Opinion
No. 341899
02-21-2019
FAWZY MOHAMED, Plaintiff-Appellant, v. BRENNER OIL COMPANY, Defendant-Appellee.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Monroe Circuit Court
LC No. 17-140337-CD Before: GLEICHER, P.J., and K. F. KELLY and LETICA, JJ. PER CURIAM.
In this employment discrimination and retaliation action, plaintiff appeals as of right the trial court's order granting summary disposition pursuant to MCR 2.116(C)(7) in favor of defendant and dismissing plaintiff's discrimination and retaliation claims. We reverse.
We note that, notwithstanding language in the trial court's order stating that it granted summary disposition pursuant to MCR 2.116(C)(10), defendant only moved for summary disposition pursuant to MCR 2.116(C)(7).
Plaintiff was previously employed by defendant. Before starting his job, plaintiff participated in an orientation, during which he briefly reviewed defendant's Employee Handbook (the Handbook) and signed the Receipt and Acknowledgment Form (the Form) located at the back of the Handbook. The Handbook states repeatedly that it should not be construed as an enforceable or binding contract and that defendant may modify the policies in the Handbook at any time with or without prior notice. The Form, which is listed in the Handbook's table of contents, is the last page of the Handbook. It contains similar disclaiming language and reiterates that defendant may change the Handbook's policies at any time at defendant's sole discretion. The last paragraph of the Form contains a 180-day statute of limitations period for bringing claims against defendant.
After plaintiff was terminated in January 2017, he filed suit against defendant in September 2017, claiming race, national origin, and religious discrimination, as well as retaliatory termination, in violation of the Elliott-Larsen Civil Rights Act, MCL 37.2101 et seq. Defendant moved for summary disposition pursuant to MCR 2.116(C)(7), contending that plaintiff had agreed to a 180-day statute of limitations period and had filed his complaint after the expiration of that 180-day period. Citing Heurtebise v Reliable Business Computers, 452 Mich 405; 550 NW2d 243 (1996), plaintiff contended that the Handbook was not a contract and that the 180-day period was not enforceable. The trial court found that the Handbook was an enforceable contract and that plaintiff's claims were barred because he filed his complaint outside the 180-day statute of limitations period.
On appeal, plaintiff contends that the trial court erred in granting defendant's motion for summary disposition because the Handbook and Form did not create a contract. Specifically, plaintiff argues that the Form was part of the Handbook, and defendant never intended to be bound by any provision in the Handbook. Thus, according to plaintiff, he was not bound by the 180-day statute of limitations provision. We agree.
"This Court reviews de novo a trial court's decision on a motion for summary disposition." Major v Village of Newberry, 316 Mich App 527, 534; 892 NW2d 402 (2016). MCR 2.116(C)(7) permits a trial court to grant summary disposition when the claim is barred by an applicable statute of limitations period. Nuculovic v Hill, 287 Mich App 58, 61; 783 NW2d 124 (2010). In addressing a summary disposition motion brought under MCR 2.116(C)(7), this Court must consider "all documentary evidence submitted by the parties, accepting as true the contents of the complaint unless affidavits or other appropriate documents specifically contradict them." Major, 316 Mich App at 534 (quotation marks and citation omitted). "The existence and interpretation of a contract are issues of law reviewed de novo." Dunn v Bennett, 303 Mich App 767, 774; 846 NW2d 75 (2014).
"In Michigan, the essential elements of a valid contract are (1) parties competent to contract, (2) a proper subject matter, (3) a legal consideration, (4) mutuality of agreement, and (5) mutuality of obligation." Puetz v Spectrum Health Hosps, 324 Mich App 51, 76; 919 NW2d 439 (2018) (quotation marks and citation omitted). Those elements "reflect the fact that the parties to a contract must have 'a meeting of the minds on all essential terms of a contract.' " Calhoun Co v Blue Cross Blue Shield Mich, 297 Mich App 1, 13; 824 NW2d 202 (2012), quoting Burkhardt v Bailey, 260 Mich App 636, 655; 680 NW2d 453 (2004). A contract does not exist if there is no mutual assent or a lack of intent to make a contract. Calhoun Co, 297 Mich App at 13. "A meeting of the minds is judged by an objective standard, looking to the express words of the parties and their visible acts, not their subjective states of mind." Id. (quotation marks and citation omitted).
A contract will not fail as a result of indefiniteness when the "promises and performances of each party are set forth with reasonable certainty . . . ." Id. at 14, citing Nichols v Seaks, 296 Mich 154, 159; 295 NW 596 (1941). A contract may be enforced despite its terms being incomplete or indefinite "if it is established that the parties intended to be bound by the agreement . . . ." Calhoun Co, 297 Mich App at 15 (quotation marks and citation omitted; emphasis omitted). See also Nichols, 296 Mich at 159 ("In interpreting doubtful agreements a court will, if possible, attach a sufficiently definite meaning to a bargain of parties who evidently intended to enter into a binding contract . . . .") (quotation marks and citation omitted).
Mutuality of obligation means that "both parties are bound to an agreement or neither is bound." Bancorp Group, Inc v Mich Conference of Teamsters Welfare Fund, 231 Mich App 163, 171; 585 NW2d 777 (1998). In other words, "mutuality is not present where one party is bound to perform, but not the other." Reed v Citizens Ins Co of America, 198 Mich App 443, 449; 499 NW2d 22 (1993), overruled on other grounds by Griffith v State Farm Mut Auto Ins Co, 472 Mich 521; 697 NW2d 895 (2005). Mutuality of obligation means that "there must be consideration, without which there is no obligation on either party because there is no binding contract." Hall v Small, 267 Mich App 330, 334; 705 NW2d 741 (2005) (quotation marks and citation omitted). "Thus, '[t]he enforceability of a contract depends . . . on consideration and not mutuality of obligation.' " Id. at 334, quoting Toussaint v Blue Cross & Blue Shield of Mich, 408 Mich 579, 600; 292 NW2d 880 (1980) (alteration in original).
