SSC Associates Ltd. Partnership v. General Retirement System of City of Detroit

• Decision Date: 05 May 1995
• Docket Number: 166671,Docket Nos. 165250
• Citation: 210 Mich.App. 449,534 N.W.2d 160
• Parties: SSC ASSOCIATES LIMITED PARTNERSHIP, Plaintiff-Appellee-Cross Appellant, v. GENERAL RETIREMENT SYSTEM OF the CITY OF DETROIT, Defendant-Appellant-Cross Appellee. SSC ASSOCIATES LIMITED PARTNERSHIP, Plaintiff-Appellee, v. GENERAL RETIREMENT SYSTEM OF the CITY OF DETROIT, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 160

534 N.W.2d 160

210 Mich.App. 449

SSC ASSOCIATES LIMITED PARTNERSHIP, Plaintiff-Appellee-Cross Appellant, v. GENERAL RETIREMENT SYSTEM OF the CITY OF DETROIT,

Defendant-Appellant-Cross Appellee.

SSC ASSOCIATES LIMITED PARTNERSHIP, Plaintiff-Appellee, v. GENERAL RETIREMENT SYSTEM OF the CITY OF DETROIT, Defendant-Appellant.

Docket Nos. 165250, 166671.

Court of Appeals of Michigan.

Submitted Nov. 15, 1994, at Detroit.

Decided May 5, 1995, at 9:15 a.m.

Released For Publication July 12, 1995.

Jaffe, Raitt, Heuer & Weiss, P.C. by Melanie LaFave, Detroit, for plaintiff.

Ronald Zajac, P.C. by Ronald Zajac, and Michael J. VanOverbeke, Detroit, for defendant.

Before HOOD, P.J., and JANSEN and DAVIS, ^* JJ.

PER CURIAM.

The issues of this case concern a mortgage given by defendant to plaintiff. Defendant appeals as of right the trial court's judgment in plaintiff's favor and its grant of plaintiff's motion for prefiling interest. Plaintiff appeals as of right the trial court's decision regarding a commitment fee that was paid by plaintiff to defendant and Mellon Financial Services. The appeals were consolidated. We affirm. In a prior proceeding, this Court reversed the trial court's grant of summary disposition for plaintiff because the trial court erroneously determined that there was no dispute of fact regarding the interest rate involved in the mortgage. SSC Associates Limited Partnership v. General Retirement System of the City of Detroit, 192 Mich.App. 360, 480 N.W.2d 275 (1991).

In December 1984, plaintiff executed a mortgage note for $5,500,000 payable to defendant. In October 1986, plaintiff prepaid the note in the amount of $6,007,910; the interest was calculated by defendant. Plaintiff demanded a partial refund on the basis that defendant miscalculated the amount of interest due. This action followed after defendant refused to issue a refund.

With regard to interest, the note provided:

Minimum Interest Return. Notwithstanding anything to the contrary contained in this Note, the total amount of interest to be paid by Maker to Payee shall not be less than an amount sufficient to pay to Payee an internal rate of return of fourteen and one half (14 1/2%) percent per annum, as calculated by Payee, on the Principal Balance.

Plaintiff contended that the interest should be computed to yield an annual rate of 14.5 percent. Defendant instead treated the internal rate of return as an interest rate and compounded it. The resulting interest as calculated by defendant was 15.5 percent. Plaintiff's expert concluded that the calculation used by defendant to determine the interest was incorrect and not according to industry standards. This witness stated that, as used in the industry, the phrase "as calculated by Payee" means that a ministerial act is performed, meaning that certain rules are followed to calculate interest. Defendant's expert testified that there is more than one way to calculate the internal rate of return.

The trial court found that plaintiff's expert was more credible than defendant's and that defendant, although it was empowered to calculate the interest due, failed to follow normal accounting procedures. Defendant argues that the trial court erred in concluding that the internal rate of return provision was ambiguous and in considering evidence outside the mortgage note to interpret that provision.

Where contractual language is clear, its construction is a question of law, G & A Inc. v. Nahra, 204 Mich.App. 329, 330, 514 N.W.2d 255 (1994), and therefore is reviewed de novo. Cardinal Mooney High School v. Michigan High School Athletic Ass'n, 437 Mich. 75, 80, 467 N.W.2d 21 (1991). If there is a dispute, the parties' intent must be ascertained and the agreement enforced according to that intent. Id. Contractual language is construed according to its ordinary and plain meaning, and technical and constrained constructions are to be avoided. G & A at 330-331, 514 N.W.2d 255. However, where the contract contains technical or trade terms, parol evidence to define and explain the meaning of those terms or phrases is permissible. Moraine Products, Inc. v. Parke, Davis & Co, 43 Mich.App. 210, 213, 203 N.W.2d 917 (1972).

It was proper for the trial court to accept extrinsic evidence in the form of expert witness testimony. "Internal rate of return" is a technical term and explanation of that term through parol evidence is permissible. Moreover, we defer to the trial court's credibility determination regarding the expert witnesses. Stanton v. Dachille, 186 Mich.App. 247, 255, 463 N.W.2d 479 (1990). The trial court's factual findings are reviewed to determine whether they were clearly erroneous. MCR 2.613(C). A finding is clearly erroneous if the reviewing court is left with a definite and firm conviction that a mistake has been made. Ypsilanti Twp. v. General Motors...