Order Michigan Supreme Court
Lansing, Michigan
March 8, 2019 Bridget M. McCormack,
Chief Justice
156018 David F. Viviano,
Chief Justice Pro Tem
Stephen J. Markman
VAN BUREN CHARTER TOWNSHIP, Brian K. Zahra
Plaintiff-Appellant, Richard H. Bernstein
Elizabeth T. Clement
v SC: 156018 Megan K. Cavanagh,
Justices
COA: 331789
Wayne CC: 15-008778-CK
VISTEON CORPORATION,
Defendant-Appellee.
_________________________________________/
On October 9, 2018, the Court heard oral argument on the application for leave to
appeal the May 16, 2017 judgment of the Court of Appeals. On order of the Court, the
application is again considered, and it is DENIED, there being no majority in favor of
granting leave to appeal or taking other action.
VIVIANO, J. (dissenting).
I respectfully dissent from the Court’s order denying leave to appeal. I believe
that the circuit court and the Court of Appeals erred in holding that plaintiff’s declaratory
judgment claim was not ripe. The Court of Appeals then proceeded to determine whether
the parties had any present rights or obligations under their settlement agreement, even
though such a determination was not necessary to the Court’s ripeness analysis.
Regardless, I believe the Court of Appeals further erred by concluding that the parties
had no present rights or obligations under the settlement agreement. Accordingly, I
would vacate Part (III)(A) of the Court of Appeals’ opinion and remand to the trial court
for further proceedings.
I. FACTS AND PROCEDURAL HISTORY
In 2002, defendant Visteon Corporation entered into discussions with plaintiff Van
Buren Charter Township about the possibility of locating its national headquarters in the
Township. Specifically, defendant discussed building its headquarters in plaintiff’s Local
Development Finance Authority District (LDFA District). In 2003, plaintiff issued over
$28 million in bonds to assist in the construction of defendant’s headquarters, known as
“Visteon Village.” Plaintiff projected that property-tax revenue from the LDFA District
would cover the costs of bond issuance.
By 2006, tax revenues from the LDFA District were lower than projected, so
plaintiff issued new bonds in order to advance refund a portion of the original bonds.
This allowed plaintiff more time to pay the principal on the original bonds. As a result,
plaintiff was able to temporarily avoid a shortfall, i.e. not having sufficient funds to make
the bond payments.
2
Then, in 2009, defendant filed for bankruptcy. Plaintiff filed an unsecured claim
to recover unpaid amounts from earlier tax abatement agreements. In 2010, the parties
entered into a settlement agreement, which provided that plaintiff would significantly
lower Visteon Village’s assessed taxable value. In exchange, defendant agreed to pay
$2.2 million toward plaintiff’s claimed amount and to not object to the remainder of
plaintiff’s unsecured claim. 1 The settlement agreement also contained the following
provision, the meaning of which is now in dispute:
Section 3. Bond Payments
Visteon acknowledges that the Township assisted Visteon in the
construction of the Village through the issuance by the Township of certain
bonds supported by the full faith and credit of the Township, the proceeds
of which were used to help construct the Village. To the extent that the
property tax payments made by Visteon to the Township, including
payments made by Visteon to the Township pursuant to Section 2.2, are
inadequate to permit the Township to meet its payment obligations with
respect to that portion of the bonds that were used to help fund the Village,
Visteon hereby agrees to negotiate with the Township in good faith to
determine the amount of the shortfall with respect to those bonds and make
a non-tax payment, payment in-lieu-of tax, (PILOT) to the Township to
assist the Township in making timely payments on the bonds.
Visteon emerged from bankruptcy later that year.
In 2013, plaintiff retained Public Financial Management (PFM) to conduct a cash-
flow analysis to determine plaintiff’s ability to pay on the bonds. In its report, PFM
predicted that a shortfall ranging from $23.7 million to $36.4 million would occur
sometime between 2017 and 2018. 2 Based on the report, plaintiff demanded that
defendant enter into negotiations to determine defendant’s payment obligations under the
agreement with respect to the projected shortfall. Defendant met with plaintiff but argued
that it had no obligation to negotiate until plaintiff experienced an actual shortfall and,
even in the event of a shortfall, defendant argued that it may not owe plaintiff any amount
under the contract.
