In ONB Ridge Villa One, LLC v. Oil Nut Bay, Inc. and David V. Johnson, unpublished per curiam opinion of the Court of Appeals, issued June 27, 2019 (Docket No. 342371), the Michigan Court of Appeals affirmed the dismissal of various claims related to a plan to build a road that never materialized.
In May 2009, Plaintiff purchased a parcel of land in the British Virgin Islands from Defendant Oil Nut Bay, Inc. (“ONB”)that Plaintiff intended to develop. Sometime in 2011, Defendant Johnson, the chairman and authorized representative of Defendant ONB, requested to build a road across the property to facilitate easy access to transport building materials to adjacent lots. Plaintiff agreed to allow Defendant to build a road in exchange for Defendant ONB providing space for Plaintiff to store building materials.
After the road never materialized, Plaintiff filed a complaint on June 20, 2016 alleging breach of contract, promissory estoppel, tortious interference and unjust enrichment against Defendant ONB, and promissory estoppel and tortious interference against Defendant Johnson.
Rather than filing answers to the Plaintiff’s complaint, Defendants filed separate motions for summary disposition on August 29, 2016. The trial court granted Defendant Johnson’s motion for summary disposition but denied Defendant ONB’s motion. On July 28, 2017, Defendant ONB filed a motion for partial summary judgment, which was granted by the trial court. In dismissing all four counts, the trial court held that the access road constituted an easement and, therefore, the statute of frauds barred Plaintiff’s claim for breach of contract because a written agreement did not exist. Plaintiff appealed, arguing that the statute of frauds did not apply to any of the four claims originally brought. In affirming the trial court’s holding, the Court of Appeals analyzed each disputed claim individually.
The Court of Appeals first analyzed the Plaintiff’s breach of contract claim. While the Plaintiff claimed that the trial court erred because the statute of frauds does not bar a breach of contract claim, the Court of Appeals disagreed, noting that the record made it clear that the construction of the road was an easement. Since an easement is the transfer of a property interest, it is subject to the statute of frauds, meaning that it must be made in writing and signed by everyone with an interest in the property. Therefore, because there was no such agreement between the parties, the statute of frauds barred the Plaintiff’s claim for breach of contract.
The Court next addressed the promissory estoppel claim. While the Plaintiff argued that the essential elements of a claim for promissory estoppel were satisfied, the Court of Appeals disagreed. The Court first noted that even if all the elements of promissory estoppel were satisfied, promissory estoppel must be cautiously applied, and only when the facts are unquestionable and the wrong to be prevented undoubted. With this in mind, the Court held that because it had already determined that the access road involved an easement, promissory estoppel could not be used to avoid the requirements of the statute of frauds.
Lastly, the Court of Appeals briefly discussed the remaining issues of unjust enrichment and tortious interference. The Court first held that because the easement never came to fruition, and Defendant ONB never received a benefit from the Plaintiff, a claim for unjust enrichment was meritless. As for the tortious interference claim, the Court held that because Plaintiff failed to demonstrate that Defendant Johnson was a third party, their claim failed regardless of whether they were bringing a claim for interference with a contract or interference with business relationships.
A link to the opinion can be found here: https://law.justia.com/cases/michigan/court-of-appeals-unpublished/2019/342371.html
This article was written by Emily Honet, Law Clerk
