966 N.W.2d 755
Mich. Ct. App.2021Background:
- Elia Companies (operating Perfect Cup/Think Fresh) leased commercial space in the University of Michigan’s Michigan Union (2013) and operated a Starbucks franchise.
- The University terminated the lease by letter dated April 17, 2018 (effective April 20, 2018), citing numerous alleged violations and ordered Elia to vacate; the Union then closed for renovation.
- Elia sued in Washtenaw Circuit Court in August 2018; the University removed the case to the Court of Claims and raised verification/notice defects and governmental immunity defenses.
- The Court of Claims granted summary disposition under MCR 2.116(C)(7), dismissing most counts as barred by governmental immunity or contract preclusion and dismissing the breach-of-contract count for failure to file a signed, verified claim/notice under MCL 600.6431(1).
- On appeal the court affirmed dismissal of tort-based and contract-duplicative claims but reversed the dismissal of the breach-of-contract claim, holding Elia may cure verification defects during proceedings and the Court of Claims must give Elia an opportunity to do so; the case was remanded for further proceedings.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether University’s actions give rise to tort liability or are barred by governmental immunity (proprietary-function exception) | University was leasing commercial space “for profit” so exception applies | Union operations are governmental (student enrichment); not primarily for pecuniary profit | Proprietary-function exception does not apply; tort claims barred by governmental immunity |
| Whether MCL 600.2918 (anti-lockout) sounds in tort or contract | Claim arises from forcible/ unlawful ejection and can be pursued despite contract label | Claim is tort-like and thus barred by governmental immunity | Anti-lockout claim is a tort claim; barred by governmental immunity |
| Whether unjust enrichment; quiet-possession; constructive eviction; inverse condemnation survive | Some pled in the alternative; unjust enrichment allowed if no express contract | Express lease governs; these claims are duplicative or inappropriate | Unjust enrichment and quiet-possession/eviction claims dismissed as duplicative or contract-controlled; inverse condemnation not established here |
| Whether failure to file a signed, verified claim/notice in Court of Claims mandates dismissal without chance to cure | Complaint was filed in circuit court before transfer; affidavit later filed should satisfy verification or plaintiff should be allowed to cure | Verification and signature requirements of MCL 600.6431/600.6434 were not met and are a bar | Plaintiff must comply with verification rules but may cure defects during proceedings; dismissal of breach-of-contract count for inability to cure was reversed and remanded |
Key Cases Cited
- Maiden v. Rozwood, 461 Mich. 109 (standards for summary disposition)
- Fairley v. Dep’t of Corrections, 497 Mich. 290 (verification/notice requirements under Court of Claims Act)
- Coleman v. Kootsillas, 456 Mich. 615 (proprietary-function exception two-part test)
- Hyde v. Univ. of Mich. Bd. of Regents, 426 Mich. 223 (proprietary-function exception interpretation)
- In re Bradley Estate, 494 Mich. 367 (definition of tort liability under GTLA)
- McCahan v. Brennan, 492 Mich. 730 (Court of Claims notice/verification strictness)
- Belle Isle Grill Corp. v. City of Detroit, 256 Mich. App. 463 (unjust enrichment precluded by express contract)