West Lansing Retail Development LLC v. Kris Krstovski ( 2023 )

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
WEST LANSING RETAIL DEVELOPMENT, LLC, UNPUBLISHED
November 9, 2023
Plaintiff-Counterdefendant-Appellant,
v No. 365181
Eaton Circuit Court
KRIS KRSTOVSKI and K2 RETAIL LC No. 2022-000906-CB
CONSTRUCTION SERVICES, INC.,
Defendants-Cross-Defendants-
Appellees,
and
UNIFIED GROUP, LLC,
Defendant-Counterplaintiff-Cross-
Plaintiff-Appellee.
K2 RETAIL CONSTRUCTION SERVICES, INC.,
Plaintiff-Counterdefendant-Appellee,
v No. 365183
Eaton Circuit Court
WEST LANSING RETAIL DEVELOPMENT, LLC, LC No. 2022-000907-CB
Defendant-Cross-Defendant-
Appellant
and
UNIFIED GROUP, LLC,
Defendant-Counterplaintiff-Cross-
Plaintiff-Third-Party Plaintiff-
Appellee,
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and
ROHR GASOLINE EQUIPMENT, INC.,
Defendant-Third-Party Defendant,
and
KRIS KRSTOVSKI,
Third-Party Defendant-Appellee.
Before: GLEICHER, C.J., and JANSEN and RICK, JJ.
PER CURIAM.
The dissolution of business relationships can be complicated. This is especially true in
large construction and development projects that involve interwoven corporations, investors,
contractors, and subcontractors. Here, the entity formed to hold the real property for a large multi-
use development stopped paying the general contractor, which was also the entity that initiated the
project. No payment meant that the general contractor lacked liquid assets to purchase the real
property in a receivership action and lost out to the property holder. The general contractor
eventually won its battle, however, by filing a construction lien and securing a court order of
subrogation after the property holder breached the purchase agreement with the landowner.
We are asked to overturn the subrogation order and order summary disposition in the land
holder’s favor. However, we discern no error on the circuit court’s part and affirm.
I. BACKGROUND
In 2019, Kris Krstovski, as “manager” of West Lansing Retail Development, LLC
(WLRD), signed a purchase agreement with Unified Group, LLC (UG) to purchase a total of 207
acres in six phases through August 2023, on which he would develop Delta Crossings, a mixed-
use development. Krstovski is also the managing partner of K2 Retail Construction Services, LLC
(K2), which served as the general contractor for the development. Krstovski invited a handful of
investors to join the project and the individuals created a hodgepodge of corporate entities
connected to the development. WLRD remained the entity tasked with purchasing the property
phases by dates set within the purchasing agreement. WLRD timely purchased Phases I and II and
development of those phases was nearly complete when disputes arose among the investors.
Although WLRD had yet to purchase the remaining phases, K2 had already made improvements
that crossed parts of Phases III and IV, including installing a road, underground utilities, and a
retention pond.
Between late 2021 and mid-2022, the individual investors, corporate entities, and
subcontractors filed several lawsuits against each other in Oakland Circuit Court, some of which
are still ongoing. In relevant part, the other investors accused Krstovski of mismanaging finances.
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Krstovski accused the others of wrongfully withholding payments for completed and ongoing
construction and development. Only one of the Oakland County cases has made its way into the
current record. In LIP West Lansing, LLC v Krstovski, Oakland Circuit Court Docket No. 2022-
193988-CB, the court appointed a receiver “to take possession, custody, and control of” K2-LIP
JV West Lansing, LLC, West Lansing Retail Phase I, LLC, and West Lansing Retail Phase II, LLC
“including their property and affairs,” which included the real property of Phases I and II but not
Phases III through VI. Krstovski was ordered to “turn over” “all documents, books, records and
computer files, computer equipment, software, management files, . . . and all passwords”
“pertaining to the Receivership Property.” Krstovski complied.
