Clay W Long v. Harbor Point Association

STATE OF MICHIGAN

COURT OF APPEALS

CLAY W. LONG, UNPUBLISHED
October 15, 2015
Plaintiff/Counter Defendant-
Appellant,

v No. 322327
Emmett Circuit Court
HARBOR POINT ASSOCIATION, LC No. 13-103876-CH

Defendant/Counter Plaintiff/Third
Party Plaintiff-Appellee,
and

LYNSEY LONG,1

Third Party Defendant.

Before: MARKEY, P.J., and STEPHENS and RIORDAN, JJ.

PER CURIAM.

Plaintiff sought a declaratory judgment that he was under no contractual or other
obligation to pay defendant an assessment and that defendant was required to grant him
easements for utilities and access to his property. The trial court granted defendant summary
disposition finding that plaintiff was required to pay the assessment and that this finding required
dismissal of plaintiff’s remaining claims seeking easements over defendant’s property. Plaintiff
appeals by right. We affirm.

I. FACTUAL BACKGROUND

Defendant is an association incorporated under the Summer Resort Association Act,
MCL 455.1 et seq. Defendant’s members are essentially all owners of cottages that are located
on a pointed peninsula with Little Traverse Harbor to the North and Little Traverse Bay to the

1
The trial court dismissed defendant’s counterclaim against plaintiff’s wife, Lynsey Long,
finding that her interest in the property at issue at the time of the suit was merely an “inchoate
dower interest.” Long is not a party to this appeal.

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South. Defendant Association owns all the land on the peninsula with the exception of a small
plot of land in the northwest corner which is known as the “ice lots.” The ice lots are a plot
where the town kept its ice house. When the ice house was abandoned, defendant chose not to
purchase the ice lots. Thus, the ice lots are surrounded on three sides by land owned by
defendant and on the fourth side by Little Traverse Harbor. Plaintiff owns a portion of the ice
lots and has a cottage on his property.

Defendant charges each of its members an assessment to fund such things as water line
maintenance, sewer maintenance, security, fire protection, snowplowing, etc. Additionally, it
funds upkeep of defendant’s common areas, such as parks, a golf course, and a horse and buggy
transportation system. In 1916, defendant passed a resolution that stated that ice lot owners
would be provided all of the amenities enjoyed by regular members so long as they paid the
assessment fee. Ice lot owners, however, are not members of defendant Association, so they are
not entitled to vote in defendant’s elections or serve as officers or directors of defendant
Association.

Plaintiff acquired his property in 1992. His father originally gave the property to plaintiff
and his sister as tenants in common. In 1994, plaintiff acquired his sister’s one-half interest in
the property. Plaintiff’s father acquired the property via a probate deed that granted him the
property

[s]ubject to the following two covenants which shall be binding on second party,
his executors, administrators, heirs and assigns:

* * *

(2) Ownership of the property above described shall never be
transferred, except with prior written approval of the Directors of Harbor Point
Association, of Harbor Springs, Michigan.

Subject further to general taxes not yet due and payable; special taxes and
assessments not yet due and payable; covenants, conditions and restrictions of
record including, but not limited to the rights of the Association in the property;
zoning and building laws and ordinances; public utility easements; public roads
and highways; public and private easements; drainage ditches; feeders and
latterals; and Association rules, regulations and by-laws, to the extent applicable.

From the time plaintiff acquired his ice lot property in 1992 until 2002, he paid the
assessment to defendant without protest. In 2002, plaintiff requested that he be exempted from a
portion of the assessment that was used to fund the horse and buggy system because plaintiff did
not use that service. But in the letter, plaintiff stated that he was aware of “the need for everyone
to fund common elements.” The record is unclear regarding whether plaintiff was granted this
exception. In 2006 and 2007, plaintiff paid the assessment but did so under protest. It is also not
clear what occurred in 2008 and 2009, but in 2010, plaintiff refused to pay the assessment.
Defendant filed suit against plaintiff in district court in 2010. The district court held that a
contract implied in fact existed between the parties whereby defendant would provide services to

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plaintiff and plaintiff would pay for those services in the form of the assessment fee.
Specifically, the district court held:

[Plaintiff] purchased [his] property understanding that services were going
to be rendered to the benefit of [his] property by Harbor Point Association, and by
paying the dues, that [he] had the authority to use all of the services of Harbor
Point Association.

These facts established that there was in fact an implied contract and
understanding by [plaintiff] when [he] acquired title that [he] would be receiving
the benefits of the services to be provided to [him] by, and to use the property of,
Harbor Point Association, and would pay dues to Harbor Point Association.

In one of his pleadings in the 2010 litigation, plaintiff asserted:

[Plaintiff (and his wife)] do hereby notify the Association that they terminate any
contracts, express or implied, that they may have ever had between themselves
and the Association to pay assessments or similar charges or dues that the
Association may attempt to impose upon them.

