Shay v. Aldrich

487 Mich 648 SHAY v ALDRICH August Dеcided 2010. Docket No. 138908. Wayne against Shay brought an action in the Circuit Court

Thomas J. (John Aldrich, city police from the of Melvindale three officers Miller) Plemons, Joseph police and and two officers from the William Locklear), city (WayneAllbright Albright or and Kevin of Allen Park battery respect alleging to the Melvindale defen- assault and with gross negligence through Park the inaction of the Allen dants and evaluation, during Following plaintiff case defendants the assault. defendants, court, Allen Park and the Prentis executed releases ofthe J., against Edwards, dismissing plaintiffs an order claims entered prejudice. plaintiffs A trial date was set for those defendants with contained claims the Melvindale defendants. The releases language referring persons,” to the release of “all other and the summary asserting disposition, defendants moved for Melvindale language effectivelyreleased them as well. The court denied that this motion, ruling been their that dismissal on that basis would have proper only if the releases had been executed before filed the Melvindale defendants could have relied on the lawsuit and that the releases if had asserted the releases as a defense in their responsive pleading. The Melvindale defendants moved to first defenses, relying Opper, affirmative on Romska v amend their (1999), language parties” App that the “all other which held unambiguous consequently in a and that there was no release was beyond language determine need to look of the release to similarly argued scope. release’s The Melvindale defendants that the persons” unambiguously “all other released them and that scope parol be used determine the evidence should not motion, releases. The court denied the and Melvindale defendants Romska, sought appeal. Applying Appeals, the Court of leave to JJ., EJ., unpub- Meter and reversed in an Fort Jansen, Hood, (Docket 282550), curiam, 5,2009 opinion per issued March No. lished entry judgment for in the Melvindale and remanded case appeal. Supreme applied favor. Plaintiff for leave to defendants’ grant argument plain- and heard oral on whether to Court ordered peremptory application 485 Mich 911 tiffs or take other action. v Aldrich opinion by joined by In an Justice Chief Justice Kelly Weaver, Cavanagh Supreme and Justices and Hathaway, Court held: determining person The standard third-party whether a is a beneficiary objective one, third-party- of a release an beneficiary language status must be determined from the of the only. may contract Courts consider extrinsic evidence of the scope party intended of a release when an unnamed seeks to third-party-beneficiary rights enforce language based on broad ambiguity respect release and an exists with to the intended scope of the release. governs rights third-party 1. MCL 600.1405 beneficia- provides person ries and third-party beneficiary that a is a of a only promisor obligation contract when the directly undertakes an person. third-party beneficiary may to or for the A be a member of class, sufficiently objective but the class must be described. An standard must be used to determine from the releases whether directly executed them for the benefit of the Melvindale They qualified third-party defendants. beneficiaries under MCL unambiguously 600.1405 because the releases released all other persons. third-party beneficiary 2. The status of person confers on a right contract, to third-party beneficiary sue to enforce the but the rights original promisee has the same that the would have rights subject any conditions, had. limitations, Those are and infirmities of the promisee’s rights contract to which the would be subject. principles interpretation 3. Traditional apply of contract third-party beneficiary’s rights determination of a under a release. subject parol rule, Releases are may evidence but a court use extrinsic evidence to determine the actual intent of the ambiguity when an exists. ambiguity 4. A latent language ap- exists when the contract pears intelligible suggests single to be clear and meaning and but other interpretation facts create the among need for or a choice possible meanings. verify two or more To the existence of a latent ambiguity, presented a court must examine the extrinsic evidence supports argument and determine if it an that under the circum- formation, language stances of the contract’s at issue is susceptible interpretation. to more than ambiguity one If a latent exists, again the court must examine the extrinsic evidence meaning language. ascertain the of the 5. The Melvindale group defendants were included persons” “all other covered the releases. The extrinsic evidence Mich 648 however, argument case, supported his

plaintiff presented in this language, ambiguity and the Melvin- in the latent existed that a dispute It is clear that that evidence. defendants did not dale Melvindale defen- settling parties intend to release the did not liability. dants from prohibits courts to the extent that it is overruled 6. Romska scope considering intended of a extrinsic evidence of the from third-party- party to enforce an unnamed seeks release when beneficiary rights included in the release based on broad scope ambiguity respect with to the intended and an exists release. Reversed and remanded. Corrigan joined by Justices Justice Markman, Young, judgment Appeals dissenting, of the Court of would affirm the grounded Romska is on well- would not overrule Romska. consistently, applied, principles been contract and has established releasing unambiguous language “all

providing clear notice persons,” persons” releases “all other a class that other in fact undisputedly defendants. The Court of includes the Melvindale correctly no Appeals determined that the releases contained law, and, accomplished any matter of what kind as a majority holding undermines the fundamental stated. The law, contract, uncertainty creates contract freedom unnecessary generate litigation. and will — — — Third-Party Scope Beneficiaries —Evidence Parol Evidence Release Releases. determining person third-party for whether a standard objective one, third-party- beneficiary of a release is an beneficiary language from the of the status must be determined only, may but courts use extrinsic evidence to determine release party scope an unnamed seeks to enforce of a release when rights third-party-beneficiary based on broad in the respect scope the intended release and an exists with (MCL 600.1405). of the release A. Robin- David A. Robinson & Associates David (by Clemons) and Bendure & Tho- E. Theophilus son Bendure) mas Mark R. Shay. for Thomas J. (by and Peter (by Ernest R. Bazzana W. Cooney Plunkett Peacock) Plemons, Aldrich, William and Jo- for John Miller. seph Shay v Aldrich Opinion op the Court

Amicus Curiae:

Barbara H. Goldman the Michigan Association for Justice.

WEAVER, case, we decide whether Michigan Appeals case, Court of Romska v Opper, 512; Mich App (1999), 594 NW2d 853 correctly was decided. After examination of the Romska decision regarding scope of a liability, release from we overrule Romska to the extent its holding pre- cludes the use of parol evidence when an unnamed party asserts third-party-beneficiary rights based on broad language included in a release from liability and an ambiguity exists with respect to the scope intended release. Accordingly, pursuant to MCR 7.302(H)(1), in lieu of granting leave to appeal, we reverse judgment of the Court of Appeals, which heavily Romska, relied on and remand this case to the trial court for further proceedings.

I. FACTS AND PROCEDURAL BACKROUND Plaintiff, Thomas Shay,1 alleged that he was as- saulted by Melvindale and Allen Park police officers. On the day alleged assault, Officers John Aldrich and William Plemons of the Melvindale Police Department visited at his home in response to a car alarm. After speaking with plaintiff, Officers Aldrich and Plemons left the home. They returned day, later that accompanied by Officer Joseph Miller of the Melvindale Police Department. In addition to the police Melvindale approximately Thomas died argument four months after oral on application appeal Court, his Shay, for leave to in this and Nicole personal representative estate, plaintiff. of his was substituted as Refer “plaintiff” opinion ences to Shay. in this are to Thomas 487 Mich 648

Opinion op the Court Depart- Allen Park Police officers, officers from the two (or Lock- Albright) and Kevin ment, Wayne Allbright Aldrich lear, alleged Plaintiff that Officer present. were Plaintiff further ground. him and he fell to the struck him after present officers assaulted alleged other he fell. Officers suit, naming five defendants:

Plaintiff filed (“the Plemons, Melvindale Offic- Aldrich, and Miller (“the Allbright Officers and Locklear ers”), as well as Officers”). to the Melvindalе respect Allen Park With an as- Officers, alleged committed Officers, plain- the Allen Park battery. sault and As for during alleged their inaction assault alleged tiff gross negligence. amounted to Officers, and their and Allen Park Melvindale covered different respective municipalities, were polices. insurance and different insurance companies Officers, the Melvindale and Allen Park Additionally, municipalities, represented and their were respective Plaintiff, the Melvindale by separate defense counsel. Officers, agreed appear and the Allen Park Officers hearing, After the hearing. for a case-evaluation awards, defendant’s following respective based on each $500,000 Melvindale Of- liability, against were issued: Aldrich, $500,000 Melvindale Officer against ficer Miller, Plemons, $450,000 Melvindale Officer against $12,500 Allbright, Officer against Allen Park $12,500 Allen Park Officer Locklear. against against awards accepted

Plaintiff case-evaluation Officers, Allen Park and both Allen Park Officers additionally accepted to the awards. Plaintiff agreed Melvindale Officer against case-evaluation award Miller, awards rejected but the case-evaluation All Aldrich and Plemons. three of Melvindale Officers rejected the case-evaluation the Melvindale Officers v Aldrich Opinion of the Court Accordingly, awards. the Allen Park Officers were dis- case, missed from the while a trial date was set for the remaining defendants, the three Melvindale Officers.

Plaintiff releases, executed two naming one Allen Park Allbright Officer and naming one Allen Park Officer Locklear. The two releases identical in all were respects for the except named Allen Park Officer indi- cated the document. naming The release Officer Locklear read in part as follows:

For the sole consideration of TWELVE THOUSAND ($12,500.00) FIVE HUNDRED AND DOLLARSto NO/100 paid Michigan me in hand Municipal Liability and Property ourselves, executors, Pool do for administra- tors, assigns, discharge, successors and ALLEN PARK POLICE OFFICER KEVIN LOCKLEAR and Michi- gan Municipal Liability Pool, insurer, Property and together persons, with all other corporations, firms and any claims, from and all demands and actions which I have may arising now or any damages, have out of and all expenses, any damage resulting loss or from an inci- occurring September 8, dent on 2004.

Each release also stated that “the execution of this agreement shall operate as a satisfaction of my claims against such other to the extent that such other parties are or may recover, be entitled to by way of contribution, hen or indemnity, otherwise, from the par- ties herein released.” Additionally, each release stated that plaintiff further agreed to “indemnify hold harmless the above-named released and discharged parties ....” signed releases, Plaintiff and the trial court entered a stipulated “Order for Dismissal Prejudice with as to Defendants, Allen Park Police Albright Officer and Allen Park Locklear, Police Officer Only.”

Approximately later, two months the Melvindale summary Officers moved for disposition under MCR 2.116(C)(7), on relying the Allen Park Officers’ re- 487 MICH 648 op Opinion the Court Officers asserted

leases. The Melvindale re- other contained language persons” “all trial them as well. The released effectively leases motion for Officers’ denied the Melvindale court agreeing with summary disposition, (C)(7) if only proper on would dismissal based had executed before the commencement releases been Furthermore, ruled the trial court suit. plaintiff’s have relied on Officers could that the Melvindale as a if had raised the releases responsive pleading. defense in their first their Officers moved to amend affir- The Melvindale language in mative defenses order to include Officers relied releases as a defense. Melvindale Romska, Appeals Romska. In the Court of heavily on in a language parties” that the “all other majority held and, therefore, there was “no unambiguous release was beyond the . . . of the release” to language need to look argued The Melvindale Officers scope.2 determine its language persons” that the “all other contained within unambiguous, just clear and as the releases was Thus, in the in language release Romska was. asserted that too were released Melvindale Officers that language persons” parol “all other used to determine the scope evidence should not be the Allen Park Officers’ releases. Officers’ mo-

The trial court denied Melvindale rejected to amend their affirmative defenses and tion argument their that of the releases was trial to release them as well. The court enough broad that ambiguous, noting instead found the releases to be Park and their insur- the names of the Allen Officers letters and bold which capital type, ance carrier were limiting language. nature of the This bold suggested 2 Romska, App at 515-516. v Aldrich Opinion of the Court

type was used both the first and last paragraphs releases, which the trial court reasoned was further intentionally indication the releases were limited persons named bold. The trial court addition- ally noted that the Melvindale Officers not men- were anywhere tioned in the releases.

