John J Matouk v. the Robert Barrick Trust ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
JOHN J. MATOUK, UNPUBLISHED
May 2, 2017
Plaintiff-Appellee,
v No. 328983
Oakland Circuit Court
THE ROBERT L. BARRICK TRUST and LC No. 2014-143447-CK
ROBERT L. BARRICK,
Defendants,
and
TIMOTHY MATOUK,
Appellant.
JOHN J. MATOUK and MATOUK
INVESTMENTS OF NOVI, LLC,
Plaintiffs-Appellants,
v No. 331987
Oakland Circuit Court
ROBERT L. BARRICK, THE ROBERT L. LC No. 2014-143447-CB
BARRICK TRUST, and BARRICK
PROPERTIES #40, LLC,
Defendants-Appellees.
Before: MARKEY, P.J., and WILDER and SWARTZLE, JJ.
PER CURIAM.
These consolidated appeals arise out of distinct orders entered below by different circuit
court judges. The change in judges resulted from a midstream transfer of the action below to
business court. In Docket No. 328983, nonparty-appellant, Timothy Matouk (Timothy),claims
an appeal as of right from the trial court’s order granting the motion of plaintiff, John J. Matouk
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(John), to compel Timothy to attend a deposition and answer certain questions.1 Because he
neither was nor will be deposed, we conclude that Timothy’s claim of appeal is moot.
In Docket No. 331987, in which John and Matouk Investments of Novi, LLC (Matouk
Investments) (collectively, plaintiffs), appeal as of right the trial court’s order granting
defendants Robert L. Barrick, the Robert L. Barrick Trust (the Trust), and Barrick Properties
#40, LLC (Barrick Properties) (collectively, defendants) summary disposition of all of plaintiffs’
claims, we affirm.
I. FACTUAL BACKGROUND
This case arises out of plaintiff John’s insolvency during the “Great Recession,” resulting
in numerous judgments against him. John subsequently attempted to shield his assets from
creditors by temporarily transferring title to those assets to Barrick, such attempt being described
euphemistically by the parties as the “parking” of John’s assets with Barrick.
By affidavit, John testified as follows:
1. I am a real estate investor who fell into financial hardship when the
real estate market imploded.
2. Facing foreclosure on my personal residence as well as other
outstanding debt obligations that were coming or had come due, I sought the help
of a trusted friend: Robert L. Barrick.
3. Between 2008 and 2012, I entered into a series of loan transactions
with Robert L. Barrick or various financial entities under his control (“Barrick”)
in which Barrick made certain loans and advances to me (both secured and
unsecured) in exchange for an oral promise that I would repay him for the value
of those loans when my personal finances improved.
* * *
5. Consistent with our loan arrangements, I transferred the title to
certain real and personal properties to Barrick. These transfers were not sales or
purchases, but rather were intended to serve as collateral for the loan obligations I
had incurred, in the event that I was unable to repay Barrick.
6. For example, in March 2009, Barrick took title to real property
situated at 43420 Grand River Ave., Novi, MI, where Fidelity Investments was
the major tenant (the “Fidelity Property”).
1
John argues that this Court lacks appellate jurisdiction over Timothy’s claim of appeal.
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7. At the time the Fidelity Property was provided to Barrick, it had
been sold at sheriff’s auction by Huntington Bank for $1,519,937.91.
* * *
10. Barrick and I agreed that the Fidelity Property would serve as
additional collateral for loans that Barrick had previously provided to me, because
the existing collateral provided to that point had been insufficient.
11. Barrick did not repay me or any business entity under my control
any money for the Fidelity Property, nor did he loan me any additional money at
the time that the deal closed.
* * *
15. Barrick received $1,577,132 in payments on the [Fidelity]
property.
* * *
24. In early 2012, Barrick and I agreed that I could redeem the Fidelity
Property and fully repay Barrick for all outstanding loan obligations that I owed
to Barrick, by paying $2.95 million. We also decided that the amount of credit
given for rents paid on the Fidelity Property would be addressed later.
* * *
26. Barrick fraudulently induced me into believing that I could
reacquire the Fidelity Property once I repair [sic] certain outstanding loan
obligations.
