GKC Michigan Theaters, Inc. v. Grand Mall

• Decision Date: 14 March 1997
• Docket Number: Docket No. 188934
• Citation: 564 N.W.2d 117,222 Mich.App. 294
• Parties: GKC MICHIGAN THEATERS, INC., Plaintiff-Appellant, v. GRAND MALL, a Michigan Limited Partnership, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 117

564 N.W.2d 117

222 Mich.App. 294

GKC MICHIGAN THEATERS, INC., Plaintiff-Appellant, v. GRAND MALL, a Michigan Limited Partnership, Defendant-Appellee.

Docket No. 188934.

Court of Appeals of Michigan.

Submitted Feb. 5, 1997, at Lansing.

Decided March 14, 1997, at 9:20.

Released for Publication May 22, 1997.

Dykema Gossett P.L.L.C. by Alan R. Dominick and Thomas A. Norton, Lansing, for Plaintiff-Appellant,

Liss and Associates, P.C. by Arthur Y. Liss and Andrew M. Zack, Bloomfield Hills, for Defendant-Appellee.

Before O'CONNELL, P.J., and MARKMAN and M.J. TALBOT ^*, JJ.

O'CONNELL, Presiding Judge.

Plaintiff appeals as of right the circuit court's order granting defendant's motion for summary disposition pursuant to MCR 2.116(C)(10). The circuit court found as a matter of law that plaintiff was unable to establish causation in its slander of title claim. We reverse and remand.

This case arises out of a dispute regarding two adjacent parcels of property located in Grand Blanc, Michigan. Plaintiff is the prior owner of real property located at 12901 South Saginaw Street (hereinafter referred to as the GKC property) and defendant owns real property on which Grand Mall Shopping Center is situated, located at 12741 South Saginaw Street (hereinafter referred to as the mall property). In 1972, defendant's predecessor granted an easement for the benefit of the GKC property allowing its users and owners to use the mall's driveway and a designated number of spaces in the mall's parking lot.

On September 9, 1991, plaintiff and Michael Bogle signed a purchase agreement pursuant to which Bogle would acquire the GKC property. This purchase agreement was "subject to city approval of expansion." Plaintiff and Bogle also signed two modifications of the purchase agreement on September 9, 1991. The first modification of the agreement pertained to a proposed expansion of the building on the GKC property and provided that the offer to purchase was subject to Bogle's ability to obtain from the city the appropriate building approvals regarding this expansion. The second modification of the purchase agreement provided that the agreement was "conditioned upon Purchasers [sic] satisfaction that zoning, easements and restrictions on the premises will permit Purchaser to use the premises for his intended purpose." Bogle intended to use the GKC property to house his hardware business, which was located in Grand Mall Shopping Center at the time that the purchase agreement was signed.

On October 18, 1991, defendant filed a "Notice of Termination of Easement," claiming that the easement had been granted to benefit the GKC property only while it was used as a movie theater, and, because the property was no longer being used in this way, the purpose of the easement had terminated. Plaintiff then filed its complaint alleging that defendant's action of filing the notice of termination constituted slander of title (count I) and seeking a declaratory judgment regarding the validity of the easement (count II).

On December 6, 1991, plaintiff and Bogle again modified their purchase agreement. The third modification essentially provided that although Bogle was financially able to carry out the purchase agreement, closing would not take place until plaintiff was able to "assure a clear record title" by removing the notice of termination. The modification further provided that, after plaintiff removed the cloud from the title, Bogle had an option to delay closing until January 31, 1992.

On December 20, 1991, plaintiff moved for partial summary disposition with regard to count II of its complaint. The trial court granted plaintiff's motion and entered an order on January 13, 1992, declaring that the easement was valid and perpetual in duration. The court further ordered that the termination of easement was invalid and should be stricken from the records. Defendant appealed the trial court's order to this Court, and this Court affirmed the lower court's decision in an unpublished opinion per curiam, issued April 28, 1994 (Docket No. 148491). On May 18, 1994, defendant filed an application for leave to appeal that decision to the Supreme Court. The Supreme Court denied leave to appeal on January 25, 1995. 448 Mich. 854, 528 N.W.2d 732 (1995).

