Emmanuel Boykin v. General Motors LLC ( 2018 )

STATE OF MICHIGAN
COURT OF APPEALS
EMMANUEL BOYKIN, UNPUBLISHED
December 4, 2018
Plaintiff-Appellant,
v No. 338594
Wayne Circuit Court
GENERAL MOTORS, LLC, LC No. 15-013865-CB
Defendant-Appellee.
Before: O’BRIEN, P.J., and TUKEL and LETICA, JJ.
PER CURIAM.
Plaintiff appeals as of right the trial court’s order denying his motion for leave to file a
second amended complaint. Plaintiff also challenges the trial court’s prior order granting
defendant’s motion for summary disposition. For the reasons provided below, we affirm.
This case arises from a contract dispute between plaintiff, and defendant regarding
plaintiff’s employment and ownership of a General Motors (GM) dealership. Plaintiff had been
employed by defendant in several different positions. In 2001, plaintiff, who is African-
American, participated in defendant’s Minority Dealer Development Program (MDDP). In the
summer of 2011, after having worked in various GM dealerships, plaintiff expressed an interest
in purchasing Mack Buick GMC in Ann Arbor with a fellow GM dealer because defendant had
expressed its desire to sell it to someone who participated in the MDDP. Defendant allegedly
informed plaintiff that it would sell plaintiff the dealership if he worked with Maureen
LaFontaine, the wife of an existing GM dealer.
Plaintiff and the LaFontaine Automotive Group (LAG) bid to purchase the dealership in
the fall of 2011, and defendant accepted their bid. On January 3, 2012, plaintiff and LAG
entered into an employment agreement, naming plaintiff as the dealer operator of the dealership.
The employment agreement provided that plaintiff would be employed as the dealer operator
under defendant’s standard dealer sales and service agreement (Dealer SSA). On March 19,
2012, plaintiff and LAG entered into a letter agreement with defendant, where plaintiff was
named as the proposed dealer operator.
The dealership was sold to LAG on April 5, 2012, pursuant to the Dealer SSA between
LAG and defendant. Plaintiff successfully operated the dealership for approximately two years.
But in March 2014, LAG sought to separate from plaintiff. Defendant attempted to purchase the
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dealership from LAG and sell it to plaintiff, to maintain its minority-owned status, but the sale
fell through. LAG ultimately requested that plaintiff stop coming to the dealership, and plaintiff
complied “to avoid an untenable situation.” Plaintiff asked defendant to prevent his exclusion
from the dealership, but defendant asserted that such action was not subject to the Dealer SSA.
LAG subsequently terminated plaintiff’s employment on September 11, 2014.
In his first amended complaint against defendant, plaintiff alleged a single count of
breach of contract based on the letter agreement. Plaintiff asserted that defendant breached the
letter agreement by “failing to take action to meet its contractual obligations and ensure that Mr.
Boykin would be the dealer operator and part owner of the Dealership.” Defendant thereafter
moved for summary disposition pursuant to MCR 2.116(C)(8), and the trial court granted the
motion. While the motion was pending, plaintiff also moved to amend his complaint a second
time, but the trial court ultimately denied that motion.
I. SUMMARY DISPOSITION
Plaintiff argues that the trial court erred when it granted defendant summary disposition
because it improperly interpreted the letter agreement to place obligations on plaintiff but not on
defendant. We disagree.
Defendant moved for summary disposition pursuant to MCR 2.116(C)(8). The trial court
granted defendant’s motion because plaintiff failed to state a claim for breach of contract based
on the lack of any obligation of defendant to ensure plaintiff’s roles with the dealership. This
Court reviews a motion for summary disposition de novo. Gorman v American Honda Motor
Co, Inc, 302 Mich. App. 113, 115; 839 NW2d 223 (2013). A motion for summary disposition
under MCR 2.116(C)(8) is granted if the party opposing the motion “ ‘has failed to state a claim
upon which relief can be granted.’ ” Dalley v Dykema Gossett, 287 Mich. App. 296, 304; 788
NW2d 679 (2010), quoting MCR 2.116(C)(8). A trial court’s decision under MCR 2.116(C)(8)
is based solely on the pleadings. Dalley, 287 Mich. App. at 304. Thus, “[a] party may not support
a motion under subrule (C)(8) with documentary evidence such as affidavits, depositions, or
admissions.” Id. at 305. This Court “accepts all well-pleaded factual allegations as true and
construes them in the light most favorable to the nonmoving party.” Id. at 304-305. Summary
disposition under MCR 2.116(C)(8) is only proper when “the claim ‘is so clearly unenforceable
as a matter of law that no factual development could possibly justify a right of recovery.’ ” Id. at
305 (citation omitted).