The receiver auctioned off the receivership property. Krstovski (through K2) competed
with WL Acquisitions (the successor of WLRD without Krstovski as a member) for the right to
purchase. WL/WLRD entered the winning bid of $1,050,000; Krstovski offered $1 million plus
an additional $1,200,000 credit bid that was rejected. The order of sale entered September 8, 2022.
Three days later, K2 filed a claim of lien for $1,028,793.62 “for work relating to Phases III, IV
and V of Delta Crossings,” to cover improvements that had been made to the land without
remuneration. K2 cited September 9 as the its last day of work.
WL/WLRD was required to purchase an additional phase of the property by August 17,
2022. It missed that window. The purchase agreement created a 30-day grace period, but
WL/WLRD missed that deadline as well. WL/WLRD indicated that it would not purchase the
next phase with K2’s cloud on the title and demanded that UG clear it. UG refused and terminated
the purchase agreement.
In the meantime, both WLRD and K2 filed the current lawsuits in the Eaton Circuit Court.
In the case underlying Docket No. 365181, WLRD accused K2 of wrongfully inflating the amount
of the construction lien to interfere with WLRD’s ability to perform under the purchase agreement.
In the case underlying Docket No. 365183, K2 originally sought foreclosure of its construction
lien against WLRD, UG, and a third defendant that is not party to this appeal. After UG terminated
the purchase agreement with WLRD for nonpayment, K2 filed a motion “to subrogate WLRD and
perform the Purchase Agreement with” UG pursuant to MCL 570.1107(4) of the Construction
Lien Act, MCL 570.1101 et seq. (CLA). If granted, this would allow K2 an additional 30 days to
purchase the next phase of the Delta Crossings development from UG.
MCL 570.1101(1) of the CLA grants contractors, subcontractors, suppliers, and laborers a
construction lien against real property to which they have made improvements to secure payment
for their work. The general method of recovery for nonpayment is foreclosure as provided in MCL
570.1101(3). The alternative remedy of subrogation and performance is provided in MCL
570.1101(4) as follows:
If the rights of a person contracting for an improvement as a land contract vendee
or a lessee are forfeited, surrendered, or otherwise terminated, any lien claimant
who has provided a notice of furnishing or is excused from providing a notice of
furnishing under [MCL 570.1108, MCL 570.1108a, or MCL 570.1109] and who
performs the covenants contained in the land contract or lease within 30 days after
receiving actual notice of the forfeiture, surrender, or termination is subrogated to
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the rights of the contracting vendee or lessee as those rights existed immediately
before the forfeiture, surrender, or termination. [Emphasis added.]
The Eaton Circuit Court took argument on the subrogation issue in November 2022. The
court summarized the issues then before it as whether K2’s lien was valid and whether the purchase
agreement was actually terminated. WLRD’s counsel agreed with this statement. The court
determined that there remained a question of fact regarding when K2 actually stopped working—
when a stop work order entered in May 2022 or on September 9, 2022 as claimed in the lien. The
validity of the lien was “such a critical fact” that the questions of subrogation and WLRD’s
responsive motion for summary disposition could not be decided without an evidentiary hearing.
UG then argued that before the court could permit K2’s subrogation under the contract, it had to
determine that the purchase agreement had been terminated. This was a question of law for the
court to decide based on the contractual language, UG contended. In response to the court’s
inquiry, UG asserted that it had no duty to clear a lien based on unpaid construction costs as
anything related to construction on and improvement to the property was WLRD’s responsibility,
not the seller’s. K2 was WLRD’s agent, UG had no part in that relationship and could not be
responsible for WLRD failing to pay its own contractors. The court ultimately determined it would
schedule “an evidentiary hearing on the validity of the lien,” and noted, “I believe that will allow
me to do - - to make other decisions.” However, the court subsequently stated that the “sole issue”
for the hearing was the validity of the lien.
