Parkhurst Homes, Inc. v. McLaughlin, Docket No. 118434

• Decision Date: 05 February 1991
• Docket Number: Docket No. 118434
• Parties: PARKHURST HOMES, INC., Plaintiff-Appellant, v. Doris McLAUGHLIN and Vickie Pittenturf, Defendants, and Genesee Bank, Defendant-Appellee. 187 Mich.App. 357, 466 N.W.2d 404
• Court: Court of Appeal of Michigan — District of US

Page 404

466 N.W.2d 404

PARKHURST HOMES, INC., Plaintiff-Appellant, v. Doris McLAUGHLIN and Vickie Pittenturf, Defendants and Genesee Bank, Defendant-Appellee.

Docket No. 118434.

187 Mich.App. 357, 466 N.W.2d 404

Court of Appeals of Michigan.

Submitted Dec. 11, 1990, at Grand Rapids.

Decided Feb. 5, 1991, at 9:00 a.m.

Released for Publication March 25, 1991.

[187 MICHAPP 358] DeMarco & Sage, P.C. by Bruce J. Sage, Troy, for Parkhurst homes, inc.

Neithercut, Klapp, Shegos, Dillard & Banas by Kittredge R. Klapp, Flint, for Genesee Bank.

Before MAHER, P.J., and SAWYER and BRENNAN, JJ.

PER CURIAM.

The trial court granted defendant Genesee Bank's motion for summary disposition, thereby dismissing plaintiff's claim against it, while also granting defendant's request for costs under the offer-of-judgment rule, MCR 2.405. Plaintiff appeals as of right. We affirm the dismissal of plaintiff's claim, but reverse the award of costs.

Defendant bank was named as a party to this action by virtue of its role as a lender of funds for the purchase of a mobile home which individual defendants McLaughlin and Pittenturf contracted to purchase from plaintiff. Plaintiff commenced this action on November 12, 1987, after McLaughlin and Pittenturf refused to pay for the mobile home. Count III of plaintiff's complaint asserted a claim of promissory estoppel against defendant bank. The complaint contained the following allegations:

19. That on October 6, 1986, Defendant Genesee [187 MICHAPP 359] Bank sent a written communication to Plaintiff advising Plaintiff that Defendant Genesee Bank approved Defendants McLaughlin and Pittenturf [sic] request for a loan, for the benefit of your plaintiff, for the purchase of the mobile home indicated above.

20. That the aforementioned written communication to your Plaintiff constituted a promise by Defendant Genesee Bank to loan money to Defendants McLaughlin and Pittenturf, for Plaintiff's benefit.

21. That Defendant Genesee Bank, by virtue of the aforementioned communication, expected and intended that communication to induce the Plaintiff to order the manufacture and construction of the aforementioned mobile home.

22. That your plaintiff relied upon the written communication by Defendant Genesee Bank and in fact ordered the manufacture and construction of the aforementioned mobile home.

23. That thereafter, without any notice to your plaintiff whatsoever, Defendant Genesee Bank conducted a closing of the loan extended to Defendants McLaughlin and Pittenturf and upon information and belief gave to Defendants McLaughlin and Pittenturf money belonging to your plaintiff.

24. That Defendant Genesee Bank took no reasonable precaution to insure that Plaintiff would receive the monies rightfully due to Plaintiff which the Plaintiff expected to receive from Defendant Genesee Bank pursuant to the written communication of October 6, 1986.

25. That justice will be served by this Court ordering Defendant Genesee Bank to forthwith pay to the Plaintiff the proceeds of the loan extended to the Defendants McLaughlin and Pittenturf.

Defendant bank filed an answer denying liability. On March 4, 1988, the bank offered to stipulate to the entry of a judgment in favor of plaintiff in the amount of one dollar pursuant to MCR [187 MICHAPP 360] 2.405. Plaintiff rejected the offer. In April 1988, cross-motions for summary disposition were filed, and on April 7, 1989, the trial court issued its opinion granting the bank's motion on the ground that plaintiff failed to state a claim on which relief could be granted, MCR 2.116(C)(8). Accordingly, the trial court found it unnecessary to address plaintiff's motion. The trial court also granted the bank's request for costs under the offer-of-judgment rule, MCR 2.405, but denied its request under MCR 2.114.

I

First, plaintiff argues that the trial court erred in granting defendant bank's motion for summary disposition. We disagree.

