Smith Trust and Estate v. Erickson Retirement Communities

STATE OF MICHIGAN

COURT OF APPEALS

SMITH LIVING TRUST and ESTATE OF FOR PUBLICATION

REGINALD SMITH, by DAVID SMITH, as October 30, 2018

Trustee and Personal Representative, and on behalf 9:00 a.m.

of all others similarly situated,

Plaintiff-Appellant,

v No. 338638

Wayne Circuit Court

ERICKSON RETIREMENT COMMUNITIES, LC No. 16-004191-CK

HENRY FORD VILLAGE, INC., REDWOOD-

ERC MANAGEMENT, LLC, doing business as

ERICKSON LIVING MANAGEMENT, LIFE

CARE SERVICES, SENIOR CAMPUS

SERVICES, LLC, and SENIOR CAMPUS

LIVING, INC.,

Defendants-Appellees.

Before: MURRAY, C.J., and BORRELLO and RONAYNE KRAUSE, JJ.

RONAYNE KRAUSE, J.

Acting as personal representative and successor trustee, respectively, of the estate and

trust of his deceased father Reginald Smith (decedent), plaintiff David Smith appeals as of right

from the trial court’s order granting defendants summary disposition under MCR 2.116(C)(10)1

of all claims in this action. We affirm.

1

Defendants moved for summary disposition under MCR 2.116 (C)(7), (C)(8), and (C)(10), and

the trial court did not explicitly state the subpart under which it ruled. However, when

announcing its ruling, the trial court did not seemingly conclude that any of plaintiff’s claims

were barred for purposes of (C)(7), and it considered evidence outside the pleadings and the

several documents that constitute the parties’ written agreement. Thus, we review the trial

court’s decision under MCR 2.116(C)(10). See Sisk-Rathburn v Farm Bureau Gen Ins Co of

Mich, 279 Mich App 425, 427; 760 NW2d 878 (2008); Laurel Woods Apartments v Roumayah,

274 Mich App 631, 635; 734 NW2d 217 (2007).

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I. FACTUAL BACKGROUND

A. INTRODUCTION

Decedent resided in a unit at the Henry Ford Village Continuing Care Retirement

Community (the retirement community) in the years immediately preceding his death. The

retirement community is owned by defendant Henry Ford Village, Inc. (HFV), and it was

managed, at various times, by the other defendants. Decedent was required to pay a “refundable

entrance deposit” for his unit. The entirety of this deposit was “refundable” to decedent’s estate

or trust as of decedent’s death in 2013, subject to several conditions precedent, and minus certain

fees that plaintiff does not challenge. HFV refunded most, but not all, of the remainder of

decedent’s entrance deposit, pursuant to an agreement with plaintiff, which in turn was pursuant

to a provision of decedent’s contract with HFV. The gravamen of this case is plaintiff’s

contention that HFV should have refunded the entirety of decedent’s deposit, notwithstanding

the terms of decedent’s contract with HFV or plaintiff’s agreement with HFV. At oral argument,

plaintiff conceded that HFV violated none of the terms of its contract with the decedent or

agreement with plaintiff, as those documents are actually written.

One of the conditions precedent to a refund was re-occupancy of decedent’s unit by a

new resident, including the payment of a new entrance deposit. Decedent’s unit remained

unoccupied approximately nine months after it was vacated. HFV suggested to plaintiff that, due

to the decline in the real estate market, the unit was priced too high at $152,000.00. Plaintiff

agreed to a reduction in the unit’s entrance deposit. In 2016, decedent’s unit was re-occupied for

an entrance deposit of $136,000.00. Under the agreement and one of the contractual provisions

in the Residence and Care Agreement (the RCA), if a unit’s re-occupancy entrance deposit is

reduced, any refund of the original deposit will be likewise reduced. Consequently, HFV issued

a check to plaintiff in the amount of $126,861.93, reflecting the reduced entrance deposit and the

subtraction of the unchallenged fees. Plaintiff asserts that, notwithstanding the agreement to the

lesser amount, $16,000.00 of decedent’s entrance deposit refund remains outstanding.

B. CONTRACTS AND DOCUMENTS EXECUTED BY DECEDENT

Several contracts and other documents are at issue in this matter. On May 22, 2006,

decedent executed a “Refund of Entrance Deposit Form,” which, in relevant part, stated that “the

Resident” (i.e., decedent) was

entitled to a refund of the Entrance Deposit . . . under certain specified conditions

during Resident’s lifetime or upon Resident’s death based upon termination of the

applicable Care Agreement. The conditions for the refund of the Entrance

Deposit are set forth in the Care Agreement.

The form further expressly advised the Resident to “review this Refund Form with an attorney or

other estate planning professional prior to execution . . . ” Finally, the form provided,

immediately above the signature line, that “Resident hereby acknowledges that he or she has

read the following preliminary statements and instructions, reviewed the attached options for a

refund of the Entrance Deposit, and understands the purpose and consequences of this Refund

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Form.” Decedent nominated himself, as trustee of his revocable living trust (the trust), as sole

beneficiary of any refund of his entrance deposit.

On June 8, 2006, decedent executed several more documents. One of those was a single-

page document entitled “Helpful Information Regarding Your Refund of Entrance Deposit and

Your Residence and Care Agreement.” This document described itself as “a brief and general

overview of some sections of the Residence and Care Agreement,” but cautioned that it “is not

meant to replace the Residence and Care Agreement nor supercede [sic] any of its terms . . . ” It

stated, in relevant part, that “[i]n general, in the event of death of a resident, the entrance deposit

will be refunded within 30 days of their apartment being re-settled (a new entrance deposit has

been placed on that apartment).” The document did not mention any reduction in the entrance

deposit. It concluded by stating that “[y]our Residence and Care Agreement is designed to offer

you many protections,” and inviting the resident to discuss any questions about the RCA with

HFV’s Marketing Office.