After concluding ambiguous the releases were and, therefore, parol admissible, evidence was the trial court noted that the dismissal order entered as a result of the releases was entitled “Order for Dismissal with Prejudice Defendants, as to Allen Park Police Officer Albright and Allen Park Police Locklear, Officer Only.” The order also indicated that “entry of this Order does not resolve the last pending claim between the parties and does not close Additionally, the case.” the trial court acknowledged an affidavit from the attorney for the Allen Park explaining Officers that he had intended to negotiate the releases with for the Allen Park Officers only.

The trial court further indicated that the amount of consideration for the releases indicated that they were dispose meant to claims the Melvindale Officers. The against case-evaluation awards Melvindale Officers $1,450,000, totaled while the re- leases $25,000 were executed exchange for the com- bined case-evaluation amount against the Allen Park Officers. The trial court reasoned that unlikely was that plaintiff forgo would his claims against the Melvin- $25,000. dale Officers just for Plaintiff filed an emergency motion to reform the However, releases. any before decision on that mo- tion, the Melvindale Officers filed an application for leave to in the appeal Appeals. Court of The Court of Appeals found Romska instructive and concluded 487Mich 648

656 Opinion op the Court unambigu- the Allen Park Officers’ releаses were applied The Court of and must be as written.3 ous plaintiffs Appeals claims therefore concluded Melvindale Officers were barred.4 Appeals trial court’s order reversed the Court summary denying Officers’ motion for the Melvindale disposition to the trial court and remanded case entry judgment in favor of the Melvindale for Officers.5 application appeal for leave to

Plaintiff filed an argument this Court. Weordered that oral be heard on application, directing to address (1999), App Mich “whether Romska v 234 512 Opper, correctly decided.”6 was

II. STANDARD OF REVIEW de decisions on motions This Court reviews novo summary disposition.7 determining When summary brought disposition a motion for whether 2.116(C)(7) pursuant properly decided, to MCR was documentary accept we consider all evidence and factually complaint accurate unless or affidavits presented specifically other documents contradict it.8 questions regarding This issue also involves of law contract, the construction of a which we review de novo as well.9 3 Shay Aldrich, unpublished v opinion per curiam of the Court of (Docket 5, 282550),

Appeals, pp March 2009 No. 3-4. issued 4 Id. at 4. 5 Id. at 5.

6 (2009). Aldrich, v (2000). Bay City, 111, 117; Co v Herald 463 Mich 614 NW2d 873 (2008). Corp, 169, 175-176; Raksha Kuznar v 481 Mich 750 NW2d 121 Trust, 23-24; Egbert In re R Smith 745 NW2d 754 v Aldrich Opinion op the Court

III. ANALYSIS A. THE ROMSKA DECISION Romska, plaintiff driving was her car when by she was struck by a car driven Veliko Velikov.10 Velikov hit the plaintiffs car after swerving to avoid a vehicle driven plaintiff filed personal injury defendant, claims David Opper. both Velik ov’s and Opper’s insurance carriers and was able to reach a carrier, settlement with Velikov’s Farm Bureau Insurance Company, She executed a stan $45,000.12 dard form, release releasing Bureau, Farm as well as “all other parties, firms, or corporations who are or might be liable.”13

The plaintiff was unable to reach a settlement with carrier, Opper’s American States Insurance Company.14 result, As a filed suit against Opper him- Opper then moved for summary disposition, rely- self.15 ing on the language “all parties” other in the Farm Bureau release.16

In split decision, the Court Appeals held that the language of the Farm Bureau release was unambigu- ous.17 Because Opper could be classified within the phrase “all parties, other firms or corporations who are or might liable,” the majority reasoned that there

10 Romska, App 234 Mich at 513. 11 Id.

12 Id. at 513-514.

13 Id. at 514.

14 Id.

15 Id.

16 Id. Id. at 515. The Appeals majority opinion Court of was authored Judge joined by then Judge Judge Markman authored Saad. Hoekstra partial partial concurrence and dissent.

Opinion of the Court explicit, beyond plain, need to look was “no unambiguous language in order to con- release from released that he has been clude liability.”18 provided plaintiff majority the noted that The adequate and, release under the consideration received majority Additionally, the was thus, the release valid.19 merger weight gave clause within the existence of reasoning dictated that the clause release, that the concerning “disputes to be resolved the release are language exclusivelyby the release of the resort to majority order Therefore, the concluded itself.”20 merger give clause, it must not consider effect to might otherwise ‍‌​​​‌​​‌​‌‌​‌​​​‌‌‌​‌‌​‌‌‌‌​​​​​​​​‌​​‌‌​‌‌‌​‌‌​‍have been evidence extrinsic merger clause not been had the considered included.21 settling majority that the went on to reason The language likely in the release for broad included avoiding legal purpose that could future burdens brought plaintiff potentially arise out lawsuits against cautioned that The third parties.22 truly through finality might a release achieved never be language, coupled unambiguous with a release if even effectivelypreclude merger future clause, such cannot lawsuits.23 partial opined that when a contrast, dissent language apply

“stranger” broad to a release seeks against release to bar claims contained parol stranger, appropriate a court to consider it scope the true intent in order to determine evidence of 18Id. at Id. 516. at 516-517. Id. 21Id.

22Id. at 517-518.

23Id. v Aldrich Opinion the Court that Michi- dissent noted partial The of the release.24 in MCL 600.2925d abolished gan’s Legislature joint one the release of principle common-law The dissent partial release of all.25 is the tortfeasor fundamentally unfair to bar be that it would opined the broad on the basis of against Opper claim plaintiffs effectively deprive because this would release a tortfeasor of action of a cause intend to release.26 she did nоt whom unambigu- acknowledged that an dissent partial “solely on interpreted generally document must ous within its four the information contained the basis of always “is not corners,” it noted that this situation but as follows: dissent concluded partial the case.”27The Court, too, agrees “the Indeed, stated that it with has parol rule majority which hold that the evidence of courts stranger by against a to the either or cannot be invoked 545, Jacob, 550; App 446 NW2d contract.” Denha v 179 2d, Evidence, 1031, (1989), citing pp § 166- 30 Am Jur Therefore, parol operative rule is because the evidence 167. document, respect parties to a it cannot with Hence, stranger the either or a contract. invoked the in to determine the intentions of about order release, be al- scope general extrinsic evidence should of a may rely stranger on the lowed to determine whether a firms, corporations” parties, other or omnibus “all release.[28] that is contained within a DECIDED B. ROMSKA AND THIS CASE WERE CORRECTLY WHETHER Romska, pre- dissent majority partial question critical to opposing regarding sented views dissenting J., concurring part part). at (Hoekstra, Id. 25 Id. at 527. 26 Id. at 528.

27 Id. at 531.

28 Id. at 533. 487 Mich 648

Opinion of the Court May resolution of this matter: a court properly consider extrinsic evidence of the in- settling parties’ tent regarding scope of release when a nonparty to the release attempts rely on broad release language? We conclude may that courts consider extrinsic evi- dence of the intended of a scope release when an unnamed party seeks to enforce third-party-beneficiary rights based on the broad release language but evidence presented establishes that an ambiguity exists respect with scope intended of the release. law, At common joint release of one tortfeasor effectively released all other joint tortfeasors.29 In however, Michigan Legislature abrogated the common-law rule and dictated statute that joint release of one tortfeasor from liability does not automatically release other joint tortfeasors from liabil- ity unless the terms the release so provide.30

This Court has traditionally applied theories of con- tract law to disputes rеgarding the terms of a release.31 “The cardinal rule in interpretation of contracts is to ascertain the intention parties. To this rule all others are subordinate.”32 if Generally, the language of a contract is unambiguous, it is to be construed accord- ing plain to its meaning.33 hand, On the other if the language of a contract is ambiguous, courts may con- sider extrinsic evidence to determine the intent of the parties.34 Applying this principle, the Appeals Court of “[tjhere Romska concluded that cannot be any broader ‘all,’ classification than the word and ‘all’ Co, 492, 494; Slater v Ianni Constr 256 NW 495 600.2925d(a). MCL Utley, 332, (1957). 335-338; See v Denton 350 Mich 86 NW2d 537 Groomes, 215, 218; McIntosh v 198 NW 954 Liability Prop Pool, Grosse Pointe Park v Mich Muni & 473 (2005) 197-198; 702 NW2d 106 J.). (opinion by CAVANAGH, 34Id. at 198. Shay v Aldrich op Opinion the Court Therefore, major- exceptions.”35 leaves room for no that it look to ity “inappropriate reasoned would be here in parol determining scope evidence release.”36 case,

In this the trial court found the broad release denied language ambiguous and the Melvindale Officers’ extrin- summary disposition considering motion for after plaintiff sic evidence that neither nor the Allen Park had intended that the Officers Melvindale Officers would also be released executed. The documents Court however, Appeals, noted the releases “use the same Romska, broad language as the release at issue and ”37 Therefore, also ‘all.’ employ word the Court concluded that the trial Appeals court erred considering extrinsic plain- evidence the intentions of tiff and the Allen Park Officers and ordered that judg- ment be entered for the Melvindale Officers.38 We disagree Appeals’ with the Court of conclusion. foremost,

First and it is undisputed the Melvin- dale Officers were not involved in the Park Allen Officers’ settlement negotiations plaintiff, with were releases, not named in the executed did sign and releases. The parties negotiating the releases included the Allen Park Officers Plaintiff only. an presented affidavit from counsel for the Allen Park Officers stating: Release,

My only regard intent with Settlement my clients, and Order of Dismissal was to release defendant Locklear, Albright liability Allen Park Officers from $25,000.00 this matter for the consideration of the Case Evaluation Award.

35Romska, App 234 Mich. at 515-516. 36Id. at 516.

37 Shay, unpub op at 4.

38Id. at 5. 487 Mich 648 Opinion of Court Court, in coun- Additionally, during argument oral plaintiff for the Melvindale Officers conceded that sel Officers, the only parties negoti- and the Allen Park releases, ating the did not intend to release the Melvin- dale Officers. they not asserted that Melvindale Officers have negotiations executions; to the parties

were release rather, they boilerplate seek to benefit from the simply Allen language contained Park Officers’ releases. Again, the Melvindale Officers concede that neither nor the Allen Park Officers intended to plaintiff release liability.39 them from

Acknowledging they were not releases, the argue they Melvindale Officers were liability by nevertheless released from Park the Allen Officers’ releases because are third-party benefi- the agreement ciaries of and the Allen between Park governs rights Officers. MCL 600.1405 states, third-party Michigan beneficiaries pertinent part:

Any person promise by way for whose benefit a is made contract, defined, right as hereinafter has the same promise enforce said that he if would have had the said promise directly promise. had been made to him as the

(1) promise A shall be construed to been have made for person promisor benefit of a whenever of said promise give had undertaken to or to do or refrain from doing something directly person. to or for said This Court has interpreted applicable statutory language as follows: 39 During argument, plain oral defense counsel conceded that neither tiff nor the Allen Park Officers intended to release the Melvindale liability. Nevertheless, requested Officers from defense counsel that this language third-party- Court conclude the broad release created

beneficiary rights in the Melvindale Officers. Shay v Aldrich Opinion of the Court describing contractual the conditions under which a party

promise for the benefit of a third is to be construed as Legislature §in utilized the to the contract stated, “directly.” Simply section 1405 does modifier empower just any person who a contract to benefits from Rather, person third-party it. it states that a is a enforce beneficiary promisor when the undertakes contract obligation “directly” person. to or This an Legislature’s indicates thе intent to assure that contract ing parties clearly scope of their are aware that undertakings encompasses party, third di contractual rectly contract, party referred to in the before the third contract.[40] able to enforce the additionally explained This Court has that “a third- party beneficiary may class, abe member of a but the sufficiently Thus, class must be described.”41 in order qualify third-party for the Officers to as Melvindale language beneficiaries, the of the releases must have undertaking by plaintiff directly demonstrated an the benefit of the Melvindale Officers or for suffi- ciently designated class that would include the Melvin- dale Officers.42 objective

An standard must be used to determine from the release documents whether executed directly the releases for the benefit the Melvindale The trial court did conclude that the Officers.43 used in the releases indicated that were directly executed for the benefit of the Melvindale Instead, Officers. the trial court found that the lan- guage appeared intentionally limiting noting nature, named in font that the Allen Park Officers were bold (1999) Haven, Koenig v South 667, 676-677; 597 NW2d 99 added). (emphasis 41 Id. at 680.

