Opinion
No. 347647
04-30-2020
SHAMAMA ANTHON, Plaintiff/Counterdefendant-Appellee, v. JACOB KALO, Individually and as Trustee of the JACOB KALO REVOCABLE LIVING TRUST, YEHIELLA KALO, Individually and as Trustee of the YEHIELLA KALO REVOCABLE LIVING TRUST, and KALO FAMILY INVESTMENT COMPANY IV, LLC, Defendants/Counterplaintiffs-Appellants.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Oakland Circuit Court
LC No. 2013-135686-CH Before: MURRAY, C.J., and RONAYNE KRAUSE and TUKEL, JJ. PER CURIAM.
Defendants/counterplaintiffs Jacob Kalo (Dr. Kalo), individually and as trustee of the Jacob Kalo Revocable Living Trust, Yehiella Kalo (Yehiella), individually and as trustee of the Yehiella Kalo Revocable Living Trust, and Kalo Family Investment Company IV, LLC ("the Kalos' LLC") (collectively "defendants"), appeal as of right the trial court order granting plaintiff/counterdefendant Shamama Anthon's motion to enforce the settlement agreement in this real property dispute. Defendants argue on appeal that the trial court erred in granting plaintiff's motion to enforce the settlement agreement over three years after the settlement was placed on the record without considering whether plaintiff breached the agreement, whether the parties abandoned the agreement, or whether the purpose of the agreement was frustrated. We affirm. This appeal is being decided without oral argument under MCR 7.214(E)(1).
I. STATEMENT OF FACTS
This case arises over a dispute regarding the property line between two neighboring parcels owned by plaintiff and the Kalos on Walnut Lake in West Bloomfield. Plaintiff originally filed a two-count complaint against defendants in August 2013. Plaintiff alleged that defendants constructed a retaining wall, driveway, trees, and an art sculpture on plaintiff's property without her permission, and therefore filed suit for quiet title and trespass. Defendants denied the allegations, and filed a countercomplaint, alleging that plaintiff took several actions constituting improper and intentional interference with defendants' agreements with the township and wetlands board, intentional infliction of emotional distress, invasion of privacy, tortious interference with quiet enjoyment of property, and trespass.
The Kalos transferred their interests in their property by quit claim deed to the Kalos' LLC, which deeded small percentages of interest in the property to each of the Kalos' revocable living trusts.
Pursuant to a consent judgment entered between defendants and the previous owners of plaintiff's property, William Roby and Jenny Roby, defendants were granted a limited license to maintain trees on the neighboring property until the Robys sold it.
Plaintiff filed a motion for summary disposition, which was denied, and on the date set for trial, June 10, 2015, the parties appeared to put their settlement agreement on the record. In essence, the parties agreed to a new property line between their neighboring parcels, and defendants would pay plaintiff $30,000 for the additional property they would receive as a result. The parties agreed to be bound by the terms of the settlement, and plaintiff's attorney agreed to draft the settlement agreement. On June 15, 2015, the court entered a stipulation and order for dismissal of all claims and counterclaims with prejudice, providing that either party could file a motion to enforce the settlement.
In November 2018, plaintiff filed a motion to enforce the settlement because the parties had not yet executed a written settlement agreement or effectuated the terms of the settlement put on the record on June 10, 2015. Defendants opposed plaintiff's motion, alleging that plaintiff's proposed settlement agreement differed from that put on the record, and was more favorable to plaintiff. Defendants also alleged that the court could not enforce the settlement because plaintiff committed a material breach, and the passage of time frustrated the purpose of the settlement agreement.
Defendants contended that because of the sensitive and potentially dangerous nature of Dr. Kalo's work, defendants required the additional security of barrier trees along the property line. The breaches alleged by defendants largely pertain to plaintiff cutting some of defendants' trees, and causing defendants to become unable to transplant some of their trees. Plaintiff argues that defendants themselves could have sought to enforce the settlement agreement at an earlier time.
The court first held a hearing on plaintiff's motion to enforce the settlement on December 12, 2018. The court determined that the settlement on the record from 2015 was "easily enforceable," and the court clarified the proper interpretation of the new boundary line. Thereafter, the court ordered the parties to redraft the settlement with the boundary line as the court described, and if there were still unresolved issues, to come back to court the following week. The parties returned to court on December 19, 2018, and by telephone conference on December 21, 2018, to discuss the parties' final disputes. On January 2, 2019, the court entered the order granting plaintiff's motion to enforce the settlement. The settlement agreement attached as an exhibit to the order "constitutes the settlement that was placed on the record on June 10, 2015," and the parties were ordered to comply with its terms.
