PRENTIS FAMILY FOUNDATION, INC. v. Barbara Ann Karmanos Cancer Inst.

698 N.W.2d 900

266 Mich. App. 39

The Meyer and Anna PRENTIS FAMILY FOUNDATION, Inc., Plaintiff-Appellant, v. BARBARA ANN KARMANOS CANCER Institute, Defendant-Appellee. and Honigman, Miller, Schwartz and Cohn, Defendant-Appellee.

The Meyer and Anna Prentis Family Foundation, Inc., Plaintiff-Appellee, v. Barbara Ann Karmanos Cancer Institute, Defendant-Appellant. and Honigman, Miller, Schwartz and Cohn, Defendant-Appellee.

Docket Nos. 249438, 249471.

Court of Appeals of Michigan.

Submitted January 18, 2005, at Detroit.

Decided February 10, 2005.

Approved for publication April 19, 2005, at 9:15 a.m.

Released for Publication June 7, 2005.

Mark L. Silverman, M.D., J.D., P.C. (by Mark L. Silverman, M.D.), Birmingham, for the Meyer and Anna Prentis Family Foundation, Inc.

Dickinson Wright PLLC (by Lawrence G. Campbell, Jennifer Uetz Hastings, and Paul R. Bernard), Detroit, for Barbara Ann Karmanos Cancer Institute.

Barris, Sott, Denn & Driker, P.L.L.C. (by Eugene Driker and Kevin Kalczynski), Detroit, for Honigman Miller Schwartz and Cohn LLP.

Before: MARKEY, P.J., and FITZGERALD and OWENS, JJ.

PER CURIAM.

Plaintiff appeals by right an order summarily dismissing Honigman Miller Schwartz and Cohn (HMSC) as a defendant. Plaintiff also appeals an order granting summary disposition of its claim for legal damages against defendant Barbara A. Karmanos Cancer Institute¹ formerly known as the Michigan Cancer Foundation, which merged with the Comprehensive Cancer Center of Metropolitan Detroit (the center). Karmanos Cancer Institute appeals by right an order finding that it breached its agreement with plaintiff. This case arose out of a 1985 endowment agreement in which the donees agreed to rename the center the Meyer L. Prentis Comprehensive Cancer Center of Metropolitan Detroit (MLPCCCMD). We affirm in part and reverse in part.

Plaintiff first argues the court should not have dismissed HMSC as a defendant because HMSC owed plaintiff a duty where plaintiff relied on HMSC, and HMSC engaged in a conflict of interest by representing multiple parties in the 1985 contract. We disagree.

A trial court's grant of summary disposition pursuant to MCR 2.116(C)(10), on the ground that there is no factual support for a claim, is reviewed de novo. Dressel v. Ameribank, 468 Mich. 557, 561, 664 N.W.2d 151 (2003). A grant of summary disposition pursuant to MCR 2.116(C)(8) for failure to state a legally sufficient claim is also reviewed de novo. Adair v. Michigan, 470 Mich. 105, 119, 680 N.W.2d 386 (2004). And a grant of summary disposition pursuant to MCR 2.116(C)(7) is likewise reviewed de novo. Id., citing Maskery v. Univ. of Michigan Bd. of Regents, 468 Mich. 609, 613, 664 N.W.2d 165 (2003). Questions of law are subject to review de novo. Sills v. Oakland Gen. Hosp., 220 Mich.App. 303, 307, 559 N.W.2d 348 (1996).

When a fiduciary relationship exists, the fiduciary has a duty to act for the benefit of the principal regarding matters within the scope of the relationship. Teadt v. Lutheran Church Missouri Synod, 237 Mich.App. 567, 581, 603 N.W.2d 816 (1999), citing Melynchenko v. Clay, 152 Mich.App. 193, 197, 393 N.W.2d 589 (1986). Whether a duty exists is a question of law for the court to decide. Harts v. Farmers Ins. Exch., 461 Mich. 1, 6, 597 N.W.2d 47 (1999). "[A] fiduciary relationship arises from the reposing of faith, confidence, and trust and the reliance of one on the judgment and advice of another." Teadt, supra at 580-581, 603 N.W.2d 816, citing Vicencio v. Ramirez, 211 Mich.App. 501, 508, 536 N.W.2d 280 (1995). However, the placement of trust, confidence, and reliance must be reasonable, and placement is unreasonable if the interests of the client and nonclient are adverse or even potentially adverse. Beaty v. Hertzberg & Golden, PC, 456 Mich. 247, 260-261, 571 N.W.2d 716 (1997). The only ground plaintiff gave for finding that its trust, confidence, and reliance was reasonable was that a representative of plaintiff was a board member of the center. However, when an attorney is hired to represent a corporation, his client is the corporation rather than the shareholders. Scott v. Green, 140 Mich. App. 384, 400, 364 N.W.2d 709 (1985) (Kirwan, J., concurring) (explicitly adopted by the majority at 386, 364 N.W.2d 709), citing Fassihi v. Sommers, Schwartz, Silver, Schwartz & Tyler, PC, 107 Mich.App. 509, 514, 309 N.W.2d 645 (1981). See also Macomb Co. Prosecutor v. Murphy, 233 Mich. App. 372, 386, 592 N.W.2d 745 (1999) (citing MRPC 1.13[a]), reversed on other grounds 464 Mich. 149, 627 N.W.2d 247 (2001). Although an attorney must necessarily communicate with a corporation's human agents to effectively represent the corporation, Diversified Industries, Inc. v. Meredith, 572 F.2d 596, 602 (C.A.8, 1977), the purpose of the communication is representation of the corporation, not the agents themselves.