As an initial matter, we note that when defendant filed its motion for summary
disposition, it attached the letter agreement, the Dealer SSA, and the employment agreement.
Defendant acknowledged that these were not attached to the complaint, but it claimed that
pursuant to MCR 2.113(F)(1),1 they nevertheless should be considered as part of the pleadings
1
MCR 2.113 was amended, effective September 1, 2018. Although we cite to the prior version
of MCR 2.113(F) that was in effect at the time of the lower court proceedings, we note that the
content of that part of the rule is now codified at MCR 2.113(C). The pre-amendment version of
MCR 2.113(F) provided, in pertinent part:
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because plaintiff relied on them without attaching them. In his response to defendant’s motion,
plaintiff did not object to the inclusion of these documents. In fact, plaintiff himself cited to
these very same documents in support of his arguments opposing defendant’s motion. The trial
court also relied on these documents in rendering its decision. On appeal, no party claims that it
was improper to consider the documents in the context of a summary disposition motion brought
under MCR 2.116(C)(8). Accordingly, we accept without deciding that these documents are
properly considered for purposes of defendant’s summary disposition motion.
The letter agreement stated that it was in response to plaintiff’s request that defendant
enter into a Dealer SSA with LAG, naming plaintiff the dealer operator. The “proposed dealer
company” (LAG) and the “proposed dealer operator” (plaintiff) were referred to as the
“Applicants” therein. After plaintiff and LAG “fulfill[ed] the requirements below, and subject to
all terms, conditions and requirements” of the letter agreement, defendant would offer a Dealer
SSA. Below this paragraph was a list of bullet points pertaining to certain documents that
defendant needed from plaintiff and LAG, including the articles of organization and tax
documentation. Below the bullet points were several numbered paragraphs, including the
following:
3. Membership Interests: Proposed Dealer Company has to be personally and
directly owned by Proposed Dealer Operator [plaintiff] and others on a basis that
is acceptable to [defendant]. Proposed Dealer Operator [plaintiff] shall own and
continue to own, on a personal and direct basis, an unencumbered equity interest
of at least fifteen percent (15%).
The other numbered paragraphs required the “Applicants” to complete other requirements, such
as obtaining a line of credit and all necessary licenses. The last numbered paragraphs, 20 and 21,
read as follows:
20. Dealer Agreement: Applicants shall cause Proposed Dealer Company to
fulfill all of the terms and conditions set forth in the [Dealer SSA]. Upon
execution of the [Dealer SSA] by Proposed Dealer Company, all of the
(1) If a claim or defense is based on a written instrument, a copy of the instrument
or its pertinent parts must be attached to the pleading as an exhibit unless the
instrument is
* * *
(b) in the possession of the adverse party and the pleading so states[.]
* * *
(2) An exhibit attached or referred to under subrule (F)(1)(a) or (b) is a part of the
pleading for all purposes.
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obligations set forth in this Letter Agreement are incorporated by reference into
the [Dealer SSA].
21. Dealer Operator/Assignment Limitations: [Defendant] executes this Letter
Agreement in reliance upon the personal services, business experience and
financial qualifications of [plaintiff] as Proposed Dealer Operator. Accordingly,
Applicants may not assign, transfer or convey this Letter Agreement, in whole or
in part, without the express written consent of [defendant]. Moreover, [defendant]
shall not be obligated, under any circumstances, to enter into the [Dealer SSA]
with Proposed Dealer Company, unless Proposed Dealer Operator is named
dealer operator thereof in accordance with the terms of this Letter Agreement.
Although this Letter Agreement is entered into in reliance upon the personal
services, business experience and financial qualifications of the Proposed Dealer
Operator, Proposed Dealer Company is the only party to the [Dealer SSA] with
[defendant]. Upon execution of the [Dealer SSA] as contemplated by this Letter
Agreement, the provisions of the [Dealer SSA] shall supersede the inconsistent
terms, conditions and requirements of this Letter Agreement, except that
[defendant] may continue to rely upon the representations and promises of the
Applicants contained in this Letter Agreement.
The letter agreement ended with the provision that “[t]here are no other agreements or
understandings, written or verbal, between the parties with regard to the matters covered by this
Letter Agreement.” The letter agreement was signed by plaintiff on March 19, 2012.
Contracts are enforced according to their terms. Rory v Continental Ins Co, 473 Mich.
