North American Brokers LLC v. Howell Public Schools
North American Brokers LLC v. Howell Public Schools
Opinion of the Court
On April 12, 2018, the Court heard oral argument on the application for leave to appeal the February 9, 2017 judgment of the Court of Appeals. On order of the Court, the application is again considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court.
The equitable principle of estoppel is many centuries old. Under the doctrine, a promise that the promisor should reasonably expect to produce action or inaction from its recipient may be binding if justice so requires. See Restatement Contracts, 2d, § 90. Its age highlights its staying power. Over the years, it has been widely adopted, easily applied, and narrowly tailored. I agree with the Court that we should decline an invitation to disassemble it today.
The English Parliament adopted the first statute of frauds in 1677. Note,
Statute of Frauds-The Doctrine of Equitable Estoppel and the Statute of Frauds
,
From the very beginning of British jurisprudence relating to the statute of frauds, British courts have applied equitable rules to enforce promises that induced a party to act in reliance. Costigan, Jr.,
The Date and Authorship of the Statute of Frauds
,
Michigan is no outlier. Our Legislature passed the first statute of frauds in 1838, just after statehood, 1838 RS, pt. 2, tit. vi, ch. 1, and before that, a statute of frauds could be found in Michigan's territorial
laws, 1 Territorial Laws, Act of December 7, 1819, § 10, p. 467. And this Court has applied the doctrine of equitable estoppel for nearly a century to prevent the statute from becoming "an instrument of fraud."
Lyle v. Munson
,
More recently, this Court affirmed promissory estoppel in
Opdyke Investment Co. v. Norris Grain Co.
,
We have considerable company. Three-fifths of the states apply promissory estoppel in some fashion despite the statute of frauds.
And even the cases the dissent cites do not uniformly support its position. The dissent cites
Tiffany Inc. v. WMK Transit Mix, Inc.
,
And then there's stare decisis.
As the brief tour of the statute's history, our relevant jurisprudence and that of our sister states demonstrates,
Opdyke
was correctly decided. Confronted with this same problem over the years and across jurisdictions, courts have repeatedly permitted parties to rely on promissory estoppel to enforce noncontractual promises in
the right circumstances. This is unsurprising, as the doctrine exemplifies practical workability by setting out a straightforward legal rule for courts to follow. The Court of Appeals opinion in this case proves the point: for all its grousing about the result, the panel had no trouble reaching it.
To overrule
Opdyke
and reject equitable exceptions to the statute of frauds would contravene core principles of stare decisis. Stability in the law is usually preferred, as it prevents arbitrary discretion by courts.
McCormick v. Carrier
,
But there's more. To abandon all equitable exceptions to the statute of frauds, as the dissent advocates, implicates not only
Opdyke
, but also more than a century of our Court's precedent (not to mention centuries of English common law before that). While the dissent believes that this result is warranted by the plain language of the text and by principles of judicial restraint, in fact overruling, in one fell swoop, centuries of well-settled precedent tilts in the other direction. "[T]he longer a rule has continued, the more thoroughly has it inevitably become interwoven with the business and property interests of the community at large; and, therefore, the more disastrous must be a change, especially a sudden change." Wells, A Treatise on the Doctrines of Res Judicata and Stare Decisis (1878), pp. 544-545. The dissent has this characterization backwards; the majority's decision today is compelled by principles of stability and judicial modesty.
The rule has not, moreover, declared open season on contracts. As an equitable doctrine, courts retain the discretion to strictly enforce the statute of frauds. Countless decisions have done just that. E.g.
Hazime v. Martin Oil Co. of Ind.
,
While it may be correct that very few people have ever entered an agreement with the expectation of having it violated and later judicially enforced by promissory estoppel, this view misses the point. Very few people have ever driven a car with the expectation of triggering their airbags, but the presence of the safety device allows them peace of mind and mitigates injuries from the unexpected crash. Just so, promissory estoppel allows parties to trust each other in matters where trust is essential and permits limited recovery where a party has acted in bad faith. See
Curry
,
There are times when courts must overturn precedent. But, in my view, those occasions should be rare and the case for doing so compelling. This is plainly not one of those cases.