The court conducted a two-day evidentiary hearing to consider the validity of K2’s lien in
response to the subrogation motion. The court heard extensive testimony from the former K2
project manager (James Cisek), Krstovski, and UG’s managing partner (Jonathan Eyde). The
witnesses described in great detail the work performed on Phases I and II, as well as work
performed on the other phases that had yet to be purchased. The witnesses more generally
discussed the flow of money for the project, or lack thereof, and bills that remained unpaid. WLRD
presented no witnesses of its own.
At the close of the hearing, the court stated, “I’m not sure if the amount of the lien is
accurate.” If the action were one of foreclosure, the court noted, this would prevent recovery. As
the relief sought was subrogation, however, the court was only required to determine if the lien
was valid. The court found that K2 had performed work on Phase III that “benefitted” the property
and was “an improvement.” The court also found that Krstovski had authority to perform the work
and had only stopped work on September 9, 2022, within the timeline contemplated by the CLA.1
Accordingly, the court ruled, “I think there’s a valid lien; I’m not sure about the amount, but I
think it’s irrelevant” as Krstovski would “be allowed to subrogate and close on the property.” The
court continued, “I don’t have to care about how much the lien is because the lien is gonna be
dissipated upon the completion of the sale.”
K2 was prepared with a draft order for the court. WLRD objected to certain language in
that order; specifically, that the purchase agreement was terminated. The court chastised WLRD
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MCL 570.1111(1) provides that a contractor’s right to a construction lien “shall cease to exist
unless, within 90 days after the lien claimant’s last furnishing of labor or material for the
improvement, pursuant to the lien claimant’s contract,” the claimant files its lien.
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for failing to present any witnesses to testify that the purchase agreement was not properly
terminated for its failure to purchase the next phase. The court ruled, “I believe the contract was
terminated based on what I have on the record today and the exhibits that WLRD was obligated to
complete it by, I think it was August 17th. They were provided written notice that they were in
default, they didn’t cure it and on September 20th, [UG] notified WLRD that it was in default and
terminating the purchase agreement.”
WLRD further objected that the evidentiary hearing only pertained to the validity of K2’s
lien and that the issue of subrogation required an additional hearing. The court responded that the
validity of the lien resolved that subrogation was proper.
WLRD sought reconsideration of the court’s subrogation order, contending that the court
was required to ascertain the true amount of the lien in considering its validity and that the court
erred in finding that WLRD breached the purchase agreement when it had not taken any evidence
on that issue. The circuit court denied WLRD’s motion. Although WLRD argued that K2
fraudulently inflated the value of the lien, the court determined that this would only be relevant if
K2 sought to foreclose. Subrogation, unlike foreclosure, required the court to find that there was
a valid lien and that the purchase agreement had been terminated. “For the lien to be valid, the
Court needed to determine that K2 had performed work pursuant to a contract within ninety (90)
days of filing the Lien” pursuant to MCL 570.1111. And the court declined to reiterate on the
record the reasons it found the lien valid.
In the meantime, K2 followed through and purchased the next phase of the development
from UG. Thereafter, WLRD admitted that all of its claims but one were adjudicated by the court’s
determination that K2 held a valid lien. K2 sought summary disposition of that final claim: tortious
interference with a contract. WLRD argued that K2 intentionally inflated the amount of its lien to
interfere with WLRD’s ability to perform its duties under the purchase agreement with UG. K2
contended that WLRD improperly conflated the elements of tortious interference with a contract
with the elements of tortious interference with a business relationship.
Ultimately, the circuit court summarily dismissed WLRD’s claim, concluding:
The Court issued its order after hearing testimony for at least two days and reading
numerous briefs, affidavits, and other information. . . . [T]he Court found that [UG]
properly terminated the contract. That K2 had substantially complied with the
[CLA]. The Court allowed K2 to subrogate. And therefore, the Court finds, as a
matter of law, that WLRD cannot be successful on their claim whether they want
to call it a claim for tortious interference with a contractual relationship, or tortious
interference with a business expectancy.
WLRD now appeals.
