Platt Laundromat LLC v. Detergent Solutions

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
PLATT LAUNDROMAT, LLC, and UNPUBLISHED
FAKHREDDIN BILBEISI, July 30, 2020
Plaintiffs-Appellants,
v No. 348529
Washtenaw Circuit Court
DETERGENT SOLUTIONS and MICHAEL LC No. 17-000635-CB
KLINE,
Defendants-Appellees,
and
DEXTER FINANCIAL SERVICES, INC.,
Defendant.
Before: METER, P.J., and BECKERING and O’BRIEN, JJ.
PER CURIAM.
Plaintiffs, Platt Laundromat, LLC, and Fakhreddin Bilbeisi, appeal as of right the trial
court’s order granting summary disposition in favor of defendants, Detergent Solutions and
Michael Kline, under MCR 2.116(C)(8) and (10). This appeal has been decided without oral
argument pursuant to MCR 7.214(E). We affirm.
I. BACKGROUND
Bilbeisi was interested in starting a dry-cleaning or laundromat business in a strip mall that
he owned and wanted advice on the practicality of doing so. Bilbeisi turned to the Internet in
search of that advice, and eventually found Detergent Solutions’ website. He used information
from that site to contact Kline, an owner and employee of Detergent Solutions. Kline advised
Bilbeisi to not open a dry-cleaning facility because dry-cleaning was a highly-regulated industry,
and agreed to conduct a study for Bilbeisi on whether a laundromat could be a good fit in Bilbeisi’s
strip mall. Kline presented Bilbeisi with a demographics report of the area surrounding Bilbeisi’s
strip mall, created a potential layout for the laundromat, and connected Bilbeisi with Dexter
-1-
Financial Services so that Bilbeisi could purchase the necessary machinery for the laundromat.
Bilbeisi formed Platt Laundromat, LLC, and Dexter Financial Services issued Platt Laundromat a
promissory note for over $400,000 for laundromat equipment. Kline oversaw the building of the
laundromat, but ceased his involvement after the laundromat opened.
After a few months of business, Bilbeisi realized that the laundromat was unable to bring
in the profit he thought it would. This led Bilbeisi to stop paying the laundromat’s employees and
rent, and also stop the payments to Dexter Financial Services. Due to the business’s failure,
Bilbeisi and Platt Laundromat sued Kline and Detergent Solutions. Plaintiffs’ complaint did not
identify any specific causes of action, but generally alleged that plaintiffs created the laundromat
in reliance on Kline’s representations that the laundromat could be successful in the strip mall with
the number of machines it had.
Defendants eventually filed a motion for summary disposition under MCR 2.116(C)(8) and
(10). Defendants contended that they were entitled to relief under MCR 2.116(C)(8) because
plaintiff’s complaint was “threadbare and practically incomprehensible,” and that assuming
plaintiffs were attempting to plead fraudulent inducement, fraudulent misrepresentation, and
negligent misrepresentation, plaintiffs’ complaint failed to set forth facts establishing those claims
or plead those claims with sufficient particularity. Defendants also argued that they were entitled
to summary disposition under MCR 2.116(C)(10) on those same presumed claims. For plaintiffs’
claims of fraudulent inducement and fraudulent misrepresentation, defendants contended that they
were entitled to summary disposition because any representations defendants made were mere
sales puffing. As for plaintiffs’ negligent misrepresentation claim, defendants contended that
plaintiffs failed to establish that defendants breached any duty of care to plaintiffs.
In their response, plaintiffs stated that they were asserting claims “for Fraudulent
Misrepresentation, and/or Negligent Misrepresentation,” and then generally asserted that they
could prove each element of those claims.
At a hearing, the trial court asked questions of both parties before eventually granting
defendants’ motion. For plaintiffs’ fraudulent inducement and misrepresentation claim, the trial
court explained that the representations that Kline made “would legitimately be categorized as
sales puffing,” and that “Plaintiffs as business owners of a mall with other tenants would clearly
understand some level of risk” so defendants did not “have to say what that risk [was] at the
moment . . . .” Addressing plaintiffs’ claim for negligent misrepresentation, the trial court
reasoned that Bilbeisi testified “that the Defendant[s] fulfilled all of [their] obligations per the
parties’ agreement,” so there was no basis to conclude that defendants breached a duty owed to
plaintiffs.
Plaintiffs now appeal.