Plaintiff thereafter filed this action seeking a declaratory judgment that due to this renunciation,
no implied in fact contract continued to exist between himself and defendant. Plaintiff also
asserted claims for easements for both access and utilities over defendant’s property.

The trial court found that notwithstanding the declaration, plaintiff’s property continued
to receive the benefit of services from defendant. The trial court stated that plaintiff’s position
was not an attempt to terminate the contract but to unilaterally modify it. The trial court found
that what defendant offered was a “package of services” that are not separately available;
consequently, the court granted defendant summary disposition on both its counterclaim and on
plaintiff’s claim for declaratory relief. Having decided that an implied contract existed, the trial
court found it was unnecessary to address plaintiff’s claims of easements for access and utilities.

II. STANDARD OF REVIEW

This Court “reviews the grant or denial of summary disposition de novo to determine if
the moving party is entitled to judgment as a matter of law.” Maiden v Rozwood, 461 Mich 109,
118; 597 NW2d 817 (1999); MCR 2.116(C)(10).

III. ANALYSIS

Preliminarily, defendant argues that res judicata precludes plaintiff from contesting
whether a contract implied in fact exists since that issue was determined by the district court in
the 2010 litigation between the parties. Although the trial court’s opinion in this case did not
specifically address the issue of res judicata, defendant can raise it as an alternative reason for
affirming the trial court’s decision. See Middlebrooks v Wayne Co, 446 Mich 151, 166 n 41; 521
NW2d 774 (1994) (noting a cross appeal is not necessary to assert an alternative basis to affirm
the lower court); and Smith v Foerster-Bolser Constr, Inc, 269 Mich App 424, 427; 711 NW2d

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421 (2006) (holding that this Court “may overlook preservation requirements if . . . the issue
involves a question of law and the facts necessary for its resolution have been presented”).
Moreover, this Court will affirm a trial court when it reaches the correct result even if for the
wrong reason. Hess v Cannon Twp, 265 Mich App 582, 596; 696 NW2d 742 (2005).

“Res judicata bars a subsequent action between the same parties when the evidence or
essential facts are identical.” Sewell v Clean Cut Mgmt, 463 Mich 569, 575; 621 NW2d 222
(2001). In Michigan, the doctrine of res judicata bars claims that have been already litigated, but
also bars “every claim arising from the same transaction that the parties, exercising reasonable
diligence, could have raised but did not.” Id. “The doctrine of res judicata applies not only to
facts previously litigated, but also to points of law necessarily adjudicated in determining and
deciding the subject matter of the litigation.” Jones v State Farm Mut Auto Ins Co, 202 Mich
App 393, 401; 509 NW2d 829 (1993), modified on other grounds Patterson v Kleiman, 447
Mich 429; 526 NW2d 879 (1994). The doctrine precludes litigation of a second action when
“(1) the first action was decided on the merits, (2) the matter contested in the second action was
or could have been resolved in the first, and (3) both actions involve the same parties or their
privies.” Dart v Dart, 460 Mich 573, 586; 597 NW2d 82 (1999).

The previous litigation clearly concerned the same parties and was decided on the merits.
The issue is whether the matter contested in this action was or could have been resolved in the
prior litigation. Plaintiff argues that the present matter is not the same as that contested in the
2010 litigation because the 2010 case only involved whether a contract between the parties
existed in 2010 whereby defendant would provide services and plaintiff would pay an
assessment fee. Plaintiff argues that the present case concerns whether a contract existed for
2011 and 2012 and is thus a different matter that could not have been asserted in the 2010
litigation. Although plaintiff assumes that the contract at issue in the 2010 litigation was subject
to renewal or cancellation by plaintiff each year, our reading of the district court’s opinion
suggests otherwise. The district court’s final judgment in 2010 clearly found that an implied in
fact contract existed “when [Long] acquired title.” Regardless of defendant’s 1916 resolution, it
appears clear from both the 1978 probate deed and the parties’ pattern of practice for the entire
time plaintiff owned the property, that paying the assessment was not optional. We conclude
that the district court in the 2010 litigation found that a contract implied in fact was formed when
defendant acquired title, the duration of which was to last until plaintiff no longer owned the ice
lot property. Therefore, we conclude that this action involves the same issue that was previously
raised and decided in the 2010 litigation. Accordingly, plaintiff is barred by res judicata from re-
litigating the issue in the present action. Although the trial court did not base its decision on res
judicata, we conclude that it reached the right result in granting defendant’s motion for summary
disposition. Hess, 265 Mich App at 596.

We affirm.

/s/ Jane E. Markey
/s/ Cynthia Diane Stephens
/s/ Michael J. Riordan

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