Kamalnath v. Mercy Memorial Hospital Corp.

487 N.W.2d 499, 194 Mich. App. 543

• Court: Michigan Court of Appeals
• Decided: June 15, 1992
• Docket: Docket 128108
• Status: Published

Opinion

Corrigan, J.

Plaintiffs appeal a grant of summary disposition of their complaint of breach of contract, wrongful discharge, employment discrimination, fraud, misrepresentation, and intentional infliction of emotional distress. We affirm.

In 1986, defendant decided to open an outpatient family practice clinic in Petersburg in Monroe County. Defendant retained a recruiter to identify a private family practitioner who brought plaintiff Jacintha Kamalnath and defendant together.

In June 1986, plaintiff, an endocrinologist, first visited the area and discussed the clinic plan with John Iacoangeli, defendant’s director of planning and development. Plaintiff was unfamiliar with Monroe County and also lacked experience in the "business” aspects of medical practice. Iacoangeli allegedly stated that the hospital would assist plaintiff with marketing.

On June 20, 1986, Iacoangeli wrote plaintiff as follows:

Thank you for visiting this facility and touring the communities of Monroe and Petersburg on Saturday. As discussed at our meeting, I stated that I would present for your consideration an offer relative to the start-up of a physician office in Petersburg and your retention as a private family practitioner. The following offer is subject to receipt and review of your curriculum vitea [sic].

1. The hospital will provide a net salary guarantee before taxes for one year in an amount not to exceed Sixty Thousand [$60,000] Dollars. The salary guarantee is determined by subtracting office and equipment rental, insurance, including medical liability, salaries, payroll taxes and workers compensation for office staff, office supplies and medical records, dues to medical organizations (ama, Michigan State Medical Society), fees associated with normal business operations (legal and accounting), and telephone.

2. Underwrite the rental of the physician office for the first year of operation.

3. Provide a Fifty-Thousand [$50,000] Dollar line of credit to be used for operational and professional expenses. The interest rate for using these funds will be seven percent. This line of credit will be available for two years.

4. The hospital will assist you with your relocation costs to a home within Monroe County at a cost not to exceed $1,500.

As I mentioned, the salary guarantee is associated with the primary care aspect of the Peters-burg Physician Office. Consultation and other fees associated with your speciality in Endocrinology are separate.

This offer is based on your availability to serve the Petersburg market area as a primary care physician and maintain regular office hours four [4] full days and two [2] half-days a week.

If you have any further questions, please feel free to contact me.

/s/ John R. Iacoangeli

Plaintiff did not accept this written offer. Instead, she suggested various changes and additions, principally an increase in the term from one year to three years and a provision that the hospital handle marketing.

On June 30, 1986, Iacoangeli sent plaintiff a second letter, which provided in part:

It was a pleasure speaking with you again regarding the physician opportunity in Petersburg. As I mentioned, the following revisions to my June 20 letter, are outlined as follows:

1. The net salary-guarantee before taxes in an amount not to exceed Sixty Thousand [$60,000] dollars will be offered for three [3] years, subject to an annual performance review.

2. In addition to those expenses that are subtracted from gross receipts as outlined previously, medical education relating to primary care has been added.

3. Cost of relocation will be increased to a cost not to exceed $2,750.

4. The hospital administration will assist in providing coverage for the office when you are on vacation.

Also, I have enclosed an application for appointment to the Medical Staff. Please complete this as soon as possible. . . .

Defendant subsequently prepared several drafts of a proposed contract, but none of them proved satisfactory to plaintiff, who testified: "[T]here were so many things that was [sic] not acceptable, I saw it [the contract] as not acceptable and that’s the whole thing.”

Plaintiff, however, moved to Petersburg and began work, although she had no signed contract and the clinic was not yet completed. Various problems then developed with equipping and staffing the clinic. Defendant allegedly did not provide promised equipment, office staff, and advertising and did not timely bill the patients. In addition, although the hospital arranged a line of credit, plaintiff allegedly was not informed that the Nine of credit” was actually a personal loan. 1

The Petersburg clinic was not as successful as the parties had hoped. Relations between them deteriorated. A white male physician, who is allegedly less qualified than plaintiff, was added to the clinic staff. In November 1987, defendant formally notified plaintiff to vacate the clinic after a breakdown in their relationship.

