Barclae v. Zarb
300 Mich. App. 455
| Mich. Ct. App. | 2013Background
- Barclae, CYNBA International, Inc., and Robot Defined appeal a summary disposition in favor of Zarb and Comerica.
- Allegations center on fraudulent misrepresentations by Zarb in April 2007 to induce cash advances tied to Robot Printing and Robot Properties against Comerica loans.
- May 4, 2007 debt purchase and forbearance agreements shifted debts to Robot Defined; plaintiffs sought asset-based recovery including the Robocolor Process.
- Trial court held MCL 566.132 (statute of frauds) applies and barred oral promises; merger clause and agency principles supported dismissal of most claims against Zarb and Comerica.
- Plaintiffs argued standing, part performance, and fraud claims survived; court ultimately affirmed dismissal and addressed standing and indemnity issues in Robot Defined’s counterclaims.
- Key legal issue is whether the statute of frauds precludes the claims against Zarb as Comerica’s agent and whether the April 20, 2007 writing satisfies writing requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does MCL 566.132 apply to Zarb as Comerica’s agent? | Zarb isn’t a financial institution or affiliate; plaintiff argues standing and agency permit claims outside statute. | Zarb qualifies to assert statute via basic agency principles; he was an agent of a financial institution and the statute bars oral promises. | Yes; statute applies through agency; Zarb can invoke defense. |
| Does the April 20, 2007 present agreement satisfy the writing requirement of the statute? | The April 20 document, with handwritten terms, satisfies signing and writing requirements when viewed with surrounding circumstances. | The present agreement reflects ongoing negotiations; it lacks mutuality and final terms; not a valid writing. | No; not a sufficient signed writing under MCL 566.132. |
| Does the merger clause bar claims or does fraud vitiate the contract? | Fraud could invalidate the merger clause; parol evidence may show fraud that would affect the contract. | Merger clause generally bars prior negotiatons; only fraud affecting the merger or the entire contract could override it. | Fraud may vitiate the contract in limited circumstances, but claims fail for other reasons. |
| Do Barclae and CYNBA have standing to pursue the fraud claims? | Barclae and CYNBA have direct injuries from Zarb’s deceit and are not merely Robo Defined’s audi alteram partem. | Standing should track the plaintiff in the debt sale agreement; Robo Defined is the party to the contract. | Barclae and CYNBA have standing to pursue the fraud claim. |
| Can Robot Defined recover on its indemnity/receivables claims given the statute of frauds and related agreements? | Claims are based on oral representations and misrepresentations unrelated to the debt sale contract. | Statute bars these claims; forbearance and debt sale documents govern recoveries; liquidated damages and election of remedies apply. | Yes; most claims dismissed; some defenses and counterclaims addressed, but primary claims barred. |
Key Cases Cited
- UAW-GM Human Resources Ctr v. KSL Recreation Corp, 228 Mich App 486 (1998) (parol evidence and merger clause interaction with fraud)
- Crown Technology Park v D&N Bank, FSB, 242 Mich App 538 (2000) (statute of frauds interpretation and agency principles)
- In re Moroun, 295 Mich App 312 (2012) (agency relationship extends to bank officers)
- Titan Ins. Co. v. Hyten, 491 Mich 547 (2012) (fraud and misrepresentation doctrines in insurance context)