Comerica Bank v. Hb Stubbs Properties LLC ( 2016 )

STATE OF MICHIGAN
COURT OF APPEALS
COMERICA BANK, UNPUBLISHED
December 22, 2016
Plaintiff-Appellee,
v No. 328425
Oakland Circuit Court
H.B. STUBBS PROPERTIES, LLC, H.B. LC No. 2014-143341-CK
STUBBS HOLDINGS COMPANY, INC., H.B.
STUBBS COMPANY, LLC, H.B. STUBBS
COMPANY, LLC-EAST, H.B. STUBBS
COMPANY, LLC-WEST, STEPHEN O.
STUBBS, STEPHEN H. STUBBS, SCOTT W.
STUBBS, and THE HAROLD AND EVELYN
STUBBS 1996 EXEMPT FAMILY TRUST FOR
STEPHEN O. STUBBS,
Defendants-Appellants.
Before: GADOLA, P.J., and FORT HOOD and RIORDAN, JJ.
PER CURIAM.
Defendants appeal as of right a judgment for plaintiff in this collection action. The trial
court granted plaintiff’s motion for summary disposition and thereafter entered the judgment
with respect to all defendants “except Scott O. Stubbs.” On appeal defendants argue that the trial
court erred when it granted plaintiff’s motion for summary disposition before discovery was
complete. We affirm.
This case arises out of two loan agreements between plaintiff and defendants, specifically
the H.B. Stubbs corporate entities. In 2012, plaintiff agreed to lend the H.B. Stubbs corporate
entities a principal amount of $4,000,000. Later that year, plaintiff agreed to lend one of the
H.B. Stubbs corporate entities a principal amount of $800,000. The indebtedness was
commemorated in two notes. On March 6, 2014, with the H.B. Stubbs corporate entities in
default on the loans, the individual defendants entered into a Guaranty with plaintiff, which
operated to make each individual defendant personally liable for the corporate entities’ debts to
plaintiff. In consideration, plaintiff and defendants executed a forbearance agreement wherein
plaintiff agreed to forebear in its collection on the two notes until May 1, 2014. Under the
forbearance agreement, defendants admitted that both notes were in default and waived all
defenses they may have had against plaintiff regarding the indebtedness.
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Plaintiff filed its complaint against defendants on October 6, 2014, alleging that the
corporate entities were in breach of their obligations under the two loan agreements, and that the
individual defendants were in breach of the Guaranty. The complaint alleged that defendants
owed a total amount of $905,175.74 on the two notes. A scheduling order was entered on
January 6, 2015, ordering plaintiff to submit an accounting within 21 days and stating that
discovery would close on May 8, 2015.
Plaintiff filed its motion for summary disposition the next day, on January 7, 2015,
pursuant to MCR 2.116(C)(9) and (C)(10), claiming that defendants had failed to assert a valid
defense and that there was no genuine issue of material fact and that plaintiff was therefore
entitled to judgment as a matter of law. Plaintiff supported the complaint with an affidavit from
its vice president, Jacob Villemure, attesting that the amount sought in the complaint was correct.
Defendants filed an objection to the motion contending that discovery was ongoing and that
plaintiff had submitted its accounting six weeks past the scheduling order’s deadline.
Defendants included an affidavit from Stephen H. Stubbs, in which he stated that a payment of
$45,000 made after the lawsuit was commenced may not have been credited to defendants’
account. The affidavit also stated that “[t]here may be other transactions which are not properly
reflected in [Villemure’s affidavit].”
At the hearing on the motion for summary disposition, the trial court determined that
defendants had failed to produce any evidence that disputed the amount owed. Plaintiff had
provided an accounting that reflected the $45,000 payment, whereas defendants had provided no
evidence that raised a genuine factual dispute as to damages. The trial court also found that
defendants had failed to establish how further discovery would provide support to any defense to
plaintiff’s claim. The trial court therefore granted plaintiff’s motion for summary disposition.
On appeal, defendants argue that the trial court erred when it granted plaintiff’s motion
for summary disposition because discovery had not been completed and that there still existed a
genuine issue of material fact as to damages. We disagree.
This Court reviews de novo a trial court’s grant of summary disposition to determine
whether the moving party was entitled to judgment as a matter of law. Arabo v Mich Gaming
Control Bd, 310 Mich App 370, 382; 872 NW2d 223 (2015). Summary disposition under MCR
2.116(C)(9) is warranted when a defendant has failed to plead a viable defense to a claim. The
sufficiency of the defendant’s pleading is tested by accepting all well-pleaded allegations as true.