42 See id. at 683. Zeeland, 293, 297-298; v Brunsell 651 NW2d 487 Mich 648 Opinion of the Court any- Officers were not named while Melvindale in the where documents. acknowledged the trial court that the release

While language, contained similar broad Romska con- distinguishable cluded that Romska from the was present case for reasons. The trial court noted various rejected the Melvindale Officers the case- against them, a trial evaluation awards date was set for indicating them, and the court entered a consent order plaintiffs case was dismissed the Allen only. undisputed Therefore, Park Officers it is that the plaintiffs Melvindale Officers remained law- suit after the Park Allen Officers were released. correctly plaintiff,

The trial court concludedthat Officers, Allen Park and the Melvindale Officers were par- aware that the Melvindale Officers remain would plaintiffs ties to lawsuit after the releases were ex- previously explained, However, ecuted. this Court long determining has held that the standard for person third-party beneficiary whether a is a is an objective standard and must be determined from the language only.44 majority of the contract A of this Court has affirmed this rule recent cases and further emphasized promise directly that the must be made for person and, thus, the that incidental beneficiaries of contracts could not recover.45 Legislature’s

This rule reflects “the intent to ensure contracting parties clearly scope that are that the aware 44 See, e.g., Brown, Depositors Corp Guardian v 433, 437; 290 Mich 287 (1939) (stating legislature “[t]he NW 798 standard which the has * * * prescribed determining ‘promisor when a has undertaken’ to perform performing given act, think, objective or refrain from a we is an itself”). one, meaning determined from the form and of the contract 45 Co, 422, 428; v North Pointe Ins See 469 Mich 670 NW2d Schmalfeldt (2003); Brunsell, 651 467 Mich at 296-298. v Aldrich Opinion op the Court undertakings encompasses a third of their contractual contract, the directly referred to in the before party, Although if third is able to enforce the contract.”46 party read to mean taken out of context this sentence could be subjective is the under- important inquiry when read con- standing contracting parties, text, contracting “intent” with parties’ it is clear beneficiaries is to be determined regard third-party to meaning” from the “form and of the contract.47 solely long history interpreting Given this Court’s require objective statute to an third-party-beneficiary we conclude that interpretation language, Officers as beneficiaries qualify third-party Melvindale face, statute on its applicable under because unambiguously release releases “all other persons.”

Once it party qualifies has been determined that signifi- must address the third-party beneficiary, we cance of this determination. This Court has held that significance party being recognized of a under the third-party-beneficiary statute is that the status con- and the A right fers on a cause of action to sue.48 effec- party qualifies third-party beneficiary who as a tively original promisee “stands the shoes” of the “has the said that he right promise same enforce

46Brunsell, 467 Mich at 297. objective Koenig, (stating Mich at that “an is to See standard promisor used to from the itself determine contract whether doing directly give something undertook ‘to or to do or to refrain from (citation putative third-party beneficiary”) omitted; emphasis or for’ the omitted). Vibrators, Inc, 294, 300; See id. at Lidke v Jackson 379 Mich 442; (1967), Depositors, 150 NW2d 737 and Guardian 290 Mich at see (1974) 6, 14; Polgar, also v 215 NW2d 149 Williams (recognizing third-party exception beneficiaries as an common- rule). privity law

666 487 MICH 648 Opinion op the Court if the said had been made promise would have had directly promisee.”49 to him as the expressly pro- statute third-party-beneficiary beneficiary of the are rights third-party vides that the conditions, to such or “subject always express implied limitations, or infirmities of the contract to which rights promisee promise subject.”50 or the are Thus, qualifies third-party- a who under the person beneficiary gains right to sue to enforce the statute so, in the doing person contract. But stands the same original promisee only gains shoes of the right original would have had. Ac- promisee cordingly, third-party beneficiary automatically is not sought-after merely by entitled to the benefit qualifying third-party beneficiary. third-party as a While a benefi- has the to seek enforcement ciary right promise, courts must still basic of contract apply principles the extent of the third interpretation determining when party’s rights under contract.51 Accordingly, objective an test is used to determine a third party pursue whether is entitled to a cause of action for enforcement of a contract but that promise,

49MCL 600.1405. 600.1405(2)(a). MCL 51 See, Lidke, e.g., (affirming 379 Mich at 299-300 the trial court’s plaintiff determination that was “entitled to maintain a cause of beneficiary third-party proceeding action” as a of a contract and analyze contract), plaintiffs rights the extent of the under the Greenlees (1954) Co, 670, 677; v Owen Ames Kimball 66 NW2d 227 (remanding interpret the case to the trial court to the contract on the merits after this Court determined that was “entitled to beneficiary statute”), third-party maintain his cause of action under the Co, 483; Szymanski v John Mut Hancock Ins NW2d Life (1943) (the beneficiary named of her deceased husband’s insurance attempt rights ultimately contract was able to sue to to enforce her but promise unable to because determined that the recover this Court she sought seeking). to enforce did not extend to the relief she was v Aldrich Opinion op the Court govern interpreta- test does not also objective same Instead, principles the usual tion of contract. promise subject and the is interpretation apply, contract “limitations” and “infirmities” as would to the same being original promisee.52 if it were enforced documents, face the release the Melvindale On the third-party promise, Officers are beneficiaries it. i.e., liability, may the release from and seek to enforce Given that we have determined that Melvindale beneficiaries, must now third-party Officers are we to principles interpretation traditional of contract apply rights of the Melvindale Officers’ scope determine the the release. under stated, generally

As releases are treated previously thus, and, subject law Michigan contracts under rule, the use of extrinsic parol prohibits evidence which a interpret unambiguous language evidence to within However, if ambiguous, document.53 a contract then ac- “extrinsic evidence is admissible to determine the parties.”54 tual intent of the An latent. This ambiguity may patent either be or has held may Court that extrinsic evidence not be used a identify patent ambiguity patent because a ambi- However, guity appears from the face of the document. may extrinsic evidence be used that a latent to show ambiguity ambiguity, exists.55 With to a latent respect explained we have as follows: 52 600.1405(2)(a). See MCL 53 See, Co, 587; generally, Paul v Univ Motor Sales 283 278 NW J.). Park, (opinion by Grosse Pointe 473 Mich at 198 Cavanagh, 198-201; Co, 567, 575; McCarty Mercury at v Id. Metalcraft (1964); Chippewa 127 NW2d 340 Sault Ste Marie Tribe Indians v (CA 2007) Granholm, 6, (applying 475 F3d the “well-settled may Michigan ‍‌​​​‌​​‌​‌‌​‌​​​‌‌‌​‌‌​‌‌‌‌​​​​​​​​‌​​‌‌​‌‌‌​‌‌​‍tenet of contract law” that extrinsic evidence be admitted identify ambiguity). interpret a latent 487 Mich 648 Opinion op the Court however, ambiguity,

A latent is one “that does not document, readily appear language in the of a but instead arises from a collateral matter when the document’s terms applied are or executed.” Because “the detection of a latent ambiguity requires a consideration of factors outside the itself, obviously instrument extrinsic evidence is admissible prove ambiguity, the existence of the as well as to resolve ”[56] any ambiguity proven to exist. A latent exists when contract to bе clear and appears intelligible sug- gests single but other meaning, facts create the “ ‘necessity for or a interpretation among choice two or ”57 possible meanings.’ more To verify the existence of a latent ambiguity, a court must examine the extrinsic presented evidence and determine if in fact that evi- dence supports argument an that the language contract issue, at under the formation, circumstances of its susceptible to more than interpretation.58 Then, one if a exist, latent ambiguity is found to a court must examine again extrinsic evidence meaning ascertain the of the contract language at issue.59 56 J.) Park, (opinion by Grosse Pointe 473 Mich at 198 Cqvanagh, (citations omitted). 57 (citation omitted). McCarty, 372 Mich at 575 See also In re Kremlick Estate, 237; (1983), bequeathed 417 Mich 331 NW2d 228 in which a will half “Michigan Society,” of an estate to the existing Cancer which was an organization money pursuant that could have received the from the estate Thus, applied the terms of the will. could have been without Nonetheless, permitted confusion. this Court extrinsic evidence to show that grantor actually beneficiary “Michigan intended the be Division of Society” instead, explaining the American Cancer that a latent “ language employed can intelligible arise ‘where the is clear and suggests single meaning, but a but some extrinsic fact or extraneous ” possibility 240, meaning.’ evidence creates’ the of more than one at Id. quoting Estate, (1979). 702, 711; In re 405 Mich 275 NW2d 262 Butterfield 58 Goodwin, Pontiac, Inc, 195, 206; Inc v Orson E Coe NW2d 664 206, Id. at 209-210. Shay v Aldrich Opinion of the Court latent-ambiguity The doctrine has a long history Michigan law, Kimball, as demonstrated Ives v (1849), this Court explained which ambiguity may that a latent evi- by parol shown dence: useful, law, just practical

There is no more rule of surrounding than that which admits evidence circum- facts, stances and collateral within certain well defined limits, purpose enabling for the courts to ascertain and carry contracting parties. into effect the intention of applied cases in this rule which has been are almost innumerable. applied

This Court has the latent-ambiguity doctrine when extrinsic evidence demonstrates that there is an ambiguity concerning the identity of the intended ben- eficiary promisе of a in a In contract. Hall v Equitable States, Assurance Society United Life context of contract, an insurance this Court stated “ introduced, ‘[w]here the evidence which is there from arises doubt as to what party or are to receive the benefit policy, evidence parol is admissible to ”60 Hall, determine such fact.’ although dece- policy dent’s insurance clearly named a certain person as the beneficiary, extrinsic evidence made it clear that the decedent had only intended person to name that temporarily, guardian, as a until he determined who would act properly guardian estate, as the of his but he being died before able to make that determination. This Court applied the latent-ambiguity doctrine and held that though even a specific person unambiguously was in named the policy, proceeds go would to the estate generally.61 60 Equitable Society, Hall v 404, 411; Assurance 295 Mich 295 NW Life (1940) omitted). added; (emphasis

204 citation 61 Id. 648

670 Opinion of the Court in v addition, Meyer Shapton, In this Court noted (1914), 417, 425; “parol that evidence NW correct, identify, explain or may be admitted to in writing grantee, intended as given party name instru- devisee, pervert or not to the written promisee, ment, being the written instrument prevent but contracting par- the true intent of the perverted from parties In of the named in a contract Meyer, ties.”62 one existed, and, corporation longer of sale was a that no contract, examined voiding rather than the Court circumstances to determine who the surrounding really intended was.63 party Officers are dispute We do not that the Melvindale fact, as the term is used in the releases. In “persons,” in possible any person is that the world could fall into broadly defined of “all other How- group persons.” ever, that this conclusion alone does not dictate we must apply language the release to the Melvindale Officers considering without even whether an arises by from the extrinsic evidence undisputed presented obligated construing Courts are releases plaintiff.64 62 Meyer, disputed language given meaning was a the courts plain meaning inconsistent itself was with “Meyer designated because the seller in the contract at issue was аs when, fact, Bros.” the extrinsic evidence indicated “Herman C. Meyer” “Meyer longer the intended and that Bros.” was seller was no existence. at Id. 424-425. expressly The Third Restatement of Torts addresses what it charac “frequently occurring problem” plaintiff [who] terizes “a enters provides into release with a defendant that releases the defendant and Torts, 3d, persons’. Apportion that it ‘all . ..” also releases Restatement Liability, 24, g, p reporter’s § ment of comment 302. The note to comment jurisdictions g inquire states that some “into the intent of the agreement” require showing “[s]ome the settlement persons’ language ambiguous the ‘all or constitutes a mis take . ...” Id. at 307. v Aldrich Opinion the Court of the issue, the intent to effectuate as those at

such is admissible extrinsic evidence and parties, necessary to do so.65 extent his support evidence to extrinsic presented