II. STANDARD OF REVIEW
Appellate courts review de novo a trial court’s grant of summary disposition. Innovation
Ventures v Liquid Mfg, 499 Mich 491, 506; 885 NW2d 861 (2016). The trial court granted
summary disposition to defendants under MCR 2.116(C)(8) and (10). In Maiden v Rozwood, 461
-2-
Mich 109, 119-120; 597 NW2d 817 (1999), our Supreme Court explained the process for
reviewing a motion filed under MCR 2.116(C)(8):
A motion under MCR 2.116(C)(8) tests the legal sufficiency of the
complaint. All well-pleaded factual allegations are accepted as true and construed
in a light most favorable to the nonmovant. Wade v Dep’t of Corrections, 439 Mich
158, 162; 483 NW2d 26 (1992). A motion under MCR 2.116(C)(8) may be granted
only where the claims alleged are “so clearly unenforceable as a matter of law that
no factual development could possibly justify recovery.” Id. at 163. When
deciding a motion brought under this section, a court considers only the pleadings.
MCR 2.116(G)(5).
For a motion under MCR 2.116(C)(10), the Maiden Court explained the review as follows:
A motion under MCR 2.116(C)(10) tests the factual sufficiency of the
complaint. In evaluating a motion for summary disposition brought under this
subsection, a trial court considers affidavits, pleadings, depositions, admissions,
and other evidence submitted by the parties, MCR 2.116(G)(5), in the light most
favorable to the party opposing the motion. Where the proffered evidence fails to
establish a genuine issue regarding any material fact, the moving party is entitled
to judgment as a matter of law. [Maiden, 461 Mich at 120.]
A genuine issue of material fact exists when, after viewing the evidence in a light most favorable
to the nonmoving party, reasonable minds could differ on the issue. Allison v AEW Capital Mgt,
LLP, 481 Mich 419, 425; 751 NW2d 8 (2008).
III. ANALYSIS
Before addressing the substance of plaintiffs’ claims on appeal, we note that plaintiffs’
brief on appeal is so inadequate that it amounts to an abandonment of the entire appeal. Nowhere
in the brief do plaintiffs cite the record, nor do plaintiffs point to any binding caselaw to support
the assertions they make. The issues that plaintiffs seek relief on are whether the trial court erred
by granting summary disposition under MCR 2.116(C)(8) and (10), but plaintiffs never cite to their
complaint to explain how it states claims upon which relief could be granted, nor do they point to
what evidence in the record created a genuine issue of material fact such that those claims should
survive a (C)(10) motion. Instead, plaintiffs make legal conclusions about what the evidence will
show without reference to the record, and then contend that those unsupported assertions warrant
reversal. It is well established that “[i]t is not enough for an appellant to simply announce a
position or assert an error in his or her brief and then leave it up to this Court to discover and
rationalize the basis for the claims, or unravel and elaborate the appellant’s arguments, and then
search for authority either to sustain or reject the appellant’s position.” DeGeorge v Warheit, 276
Mich App 587, 594-595; 741 NW2d 384 (2007). In light of plaintiffs’ failure to adequately
develop their arguments, cite to the record to support their claims, and cite binding legal authority
to sustain their positions, they have abandoned their appeal.
Because plaintiffs abandoned their appeal, we need not address the substance of the trial
court’s opinion, but we do so for the sake of thoroughness.
-3-
A. FRAUDULENT INDUCEMENT OR MISREPRESENTATION
To establish a claim of fraudulent inducement or misrepresentation, plaintiffs are required
to prove “(1) the defendant made a material representation; (2) the representation was false; (3)
when the representation was made, the defendant knew that it was false, or made it recklessly,
without knowledge of its truth, and as a positive assertion; (4) the defendant made it with the
intention that the plaintiff should act upon it; (5) the plaintiff acted in reliance upon the
representation; and (6) the plaintiff thereby suffered injury.” Roberts v Saffell, 280 Mich App 397,
403; 760 NW2d 715 (2008). See also Custom Data Solutions, Inc v Preferred Capital, Inc, 274
Mich App 239, 243; 733 NW2d 102 (2006). “An action for fraudulent misrepresentation must be
predicated upon a statement of past or existing fact.” Marrero v McDonnell Douglas Capital
Corp, 200 Mich App 438, 444; 505 NW2d 275 (1993).
As relevant to their claims of fraud, plaintiffs in their complaint stated:
19. The Plaintiffs herein relied upon DETERGRNT [sic] SOLUTIONS,
and MICHAEL KLINE’S misrepresentations and untrue statements of fact, when
they entered into the contract for their purchase of Dexter Laundromat Equipment
using DEXTER FINANCIAL SERVICES, INC., a Defendant herein,[1] as directed
by them, and said misrepresentations were and are the direct and proximate cause
of the monetary damages the Plaintiffs herein have suffered from January 7, 2016,
the date the contract was signed to the present, and continue into the future.