The same day, decedent executed another single-page document entitled “Receipt of

Disclosure Statement.” In relevant part, decedent acknowledged that he had received and had

sufficient time to review2 a disclosure statement required by the Living Care Disclosure Act

(LCDA), MCL 554.801 et seq.; specifically by MCL 554.819.3 The disclosure statement itself,

which included a table of contents, provided, in relevant part:

REQUIRED DISCLOSURES

1. YOU HAVE THE RIGHT TO CANCEL YOUR PURCHASE AND

RECEIVE A FULL REFUND WITH SEVEN (7) DAYS AFTER YOU HAVE

EITHER MADE A DEPOSIT AND RECEIVED A COPY OF THIS

DISCLOSURE STATEMENT OR EXECUTED THE RESIDENCE AND CARE

AGREEMENT AND RECEIVED A COPY OF THIS DISCLOSURE

STATEMENT. YOU CANNOT BE REQUIRED TO MOVE INTO THE

FACILITY BEFORE THE EXPIRATION OF THIS 7 DAY PERIOD.

2. THE SIGNING OF A LIFE INTEREST OR LONG TERM LEASE IS

AN INVESTMENT THAT MAY INVOLVE A HIGH DEGREE OF RISK AND

YOU SHOULD SEEK ADVICE FROM AN ATTORNEY OR OTHER

FINANCIAL ADVISOR INDEPENDENT OF THE FACILITY.

3. THIS DISCLOSURE STATEMENT IS REQUIRED BY LAW TO

CONTAIN ALL MATERIAL FACTS REGARDING THE OFFERING

MADE HEREBY. THE MICHIGAN OFFICE OF FINANCIAL AND

2

Plaintiff admitted at oral argument that decedent had been given all of the documents ahead of

time and the opportunity to review them before returning to sign them.

3

The LCDA was repealed effective April 2, 2015, by 2014 PA 448, and replaced by the

Continuing Care Community Disclosure Act, MCL 554.901 et seq.

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INSURANCE SERVICES HAS NOT PASSED UPON THE ACCURACY

OF THIS DISCLOSURE STATEMENT, NOR HAS THE OFFICE

APPROVED OR DISAPPROVED THE OFFERING DESCRIBED

HEREIN. ANY REPRESENTATION TO THE CONTRARY IS

UNLAWFUL AND SHOULD BE REPORTED . . .

4. NO PERSON IS AUTHORIZED TO MAKE ANY PROMISES IN

CONNECTION WITH THIS OFFERING OTHER THAN THOSE

CONTAINED IN THIS DISCLOSURE STATEMENT.

* * *

SECTION 5 - ENTRANCE DEPOSITS (SUMMARY)

The one-time refundable Entrance Deposit must be paid by the resident of

each Living Unit, with 10 percent due upon signing a Residence and Care

Agreement and the remainder due prior to occupancy. A list of the current

Entrance Deposits is attached as Exhibit 2. The Entrance Deposit is determined

by the size of and amenities available in the living unit. The Entrance Deposit is

100% refundable in accordance with the terms of the Residence and Care

Agreement.

* * *

SECTION 7 – OTHER SERVICES AND CHARGES

* * *

Residents have no further financial obligations to Henry Ford Village

other than those described in the Residence and Care Agreement, attached as

Exhibit 6.

* * *

SECTION 11 - CANCELLATIONS AND REFUNDS

* * *

C. Termination After Six Months of Occupancy: A Resident is entitled

to a full refund of the Entrance Deposit if the Resident terminates or all Joint

Residents terminate the Residence and Care Agreement more than six months

after taking occupancy. The Resident must give Henry Ford Village 90 days [sic]

notice in writing. The Resident shall be entitled to a full refund of the Entrance

Deposit, less the applicable Monthly Service Package, if previously not paid, the

Vacancy Fee, the Marketing Fee, and all other outstanding charges. The unearned

portion of such refund shall be refunded within 45 days after the Notice is given

or upon re-occupancy of the Unit, whichever occurs first. The earned portion of

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the Entrance Deposit shall be paid within 30 days of the date that a new qualified

Resident pays a new Entrance Deposit in full.[4]

* * *

SECTION 12 - DIVORCE, DEATH OF SPOUSE, MARRIAGE

A. Death of a Single Resident: If a single Resident dies during residency

at Henry Ford Village, the Residence and Care Agreement is automatically

terminated. The refund of the Entrance Deposit will be made within thirty (30)

days of fulfillment of the following conditions: the Resident’s or the Resident’s

representative’s vacating the living unit, removing all possessions, paying all

outstanding charges, and a new, qualified Resident paying a new Entrance

Deposit in full.

Plaintiff’s counsel admitted in the trial court that a copy of the RCA was attached to the

disclosure statement.

Finally, also on June 8, 2006, decedent executed the RCA itself. With its attached

schedules and table of contents, the RCA was 29 pages in length. Its table of contents listed the

title and page of each of its sections and subsections. In pertinent part, the RCA provided:

Section 7. REFUNDABLE ENTRANCE DEPOSIT

7.1 Payment of Refundable Deposit. Resident shall pay to HENRY

FORD VILLAGE a total Entrance Deposit, as indicated in Schedule I, attached

and incorporated hereto, on or before taking residence at the Community.

* * *

7.4 Refund of Deposit after Occupancy. After occupancy of the

Continuing Care Unit and subject to the terms and conditions of Section 7.5 of

this Agreement, HENRY FORD VILLAGE shall pay a refund of the Entrance

Deposit to the Resident as follows.

7.4.1 Refund during Lifetime. These terms apply

whether Resident or Henry Ford Village terminates the Agreement

during Resident’s lifetime . . .

