Adell Broadcasting v. Apex Media Sales

• Decision Date: 17 November 2005
• Docket Number: Docket No. 256285.,Docket No. 257050.
• Citation: 708 N.W.2d 778,269 Mich. App. 6
• Parties: ADELL BROADCASTING Corporation, d/b/a WADL TV 38, Plaintiff/Counter-Defendant-Appellant, and World Religious Relief, Inc., d/b/a Word Network, Plaintiff/Counter-Defendant, v. APEX MEDIA SALES, Inc., d/b/a Apex & Apex Media, and Dennis Hart, Defendants/Counter-Plaintiffs-Appellees.
• Court: Court of Appeal of Michigan — District of US

708 N.W.2d 778

269 Mich. App. 6

ADELL BROADCASTING Corporation, d/b/a WADL TV 38, Plaintiff/Counter-Defendant-Appellant, and World Religious Relief, Inc., d/b/a Word Network, Plaintiff/Counter-Defendant, v. APEX MEDIA SALES, Inc., d/b/a Apex & Apex Media, and Dennis Hart, Defendants/Counter-Plaintiffs-Appellees.

Docket No. 256285.

Docket No. 257050.

Court of Appeals of Michigan.

Submitted November 9, 2005, at Detroit.

Decided November 17, 2005, at 9:05 a.m.

Released for Publication February 3, 2006.

COPYRIGHT MATERIAL OMITTED

Hyman Lippitt, P.C. (by Norman L. Lippitt, Julie Lyons Kosovec, and Daniel J. McCarthy), Birmingham, for Adell Broadcasting Corporation.

Honigman Miller Schwartz & Cohn LLP (by Norman C. Ankers, Ruth E. Zimmerman, and Eric J. Eggan), Lansing, for Apex Media Sales, Inc.; and Dennis Hart.

Before: DAVIS, P.J., and FITZGERALD and COOPER, JJ.

PER CURIAM.

In these consolidated appeals, plaintiff Adell Broadcasting Corporation, doing business as WADL TV 38, appeals by leave granted the trial court's opinions and orders granting partial summary disposition for defendants on their counterclaim for rescission and denying plaintiff's motion for reconsideration. We reverse.

Between 1993 and 2002, defendant Apex Media Sales, Inc. (AMS), was plaintiff's exclusive media representative for national religious and secular broadcast spot and program sales. Several months before the parties ended their relationship, Kevin Adell, plaintiff's president, expressed dissatisfaction with the representation by AMS. He believed that the AMS sales staff was not selling available air time for full value and that AMS personnel, including its president, defendant Dennis Hart, were not available and responsive to plaintiff's needs. AMS and Hart were also dissatisfied with the relationship because plaintiff owed them outstanding commission payments. On February 26, 2002, the parties amended their agreement in an attempt to save the relationship. The parties agreed that plaintiff owed $568,461 in commissions, but AMS would consider an immediate payment of $370,000 as full satisfaction of all commissions owed through December 2001. The parties also agreed that the commission rate for AMS would decrease from 15 percent to 10 percent, that there would be a 30-day termination provision to end the business relationship, and that plaintiff would pay commissions to AMS on 30-day terms. The parties thereafter continued dealing with each other, but their problems did not abate. In April 2002, they severed the relationship.

Plaintiff, and a related company¹ that also dealt with AMS, filed suit against AMS and Hart, alleging several causes of action. Defendants filed a countercomplaint seeking, among other things, rescission of the amended agreement. Plaintiffs sought partial summary disposition on that claim, arguing that defendants were barred from seeking rescission because they did not tender back the $370,000. The trial court found that the $370,000 constituted partial satisfaction of an undisputed debt, so defendant was not obligated to tender it back. Defendants later moved for partial summary disposition on the same claim. The trial court granted the motion, finding that there was no consideration for the amended agreement, and it ordered defendants to amend their countercomplaint to include a claim that the amended agreement was void for lack of consideration. The trial court later denied plaintiffs' motion for reconsideration of its order granting partial summary disposition.

Adell Broadcasting Corporation (hereafter plaintiff) first argues that the trial court erred by refusing to apply MCL 566.1 to the amended agreement. We agree. MCL 566.1 provides:

An agreement hereafter made to change or modify, or to discharge in whole or in part, any contract, obligation, or lease, or any mortgage or other security interest in personal or real property, shall not be invalid because of the absence of consideration: Provided, That the agreement changing, modifying, or discharging such contract, obligation, lease, mortgage or security interest shall not be valid or binding unless it shall be in writing and signed by the party against whom it is sought to enforce the change, modification, or discharge.

