Opinion
No. 330549 No. 330604
03-21-2017
UNPUBLISHED Bay Circuit Court
LC No. 14-003067-CH Bay Circuit Court
LC No. 14-003338-CH Before: BECKERING, P.J., and O'CONNELL and BORRELLO, JJ. PER CURIAM.
In this action for trespass, tortious interference with a business relationship, and tortious interference with a contract, the trial court found that defendant Lane Sherman trespassed on land that plaintiff Gray Farms LLC had leased to farm from defendant Duane L. Sherman Trust and ordered Sherman to pay $100 in nominal damages. The trial court found no cause for action on all other counts. In both of these consolidated appeals, plaintiff appeals as of right. For the reasons set forth in this opinion, we affirm.
I. BACKGROUND
Defendant Lane Sherman was a co-trustee of defendant The Duane L. Sherman Trust (the trust), along with his sisters, Shirley Bozer and Shelly Sheskey. The property at issue, which is 55 acres of farmland, was conveyed to the trust by a May 2012 quitclaim deed from Duane L. Sherman.
In March 2013, the trust leased the property to plaintiff for one year and granted plaintiff the right to renew the lease for another year. The terms of the lease provided that the trust was to receive one-third of the gross yields of plaintiff's crop and granted plaintiff the first right to match the purchase price of the property if it was not sold to a family member. The trust had the ability to terminate the lease by selling the property, provided that the purchaser negotiated to end plaintiff's farming operations.
Defendant Lane Sherman wanted to buy the property but his sisters did not want to sell it to him. Ultimately, after a November 12, 2013 hearing, the probate court ordered an auction of the property and Sherman acquired the property at auction via proxy. Sherman signed the purchase agreement and deposited $10,000 as a down payment. According to Sherman, the auctioneer stated that Sherman could take immediate possession of the property and proceed to closing on the property; however, the closing did not actually occur until November or December 2014. Sherman stated that he thought he had an immediate right to farm the property because he paid a $10,000 down payment.
On January 31, 2014, plaintiff commenced suit in the circuit court (Docket No. 14-003067) disputing the effectiveness of the sale of the property. Sometime thereafter, Sherman's sisters, on behalf of the trust, signed a document renewing the crop share farm lease for another year. Sherman recalled arguing with his sisters on March 22, 2014 when they informed him that they had extended the crop share lease with plaintiff for another year. Sherman acknowledged that he and his sisters were co-trustees of the trust and that two must agree to make a decision. He further acknowledged a May 20, 2014, letter from Tina Gray, one of plaintiff's owners, and counsel of record in this action, addressed to his attorney, enclosing the hand written extension.
Court of Appeals Docket No. 330549.
The effectiveness of the auction sale is not at issue in this appeal.
Larry Gray, the other of plaintiff's owners, walked the disputed property on March 22, 2014 and thought that it was too wet to be planted. Sherman testified that he started farming the disputed acres on May 23, 2014 and borrowed Gerald Sylvester, Sr.'s equipment to complete the planting the next day. The parties stipulated that 55 acres of corn were planted in 2014. Sylvester, Sr. was a farmer and stated that Sherman obtained his materials and some equipment for planting the field through him and defendant Gerald Sylvester, Jr., a fertilizer sales person because Sherman did not have a credit line. Both Sylvester, Sr. and Sylvester, Jr. stated that they did not do any of the planting. Larry Gray called the sheriff's department on May 23, 2014 when he saw Sherman working the land, and Sherman recalled the police speaking to him on May 23, 2014 regarding whether he had a right to farm the property.
Crop consultant Frank Marcello testified that it was best to plant corn in the middle of May and dry beans by the end of June. Farmer and consultant Mike Houghtaling testified that 2014 was a wet spring so most of the corn fields in the area were planted later than the ideal time, but black beans could have been planted a couple weeks later. Larry Gray stated that he would have planted the field on Friday or Saturday of the following week. Marcello and Sylvester, Jr. stated that Memorial Day weekend 2014 was one of the windows in which corn could have been planted in 2014. Houghtaling recalled that many fields remained too wet to plant on Memorial Day weekend 2014, and Marcello, who observed the leased field on the Tuesday after Memorial Day, thought that the property was wet with standing water. Sherman stated that the field only had three spots that were too wet to plant, and that the corn came up without any problems. He concluded that the field was not too wet to plant on Memorial Day weekend, noting that he planted the corn at a normal depth.