Plaintiff in- language ambiguous, that the release argument (1) Allen Park Officers facts: following cluding by differ- represented and the Melvindale Officers were (2) plaintiff that counsel, agreed expressly ent was $25,000 case-evaluation the combined accept would Officers, but the Allen Park respect with to awards to respect million award with accept the $1.5 would (3) Park Officers, for the Allen counsel the Melvindale the releases were to that explained plaintiff Officers his claims plaintiffs in order to settle drafted (4) the Allen clients, dismissing and order stipulation a (5) entered, the Melvindale only Park Officers was a lawsuit with plaintiffs to parties Officers remained them. proceed against for trial date set the affidavit is further bolstered extrinsic evidence drafter for the Allen Park Officers —the from counsel drafted the re- that when he indicating the releases — the release of leases, provide he had not intended as well. the Melvindale Officers as one has been described Again, a latent “ will, deed or the words of upon ‘arises not themselves, upon but instrument, as looked at other approach, relying adopts on Professor this “intent” The Restatement Corbin, permits inquiry explains into extrinsic “[clontract law parties, might explain negotiations the circum- of the evidence that goals prepared, respective stances in which the release was contrast, entering . .. parties in into the settlement and release Id. Romska, noting rejects adopted approach the Restatement “ persons’ minority” jurisdictions ‘all treat a “distinct challenged by unambiguous, which therefore cannot parties’ at intent.” Id. 306. extrinsic evidence of J.). Cavanagh, Park, (opinion Mich at 198 Grosse Pointe 487 Mich 648 op Opinion the Court those words when applied object or to the subject “”66 where, which describe.’ ‘And from the evi- introduced, dence which is there arises doubt as to party what or are to receive the benefit [of contract], parol evidence is admissible to determine ”67 such fact.’ “In construing provisions [contractual] regard due must be had to the purpose sought to be accomplished by the parties as indicated the lan- guage used, in light read of the attendant facts and circumstances.”68 “Such intent when must, ascertained if possible, given be effect and must prevail against the literal meaning expressions in agree- used ment.”69

The extrinsic presented evidence here is not disputed by the Officers, Melvindale undeniably reveals the clear intent of parties. Furthermore, the lan- guage the releases expressly contemplates a situation in which the Allen Park might Officers by way liable of contribution or indemnity to another party. This language implies the existence of the continued lawsuit against other parties. Given the undisputed extrinsic facts that the Melvindale Officers remained parties to plaintiffs lawsuit and were former codefendants of the Allen Park Officers, it would be entirely reasonable for the Allen Park Officers to include language in the releases that would protect them from actions for contribution or indemnity by remaining parties. Con- sidering the language of the releases and the extrinsic presented, evidence it is clear that the settling parties did not include the term “persons” in the in releases Hall, (citation omitted). 295 Mich at 409 (citation omitted). Id. at 411 Co, Folsinski, Barnes Inc v W O 376-377; 60 NW2d 302 Id. at 377. v Aldrich Opinion op the Court release the Melvindale order to effectuate an intent liability. Officers from of contracts elementary

It is an rule of construction doubt, strictly is to be in case of a contraсt it was party by agent whose construed However, agrees plain- drafted.70 the drafter here with settling the intent of the parties. tiffs assertions about about settling parties agreement are the full Not intent, not even their but the Melvindale Officers do seriously point expressed agree- contest this and have intent. There is no indication ment with this same for either the Allen Park whatsoever counsel any or the Officers took action Officers Melvindale clients’ agreement. relation to this matter without their entirely are unfounded. Any suggestions contrary to a stranger This is not a case which simply contract or release comes forward sometime after the the contract or release and seeks to benefit formation of Instead, terms. the Melvindale Officers were from its readily pending ascertainable codefendants in a lawsuit addition, by In this is not a case which there plaintiff. any legitimate dispute settling parties’ is about dispute parties’ intent. Defendants do not even actual intent. case, plaintiff

Under the facts of this if were not extrinsic evidence in order to permitted present settling parties, settling ascertain the intent of the intent be Plain- parties’ undoubtedly perverted.71 would tiff would be of his claim for assault and deprived Officers, the Melvindale which he ex- battery against by rejecting the case-evaluations pressly preserved addition, In awards assessed them. counsel for 70 Morse, 41, 46; Mich Chandelier Co v 297 Mich 297 NW 64 71 Meyer, 178 Mich at 424-425. 487 Mich Opinion of the Court the Allen Park would be deemed responsible Officers it releasing liability Melvindale Officers’ from when Further, was not his intention to do so. the Melvindale by obtain a complete being Officers would windfall liability exchange released from for their acts in for no all, and no consideration at de- bargained-for promise spite they dispute the fact that do not that this was not the intent the settling parties. only Not would this be result, unjust contrary an it would cardinal interpretation: rule of contract that the contracting intent parties’ should control.72 case, In plaintiff this has that the circum- shown surrounding stances the execution of the releases cre- ated a latent about in- parties whom tended to include within the All scope releases. contracting рarties agree neither nor the Allen Park Officers intended the releases to have any effect on the liability. Melvindale Officers’ Even the Melvindale Officers did themselves not believe that the releases Further, were intended to include them.73 it is dissent, Markman, The authored Justice who also authored Romska Appeals, unpersuasive, despite pages length, in the Court of is its arguments repetitive analysis because the are of Justice Markman’s Romska, rejected today. which we have The dissent claims that this decision claim, support is inconsistent with the law of this state. To this the dissent merely provides string Appeals citation to Court of decisions decided after by Romska, Romska. Given that these lower court decisions were bound hardly analysis. legal remarkable that utilized Romska’s support other citations offered the dissent in of its claim are federal cases. fact, latent-ambiguity it is the dissent’s limited formulation of the applied doctrine is inconsistent with cases in which this Court has See, Co, e.g., 355, 362; doctrine. Keller v Paulos Land 161 NW2d (1968), in which this Court concluded that the intended that an “ingress egress” parking easement for would be an easement for instead, though understanding ingress egress even “was not a use of legal meaning.” within the common interpreting ambiguity, This Court has held that when an it is significant parties See, if the relevant were aware of the circumstances. v Aldrich Opinion op the Court accepted have to think that would illogical Officers as the Allen Park amounts for case-evaluation when the all defendants releasing consideration for larger had much the Melvindale Officers claims on the face of Although case-evaluation amounts. are entitled as third- the Melvindale Officers releases releases, seek enforcement of the beneficiaries to party same “limitations” and subject the releases are to the they been if had been they “infirmities” as would have This means that directly made for those officers. subject must be to evidence of the release ambiguity demonstrating latent the Melvindale included in release from plaintiffs Officers are not liability of “all other persons.” sum, party to determine whether an unnamed is release lan- liability by vague released from broad or guage, party’s third-party beneficiary status as a objective analysis must be established an However, release traditional contract language. prin- release, continue to the ciples apply may courts consider the intent of the named and un- subjective parties named to the release under certain circum- stances, ambiguity. such as there is a latent when third-party-beneficiary Legis- statute indicates that the parties lature intended to allow who are direct benefi- ciaries to their rights, sue to enforce but statute states that beneficiaries have expressly third-party if right” promise the “same to enforce as would the is, MCL That directly had been made them. 600.1405. action, the statute creates a cause of but it is not Faulhaber, 244, 250; e.g., Loyal v 41 NW2d 535 Order Moose (1950) (noting necessary an that when court to construe bearing agreement, “[a]s it must determine the intent of the made, question intent at the time the contract was it was on the of such hy testimony proper parol to show the actual situation that then existed knowledge plaintiff”). of defendant as well as 487MICH648 Dissenting Opinion by J. Markman, parties greater rights they intended to third afford than original promisee. if had would have been the objective If this Court were to extend the test it has adopted determining third-party whether there is a beneficiary interpreting scope rights of the of the third-party beneficiary, contrary it would be in which, here, statute instances in because of the latent-ambiguity subjective doctrine, the intent of the party determining party’s would be relevant to rights promise directly if the had been made party. objectiveapproach Thus, while the for determin- ing party third-party beneficiary whether a is a must be applied, principles, including traditional contractual latent-ambiguity applied doctrine, must also be scope third-party order to determine the of the benefi- ciary’s rights.

IV CONCLUSION granting appeal, In lieu of leave to we reverse the judgment Appeals of the Court of and overrule Romska prohibits considering to the extent that it a court from scope extrinsic evidence of the intended of a release party third-party- when an unnamed seeks to enforce bеneficiary rights based on broad included liability a release from and an exists with respect scope to the intended of that release. Accord- ingly, we remand this case to the trial court for further proceedings conformity opinion. with this

Reversed and remanded.

Kelly, C.J., JJ., con- Cavanagh and Hathaway, J. Weaver, curred with (dissenting).

MARKMAN, J. Not all cases that come before this Court are defined in terms their core Shay v Aldrich Dissenting Opinion Markman, as this one. At issue here is dispute clarity with as much Michigan. read in the state of properly how a contract is is, read as a function of the That should contract be intent or should it be read as a parties’ subjective the contract unambiguous words of function simple significant. itself? This case is that and that on the rule from Romska v Relying Opper, (1999), 512; 594 NW2d 853 which embodied the App century Michigan of more than a contract principles law, adopted the Court of the latter Appeals properly of an holding unambiguous language approach, in agreement releasing persons” “all other fact releases Aldrich, unpublished opin- “all other v persons.” Shay 5, curiam of the Court of issued March per Appeals, ion (Docket 282550). Today, reversing 2009 No. Romska, overruling of of Appeals Court Because newly adopts approach. this Court the former majority’s “engender uncertainty among rule will none, breed parties currently to releases where there is currently there are opportunities litigation where none, ability and erode the of individuals to fashion dispute their own rules for resolution free of the uncer- intervention,” Romska, judicial tainties of I dissent. 234 Mich at 521. App

