Thomas Buckley v. E Ann Redfield ( 2020 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
THOMAS BUCKLEY and CAROLYN UNPUBLISHED
BUCKLEY, January 28, 2020
Plaintiffs-Appellants,
v No. 344684
Wayne Circuit Court
E. ANN REDFIELD, TRISTA REDFIELD, LC No. 17-008910-CH
RIVERPOINTE REALTY, INC., doing business
as CENTURY 21 RIVERPOINTE REALTY,
TIMOTHY MOORE, and SELIMA HADAD as
Trustee of the SELIMA HADAD REVOCABLE
LIVING TRUST,
Defendants-Appellees.
Before: BECKERING, P.J., and CAVANAGH and STEPHENS, JJ.
PER CURIAM.
Plaintiffs appeal as of right an order granting defendants’ motions for summary
disposition of this case arising from a failed attempt to purchase real property. We affirm.
In May 2017, plaintiffs were interested in purchasing a condominium owned by
defendant Selima Hadad (Hadad) as the trustee of a revocable living trust. Defendants E. Ann
Redfield, Trista Redfield, and Riverpointe Realty (Riverpointe) were Hadad’s real estate agents.
At that time, defendant Timothy Moore (Moore) had already submitted an offer to purchase the
same condominium contingent upon an appraisal for financing, which Hadad had accepted. But
when the property did not appraise at the required value for Moore’s financing, Riverpointe
notified plaintiffs’ real estate agent, Joyce Reedy, that the property remained on the market.
On May 24, 2017, plaintiffs’ agent sent a standard form “contract to purchase” to
Riverpointe, Hadad’s representative. We refer to this as “Contract 1.” According to paragraph
five on page 1, the seller was to give occupancy immediately at closing. On page four, at the
paragraph labeled “additional conditions,” the word “none” was typed.
-1-
Upon receipt of the offer, and on the same day, Hadad changed paragraph five, crossing
out the words requiring occupancy immediately at closing and adding the words “see additional
conditions.” We refer to this as “Contract 2.” On page four, at the paragraph labeled “additional
conditions,” the word “none” was crossed out and the following was typed: “Seller to have
occupancy until June 27, 2017 at 5 pm at no charge.” The two changes were initialed by Hadad.
The form contract had a paragraph 25 on page four which was labeled “Counter” and stated:
In the event the Seller makes any written changes in any of the terms and/or
conditions to the offer presented by Buyer, such changed terms and/or conditions,
shall constitute a Counter-Offer by Seller to Buyer which shall remain valid until
DATE ______ TIME ____ (unless earlier withdrawn), and shall require
acceptance by the Buyer by initialing each change before such date and time.
No date or time was added. Following paragraph 25 on page four was the “Acceptance”
paragraph which stated:
By affixing Seller’s signature hereto, the Seller accepts this offer and
acknowledges receipt of a copy hereto. Seller further agrees that Broker has
procured said offer and has brought about this sale and agrees to pay Broker for
services rendered a commission as set forth in the Listing Contract for the sale of
the property. . . .
Hadad’s electronic signature and printed name followed this paragraph.
Upon receipt, plaintiffs made additional changes to the contract to purchase. We refer to
this as “Contract 3.” The closing date which was originally typed as June 16, 2017 on page one,
was changed by handwritten addition to June 21, 2017, and was initialed by plaintiffs. Further,
on page four, at the paragraph labeled “additional conditions,” the words “no charge” pertaining
to the seller’s occupancy were crossed out and the following was handwritten: “$30.00 per
diem.” The change was initialed by plaintiffs. Plaintiffs signed and dated—May 25, 2017 at
1330—the paragraph on page four which states: “The undersigned Buyer hereby acknowledges
receipt of the Seller’s signed acceptance of the forgoing Contract to Purchase.”
However, about 30 minutes later, Hadad made an additional change to the contract to
purchase which was submitted to plaintiffs. We refer to this as “Contract 4.” This change was
typed in at the paragraph labeled “additional conditions” on page four and states: “This sale is
subject to release of first purchase agreement.” This refers to Moore’s purchase agreement that
had been entered into before plaintiffs submitted their offer. Hadad initialed the change.
Plaintiffs did not respond to this submission.
Ultimately, Moore purchased the subject property and, on June 15, 2017, plaintiffs
brought this action against defendants alleging breach of contract, fraud, innocent
misrepresentation, agency/promissory estoppel, and requesting that the court enter an order
quieting title in plaintiffs. They also recorded an “affidavit of facts” and a notice of lis pendens
pertaining to the subject property.
The Riverpointe defendants moved for summary disposition under MCR 2.116(C)(8) and
(10), arguing that there was never a binding purchase agreement between Hadad and plaintiffs.
-2-
“While offers and counter-offers were exchanged, no acceptance ever occurred such that there
was a meeting of the minds sufficient to form a contract.” Plaintiffs did not accept Hadad’s last
counteroffer which was that the sale was subject to release of the first purchase agreement—
Moore’s purchase agreement. Further, defendants argued, plaintiffs’ complaint failed to state
claims of fraud, innocent misrepresentation, agency or promissory estoppel, and quiet title.
