L J & S Development LLC v. Boar's Head Provisions Company Inc
332379
| Mich. Ct. App. | Sep 12, 2017Background
- Boar’s Head leased property from LJ&S that included a purchase option to buy the entire “Project,” defined as the Property at 322 Roost Ave plus all fixtures, improvements and completed Landlord’s Work (which included a ~2,725 sq ft tunnel located on the Premises).
- The lease required the option price to be the fair market value of the Project on the date of the Option Notice, as determined by an independent appraiser selected by Boar’s Head, and a copy of that appraisal had to accompany the Option Notice.
- During an Option Period Boar’s Head served an Option Notice and an appraisal that omitted any valuation of the tunnel.
- LJ&S sued, seeking a declaration that Boar’s Head failed to validly exercise the option; Boar’s Head counterclaimed that it had complied and sought declaratory relief. Both parties filed MCR 2.116(C)(10) motions.
- The trial court granted summary disposition for LJ&S, concluding the appraisal did not value the entire Project because it excluded the tunnel; the court later awarded LJ&S attorneys’ fees and broader costs. Boar’s Head appealed.
Issues
| Issue | Plaintiff's Argument (LJ&S) | Defendant's Argument (Boar’s Head) | Held |
|---|---|---|---|
| Whether Boar’s Head validly exercised the purchase option | Option notice lacked a valid appraisal and therefore exercise was invalid | Appraisal satisfied lease; tunnel was not part of Project or appraisal need not include tunnel | Held for LJ&S: appraisal excluded the tunnel, which is part of the Project, so strict compliance required and Boar’s Head failed to exercise the option |
| Whether equitable relief (relaxing strict compliance) should apply | Strict compliance controls; no relief | Equity should permit relief for special circumstances or estoppel based on LJ&S counsel letters | Rejected: Michigan precedent requires strict compliance; Boar’s Head cited no binding authority to overcome that rule; estoppel not shown |
| Whether LJ&S was entitled to attorney fees and whether fees were reasonable | Lease permits recovery of reasonable attorneys’ fees; requested fees reasonable | Fees/hours/rates excessive | Fees award affirmed: court reasonably assessed rates and hours given evidence and market proof |
| Whether LJ&S could recover litigation costs beyond court costs under lease | Recoverable costs limited to "court costs" per §11.9(a) | Indemnity clause §10.3(a)(iii) allows broader recovery of costs | Partial reversal: indemnity clause inapplicable (no third-party suit); award limited to court costs only |
Key Cases Cited
- LeBaron Homes, Inc. v. Pontiac Housing Fund, Inc., 319 Mich 310 (strict compliance required to exercise option)
- Bailey v. Grover, 237 Mich 548 (strict compliance; failure forfeits option)
- Maiden v. Rozwood, 461 Mich 109 (standard for MCR 2.116(C)(10) summary disposition)
- Van v. Zahorik, 460 Mich 320 (elements of equitable estoppel)
- Pirgu v. United Servs. Auto Ass’n, 499 Mich 269 (standard of review for attorney fees awards)
- Kyocera Corp. v. Hemlock Semiconductor, LLC, 313 Mich App 437 (contract interpretation principles)