Defendants filed a motion for reconsideration, asserting that the court failed to consider the evidence that plaintiff breached the settlement, its purpose was frustrated by the passage of time, and the settlement was abandoned, and this error, along with failing to order an evidentiary hearing or permit any other factual development, resulted in a palpable error. Defendants' motion for reconsideration was denied.
II. STANDARD OF REVIEW
"Generally, an issue must be raised, addressed, and decided in the trial court to be preserved for review." Dell v Citizens Ins Co of America, 312 Mich App 734, 751 n 40; 880 NW2d 280 (2015). Plaintiff filed a motion to enforce the settlement, defendants filed a response, the court held several hearings, and it granted plaintiff's motion. Therefore, the issue of whether the trial court properly granted plaintiff's motion to enforce the settlement is preserved. Id.
This Court reviews a trial court's decision to enforce a settlement agreement for an abuse of discretion. Groulx v Carlson, 176 Mich App 484, 493; 440 NW2d 644 (1989). An abuse of discretion occurs when the trial court's ruling is outside the range of reasonable and principled outcomes. Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006). Additionally, settlement agreements are subject to the laws of contract formation and interpretation. Mich Mut Ins Co v Indiana Ins Co, 247 Mich App 480, 484-485; 637 NW2d 232 (2001). "The existence and interpretation of a contract are questions of law reviewed de novo." Kloian v Domino's Pizza, LLC, 273 Mich App 449, 452; 733 NW2d 766 (2006). Whether MCR 2.507 bars enforcement of a settlement agreement is reviewed de novo. Id. at 456. Defendants' arguments on appeal, however, are unpreserved because they were not addressed or decided by the trial court, and therefore reviewed for plain error affecting substantial rights. Lawrence v Mich Unemployment Ins Agency, 320 Mich App 422, 442; 906 NW2d 482 (2017). " '[A]n error affects substantial rights if it caused prejudice, i.e., it affected the outcome of the proceedings.' " Id. at 443 (citation omitted).
III. ANALYSIS
Defendants argue that the trial court erred in enforcing the settlement agreement 3.5 years after it was put on the record without considering whether plaintiff breached the agreement, whether the parties abandoned the agreement, or whether the purpose of the agreement was frustrated.
"An agreement to settle a pending lawsuit is a contract and is to be governed by the legal principles applicable to the construction and interpretation of contracts." Kloian, 273 Mich App at 452 (quotation marks and citation omitted). The terms of a settlement agreement are accorded their plain and ordinary meaning. Hastings Mut Ins Co v Safety King, Inc, 286 Mich App 287, 292; 778 NW2d 275 (2009). "If the contractual language is unambiguous, courts must interpret and enforce the contract as written because an unambiguous contract reflects the parties' intent as a matter of law." Id. "If the contract, although inartfully worded or clumsily arranged, fairly admits of but one interpretation, it is not ambiguous." Wells Fargo Bank, NA v Cherryland Mall Ltd Partnership (On Remand), 300 Mich App 361, 386; 835 NW2d 593 (2013) (quotation marks and citations omitted).
On June 10, 2015, the day scheduled for trial, the parties put their settlement agreement on the record. Plaintiff was represented by Christopher Scott Frescoln, and John A. Ruemenapp appeared on behalf of defendants. Pursuant to the settlement, the parties agreed to a new boundary line between their properties. Plaintiff had a survey done, and the new boundary line was staked. Within 14 days of execution of the settlement, defendants were to hire their own surveyor to confirm the new boundary line. If the new line did not match the staked line, the settlement was null and void, and either party could file a motion for the court to reopen the case.
Defense attorney Ruemenapp then described the new property line as follows:
We're going to begin from the first evergreen tree that is east of the hickory tree that we saw yesterday that had the camera on there. From that point, which I'll call point A, we're going to move in a northwest direction to accommodate the driveway, the retaining wall, and the-decorative landscaping and the [satellite] dish that are on or near the borderline that-that have been installed there by Dr. Kalo, and that line will run up north or up west, it is, until Middlebelt Road back to that point A[.] [W]e'll then go in a southeast direction to a point that is 35 feet south of the-the bottom of the present driveway, and that point-I'll call that point B-will-will-will form the basis for-let me say it again. We're going to move in a southwest direction to the platted line-southeast? Let me start again.When Ruemenapp asked Frescoln if that was correct, Frescoln responded, "That's right." The new property line would be drawn so that all of defendants' personal items would be on Dr. Kalo's side. Ruemenapp then clarified that the line would be north of the hickory tree to accommodate all of defendants' property, and Frescoln agreed.
I've got the first part up to Middlebelt Road. Let me-let me try to get the other direction right.
