v Appletree Mktg, LLC, 485 Mich. 1,
14; 779 NW2d 237 (2010). In addition, MCL 600.2919a(1)(a) provides for recovery of three
times the amount of actual damages when a person is damaged as a result of “[a]nother person’s
stealing or embezzling property or converting property to the other person’s own use.” “[T]he
separate statutory cause of action for conversion ‘to the other person’s own use’ under MCL
600.2919a(1)(a) requires a showing that the defendant employed the converted property for some
purpose personal to the defendant’s interests, even if that purpose is not the object’s ordinarily
intended purpose.” Aroma Wines, 497 Mich. at 340. “To support an action for conversion of
money, the defendant must have obtained the money without the owner’s consent to the creation
of a debtor-creditor relationship and must have had an obligation to return the specific money
entrusted to his care.” Lawsuit Fin, LLC v Curry, 261 Mich. App. 579, 591; 683 NW2d 233
(2004) (quotation marks and citations omitted).
MCL 554.604(1), a provision of the LTRA, provides:
The security deposit shall be deposited in a regulated financial institution.
A landlord may use the moneys so deposited for any purposes he desires if he
deposits with the secretary of state a cash bond or surety bond written by a surety
company licensed to do business in this state and acceptable to the attorney
general to secure the entire deposits up to $50,000.00 and 25% of any amount
exceeding $50,000.00. The attorney general may find a bond unacceptable based
only upon reasonable criteria relating to the sufficiency of the bond, and shall
notify the landlord in writing of his reasons for the unacceptability of the bond.
Another provision of the LTRA, MCL 554.605, provides:
For the purposes of this act and any litigation arising thereunder, the
security deposit is considered the lawful property of the tenant until the landlord
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establishes a right to the deposit or portions thereof as long as the bond provision
is fulfilled, the landlord may use this fund for any purposes he desires.
In dismissing Chapman’s conversion claim, the trial court stated that the Alawi parties’
purported removal of the security-deposit funds during the lease term from the bank account in
which they had been placed did not constitute conversion. The trial court explained:
There was not an intent to keep [the security deposit] or to claim
ownership of it. And during that period of time, [Chapman] was not entitled to
hold it or have use of it. It’s a security deposit. It’s not his – it’s his money but
it’s not for him to use during that period of time and therefore it couldn’t have
been converted by the [Alawi parties] when there’s no indication that the [Alawi
parties] intended to keep it beyond the end of the lease term but for some other
thing that happened which is claimed damage to the house. And that’s the subject
of other counts in the complaint or – and/or the – the companion case [filed by the
Alawi parties]. That’s my ruling on [the conversion claim].
The trial court’s analysis was correct. Chapman voluntarily paid the funds at issue to the
Alawi parties as a security deposit. As Chapman’s landlords, the Alawi parties were entitled to
hold Chapman’s security deposit during the term of the lease. See MCL 554.601(e) (defining a
security deposit as “a deposit, in any amount, paid by the tenant to the landlord or his or her
agent to be held for the term of the rental agreement, or any part of the term . . .”). The Alawi
parties have never disputed Chapman’s right to recover the value of the security deposit, either as
a direct payment or as a credit against any sums that are adjudicated to be owed to the Alawi
parties. Indeed, in their action to recover unpaid rent and other damages, the Alawi parties
deducted from their damages claim a sum that was twice the amount of the security deposit paid
by Chapman and his co-tenants, thereby further confirming that the Alawi parties recognized
Chapman’s ownership of the security-deposit funds. Chapman relies on the fact that the Alawi
parties withdrew the security-deposit funds from the designated account before obtaining a
surety bond in March 2014.7 This does not alter the facts that (1) the Alawi parties obtained the
security-deposit funds from Chapman with his consent and (2) the Alawi parties never contested
Chapman’s ownership of the security-deposit funds or his right to the return of the funds.
7
In discovery responses, Alawi explained that
during the period in question in the Request, Michigan Commerce Bank became
unstable and I reasonably determined that the funds in the subject account were at
risk. Based on such determination, I transferred the funds in the subject account
(which consisted of security deposits, rents and operating funds) over time to
another financial institution. Because of the rapidity of events involving
Michigan Commerce Bank, it never crossed my mind to notify the Plaintiffs of
the change in financial institutions, and I did not do so. My available cash
resources on deposit at banks during the period in question in the Request never
dropped below $4,562.50 [the amount of the security deposit of Chapman and his
cotenants].
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Chapman fails to establish that the withdrawal of the funds from the designated account satisfies
the elements of a conversion claim. The trial court properly granted summary disposition to the
Alawi parties on Chapman’s conversion claim.
Next, Chapman argues that the trial court clearly erred in denying Chapman’s request for
sanctions against the Alawi parties’ counsel for filing a motion for a second order to show cause
regarding the Alawi parties’ bank records. We disagree. This Court has explained:
This Court reviews de novo whether the trial court properly interpreted
and applied the relevant court rules to the facts and reviews for clear error the trial
court’s determination whether to impose sanctions under MCR 2.114. A finding
is clearly erroneous if, after a review of the record, this Court is left with a
definite and firm conviction that a mistake was made. [Lawrence v Burdi, 314
Mich. App. 203, 220; 886 NW2d 748 (2016) (quotation marks, citations, and
brackets omitted).]
MCR 2.114 provides, in relevant part:
(D) Effect of Signature. The signature of an attorney or party, whether or
not the party is represented by an attorney, constitutes a certification by the signer
that
(1) he or she has read the document;
(2) to the best of his or her knowledge, information, and belief formed
after reasonable inquiry, the document is well grounded in fact and is warranted
by existing law or a good-faith argument for the extension, modification, or
reversal of existing law; and
(3) the document is not interposed for any improper purpose, such as to
harass or to cause unnecessary delay or needless increase in the cost of litigation.
(E) Sanctions for Violation. If a document is signed in violation of this
rule, the court, on the motion of a party or on its own initiative, shall impose upon
the person who signed it, a represented party, or both, an appropriate sanction,
which may include an order to pay to the other party or parties the amount of the
reasonable expenses incurred because of the filing of the document, including
reasonable attorney fees. The court may not assess punitive damages.
(F) Sanctions for Frivolous Claims and Defenses. In addition to sanctions
under this rule, a party pleading a frivolous claim or defense is subject to costs as
provided in MCR 2.625(A)(2). The court may not assess punitive damages.
MCR 2.625(A)(2) states: “In an action filed on or after October 1, 1986, if the court finds on
motion of a party that an action or defense was frivolous, costs shall be awarded as provided by
MCL 600.2591.” MCL 600.2591 provides:
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(1) Upon motion of any party, if a court finds that a civil action or defense
to a civil action was frivolous, the court that conducts the civil action shall award
to the prevailing party the costs and fees incurred by that party in connection with
the civil action by assessing the costs and fees against the nonprevailing party and
their attorney.
(2) The amount of costs and fees awarded under this section shall include
all reasonable costs actually incurred by the prevailing party and any costs
allowed by law or by court rule, including court costs and reasonable attorney
fees.
(3) As used in this section:
(a) “Frivolous” means that at least 1 of the following conditions is met:
(i) The party’s primary purpose in initiating the action or asserting the
defense was to harass, embarrass, or injure the prevailing party.
(ii) The party had no reasonable basis to believe that the facts underlying
that party’s legal position were in fact true.
(iii) The party’s legal position was devoid of arguable legal merit.
(b) “Prevailing party” means a party who wins on the entire record.
“[I]f a violation of MCR 2.114(D) has occurred, the sanctions provided for by MCR
2.114(E) are mandatory.” Guerrero v Smith, 280 Mich. App. 647, 678; 761 NW2d 723 (2008).
Likewise, an award of sanctions is mandatory under MCL 600.2591(1) if the action or defense is
found to be frivolous. Cvengros v Farm Bureau Ins, 216 Mich. App. 261, 268; 548 NW2d 698
(1996). The purpose of sanctions “is to deter parties and attorneys from filing documents or
asserting claims and defenses that have not been sufficiently investigated and researched or that
are intended to serve an improper purpose.” BJ’s & Sons Constr Co, Inc v Van Sickle, 266 Mich
App 400, 405; 700 NW2d 432 (2005) (quotation marks and citation omitted). A party should not
be penalized for asserting a claim that “initially appears viable but later becomes unpersuasive.”
Louya v William Beaumont Hosp, 190 Mich. App. 151, 163; 475 NW2d 434 (1991). “Not every
error in legal analysis constitutes a frivolous position.” Kitchen v Kitchen, 465 Mich. 654, 663;
641 NW2d 245 (2002). The mere fact that a court rejects a party’s legal position does not mean
that the party’s position was frivolous. See id. “The determination whether a claim or defense is
frivolous must be based on the circumstances at the time it was asserted. That the alleged facts
are later discovered to be untrue does not invalidate a prior reasonable inquiry.” Jerico Constr,
Inc v Quadrants, Inc, 257 Mich. App. 22, 36; 666 NW2d 310 (2003) (citation omitted).
On February 24, 2015, the Alawi parties filed a motion for a second order to show cause
regarding the bank records. The Alawi parties asserted that, in February 2015, Chapman served
a discovery request on the Alawi parties that contained detailed data and information that could
only have come from the bank records that the trial court had previously ordered must not be
used or disseminated. The Alawi parties asserted that Chapman and his counsel had violated the
trial court’s order and should be held in contempt of court. On February 25, 2015, the trial court
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entered an order requiring Chapman’s counsel to show cause why they should not be held in
contempt and why other relief should not be granted to the Alawi parties. Chapman’s counsel
filed responses objecting to the order to show cause and opposing the Alawi parties’ motion.
Chapman’s counsel denied that they had retained and used the bank records. Chapman’s counsel
asserted that the information contained in the discovery requests came from other materials in the
case, including the lease agreement, which contained the full amount of the security deposit, a
copy of a check that Chapman had provided to the Alawi parties as payment for his share of the
security deposit, the surety bond, and other information provided by the Alawi parties.
Chapman’s counsel sought sanctions on the grounds that the Alawi parties’ motion for an order
to show cause was frivolous.
At a motion hearing on March 11, 2015, the trial court dismissed the show-cause order
but denied the request for sanctions by Chapman’s counsel. Before the court ruled, the Alawi
parties’ counsel acknowledged, after reading the response of Chapman’s counsel, that the
information could have been obtained from sources other than the bank records. Therefore, the
Alawi parties’ counsel conceded that he could no longer argue in good faith that the discovery
requests were evidence that Chapman’s counsel had retained the bank records. In denying the
request for sanctions by Chapman’s counsel, the trial court recounted the history of the litigation,
i.e., that the bank had mistakenly released its records concerning the Alawi parties, and those
records had then been disseminated by counsel for Chapman and intervening plaintiffs to their
experts and clients while an objection to the subpoena and a motion for a protective order were
pending. The trial court further stated:
[Chapman’s counsel] knew that there was an objection to the subpoena, whether
they received it themselves or not. They knew that there was a motion for
protective order pending and they received the [mistakenly released bank
information,] shared it among themselves and others while the motion was
pending.
