Nino Salvaggio Investment Company Ltd v. William Beaumont Hospital ( 2023 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
NINO SALVAGGIO INVESTMENT COMPANY UNPUBLISHED
LTD., August 3, 2023
Plaintiff-Appellant,
v No. 362212
Oakland Circuit Court
WILLIAM BEAUMONT HOSPITAL, INC., LC No. 2020-182616-CB
Defendant-Appellee.
Before: GADOLA, P.J., and MURRAY and MALDONADO, JJ.
PER CURIAM.
Plaintiff, Nino Salvaggio Investment Company Ltd., appeals as of right the trial court’s
order granting defendant William Beaumont Hospital, Inc.’s motion for summary disposition,
under MCR 2.116(C)(10) (no genuine issue of material fact). We affirm in part, reverse in part,
and remand for further proceedings consistent with this opinion.
I. BACKGROUND
This matter stems from the parties’ failed negotiations concerning plaintiff, a specialty
grocer, leasing a concession space at Beaumont Hospital in Royal Oak and a grocery space
adjacent to the hospital within Woodward Corners Development, also owned by defendant. At all
relevant times, Carolyn Wilson was defendant’s Chief Operating Officer, and plaintiff was owned
in part by Leonard Salvaggio.
In 2016, Arkan Jonna, owner of Tower Construction (which is affiliated with defendant),
approached Michael McInerney, an attorney and owner of MKM Consulting, Inc., which
represents plaintiff. According to McInerney, Jonna wanted to discuss plaintiff becoming
defendant’s “anchor grocer tenant at its yet-to-be developed Woodward Corners [Development]
space.” Tower Construction was “to build the core and shell for all the buildings on the property,”
while Hobbs + Black Architects would design the Woodward Corner Market building. David
Schostak, the President and Chief Executive Officer for Schostak Brothers and Company, and
Jonna were “essentially the leasing agents” for defendant.
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Leonard and plaintiff’s other owners agreed they would pursue the opportunity with
defendant. At some later point, the parties began negotiating the terms of a letter of intent (LOI)
and reviewing design concepts for the Woodward Corner Market building. Additionally, plaintiff
“insisted on, and [defendant] agreed, that [plaintiff] would [also] . . . be the exclusive tenant for
[a] concession space across the street at the Beaumont Hospital. . . .” According to plaintiff’s
representatives, they were repeatedly assured by defendant’s representatives that plaintiff was the
selected grocer, which prompted Leonard to approve the creation of a commissary. The
commissary would serve to “centralize certain functions within the stores and to create capacity
for the two operations” within Woodward Corner Market and the hospital concession space.
On February 2, 2018, Ronald Henry, defendant’s then Vice President of Real Estate,
Design, and Construction, sent an e-mail to Justine O’Brien and Thomas Litzler, who worked for
Schostak Brothers. David and Jonna were cc’ed on the e-mail, which stated:
This email is official notification that [defendant] has approved [plaintiff]
as the Grocer for Woodward Corners at Beaumont. The lease rate shall be
$15/[square foot]. Please proceed with finalizing the[] LOI and let me know when
you are ready to engage outside counsel or [defendant’s] counsel . . . to begin lease
negotiations. Also, please notify the design and construction team so they can begin
detailed design documents for the . . . building. On a similar yet separate note, we
will also need to begin discussions with [plaintiff] for leasing the space currently
occupied by Papa Joe’s in the near future. Once the [plaintiff’s] schedule is defined
and we have an idea on when the store will be completed we can then work to
determine timing on the work required in the South Tower to allow [plaintiff] time
for renovation.
Henry forwarded the February 2, 2018, e-mail to McInerney. A short time later, on
February 28, 2018, a confidentiality and nondisclosure agreement (NDA) was executed, which
provided that neither party could identify the other party “in any announcement, publication,
publicity, promotional, or advertising material concerning the existence or terms of this Agreement
without the express prior written consent of that other party.” Negotiations concerning the LOI
continued, and although it is disputed who was to blame for the delay in the execution of the LOI,
it was ultimately executed on June 21, 2018. It contained several terms concerning the Woodward
Corner Market lease, but the parties agreed those terms were not binding and were contingent upon
defendant’s approval of plaintiff’s financial information and execution of a lease. The LOI also
contained a clause entitled “CONCESSION LEASE EXCLUSIVITY” (exclusivity clause),
which stated:
[Plaintiff] shall have the exclusive right to negotiate and enter into a lease
with [defendant] to provide a food and beverage concession within Beaumont
Hospital-Royal Oak North Tower (“Concession Lease Exclusivity”). The
Concession Lease Exclusivity shall begin upon the execution date of this letter and
expire on the 90th day following the execution date of the lease for the Premises
(“Concession Lease Exclusivity Period”). Upon expiration of the Concession
Lease Exclusivity Period, [defendant] shall have no further obligation to [plaintiff]
for space within Beaumont Hospital—Royal Oak North Tower location.