I. MICHIGAN CONTRACT LAW FUNDAMENTAL A. PRINCIPLES Michigan It has the rule in for well over a been century principle that the first and foremost of contract unambiguous open is that contracts are not law written, be enforced as judicial construction must See, policy. e.g., contract violates public unless the Co, 348, & 460 Mich Henderson v State Farm Fire Cas (1999); Comm’r, 354; Hwy 190 State 596 NW2d Juif v 35, 41; (1938); Darling, Mich 282 NW 892 Forbes v 287 MICH648 678 487 Dissenting Opinion by Markman, (1893). 621, 625; words, 94 Mich 54 NW 385 other parties’ reflects the intent as unambiguous “an contract Trust, In re R Smith 480 Mich Egbert a matter of law.” (2008). 19, 24; 745 NW2d 754 may Extrinsic evidence be admitted to determine the ambiguous. intent of the when a contract is New Sokolowski, 340, 342; Amsterdam Cas Co v 374 Mich (1965). аmbiguous a contract is NW2d Whether law, this Court de novo. question is which reviews Nikkel, Mich Farm Bureau Mut Ins Co Mich v (1999). 558, 563; are Michigan 596 NW2d 915 courts to “create where the terms of permitted the contract are clear.” Frankenmuth Mut Ins Co v Masters, 105, 111; 595 NW2d 832 “Ambiguity fairly written contracts can be said to types: patent consist of two and latent.” Grosse Pointe Pool, Liability Park v Mich Muni & 473 Mich Prop (2005) J.). 198; by Cavanagh, 702 NW2d 106 (opinion “ ‘A patent ambiguity is one the face of apparent upon the instrument....’” Hall v Assurance Equitable Life States, 404, 409; Society the United 295 NW ‍‌​​​‌​​‌​‌‌​‌​​​‌‌‌​‌‌​‌‌‌‌​​​​​​​​‌​​‌‌​‌‌‌​‌‌​‍(1940) (citation omitted). A patently contract only if, after the ambiguous engaged court has its judicial giving duties of effect to the contract’s lan guage, the court concludes that a term “is equally susceptible single meaning,” to more than a Lansing Comm, 154, 166; v Pub Mayor Serv 470 Mich 680 NW2d (2004), 840 or that provisions “two same contract other,” irreconcilably conflict with each v United Klapp Inc, 459, 467; Ins Group Agency, 663 NW2d (2003). 447 “ hand,

A latent ambiguity, on other ‘arises not will, upon deed, instrument, the words of the or other themselves, in upon looked at but those words when to the to the applied object subject they or which 679 v Aldrich Dissenting Opinion by Markman, J. ” Co, City Zilwaukee v R Twp Saginaw-Bay describe.’ (citation (1921) omitted).1 61, 69; Mich 181 NW 37 213 whether a contract con determining When a court is a latent first “extrinsic evidence is ambiguity, tains and, ambiguity, the existence of the prove admissible to exist, extrinsic proven if a latent is evi ambiguity may dence then be used as an aid the construction of Park, 473 Mich at 201 the contract.” Grosse Pointe J.). latent-ambiguity Because the (opinion by Cavanagh, the admission of extrinsic evidence permits doctrine exist, an is found to it is tension ambiguity before with the fundamental rule of contracts that when face, a unambiguous contact is clear and on its court and not consult extrinsic evidence will enforce will See, Bureau, 460 Mich at e.g., contract as written. Farm Morse, in Mich Chandelier Co v 297 566. This Court (1941), 41, 48; addressed this tension 297 NW by making clear that provided proper its resolution ambiguity. mistake is not an Parol “[a]n omission or guise ambiguity evidence under the of a claimed latent Young Justice has observed that example ambiguity [t]he a latent is found in the tradi- classic Wichelhaus, first-year tional law school case of v Hurl & Raffles 906; Raffles, parties Eng Rep C two contractеd Bombay. shipment for a of cotton “to arrive ex Peerless” from out, However, ships sailing as it turned there were two from Thus, Bombay though the name even under “Peerless.” face, ambigu- unambiguous contract was on its there was a latent ity regarding ship [Grosse to which the contract referred. Park, (opinion J.).] Young, Pointe 473 Mich at 217 n 21 Thus, contract, parties signed at time the believed Raffles lay unambiguous, although their an words to be clear parties, happened in the text: there to he dormant unbeknownst ambiguity, ships two named Peerless. Because of that latent it was no longer what the clear from the four corners of the document Peerless, parol meant their of the name and so evidence was use properly parties’ admitted determine the intent. 487 MICH648 by Dissenting Opinion Markman, J. permissible vary, plainly

not add to or contradict expressed writing terms of this or to substitute a different purpose contract for it to intention therein show an or expressed.” [Citation omitted.] Similarly, Hall, in finding this Court a latent “ ambiguity, explained ambiguity is properly ‘[a]n latent, law, in the sense when the . . . extrinsic circumstances to which words of the instrument refer susceptible by [are] a mere explanation devel of extraneous opment facts without or altering adding Hall, to the written language . . . 295 Mich at 409 (citation omitted) added). (emphasis Under this proper understanding latent-ambiguity doctrine, of the a court does not point “cross the at which the written contract is altered guise under the of contract interpretation.” Park, Grosse Pointe 473 Mich at (opinion by Young, J.). And importantly, pursuant to this understanding, the doctrine’s exception, by which extrinsic evidence is permitted to ascertain intent an has before exist, been found to does not nullify the most basic and fundamental rule of contract law—that unambiguous open judicial contracts are not construction and must be enforced as written. A related and equally settled principle Michigan “

contract law is that ‘one signs who a contract will not say, be heard to when enforcement sought, that he did it, not read or that he supposed it was different its ” (citation Bureau, terms.’ Farm at 567-568 omitted).2 While this general rule is not if applicable recognized As this Court party may [t]o reply upon hоld that a to an action a written instrument, contract, my “It is true I made the but it was not agreement, it,” and I did not intend to be bound would set the afloat, certainty fiction,

law of contracts all render the of the law a v Aldrich Opinion by Dissenting Markman, instrument was “induced some failure to read the one trick, part or artifice on the stratagem, contract,” in all applies situa- seeking to enforce of in to read was because neglect tions which Int’l v 254 Transp Bylenga, carelessness alone. Ass’n (1931). 236, citizen of this 239; Every Mich 236 NW 771 on notice of this commonsense and fundamen- state is long ago stated in clear tally fair rule because this Court a contract has the party and certain terms that a to contract, signed, he “duty to examine know what and cannot be made to suffer for this complainants 635, 637; 112 neglect part.” Lodge, on his Liska v Mich (1897). 71 NW 171 why principles

There are reasons these fundamental have withstood the test of time and have served as the of contract in this state from time imme- bedrock law adhere these morial. Courts fundamental rules— enforcing according contracts to their unambiguous terms, responsibly diligently executing judi- and their duty cial in if a contract is and determining ambiguous, insisting read their contracts —because so the freedom of individuals “doing respects freely arrange Rory their affairs via contract.” v Continental Co, 457, 468; Ins 703 NW2d 23 “ general rule competent ‘[T]he [of contracts] is that shall persons liberty contracting have the utmost of and that their agreements voluntarily fairly and made shall ” be held valid and enforced the courts.’ Terrien v (2002) (citation Zwit, 56, 71; Mich 648 NW2d 602 omitted). 469, demonstrated, Rory, As 473 Mich at is “ancient and irrefutable”: notion strength It draws from common-law roots and can be charter, in our the United Con- seen fundamental States place parties beyond judicial obligations [Adair control. (1858).] Adair, 204, v Mich 648 Dissenting Opinion by Markman, stitution, government impairing where is forbidden from citizens, I, § the contracts of art cl 1. Our own state years similarly constitutions over the of statehood have is, short, government power. It echoed this limitation on part legal an unmistakable and ineradicable fabric of society. our

It is because these fundamental are precisely principles society, so settled and so essential to a free gov- well law, equal erned rule of that our citizens’ reliance great. on them is so Courts adhere rightly to these rules so as not to upend expectations citizenry an area of the law that touches their upon personal every day commercial relations in myriad ways.

B. ROMSKA principles Michigan With these well-settled contract it, guide Appeals law to our Court of in Romska v Opper give was asked to effect to an unambiguous release that included, in very document, first sentence of the “ language firms, ‘all other releasing parties, or corpora- Romska, tions who are or be might hable 234 Mich omitted). App at 514 (emphasis Romska executed the release as of a part negotiated settlement agreement with the insurer of one of the drivers involved in a three-car accident. She ultimately settled with the insurance company $45,000. of one of the drivers for driver, Unable to reach a settlement with the other David Opper, insurer, or with his the plaintiff filed suit him. Opper summary disposition moved for based on the “ ‘[Tjhis release, which the trial granted, observing, court face, release is clear and unambiguous on its it was entered into and knowingly intelligently, and it is clear that the plaintiff acknowledged full settlement and satis- faction of all of her claims that may arise out of this ” accident.’ Id. at 515 n 2. Shay v Aldrich Dissenting Opinion by Markman,

The Court of affirmed. Appeals Consistent with the established common-law governing legal rule effect instrument, unambiguous of an the Court reasoned: clearly Because defendant fits within the class of “all parties, corporations might other firms or who are or be liable,” beyond we see plain, explicit, no need to look unambiguous language release order to liability. conclude that has been he released from “There any ‘all,’ cannot broader classification than the word exceptions.” and ‘all’ leaves room for no at 515-516 [Id. (citation omitted).][3] partial The Court of Appeals dissent would have de- parted from majority’s “common-law” rule rule,” adopting what it termed as an “intent explaining: generally unambiguous it is While correct that an interpreted solely document must be on the basis of the corners, information contained within its four that is not always the attempts case. When a to a release stranger rely on omnibus contained within the docu- ment, case, parol as in this evidence is admissible to parties establish whether intended the release to apply nonparty. to the affirming court, As an additional reason the trial Romska noted explicit merger indepen the “release an contains clause that dently precludes parol contrary ruling resort evidence” and that give merger by allowing would “no all effect at clause resort to exactly might same extrinsic evidence as be allowed absent merger Romska, case, App clause.” at 516-517. In the instant merger language, they expressly provide the releases also contain agreements understandings that “all between reference thereto are embodied herein.” The does not even provision. merger language take of this note While the effect of why primary written, not the reason the releases should be enforced as language only strengthens the inclusion that this As conclusion. explained, language, merger coupled

Romska if “clear release with a clause, protection against [having does not afford to defend claims], remaining finality it hard to understand how could ever through negotiated achieved Id. at release.” 518. 487 MICH648

684 Opinion Dissenting Markman, J. dissenting (HOEKSTRA, J., concurring part and [Id. 531 at omitted).][4] (citation part) rule, specifically ques- and proposed to this response partial of the dissent’s appropriateness tioning nomenclature, the Rom- rule” the “intent adoption stated: ska judgment, rule better deserves the common-law

[I]n our general that a description. The common-law rule holds this unambiguously “any persons” releases and all release parties.” rale holds that the “any The common-law and all meaning. It is be accorded language of a release should but, predicated of the unlike on intentions from dissent, such intentions the lan- derives rale freely [Id. guage which have assented. of the release to (majority opinion).] at 517 Court, we denied Romska appealed When was v application appeal. for leave to Romska plaintiffs decade, ensuing Mich 461 927 For Opper, rule, consistently applied its Appeals our Court of has unambiguous in an release holding in fact releases “all other persons” releases “all other consistently has denied leave persons,” this Court challenging in cases those ruli sought when appeal Thus, the of this state and the bench ngs.5 citizens 4 permitted parol partial have in Romska would While dissent release, “stranger” theory defendant evidence on its that the was partial find that dissent did not the release should be noted any ambiguity, patent contained or latent. 5 (On Lines, See, e.g., Ins Co v Mason-Dixon Inc Meridian Mut (2000); 645, 647; Remand), App v 620 NW2d 310 Collucci (2000), 654, 658; Eklund, App lv Mich Mich 613 NW2d 402 den 463 240 (2000); McKinzie, unpublished opinion per 934 Beck v curiam of (Docket 223680); 20, Appeals, No. Court of issued November Contractors, 646, 6; Inc, n Batshon v Gen Mar-Que (2001); Mitsubishi, unpublished opinion per curiam Samuel v NW2d 903 (Docket 229464), May Appeals, No. lv den of the Court of issued v Aldrich Dissenting Opinion by Markman, unambiguous bar have been on clear notice that an releasing release that includes “all language per- other says. sons” means what it

II. APPLICATION OF PRINCIPLES It is against legal backdrop this Court is this now upon give called effect to the releases at issue that a provision each releasing persons include “all other . .. any from and all resulting claims . . . from an incident occurring September 8, Plaintiff, on 2004.” represented by counsel, signed identical, self-contained, two two- releases, each page containing this language context of a accepting award re- case-evaluation with spect officers, to the Allen Park police Wayne Allbright (or Locklear, Albright) and repre- Kevin who were also sented counsel. Two months signing after the re- leases, plaintiff provided them to police the Melvindale officers, Aldrich, Plemons, John William Joseph and Miller, who then moved for claim- summary disposition, ing the releases’ reference to “all other persons” released liability. them from The Appeals Court of unanimously reversed the trial court’s denial of sum- mary disposition because it language concluded that the of the releases was unambiguous operated and to bar plaintiffs claims the Melvindale officers.