So I, I give that to you by way of explaining why [the Alawi parties’
counsel] would be extremely sensitive to the dissemination of information.
Now should he have recognized that those numbers [in the discovery
requests] would correspond directly to the amounts of security deposits? Maybe,
maybe even more than maybe he should have recognized that, but the request
didn’t say the amount – there was no parenthetical phrase there saying the amount
of the security deposit being nine hundred and whatever dollars.
And these folks hate each other so much that neither one of them will call
the other and say hey where did you get those numbers, why are you doing that or
I got your motion for contempt did you realize these are the numbers.
So I’m not going to sanction [the Alawi parties’ counsel] in any way. I’m
dismissing the, the show cause against [Chapman’s counsel], but there’s a history
here that might not have come through to [the attorney for Chapman’s counsel] as
you were reviewing the file and if you want to make a complaint to the, the, the
Attorney Grievance Commission I’ll leave that to you, but I don’t see that what
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[the Alawi parties’ counsel] did here was sanctionable in light of everything else
that has happened in this case.
On April 1, 2015, the trial court entered an order finding that Chapman and his counsel
had not violated the court’s prior order regarding bank records in preparing their discovery
request. On May 4, 2015, Chapman filed a formal motion for sanctions despite the court’s
earlier oral ruling that it would not award sanctions. Following a hearing on May 13, 2015, the
trial court entered an order on May 15, 2015, denying Chapman’s motion for sanctions.
On appeal, Chapman challenges the trial court’s reasoning expressed at the March 11,
2015, hearing for refusing to award sanctions against the Alawi parties’ counsel. According to
Chapman, the trial court’s summary of the history of this litigation reflected that the trial court
was “keeping score” and allowing prior matters in the litigation to influence the determination of
whether to grant sanctions against the Alawi parties’ counsel for filing the motion for a second
show-cause order. Chapman’s argument is unavailing. The trial court recounted the history of
the litigation not as a way to “keep score” but rather to explain why it was understandable that
the Alawi parties’ counsel was sensitive to the possible dissemination of financial information
about his clients. That is, the trial court explained that there had earlier been a mistaken release
of bank records and that counsel for Chapman and intervening plaintiffs then disseminated those
records even though an objection to the subpoena for those records and a motion for a protective
order were pending. This led to the entry of an order requiring counsel for Chapman and
intervening plaintiffs to destroy or return the mistakenly-released and improperly-disseminated
records. A subsequent discovery request from Chapman’s counsel appeared to the Alawi parties’
counsel to contain information that could only have been obtained from the bank records, which
led the Alawi parties’ counsel to file the motion for a second order to show cause. The trial court
noted that the Alawi parties’ counsel perhaps should have realized the information contained in
the discovery request could have been obtained from materials other than the bank records, but
that the sensitivity on the part of the Alawi parties’ counsel to the possible use of information
obtained from the bank records was nonetheless understandable given the history of this
litigation, particularly the improper dissemination of the bank records and the extremely hostile
nature of the litigation. The fact that the Alawi parties’ counsel made a mistake in thinking that
the information in the discovery request could only have been obtained from the bank records—a
mistake that the Alawi parties’ counsel later candidly acknowledged at the motion hearing—does
not establish that the initial position of the Alawi parties’ counsel on this matter was frivolous.
See Kitchen, 465 Mich. at 663, Jerico Constr, 257 Mich. App. at 36, and Louya, 190 Mich. App. at
163. Overall, the trial court did not clearly err in denying Chapman’s request for sanctions
against the Alawi parties’ counsel.
Chapman next argues that the trial court erred in granting summary disposition to the
Alawi parties with respect to Chapman’s claim of federal statutory violations regarding lead-
based paint hazards. We disagree.
Statutory interpretation is a question of law we review de novo, as is the
interpretation of administrative regulations. This standard applies to the
interpretation of federal statutes and regulations, though reasonable administrative
interpretations of regulations operating as statutory gap-fillers are entitled to
deference. Clear and unambiguous statutory language is given its plain meaning,
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and is enforced as written. [In re Petition of Attorney General for Investigative
Subpoenas, 274 Mich. App. 696, 698; 736 NW2d 594 (2007) (quotation marks and
citations omitted).]
In his fourth amended complaint, Chapman alleged that the Alawi parties violated
provisions of the Residential Lead-Based Paint Hazard Reduction Act, 42 USC 4851 et seq.
(RLPHRA), and the Toxic Substances Control Act, 15 USC 2601 et seq. (TSCA), and
regulations under each act. Chapman asserted that the Alawi parties failed to provide notice of
lead-based paint hazards and to maintain records of maintenance and repair activities. Chapman
claimed that the Alawi parties’ employees performed renovations, repairs, and painting at the
rental property without proper licenses or certifications, without following required protocols to
contain and eliminate lead dust, and without providing notice to Chapman of the hazardous
nature of lead dust. As a result, Chapman claimed, he suffered damages and injuries that
included expenses for medical diagnostic testing to determine whether he was exposed to lead or
suffered lead poisoning, along with “unknown” injuries that “may develop” as a result of being
exposed to lead at the rental property.
A federal statute, 42 USC 4852d(a)(1), requires the Secretary and the Administrator of
the Environmental Protection Agency (EPA) to promulgate regulations for the disclosure of lead-
based paint hazards in “target housing”8 that is offered for sale or lease. The regulations were to
require that the lessee be provided with a lead-hazard information pamphlet as prescribed by the
EPA and that disclosure be made to the lessee of any known lead-based paint hazards. 42 USC
4852d(a)(1)(A) & (B). A person who knowingly violates these provisions “shall be jointly and
severally liable to the purchaser or lessee in an amount equal to 3 times the amount of damages
incurred by such individual.” 42 USC 4852d(b)(3).
The promulgated regulations under the RLPHRA are set forth in the Code of Federal
Regulations. Under the federal regulations, owners of properties are not required “to evaluate
the property(ies) for the presence of lead-based paint hazards or take any action to control these
conditions if one or more of them is identified.” 40 CFR 745.61(c). Regulations concerning
information-distribution, certification, training, and work-practice requirements apply to
“renovations performed for compensation in target housing” unless lead levels are below a
certain threshold. See 40 CFR 745.82(a). A renovation is defined as “the modification of any
existing structure, or portion thereof, that results in the disturbance of painted surfaces . . . .” 40
CFR 745.83. This includes the removal, modification, or repair of painted surfaces, sanding or
scraping that may generate paint dust, and the removal of walls, ceilings, or plumbing. 40 CFR
745.83. However, “minor repair and maintenance activities” do not constitute a “renovation.”
40 CFR 745.83. “Minor repair and maintenance activities” generally include activities “that
disrupt 6 square feet or less of painted surface per room for interior activities or 20 square feet or
less of painted surface for exterior activities[.]” 40 CFR 745.83. Emergency renovations are
exempt from the information-distribution, warning-sign, containment, waste-handling, training,
8
“Target housing” generally means “housing constructed prior to 1978[.]” 42 USC 4851b(27).
It is undisputed that the house on the rental property in this case was constructed before 1978.
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and certification requirements set forth in the regulations. 40 CFR 745.82(b). Emergency
renovations “are renovation activities that were not planned but result from a sudden, unexpected
event (such as non-routine failures of equipment) that, if not immediately attended to, presents a
safety or public health hazard, or threatens equipment and/or property with significant damage.”
40 CFR 745.82(b). Emergency renovations are not exempt from the cleaning, cleaning-
verification, and recordkeeping requirements of the regulations. 40 CFR 745.82(b). The
regulations implement the provisions of 42 USC 4852d that impose requirements on the sale or
lease of target housing; under these regulations,
a seller or lessor of target housing shall disclose to the purchaser or lessee the
presence of any known lead-based paint and/or lead-based paint hazards; provide
available records and reports; provide the purchaser or lessee with a lead hazard
information pamphlet; give purchasers a 10–day opportunity to conduct a risk
assessment or inspection; and attach specific disclosure and warning language to
the sales or leasing contract before the purchaser or lessee is obligated under a
contract to purchase or lease target housing. [40 CFR 745.100.]
In this case, Chapman asserted that the Alawi parties performed several repairs that
amounted to renovations under the federal regulations, including removing and replacing sagging
drywall in the bedroom and living room; repairing a broken window; scraping, sanding, and
repainting the front porch; repairing cracked and peeling paint in the kitchen; and repairing the
plaster ceiling at an exterior cellar door. Because these activities supposedly comprised
renovations, Chapman contended that the Alawi parties were subject to the notice, work-practice,
certification, and training requirements of the federal regulations. The Alawi parties argued that
these activities constituted either emergency renovations or minor repair and maintenance
activities that were excluded from the definition of “renovations.”
The trial court ruled that given the small repair area, the replacement of drywall in the
bedroom was a minor repair rather than a renovation, and that the drywall replacement in the
living room was too large to constitute a minor repair, but it was an emergency renovation due to
a plumbing-equipment failure that created a threat of significant damage to person or property.
The court noted that an emergency renovation is not exempt from the cleaning, cleaning-
verification, and recordkeeping requirements of the federal regulations. The trial court thus
granted summary disposition to the Alawi parties regarding the replacement of the drywall in the
bedroom but denied summary disposition concerning the replacement of the drywall in the living
room. The court concluded that the repair of the broken window was not a renovation because it
did not require the disturbance of any painted surface and thus granted summary disposition to
the Alawi parties on that part of the claim. The court found no violation of the federal
regulations regarding the alleged sanding, scraping, and painting of the front porch and thus
granted summary disposition to the Alawi parties on that part of the claim. Chapman failed to
present sufficient evidence to establish that the repair of the plaster ceiling at the exterior cellar
door or the repair of the cracked and peeling paint in the kitchen constituted renovations rather
than minor repairs or maintenance activities. Overall, the trial court granted summary
disposition to the Alawi parties on all aspects of the lead-based paint hazard claim except for
whether the replacement of the drywall in the living room was a renovation within the meaning
of the RLPHRA and federal regulations and whether Chapman received the information
pamphlet required by the RLPHRA (with respect to which the court had earlier concluded that a
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factual issue existed). Later in the litigation, however, the court dismissed the entire count
regarding lead-based paint hazards because the alleged damages were for a fear of injury, which
was not compensable.