Even if doctrine had grown stale, this case would be a poor vehicle to upend it. I largely agree with the dissent's view of the facts, but one key point is missing: the defendant chose not to produce any evidence to support its position regarding summary disposition. Instead of giving the trial court facts from which it could have determined that the plaintiff's claim of promissory estoppel was not supported, it decided instead to ask the court to hold the doctrine inapplicable, an impossible request of any court but this one.
This strategic decision should have prevented the trial court from granting the defendant's motion for summary disposition under MCR 2.116(C)(8). In ruling on the motion, the trial court must accept all well-pled factual allegations as true in the light most favorable to the nonmoving party, and it may only grant the motion if the claims are so clearly unenforceable as a matter of law that no factual development could possibly justify recovery.
Maiden v. Rozwood
,
The plaintiffs claim that the defendant promised them they would be paid a broker's commission for their role in matching the defendant with a buyer. They submitted a photo of the defendant's sign that read "Brokers Protected" and alleged that this text is understood in their industry as a promise to pay a brokerage fee. The defendant made no counter allegations and submitted nothing to rebut the plaintiffs' claims. Perhaps if the defendant had submitted evidence in support of summary disposition, the trial could have properly concluded that there was no "clear and definite" promise, and thus, promissory estoppel was inapposite. But because it did not, the trial court was obligated to follow Opdyke and was not in a position to make the new rule of law the dissent would want this Court to make. And the Court of Appeals was correct to reverse the trial court's grant of the defendant's motion on this record.
What's more, the procedural history of this case makes it a poor candidate to announce a watershed ruling. It is interlocutory, and discovery has not taken place, so there is still room for factual development. If we were to make the robust doctrinal move the dissent would have us make, this would be a startling case in which to do so.
For all these reasons, the Court is correct to deny leave on this case.
Viviano, J., joins the statement of McCormack, J.
As rules of evidence developed to address many of the concerns that gave rise to the statute of frauds, the statute came under criticism as unnecessary or dangerous. See Epstein, Starbird & Vincent,
Reliance on Oral Promises: Statute of Frauds and Promissory Estoppel
,
The 1992 revision added a section that the Court of Appeals has interpreted to prevent promissory estoppel from applying to suits against financial institutions. See
Crown Tech. Park v. D&N Bank, FSB
,
And the Chief Justice has recognized another equitable doctrine, partial performance, as creating an exception to the statute of frauds.
Vittiglio v. Vittiglio
,
Kiernan v. Creech
,
"Stare decisis," the Latin phrase that means "to stand by the decided matters," is, of course, our shorthand for the principle that guides our branch of government: that we should respect our earlier decisions.
Writing in support of the defendants, Michigan Realtors argues that
Opdyke
undermines good business practices, and the dissent is persuaded that this should feature in our consideration. We are in no position to gainsay these policy arguments, but they are more properly directed towards the Capitol Building, not the Hall of Justice. The Legislature has amended the Statute of Frauds to clarify the application of promissory estoppel for certain industries. See
Crown Technology Park v. D&N Bank
,
If it is a retreat from textualism, as the dissent asserts, to recognize that in certain instances-this case being an obvious example-the doctrine of stare decisis operates as a pragmatic exception to dogmatic textualism, at least I have the comfort of knowing that I am in good company. See Scalia, A Matter of Interpretation: Federal Courts and the Law , pp. 138-139 (Princeton: Princeton University Press, 1997) ("Originalism, like any other theory of interpretation put into practice in an ongoing system of law, must accommodate the doctrine of stare decisis ; it cannot remake the world anew. It is of no more consequence at this point whether the Alien and Sedition Acts of 1798 were in accord with the original understanding of the First Amendment than it is whether Marbury v. Madison was decided correctly."); Scalia & Garner, Reading Law: The Interpretation of Legal Texts (St. Paul: Thomson/West, 2012), pp. 413-414 (asserting that "[s]tare decisis ... is not a part of textualism. It is an exception to textualism ... born not of logic but of necessity. Courts cannot consider anew every previously decided question that comes before them. Stare decisis has been a part of our law from time immemorial, and we must bow to it. All we categorically propose here is that, when a governing precedent deserving of stare decisis effect does not dictate a contrary disposition, judges ought to use proper methods of textual interpretation. If they will do that, then over time the law will be more certain, and the rule of law more secure.").
