Mjcc 8 Mile LLC v. Basrah Custom Design Inc
346969
Mich. Ct. App.Apr 28, 2022Background
- MJCC 8 Mile contracted with Basrah to lease property for a medical-marijuana dispensary; the parties executed a February lease (revised twice) and a November 2016 lease that contained an Option to Purchase.
- The leases are internally inconsistent: the written address in the November Lease named 7461 W. 8 Mile as the leased premises while an attached legal description listed Lot 22 (7451 W. 8 Mile); prior leases and exhibits showed overlapping/adjacent descriptions.
- Plaintiff paid to terminate a prior tenant and to compensate Basrah for closing a business; the November Lease reduced rent but increased the Option to Purchase price to $1,200,000.
- Defendants (Basrah, Nocha, Rafaa, Holden, DMCC) refused possession; plaintiff sued for breach and sought specific performance or damages. The trial court found the November Lease valid, found breach, and awarded plaintiff the option to purchase (plaintiff elected specific performance).
- After judgment, defendants alleged judicial misconduct (an intermediary solicited payments for a favorable outcome and the judge made a suspicious visit to a relative’s store). Defendants moved for relief from judgment under MCR 2.612(C)(1)(f); the trial court denied the motion without an evidentiary hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope/interpretation of lease & Option to Purchase (which parcels are covered) | The parties intended plaintiff to lease 7461 and the Option covers both 7451 and 7461; extrinsic evidence resolves latent ambiguity | The lease exhibits and legal descriptions are inconsistent; Option should be limited to the Property as written (7461) and court may not reform without pleading reformation | Court found a latent ambiguity and, using parol evidence and equitable reformation principles, held the parties intended lease of 7461 and that the Option applied to both parcels; affirmed enforcement of Option for both addresses |
| Validity of November Lease (consideration/modification) | November Lease valid as a written modification under MCL 566.1 and supported by consideration (payments toward debts, higher option price) | Lease unenforceable for lack of consideration or because earlier lease(s) did not cover same property | Court held November Lease enforceable: MCL 566.1 permits written modification and sufficient consideration existed; no inquiry into adequacy of consideration |
| Whether Nocha retained membership interest in plaintiff (effect of November Lease) | November Lease supersedes prior agreements and omits recognition of Nocha’s membership, so Nocha was divested | Trial court’s statements are unclear/inconsistent as to whether Nocha retained an interest | Court inferred Nocha was divested of membership (November Lease superseded prior agreements; operating agreement unsigned), and its statements were not contradictory |
| Motion for relief from judgment based on alleged judicial misconduct; entitlement to evidentiary hearing | Judicial conduct and intermediary evidence created a strong appearance of impropriety and warranted relief and an evidentiary hearing under MCR 2.612(C)(1)(f) | Allegations were implausible or showed Nocha attempted to bribe the judge; plaintiff not implicated; Rafaa had unclean hands | Trial court did not abuse discretion denying relief or an evidentiary hearing: defendants failed to meet the extraordinary-circumstances standard; Rafaa’s unclean-hands involvement foreclosed equitable relief |
Key Cases Cited
- In re Smith Trust, 480 Mich 19 (2008) (contract interpretation: determine parties’ intent from contract language and, if ambiguous, allow extrinsic evidence)
- Shay v Aldrich, 487 Mich 648 (2010) (latent ambiguity permits parol evidence to ascertain parties’ intent)
- Tkachik v Mandeville, 487 Mich 38 (2010) (equity’s broad powers, including reformation to effectuate parties’ actual agreement)
- Innovation Ventures v Liquid Mfg, 499 Mich 491 (2016) (contract formation and consideration principles; courts generally will not inquire into adequacy of consideration)
- Heugel v Heugel, 237 Mich App 471 (1999) (requirements for relief under MCR 2.612(C)(1)(f): not covered by a–e, opposing party’s rights, and extraordinary circumstances)
- Burnett v Ahola, 501 Mich 1055 (2018) (an evidentiary hearing may be required to determine whether fraud on the court warrants relief)