* * *

7.4.2 Refund due to Death of Resident. If Resident dies

after the Occupancy Date, HENRY FORD VILLAGE shall pay a

4

The distinction between “earned” and “unearned” is not relevant to this appeal. It is undisputed

that the entirety of decedent’s entrance deposit was “earned” by the time of his death.

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refund of the Entrance Deposit within thirty (30) days after

fulfillment of the following conditions: (1) the Resident’s personal

representative or family has removed all possessions from the

Continuing Care Unit; (2) the Resident’s personal representative or

family has signed a unit release for the Continuing Care Unit; (3)

the Resident’s personal representative or family has paid all

outstanding fees and charges; and (4) a qualified new resident has

signed a new Residence and Care Agreement for the continuing

Care Unit and has settled in full by paying a new entrance deposit.

The refund shall be payable by HENRY FORD VILLAGE to the

beneficiaries named in a duly executed Refund of Entrance

Deposit Form or, if there is no Refund of Entrance Deposit Form,

to the personal representative of Resident’s estate . . .

Please be advised that HENRY FORD VILLAGE is not

obligated to refund the full Entrance Deposit until, or unless,

the conditions stated above are fulfilled, including the re-

subscription of the Unit.

7.5 Limitation on Amount of Refund. The amount of the refund which

HENRY FORD VILLAGE is obligated to pay to Resident or Resident’s estate

and which Resident or Resident’s estate is entitled to receive shall normally be the

amount of Resident’s Entrance Deposit at termination minus any outstanding fees

or charges unless paid separately . . . With respect to the refund of any Earned

Portion of the Entrance Deposit, if Resident’s Continuing Care Unit is not

reoccupied within a reasonable period of time, in HENRY FORD VILLAGE’s

sole discretion, by a qualified new resident with an Entrance Deposit equal to or

greater than Resident’s Entrance Deposit, then HENRY FORD VILLAGE will so

notify Resident or Resident’s personal representative. Resident or Resident’s

personal representative may then direct HENRY FORD VILLAGE to re-market

the Continuing Care Unit for a discounted Entrance Deposit. The amount of the

discounted Entrance Deposit, when received from a qualified new resident, minus

the Unearned Portion already refunded, will constitute the amount of the refund of

the Earned Portion of the Entrance Deposit to Resident.

* * *

Section 14. MISCELLANEOUS PROVISIONS.

14.1 Documents Incorporated by Reference. This Agreement includes

the Admissions Application for residence, the Financial Information Form, the

Resident Information Form, including Resident’s medical records, if any, and the

Refund of Entrance Deposit Form. . . . Resident acknowledges that HENRY

FORD VILLAGE will rely on statements of Resident in these documents and

warrants that all statements are true and complete to the best of Resident’s

knowledge.

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* * *

14.4 Entire Agreement. This Agreement and the documents referenced

in Section 14.l represent the entire agreement between HENRY FORD

VILLAGE, Resident, and Guarantor, if any, and supersedes all prior Agreements

and negotiations. Except as contained herein or in any contemporaneous, written

agreements, there are no promises or agreements between the parties.

* * *

14.6 Disclosure Statement. Resident hereby acknowledges that

Resident received the latest disclosure statement of HENRY FORD VILLAGE at

least three (3) days before signing this Agreement or before transferring any

money to HENRY FORD VILLAGE, whichever is earlier, and has reviewed such

statement.

Immediately above the signature lines was the statement:

This document is a legal contract. Signing this Agreement means that you are

legally bound by its terms. Therefore, you should seek the advice of a legal or

financial advisor.

Decedent initially paid an entrance deposit of $145,000.00, but in 2008 he transferred to a more

expensive unit, which increased his total entrance deposit to $152,000.00.

C. EVENTS FOLLOWING DECEDENT’S DEATH

Following decedent’s death on April 30, 2013, his children removed his belongings from

his unit, and HFV, through its agents, began to market the unit to new prospective tenants. The

unit was listed for the original entrance deposit of $152,000.00. As of January 2014, the unit

remained unoccupied. HFV sent correspondence to plaintiff opining that decedent’s unit was

likely overpriced due to the drastic decline in the real estate market. HFV indicated that the

average entrance deposit recently charged for similar units was $129,000, and further that 24

similar units were available at the time. HFV noted that under § 7.5 of the RCA, if plaintiff

wished to do so, he could agree to lower the unit’s listed entrance deposit—at the expense of

lowering the resulting refund commensurately—in hopes of pricing the unit competitively and

thereby expediting reoccupancy. Plaintiff ultimately agreed to do so.

Therefore, on February 24, 2014, plaintiff and HFV executed a “discounted refund

addendum” that, in significant part, agreed to discount the entrance deposit for decedent’s unit to

$136,000.00 pursuant to § 7.5 of the RCA. The addendum contained an acknowledgement that

plaintiff’s entrance deposit refund would be reduced by an equal amount. The addendum further

provided that plaintiff had freely entered into the addendum, had read and fully understood §

7.4.2 and § 7.5 of the RCA, and had a reasonable opportunity to consult with an independent

legal or financial advisor. Finally, the addendum provided:

This Addendum, including the exhibits hereto, constitutes the entire

understanding between the parties and supersedes any and all other prior

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agreements, written or oral, between the parties, with respect to the subject matter

hereof . . . This Addendum does not terminate, amend or reform any provision of

the RCA executed by Resident and HFV, which shall remain in full force and

effect, except as expressly stated herein.

HFV eventually found a new occupant for the decedent’s unit, who paid an entrance fee of

$136,000. On December 1, 2016, HFV remitted a check to plaintiff, as successor trustee of

decedent’s trust, for $126,861.93, which represented the reduced refund amount of $136,000,

minus uncontested fees of $9,138.07. Plaintiff accepted that refund amount, cashing HFV’s

check.

