Pakideh v. Franklin Commercial Mortg. Group, Inc.

• Citation: 213 Mich.App. 636,540 N.W.2d 777
• Decision Date: 29 September 1995
• Docket Number: Docket No. 149804
• Parties: Khalil PAKIDEH, Plaintiff-Appellant, v. FRANKLIN COMMERCIAL MORTGAGE GROUP, INC. f/k/a Franklin Mortgage, Defendant-Appellee.
• Court: Court of Appeal of Michigan (US)

Page 777

540 N.W.2d 777

213 Mich.App. 636

Khalil PAKIDEH, Plaintiff-Appellant, v. FRANKLIN COMMERCIAL MORTGAGE GROUP, INC. f/k/a Franklin

Mortgage, Defendant-Appellee.

Docket No. 149804.

Court of Appeals of Michigan.

Submitted April 5, 1995, at Detroit.

Decided Sept. 29, 1995, at 9:10 a.m.

Released for Publication Dec. 18, 1995.

Dickinson, Wright, Moon, Van Dusen & Freeman by Robert W. Powell, Detroit, for plaintiff.

Mason, Steinhardt, Jacobs & Perlman by Randolph J. Friedman and Jonathan B. Frank, Southfield, for defendant.

Before MARK J. CAVANAGH, P.J., and JANSEN and KOLENDA, ^* JJ.

PER CURIAM.

Plaintiff appeals as of right from a jury verdict of no cause of action in this conversion action. We conclude that the trial court erred in denying plaintiff's motions for a directed verdict and judgment notwithstanding the verdict, and we therefore reverse.

Plaintiff seeks to recover $52,500 given to defendant during the negotiation of a commercial loan. In August 1987, plaintiff sought to obtain a loan from defendant in order to finance the purchase of an interest in an apartment complex. After obtaining relevant information from plaintiff, defendant sent plaintiff a commitment letter dated December 2, 1987. In the commitment letter, defendant offered to loan plaintiff $3 million on specified terms. Defendant indicated that it required a commitment fee of two percent, or $60,000. After a telephone conversation between plaintiff and Ean Kerr, defendant's vice president, defendant agreed to reduce the commitment fee to $52,500.

The commitment letter contained the following term:

24. Expiration: Please indicate your acceptance of the terms of this commitment by signing the original and one copy of this commitment in the space provided below, initialing and dating all attached pages and exhibits and returning the same to Franklin. This commitment shall expire if not returned to Franklin by December 16, 1987, and closed within sixty (60) days thereafter, unless formally extended by Franklin and payment of an appropriate extension fee [sic]. Please remit the appropriate commitment fee when returning this document.

Plaintiff never signed or returned the commitment letter. However, on December 30, 1987, plaintiff paid defendant $52,500. At trial, the parties presented conflicting evidence regarding plaintiff's motive for the payment. Plaintiff testified that Kerr requested the remittance as a "good faith deposit" while the parties continued to negotiate the terms of the loan. Kerr testified that when he called plaintiff to find out why plaintiff had paid the fee without returning the signed commitment letter, plaintiff had told Kerr that he intended to sign the letter after conferring with his attorney.

The loan negotiation subsequently stalled, in part because plaintiff was having trouble clearing the title to the apartment complex. In August 1988, the parties renegotiated the terms of the commitment to reflect decreasing interest rates and because plaintiff wanted to borrow a larger amount. On August 8 1988, defendant issued a revised commitment letter. However, the parties were unable to agree on the terms, and in November 1988, plaintiff demanded the return of the $52,500. Defendant informed plaintiff that the money was not a deposit, but rather a non-refundable commitment fee. Although the parties engaged in additional negotiations, they were unable to agree on loan terms, and in early 1989 plaintiff obtained a loan from another company.

On September 13, 1989, plaintiff filed the instant action, claiming that defendant had unlawfully converted plaintiff's money to its own use. Defendant defended by contending that plaintiff had impliedly accepted the terms of the original commitment letter. A jury returned a verdict of no cause of action. On appeal, plaintiff argues, inter alia, that the trial court erred in denying his motions for a directed verdict and judgment notwithstanding the verdict.

In reviewing the denial of a motion for a directed verdict, this Court examines the evidence presented in the light most favorable to the plaintiff and gives the plaintiff the benefit of every reasonable inference that may be drawn from the evidence. If reasonable minds could differ in regard to whether the plaintiff has met the burden of proof, a motion for a directed verdict should be denied. Rynerson v. Nat'l Casualty Co., 203 Mich.App. 562, 564, 513 N.W.2d 436 (1994).

In reviewing a trial court's failure to grant a defendant's motion for judgment notwithstanding the verdict, we examine the testimony and all legitimate inferences that may be drawn in the light most favorable to the plaintiff. If reasonable jurors could honestly have reached different conclusions, neither the trial court nor this Court may substitute its judgment for that of the jury. Thorin v. Bloomfield Hills Bd. of Ed., 203 Mich.App. 692, 696, 513 N.W.2d 230 (1994).

The issue presented in this case is whether a valid contract was formed. Plaintiff argues that a contract was never made because he never accepted defendant's offer in accordance with the terms of that commitment, which required that he sign, date, and return the commitment letter and pay the commitment fee by December 16, 1988. Defendant asserts that plaintiff impliedly accepted the terms of the commitment letter by tendering a check for the amount of the commitment fee and by subsequently making inquiries about completing the transaction.

Before a contract can be completed, there must be an offer and acceptance. Unless an acceptance is unambiguous and in strict conformance with the offer, no contract is formed. Independence Twp. v. Reliance Building Co., 175 Mich.App. 48, 53, 437 N.W.2d 22 (1989). If an offer does not require a specific form of acceptance, acceptance may be implied by the offeree's conduct. Ludowici-Celadon Co. v. McKinley, 307 Mich. 149, 153, 11 N.W.2d 839, 11 N.W.2d 839 (1943).

Where contractual language is clear, its construction is a question of law and is therefore reviewed de novo. Contractual language is construed according to its plain and ordinary meaning, and technical or...