II. SUBROGATION
WLRD cites the standard of review for a summary disposition motion in relation to all its
appellate challenges. However, the subrogation issue was not resolved on summary disposition.
Rather, the circuit court conducted an evidentiary hearing, made findings of fact and conclusions
of law, and resolved the issue. Accordingly, our review is akin to appellate review following a
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bench trial. We review for clear error the court’s factual findings and review de novo the court’s
legal conclusions. Alan Custom Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379(2003).
As noted, MCL 570.1107(4) provides the remedy of subrogation in a construction lien
matter:
If the rights of a person contracting for an improvement as a land contract vendee
or a lessee are forfeited, surrendered, or otherwise terminated, any lien claimant
who has provided a notice of furnishing . . . and who performs the covenants
contained in the land contract or lease within 30 days after receiving actual notice
of the forfeiture, surrender, or termination is subrogated to the rights of the
contracting vendee or lessee as those rights existed immediately before the
forfeiture, surrender, or termination.
There is very limited caselaw citing this provision and none analyzing its language. In
Norcross Co v Turner-Fisher Assoc, 165 Mich App 170, 180; 418 NW2d 418 (1987), this Court
merely acknowledged that a lienholder may elect “to subrogate himself to the rights of the
contracting vendee or lessee” in lieu of foreclosure. This Court noted, “The subrogation right is
but one of several rights granted to lienholders. It is not the exclusive remedy under the act.” Id.This Court cited Norcross and MCL 570.1107(4) in AFP Specialists, Inc v Vereyken, 303 Mich
App 497, 505; 844 NW2d 470 (2014), but only to note that this Court “liberally constru[ed]” the
statute. Despite this lack of guidance, the language of this provision is clear and unambiguous.
Relevant to the current matter, K2 was required first to establish the existence of a valid
construction lien under MCL 570.1107(1) and MCL 570.1111. Under § 107(4), K2 was then
required to establish that (1) the purchase agreement was terminated and (2) K2 acted within 30
days of the purchase agreement’s termination toward performance of that contract.
A. VALIDITY OF THE LIEN
Relevant to the validity of the lien, WLRD contends that the circuit court was required to
ascertain the actual amount of the lien at the subrogation hearing. WLRD asserts that it made a
prima facie showing that K2’s lien was fraudulent and therefore invalid. WLRD further claims
that the court erred in finding that work continued after the stop work order entered, rendering the
lien untimely.
MCL 570.1302(1) states that “[s]ubstantial compliance with the provisions of [the CLA]
shall be sufficient for the validity of the construction liens provided for in this act . . . .” MCL
570.1107(1) requires that a construction lien “not exceed the amount of the lien claimant’s contract
less payments made on the contract.” In the context of the former mechanics’ lien laws that were
replaced by the CLA, this Court held that a lien is not invalid merely because the lien amount was
later found to exceed the actual amount owed. A lien is only invalidated if the claimant’s “bad
faith is evident.” Tempo, Inc v Rapid Electric Sales & Serv, Inc, 132 Mich App 93, 104; 347
NW2d 278 (1984). An error due to a good faith mistake is remedied simply by reducing the
amount of recovery. Id. This Court has applied this principle to liens filed under the CLA as well.
See Alan Custom Homes, 256 Mich App at 512-513.
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K2 was not seeking repayment or to foreclose the lien, situations in which K2 could
potentially collect funds beyond what it was owed. Accordingly, as determined by the circuit
court, the exact amount of the lien is not relevant here. As long as K2’s lien was calculated in
good faith, it could support subrogation.
Although WLRD attempted to establish that K2 fraudulently inflated the amount of the
lien, the court did not clearly err in rejecting that position based on the evidence presented.
To establish a prima facie case of fraud, a plaintiff must prove that (1) the defendant
made a material representation, (2) the representation was false, (3) the defendant
knew that it was false when it was made, or made it recklessly, without any
knowledge of its truth and as a positive assertion, (4) the defendant made the
representation with the intention that the plaintiff would act on it, (5) the plaintiff
acted in reliance on it, and (6) the plaintiff suffered injury because of that reliance.