Promissory estoppel has also gained widespread acceptance in learned treatises. E.g., Restatement Contracts, 2d, § 90 ; 4 Williston, Contracts (4th ed.), § 8:4; 4 Am. Jur. 2d, Proof of Facts, § 641; 3 Williston & Jaeger, A Treatise on the Law of Contracts (3d ed.), § 533A.
Dissenting Opinion
The issue in this case is straightforward. MCL 566.132(1)(e) plainly provides that an agreement, promise, or contract to pay a commission for or upon the sale of an interest in real estate promise is void unless that agreement, contract, or promise is in writing and signed by the party to be charged with the agreement, contract, or promise. Despite this legislative directive, this Court has sanctioned the enforcement of an unwritten promise to pay a commission for or upon the sale of an interest in real estate. Because the law clearly provides that this promise is void, it is not enforceable. Accordingly, I dissent. I would overrule this Court's decision in
Opdyke Investment Co. v. Norris Grain Co.
I. BASIC FACTS AND PROCEDURAL HISTORY
Plaintiffs are real estate brokers who seek compensation for their efforts in procuring the sale of real property from defendant Howell Public Schools to defendant St. John Hospital. According to plaintiffs' complaint, Howell Public Schools offered for sale real property through a sign stating that the sale was "broker protected." The complaint alleges that this sign "explicitly promised [p]laintiffs that [Howell Public Schools] would honor the earned broker fee for delivering to [Howell Public Schools] a buyer." Plaintiffs allege that they relied on this promise by expending considerable effort to broker a sale of the property to St. John. According to the complaint, plaintiffs contacted an associate superintendent of Howell Public Schools and informed him they had a "client" interested in viewing their listed properties. Later, plaintiffs met with this associate superintendent at one of Howell Public Schools' properties, the Latson School Property, and toured the site. Afterwards, plaintiffs sent St. John a "Letter of Intent" to sign and return. St. John did not return the document. Plaintiffs also sent the associate superintendent a "Confidentiality, Commission & Broker Protection Agreement." This document was likewise not returned, apparently and according to plaintiffs' complaint, because plaintiffs sought an 8% commission for the sale. Plaintiffs allege in their complaint that "[u]pon information and belief, sometime in, or around, early April 2014, one of the Defendants caused Thomas A. Duke Company, a commercial real estate company, to fashion a purchase agreement for the sale of the Latson School Property from Howell [Public] Schools to St. John." Plaintiffs' complaint further alleges that defendants learned in late April 2014 of plaintiffs' efforts to broker a sale between them. Plaintiffs allege that "a few months later, on July 7, 2014, Howell [Public] Schools entered into a purchase agreement with St. John for the Latson School Property."
In lieu of an answer, defendants filed a motion for summary disposition, arguing that plaintiffs' complaint must be dismissed under MCL 566.132, commonly known as the statute of frauds. The statute of frauds requires certain types of agreements to be in writing and signed by the party against whom it will be enforced. This expressly includes "[a]n agreement, promise, or contract to pay a commission for or upon the sale of an interest in real estate." MCL 566.132(1)(e). Plaintiffs countered that the statute of frauds did not apply because plaintiffs pleaded a theory of promissory estoppel, which is a judicially created exception to the statute of frauds. The circuit court granted defendants' motion and dismissed the case.
The Court of Appeals reversed, reluctantly holding that "[r]egardless of the wisdom of using a judicially created exception to a statute, we must apply it."
Howell Public Schools appealed in this Court. We ordered argument on the application and requested that the parties file supplemental briefs on the question whether promissory estoppel is an exception to the statute of frauds.
II. ANALYSIS
MCL 566.132(1) expressly provides in relevant part:
In the following cases an agreement, contract, or promise is void unless that agreement, contract, or promise, or a note or memorandum of the agreement, contract, or promise is in writing and signed with an authorized signature by the party to be charged with the agreement, contract, or promise:
* * *
(e) An agreement, promise, or contract to pay a commission for or upon the sale of an interest in real estate.
There is no dispute that the plain language of MCL 566.132 renders "void" Howell Public Schools' alleged "promise ... to pay a commission for or upon the sale of an interest in land" because there is no "writing" that is "signed with an authorized signature by" Howell Public Schools. In fact, plaintiffs admit that Howell Public Schools flat-out refused to sign their proposed agreement. The text of MCL 566.132 is clear and definite; unless there is a writing signed with an authorized signature by the party to be charged, the promise is void. The Legislature did not provide for any exceptions to this rule. Thus, the statute of frauds should apply in this case.
