Nicholas Logistics, Inc. v. Sargent Appliance Sales & Serv.

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NICHOLAS LOGISTICS, INC., Plaintiff-Appellant, v. SARGENT APPLIANCE SALES AND SERVICE, INC., Defendant-Appellee.

No. 359793

Court of Appeals of Michigan

March 23, 2023

UNPUBLISHED

Oakland Circuit Court LC No. 2020-182791-CB.

Before: Michelle M. Rick, P.J., and Michael J. Kelly and Michael J. Riordan, JJ.

PER CURIAM.

In this action arising from a contractual dispute between the parties, plaintiff appeals by right the trial court's order granting summary disposition in favor of defendant. We affirm.

I. BACKGROUND

This case arises out of a dispute between plaintiff and defendant over the terms of an oral contract that once existed between the parties. In 2014, plaintiff and defendant entered into an open-ended agreement in which plaintiff agreed to provide delivery and installation services for defendant, a company that sells home appliances. In exchange, defendant agreed to pay plaintiff on a per-delivery basis. The parties worked together with no notable issues for several years, and renegotiated the terms of their agreement once in mid-2019. At that point, plaintiff's owner, Nicholas De Smet, and defendant's part-owner and president, John Skolas discussed new delivery prices and the prospect of a written contract. In an e-mail to defendant's part-owner and president, John Skolas, plaintiff's owner, Nicholas De Smet, laid out new prices for particular deliveries and services, and stated that he wanted to enter into a written contract for a set duration of 12 to 24 months. A written contract was never signed, but the parties operated under the terms contained in the e-mail following the negotiations.

Plaintiff and defendant continued their business arrangement until early 2020, when the COVID-19 pandemic led to a statewide emergency shutdown per the Governor's Executive Order No. 2020-59. Under the order, only a select group of first-responders and essential workers were permitted to continue normal work operations, while everyone else in the state was ordered to stay at home. Skolas sent an e-mail to De Smet on March 29, 2020, stating that pursuant to the executive order, all delivered appliances were to be left in the garage or at the front door of customer's homes, and advising plaintiff that there would be no in-home installations. Plaintiff's employees adhered to those rules during the first few weeks following the shutdown, but on April 24, 2020, Skolas sent a text message to De Smet stating that in-home installations would resume the following week. De Smet disagreed with this decision and refused to allow plaintiff's employees to provide in-home installations until the order was lifted. As a result, Skolas immediately terminated defendant's agreement with plaintiff. Skolas then replaced plaintiff with a new trucking company.

Plaintiff thereafter filed a complaint alleging promissory estoppel, breach of contract, and breach of implied contract, and requested a declaratory judgment regarding the parties' obligations under the agreement. In lieu of filing an answer, defendant moved for summary disposition on all of plaintiff's claims pursuant to MCR 2.116(C)(7) (claim barred by operation of law), (8) (failure to state a claim), and (10) (no genuine issue of material fact). Plaintiff filed a response to the motion, then filed a first amended complaint before defendant's summary disposition motion was decided, rendering the first summary disposition motion moot.

Defendant later renewed its motion for summary disposition. A hearing was not held on the motion, and approximately six months after it was filed, the trial court granted summary disposition in favor of defendant, stating that it was granting the motion pursuant to MCR 2.116(C)(8) only. Plaintiff then filed a motion for reconsideration of the trial court's order granting summary disposition. Plaintiff contended that deposition testimony from Skolas, submitted for the first time with the motion for reconsideration, provided evidence that there were genuine issues of material fact on each of plaintiff's claims and that summary disposition was thus improperly granted. The trial court denied plaintiff's motion for reconsideration without providing any substantive explanation for doing so. This appeal followed.

II. ANALYSIS

Plaintiff argues that the trial court erred by granting summary disposition to defendant under MCR 2.116(C)(8) and MCR 2.116(C)(10). We disagree.