27. A third party purchaser acquired the Fidelity Property from Barrick
Properties. . . .
As referenced in John’s affidavit testimony, the “parking” arrangement between John and
Barrick involved numerous assets and was memorialized by several written agreements. In
October 2008, Barrick, acting as trustee of his Trust, entered into the “Global Agreement” (the
global agreement) with John. The “RECITALS” section of the global agreement provided, in
pertinent part, “It is agreed by the parties that the above mentioned recitals are not mere
declarations, but rather part of the terms and conditions of this Agreement.” The global
agreement had neither a merger clause nor an integration clause. Attached to the global
agreement as exhibits were seven other contractual agreements between the parties. Such
contracts granted Barrick (as trustee of his trust) a variety of interests in John’s real and personal
property. The contracts in question demonstrate a sophisticated understanding of contract law
and secured transactions and include outright purchase agreements, a lease, an assignment of a
lease, several options to purchase real estate, a pledge of security consisting of membership
interests in a limited liability company (LLC), and a security agreement.
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Matouk Investments later assigned the right to redeem the Fidelity property to Barrick
Properties. Matouk Investments also provided a warranty deed conveying the Fidelity property
to Barrick Properties, which was duly recorded.
In July 2009, the parties entered a “First Amendment to Global Agreement” (the first
amendment). The “RECITALS” section of the first amendment provides,
A. On October 17, 2008, the Parties entered into a Global Agreement
(“Agreement”) setting forth the terms and conditions of certain financing
extended by Barrick to [John] as well as the sale and transfer of certain personal
and real property from [John] to Barrick.
B. Since entering the Agreement . . . Barrick has made additional
loans, both secured and non-secured, to [John] and/or entered into transactions for
the benefit of [John], which can be summarized as follows:
(i) $1,732,500 - Fidelity Investments of Novi building
(ii) $ 25,000 - Advanced secured [sic] by Mercedes CL55
(iii) $10,000 - Advance secured by IWC Watch
(iv) $ 90,000 - Advance secured by Ferrari 360 Spider
(v) $105,000 - Advance
C. On July 23, 2009, Barrick has advanced the sum of $75,000 to
[John].
D. The Parties agree that [John] is indebted to Barrick in the amount
$3,300,000.
In pertinent part, the remainder of the first amendment provides,
1. On or before August 15, 2009, [John] shall pay the sum of
$3,000,000 to Barrick.
2. Upon receipt of the payment called for in paragraph 1 above,
Barrick shall transfer the Fidelity Investments of Novi Building to [John] or an
entity to be formed by [John].
* * *
7. Except as otherwise provided herein, all other terms and condition
[sic] of the original Global Agreement, and any subsequent financing related
agreement between the Parties, shall remain in full force and effect.
John failed to make the $3 million payment to Barrick described in ¶ 1 of the first amendment.
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On April 25, 2012, Barrick Properties and NOVI/GR LLC (NOVI/GR)—an entity John
had formed to reacquire the Fidelity property—entered into a purchase agreement under which
NOVI/GR agreed to pay $2.95 million, “plus or minus net pro-rations and adjustments as
provided” in the purchase agreement, for the Fidelity property. The parties to the April 25, 2012
purchase agreement agreed that Barrick Properties was then “the owner of fee simple title to” the
Fidelity property. On appeal, plaintiffs concede that NOVI/GR failed to pay the agreed $2.95
million. Defendants subsequently sold the Fidelity property to a third-party purchaser.
In reaction, John filed a verified complaint against Barrick and his Trust, asserting,
among others, the following claims: (1) breach of contract, (2) fraudulent misrepresentation, (3)
innocent misrepresentation, (4) breach of fiduciary duty, (5) unjust enrichment, (6) common-law
conversion, (7) statutory conversion, (8) accounting, and (9) negligence.2 At defendant’s
motion, the trial court subsequently granted Barrick and his Trust partial summary disposition of
several claims other than those at issue in this appeal.