Like the Court of Appeals panel in this case, I have previously been in a position to "reluctantly agree" that the statute of frauds can be circumvented through judicially created exceptions "[r]ather than deferring to the Legislature to address through the legislative amendment process any perceived inequity in the statute of frauds ...."
[a]llowing judge-made doctrines such as estoppel to override and preclude the application of legislatively created laws such as the statute of frauds "is contrary to well-founded principles of statutory construction and is inconsistent with traditional notions of the separation of powers between the judicial and legislative branches of government." [17 ]
The concurrence states that we ought not reverse
Opdyke
under principles of stare decisis. Indeed, this Court is generally reluctant to overturn precedent. It is often argued that the Court should be particularly careful overturning statutory precedent that the Legislature is in a position to clarify on its own through new legislation. Nonetheless, this Court has recognized that "legislative acquiescence ... is an exceptionally poor indicator of
legislative intent."
[I]t is to the words of the statute itself that a citizen first looks for guidance in directing his actions. This is the essence of the rule of law: to know in advance what the rules of society are. Thus, if the words of the statute are clear, the actor should be able to expect ... that they will be carried out by all in society, including the courts. In fact, should a court confound those legitimate citizen expectations by misreading or misconstruing a statute, it is that court itself that has disrupted the reliance interest. When that happens, a subsequent court, rather than holding to the distorted reading because of the doctrine of stare decisis, should overrule the earlier court's misconstruction. The reason for this is that the court in distorting the statute was engaged in a form of judicial usurpation that runs counter to the bedrock principle of American constitutionalism, i.e., that the lawmaking power is reposed in the people as reflected in the work of the Legislature, and, absent a constitutional violation, the courts have no legitimacy in overruling or nullifying the people's representatives. Moreover, not only does such a compromising by a court of the citizen's ability to rely on a statute have no constitutional warrant, it can gain no higher pedigree as later courts repeat the error. [ Robinson v. Detroit ,462 Mich. 439 , 467-468,613 N.W.2d 307 (2000).]
In such cases, where the result of a decision effectively "usurp[s]" or "nullif[ies]" the "legislative function," this Court is obligated to correct that decision, regardless whether the Legislature has " 'acquiesced' in the decisions of the Court to which it has not responded ...."
In determining whether to overrule a prior case, this Court first considers whether the earlier case was wrongly decided.
As cogently explained by amicus curiae Michigan Realtors (amicus),
Opdyke
undermines the good business practices of more than 28,000 appraisers, brokers, and salespersons licensed under Michigan law, who are "consistently taught that there is no entitlement to a commission based upon agreements or promises that are not in writing and are not signed by the party to be charged." The members of amicus are clearly significant stakeholders to this aspect of Michigan law, as they are involved in hundreds of real estate transactions each day. This Court should not dismiss amicus's concern that "[t]he application of promissory estoppel to circumvent the statute of frauds creates an exception to an otherwise clear rule and fosters uncertainty and ambiguity in what are currently fairly 'cut and dried' transactions." In particular, amicus highlights that "[t]he application of promissory estoppel to the ... statute of frauds potentially subjects sellers of residential real estate in Michigan to claims for more than one commission." Members of amicus are not seeking special treatment, but are only requesting that Michigan courts faithfully apply the plain language of the statute of frauds in all cases. Sustaining this Court's decision in
Opdyke
will only continue to undermine the "practical workability" of amicus's good business practices and result in unnecessary and costly litigation.
The notion that promissory estoppel is barred by a legislative directive that particular contracts must be in writing is not radical. Indeed, several out-of-state jurisdictions have enforced the statute of frauds and rejected judicially created exceptions to it for the same reason.
Stearns v. Emery-Waterhouse Co.
Greaves v. Med. Imaging Sys., Inc.