Plaintiff filed suit, seeking both a declaratory judgment and damages for breach of
contract. As to the declaratory judgment claim, plaintiff asked that the court “adjudicate
the Parties’ rights and obligations under the Settlement Agreement” and “enter a
1
Plaintiff subsequently sold the unsecured claim for approximately $5.7 million.
2
Because plaintiff used the payments made by defendant pursuant to the settlement
agreement, as well as the funds obtained by the sale of the unsecured claim, to pay a
portion of the interest on the bonds, the shortfall is now projected to occur in 2019.
3
declaration that Visteon is responsible for payment of any shortfall . . . .” As to the
breach of contract claim, plaintiff asserted that defendant breached the agreement by “(i)
refusing to negotiate the amount of the Bond debt service shortfall in good faith and (ii)
failing to provide – or commit to provide – the Township with funds to pay for any
shortfall with the Bond debt service payments.” Plaintiff also claimed anticipatory
repudiation, pointing to certain statements made by defendant indicating that defendant
did not believe it owed plaintiff anything under the agreement.
Defendant filed a motion for summary disposition under MCR 2.116(C)(4) and
(C)(8), arguing that plaintiff’s claims were not ripe. Defendant argued that plaintiff’s
claims rested upon a hypothetical future shortfall; thus, no actual controversy presently
existed. The trial court agreed, granting summary disposition in defendant’s favor. On
the record, the trial court explained its reasoning as follows:
The Court agrees with the defendant that this case epitomizes why
the ripeness doctrine exists, mainly to prevent courts from becoming
prematurely embroiled in complex disputes involving hypothetical and
contingent facts when, especially when the projected [shortfall] is estimated
three years from now.
The Court of Appeals affirmed in a published opinion. In finding plaintiff’s
declaratory judgment claim unripe, the court explained:
According to the plain language of the contract, defendant is
obligated to “negotiate with [plaintiff] in good faith to determine the
amount of the shortfall,” but only “[t]o the extent that the property tax
payments made by [defendant]” are “inadequate to permit [plaintiff] to
meet its payment obligations” and only “with respect to that portion of the
bonds that were used to help fund the Village.” Thereafter, defendant is
obligated to “make a non-tax payment” in order to “assist” plaintiff in
making “timely” payments on those bonds. In each case, the tense of the
verb is present, not future. No reasonable person reading this provision
could find it ambiguous or conclude that defendant is obligated to engage in
negotiations before the shortfall. Indeed, the contract admits of but one
interpretation, in which the occurrence of the shortfall is a condition
precedent to defendant’s obligation to perform, and defendant is not
obligated to do anything until after plaintiff has experienced a shortfall. In
fact, defendant is not obligated to perform until after two conditions have
been met: (1) a shortfall has occurred, and (2) property taxes paid by
defendant are inadequate for plaintiff to pay that portion of the bonds that
was used to fund the Village. This second condition cannot be met until
after the shortfall has occurred and the parties have determined the amount
due.