The goal of statutory interpretation is to determine and give effect to the intent of the Legislature, and the courts must enforce unambiguous statutory language as it is written. Gladych v. New Family Homes, Inc., 468 Mich. 594, 597, 664 N.W.2d 705 (2003).

Defendants argue that MCL 566.1 only applies to contracts involving real or personal property. We disagree. It is a common grammatical rule of construction that a modifying clause will be construed to modify only the last antecedent unless some language in the statute requires a different interpretation. Stanton v. Battle Creek, 466 Mich. 611, 616, 647 N.W.2d 508 (2002). MCL 566.1 addresses the amendment, modification, or discharge of several different legal documents, the last of which is "any mortgage or other security interest in personal or real property." The phrase "in personal or real property" grammatically modifies "mortgage or other security interest." It would be contrary to the plain meaning of the statute and rules of statutory construction to read the modifying phrase "in personal or real property" to modify "any contract, obligation or lease."²

We disagree with defendants that In re Certified Question (Bankey v. Storer Broadcasting Co.), 432 Mich. 438, 448 n. 11, 443 N.W.2d 112 (1989), supports their position that MCL 566.1 applies only to cases involving real or personal property, because in that case our Supreme Court specifically declined to address the applicability of MCL 566.1. Nor does Yerkovich v. AAA, 461 Mich. 732, 610 N.W.2d 542 (2000), compel a different conclusion. In Yerkovich, the plaintiff was required to sign a second agreement imposing additional obligations in order to receive what she was owed under the first agreement. The defendant had a preexisting duty to the plaintiff under the first contract, so the plaintiff was not required to assume additional obligations to receive what she was already owed. We are not presented with an issue of preexisting duty here.

In this case, there was a bargained modification to the parties' agreement. It is axiomatic that parties to a contract may contract to modify the contract by a later agreement. Quality Products & Concepts Co. v. Nagel Precision, Inc., 469 Mich. 362, 372-373, 666 N.W.2d 251 (2003). There must be mutual assent for the modification, and a modification will be considered mutual if it is established through clear and convincing evidence of a written agreement establishing a mutual agreement to waive the terms of the original contract. Id. In this case, the parties waived certain terms of their original agreement in a signed writing. In doing so, the parties considered the changes to their advantage. The fact that parties consider it to their advantage to modify their agreement is sufficient consideration. Buck v. Northern Dairy Co., 364 Mich. 45, 49, 110 N.W.2d 756 (1961); MCL 566.1. No other consideration for the amended agreement was necessary.

We nevertheless find additional bargained consideration in this case. The trial court relied on Cochran v. Nat'l Cas. Co., 261 Mich. 273, 246 N.W. 87 (1933), and Leeson v. Anderson, 99 Mich. 247, 248, 58 N.W. 72 (1894), holding that an agreement to discharge the whole debt on payment of only part is inoperative for a lack of consideration. However, partial payment on an undisputed debt may constitute satisfaction of the entire debt on valid consideration. See Tanner v. Merrill, 108 Mich. 58, 60, 65 N.W. 664 (1895); Monroe v. Bixby, 330 Mich. 353, 357, 47 N.W.2d 643 (1951). If consideration exists, the rule that partial payment on an undisputed debt cannot satisfy the whole debt does not apply. Our review of all the pleadings, arguments, and submitted deposition testimony shows that the parties' continuation of their business relationship was consideration for the amended agreement. Because there was consideration, it is possible that the partial payment discharged the entire debt. The trial court has not yet decided this issue. Its ruling that the amended agreement failed for want of consideration requires reversal.

Defendants argue in the alternative that plaintiff's failure to pay for services constituted a complete failure of consideration, which would independently warrant rescission of the amended agreement. Vowels v. Arthur Murray Studios of Michigan, Inc., 12 Mich.App. 359, 363, 163 N.W.2d 35 (1968). There is no enforceable contract where there is a failure of consideration. Freeurger v. Dep't of Mental Health, 161 Mich.App. 316, 320, 409 N.W.2d 821 (1987)....