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It was further agreed the terms of the LOI were “subject to” the NDA, and that the exclusivity
clause concerning the concession space was binding.
After the LOI was executed, Wilson wanted to announce the deal publicly. Plaintiff’s
representatives declined because of a concern that plaintiff’s reputation would be harmed if the
deal was not completed. The parties began negotiating the terms of the lease agreement for the
Woodward Corner Market building and discussed changes to the building’s size and design.
Although defendant’s representatives wanted to execute a lease by July or August 2018, plaintiff’s
representatives elected to move at a “reasonable pace,” and were concerned that they were not
being provided with necessary cost information to complete the lease agreement for the Woodward
Corner Market building.
A meeting was held on September 6, 2018, to address the lack of progress and the parties’
concerns. During the meeting, Leonard expressed frustration and a desire to re-negotiate certain
terms in the LOI and potentially re-open the planned unit development (PUD) with respect to the
Woodward Corner Market building. Two weeks later, “an all hands meeting” was held. Leonard,
who was present, found the tone of defendant’s representatives to be “insulting,” and he knew
“something wasn’t right.” At the meeting, it was agreed plaintiff would accept “a smaller
footprint” so defendant’s representatives could avoid the timely re-submission of the PUD to Royal
Oak officials. This concession was based on certain design changes to the Woodward Corner
Market building. Plaintiff’s representatives were also provided with additional cost information.
Although some progress had been made, Wilson decided to negotiate with Meijer Inc.,
which defendant had previously considered for the grocer at Woodward Corner Market.
According to Henry, Wilson instructed him to “negotiate and expedite . . . with Meijer[],” and to
not inform plaintiff about this. Henry was instructed to “drag [plaintiff] along” in the event the
negotiations with Meijer were unsuccessful. Wilson told Henry to tell plaintiff that defendant was
“still reviewing” matters if he was asked for updates. Henry testified he complied with Wilson’s
instructions, even though doing so made him “very uncomfortable” because he knew plaintiff was
“purchasing advanced long lead items” in anticipation of reaching an agreement with defendant.
Henry told his staff, Litzler, Jonna, and David about Wilson’s instructions. Meanwhile, in October
2018, plaintiff’s representatives met with representatives from Hobbs + Black Architects to discuss
the building design. Plaintiff also completed the commissary, at an alleged total cost of
$943,735.83.
Wilson terminated Henry’s employment in January 2019. Thereafter, Meijer and
defendant executed a lease agreement for Woodward Corner Market, which was publicly
announced one month later. Although defendant’s representatives had gone “radio silent” in the
time leading up to the announcement, Leonard was still surprised.
Plaintiff subsequently filed suit against defendant, alleging (1) breach of contract with
respect to the exclusivity clause and the NDA, (2) fraudulent misrepresentation, (3) silent fraud,
(4) negligent and innocent misrepresentation, and (5) promissory estoppel.
After the close of discovery, defendant moved for summary disposition under MCR
2.116(C)(10). In relevant part, defendant argued that: (1) the exclusivity clause lacked material
terms and was unenforceable; (2) plaintiff could not present substantively admissible evidence to
support breach of the NDA; (3) plaintiff’s alleged reliance on statements made by defendant’s
representatives was unreasonable; (4) it did not owe plaintiff a duty to disclose that it was
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negotiating with Meijer, and (5) plaintiff’s promissory estoppel claim failed because defendant did
not make definite and clear promises to plaintiff. Plaintiff opposed the motion, arguing genuine
issues of material fact existed for trial.1 The trial court waived oral arguments and granted
summary disposition in favor of defendant under MCR 2.116(C)(10). This appeal followed.
II. STANDARDS OF REVIEW AND RELEVANT AUTHORITY
We review “de novo a trial court’s decision on a motion for summary disposition.” Bailey
v Antrim Co, 341 Mich App 411, 421; 990 NW2d 372 (2022) (quotation marks and citation
omitted). “De-novo review means that we review the legal issue independently, without deference
to the lower court.” Bowman v Walker, 340 Mich App 420, 425; 986 NW2d 419 (2022) (quotation
marks and citation omitted).
A motion under MCR 2.116(C)(10) . . . tests the factual sufficiency of a
claim. When considering such a motion, a trial court must consider all evidence
submitted by the parties in the light most favorable to the party opposing the
motion. A motion under MCR 2.116(C)(10) may only be granted when there is no
genuine issue of material fact. A genuine issue of material fact exists when the
record leaves open an issue upon which reasonable minds might differ. [El-Khalil
v Oakwood Healthcare, Inc, 504 Mich 152, 160; 934 NW2d 665 (2019) (quotation
marks and citations omitted; emphasis omitted).]