Plaintiff subsequently instituted this action against defendants. In his first amended

complaint, which sought certification of a class action including all others similarly situated,5

plaintiff alleged 12 counts, among them breach of contract, fraud, unjust enrichment, conversion

(both statutory and common-law), a statutory cause of action under the LCDA, and civil

conspiracy. Following several months of discovery, defendants all moved for summary

disposition. At the ensuing motion hearing, the trial court entertained extensive oral argument

and then ruled from the bench in defendants’ favor. This appeal ensued.

II. STANDARD OF REVIEW

We review de novo the trial court’s ruling concerning summary disposition, the proper

interpretation of the parties’ agreement, and any questions of statutory interpretation. Innovation

Ventures v Liquid Mfg, 499 Mich 491, 507; 885 NW2d 861 (2016); Kemp v Farm Bureau Gen

Ins Co of Mich, 500 Mich 245, 251-252; 901 NW2d 534 (2017).

A motion under MCR 2.116(C)(10) tests the factual support of a plaintiff’s claim.

Summary disposition is appropriate under MCR 2.116(C)(10) if there is no

genuine issue regarding any material fact and the moving party is entitled to

judgment as a matter of law. In reviewing a motion under MCR 2.116(C)(10),

this Court considers the pleadings, admissions, affidavits, and other relevant

documentary evidence of record in the light most favorable to the nonmoving

party to determine whether any genuine issue of material fact exists to warrant a

trial. A genuine issue of material fact exists when the record, giving the benefit of

reasonable doubt to the opposing party, leaves open an issue upon which

reasonable minds might differ. [Zaher v Miotke, 300 Mich App 132, 139-140;

832 NW2d 266 (2013) (quotations marks and citations omitted).]

“Only the substantively admissible evidence actually proffered may be considered.” 1300

LaFayette East Coop, Inc v Savoy, 284 Mich App 522, 525; 773 NW2d 57 (2009) (quotation

marks and citation omitted). “Circumstantial evidence can be sufficient to establish a genuine

issue of material fact, but mere conjecture or speculation is insufficient.” McNeill-Marks v

5

The trial court did not rule on class certification before granting defendants summary

disposition. We likewise conclude that it is unnecessary to do so.

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Midmichigan Med Ctr-Gratiot, 316 Mich App 1, 16; 891 NW2d 528 (2016). “This Court is

liberal in finding genuine issues of material fact.” Jimkoski v Shupe, 282 Mich App 1, 5; 763

NW2d 1 (2008).

III. ANALYSIS

Plaintiff, in an exceedingly loquacious and difficult to comprehend brief, has presented

an ostensible 20 distinct issues for this Court to address. However, those stated issues resolve to

seven effective claims. In essence, plaintiff argues that the trial court erred in granting summary

disposition: (1) to HFV on plaintiff’s claim for breach of contract, (2) to all defendants on

plaintiff’s several fraud-based claims, (3) to all defendants on plaintiff’s statutory claims under

the LCDA, (4) to all defendants on plaintiff’s claims for common-law and statutory conversion,

(5) to all defendants on plaintiff’s claim for unjust enrichment, (6) to all defendants on plaintiff’s

civil conspiracy claim, and (7) to defendant Redwood-ERC Management, LLC (Redwood-ERC)

on plaintiff’s “claim” of successor liability against it. We disagree with all seven claims.

A. BREACH OF CONTRACT

We conclude that the trial court did not err by granting defendants summary disposition

of plaintiff’s claim for breach of contract.

“A party asserting a breach of contract must establish by a preponderance of the evidence

that (1) there was a contract (2) which the other party breached (3) thereby resulting in damages

to the party claiming breach.” Miller-Davis Co v Ahrens Constr, Inc, 495 Mich 161, 178; 848

NW2d 95 (2014). There can be no serious dispute that the RCA is a contract, although plaintiff

argues that the disclosure statement should also be deemed contractual. HFV’s alleged breach

was, broadly, requiring plaintiff to accept a reduced refund. The amount of that reduction is

plaintiff’s claimed damages. Plaintiff’s breach of contract claim is premised on first reforming

the parties’ contracts. As noted, plaintiff admitted that HFV did not breach any term of the RCA

as written, without either reformation or considering the disclosure statement to be part of the

same contract.

Initially, HFV argues that we are precluded by the RCA’s merger clause from

considering the disclosure statement. For purposes of resolving this appeal, we disagree. “[I]t is

a prerequisite to application of the parol evidence rule that there be a finding that the parties

intended the written instrument to be a complete expression of their agreement with regard to the

matters covered.” Hamade v Sunoco, Inc, 271 Mich App 145, 167; 721 NW2d 233 (2006). The

merger clause provided that “[e]xcept as contained herein or in any contemporaneous, written

agreements, there are no promises or agreements between the parties” (emphasis added). The

Receipt of Disclosure Statement was signed by both decedent and HFV’s agents on the same

date as the RCA. We think it reasonable that decedent would have read, and thus relied on, both

the RCA and the disclosure statement. We will presume, although we do not decide, that the

disclosure statement constitutes a “contemporaneous, written agreement,” the consideration of

which is not precluded by the RCA’s merger clause.

Plaintiff properly concedes that under both the RCA and the disclosure statement, HFV’s

duty to refund the entrance deposit was contingent on several conditions precedent. “A

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condition precedent is a fact or event that the parties intend must take place before there is a right

to performance.” Able Demolition v Pontiac, 275 Mich App 577, 583; 739 NW2d 696 (2007)

(quotation marks and citation omitted). “If the condition is not satisfied, there is no cause of

action for a failure to perform the contract.” Harbor Park Market, Inc v Gronda, 277 Mich App

126, 131; 743 NW2d 585 (2007). In particular, plaintiff accepts that HFV had no obligation to

refund decedent’s entrance deposit until decedent’s unit was re-occupied and the new resident

paid a new entrance deposit in full. Rather, plaintiff argues that § 7.5 of the RCA must be

deemed unenforceable, and as a consequence he should have been entitled to a refund of the

entirety of decedent’s entrance deposit irrespective of the amount of the new entrance deposit.

