Birou v. Thompson-Brown Co.

• Decision Date: 26 February 1976
• Docket Number: THOMPSON-BROWN,Docket Nos. 23689,23777
• Citation: 67 Mich.App. 502,241 N.W.2d 265
• Parties: Ronald F. BIROU and Beverly J. Birou, Plaintiffs-Appellees, v.COMPANY, a Michigan Corporation, Defendant-Appellant, and Homestead Corporation, a Michigan Corporation, Defendant-Appellant. 67 Mich.App. 502, 241 N.W.2d 265
• Court: Court of Appeal of Michigan — District of US

Page 265

241 N.W.2d 265

Ronald F. BIROU and Beverly J. Birou, Plaintiffs-Appellees, v. THOMPSON-BROWN COMPANY, a Michigan Corporation Defendant-Appellant and Homestead Corporation, a Michigan Corporation Defendant-Appellant.

Docket Nos. 23689, 23777.

67 Mich.App. 502, 241 N.W.2d 265

Court of Appeals of Michigan.

Feb. 26, 1976.

Released for Publication May 5, 1976.

Leave to Appeal Denied June 23, 1976.

[67 MICHAPP 505] Hartman, Beier, Howlett, McConnell & Googasian by Dean G. Beier, Bloomfield Hills, Hibbs, Lewis & Berg, P.C., by George R. Lewis, Mt. Clemens, for Thompson-Brown.

Robert A. Jacobs, Troy, for Homestead.

David M. Fried, Southfield, for plaintiffs-appellees.

Before HOLBROOK, P.J., and J. H. GILLIS and KELLY, JJ.

KELLY, Judge.

These are consolidated appeals of right from Oakland County Circuit Court. The cause was originally part of a class action but the instant case was severed for initial disposition and trial.

This case arose out of the purchase of a home and lot in the Meadowbrook Lake Subdivision in Novi. Plaintiffs alleged that defendant Thompson-Brown Company negligently and recklessly made false statements about the condition of Meadowbrook Lake while acting as agent for defendant Homestead Corporation, the subdivision developer. The representations were, Inter alia, that Meadowbrook Lake which abutted plaintiffs' property was suitable for swimming A jury found for the plaintiffs and against both defendants, and assessed plaintiffs' damages at $5,400. A separate hearing was held on cross-claims for indemnity between the two defendants. As a result of that hearing, the court dismissed the cross-claim of defendant Thompson-Brown and granted the cross-claim of defendant Homestead. Thereafter, the trial court denied Homestead's motion to reopen proofs so as to include costs and attorneys' fees within the indemnification order.

ranged in depth from 12 to 18 feet, had a sandy bottom, and was not polluted. [67 MICHAPP 506] Plaintiffs offered evidence at trial to show that all these representations were false.

Both defendants have appealed, raising twelve issues having to do with the finding of liability and the award of damages, the award of indemnity and the denial of Homestead's motion regarding attorneys' fees.

LIABILITY AND DAMAGES

With regard to the original trial, defendants raise nine claims of error. The first of these is that the trial judge erred in instructing the jury, as a matter of law, that Thompson-Brown was acting as agent for Homestead in the sale of the property. Defendant Homestead alleges that the question of agency was one for the jury to determine.

It has been repeatedly held that the existence of an agent-principal relationship is generally for the jury to decide, if there is any evidence as to its existence presented at trial. Ardash v. Karp, 18 Mich.App. 241, 244, 170 N.W.2d 854 (1969), Head v. Benjamin Rich Realty Co., 55 Mich.App. 348, 357, 222 N.W.2d 237 (1974). However, where the relationship of the parties has been defined by written agreement, it is the province of the trial judge to determine the relationship. Keiswetter v. Rubenstein,[67 MICHAPP 507] 235 Mich. 36, 42, 209 N.W. 154 (1926). See also, Ayer v. Devlin, 179 Mich. 81, 88--89, 146 N.W. 257 (1914).

Here there was a written agreement between Thompson-Brown and the owners of the subdivision, Suburban Development Co., later Homestead. By this agreement, Thompson-Brown was to sell lots and contract with builders to build the homes, subject to various conditions set forth in the agreement. In return, Thompson-Brown was to receive $500 per lot.

Defendant Homestead argues that Thompson-Brown was an agent for Nosan Building Company, not a party to this suit, which built plaintiffs' home. Further, Homestead argues, Thompson-Brown was an independent contractor vis-a-vis Homestead, because plaintiffs' purchase agreement did not include Homestead as a party.

We disagree. The test of principal and agent is the right to control. Van Pelt v. Paull, 6 Mich.App. 618, 624, 150 N.W.2d 185 (1967). The agreement between Thompson-Brown and Homestead spelled out the relationship between the parties in great detail. Homestead retained the right to cancel the agreement under specified conditions, the right to approve any changes in deed restrictions sought by Thompson-Brown, and the right to enforce certain express conditions as to builders and pricing arrangements. The written agreement clearly contemplated a sales agency and we hold that the trial judge was correct in so instructing the jury.