On May 27, 2014, the Tuesday after Memorial Day, plaintiff filed another complaint in circuit court (Docket No. 14-003338.) Plaintiff alleged that defendants trespassed on the property by tilling the soil and planting corn on May 24, 2014, when plaintiff had the right to farm the property after extending the lease pursuant to the share crop lease agreement. Plaintiff alleged that it suffered a loss of income from growing crops. Further, plaintiff claimed that defendants' farming the land constituted a tortious interference with a contract and a tortious interference with a business relationship or expectancy. At the time plaintiff filed its complaint, plaintiff filed a motion to enjoin defendants from further farming the property.
Court of Appeals Docket No. 330604.
Following a hearing, the trial court granted plaintiff's motion for injunctive relief. The trial court held that the trust owned the farmland in question, that the crop share farm lease was valid and that plaintiff had possessory rights to the property for the 2014 farming season. The court enjoined defendants from interfering in plaintiff's farming operations. Thereafter, the trial court granted the trust's motion to intervene and consolidated the two actions.
Plaintiff moved for summary disposition, arguing that defendant admitted all elements of the claim. The trust also moved for summary disposition, arguing that the property was ordered to be sold at an auction without the presence of family and that Lane Sherman used a representative to purchase the property.
At a hearing on the motions for summary disposition, defendants argued that Sherman purchased the property at an auction through a bidder so that plaintiff no longer had a right of first refusal to purchase the property. Defendants further argued that the trial court should reconsider its decision to enjoin Sherman from farming the property because he had purchased the property at auction.
With respect to whether the sale to Sherman was valid, the trial court granted defendants' motion for summary disposition, and denied plaintiff's motion for summary disposition. The trial court found no genuine issue of material fact with respect to whether plaintiff had the right of first refusal to purchase the leased land because Sylvester, Sr. was an agent for Sherman with the highest bid at auction. With respect to the right to farm the property, the trial court denied defendants' motion for reconsideration, finding that the lease had been extended and that plaintiff had the right to farm the property.
After an October 27, 2014 hearing, the trial court held that plaintiff was entitled to harvest the existing crop on the property and hold the proceeds in an account after providing a share to the trust until the trial court could hold an evidentiary hearing to determine the distribution of the sale proceeds. The trial court ordered that each party was to file an affidavit of its costs to farm the land, and ordered that Sherman would obtain possession of the property at the time that he closed on the auction sale.
At a subsequent evidentiary hearing to determine the outstanding issues, Larry Gray indicated that he walked the field after the trial court gave him permission to farm and thought that the corn was planted too shallow and that the soil was lumpy because it was wet when it had been tilled. He testified that he had planned to plant corn on the southern 25 acres and black beans on the northern 30 acres after deep tilling, and had purchased the bean seeds. He recalled that he did not plow under the corn that Sherman had planted and plant the beans as planned because the seed bed was uneven and he had unsuccessfully waited for rain so that he could make it smooth, and because the field may have been sprayed with pesticides that would have been harmful to beans. Larry Gray explained that he could use his corn and black bean seeds the following planting season, but could not return the bean seeds because they were treated with a chemical and it was too late in the season when he decided not to plant them. Marcello consulted with plaintiff around the middle of June and concluded that it would be best to leave the field as Sherman had planted it because it was late in the year, wet, and they did not know whether a chemical had been sprayed to prevent the planting of another crop. Houghtaling did not know whether the corn could have been plowed under and replanted with beans because he did not know which chemicals were used on the corn in what concentration, but he stated that none of the chemicals plaintiff listed on an affidavit would have prevented beans.