[Zaremba Equip, Inc v Harco Nat’l Ins Co, 280 Mich App 16, 38-39; 761 NW2d
151 (2008).]
As evidence of fraud, WLRD points to a QuickBooks printout presented by Krstovski in
the receivership action. That document states that as of July 25, 2022, WLRD owed K2
$79,818.12. WLRD expressed disbelief that K2’s billables could have increased more than
$900,000 by September 9. However, the QuickBooks document pertained to work performed only
on Phases I and II, not III through VI, and were not a complete picture of WLRD’s debt to K2. At
the evidentiary hearing, Cisek and Krstovski testified that K2 had performed extensive work on
Phases III and IV despite that WLRD had yet to purchase them from UG. This work was necessary
to support the work performed on Phases I and II. K2 and its subcontractors had dug a retention
pond, installed underground utilities, and built a road. Dirt removed from Phases I and II was
stored on Phase III for later grading of the remaining phases. Money had been expended on
engineering reports and architectural designs for the entire property. Krstovski noted that some
subcontractors had filed liens against Phases I and II for the unpaid work they had performed on
Phases III and IV for lack of a better option. Krstovski further explained that “any costs associated
with the future phases would be carried by K2 until the time of funding was in place to get
reimbursement for.” Accordingly, it had no opportunity to collect these accrued costs. K2
presented a forensic audit report prepared for the receivership case indicating that K2 was owed
$1.2 million. Given that K2 would ultimately require $70 million in financing to complete Phase
III, the $1.2 million lien was not out of bounds.
WLRD further contends that K2 presented a falsified invoice into evidence. The invoice
dated April 6, 2022 indicates that K2 billed WLRD $925,000 for services related to Parcel III.
WLRD posits that this invoice is fake because it was not presented to the receiver. Again, the
receiver only took possession of Phases I and II of the development and the court only ordered
Krstovski to present documents related to Phases I and II. The subject invoice pertains to work on
Phase III. Overall, there was sufficient evidence for the circuit court to find that although the
amount cited in the lien might not be accurate, it was not fraudulent.
The record also supports the court’s conclusion that K2 continued working through
September 9, 2022, making its lien timely. Cisek and Krstovski admitted that a stop work order
entered in May 2022. They both indicated, however, that industry standards required additional
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work beyond that date. Cisek testified that occupational safety regulations prohibit contractors
from leaving job sites in an unsafe condition. Trenches had been dug that required filling and
temporary power sources had to be removed. The drainage system for the retention pond had to
be completed to prevent flooding. Krstovski explained that additional substantive work was
required on Phases I and II because K2 had “sold these assets before they were completed” and
“they needed to be done in order . . . to get out of” the loans secured for the project. K2 therefore
“convinced the subcontractors to continue doing the work.”
Ultimately, the circuit court correctly interpreted and applied the relevant law and given
the evidence presented at the evidentiary hearing, the circuit court did not clearly err in finding
K2’s lien valid.
B. TERMINATION OF PURCHASE AGREEMENT
The first step for application of MCL 570.1107(4) is to determine if the rights of the land
purchaser have been “forfeited, surrendered, or otherwise terminated.” The circuit court
determined that the purchase agreement was terminated as a result of WLRD’s failure to timely
purchase the next phase of the development. The circuit court did not address WLRD’s challenges
based on other provisions of the purchase agreement. However, consideration of the purchase
agreement as a whole supports that UG properly terminated it.
Consideration of this issue requires reliance on several provisions of the purchase
agreement. “Our goal in contract interpretation is to give effect to the intent of the parties, to be
determined first and foremost by the plain and unambiguous language of the contract itself.”
Kendzierski v Macomb Co, 503 Mich 296, 311; 931 NW2d 604 (2019) (quotation marks and
citation omitted). A fundamental tenet of our jurisprudence is that unambiguous contracts are not
open to judicial construction and must be enforced as written.” Rory v Continental Ins Co, 473
Mich 457, 468; 703 NW2d 23 (2005).