4
Contrary to plaintiff’s assertion on appeal, the requirement that
defendant negotiate in good faith to “determine the amount of the shortfall”
does not force the implication that defendant must be required to negotiate
before the occurrence of a shortfall. Plaintiff forgets that the provision
contains qualifying language, requiring defendant to negotiate in good faith
to determine the amount of the shortfall only “with respect to those bonds”
that were “supported by the full faith and credit of [plaintiff], the proceeds
of which were used to help construct the Village.” Defendant is therefore
clearly obligated to engage in negotiations once a shortfall occurs, to
determine which part of the shortfall can be attributed to bonds it is
obligated to assist plaintiff to pay.[3]
Similarly, regarding plaintiff’s breach of contract claim, the Court of Appeals found the
claim unripe because “defendant could not have breached its contract by failing to
perform before the time of performance has even arrived.” 4 Further, the Court of
Appeals explained that, “at least at this time, plaintiff’s alleged damages are conjectural,
speculative, and clearly ‘dependent upon the chances of business or other
contingencies.’ ” 5
Following plaintiff’s appeal to our Court, we ordered oral argument on the
application, directing the parties to address
whether the Court of Appeals: (1) properly determined that a declaratory
judgment was not ripe under MCR 2.605; and (2) properly interpreted the
contract to determine that “defendant is not obligated to perform [under the
contract] until . . . a shortfall has occurred, and . . . property taxes paid by
defendant are inadequate for plaintiff to pay that portion of the bonds that
was used to fund the Village.”[6]
II. ANALYSIS
A. RIPENESS OF PLAINTIFF’S DECLARATORY JUDGMENT CLAIM
Declaratory judgment in Michigan is governed by MCR 2.605, which provides in
relevant part, “In a case of actual controversy within its jurisdiction, a Michigan court of
record may declare the rights and other legal relations of an interested party seeking a
3
Van Buren Charter Twp v Visteon Corp, 319 Mich App 538, 548-549 (2016).
4
Id. at 554.
5
Id. at 552, quoting Doe v Henry Ford Health Sys, 308 Mich App 592, 601 (2014).
6
Van Buren Charter Twp v Visteon Corp, 501 Mich 1069 (2018).
5
declaratory judgment, whether or not other relief is or could be sought or granted.” 7
Regarding the purpose of the declaratory judgment rule, our Court has stated, “The
declaratory judgment rule was intended and has been liberally construed to provide a
broad, flexible remedy with a view to making the courts more accessible to the people.” 8
“One great purpose is to enable parties to have their differences authoritatively settled in
advance of any claimed invasion of rights, that they may guide their actions accordingly
and often may be able to keep them within lawful bounds . . . .” 9 As noted by one
scholar, “[p]robably one of the most useful functions of the declaratory judgment in
preventing litigation lies in the fact that it enables parties to obtain in case of doubt and in
advance of the necessity of acting upon their own interpretation of their obligations, with
the resulting invitation of a lawsuit, an authoritative judicial interpretation of their mutual
rights, powers, duties, etc., under written instruments.” 10
That a declaratory judgment must address an “actual controversy” is central to the
legitimacy of the device. In Washington-Detroit Theatre Co v Moore, our Court
considered the Legislature’s second attempt to enact a declaratory judgment act that
satisfied constitutional standards. 11 We had found the prior declaratory judgment act
unconstitutional, explaining that “it requires that the time of the court shall be taken, not
in the determination of actual controversies where rights have been invaded and wrongs
have been done, but in the giving of advice to all who may seek it.” 12 The new act,
however, conditioned that a declaratory judgment was only available in “ ‘cases of actual
7
MCR 2.605(A)(1).
8
Shavers v Attorney General, 402 Mich 554, 588 (1978).
9
Merkel v Long, 368 Mich 1, 13 (1962), quoting Sigal v Wise, 114 Conn 297, 301-302
(1932).
10
Borchard, The Declaratory Judgment—A Needed Procedural Reform (Washington,
DC: United States Government Printing Office, 1919), p 45. See also 11 Williston on
Contracts § 30:2 (4th ed), p 36 (“A frequently employed means of demonstrating in an
authoritative manner the intent of the parties to a contract, either for the purpose of
establishing rights or the nonexistence of liabilities, is the petition for declaratory
judgment.”).
11
Washington-Detroit Theatre Co v Moore, 249 Mich 673 (1930). This act, 1929 PA 36,
was codified into the Judicature Act and governed declaratory judgment actions in
Michigan until it was repealed by the Revised Judicature Act, 1961 PA 236. In the same
period, our Court adopted a rule governing declaratory judgment actions, GCR 1963,
521, now MCR 2.605. Thus, declaratory judgment actions in Michigan are no longer
governed by statute, but instead are governed by court rule.