On appeal, Chapman asserts without elaboration “that the classification of the repairs in
the bedroom and in the living room were questions of fact for the jury to decide.” Chapman also
states that, with respect to the sanding, scraping, and painting of the front porch, the trial court
“flat out missed” the alleged fact that “the lead dust, chips, and scrapings . . . traveled throughout
the house, yard, siding, window jams, porch steps, etc.” Chapman then asserts that “that the
classification of the repair of the broken window, the sanding, scraping and painting of the entire
porch, and [the Alawi parties’] requirement to provide records to Chapman were questions of
fact for the jury to decide.” Chapman cites no authority and provides no reasoning to support his
contention that questions of fact existed on these issues. “It is not sufficient for a party simply to
announce a position or assert an error and then leave it up to this Court to discover and
rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then
search for authority either to sustain or reject his position.” Wilson, 457 Mich. at 243 (quotation
marks and citation omitted). Failure to adequately brief an issue constitutes abandonment.
McIntosh, 282 Mich. App. at 484. We discern no basis to disagree with the trial court’s thorough
analysis addressing each aspect of the claim concerning lead-based paint hazards.
In any event, the trial court ultimately dismissed the entire lead-based paint hazard claim
on the ground that Chapman had failed to present evidence that he suffered any compensable
damages. Chapman contends that he has incurred expenses for blood and urine laboratory
testing and medical consultations to determine the extent of his exposure to lead. He argues that
no federal court has ruled that damages under the RLPHRA, the TSCA, and federal regulations
are limited to personal injury or lead poisoning. Chapman’s arguments are unavailing. The trial
court correctly concluded that Chapman failed to present evidence of compensable damages with
respect to the lead-based paint hazard count. Chapman has not alleged or presented evidence
that he suffers from lead poisoning. What Chapman is asking for is that he be entitled to collect
damages for the expense of medical testing and consultation, i.e., monitoring his health. But
such expenses incurred due to the fear of a possible future injury are not compensable damages
in the absence of a present injury. See Henry v Dow Chemical Co, 473 Mich. 63, 77-79; 701
NW2d 684 (2005) (in the analogous context of a negligence action, medical-monitoring
expenses incurred due to the fear of a future physical injury are not compensable). Chapman
cites no authority suggesting that a different rule should apply in this context to allow recovery
of expenses for medical monitoring in the absence of a present physical injury. The trial court
thus properly granted summary disposition to the Alawi parties on Chapman’s claim of federal
statutory violations regarding lead-based paint hazards.
Chapman argues that the trial court erred in dismissing Chapman’s claims for breach of
the covenant of fitness and habitability, negligence, premises liability, and nuisance, all premised
on allegations that he suffered damages arising from the presence of toxic mold at the rental
property. We disagree.
MCL 554.139(1) provides:
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In every lease or license of residential premises, the lessor or licensor
covenants:
(a) That the premises and all common areas are fit for the use intended by
the parties.
(b) To keep the premises in reasonable repair during the term of the lease
or license, and to comply with the applicable health and safety laws of the state
and of the local unit of government where the premises are located, except when
the disrepair or violation of the applicable health or safety laws has been caused
by the tenants willful or irresponsible conduct or lack of conduct.
“[A] breach of the duty to maintain the premises under MCL 554.139(1)(a) or (b) would be
construed as a breach of the terms of the lease between the parties and any remedy under the
statute would consist exclusively of a contract remedy.” Allison v AEW Capital Mgt, LLP, 481
Mich. 419, 425-426; 751 NW2d 8 (2008). “[T]ypically, a plaintiff’s remedy for breach of
contract is limited to damages that arise naturally from the breach or those that were in the
contemplation of the parties at the time the contract was made.” Id. at 426 n 3 (quotation marks
and citations omitted).
“To establish a prima facie case of negligence, a plaintiff must prove four elements: (1) a
duty owed by the defendant to the plaintiff, (2) a breach of that duty, (3) causation, and (4)
damages.” Quinto v Woodward Detroit CVS, LLC, 305 Mich. App. 73, 75; 850 NW2d 642 (2014)
(quotation marks and citation omitted). With respect to the element of causation, this Court has
explained:
Proving causation requires proof of both cause in fact and proximate
cause. Cause in fact requires that the harmful result would not have come about
but for the defendant’s negligent conduct. Cause in fact may be established by
circumstantial evidence, but such proof must facilitate reasonable inferences of
causation, not mere speculation. A plaintiff must present substantial evidence
from which a jury may conclude that more likely than not, but for the defendant’s
conduct, the plaintiff’s injuries would not have occurred. A mere possibility of
such causation is not sufficient; and when the matter remains one of pure
speculation and conjecture, or the probabilities are at best evenly balanced, it
becomes the duty of the court to direct a verdict in favor of the defendant.
Normally, the existence of cause in fact is a question for the jury to decide, but if
there is no issue of material fact, the question may be decided by the court.
[Genna v Jackson, 286 Mich. App. 413, 417-418; 781 NW2d 124 (2009)
(quotation marks and citations omitted).]
“In a premises liability action, a plaintiff must prove the elements of negligence[.]”
Benton v Dart Props, Inc, 270 Mich. App. 437, 440; 715 NW2d 335 (2006).
Michigan law distinguishes between claims arising from ordinary
negligence and claims premised on a condition of the land. Ordinary negligence
claims are grounded on the underlying premise that a person has a duty to
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conform his or her conduct to an applicable standard of care when undertaking an
activity. In contrast, in a premises liability claim, liability emanates merely from
the defendant’s duty as an owner, possessor, or occupier of land. Thus, when an
injury develops from a condition of the land, rather than emanating from an
activity or conduct that created the condition on the property, the action sounds in
premises liability. [Lymon v Freedland, 314 Mich. App. 746, 756; 887 NW2d 456
(2016) (quotation marks, citations, and brackets omitted).]
“Historically, Michigan has recognized two distinct versions of nuisance, public nuisance
and private nuisance.” Adkins v Thomas Solvent Co, 440 Mich. 293, 302; 487 NW2d 715 (1992).
“A public nuisance is an unreasonable interference with a common right enjoyed by the general
public.” Cloverleaf Car Co v Phillips Petroleum Co, 213 Mich. App. 186, 190; 540 NW2d 297
(1995). “The essence of private nuisance is the protection of a property owner’s or occupier’s
reasonable comfort in occupation of the land in question.” Adkins, 440 Mich. at 303. Chapman
does not expressly indicate whether he is claiming a public nuisance or a private nuisance. He
does not allege any facts suggesting an unreasonable interference with a common right enjoyed
by the general public; his allegations are centered on the purported presence of toxic mold at the
rental property, which is a private residence. We therefore construe his claim as alleging a
private nuisance. “A private nuisance is a nontrespassory invasion of another’s interest in the
private use and enjoyment of land.” Id. at 302.
The elements of a private nuisance are satisfied if (a) the other has
property rights and privileges in respect to the use or enjoyment interfered with,
(b) the invasion results in significant harm, (c) the actor’s conduct is the legal
cause of the invasion, and (d) the invasion is either (i) intentional and
unreasonable, or (ii) unintentional and otherwise actionable under the rules
governing liability for negligent, reckless, or ultrahazardous conduct. To prove a
nuisance, significant harm to the plaintiff resulting from the defendant’s
unreasonable interference with the use or enjoyment of property must be proven.
[Capitol Props Group, LLC v 1247 Ctr Street, LLC, 283 Mich. App. 422, 431-432;
770 NW2d 105 (2009) (citation omitted).]
In connection with this issue, Chapman offers a cursory criticism of the trial court’s
ruling at the conclusion of a Daubert9 hearing excluding the testimony of two of Chapman’s
experts and limiting the testimony of a third expert, Dr. Mark Banner, such that Dr. Banner could
testify regarding his testing of the rental property for mold spores but could not testify regarding
the health effects of living in a house with mold. A trial court’s decision whether to admit
evidence is reviewed for an abuse of discretion. Edry v Adelman, 486 Mich. 634, 639; 786
NW2d 567 (2010). An abuse of discretion occurs when the trial court’s decision falls outside the
range of principled outcomes. Id. This Court reviews de novo questions of law underlying
evidentiary rulings. Elher v Misra, 499 Mich. 11, 21; 878 NW2d 790 (2016). Chapman asserts
that the trial court’s decision was bereft of a proper analysis, but Chapman fails to elaborate on
9
Daubert v Merrell Dow Pharm, Inc, 509 U.S. 579; 113 S. Ct. 2786; 125 L. Ed. 2d 469 (1993).
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this cursory criticism. Chapman may not leave it to this Court to rationalize his bare assertion;
this aspect of his argument is therefore abandoned. Wilson, 457 Mich. at 243; McIntosh, 282
Mich. App. at 484. The trial court explained its analysis sufficiently by noting that Dr. Banner’s
expertise was in testing for mold spores and knowing which mold spores were which but that his
belief regarding the deleterious health effects of residing in a house containing mold was
anecdotal and lacked a sufficient scientific basis. The trial court also discussed convincingly the
lack of scientific support for the causation testimony of Chapman’s two proposed medical
experts that the court excluded because of this lack of support. In the absence of any substantive
appellate argument by Chapman, we can discern no basis to conclude that the trial court’s ruling
at the conclusion of the Daubert hearing fell outside the range of reasonable and principled
outcomes.
The trial court properly granted summary disposition on the mold-related claims because
Chapman failed to present evidence that his claimed injuries were caused by the alleged presence
of toxic mold at the rental property. The trial court excluded the testimony of Chapman’s
proposed medical experts. Although Dr. Banner was permitted to testify regarding his testing of
the rental property for mold spores, he was not permitted to testify regarding the health effects of
living in a house containing mold. Chapman has failed to present any admissible expert
testimony that his claimed health problems were caused by mold spores at the rental property.
Nor has Chapman presented any other evidence to establish causation. In Genna, 286
Mich. App. at 418, this Court held that direct expert testimony is not required to establish that a
toxin was the cause of the plaintiff’s injury. In Genna, id. at 415, a water heater in the
defendant’s condominium unit ruptured while she was gone for many months; as a result, the
condominium unit became infested with “patches of mold of all different colors all over the
walls and ceilings in her kitchen, family room, and dining area.” The interior of the
condominium unit was so grossly contaminated that the inside needed to be demolished. Id. at
416. The plaintiffs’ children, who lived in the adjoining unit, began experiencing flu-like
symptoms that included diarrhea, vomiting, congestion, and nosebleeds. Id. at 415. The
children’s health condition required numerous trips to the hospital and a doctor’s office. Id. at
420. The plaintiffs’ experts confirmed the deleterious health effects of mold and that the mold in
the condominium units was toxic. Id. at 420-421. The children had been healthy before their
exposure to mold, and their health improved after they moved out of the condominium unit. Id.
at 421. In finding sufficient evidence to submit the case to the jury, this Court reasoned:
This is not a complicated case: the children were sick, the children were
removed from the home, the mold was discovered, and the children recovered.