Section 2(b)(3) of the purchase agreement required WLRD to purchase a third phase of the
development within 24 months of the Phase I closing. That date was August 17, 2022. WLRD
allowed that date to pass without purchasing an additional phase. UG notified WLRD of its breach
and permitted it 30 days to comply as provided in § 19(a) of the purchase agreement. WLRD
missed that deadline as well. The court correctly determined that WLRD’s breach triggered UG’s
right to terminate the contract under the same section.
This does not end the inquiry as WLRD contends that other provisions of the purchase
agreement excuse its breach. WLRD asserts that UG breached the purchase agreement first
because it was required to present clear title to the land. WLRD demanded that UG pay off K2’s
lien to clear the title, but UG refused. Section 4(b)(i) of the purchase agreement provides that
“[o]n each applicable Closing Date, Seller shall execute and/or deliver to Purchaser” “[a] warranty
deed . . . conveying the applicable Property to Purchaser, free and clear of all encumbrances,
except the Permitted Encumbrances hereafter defined.” When read in a void, this provision seems
to require UG to clear K2’s lien. But the contract must be read as a whole. Auto Owners Ins Co
v Olympia Entertainment, Inc, 310 Mich App 132, 145; 871 NW2d 530 (2015). Other provisions
of the purchase agreement clarify that UG was not liable or responsible for clearing K2’s lien.
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First and foremost, UG is not responsible for the costs of any improvement to or
construction on the property, WLRD is. It follows that WLRD alone would be responsible for a
lien arising from the costs of any improvement or construction. Section 5(e) of the purchase
agreement provides:
Purchaser shall pay the cost for all site improvements and infrastructure for all
Phases of the development, including but not limited to, roads (including curb and
gutters) and utility extensions . . ., all costs to install said road gutters and utilities
extensions, plus the cost of all storm water retention and engineering services for
the development.
K2’s lien was based on “the cost for all site improvements and infrastructure.” If payment of those
costs was outstanding, it was WLRD’s contractual duty to pay them.
Section 3(a) of the purchase agreement provides that the purchaser’s obligations are
contingent upon title being “found acceptable” or being “made acceptable, in accordance with the
requirements and terms of Section 6 of this Agreement.” Again, read in a void, this section appears
to require UG to clear K2’s lien. Again, it does not.
Section 6 referenced in § 3(a) is entitled “Title Examination” and provides, in relevant part:
Title Examination will be conducted as follows:
a. Purchaser’s Objections to Title. Prior to the expiration of the Inspection
Period, as may be extended pursuant to Section 3(b), Purchaser will make, in
writing, any objections (the “Objections”) to any matters disclosed in the Title and
Survey that are not acceptable to Purchaser. Any matter shown on such Title and
Survey and not timely objected to by Purchaser shall be a “Permitted
Encumbrance” hereunder. . . .
Section 3(b) is entitled “Soil Tests” and provides:
Purchaser shall have determined, on or before the first business day which is ninety
(90) days from the Effective date (the “Inspection Period”) that Purchaser is
satisfied with the results of and matters disclosed by such soil and geotechnical tests
of the Property as Purchaser may deem necessary, all such tests to be obtained at
Purchaser’s sole cost and expense. So long as Purchaser is diligently conducting
its inspection, the Purchaser may, in its sole discretion, extend the due diligence
period for two (2) consecutive periods of sixty (60) days each . . . upon notice to
Seller and payment of additional earnest money of Fifty Thousand and 00/100
($50,000) Dollars for each Extension Period, prior to the expiration of the
Inspection Period or applicable Extension Period. . . .
Also relevant is § 2(f), which clarifies:
For avoidance of any doubt, Purchaser and Seller acknowledge and agree that
unless this Agreement is terminated by Purchaser prior to the expiration of the
Inspection Period (as defined in Section [3](b)) or in accordance with the terms of
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Section 19, Purchaser shall have an obligation to close all phases and purchase the
entire Property.