12
Anway v Grand Rapid R Co, 211 Mich 592, 606 (1920).
6
controversies’ ” and was therefore constitutional. 13
In order to satisfy the “actual controversy” requirement, a plaintiff’s claim must be
justiciable. 14 Thus, the “actual controversy” requirement contained in the court rule
incorporates the concepts of standing, mootness, and ripeness. 15 Like in an ordinary
action, ripeness in the declaratory judgment context requires a present legal controversy,
not one that is merely hypothetical or anticipated in the future. 16 Unlike an ordinary
action, however, in a declaratory action “a court is not precluded from reaching issues
before actual injuries or losses have occurred.” 17 Indeed, “the basic purpose of a
declaratory judgment act is to provide for declaratory judgments without awaiting a
breach of existing rights.” 18
13
Washington-Detroit Theatre Co, 249 Mich at 676, quoting 1929 PA 36. Anway and
Washington-Detroit Theatre Co have been widely cited by federal courts and our sister
state courts in deciding the constitutionality of declaratory judgment acts within their
jurisdictions.
14
See Shavers, 402 Mich at 589 (“[A] plaintiff must allege and prove an actual
justiciable controversy.”).
15
See Associated Builders and Contractors v Dep’t of Consumer & Industry Servs Dir,
472 Mich 117, 125 (2005) (“Moreover, the rule requires that there be ‘a case of actual
controversy’ and that a party seeking a declaratory judgment be an ‘interested party,’
thereby incorporating traditional restrictions on justiciability such as standing, ripeness,
and mootness.”), overruled on other grounds by Lansing Sch Ed Ass’n v Lansing Bd of
Ed, 487 Mich 349 (2010).
16
Borchard, Declaratory Judgments (1934), p 40 (“When the complaint on these tests is
considered premature, the dismissal may be explained by any one of a series of labels,
e.g., that there is as yet no ‘controversy,’ that the issue is hypothetical, that the result
would be only an advisory opinion, etc.”); 26 CJS, Declaratory Judgment, § 28, p 66
(“[A] controversy is justiciable, such that a declaratory judgment action may be
maintained, when present legal rights are affected, not when a controversy is merely
anticipated.”).
17
Shavers, 402 Mich at 589. See also 26 CJS, Declaratory Judgment, § 28, p 67 (“A
party should not be forced to wait until the event giving rise to the claim occurs before a
court may determine the party’s rights and obligations in a declaratory judgment
action.”).
18
Id. See also 9A Michigan Pleading & Practice (2d ed), § 69:8, p 390-391 (“[A]n actual
present controversy, justifying a declaratory judgment, is present where uncertainties and
controversies arise between interested parties about what their respective rights will be
when those rights accrue or become vested, and it is necessary to have those rights
determined at the present time to avoid needless hazards or possible losses in the future.
In these situations, courts are not precluded from reaching issues before actual injuries or
7
In this case, plaintiff’s request for a declaratory judgment involves a
present legal controversy—it is a dispute over the parties’ present rights
and obligations under Section 3 of the 2010 settlement agreement. In
particular, plaintiff argues that defendant has a present duty under the
settlement agreement to negotiate with plaintiff to determine the amount of
the projected shortfall and to make a payment to the township to assist it in
making timely payments on the bonds; and defendant claims that it has no
present duty under the agreement. Thus, even if plaintiff has not yet shown
an injury, plaintiff has presented an “actual controversy” within the
meaning of MCR 2.605. 19
It may be true, as defendant argues, that determining the exact
amount of defendant’s liability is not possible at this time. 20 This is not
relevant, however, to plaintiff’s declaratory judgment claim. Plaintiff’s
declaratory judgment claim does not seek a specific amount of damages,
but instead seeks a declaration of the parties’ present obligations under the
losses have occurred.”).
