Opinion
354002
09-23-2021
ADR CONSULTANTS, LLC, Plaintiff-Appellant, v. MICHIGAN LAND BANK FAST TRACK AUTHORITY and MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY, Defendants-Appellees.
UNPUBLISHED
Court of Claims LC No. 15-000177-MK
Before: Beckering, P.J., and Shapiro and Swartzle, JJ.
Per Curiam.
Plaintiff, ADR Consultants, LLC, appeals by right the trial court's judgment awarding ADR $362,521.35 plus statutory interest, following a bench trial, in favor of ADR on some of its claims, but finding that defendants, Michigan Land Bank Fast Track Authority and Michigan State Housing Development Authority, were not liable for ADR's oral-contract claim. On appeal, ADR argues that the trial court erred by finding that the oral contract did not require the Michigan Land Bank to pay ADR $100 per property it managed under Detroit's Hardest Hit Blight Program, but instead that the parties orally agreed to extend ADR's existing contract with the Michigan Land Bank an additional two years in exchange for ADR working on the Hardest Hit Program. ADR additionally argues that the trial court erred when calculating damages. Both claims on appeal are without merit, and we affirm.
I. BACKGROUND
This Court has recited much of the factual background and procedural history of this case in a previous opinion. See ADR Consultants, LLC v Mich. Land Bank Fast Track Auth, 327 Mich.App. 66; 932 N.W.2d 226 (2019). On August 29, 2012, ADR and the Michigan Land Bank entered into a contract under which ADR provided inspection and demolition services related to the Hardest Hit program. Id. at 68. The Michigan Land Bank was tasked with blight elimination, including demolition work, and it engaged ADR as a contractor for blight elimination. Id. at 68-69. ADR's role was to assist with organizational, procurement, and managerial tasks. Id. at 69. ADR would help the Michigan Land Bank manage the demolition of sites, but other subcontractors would perform the demolition work itself. Id.
According to the parties' contract, ADR's scope of work included "organizational, procurement, and management tasks," and "[p]rovid[ing] contract management services for demolition contracts procured by the State." The original contract term was September 11, 2012 to September 10, 2013. The parties had the option to renew for up to five one-year periods and in fact did renew it in 2013 and 2014. The contract provided that ADR was required to notify the state before performing any work that ADR believed was outside the scope of the contract.
As this Court stated in its prior opinion, however, "[a]fter the contract was signed, the [Michigan Land Bank] requested that ADR perform additional services outside the contract's scope, including new demolition project management and 'in-process demolition inspections.'" Id. ADR began work on the out-of-scope services on September 11, 2012. Id. at 70. In November 2013, the Housing Development Authority tasked the Detroit Land Bank with oversight of the Hardest Hit program. Id. The Michigan Land Bank and Detroit Land Bank signed an intergovernmental agreement, under which the Michigan Land Bank agreed to provide project management services to the Detroit Land Bank, and the Detroit Land Bank agreed to pay the Michigan Land Bank $100 "for each property subject to its demolition project management services." Id. The Michigan Land Bank hired ADR to manage and administer the Hardest Hit program. Id. The Detroit Land Bank would notify the Michigan Land Bank and request that ADR perform services, and the Michigan Land Bank would then notify ADR and engage ADR's services. Id. According to ADR, the Michigan Land Bank agreed to pay ADR $100 for each property it managed under the Hardest Hit program. According to the Michigan Land Bank, however, ADR waived the $100 per property payment and instead sought to extend the preexisting written contract an additional two years. This factual dispute was eventually resolved at trial.
In September 2014, ADR claimed that it had not been paid for its management and in-process hourly rate demolition services since January 2014. Id. ADR halted its inspections on February 9, 2015, but it continued to manage the program. Id. On April 15, 2015, ADR received a notice of termination and a "stop-work order," terminating the original contract between ADR and the Michigan Land Bank. Id.
Following this Court's previous decision, which affirmed the trial court's denial of defendants' motions for summary disposition, id. at 68, 78, the trial court held a bench trial. The trial court issued a written opinion following trial and determined that only two issues remained, including the only issue on appeal: ADR's claim for $423,000 in management services related to the Hardest Hit program. The trial court found that there was no oral contract between ADR and defendants that required payment of $100 for each property to ADR under the Hardest Hit program. Instead, it found that the amount had been discussed, but ADR rejected it in favor of the Michigan Land Bank retaining these funds so that the blight-elimination contract could be extended for another two years. Consequently, the trial court concluded that ADR did not establish that the Michigan Land Bank breached an oral agreement to pay it $100 for each property it managed. This appeal followed.
