Marina Bay Condominiums, Inc. v. Schlegel

• Decision Date: 31 May 1988
• Docket Number: Docket No. 94219
• Citation: 167 Mich.App. 602,423 N.W.2d 284
• Parties: MARINA BAY CONDOMINIUMS, INC., Plaintiff-Appellee and Cross-Appellant, v. Henry C. SCHLEGEL and Letha B. Schlegel, Defendants-Appellants and Cross-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 284

423 N.W.2d 284

167 Mich.App. 602

MARINA BAY CONDOMINIUMS, INC., Plaintiff-Appellee and Cross-Appellant, v. Henry C. SCHLEGEL and Letha B. Schlegel,

Defendants-Appellants and Cross-Appellees.

Docket No. 94219.

Court of Appeals of Michigan.

Submitted Aug. 21, 1987.

Decided April 4, 1988.

Released for Publication May 31, 1988.

Simpson & Moran, P.C. by Lawrence P. Hanson, Cheboygan, for plaintiff-appellee and cross-appellant.

Daniel Loznak, P.C. by Daniel Loznak, Cheboygan, for defendants-appellants and cross-appellees.

Before MacKENZIE, P.J., and DOCTOROFF and KINGSLEY, ^* JJ.

DOCTOROFF, Judge.

This appeal involves a contract concerning condominiums that were offered for sale by plaintiff. Plaintiff brought this action for breach of contract of sale of a condominium unit after defendants filed a complaint with the condominium section of the Corporation and Securities Bureau seeking return of $2,600 from plaintiff. Following a bench trial, the trial court found that the parties had an option contract and entered judgment for plaintiff for $2,600, together with costs and interest. Defendants appeal as of right. Plaintiff cross-appeals as of right. We reverse the award of costs, but affirm the judgment in all other respects.

I

The first issue raised in this appeal is whether the trial court's finding that the parties had entered into an option contract is clearly erroneous. Defendants argue that the $2,600 deposit should be returned to them because the parties' agreement should be construed to be a preliminary reservation agreement, M.C.L. Sec. 559.109(4); M.S.A. Sec. 26.50(109)(4). Plaintiff, by cross-appeal, argues that the parties' agreement constituted an amended purchase agreement, breach of which entitles it to damages as well as to retention of the $2,600 deposit or, alternatively, to specific performance of the agreement.

Findings of fact by the trial court may not be set aside unless clearly erroneous, MCR 2.613(C). A trial court's finding is clearly erroneous where, although there is evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made. Henderson v. Biron, 138 Mich.App. 503, 507, 360 N.W.2d 230 (1984), lv. den. 422 Mich. 976 (1985).

The trial court found that, although defendants had originally entered into an agreement to purchase condominium unit # 104 for $105,500 and deposited both a $5,000 check toward the purchase and a $2,600 check for a built-in vacuum cleaner and entertainment system, they elected to withdraw from the agreement on the following day. They did so without reason or penalty, which they were entitled to do according to the terms of the agreement.

The court further found that approximately four days thereafter defendants retrieved their checks. However, that same day, they tendered a third check to plaintiff for $2,600. Both the original and the duplicate of the purchase agreement were altered by deletion of the unit number, the purchase price, and the $5,000 deposit amount. The amount of $2,600 was then inserted in the deposit amount space.

The trial court, concluding that the agreement failed to satisfy the statute of frauds, M.C.L. Sec. 566.106; M.S.A. Sec. 26.906, found that the parties had entered into an option agreement.

Pursuant to M.C.L. Sec. 559.121(1); M.S.A. Sec. 26.50(121)(1), condominiums may only be offered for initial sale in accordance with the Condominium Act unless exempted. ¹ The act defines a preliminary reservation agreement as an opportunity to purchase a particular condominium unit for a limited period of time upon sales terms to be later determined, M.C.L. Sec. 559.109(4); M.S.A. Sec. 26.50(109)(4).

In this case, the contract at issue did not identify a particular unit, and the trial court so found. The contract therefore did not fall under the aegis of a preliminary reservation agreement as defined by the condominium act.

Plaintiff asserts on cross-appeal that the agreement between the parties was an amended purchase agreement, breach of which entitles it to retention of the $2,600 as well as to damages or to specific performance.

A conveyance of an interest in land must be in writing and comport with the statute of frauds, M.C.L. Sec. 566.106; M.S.A. Sec. 26.906. ² To satisfy the statute of frauds, the writing or memorandum must be certain and definite as to the parties, property, consideration, premises and time of performance. Cooper v. Pierson, 212 Mich. 657, 660, 180 N.W. 351 (1920). It must leave no essential element to be supplied by parol. Caughey v. Ames, 315 Mich. 643, 647, 24 N.W.2d 521 (1946).