Marcello examined the field in the middle of June and believed that the corn was emerging adequately, except at the northern end where it was poor because of poor drainage. Marcello had soil samples analyzed from the field to determine what plaintiff should apply to the field and found that the elements were adequate. Sherman observed that 12 acres remained stunted with little corn. Sylvester, Jr. photographed the field on July 1, 2014, and thought that the field had some healthy growing corn and saw that the growth of the corn in a portion of the field was stunted. Sylvester, Jr. stated that the type of fertilizer, 28 percent solution, that had been applied to the corn crop in the field in late June 2014 would have burned leaves that it touched and possibly stunted the growth of the corn. He did not see plaintiff apply a 28 percent solution but thought that it was applied because he saw disk marks in the soil. He testified that a disk in the soil was the proper way to apply 28 percent so it did not touch the plants, but he observed burning on the plants indicating that the applicator may have dislodged and did not get the solution into the ground. Sherman stated that he thought that plaintiff had applied 28 percent to about 12 acres because, in June, he witnessed that the corn was "burned." Larry Gray said he twice applied 28 percent solution with a disc applicator and denied that the hose broke on the applicator. Marcello believed that the stunted corn was damaged by water because the area was very wet, and he did not think the damage was caused by fertilizer solution accidentally applied due to a broken hose.
Marcello believed that some areas of the field did not produce well because the corn was flooded out. Houghtaling thought that some areas of the field did not yield well because they were areas that had excessive moisture, either when it was planted or while it was growing. Houghtaling summarized his conclusions, stating that 10 to 15 acres of the 50-acre field did not produce good corn due to the soil conditions. Utilizing data from plaintiff's combine tractor, Houghtaling said that the field had three acres that had no yield and five acres across the top of the property that yielded less than five bushels an acre. Houghtaling calculated that plaintiff's yield was 148.93 bushels an acre with 15.0 moisture, or an estimated dry volume of 7,517 bushels.
The trust reported that it received its share of the crop that plaintiff harvested. Sylvester, Sr. presented a cost document prepared by Sylvester, Jr. at the fertilizer company. Houghtaling thought that Sherman's affidavit of expenses associated with the corn crop was reasonable. Larry Gray detailed his $14,343 costs for seeds, pre-emergent herbicide for weeds, chemicals, and fertilizers, and other costs, in an affidavit. He averred that he received $14,342 from selling the corn crop, after giving one-third of the crop to the trust. Marcello said the costs listed on plaintiff's affidavit were reasonable. Larry Gray claimed that he lost money due to the way the leased field was farmed in 2014.
The trial court found that Lane Sherman trespassed, and ordered that he pay plaintiff $100 in damages. The trial court reasoned that it could only award nominal damages because plaintiff did not demonstrate any actual damages resulting from the trespass with certainty. The trial court found that plaintiff had not demonstrated any cause of action against Sylvester, Jr. or Sylvester, Sr. The trial court found that Sherman could not "assign" to plaintiff the $18,561 he sought for the cost of planting the field. The trial court found that plaintiff failed to prove any tortious interference with a business relationship or with a contract. The trial court entered an order on November 16, 2015. This appeal then ensued.
Although the circuit court consolidated the cases, plaintiff filed appeals in both lower court dockets appealing the same November 16, 2015, court order. This Court, on its own motion, consolidated the appeals. Gray Farms LLC v Duane L. Sherman Trust, unpublished order of the Court of Appeals, entered March 31, 2016 (Docket No. 330549); Gray Farms LLC v Lane Sherman, unpublished order of the Court of Appeals, entered March 31, 2016 (Docket No. 330604). --------
II. STANDARD OF REVIEW
Plaintiff argues that the trial court erred in awarding only nominal damages, erred by finding that defendants Gerald Sylvester, Sr., and Gerald Sylvester, Jr. did not trespass, and erred by finding that plaintiff did not demonstrate that any defendant acted in tortious interference with a business relationship or with a contract.
A trial court's finding of damages is reviewed for clear error. Triple E Produce Corp v Mastronardi Produce, Ltd, 209 Mich App 165, 176; 530 NW2d 772 (1995). On appeal from a bench trial, this Court reviews the trial court's factual findings for clear error and conclusions of law de novo. Ligon v City of Detroit, 276 Mich App 120, 124; 739 NW2d 900 (2007). A trial court's factual findings are clearly erroneous when there is no supporting evidence for the findings or the reviewing court is left with a "definite and firm conviction" that a mistake was made. Hill v Warren, 276 Mich App 299, 308; 740 NW2d 706 (2007).