“[A]ffidavits, depositions, admissions, or other documentary evidence may be submitted
by a party to support or oppose the grounds asserted in [a] motion” for summary disposition. MCR
2.116(G)(2). However, such evidence “shall only be considered to the extent that the content or
substance would be admissible as evidence to establish or deny the grounds stated in the motion.”
MCR 2.116(G)(6) (emphasis added). “The trial court is not permitted to assess credibility, weigh
the evidence, or resolve factual disputes, and if material evidence conflicts, it is not appropriate to
grant a motion for summary disposition under MCR 2.116(C)(10).” Ass’n of Home Help Care
Agencies v Dep’t of Health & Human Servs, 334 Mich App 674, 684 n 4; 965 NW2d 707 (2020)
(quotation marks and citation omitted).
We review de novo questions involving the existence and interpretation of a contract.
Kloian v Domino’s Pizza, LLC, 273 Mich App 449, 452; 733 NW2d 766 (2006). In doing so, we
keep the following principles in mind:
[T]he main goal in the interpretation of contracts is to honor the intent of
the parties. This is done by giving the plain and unambiguous words of a contract
their plain and ordinary meaning. The words and phrases of the contract cannot be
read in isolation, but must be construed in context and read in light of the contract
as a whole. If the contract, although inartfully worded or clumsily arranged, fairly
admits of but one interpretation, it is not ambiguous. [Allen Park Retirees Ass’n,
1
Plaintiff also argued summary disposition in its favor was proper under MCR 2.116(I)(2) on the
breach-of-contract claims. However, on appeal plaintiff no longer pursues that argument.
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Inc v Allen Park, ___ Mich App ___, ___; ___ NW2d ___ (2023) (Docket No.
357956); slip op at 5 (alteration in original; quotation marks and citations omitted).]
III. ANALYSIS
A. ALLEGED BREACH OF THE EXCLUSIVITY CLAUSE
Plaintiff argues summary disposition on the breach-of-contract claim relating to the
exclusivity clause in the LOI was improper because genuine issues of material fact existed as to
whether the exclusivity clause was enforceable.
A valid contract requires the following elements: “(1) parties competent to contract, (2) a
proper subject matter, (3) legal consideration, (4) mutuality of agreement, and (5) mutuality of
obligation.” AFT Mich v Michigan, 497 Mich 197, 235; 866 NW2d 782 (2015). Mutuality of
agreement requires “a meeting of the minds on all the essential terms,” which is judged objectively
by looking at the visible acts and expressed words of the parties. Kloian, 273 Mich App at 454.
“A mere expression of intention does not make a binding contract[.]” Kamalnath v Mercy
Memorial Hosp Corp, 194 Mich App 543, 549; 487 NW2d 499 (1992). “The party seeking to
enforce a contract bears the burden of proving that the contract exists.” AFT Mich, 497 Mich at
235.
As noted earlier, the parties agreed plaintiff would have the “exclusive right to negotiate. .
. a lease with” defendant “to provide a food and beverage concession within Beaumont Hospital—
Royal Oak North Tower.” Plaintiff argues a question of material fact exists regarding whether this
language constitutes an enforceable agreement.2 “A valid contract requires mutual assent on all
essential terms. Mere discussions and negotiation cannot be a substitute for the formal
requirements of a contract.” Eerdmans v Maki, 226 Mich App 360, 364; 573 NW2d 329 (1997)
(citations omitted). However, “[a] contract to make a subsequent contract [i.e. an ‘agreement to
agree’] is not per se unenforceable; in fact, it may be just as valid as any other contract.” Opdyke
Investment Co v Norris Grain Co, 413 Mich 354, 359; 320 NW2d 836 (1982). “To be enforceable,
a contract to enter into a future contract must specify all its material and essential terms and leave
none to be agreed upon as the result of future negotiations.” Socony-Vacuum Oil Co v Waldo, 289
Mich 316, 323-324; 286 NW 630 (1939) (quotation marks and citation omitted).
If all the conditions of the postponed agreement are specified in such
agreement, it is an agreement in praesenti. But where the conditions of the deferred
contract are not set out in the provisional one, or where material conditions are
omitted, it is not a contract in praesenti, because the minds have not met and may
never meet. [Id. at 322-323 (quotation marks and citation omitted).]
See also Hansen v Catsman, 371 Mich 79, 82-84; 123 NW2d 265 (1963) (finding no enforceable
agreement when essential terms of building plans for a drug store were left for future negotiations
and had to be “acceptable to both parties”) and Professional Facilities Corp v Marks, 373 Mich
2Plaintiff acknowledges it only had the exclusive right to negotiate a lease with defendant.
