Michigan Court of Appeals Unpublished Criminal Case Summaries: January 31, 2014.

Byline: MILW Staff

--(January 23, 2014) MICHIGAN COURT OF APPEALS UNPUBLISHED CASES Business Law Parties made binding contract in vehicle repurchase case Where a car dealer offered to repurchase plaintiff's vehicle, the dealer accepted plaintiff's counteroffer by asking for the documentation necessary to issue plaintiff a check. The trial court correctly determined that the parties formed a binding contract, and that the dealer breached the agreement by refusing to proceed. Background Plaintiff bought a new vehicle from defendant. Plaintiff took the vehicle to defendant for service 20 times in two years. Plaintiff hired an attorney to press federal and state statutory breach-of-warranty claims. In May 2009, defendant began negotiations to buy the vehicle back from plaintiff. Plaintiff's attorney rejected defendant's initial offer. In August, defendant then made what it termed as its "final settlement offer." Plaintiff responded to the offer by agreeing to settle for a $4,100 payment to plaintiff and a payment to the vehicle's lienholder of approximately $53,220. Plaintiff's response also provided, "Client shall not be responsible for making any further payments and Lexus agrees to satisfy the loan balance in full." Defense counsel did not answer plaintiff's response. A few days later, defendant asked plaintiff's counsel to provide a current registration for the vehicle and a W-9 form to obtain the law firm's taxpayer identification number. Plaintiff provided the requested documents. On Sept. 22, plaintiff informed defense counsel that ISG, the transfer agent to which the vehicle would be surrendered, sought to arranger a surrender date. Plaintiff said the actual surrender of the vehicle would be delayed because the vehicle had been vandalized and was in the body shop. On Oct. 8, defendant emailed plaintiff. Defendant noted that the vehicle was still not available for repurchase, and that plaintiff was accumulating addition miles on it. Defendant said although the settlement had been based on the vehicle's mileage as of May 9, defendant would not seek a deduction for the extra miles. Defendant also noted that plaintiff was behind three payments on the car, totaling $4,570, which was more that what defendant was required to tender under the settlement. Defendant said it would not buy back the vehicle until plaintiff brought the account current with the lienholder. Defendant issued an Oct. 16 deadline. Plaintiff responded that no additional payments were required. Defendant refused to perform. Plaintiff sued. The trial court ruled that defendant breached the agreement. The Court of Appeals affirmed. Contract formation The trial court correctly determined "that a binding settlement was reached. "A review of the documentation reveals that on August 19, 2009, defense counsel sent a letter of final settlement with a settlement amount of $54,893.68 less $53,218.87 to the lienholder, $1,674.81 to plaintiff, and $2500 to plaintiff's attorney for fees. "The settlement amount acknowledged that the amount due the lienholder would increase after August 24, 2009. That is, the lien amount would increase after August 24, 2009, and plaintiff would be required to make additional payments to the lienholder if the deal was not completed by that date. "Consequently, in response, plaintiff's counsel sent a letter of acceptance, but noted that 'Client shall not be responsible for making any further payments and Lexus agrees to satisfy the loan balance in full.' "Defense counsel never sent any correspondence in return rejecting that phrase, irrespective of whether it is classified as an 'additional' term or 'counteroffer.' The next activity consisted of Horstman (defendant's representative] requesting a copy of the vehicle's current registration and the W- 9 form for the law firm. "Thus, defense counsel forwarded the acceptance by plaintiff's counsel to Horstman, and her actions indicated that the parties had reached a settlement because she took steps to obtain the documentation to order the check for plaintiff. "She also must have notified ISG ... and on or before September 22, 2009, ISG contacted plaintiff's counsel to complete the transaction by surrender of the vehicle. "The trial court held that counsel's statement that plaintiff would not be required to make any additional payments constituted an additional term and that defendant accepted this term by its conduct. "In light of the record evidence, we cannot conclude that the trial court clearly erred in this factual determination. ... "In response to the statement that plaintiff would not make any additional payments, defendant never objected and its subsequent action indicated its acceptance. "Moreover, Horstman acknowledged that there essentially was no change to the offer if the deal was completed by August 24, 2009. Specifically, she testified that a check could be 'cut' within a day. "It is unclear why defendant did not simply issue a check to the lienholder by that date to avoid this dispute. "In light of the actions by defendant's agent following receipt of plaintiff's response to the offer, defendant's contention that the trial court erred in holding that a valid and enforceable contract existed is without merit." Yaldo v. Toyota Motor Sales. (MiLW No. 08-84080 - 9 pages) (Michigan Court of Appeals) (unpublished per curiam) (M.J. Kelly, Wilder and Fort Hood, JJ.) On appeal from the Oakland County Circuit Court; Langford-Morris, J.