19
Even if the Court of Appeals was correct that defendant has no obligations under the
settlement agreement until after a shortfall occurs, and that therefore plaintiff’s claim
only involved future rights and obligations, its conclusion that plaintiff’s claim was
unripe would still be on shaky ground. It is true that, generally, a declaratory judgment
must address “the existing law on an existing state of facts.” Borchard, Declaratory
Judgments, p 40. But this is not an inflexible rule—a declaratory judgment may address
parties’ rights under future, or even contingent, events or circumstances. Id. at 44
(“[C]ourts have been less inclined to refuse declarations where they were convinced that
the future event was certain or practically certain to occur, and that a useful purpose
could be served, whereas theretofore they were disposed to ask for more accrued facts as
a condition of adjudication.”). Indeed, as we have previously recognized, “ ‘to carry out
the purposes intended to be served by [declaratory] judgments, it is sometimes necessary
to determine rights which will arise or become complete only in the contingency of some
future happening.’ ” Merkel, 368 Mich at 13, quoting Sigal, 114 Conn at 301-302.
“Courts continually declare rights which have not become fixed under an existing state of
facts, but are prospective only; they may not, however, be so remote and speculative as to
be hypothetical and abstract.” Merkel, 368 Mich at 13, quoting Borchard, Declaratory
Judgments (2d ed), pp 422-424. Thus, the Court of Appeals erred by assuming that, if
plaintiff’s claim involved future rights and obligations, it could not be ripe.
20
See Appellee’s Answer Brief at 27 (“But even if the Township is right that a shortfall
in some amount is “certain” to occur at some point in the future, when that might happen
is simply unknown. More importantly, there is no way to know what the amount of any
shortfall might be.”).
8
settlement agreement. 21 To the extent that the Court of Appeals found
plaintiff’s declaratory judgment claim unripe because the Court could not
determine the exact amount of defendant’s liability at this time, the Court
of Appeals erred in this regard as well. 22
For these reasons, plaintiff’s claim as to the parties’ rights and obligations under
the agreement is ripe for adjudication.
B. THE COURT OF APPEALS’ INTERPRETATION OF THE SETTLEMENT
AGREEMENT
Had the Court of Appeals merely held that plaintiff’s claim was not ripe, my
analysis would end here. However, the Court of Appeals proceeded to partially
determine the parties’ rights and obligations under the settlement agreement, stating as
follows:
[T]he contract admits of but one interpretation, in which the occurrence of
the shortfall is a condition precedent to defendant’s obligation to perform,
and defendant is not obligated to do anything until after plaintiff has
experienced a shortfall. In fact, defendant is not obligated to perform until
after two conditions have been met: (1) a shortfall has occurred, and (2)
property taxes paid by defendant are inadequate for plaintiff to pay that
portion of the bonds that was used to fund the Village. This second
condition cannot be met until after the shortfall has occurred and the parties
have determined the amount due.[23]
21
It is true that plaintiff’s complaint sought a declaration that defendant was obligated to
pay the full amount of any shortfall. See Plaintiff’s Complaint at 14-15
(“WHEREFORE, the Township seeks a declaratory judgment pursuant to MCR 2.605 to
adjudicate the Parties’ rights and obligations under the Settlement Agreement, and the
Township respectfully requests the Court enter a declaration that Visteon is responsible
for payment of any shortfall in the Bond debt service payments identified in this
Complaint, as well as any other relief as justice and fairness require.”). Even this,
however, is not a request for the court to determine the exact amount of a shortfall.
Instead, plaintiff is seeking an interpretation of the settlement agreement that would
require defendant to pay the full amount of the shortfall, whatever that amount might be.
22
While the impossibility of determining plaintiff’s actual damages at this time does not
render plaintiff’s declaratory judgment claim unripe, it does affect plaintiff’s breach of
contract claim, which requires plaintiff to make a showing as to damages. Accordingly, I
would not disturb the Court of Appeals’ holding as to plaintiff’s breach of contract claim.
23
Van Buren, 319 Mich App at 548.
