William Sams v. Common Ground

STATE OF MICHIGAN
COURT OF APPEALS
WILLIAM SAMS, UNPUBLISHED
January 31, 2017
Plaintiff-Appellant,
v No. 329600
Genesee Circuit Court
COMMON GROUND, LC No. 15-104205-CD
Defendant-Appellee.
Before: BECKERING, P.J., and SAWYER and SAAD, JJ.
PER CURIAM.
In this employment discrimination claim, plaintiff appeals the trial court’s order that
granted defendant’s motion for summary disposition on the grounds that plaintiff’s claim was
time barred by the contractual limitation period of one year. For the reasons stated below, we
affirm.
I. BASIC FACTS
The relevant facts for the issues on appeal are brief and are not in dispute.1 On August
15, 2011, plaintiff applied for employment with defendant and agreed to be bound by the
following:
In consideration of my employment, I agree to conform to the rules and policies
of Common Ground. Also, I agree not to begin any action or lawsuit relating
directly or indirectly to employment with Common Ground more than one (1)
year after the earlier of (a) the incident or event giving rise to such action or
lawsuit or (b) the date of the termination of such employment. I waive any statute
of limitations to the contrary.
Defendant subsequently hired plaintiff.
1
Because the sole issue is whether plaintiff contractually waived the statutory three-year statute
of limitations, the facts underlying plaintiff’s specific civil rights claim are not relevant.
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On July 27, 2012, defendant notified plaintiff in a letter that his position would change
from “Crisis Interventionist 1” to “Recovery Coach” effective August 5, 2012. This change
would lower plaintiff’s hourly rate and other fringe benefits. The letter had a place for plaintiff
to sign to show his acceptance of the changes to his employment, and plaintiff signed it on
August 2, 2012. However, on September 21, 2012, plaintiff advised defendant that he was
resigning and that his last day of employment would be September 30, 2012.
Plaintiff filed suit against defendant on February 5, 2015, approximately 2-1/2 years after
resigning, and alleged that defendant violated the Persons with Disabilities Civil Rights Act,
MCL 37.1101, et seq. Plaintiff alleged that defendant’s actions forced him to resign, which
constituted a constructive discharge.
Defendant moved for summary disposition under MCR 2.116(C)(7) and argued that
plaintiff’s claim was time barred because plaintiff waived the statutory three-year period of
limitations and agreed to be bound by a one-year period, as stated in his employment application.
Plaintiff argued that the application did not apply because, when he was offered the new positon
with defendant, they did not incorporate the terms of the prior application. Plaintiff also argued
that, in any event, the provision shortening the limitations period was not enforceable because it
was unconscionable. The trial court agreed with defendant and granted the motion for summary
disposition.
II. STANDARD OF REVIEW
We review de novo a trial court’s a grant or denial of a motion for summary disposition.
Dybata v Wayne Co, 287 Mich. App. 635, 638; 791 NW2d 499 (2010). Summary disposition is
appropriate under MCR 2.116(C)(7) when a claim is barred by the applicable statute of
limitations. When considering a motion brought under this subrule, “the trial court must
consider any affidavits, depositions, admissions, or other documentary evidence submitted by the
parties to determine whether there is a genuine issue of material fact precluding summary
disposition.” Id. at 637. In doing so, a court must consider the evidence in the light most
favorable to the nonmoving party. Moraccini v City of Sterling Heights, 296 Mich. App. 387,
391; 822 NW2d 799 (2012). “If no facts are in dispute, or if reasonable minds could not differ
regarding the legal effect of those facts, then the question whether the claim is barred . . . is an
issue of law.” Dybata, 287 Mich. App. at 637.
Our review of the proper interpretation of a contract also is a matter of law that we
review de novo. Burkhardt v Bailey, 260 Mich. App. 636, 646; 680 NW2d 453 (2004).
III. ANALYSIS
As noted above, as a condition of his employment, plaintiff agreed, in writing, to not
bring an employment-related lawsuit against defendant unless he filed his suit within one year of
his termination. Further, he expressly agreed to waive the statutory limitation period to bring
suit. And he testified that he read and understood all the terms of his agreement and that if he
did not understand them, he had the opportunity to ask for clarification.