I would affirm the Court of Appeals because that court engaged proper analysis under Michigan and correctly law determined that the releases here ambiguity thus, contained no law, as a matter of accomplished they what stated. The burden on the majority is therefore to refute that the releases mean they say, what they to demonstrate that are some- ambiguous how because contain either a patent or (2003); Ruppel Carlson, unpublished opinion per v 467 Mich 953 curiam (Docket 235266). Appeals, of the Court of issued November No. Mich 648 Opinion by Dissenting Markman, J. question ambiguity. the releases whether latent through- patent has been issue contain litigation. The trial court found the out ambiguous. although And releases to be the initially position unam- that the releases were took the argued subsequently appeal biguous, on he ambiguous” “internally inconsistent or releases were their face. on majority in determination of is clear its own

The less ambiguous, patently which, it the releases are whether primary implicates a remembered, court’s be should duty majority addressing legal The a instrument. (1) variously language disparages as the release any why being explanation “broad,” of albeit without (2) any way legally suspect, as “broad” is bad or in “vague,” identifying any specificlanguage that without (3) imprecise, “boilerplate unclear or as lan- is guage,” any justification either for this charac- absent any consequences explanation the of or terization majority also devotes an such a characterization.6 repeating to trial inordinate amount of time the court’s patently are reasons for its conclusion the releases actually ambiguous, adopting this without con- albeit majority Apparently, the a even cannot with clusion. straight language the of these face characterize releases ambiguous. simply patently Indeed, it is hard to as (“all per- imagine issue other how the three words at sons”) any any “vague” compre- could be less or more acknowledged plaintiffs at even counsel hensible. As certainly argument, . these “three words. . are oral enough [the officers].” Melvindale include broad adoption Humpty Dumpty’s approach to the Without majority’s significance the As best as I can understand characterization, “boilerplate” it is to I assume that communicate language may safely ignored. be such Shay Aldrich v Dissenting by Opinion Markman, linguistic interpretation in Through Looking Glass— “ word,... I use I just ‘When it means choose to what it patent mean —neither more nor less”—no ambiguity can in the possibly language found clear of these releases.7 by Not be deterred obviously unambiguous releases, of the language offers the novel argument that the releases contain a latent ambiguity. discussing Before of the majority’s merits applica- doctrine, important tion of this recognize is just very how novel majority’s argument is. Not was it not any raised of the or lower courts in case, according caselaw, to the available it has never even court, been mentioned any by any party, or has ever addressed the issue of whether release containing language “all other persons,” or some thereof, variation enforceable written under Michi- gan case, law.8As in the instant plaintiffs these 7 Carroll, Through Looking There, Glass What Mice Found (New House, 1960), The Annotated p Alice York: Equally Bromhill 269. plaintiffs argument without merit is interplay that the persons” “all paragraph indemnity other in the releases’ first and the provision paragraph patent in the ambiguity. third somehow creates a paragraphs separate promises. These nothing are and distinct There is slightly even promise may about inconsistent the fact that one be broader than anything another. Nor is there inconsistent about the Allen Park security desire by officers’ to obtain maximum future claims including provisions Rather, both simply the releases. these reflect prudent precautions. 8 See, e.g., Meridian, 650; App Collucci, 242 App Mich at 240 Mich at 658; Heritage Caterpillar Corp, App Resources Inc v Fin Servs 284 Mich 617, 641-643; Beck, (2009); 2-3; Samuel, unpub op 774 332 NW2d at 2; unpub op Thomas, unpublished per at opinion Collier v curiam of the (Docket Appeals, 26, April 252018); Court of Murray issued 2005 v No. Arce, unpublished opinion per May Appeals, curiam of the Court of issued (Docket 20, 238757);Ruppel, unpub op 2-3; 2003 No. at Whitmore v Ford Co,unpublished opinion per Appeals, Motor curiam of the of Court issued (Docket 26, 216132); Kirkpatrick, unpublished June 2001 No. Dilorenzo v per opinion Appeals, February 14, curiam the of Court of issued 2006 648

688 by Opinion Dissenting Markman, J. release did not “intend” to claimed that other cases And, plaintiff with liability. the from defendants evi extrinsic case, plaintiffs those offered the instant s.9 these similari support Despite their claim dence to court, none is ties, my the best of review —and no to ever detected a latent majority the identified —has today. majority that the unearths ambiguity of the sort majority’s the latent ambi- Turning to the merits of I find no reason conclude that guity argument, who right, every judge other today it while majority gets it gotten wrong. this issue has has addressed has shown that majority “plaintiff concludes of re- the execution surrounding circumstances latent about whom leases created a scope to include within the of parties intended conclusion is its majority’s Central releases.” contracting parties agree that nei- assertion that “[a]ll Park Officers intended the ther nor the Allen any to have effect on the Melvindale Officers’ releases did Even Melvindale Officers themselves liability. to include not that the releases were intended believe This is simply majority them.” not true. The (Docket Ketz, per 261748); Hampton unpublished opinion v curiam of No. (Docket 13, 227656); Appeals, 2002 No. issued December see Court (CA 867, States, 6, 1989); Taggart v also v 880 F2d Kessler United (ED Indus, Mich, 12, 1995); Dist LEXIS 11015 June Nat’l Presto 1995 US (WD U-Haul, Inc, Mich, August Rutcoskey v Dist LEXIS 12062 US 1994). 1, ambiguous, release to and thus When courts have found a Romska, patent ambiguity distinguished of a created was because See, language, any supposed ambiguity. the release not because of latent Sosnowski, per e.g., unpublished opinion Herrick v curiam the Court (Docket 252299). Appeals, May issued No. in these often included an The extrinsic evidence offered cases stating party “intend” release from affidavit that one did not another liability dispositive. exact here finds evidence which —the cases None of the courts in these determined that such evidence created 650; ambiguity. See, e.g., Meridian, Beck, unpuh App a latent at op at 3 n 2. v Aldrich by Dissenting Opinion Markman, J. of parties expressed frustrates the intent the the very being here, words the releases nullified but fails the all by conflating to consider themselves at subjective their intent with that of their attorneys. Specifically, majority accepts as evidence of the Allen Park intentions an affidavit from their officers’ attorney that he intended to explaining negotiate the plaintiff releases with for the Allen Park only. officers Notably, themselves, i.e., the Allen Park officers parties, actual offered no have such sworn statements. Similarly, argu- defense counsel’s concession at oral ment that neither nor Allen Park officers intended to release the liability Melvindale officers from not supported by any statements offered Melvindale officers themselves.10

While the subjective intent of parties may con- ceivably have been in accord with their attor- neys, are there several reasons it why may not be appropriate reflexively conflate the intent of one with other, as the majority First, given does. plain- tiff might conceivably a legal malpractice have claim if attorney his the releases were read to mean say, what the latter’s regarding assertions his client’s approached intentions should be with some caution, measure of absent clearer evidence Second, regard. hardly would be remarkable to sup- pose might there be some sense of on empathy part police officers in community one police toward officers in neighboring community who have become target of lawsuit alleging battery, assault such being a lawsuit an occupational hazard for even those 10Although opinion finds defense counsel’s that there was subjective significant, “no actual [his] intent release clients” to be it is clear conclusively parties’ how defense counsel can know the other subjective intent. MICH 648 487 Opinion by Dissenting. Markman, J. highly in most themselves the conducting officers police Therefore, Allen Park officers’ the manner. professional well have may in with settling plaintiff subjective intent intent, attorney’s subjective different from their been that the reality including of the in view especially the releases scope the of Melvindale officers within any way complete in release not have diminished would liability. For these Park from of the Allen officers Park officers reasons, affidavit from the Allen absent an themselves, why me their lawyer’s is not obvious to it to Melvindale with the regard intentions subjective conclusively are and reflective necessarily officers themselves.11 of these officers intentions if the However, majority’s the consideration of even sound, case presented evidence in this were extrinsic analysis ambiguity could its latent salvage still releases; in no these ambiguity latent exists because is, ambiguity unambiguous no created when the is “ object are the or persons” ‘applied “all to words other ” Twp, Zilwaukee subject they which describe.’ (citation omitted). Again, provision the 213 Mich at 69 any . . . and all persons “all from at issue releases other occurring Sep- an on resulting . . . from incident claims ambiguity, majority additional evidence the claimed latent As accepted plaintiff and Allen Park officers relies on the fact that Melvindale officers case-evaluation awards and precedent rejected larger question a award. I the wisdom of the majority such sets with its reliance on this information because informa 2.403(N)(4). nonjury protected While the trial trials. See MCR tion is fact-finder, majority’s acting use court was not here perverse parties to for future disclose creates incentive information prove precisely to of a claimed in order existence award amounts litigative thereby nullify provides ambiguity and a release that otherwise Using incompatible finality. in this is with the the information manner evaluation, simplify goal expedite final which is “to of case Specialists, App settlement of cases.” Bennett v Med Evaluation 231; 227, NW2d v Aldrich Dissenting Opinion Markman, tember 2004.” It is to what beyond state obvious all majority say almost but the that the Melvindale officers are were “persons.” They involved “an inci- 8, 2004,” occurring September dent on and that inci- plaintiffs dent resulted in “claims.”12 Where is the ambiguity latent is created when these words are applied “subject which describe”?

There is no such ambiguity, course, latent conclusion that is when purported confirmed latent compared here is to actual ‍‌​​​‌​​‌​‌‌​‌​​​‌‌‌​‌‌​‌‌‌‌​​​​​​​​‌​​‌‌​‌‌‌​‌‌​‍ambiguities latent cases, that courts properly have found other some of which the cites in support of its For decision. instance, Wichelhaus, in v 2 906; Hurl & C 159 Raffles Rep (1864), Eng 375 the textbook latent-ambiguity сase, such an ambiguity was created when the contrac “ tual provision stating shipment that the ‘to arrive was ’ ” ex “Peerless” was to the it applied subject described because unbeknownst to the parties, happened there to ships sailing two named Peerless on particular day. Hall, Court this found that a properly latent ambiguity created naming was when the “Emma H. (guardian)” Foote as the beneficiary of an insurance subject contract was to applied the it de scribed because Emma H. Foote was never the dece- majority The not even does consider the entire at in sentence issue analysis. latent-ambiguity that, although its It “dofes] states it not ” dispute ‘persons,’ “any person the Melvindale Officers are in the broadly group begin with, world could fall into this defined ....” To while majority apparently is language, the offended the result of this “broad’ identify legal principle it does not the under which that is result impermissible, Further, principle. majority’s there is no because such the By terms, statement here is not even accurate. their clear the contracts persons” resulting at .. issue released “all. from claims from the September is, occurring “incident on 2004.” That the contracts persons specific certain released from claims. The Melvindale officers certainly specifically fall group, “personfs] within this defined but not all world” the do. Mich Dissenting Opinion Markman, v Meyer Mich 410. And in guardian. Hall, at

dent’s (1914), 417, 424-425; 144 NW 887 Shapton, 178 was ambiguity that a latent reasonably found this Court in contract of the seller designation created when it sale, Bros.,” applied subject was to “Meyer Bros, had entity Meyer corporate described because the years. existence for been out of genu- these cases contained each of contracts ambiguities, properly applied and the courts ine latent However, cases far these are so the relevant doctrine. us it is simply impos- afield the case before from Indeed, majority to does reasoning. sible their apply so, argue that, not even do for what could attempt — at signed the time unbeknownst actual releases, “persons”? the Melvindale officers were Meyer, on Hall and these majority While the relies cases, latent examples ambiguities, with their true legal into lack of cast relief utter serious actuality And it be- underpinnings majority’s argument. that, in increasingly today, its decision comes clear doctrine, in con- latent-ambiguity misuses the of this clear directive that travention Court’s “[plarol guise evidence under of a claimed latent permissible vary, to or add contradict plainly expressed writing terms of or substitute purpose contract it to show intention or different an Chandelier, expressed.” [Mich not therein 297 Mich at 49 (citation omitted).] Surely, majority of on the is aware this limitation Chandelier, It latent-ambiguity doctrine. cites does has no majority apparent this dissent. Yet the disregard for its of this limitation and for explanation major- misapplication its resultant the doctrine. The “ does ‘under of a claimed ity explain why, guise ” parol latent evidence that un- ambiguity,’ permits it Shay v Aldrich Dissenting by Opinion Markman, J. “ deniably ‘var[ies], add[s] contradices] or plainly expressed terms of this Ac- writingId. cording per- to the releases’ clear other language, “all sons” liability; parol are released from according evidence by plaintiff, only offered the Allen Park offic- ers are released. Not does this evidence contradict plainly releases, a expressed term of the it nullifies the altogether. evidence, term In permitting major- ity latent-ambiguity abuses the doctrine and offends “ principles traditional freedom of contract ‘sub- ” stituting] a different contract’ for the contract freely which the parties assented. Id. view,