Read together, these provisions permitted WLRD to conduct a preliminary inspection of
the property, including soil and geotechnical tests and to complete a survey. WLRD then had 90
days to object to “any matters” revealed that were “not acceptable” to it. If WLRD did not object,
those existing matters would be deemed “permitted encumbrance[s].” These provisions did not
require a new inspection period before closing on the purchase of each phase. The duties and
rights imposed pertained only to the initial closing, following testing and surveying of the entire
property.
Based on the contract as a whole, UG had no duty to clear K2’s September 2022
encumbrance. WLRD’s duty to purchase the next phase of the development was not excused.
WLRD breached the purchase agreement by failing to cure its default within the 30-day grace
period and UG was permitted to terminate the contract.
C. K2 ACTED WITHIN 30 DAYS
The final step under MCL 570.1101(4) is to show that K2 “peform[ed] the covenants
contained in the land contract or lease within 30 days after receiving actual notice” of the purchase
agreement’s termination. K2 acted swiftly and diligently to seek its remedies in these legal
proceedings. Krstovski testified that K2 was ready to purchase the next phase of the development
immediately upon being granted the right of subrogation, and K2 actually did so. This requirement
was adequately met.
Contrary to WLRD’s protestations, the circuit court properly granted K2’s motion for
subrogation. WLRD is not entitled to relief in this regard.
III. TORTIOUS INTERFERENCE WITH A CONTRACT
The circuit court summarily dismissed WLRD’s tortious interference with a contract claim
pursuant to MCR 2.116(C)(10). We review de novo a lower court’s decision on a motion for
summary disposition. Zaher v Miotke, 30. 0 Mich App 132, 139; 832 NW2d 266 (2013).
A motion under MCR 2.116(C)(10) tests the factual support of a plaintiff’s claim.
Summary disposition is appropriate under MCR 2.116(C)(10) if there is no genuine
issue regarding any material fact and the moving party is entitled to judgment as a
matter of law. In reviewing a motion under MCR 2.116(C)(10), this Court
considers the pleadings, admissions, affidavits, and other relevant documentary
evidence of record in the light most favorable to the nonmoving party to determine
whether any genuine issue of material fact exists to warrant a trial. A genuine issue
of material fact exists when the record, giving the benefit of reasonable doubt to
the opposing party, leaves open an issue upon which reasonable minds might differ.
[Id. at 139-140 (quotation marks and citations omitted).]
As described by this Court in Health Call of Detroit v Atrium Home & Health Care Svcs,
Inc, 268 Mich App 83, 89; 706 NW2d 843 (2005), “In Michigan, tortious interference with a
contract or contractual relations is a cause of action distinct from tortious interference with a
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business relationship or expectancy.” To establish a claim of tortious interference with a contract,
the pleading party must show “(1) the existence of a contract, (2) a breach of the contract, and (3)
an unjustified instigation of the breach by the defendant.” Id. at 90. The final element is a
recognition that “tortious interference with a contract is an intentional tort.” Knight Enterprises,
Inc v RPF Oil Co, 299 Mich App 275, 280. To support this element, the plaintiff must show “the
intentional doing of a per se wrongful act or the doing of a lawful act with malice and unjustified
in law for the purpose of invading the contractual rights . . . of another.” Id. (quotation marks and
citations omitted).
There is no factual issue that K2’s lien was filed unjustifiably to interfere with WLRD’s
contract. WLRD relies on its claim that K2 fraudulently inflated the amount of its lien to ensure
that WLRD could not clear it, opening the door for K2 to purchase the development out from under
it. The circuit court resolved that issue at the evidentiary hearing on subrogation. As noted, that
decision was supported by the evidence. The propriety of the subrogation resolved this issue.
Accordingly, there was nothing left to resolve at trial.
We affirm.
/s/ Elizabeth L. Gleicher
/s/ Michelle M. Rick
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