Van Buren Charter Township v. Visteon Corporation
319 Mich App 538
Mich. Ct. App.2017Background
- Van Buren Charter Township (plaintiff) and Visteon Corporation (defendant) entered a 2010 Settlement Agreement concerning defendant’s obligations to cover any bond-payment shortfall for bonds issued by the township to finance Visteon Village.
- In 2013 plaintiff’s consultant (PFM) produced projections showing an inevitable cash shortfall between 2017–2019 ranging roughly $23.7M–$36.4M unless new revenues were introduced.
- Plaintiff sent the PFM report to Visteon and demanded immediate negotiations to determine Visteon’s payment obligation under Paragraph 3 of the Agreement; Visteon asserted it had no duty to negotiate until an actual shortfall occurred.
- Plaintiff sued for declaratory judgment and breach of contract (failure to negotiate in good faith; anticipatory repudiation). The trial court granted summary disposition for defendant under MCR 2.116(C)(4) and (C)(8)/(C)(10).
- The Court of Appeals affirmed, holding Paragraph 3 unambiguous (performance triggered by an actual shortfall), damages speculative at this time, and breach claims unripe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Paragraph 3 is ambiguous and requires pre-shortfall negotiations | Paragraph 3 is ambiguous and reasonably read to require timely/pre-shortfall negotiations | Paragraph 3 is unambiguous: obligations (negotiate and make a PILOT) are triggered only after an actual shortfall | Court: Paragraph 3 is unambiguous; shortfall is a condition precedent, no duty to negotiate before shortfall |
| Whether declaratory relief is warranted now | An actual controversy exists—resolution needed to preserve rights and avoid catastrophic harm | No justiciable controversy because contractual duty arises only after shortfall; declaratory relief discretionary | Court: No actual controversy; refusal to grant declaratory relief was permissible |
| Whether plaintiff’s projected damages are sufficiently certain to support breach claim now | PFM report shows shortfall is inevitable, so damages are certain | Projections are speculative/contingent; amount and timing uncertain | Court: Damages are speculative/hypothetical now; plaintiff cannot prove damages with required certainty |
| Whether Visteon anticipatorily repudiated or already breached by refusing to negotiate | Visteon refused to negotiate and said it would not pay, constituting anticipatory repudiation and breach | Visteon merely asserted it need not negotiate until performance is due and did not unequivocally refuse future performance | Court: No unequivocal repudiation or present breach; claims are not ripe |
Key Cases Cited
- Lansing Schools Educ Ass’n v. Lansing Bd. of Educ., 293 Mich. App. 506 (procedural standard for declaratory-judgment review)
- McDonald v. Farm Bureau Ins. Co., 480 Mich. 191 (contract interpretation is question of law)
- Maiden v. Rozwood, 461 Mich. 109 (summary-disposition evidentiary standard)
- PT Today, Inc. v. Comm’r of Fin. & Ins. Servs., 270 Mich. App. 110 (discretionary nature of declaratory relief)
- Shavers v. Kelley, 402 Mich. 554 (when declaratory relief is necessary to guide future conduct)
- Meagher v. Wayne State Univ., 222 Mich. App. 700 (ambiguity standard for contract interpretation)
- Rory v. Continental Ins. Co., 473 Mich. 457 (courts may not rewrite unambiguous contracts)
- Alan Custom Homes, Inc. v. Krol, 256 Mich. App. 505 (elements and damages standard for breach of contract)
- Doe v. Henry Ford Health Sys., 308 Mich. App. 592 (damages cannot be speculative or contingent)
- Stoddard v. Manufacturers Nat’l Bank, 234 Mich. App. 140 (anticipatory repudiation doctrine)