Testimony established extremely high levels of mold and that mold can cause the
types of symptoms suffered by the children. It does not take an expert to
conclude that, under these circumstances, defendant more likely than not is
responsible for plaintiff’s injuries. Here, there was ample circumstantial evidence
that would facilitate reasonable inferences of causation, not mere speculation. [Id.
(quotation marks, brackets, and citations omitted).]
Unlike in Genna, plaintiff has failed to present circumstantial evidence of a causal link
between the alleged presence of mold and any injuries. In contrast to Genna, there is no
evidence that Chapman sought medical attention for mold-related conditions while living at the
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rental property.10 Although Chapman visited medical doctors a few months after moving out of
the rental property, his doctors were barred from testifying regarding his alleged mold-related
conditions. In contrast to the significant visible mold infestation of multiple colors that occurred
in Genna, Chapman’s housing-inspection expert observed no visible mold at the rental property.
Dr. Banner conducted air testing that determined that some mold spores were present, but the
record does not even remotely support a conclusion that the mold spores detected in this case
were substantial enough to establish a reasonable inference of causation.
Chapman has thus failed to present anything beyond speculation and conjecture, which
are insufficient to establish the causation element of a negligence claim. Id. at 418. And because
the elements of negligence must be proven in a premises-liability action, Benton, 270 Mich. App.
at 440, Chapman’s negligence and premises-liability claims were both properly dismissed.
Chapman has likewise failed to support his claim for breach of the implied covenant of fitness
and habitability because he has not articulated any manner in which he has suffered damages
arising naturally from the alleged breach of the covenants or that were in the contemplation of
the parties when the contract was made. Allison, 481 Mich. at 426 n 3. The lack of proof of
causation also supported dismissal of the nuisance claims given that Chapman cannot establish
that he suffered significant harm resulting from an unreasonable interference with his use or
enjoyment of the property. Capitol Props Group, 283 Mich. App. at 431-432.
Chapman next contends that the trial court abused its discretion in refusing to admit into
evidence two governmental publications regarding the health effects of mold. We disagree.
Hearsay is inadmissible except as provided by the Michigan Rules of Evidence. MRE
802. “ ‘Hearsay’ is a statement, other than the one made by the declarant while testifying at the
trial or hearing, offered in evidence to prove the truth of the matter asserted.” MRE 801(c). The
parties do not dispute that the governmental publications constitute hearsay; their disagreement is
over whether the hearsay exceptions contained in MRE 803(8) or MRE 803(24) are applicable.
MRE 803(8) sets forth the following exception to the hearsay rule:
Records, reports, statements, or data compilations, in any form, of public
offices or agencies, setting forth (A) the activities of the office or agency, or (B)
matters observed pursuant to duty imposed by law as to which matters there was a
duty to report, excluding, however, in criminal cases matters observed by police
officers and other law enforcement personnel, and subject to the limitations of
MCL 257.624.
MRE 803(8)(A) is inapplicable because the governmental publications regarding the
health effects of mold are not related to the activities per se of the governmental entities. See
Solomon v Shuell, 435 Mich. 104, 130; 457 NW2d 669 (1990) (opinion by ARCHER, J.) (stating
that “MRE 803(8)(A) is limited to ‘records or reports’ describing the general activities of an
10
Chapman sought medical attention for a foot infection while living at the rental property, but
there is no evidence that this was caused by the alleged presence of mold at the rental property.
-29-
agency per se”), and Hewitt v Grand Trunk Western R Co, 123 Mich. App. 309, 326; 333 NW2d
264 (1983) (holding that an accident report was not related to the activities per se of a police
agency). MRE 803(8)(B) is also inapplicable because there is no indication that the statements
regarding the health effects of mold concerned matters that were observed by the unidentified
authors of the governmental publications. The sources for the information contained in the
documents are unknown. See Bradbury v Ford Motor Co, 419 Mich. 550, 554; 358 NW2d 550
(1984) (MRE 803(8)(B) “reflects the narrow common-law rule which limits public reports of
matters observed by agency officials to reports of objective data observed and reported by these
officials.”), and Hewitt, 123 Mich. App. at 327 (holding that an accident report did not fall within
MRE 803(8)(B) because “the reporting officer had no firsthand knowledge of the facts contained
therein”).
MRE 803(24) provides the residual hearsay exception:
A statement not specifically covered by any of the foregoing exceptions
but having equivalent circumstantial guarantees of trustworthiness, if the court
determines that (A) the statement is offered as evidence of a material fact, (B) the
statement is more probative on the point for which it is offered than any other
evidence that the proponent can procure through reasonable efforts, and (C) the
general purposes of these rules and the interests of justice will best be served by
admission of the statement into evidence. However, a statement may not be
admitted under this exception unless the proponent of the statement makes known
to the adverse party, sufficiently in advance of the trial or hearing to provide the
adverse party with a fair opportunity to prepare to meet it, the proponent’s
intention to offer the statement and the particulars of it, including the name and
address of the declarant.
The residual exception “may be used to admit statements that are similar to, but not admissible
under, the categorical hearsay exceptions.” People v Katt, 468 Mich. 272, 290; 662 NW2d 12
(2003). However, the requirements of the residual exception “are stringent and will rarely be
met, alleviating concerns that the residual exception[] will ‘swallow’ the categorical exceptions
through overuse.” Id. at 289. “To be admitted under MRE 803(24), a hearsay statement must:
(1) demonstrate circumstantial guarantees of trustworthiness equivalent to the categorical
exceptions, (2) be relevant to a material fact, (3) be the most probative evidence of that fact
reasonably available, and (4) serve the interests of justice by its admission.” Id. at 290.
Chapman has not established that the statements in the governmental publications are relevant to
a material fact. To be admissible, the proffered statements must be relevant to “a fact that is
significant or essential to the issue or matter at hand.” Id. at 292 (quotation marks, citation, and
brackets omitted). The governmental publications contain generalized statements to the effect
that mold may have deleterious health effects. Such broad policy assertions are not probative of
whether Chapman’s alleged injuries were caused by the presence of mold in the rental property.
The publications also lack circumstantial guarantees of trustworthiness equivalent to the
categorical hearsay exceptions. “[C]ourts should consider all factors that add to or detract from
the statement’s reliability.” Id. There is no indication that the assertions in these documents are
the product of peer-reviewed scientific research or even that the documents were prepared or
reviewed by scientists. Because the governmental publications are not relevant to a material fact
and are not sufficiently trustworthy, the trial court properly declined to admit these publications.
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II. DOCKET NO. 332711
Chapman argues that the trial court abused its discretion in setting aside two defaults that
were entered against the Alawi parties for failing to answer Chapman’s counterclaims in the
Alawi parties’ action. We disagree. “We review for an abuse of discretion a trial court’s
decision on a motion to set aside a default and whether to grant a default judgment. A trial court
abuses its discretion when it reaches a decision that falls outside the range of principled
outcomes.” Huntington Nat’l Bank v Ristich, 292 Mich. App. 376, 383; 808 NW2d 511 (2011)
(citations omitted).
Assuming proper notice, see Brooks Williamson & Assoc, Inc v Mayflower Constr Co,
308 Mich. App. 18, 35-36; 863 NW2d 333 (2014), “[a] motion to set aside a default or a default
judgment, except when grounded on lack of jurisdiction over the defendant, shall be granted only
if good cause is shown and an affidavit of facts showing a meritorious defense is filed.” MCR
2.603(D)(1).
Good cause can be shown by: (1) a substantial defect or irregularity in the
proceedings upon which the default was based, (2) a reasonable excuse for failure
to comply with the requirements which created the default, or (3) some other
reason showing that manifest injustice would result from permitting the default to
stand. [Shawl v Spence Bros, Inc, 280 Mich. App. 213, 221; 760 NW2d 674
(2008) (quotation marks and citations omitted).]
This Court has identified the following factors that a trial court should consider in determining
whether a party has shown good cause:
(1) whether the party completely failed to respond or simply missed the
deadline to file;
(2) if the party simply missed the deadline to file, how long after the
deadline the filing occurred;
(3) the duration between entry of the default judgment and the filing of the
motion to set aside the judgment;
(4) whether there was defective process or notice;
(5) the circumstances behind the failure to file or file timely;
(6) whether the failure was knowing or intentional;
(7) the size of the judgment and the amount of costs due under MCR
2.603(D)(4);
(8) whether the default judgment results in an ongoing liability (as with
paternity or child support); and
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(9) if an insurer is involved, whether internal policies of the company were
followed. [Id. at 238.]
In determining whether a meritorious defense has been established, a court should consider
whether the affidavit sets forth evidence that:
(1) the plaintiff cannot prove or defendant can disprove an element of the
claim or a statutory requirement;
(2) a ground for summary disposition exists under MCR 2.116(C)(2), (3),
(5), (6), (7) or (8); or
(3) the plaintiff’s claim rests on evidence that is inadmissible. [Id.]
These lists are not exhaustive or exclusive. Id. at 239. “[T]he trial court should consider only
relevant factors, and it is within the trial court’s discretion to determine how much weight any
single factor should receive.” Id. A trial court should base its decision on the totality of the
circumstances. Id. at 237. Also, “the strength of the defense obviously will affect the ‘good
cause’ showing that is necessary. In other words, if a party states a meritorious defense that
would be absolute if proven, a lesser showing of ‘good cause’ will be required . . . .” Alken-
Ziegler, Inc v Waterbury Headers Corp, 461 Mich. 219, 233-234; 600 NW2d 638 (1999).
In his motion to set aside the first default, counsel for the Alawi parties indicated that he
apparently overlooked the counterclaims given the numerous issues involved in this litigation.
Counsel noted that the matter had been vigorously litigated in both of the consolidated cases, and
asserted that neither he nor his clients had been dilatory in taking action on this matter. At the
hearing on the motion to set aside the first default, counsel for the Alawi parties again admitted
his oversight in the matter. He noted that the essence of the defense to the counterclaims had
been asserted in the consolidated case filed by Chapman, and that there had been extensive
litigation on the matter. Chapman’s counterclaims were identical to his claims in his own action,
which had been “litigated over and over and over again.” Hence, the defenses to the
counterclaims would be identical to the defenses to Chapman’s claims in his own action. There
would thus be no surprises or prejudice to Chapman from setting aside the default. The trial
court ruled from the bench:
The fact that, that Chapmans [sic] did not [earlier] realize that there wasn’t
an answer demonstrates that there was no prejudice in the [Alawi parties’] failure
to answer.