In early 1988, plaintiff filed suit, claiming breach of contract, wrongful discharge, sex and race discrimination in employment, fraud and misrepresentation, negligent misrepresentation, and intentional infliction of emotional distress. Defendant sought summary disposition pursuant to MCR 2.116(C)(8) and (10), asserting that the statute of frauds barred plaintiff’s contract claim, that plaintiff’s sex and race discrimination claims had no factual basis, that the alleged fraud and misrepresentation involved matters of opinion and future promises, that the claim of intentional infliction of emotional distress lacked any basis, and that plaintiff was an independent contractor who could not sue for wrongful discharge. The motion was supported by a detailed affidavit from John Iacoangeli.

Plaintiff’s response brief lacked any citations to authority. The support filed by plaintiff’s counsel consisted of an "Affidavit of Unavailability of Affidavits,” the material portions of which read:

2. The Motion was filed while I was on vacation, and my schedule did not permit me to have the necessary communications with potential witnesses that would have been necessary prerequisites to the preparation of specific affidavits.

3. The persons from whom affidavits might have been obtained would include Plaintiffs, who would have been able to support everything contained in the Complaint, as well as the testimony of Dr. Omana Menon relating to damages, the testimony of Dr. Bruce Feyz and Dr. Amba Krishnan regarding the discrimination claim.[ 2 ]

The court granted defendant’s motion, finding that the June 20 and June 30, 1986, letters were mere offers outside the statute of frauds, that plaintiff was not defendant’s employee, that no genuine issue of fact existed as to the discrimination claims, that the fraud and misrepresentation claims involved promises and matters of opinion with no evidence of intent to deceive, and that no "outrageous conduct” supported plaintiff’s claim of intentional infliction of emotional distress.

Plaintiff sought rehearing, rearguing her earlier points and newly claiming promissory and equitable estoppel. She also sought for the first time recovery in quantum meruit. The court denied the motion for rehearing.

I. THERE WAS NO ENFORCEABLE CONTRACT BETWEEN THE PARTIES.

It is hornbook law that a valid contract requires a "meeting of the minds” on all the essential terms.

In order to form a valid contract, there must be a meeting of the minds on all the material facts. 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. [Stanton v Dachille, 186 Mich App 247, 256; 463 NW2d 479 (1990), citing Heritage Broadcasting Co v Wilson Communications, Inc, 170 Mich App 812, 818; 428 NW2d 784 (1988).]

"Meeting of the minds” is a figure of speech for mutual assent. Goldman v Century Ins Co, 354 Mich 528, 534; 93 NW2d 240 (1958). See also, e.g., Stark v Kent Products, Inc, 62 Mich App 546, 548; 233 NW2d 643 (1975).

An offer is a unilateral declaration of intention, and is not a contract. Western Michigan Univ Bd of Trustees v Slavin, 381 Mich 23, 31; 158 NW2d 884 (1968); Eastern Michigan Univ Bd of Control v Burgess, 45 Mich App 183, 187; 206 NW2d 256 (1973). A contract is made when both parties have executed or accepted it, and not before. Brown v Considine, 108 Mich App 504, 507; 310 NW2d 441 (1981), citing Holder v Aultman, Miller & Co, 169 US 81, 89; 18 S Ct 269; 42 L Ed 669 (1898). A counterproposition is not an acceptance. Harper Bldg Co v Kaplan, 332 Mich 651, 655; 52 NW2d 536 (1952). Mere discussions and negotiation, including unaccepted offers, cannot be a substitute for the formal requirements of a contract. Kirchhoff v Morris, 282 Mich 90, 95; 275 NW 778 (1937).

A mere expression of intention does not make a binding contract, Hammel v Foor, 359 Mich 392, 400; 102 NW2d 196 (1960):

The burden is on plaintiffs to show the existence of the contract sought to be enforced, and no presumption will be indulged in favor of the execution of a contract since, regardless of the equities in a case, the court cannot make a contract for the parties when none exists.

In this case, the parties did not have a sufficient "meeting of the minds” regarding the essential terms of the contract. Plaintiff rejected the June 20 offer, as the June 30 offer makes plain. Plaintiff herself admitted that she did not approve any of the proposed contracts after her move to Peters-burg. Important differences remained between the parties as to basic contractual duties such as the responsibility for certain major expenses. The parties had exchanged a series of offers and counteroffers, not an offer and an acceptance.