9
In so holding, the Court of Appeals essentially entered a partial declaratory judgment
determining when defendant’s obligations under the contract are triggered. Having
concluded that plaintiff’s declaratory judgment claim is ripe for adjudication, I now
believe it necessary to address the Court of Appeals’ determination that defendant’s
contractual duties are not triggered until a shortfall has occurred.
In concluding that defendant has no obligation under the contract until after a
shortfall has occurred, the Court of Appeals relied primarily on the verb tense used in the
settlement agreement, explaining:
[T]he tense of the verb[s] is present, not future. No reasonable person
reading this provision could find it ambiguous or conclude that defendant is
obligated to engage in negotiations before the shortfall. Indeed, the
contract admits of but one interpretation, in which the occurrence of the
shortfall is a condition precedent to defendant’s obligation to perform, and
defendant is not obligated to do anything until after plaintiff has
experienced a shortfall.[24]
We have relied on verb tense in the past when interpreting legal texts. 25 We have
also recognized, however, that verb tense is not always determinative and must be
considered in the context of the surrounding text. 26 Accordingly, a close inspection of
the verbs contained within the agreement is necessary to determine whether the Court of
Appeals is correct that the verb tense is indicative of the timing of defendant’s
obligations. The agreement uses the following verbs: “To the extent that the property tax
payments . . . are inadequate to permit the Township to meet its payment obligations . . . ,
Visteon hereby agrees to negotiate with the Township in good faith to determine the
amount of the shortfall with respect to those bonds and make a non-tax payment . . . to
the Township to assist the Township in making timely payments on the bonds.”
(Emphasis added.) 27 With two exceptions—“are” and “agrees”—each of the verbs
identified above is in the infinitive form. 28 Unlike finite verbs, infinitives primarily
24
Id.
25
See, e.g., City of Coldwater v Consumers Energy Co, 500 Mich 158, 176 (2017)
(noting that the phrase “already receiving” within MCL 124.3(2) is a present participle
and that “[t]he verb tense is meaningful here because it indicates a present-tense lens”).
26
See Rock v Crocker, 499 Mich 247, 263 (2016) (recognizing that “the Legislature
deviated from the general rules of grammar in MCL 600.2169(1)(a) by using the present
tense when referring to an event that had already occurred”).
27
“Making” is a gerund in this context, which functions as a noun. See The Chicago
Manual of Style (16th ed), p 233.
28
Id. at 232 (“An infinitive verb, also called the verb’s root or stem, is a verb that in its
10
function as nouns, adjectives, or adverbs, 29 and are widely considered to have no tense. 30
Additionally, when an infinitive is paired with a present tense finite verb, such as “agrees
to negotiate,” the result can indicate either present or future action. 31 Thus, while
“agrees” is in present tense, because it is paired with the infinitive it may refer to either
present or future obligations.
We are left, then, to determine whether the agreement’s single remaining use of
present tense in the noninfinitive form—“are inadequate”—is sufficient to conclude that
defendant’s obligations under the agreement come into effect at the time of the shortfall.
The Court of Appeals’ interpretation of the agreement assumed that the property tax
payments will become “inadequate” at the time that the shortfall occurs. This is not the
only possible reading, however. The agreement may, alternatively, consider the
payments “inadequate” when a shortfall is projected to occur. Under this reading, the tax
payments are presently inadequate because they will not allow plaintiff to continue
making timely payments. Because both of these readings are grammatically acceptable, I
do not think the use of present tense for “are inadequate” necessarily leads to the Court of
Appeals’ conclusion.
Accordingly, we must look to the remainder of the provision to determine the
appropriate interpretation. As plaintiff points out, the agreement requires that defendant
“make a non-tax payment . . . to assist [plaintiff] in making timely payments.” “Timely”
is defined as “coming early or at the right time.” 32 Suffice it to say that, if defendant is
principal uninflected form may be preceded by to {to dance} {to dive}.”).
29
See Vitto, Grammar by Diagram: Understanding English Grammar Through
Traditional Sentence Diagramming (2d ed), p 219.