Under the foregoing facts and pursuant to well-established Michigan precedent, plaintiff
is bound by his agreement regarding the limitation of action provision. Indeed, our Court has
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ruled that a virtually identical provision is binding under Michigan law and that this limitation
provision does not violate public policy. Accordingly, plaintiff is bound by his agreement and
his claim is time barred and the defenses he raises to the applicability of this provision, which we
discuss below, are unavailing.
A. APPLICABILITY OF THE APPLICATION
Plaintiff argues that the provision in the application that shortened the amount of time he
could bring an action against defendant lacks “any contractual significance.” We disagree.
Although plaintiff does not deny signing the application, he contends that his signature
merely reflects that he read and understood the terms contained in the application—not that he
actually agreed to them. Plaintiff points out that the location where he signed the application
states, “My signature below indicates that I have read and understood the above paragraphs.”
(Emphasis added.) However, plaintiff ignores the key and controlling language he agreed to:
In consideration of my employment, I agree to conform to the rules and policies
of Common Ground. Also, I agree not to begin any action or lawsuit relating
directly or indirectly to employment with Common Ground more than one (1)
year after the earlier of (a) the incident or event giving rise to such action or
lawsuit or (b) the date of the termination of such employment. I waive any statute
of limitations to the contrary. [Emphasis added.]
Accordingly, plaintiff’s signature represents that he understood and agreed not to begin
any action against defendant after one year has passed. Further, he understood that he waived
the application of the otherwise applicable statute of limitations. As a result, we find plaintiff’s
argument that he did not actually agree to anything in the application to be without merit. The
facts mandate otherwise.2
2
Plaintiff also claims that because the application has language in it that states that the
“application for employment shall be considered active for sixty (60) days,” any such agreements
he made were no longer enforceable after 60 days had passed. First, we note that the language
does not state that the terms of the application were to be void after 60 days. Instead, it merely
provides that plaintiff will be considered for employment for 60 days. This subtle difference is
important. Moreover, the language makes it perfectly clear that plaintiff’s agreement to the
terms was consideration for any employment with defendant. No reasonable reading of the
application shows that the consideration he was giving was only to last for 60 days. Indeed, such
a reading would make the salient terms of the agreement nugatory because if the terms were void
after 60 days, then the agreement never would be able to effectuate the one-year limitation
period. When interpreting such contractual documents, we are to “give effect to every word,
phrase, and clause . . . and avoid an interpretation that would render any part of the contract
surplusage or nugatory.” Klapp v United Ins Group Agency, Inc, 468 Mich. 459, 468; 663 NW2d
447 (2003). Therefore, we reject plaintiff’s claim that he was no longer bound by his agreements
after 60 days had lapsed. Plaintiff makes a related argument that any consideration given by
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Plaintiff also says that because he subsequently “applied” for a new position with
defendant, the original application is not relevant and therefore not enforceable. Plaintiff relies
on the letter that he received from defendant that notified him that his duties would change.
Contrary to plaintiff’s contention, the record shows that he did not “apply” for this new
position. Instead, as employers have the right to do, defendant made changes to plaintiff’s duties
and related compensation. The letter merely served to confirm plaintiff’s acquiescence and
acknowledgment of the cited changes regarding his employment. Because plaintiff remained
employed by defendant at all relevant times, his agreement to provide consideration for his
employment also remained in force. In brief, there is nothing in the agreement he signed that
suggests that any consideration was only valid for a particular position while employed at
defendant. Again, it is important that the record shows that plaintiff remained employed by
defendant throughout this change; plaintiff’s employment was never terminated such that he had
to re-apply for employment.
B. UNCONSCIONABILITY
Plaintiff argues that regardless of the applicability of the application, the term reducing
the amount of time to bring an action under the Persons with Disabilities Civil Rights Act is
unconscionable and therefore not enforceable. We disagree.
Michigan law is clear on this point: An unambiguous contractual provision is to be given
full effect unless the provision violates law or public policy, or a traditional contract defense,
such as unconscionability. Rory v Continental Ins Co, 473 Mich. 457, 470; 703 NW2d 23 (2005).