And to say that the [Alawi parties] have participated fully in the litigation
would be an understatement. I can understand that, that a deadline to answer
might have been missed and I understand why it was missed. This has been an
extremely active case and I’ll grant the motion to vacate the default.
The trial court’s decision fell within the range of reasonable and principled outcomes.
Although the neglect or carelessness of a litigant or attorney is not typically a ground for setting
aside a default, Epps v 4 Quarters Restoration, LLC, 498 Mich. 518, 554; 872 NW2d 412 (2015),
there are many unique features of the present case that distinguish it from a typical case. The
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counterclaims asserted by Chapman in the Alawi parties’ action were identical in all relevant
respects to the claims asserted by Chapman in his own action. Those claims were—to put it
mildly—fully litigated in Chapman’s action. The extent of litigation is reflected in the fact that
the records for these two cases fill up seven boxes. The trial court reasonably concluded that it
was understandable in this context that the Alawi parties’ counsel overlooked the counterclaims.
Indeed, Chapman’s own counsel admitted at the motion hearing that she had failed to realize
until late in the litigation that the counterclaims had not been answered. Chapman was not at all
prejudiced by the failure of the Alawi parties to answer the counterclaims given that the identical
claims were answered and litigated extensively in the companion case. On these facts, the Alawi
parties provided a reasonable excuse for the failure to file an answer. In addition, a meritorious
defense existed given that the identical claims in Chapman’s action were not only answered but
were fully litigated and ultimately dismissed by summary disposition.
Likewise, in moving to set aside the second default (which was entered after the Alawi
parties answered Chapmans October 8, 2014, counterclaim but failed to answer his June 23,
2014, counterclaim), the Alawi parties moved to set aside that default and noted that Chapman’s
June 23, 2014, counterclaim asserted the same claims that had been pleaded in Chapman’s own
action, which the Alawi parties had answered. Chapman was thus aware of the Alawi parties’
defenses. The prior existence of the claims asserted in the June 23, 2014, counterclaim and the
fact that the substance of those claims had been at issue for months was asserted to comprise
good cause for the Alawi parties’ failure to file an answer to the counterclaim. A meritorious
defense was again asserted to exist because the Alawi parties had prevailed on the identical
claims raised in Chapman’s own action. Hence, the Alawi parties argued, the second default
should be set aside. The trial court granted the Alawi parties’ motion to set aside the second
default because “all the matters at issue in this case have been litigated and dealt with on the
merits.” The trial court’s decision to set aside the second default fell within the range of
reasonable and principled outcomes for the same reasons articulated with respect to the setting
aside of the first default. The extent of litigation in this case and the fact that the same claims
had been asserted, answered, and litigated to completion in the companion case provided a
reasonable excuse for the failure to file an answer, and the fact that the identical claims had been
summarily dismissed in the companion case established a meritorious defense.
Chapman notes that the Alawi parties did not file with their motions to set aside the
defaults an affidavit of facts showing a meritorious defense as discussed in MCR 2.603(D)(1).
Chapman fails to cite authority establishing that the failure to file the affidavit precludes setting
aside the default where a meritorious defense has otherwise been articulated in the motion and on
the record at the motion hearing. Not only did the Alawi parties identify their meritorious
defenses in their motions to set aside and orally in court, but the defenses were in fact asserted
and fully litigated with success in Chapman’s action in the consolidated case. On the facts of
this case, the failure to file an affidavit showing a meritorious defense did not bar setting aside
the defaults. See, generally, Lawrence M Clarke, Inc v Richco Constr, Inc, 489 Mich. 265, 273 n
3; 803 NW2d 151 (2011) (noting that setting aside default judgments even though the affidavits
were filed after the motions to set aside was consistent “with the general principle that defaults
are not favored and doubts generally should be resolved in favor of the defaulting party”)
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(quotation marks, citation, and brackets omitted),11 and Sylvania Savings Bank v Turner, 27
Mich. App. 640, 649-650; 183 NW2d 894 (1970) (reviewing the merits of the defaulting party’s
claim without an affidavit of meritorious defense having been filed).
Chapman next argues that the trial court erred in dismissing Chapman’s counterclaims
and in striking his affirmative defenses in the Alawi parties’ action. We disagree. A trial court’s
decision whether to strike a pleading is reviewed for an abuse of discretion. Belle Isle Grill Corp
v Detroit, 256 Mich. App. 463, 469; 666 NW2d 271 (2003).
Chapman asserts that there was no basis for an involuntary dismissal of the counterclaims
under MCR 2.504(B), but there is no indication that the trial court dismissed the counterclaims
under that subrule. We construe the trial court’s decision as granting summary disposition to the
Alawi parties for the same grounds on which it summarily dismissed Chapman’s claims in his
own action. Chapman does not dispute that his counterclaims were identical in all relevant
respects to the claims asserted in his own action, all of which the trial court had already
summarily dismissed. The Alawi parties asked the trial court to “apply all of the prior decisions
on the merits to the counter-claims and dismiss them . . . .” The trial court expressed agreement
with the Alawi parties that “all the matters at issue in this case have been litigated and dealt with
on the merits.” The trial court then dismissed the counterclaims, subject to the disposition of the
security deposit held by the Alawi parties. In short, it is apparent that the trial court applied its
rationale for dismissing Chapman’s claims in his own action to his identical counterclaims
asserted in the Alawi parties’ action. We discern no error in the dismissal of the counterclaims
on this ground. As discussed earlier, Chapman has failed to establish any error in the dismissal
of the claims in his own action; he has therefore likewise failed to establish an error in the
dismissal of his identical counterclaims.
Chapman also challenges the dismissal of his affirmative defenses. The Alawi parties
asked the trial court to strike Chapman’s affirmative defenses because Chapman had replicated
his claims from his own action and his counterclaims in his affirmative defenses; the Alawi
parties argued that the affirmative defenses could not succeed given the trial court’s previous
summary dismissal of the claims in his own action. It appears that the trial court adopted this
rationale in stating that “all the matters at issue in this case have been litigated and dealt with on
the merits.” The trial court struck all of Chapman’s affirmative defenses except for his
affirmative defense concerning the Sykes release (discussed below). In any event, any error in
the striking of Chapman’s affirmative defenses other than the one based on the Sykes release is
harmless. With respect to the Alawi parties’ claims against Chapman, the trial court granted
summary disposition to Chapman on the basis of the Sykes release. Hence, the striking of
Chapman’s affirmative defenses other than on the basis of the Sykes release did not affect the
outcome of the case, making any error harmless such that reversal would not be required. See
MCR 2.613(A).
11
We note that the default judgments in Lawrence M Clarke were set aside under MCR 2.612,
which does not expressly require filing an affidavit of meritorious defense. See Lawrence M
Clarke, 489 Mich. at 273.
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On cross-appeal, the Alawi parties argue that the trial court abused its discretion in
allowing Chapman to amend his affirmative defenses to include the Sykes release and that the
trial court erred in granting summary disposition to Chapman on the basis of the Sykes release.
We disagree.
A trial court’s decision whether to allow an amendment of pleadings to add an
affirmative defense is reviewed for an abuse of discretion. Ostroth v Warren Regency, GP, LLC,
263 Mich. App. 1, 5; 687 NW2d 309 (2004), aff’d 474 Mich. 36 (2006). “This Court reviews de
novo a trial court’s decision on a motion for summary disposition.” Hackel, 298 Mich. App. at
315.
When the plaintiffs’ claims are barred because of a release, summary disposition
is proper under MCR 2.116(C)(7). The interpretation of a release presents a
question of law that is reviewed de novo.
Contract law applies to disputes involving the terms of a release. The
cardinal rule in the interpretation of contracts is to ascertain the intention of the
parties. The scope of a release is governed by the intent of the parties as it is
expressed in the release. If the language is unambiguous, it must be construed, as
a whole, according to its plain and ordinary meaning. [Radu v Herndon &
Herndon Investigations, Inc, 302 Mich. App. 363, 373-374; 838 NW2d 720 (2013)
(quotation marks and citations omitted).]
The Alawi parties contend that the trial court abused its discretion in permitting Chapman
to amend his affirmative defenses to include the Sykes release. We disagree.
Leave to amend should be freely granted when justice so requires. MCR
2.118(A)(2). However, leave to amend should not be granted in the face of undue
delay, bad faith, or dilatory motive on the part of the movant, or undue prejudice
to the opposing party by virtue of allowance of the amendment. [Ostroth, 263
Mich. App. at 5.]
There is no indication that Chapman’s failure to seek amendment earlier was the result of bad
faith or undue delay. Although the Sykes release was signed on October 16, 2015, Chapman
represents that his counsel obtained a copy of the Sykes release on January 22, 2016, and then
filed the motions to amend and for summary disposition on January 25, 2016. There is no basis
to conclude that the Alawi parties were prejudiced by the amendment. As signatories to the
Sykes release, they were already aware of the language of the release. “The mere fact that an
amendment might cause a party to lose on the merits is not sufficient to establish prejudice.” Id.
The Alawi parties argue that the trial court erred in granting summary disposition to
Chapman with respect to the Alawi parties’ claim for unpaid rent and other damages because
Chapman was not an intended third-party beneficiary of the Sykes release. We disagree.
MCL 600.1405 concerns the rights of third-party beneficiaries and provides, in part:
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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.
(1) A promise shall be construed to have been made for the benefit of a
person whenever the promisor of said promise had undertaken to give or to do or
refrain from doing something directly to or for said person.
In Romska v Opper, 234 Mich. App. 512, 513-514; 594 NW2d 853 (1999), overruled in
part by Shay v Aldrich, 487 Mich. 648; 790 NW2d 629 (2010), the plaintiff entered into a
settlement agreement with the insurer of one of two vehicles involved in a car accident with the
plaintiff’s vehicle. The release contained language releasing “all other parties, firms, or
corporations who are or might be liable . . . .” Romska, 234 Mich. App. at 514. The plaintiff then
sued the defendant, who was the driver of the other vehicle involved in the accident. Id. The
trial court granted summary disposition to the defendant on the ground that the broad language of
the release also released the defendant from liability, and this Court affirmed. Id. at 513, 515.
This Court reasoned:
Because defendant clearly fits within the class of “all other parties, firms,
or corporations who are or might be liable,” we see no need to look beyond the
plain, explicit, and unambiguous language of the release in order to conclude that
he has been released from liability. There cannot be any broader classification
than the word “all,” and “all” leaves room for no exceptions. [Id. at 515-516
(quotation marks and citation omitted).]
This Court further held that it was inappropriate to consider parol evidence in determining the
scope of the release because, among other things, “the language of the release is unambiguous
and thereby precludes resort to allegedly contradictory parol evidence.” Id. at 516.