In this case, the contract was never signed or dated by the parties. Additionally, the unit number and price were not indicated. Consequently, the agreement does not comport with the statute of frauds and thus cannot be a purchase agreement.

The court found that the parties had entered into an option agreement that gave defendants the right to purchase property at a fixed price within a specified time.

An option is a preliminary contract for the privilege of purchase and not itself a contract of purchase. Oshtemo Twp. v. Kalamazoo, 77 Mich.App. 33, 37, 257 N.W.2d 260 (1977), lv. den. 402 Mich. 814 (1977). It is a contract collateral to the offer to sell whereby the offer is irrevocable for a specified period. EMU Bd. of Control v. Burgess, 45 Mich.App. 183, 186, 206 N.W.2d 256 (1973), lv. den. 392 Mich. 788 (1974). It involves the privilege of buying property at a fixed price within a specified period of time. Oshtemo Twp., supra, 77 Mich.App. at p. 37, 257 N.W.2d 260. An option contract does not create an interest in land. Id. Therefore, it is not subject to the statute of frauds.

The trial court's conclusion that the parties had entered into an option contract and that plaintiff was entitled to an award of $2,600 that represented the consideration for the unexercised option is not clearly erroneous.

II

Defendants next argue that the trial court erred by failing to find in their favor pursuant to the Michigan Consumer Protection Act, M.C.L. Sec. 445.901 et seq.; M.S.A. Sec. 19.418(1) et seq. They assert that this act was violated by plaintiff's refusal to return the $2,600 to them because the Condominium Act mandated the return of the deposit within three business days of the cancellation of a preliminary reservation agreement, M.C.L. Sec. 559.183(3); M.S.A. Sec. 26.50(183)(3).

The Michigan Consumer Protection Act prohibits unfair, unconscionable, or deceptive methods, acts or practices in conduct of trade or commerce, M.C.L. Sec. 445.903(1); M.S.A. Sec. 19.418(3)(1). Trade or commerce includes real estate transactions under this act, M.C.L. Sec. 445.902(d); M.S.A. Sec. 19.418(2)(d). The refusal to cancel an agreement and return the deposit when such is required by law constitutes a violation of the act, M.C.L. Sec. 445.903(1)(u); M.S.A. Sec. 19.418(3)(1)(u).

However, as previously stated, the trial court's finding that the subject contract was an option contract was not clearly erroneous. Therefore, a violation of the Consumer Protection Act because a preliminary reservation was not cancelled and the deposit was not returned within three business days did not occur, M.C.L. Sec. 445.903(1)(u); M.S.A. Sec. 19.418(3)(1)(u).

III

Defendants' final argument is that the trial court erred by taxing costs against them and also by awarding plaintiff interest on the judgment. MCR 2.625 provides in relevant part:

"Costs will be allowed to the prevailing party in an action, unless prohibited by statute or by these rules or unless the court directs otherwise, for reasons stated in writing and filed in the action."

However, costs are taxed only when a party has prevailed in full. See, e.g., Deziel v. Difco Laboratories, Inc., 394 Mich. 466, 232 N.W.2d 146 (1975), app. after remand 403 Mich. 1, 268 N.W.2d 1 (1978); Haddad v. Justice, 64 Mich.App. 74, 235 N.W.2d 159 (1975), lv. den. 395 Mich. 825 (1976).

In this case, the trial court determined that the $2,600 that defendants paid into escrow was consideration for the option contract and, instead of granting the parties their requested relief, awarded $2,600 to plaintiff. Because neither party prevailed in full, the trial court erred by awarding costs to plaintiff.

Defendants argue further that the trial court erred by awarding plaintiff interest on the judgment. M.C.L. Sec. 600.6013; M.S.A. Sec. 27A.6013 provides that interest is to be paid on a money judgment in a civil action from the date the complaint is filed. The allowance of interest under this statutory provision is mandatory. Goins v. Ford Motor Co., 131 Mich.App. 185, 201-202, 347 N.W.2d 184 (1983), lv. den. 424 Mich. 879 (1986).

Defendants posit that plaintiff was not granted a judgment on which statutory interest could be awarded, but only allowed to keep the $2,600 that had been placed in escrow. A "money judgment" is one which adjudges the payment of a sum of money as distinguished from directing an act to be done. City of Warren v. Dannis, 136 Mich.App. 651, 662-633, 357 N.W.2d 731 (1984). The judgment entered for plaintiff against defendants for $2,600 was thus a money judgment.

In light of the statute's mandatory language providing for payment of interest on money judgments in civil actions, we conclude that the trial court's award of interest to plaintiff on the $2,600 money judgment was proper.

Reversed as to costs. Affirmed in all other respects.

KINGSLEY, J., concurs.

MacKENZIE, Presiding Judge, (dissenting).

I dissent because the trial court erred in characterizing the instant agreement as an option...