The matter proceeded to discovery. Timothy was listed as a potential witness in both
John’s witness list and that filed by defendants Barrick and the Trust. In July 2015, John filed a
motion to compel Timothy’s compliance with a subpoena to testify at a deposition. John alleged
that Timothy had ignored a previous subpoena to appear for a deposition and had, through
counsel, indicated that he was only willing to be deposed if the “scope” of the inquiry excluded
certain questions. After entertaining oral argument on the matter, the trial court granted John’s
motion to compel, thereby ordering Timothy to appear for his deposition and to answer the
disputed questions. Timothy filed a claim of appeal from the trial court’s order compelling his
deposition testimony, thereby instituting Docket No. 328983.3
Once the action was transferred to business court, defendants moved for summary
disposition of all of plaintiffs’ claims under MCR 2.116(C)(10). Defendants argued, inter alia,
(1) that plaintiffs could not pursue a breach of contract claim against defendants regarding the
Fidelity property because plaintiffs breached the first amendment, failing to pay defendants $3.3
million within the agreed timeframe, (2) that the first amendment and subsequent purchase
agreements superseded any prior oral agreement between the parties regarding the alleged
“parking” arrangement, (3) that all of plaintiffs’ equitable claims were barred by the doctrine of
unclean hands, (4) that plaintiffs’ innocent and intentional misrepresentation claims failed
because the misrepresentations of which plaintiffs complained were about future conduct, not of
a past or then-existing fact, (5) that even if such purported misrepresentations were considered
under a fraudulent inducement theory, plaintiffs’ claim would still fail because plaintiffs had
2
John later sought and was granted leave to amend his verified complaint. Among other things,
plaintiffs’ first amended complaint added plaintiff Matouk Investments and defendant Barrick
Properties, prompting the trial court to transfer this action to business court.
3
John subsequently filed a motion in this Court to dismiss Timothy’s claim of appeal for lack of
appellate jurisdiction, which this Court denied without prejudice pending “further review by the
case call panel.” John J Matouk v The Robert Barrick Trust, unpublished order of the Court of
Appeals, entered November 4, 2015 (Docket No. 328893).
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adduced no evidence that Barrick did not actually intend to allow plaintiff to reacquire the
Fidelity property when he allegedly promised to do so, (6) that plaintiffs’ negligence claim was
fatally flawed because plaintiffs had cited no legal duty owed them by defendants, (7) that
plaintiffs could not pursue an unjust enrichment claim regarding the Fidelity property because
express contracts between the parties existed regarding that property, and (8) that plaintiffs’
conversion claims should be dismissed because “[t]he failure to make a credit against an alleged
loan balance is not conversion” and also because such claims were barred by the applicable
three-year statute of limitations.
In response, plaintiffs argued, in relevant part, (1) that plaintiffs did not breach the first
amendment because it did not require plaintiffs to repurchase the Fidelity property, instead
merely granting them an option to do so, (2) that the first amendment and subsequent purchase
agreements did not supersede the parties’ agreement regarding the “parking” arrangement, (3)
that defendants had failed to present any evidence that plaintiffs’ hands were unclean and that, in
any event, defendants could not defend on the basis of unclean hands because their hands were
equally dirty, (4) that plaintiffs had stated actionable claims for both fraudulent and innocent
misrepresentation, (5) that the first amendment demonstrated that Barrick owed John a fiduciary
duty because the parties had engaged in transactions “for the benefit of” John, (6) that a genuine
issue of material fact remained whether defendants converted plaintiffs’ property by retaining the
rent proceeds from the Fidelity property without crediting those proceeds against John’s “loan
obligations” to defendants, and (7) that plaintiffs’ negligence claim could proceed on the basis
that Barrick owed plaintiffs a fiduciary duty.
After considering the matter, the trial court granted defendants summary disposition of all
of plaintiffs’ remaining claims. Notably, with regard to plaintiffs’ breach of contract claim, the
trial court decided that the “RECITALS” section of the first amendment, upon which plaintiffs’
breach of contract claim was largely premised, was not part of the parties’ agreement:
[T]he Recitals of the First Amendment were not identified as part of the terms and
conditions of the Agreement – unlike the Global Agreement, which provided that
“the above mentioned recitals are not mere declarations, but rather part of the
terms and conditions of this Agreement.” It follows, therefore, that the Recitals
of the First Amendment are not a part of the terms of the parties’ contract.
