Fera v. Village Plaza, Inc.

218 N.W.2d 155, 52 Mich. App. 532, 1974 Mich. App. LEXIS 1066
CourtMichigan Court of Appeals
DecidedApril 26, 1974
DocketDocket 14569-14570
StatusPublished
Cited by9 cases

This text of 218 N.W.2d 155 (Fera v. Village Plaza, 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
Fera v. Village Plaza, Inc., 218 N.W.2d 155, 52 Mich. App. 532, 1974 Mich. App. LEXIS 1066 (Mich. Ct. App. 1974).

Opinions

J. H. Gillis, J.

Defendants Village Plaza, Inc., Fairborn Property Co., Inc., Schostak Brothers & Company, Inc., and Bank of the Commonwealth appeal a jury verdict awarding plaintiffs Frank and Anthony Fera $200,000 for breach of a lease.

On January 14, 1965 plaintiffs Frank and Anthony Fera signed an "intent to lease” and deposited $1,000 as security on a location in Fairborn’s proposed Village Plaza shopping mall. On August 20, 1965, plaintiffs and agents of Fairborn-Village Plaza executed a ten-year lease, for a "book and bottle” shop at a certain contested location in the mall at $1,000 minimum monthly rent and 6% rent override on annual receipts in excess of $240,-000.

Suffice it to say, complications arose. The mall, scheduled for completion in 1966, suffered from 26 work stoppages, skyrocketing costs, and sundry crises. Tenants did not move into the still unfinished mall until 1969. Much earlier, in February 1967, Bank of the Commonwealth, the construction lender, accepted Fairborn’s $5,750,000 mortgage on the mall. When Fairborn defaulted, the permanent lender terminated its commitment. On March 20, 1968, the bank took a deed in lieu of [536]*536foreclosure from Fairborn and Village Plaza, undertaking to complete and operate Village Plaza as Fairborn’s "agent”.1 In August 1969 the bank re-conveyed the property to Fairborn. In the interim, Schostak Brothers managed the property and served as leasing agent in the bank’s behalf.

In late 1968, after finding an unexecuted lease for 576 feet, dated July 1967, Schostak’s agent contacted plaintiffs. When plaintiffs asserted the existence of the prior lease, Schostak’s agent requested production. However, the agent’s demand could not be met because plaintiffs had surrendered their sole copy of the lease to Fairborn’s agent for certain modifications. An impasse ensued. The agent claimed he offered plaintiffs "alternate space” which they accepted. Plaintiffs vehemently denied that contention. (When negotiations began, the disputed space was available; however, Schostak leased the contested space to third parties in late 1968 or early 1969.)

Plaintiffs had once operated a liquor store, and currently operated several bookstores. Since 1969, they have developed "Little Professor’s”, a 24-store franchise operation, in 17 states. Relying on that expertise to prove damages, Frank Fera submitted an annual budget for an unnamed year reflecting $18,000 first-year profits. He claimed a 6% profit increase each year thereafter. A defense expert testified a $14,000 loss would result.

The trial court excluded defense hearsay testimony about the bankruptcy of several Village Plaza stores, but permitted testimony about occupancy rates, traffic patterns and volume as relevant to lost profits.

A Liquor Control Commission regional supervi[537]*537sor and a former commission member both testified that the described book and bottle store could not obtain a license. Finally, defense witnesses testified that plaintiffs lost interest in the original space, refused an offer of better space, and never operated the business. The jury awarded $200,000 to plaintiffs, finding all four defendants liable.

Defense motions for directed verdict and new trial were denied.

On appeal, defendants claim the trial court erred in finding waiver of the nonjury trial provision in the lease. We do not agree. The instant pretrial proceedings support the trial judge’s conclusion. Further, the sequence of events creates some doubts about the parties’ good faith in the conduct of discovery proceedings. Plaintiffs had sued on the theory of a lost or destroyed lease executed in January, 1965. Defendants denied the lease for "lack of sufficient information to form a belief’. Plaintiffs thereafter demanded a jury trial without defense objection, although the missing lease contained a nonjury trial provision. At the pretrial conference and in the pretrial summary, defendants never objected to the jury trial. On the first day of trial, some three years after filing of the complaint, answer, and commencement of discovery, defendant Fairborn produced at last the August, 1965, lease. Plaintiffs submitted an unexecuted copy. Defendant bank then moved to strike the jury, in contravention of the pretrial statement.

No error arose in finding waiver in these circumstances. GCR 1963, 301.1(2), provides:

"In every contested civil action the court shall direct the attorneys for the parties to appear before it for a conference to
[538]*538"(2) * * * determine whether a jury trial shall be had pursuant to demand, if any, theretofore made.”

GCR 1963, 301.3, provides:

"The judge shall prepare, file, and cause to be served upon the attorneys of record, at least 10 days in advance of trial a summary of the results of the pretrial conference specifically covering each of the items herein stated. The summary of results controls the subsequent course of the action unless modified at or before trial to prevent manifest injustice. "(Emphasis supplied.)

The modification of the pretrial summary rests within the trial court’s sound discretion. Reinhardt v Bennett, 45 Mich App 18; 205 NW2d 847 (1973). Different from Reinhardt, supra, where a disputed issue had been sufficiently raised in the pleadings to avoid unfair surprise, the nonjury trial provision here presumably caught plaintiffs unaware. While the waiver clause appeared in small print in plaintiffs’ unexecuted lease copy, knowledge of that provision is more properly chargeable to defendants who used a variety of standard shopping center leases, some incorporating a waiver of jury trial provision. Even assuming plaintiffs were aware of that provision, defendants had the burden of timely assertion. Defendants’ inaction permitted plaintiffs to assume defendants were satisfied with a jury trial. Assertion of the waiver provision could therefore have caused unfair surprise, even assuming some prior knowledge of that provision. The court rule requires a showing of manifest injustice. We find none.

Next, defendants claim that plaintiffs’ failure to assert their right of occupancy under the lease estops them from suit. Abandonment requires proof of an intent to abandon and acts of abandon[539]*539ment. Log-Owners’ Booming Co v Hubbell, 135 Mich 65; 97 NW 157 (1903). The burden of proof rests on the party asserting it. West Michigan Park Association v Department of Conservation, 2 Mich App 254; 139 NW2d 758 (1966). The parties introduced conflicting evidence as to acts of abandonment. The fact-trier’s resolution of a disputed factual issue will not be disturbed on appeal unless no evidence supports that finding. Credibility is for the jury. Here, the jury could have found that plaintiffs’ delay in asserting their rights could reasonably be attributed to construction delays and ongoing negotiations with Schostak’s agent. Failure to assert occupancy rights does not constitute abandonment in this context.

The trial court did not permit defendants to amend their pleadings to add failure to mitigate damages as an affirmative defense. Since parties suing for breach of contract have the affirmative obligation to mitigate damages, Van Lierop v Chesapeake & O R Co, 335 Mich 702; 57 NW2d 431 (1953), cert den,

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Bluebook (online)
218 N.W.2d 155, 52 Mich. App. 532, 1974 Mich. App. LEXIS 1066, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fera-v-village-plaza-inc-michctapp-1974.