Here, plaintiff claims that the provision in the application that limits the period of time to bring
an action against defendant is unconscionable.
In order for a contract or contract provision to be considered
unconscionable, both procedural and substantive unconscionability must be
present. Procedural unconscionability exists where the weaker party had no
realistic alternative to acceptance of the term. If, under a fair appraisal of the
circumstances, the weaker party was free to accept or reject the term, there was no
procedural unconscionability. Substantive unconscionability exists where the
challenged term is not substantively reasonable. However, a contract or contract
provision is not invariably substantively unconscionable simply because it is
foolish for one party and very advantageous to the other. Instead, a term is
substantively unreasonable where the inequity of the term is so extreme as to
shock the conscience. [Clark v DaimerChrysler Corp, 268 Mich. App. 138, 143-
144; 706 NW2d 471 (2005) (citations omitted).]
defendant in return for plaintiff’s wavier was illusory and therefore he is not bound by the
waiver. This position is meritless. This Court has specifically addressed this contention and
rejected it because an employee’s waiver of such a statutory right in an application is supported
by consideration by the defendant employer through the employment, itself, and the
accompanying wages. Timko v Oakwood Custom Coating, Inc, 244 Mich. App. 234, 244; 625
NW2d 101 (2001).
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Michigan case law directly rejects plaintiff’s position. In Clark, this Court held that the
plaintiff’s agreement in an employment application to reduce the amount of time to bring a suit
related to employment is enforceable, because it does not violate the law, or public policy and is
thus, not unconscionable. Id. at 142-144. Regarding unconscionability, the Court further noted
that the plaintiff presented no evidence that he had no realistic alternative to employment with
the defendant. Id. at 144. As such, although the plaintiff had unequal bargaining power with
defendant, the Court could not conclude that the “plaintiff lacked any meaningful choice but to
accept employment under the terms dictated by defendant.” Id. The same holds true here.
Plaintiff has not offered any evidence to show that he had to accept employment with defendant.
Thus, the fact that defendant essentially made the terms of the application a precondition to
employment does not rise to the level of procedural unconscionability. Further, the Courts in
Clark, 268 Mich. App. at 144, and Timko, 244 Mich. App. at 243, ruled that reducing the
limitations period to 180 days or six months is not substantively unconscionable.3 Further, as
here, Clark and Timko both dealt with shortened periods to bring an employment discrimination
claim. Clark, 268 Mich. App. at 140, 144; Timko, 244 Mich. App. at 237; see also Hicks v EPI
Printers, Inc, 267 Mich. App. 79, 84, 91; 702 NW2d 883 (2005). Therefore, because we found
the shortened periods in Hicks (one year) and Clark and Timko (six months) to be reasonable and
not unconscionable, is it is clear that here, one year is not substantively unconscionable.
We would note that the Hicks Court cautions that the “[w]aiver of a statutory period of
limitations for a civil rights claim is subject to heightened judicial scrutiny that asks if the waiver
was knowing, intelligent, and voluntary.” Hicks, 267 Mich. App. at 91. Again, as noted above, in
his deposition, plaintiff was asked specifically if he read the application and understood all of its
terms. He replied that he did. As a result, we find that plaintiff’s waiver was indeed knowing,
intelligent, and voluntary. Moreover, had plaintiff not admitted that he read and understood the
terms, his signing of the application, absent any coercion, mistake, or fraud, is sufficient to show
that it was knowing, intelligent, and voluntary. See Clark, 268 Mich. App. at 144-145.
C. CONCLUSION
Plaintiff’s agreement to waive the statutory limitations period and replace it with a one-
year period is valid under well-established Michigan law. Accordingly, plaintiff’s suit, which
was filed more than one year after his employment was terminated with defendant, was not
timely, and the trial court properly granted defendant’s motion for summary disposition pursuant
to MCR 2.116(C)(7).
3
The Court in Hicks upheld a one-year period to bring claims as not unconscionable. Hicks, 267
Mich. App. at 91.
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Affirmed. Defendant, as the prevailing party, may tax costs pursuant to MCR 7.219.
/s/ Jane M. Beckering
/s/ David H. Sawyer
/s/ Henry William Saad
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