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673, 678-679; 131 NW2d 60 (1964) (providing that agreements to negotiate are unenforceable for
lack of material terms). Additionally:
When the evidence clearly shows, either by reason of definite
language or otherwise, that the only (and the complete) subject
matter that is under consideration is left for further negotiation and
agreement, there is no contract, not for vagueness or indefiniteness
of terms but for lack of any terms. The parties may use words
constituting an ‘agreement to agree’ or an ‘agreement to negotiate,’
with the result that they feel a sense of ‘obligation.’ This is merely
an obligation to discuss terms . . . not an obligation . . . to render any
other future performance. [1 Corbin on Contracts § 4.1, p 531.]
It is undisputed that the exclusivity clause (1) identifies the parties (plaintiff and
defendant), (2) the subject matter (the concession space lease), and (3) the date when the
exclusivity clause became binding and when it expired. On its face, the exclusivity clause is an
agreement to negotiate the concession space lease after June 21, 2018, which is the date the LOI
was executed. However, there is no mention of several material terms, e.g., the size of the
concession space, the amount of rent to be paid for the concession space, or the term of the
concession space lease. See e.g., Gedvick v Hill, 333 Mich 689, 695; 53 NW2d 583 (1952) (“It
has been held . . . that a memorandum[,] to be sufficient . . . must be complete in itself, and leave
nothing to rest in parol.”) (quotation marks and citations omitted); McFadden v Imus, 192 Mich
App 629, 633; 481 NW2d 812 (1992) (“[A] writing transferring an interest in land (other than
leases not exceeding one year) must be certain and definite with regard to the parties, property,
consideration, premises, and time of performance.”).
Here, the exclusivity clause does not contain material particulars with regard to its subject
matter: the concession space lease. As such, it is merely an unenforceable agreement to negotiate
rather than an enforceable agreement to agree. The trial court did not err by granting summary
disposition on plaintiff’s breach-of-contract claim with respect to the exclusivity provision in the
LOI.
B. ALLEGED BREACH OF THE NDA
Turning to plaintiff’s other breach of contract claim, we agree with plaintiff that the trial
court erred in disregarding some of the evidence proffered by plaintiff regarding breach of the
NDA on the basis that it was inadmissible hearsay. But in the end, summary disposition was
properly entered for defendant on this claim.
In relevant part, under the NDA the parties agreed not to “identify the other party in any
announcement, publication, publicity, promotional, or advertising material . . . without the express
prior written consent of that other party. . . .” To support defendant breached the NDA, plaintiff
cited portions of McInerney’s deposition testimony, which plaintiff claimed supported the
assertion that defendant’s representatives were identifying plaintiff as the grocer to attract potential
tenants to Woodward Corner Development. The trial court concluded this testimony amounted to
inadmissible hearsay, and disregarded the evidence. And, without that evidence, dismissed the
claim because of the lack of evidentiary support.
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Hearsay is a “statement,” other than one made by the declarant while testifying “at the
current trial or hearing,” offered “to prove the truth of the matter asserted in the statement.” MRE
801(c). The alleged statements all concern the fact that plaintiff was selected as the grocer at
Woodward Corner Market. However, as plaintiff argues, the statements were not offered to prove
the truth of the matter asserted, i.e., that plaintiff was the selected grocer. Rather, the statements
were offered to prove the statements were made as an attempt to publicize the new grocery tenant.
Because the alleged statements were offered for something other than to prove the truth of the
matter asserted, they do not amount to hearsay. See Hilliard v Schmidt, 231 Mich App 316, 318;
586 NW2d 263 (1998), abrogated in part on other grounds by Molloy v Molloy, 247 Mich App
348, 349-350; 637 NW2d 803 (2001) (“Statements offered to show that they were made . . . are
not hearsay.”).
Although the deposition testimony was not hearsay, that conclusion does not yet get
plaintiff over the hurdle. Instead, we agree with defendant that all of Leonard’s testimony, and
virtually all of McInerney’s testimony, about unidentified people at a golf course or “around town”
asking whether it was true that plaintiff was the selected grocer, was not admissible because of a
lack of foundation. See Detroit & Milwaukee RR Co v Van Steinburg, 17 Mich 99, 108 (1868),
and Carden v Westinghouse Electric Corp, 850 F2d 996, 1002 (CA 3, 1988). With one exception,
none of the offered testimony creates a question of fact on whether defendant made public
statements that plaintiff was the selected grocer in violation of the NDA. Though some of the
testimony was to the effect that the “word on the street” was that plaintiff was selected as the
grocer, none of that testimony linked that knowledge as having come from defendant. Nor could
any deponent (again, with one exception) identify a single witness by name who could testify to
this “word on the street.”
