Court: Home sellers did not breach agreement

By Thomas Franz
BridgeTower Media Newswires
 
DETROIT — A Michigan Court of Appeals panel ruled on whether the sellers of a home breached a purchase agreement by removing expensive fixtures from their home prior to handing the property over to purchasers.

In Rahaim v. Denton and Forman Johnston Realty, the court affirmed a Macomb County Circuit Court ruling that granted a motion for summary disposition in favor of the defendants after determining they removed fixtures prior to executing a purchase agreement.

Judges Kirsten Frank Kelly, Jonathan Tukel, and James Robert Redford affirmed the case.

According to the COA’s unpublished opinion, defendants Leet Denton and Patsy Denton listed their property for sale and employed Forman Johnston as their listing agent.

In October 2016, the defendants began negotiating with plaintiffs James Rahaim and Nicole Wilski for the sale of the property.

The plaintiffs visited the property on Oct. 22, 2016, and Jan. 8 and Jan. 26, 2017.

On March 21, 2017, the parties executed a purchase agreement for $3.5 million. The purchase agreement’s second paragraph noted that also included in the sale were “all attached carpeting; all attached lighting fixtures; all window treatments and electrical fixtures as shown.”

Other portions of the purchase agreement note that the property was being purchased “as is” and it would be in substantially the same condition at the time of closing.

Following an inspection on March 23, 2017, the plaintiffs requested a price reduction of $40,000 for seawall updates, which was agreed to by the defendants.

The COA wrote that on April 28, 2017, the parties executed a land contract which stated the sale includes “all tenements, hereditaments, improvements, and appurtenances, now on or affecting the Premises.”

The plaintiffs took possession of the property on May 1, 2017, but quickly contacted the defendants and asked for certain fixtures to be returned.

The defendants refused and said the fixtures were not part of the sale.

On May 23, 2017, the plaintiffs filed a three-count complaint. The first count was for breach of the purchase agreement by removing expensive fixtures from the property without the plaintiffs’ knowledge or consent.

The second count was for alleged wrongful conversion of the fixtures by the defendants.

The third count was for alleged fraud by the defendants for failing to notify the plaintiffs that the fixtures were going to be removed and by making false representations of material facts which led the plaintiffs to believe the fixtures were part of the agreement and would remain with the property.

The circuit court granted a motion for summary disposition by finding there was no genuine issue of material fact that the fixtures had been removed well before the purchase agreement was executed.

The COA panel disagreed with the plaintiffs’ claim that the trial court erred in granting summary disposition.

On the breach of contract claim, the plaintiffs argued that a factual dispute existed as to when the fixtures were removed from the property.

The court wrote that the purchase agreement was executed on March 21, 2017, so only the fixtures present on the property at that time were included in the sale.

“Here, the evidence is uncontradicted that the fixtures in question were removed no later than February 10, 2017, roughly 40 days before plaintiffs executed the Purchase Agreement,” the court wrote.

The defendants submitted invoices from contractors to show that fixtures had been removed on Aug. 9, 2016, Jan. 27, 2017, and Feb. 10, 2017. The plaintiffs’ affidavits provided that the plaintiffs observed “all or some” of the fixtures when they visited the property on Oct. 6, 2016, Jan. 8, 2017, and Jan. 26, 2017.

“In contesting the Dentons’ motion for summary disposition, plaintiffs presented no specific evidence to suggest that any of the fixtures were on the property at the time the Purchase Agreement was executed,” the court wrote.

On the fraud claim, the COA also wrote that the plaintiffs provided no evidence to show that the Dentons or Forman Johnston made any affirmative misrepresentations.

The plaintiffs alleged that Forman Johnston committed fraud by including pictures of the fixtures in its advertising of the property for sale, but the court wrote that claim failed in three ways.

“First, plaintiffs agreed to release the brokers involved in the transaction from liability,” the court wrote. “Second, in the Purchase Agreement, plaintiffs assented to there having been no
representations made outside the Purchase Agreement.”

The court also added that the listing in which the pictures were contained included a statement that a “few exclusions” applied to the listing, and that left the extent of the exclusions open-ended.

Defense counsel Morgan D. Schut, an attorney with Kemp Klein Law Firm in Troy, said her side’s main focus was on the timeline of events.

“That includes when the house went up for sale and when the fixtures and items the plaintiffs thought were going to be part of the deal started to be taken out of the home, which was far in advance of even their first visit to the home,” Schut said. “We explained to the court that they signed the purchase agreement and that included all of the items in the home at that time.”

Schut said the sellers had no intention of selling the fixtures and the MLS listing included that exclusions apply. She said the invoices related to the removal of the fixtures solidified their position.

“It showed that the timeline wasn’t just one party’s word against another, it was a third party that came in and did the work, so that always helps as far as weight,” Schut said.

On the fraud claim, Forman Johnston counsel Katherine W. Shensky of Wood, Kull, Herschfus, Obee & Kull PC in Farmington Hills said her client didn’t have any duty to the buyers unless there was a direct question asked to them.

“We never talked to the buyers, there was no communication,” Shensky said. “We argued that the listing said some property would be excluded. That requires the due diligence on behalf of the buyers, and they didn’t execute any due diligence here.”

Shensky and Schut both mentioned that the homebuyers had a final walk-through inspection, when the seawall was found, but they didn’t bring up the fixtures in question.

“That was another part of our argument, if the buyers saw that the fixtures had been taken, they had the opportunity to see they’ve been taken prior to signing. Unfortunately, they just didn’t,” Schut said.

Plaintiff’s counsel John M. Keltzer did not respond to requests for comment on this case.

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