II. ANALYSIS
A. MISREADING THE TRIAL COURT'S OPINION
ADR argues that the trial court erred by ruling that the Hardest Hit program was within the scope of the parties' contract and that a separate contract related to the Hardest Hit program was controlled by ADR's existing contract with the Michigan Land Bank. We reject these arguments, which do not address the basis of the trial court's decision.
This Court need not consider an issue that was not the basis of the trial court's decision. Derderian v Genesys Health Care Sys, 263 Mich.App. 364, 381; 689 N.W.2d 145 (2004). If a party does not address the basis of the trial court's decision, this Court need not even consider granting the party relief. Id.
Regarding ADR's argument that the trial court erred by finding that the Hardest Hit program was within the scope of the parties' written contract, the trial court's opinion contradicts this argument. The trial court extensively quoted from its earlier 2017 opinion, which held that the Hardest Hit program was outside the scope of the parties' contract, and it explicitly approved of the previous analysis. Thus, the trial court did not make the finding to which ADR now assigns error.
Regarding ADR's argument that the trial court erred by ruling that the written contract with the Michigan Land Bank controlled the oral agreement concerning the Hardest Hit program, again, the trial court made no such ruling. Instead, the trial court found that there simply was no oral agreement between ADR and defendants that required defendants to pay ADR $100 per property. The parties agreed to extend the contract for two more years, and ADR had been paid for its work for the Hardest Hit program as part of its monthly payments under the extended contracts. Thus, the trial court did not conclude that the written contract-by its own terms-controlled ADR's payment for working on the Hardest Hit program; rather, it concluded that the parties entered into an oral contract that extended the written contract and applied its terms to the Hardest Hit program. Thus, the factual premise behind ADR's argument is mistaken.
B. CONTRACT EXTENSION
ADR next argues that the trial court clearly erred by finding that a contract-management extension was the basis of ADR's agreement to work on the Hardest Hit program. This Court reviews for clear error the trial court's findings of fact following a bench trial and reviews de novo issues of law. Trader v Comerica Bank, 293 Mich.App. 210, 215; 809 N.W.2d 429 (2011). A finding is clearly erroneous if, after reviewing the entire record, this Court is definitely and firmly convinced that the trial court made a mistake. Augustine v Allstate Ins Co, 292 Mich.App. 408, 424; 807 N.W.2d 77 (2011). This Court gives deference to the trial court's credibility determinations. Id. The finder of fact has the responsibility to determine the weight of the evidence. Moore v Detroit Entertainment, LLC, 279 Mich.App. 195, 202; 755 N.W.2d 686 (2008).
The trial court found that the Michigan Land Bank's former Executive Director, Kim Homan, credibly testified that she offered ADR $100 per property for managing the Hardest Hit program. But it also found that ADR President Barry Ellentuck credibly testified that he rejected that offer. The trial court additionally considered that Ellentuck could have stopped providing services if he thought he was not being paid, and that the Michigan Land Bank's accountant testified that the Hardest Hit program had a different funding source than the source from which ADR was paid.
The evidence supported the trial court's findings. Homan testified that she approached ADR about the Hardest Hit program and asked ADR to provide primary program management and project management support. Homan anticipated that the $100 that was paid to the Michigan Land Bank would go to ADR, and Ellentuck testified that Homan said ADR would receive $100 per property. But Ellentuck also testified that the agreement changed:
Q. Okay. And was that hundred dollars per property to go to ADR for managing the [Hardest Hit] program?
A. Originally, yes.
Q. Okay. And did that change?
A. Yes.
Q. When?
A. Shortly after I was asked.
Q. And what was the change?
A. I wanted the actual hundred to go back to the [Michigan Land Bank] to fund blight remediation efforts, and ADR would then continue doing the program- project management for [the Michigan Land Bank] using those funds to actually double dip. We could have just taken the money and run. Instead we allowed [the Michigan Land Bank] to bank the money and then we would actually just manage it.
Q. And to be clear, when you say double dip, you mean that would extend the program?
A. Yeah. We felt we could get another two years out of it. [Emphasis added.]
Furthermore, a Housing Development Authority accountant who did work for the Michigan Land Bank testified that the Hardest Hit program was federally funded and that the Michigan Land Bank ultimately deposited the $100 per property it received under the Hardest Hit program into the Hardest Hit federal fund, which did not contain "state or local monies." The accountant's testimony established that the money was being reinvested into the program from which it came, supporting that the Michigan Land Bank was extending the life of the program.
