Stroud v. Glover, Docket No. 55021
| Decision Date | 06 January 1983 |
| Docket Number | Docket No. 55021 |
| Parties | Glenna STROUD, Plaintiff-Appellee, v. Rex B. GLOVER, Individually and d/b/a Glover Real Estate One, Inc., a Michigan corporation, Defendant-Appellant. 120 Mich.App. 258, 327 N.W.2d 462 |
| Court | Court of Appeal of Michigan — District of US |
[120 MICHAPP 259] Henry H. Newlin, Tecumseh, for plaintiff-appellee.
Hammond, Baker, Kralick & Fraile by Robert J. Fraile, Adrian, for defendant-appellant.
Michigan Ass'n of Realtors by Dickinson, Wright, Moon, VanDusen & Freeman by Gregory L. McClelland and Charles J. Ten Brink, Lansing, amicus curiae.
Before CAVANAGH, P.J., and ALLEN and PENZIEN *, JJ.
Plaintiff sued defendant, alleging damages for breach of contract. Defendant, a real estate broker, and plaintiff, a salesperson, had entered into a contract under which plaintiff was [120 MICHAPP 260] entitled to commissions upon the sale of certain real estate. Defendant maintains that the contract was subsequently terminated, and plaintiff is not entitled to the commissions at issue. The parties stipulated that had the contract not been terminated and had plaintiff continued to act as a listing salesperson, she would have earned $1,803.29 on four real estate transactions. The district court, affirmed by the circuit court, found in favor of plaintiff and awarded her damages in the amount stipulated. Defendant appeals by leave granted.
The district court's conclusion that defendant had breached his contract with plaintiff was based upon the court's finding that plaintiff had not been given the notice of termination required by the contract. The contract provided, in pertinent part:
"1.8 This contract and the association created hereby may be terminated by either party hereto at any time upon notice given to the other; * * *." (Emphasis added.)
The court interpreted "upon notice" to mean "upon reasonable notice" and found that the defendant's failure to give plaintiff advance notice of termination constituted a breach of the contract. This interpretation was upheld by the circuit court.
On appeal, defendant first argues that the circuit court erred by rejecting defendant's contention that the district court improperly exercised equitable jurisdiction in considering plaintiff's claim. Defendant maintains that plaintiff sought to be relieved from the contract's termination clause on the basis that it constituted an impermissible forfeiture provision and thus, by refusing to apply [120 MICHAPP 261] the clause as written, the district court granted plaintiff equitable relief.
Defendant appears to misconstrue the respective holdings of the district and circuit courts. The district court did not construe the contract's termination clause to be a penalty and then grant plaintiff relief from its forfeiture effect. The district court's discussion of a penalty was part of its discussion of the proper interpretation to be given to the term "notice" in the termination clause, because the court stated that, if the term were to be construed in defendant's favor, a penalty would result. Properly noting that a contract is to be construed against its drafter, here the defendant, the court construed the contract to require "reasonable notice" and found the defendant in breach of such a requirement.
Since the contract was not construed to contain a penalty provision from which plaintiff was granted relief, the district court did not exceed its jurisdiction and exercise equitable powers. The district court granted plaintiff relief from defendant's breach of contract, and the circuit court clearly affirmed that holding only on the basis of a breach of contract. An action for damages for a breach of contract is historically an action at law, not in equity. Reith v. University Housing Corp., 247 Mich. 104, 108, 225 N.W. 528 (1929). Therefore, the circuit court was correct in rejecting defendant's contention that the district court attempted to exercise equitable jurisdiction and grant plaintiff equitable relief.
Defendant also argues that the circuit court erred by affirming the district court's interpretation of the term "notice" in the contract. The question the district court had to answer was whether the term "upon notice" meant that defendant[120 MICHAPP 262] could terminate the contract immediately upon giving...
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