Baby Buford Port Huron, LLC v. Port Huron Realty Partners, LLC

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BABY BUFORD PORT HURON, LLC, Plaintiff/Counterdefendant-Appellant, v. PORT HURON REALTY PARTNERS, LLC, Defendant/Counterplaintiff-Appellee, and BRIAN ZETOUNA and FAH PORT HURON, LLC, Defendants-Appellees.

No. 364549

Court of Appeals of Michigan

November 30, 2023

UNPUBLISHED

St Clair Circuit Court LC No. 20-002152-CZ

Before: MURRAY, P.J., and CAMERON and PATEL, JJ.

PER CURIAM.

In this dispute arising from a commercial lease agreement, plaintiff Baby Buford Port Huron, LLC, appeals as of right following entry of a judgment of no cause of action entered in favor of defendants Port Huron Realty Partners, LLC ("PHRP"), Brian Zetouna, and FAH, Port Huron, LLC following a bench trial. On appeal, Baby Buford challenges the trial court's decision on the merits, as well as the earlier orders denying its motion for partial summary disposition, striking Baby Buford's jury demand and granting defendants' motion for a bench trial. We affirm.

I. BACKGROUND

This case arises from a landlord-tenant dispute over real property in Port Huron. On July 8, 2015, Baby Buford entered into a lease agreement with the Charles F. Barrett Trust to lease the property, on which it subsequently operated a Checkers restaurant. The lease had a 10-year term, with an expiration date in July 2025. On March 14, 2016, PHRP purchased the property and became the landlord. In early 2020, Baby Buford became engaged in a franchise dispute that resulted in a closure of the Checkers restaurant. Baby Buford, however, denies that it abandoned or surrendered the property or equipment.

In August 2020, Baby Buford sent some workers to the property to collect its equipment. Zetouna arrived and refused to permit them to remove the equipment. The police were called and prohibited Baby Buford's workers from taking any of the equipment until the parties resolved their dispute in court. In October 2020, Baby Buford became aware that PHRP had leased the property to defendant FAH, which eventually began operating a restaurant on the property. Baby Buford alleged that some of its equipment had been removed by PHRP, or converted by PHRP and FAH to their own use.

Baby Buford then filed this action in October 2021 and, as relevant to this appeal, asserted claims for violation of the anti-lockout statute (MCL 600.2918), conversion, and claim and delivery.^[1] Baby Buford filed a motion for partial summary disposition under MCR 2.116(C)(9) and (10), which the trial court denied. Although Baby Buford had filed a jury demand, the trial court granted PHRP's motion to strike the jury demand and ordered a bench trial in accordance with the terms of the parties' lease agreement. Following the bench trial, the trial court issued a detailed opinion in which it found that PHRP met its burden of establishing its defense of abandonment, which was a complete defense to all of Baby Buford's claims. Although the court noted that it was unnecessary to address Baby Buford's alleged damages, it found that plaintiff failed to offer competent evidence to establish its damages with reasonable certainty. Accordingly, the court entered a judgment of no cause of action in favor of defendants.

II. SUMMARY DISPOSITION

Baby Buford first argues that the trial court erred by denying its motion for summary disposition under MCR 2.116(C)(9) and (10).

A trial court's decision on a motion for summary disposition is reviewed de novo. Maiden v Rozwood, 461 Mich. 109, 118; 597 N.W.2d 817 (1999). Baby Buford moved for summary disposition under MCR 2.116(C)(9) and (10). In Village of Dimondale v Grable, 240 Mich.App. 553, 564; 618 N.W.2d 23 (2000), this Court explained:

Summary disposition under MCR 2.116(C)(9) is proper if a defendant fails to plead a valid defense to a claim. Nicita v Detroit (After Remand), 216 Mich.App. 746, 750; 550 N.W.2d 269 (1996). A motion under MCR 2.116(C)(9) tests the sufficiency of a defendant's pleadings by accepting all well-pleaded allegations as true. Lepp v Cheboygan Area Sch, 190 Mich.App. 726, 730; 476 N.W.2d 506 (1991). If the defenses are" 'so clearly untenable as a matter of law that no factual development could possibly deny plaintiff's right to recovery,'" then summary disposition under this rule is proper. Id., quoting Domako v Rowe, 184 Mich.App. 137, 142; 457 N.W.2d 107 (1990).