* * *
21. DETERGENT SOLUTIONS, and MICHAEL KLINE, the Defendants
herein, made misrepresentations to the Plaintiffs herein knowing the same to be
untrue regarding the benefits of a laundromat for the Plaintiffs herein location,
which induced the Plaintiffs herein to enter into the contract for the purchase [of]
$401,110 of said Dexter Laundromat Equipment using DEXTER FINANCIAL
SERVICES, INC., the other Defendant herein, to provide the money for said
purchases . . . .
* * *
24. DETERGENT SOLUTIONS, and MICHAEL KLINE, Defendants
herein, fraudulently induced the Plaintiffs herein prior to signing the contract to
enter into the contract for the Dexter Laundromat Equipment, and financing
thereof . . . by making material false statements of fact intending the Plaintiffs to
rely thereon without knowledge of their falsity, and the Plaintiffs’ reliance thereon
has caused the Plaintiffs’ continuing damage.
1
Plaintiffs originally named Dexter Financial Services as a defendant, but their action against them
was dismissed for reasons unrelated to this case, hence why they are not a party to this appeal.
-4-
“Fraud claims must be pleaded with particularity, addressing each element of the tort.”
Stephens v Worden Ins Agency, LLC, 307 Mich App 220, 229-230; 859 NW2d 723 (2014). See
also MCR 2.112(B)(1) (“In allegations of fraud or mistake, the circumstances constituting fraud
or mistake must be stated with particularity.”). Paragraphs 19 and 24 do not contain any factual
allegations and instead merely recite legal conclusions to support plaintiffs’ claims. Such
pleadings need not be taken as true for purposes of MCR 2.116(C)(8), and are therefore insufficient
to survive a motion for summary disposition under that rule. Accord Davis v City of Detroit, 269
Mich App 376, 379 n 1; 711 NW2d 462 (2005) (“Plaintiff’s reliance on her allegation in her
complaint that the city was engaged in a proprietary activity is unwarranted because only factual
allegations, not legal conclusions, are to be taken as true under MCR 2.116(C)(7) and (8).”). In
¶ 20, plaintiffs allege that defendant made statements about “the benefits of a laundromat for the
Plaintiffs herein location.” Assuming that this allegation is sufficiently particular to survive the
pleading requirements for fraud, it still does not state a claim upon which relief can be granted
because it alleges that Kline made inaccurate statements about future events (the success of a
laundromat at the selected location), which is not a misrepresentation of existing or past facts
necessary to support a claim of fraud. See Cummins v Robinson Twp, 283 Mich App 677, 695;
770 NW2d 421 (2009) (“At most, plaintiffs allege that defendants made intentional, inaccurate
statements regarding the law or stated opinions about future events (repair costs), which were not
misrepresentations of existing or past facts necessary to support a claim of fraud. So plaintiffs’
complaint fails to state a claim for which relief can be granted.”). Plaintiffs’ complaint does not
otherwise state with particularity each element of their fraud claims. Therefore, their complaint
fails to state a claim for either fraudulent inducement of fraudulent misrepresentation. MCR
2.116(C)(8)
These same claims fail under MCR 2.116(C)(10). At the hearing in the trial court, plaintiffs
made clear that their “chief complaint is the laundromat’s location.” That continues to be their
main complaint on appeal—that they built the laundromat where they did based on Kline’s
representations that the laundromat would flourish in the selected location. But, again, even if
Kline made representations about the success of the laundromat at the selected location, those
statements were about future events, not existing or past facts, and so do not support plaintiffs’
claims of fraud. See Cummins, 283 Mich App at 695.
For whatever reason, plaintiffs do not mention as a basis for their claims for fraud that
Bilbeisi testified that Kline promised him that the laundromat would earn $24,000 per month. “It
is axiomatic that where a party fails to brief the merits of an allegation of error, the issue is deemed
abandoned by this Court.” Prince v MacDonald, 237 Mich App 186, 197; 602 NW2d 834 (1999).
Even if we consider this testimony of Bilbeisi, we conclude that it is not sufficient to save
plaintiffs’ fraud claims. First, it is unclear the contours of Kline’s promise. While Bilbeisi indeed
testified that Kline “promised” that the laundromat would earn $24,000 per month, he never
specified what Kline actually said or when Kline made this “promise.” Second, when questioned
at his deposition further about Kline’s promise that the laundromat would make $24,000 per
month, Bilbeisi conceded that he did not actually follow all of Kline’s recommendations for
operating the laundromat. Lastly, Bilbeisi testified that the $24,000 per month “promise” was
based on “turns” of his washing machines, but did not provide any further details. In plaintiffs’
response to defendants’ motion for summary disposition, plaintiffs asserted that Kline “represented
by text message directed to the Plaintiffs herein that in the laundromat industry the machines
-5-
average 3.5 turns per day, and that his guess in Ann Arbor the turns per machine could be as high
as 4 to 5 turns per day, and he wouldn’t be surprised if said machines would be as high 9 or 10
turns per day.” Yet, for whatever reason, plaintiffs never produced those text messages, so we are
unable to discern what Kline actually represented. In sum, viewing this evidence in the light most
favorable to plaintiffs, we can only conclude that Kline promised Bilbeisi that the laundromat
would make $24,000 per month, but cannot determine anything about the circumstances
surrounding that promise.