In Shay, 487 Mich. at 676, the Michigan Supreme Court “overrule[d] Romska to the
extent that it prohibits a court from considering extrinsic evidence of the intended scope of a
release when an unnamed party seeks to enforce third-party-beneficiary rights based on broad
language included in a release from liability and an ambiguity exists with respect to the intended
scope of that release.” In Shay, 487 Mich. at 651-652, the plaintiff sued officers of the
Melvindale Police Department (the Melvindale Officers) and officers of the Allen Park Police
Department (the Allen Park Officers) for assault. The plaintiff later executed releases with
respect to the claims against the Allen Park Officers. Id. at 653. The releases contained
language discharging the Allen Park Officers “together with all other persons, firms and
corporations, from any and all claims, demands and actions which I have now or may have
arising out of any and all damages, expenses, and any loss or damage resulting from [the incident
in question].” Id. The Melvindale Officers sought summary disposition on the ground that the
“all other persons” language in the releases effectively released the Melvindale Officers. Id. at
653-654. The trial court denied the Melvindale Officers’ motion for summary disposition, but
this Court reversed, reasoning in accordance with Romska that the unambiguous language of the
releases of the Allen Park Officers also barred the claims against the Melvindale Officers. Id. at
654-656. The Supreme Court reversed this Court’s decision and overruled Romska in part. Id. at
651, 676.
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The Court in Shay summarized its holding as follows:
We conclude that courts may consider extrinsic evidence of the intended scope of
a release when an unnamed party seeks to enforce third-party-beneficiary rights
based on the broad release language but the evidence presented establishes that an
ambiguity exists with respect to the intended scope of the release. [Id. at 660.]
The Court stated that unambiguous contractual language is generally construed according to its
plain meaning but that extrinsic evidence may be considered to determine the parties’ intent if
the contractual language is ambiguous. Id. The Melvindale Officers’ counsel conceded that the
plaintiff and the Allen Park Officers did not intend to release the Melvindale Officers. Id. at 662.
The Court stated that “the Melvindale Officers qualify as third-party beneficiaries under the
applicable statute because on its face, the release language unambiguously releases ‘all other
persons.’ ” Id. at 665. “On the face of the release documents, the Melvindale Officers are third-
party beneficiaries of the promise, i.e., the release from liability, and may seek to enforce it.” Id.
at 667. However, extrinsic evidence may be used to demonstrate that a latent ambiguity exists.
Id.
A latent ambiguity exists when the language in a contract appears to be
clear and intelligible and suggests a single meaning, but other facts create the
necessity for interpretation or a choice among two or more possible meanings. To
verify the existence of a latent ambiguity, a court must examine the extrinsic
evidence presented and determine if in fact that evidence supports an argument
that the contract language at issue, under the circumstances of its formation, is
susceptible to more than one interpretation. Then, if a latent ambiguity is found to
exist, a court must examine the extrinsic evidence again to ascertain the meaning
of the contract language at issue. [Id. at 668 (quotation marks and citations
omitted).]
In Shay, 487 Mich. at 671, the plaintiff presented extrinsic evidence to support his
contention that the release language was ambiguous, including an affidavit of counsel for the
Allen Park Officers, who drafted the releases, stating that he had not intended to release the
Melvindale Officers. The Melvindale Officers did not dispute this extrinsic evidence. Id. at 672.
All of the contracting parties agreed that they did not intend for the releases to have any effect on
the Melvindale Officers’ liability, and “[e]ven the Melvindale Officers themselves did not
believe that the releases were intended to include them.” Id. at 674.
The present case is far different from Shay. In this case, there was no extrinsic evidence
properly before the trial court that would create a latent ambiguity in the release language. The
Sykes release contained broad language in which the Alawi parties released, in addition to Sykes,
any other persons, firms, organizations, associations, partnerships, corporations,
or other entities who might be claimed to be liable, at fault or otherwise
responsible, or who are or might be in privity with it from any and all claims,
judgments, debts, liabilities, expenses, attorneys’ fees, actions, causes of action,
grievances, demands, costs, loss of services, compensation and all damages of
whatever type or nature including those sounding [in] contract and tort, whether
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legal or equitable, compensatory or punitive, known or unknown, whether raised
in the Litigation or not, which they have or ever have had through the date of this
[settlement and release].
The only document that the Alawi parties appended to their response to Chapman’s motion for
summary disposition was a purported affidavit of Alawi, but the document was not signed by
Alawi or notarized and thus did not constitute an affidavit. See Gorman, 302 Mich. App. at 120
(noting that a trial court may not consider an unsigned, unsworn affidavit when deciding a
motion for summary disposition). Although the Alawi parties filed a signed and notarized copy
of the affidavit two days after the hearing in which the trial court decided the motion for
summary disposition, that version of the affidavit may not be considered because “appellate
review of the trial court’s decision is limited to the evidence that had been presented at the time
the motion was decided.” Id.; see also Pena v Ingham Co Rd Comm, 255 Mich. App. 299, 310;
660 NW2d 351 (2003) (noting that this Court “only consider[s] what was properly presented to
the trial court before its decision on the motion [for summary disposition]”).12
Even if Alawi’s unsigned and unsworn affidavit were considered, it falls far short of the
type of evidence that created a latent ambiguity in Shay. Alawi’s purported affidavit stated that
Chapman was not considered to be a third-party beneficiary of ¶ 4 of the Sykes release, but that
provision released Sykes’s claims against the Alawi parties; it was ¶ 5 of the Sykes release that
contained the broad language quoted above releasing Sykes and “any other persons[,]” etc. Even
if Alawi’s affidavit is construed as referring to ¶ 5 of the Sykes release, there is no evidence that
the other party to the release, Sykes, agrees with Alawi’s self-serving claim that Chapman was
not an intended third-party beneficiary of the release, a claim that contravenes the plain language
of the release that released the broadest possible category of persons. Further, unlike in Shay,
where the Melvindale Officers admitted that they were not intended to be third-party
beneficiaries of the release, Chapman has made no such concession here. In addition, the release
in this case does refer to Chapman by name in stating the names of the cases in which Sykes and
the Alawi parties were involved in litigating, Sykes is referred to as a tenant in the release, and
there is no dispute that Chapman and Sykes were co-tenants such that they fell within the same
class of persons who were involved in litigation with the Alawi parties, the landlords of the
house that Chapman and Sykes were renting together. In addition, the release at one point refers
to “[t]enants” in the plural: ¶ 2 states that “Tenants shall pay to Landlord the sum of $2,905.00,
receipt of which is hereby acknowledged.” Overall, even if Alawi’s purported affidavit were
considered, we are not convinced that it establishes the existence of a latent ambiguity, or that
12
In addition, there is no evidence that the signed and notarized version of the affidavit was
served on Chapman until much later, when the Alawi parties filed a motion for reconsideration,
and Chapman represents on appeal that he was not served with the affidavit until the motion for
reconsideration was filed.
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the resolution of such a latent ambiguity would lead to the conclusion that the contracting parties
did not intend for Chapman to be a third-party beneficiary of the release.13
The Alawi parties next argue the trial court erred in requiring them to pay Chapman twice
the amount of the entire security deposit. We disagree. The trial court’s decision is premised on
a judicial admission made by the Alawi parties. Whether the Alawi parties made a judicial
admission constitutes a question of law. Questions of law are reviewed de novo. See, generally,
Chapdelaine v Sochocki, 247 Mich. App. 167, 169; 635 NW2d 339 (2001). Principles governing
the interpretation of contracts apply to this Court’s review of the language of a lease. In re Smith
Trust, 480 Mich. 19, 24; 745 NW2d 754 (2008). Questions concerning the proper interpretation
of a contract or the legal effect of a contractual provision are reviewed de novo. McDonald v
Farm Bureau Ins Co, 480 Mich. 191, 197; 747 NW2d 811 (2008).
In interpreting a contract, it is a court’s obligation to determine the intent of the
parties by examining the language of the contract according to its plain and
ordinary meaning. If the contractual language is unambiguous, courts must
interpret and enforce the contract as written, because an unambiguous contract
reflects the parties’ intent as a matter of law. [In re Smith Trust, 480 Mich. at 24
(citations omitted).]
MCL 554.613(1), a provision of the LTRA, generally requires a landlord to commence an
action for money damages or return the security deposit to the tenant within 45 days after
termination of the tenant’s occupancy. MCL 554.613(2) provides that a landlord who fails to
comply with MCL 554.613 is “liable to the tenant for double the amount of the security deposit
retained.” In their second amended complaint in their action seeking to collect unpaid rent and
other damages, the Alawi parties set forth a calculation of their damages and deducted from their
damages claim the amount of $9,185, which was alleged to represent the “[s]ecurity [d]eposit on
hand (x2).”14 This comprised a judicial admission that was binding on the Alawi parties. A
judicial admission is a formal concession in the pleadings or a stipulation by a party or its
attorney that has the effect of withdrawing a fact from issue and dispensing with the need to
prove that fact. Radtke v Miller, Canfield, Paddock & Stone, 453 Mich. 413, 420; 551 NW2d 698
(1996). In contrast to an evidentiary admission, a judicial admission is conclusive unless the trial
court allows it to be withdrawn. Id. at 421.15 The Alawi parties’ admission could be interpreted
13
Although it is not necessary to the analysis, we note that the Alawi parties’ attorney drafted the
Sykes release, and that in Shay, 487 Mich. at 673, the Supreme Court stated that “[i]t is an
elementary rule of construction of contracts that in case of doubt, a contract is to be strictly
construed against the party by whose agent it was drafted.” Therefore, even if a latent ambiguity
existed here, it is far from clear that this would lead to an outcome favorable to the Alawi parties.
14
As Chapman’s appellate brief explains, the Alawi parties’ second amended complaint slightly
overstated the amount that was twice the security deposit—the security deposit was $4,562.50,
and twice that amount is $9,125.
15
An alternatively-stated claim in a complaint does not constitute an admission that can be used
against a party, Shuler v Mich Physicians Mut Liability Co, 260 Mich. App. 492, 514-515; 679
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as either an admission of fact or an admission that, by operation of MCL 554.613(2), they owed
twice the amount of the security deposit. In either event, the admission is binding because a
party may admit to both facts and “the application of law to fact[.]” MCR 2.312(A).
In light of the Alawi parties’ judicial admission on this point, it is unnecessary to address
whether the Alawi parties failed to commence their action within the 45-day period required by
MCL 554.613(1) such that a doubling of the security deposit under MCL 554.613(2) was
required absent a judicial admission. The trial court did not address that question, instead
resolving the issue on the basis of the Alawi parties’ concession in their second amended
complaint. Moreover, the Alawi parties do not present a sufficient appellate argument on that
point, thereby abandoning that issue. Wilson, 457 Mich. at 243; McIntosh, 282 Mich. App. at 484.
