Price v. Long Realty, Inc.

• Decision Date: 27 April 1993
• Docket Number: Docket No. 120698
• Citation: 199 Mich.App. 461,502 N.W.2d 337
• Parties: Charles PRICE and Molly E. Price, Plaintiffs-Appellees, v. LONG REALTY, INC., Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 337

502 N.W.2d 337

199 Mich.App. 461

Charles PRICE and Molly E. Price, Plaintiffs-Appellees, v. LONG REALTY, INC., Defendant-Appellant.

Docket No. 120698.

Court of Appeals of Michigan.

Submitted April 8, 1992, at Lansing.

Decided Feb. 10, 1993.

Approved for Publication

April 27, 1993, at 9:00 a.m.

Released for Publication July 30, 1993.

H. James Starr, Lansing, for plaintiffs-appellees.

Howard & Howard by Patrick D. Hanes, Lansing, for defendant-appellant.

Before REILLY, P.J., and HOLBROOK and MARILYN J. KELLY, JJ.

PER CURIAM.

Following a jury trial, defendant was found liable for common-law fraud, malpractice, and violation of the Michigan Consumer Protection Act (MCPA), M.C.L. § 445.901 et seq.; M.S.A. § 19.418(1) et seq. Defendant appeals as of right the June 7, 1989, Ingham Circuit Court judgment ordering it to pay the plaintiffs $13,200 in damages and over $23,000 in costs and attorney fees. We affirm.

This case arose from the sale of residential property. In August 1983, defendant's real estate agent, Marie Bassila, sold the plaintiffs' home and then assisted them in locating a vacant parcel on which to build a new home with a pole barn. Plaintiffs, Bassila, and a representative of Norman Construction, Inc., visited a parcel in Alaiedon Township in Ingham County. During the visit, Bassila told Mr. Price that there would be no problem building a home in the narrow section of the parcel and putting a pole barn in the back. Plaintiffs then signed an offer to purchase the property upon Bassila's further assurance that she had prepared the offer to ensure that the property would include a pole barn. The plaintiffs accepted the owners' counteroffer. Norman Construction entered into a contract with the plaintiffs, agreeing to build them a house.

After finalizing the financing of the purchase, Mr. Price placed stakes on the property on February 26, 1984, to mark the proposed site of the house approximately 100 feet from the road. Norman Construction and a surveyor then convinced the plaintiffs that they had no choice but to locate the house 400 feet back from the road. In April 1984, the plaintiffs learned that the location of the house had to be 586 feet back from the road and that it would not be possible to put a pole barn behind the house.

Upon investigation, the plaintiffs discovered that the township clerk had written a letter dated October 5, 1983, to the Ingham County Health Department stating that the township would not permit a house to be built on the narrow front part of the lot. The Ingham County Health Department had also sent a letter dated August 19, 1983, to the seller's real estate broker that stated that putting a house on the front part of the property would have created a serious problem because of the installation of the septic system. Although Norman Construction learned about the problem when it sought a health permit, Bassila never made inquiries into the matter.

Notwithstanding the health restriction on building on the front part of the property, the plaintiffs decided to proceed with the real estate purchase because they were afraid of losing a considerable amount of money on property they otherwise liked. The house was ultimately built nearly 600 feet back from the road and without a pole barn.

In September 1984, the plaintiffs filed suit for damages against Norman Construction and Long Realty, Inc. A judgment against Norman Construction was entered upon the parties' acceptance of a mediation evaluation in favor of the plaintiffs. In the plaintiffs' case against Long Realty, this Court, in an unpublished opinion per curiam, decided December 3, 1987 (Docket No. 90586), reversed the trial court's order granting summary disposition for the defendant and remanded the case for a trial on the merits. After the jury rendered its verdict, the trial court denied the defendant's motion for judgment notwithstanding the verdict or for a new trial.

On appeal, the defendant raises several evidentiary issues. The decision whether to admit evidence rests within the sound discretion of the trial court and will not be set aside on appeal absent an abuse of discretion. Rodriguez v. Solar of Michigan, Inc., 191 Mich.App. 483, 487, 478 N.W.2d 914 (1991).

Defendant first argues that the trial court erred in granting the plaintiffs' motion to preclude the defendant from presenting evidence of Norman Construction's settlement offer to the plaintiffs to rescind their contract. Defendant claims that the evidence is not barred by MRE 408 because it establishes that the plaintiffs had at least one opportunity to mitigate their damages by forgoing the construction of their house.