Moreover, ADR could have stopped working on the program if it was not being paid, but it did not do so. The intergovernmental agreement, the August 2013 contract amendment, and the August 2014 contract amendment did not mention that ADR would receive $100 per property for managing the Hardest Hit program. Ellentuck testified that ADR could have stopped providing services if it was not receiving $100 per property that it had been told it would receive. In a different circumstance regarding in-process inspections, which ADR performed for additional compensation although the inspections exceeded the scope of the contract, ADR in fact stopped providing services when it was not being paid.
In sum, the trial court did not err when it found that ADR and the Michigan Land Bank did not have an agreement under which ADR would receive $100 for each property that it managed for the Hardest Hit program, but instead that ADR elected to extend the contract another two years rather than receive $100 per property. There was factual support for both theories, and we defer to the trial court's determination, as the finder of fact, that ADR chose to not receive the $100 per property in exchange for extending the contract another two years.
C. UNJUST ENRICHMENT AND PROMISSORY ESTOPPEL
ADR also argues, in the alternative, that it is entitled to relief under unjust enrichment and promissory estoppel. "The elements of a claim for unjust enrichment are (1) receipt of a benefit by the defendant from the plaintiff, and (2) an inequity resulting to plaintiff from defendant's retention of the benefit. In such instances, the law operates to imply a contract in order to prevent unjust enrichment." Bellevue Ventures, Inc v Morang-Kelly Investment, Inc, 302 Mich.App. 59, 64; 836 N.W.2d 898 (2013). As for promissory estoppel,
a plaintiff must establish the following elements: (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. [Bodnar v St John Providence, Inc, 327 Mich.App. 203, 226-227; 933 N.W.2d 363 (2019) (quotation marks and citation omitted).]
Both legal theories rely on some sort of promise and for one party to retain the benefit of the bargain to the other party's detriment.
ADR's unjust enrichment and promissory estoppel claims both rely on a finding that the Michigan Land Bank promised to pay ADR $100 for each property that it managed for the Hardest Hit program. As we have already explained, however, the trial court did not err by concluding that ADR rejected the offer, and thus no "promise" on which ADR could have relied was made. Instead, ADR and the Michigan Land Bank agreed that the Michigan Land Bank would retain the $100 per property in exchange for increasing the length of ADR's contract. The contract was extended and, therefore, ADR received the benefit of its bargain and the Michigan Land Bank did not improperly retain the benefit of the bargain. Consequently, ADR's unjust enrichment and promissory estoppel claims both fail.
D. DAMAGES MISCALCULATION
Finally, ADR argues that the trial court miscalculated when the two additional years began. Specifically, ADR contends that the 2013 extension could not have been the first contractual extension because the Hardest Hit program did not commence until 2014. ADR raised this issue, however, for the first time in its motion for reconsideration. An issue is not preserved if it is presented to the trial court for the first time in a motion for reconsideration. Vushaj v Farm Bureau Gen Ins Co of Mich, 284 Mich.App. 513, 519; 773 N.W.2d 758 (2009). Thus, this issue is unpreserved.
In civil cases, "a failure to timely raise an issue waives review of that issue on appeal." Walters v Nadell, 481 Mich. 377, 387; 751 N.W.2d 431 (2008) (quotation marks and citation omitted). But this Court has discretion to "overlook preservation requirements if the failure to consider the issue would result in manifest injustice, if consideration is necessary for a proper determination of the case, or if the issue involves a question of law and the facts necessary for its resolution have been presented." Smith v Foerster-Bolser Constr, Inc, 269 Mich.App. 424, 427; 711 N.W.2d 421 (2006) (citation omitted).
We decline to exercise our discretion to review ADR's unpreserved issue in this case. ADR had an opportunity to raise this issue before its motion for reconsideration. Indeed, this case even went to trial and, therefore, ADR had as complete an opportunity as possible to raise and preserve this issue.
Regardless, ADR's unpreserved argument appears to lack merit. Evidence supported that the 2013 contract extension was signed after the parties discussed ADR's involvement in the Hardest Hit program. The trial court noted in its opinion that Ellentuck testified that the agreement was made in mid-2013 and the blight-elimination contract was extended in August 2013 and August 2014. Ellentuck testified that the Hardest Hit program began in 2013, and ADR was first asked to become involved in the Hardest Hit program in mid-2013. He testified that ADR managed the program from July 2013 to April 2015, and did preparation work in 2013. Although Ellentuck also testified that the program was not "operational" in 2013 and ADR did not request compensation under the program, there was sufficient evidence that ADR agreed to do the work in 2013 and began doing the work before the 2013 contract extension was signed.
III. CONCLUSION
ADR concedes that we need not reach its issue concerning joint-and-several liability if we affirm. Accordingly, we do not reach that issue. For the reasons stated in this opinion we affirm the trial court's opinion and order. Defendants, as the prevailing parties, may tax costs under MCR 7.219.