Gerald Peguese v. Pnc Bank National Association ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
GERALD PEGUESE, UNPUBLISHED
May 16, 2017
Plaintiff-Appellant,
v No. 330937
Wayne Circuit Court
PNC BANK NATIONAL ASSOCIATION and LC No. 15-006100-CZ
DOMINIC GOYETTE,
Defendants-Appellees.
Before: SERVITTO, P.J., and CAVANAGH and FORT HOOD, JJ.
PER CURIAM.
Plaintiff appeals as of right an order granting defendant PNC Bank National
Association’s motion for summary disposition and dismissing this business-related dispute on
the ground that plaintiff lacked standing to bring his claims of tortious inference with a business
relationship or expectancy, aiding and abetting, and conspiracy. We reverse.
Plaintiff was a certified minority vendor in the automotive industry and held a Vendor ID
in his name that was issued to him several years ago by Chrysler Group, LLC. He conducted
business through several different corporate entities including EL Mechanical, Inc., in which he
was the president and sole shareholder. In 2008, plaintiff agreed to enter into a business
“Arrangement” with defendant Dominic Goyette, who controlled Goyette Mechanical Company,
Inc., whereby EL Mechanical would obtain mechanical work in the automotive industry
specifically earmarked for certified minority vendors and Goyette would “mentor” plaintiff and
EL Mechanical regarding administrative business issues like payroll, bonding, and banking.
In 2011, defendant PNC Bank entered into a loan facility with Goyette Mechanical, EL
Mechanical, and Goyette-West, Inc., which included a line of credit and a borrowing base rider
for the exclusive use of the “Arrangement.” According to plaintiff, defendant Goyette had a
longstanding and personal relationship with the loan officer, Fred Mitchell, at PNC Bank. PNC
Bank always disbursed the funds under the loan facility to a bank account in the name of Goyette
Mechanical and eventually the line of credit was $6,000,000. Subsequently, according to
plaintiff, Goyette completely controlled the operations of EL Mechanical—as was his plan from
the beginning of their relationship—and took unfair financial advantage of both plaintiff and EL
Mechanical with the assistance of PNC Bank.
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Eventually, plaintiff terminated his involvement in the “Arrangement.” PNC Bank
declared the loan in default and commenced litigation in the federal court. Thereafter, a receiver
was appointed and, at some point, the receiver ordered the cancellation of a project that was to be
performed by EL Mechanical at a Chrysler facility over the July 4, 2014 holiday weekend.
According to plaintiff, PNC Bank contacted the receiver, at the request of Goyette, and requested
the cancellation of that project to further Goyette’s plan to destroy the long-established business
relationship that plaintiff had with Chrysler as a certified minority vendor. As a consequence of
the receiver’s cancellation of that project, plaintiff alleged, Chrysler placed plaintiff and EL
Mechanical on a “suspension list” which prevented them from doing future business with
Chrysler, as well as other automotive manufacturers.
Then plaintiff filed this lawsuit. In Count I of the first amended complaint, plaintiff
asserted a claim of tortious interference with a business relationship or expectancy against
Goyette. Plaintiff alleged that (1) he had a valid business relationship or expectancy with
Chrysler and other customers, (2) Goyette had knowledge of the same, (3) Goyette engaged in
“intentional interference inducing or causing a breach or termination of the relationship or
expectancy,” and (4) plaintiff was damaged as a result of Goyette’s conduct. In Count II,
plaintiff asserted a claim of aiding and abetting against PNC Bank. Plaintiff alleged that PNC
Bank knew of Goyette’s tortious interference and intentionally provided Goyette with
“substantial assistance” to affect the wrong. In Count III, plaintiff asserted a claim of civil
conspiracy against Goyette and PNC Bank, alleging that they combined to “accomplish an
unlawful purpose, being the destruction of the reputation of [plaintiff] and the tortious
interference with Chrysler[.]”
Eventually, defendant PNC Bank filed a motion for summary disposition pursuant to
MCR 2.116(C)(8) and (10) arguing, in relevant part, that plaintiff lacked standing to bring this
lawsuit. PNC Bank argued that the contract that was cancelled by the receiver, and which gave
rise to plaintiff’s claims, was between Chrysler and EL Mechanical—plaintiff was not a party to
that contract. At most plaintiff was the president and sole shareholder of EL Mechanical, but
neither officers nor shareholders have standing to allege personal injury to a corporation. The
law treats a corporation as entirely separate from its officers and shareholders, even when one
person owns all the corporate stock. Accordingly, any lawsuit to enforce corporate rights or to
redress injury to a corporation, whether arising by tort or contract, must be brought in the name
of the corporation. PNC Bank argued that plaintiff was claiming to have suffered derivative
damages arising from harm done to EL Mechanical through the alleged interference with its
business relationship or expectancy with Chrysler. Thus, the tort was committed, if at all,
against EL Mechanical. Plaintiff had no individual business relationship or expectancy with
Chrysler; thus, he lacked standing to sue Goyette or PNC Bank and this case should be
dismissed.