In light of the limitedness of this evidence, we agree with the trial court that a reasonable
juror could only conclude that Kline’s representation was sales puffing. In Van Tassel v McDonald
Corp, 159 Mich App 745, 750; 407 NW2d 6 (1987), this Court stated, “An action for fraud may
not be predicated upon the expression of an opinion or salesmen’s talk in promoting a sale, referred
to as puffing.” Thirty years before Van Tassel, our Supreme Court explained:
[W]e are here in the realm of what the common law has for years termed “puffing,”
a salesman’s praise of his own property, involving matters of estimate or judgment
upon which reasonable men may differ. Ordinarily these are not regarded as
actionable, even though the vendee’s joys of realization fall short of those of his
anticipation. The reason for this lies in the realities of commercial intercourse. As
Judge Learned Hand put it in Vulcan Metals Co v Simmons Mfg Co, 248 F 853, 856
(CA 2, 1918):
There are some kinds of talk which no sensible man takes seriously,
and if he does he suffers from his credulity. If we were all
scrupulously honest, it would not be so; but, as it is, neither party
usually believes what the seller says about his own opinions, and
each knows it. Such statements, like the claims of campaign
managers before election, are rather designed to allay the suspicion
which would attend their absence than to be understood as having
any relation to objective truth.
[Hayes Const Co v Silverthorn, 343 Mich 421, 426; 72 NW2d 190 (1955).]
Kline’s representation that the laundromat would earn $24,000 per month was Kline’s opinion,
which he made for purposes of promoting the product he was selling. That plaintiffs’ realization
fell short of Kline’s promotion is a “realit[y] of commercial intercourse.” Id. Because a claim of
fraud cannot be predicated on a salesman’s “puffing,” we conclude that Kline’s representation that
the laundromat would make $24,000 per month was not actionable fraud.
B. NEGLIGENT MISREPRESENTATION
“A claim for negligent misrepresentation requires plaintiff to prove that a party justifiably
relied to his detriment on information prepared without reasonable care by one who owed the
relying party a duty of care.” Alfieri v Bertorelli, 295 Mich App 189, 194; 813 NW2d 772 (2012).
Thus, a claim for negligent misrepresentation “require[s] a defendant to owe a duty to the
plaintiff.” Id.-6-
In support of their claim for negligent misrepresentation, plaintiffs stated in their
complaint:
22.. ln the alternative DETERGENT SOLUTIONS, and MICHAEL
KLINE, Defendants herein, did not use reasonable care in regard to their
representations of fact made to the Plaintiffs herein that did lead the Plaintiffs herein
to enter into the contract to purchase and finance the laundromat equipment, and
the Plaintiffs herein were and are the victims of the Defendants’ herein ‘negligent
misrepresentations’.
Clearly, ¶ 22 does not state what duty defendants owed plaintiffs, and plaintiffs failed to otherwise
specify the duty that defendants owed plaintiffs elsewhere in their complaint. Thus, plaintiffs
failed to state a claim for negligent misrepresentation, and summary disposition was properly
granted under MCR 2.116(C)(8).
Defendants were also entitled to summary disposition on plaintiffs’ negligent
misrepresentation claim under MCR 2.116(C)(10). Defendants asserted in the trial court that
“Plaintiff[s] cannot establish that Defendant[s] breached any duty of care owed to Plaintiff[s],”
and pointed to Bilbeisi’s testimony that defendants performed all of their obligations under the
parties’ agreement. In response, plaintiff failed to identify any duty that defendants owed
plaintiffs, or to provide record evidence tending to establish a question of fact whether defendants
owed plaintiffs a duty. Thus, plaintiffs failed to establish whether defendants owed plaintiffs a
duty, so summary disposition to defendants on plaintiffs’ negligent misrepresentation claim was
proper. See Quinto v Cross & Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996) (explaining
that a moving party is entitled to summary disposition if they can “demonstrate to the court that
the nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving
party’s claim”).
Affirmed.
/s/ Patrick M. Meter
/s/ Jane M. Beckering
/s/ Colleen A. O’Brien
-7-