Md Holdings LLC v. R L Deppmann Company, 357462

Background

Plaintiffs (MD Holdings, LLC, et al.) purchased commercial property from R.L. Deppmann in 2018 under a written purchase agreement that included a 60‑day inspection period, an “as‑is” clause, and ¶28 warranting the seller had no knowledge of facts that "might result in an action, suit or other proceedings."
After closing, plaintiffs could not obtain an occupancy permit because the property as‑built (≈45 parking spaces, ≈6,000 sf office) diverged from the 1980 approved site plan (fewer parking spaces, ≈4,000 sf office); plaintiffs alleged defendant knew of the nonconformities and failed to disclose them.
Defendant moved for summary disposition (MCR 2.116(C)(8)/(C)(10)); the trial court granted the motion, concluding (a) no evidence defendant knew of facts that would lead to proceedings, and (b) plaintiffs’ tort claims were indistinguishable from contract claims (no separate duty), so tort recovery was barred.
Key factual dispute focused on whether R.L. Deppmann’s finance VP, Robert Schmitt, had knowledge pre‑sale: he had received a 2011 email from the city with the 1980 site plan and an aerial photo but testified he did not notice discrepancies.
The 2011 repaving/striping project had an issued permit with a required final inspection; no city objections were in the record from that inspection. Plaintiffs did not present admissible evidence showing defendant’s officers knew of noncompliance.
The trial court dismissed breach‑of‑contract and all tort counts; defendant cross‑appealed seeking sanctions for a frivolous suit. The Court of Appeals affirmed the summary disposition and denied sanctions on appeal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Breach of contract (¶28: seller knowledge)	Schmitt knew by 2011 email that site plan and aerial conflicted, so defendant breached ¶28	Schmitt didn’t notice discrepancies in the poor‑quality 2011 documents; no one at seller had knowledge that would "result in" proceedings	Affirmed: no genuine issue that seller knew of facts that would lead to proceedings; possession of unclear documents alone insufficient to show knowledge
Prematurity of summary disposition	Dismissal was premature; further discovery could show other officers knew	Plaintiffs never argued prematurity below and presented Schmitt’s deposition as dispositive	Affirmed: issue unpreserved and plaintiffs failed to show a reasonable chance further discovery would alter result
Misrepresentation claims (fraudulent, negligent, innocent)	Pre‑contract misrepresentations induced plaintiffs to buy (sq ft, parking, ordinance compliance, occupancy)	Misrepresentations are not extraneous to the contract and thus indistinguishable from contract claims	Affirmed dismissal under MCR 2.116(C)(8): alleged misrepresentations were not independent of contractual warranties or were discoverable by plaintiffs’ due diligence
Silent fraud / duty to disclose	Seller had a duty to disclose that property was not ordinance‑compliant and occupancy would be required	No independent legal duty outside the contract; caveat emptor applies to commercial land sales	Affirmed: no duty independent of contract means silent‑fraud claim fails
Civil conspiracy	Conspiracy claim rests on underlying torts	No viable underlying torts exist	Affirmed dismissal: conspiracy requires an actionable underlying tort
Cross‑appeal: sanctions for frivolous suit	(plaintiff) – N/A	Defendant sought fees and sanctions under MCR 1.109(E), MCR 2.625, and MCL 600.2591	Affirmed: defendant never filed a proper sanctions motion or cited authority; court did not err in not awarding fees

Key Cases Cited

Odom v. Wayne County, 482 Mich 459 (standard of review for summary‑disposition rulings)
Maiden v. Rozwood, 461 Mich 109 (MCR 2.116(C)(10) tests factual sufficiency; view record in favor of nonmovant)
Corley v. Detroit Bd. of Ed., 470 Mich 274 (scope of materials considered on summary disposition)
Michalski v. Bar‑Levav, 463 Mich 723 (standard for granting C(10) motion)
Silberstein v. Pro‑Golf of America, Inc., 278 Mich App 446 (when C(10) review applies where parties relied on matters outside pleadings)
Hart v. Ludwig, 347 Mich 559 (tort requires breach of duty distinct from contract)
Rinaldo’s Constr. Corp. v. Michigan Bell Tel. Co., 454 Mich 65 (plaintiff must allege a duty separate from contractual obligations to maintain tort claim)
Neibarger v. Universal Coops., Inc., 439 Mich 512 (economic‑loss doctrine limits tort recovery in sale‑of‑goods context)
Beaudrie v. Henderson, 465 Mich 124 (C(8) tests legal sufficiency of pleadings)
Forge v. Smith, 458 Mich 198 (incorporation by reference of contractual documents)
Alfieri v. Bertorelli, 295 Mich App 189 (plaintiff cannot recover for fraud when they had means to discover the truth)
Haliw v. Sterling Heights, 471 Mich 700 (American rule: attorney fees not awarded except by statute or rule)
Walters v. Nadell, 481 Mich 377 (parties must present legal arguments and authorities to trial courts)
Foreman v. Foreman, 266 Mich App 132 (reasonable reliance requirement for misrepresentation claims)