Plaintiffs filed this claim of appeal from the trial court’s summary disposition ruling, thereby
instituting Docket No. 331987.
II. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision regarding a motion for summary
disposition. Heaton v Benton Constr Co, 286 Mich. App. 528, 531; 780 NW2d 618 (2009).
A motion under MCR 2.116(C)(10) tests the factual support of a plaintiff's claim.
Summary disposition is appropriate under MCR 2.116(C)(10) if there is no
genuine issue regarding any material fact and the moving party is entitled to
judgment as a matter of law. In reviewing a motion under MCR 2.116(C)(10),
this Court considers the pleadings, admissions, affidavits, and other relevant
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documentary evidence of record in the light most favorable to the nonmoving
party to determine whether any genuine issue of material fact exists to warrant a
trial. A genuine issue of material fact exists when the record, giving the benefit of
reasonable doubt to the opposing party, leaves open an issue upon which
reasonable minds might differ. [Zaher v Miotke, 300 Mich. App. 132, 139-140;
832 NW2d 266 (2013) (quotations marks and citations omitted).]
“This Court is liberal in finding genuine issues of material fact.” Jimkoski v Shupe, 282 Mich
App 1, 5; 763 NW2d 1 (2008).
III. ANALYSIS
A. DOCKET NO. 331987
In Docket No. 331987, plaintiffs argue that the trial court erred by granting defendants
summary disposition of all of plaintiffs’ claims under MCR 2.116(C)(10). We disagree.
1. BREACH OF CONTRACT
“[I]n regard to breach of contract, a party claiming a breach must establish (1) that there
was a contract, (2) that the other party breached the contract, and (3) that the party asserting
breach of contract suffered damages as a result of the breach.” Doe v Henry Ford Health Sys,
308 Mich. App. 592, 601; 865 NW2d 915 (2014).
When interpreting a contract, the examining court must ascertain the intent of the
parties by evaluating the language of the contract in accordance with its plain and
ordinary meaning. If the language of the contract is clear and unambiguous, it
must be enforced as written. A contract is unambiguous, even if inartfully
worded or clumsily arranged, when it fairly admits of but one interpretation.
Every word, phrase, and clause in a contract must be given effect, and contract
interpretation that would render any part of the contract surplusage or nugatory
must be avoided. [McCoig Materials, LLC v Galui Const, Inc, 295 Mich. App.
684, 694; 818 NW2d 410 (2012) (citations omitted).]
“[S]eparate agreements are treated separately. However, when parties enter into multiple
agreements relating to the same subject-matter, we must read those agreements together to
determine the parties’ intentions.” Wyandotte Electric Supply Co v Electrical Technology Sys,
Inc, 499 Mich. 127, 148; 881 NW2d 95 (2016).
Plaintiffs’ argument on appeal is that the parties’ agreement was ambiguous and, thus,
that their intent must be determined by a jury at trial, with the parties permitted to introduce
extrinsic evidence regarding their intent. Plaintiffs’ argument in this regard is dependent on
language found in the first amendment’s “RECITALS” section. Plaintiffs have cited no
contractual language other than those recitals in support of their argument that the parties’
written agreement was ambiguous about whether the Fidelity transaction constituted an outright
sale or a collateralized loan. Because we conclude that the trial court properly determined that
such recitals were not part of the terms and conditions of the parties’ agreement, plaintiffs’
instant claim of error must fail.
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The global agreement’s “RECITALS” section specifically provided that its recitals were
“not mere declarations, but rather part of the terms and conditions of” the global agreement. On
the other hand, the first amendment to the global agreement did not include such language. A
construction of the parties’ agreement nevertheless treating the recitals in the first amendment as
“part of the terms and conditions of” the parties’ agreement would render the “not mere
declarations” language in the global agreement nugatory. In other words, if the parties intended
the recitals in all of their written agreements to be part of their contract, they would not have
included explicit language to that effect in only the global agreement while excluding such
language from subsequent agreements. Ergo, the trial court correctly held that the recitals in the
first amendment cannot be construed as part of the parties’ agreement.