III. DAMAGES FOR TRESPASS
"Because a trespass violate[s] a landholder's right to exclude others from the premises, the landholder could recover at least nominal damages even in the absence of proof of any other injury." Wiggins v City of Burton, 291 Mich App 532, 555; 805 NW2d 517 (2011) (quotation omitted). "Nominal damages are those damages recoverable where [a] plaintiff's rights have been violated by breach of contract or tortious injury, but no actual damages have been sustained or none can be proved." 4041-49 W Maple Condo Ass'n v Countrywide Home Loans, Inc, 282 Mich App 452, 460; 768 NW2d 88 (2009). Further, a plaintiff can recover actual damages that occurred as a result of a trespass. Wiggins, 291 Mich App at 558.
Plaintiff argues that the trial court erred in ordering only nominal damages of $100, asserting that it demonstrated that it had actual damages. The trial court concluded that plaintiff could not establish with certainty any actual damages that it suffered as a result of the trespass. We find no clear error.
Plaintiff argues that 7.44 acres of land were not planted because the soil was too wet when Sherman planted the field, and that plaintiff would have waited a few days to plant so that the field could dry out. It appears that in referencing the 7.44 acres, plaintiff includes acres not planted as well as acres that did not produce a yield. Farmer and consultant Mike Houghtaling used GPS to determine that 50.48 acres of the roughly 55-acre field had been planted and 47.24 acres produced a crop to harvest. Houghtaling stated that the acres that were not planted, and the almost three areas that produced very little corn, consisted of areas that were likely too wet to plant at the time they were planted. Crop consultant Frank Marcello observed four days after the planting that the field was wet with standing water. Sherman acknowledged that the field had three spots that were too wet to plant. Thus, there was factual support to establish that Sherman did not plant or was not able to produce a crop on 7.44 acres because of excess water on the field. To find that plaintiff would have successfully planted this area, or that the yield would have exceeded a minimal amount, would have required speculation beyond what was reasonably certain. A claimant must prove actual damages with "reasonable certainty." 4041-49 W Maple Condo Ass'n, 282 Mich App at 459-460. Damages which are "remote, contingent, or speculative" are not recoverable. Id. at 460.
Here, Marcello reported that it was best to plant corn in the middle of May. Houghtaling explained that it was a wet spring so most of the corn fields in the area were planted later than the ideal time. Sylvester, Jr., stated that Memorial Day weekend presented a small opportunity to plant the wet field with more bad weather coming, and Marcello agreed that Memorial Day weekend was one of the windows in which corn could have been planted in 2014. Marcello observed the Tuesday after Memorial Day that a lot of fields in the area were wet with standing water, and Houghtaling said that many fields remained too wet to plant on Memorial Day weekend, but that each farmer had to decide which day to plant considering how many days were left in the season that the weather would permit planting. Significantly, Sherman said that two water holes were present every year. Thus, whether the areas that were not planted or that generated a poor yield due to standing water could have been successfully planted at a later date was speculative, depending on, at least the weather and the field drainage properties. Additionally, there is no reasonable certainty regarding what the yield of the unplanted area would have been had it been planted as this would depend on the condition of the soil, the weather, and at which point during the growing season, if ever, the corn would have been able to be successfully planted. Accordingly, the trial court did not clearly err in declining to award damages for the 7.44 acres.
Plaintiff also argues that Sherman's planting yielded 26 bushels of corn per acre less than would have been the yield had plaintiff planted the field. However, there was conflicting evidence regarding what yield should have been produced, whether the yield could have been any better given the conditions, what caused any decrease in the yield, or whether the yield could have been different had a different party planted or cultivated the crops. Thus, we cannot conclude that the trial court clearly erred in determining that it was speculative to estimate a different yield had plaintiff planted the crop as opposed to Sherman.
Additionally, plaintiff argues that it incurred actual damages because it was prevented from diversifying the crop by planting dry beans on a part of the field. Again, however, the alleged damages were speculative. Here, even assuming that the chemicals Sherman used were non problematic, it was not certain that plaintiff would have been able to plant the beans, or cultivate them successfully, due to the weather and soil conditions. Marcello indicated that the soil was too wet to till at the time he was considering replanting the area. Marcello was asked why his advice was not to plant beans as plaintiff had planned, and he responded, "Soil conditions were just - we were having more rain and we just couldn't get in there and do anything, we just couldn't." Larry Gray recalled that the other reasons that he did not plow under the corn and plant the beans as planned were because the seed bed was uneven and he had unsuccessfully waited for rain so that he could make it smooth. Marcello's recommendation to plaintiff around the middle of June was that it would be best to leave the field as Sherman had planted it because, in part, it was late in the year and wet. Thus, there was no reasonable certainty that plaintiff would have been able to plant beans on the wet portion of the field or that plaintiff could have successfully cultivated the crop, either from planting over corn or planting as planned, given the conditions of the soil and the uncertainty of the weather. Accordingly, the trial court did not clearly err in declining to award damages based on plaintiff's inability to diversify the crop.