Several of plaintiff’s arguments rely on interpreting the word “refundable.” Specifically,

plaintiff notes that the entrance deposit is described in some documents as “100% refundable.”

Plaintiff apparently deems this to mean that the entirety of the deposit necessarily must be

refunded, thus conflicting with § 7.5 of the RCA. We disagree. “Refundable” is not defined in

the RCA, so we consult a dictionary. See Auto Owners Ins Co v Seils, 310 Mich App 132, 145;

871 NW2d 530 (2015). “Refundable” is an adjectival form of the verb “refund.” Merriam-

Webster’s Collegiate Dictionary (11th ed). Importantly, the suffix in the word “refundable” is “-

able,” which—“chiefly in adjectives derived from verbs,” e.g., “breakable”—means “capable of,

fit for, or worthy of (being so acted upon or toward)[.]” Merriam-Webster’s Collegiate

Dictionary (11th ed). Thus, the plain meaning of the word “refundable” is not the meaning

suggested by plaintiff. A “100% refundable” sum is one that can be refunded entirely, not one

that necessarily will be refunded entirely. Describing the deposit as “100% refundable” does not

conflict with the existence of possible limitations on the amount of that refund.

Plaintiff further argues that decedent should be excused from any obligation to read the

RCA, and therefore from being bound by the RCA. Plaintiff admits that as a general rule, “one

who signs a contract will not be heard to say, when enforcement is sought, that he did not read it,

or that he supposed it was different in its terms.” Int’l Transportation Ass’n v Bylenga, 254

Mich 236, 239; 236 NW 771 (1931). Nevertheless, plaintiff contends that decedent was induced

to execute the RCA by both fraudulent misrepresentations and acts of silent fraud. “Fraud in the

inducement to enter a contract renders the contract voidable at the option of the defrauded party.”

Custom Data Solutions, Inc v Preferred Capital, Inc, 274 Mich App 239, 243; 733 NW2d 102

(2006) (quotation marks and citation omitted). Moreover, “Michigan has long recognized that an

agreement may be reformed because of a unilateral mistake that was induced by fraud.” Johnson

Family Ltd Partnership v White Pine Wireless, LLC, 281 Mich App 364, 380; 761 NW2d 353

(2008). Plaintiff concludes that if he could prove decedent was fraudulently induced into

executing the RCA, the trial court could reform the RCA as plaintiff has requested.

To prevail on a theory of fraud in the inducement, a plaintiff must prove five essential

elements, one of which is reasonable (or justified) reliance. Barclae v Zarb, 300 Mich App 455,

482; 834 NW2d 100 (2013); Hamade, 271 Mich App at 167; Custom Data, 274 Mich App at

243. We note that all of the above-described documents signed by decedent at least mentioned

the RCA, and most of them either stated or implied that the entrance deposit refund was

governed by the terms set forth in the RCA. The Refund of Entrance Deposit Form states:

[t]he conditions for the refund of the Entrance Deposit are set forth in the Care

Agreement. Resident and Resident’s beneficiaries are subject to all terms and

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conditions for the refund of the Entrance Deposit and should review the same

carefully.

The “Helpful Information” sheet clearly explains that it “is not meant to replace the Residence

and Care Agreement nor supercede [sic] any of its terms.” The disclosure statement makes

numerous references to the RCA, including an express statement that “[t]he Entrance Deposit is

100% refundable in accordance with the terms of the Residence and Care Agreement” (emphasis

added). No reasonable person would, after reviewing the above documents, fail to appreciate

that the RCA was the critical and controlling document. In any event, plaintiff admitted at his

deposition that he did not know which documents decedent read before signing, or whether

decedent viewed any allegedly misleading advertisements.

Even if we were to conclude that the disclosure statement is misleading, which we do not,

plaintiff has not provided any evidence beyond speculation that decedent declined to read the

RCA because he read the contents of the disclosure statement. Fraudulent inducement must be

proved by clear and convincing evidence. Hi-Way Motor Co v Int’l Harvester Co, 398 Mich

330, 336; 247 NW2d 813 (1976). Plaintiff could not merely rest on the allegations in his

complaint. See MCR 2.116(G)(4); Coblentz v City of Novi, 475 Mich 558, 569; 719 NW2d 73

(2006). Instead, to survive summary disposition, plaintiff was required to adduce substantively

admissible evidence to support each of the essential elements of his fraud-in-the-inducement

theory. See MCR 2.116(G)(6); Quinto v Cross & Peters Co, 451 Mich 358, 363; 547 NW2d

314, 317 (1996). Plaintiff has not done so. Thus, the trial court correctly concluded that

plaintiff’s allegations of fraud in the inducement concerning the RCA did not preclude summary

disposition of his claim for breach of contract.6

Consequently, we conclude that plaintiff is bound by the provisions of the RCA,

including § 7.5. Plaintiff therefore attempts to minimize the importance of the refund addendum.