A motion under MCR 2.116(C)(8) tests the legal sufficiency of a claim by the pleadings alone. Formall, Inc. v. Community Nat'l Bank, 166 Mich.App. 772, 777, 421 N.W.2d 289 (1988). All factual allegations in support of the claim are accepted as true, as well as any reasonable inferences or conclusions which can be drawn from the facts. Kauffman v. Shefman, 169 Mich.App. 829, 833, 426 N.W.2d 819 (1988). The motion should be granted only when the claim is so clearly unenforceable as a matter of law that no factual development could possibly justify a right of recovery. Scameheorn v. Bucks, 167 Mich.App. 302, 306, 421 N.W.2d 918 (1988).

Plaintiff's assertion that defendant bank was directly liable to it for the money it agreed to loan the individual defendants was not premised upon contract, but rather upon the existence of a promise sufficient to support a claim under a promissory estoppel theory. The elements of promissory estoppel are: (1) a promise, (2) that the promisor reasonably should have expected to induce action [187 MICHAPP 361] of a definite and substantial character on the part of the promisee, (3) which in fact produced reliance or forbearance of that nature, and (4) in circumstances requiring that the promise be enforced if injustice is to be avoided. Nygard v. Nygard, 156 Mich.App. 94, 100, 401 N.W.2d 323 (1986).

The only alleged promise relied upon by plaintiff in this case was "a promise by defendant Genesee Bank to loan money to defendants McLaughlin and Pittenturf, for plaintiff's benefit." As indicated above, the remedy of promissory estoppel is available in circumstances where a promise must be enforced if injustice is to be avoided. In this case, however, plaintiff's complaint alleged that Genesee Bank did in fact loan the money to the individual defendants as promised. Thus, because the only promise alleged by plaintiff was also alleged to have been performed, there was nothing on which relief could be granted. With respect to plaintiff's allegations that the bank failed either to notify it of the closing or to take reasonable precautions to insure plaintiff's receipt of the money, the trial court properly recognized that plaintiff failed to allege that the bank made any promises concerning either of these alleged obligations. Because the basis of a promissory estoppel claim is the existence of a promise, absent an allegation of a promise, a claim of promissory estoppel has not been stated.

Accordingly, we conclude that the trial court properly held that plaintiff failed to state a claim of promissory estoppel on which relief could be granted.

II

Next, we conclude that, because the trial court properly held that plaintiff's complaint failed to [187 MICHAPP 362] state a claim against the bank, the court did not err by thereafter declining to consider plaintiff's motion for summary disposition against the bank.

III

Because plaintiff had previously rejected the bank's offer to stipulate to the entry of a judgment in the amount of one dollar, the trial court awarded the bank costs under MCR 2.405(D), which provides in relevant part:

If an offer is rejected, costs are payable as follows:

(1) If the adjusted verdict is more favorable to the offeror than the average offer, the offeree must pay to the offeror the offeror's actual costs incurred in the prosecution or defense of the action.

Plaintiff argues that the trial court's award of costs under this court rule was erroneous because: (1) there was no "verdict" within the meaning of MCR 2.405(D), and (2) defendant bank's offer of one dollar was not a bona fide offer that satisfied the "offer" requirement of MCR 2.405. Because we agree with plaintiff's first argument, we find it unnecessary to reach the second.

The court rule directs that it is the "adjusted verdict" that must be examined to determine whether costs are payable. The adjusted verdict is defined as "the verdict plus interest and costs from the filing of the complaint through the date of the offer." MCR 2.405(A)(5). The term "verdict," however, is defined as "the award rendered by a jury or by the court sitting without a jury, excluding all costs and interest." MCR 2.405(A)(4).

Plaintiff contends that the term "verdict" was not intended to include dispositions pursuant to a ruling on a motion. The question, therefore, is how [187 MICHAPP 363] broad was the language "award rendered by ... the court sitting without a jury" intended to be. In deciding this issue, we believe that a comparison of the sanction provisions of the offer-of-judgment rule and those of the mediation rule, is helpful, in that both rules are similar in purpose (i.e., to encourage settlement prior to trial). Sanders v. Monical Machinery Co., 163 Mich.App. 689, 693, 415 N.W.2d 276 (1987).

Before December 1, 1987, the court rule governing the award of costs against a party who had rejected a mediation evaluation provided:

If a party has rejected an evaluation and the action proceeds to trial, that party must pay the opposing party's actual costs unless the verdict is more favorable to the opposing party than the mediation evaluation. [Emphasis added.]

Applying this language, courts of this state were in disagreement over the precise circumstances under which mediation sanctions could be awarded, and, in particular, whether sanctions could be awarded following an order granting summary disposition. This disagreement was attributable primarily to...