Under MRE 408, evidence of an offer to compromise a claim is inadmissible to prove liability for or the invalidity of the claim, but the rule does not require the exclusion of evidence when offered for another purpose, such as proving bias or prejudice of a witness, contesting a contention of undue delay, or proving an effort to obstruct a criminal investigation. Here, Norman Construction's offer to rescind its contract with the plaintiffs was properly excluded at trial because it constituted evidence of settlement negotiations with a third party. Windemuller Electric Co. v. Blodgett Memorial Medical Center, 130 Mich.App. 17, 23, 343 N.W.2d 223 (1983). The failure to mitigate damages might arguably constitute a proper purpose for admitting evidence of settlement negotiations under MRE 408, but the issue is irrelevant in this case because the plaintiffs did not have the duty to mitigate their damages by accepting the offer to rescind. As the victims of misrepresentation, the plaintiffs could elect to either affirm the contract and sue for damages or rescind the contract. 37 AmJur2d, Fraud and Deceit, § 327, p 432; § 329, [199 Mich.App. 467] p 436. The trial court did not abuse its discretion in excluding the evidence of the settlement offer.

As its second evidentiary issue, the defendant argues that the trial court erred in not allowing evidence of the judgment against Norman Construction. Defendant claims that the judgment would have assisted the jury in understanding Norman Construction's liability for misrepresentation. However, we consider the issue unpreserved for review because the defendant has failed to provide supporting authority for its argument. Goolsby v. Detroit, 419 Mich. 651, 655, n. 1, 358 N.W.2d 856 (1984); Mann v. Mann, 190 Mich.App. 526, 536-537, 476 N.W.2d 439 (1991). Further, we agree with the trial court that the jury should not be informed of the judgment because there is no genuine dispute regarding the plaintiffs' judgment against Norman Construction. Brewer v. Payless Stations, Inc., 412 Mich. 673, 679, 316 N.W.2d 702 (1982).

Defendant's third evidentiary issue is that the trial court abused its discretion in determining that a sufficient foundation had been laid for the admission of mortgage documents. Defendant argues that the documents were not admissible as business records under MRE 803(6) because the plaintiffs failed to show that the documents were records kept in the course of a regularly conducted business activity. Without explanation, the trial court received the documents into evidence.

The business records exception to the hearsay rule provides that reports or records kept in the course of a regularly conducted business activity are not to be excluded as hearsay unless the source of information or method or circumstances of preparation indicate a lack of trustworthiness. MRE 803(6); Solomon v. Shuell, 435 Mich. 104, 115, 457 N.W.2d 669 (1990). Our review of the record in the present case reveals that the plaintiffs failed to lay an adequate foundation for admission under MRE 803(6) because there was no testimony that the records were prepared in the course of a regularly conducted business activity. Compare People v. Safiedine, 163 Mich.App. 25, 33, 414 N.W.2d 143 (1987). However, we also determine that admitting these documents into evidence under MRE 803(6) was harmless error. First, Mr. Price testified independently about the information contained in two of the documents. Second, because the plaintiffs were not required to attempt to rescind the transaction, we disagree with the defendant's argument that this evidence was important because it showed that the plaintiffs could not back out of the transaction. Third, the documents did not confuse or influence the jury's determination of damages. Consequently, the trial court's decision to admit this evidence without ascertaining whether the documents kept in the course of a regularly conducted business activity is not by itself sufficient ground to set aside the verdict. MCR 2.613(A).

As its next evidentiary issue, the defendant argues that William Hersey was not qualified to testify as an expert in real estate transactions. The qualification of a witness as an expert is within the trial court's discretion and will not be set aside absent an abuse thereof. Mulholland v. DEC Int'l Corp., 432 Mich. 395, 402, 443 N.W.2d 340 (1989). A witness may be qualified as an expert by knowledge, skill, experience, training, or education. MRE 702. Mr. Hersey testified that he was a licensed real estate broker in Michigan, with twenty years of experience in the business. The trial court did not abuse its discretion by qualifying him as an expert witness.

As its final evidentiary issue, the defendant contends that the trial court erred in prohibiting its witness from testifying about the value of the plaintiffs' property. Again, the defendant cites no supporting authority for this claim of error. The record indicates that the defendant revealed in its answers to the plaintiffs' interrogatories that Dennis Goff would be offered as an expert to testify about the standard of care of realtors, but did not disclose that he would testify about the value of the plaintiffs' real estate. See MCR 2.302(E)(1)(a)(ii). Defendant's...