However, “where one writing refers to another, the two writings are to be construed together,”

Foremost Ins Co v Allstate Ins Co, 439 Mich 378, 389 n 27; 486 NW2d 600 (1992), “including

any modifications agreed to by the parties” in subsequent writings, Neville v Neville, 295 Mich

App 460, 469-470; 812 NW2d 816 (2012). In the refund addendum, plaintiff agreed to accept a

discounted refund on behalf of the trust. Under the Michigan Trust Code, plaintiff, as successor

trustee of decedent’s trust (i.e., the named beneficiary of the refund), had legal authority to

6

Plaintiff additionally argues that HFV failed to undertake reasonable or good-faith efforts to

market the unit. See Stewart v Henry Ford Village, Inc, unpublished per curiam opinion of the

Court of Appeals, issued January 28, 2014 (Docket No. 312130), slip op at pp 6-9. Unpublished

opinions of this Court are not binding. MCR 7.215(C)(1). However, they may be instructive or

persuasive. Cox v Hartman, 322 Mich App 292, 307-308; 911 NW2d 219 (2017). Nevertheless,

Stewart is materially distinguishable: it appears that the Residence and Care Agreement in that

case lacked a provision analogous to § 7.5 of the RCA here, and the plaintiff in Stewart did not

agree to a reduced entrance deposit. Plaintiff’s argument regarding HFV’s alleged marketing

infirmities largely depends on voiding § 7.5 of the RCA and the refund addendum.

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modify decedent’s agreement with HFV. See MCL 700.7817. Consequently, the parties’ 2006

agreement must be construed in accordance with the refund addendum.

Because plaintiff recognizes that the refund addendum is—unless unenforceable—fatal to

his breach of contract claim, he argues strenuously against its enforceability. He first contends

that he was fraudulently induced to enter the refund addendum. However, plaintiff readily

admitted at his deposition that he understood § 7.5 of the RCA and the terms of the refund

addendum at the time that he executed the addendum. Plaintiff asserts that the addendum was

fraudulently obtained because he was not provided a copy of the disclosure agreement prior to

executing the addendum, but as discussed, because the RCA, including § 7.5, is binding, that

omission is irrelevant. We conclude that the record provides no support for plaintiff’s claim of

fraudulent inducement.

Furthermore, plaintiff’s attempts to avoid enforcement of the refund addendum are barred

by the tender-back rule, under which a party seeking to set aside a compromise “must tender the

recited consideration before there is a right to repudiate the release.” Stefanac v Cranbrook Ed

Community, 435 Mich 155, 165; 458 NW2d 56 (1990). An offer to tender back consideration

“must occur not only within a reasonable time after execution of the agreement, but in all cases

prior to or simultaneously with the commencement of any proceeding raising a legal claim in

contravention of the agreement.” Stefanac, 435 Mich at 159 (emphasis added). Furthermore, an

offer to tender back must be made even “if it is apparent that it would not be accepted.” Randall

v Port Huron, St C & MC Ry Co, 215 Mich 413, 424; 184 NW 435 (1921). The only exceptions

entail a waiver by the other party, or fraud in the execution, neither of which are present here.

Stefanac, 435 Mich at 165.

Fraud in the execution exists when a party is induced, by fraud, to sign a document under

the mistaken belief that he or she is actually signing something else. Stefanac, 435 Mich at 166.

Plaintiff makes no such claim. Moreover, plaintiff has presented no evidence that he ever

offered to tender back the discounted refund that he received. Even if he were to now make such

an offer, it is too late. See Stefanac, 435 Mich at 159 (holding that tender back must occur

before filing suit); Randall, 215 Mich at 424 (holding that a delay of “2¼ years . . . cannot be

said to be a reasonable time as a matter of law.”). Plaintiff cashed HFV’s refund check on

December 7, 2016, approximately eight months after he initiated this action in the trial court, and

also about seven months after he had notice that HFV was asserting, as an affirmative defense,

that plaintiff’s claims in this action were barred absent “tender back of any refund received . . . ”

Indeed, even now, plaintiff has not indicated that he would be willing to tender back the partial

refund if doing so was necessary to save his claims.

Plaintiff also contends that the RCA and the addendum are unenforceable under various

provisions of the since-repealed LCDA. However, we are aware of no exception to the tender-

back rule for claims brought pursuant to the LCDA, nor has plaintiff cited any authority

suggesting an exception. On the contrary, in Stefanac, our Supreme Court held, “The only

recognized exceptions in Michigan are a waiver of the plaintiff’s duty by the defendant and fraud

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in the execution.” Stefanac, 435 Mich at 165 (emphasis added; citations omitted).7

Nevertheless, we note that plaintiff has presented a baffling argument that the LCDA somehow

prohibits disclosure statements from incorporating terms of the RCA by reference, apparently on

the theory that an analogous statute in Pennsylvania expressly permits such incorporation by

reference. We take this as a mangled attempt to invoke the doctrine of expressio unius est

exclusio alterius, that “the expression of one thing suggests the exclusion of all others.” People v

Wilson, 500 Mich 521, 526; 902 NW2d 378 (2017). This argument might be plausible if

plaintiffs were comparing one provision of Michigan’s LCDA to another provision of

Michigan’s LCDA, but the mere fact that another state chose to expressly permit something in a

different statute that our Legislature did not see fit to expressly prohibit is of no coherent

significance.

In sum, we hold that that the trial court did not err by granting defendants summary

disposition of plaintiff’s breach of contract claim. Plaintiff failed to present sufficient evidence

of reliance to support his theory that decedent was fraudulently induced into executing the RCA,

and plaintiff cannot challenge the RCA or the refund addendum on the grounds he now argues

without having first offered to tender back the partial refund that he accepted. He has failed to

do so. In all other respects, we agree with plaintiff’s concession that HFV breached no provision

of any contract as written. Therefore, summary disposition of this claim was appropriate.

