Scott Simmons v. Estate of Bonnie Vant ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
SCOTT SIMMONS, UNPUBLISHED
December 21, 2017
Plaintiff-Appellant,
v No. 334351
Ingham Circuit Court
DAVID A. VANT, Co-Personal Representative for LC No. 16-000244-CB
the Estate of BONNIE VANT, NANCY L.
NELSON, Co-Personal Representative for the
Estate of BONNIE VANT, DAVID A. VANT,
Trustee of the BONNIE L. VANT TRUST,
NANCY L. NELSON, Trustee of the BONNIE L.
VANT TRUST, VERTICAL SOLUTIONS
COMPANY, BERT VANT, DIANE WISE, ALL
KNOWN OR UNKNOWN HEIRS
SUCCESSORS OR ASSIGNS OF BONNIE
VANT,
Defendants-Appellees.
Before: MURPHY, P.J., and M. J. KELLY and SWARTZLE, JJ.
PER CURIAM.
Plaintiff Scott Simmons appeals as of right the trial court’s order granting summary
disposition in favor of defendants pursuant to MCR 2.116(C)(8) in this action involving claims
of promissory estoppel and breach of contract arising out of a business agreement. We affirm.
In 2002, Simmons and Bonnie Vant formed an elevator parts and services company
known as The Vertical Solution Company (VSC). Simmons and Vant initially had an oral
agreement with respect to the business venture, which was later reduced to writing. The written
agreement provided, in part, that “Simmons will be issued 90% of the shares as a signing bonus
when he becomes fully employed by [VSC] and begins to draw a salary.” We shall refer to this
provision as the “employment clause.” There is no dispute that, initially, Vant was VSC’s sole
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shareholder.1 The written agreement further provided that “[i]n the event of the death of Bonnie
Vant it is intended that Scott Simmons assume ownership of [VSC] and the 10% will go to the
estate of Bonnie Vant and no further claims of Bonnie Vant’s estate will be made on [VSC].”
We shall refer to this provision as the “death clause.”
Vant died in 2015, at which time Simmons had not yet become employed by VSC, which
he concedes. A dispute then arose between Simmons and defendants, who consisted of various
representatives of Vant’s probate and trust estates and others, with respect to the ownership
interests in VSC. Simmons contended that the agreement’s death clause operated to give him a
90% ownership interest in VSC upon Vant’s death, with the remaining 10% going to Vant’s
estate, even though the employment clause had never been implicated. Essentially, Simmons’s
position was that under the agreement he could obtain a 90% ownership interest in VSC either by
becoming a full-time, salary-drawing employee under the employment clause, which did not
transpire, or by Vant’s passing under the death clause, regardless of his employment status at the
time of Vant’s death. Defendants maintained that Simmons never satisfied the employment
clause and that the written agreement lacked mutuality of obligation because Simmons was not
required to seek full-time employment with VSC and because the death clause allowed Simmons
to obtain a 90% interest in VSC for no return performance and simply on the basis of Vant’s
death.
Simmons filed a complaint against defendants, alleging breach of contract and
promissory estoppel. Defendants subsequently filed a motion for summary disposition under
MCR 2.116(C)(8) and (10), arguing lack of mutuality of obligation, lack of a definite promise by
Vant to convey ownership to Simmons upon her death for purposes of the promissory estoppel
claim, and lack of compliance with the requirements for making a valid will. 2 Simmons
responded that mutuality of obligation did exist, where the written agreement was not a full
integration of the business agreement or venture, and where parol evidence showing all of
Simmons’s many contributions and efforts to advance the business established the consideration
and mutuality of obligation necessary to contractually support a transfer of ownership upon
Vant’s death. Simmons further contended that, as to promissory estoppel, there were words,
writings, and conduct that reflected a clear and definite promise by Vant to transfer ownership of
VSC to Simmons at her death. And Simmons maintained that the written agreement was not
subject to the requirements of a will, as the agreement merely dictated what interest in VSC that
Vant actually held, which interest would in turn become part of her estate and distributed to
1
The written agreement contains language at the start which states that VSC is a business
venture between Simmons and Vant that is divided “10% Bonnie Vant” and “90% Scott
Simmons.” Although this language suggests that Simmons had a 90% ownership interest from
the beginning, no party makes that assertion, and later language makes clear that a contingency
existed.