However, McInerney did identify with some specificity about the alleged disclosure of
plaintiff as the grocer. Specifically, McInerney testified that Joe Rosenberg heard from two CBRE
agents that a Schostak representative named Justine said that plaintiff was going to be the grocer.
Again, there is a foundational problem because the CBRE agents who allegedly repeated what
“Justine” said are not identified, but at least there was more specificity in the chain of witnesses.
But regardless, even considering that testimony, there still was no genuine issue of material fact
that defendant did not identify plaintiff as the grocer in any “announcement, publication, publicity,
promotional, or advertising material concerning the existence or terms of this Agreement.” A
casual remark by a real estate broker acting on behalf of defendant does not amount to an
“announcement, publication, publicity, promotional or advertising material” concerning the
agreement. Instead, the plain language of the NDA is focused on official-type announcements
and publicity, much like what Wilson wanted plaintiff to do after the LOI was signed. But, because
plaintiff did not consent as required by the NDA, the announcement was not held.
Summary disposition of this part of the breach of contract claim was proper.
C. FRAUDULENT MISREPRESENTATION
Plaintiff also argues that summary disposition on the fraudulent misrepresentation claim
was improper because genuine issues of material fact existed regarding whether plaintiff’s
representatives reasonably relied on the statements made by defendant’s representatives.
“Michigan’s contract law recognizes several interrelated but distinct common-law
doctrines” that are “loosely aggregated under the rubric of ‘fraud’. . . .” Titan Ins Co v Hyten, 491
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Mich 547, 555; 817 NW2d 562 (2012). “These doctrines include actionable fraud, also known as
fraudulent misrepresentation; innocent misrepresentation; and silent fraud, also known as
fraudulent concealment.” Id. In Maurer v Fremont Ins Co, 325 Mich App 685, 695; 926 NW2d
848 (2018), this Court reiterated the elements of fraudulent misrepresentation:
(1) the [party] made a material representation; (2) the representation was
false; (3) when the [party] made the representation, the [party] knew that it was
false, or made it recklessly, without knowledge of its truth as a positive assertion;
(4) the [party] made the representation with the intention that the [opposing party]
would act upon it; (5) the [opposing party] acted in reliance upon it; and (6) the
[opposing party] suffered damage. [Id., quoting M & D, Inc v McConkey, 231 Mich
App 22, 27; 585 NW2d 33 (1998) (quotation marks and citation omitted; alterations
in original).]
A plaintiff in a fraud case must prove that any reliance on the defendant’s alleged
misrepresentations was reasonable. Novak v Nationwide Mut Ins Co, 235 Mich App 675, 690-
691; 599 NW2d 546 (1999). “There can be no fraud where a person has the means to determine
that a representation is not true.” Nieves v Bell Indus, Inc, 204 Mich App 459, 464; 517 NW2d
235 (1994). Indeed, “a plaintiff cannot claim to have been defrauded where he [or she] had
information available to him that he chose to ignore.” Id. at 465. “Generally, a claim of fraud
cannot be based on a promise of future conduct. An exception to this rule exists, however, if a
promise is made in bad faith without the intention to perform it.” Derderian v Genesys Health
Care Sys, 263 Mich App 364, 378; 689 NW2d 145 (2004) (citations omitted).
Although plaintiff argues that Henry repeatedly made misrepresentations at the direction
of Wilson, the trial court found that plaintiff could not have reasonably relied on these alleged
misrepresentations. On appeal, plaintiff argues the trial court failed to acknowledge that the
exclusivity clause in the LOI concerning the concession space was binding on the parties.
However, the exclusivity clause is not enforceable because it lacked material terms. Moreover,
the purported representations all relate to the lease agreement for the Woodward Corner Market
building—not the concession space. Indeed, there is no indication the parties began to negotiate
the concession space lease until after it was announced Meijer was selected as the grocer. Plaintiff
does not rely on any statements that were made during these negotiations, which appear to have
been brief. In sum, there is no evidence that defendant’s representatives made misrepresentations
concerning the concession space lease.
Instead, the alleged misrepresentations relate solely to the Woodward Corner Market lease.
With respect to whether plaintiff’s representatives could reasonably rely on these representations,
the LOI stated:
This Letter of Intent includes some of the basic business terms upon which
[defendant] may consider entering into lease negotiations for space at the Center.
Not all of the essential terms required for a lease are contained in this letter.
Additional items may arise in our continuing discussions. This proposal is
expressly contingent upon (a) receipt, review and approval by [defendant] of
financial statements and credit check authorization for all parties . . . (b) full
execution of a lease on [defendant’s] template retail lease form for the Center.