IV. TRESPASS BY THE SYLVESTERS
Next, plaintiff challenges the trial court's factual finding that Sylvester, Jr. and Sylvester, Sr. did not trespass.
In order to demonstrate a trespass to land, a plaintiff must provide "proof of an unauthorized direct or immediate intrusion of a physical, tangible object onto land over which the plaintiff has a right of exclusive possession." Wiggins, 291 Mich App at 555.
Plaintiff argues that the trial court erred in finding that Sylvester, Jr. and Sylvester, Sr. did not "in conspiracy with or in their own right, commit[] any trespass upon the farm." Sherman testified that he used Sylvester, Sr.'s equipment to complete planting corn in the field. Sylvester, Sr. stated that Sherman obtained his seeds, chemicals, fuel, and some equipment for planting the field through him and Sylvester, Jr. because Sherman did not have a credit line, but both he and Sylvester, Jr. stated that they did not farm any of the field. Sylvester, Jr. explained that he advised Sherman on the use of fertilizers for the field. Sherman stated that he asked Sylvester, Sr. to create a release for the water hole, but did not know whether he did so.
"It is a well-established principle of law that all persons who instigate, command, encourage, advise, ratify, or condone the commission of a trespass are co-trespassers and are jointly and severally liable as joint tortfeasors." Id. at 557 (citations omitted). Here, despite purposefully providing some assistance to Sherman, there was no evidence that the Sylvesters knew that Sherman was trespassing. Sylvester, Sr. and Sylvester, Jr. could not "instigate, command, encourage, advise, ratify, or condone the commission of a trespass" without knowledge that Sherman was trespassing when the crops were planted. "Every unauthorized intrusion upon the private premises of another is a trespass." Id. at 555. "[A] direct or immediate invasion for purposes of trespass is one that is accomplished by any means that the offender knew or reasonably should have known would result in the physical invasion of the plaintiff's land." Boylan v Fifty Eight LLC, 289 Mich App 709, 723; 808 NW2d 277 (2010) (quotation marks omitted).
Here, there was no evidence that Sylvester, Sr. and Sylvester, Jr. knew or had reason to know that the land did not belong to Sherman. Sylvester, Sr. had represented Sherman at the auction where Sherman was the highest bidder for the land. Sylvester, Jr. made a comment during his testimony that "we thought we had the property to start out with" and was aware that a court had subsequently held that plaintiff had a right to the property. "There is no joint trespass where defendant's independent acts contributed to the result or where they cooperated to do a lawful act and in doing it some of them committed a trespass." Kratze v Indep Order of Oddfellows, Garden City Lodge No 11, 190 Mich App 38, 43; 475 NW2d 405 (1991). Here, there was no evidence presented that Sylvester, Sr. or Sylvester, Jr thought they were providing any assistance beyond the assistance they ordinarily would provide to Sherman for whatever field he was farming. The trial court did not clearly err in finding that plaintiff failed to demonstrate that Sylvester, Sr. or Sylvester, Jr. trespassed.
V. TORTIOUS INTERFERENCE
Next, plaintiff argues that the trial court erred in finding that plaintiff did not demonstrate that defendants intentionally interfered with his business relationship with the Duane L. Sherman Trust.
"The elements of tortious interference with a business relationship or expectancy are the existence of a valid business relationship or expectancy, knowledge of the relationship or expectancy on the part of the defendant, an intentional interference by the defendant inducing or causing a breach or termination of the relationship or expectancy, and resultant damage to the plaintiff." Cedroni Ass'n, Inc v Tomblinson, Harburn Assocs, Architects & Planners Inc, 492 Mich 40, 45; 821 NW2d 1 (2012), quoting Dalley v Dykema Gossett PLLC, 287 Mich App 296, 323; 788 NW2d 679 (2010).
