Sullivan v. Thomas Organization

• Decision Date: 16 January 1979
• Docket Number: Docket No. 77-2707
• Citation: 88 Mich.App. 77,276 N.W.2d 522
• Parties: Thomas A. SULLIVAN and Noel A. Gage, Plaintiffs-Appellants, v. The THOMAS ORGANIZATION, P. C., Michael Thomas and Jack Rosenzweig, Defendants-Appellees. 88 Mich.App. 77, 276 N.W.2d 522
• Court: Court of Appeal of Michigan — District of US

Page 522

276 N.W.2d 522

Thomas A. SULLIVAN and Noel A. Gage, Plaintiffs-Appellants, v. The THOMAS ORGANIZATION, P. C., Michael Thomas and Jack Rosenzweig, Defendants-Appellees.

Docket No. 77-2707.

88 Mich.App. 77, 276 N.W.2d 522

Court of Appeals of Michigan.

Jan. 16, 1979.

Released for Publication March 29, 1979.

[88 MICHAPP 79] Bushnell, Gage & Reisen by William A. Roy, Southfield, for plaintiffs-appellants.

Howard B. Kaplan, Southfield, for defendants-appellees.

Before R. B. BURNS, P. J., and J. H. GILLIS and V. J. BRENNAN, JJ.

R. B. BURNS, Presiding Judge.

In this disparagement of title action, defendants moved for summary judgment under GCR 1963, 117.2(1) and GCR 1963, 117.2(3). The trial court entered an order granting summary judgment for the reasons set forth in defendants' brief, without indicating under which subrule it was granting the motion. Defendants' brief confused the analysis under the two subrules by relying upon deposition testimony in arguing that plaintiffs had failed to state a cause of action. See, E. g., Crowther v. Ross Chemical & Manufacturing Co., 42 Mich.App. 426, 202 N.W.2d 577 (1972). It [88 MICHAPP 80] therefore appears that the trial court erred by using an incorrect analysis in deciding the motion. We have undertaken an independent review under each subrule, see Partrich v. Muscat, 84 Mich.App. 724, 270 N.W.2d 506 (1978), and, having determined summary judgment was not proper under either subrule, find the error was not harmless, and reverse. Additionally, we find the trial court improperly consolidated for trial the instant case with another case.

In the consolidated case, Oakland County Circuit Court case 75-128-782-CZ, defendants Thomas and Rosenzweig sued plaintiffs for the return of an earnest money deposit on realty which Thomas and Rosenzweig were to buy from plaintiffs, contingent upon approval by the City of Birmingham of architectural plans submitted by Thomas and Rosenzweig. That case concerns a dispute as to the interpretation of a contract which provided the deposit would be returned if the City declined issuance of the permits within a certain time, where the City neither issued nor declined to issue the permits, but instead requested further information.

The thrust of plaintiffs' complaint in the instant case is that defendants maliciously retaliated against plaintiffs for their failure to return the deposit by knowingly filing an invalid mechanics' lien against the property, with the intent and effect of rendering plaintiffs' title unmarketable. Plaintiffs' allegations are more fully set forth in the footnote. ¹

[88 MICHAPP 82] "The standard governing this Court's review of a grant or denial of a motion for summary judgment based on GCR 1963, 117.2(1) is well settled. The motion is to be tested by the pleadings alone. Todd v. Biglow, 51 Mich.App. 346, 214 N.W.2d 733 (1974), Lv. den., 391 Mich. 816 (1974). The motion tests the legal basis of the complaint, not whether it can be factually supported. Borman's, Inc. v. Lake State Development Co., 60 Mich.App. 175, 230 N.W.2d 363 (1975). The factual allegations of the complaint are taken as true, along with any inferences or conclusions which may fairly be drawn from the facts alleged. Unless the claim is so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recover, the motion under this subrule should be denied. Crowther v. Ross Chemical & Manufacturing Co., (supra)." Partrich v. Muscat, supra, at 729-730, 270 N.W.2d at 509.

In order to state a claim upon which relief may be granted for disparagement of title, plaintiffs must have alleged that defendants maliciously published false matter disparaging plaintiffs' title, causing plaintiffs special damages. See Glieberman v. Fine, 248 Mich. 8, 226 N.W. 669 (1929), Harrison v. Howe, 109 Mich. 476, 67 N.W. 527 (1896), Chesebro v. Powers, 78 Mich. 472, 44 N.W. 290 (1889), Haney Manufacturing Co. v. Perkins, 78 Mich. 1, 43 N.W. [88 MICHAPP 83] 1073 (1889), Gehrke v. Janowitz, 55 Mich.App. 643, 223 N.W.2d 107 (1974), Prosser, Torts (4th ed.), § 128, pp. 919-920, 50 Am.Jur.2d, Libel and Slander, § 541, p. 1060.

Defendants initially argue that plaintiffs have failed to allege falsehood, because plaintiffs have not alleged that anything contained in the Statement of Account and Lien was inaccurate. However, the filing of an invalid lien may be a falsehood, even if the matter contained in the lien is correct. Cf. Glieberman v. Fine, supra.