Accordingly, the Riverpointe defendants requested that the lis pendens be discharged and this
case dismissed in its entirety. Defendants Moore and Hadad concurred in the motion for
summary disposition.
Plaintiffs responded to the motions for summary disposition, arguing that Hadad executed
the “acceptance” provision on page four of the purchase agreement and did not complete the
“counter-offer” section on Contract 2; thus, all of the terms were accepted and a binding contract
was formed. Thereafter, plaintiffs executed the “acknowledgment” section of the agreement,
indicating that they received the seller’s signed acceptance. At that point, plaintiffs argued, the
parties had a fully executed contract. The revision that Hadad made after the parties executed
the contract was an improper unilateral modification that did not convert her acceptance into a
counteroffer. Accordingly, plaintiffs requested that the court deny defendants’ motions for
summary disposition.
On March 27, 2018, oral arguments were held on defendants’ motions and the parties
argued consistent with their briefs. Essentially, defendants argued that when Hadad signed the
acceptance, she added additional terms which made it a counteroffer. Then plaintiffs added a
charge for occupancy which was another counteroffer. Hadad then added another term which
was the release of the first purchase agreement in another counteroffer that was never accepted
by plaintiffs. Thus, there were several counteroffers and no final acceptance of Hadad’s final
counteroffer; accordingly, a contract was never formed. Plaintiffs argued that, once Hadad
signed the “acceptance” provision, the contract was formed. The trial court disagreed with
plaintiffs, holding that “on the undisputed sequence of events no contract was formed.” And
summary disposition before the completion of discovery was not premature because plaintiffs
failed to set forth any potential fact that could be discovered that would change the result.
Thereafter, an order granting defendants’ motions for summary disposition was granted,
dismissing the case in its entirety. Plaintiffs’ motion for reconsideration was denied, and this
appeal followed.
Plaintiffs argue that the trial court erred when it considered extrinsic evidence to
determine whether the purchase agreement at issue in this case was a binding and enforceable
contract, and therefore, summary disposition was not appropriate. Plaintiffs’ argument is
without merit.
We review de novo a trial court’s decision to grant a motion for summary disposition.
Sheridan v Forest Hills Pub Sch, 247 Mich. App. 611, 620; 637 NW2d 536 (2001). A motion
brought under MCR 2.116(C)(10) tests whether there is factual support for a claim and should be
granted if, after review of the admissible evidence, no genuine issue of material facts exists.
Sisk-Rathburn v Farm Bureau Gen Ins Co of Mich, 279 Mich. App. 425, 427; 760 NW2d 878
(2008). “There is a genuine issue of material fact when reasonable minds could differ on an
issue after viewing the record in the light most favorable to the nonmoving party.” Allison v
AEW Capital Mgt, LLP, 481 Mich. 419, 425; 751 NW2d 8 (2008).
-3-
The determination whether a contract exists is a question of law reviewed de novo.
Kloian v Domino’s Pizza, LLC, 273 Mich. App. 449, 452; 733 NW2d 766 (2006). “Before a
contract can be completed, there must be an offer and acceptance. Unless an acceptance is
unambiguous and in strict conformance with the offer, no contract is formed.” Pakideh v
Franklin Commercial Mtg Group, Inc, 213 Mich. App. 636, 640; 540 NW2d 777 (1995). Stated
another way, there is no legally enforceable contractual obligation until there is an offer and an
acceptance of that specific offer. Mathieu v Wubbe, 330 Mich. 408, 412; 47 NW2d 670 (1951).
If material terms are altered, a response to an offer will be deemed a counteroffer not an
acceptance. Zurcher v Herveat, 238 Mich. App. 267, 296; 605 NW2d 329 (1999). This is so
because to form a valid contract, there must be mutual assent or a meeting of the minds on all the
essential terms of the contract. Burkhardt v Bailey, 260 Mich. App. 636, 655; 680 NW2d 453
(2004). “A meeting of the minds is judged by an objective standard, looking to the express
words of the parties and their visible acts, not their subjective states of mind.” Calhoun Co v
Blue Cross Blue Shield of Mich, 297 Mich. App. 1, 13; 824 NW2d 202 (2012) (quotation marks
and citations omitted).
In this case, plaintiffs argue that the version of the contract to purchase that was executed
by both parties—Contract 3—was a valid and binding contract; it was not a counteroffer by
plaintiffs as posited by defendants. But plaintiffs fail to address the fact that material terms of
that version of the contract to purchase had been modified by plaintiffs and then submitted back
to defendants. Plaintiffs actually changed the closing date from June 16, 2017 to June 21, 2017.
And plaintiffs changed the seller’s post-closing occupancy from “no charge” to “$30.00 per
diem.” These were two material changes to the contract to purchase. The gist of plaintiffs’
argument is that, because Hadad signed the “acceptance” provision on page four of Contract 2
and did not complete paragraph 25, the counteroffer section, plaintiffs could add any terms they
desired, then sign the “acknowledgment” paragraph, and this “new” version of their contract—
Contract 3—is binding against Hadad, even if she did not specifically agree to the “new” terms.