457, 468; 703 NW2d 23 (2005). This Court gives the words used in contractual language their
plain and ordinary meanings. Wilkie v Auto-Owners Ins Co, 469 Mich. 41, 47; 664 NW2d 776
(2003). “[A]n unambiguous contractual provision is reflective of the parties’ intent as a matter
of law, and [i]f the language of the contract is unambiguous, we construe and enforce the
contract as written.” Coates v Bastian Bros, Inc, 276 Mich. App. 498, 503; 741 NW2d 539 (2007)
(quotation marks and citation omitted). Contract language is ambiguous when there are two
provisions in irreconcilable conflict, or when a term is susceptible to more than one meaning. Id.
Courts must give effect to every word, phrase, and clause in a contract, and avoid interpreting a
contract to render any part surplusage or nugatory. Wells Fargo Bank, NA v Cherryland Mall
Ltd P’ship, 295 Mich. App. 99, 111; 812 NW2d 799 (2011). Contracts must be read as a whole.
Detroit Pub Schs v Conn, 308 Mich. App. 234, 251-252; 863 NW2d 373 (2014).
The trial court did not err when it determined that plaintiff failed to establish a
contractual obligation on behalf of defendant to ensure that plaintiff remained a dealer operator
and owner of the dealership. The letter agreement contained several requirements that plaintiff
and LAG had to fulfill before defendant would offer a Dealer SSA for the dealership. When read
as a whole, it is clear that plaintiff’s and LAG’s obligations were not limited to the bullet points
contained on the first two pages; the numbered paragraphs also included conditions and
requirements as a prerequisite to defendant offering the Dealer SSA. While it is true that
paragraphs 1, 2, and 4 use the language “Applicants shall cause” and paragraph 3 does not, this
does not mean that paragraph 3 imposes an obligation on defendant, rather than plaintiff and
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LAG. Rather, when paragraph 3 is read in the context of the entire letter agreement, it is clear
that it is a requirement that plaintiff and LAG had to fulfill to be issued the Dealer SSA.
Plaintiff focuses on the language in the second sentence of paragraph 3 that plaintiff
“shall own and continue to own” 15 percent of the dealership. However, that paragraph also
provided that the dealership had to be owned by the dealer operator and others “on a basis
acceptable to [defendant].” It then provided that the proposed dealer operator shall own at least
15 percent. Thus, the 15 percent ownership requirement is a part of the acceptable basis of
ownership to defendant. As determined by the trial court, there is no indication in this paragraph
that defendant was obligated to ensure that plaintiff maintained this ownership interest. Indeed,
there is no indication in the entirety of the letter agreement imposing this obligation on
defendant. Rather, it was an obligation of plaintiff and LAG to maintain a 15 percent ownership
interest in the dealer operator as an acceptable basis of ownership for defendant.
Further, contrary to plaintiff’s assertion, his interpretation of the contract was not “at least
reasonable,” entitling him to reversal of the order granting defendant summary disposition. He
argues that his interpretation was consistent with the attendant facts and circumstances, referring
to the fact that defendant wanted to claim minority ownership of the dealership and needed
plaintiff’s participation to do so. However, as noted by the trial court at the motion hearing,
there was no requirement in the letter agreement to maintain minority ownership. Thus, it was
not a term of the contract to be enforced. See Rory, 473 Mich. at 468.
Accordingly, the trial court did not err when it granted defendant’s motion for summary
disposition.2
II. LEAVE TO FILE SECOND AMENDED COMPLAINT
On appeal, plaintiff argues that the trial court abused its discretion when it denied his
motion to file a second amended complaint. Specifically, plaintiff asserts that his fraud and
2
To the extent that consideration of these documents is erroneous under MCR 2.116(C)(8), this
Court would review the motion under MCR 2.116(C)(10). See Kefgen v Davidson, 241 Mich
App 611, 616; 617 NW2d 351 (2000) (stating that when a motion for summary disposition is
brought under MCR 2.116(C)(8) but the parties and the trial court considered documentary
evidence beyond the pleadings, the motion is treated as having been decided under MCR
2.116(C)(10)). In doing so, the evidence submitted is considered in a light most favorable to the
nonmoving party to determine if there are any triable issues. Id. The motion is properly granted
if there are no genuine issues of fact and the moving party is entitled to judgment as a matter of
law. Anzaldua v Neogen Corp, 292 Mich. App. 626, 630; 808 NW2d 804 (2011). For the same
reasons discussed, there would be no genuine issue of fact that the letter agreement did not
impose an obligation on defendant to ensure that plaintiff maintained his employment. Thus,
summary disposition would be warranted under MCR 2.116(C)(10) as well.