Defendant Homestead next argues that the trial judge erred in allowing the jury to consider a different theory of the case from that alleged by the plaintiffs, thus working a hardship upon defendant Homestead. The trial judge instructed the jury on a theory of negligent misrepresentation. [67 MICHAPP 508] These instructions, Homestead alleges, were a surprise and deprived it of the opportunity to raise the defense of contributory negligence or to bring in third parties.

It is true that a party may not inject a new theory into a case where the result would prejudice adverse parties. Fred Gibbs, Inc. v. Old Colony Insurance Co., 30 Mich.App. 352, 356, 186 N.W.2d 396 (1971). This is clearly not such a situation. The transcript is replete with arguments by defense counsel not only recognizing the issue The theory of negligent misrepresentation was set forth in paragraphs 10 and 11 of plaintiffs' second amended complaint:

of negligent misrepresentation, but asserting to the trial court that that was the sole issue framed by plaintiffs' complaint. In fact, the attorneys for defendant Thompson-Brown were vitally interested in narrowing the claim to one of negligent misrepresentation because liability insurance coverage hinged on that finding. The attorneys expressed this openly to the court below and it had been the subject of pretrial motions. We find the raising of this issue on appeal improper.

'10. That at the time said unqualified and positive advertisements, statements and representations were made to the plaintiffs herein, they were untrue and were made negligently and recklessly in that the defendant, Homestead Corporation, and the defendant, Thompson-Brown Company, failed to determine the truth of said representations at the time they were made to the plaintiffs.

'11. That as a result of the negligent representations made to the plaintiffs by the defendants, the plaintiffs, in reliance thereon, entered into contracts for the purchase of lots in Meadowbrook Lake Subdivision and caused a dwelling to be built on each of the lots purchased. As a result of such purchase, each of the [67 MICHAPP 509] plaintiffs have been damaged in the sum of Fifteen Thousand ($15,000) Dollars.'

Certainly this language informed defendants that plaintiffs were basing their cause of action, in part, on a theory of negligent misrepresentation. Further, defense counsel did not challenge the theory of negligent representation until the end of trial. In fact, during the trial, the defense consistently attempted to limit testimony to that theory. There was no surprise or hardship, and we find that the judge committed no error in this regard.

Defendant Homestead next contends that the trial judge erred in denying its motion for a directed verdict, and motion for judgment notwithstanding the verdict or, in the alternative, for a new trial. Homestead argues that the motions should have been granted because there was no evidence of Homestead's participation in misrepresentations, and no evidence of an agency relationship with Thompson-Brown Company. We have already addressed the agency question.

When a trial court's refusal to grant a motion for directed verdict or judgment notwithstanding the verdict is reviewed, the facts are considered in the light most favorable to the adverse party. If reasonable men could differ as to the meaning of the evidence, then a directed verdict should be denied. Holliday v. National Dairy Products Corp., 50 Mich.App. 366, 370, 213 N.W.2d 289 (1973). The testimony of the witnesses, if believed, showed misrepresentations by the agent made within the scope of his agency. Chanler v. Venetian Properties Corp., 254 Mich. 468, 472, 236 N.W. 838 (1931), Sullivan v. Ulrich, 326 Mich. 218, 40 N.W.2d 126 (1949). The trial judge did not err in denying the motions.

The next six assigned errors have to do with the [67 MICHAPP 510] admission of evidence and conduct of the trial. We find no error.

1) The determination of the qualifications of a witness to give opinion testimony is within the discretion of the trial judge. Auto-Ion Chemicals Inc. v. Gates Rubber Co., 33 Mich.App. 574, 577, 190 N.W.2d 357 (1971). The trial court did not abuse its discretion in allowing plaintiff Ronald Birou to testify as to the difference in value of his property located on a swimmable lake, as contrasted with a nonswimmable lake.

2) The trial court did not abuse its discretion in permitting plaintiffs to call a rebuttal witness in view of a prior protective order regarding expert witnesses. The trial court has the discretionary power to modify a pretrial summary and allow the parties to call witnesses who are not listed. Jamison v. Lloyd, 51 Mich.App. 570, 573, 215 N.W.2d 763 (1974). In this case plaintiff called as a rebuttal witness William Coleman of the State Highway Department to 3) It is not necessary for an expert witness to state an opinion in terms of absolute certainty for it to be admissible. See Knoper v. Burton,12 Mich.App. 644, 650, 163 N.W.2d 453 (1968), Reversed on other grounds,383 Mich. 62, 173 N.W.2d 202 (1970), Bilicki v. W. T. Grant Co., 382 Mich. 319, 170 N.W.2d 30 (1969). Therefore the trial court did not err in allowing an expert witness to testify that he would not swim in the lake as it existed in 1968, even though he stated there were extenuating circumstances which made it difficult to give a 'scientific...