2
Defendants compared the written agreement’s death clause to a will, maintaining that witness
signatures were necessary to make any disbursement of a VSC ownership interest to Simmons
valid under the law governing wills.
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heirs. Simmons also argued that he was the party entitled to summary disposition, MCR
2.116(I)(2). The trial court granted summary disposition in favor of defendants pursuant to MCR
2.116(C)(8). The court found that if the agreement were interpreted as argued by Simmons,
mutuality of obligation would be lacking, and it concluded that the agreement only contemplated
giving Simmons an ownership interest if he became fully employed by VSC and began drawing
a salary, which never occurred. The trial court summarily dismissed the promissory estoppel
claim because the written agreement did not contain a clear and definite promise that Simmons
would obtain 90% ownership upon Vant’s death if Simmons had no existing ownership interest
under the employment clause. The court also agreed with defendants’ will-related arguments.
The trial court did give Simmons permission to file an amended complaint, so as to give him an
opportunity to present allegations regarding parol evidence and to support his argument that the
written agreement did not constitute the full agreement between Simmons and Vant.
Simmons proceeded to file an amended complaint consistent with his summary
disposition arguments concerning parol evidence. He again alleged claims of breach of contract
and promissory estoppel. Defendants later filed a motion for summary disposition, essentially
making the same arguments as presented in their earlier motion, and Simmons responded in
similar fashion to his previous arguments. The trial court again granted summary disposition in
favor of defendants on Simmons’s amended complaint. The court’s general reasoning was that
the written agreement alone governed the dispute because its language was plain and
unambiguous, providing Simmons with a 90% ownership interest in VSC solely upon
satisfaction of the employment clause, which did not take place, with the death clause only
giving some direction where, previous to Vant’s death, Simmons had already obtained a 90%
ownership interest pursuant to the employment clause. The court also ruled, for purposes of
promissory estoppel, that there was no clear and definite promise by Vant that Simmons would
obtain a 90% interest in VSC simply based upon Vant’s death. Simmons appeals as of right.
We review de novo a trial court’s ruling on a motion for summary disposition. Loweke v
Ann Arbor Ceiling & Partition Co, LLC, 489 Mich. 157, 162; 809 NW2d 553 (2011).
“[Q]uestions involving the proper interpretation of a contract or the legal effect of a contractual
clause are also reviewed de novo.” Rory v Continental Ins Co, 473 Mich. 457, 464; 703 NW2d
23 (2005). We likewise review de novo the question whether contractual terms are ambiguous.
Rossow v Brentwood Farms Dev, Inc, 251 Mich. App. 652, 658; 651 NW2d 458 (2002). “The
cardinal rule in the interpretation of contracts is to ascertain the intention of the parties[;] [t]o this
rule all others are subordinate.” McIntosh v Groomes, 227 Mich. 215, 218; 198 N.W. 954 (1924).
In light of this rule, “[i]f the language of the contract is clear and unambiguous, it is to be
construed according to its plain sense and meaning; but if it is ambiguous, testimony may be
taken to explain the ambiguity.” New Amsterdam Cas Co v Sokolowski, 374 Mich. 340, 342; 132
NW2d 66 (1965); see also Frankenmuth Mut Ins Co v Masters, 460 Mich. 105, 111; 595 NW2d
832 (1999). However, a court will not create ambiguity where the terms of the contract are clear.