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unjust enrichment claims were not futile and that he should be able to reassert his breach of
contract claim. 3 We disagree.
“[D]ecisions granting or denying motions to amend pleadings[] are within the sound
discretion of the trial court and reversal is only appropriate when the trial court abuses that
discretion.” Weymers v Khera, 454 Mich. 639, 654; 563 NW2d 647 (1997). An abuse of
discretion occurs when the trial court’s decision falls outside the range of principled outcomes.
Woods v SLB Property Mgt, LLC, 277 Mich. App. 622, 625; 750 NW2d 228 (2008).
Plaintiff filed his motion for leave to file a second amended complaint pursuant to MCR
2.118(A)(2). MCR 2.118(A)(2) provides that leave to amend a pleading “shall be freely given
when justice so requires.” If a trial court grants summary disposition pursuant to MCR
2.116(C)(8), the court must give the parties an opportunity to amend their pleadings pursuant to
MCR 2.118, unless the amendment would be futile. MCR 2.116(I)(5); Weymers, 454 Mich. at
658. If the trial court denies the motion to amend, it must specify its reasoning, and failure to do
so requires reversal unless the amendment would be futile. Sharp v City of Lansing, 238 Mich
App 515, 522; 606 NW2d 424 (1999), aff’d 464 Mich. 792 (2001). A grant of summary
disposition does not necessarily preclude amendment of a complaint. Id. at 523.
A. ACTIONS IN TORT
Plaintiff claims that the trial court abused its discretion when it determined that the letter
agreement barred plaintiff’s tort claims because these claims were “alternative” claims asserted
by plaintiff in the event that the court determined that the letter agreement contained no
continuing obligation of defendant to ensure plaintiff’s roles with the dealership. We disagree.
“[A] ‘tort’ is an act that has long been understood as a civil wrong that arises from the
breach of a legal duty other than the breach of a contractual duty.” In re Bradley Estate, 494
Mich. 367, 381; 835 NW2d 545 (2013). An action in tort cannot be maintained where a contract
exists, unless a duty separate and distinct from the contractual obligation is established. Sherman
v Sea Ray Boats, Inc, 251 Mich. App. 41, 52; 649 NW2d 783 (2002). When a lawsuit arises from
a breach of a promise, it is a lawsuit for breach of contract. Hart v Ludwig, 347 Mich. 559, 563;
79 NW2d 895 (1956).
The trial court did not err when it determined that plaintiff failed to state a cause of action
in tort. Plaintiff’s fraud and unjust enrichment claims are based on his assertion that defendant
had a promise to fulfill under the letter agreement and that defendant did not perform the
promise. The promise alleged in plaintiff’s proposed fraud claim was that defendant “promised”
3
Plaintiff does not assert on appeal that he should be allowed to file an amended complaint to
include the remaining claims alleged in his proposed second amended complaint, including
breach of fiduciary duty, tortious interference with a business relationship or expectancy, and
silent fraud. Consequently, any issues related to those claims are abandoned. See Froling v
Carpenter, 203 Mich. App. 368, 373; 512 NW2d 6 (1993) (stating that the appellants’ failure to
argue an issue in their brief on appeal results in abandonment of the issue).
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that plaintiff would own and operate the dealership with defendant’s support, but defendant did
not intend to keep this promise, and plaintiff relied on this promise when he invested in the
dealership. In his unjust enrichment claim, plaintiff asserted that defendant did nothing in
response to plaintiff’s termination, despite its “promises” to plaintiff, and defendant’s rights and
remedies contained in the Dealer SSA. Thus, as an initial matter, the trial court did not abuse its
discretion when it denied plaintiff’s motion for leave to amend his complaint because plaintiff
cannot establish his claims in tort. Therefore, amendment would be futile.
B. FRAUD
Plaintiff argues that his fraud claim was not futile because he specifically identified
defendant’s misrepresentations, and he reasonably relied on the misrepresentations to his
detriment. We disagree.
Plaintiff’s fraud claim in his proposed second amended complaint asserted that (1)
defendant promised that plaintiff would own and operate the dealership with defendant’s
support, (2) defendant did not intend to keep these promises, (3) defendant made them with the
intent that plaintiff would invest in the dealership, and (4) plaintiff relied on them when he
invested and relinquished other business opportunities. Common-law fraud requires proof that
(1) the defendant made a material representation; (2) the representation was false;
(3) when the defendant made the representation, the defendant knew that it was
false, or made it recklessly, without knowledge of its truth as a positive assertion;
(4) the defendant made the representation with the intention that the plaintiff
would act upon it; (5) the plaintiff acted in reliance upon it; and (6) the plaintiff
suffered damage. [Cummins v Robinson Twp, 283 Mich. App. 677, 695-696; 770
NW2d 421 (2009) (citation omitted).]