In my instead of pursuing its novel latent- theory exists, ambiguity when no such been would have better advised to apply what is perhaps the most well-established of all rules of law, contract and one that a provides straightforward “ resolution of this case: that ‘one signs who contract will say, not be heard sought, when enforcement it, did he not read or that he supposed was ” Bureau, different its terms.’ Farm 460 Mich at 567 (citation omitted).13 Surely the majority is aware of this contracts, yet basic rule of it entirely ignores rule, one undoubtedly recognized and acted on all prudent citizens their own contractual citi- dealings. These zens, knowing their obligations as responsible adult persons reading majority’s opinion, must be asking themselves: “But I I thought my had to read contracts before I signed Why them. doesn’t Michi- gan Court Supreme talk about that rule?” This confu- fact, majority’s arguably places viability decision in doubt the string dating century Farm Bureau and the of cases back over well espoused See, e.g., Plumbing Heating, that have this rule. Komraus & Inc Motel, Inc, 285, 290; (1972); v Cadillac Sands 387 Mich 195 NW2d 865 Johnson, 258, 260; Liska, (1926); Gardner v NW Mich at 637-638. Mich 648 Dissenting by Opinion J. Markman, because, of as the circumstances

sion is understandable the instant reveal, it to view impossible this case than an instance other anything at its core dispute his he has not read relief because party claims which seeking excused to be Plaintiff is legal own document. responsibility, and personal of his own dereliction from him, detri- to the eventual accommodates majority the care in their respon- have more ment of all who taken that their sibilities, now less certain all of whom will of as intended the courts upheld will be contracts this state. complex, or lengthy, at are not

The releases issue not claim that he was fraudu- technical. Plaintiff does contrary, To the he signing induced into them. lently knowingly signed when he by counsel represented was circumstances, release twice. Under these the same is that logical predicament for his only explanation did not read even plaintiff and his counsel first assenting before their sentence their releases of of this case procedural history terms. And the Plaintiff of their error. the carelessness compounds July, provide releases in but did not even executed the October, defendants until at them to the Melvindale attorney neither he nor his appears which time it that two-page had read the first sentence these even committed himself. documents to which he clearly so result support Because the law does reached, only give I benefit can it makes new law order doubt and assume that sympathetic as the facts accommodate what views case, that “bad facts reaffirming adage thus dispute that the facts of this bad There is no make law.” is more appellant in the that the case are “bad” sense major- in Romska. The than the sympathetic appellant trial that court ity takes note of several factors Shay Aldrich v Dissenting Opiniоn Markman, distinguish relied the Melvindale on to Romska: officers rejected case-evaluation awards set, them, a trial date the court was consent Park dismissing entered a order the Allen only.14 officers While I find that the interesting the majority distinguish feels need to a case over- time, rule same not the disagree it at the I do that facts here from at Romska, make this case different least to the they greater extent that evoke some for sympathy However, plaintiffs predicaments. and counsel’s these facts, every while in the sense case distinguishing that another, can distinguished be in its facts from are irrelevant, and it to legally up recognize is courts to legally what distinctions are and While are relevant. one Finch, does not have to Atticus attuned to walking shoes, empathize plaintiff another’s with attorney and his finally once read their own releases, explain why specific the fails to the facts time-honored disregard of this case warrant principles contract of law. 14 majority’s distinguishing of some characterizations of the as pects questionable First, case are this and deserve further comment. majority’s plaintiff “expressly preserved [his that statement claim for battery against by rejecting assault and officers] the Melvindale misleading. case-evaluation awards them” assessed Both rejected and the Melvindale officers case-evaluation awards. Second, majority’s contention that Melvindale release officers’ liability supported simply legally from was not consideration is requirement agree incorrect. There is no consideration for an third-party beneficiary agreement. ment come from of the As the Court “ Appeals case, explained in this basic rule law ‘the of contract is that paid promises whatever consideration is of the for all is consideration for Shay, unpub op 5, Small, quoting App each one ....’” at Hall v 267 Mich 330, 334; Thus, disagree majority’s 705 NW2d 741 I with the complete conclusion that “Melvindale would obtain a officers windfall

by being liability from released for their acts” and that would “be an unjust improperly plaintiffs suggests Such a result....” conclusion true, allegations premised are and it is on a of basic misconstruction cоntract law. 487 MICH Dissenting Opinion Markman, to facts justice evenhanded applied

This Court has in this presented than those far more difficult that are no child has died and loved one case, in which no one have Michigan courts injured. permanently has been to facts that principles our contract applied regularly intended the not have may suggest of a unambiguous language in the expressed meaning Chandelier, Mich at 49 See, Mich e.g., contract. differ- reached a might have that the Court (explaining glean from permitted “[i]f we were ent conclusion Meridian, intent”); his actual defendant] [the mind of consider an affidavit (refusing App at in this case because by plaintiff to that offered similar release”). unambiguous clear and “the “ is not that a ‘mistake has made clear And this Court ” Chandelier, Mich at 48 ambiguity.’ an omitted). (citation Michigan’s steadfastly By applying law, to cases even of contract principles fundamental facts,” as “bad majority may the view involving what stability that of over time Court has determined this meaning to giving of in contract, the rule law equal all contracts, integrity judicial process and the person a careless allowing the of goal over predominate to avoid the conse- read his contract has failed to who subtle, but There will be his carelessness. of quences majority’s the inevitable, legal system the from costs to in consideration to these values give to this same failure today’s decision. MAJORITY’S NEW RULE

III. the is unclear about is much that While there rule, by disregarding clear is that what is majority’s new has embarked this Court principles, contract well-settled parties’ the intentions in which approach on a new such through which in the vehicle expressed v Aldrich Dissenting Opinion Maekman, J. intentions have been traditionally communicated —the Indeed, contract itself —are no longer dispositive.15 majority’s response dissent, studied silence in to this and with to regard law, established rules of contract suggests is majority not much interested in reconciling governed its decision with rules that have the law of contracts in this state more than Instead, century.16 to according rule, the majority’s new a court now may consider extrinsic evidence to deter- 15Contrary majority, to the assertions of the the well-settled and long-established body Michigan governs case, of contract law this not the Third Restatement of Torts. 16 majority any respond The does of the criticisms offered in this dissent, concluding summarily “unpersuasive, that it finds the dissent despite pages length, arguments repetitive its 32 because are analysis However, given Justice Markman’s in Romska... that the majority responded arguments Romska, before has never it is hard response understand relevance of its observation that a on its part short, “repetitive.” majority would any has never offered response. Thus, truly repetitive such all that majority’s here is the why explain arguments failure to offered in are this dissent neither compelling persuasive. nor incorrectly suggests also authorities support Appeals offered in of this dissent are “Court of decisions decided post decisions, course, Romska." These -Romska are not cited to after justify Romska, uniformity are cited but to demonstrate the with which applied resulting Romska has been and the reliance on its rule. The authority support actual cited of this dissent consists the various developed by century, including rules of contract for over Court long-established principles asserting such of contract law as those (a) unambiguous courts create do not and instead enforce written, see, Trust, e.g., 24; contracts as Smith 480 Mich at Franken- muth, (b) 111; Juif, 40-41; required 460 Mich at at are them, see, they sign Bureau, to read their e.g., contracts before Farm 567; 290; Gardner, Plumbing, Mich at Komraus at 236 Mich at (c) 260; Liska, 637-638; latent-ambiguity atMich doctrine is proposition limited permitted the evidence extrinsic is not to alter Chandelier, contract, 48-49; Hall, a written see Mich 297 Mich at 295 (d) 409-410; overriding Mich principle at and freedom is an of contract of Michigan, see, Terrien, 71; e.g., Rory, contract law in 467 Mich at 473 Mich at 469. Dissenting Opinion Markman, 487 Mich liability an a release from “when mine the scope third-party-beneficiary seeks enforce party unnamed the release but on the broad rights based an exists establishes that evidence presented I of the release.” respect scope to the intended with means longer no this rule does not mean —it know what is determine evidence permitted that extrinsic finding patent of a intent upon latеnt But ambiguity. the existence of a ambiguity or considerably it is less what does mean ascertaining Thus, litigation contract this state is clear. increased all but certain. considers prong majority’s

The first rule seeks to enforce third- party whether an “unnamed rights on the broad release party-beneficiary based matter, very threshold first language.” As a with inquiry, majority open word of this leaves identity rule,” possibility adopting “specific general only discharge that a release will which holds “ those named in the release’ . . . .” Rom ‘specifically J., ska, concurring at 526 App (Hoekstra, dissenting part), Develop and Recent part quoting ments, general law—The release Three Tort forms: 445, views, 21 Am J distinct Trial Advoc dissent in Appeals partial Even Court Romska rejected rule, approach “strays that this observing rule,” the furthest from common law and can unwary “create a Rom trap plaintiffs’ attorneys.” (citations ska, at App quotation omitted). marks here is less about explicit preclude its Its decision the re intentions. does every discharged person entity quirement in a in order to specifically named release be within it also this. If scope, acknowledge release’s but does not majority’s adopt “specific it is the intention to effectively it has the use identity rule,” then abolished v Aldrich Dissenting by Opinion Markman, general state; of releases in if is not this this the majority’s intention, its by ensuring then silence it is a in uncertainty and confusion in realm of law which uncertainty and confusion are most to damaging the conduct of and personal business affairs. opinion

The cites the majority favorably also formu- partial lation of the rule the Romska dissent would have adopted:

[I]n to order determine the intentions scope release, general about the of a extrinsic evidence stranger may should be allowed to determine whether a rely language parties, firms, on the “all omnibus other or [Id. corporations” that is within a contained release. at 533 added).] (emphasis

If this is purpose rule, problem the behind its new is that the “very provision controversy, agreed in and the parties contract, explicitly relates to the strangers.” Romska, interests of at 516 n App 4 (majority A opinion). person relying on the “аll other in persons” a release is necessarily a “stranger,” sense, least in a legal at the extent he or Thus, she is party. stating named that a provision contract providing the release “all other of persons” regard is effective with to everyone except a “stranger” equivalent is saying that it is not effective at all. Id. this Since seems to the result majority desires, it accomplish could a far forthright more manner by simply “all holding words other persons” in longer legal a release will no be given effect would, least, this state. This clarify legal at proposition intended by majority.17 17Additionally, stranger/non-stranger I note that this focus on the person issue, status of legal who relies on a release misconceives rights strangers, which rights “does not concern the but rather the 487 MICH Opinion Dissenting Markman, J.