Likewise, our caselaw supports the conclusion that the statute of frauds cannot be circumvented by a promissory estoppel claim. See, e.g.,
Collin v. Kittelberger
To determine whether a case that was wrongly decided should be overruled, the Court must "examine reliance interests," specifically:
whether the prior decision defies "practical workability"; whether the prior decision has become so embedded, so fundamental to everyone's expectations that to change it would produce not just readjustments, but practical real-world dislocations; whether changes in the law or facts no longer justify the prior decision; and whether the prior decision misread or misconstrued a statute. [43 ]
Suffice to say that very few people have ever sought to enter an agreement, contract, or promise expecting to enforce the agreement, contract, or promise based on an equitable exception to the statute of frauds. And for those who have done so, they would necessarily be precluded from asserting an equitable claim because they would in effect have "unclean hands." Thus, overruling
Opdyke
would not unsettle a single person's legitimate expectations.
The concurrence also suggests that
Opdyke
, a case decided by this Court in 1982, ought not be reversed because it is grounded in common law principles of equities that are centuries old. While I agree that "[t]he equitable principle of estoppel is many centuries old," the principle of promissory estoppel was not developed until sometime in the twentieth century, was not embraced by the Michigan Supreme Court until 1977,
"Courts that have taken a textualist approach with respect to implied terms generally have not identified implied estoppel exceptions."
Accordingly, a textualist approach would embrace the notion that when the Legislature intended for common law and other exceptions to apply to the statute of frauds for the uniform commercial code, it expressly provided those exceptions. See MCL 440.2201(3)(a) through (c). This is reflected in Justice MARKMAN 's concurrence in
Vittiglio v. Vittiglio
.
No estate or interest in lands, other than leases for a term not exceeding 1 year, nor any trust or power over or concerning lands, or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered or declared, unless by act or operation of law, or by a deed or conveyance in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same, or by some person thereunto by him lawfully authorized by writing.
And MCL 566.108 provides as follows:
Every contract for the leasing for a longer period than 1 year, or for the sale of any lands, or any interest in lands, shall be void, unless the contract, or some note or memorandum thereof be in writing, and signed by the party by whom the lease or sale is to be made, or by some person thereunto by him lawfully authorized in writing: Provided, That whenever any lands or interest in lands shall be sold at public auction and the auctioneer or the clerk of the auction at the time of the sale enters in a sale book a memorandum specifying the description and price of the land sold and the name of the purchaser, such memorandum, together with the auction bills, catalog or written or printed notice of sale containing the name of the person on whose account the sale is made and the terms of sale, shall be deemed a memorandum of the contract of sale within the meaning of this section.
Although MCL 566.106 and MCL 566.108 are distinct statute of frauds provisions from MCL 566.132, all three provisions are contained within Chapter 566 of the Michigan Compiled Laws. And MCL 566.110 provides as follows: "Nothing in this chapter [i.e., Chapter 566] contained shall be construed to abridge the powers of the court of chancery to compel the specific performance of agreements, in cases of part performance of such agreements." That is, the Legislature has explicitly adopted a provision to make clear that "part performance" may operate as an exception to the statute of frauds.
That the Legislature felt the need to affirmatively specify that "part performance"
may constitute an exception to the statute of frauds reinforces the proposition that, as actually written, the statute of frauds does not already contain equitable exceptions of the sort read into it by the majority in acquiescing to Opdyke . Clearly, where the Legislature believes it proper to establish an exception to the statute of frauds, it has provided for such exception. When the history of this Court's retreat from textually grounded interpretations of the law is written, its erosion of the statute of frauds in such cases as this will be writ large.
III. CONCLUSION
I would overrule this Court's decision in Opdyke and apply the plain language of MCL 566.132(1). Accordingly, I would reverse the opinion and order of the Court of Appeals and remand to the circuit court to reinstate the judgment in favor of Howell Public Schools.
Markman, C.J., and Wilder, J., join the statement of Zahra, J.
Opdyke Investment Co. v. Norris Grain Co.
,
Plaintiffs and St. John reached a settlement and St. John was dismissed from the case.
North American Brokers v. Howell Pub. Sch.
, unpublished per curiam opinion of the Court of Appeals, issued February 9, 2017 (Docket No. 330126), p. 3,
North American Brokers , unpub. op. at 3 (quotation marks and citation omitted).
Id . at 3 n. 2.
Kelly-Stehney & Assoc., Inc. v. MacDonald's Indus. Prod., Inc.