A fraud claim must be based on a false statement related to a past or existing fact. Id. at 696.
Promises for the future are contractual, and do not support a claim of fraud. Id.
Plaintiff failed to establish that defendant made a false material representation related to a
past or existing fact. Id. Plaintiff argues that the misrepresentation was that defendant promised
plaintiff that he “would” be the dealer operator and owner and that defendant “would” support
him in these roles. Because this is a promise related to the future, it is contractual, and therefore,
does not support a claim of fraud. Id. In addition, plaintiff served as the dealer operator and
owner for a period of time, so this “promise” by defendant was fulfilled.
Moreover, to be actionable, a party’s reliance on a misrepresentation in a fraud action
must be reasonable. Bergen v Baker, 264 Mich. App. 376, 389; 691 NW2d 770 (2004). Plaintiff
cannot establish that he reasonably relied upon any alleged misrepresentation by defendant.
Plaintiff claims that he reasonably relied on defendant’s promises by investing and operating the
dealership. However, plaintiff cannot argue that he reasonably relied on defendant’s purported
misrepresentations to think that he would be guaranteed to be the dealership’s owner and dealer
operator. This is so because although plaintiff asserted that some of defendant’s employees
made oral promises to him, the letter agreement expressly provided that there were “no other
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agreements or understandings, written or verbal” between the parties; thus, plaintiff could not
reasonably rely on any of the allegedly false representations.
As a result, the trial court did not abuse its discretion when it denied plaintiff’s motion for
leave to file an amended complaint regarding his fraud claim. Because plaintiff could not
establish the elements of his fraud claim, amendment would be futile.
C. UNJUST ENRICHMENT
The trial court determined that amendment of plaintiff’s complaint to include an unjust
enrichment claim would be futile because the letter agreement and Dealer SSA were express
written contracts that covered the same subject matter as this claim. Plaintiff argues that this was
an abuse of discretion because his unjust enrichment claim arises from the benefit that defendant
enjoyed after plaintiff was removed from his roles. Plaintiff alleges that defendant continued to
enjoy the benefits of claiming the dealership as minority-owned after defendant knew that
plaintiff’s employment was terminated.
To sustain a claim for unjust enrichment, plaintiff must demonstrate that defendant
received a benefit from plaintiff, and an inequity resulted to plaintiff as a result of defendant
obtaining that benefit. Liggett Restaurant Group, Inc v City of Pontiac, 260 Mich. App. 127, 137;
676 NW2d 633 (2003). If these elements are established, a contract is implied to prevent unjust
enrichment. Belle Isle Grill Corp v City of Detroit, 256 Mich. App. 463, 478; 666 NW2d 271
(2003). However, “a contract cannot be implied when an express contract already addresses the
pertinent subject matter.” Liggett Restaurant Group, Inc, 260 Mich. App. at 137. Here, the letter
agreement and the Dealer SSA were express written contracts that covered the same subject
matter as plaintiff’s unjust enrichment claim. Plaintiff alleged in his proposed second amended
complaint that, “[w]hen the Dealership terminated [plaintiff’s] employment, [defendant] did
nothing despite its promises to [plaintiff] and its rights and remedies under the [Dealer SSA].”
Thus, plaintiff’s unjust enrichment claim was based on termination of plaintiff’s employment.
Termination of plaintiff’s employment was provided for in the employment agreement, as well
as in the Dealer SSA. Although the minority-owned status of the dealership was not referenced
in any of the contracts, the subject matter of plaintiff’s unjust enrichment claim was his
termination, which was expressly provided for in the documents. Therefore, amendment of
plaintiff’s unjust enrichment claim was futile, and the trial court did not err when it denied
plaintiff’s motion for leave to file a second amended complaint.
D. BREACH OF CONTRACT
Plaintiff briefly asserts in his brief on appeal that, should he be permitted to file a second
amended complaint, he be allowed to include his breach of contract claim, as the trial court erred
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when it dismissed that claim because plaintiff’s interpretation of the contract was reasonable.
But because we have determined that the trial court did not err in dismissing the breach of
contract claim, allowing the claim to continue in an amended pleading would, by definition, be
futile.
Affirmed. Defendant, as the prevailing party, may tax costs pursuant to MCR 7.219.
/s/ Colleen A. O'Brien
/s/ Jonathan Tukel
/s/ Anica Letica
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