Plaintiff opposed defendant PNC Bank’s motion for summary disposition arguing, in
relevant part, that he had standing to bring this lawsuit because Goyette tortiously interfered with
the business relationship between him, as an individual, and Chrysler Group. More particularly,
it was he, not EL Mechanical, who was issued a Vendor ID by Chrysler years ago which allowed
him to submit bids on work. And it was through that Vendor ID that plaintiff’s various
companies were provided work by Chrysler over the previous several years. There is an
exception to the general rule that only a corporation can sue to redress injury to it and that is
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“when the individual can show a violation of a duty owed directly to the individual that is
independent of the corporation[.]” Belle Isle Grill Corp v Detroit, 256 Mich. App. 463, 474; 666
NW2d 271 (2003). In this case, plaintiff’s own personal business relationship with Chrysler was
the subject of his tortious interference claim; thus, he had standing to file this lawsuit.
PNC Bank filed a reply brief in support of its motion for summary disposition arguing, in
relevant part, that it was immaterial that the Vendor ID was in plaintiff’s name because Chrysler
did not do business with plaintiff in his individual capacity. Rather, Chrysler only did business
with various business entities in which plaintiff was an officer and shareholder, including EL
Mechanical. Thus, plaintiff lacked standing to claim a personal injury because of alleged
damage to EL Mechanical.
Plaintiff also submitted an affidavit in support of his opposition to PNC Bank’s motion
for summary disposition. Plaintiff, as affiant, stated that he had a personal relationship with the
buyers, purchasing officers, and engineers at Chrysler from 1989 through July 3, 2014, and was
able to submit bids for work as a minority vendor using a Vendor ID that was assigned to him.
However, after the receiver refused to allow the work to be performed at the Chrysler plant
during the July 4, 2014 holiday weekend, he was “locked out” of the Chrysler infranet and was
unable to obtain information about prospective work or submit bids for work. Further, as a result
of the “lock out,” he was unable to obtain work from other automotive manufacturers. Plaintiff
stated that he had been a “diversity supplier” for over 25 years and had always had opportunities
to perform plumbing and mechanical work for automotive manufacturers until he was “locked
out.” Plaintiff stated that he was not alleging that the receiver’s conduct was improper; rather, he
was alleging that Goyette and PNC Bank provided false information to the receiver which was
relied upon and resulted in the decision to refuse to allow the work to be performed at Chrysler
during the July 4, 2014 holiday.
On December 8, 2015, the trial court entered an opinion and order granting PNC Bank’s
motion for summary disposition and dismissing this lawsuit. The court noted that the case arose
out of a joint venture between EL Mechanical, Goyette Mechanical, and/or Goyette-West to
obtain and perform mechanical work. The joint venture led to an agreement between Chrysler
Group and EL Mechanical to perform work. Subsequently, the court noted, PNC Bank executed
multi-million-dollar loans to the benefit of the joint venture and, eventually, they went into
default which led to a federal lawsuit and the appointment of a receiver. Plaintiff’s claims in this
action were rooted in allegations that Goyette interfered with EL Mechanical’s agreement with
Chrysler and orchestrated a breach of that contract by improperly influencing the receiver to
remove EL Mechanical off of a profitable job. The trial court concluded, however, that plaintiff
did not have standing to bring this action because he failed to show that any duty was owed
directly to him. All alleged damages arose from injuries to EL Mechanical only and, thus, any
lawsuit for such damages must have been brought in its name, not plaintiff’s name as its
stockholder and officer. Accordingly, plaintiff’s complaint was dismissed in its entirety. This
appeal followed.
Plaintiff argues that he had standing to bring this lawsuit; thus, the trial court’s order
granting summary disposition and dismissing this case must be reversed. We agree.
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We review de novo a trial court’s decision to grant a motion for summary disposition.
Lakeview Commons v Empower Yourself, LLC, 290 Mich. App. 503, 506; 802 NW2d 712 (2010).
Although the trial court did not indicate under which subrule it was granting PNC Bank’s motion
for summary disposition, because the parties submitted numerous documents in support of their
briefs, which the trial court presumably considered, we review this matter as granted under MCR
2.116(C)(10). See Cuddington v United Health Servs, Inc, 298 Mich. App. 264, 270; 826 NW2d
519 (2012). A motion brought under MCR 2.116(C)(10) tests the factual support of a plaintiff’s
claim and should be granted if, after consideration of the evidence submitted by the parties in the
light most favorable to the nonmoving party, no genuine issue regarding any material fact exists.
Lakeview Commons, 290 Mich. App. at 506. We also review de novo as an issue of law whether a
party has standing to bring an action. Dep’t of Consumer & Indus Servs v Shah, 236 Mich. App.
381, 384; 600 NW2d 406 (1999).