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When viewing the evidence in a light most favorable to plaintiff, the trial court did not err
by concluding plaintiff failed to create a genuine issue of material fact as to whether it reasonably
relied on defendant’s alleged fraudulent misrepresentations. First, the parties agreed that the LOI
did not constitute “a lease or an offer to lease” with respect to the Woodward Corner Market
building. Rather, it was “intended to be a summary of general business terms and conditions for
consideration for a formal lease.” The parties also agreed that “[n]either [party] shall be bound by
any terms of this [LOI] except for the Concession Lease Exclusivity and shall not incur any
obligation until a formal lease has been executed by both parties.” These written statements that
plaintiff agreed to significantly detract from any reasonable reliance on subsequent contrary
statements.
Second, while the February 2018 e-mail reflected that defendant chose plaintiff to be the
grocer, it also reflected that the parties had to finalize the LOI and a lease agreement. Leonard and
McInerney were aware the deal was not final until the Woodward Corner Market lease was
executed. Indeed, Leonard and McInerney did not want to announce the deal publicly in July 2018
because they feared plaintiff’s reputation would suffer if the parties were unable to reach an
agreement. Third, the record also supports that plaintiff’s representatives, including Leonard and
McInerney, were trepidatious during the negotiation period and often requested reassurance from
defendant’s representatives. This conduct demonstrates plaintiff’s representatives were well aware
that plaintiff was not guaranteed a lease for the Woodward Corner Market building. For these
reasons, and because “a plaintiff cannot claim to have been defrauded where he had information
available to him that he chose to ignore,” Nieves, 204 Mich App at 465, the trial court did not err
in granting defendant summary disposition on this claim.
D. SILENT FRAUD
With respect to the silent fraud claim, the trial court dismissed it on the basis that defendant
had no legal or equitable duty to inform plaintiff that it had begun negotiations with Meijer.
Plaintiff argues summary disposition was improper because plaintiff presented evidence
establishing that an equitable duty to disclose existed, and that defendant violated that duty.
“Michigan courts have recognized that silence cannot constitute actionable fraud unless it
occurred under circumstances where there was a legal duty of disclosure.” M & D, Inc, 231 Mich
App at 29. “ ‘Silent fraud’, also known as fraud by nondisclosure or fraudulent concealment, is a
commonly asserted, but frequently misunderstood, doctrine. This is primarily because most fraud
claims are based upon alleged affirmatively stated false representations of material fact.” Id. at
28. Importantly, “[a] claim of ‘silent fraud’ requires a plaintiff to set forth a more complex set of
proofs.” Id. However, “courts have not hesitated to sustain recoveries where the truth has been
suppressed with the intent to defraud.” Titan, 491 Mich at 557 (quotation marks and citation
omitted).
In Maurer, this Court explained:
Silent fraud, also known as fraudulent concealment, acknowledges that
suppression of a material fact, which a party in good faith is duty-bound to disclose,
is equivalent to a false representation and will support an action in fraud. But in
order for silent fraud to be actionable, the party having a legal or equitable duty to
disclose must have concealed the material fact with an intent to defraud. [Maurer,
325 Mich App at 695 (quotation marks and citations omitted).]
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A party has a legal duty to disclose a fact when he or she contractually agrees to disclose a
particular fact. M & D, Inc, 231 Mich App at 29, 40. A party has an equitable duty to disclose a
fact when the other party has directly inquired or expressed a particularized concern about a fact
such that the party’s silence in the face of the inquiry or concern would create a false impression.
Id. See also Nowicki v Podgorski, 359 Mich 18, 32; 101 NW2d 371 (1960) (“(O)ne who remains
silent when fair dealing requires him to speak may be guilty of fraudulent concealment.”). The
duty to disclose applies generally to fiduciaries and certain relationships, but there is no duty to
disclose in the ordinary contract setting except when a party is responding to a specific inquiry.
Toering v Glupker, 319 Mich 182, 187; 29 NW2d 277 (1947).
For example, in Groening v Opsata, 323 Mich 73, 77; 34 NW2d 560 (1948), when the
plaintiffs considered purchasing a house built on a bluff, they asked the defendants whether the
house was built too close to the bluff and whether, as a result, the house was in a dangerous
position. The plaintiffs also told the defendants they had been warned the bluff was breaking off
and the whole property would eventually collapse. Id. at 78. The defendants responded that the
house was not too close and “the bluff was perfectly safe.” Id. One year after the purchase, the
bluff completely eroded, and the evidence supported the defendants knew at least two years before
the sale that the bluff had been eroding. Id. at 76, 79.