Business Law Sufficient evidence to support fraud in the inducement claim Where a home builder invested in defendant's development based on representations that defendant would provide amenities suitable for an "upscale" development, the trial court correctly sent to the jury plaintiff's claim of fraud in the inducement when the promised amenities were not furnished. A $2.5 million damage award is affirmed. Background Kheder, a home builder, became involved with Singh Homes Charleston Park in a real estate development. He dealt with Gary and Darshan Grewal. "According to Kheder, Gary and Darshan conveyed to him that they would develop Charleston Park as an upscale, sophisticated development to attract affluent clients; specifically, the subdivision would contain wrought iron fences surrounding detention ponds, fountains in detention ponds, ornate decorative light posts, a children's play area (or 'tot lot') as a focal point, and landscaped irrigated common areas and cul-de-sac islands planted with grass from sod. ... "Kheder envisioned selling homes in Charleston Park for about $300,000 to $400,000 each. "On September 7, 2005, plaintiff and Singh Homes Charleston Park entered into an option agreement with a commencement date of September 21, 2005. "Under the option agreement, in which Charleston Park Singh undertook certain duties as 'the Developer,' plaintiff paid an option fee of $1,500,000 for the right to purchase 96 lots in phase 1 of the Charleston Park subdivision. Plaintiff was to build homes on the lots and sell the lots to home buyers. ... "According to Kheder, Singh never developed the Charleston Park subdivision as promised despite his repeated requests; the various amenities were either never provided or provided in an unsatisfactory manner below the standards promised for an upscale development. "Although plaintiff sold a few homes, plaintiff's venture, the timing of which corresponded with the fall of the real-estate market in the United States, was ultimately unsuccessful. "In correspondence dated August 26, 2009, Darshan, signing as manager for Singh Homes Charleston Park, notified Kheder that he was terminating the option agreement between plaintiff and Singh Homes Charleston Park." In the trial court "Plaintiff brought this action against defendants for fraud in the inducement, and the trial court conducted a jury trial. "The jury found that Darshan, acting on behalf of Singh Homes Charleston Park and Charleston Park Singh, made a promise to plaintiff, intending that plaintiff rely on it, and knowing that Singh Homes Charleston Park and Charleston Park Singh did not intend to keep the promise. "The jury found that plaintiff relied on the promise, that Charleston Park Singh breached the promise, and that the breach caused damage to plaintiff. "The jury found that plaintiff did not prove that Darshan made a false promise on his own behalf or that Gary made a false promise on behalf of a corporate defendant or on his own behalf. "The jury awarded damages to plaintiff in the amount of $2,502,338.71. The trial court entered a judgment in favor of plaintiff on the basis of its fraud claim 'against Charleston Park Singh, L.L.C. (pursuant to vicarious liability) and Darshan Grewal, in the total amount of $2,502,338.71.' "Defendants moved the trial court for a new trial or, alternatively, for judgment notwithstanding the verdict (JNOV) or remittitur. The trial court denied the motion." Causation "(W]e conclude that a factual question existed regarding whether the fraud caused plaintiff's damages. More specifically, we conclude that a reasonable person could find that the loss of plaintiff's investment in the Charleston Park subdivision was the natural and proximate consequence of the misrepresentation that defendants would develop the subdivision as an upscale development (with amenities) comparable to other upscale Singh residential developments, particularly Churchill Crossing and Tollgate in Novi. ... "There was abundant evidence at trial that defendants did not develop Charleston Park into an upscale subdivision as promised. Instead of wrought iron fencing, chain link fencing surrounded the detention pound. No fountains were installed. And the subdivision did not have light posts, let alone light posts of the ornate decorative variety. Although a tot lot was provided, it was installed much later than expected. Not all common areas and islands were irrigated and landscaped with grass from sod. ... "Furthermore...