30
See Garner, Garner’s Modern English Usage (4th ed), p 853 (“An infinitive is the
tenseless form of a verb preceded by to, such as to dismiss or to modify.”). But see
Stowell, The Tense of Infinitives, 13 Linguistic Inquiry 561 (1982) (discussing infinitive
tenses). Moreover, the infinitives here clearly serve functions unrelated to the timing of
defendant’s obligations. “[T]o permit,” “to determine,” and “to assist” all function as
adverbs, denoting the purpose of defendant’s agreed-to actions. See Vitto, pp 222-224.
Similarly, “to meet,” “to negotiate,” and “[to] make” are each nouns, functioning as the
direct objects of “permit” and “agrees.” Id. at 221. Thus, each of the infinitives in the
agreement is functioning not as a verb, whose tense could indicate the timing of
defendant’s obligations, but instead as either an adverb or a noun.
31
See Curme, College English Grammar (Richmond: Johnson Publishing Company,
1925), p 301 (“Here the present tense indicates time contemporaneous or future with
reference to that of the principal verb: I wish to go at once. I intend to write a line or two
to her soon. Yesterday I intended to write a line to her, but forgot it.”).
32
Merriam-Webster’s Collegiate Dictionary (11th ed).
11
not obligated to even begin negotiations until after a shortfall occurs, then plaintiff’s
payments to the bond holders will not be “coming early or at the right time.” The Court
of Appeals sweeps this concern aside, concluding that the agreement is “perhaps
inartfully worded.” 33 However, I believe the meaning is clear: defendant is required to
“make a non-tax payment . . . to [plaintiff] to assist [plaintiff] in making timely
payments”—i.e., to make whatever payment is owed, if any, before the shortfall occurs.
The agreement also requires that defendant “negotiate with the Township in good
faith to determine the amount of the shortfall with respect to those bonds [that were used
to help fund the Village].” Plaintiff argues that this clause requires defendant to negotiate
with plaintiff before a projected shortfall to estimate the amount of the shortfall.
Defendant, on the other hand, argues that this clause only requires defendant to negotiate
with plaintiff at the time of the shortfall to determine the proportion of the shortfall that
correlates with the bonds that were issued to assist with the construction of Visteon
Village. The word “amount,” however, refers not to a proportion, but to a “quantity.” 34
Thus, under the agreement, the parties must negotiate the “quantity” of the shortfall, not
merely the percentage of the shortfall correlating to the relevant bonds. Because the
agreement requires the parties to negotiate a quantity, I believe the agreement
contemplates negotiations before a shortfall has occurred. Otherwise, as plaintiff argues,
the parties would have nothing to negotiate—the amount would already be determined.
For the reasons stated above, I believe the parties’ agreement clearly contemplates
that defendant has an obligation prior to the occurrence of a shortfall: (1) to negotiate
with plaintiff to determine the amount of the projected shortfall, and (2) to make
whatever payment it may owe to plaintiff to assist it in making timely payments on the
bonds. Determining the nature and extent of defendant’s obligations in the first instance
is a task properly left to the trial court.
III. CONCLUSION
I believe the Court of Appeals erred in its published opinion by finding plaintiff’s
33
Van Buren Charter Twp, 319 Mich App at 547.
34
See Merriam-Webster’s Collegiate Dictionary (defining “amount” as “the total number
or quantity” and “the quantity at hand or under consideration”).
12
declaratory judgment action unripe and in its determination that the parties had no present
rights or obligations under the settlement agreement. Accordingly, I would vacate Part
(III)(A) of the Court of Appeals’ opinion and remand to the trial court for further
proceedings.
MCCORMACK, C.J., joins the statement of VIVIANO, J.
BERNSTEIN, J., would reverse the judgment of the Court of Appeals.
CAVANAGH, J., did not participate in the disposition of this case because the Court
considered it before she assumed office.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
March 8, 2019
p0305
Clerk