Marina Bay Condominiums, Inc v. Schlegel

423 N.W.2d 284, 167 Mich. App. 602
CourtMichigan Court of Appeals
DecidedApril 4, 1988
DocketDocket 94219
StatusPublished
Cited by22 cases

This text of 423 N.W.2d 284 (Marina Bay Condominiums, Inc v. Schlegel) 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
Marina Bay Condominiums, Inc v. Schlegel, 423 N.W.2d 284, 167 Mich. App. 602 (Mich. Ct. App. 1988).

Opinions

Doctoroff, J.

This appeal involves a contract concerning condominiums that were offered for sale by plaintiff. Plaintiff brought this action for breach of contract of sale of a condominium unit after defendants filed a complaint with the condominium section of the Corporation and Securities Bureau seeking return of $2,600 from plaintiff. Following a bench trial, the trial court found that the parties had an option contract and entered judgment for plaintiff for $2,600, together with costs and interest. Defendants appeal as of right. Plaintiff cross-appeals as of right. We reverse the award of costs, but affirm the judgment in all other respects.

i

The first issue raised in this appeal is whether the trial court’s finding that the parties had entered into an option contract is clearly erroneous. Defendants argue that the $2,600 deposit should be returned to them because the parties’ agreement should be construed to be a preliminary reservation agreement, MCL 559.109(4); MSA 26.50(109)(4). Plaintiff, by cross-appeal, argues that the parties’ agreement constituted an amended purchase agreement, breach of which entitles it to damages as well as to retention of the $2,600 deposit or, alternatively, to specific performance of the agreement.

Findings of fact by the trial court may not be set aside unless clearly erroneous, MCR 2.613(C). A trial court’s finding is clearly erroneous where, although there is evidence to support it, the re[605]*605viewing court is left with a definite and firm conviction that a mistake has been made. Henderson v Biron, 138 Mich App 503, 507; 360 NW2d 230 (1984), lv den 422 Mich 976 (1985).

The trial court found that, although defendants had originally entered into an agreement to purchase condominium unit No. 104 for $105,500 and deposited both a $5,000 check toward the purchase and a $2,600 check for a built-in vacuum cleaner and entertainment system, they elected to withdraw from the agreement on the following day. They did so without reason or penalty, which they were entitled to do according to the terms of the agreement.

The court further found that approximately four days thereafter defendants retrieved their checks. However, that same day, they tendered a third check to plaintiff for $2,600. Both the original and the duplicate of the purchase agreement were altered by deletion of the unit number, the purchase price, and the $5,000 deposit amount. The amount of $2,600 was then inserted in the deposit amount space.

The trial court, concluding that the agreement failed to satisfy the statute of frauds, MCL 566.106; MSA 26.906, found that the parties had entered into an option agreement.

Pursuant to MCL 559.121(1); MSA 26.50(121)(1), condominiums may only be offered for initial sale in accordance with the Condominium Act unless exempted.1 The act defines a preliminary reservation agreement as an opportunity to purchase a [606]*606particular condominium unit for a limited period of time upon sales terms to be later determined, MCL 559.109(4); MSA 26.50(109)(4).

In this case, the contract at issue did not identify a particular unit, and the trial court so found. The contract therefore did not fall under the aegis of a preliminary reservation agreement as defined by the Condominium Act.

Plaintiff asserts on cross-appeal that the agreement between the parties was an amended purchase agreement, breach of which entitles it to retention of the $2,600 as well as to damages or to specific performance.

A conveyance of an interest in land must be in writing and comport with the statute of frauds, MCL 566.106; MSA 26.906.2 To satisfy the statute of frauds, the writing or memorandum must be certain and definite as to the parties, property, consideration, premises and time of performance. Cooper v Pierson, 212 Mich 657, 660; 180 NW 351 (1920). It must leave no essential element to be supplied by parol. Caughey v Ames, 315 Mich 643, 647; 24 NW2d 521 (1946).

In this case, the contract was never signed or dated by the parties. Additionally, the unit number and price were not indicated. Consequently, the agreement does not comport with the statute of frauds and thus cannot be a purchase agreement.

The court found that the parties had entered [607]*607into an option agreement that gave defendants the right to purchase property at a fixed price within a specified time.

An option is a preliminary contract for the privilege of purchase and not itself a contract of purchase. Oshtemo Twp v Kalamazoo, 77 Mich App 33, 37; 257 NW2d 260 (1977), lv den 402 Mich 814 (1977). It is a contract collateral to the offer to sell whereby the offer is irrevocable for a specified period. EMU Bd of Control v Burgess, 45 Mich App 183, 186; 206 NW2d 256 (1973), lv den 392 Mich 788 (1974). It involves the privilege of buying property at a fixed price within a specified period of time. Oshtemo Twp, supra, p 37. An option contract does not create an interest in land. Id. Therefore, it is not subject to the statute of frauds.

The trial court’s conclusion that the parties had entered into an option contract and that plaintiff was entitled to an award of $2,600 that represented the consideration for the unexercised option is not clearly erroneous.

ii

Defendants next argue that the trial court erred by failing to find in their favor pursuant to the Michigan Consumer Protection Act, MCL 445.901 et seq.; MSA 19.418(1) et seq. They assert that this act was violated by plaintiffs refusal to return the $2,600 to them because the Condominium Act mandated the return of the deposit within three business days of the cancellation of a preliminary reservation agreement, MCL 559.183(3); MSA 26.50(183)(3).

The Michigan Consumer Protection Act prohibits unfair, unconscionable, or deceptive methods, acts or practices in conduct of trade or commerce, MCL 445.903(1); MSA 19.418(3)(1). Trade or com[608]*608merce includes real estate transactions under this act, MCL 445.902(d); MSA 19.418(2)(d). The refusal to cancel an agreement and return the deposit when such is required by law constitutes a violation of the act, MCL 445.903(1)(u); MSA 19.418(3)(1)(u).

However, as previously stated, the trial court’s finding that the subject contract was an option contract was not clearly erroneous. Therefore, a violation of the Consumer Protection Act because a preliminary reservation was not cancelled and the deposit was not returned within three business days did not occur, MCL 445.903(1)(u); MSA 19.418(3)(1)(u).

iii

Defendants’ final argument is that the trial court erred by taxing costs against them and also by awarding plaintiff/interest on the judgment. MCR 2.625 provides in relevant part:

Costs will be allowed to the prevailing party in an action, unless prohibited by statute or by these rules or unless the court directs otherwise, for reasons stated in writing and filed in the action.

However, costs are taxed only when a party has prevailed in full. See, e.g., Deziel v Difco Laboratories, Inc, 394 Mich 466; 232 NW2d 146 (1975), app after remand 403 Mich 1; 268 NW2d 1 (1978); Haddad v Justice, 64 Mich App 74; 235 NW2d 159 (1975), lv den 395 Mich 825 (1976).

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Marina Bay Condominiums, Inc v. Schlegel
423 N.W.2d 284 (Michigan Court of Appeals, 1988)

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Bluebook (online)
423 N.W.2d 284, 167 Mich. App. 602, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marina-bay-condominiums-inc-v-schlegel-michctapp-1988.