Pearson Construction Company Inc v. the Dailey Company

CourtMichigan Court of Appeals
DecidedApril 17, 2026
Docket369918
StatusUnpublished

This text of Pearson Construction Company Inc v. the Dailey Company (Pearson Construction Company Inc v. the Dailey Company) 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
Pearson Construction Company Inc v. the Dailey Company, (Mich. Ct. App. 2026).

Opinion

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

PEARSON CONSTRUCTION COMPANY, INC., UNPUBLISHED April 17, 2026 Plaintiff/Counterdefendant-Appellant, 12:13 PM

v No. 369918 Oakland Circuit Court THE DAILEY COMPANY, LC No. 2022-194484-CB

Defendant-Appellee, and

HIGH TOP BUDS, LLC,

Defendant/Counterplaintiff-Appellee.

Before: GADOLA, C.J., and MURRAY and M.J. KELLY, JJ.

PER CURIAM.

In this action for breach of a construction contract, plaintiff/counterdefendant Pearson Construction Company, Inc. appeals as of right from the trial court’s judgment in favor of defendant/counterplaintiff High Top Buds, LLC, entered following a jury trial. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

HTB contracted with general contractor The Dailey Company1 for the construction of a commercial cannabis grow facility. In turn, Dailey and Pearson entered into a subcontract for Pearson to do carpentry work on the project. The subcontract included the installation of fiberglass reinforced plastic (FRP) walls.

After completing its work on the project, Pearson filed this action against Dailey for breach of contract and against HTB for unjust enrichment, alleging that it informed Dailey of humidity

1 Dailey is not a party to this appeal.

-1- issues affecting installation of the FRP, but Dailey directed Pearson to continue the work, and Pearson completed its portion of the project, but HTB refused to pay Dailey for Pearson’s work.

HTB subsequently filed a countercomplaint against Pearson for breach of duty, both under the common law and as a third-party beneficiary to the subcontract, alleging that “Pearson breached its duty to HTB by abiding by Dailey’s instruction to install the FRP paneling despite unacceptably high humidity levels and against Pearson’s own recommendation that the installation work not proceed,” resulting in bubbling of the panels. Pearson then moved for summary disposition of HTB’s breach of duty claim under MCR 2.116(C)(8) and (C)(10), arguing in part that HTB was barred from bringing a claim as a third-party beneficiary to the subcontract because the subcontract did not include any express promises or direct benefits to HTB. In its brief in opposition to Pearson’s motion, HTB argued the court should deny the motion, and instead grant HTB summary disposition under MCR 2.116(I)(2), because HTB is a third-party beneficiary of the contract pursuant to MCL 600.1405, and Pearson had a common law duty to HTB to exercise reasonable care. The court ultimately denied Pearson summary disposition and instead granted HTB partial summary disposition under MCR 2.116(I)(2), finding HTB to be a third-party beneficiary of the subcontract between Pearson and Dailey as a matter of law under MCL 600.1405.

Following that ruling, HTB moved for partial summary disposition of Pearson’s claims against it under MCR 2.116(C)(10), asserting that Pearson breached the subcontract by failing to install perimeter walls, as required by the subcontract. The trial court agreed, finding the subcontract language to be clear and unambiguous, and granted the motion.

Ultimately, a jury trial was held, and the jury found Pearson liable in the amount of $250,000 for its failure to construct the perimeter walls, and in the amount of $751,958.25 for breach of contract as to the interior walls. This appeal followed.

II. SUMMARY DISPOSITION

A. THIRD-PARTY BENEFICIARY

Pearson first argues that the trial court erred in granting HTB partial summary disposition pursuant to MCR 2.116(I)(2) and holding that HTB is a third-party beneficiary to the subcontract between Pearson and Dailey.

We review de novo a trial court’s decision on a motion for summary disposition. Yopek v Brighton Airport Ass’n, Inc, 343 Mich App 415, 422; 997 NW2d 481 (2022). A motion under MCR 2.116(C)(10) tests the factual sufficiency of a claim. El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 160; 934 NW2d 665 (2019).

When considering such a motion, a trial court must consider all evidence submitted by the parties in the light most favorable to the party opposing the motion. A motion under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact. A genuine issue of material fact exists when the record leaves open an issue upon which reasonable minds might differ. [Id. (quotation marks and citations omitted).]

-2- “On the other hand, summary disposition is proper under MCR 2.116(I)(2) if the court determines that the opposing party, rather than the moving party, is entitled to judgment as a matter of law.” Rataj v Romulus, 306 Mich App 735, 747; 858 NW2d 116 (2014) (quotation marks and citation omitted). “We also review de novo the existence and interpretation of a contract as a question of law.” Bailey v Schaaf, 293 Mich App 611, 623; 810 NW2d 641 (2011).

Pearson argues, as it did below, that it was entitled to summary disposition because HTB was barred from bringing a counterclaim against it for breach of duty as a third-party beneficiary to the subcontract. Under MCL 600.1405:

Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said promise had been made directly to him as the promisee.

(1) A promise shall be construed to have been made for the benefit of a person whenever the promisor of said promise had undertaken to give or to do or refrain from doing something directly to or for said person.

With use of the modifier “directly,” the Legislature

“intended ‘to assure that contracting parties are clearly aware that the scope of their contractual undertakings encompasses a third party, directly referred to in the contract, before the third party is able to enforce the contract.’ ” Schmalfeldt v North Pointe Ins Co, 469 Mich 422, 428; 670 NW2d 651 (2003), quoting Koenig v South Haven, 460 Mich 667, 677; 597 NW2d 99 (1999). When determining whether MCL 600.1405 applies to a purported third-party beneficiary, “a court should look no further than the form and meaning of the contract itself” and should view the contract objectively. Schmalfeldt, 469 Mich at 428 (quotation marks omitted). [Boylan v Fifty Eight LLC, 289 Mich App 709, 728-729; 808 NW2d 277 (2010).]

“Only intended, rather than incidental, third-party beneficiaries may sue when a contractual promise in their favor has been breached.” Kisiel v Holz, 272 Mich App 168, 170; 725 NW2d 67 (2006). In other words:

A third person cannot maintain an action on a simple contract merely because he or she would receive a benefit from its performance or would be injured by its breach. Third-party beneficiary status requires an express promise to act to the benefit of the third party; where no such promise exists, that third party cannot maintain an action for breach of the contract. Further, a determination that a contract establishes an intended third-party beneficiary through a direct promise to the third party must be based on an objective review of the form and meaning of the contract itself. [Id. at 170-171 (quotation marks and citations omitted).]

Generally, although work performed by a subcontractor ultimately benefits the property owner, the property owner is not an intended third-party beneficiary of the contract between the subcontractor and contractor. Id. at 171. “Absent clear contractual language to the contrary, a property owner does not attain intended third-party-beneficiary status merely because the parties

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Bluebook (online)
Pearson Construction Company Inc v. the Dailey Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pearson-construction-company-inc-v-the-dailey-company-michctapp-2026.