Even if the June 20 and 30 letters were considered a binding contract, defendant reserved the right to terminate plaintiff. She had no guarantee of continuation after the first year. The June 30 letter expressly provided that "[t]he net salary-guarantee . . . will be offered for three [3] years, subject to an annual performance review.” [Emphasis supplied.] Plaintiff’s performance was subjected to an annual performance review and found deficient. Iacoangeli averred that defendant terminated plaintiff’s employment "based on her poor performance in operating the Petersburg Clinic in terms of her office hours, patient relations, patient charges, accounting and general management responsibilities.” As noted, plaintiff never countered the Iacoangeli affidavit.

Further, under the statute of frauds, MCL 566.132(a); MSA 26.922(a), "[a]n agreement that, by its terms, is not to be performed within 1 year from the making thereof’ must be in writing and "signed by the party to be charged.” The proposed contract was for three years. The only document signed by defendant’s agent that refers to a three-year term is the June 30 letter. That letter, however, is not a contract; the author refers to "revisions to my June 20 letter.” The June 20 letter was merely "an offer relative to the start-up of a physician office in Petersburg and your retention as a private family practitioner.” Thus, plaintiff’s claim is defeated by the statute of frauds. Plaintiff cannot avoid the effect of the statute by claiming partial performance of the terms of the purported contract. In Michigan, the partial-performance doctrine does not apply to employment contracts for more than one year. McMath v Ford Motor Co, 77 Mich App 721, 725; 259 NW2d 140 (1977).

Plaintiffs alternative argument, seeking compensation under some other theory, was presented to the court below only on plaintiffs motion for rehearing. The trial court did not rule on it. Generally, questions not ruled on below cannot be presented to or considered by a reviewing court, absent a miscarriage of justice. Bajis v Dearborn, 151 Mich App 533, 536; 391 NW2d 401 (1986); Petrus v Dickinson Co Bd of Comm’rs, 184 Mich App 282, 288; 457 NW2d 359 (1990). We see no miscarriage of justice here.

Nevertheless, we find plaintiffs alternative argument to have no merit. Because she has been compensated, she cannot seek recovery in quantum meruit. She was paid for her services at the clinic in 1986 and 1987 at the proposed contract rate of $60,000 a year. The doctrine of quantum meruit allows a party to recover the reasonable value of services rendered. A contract, though void under the statute of frauds, may be admissible to show the value placed on a plaintiffs services by the parties. Ordon v Johnson, 346 Mich 38, 49; 77 NW2d 377 (1956). Plaintiff is not entitled to any additional payment under a quantum meruit analysis.

Nor does the doctrine of equitable estoppel support plaintiff. "[A]s an equitable remedy, [estoppel] is employed to alleviate an unjust result of strict adherence to established legal principles.” Ass’n of Hebrew Teachers v Jewish Welfare Federation, 62 Mich App 54, 60; 233 NW2d 184 (1975). Defendant has not been unjustly enriched at plaintiffs expense.

Even assuming a three-year contract for plaintiffs services, plaintiffs contractual rate of compensation ($60,000 a year) was identical to what she was actually paid. Plaintiffs apparent suggestion that clinic revenues increased because of her activity lacks any merit since her compensation was not tied to clinic income. She would not have received any more than $60,000 a year from defendant had she remained at the Petersburg clinic longer than she did. Had defendant refused to pay plaintiff at all for services rendered or paid her at a lower rate, the case might be different. But plaintiff herself admitted that she was paid appropriately.

Moreover, to support a claim of estoppel, a promise must be definite and clear. McMath, supra at 726, citing Ass’n of Hebrew Teachers, supra at 59. The promises upon which plaintiff allegedly relied are certainly not definite and clear. The only promise mentioned in the complaint was defendant’s "promise to use business expertise and experience.” The doctrine of estoppel should be applied only where the facts are unquestionable and the wrong to be prevented undoubted. Commercial Union Ins Co v Medical Protective Co, 136 Mich App 412, 421; 356 NW2d 648 (1984), rev’d in part on other grounds 426 Mich 109; 393 NW2d 479 (1986). This vague promise does not qualify.

ii. plaintiff’s remaining claims do not warrant REVERSAL.

Plaintiff’s remaining allegations require minimal discussion.