We're going to start at that same point A; we're then going to move in a southeast direction until we reach the platted line. The platted line will-where those two lines intersect, that will be our point B, and then we'll follow the platted line east to the edge of the property or-or the center of the law [sic] or whatever it is.
At the December 12, 2018 hearing on plaintiff's motion to enforce the settlement agreement, the court determined that the new boundary line was clear from the record of the June 10, 2015 hearing.
The first issue has to do with the boundary line, and I-my reading of the-of the settlement agreement said that-the first mention I believe is on page eight, and it sets that point A, the beginning point, as the first evergreen that's east of the hickory tree with the camera on it. We'd all been out to view the property and knew what that was. However, on page 11, that point is corrected by when Mr. Ruemenapp said that point is going to be some distance north of the hickory tree in
order to accommodate the driveway[,] retaining wall, all those things; I think in the pro-in the drawings that you have proposed, Mr. Neuman, you've-instead of making it that straight line from point A to Middlebelt, you have a jog so that it comes-you know, goes from point A, it comes a little bit, and then evens out.The parties were then given more time to resolve their remaining disputes.
I believe that the proper interpretation of that is that there is a point that can be set by surveyors that is-would probably be slightly north of that hickory tree so that you can then run at a straight line from point A to the platted corner line up at Middlebelt Road, so that is a straight line. I believe at that point, it's easy to plot the next line, which comes down to point 35 feet east of the driveway on the platted line, so there should be really only one point that needs to be set by the surveyors, and-and determining that lot-that point 35.
So two lines; one from Middlebelt to point A, one from point A to the 35 feet south-or east of the-of the driveway, and in that way, that incorporates, you know, all of the improvements, and I think were the whole subject of the lawsuit, the-the-the retaining wall, the driveway, all those things that were potentially encroaching on the property.
After that, I believe, because we've just reviewed them, everything else is very easy to resolve, and so I will tell you that I would like you to redraft the-the settlement agreement as I've just-with the-the boundary line as I've just described, and if you need further illumination on that, I can give you that.
Here, the language regarding the new proposed boundary, although "inartfully worded or clumsily arranged," Wells Fargo Bank, 300 Mich App at 386, was unambiguous. With the description and the clarification provided by the parties' attorneys at the June 10, 2015 hearing, the court could easily ascertain the new boundary line. "Under ordinary contract principles, if contractual language is clear, construction of the contract is a question of law for the court." Klein v HP Pelzer Auto Sys, Inc, 306 Mich App 67, 76; 854 NW2d 521 (2014) (quotation marks and citations omitted). Additionally, a court may not enter an order "which deviates in any material respect from the agreement of the parties." Kloian, 273 Mich App at 461 (quotation marks and citation omitted). Therefore, the court did not err when it determined that the settlement agreement was "easily enforceable" from the terms the parties set forth on the record on June 10, 2015, and therefore granted plaintiff's motion to enforce the settlement. Under the settlement agreement, defendants received additional land as a result of the new boundary line, with all of defendants' personal property now on their side of the line, and plaintiff is required to maintain a dense boundary of trees on her property until it is sold.
Additionally, the parties' settlement was enforceable because it met the requirements of MCR 2.507(G). A valid contract requires an offer, acceptance, consideration, and mutual agreement to all of the contract's essential terms. Kloian, 273 Mich App at 452-453. "A contract for the settlement of pending litigation that fulfills the requirements of contract principles will not be enforced unless the agreement also satisfies the requirements of MCR 2.507[(G)]." Id. at 456. A settlement agreement is therefore binding and enforceable if the agreement satisfies the requirements of MCR 2.507(G). Columbia Assoc, LP v Dep't of Treasury, 250 Mich App 656, 668-669; 649 NW2d 760 (2002). MCR 2.507(G) provides that "[a]n agreement or consent between the parties or their attorneys respecting the proceedings in an action is not binding unless it was made in open court, or unless evidence of the agreement is in writing, subscribed by the party against whom the agreement is offered or by that party's attorney." This court rule applies to situations where the parties have come to an agreement, and are seeking to memorialize the agreement in writing. Id. "A settlement agreement is binding when it is made in open court." Mikonczyk v Detroit Newspapers, Inc, 238 Mich App 347, 349; 605 NW2d 360 (1999). "As a general rule, settlement agreements are final and cannot be modified." Clark v Al-Amin, 309 Mich App 387, 395; 872 NW2d 730 (2015) (citation and quotation marks omitted). "This is because settlements are favored by the law, and therefore will not be set aside, except for fraud, mutual mistake, or duress." Id.
The Kloian Court refers to the previous version of this court rule, wherein the relevant subsection was located at MCR 2.507(H). Kloian, 273 Mich App at 456.