Recognizing that “concealment of material facts that one under the circumstances is bound
to disclose may constitute actionable fraud,” id. at 83, the Groening Court explained that the
defendants’ responses created a false impression equivalent to an express and intentional
misrepresentation:
[The defendants] made replies to plaintiffs’ specific inquiries, which replies did not
bring forth the facts that plaintiffs were seeking to learn, but were in such form as
naturally tended to reassure plaintiffs and to cause them to proceed on the
assumption that the property was not in any danger from erosion. Under such
circumstances the concealment of the true facts and the deliberate creating of false
impressions and inferences is the equivalent of an express and intentional
misrepresentation.
* * *
In replying to plaintiffs’ inquiries concerning the property it was the duty of
defendants to state the facts called for in accordance with their knowledge of the
situation. Their replies were well calculated to create the impression that they were
doing so. Actually, however, they were, as the jury found, guilty of
misrepresentation. Such misrepresentation lay in the positive misstatements made
and in the failure to give the true facts while ostensibly doing so. [Id. at 82, 84.]
With respect to whether defendant had a legal duty to disclose to plaintiff that it was
considering Meijer to be the grocer, the LOI was not enforceable and a legal duty did not arise by
virtue of the LOI. With respect to whether an equitable duty arose, evidence suggested that after
the September 2018 meetings plaintiff made direct inquiries to defendant about the continued
status of the contract and negotiations, and were not informed of the complete picture.
Specifically, Hank Ribaris testified that in 2018 he repeatedly asked Henry “what Beaumont’s
intentions were and whether they had changed course or direction.” This testimony is sufficient
evidence to create a question of fact on whether plaintiff made a specific, particularized inquiry
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about the status of negotiations. And, according to Henry, in response he failed to inform Ribaris
(or anyone else) that Beaumont had shifted direction and was now in negotiations with Meijer to
be the grocer.3 Instead, each time McInerney or Gary Roncelli called him, Henry gave “them
information that pushed it down the road” by providing “very vague statements that would keep
them there, but not give them all the information. . . .” While Wilson denied she told Henry to
make misrepresentations to plaintiff, we cannot assess credibility, weigh the evidence, or resolve
factual disputes when reviewing a decision on a motion for summary disposition. See Ass’n of
Home Help Care Agencies, 334 Mich App at 684 n 4.
The trial court erred by granting summary disposition on the silent fraud claim based on its
conclusion that an equitable duty did not exist. Cf. Hord v Environmental Research Institute of
Mich, 463 Mich 399, 412-413; 617 NW2d 543 (2000) (holding a duty to disclose the company’s
economic status, which was poor, did not exist where the plaintiff did not make inquiries about his
prospective employer’s financial situation).
E. NEGLIGENT MISREPRESENTATION
We now turn to plaintiff’s next argument—that the trial court erred when it granted
summary disposition of its negligent misrepresentation claim based on the conclusion that
defendant did not owe a duty to plaintiff.
“A claim for negligent misrepresentation requires plaintiff to prove that a party justifiably
relied to his detriment on information prepared without reasonable care by one who owed the
relying party a duty of care.” Alfieri v Bertorelli, 295 Mich App 189, 194; 813 NW2d 772 (2012)
(quotation marks and citation omitted). Like silent fraud, “negligent misrepresentation . . .
require[s] a defendant to owe a duty to the plaintiff.” Id. For the reasons discussed in detail above,
plaintiff presented evidence to support that an equitable duty of disclosure existed. The trial court
erred by granting summary disposition on the negligent misrepresentation claim.
F. PROMISSORY ESTOPPEL
Finally, plaintiff argues that the trial court erred by granting summary disposition of
plaintiff’s promissory estoppel claim because a genuine issue of material fact existed as to whether
defendant’s representatives made clear and definite promises.
The elements of promissory estoppel are “(1) a promise, (2) that the promisor should
reasonably have expected to induce action of a definite and substantial character on the part of the
promisee, and (3) that in fact produced reliance or forbearance of that nature in circumstances such
that the promise must be enforced if injustice is to be avoided.” Cove Creek Condo Ass’n v Vistal
Land & Home Dev, LLC, 330 Mich App 679, 713; 950 NW2d 502 (2019) (quotation marks and
citation omitted). “A promise is a manifestation of intention to act or refrain from acting in a
3
According to Henry, Wilson changed course after the September 2018 meeting and wanted to
negotiate a grocer lease with Meijer. Henry testified that after that decision, he was instructed to
“drag [plaintiff] along” in the event the negotiations with Meijer were unsuccessful. Henry
testified he complied with Wilson’s instructions, even though doing so made him “very
uncomfortable” because he knew plaintiff was “purchasing advanced long lead items. . . .”
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specific way, so made as to justify a promisee in understanding that a commitment has been made.”