Furthermore, even if we consider the recitals in the first amendment as part of the parties’
agreement, as plaintiffs urge us to do, we nevertheless discern no ambiguity whether the first
amendment was in the form of a collateralized loan agreement or was an agreement regarding an
outright sale. The recitals to the first amendment provided that Barrick had, since entering into
the global agreement, “made additional loans, both secured and non-secured, to [John] and/or
entered into transactions for the benefit of” John, including the redemption of the Fidelity
property. (Emphasis added.) Although splicing the conjunctive “and” and the disjunctive “or”
into “and/or” may not be the optimal way to list alternatives, in context the meaning is readily
apparent here. The plain meaning expressed is that Barrick had “made additional loans, both
secured and non-secured,” to John, or “entered into transactions for” John’s benefit, or done
both. Hence, contrary to plaintiffs’ argument on appeal, the recital language does not actually
suggest that the Fidelity transaction was in the form of a loan, only that it was either a loan or a
transaction for John’s benefit.
And it is indisputable that the first amendment’s provisions regarding the Fidelity
transaction are in the form of an agreement about a contemplated conveyance, not a secured loan
or an option agreement. As the series of contractual agreements appended to the global
agreement demonstrates, the parties knew how to create an option to purchase real estate and
how to grant a security interest in collateral when they wished to do so. The pertinent provisions
of the first amendment, however, merely state, “[o]n or before August 15, 2009, [John] shall pay
the sum of $3,000,000 to Barrick” and that “[u]pon receipt of” said payment, “Barrick shall
transfer” the Fidelity property to John. (Emphases added.) “The word ‘shall’ is generally used
to designate a mandatory provision,” Old Kent Bank v Kal Kustom, Enterprises, 255 Mich. App.
524, 532; 660 NW2d 384 (2003), and no contrary intent is apparent under the terms of the
agreement. Had the parties wished to provide John an “option” to reacquire the Fidelity
property, as plaintiffs argue, they would have used the phrase “may pay the sum of $3,000,000 to
Barrick,” not “shall pay the sum.” Moreover, with regard to the Fidelity transaction, the
agreement does not include the terms “loan,” “collateral,” “security,” or any other words to that
effect. For those reasons, we reject plaintiffs’ contention that the first amendment is ambiguous
about whether the Fidelity transaction memorialized a secured loan.
Additionally, it is undisputed that because John failed to pay the agreed sum to Barrick
by the agreed date, plaintiffs failed to perform under the first amendment.. Thus, the trial court
properly determined that there is no genuine issue of material fact that plaintiffs were the first to
materially breach the parties’ agreement and cannot maintain an action against defendants for
subsequently breaching it. Plaintiffs cannot fail to pay for a multimillion dollar parcel of real
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estate, then complain that the seller failed to convey the property as agreed. See Michaels v
Amway Corp, 206 Mich. App. 644, 650; 522 NW2d 703 (1994). Accordingly, we hold that
summary disposition of plaintiffs’ breach of contract claim was appropriately granted.
2. EQUITABLE CLAIMS
Plaintiffs also sought the aid of equity in the trial court, asserting equitable claims
including that of unjust enrichment, see AFT Mich v Michigan, 303 Mich. App. 651, 677; 846
NW2d 583 (2014), accounting, see Bondy v Davis, 40 Mich. App. 153, 159; 198 NW2d 418
(1972), breach of fiduciary duty, see Rapistan Corp v Michaels, 203 Mich. App. 301, 313-314;
511 NW2d 918 (1994), constructive trust, see McPeak v McPeak, 457 Mich. 311, 314-315; 577
NW2d 670 (1998), and equitable mortgage, see Burkhardt v Bailey, 260 Mich. App. 636, 659; 680
NW2d 453 (2004).
The trial court did not address defendants’ unclean hands defense. However, as an
alternative ground for affirmance,4 we rule that plaintiffs’ equitable claims are barred by the
doctrine of unclean hands.
