Bank of Lansing v. Stein, Hinkle, Dawe & Associates Architects, Inc.

300 N.W.2d 383, 100 Mich. App. 719, 1980 Mich. App. LEXIS 2994
CourtMichigan Court of Appeals
DecidedOctober 22, 1980
DocketDocket 78-1665
StatusPublished
Cited by3 cases

This text of 300 N.W.2d 383 (Bank of Lansing v. Stein, Hinkle, Dawe & Associates Architects, Inc.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of Lansing v. Stein, Hinkle, Dawe & Associates Architects, Inc., 300 N.W.2d 383, 100 Mich. App. 719, 1980 Mich. App. LEXIS 2994 (Mich. Ct. App. 1980).

Opinion

T. Gillespie, J.

In 1967, the Bank of Lansing agreed to loan $2,500,000 to Normandy Meadows, Inc. to construct an apartment complex. The principal stockholder and president of Normandy Meadows was James Duncan. At the inception Mr. Duncan was associated with Glenn Harris, who owned Harris Construction Co. Mr. Harris withdrew from the project shortly after a construction agreement was signed, and construction was assumed by Associated Builders, a company formed by Duncan for the purpose of building Normandy Meadows complex.

After the bank loan was arranged, Normandy Meadows hired the architectural firm of Frank and Stein Associates, Inc. to inspect the construction progress and to review and approve periodic disbursements of the loan. The agreement with the bank required such architect’s approval. Upon receipt of such approval, Associated could draw on up to 90% of the work certified as complete. The architectural duties were subsequently taken over by Stein, Hinkle, Dawe and Associates, the successor to Frank and Stein.

Duncan’s projected cost in 1967 was $2,630,000, of which he was to furnish the land valued at $130,000 and used the $2,500,000 to build 15 apartment buildings and a community building. It appears that immediately the $130,000 was paid from the bank loans instead of Duncan’s funds. It also appears that the bank had, at the time Duncan was representing to the bank that the project could be built for $2,630,000, an independent ap *723 praisal of the project, which estimated the cost of the project at $3,600,000.

Between December 6, 1967, and July 28, 1968, there were nine requests for draws, and $1,259,397 was approved by either defendant Morris Stein or defendant Richard Frank, principals and officers of the architectural firm. At the latter date Frank and Stein’s services were terminated. The bank took over the project and partially completed it and eventually sold at a loss which the bank estimated to be between $660,000 and $683,000.

On January 10, 1973, the bank filed a complaint containing one count alleging fraud. This complaint was amended on April 26, 1973, to add a second count alleging breach of duty. Trial was set for May 19, 1975.

On the day of trial, the trial court granted defendants’ motion for summary and/or accelerated judgment, based on an alleged release by plaintiff of Duncan and Normandy Meadows. In an unpublished per curiam opinion, this Court reversed the trial court’s decision and remanded the case for further proceedings. A jury trial was held January 9 — February 2, 1978. Verdicts of no cause of action were returned on both counts. Plaintiff moved for a new trial. After a hearing on April 13, 1978, the trial court declined to grant plaintiff’s motion. Plaintiff now appeals as of right.

Plaintiff first argues that the jury’s verdicts were so against the great weight of the evidence that the trial court abused its discretion by declining to grant a new trial. In Carpenter v Cleveland, 32 Mich App 213, 215; 188 NW2d 248 (1971), the Court said:

"A new trial may be ordered if the court in its discretion considers the verdict to be against the great *724 weight of the evidence. GCR 1963, 527.1(5). Davis v Belmont Creamery Co (1937), 281 Mich 165. An appellate court will interfere with the trial court’s exercise of its discretion in this regard only if abuse of its discretion is so plain that upon consideration of the facts upon which the trial judge acted an unprejudiced person can say that there was no justification or excuse for the ruling made. Patzke v Chesapeake & O R Co (1962), 368 Mich 190.”

There were a number of reasons why the jury could have found for the defendants. There was evidence relating to thefts of material, increasing costs during construction, a shutdown and restarting of the project which increased expenses, and the developer, James Duncan, used $130,000 to buy the land which he had agreed to furnish, all of which contributed to plaintiffs losses, but none of which were the fault of the defendants.

The case was tried ten years after the events. Witnesses had difficulty in remembering particulars, and the detailed documentary record had been partially lost. The jury could have reasonably concluded that the evidence was too confused to support a verdict for the plaintiff.

The. jury could well have believed that justice demanded release of the defendants after plaintiff released Duncan and Normandy Meadows, who originated the claims which the defendants were alleged to have overcertified.

The plaintiffs expert witness testified that variations of 15% by architects on estimates of completion are not uncommon. The jury may have believed from the evidence that there was no fraud or breach of contract, even though some items may have been overcertified, so long as the total certification was within contract limits.

These reasons, among others, would have ren *725 dered it improper for the trial judge to do other than what he did: accept the verdict and deny a new trial.

In a case such as this one, where relevant testimony is in sharp conflict, the question of credibility of witnesses is solely for the jury, whose verdict should not be second-guessed by the judge.

It is the settled law in this state that, upon deciding a motion for a new trial grounded upon the allegation that the verdict is against the great weight of the evidence, the trial judge is vested with large discretion, and appellate courts will not interfere unless there is palpable abuse. Fera v Village Plaza, Inc, 396 Mich 639, 648; 242 NW2d 372 (1976), Lemanski v Ford Motor Co, 82 Mich App 244, 248; 266 NW2d 775 (1978), Goodman v Stafford, 20 Mich App 631; 174 NW2d 593 (1969).

On the facts in this case, the trial court did not abuse its discretion.

The second argument pressed by the bank is that, during trial, the judge allowed a question to be asked on cross examination of several of plaintiff’s witnesses substantially as follows:

"Do you have any facts or any knowledge that would support an allegation in this case that Mr. Stein was guilty of fraud and misrepresentation?”

In each instance the counsel for plaintiff objected, but the question was allowed. MRE 701, which permits lay opinion testimony on ultimate issues, did not take effect until March 1, 1978, approximately one month after this trial concluded. The bank argues that such question called for a legal conclusion inasmuch as the witness would have to know the elements of fraud and misrepresentation to answer the question.

*726 The question was a mixed question of law and fact. The question called for "facts”, but to arrive at what such "facts” were, certain legal assumptions were called for. If the question calls for a conclusion for which there is a legal standard, it may not be the subject of opinion as to whether or not the person or conduct measures up to that standard.

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Bluebook (online)
300 N.W.2d 383, 100 Mich. App. 719, 1980 Mich. App. LEXIS 2994, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-lansing-v-stein-hinkle-dawe-associates-architects-inc-michctapp-1980.