"A party cannot, after agreeing in open court, refuse to sign a proposed judgment which accurately incorporates the agreement unless there was mistake, fraud, or unconscionable advantage which would justify setting aside the settlement agreement," Mich Bell Tel Co v Sfat, 177 Mich App 506, 515; 442 NW2d 720 (1989). Moreover, a settlement agreement made in open court that affects interests in land is binding on the parties, even when they disagree about the terms that should be included in the subsequent consent judgment. Siegel v Spinney, 141 Mich App 346, 350; 367 NW2d 860 (1985).
After the parties discussed the terms of the settlement in open court on June 10, 2015, each party was questioned, and stated that they agreed to be bound by the terms of the settlement. Plaintiff, with the help of translation by her son, Thomas Shaffou, stated that she understood the terms of the agreement, and agreed to be bound by them. Then Dr. Kalo stated his acquiescence to the settlement:
Mr. Ruemenapp: Just briefly. Dr. Kalo, let me ask you; you heard and understood the terms that we put on the record today to-to-to resolve this case-
Jacob Kalo: Yes.
Mr. Ruemenapp: -is that correct? And do you agree to those terms and agree to be bound by them?
Jacob Kalo: Yes.
Mr. Ruemenapp: Okay. And you also understand that we could have proceeded to trial, and Judge McMillen could have rendered a decision that may
have been substantially more favorable or substantially less favorable, or somewhere in the middle, as it relates to the settlement agreement you've reached?Dr. Kalo also stated that he had authority to speak on behalf of his wife, Yehiella, in agreeing to the settlement.
Jacob Kalo: Yes, I do.
Mr. Ruemenapp: Okay. And you would prefer to go along with the settlement agreement.
Jacob Kalo: Yes.
"The evidence in this case as revealed in the transcripts of the hearings on this issue in the court below, instead of suggesting mistake, fraud, or excusable neglect suggests that defendants, as stated by defense counsel, were unhesitating in their consent to the terms of the settlement agreement at the time the agreement was formally read into the record, but that shortly thereafter they had a 'change of heart.' " Groulx, 176 Mich App at 492. "A change of heart is normally insufficient to justify the setting aside of a settlement agreement." Id. The transcript of the June 10, 2015 hearing is clear that all parties involved understood the terms set forth by the parties' attorneys, and agreed to be bound by the settlement. Thus, the record reflects the parties' intent to be bound, and their assent on all material terms of the agreement. The trial court did not abuse its discretion when it granted plaintiff's motion to enforce the settlement agreement.
Defendants offer no support for their contention that the trial court was required to consider other evidence or inquire into other factual claims before enforcing a settlement agreement. "A party may not merely announce a position and leave it to this Court to discover and rationalize the basis for the claim." Nat'l Waterworks, Inc v Int'l Fidelity & Surety, Ltd, 275 Mich App 256, 265; 739 NW2d 121 (2007). Defendants attempt to categorize the trial court's decision as one regarding summary disposition, wherein the trial court would be required to consider evidence. MCR 2.116(G). However, the trial court order being appealed was on plaintiff's motion to enforce the settlement, and we find no support for defendants' position that the trial court was required to consider his evidence of alleged breach, abandonment, or frustration of purpose before enforcing the settlement agreement. In any event, defendants primarily allege that plaintiff breached the agreement by unilaterally cutting down some of defendants' boundary trees, and causing defendants to become unable to transplant some of their trees. Nothing in this opinion should be construed as precluding defendants from seeking to proceed against plaintiff on the basis of the arguments noted above. However, they are irrelevant to whether the parties originally made a binding settlement agreement on the record in 2015. To that end, the intent of the parties is found in the words of the contract, and a court may not use extrinsic evidence to determine intent if the words are clear and unambiguous. UAW-GM Human Resource Ctr v KSL Recreation Corp, 228 Mich App 486, 491; 579 NW2d 411 (1998). Therefore, because the settlement put on the record on June 10, 2015, was clear and unambiguous, and complied with the requirements of MCR 2.507(G), the trial court did not abuse its discretion by granting plaintiff's motion to enforce the settlement agreement.
We note that the case cited by defendants, Boylan v Fifty Eight, LLC, 289 Mich App 709, 714; 808 NW2d 277 (2010), merely provides the de novo standard of review for a trial court's decision on a motion for summary disposition. This case provides no authority for defendants' proposition that a trial court's decision on a motion to enforce a settlement should also be reviewed de novo.
We recognize that Dr. Kalo filed a different lawsuit during the course of these proceedings against plaintiff and Shaffou, seeking to quiet title and other relief. --------
Affirmed.
/s/ Christopher M. Murray
/s/ Amy Ronayne Krause
/s/ Jonathan Tukel