The Alawi parties further argue that Chapman was only entitled to receive the portion of
the security deposit that he paid and not the portions paid by any co-tenant. However, the lease
provides the following:
If more than one person signs this lease, then the security deposit shall be returned
in one check payable to one tenant. . . . This tenant shall act as agent of all other
persons who have signed this lease or acquired legal rights of occupancy under it
in dividing the security deposit according to any shares the tenants have agreed
upon and in remitting those shares to each person. Landlord shall not be
responsible for the proper division of shares in the security deposit, nor for the
assessment of individual liability for any charges against the security deposit
made by Landlord, which shall be matters solely for the Tenants to agree upon.
The trial court properly determined that the entire security deposit should be returned to
Chapman given that the plain language of the lease provides for the security deposit to be
returned in one check payable to one tenant; Chapman was the only tenant still involved in this
litigation at the time of the court’s ruling on this issue. The Alawi parties further argue that three
of Chapman’s co-tenants assigned their rights to the security-deposit funds to the Alawi parties
as part of a settlement agreement. However, the Alawi parties failed to provide that settlement
agreement to the trial court before the trial court decided this issue, instead providing the
settlement agreement for the first time in their motion for reconsideration.16 This Court may
only consider the documents that were properly presented to the trial court when it decided this
issue. See Pena, 255 Mich. App. at 310. But even if the co-tenants’ settlement agreement were
considered, it was executed in September 2014, months before the Alawi parties filed their
second amended complaint in January 2015 that deducted twice the amount of the entire security
deposit from their damages claim. The Alawi parties offer no explanation for why they would
have deducted twice the amount of the entire security deposit if they were taking the position that
three of Chapman’s co-tenants had already surrendered their portions of the security deposit to
NW2d 106 (2004), but the Alawi parties’ deduction of twice the amount of the security deposit
from their damages claim was not an alternatively-stated claim.
16
The settlement agreement, which was executed in September 2014, does indicate that three of
Chapman’s co-tenants—Thomas Sullivan, Nikola Rakic, and George Kelly—surrendered their
shares of the security deposit to the Alawi parties.
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the Alawi parties. Hence, the Alawi parties have failed to establish that the settlement agreement
with three of Chapman’s co-tenants made it inappropriate to award Chapman twice the amount
of the entire security deposit.
Finally, the Alawi parties cursorily assert that the trial court had previously dismissed
Chapman’s counterclaims, including his claim to twice the amount of the security deposit, such
that it was improper to award twice the amount of the security deposit to Chapman. As
discussed, however, the trial court expressly reserved the issue of the security deposit when it
decided to dismiss Chapman’s counterclaims. After further briefing, the trial court held a
subsequent hearing at which it rendered its decision on the security-deposit issue. The trial court
then entered its order requiring the Alawi parties to pay to Chapman the sum of $9,125, which
was twice the amount of the security deposit, and entered a separate order that, among other
things, dismissed Chapman’s counterclaims subject to the disposition of the security deposit. In
short, the Alawi parties’ cursory appellate claim fails to recount accurately the procedural
history. The trial court did not err in its ruling on this issue.
III. DOCKET NO. 333259
The Alawi parties17 argue that the trial court clearly erred in denying the Alawi parties’
request for sanctions against Chapman for filing a frivolous action. We disagree.
Initially, we note that Chapman cursorily asserts in his appellee brief that this Court lacks
“subject matter jurisdiction over 1129 S. State Street, LLC in this appeal” because 1129 S. State
Street, LLC, did not file a claim of appeal or an application for leave to appeal within the
required time limits. However, three days before Chapman filed his appellee brief, this Court
entered an order granting a motion by the Alawi parties’ counsel, Mark A. Hopper, to add 1129
S. State, LLC, as an appellant. See Chapman v Alawi, unpublished order of the Court of
Appeals, entered April 4, 2017 (Docket No. 333259). Only Alawi claimed an appeal from the
order denying the Alawi parties’ motion for sanctions against Chapman, but Hopper then filed a
brief on appeal that listed Michigan Rental, Alawi, and 1129 S. State, LLC, as appellants. After
our Clerk’s office informed Hopper of the discrepancy in the designation of appellants, Hopper
moved to amend the claim of appeal to add 1129 S. State, LLC, as an appellant, which we
granted. Id. MCR 7.204(A) states that the “time limit for an appeal of right is jurisdictional.”
An appeal of right must be taken within 21 days after entry of the order being appealed. MCR
7.204(A)(1). It is true that 1129 S. State did not take an appeal within 21 days after entry of the
order. However, an appeal of right was taken from the May 25, 2016, order denying sanctions
within the 21-day time frame, even if not by 1129 S. State. Thus, this Court has jurisdiction to
decide the issues related to the May 25, 2016, order. And MCR 7.216(A)(2) grants this Court
authority to “allow substitution, addition, or deletion of parties or allow parties to be rearranged
as appellants or appellees, on reasonable notice[.]” Additionally, MCR 7.216(A)(7) grants this
Court authority to enter any order as the case may require.
17
Although Michigan Rental is not designated as an appellant in the appeal in which this issue is
raised, Alawi and 1129 S. State, LLC, are designated as appellants, and we will refer to Alawi
and 1129 S. State, LLC, as “the Alawi parties” in this issue for the sake of simplicity.
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The court rules thus allowed the addition of 1129 S. State as a party appellant to the case
on reasonable notice. Reasonable notice was satisfied here. Clearly, Hopper believed that 1129
S. State was an appellant in the case. He filed his brief, listing that party as an appellant. As
soon as he received this Court’s letter advising him that Alawi was the only appellant in the case,
he moved to add 1129 S. State. Notably, in a prior motion answer filed by Chapman on
September 7, 2016, he listed 1129 S. State in the case caption as an appellant in this case. Thus,
Chapman cannot claim prejudice from the addition of 1129 S. State as a party. He, too, believed
1129 S. State was an appellant. Moreover, the May 25, 2016, order from which Alawi claimed
the appeal denied 1129 S. State the same relief that Alawi had requested. All of the Alawi
parties were denied attorney fees and costs as a sanction against Chapman. This Court’s opinion
related to the May 25, 2016, order therefore necessarily adjudicates the rights of 1129 S. State.
Additionally, 1129 S. State is a party to the other five consolidated cases that are before this
Court. This fact supports that there has been no prejudice to Chapman from amending the claim
of appeal to add 1129 S. State as an appellant. Chapman’s cursory assertion in his appellee brief
that this Court lacks subject-matter jurisdiction over 1129 S. State is devoid of merit.
We now turn to the substantive issue. The trial court correctly concluded that the Alawi
parties’ motion for sanctions is barred by the Sykes release. As discussed earlier, the Sykes
release contains broad language by which the Alawi parties released, in addition to Sykes,
any other persons, firms, organizations, associations, partnerships, corporations,
or other entities who might be claimed to be liable, at fault or otherwise
responsible, or who are or might be in privity with it from any and all claims,
judgments, debts, liabilities, expenses, attorneys’ fees, actions, cause of action,
grievances, demands, costs, loss of services, compensation and all damages of
whatever type or nature including those sounding [in] contract and tort, whether
legal or equitable, compensatory or punitive, known or unknown, whether raised
in the Litigation or not, which they have or ever have had through the date of this
[settlement and release]. [Emphasis added.]
We adhere to our earlier analysis concluding that the Alawi parties have failed to establish a
latent ambiguity in the Sykes release that should be resolved in favor of the Alawi parties’
position that the release is inapplicable to claims against Chapman. The Alawi parties are barred
under the Sykes release from obtaining the requested costs and attorney fees against Chapman.
Nor did the trial court clearly err in determining that, even if the Sykes release was
inapplicable, the Alawi parties would not be entitled to sanctions. Although the trial court
ultimately dismissed all of Chapman’s claims, this does not prove that the claims were frivolous.
See Kitchen, 465 Mich. at 663, Jerico Constr, 257 Mich. App. at 36, and Louya, 190 Mich. App. at
163. The Alawi parties fail to address each specific claim raised by Chapman and to explain
precisely how it was frivolous. “It is not sufficient for a party simply to announce a position or
assert an error and then leave it up to this Court to discover and rationalize the basis for his
claims, or unravel and elaborate for him his arguments, and then search for authority either to
sustain or reject his position.” Wilson, 457 Mich. at 243 (citation and quotation marks omitted).
Failure to adequately brief an issue constitutes abandonment. McIntosh, 282 Mich. App. at 484.
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To the extent that the Alawi parties have briefed the issue, their arguments are unavailing.
The Alawi parties acknowledged legal deficiencies in their lease with Chapman and that they
have now corrected those deficiencies in their leases with other tenants. Although Chapman was
ultimately unable to recover due to the lack of damages and inability to establish entitlement to a
declaratory judgment, this does not mean his claims were frivolous. The fact that Chapman’s
counsel ultimately withdrew his class action claims does not establish that his original request for
class-action status was frivolous. The Alawi parties’ acknowledgement of deficiencies in their
leases that were later corrected arguably suggests that other tenants of the Alawi parties may also
have had potential claims. That Chapman’s counsel ultimately chose to focus on Chapman’s
claims when his mold and lead-paint claims were discovered in lieu of pursuing the class action
does not necessitate a finding of frivolousness. Indeed, the court rule pertaining to class actions
expressly contemplates that a class action will sometimes not be pursued despite having been
alleged in the complaint. See MCR 3.501(B)(1) and (2). The Alawi parties’ argument regarding
the claims asserted by the estate of a co-tenant who committed suicide are not pertinent in
assessing whether Chapman’s own claims were frivolous. Chapman’s mold and lead-paint
claims were ultimately determined to lack sufficient support, but this was after litigation that
included assessments by the trial court regarding the evidence presented and the admissibility of
proposed expert testimony. It has not been established that the claims were frivolous based on
the circumstances at the time the claims were asserted. See Jerico Constr, 257 Mich. App. at 36.
IV. DOCKET NOS. 334164 AND 33416518
Chapman argues that the trial court erred in denying his motion for case-evaluation
sanctions. We disagree. “A trial court’s decision whether to grant case-evaluation sanctions
under MCR 2.403(O) presents a question of law, which this Court reviews de novo.” Smith, 481
Mich. at 526 (opinion by TAYLOR, C.J.).