When reviewing a grant of summary disposition pursuant to MCR 2.116(C)(10), we consider the
affidavits, pleadings, depositions, admissions, and other documentary evidence in the light most
favorable to the nonmoving party. Liparoto Constr, Inc v Gen Shale Brick, Inc, 284 Mich App
25, 29; 772 NW2d 801 (2009). Summary disposition is appropriate under MCR 2.116(C)(10)
when, except as to the amount of damages, there is no genuine issue with respect to any material
fact and the moving party is entitled to judgment as a matter of law. Maiden v Rozwood, 461
Mich 109, 120; 597 NW2d 817 (1999). A genuine issue of material fact exists when the record
leaves open an issue upon which reasonable minds could differ, giving the benefit of reasonable
doubt to the opposing party. Allison v AEW Capital Mgt, LLP, 481 Mich 419, 425; 751 NW2d 8
(2008).
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A motion for summary disposition generally is considered to be premature if it is granted
before discovery on a disputed issue is completed. Peterson Novelties, Inc v City of Berkley, 259
Mich App 1, 24-25; 672 NW2d 351 (2003). When a party asserts that summary disposition is
inappropriate because discovery is incomplete, “the party must at least assert that a dispute does
indeed exist and support that allegation by some independent evidence.” Davis v City of Detroit,
269 Mich App 376, 380; 711 NW2d 462 (2006), quoting Bellows v Delaware McDonald’s Corp,
206 Mich App 555, 561; 522 NW2d 707 (1994). “However, summary disposition may
nevertheless be appropriate if further discovery does not stand a reasonable chance of uncovering
factual support for the opposing party’s position.” Peterson, 259 Mich App at 25. “Mere
conjecture does not entitle a party to discovery, because such discovery would be no more than a
fishing expedition.” Davis, 269 Mich App at 380.
As a preliminary point we note that in this case, pursuant to the trial court’s scheduling
order, discovery closed on May 8, 2015 and the trial court did not grant the motion for summary
disposition until June 10, 2015. Therefore, discovery was closed at the time the motion was
granted. Defendants, however, argue that even though discovery had officially closed, discovery
was not completed on a disputed issue—damages. Defendants argue that there was a dispute as
to damages because they had provided the affidavit of Stephen H. Stubbs, who claimed that a
$45,000 payment to plaintiff may not have been credited to defendants’ account. We disagree.
Plaintiff provided an accounting that showed that the $45,000 payment was credited to
defendants’ account. Defendants, on the other hand, have failed to provide any independent
evidence that the payment was not credited to their account.
Defendants further argue that plaintiff may have received other payments after the
initiation of this litigation in addition to the $45,000. Defendants, however, did not provide
proof of any such additional payments. Defendants’ hope that further discovery would reveal
other payments was therefore no more than conjecture. “Minimal independent evidentiary
support” is required to successfully argue that a trial court should not grant summary disposition
and should permit additional discovery. Davis, 269 Mich App at 380.
Moreover, not only must defendants provide some independent evidence that supports
their assertions, they must show that any further discovery would “stand a reasonable chance of
uncovering factual support” for their position. Peterson, 259 Mich App at 25. Defendants argue
that if they had the opportunity to depose plaintiff’s representative and review their consultant’s
findings, there likely would be evidence that could dispute the amount of damages owed.
Defendants, however, have not shown that such additional discovery would stand a reasonable
chance of uncovering a dispute as to damages. The general contention that there is a possibility
that further discovery might reveal a dispute in damages is not sufficient to overcome summary
disposition.
By contrast, plaintiff demonstrated before the trial court evidence as to both liability and
damages. Plaintiffs provided the two loan agreements, the Guaranty, the forbearance agreement,
the accounting, and Villemure’s affidavit. These documents establish defendants’ obligations
and current amounts owed under both loans. Defendants have not claimed that plaintiff’s
accounting was wrong, only that further discovery might reveal a dispute regarding the amount
owed. Because defendants have not provided even a minimal level of independent evidence
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required to show a factual dispute as to damages, and the trial court did not err when it granted
plaintiff’s motion for summary disposition.
Lastly, defendants claim on appeal that they were not afforded complete discovery
because plaintiff violated the trial court’s discovery order when plaintiff’s accounting statement
did not conform to MCR 2.310(C)(5). This issue was argued before the trial court in defendants’
motion to compel, which the trial court determined was moot. Defendants have not challenged
the trial court’s determination regarding the motion to compel, and because this Court need only
consider issues properly presented, we decline to address the issue. Royal Prop Group, LLC v
Prime Ins Syndicate, Inc, 267 Mich App 708, 721; 706 NW2d 426 (2006).
Affirmed.
/s/ Michael F. Gadola
/s/ Karen M. Fort Hood
/s/ Michael J. Riordan
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