Opinion
No. 99-72278
July 20, 2001
OPINION AND ORDER
Before the Court is Plaintiffs motion for partial summary judgment and Defendants' motions for summary judgment.
BACKGROUND FACTS
On May 7, 1999, Plaintiff brought suit against Defendants alleging, inter alia, breach of contract. Bank One responded by filing a motion to dismiss for failure to join necessary parties. On April 3, 2000, this Court denied Bank One's motion to dismiss and allowed Plaintiff to add additional defendants.
Plaintiffs complaint presents a breach of contract claim. Defendant Bank One (formerly NBD) held certain loans that were in default and wished to sell these loans. Plaintiff, Mayfair Associates Limited partnership ("Mayfair"), asserts that Bank One offered to sell the loans, Mayfair accepted the offer, and Bank One has reneged on its promise by refusing to transfer the loans.
The basis of Mayfair's claims against Bank One are two letters. Mayfair asserts that the first letter, dated November 14 (the "November 14th Letter"), is an offer to sell the loans. Further, Mayfair claims the second letter, dated November 25 (the "November 25th Letter) is a valid acceptance of the offer, creating an enforceable contract.
Mayfair presents two additional claims against Defendant: Count II is for Fraud and Count III is for Intentional and/or Negligent Misrepresentation. The instant motions before the court are Plaintiffs Motion for Summary judgment (with respect to Count I- breach of contract) and Defendant's Motions for Summary Judgment (all four counts).
There exists a fourth count in the complaint. However, Count IV seeks relief only from Co-Defendants, James D. Blain and Ronald Slavik.
STANDARD OF REVIEW
A motion for summary judgment under Rule 56 of the F.R.C.P. will be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." F.R.C.P. 56(c). In deciding defendant's motion, one must consider whether the evidence is such that a reasonable jury could return a verdict for plaintiff. Street v. J.C. Bradford Co., 886 F.2d 1472, 1478 (6th Cir. 1989). The facts must be viewed in the light most favorable to plaintiff, the non-moving party. Monette v. Electronic Data Systems, 90 F.3d 1173 (6th Cir. 1996).
LAW AND ANALYSIS
A Breach of Contract
Plaintiff argues that it is entitled to summary judgment as to the Count I breach of contract claim because the November 14th letter constituted an offer, the November 25th letter constituted a valid acceptance and Defendant's refusal to transfer the loans constitutes a breach of contract.
Conversely, Defendants assert that the November 14th letter did not constitute an offer but rather "an invitation to negotiate." Moreover, even if the letter was an offer, the offer was not made to Mayfair. Thus, Mayfair, through its November 25th letter, was not authorized to accept the "offer" and no valid contract was created.
"An offer is the manifestation of willingness to enter into a bargain as to justify' another person in understanding that his assent to that bargain is invited and will conclude it." Restatement Contracts (Second) § 26 (1981). "[I]t is judged by its objective modification [and] not by any mental reservations or subjective interpretations or intentions of the offeror . . . [and] . . . must be definite and certain . . ." 17 Am.Jur.2d Contracts § 43 (1964).
The November 14th letter states, in relevant part:
In connection with the above matter and pursuant to the request of your client who has expressed an interest in acquiring certain mortgages and notes from our client, NBD Bank ("Bank"), at part, we enclose the various documents listed in this letter, and we advise as follows:
5. Bank is willing to sell its interest in the Detroit Plaza Mortgage for payment in full of the monies due it, i.e., the balance of the J J Note and one-half of the amount due on the Blain Note, represented by the amount in paragraph 2. The sale will be without representation, warranty or recourse of any kind.
The language of the November 14th letter coupled with its enclosures does not express an offer. Defendant expressed only a willingness to sell and did included many relevant terms necessary to effectuate a deal. The Plaintiffs subsequent "acceptance" in response to the Defendant's November 14th letter did not create a contract.
B Innocent Misrepresentation
The Plaintiff claims Bank One committed actionable innocent misrepresentation when it altered the recourse provisions of the Slavik Note and Guarantees. Under the Settlement Agreement, the Bank allowed Slavik to avoid personal liability on the Slavik Note that was not paid and that Slavik has refused to pay. In so doing, the Bank altered the guaranty liability of the Beztak guarantors and increased the risk to the mortgaged property in which Beztak holds a one-third ownership interest.
The elements of a claim for innocent misrepresentation are (1) privity of contract existed between the party asserting the claim and the party charged; (2) the party charged made false representations in connection with the contract; (3) the party asserting the claim was deceived by the representations in connection with the contract; (4) he or she relied upon the representations to his or her detriment; and (5) his or her loss inured to the benefit of the other party. Sheldon Co Profit Sharing Plan Trust v. Smith, 858 F. Supp. 663, 670 (W.D. Mich. 1994).
Since no contract existed between the parties the first element above is not satisfied.
Count II also includes the Plaintiffs Silent Fraud claim. The Plaintiff claims that by not disclosing the loan alteration with Slavik Bank One breached their fiduciary duty. The duty to disclose arises when one party has information that the other party is entitled to know because of fiduciary or other similar relation of trust and confidence between them. Chiarella v. U.S., 100 S.Ct. 1108, 1115 (1980). Here there was no duty to disclose.
C Promissory Estoppel
Promissory estoppel is an equitable remedy to alleviate an unjust result. Promissory estoppel arises in equity when (1) a person makes a promise (2) that promiser should reasonably have expected to induce action of definite and substantial character on the part of promisee (3) which, in fact, produced reliance or forbearance of the nature and (4) circumstances require enforcement of promise to avoid injustice. Cole v. Knoll, Inc., 984 F. Supp. 1117 (1997).
The court has concluded that Bank One ever made a promise to sell it the relevant mortgages.
D Tortious Interference with Business Relationship
Count IV of the Second Amended Complaint is the only count of the complaint seeking relief against defendants Blain, Slavik and SIC. The Plaintiff claims that these defendants interfered with their relationship with Bank One. On November 25, 1997, SIC, Blain and Ron Slavik, through their common attorney, informed Bank in writing that NBD cannot sell the Detroit Plaza Mortgage because it has already sold that mortgage to SIC, subject to certain reserved rights. The Defendants claim that they were acting to protect their legitimate business interests.
To establish a prima facie case of tortious interference with a business relationship, a plaintiff must show (1) the existence of a valid business relationship or expectancy; (2) knowledge of the relationship or expectancy on the part of the interferer; (3) an intentional or improper interference with the relationship that induces or causes a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted. DXS, Inc. v. Siemens Med. Systems, Inc., 100 F.3d 462, 496 (6th Cir. 1996).
Plaintiffs Count IV fails because it can not show that a valid business relationship existed.
IT IS HEREBY ORDERED that Plaintiffs Motion for Partial Summary Judgment is DENIED, and Defendants' Motions for Summary Judgment are GRANTED.
Judgment for all Defendants will be entered.