We review de novo a trial court's grant of summary disposition. El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 159; 934 N.W.2d 665 (2019). Defendant moved for summary disposition pursuant to MCR 2.116(C)(7), (C)(8), and (C)(10); on appeal, plaintiff challenges the trial court's ruling under MCR 2.116(C)(8) and (C)(10). We note that although the trial court stated that it granted summary disposition to defendant pursuant to MCR 2.116(C)(8), the parties clearly relied on evidence outside the pleadings, and the language used in the order granting summary disposition suggests that the trial court considered matters outside the pleadings in ruling on the motion. That being the case, it is appropriate to analyze plaintiff's claims under MCR 2.116(C)(10), rather than (C)(8). See Silberstein v Pro-Golf of America, Inc, 278 Mich.App. 446, 457; 750 N.W.2d 615 (2008) (stating that "[w]here a motion for summary disposition is brought under both MCR 2.116(C)(8) and (C)(10), but the parties and the trial court relied on matters outside the pleadings, as is the case here, MCR 2.116(C)(10) is the appropriate basis for review.").

A motion under MCR 2.116(C)(10) tests the factual sufficiency of a claim. El-Khalil, 504 Mich. at 160. When evaluating a (C)(10) motion, the trial court must consider all of the "affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties" in the light most favorable to the nonmovant. Estate of Trueblood v P &G Apartments, LLC, 327 Mich.App. 275, 284; 933 N.W.2d 732 (2019) (citation omitted). If the evidence does not establish that a genuine issue of material fact exists, then the moving party is entitled to judgment as a matter of law. Id. "A genuine issue of material fact exists when, after viewing the evidence in the light most favorable to the nonmoving party, reasonable minds could differ on the issue." Id.

A. PROMISSORY ESTOPPEL

The elements of promissory estoppel are "(1) a promise, (2) that the promisor should reasonably have expected to induce action of a definite and substantial character on the part of the promisee, and (3) that in fact produced reliance or forbearance of that nature in circumstances such that the promise must be enforced if injustice is to be avoided." Cove Creek Condo Ass'n v Vistal Land &Home Dev, Inc, 330 Mich.App. 679, 713; 950 N.W.2d 502 (2019) (quotation marks and citation omitted). "A promise is a manifestation of intention to act or refrain from acting in a specific way, so made as to justify a promisee in understanding that a commitment has been made." Zaremba Equip, Inc v Harco Nat'l Ins Co, 280 Mich.App. 16, 41; 761 N.W.2d 151 (2008) (quotation marks and citation omitted). "In determining whether a requisite promise existed, we are to objectively examine the words and actions surrounding the transaction in question as well as the nature of the relationship between the parties and the circumstances surrounding their actions." Novak v Nationwide Mut Ins Co, 235 Mich.App. 675, 687; 599 N.W.2d 546 (1999). A court must "exercise caution in evaluating an estoppel claim and should apply the doctrine only where the facts are unquestionable and the wrong to be prevented undoubted." Id.

Plaintiff contends that an agreement existed between the parties, and that plaintiff had the right to rely on it. Under that agreement, which began in 2014, plaintiff made deliveries for defendant for a set price. There was no agreed-upon end date, but the arrangement was subject to renewal at the end of each calendar year and could be terminated for cause. According to plaintiff, termination of the agreement required six months' advanced notice.

Plaintiff primarily relies on State Bank of Standish v Curry, 442 Mich. 76; 500 N.W.2d 104 (1993). The defendants in State Bank were dairy farmers who annually obtained an operating loan from the plaintiff bank, in order to finance the farm's operations. Id. at 79. In the mid-1980s, the federal government initiated a buyout program for dairy businesses. The defendants expressed interest in selling their dairy business. Id. at 80. The defendants went to the bank to discuss the buyout program and received explicit assurances that the bank would offer them an operating loan the following spring if they ended up deciding not to sell the business. Id. Believing that they would be able to get another loan to keep the business going, the defendants chose not to take the federal buyout. Id. at 80-81. The following year, the bank denied the defendants' application for a new operating loan. Id. at 81. After the bank filed suit for claim and delivery, the defendants brought a counterclaim of promissory estoppel stemming from the broken promise to renew the loan. Id. at 81-82. To support their claim, defendants relied both on the course of dealing between the parties and the statements made by the bank officers that the bank would renew the loan. Id. at 82-83. The jury returned a verdict in favor of the defendants on that claim. Id. Our Supreme Court agreed, reasoning that the defendants presented sufficient evidence that the bank had promised them that it would renew the loan. Id. at 92.

The key piece of evidence supporting the promissory estoppel claim in State Bank was that the bank made explicit assurances about renewing the defendants' loan the following year. There is no evidence...