“The clean hands maxim is an integral part of any action in equity.” Stachnik v Winkel,
394 Mich. 375, 382; 230 NW2d 529 (1975). The doctrine of unclean hands “is a self-imposed
ordinance that closes the doors of a court of equity to one tainted with inequitableness or bad
faith relative to the matter in which he seeks relief, however improper may have been the
behavior of the defendant.” Id. (quotation marks and citations omitted). “The very foundation
of a court of equity is good conscience, and it will not lend its aid . . . to assist law violators.”
Society of Good Neighbors v Van Antwerp, 324 Mich. 22, 28; 36 NW2d 308 (1949). Further, “a
tortious act can never be the foundation of an equitable right.” Putnam v Fitzgerald, 44 Mich.
113, 116; 6 N.W. 198 (1880). “Since the clean hands maxim is designed to preserve the integrity
of the judiciary, courts may apply it on their own motion even though it has not been raised by
the parties or the courts below.” Stachnik, 394 Mich. at 382.
Although it is true that “[a] defendant with unclean hands may not defend on the ground
that the plaintiff has unclean hands as well,” Attorney General v PowerPick Club, 287 Mich. App.
13, 53; 783 NW2d 515 (2010), that rule does not mean that a court will afford equitable relief to
the plaintiff in such situations. Instead, under the doctrine of in pari delicto, when the parties are
equally in the wrong, “the law will not lend itself to afford relief to one as against the other, but
will leave them as it finds them.” Orzel v Scott Drug Co, 449 Mich. 550, 557; 537 NW2d 208
(1995) (quotation marks and citation omitted). See also Pantely v Garris, Garris & Garris, PC,
180 Mich. App. 768, 774; 447 NW2d 864 (1989) (“In pari delicto, as a common law doctrine,
expresses the principle that wrongdoers ought each to bear the untoward consequences of their
4
See Demski v Petlick, 309 Mich. App. 404, 441; 873 NW2d 596 (2015) (“[T]his Court will
affirm when the trial court reaches the right result for the wrong reason.”); Hanton v Hantz Fin
Servs, Inc, 306 Mich. App. 654, 669; 858 NW2d 481 (2014) (“An appellee may argue alternative
grounds for affirmance without filing a cross-appeal if the appellee does not seek a more
favorable decision.”).
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wrongdoing without legal recompense or recourse. . . . [C]ourts should not lend their aid to one
who founds a cause of action on an immoral or illegal act. . . . Suit is barred not because the
defendant is right, but rather because the plaintiff, being equally wrong, has forfeited any claim
to the aid of the court.”).
At a minimum, the “parking” arrangement between the parties may be construed as an
immoral attempt to defraud John’s creditors by sheltering assets from collection. See Quirk v
Thomas, 6 Mich. 76, 101 (1858) (opinion of MANNING, J.) (“A sale or assignment for the purpose
of delaying, hindering, or defrauding a creditor in the collection of his debt, was illegal at the
common law, and is, in itself, immoral, and against public policy. And the statutes declaring
such transactions void as against creditors, are only in affirmance of the common law on that
subject.”) (quotation marks and citation omitted). Such conduct was also actionable under the
Uniform Fraudulent Transfer Act (UFTA), MCL 566.31 et seq., most notably pursuant to MCL
566.34. Hence, plaintiffs’ hands are unclean, and they are unentitled to equitable relief.
Moreover, even assuming that the parties’ hands are equally dirty, under the doctrine of in pari
delicto the parties should be left in the very situation that they have fashioned. When he sought
to defraud his creditors by hiding assets, John assumed the risk that his immoral conduct might
be greeted in like kind. There is, as the old aphorism puts it, no honor among thieves.
Because plaintiffs’ hands are unclean, they cannot seek the aid of equity. Thus, the trial
court could not have committed error warranting reversal by summarily disposing of plaintiffs’
unjust enrichment,5 accounting, breach of fiduciary duty, constructive trust, and equitable
mortgage claims.