Zaremba Equip, Inc v Harco Nat’l Ins Co, 280 Mich App 16, 41; 761 NW2d 151 (2008) (quotation
marks and citation omitted). “In determining whether a requisite promise existed, we are to
objectively examine the words and actions surrounding the transaction in question as well as the
nature of the relationship between the parties and the circumstances surrounding their actions.”
Novak, 235 Mich App at 687.
“[T]he sine qua non of the theory of promissory estoppel is that the promise be clear and
definite. . . .” State Bank of Standish v Curry, 442 Mich 76, 85; 500 NW2d 104 (1993). “[I]f the
expression is made in the course of preliminary negotiations when material terms of the agreement
are lacking, the degree of certainty necessary in a promise is absent.” Id. at 86 (quotation marks
and citation omitted). “[A] promise must be distinguished from a statement of opinion, a
prediction of future events, or a party’s will, wish, or desire for something to happen.” First
Security Savings Bank v Aitken, 226 Mich App 291, 313; 573 NW2d 307 (1997), overruled on
other grounds by Smith v Globe Life Ins Co, 460 Mich 446, 454 n 2; 597 NW2d 28 (1999),
superseded by statute as stated in Dell v Citizen Ins Co of America, 312 Mich App 734, 742; 880
NW2d 280 (2015).
It is undisputed that the parties planned to negotiate lease agreements for Woodward
Corner Market and the concession space. This was confirmed in the February 2, 2018 e-mail.
Although the statements in the February 2018 e-mail reflect defendant’s wish, will, or desire to
complete the lease agreements, the statements do not rise to the level of defendant’s commitment
to enter into leases at the time the statements were made. First Security Savings Bank, 226 Mich
App at 316. Rather, the statements reflect that the parties needed to engage in further negotiations.
As already stated, “if the expression is made in the course of preliminary negotiations when
material terms of the agreement are lacking, the degree of certainty necessary in a promise is
absent.” State Bank of Standish, 442 Mich at 86 (quotation marks and citation omitted). The
statements contained in the February 2018 e-mail do not constitute clear and definite promises.
See id. at 85.
Looking beyond the language contained in the February 2018 e-mail, the language of the
LOI indicates that the parties agreed that the LOI did not constitute “a lease or an offer to lease”
with respect to the Woodward Corner Market building. Rather, it was “intended to be a summary
of general business terms and conditions for consideration for a formal lease.” The parties agreed:
“Neither [party] shall be bound by any terms of this [LOI] except for the Concession Lease
Exclusivity and shall not incur any obligation until a formal lease has been executed by both
parties.” It is also undisputed that no formal lease was ever executed, making the LOI nonbinding.
Plaintiff cannot rely on a conditional promise to establish a promissory estoppel theory. See First
Security Savings Bank, 226 Mich App at 316 (noting the “plaintiff cannot construct a detrimental
reliance or estoppel theory on a conditional promise, especially when the condition did not take
place”) (quotation marks and citation omitted).
With respect to the statements made by defendant’s representatives, Leonard, McInerney,
and Ribaris testified that they were repeatedly reassured by defendant’s representatives that
plaintiff was the selected grocer. However, the statements that were made before the September
2018 meetings merely reflect defendant’s willingness to complete a lease agreement with plaintiff
for the Woodward Corner Market building. Although these statements reflect defendant’s wish,
will, or desire to complete the lease agreement, the statements did not rise to the level of
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defendant’s commitment to enter into a lease at the time the statements were made. See First
Security Savings Bank, 226 Mich App at 316. And, even though Henry testified that he continued
to reassure McInerney and Roncelli after the September 2018 meetings, it is undisputed the
statements did not include the material terms of the alleged promise to complete the concession
space lease or the Woodward Corner Market lease. Rather, they were empty promises that
defendant was still reviewing the matter.
The language in the LOI concerning the concession space also reflected defendant’s mere
wish, will, or desire to complete a lease agreement. Indeed, material terms were missing, and the
exclusivity clause merely constituted an unenforceable agreement to negotiate in the future.
Consequently, because plaintiff failed to present evidence that clear and definite promises were
made, summary disposition on the promissory estoppel claim was proper. See State Bank of
Standish, 442 Mich at 85.4 Given these holdings, we need not consider the remainder of the
parties’ arguments on appeal.
IV. CONCLUSION
We affirm the trial court’s order granting summary disposition on the breach of contract
claims concerning the exclusivity clause and the NDA, the fraudulent misrepresentation claim,
and the promissory estoppel claim. We reverse the trial court’s order granting summary
disposition on the silent fraud and the negligent misrepresentation claims, and remand for further
proceedings consistent with this opinion. We do not retain jurisdiction.
/s/ Michael F. Gadola
/s/ Christopher M. Murray
/s/ Allie Greenleaf Maldonado
4
Plaintiff does not challenge the trial court’s dismissal of its innocent misrepresentation claim.
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