Bruce Pesola v. Golden Family Living Trust
327185
| Mich. Ct. App. | Oct 13, 2016Background
- Plaintiffs (Bruce and Christine Pesola) held a right-of-first-option easement to buy real property housing an ice cream shop.
- The Goldens received an offer to buy their business and real estate; they sent plaintiffs correspondence and a purchase agreement stating a $485,000 sale price but did not specify that $274,000 of that price was for inventory, goodwill, and a non-compete (business personalty), leaving $211,000 as the real-property portion.
- Plaintiffs alleged the Goldens misrepresented or failed to disclose the offer terms and would have exercised the option if they had known the real-property offer was only $211,000.
- Plaintiffs filed suit more than six years after the transaction; breach of contract and misrepresentation claims are governed by six-year statutes of limitations.
- Plaintiffs relied on the fraudulent-concealment tolling statute, MCL 600.5855, arguing defendants’ communications concealed the true terms; defendants argued no affirmative concealment occurred and the real-property price was publicly discoverable.
- The trial court granted summary disposition under MCR 2.116(C)(7) as time-barred; the Court of Appeals affirmed, holding plaintiffs failed to show affirmative acts designed to prevent discovery and reasonable diligence would have revealed the $211,000 real-property price from the recorded deed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MCL 600.5855 tolled the limitations period by fraudulent concealment | Goldens’ communications omitted that $274,000 was business personalty, an affirmative concealment that prevented discovery of the real-property offer | No affirmative concealment; communications were not an artifice and public records (recorded deed) revealed the $211,000 real-property price | Tolling under MCL 600.5855 does not apply; suit is time-barred |
| Whether plaintiffs exercised reasonable diligence to discover the claim | Plaintiffs relied on defendants’ communications and did not check public records; argued they were misled | Plaintiffs had duty to check public records; reasonable diligence would have discovered the deed showing $211,000 | Plaintiffs failed to exercise reasonable diligence; public-record rule defeats tolling |
| Whether mere silence or nondisclosure suffices for fraudulent concealment | Plaintiffs contended omission amounted to concealment | Defendants asserted affirmative acts are required and mere silence is insufficient | Court reaffirmed that affirmative acts/misrepresentations are required; silence insufficient |
| Whether the underlying easement required notice about business personalty terms | Plaintiffs interpreted easement as requiring notice of offer terms for real property only | Defendants noted easement ambiguities and argued plaintiffs could verify via inquiry or records | Court found easement ambiguous and record evidence undermined plaintiff’s concealment claim |
Key Cases Cited
- Sills v. Oakland Gen. Hosp., 220 Mich. App. 303 (1996) (fraudulent-concealment tolling requires affirmative acts or misrepresentations; mere silence is insufficient)
- Meyer & Anna Prentis Family Foundation, Inc. v. Barbara Ann Karmanos Cancer Institute, 266 Mich. App. 39 (2005) (plaintiff must exercise reasonable diligence; when facts are discoverable from public records, diligence includes checking them)
- In re Farris Estate, 160 Mich. App. 14 (1987) (petitioner charged with knowledge of public-record information and cannot rely on fraudulent-concealment tolling when facts were on public record)
- RDM Holdings, Ltd. v. Continental Plastics Co., 281 Mich. App. 678 (2008) (standard for reviewing documentary evidence on a MCR 2.116(C)(7) motion)