Here, there was evidence of "the existence of a valid business relationship" because plaintiff had exercised an option to farm land belonging to the Duane L. Sherman Trust and had entered into an agreement with the trust to extend the lease. There was conflicting evidence on whether Sherman knew of the extension. He had the winning bid at the auction and claimed he did not know that plaintiff had exercised its option to extend the crop share lease until after he began planting what he thought was his property. However, Sherman testified about arguing with his sisters, co-trustees of the trust, about two months before the planting, because they told him that they had extended the crop share lease with plaintiff. Thus, there was evidence of a valid business relationship between plaintiff and the trust, and, secondly, that Sherman had "knowledge of the relationship" before he began working in the field on May 23, 2014.
Regarding the third element, "in order to succeed under a claim of tortious interference with a business relationship, the plaintiffs must allege that the interferer did something illegal, unethical or fraudulent." Michigan Podiatric Med Ass'n v Nat'l Foot Care Program, Inc, 175 Mich App 723, 736; 438 NW2d 349 (1989). "Where the defendant's actions were motivated by legitimate business reasons, its actions would not constitute improper motive or interference." Badiee v Brighton Area Schools, 265 Mich App 343, 366; 695 NW2d 521 (2005) (citations omitted). "To establish that a defendant's conduct lacked justification and showed malice, the plaintiff must demonstrate, with specificity, affirmative acts by the defendant that corroborate the improper motive of the interference." Dalley, 287 Mich App at 324 (citation and internal quotations omitted).
Here, evidence that Sherman illegally worked in the field, constituting a trespass, if he had gained knowledge that the trust had extended the crop share lease with plaintiff, was evidence of an improper motive of intentional interference. Sherman could have been motivated by the legitimate business reason of farming a field that he thought he had purchased. However, there was evidence to support that Sherman may have also worked the field after learning that the trust had agreed to extend the lease with plaintiff, rather than deferring to the property owners (the trust) or seeking a resolution as to who had the right to farm the field.
Regardless, it was not demonstrated that Sherman's conduct "caus[ed] a breach or termination of the relationship." "[L]iability may be imposed for improper conduct that prevents either party from continuing a business relationship." Winiemko v Valenti, 203 Mich App 411, 416-417; 513 NW2d 181 (1994). Here, plaintiff was able to cultivate a corn crop and divide the yield with the trust according to the lease agreement. In other words, plaintiff's business relationship with the trust continued and there was no breach. Moreover, plaintiff took the proceeds from the crop and plaintiff was not able to demonstrate, with reasonable certainty, that it incurred any "resultant damage" from Sherman planting the corn rather than plaintiff planting corn and beans.
Finally, plaintiff argues that the trial court erred in finding that plaintiff did not demonstrate that defendants intentionally interfered with his contract with the Duane L. Sherman Trust. In order to demonstrate a tortious interference with a contract, a plaintiff must demonstrate: "(1) a contract, (2) a breach, and (3) an unjustified instigation of the breach by the defendant." Badiee, 265 Mich App at 366-367. Here, plaintiff's crop share lease contract with the trust was, as discussed above, unjustly interfered with when Sherman planted the corn. Just as with interference with a business relationship, in order to demonstrate tortious interference with a contractual relationship, the plaintiff "must allege the intentional doing of a per se wrongful act or the doing of a lawful act with malice and unjustified in law for the purpose of invading the contractual rights." Wood v Herndon & Herndon Investigations, Inc, 186 Mich App 495, 499-500, 465 NW2d 5 (1990) (quotation marks omitted). As stated, evidence that Sherman illegally worked in the field, constituting a trespass, after gaining knowledge that the trust had extended the crop share lease with plaintiff, would have justified a finding of an improper motive of intentional interference. However, as the trial court found, it was not demonstrated that Sherman's conduct resulted in a breach of the contract. Plaintiff considered, with the advice of a consultant, whether he should replant the field as he desired and declined to do so. Plaintiff was able to cultivate a corn crop and divide the yield with the trust according to the lease agreement. Thus, it was not clear error to find that the crop share lease was not breached.
Affirmed. No costs awarded. MCR 7.219(A).
/s/ Jane M. Beckering
/s/ Peter D. O'Connell
/s/ Stephen L. Borrello