Frankenmuth Mut, 460 Mich. at 111. Parol evidence regarding contract negotiations, or
concerning prior or contemporaneous agreements that vary or contradict the written contract, is
inadmissible to alter the terms of a contract that is clear and unambiguous. UAW-GM Human
Resource Ctr v KSL Recreation Corp, 228 Mich. App. 486, 492; 579 NW2d 411 (1998). Parol
evidence is admissible to determine the threshold question whether a written contract constituted
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an integrated instrument showing a complete expression of the parties’ agreement, as opposed to
a partial integration where essential elements were not put in writing. Id. at 492-493.
“A party asserting a breach of contract must establish by a preponderance of the evidence
that (1) there was a contract (2) which the other party breached (3) thereby resulting in damages
to the party claiming breach.” Miller-Davis Co v Ahrens Constr, Inc, 495 Mich. 161, 178; 848
NW2d 95 (2014).3 “The essential elements of a contract are parties competent to contract, a
proper subject matter, legal consideration, mutuality of agreement, and mutuality of obligation.”
Mallory v Detroit, 181 Mich. App. 121, 127; 449 NW2d 115 (1989). “ ‘Mutuality of obligation’
means that both parties to an agreement are bound or neither is bound, that is, mutuality is not
present where one party is bound to perform, but not the other.” Reed v Citizens Ins Co of
America, 198 Mich. App. 443, 449; 499 NW2d 22 (1993); see also Bancorp Group, Inc v Mich
Conference of Teamsters Welfare Fund, 231 Mich. App. 163, 171; 585 NW2d 777 (1998).
The trial court determined that the employment clause served as the only mechanism by
which Simmons could obtain the 90% interest in VSC and that the death clause was solely
implicated if Simmons had previously obtained a 90% interest pursuant to the employment
clause, with the death clause merely directing, in that instance, that the remaining 10% would go
to Vant’s estate. The trial court focused on the language in the death clause that provided that
Vant’s estate would receive “the 10%” interest upon her death, which the court viewed as
envisioning circumstances in which Vant only had a 10% interest in VSC at the time of her
death, and that would only be the situation had Simmons already obtained his 90% interest
pursuant to the employment clause. (Emphasis added.) We agree with the trial court’s
construction of the written agreement and hold that the plain and unambiguous language of the
agreement solely provided for Simmons obtaining a 90% ownership interest if he satisfied the
employment clause, which never occurred. Had the death clause been intended to operate as
claimed by Simmons, it certainly would have had language comparable to that found in the
employment clause, e.g., “[i]n the event of the death of Bonnie Vant, Simmons will be issued
90% of the shares in VSC.” Instead, the death clause clearly contemplated a scenario in which
Simmons had already obtained a 90% interest in VSC under the employment clause, with the
death clause simply directing disbursement of Vant’s 10% interest to her estate upon her death
and prohibiting the estate from attempting to take a greater share of VSC or to make an
ownership claim. Finding no ambiguity, parol or extrinsic evidence that might conflict with the
written agreement cannot be considered. Accordingly, there was no breach of contract as a
matter of law. Moreover, there was no clear and definite promise by Vant to give Simmons a
3
“The elements of promissory estoppel are (1) a promise, (2) that the promisor should
reasonably have expected to induce action of a definite and substantial character on the part of
the promisee, and (3) that in fact produced reliance or forbearance of that nature in circumstances
such that the promise must be enforced if injustice is to be avoided.” Novak v Nationwide Mut
Ins Co, 235 Mich. App. 675, 686-687; 599 NW2d 546 (1999). The promise must be clear and
definite. State Bank of Standish v Curry, 442 Mich. 76, 85; 500 NW2d 104 (1993).
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90% interest in VSC based solely on her death; therefore, the promissory estoppel claim fails as
a matter of law.
Affirmed. Having fully prevailed on appeal, defendants are awarded taxable costs under
MCR 7.219.
/s/ William B. Murphy
/s/ Michael J. Kelly
/s/ Brock A. Swartzle
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