However, straightforward of providing instead rule, crafts wrong, albeit comprehensible, wrong interjects confusion both a new rule obscuring the general, specifically into contract law beneficiaries. rights third-party governing law holding unnecessarily its on its majority premises that “the officers determination Melvindale convoluted the applicable under third-party beneficiaries qualify statute, MCL third-party-beneficiary statute . . . .” The 600.1405, part: in relevant provides, way promise

Any person benefit a is made for whose defined, contract, right to as has the same hereinafter said promise he would had if the enforce said that have directly promisee. to him the promise had been made (1) promise A construed to been made for shall be have person promisor whenever the of said the benefit a give to promise had or or refrain from undertaken do doing directly person. for said something to or Co, Pointe Ins 469 Mich v North Schmalfeldt (2003), this clear 428; provided NW2d 651 Court status determining third-party-beneficiary for guidance a 600.1405, MCL a is explaining “person under of a when that third-party beneficiary contract has undertaken promisor contract establishes that person.” (Emphasis for that promise ‘directly’ to or added.) emphasized further the test Schmalfeldt and, objective status third-party-beneficiary therefore, no than the a court should look further “ determine of the contract itself to meaning’ ‘form ends, agreed-upon including litigative tо a contract to achieve Romska, (majority opinion). finality.” App n 4 Accord- at 516 that, majority’s “gives possibility ingly, little new rule credence to release, settling parties by including wanted to broad in the legal arising possibility potentially out of burdens avoid the of future by plaintiff parties.” against Id. lawsuits third at 517. v Aldrich Dissenting Opinion by Markman, whether a party is an intended third-party beneficiary within the meaning [MCL 600.1405].” Id.

In light of these first I principles, agree with the majority that the Melvindale defendants are third-party beneficiaries of the releases because objec- the releases tively establish promise undertook a “di- rectly” to them. Specifically, by releasing “all other persons . . . any from and all claims . . . resulting from an incident on occurring September 8, 2004,” plaintiff promised to refrain doing from something directly to those is, defendants —that he promised to refrain from pursuing potential claims them resulting from the specified incident. This determination is not nearly as difficult as the majority makes it. Contrary majority’s suggestion, our caselaw governing third- party beneficiaries cannot “be read to mean that important inquiry is the subjective understanding of the contracting parties,” even if “taken out of context,” something no one involved in case, save apparently the majority, has ever thought Rather, do. our case- law unequivocally objective establishes an test to deter- mine status, third-party-beneficiary and the Melvindale defendants are clearly third-party beneficiaries of the releases under this test.

Even more troubling than the majority’s strained determination that the Melvindale defendants are in fact third-party beneficiaries is its misunderstanding regarding the relevance of this determination to the disposition of this case. The majority deems this deter- mination significant because “[ajlthough. .. the Melvindale Officers are entitled as third-party benefi- ciaries to seek enforcement of releases, the the releases are subject to the same ‘limitations’ and ‘infirmities’ as they would have been if they had been directly made for those I officers.” can only speculate about the meaning Mich 648 Opinion Dissenting Makkman, J. then arrive here, and even analysis majority’s the that a dispute beyond hole. It is black logical at a

only the shoes effectively stands beneficiary third-party Accordingly, See MCL 600.1405. original promisee. the as the rights same have the officers the Melvindale Since under Allen Park officers. promisees, original have no officers rule, the Melvindale majority’s majority contract, is this because rights under are rights Park officers’ the Allen has found the Allen one has called infirm? No limited or somehow nor does the into rights question, Park officers’ The be so. why this would any explanation provide ma- support that could alternative rationale officers would the Melvindale analysis is that jority’s the promise even under these contracts rights no have if This MCL 600.1405. to” them. directly “made were statute, to the which contrary directly rationale is to right the “same defendants affirmatively grants had if the [they] would have said promise enforce Id.18 directly [them].” made to had been promise said does properly applied Fortunately, the law when and contortions. legal these convolutions require significant statute is third-party-beneficiary because, beneficiaries third-party this case right had the releases, defendants the Melvindale 600.1405(1). And once de- MCL their terms. enforce fendants’ vested, lost rights became defendants’ reform the releases without ability to majority’s Moreover, appears with the this rationale also inconsistent majority, According rule, it. as far as I can understand own ambiguity “infirmity” that is created is the claimed latent in the releases persons” applied officers. phrase to the Melvindale “all other when them, directly Thus, and if the promise made if the had been releases, have named in the there would officers had been Melvindale by majority’s erroneous standards latent even been no rights infirmity under the contract. somehow limit their thus no v Aldrich 703 Dissenting Opinion by Markman, J. 600.1405(2)(a).19 consent. MCL case, In this Melvindale defendants’ rights became vested once relied the language on “all persons” other and acted on the promise by moving for summary disposition. At that point, equitable remedy of reformation became unavailable to plaintiff under the principle that a court may not act equity “to avoid application statute,” of a in this case the third-party-beneficiary statute. Stokes v Millen Rоofing Co, 660, 466 671-672; 649 NW2d Thus, the relevance of the Melvindale defendants’ third-party-beneficiary goes status availability of equitable relief for on his “emer- gency motion reformation,” which, it should be remembered, he filed two months after the Melvindale defendants moved for summary disposition and more than four months after he executed the releases.20 600.1405(2)(a) MCL states: rights person promise of a for whose benefit a has been made, 600.1405(1)], as defined in [MCL shall be deemed to have vested, subject always

become express implied to such or condi- tions, limitations, or rights infirmities of the contract to which the promisee promise subject, any or the are without act or knowledge binding part, on promise his legally moment the becomes promisor, on the stipulation, agree- unless there is some understanding ment or contrary. in the contract to the See also Anno: Comment Note—Mutual rescission or release contract affecting rights third-party beneficiary, 1262,1264, 97 ALR2d which explains third-party beneficiary “where a accepted contract has been upon by party, or acted the third principal it cannot be rescinded party’s without the third consent.” light chronology, of this there are why additional reasons may reformation not have been plaintiff, including available to one “ following derived equitable from the ‘Equity maxim: will not assist man whose condition is diligence attributable to that want of ” may fairly expected which person.’ from a reasonable Powers v Co, (1930) 588; Indiana & Mich Electric 252 Mich 233 NW 424 (citation omitted). Makkman, Opinion Dissenting rule, new majority’s of the

However, prong the first seeks to party an “unnamed considers whether which that rights,” suggests third-party-beneficiary enforce is, That it different reason. for a the statute is relevant rule, fact that an majority’s under the appears a re- relying is on beneficiary third-party “unnamed” release, of the legal effect transforms lease somehow be unam- what would otherwise rendering ambiguous interpre- rule of any existing of I am unaware biguous. approach by a novel which adopts such tation on the language depends unambiguous of legal effect Quite applies. simply, language to whom such persons into the law majority introduces the confusion is inexcusable third-party beneficiaries governing is rel- statute unnecеssary. third-party-beneficiary a court from only precludes case because evant reformation, not be- motion for considering plaintiffs Michigan contract rewriting provides cause it basis law. rule consid- majority’s of the new prong

The second that an “the establishes presented ers whether evidence scope to the intended of respect exists with ambiguity statement, conclu- majority the release.” With this re- misunderstanding its sively profound illustrates major- to the ambiguity. Contrary garding contractual rule, a contract is here, general as a when ity’s assertion is face, its extrinsic evidence unambiguous on clear exists ambiguity that an “establish^] to permitted not release.” Such scope the intended respect with case to exceptional in the only permitted is evidence and a latent ambiguity, of a latent the existence prove “ when the ‘circum- found to exist ambiguity is refer [are] of the instrument stances to which the words development a mere susceptible explanation or altering adding facts without extraneous (citation Hall, 295 Mich at ....’” written v Aldrich Dissenting Opinion Markman, “ added). omitted; is, That emphasis ‘claimed latent not ambiguity permissible vary, is add or contra- dict the plainly expressed writing terms of ....’” th[e] Chandelier, majority Mich at 48. The has it exactly by allowing backwards extrinsic evidence to be presented to that an ambiguity [apparently “establishU added.) patent Thus, latent] or exists . (Emphasis . . .” holding today, its majority uses the latent- ambiguity exception, permits doctrine’s which extrinsic evidence an to discern intent has been before exist, found to to rewrite the rule fundamental contracts when a unambiguous contact clear and face, on its a court will not consider evidence extrinsic and will See, e.g., enforce contract as written. Farm Bureau, Mich at 566. The does even this acknowledge remarkable break with than 150 more years of contract law in this state.

Tragically, the impact majority’s of the rule new will be felt by the millions of citizens of this state who rely on promises contracts, the of good and the of faith those contracts, who enter such into to per- structure their sonal and business affairs. There is simply principled no reason in why the law the majority’s new rule should not be extended to in general. contact Although law the majority might consider ruling its as a one that narrow is limited to “unnamed” third-party beneficiaries of a contract, is not there one rule of contract law Michigan applies disputes to and parties between another that applies disputes rule involving to third parties, Indeed, at least before today. MCL 600.1405 makes clear that third party right has the same enforce a promise he would have had if the promise had been made to him. directly Moreover, there is no principled limiting majority’s reason new rule to only, opposed releases generally. contracts As the majority recognizes, applied itself this Court has always 487 Mich 648 Dissenting Opinion Markman, regarding disputes of contract law to

the same theories 332, 335-338; 86 Utley, Denton v a release. See “ contract, ‘[t]he in any As other NW2d 537 ” turns intent of the validity parties,’ a release on the of “ unam- of a release is clear and and ‘[i]f is ascertained from biguous, intent of the ” ordinary language.’ of the plain meaning and Contractors, Inc, Mar-Que Gen Batshon v (citation omitted). (2001) Finally, 650; 624 NW2d will majority not take false hope citizens should because, de- unfortunately, limit its instant ruling this as of cision is with the actions of Court consistent view, In my late in of contract law.21 it is the realm rule that the of law demands that contracts self-evident provides leadership that this respected Court this legal direction to ensure that occurs. Unfortu- I in the nately, my colleagues am not convinced that I Therefore, I although share this view. wish apply that the new rule will not majority’s could believe I no broadly general, to contracts see rational reason Doubtless, why years be so. after unnec- would the case essary litigation, we will learn whether this is or not.

IV CONCLUSION reasons, I For all these affirm unanimous would the Court of judgment Appeals, which reversed ‍‌​​​‌​​‌​‌‌​‌​​​‌‌‌​‌‌​‌‌‌‌​​​​​​​​‌​​‌‌​‌‌‌​‌‌​‍in favor entry judgment trial court and remanded for deciding the con- Melvindale defendants. trary overruling Opper, majority’s Romska v law in state recklessly decision unsettles contract analysis. an essentially impenetrable on basis of majority’s Because “rule” undermines new Servs, Meadowbrook, See, Inc, e.g., Mich 907 Genesee Foods Inc v Aldrich v Markman, J. Opinion Dissenting express ignores contract, and because freedom contract, the of this relevant lawmakers ofthe strongly parties themselves, I dissent.

Corrigan Young, Markman, JJ., concurred with

Case Details

Case Name: Shay v. Aldrich

Court Name: Michigan Supreme Court

Date Published: Aug 23, 2010

Citation: 790 N.W.2d 629

Docket Number: Docket 138908

Court Abbreviation: Mich.