3. MISREPRESENTATION
To establish a prima facie claim of either fraudulent or innocent misrepresentation, a
plaintiff must prove, among other things, that the defendant made a material misrepresentation.
Zaremba Equip, Inc v Harco Nat’l Ins Co, 280 Mich. App. 16, 38-39; 761 NW2d 151 (2008).
Here, with regard to both fraudulent and innocent misrepresentation, the misrepresentation
alleged by plaintiffs is that Barrick represented that, after he received the Fidelity property from
plaintiffs, he would permit plaintiffs to reacquire it for fair value. Viewing the record evidence
in the light most favorable to plaintiffs as the nonmoving party, there is no genuine issue of
material fact that Barrick did subsequently agree to permit plaintiffs to reacquire the Fidelity
property for a mutually agreed sum. Indeed, John’s own affidavit acknowledges that, in 2012, he
and Barrick “agreed that [John] could redeem the Fidelity Property and fully repay Barrick for
all outstanding loan obligations . . . by paying $2.95 million,” further agreeing “that the amount
of credit given for rents paid on the Fidelity Property would be addressed later.” There is, as
such, no triable question whether Barrick’s representation was false, and the trial court did not
err by granting defendants summary disposition of plaintiffs’ misrepresentation claims.
5
Under well-settled law, the existence of express contracts between the parties covering the
same subject matter was also fatal to plaintiffs’ unjust enrichment claim. See, e.g., Bellevue
Ventures, Inc v Morang-Kelly Inv, Inc, 302 Mich. App. 59, 64; 836 NW2d 898 (2013).
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4. CONVERSION
It is undisputed that actual legal title to the Fidelity property passed to defendants before
they began to retain the rent proceeds from the Fidelity property. Nevertheless, plaintiffs
contend that defendants converted the rent proceeds by retaining them without crediting the rent
received against plaintiffs’ “loan obligations.” Assuming that such loan obligations existed and
were enforceable, as plaintiffs claim, plaintiffs’ common-law conversion claim still necessarily
fails. In the creditor-debtor context, “[t]o support an action for conversion of money, the
defendant must have obtained the money without the owner’s consent to the creation of a debtor-
creditor relationship and must have had an obligation to return the specific money entrusted to
his care.” Lawsuit Fin, LLC v Curry, 261 Mich. App. 579, 591; 683 NW2d 233 (2004) (quotation
marks and citation omitted; emphasis added). Here, plaintiffs allege that they did consent to the
creation of a debtor-creditor relationship, whereby defendants would retain the rental proceeds
from the Fidelity property (i.e., the specific money entrusted to their care), crediting such
amounts against existing loan obligations. In consequence, plaintiffs are, as a matter of law,
unentitled to maintain a common-law conversion action against defendants.
Likewise, although statutory conversion is a distinct claim, Aroma Wines & Equip, Inc v
Columbian Distrib Servs, Inc, 497 Mich. 337, 361; 871 NW2d 136 (2015), in this case the same
outcome is appropriate for both conversion claims. Because defendants did not “convert” the
rent proceeds under the common-law principles that govern conversion, defendants are not liable
for statutory conversion either. Because the term “converting” in MCL 600.2919a is one with a
particular meaning under the common law, we construe it as such. See MCL 8.3a (“[T]echnical
words and phrases, and such as may have acquired a peculiar and appropriate meaning in the
law, shall be construed and understood according to such peculiar and appropriate meaning.”).
Under the applicable legal meaning, defendants’ retention of the rent proceeds did not constitute
a “converting” of plaintiffs’ assets to defendants’ own use. Thus, the trial court did not err by
summarily disposing of plaintiffs’ statutory conversion claim.
5. NEGLIGENCE
Finally, we conclude that the trial court did not err by granting defendants summary
disposition of plaintiffs’ negligence claim. Plaintiffs have failed to identify a legally cognizable
duty owed them by defendants, which is an essential element of any negligence claim. See
Loweke v Ann Arbor Ceiling & Partition Co, LLC, 489 Mich. 157, 162; 809 NW2d 553 (2011).