Plaintiffs’ argument is unreasonable and untenable.
First, an obvious problem with plaintiffs’ argument is that it overlooks the fundamental
tenet of all contracts which is that there must be mutual assent or a meeting of the minds on all
the essential terms of the contract. Burkhardt, 260 Mich. App. at 655; see also Kamalnath v
Mercy Mem Hosp Corp, 194 Mich. App. 543, 548-549; 487 NW2d 499 (1992). The closing date
and terms of the seller’s post-closing occupancy are such essential terms of the contract requiring
mutual assent. And plaintiffs added these terms after Hadad signed the “acceptance” provision
and submitted her counteroffer, Contract 2, as discussed below.
Second, plaintiffs’ argument ignores the principle that acceptance of a counteroffer must
be unambiguous and in strict compliance with the counteroffer to form a contract. Plaintiffs
changed two material terms—the closing date and the post-closing occupancy terms—and, thus,
no binding contract was formed when they signed the acknowledgement paragraph of Contract 3.
See Pakideh, 213 Mich. App. at 640.
Third, the fact that Hadad executed the “acceptance” provision on Contract 2 did not
cause a contract to be formed when plaintiffs later executed the “acknowledgement” paragraph
on Contract 3. Hadad’s purported “acceptance” of plaintiffs’ offer, Contract 1, was ambiguous
and not in strict conformance with the offer; thus, no contact was formed. See id. Plaintiffs’
-4-
offer, Contract 1, required occupancy immediately at closing but Hadad changed that term,
adding the condition that she was to “have occupancy until June 27, 2017 at 5 pm at no charge.”
She added this new term and also executed the “acceptance” provision; but, she clearly did not
unambiguously accept plaintiffs’ offer and instead made a counteroffer. Paragraph 25, the
“counteroffer” section, states that if the Seller makes any written changes to the terms and
conditions of offer presented, such changes “shall constitute a Counter-Offer by the Seller to the
Buyer . . . .” Although Hadad could have added a date and time to which the counteroffer would
remain valid, such terms were not required to complete a valid counteroffer. Hadad’s written
changes to Contract 2, including adding the condition that she maintain occupancy until June 27,
2017 at 5 pm at no charge, constituted a counteroffer regardless of her execution of the
“acceptance” paragraph on Contract 2. That is, her “acceptance” was not unambiguous and in
strict conformance with plaintiffs’ offer so no contract was formed. See id.
On appeal, plaintiffs argue that the final version of the contract to purchase—Contract
4—which added the contingency that the sale was subject to the release of Moore’s purchase
agreement, should not have been considered by the trial court. But it is not evident from the
lower court record that the trial court actually considered Contract 4; rather, the court held that
“on the undisputed sequence of events no contract was formed.” And we agree with the trial
court; no contract was formed. At no point in the parties’ negotiations was there a meeting of the
minds on all the essential terms of the contract to purchase. See Burkhardt, 260 Mich. App. at
655. Rather, plaintiffs made an offer, Hadad made a counteroffer, plaintiffs then made a
counteroffer, and Hadad made another counteroffer. During this negotiation, the property was
sold to another party—as was Hadad’s right. While plaintiffs may have believed that they had a
binding contract to purchase the subject property, they were mistaken. Again, we look
objectively at the transaction to determine whether there was a meeting of the minds, not at the
parties’ subjective states of mind. See Calhoun Co, 297 Mich. App. at 13.
And we reject plaintiffs’ argument on appeal that the trial could not consider “extrinsic
evidence to attack the validity of the contract.” According to plaintiffs, the trial court was only
permitted to consider what was contained within the four corners of Contract 3 in determining
whether the parties had reached a binding agreement. But plaintiffs’ argument conflates the
concepts of contract formation, involving offer and acceptance, with interpreting or enforcing the
terms of a binding contract. This case involves the issue of contract formation, i.e., whether a
binding contract was even formed. Whether an offer or counteroffer was accepted by a party
“must be determined from the acts and circumstances of the parties, including their written or
spoken words or by other acts or conduct.” Farrell v Auto Club of Mich (On Remand), 187 Mich
App 220, 228; 466 NW2d 298 (1990), citing Ludowici-Celadon Co v McKinley, 307 Mich. 149,
153; 11 NW2d 839 (1943). In this case, the trial court properly considered the evidence of
negotiations that had been submitted by the parties—including Contracts 1 through 4—when it
determined that, based on the undisputed sequence of events, no contract was formed.
In summary, the trial court properly granted defendants’ motions for summary
disposition, dismissing plaintiffs’ complaint in its entirety. Accordingly, plaintiffs are to remove
any remaining cloud on the title to the subject property, including their “affidavit of facts
affecting real property” and notice of lis pendens that were recorded in Wayne County.
-5-
Affirmed. Defendants are entitled to costs as the prevailing parties. See MCR 7.219(A).
/s/ Jane M. Beckering
/s/ Mark J. Cavanagh
/s/ Cynthia Diane Stephens
-6-