B. FRAUD

Plaintiff offers no freestanding arguments concerning his fraud claims, but rather

incorporates his arguments from his breach of contract analysis by reference. Reliance is an

element of all forms of actionable fraud, including silent fraud. Titan Ins Co v Hyten, 491 Mich

547, 555; 817 NW2d 562 (2012); Hamade, 271 Mich App at 171.8 As we have already

explained, plaintiff failed to adduce sufficient evidence of reliance for his fraud arguments to

7

Plaintiff’s attempts to distinguish Stefanac are unpersuasive. In effect, plaintiff’s argument is

that, when a plaintiff signs a release of a valid, noncontingent claim (i.e., a claim already actually

owed), the tender-back rule is inapplicable. Here, the claim was contingent—HFV only

remarketed the unit at a lower entrance deposit, and later issued a refund based on that lower

value, because plaintiff signed the refund addendum. Additionally, any factual differences

between Stefanac and this case are immaterial. In Stefanac, our Supreme Court ruled

unambiguously that the tender-back rule applies to release agreements. Id. at 165-166. The

refund addendum is, in substance, a release agreement. Hence, the tender-back rule applies here.

8

Plaintiff contends that the trial court erroneously held reliance to be an element of silent fraud,

relying on a nearly 18-year-old persuasive federal decision, Gasperoni v Metabolife, Int’l, Inc,

unpublished order of the United States District Court for the Eastern District of Michigan, issued

September 27, 2000 (Case No. 00-71255). We disagree. The courts of this state are the ultimate

arbiters of questions of state law. See Montana v Wyoming, 563 US 368, 377 n 5; 131 S Ct

1765; 179 L Ed 2d 799 (2011). Even assuming that Gasperoni represented an accurate statement

of this state’s common law at the time, subsequent Michigan decisions such as Titan Ins Co and

Hamade have made clear that reliance is an essential element of a claim for silent fraud.

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survive summary disposition. Moreover, “[t]here 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). See also Titan Ins Co, 491 Mich at 555 n 4 (explaining that a claim of

fraud fails if “the allegedly defrauded party was given direct information refuting the

misrepresentations.”). In this case, decedent was given such direct information in a copy of the

RCA, and plaintiff was given—and admittedly read and understood—a copy of the refund

addendum. Plaintiff cannot succeed on a claim of fraud related to the terms of either of those

agreements. There is no genuine issue of material fact that both plaintiff and decedent were

given direct information that refuted any alleged misrepresentations about the terms of the RCA

and the refund addendum. Summary disposition of all of plaintiff’s fraud claims was properly

granted.

C. LCDA

Nor did the trial court err by granting defendants summary disposition of plaintiff’s

LCDA claim. 9 Plaintiff’s claim is pursued under § 29(1) of the LCDA, former MCL 554.829(1),

which provided a private cause of action for violations of § 6(1), among others,10 as follows:

A person who offers or sells a life interest or long-term lease in violation

of section[] 6(1) . . . is liable to the person purchasing the life interest or lease for

damages and repayment of all fees paid to the facility less the reasonable cost of

rental and care provided until discovery or until the violation should reasonably

have been discovered and with interest at 6% from the date of purchase and

reasonable attorney fees and court costs. [Emphasis added.]

Section 6(1) of the LCDA, former MCL 554.806(1), in relevant part prohibited entities such as

HFV from:

(a) Employ[ing] a device, scheme, or artifice to defraud.

(b) Mak[ing] an untrue statement of a material fact or fail to state a

material fact necessary in order to make the statements made, in the light of the

circumstances under which they are made, not misleading.

(c) Engag[ing] in an act, practice, or course of business which operates or

would operate as a fraud or deceit upon a person.

9

Despite the repeal of the LCDA, plaintiff can nevertheless pursue a statutory cause of action

under it because his claim accrued before the effective date of the repealing act. 2014 PA 488;

MCL 8.4a; Hurt v Michael’s Food Ctr, 249 Mich App 687, 692; 644 NW2d 387 (2002).

10

The LCDA did not provide a private cause of action for alleged violations of § 8, which is the

section that plaintiff contends mandates the express and explicit recitation of § 7.5 of the RCA in

the disclosure statement. However, plaintiff correctly notes that the LCDA did provide a cause

of action for more generally engaging in fraud or deceit.

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Under MCL 554.806(2), “fraud” and “deceit” were expressly “not limited to the common law

definitions of fraud and deceit, but include the provisions of section 6(1).”

We need not determine whether HFV did, in fact, engage in “fraud” or “deceit” within

the meanings set forth in the LCDA. The plain language of § 29(1) unambiguously provides that

damages exceeding “the reasonable cost of rental and care provided until discovery or until the

violation should reasonably have been discovered” are an element of a claim pursued under §

29(1). Absent such damages, there is no liability to enforce, and consequently there is no claim.

As a matter of law, plaintiff cannot satisfy that damages element. Because plaintiff does

not contest the propriety of the $9,138.07 in fees that HFV deducted from the discounted refund,

the only potential damages figure that he has identified is $16,000—i.e., the difference between

decedent’s $152,000 entrance deposit and the $136,000 refund that was actually issued.

Moreover, plaintiff alleges that his statutory claim did not accrue until after decedent’s death, at

which time plaintiff discovered that HFV would not refund the entire entrance deposit.

The codified monthly cost of care for decedent was $2,280 (i.e., 1.5% of his $152,000

entrance deposit). MCL 554.803(8); MCL 554.810(1)(d); Mich Admin Code, R 554.1(3).

Accordingly, after just eight months of residency, the cost of care provided to decedent alone

would have exceeded his purported damages of $16,000. Thus, we also need not consider “the

reasonable cost of rental,” which is also to be deducted from the damages figure under § 29(1).

Decedent resided in the retirement community for more than six years. At the end of his sixth

year of residency, the codified cost of the care provided to him would have been $164,160.

Therefore, plaintiff’s “reasonable cost of rental and care” necessarily exceeds the purported

damages plaintiff has identified to support his LCDA claim. Thus, even if plaintiff had an

otherwise viable claim for violations of § 6(1) of the LCDA, the trial court did not err by

granting defendants summary disposition of that claim.