A. EMPLOYMENT DISCRIMINATION

Plaintiff alleges violation of the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq., because defendant engaged a white male physician to replace her, a female of Indian origin. MCL 37.2202; MSA 3.548(202) prohibits "discriminat[ion] . . . because of . . . national origin . . . [or] sex.” Plaintiff failed to adduce any evidence whatsoever to support this claim in response to defendant’s properly supported motion for summary disposition. As noted, Iacoangeli averred that he terminated defendant’s relationship with plaintiff solely on the basis of her poor performance.

When a motion under subrule (C)(10) is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his or her pleading, but must, by affidavits or as otherwise provided in this rule, set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, judgment, if appropriate, shall be entered against him or her. [Emphasis supplied; MCR 2.116(G)(4).]

Plaintiff did not come forward with any facts at all. Instead, counsel presented the previously described "Affidavit of Unavailability of Affidavits.” A mere promise to offer factual support at trial is insufficient. McCart v J Walter Thompson USA, Inc, 437 Mich 109, 115, n 4; 469 NW2d 284 (1991). Summary disposition was properly granted pursuant to MCR 2.116(G)(4).

Further, plaintiffs employment discrimination claim fails because plaintiff was not defendant’s employee. The trial court properly found that plaintiff was an independent contractor, not an employee. 3

An independent contractor is one who, carrying on an independent business, contracts to do work without being subject to the right of control by the employer as to the method of work but only as to the result to be accomplished. [Parham v Preferred Risk Mut Ins Co, 124 Mich App 618, 622-623; 335 NW2d 106 (1983), citing Marchand v Russell, 257 Mich 96; 241 NW 209 (1932).]

The proposed agreement renders plaintiff an independent contractor rather than an employee. The clinic staff were to be plaintiff’s employees, not defendant’s. Plaintiff would be required to pay all expenses from clinic receipts, including insurance, supplies, most business expenses, transportation, and depreciation. Plaintiff would also be liable for rent to defendant. We find no error.

B. FRAUD AND MISREPRESENTATION

We affirm the lower court’s dismissal of the counts of fraud and misrepresentation because plaintiff did not comply with MCR 2.116(G)(4). She failed to produce any affidavits or other evidence to counter lacoangeli’s affidavit denying any intent to defraud or mislead plaintiff.

Moreover, an action for fraudulent misrepresentation must be predicated upon a statement relating to a past or an existing fact. Future promises cannot constitute actionable fraud. State Bank of Standish v Curry, 190 Mich App 616, 623; 476 NW2d 635 (1991), citing Hi-Way Motor Co v Int'l Harvester Co, 398 Mich 330, 336; 247 NW2d 813 (1976). The actions plaintiff complained of principally relate either to promises of future action (e.g., the division of expenses between plaintiff and defendant) or to matters of opinion (e.g., defendant’s business expertise). Although the demographic makeup of Monroe County is a factual matter, plaintiff failed to oppose lacoangeli’s affidavit that he had no intent to defraud her with respect to that fact; as for claimed fraud and misrepresentation about the value of the home

plaintiff purchased, plaintiff had the opportunity to inspect it. Representations as to property value are mere expressions of opinion, especially where plaintiff can inspect the property before purchasing it. Sutton v Benjamin, 231 Mich 153, 155; 203 NW 667 (1925). See also, e.g., Cole Lakes, Inc v Linder, 99 Mich App 496, 505; 297 NW2d 918 (1980).

C. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

Finally, the trial court properly granted summary disposition of the claim of intentional infliction of emotional distress. A plaintiff must show "extreme and outrageous” conduct. See Roberts v Auto-Owners Ins Co, 422 Mich 594, 602-604; 374 NW2d 905 (1985), citing Restatement Torts, 2d, § 46, p 71. Further, in a contractual setting, a tort action must rest on a breach of duty distinct from contract. Roberts, supra at 603-604. Plaintiff nowhere specifically alleged conduct so extreme or outrageous as to establish liability in tort.

Affirmed. Costs to defendant.

1 Apparently, plaintiff and her husband did not repay the loan when it became due and the bank brought suit against them. They counterclaimed, alleging fraud and conspiracy. The outcome of that action is not known to this Court.

2 Plaintiffs’ counsel did not initiate any discovery proceedings between filing suit and the filing of defendant’s motion. We express no opinion about the wisdom of this strategy.

3 Plaintiff has not responded to this finding in her brief on appeal.