While the litigation concerning the validity of the easement was progressing, another dispute regarding the GKC property arose. This dispute concerned zoning variances for the GKC property that were granted to Bogle by the zoning board of appeals on January 7, 1992. The board granted variances to allow alterations of the existing building on the GKC property to comply with city building code requirements regarding landscaping of the parking lot and building setback requirements. Defendant challenged these zoning variances by filing a claim of appeal in the circuit court on January 13, 1992. ¹ After a hearing, the variances were upheld and the circuit court entered two orders. The first order was entered January 3, 1995. The second order, entered March 3, 1995, after another hearing, held that the first order was a final order effective February 6, 1995. There were no further appeals in the zoning litigation.

The sale of the GKC property to Bogle's assignee was finally closed on June 26, 1995. Plaintiff received the contract price for the property. At that point, plaintiff's slander of title claim was not yet resolved. Defendant then filed the motion for summary disposition presently at issue, arguing that plaintiff could not prove that the filing of the notice of termination caused the delay of the closing of the sale of the GKC property. Defendant contended that the modifications of the purchase agreement between plaintiff and Bogle conditioned the sale of the GKC property upon the zoning variances for the parking lot landscaping and the side yard setback. Further, defendant argued that plaintiff had admitted that the cause of the delay was that defendant had challenged the grant of these zoning variances. ² Defendant based this argument on plaintiff's answer to an interrogatory asking why the closing did not occur.

After October 17, 1992 [sic-1991] a closing date could not be scheduled due to the fact that Defendant clouded the title by recording a Notice of Termination of Easement. After January 15, 1992, a closing could not be scheduled because Defendant filed a lawsuit challenging the validity of the variances granted by the City of Grand Blanc.

After holding a hearing regarding the matter, the trial court granted defendant's motion for summary disposition, stating:

There's a slander of title claim that's filed by the Plaintiff saying that the Defendant basically slandered or clouded the title of the property that Plaintiff was trying to sell; claiming that the Plaintiff must prove that there--and this is the Defendant's position as it relates to the motion--claiming that the Plaintiff must prove that there has been damage caused by the slander, and the filing of the zoning appeal and the appeal through the Circuit Court and the Court of Appeals are privileged and had nothing to do with the lack of the sale of the property, and Plaintiff is unable to show that it would have been able to sell the property if it had not filed the easement termination notice, or if Defendant had not filed the easement termination notice.

Defendant further reasons that the sale was not prevented by the filing of the termination notice as Bogle ... did not have the appropriate zoning clearances which were a necessary part of the purchase agreement. Since the Defendant Mall filed an appeal of the zoning Board of Appeals decision, and it was entitled to do that as an interested party, the delay came about because of the zoning Board's [sic] of Appeals action and not because of the notice of termination of the easement was filed.

A rather unique argument. I think I'm going to buy it. Motion's granted as to C-8 and C-10 as there is no, or there hasn't been shown to be any causal connection between the injurious falsehood, i.e., the termination of easement that was filed by the Defendant Mall and the delay as it relates to the sale because ultimately the sale was consummated and it's been carried out. I drive by it and I see that there's construction on, it looks like it's moving forward.

On appeal, plaintiff argues that the trial court erred in ruling that causation was not established, because plaintiff can prove that defendant's filing of the notice of termination was a "substantial factor" in bringing about the delay of the closing of the sale. We agree and hold a factfinder must determine whether defendant's filing of the notice of termination caused the delay in the closing of the sale.

In order to prove its slander of title claim, plaintiff must establish that defendant "maliciously published false matter disparaging [plaintiff's] title, causing [it] special damages." Sullivan v. Thomas Organization, P.C., 88 Mich.App. 77, 82, 276 N.W.2d 522 (1979). The litigation regarding the declaratory judgment count of plaintiff's complaint has already established that the notice of termination of easement was false and invalid.

Initially, we note that neither the parties nor the trial court addressed the issue whether plaintiff could recover damages to compensate it for the expenses involved in the litigation to have the notice of termination stricken from the records. Both this Court and the Michigan Supreme Court have held...