Defendants also argue that the lien is valid, because, contrary to the allegation in paragraph seven of plaintiffs' complaint, the mechanics' lien act does allow persons contracting with proposed purchasers to acquire a lien.

M.C.L. § 570.1; M.S.A. § 26.281 provides in relevant part that:

"Every person who shall, in pursuance of any contract * * * existing between himself as contractor, and the owner, part owner or lessee of any interest in real estate * * * prepare and furnish pursuant to such contract to such owner, part owner or lessee * * * any * * * design * * * plan * * * for the improvement of any lot or parcel of land not exceeding one-quarter section of land * * * shall have a lien therefor upon such (improvement) * * *, and also upon the entire interest of such owner, part owner or lessee in and to the lot or piece of land * * * to the extent of the right, title and interest of such owner, part owner or lessee at the time work was commenced * * *."

As defendants correctly observe,

"the words 'owner, part owner or lessee' shall be construed to include all the interest, either legal or equitable, which such person may have in the real estate upon which the improvements contemplated by [88 MICHAPP 84] this act are made, including the interest held by any person under contracts of purchase, whether in writing or otherwise." M.C.L. § 570.29; M.S.A. § 26.309.

Thus, the legal theory of invalidity which plaintiffs have pled in their complaint is incorrect. However, it does not necessarily follow, as defendants suggest, that plaintiffs have failed to allege falsehood.

A complaint is supposed to set forth the facts upon which the pleader relies in stating his cause of action. GCR 1963, 111.1(1). We view plaintiffs' statement of law in paragraph seven as extraneous, and therefore ignore it in evaluating the facts alleged in the remainder of the complaint. Binder v. Consumers Power Co., 77 Mich.App. 343, 346-347, 258 N.W.2d 221, 223-224 (1977). From those facts, we may infer that the lien was invalid.

We infer from the facts alleged in plaintiffs' complaint that the architectural plans were not implemented. It is unclear whether an architect may ever acquire a mechanics' lien under M.C.L. § 570.1; M.S.A. § 26.281 for the drawing of plans, where no construction follows. See Anno: Architect's Services as Within Mechanic's Lien Statute, 28 A.L.R.3d 1014, § 10, pp. 1042-1043. The Supreme Court has assumed that an architect may not. Chesnow v. Gorelick, 246 Mich. 571, 225 N.W. 4 (1929). However, it is clear that an architect may not acquire such a lien for plans not implemented, where he contracted with the vendee of a real estate contract who subsequently repudiated the contract.

M.C.L. § 570.1; M.S.A. § 26.281 contemplates that the lien will attach to the improvement, or to the "entire interest of (the) owner, part owner or lessee". Where the plans are not implemented, there is no improvement upon which the lien may attach. The "entire interest of (the) owner, part [88 MICHAPP 85] owner or lessee" may include an equitable interest, M.C.L. § 570.29; M.S.A. § 26.309, but where the vendee defaults on the contract, the vendee's interest, and the architect's right to a lien on that interest, are extinguished. Eastern Construction Co. v. Cole, 52 Mich.App. 346, 351-352, 217 N.W.2d 108, 110-111 (1974). The architect's only remedy is a limited right of subrogation. M.C.L. § 570.3; M.S.A. § 26.283. Since plaintiffs allege that defendants Thomas and Rosenzweig anticipatorily breached the contract, we may infer defendants' interest was extinguished. Since there was no interest or improvement upon which the lien might have attached, we infer the lien was invalid. Plaintiffs have pled falsehood.

Defendants also assert that plaintiffs have failed to allege "special" damages, because mere unmarketability of title without the actual loss of a sale is not a compensable injury. See 50 Am.Jur.2d, Libel and Slander, § 546, pp. 1065-1066, Prosser, Torts (4th ed.), § 128, p. 920. However, in Chesebro v. Powers, supra, the Supreme Court held that reasonable expenses incurred by the plaintiff in removing the cloud from his title were recoverable as damages in a disparagement of title action. Plaintiffs in this case request as relief that the cloud on their title be removed, as well as costs and attorney fees. This is a sufficient allegation of "special" damages.

"A motion for summary judgment which is based on GCR 1963, 117.2(3) is designed to test whether there is factual support for a claim. Crowther v. Ross Chemical & Manufacturing, supra.

"When passing upon a motion under this subrule, the court must consider the pleadings, affidavits, depositions, admissions and other documentary evidence then available to it. Rizzo v. Kretschmer, 389 Mich. 363, 207 [88 MICHAPP 86] N.W.2d 316 (1973). Before the judgment may properly be granted the court must be satisfied that it is impossible for the claim asserted to be supported by evidence at trial. Rizzo v. Kretschmer, supra. The motion has the limited function of determining whether material issues of fact exist. The trial court must carefully avoid making findings of fact under the guise of determining that no issues of material fact exist." Partrich v. Muscat, supra at 730-731, 270 N.W.2d at 510.

Defendants argue that there is no evidence of express malice. Malice may not be inferred simply from the filing of an invalid lien; plaintiffs must show...