While a corporation and a shareholder may be treated as one entity for certain purposes when there is a complete identity of interests, Kline v. Kline, 104 Mich.App. 700, 702-703, 305 N.W.2d 297 (1981), a complete identity of interests did not exist here. Plaintiff's purpose for entering the endowment contract was to memorialize the Meyer L. Prentis name, while the center's purpose was to obtain financing for cancer research. There is no indication that failure to legally change the center's name injured the center. Therefore, plaintiff's interests diverged from those of the center, and plaintiff failed to point to an action on HMSC's part that might signify HMSC was representing plaintiff rather than the center. Scott, supra at 400-401, 364 N.W.2d 709 (Kirwan, J., concurring). Moreover, HMSC's relationship with the center was one of agency, and "[a]gency agreements do not create rights in third parties." Uniprop, Inc. v. Morganroth, 260 Mich.App. 442, 446, 678 N.W.2d 638 (2004), citing Koppers Co., Inc. v. Garling & Langlois, 594 F.2d 1094 (C.A.6, 1979). Thus, plaintiff failed to demonstrate that HMSC owed it an independent fiduciary duty. See Beaty, supra at 260-261, 571 N.W.2d 716.

Plaintiff next argues that the court erred in granting HMSC summary disposition on the ground that the period of limitations had expired because MCL 600.5855 operated to toll any period of limitations where HMSC fraudulently concealed the fact that the center's name was never changed and where plaintiff properly pleaded fraudulent concealment.² We disagree. An affirmative defense does not deny the allegations of the plaintiff's complaint; rather it claims—"on some ground not disclosed in the plaintiff's pleadings"—that the plaintiff is not entitled to recovery. Stanke v. State Farm Mut. Automobile Ins. Co., 200 Mich.App. 307, 312, 503 N.W.2d 758 (1993). An assertion that a claim is barred by a statute of limitations is an affirmative defense. MCR 2.111(F)(3)(a).³ Which statute of limitations applied, whether the statute was tolled, and when the limitations period ended are questions of law. Wickings v. Arctic Enterprises, Inc., 244 Mich.App. 125, 147, 624 N.W.2d 197 (2000).

The trial court found that, whether the applicable period of limitations was two years under MCL 600.5805(6) or three years, plaintiff's claims were barred. We disagree with HMSC that the period of limitations for malpractice under MCL 600.5805(6) should apply. The conduct required to constitute a breach of fiduciary duty requires a more culpable state of mind than the negligence required for malpractice. Damages may be obtained for a breach of fiduciary duty when a "position of influence has been acquired and abused, or when confidence has been reposed and betrayed." Vicencio, supra at 508, 536 N.W.2d 280.

In Local 1064, RWDSU AFL-CIO v. Ernst & Young, 449 Mich. 322, 328, 535 N.W.2d 187 (1995), our Supreme Court, citing the reasoning of Nat'l Sand, Inc. v. Nagel Constr., Inc., 182 Mich.App. 327, 332-337, 451 N.W.2d 618 (1990), concluded that MCL 600.5805 set forth the periods of limitations "for traditional common-law torts, regardless of whether the damages sought [were] for pecuniary or physical injury." In Nat'l Sand, Inc, this Court noted that "injuries to persons" was broadly interpreted to include invasions of rights such as "loss of consortium, libel, slander and deprivation of civil rights." Id. at 335, 451 N.W.2d 618. Therefore, plaintiff's loss of naming rights was in the purview of MCL 600.5805(10) and was subject to a three-year period of limitations. Plaintiff filed suit July 27, 2000; thus, plaintiff was barred from bringing suit under MCL 600.5805(10) if plaintiff's claim accrued before July 27, 1997.

"A claim of breach of fiduciary duty or breach of trust accrues when the beneficiary knew or should have known of the breach." Bay Mills Indian Community v. Michigan, 244 Mich.App. 739, 751, 626 N.W.2d 169 (2001), citing Baks v. Moroun, 227 Mich.App. 472, 493-494, 576 N.W.2d 413 (1998), which was overruled in part Estes v. Idea Engineering & Fabricating, Inc., 250 Mich.App. 270, 278, 649 N.W.2d 84 (2002). The "knew or should have known" language indicates that when a claim accrues is subject to an objective standard. "[A] plaintiff is deemed to be aware of a possible cause of action when he becomes aware of an injury and its possible cause." Shawl v. Dhital, 209 Mich.App. 321, 325, 529 N.W.2d 661 (1995), citing Moll v. Abbott Laboratories, 444 Mich. 1, 24, 506 N.W.2d 816 (1993).⁴

Here, HMSC presented evidence that plaintiff's designee on the board of trustees was present when the merger between the center and the Michigan Cancer Foundation was discussed in 1994, and was present when the Karmanos gift and renaming was discussed and voted on in 1995. This indicated that plaintiff should have been aware of a possible cause of action at least by 1995. The "possible cause of action" standard encourages claimants to diligently investigate and pursue causes of action. Shawl, supra at 327, 529 N.W.2d 661. "Generally, for fraudulent concealment to postpone the...