,
Id
. at 615,
Opdyke
,
Kelly-Stehney
,
McCahan v. Brennan,
Collier & DeRosier,
Understanding The Overrulings: A Response To Robert Sedler
,
Opdyke
,
Rowland v. Washtenaw Co. Rd. Comm.
,
Robinson
,
MCL 566.132 has been amended and renumbered since
Opdyke
was decided, but the changes have no bearing on this analysis. See
Opdyke
,
The version of the provision in effect when
Opdyke
was decided, MCL 566.132(e), also applied to a "promise." See
I strongly disagree with the concurrence that amicus has presented policy arguments that "are more properly directed towards the Capitol Building, not the Hall of Justice." The only policy that Howell Public Schools and amicus seek is to apply is that which the Legislature has already written in the statute of frauds. The problem is not that the Legislature has failed to act; it is that this Court refuses to apply the law by giving plain and ordinary meaning to the legislative mandate that "[a]n agreement, promise, or contract to pay a commission for or upon the sale of an interest in real estate" "must be in writing." MCL 566.132(1)(e). And to suggest that these arguments are better directed towards the same body that wrote this clear and unambiguous directive is truly puzzling, given this Court's refusal to apply the statute of frauds as currently written.
Stearns v. Emery-Waterhouse Co.
,
Greaves v. Med. Imaging Sys., Inc.
,
Morsinkhoff v. DeLuxe Laundry & Dry Cleaning Co.
,
Tiffany Inc. v. WMK Transit Mix, Inc.
,
Sinclair v. Sullivan Chevrolet Co.
,
Austin v. Cash
,
Anderson Const. Co., Inc. v. Lyon Metal Prod., Inc.
,
Bethune v. City of Mountain Brook
,
Lovely v. Dierkes
,
Collin v. Kittelberger
,
Paul v. Graham
,
McGavock v. Ducharme
,
Slocum v. Smith
,
Smith v. Starke
,
Aetna Mtg. Co. v. Dembs
,
It is passing strange that the concurrence would quote Justice Antonin Scalia to place the question whether Opdyke should be overruled on equal footing with the questions "whether the Alien and Sedition Acts of 1798 were in accord with the original understanding of the First Amendment ... [and] whether Marbury v. Madison was decided correctly." As Justice Scalia noted in his more recent book with Bryan Garner, Reading Law: The Interpretation of Legal Texts :
We do not propose that all the decisions made, and doctrines adopted, in the past half-century or so of unrestrained constitutional improvisation be set aside-only those that fail to meet the criteria for stare decisis. These include consideration of (1) whether harm will be caused to those who justifiably relied on the decision, (2) how clear it is that the decision was textually and historically wrong, (3) whether the decision has been generally accepted by society, and (4) whether the decision permanently places courts in the position of making policy calls appropriate for elected officials. [Scalia & Garner, Reading Law: The Interpretation of Legal Texts (St. Paul: Thomson/West, 2012), p. 412 (citations omitted) ].
Opdyke
is not only inconsistent with Michigan caselaw that suggests the statute of frauds cannot be circumvented by a promissory estoppel, see notes 28 through 32 of this statement, it has on at least three occasions been criticized in the Court of Appeals. See, e.g.,
Lovely
,
The concurrence caricatures the dissenting position as "dogmatic textualism." To the contrary, the dissent merely recognizes that it is the text of the law to which the people first look to understand their rights and responsibilities. And the "doctrine [of stare decisis] is not, to be sure, an imprisonment of reason."
United States v. Int'l Boxing Club of NY
,
Rowland
,
The fact that a party may eventually rely on promissory estoppel or another equitable exception after they make an oral agreement and once litigation has ensued is irrelevant to the stare decisis analysis. In analyzing reliance interests and whether the prior decision has become so embedded or fundamental to everyone's expectations that to change it would produce significant dislocations, this Court does not look to after-the-fact awareness of the previous caselaw. See
Robinson
,
Huhtala v. Travelers Ins Co.
,
Feinman,
Promissory Estoppel and Judicial Method
,
Knapp,
Rescuing Reliance: The Perils Of Promissory Estoppel
,
Black's Law Dictionary (10th ed.).
Id .
Maggs,
Estoppel And Textualism
,
Vittiglio v. Vittiglio
,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.