MCR 2.403(O)(1) provides for case-evaluation sanctions, in relevant part, as follows: “If
a party has rejected an evaluation and the action proceeds to verdict, that party must pay the
opposing party’s actual costs unless the verdict is more favorable to the rejecting party than the
case evaluation.” A “verdict” includes “a judgment entered as a result of a ruling on a motion
after rejection of the case evaluation.” MCR 2.403(O)(2)(c). A verdict is more favorable to the
defendant if it is more than 10 percent below the case evaluation or, if the evaluation was zero,
the verdict reflects a finding that the defendant is not liable to the plaintiff. MCR 2.403(O)(3).
“[A]ctual costs” consist of costs taxable in a civil action and a reasonable attorney fee for
services necessitated by the rejection of the evaluation. MCR 2.403(O)(6). “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.” MCR 2.403(O)(11).
Chapman argues that he is entitled to case-evaluation sanctions in both of the lower court
files because the “net” case-evaluation award of $4,000 in his favor was more favorable to the
Alawi parties than the “verdict” consisting of the order in the Alawi parties’ action requiring the
Alawi parties to pay $9,125 to Chapman. This argument is unavailing. Although Chapman’s
18
Chapman has filed a single appellate brief encompassing these two appeals.
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action and the Alawi parties’ action were consolidated for hearing purposes in the trial court, the
two cases retained their separate identities. Indeed, the circuit-court clerk provided to the
parties’ attorneys a notice regarding procedure for the consolidated cases that stated: “Please take
notice that the above cases have been consolidated for hearing in the Washtenaw County Circuit
Court by order of the court. Consolidated cases do not become as one file. Separate court files
and dockets are still maintained.” In Chen v Wayne State Univ, 284 Mich. App. 172, 196-199;
771 NW2d 820 (2009), this Court held that two consolidated cases retained their separate
identities and were not merged. Although the two consolidated cases here were submitted to the
same case-evaluation panel, the panel issued a separate evaluation for each case. Chapman’s
argument that he is entitled to sanctions in both cases is erroneously premised on treating the two
cases as one case by merging the two case-evaluation awards such that a “net” case-evaluation
award of $4,000 in his favor is created. Each case must be reviewed separately to determine
Chapman’s entitlement to case-evaluation sanctions because the two cases retained their separate
identities and were evaluated separately.
In Chapman’s action, the case-evaluation panel recommended an award of $5,000 in
favor of Chapman and against the Alawi parties. Chapman accepted the award, and the Alawi
parties rejected the award. All of Chapman’s claims in his own case were later summarily
dismissed. Therefore, the verdict was more favorable to the Alawi parties than the case-
evaluation award because the verdict amounted to a finding that the Alawi parties were not liable
to Chapman. MCR 2.403(O)(3). Chapman is therefore not entitled to case-evaluation sanctions
against the Alawi parties in Chapman’s action. MCR 2.403(O)(1).
In the Alawi parties’ action, the case-evaluation panel recommended an award of $1,000
in favor of the Alawi parties and against Chapman. Chapman accepted the award, and the Alawi
parties rejected the award. The verdict in the Alawi parties’ action consisted of an order
requiring the Alawi parties to pay Chapman $9,125. Therefore, the verdict was not more
favorable to the Alawi parties than the case-evaluation award. Hence, Chapman would generally
be entitled to case-evaluation sanctions against the Alawi parties in the Alawi parties’ action.
However, the trial court stated that it was declining to award case-evaluation sanctions to
Chapman because the Sykes release that led to the dismissal of the Alawi parties’ claims did not
yet exist at the time of the case evaluation. As noted in Allard v State Farm Ins Co, 271 Mich
App 394, 398; 722 NW2d 268 (2006), an exception to awarding case-evaluation sanctions may
be invoked when, as in this case, the verdict consists of a judgment entered as a result of a ruling
on a motion: in this situation, the trial court may, in the interest of justice, refuse to award costs.
See MCR 2.403(O)(11). While the trial court did not explicitly cite MCR 2.403(O)(11) in
making its ruling, from context it is evident that the trial court was invoking the “interest of
justice” exception to decline to sanction the Alawi parties, given the timing of the Sykes release.
The court stated that “it would be unfair to penalize [the Alawi parties] . . . for not anticipating
that the release and satisfaction would . . . occur [and] be dispositive of the case.” Under the
circumstances, we find no basis for reversal.
Chapman next argues that the trial court erred in only partially granting Chapman’s
motion for costs under MCR 2.625. We disagree. The trial court properly limited its award of
taxable costs to Chapman to those costs incurred in the Alawi parties’ action because Chapman
did not prevail in his own action.
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A trial court’s ruling on a motion to tax costs under MCR 2.625 is reviewed for an abuse
of discretion. Guerrero, 280 Mich. App. at 670. “The determination whether a party is a
‘prevailing party’ for the purpose of awarding costs under MCR 2.625 is a question of law,
which this Court reviews de novo.” Fansler v Richardson, 266 Mich. App. 123, 126; 698 NW2d
916 (2005).
MCR 2.625(A)(1) provides: “Costs will be allowed to the prevailing party in an action,
unless prohibited by statute or by these rules or unless the court directs otherwise, for reasons
stated in writing and filed in the action.” MCR 2.625(B)(1) states:
If separate judgments are entered under MCR 2.116 or MCR 2.505(A)
[pertaining to consolidated actions] and the plaintiff prevails in one judgment in
an amount and under circumstances which would entitle the plaintiff to costs, he
or she is deemed the prevailing party. Costs common to more than one judgment
may be allowed only once.
MCR 2.625(B)(2) provides:
In an action involving several issues or counts that state different causes of
action or different defenses, the party prevailing on each issue or count may be
allowed costs for that issue or count. If there is a single cause of action alleged,
the party who prevails on the entire record is deemed the prevailing party.
MCL 600.2421b(3)(a) defines a “prevailing party” as follows: “In an action involving several
remedies, or issues or counts which state different causes of actions or defenses, the party
prevailing as to each remedy, issue, or count.” MCL 600.2421b(3)(b) further defines a
“prevailing party” as follows: “In an action involving only 1 issue or count stating only 1 cause
of action or defense, the party prevailing on the entire record.” Where there are multiple claims,
if recovery on one claim would not bar recovery on other claims, different causes of action are
involved under MCR 2.625(B)(2), such that costs are allowed to the prevailing party in each
cause. Klinke v Mitsubishi Motors Corp, 219 Mich. App. 500, 520; 556 NW2d 528 (1996), aff’d
458 Mich. 582 (1998). “In order to be considered a prevailing party, that party must show, at the
very least, that its position was improved by the litigation.” Fansler, 266 Mich. App. at 128
(quotation marks, brackets, and citation omitted).
Chapman argues that he is entitled to taxable costs incurred in his own action because he
is the prevailing party in both cases. He further asserts entitlement to recover his costs for the
litigation of his own action because he asserted counterclaims in the Alawi parties’ action that
were essentially identical to Chapman’s claims in his own action. We disagree. As discussed
earlier, Chapman prevailed in the Alawi parties’ action; his position improved in that litigation
because the trial court ordered the Alawi parties to pay Chapman $9,125 in that case. But in
Chapman’s action, he was not the prevailing party because his position was not improved by the
litigation; indeed, the trial court dismissed all of Chapman’s claims. Although Chapman asserted
the claims from his action as counterclaims in the Alawi parties’ action, the Alawi parties’ action
included additional claims and issues pertaining to unpaid rent, property damages, and recovery
of the security deposit. The trial court determined that most of the costs submitted by Chapman
were related to proving his claims for personal injury and other matters in his own action. The
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trial court awarded Chapman $100 as filing fees for five motions in the Alawi parties’ action.
The litigation activity in the Alawi parties’ action was minimal in comparison to the extensive
litigation that occurred in Chapman’s action. The trial court did not abuse its discretion in
limiting Chapman’s taxable costs to those incurred in the Alawi parties’ action because that was
the only case in which Chapman was the prevailing party.
V. DOCKET NO. 334948
Chapman argues that the trial court erred in awarding taxable costs and expert-witness
fees to the Alawi parties under MCR 2.625. We agree.
Chapman argues that the Sykes release bars the Alawi parties from recovering taxable
costs and expert-witness fees against Chapman. We agree. In accordance with our earlier
analysis, we conclude that the Sykes release bars the Alawi parties from recovering costs and
expert-witness fees against Chapman because he is a third-party beneficiary of the broad
language in the release. In the Sykes release, the Alawi parties released “any other persons . . .
who might be claimed to be liable, at fault or otherwise responsible” from “any and all claims, . .
. expenses, attorneys’ fees, [and] costs . . . .”19 The Alawi parties suggest that the Sykes release
is inapplicable because the Daubert hearing (with respect to which expert-witness fees were
awarded) was held after the Sykes release was signed; the Alawi parties note that the release
states that it applies to claims, expenses, attorney fees, and costs that the Alawi parties “have or
ever have had through the date of this [settlement and release].” The Alawi parties fail to
address the fact that some of the expert-witness fees and costs claimed were incurred before the
date of the Sykes release even though the Daubert hearing was held after the signing of the
Sykes release. More importantly, the fact remains that the expert-witness fees and costs incurred
after the execution of the Sykes release were incurred as part of the ongoing litigation in which
the Alawi parties reached a settlement agreement with Sykes whereby they agreed to release
Sykes and, as a third-party beneficiary, Chapman. MCR 2.625(H) provides: “Unless otherwise
specified a settlement is deemed to include the payment of any costs that might have been
taxable.” Although the Alawi parties did not settle with Chapman, they did settle with Sykes,
and as part of that settlement they agreed to release “any other persons” from all claims,
expenses, attorney fees, and costs. Therefore, the Sykes release barred the Alawi parties from
recovering taxable costs and expert-witness fees against Chapman. It is therefore unnecessary to
address Chapman’s other arguments for reversing the award of taxable costs and expert-witness
fees against him.
Finally, the Alawi parties request sanctions under MCR 7.216(C) against Chapman for
allegedly pursuing vexatious appeals in this matter. However, a request for sanctions for filing a
vexatious appeal must be contained in a motion rather than in an appellate brief. See MCR
7.211(C)(8); see also Barrow v Detroit Election Comm, 305 Mich. App. 649, 684; 854 NW2d 489
(2014) (holding that a sanctions request in an appellate brief did not constitute a motion under
19
We note that the Sykes release referenced both of the consolidated lower-court actions in
indicating that Sykes and the Alawi parties had reached a settlement agreement.
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the court rule and that such a motion could be filed within 21 days after the date of this Court’s
opinion).
We affirm in Docket Nos. 331750, 332711, 333259, 334164 and 334165. In Docket No.
334948, we reverse and remand for entry of an order denying the Alawi parties’ request for
taxable costs and expert-witness fees. We do not retain jurisdiction.
/s/ Mark J. Cavanagh
/s/ Patrick M. Meter
/s/ Michael J. Kelly
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