Absent a contractually agreed upon statute of limitations period, the period of limitations for an action to recover damages for an injury to a person or property is three years. MCL 600.5805(10), as amended by 2012 PA 582. However, an unambiguous provision in a contract that shortens the applicable statute of limitations period will be enforced unless it violates law or public policy. Rory v Continental Ins Co, 473 Mich 457, 470; 703 NW2d 23 (2005). Those contractual provisions shortening the limitations period are generally valid in employment discrimination cases. Clark v DaimlerChrysler Corp, 268 Mich App 138, 142-144; 706 NW2d 471 (2005). This Court has previously enforced a 180-day statute of limitations period that was located in an employment application where the employer provided the employee with "consideration to support enforcement of the terms of the application, specifically employment and wages." Timko v Oakwood Custom Coating, Inc, 244 Mich App 234, 244; 625 NW2d 101 (2001).
MCL 600.5805 was amended after plaintiff filed his complaint. See 2018 PA 183. At the time plaintiff filed his complaint, MCL 600.5805(10) provided a three-year statute of limitations period for injuries to a person or property. MCL 600.5805(10), as amended by 2012 PA 582. Now, MCL 600.5805(2) provides for that same three-year statute of limitations period.
In Heurtebise, the Michigan Supreme Court addressed whether an arbitration provision found in an employee handbook was binding on an employee. Heurtebise, 452 Mich at 407-409. The employee had signed an acknowledgment form stating that she agreed to be bound by the terms of the handbook. Id. at 408-409. However, the handbook also stated that "the Policies specified herein do not create any employment or personal contract, express or implied," and that the employer had the right to change the company's policies in the handbook "at its sole discretion." Id. at 413. The Court held that this language demonstrated the employer did not intend to be bound by the provisions contained in the handbook, and, thus, the handbook did not create an enforceable contract. Id. at 414.
This Court reached a similar conclusion when it held an arbitration provision in a policy manual was unenforceable because the manual contained language stating it was not a "contract of employment" and that the policies in the manual may be unilaterally amended. Stewart v Fairlane Community Mental Health Ctr, 225 Mich App 410, 419-423; 571 NW2d 542 (1997). The Court reasoned that it could not "conclude that an agreement or provision is mutual or binding where . . . an employer may unilaterally amend at any time every policy contained in its employee manual." Id. at 420.
As in Heurtebise and Stewart, the Handbook here demonstrates that defendant never intended for it to create a contract. The front page of the Handbook explicitly states that its content "does not constitute nor should it be construed as a promise of employment or as a contract between [defendant] and any of its Employees." The Handbook's introduction section also states that "[t]his document . . . cannot be construed as an enforceable or binding contract." Moreover, defendant reserved the ability to change or modify the policies contained in the Handbook, with or without notice to plaintiff or any of its employees. This language, as in Heurtebise, 452 Mich at 414, demonstrates that defendant did not intend to be bound to any provision contained in the Handbook. Because defendant may unilaterally amend any provision in the Handbook, the agreement cannot be mutual or binding. Stewart, 225 Mich App at 420. In looking objectively at the words in defendant's Handbook, it is clear that defendant did not intend to be bound by its contents. Calhoun Co, 297 Mich App at 13, 15. Thus, just as in Heurtebise and Stewart, the Handbook's language repeatedly shows it did not create an enforceable contract.
The issue remains whether the Form is part of the Handbook, as was the case in Heurtebise and Stewart, or is a separate contract. Here, the Form was listed in the Handbook's table of contents. The Form is marked as "Page 85" and contains the same footer present throughout the Handbook. Notably, the Form also contains the Handbook's disclaiming language that its policies are subject to change "at the sole discretion" of defendant, that "[n]o contract of employment has been expressed or implied," and that, if defendant changes the Handbook in any way, it "may require an additional signature" from its employees. That language, taken together with the aforementioned notations, demonstrates that defendant intended for the Form to be part of its Handbook.
This case is also distinguishable from Timko. There, this Court held that a 180-day statute of limitations period contained in an employment application was enforceable because the application itself was a binding contract. Timko, 244 Mich App at 244. This Court held that the application was enforceable because the defendant had given consideration, namely, employment and wages, for the plaintiff's application. Id. Although defendant here provided wages to plaintiff in consideration for plaintiff's employment, we are not presented with the question of whether defendant and plaintiff had a contract of employment, but rather, whether the Handbook, including the Form, constituted a separate, valid contract between the parties. The Handbook is not an "employment application" because the Handbook states that is it is directed at individuals already employed by defendant and was "developed in order to familiarize and provide [defendant's] Employees with general employment information . . . ." Thus, this case is distinguishable from Timko.
If defendant objectively intended the Form to comprise part of its Handbook and also did not intend for its Handbook to create a contract or to be bound by its language, then defendant cannot have intended to be bound by the language in the Form. Stated otherwise, mutuality of obligation is lacking because plaintiff is bound to perform although defendant is not. Reed, 198 Mich App at 449.
In the absence of a contractually agreed upon statute of limitations period, plaintiff had three years to file his complaint. MCL 600.5805(10), as amended by 2012 PA 582. Defendant terminated plaintiff's employment on January 12, 2017. Plaintiff filed his complaint on September 27, 2017, well within the three-year statute of limitations period. Accordingly, the trial court erred in granting defendant's motion for summary disposition pursuant to MCR 2.116(C)(7) because plaintiff's claim is not barred by the statute of limitations.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
/s/ Elizabeth L. Gleicher
/s/ Kirsten Frank Kelly
/s/ Anica Letica