“[T]he question of whether the common law, as a matter of public policy, ought to impose” a
legal duty is one of law and is decided by courts, not juries. Chelik v Capitol Transp, LLC, 313
Mich. App. 83, 89; 880 NW2d 350 (2015). Ordinarily, courts consider a number of factors in
deciding whether to impose a legal duty, including “the relationship of the parties, the
foreseeability of the harm, the burden on the defendant, and the nature of the risk presented.”
Hill v Sears, Roebuck & Co, 492 Mich. 651, 661; 822 NW2d 190 (2012) (quotation marks and
citation omitted).
But here, plaintiffs offered the trial court no argument that such factors militated in favor
of imposing a legal duty on defendants. Instead, plaintiffs argued, and continue to argue in this
Court, that their negligence claim can be maintained on the basis of a fiduciary duty that Barrick
allegedly owed plaintiffs. As we have already explained, however, that equitable theory is
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barred by the doctrine of unclean hands. Consequently, even if a negligence claim can be
pursued based on the existence of a fiduciary duty—plaintiffs have cited no authority indicating
that such a theory is viable—plaintiffs cannot proceed under that theory in this case. Further,
plaintiffs could not expect the trial court to fashion some alternative duty argument on their
behalf, nor will we do so. The Courts of this state do not serve as research assistants for the
parties before them. See Walters v Nadell, 481 Mich. 377, 388; 751 NW2d 431 (2008) (“Trial
courts are not the research assistants of the litigants; the parties have a duty to fully present their
legal arguments to the court for its resolution of their dispute.”); Mitcham v City of Detroit, 355
Mich. 182, 203; 94 NW2d 388 (1959) (“It is not enough for an appellant in his brief simply to
announce a position or assert an error and then leave it up to this Court to discover and
rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then
search for authority either to sustain or reject his position.”) (citations omitted).
In any event, we fail to see how any legal duty plaintiffs might identify could viably
support their negligence claim under the circumstances at bar. Generally, “a tort action will not
lie when based solely on the nonperformance of a contractual duty.” Fultz v Union-Commerce
Assoc, 470 Mich. 460, 466; 683 NW2d 587 (2004). The threshold inquiry “is whether the
defendant owed a duty to the plaintiff that is separate and distinct from the defendant’s
contractual obligations. If no independent duty exists, no tort action based on a contract will
lie.” Id. (emphasis added). Upon plenary review of the pleadings and the record, we discern no
duty—aside from contractual duties—that defendants owed plaintiffs. Because plaintiffs have
identified no legal duty to support their negligence claim, the trial court did not err by summarily
disposing of it.
B. DOCKET NO. 328983
Having concluded that the trial court properly granted defendants summary disposition of
all claims in this action, we turn to Timothy’s claim of appeal. Before reaching the substantive
merits, this Court will “[a]s a rule, . . . decline to consider” issues “that it does not have the
power to determine, including those that are moot.” In re MCI Telecommunications Complaint,
460 Mich. 396, 436 n 13; 596 NW2d 164 (1999). An issue is moot if “it presents nothing but
abstract questions of law, which do not rest upon existing facts or rights,” Anglers of AuSable,
Inc v Dep’t of Environmental Quality, 489 Mich. 884 (2011) (quotation marks and citation
omitted), or “when a subsequent event renders it impossible for the appellate court to fashion a
remedy,” Garrett v Washington, 314 Mich. App. 436, 450; 886 NW2d 762 (2016) (quotation
marks and citation omitted). Here, the record indicates that Timothy was never actually deposed
pursuant to the order he seeks to appeal, nor, given our ruling in Docket No. 331987, will he be
deposed. Consequently, Timothy’s claim of appeal is moot.
IV. CONCLUSION
In Docket No. 328983, we dismiss, as moot, Timothy’s claim of appeal. Because we
issue no substantive ruling in Docket No. 328983, no party may tax costs in that matter pursuant
to MCR 7.219.
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In Docket No. 331987, we affirm the trial court’s contested summary disposition ruling.
As the prevailing parties, defendants may tax costs pursuant to MCR 7.219.
/s/ Jane E. Markey
/s/ Kurtis T. Wilder
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