Bank’s Failure to Raise “Abandonment” of Contract Constitutes Waiver in Breach of Contract Action

In Clapper, et al. v. Zochowski, et al, the Court of Appeals reversed the trial court’s ruling granting summary disposition in favor of a bank in a breach of contract action surrounding a loan purchase agreement.

The plaintiff sought to purchase a loan obligation held by the bank.

The bank was required to produce certain documents and parties at the closing in order to complete the contract.  The parties appeared for the closing, but the bank did not produce all documentation and the primary debtor did not appear as was required under the terms of the agreement.  Thus, the closing was never consummated.

The bank subsequently sold the loan obligations to another party.

Plaintiff filed suit against the bank alleging, among other things, breach of contract.  The bank argued that the agreement had been abandoned (although the bank raised this in reply to the plaintiff’s motion for summary disposition, not in its first responsive pleading as an affirmative defense).

The trial court entered judgment in favor of the bank, holding that the agreement did not place any burden on the bank to produce documents and certain parties.  The trial court also ruled that the agreement had been abandoned.

Here, the Court of Appeals reverses the case and remands for entry of summary disposition in favor of the plaintiff.  The Court of Appeals ruled the trial court could not address issues that were not raised before it.  More importantly, the Court of Appeals notes the bank failed to raise the issue of “abandonment” of the contract as an affirmative defense to the plaintiff’s complaint in its first responsive pleading.  This constituted a “waiver” of the defense for purposes of opposing plaintiff’s motion for summary disposition on the breach of contract claim.  Moreover, the Court of Appeals addresses and dismisses the issue of abandonment, recognizing it would be futile to allow the bank to amend its answer on remand.

Thus, the Court of Appeals orders entry of judgment in favor of plaintiff and remands only for consideration of the damages.

This case raises two important points:  first, and foremost, it is of utmost importance that all affirmative defenses available in a breach of contract action be raised by the defending party in its first responsive pleading.  The Court of Appeals correctly rules here that a failure to waive the defense constituted waiver.  It nonetheless rules that the argument of waiver would have been futile because the facts demonstrated that no abandonment of the agreement had occurred.

More importantly, perhaps, is the Court’s admonition of the trial court’s effort to address issues unrelated to the plaintiff’s claim that the bank breached its contract by failing to fulfill the requirement that certain documents and parties appear for the closing.

An interesting question raised by this case concerns whether the bank sought defense and indemnity coverage under any professional liability / errors and omissions insurance policies to cover the defense costs and potential indemnity of this claim.

Does the fact that the banking personnel failed to produce documentation and parties at the closing constitute acts that are covered by the bank’s professional liability insurance policies?

Effective appellate representation demands different skills than those required by litigation attorneys.  Appellate attorneys are adept at analyzing the intricacies of each case from an objective and critical perspective.  From reviewing and preparing the lower court record, identifying errors for appeal, and developing a strategy to raise those issues that will be addressed by appellate courts, appellate attorneys are capable of handling the most complex appeals from the application stage to oral advocacy before the highest courts.  Our research abilities and knowledge of current issues in nearly all major subject-matter areas of the law provide our clients with efficient and immediate assistance with complex and high-exposure cases.

We are also experienced at navigating through all appellate courts to shepherd the appeal in the most expeditious fashion possible so that it can be reviewed and quickly ruled upon.

Below are some of the recent significant cases prosecuted by the Appeals and Legal Research Group.

  • Omian v. Chrysler, LLC, Michigan Court of Appeals Docket No. 310743, remanded by Supreme Court as on leave granted, Supreme Court No. 146908, oral argument presented July 16, 2014 by Carson J. Tucker for Chrsyler, LLC
  • Moore v. Nolff’s Construction and Travelers Ins., Michigan Court of Appeals Docket No. 313478 and 313440 (consolidated), application and cross-application granted and oral argument in Court of Appeals presented July 2014 by Carson J. Tucker for Nolff’s Construction and Travelers Insurance
  • Arbuckle v. GM, Michigan Court of Appeals Docket No. 310611, oral argument in Court of Appeals presented May 2014 by Carson J. Tucker for GM
  • Yono v. MDOT, ___ Mich. App. ___ (201_), amicus curiae brief filed for Michigan Municipal League and Michigan Townships Association on June 16, 2014, after remand by Carson J. Tucker
  • Estate of Truett v. Wayne County, Unpublished Opinion of the Michigan Court of Appeals, dated May 6, 2014 (Docket No. 313638), briefed and argued by Carson J. Tucker for Wayne County
  • Omian v. Chrysler Group, LLC, 495 Mich. 859 (2013), application filed by Carson J. Tucker, Supreme Court remand to Court of Appeals on leave granted, oral argument to be held in July 2014
  • Ghanam v. John Does, 303 Mich. App. 522 (2013), application to appeal filed in Supreme Court by Carson J. Tucker
  • State Farm v. MMRMA, ___ Mich App ___ (2013), amicus curiae for Oakland County in support of MMRMA application, by Carson J. Tucker
  • Hannay v MDOT, ___ Mich ___ 201_), application granted, amicus curiae filed for Michigan Townships Association, Macomb County, Oakland County and Wayne County, et al., by Carson J. Tucker
  • Yono v. MDOT, ___ Mich ___ (201_), oral argument on application granted, amicus curiae for Oakland, Macomb and Wayne County filed by Carson J. Tucker in support of the state’s application
  • Huddleston v. Trinity Health, et al., 495 Mich. 976 (2014), oral argument on application granted, amicus curiae with Lawrence Garcia, Esq., for MDTC
  • Ashley, LLC v Pittsfield Twp., 494 Mich 875 (2013), application granted, for Pittsfield Township by Carson J. Tucker (resolved by settlement)
  • Bailey v. Schaaf, ___ Mich ___ (2013), amicus curiae for MDTC by Carson J. Tucker
  • Atkins v. SMART, 492 Mich 707 (2012), oral argument on application, Court of Appeals case reversed by opinion, Carson J. Tucker
  • Hagerty v Manistee, 493 Mich 933 (2013), amicus curiae for Michigan Municipal League, et al., by Carson J. Tucker
  • McMurtrie v Eaton Corp, 490 Mich 976 (2011)
  • Findley v DaimlerChrysler Corp., 490 Mich 928 (2011)
  • Brewer v. AD.Transport Express, Inc, 486 Mich 50 (2010)
  • Stokes v Chrysler, 481 Mich 266 (2008)
  • Brackett v Focus Hope, Inc, 482 Mich 269 (2008)
  • Rakestraw v Gen Dynamics, 469 Mich 220 (2003)

 

 

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