Additionally, as explained in Auto-Owners Ins Co v Campbell-Durocher Group Painting &Gen Contracting, LLC, 322 Mich.App. 218, 224; 911 N.W.2d 413 (2017):

"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." West v Gen Motors Corp, 469 Mich. 177, 183; 665 N.W.2d 468 (2003). A genuine issue of material fact exists "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 N.W.2d 8 (2008).

A trial court's interpretation and application of the court rules is reviewed de novo. Duckett v Solky, 341 Mich.App. 706, 720; 991 N.W.2d 852 (2022).

Initially, we disagree with Baby Buford that it was entitled to summary disposition under MCR 2.116(C)(9) on the basis that defendants waived the defense of abandonment by failing to assert it in their first responsive pleading. A party is generally required to raise an affirmative defense in the party's first responsive pleading, or the defense is considered waived. MCR 2.111(F)(2); Dell v Citizens Ins Co of America, 312 Mich.App. 734, 753; 880 N.W.2d 280 (2015). The record discloses that defendants responded to Baby Buford's complaint by filing an Answer and Affirmative Defenses to Include Counterclaim. An answer to a complaint, by definition, is a pleading. MCR 2.110(A)(5). While defendants did not expressly raise the defense of abandonment in the affirmative defenses portion of this pleading, they asserted as follows in Paragraphs 16, 28, and 62 of their answer:

. . . Plaintiff not only abandoned the property, but Plaintiff spray-painted the doors, windows, and signs [on] the property black.

. . . Defendant did not need to initiate an eviction proceeding because Plaintiff abandoned the property.

. . . Plaintiff abandoned the property. Plaintiff had a legal right to take possession back.

We conclude that defendants sufficiently raised the defense of abandonment in their first responsive pleading, which provided Baby Buford with ample notice of defendants' position that Baby Buford could not establish its claims because it had abandoned the property. Defendants did not waive this defense.

With respect to the second part of this argument, Baby Buford argues that the trial court failed to properly apply the standards for reviewing a motion under MCR 2.116(C)(10). Specifically, Baby Burford argues that it filed a properly supported motion under MCR 2.116(C)(10), but that PHRP did not properly respond to the motion by raising specific facts (as opposed to conclusory assertions) creating a genuine issue of material fact.

As Baby Buford argues, when a motion for summary disposition under MCR 2.116(C)(10) is supported as provided under MCR 2.116(G)(4), the opposing party may not merely rely on conclusory allegations, but has an obligation to set forth specific facts, by affidavit or as otherwise provided in the court rule, showing that a genuine issue of material fact exists. Lowrey v LMPS &LMPJ, Inc, 500 Mich. 1, 6-8; 890 N.W.2d 344 (2016). Baby Buford properly supported its motion, as required by MCR 2.116(G)(3)(b), by submitting depositions transcripts, affidavits, written documents, and discovery responses. Although admittedly slim, PHRP did submit evidence in support of their response to Baby Buford's motion. In particular, PHRP attached answers to interrogatories and requests to admit, as well as an affidavit from Zetouna.

As a defense to each of Baby Buford's claims, defendants asserted that Baby Buford abandoned the property. To establish the defense of abandonment, a party is required to show "both an intent to relinquish the property and external acts putting that intention into effect." Ambs v Kalamazoo Co Rd Comm, 255 Mich.App. 637, 652; 662 N.W.2d 424 (2003).

After considering all of the evidence before the trial court when it ruled on Baby Buford's motion for summary disposition-which includes the evidence submitted by both^[2] parties-we conclude that the trial court did not err by finding that there were genuine issues of material fact regarding whether Baby Buford abandoned the property, which would be fatal to Baby Buford succeeding on each of its claims, thereby precluding summary disposition under MCR 2.116(C)(10). In particular, the evidence submitted by both parties demonstrated that there were issues of material fact regarding (1) whether and when Baby Buford ceased paying rent, (2) whether and when Baby Buford discontinued utility payments, (3) whether and when Baby Buford undertook external actions to effectuate an intent to abandon the property, such as through blocking signage, removing some personal property, and leaving the outside premises unkept. Additionally, there was evidence submitted that Zetouna was aware of the condition of the building and the lack of utility and rent payments as early as April 2020, and had instructed his counsel to inform Baby Buford of the rent deficiencies. Under these circumstances, the trial court did not err by denying Baby Buford's motion for summary disposition under MCR 2.116(C)(10).

III. JURY DEMAND

Baby Buford next argues that the trial court erred by striking Baby Buford's jury demand and granting defendants' motion for a bench trial.

This issue presents a matter of contract interpretation and a question of law, both of which are...