Village of Edmore v. Crystal Automation Systems Inc

Procedural entryThis page is a short order in Village of Edmore v. Crystal Automation Systems Inc. Read the opinion of the Court — 322 Mich. App. 244
Michigan Court of Appeals·Decided October 19, 2017·No. 334135·Unpublished

Opinion

STATE OF MICHIGAN

COURT OF APPEALS

VILLAGE OF EDMORE, UNPUBLISHED October 19, 2017 Plaintiff/Counter-Defendant- Appellee,

v No. 334135 Montcalm Circuit Court CRYSTAL AUTOMATION SYSTEMS INC, LC No. 2016-021226-CK

Defendant/Counter-Plaintiff- Appellant.

Before: MURRAY, P.J., and SAWYER and MARKEY, JJ.

PER CURIAM.

Defendant, Crystal Automation Systems, Inc., a provider of phone and internet services to residents living in and around plaintiff, the Village of Edmore, a Michigan municipal corporation in Montcalm County, appeals as of right the trial court’s Order for Entry of Default Judgment, Order Granting Plaintiff’s Motion for Partial Summary Disposition, and Order Denying Defendant’s Motion to Vacate and/or Set Aside Default and Granting Plaintiff’s Motion for Entry of Default Judgment. Defendant contends that the trial court committed reversible error when it entered a default judgment against it, refused to set aside an improperly entered default, and granted plaintiff partial summary disposition based upon an incorrectly construed and interpreted Lease Agreement (Lease) between the parties. We agree, and reverse each of the trial court’s orders and remand for further proceedings.

I. FACTS AND PROCEEDINGS

Since April 2003, defendant has rented space on and near plaintiff’s water tower for its antennas and equipment. During 2015, plaintiff contracted with Utility Service Co., Inc. (USC) to repaint and maintain its water tower. USC told plaintiff that before it commenced the work all tenants of the water tower had to remove their equipment, so plaintiff ordered defendant to remove all of its equipment on and from around the water tower and threatened defendant that if it did not do so, plaintiff would charge defendant for doing so. Defendant objected to plaintiff’s demand on the ground that the Lease did not permit plaintiff to order defendant to vacate the premises. Defendant also advised plaintiff that if plaintiff removed the equipment, local resident’s phone, 911, and internet services would be interrupted in violation of the law. Shortly

after receiving defendant’s objection, plaintiff informed defendant that it would delay the project until the spring of 2016.

During the interim period, defendant attempted to work out an alternative arrangement with plaintiff so that defendant could provide its customers with uninterrupted services while plaintiff repainted the water tower. Plaintiff’s manager represented to defendant that it could erect a new tower on a different piece of property owned by plaintiff, but plaintiff ultimately decided it did not want to provide that option to defendant. Defendant also offered to move its equipment so that USC could work around it, but plaintiff refused that offer. Then, on March 3, 2016, plaintiff’s counsel ordered defendant to remove its equipment from on and around the water tower by May 1, 2016. Plaintiff sued defendant on March 18, 2016, alleging breach of contract and seeking injunctive relief to force defendant to remove its equipment and to terminate the Lease.

The Lease signed by the parties granted defendant an initial five-year term with three additional automatically renewable five-year terms unless defendant notified plaintiff before the end of the initial term of its intent to not extend the Lease. The Lease also granted defendant the right to terminate the agreement upon 30 days’ notice under specified instances, but did not give plaintiff the right to terminate. The Lease also contained the following provisions:

7. Maintenance:

* * *

D. In the event the Landlord or any other Tenant undertakes painting, construction or other alterations on the premises, Tenant shall take reasonable measures as [sic] Tenant’s cost to cover Tenant’s equipment, personal property or antenna facilities and protect such from paint and debris fallout which may occur during painting, construction or alteration process.

* * *

10. Interference: Tenant’s installation, operation, and maintenance of its transmission facilities shall not damage or interfere in any way with the Landlord’s water tower operations or related repair and maintenance activities or with such activities of other Tenants of the water tower. Landlord , at all times during this Lease, reserves the right to take any action it deems necessary, in its sole discretion, to repair, to maintain, alter or improve the premise in connection with the tower operations as may be necessary, including leasing parts of the water tower and surrounding ground space to others.

* * *

12. Indemnity:

* * *

B. Tenant’s Indemnification: Any and all liability, obligation, damages, penalties, claims, liens, costs, charges, losses and expenses (including, without limitation, reasonable fees and expenses of attorney’s, expert witnesses and consultants), which may be imposed upon, incurred by or be asserted against the Landlord, its agents and employees, by reason of any act or omission of Tenant, its personnel, employees, agents, contractors or subcontractors, resulting in personal injury, bodily, injury, sickness, disease or death to any person or damage to, loss of or destruction of tangible or intangible property, copyright, patent, service mark or any other right of way [sic] person, firm, or corporation, which may arise out of or be in any way connected with the construction, installation, operation, maintenance, use or condition of the premises or Tenant’s antenna facilities or the Tenant’s failure to comply with any federal, state or local stature [sic], ordinance or regulation.

On March 22, 2016, plaintiff served its complaint on defendant along with an ex parte motion for preliminary injunction seeking an order that defendant vacate the water tower. Without delay, on March 23, 2016, defendant opposed plaintiff’s motion by arguing that the Lease did not grant plaintiff the right to evict defendant from the water tower. Plaintiff filed a reply in which it requested that the trial court order defendant to remove its equipment by May 1, 2016, or allow plaintiff to do so at defendant’s expense, and enter judgment against defendant.

The parties appeared the next day for a hearing, and a conference was held off the record where it was agreed that, rather than having the trial court hear and the decide the motion for injunctive relief, plaintiff would file a motion for partial summary disposition, defendant would respond, and the trial court would hear the motion, all on an expedited basis so that the hearing on the motion could happen on April 15, 2016. The trial court later entered an order on April 7, 2016, requiring plaintiff to file its motion by April 1 and defendant to respond by April 12. The order also stated that the parties could file their pleadings via e-mail with the original sent by first-class mail.

Consistent with the order, on April 1, 2016, plaintiff moved for partial summary disposition under MCR 2.116(C)(9) and (10). Plaintiff argued that because the Lease unambiguously required defendant to vacate the premises if in plaintiff’s sole discretion it ordered defendant to do so for maintenance and repair of the water tower, defendant’s refusal to vacate upon demand breached the Lease. In its response, defendant denied that plaintiff was entitled to force defendant to vacate its leasehold, and argued that plaintiff’s conduct violated defendant’s right to quiet enjoyment of the premises and effectively nullified the purpose of the Lease.

Late on the afternoon of April 14, 2016, defendant also filed its answer, affirmative defenses, and jury demand by e-mail and the original by first-class mail. That same afternoon, however, plaintiff filed a request for entry of default against defendant for failure to timely file its answer. The clerk entered the default and plaintiff served defendant the default by mail.

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Village of Edmore v. Crystal Automation Systems Inc, (Mich. Ct. App. 2017).

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