In any event, plaintiff has failed to make the requisite showing that defendants’ conduct

in this case constituted a violation of § 6(1). It is undisputed that HFV gave decedent a copy of

all relevant documents, ample time to review them in their entirety, and repeated admonishment

to seek independent legal counsel. For the reasons already discussed above, no reasonable

person would have deemed the disclosure statement to be a substitute for the RCA itself. No

rational trier of fact could conclude that defendants’ conduct in connection with the “offer” or

“sale” of decedent’s unit was part of “a device, scheme, or artifice to defraud;” that defendants

made “an untrue statement of a material fact” or failed “to state a material fact necessary in order

to make the statements made, in the light of the circumstances under which they [we]re made,

not misleading;” or that defendants “[e]ngage[d] in an act, practice, or course of business which

operate[d] or would operate as a fraud or deceit upon a person.” Summary disposition of this

claim was thus appropriately granted.

D. CONVERSION

For dual reasons, the trial court also properly granted summary disposition of plaintiff’s

claims for statutory and common-law conversion. First, his claims are barred by the tender-back

rule, because they conflict with the terms of the addendum, in which plaintiff agreed to accept

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the discounted refund and to permit HFV to retain the balance of decedent’s entrance deposit.

See Stefanac, 435 Mich at 159.

Second, plaintiff’s conversion claims fail on the merits. Plaintiff has presented no

evidence that HFV had an obligation to keep intact or deliver the specific $152,000 that decedent

paid, in two installments, for his entrance deposit. See Dunn v Bennett, 303 Mich App 767, 778;

846 NW2d 75 (2014). Nor has plaintiff presented any evidence that HFV’s exercise of dominion

over the $152,000 was either wrongful or contrary to the interests of decedent and his trust. See

Aroma Wines & Equip, Inc v Columbian Distribution Servs, Inc, 497 Mich 337, 351-352; 871

NW2d 136 (2015). Rather, under the terms of the 2006 agreement as amended by the refund

addendum, plaintiff expressly consented to HFV’s exercise of dominion over the $152,000.

Even if plaintiff could definitively prove that HFV was obligated to refund the full $152,000

under the parties’ agreement and failed to do so, “[t]he failure to perform a contractual duty

cannot give rise to a tort action unless the plaintiff alleges a violation of a duty separate and

distinct from the underlying contractual obligation.” Kisiel v Holz, 272 Mich App 168, 172; 725

NW2d 67 (2006). We cannot discern any such separate and distinct duty in plaintiff’s

allegations.

Consequently, the trial court did not err by granting defendants summary disposition of

plaintiff’s conversion claims.

E. UNJUST ENRICHMENT

The existence of an enforceable, express agreement between the parties covering the

same subject matter entitles defendants to summary disposition of plaintiff’s claim for unjust

enrichment. See Bellevue Ventures, Inc v Morang-Kelly Investment, Inc, 302 Mich App 59, 64;

836 NW2d 898 (2013). Furthermore, because plaintiff’s unjust enrichment claim seeks to

recover funds that plaintiff agreed HFV could retain, it plainly contravenes the terms of the

refund addendum. Accordingly, the tender-back rule bars plaintiff’s claim for unjust enrichment.

See Stefanac, 435 Mich at 159. Again, the trial court correctly granted summary disposition of

plaintiff’s unjust enrichment claim.

F. CIVIL CONSPIRACY

We also reject plaintiff’s argument that the trial court erred by granting defendants

summary disposition of his claim alleging civil conspiracy. Plaintiff failed to adduce sufficient

evidence of any separate actionable tort to survive summary disposition. See Urbain v Beierling,

301 Mich App 114, 132; 835 NW2d 455 (2013). Moreover, to the extent that his claim for civil

conspiracy is based on allegations that defendants failed to comply with contractual duties, the

claim cannot proceed as a matter of law. See id. Finally, because the tender-back rule bars

plaintiff from avoiding enforcement of the refund addendum, plaintiff cannot cite any damages

arising from the alleged civil conspiracy, which is the “foundation” of any civil conspiracy

action. See Fenestra, Inc v Gulf Am Land Corp, 377 Mich 565, 594; 141 NW2d 36 (1966).

Accordingly, the trial court did not err by granting defendants summary disposition of the civil

conspiracy claim.

G. SUCCESSOR LIABILITY

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Finally, plaintiff argues that the trial court erred by granting defendant Redwood-ERC

summary disposition of plaintiff’s “claim” of successor liability against it. Although “successor

liability” is commonly described as a “claim,” it is truly a theory of liability that depends on an

underlying breach of a legal duty or commission of underlying wrongful conduct. See Chase v

Michigan Tel Co, 121 Mich 631, 637; 80 NW 717 (1899); Stevens v McLouth Steel Products

Corp, 433 Mich 365, 370-379; 446 NW2d 95 (1989); Lemire v Garrard Drugs, 95 Mich App

520, 524; 291 NW2d 103 (1980). Because summary disposition of all other claims was

appropriately granted in favor of defendants, this issue is moot. See Barrow v Detroit Election

Comm, 305 Mich App 649, 659; 854 NW2d 489 (2014) (“We generally do not address moot

questions or declare legal principles that have no practical effect in a case.”). Even presuming

that Redwood-ERC could be held liable for the acts and omissions of its predecessors under a

theory of successor liability, because those predecessors were entitled to summary disposition, it

necessarily follows that Redwood-ERC was also entitled to summary disposition.

IV. CONCLUSION

The trial court’s grant of summary disposition in favor of all defendants is affirmed.

Defendants, having prevailed in full, may tax costs. MCR 7.219(A).

/s/ Amy Ronayne Krause

/s/ Christopher M. Murray

/s/ Stephen L. Borrello

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