In Lansing Sch Ed Ass’n v Lansing Bd of Ed, 487 Mich. 349; 792 NW2d 686 (2010), our
Supreme Court explained the concept of “standing” as follows:
The purpose of the standing doctrine is to assess whether a litigant’s
interest in the issue is sufficient to ensure sincere and vigorous advocacy. Thus,
the standing inquiry focuses on whether a litigant is a proper party to request
adjudication of a particular issue and not whether the issue itself is justiciable.
[Id. at 355 (internal quotation marks and citations omitted).]
The Court further held that, as a limited, prudential doctrine, “a litigant has standing whenever
there is a legal cause of action.” Id. at 372.
In Michigan, however, a corporation is treated as entirely separate from its shareholders
or officers for purposes of the standing doctrine. Belle Isle Grill Corp, 256 Mich. App. at 473-
474. Therefore, generally, a lawsuit to enforce corporate rights or to redress injury to a
corporation, whether arising out of contract or tort, must be brought in the name of that
corporation. Id. at 474. But where an individual can show that the wrong done violates a duty
owed directly to him that is independent of the corporation, the general rule is inapplicable.
Mich Nat’l Bank v Mudgett, 178 Mich. App. 677, 679-680; 444 NW2d 534 (1989). In other
words, “where the alleged injury to the individual results only from the injury to the corporation,
the injury is merely derivative and the individual does not have a right of action against the third
party.” Id. at 680.
In this case, plaintiff alleged claims of (1) tortious interference with a business
relationship or expectancy against Goyette; (2) aiding and abetting against PNC Bank; and (3)
conspiracy against Goyette and PNC Bank. These claims all arose from the receiver’s
cancellation of the July 4, 2014 Chrysler project involving EL Mechanical. According to
plaintiff, Goyette told PNC Bank to tell the receiver to cancel the project in an effort to cause the
ruination of plaintiff’s reputation in the automotive manufacturing industry. Plaintiff notes that
he is the holder of a Vendor ID, which is necessary to secure work in that industry, and claims
that the Vendor ID is unique only to the individual holder, not the holder’s various business
entities. And because plaintiff was the holder of this Vendor ID he had, in fact, bid on and
secured jobs with Chrysler and others for several years as a certified minority vendor in the
automotive industry. That is, plaintiff personally had a longstanding and well-established
business relationship with Chrysler and other automotive manufacturers before he entered into
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the “Arrangement” with Goyette, which Goyette knew. Accordingly, plaintiff claimed, because
Goyette and PNC Bank caused the receiver to cancel the July 4, 2014 project, and his personal
Vendor ID was identified or associated with that project, Chrysler placed plaintiff—through his
Vendor ID—on a “suspension list” which prevented plaintiff from seeking any work from
Chrysler, as well as others in that industry who had access to that “suspension list.” That is,
according to plaintiff, regardless of any business entity, he personally has been precluded from
working in the automotive industry because defendant Goyette, with the assistance of PNC
Bank, succeeded in ruining both his reputation in that industry and his ability to secure work as a
certified minority vendor in the automotive industry though his personal Vendor ID.1
Plaintiff has not asserted, however, that EL Mechanical suffered damages as a
consequence of the alleged actions of defendants Goyette and PNC Bank with regard to the
cancellation of the Chrysler project. That is, plaintiff has not brought this lawsuit to enforce the
corporate rights of EL Mechanical or to redress any injury to that corporation arising from the
cancellation of the July 4, 2014 project. See Belle Isle Grill Corp, 256 Mich. App. at 474. And
the fact that the contract purportedly breached, when the receiver cancelled that project, was
between Chrysler and EL Mechanical is not dispositive here. Plaintiff did not bring a breach of
contract claim seeking damages on behalf of El Mechanical. And plaintiff’s alleged damages did
not result or derive from any injury to EL Mechanical. See Mudgett, 178 Mich. at 680. Rather,
plaintiff alleged damages resulting from a violation of a right that he individually possessed—the
right to be free from the intentional interference with his business relationships or expectancies
with manufacturers in the automotive industry, including Chrysler. Consequently, we disagree
with the trial court’s conclusion that plaintiff lacked standing because all of his alleged damages
arose from injuries to EL Mechanical, and thus, any lawsuit in that regard must have been
brought in the name of EL Mechanical.
Accordingly, we reverse the trial court’s order granting defendant PNC Bank’s motion
for summary disposition and dismissing this action on the ground that plaintiff lacked standing to
bring this lawsuit. We express no opinion, however, on the merits of plaintiff’s claims.
Reversed and remanded for proceedings consistent with this opinion. Plaintiff is entitled
to costs as the prevailing party. See MCR 7.219(A). We do not retain jurisdiction.
/s/ Deborah A. Servitto
/s/ Mark J. Cavanagh
/s/ Karen M. Fort Hood
1
A somewhat analogous situation may be when an individual’s social security number is
associated with a damaged credit profile or low credit score.
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