Order Michigan Supreme Court
Lansing, Michigan
October 1, 2008 Clifford W. Taylor,
Chief Justice
136787 Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
Robert P. Young, Jr.
KNIGHT ENTERPRISES, INC., Stephen J. Markman,
Plaintiff-Appellee, Justices
v SC: 136787
COA: 276838
Wayne CC: 05-515075-CK
FAIRLANE CAR WASH, INC., PPJ
ENTERPRISES, L.L.C., JOHN MASOURAS, and
JAMES MASOURAS,
Defendants-Appellants.
_________________________________________/
On order of the Court, the application for leave to appeal the April 8, 2008
judgment of the Court of Appeals is considered and, pursuant to MCR 7.302(G)(1), in
lieu of granting leave to appeal, we REVERSE in part the April 8, 2008 judgment of the
Court of Appeals. Paragraph 8 of the Credit Card Participating Agreement limits
defendants’ liability to “service charges assessed by CITGO/KNIGHT on credit card
sales tickets [defendants] submit ….” No provision imposes liability for credit card sales
tickets submitted by other parties. The trial court and Court of Appeals interpreted
paragraph 12 of that agreement, which provides that “[defendants] will be billed on a
monthly basis per month for … all credit card fees,” as requiring that defendants pay
service charges regardless whether they were for credit card sales tickets that defendants
submitted. Thus, neither court considered whether the credit card fees at issue were
comprised of service charges only for credit card sales tickets that defendants submitted.
The lower courts’ interpretation of paragraph 12 renders paragraph 8’s limitation
surplusage or nugatory. “[C]ourts must … give effect to every word, phrase, and clause
in a contract and avoid an interpretation that would render any part of the contract
surplusage or nugatory.” Klapp v United Ins Group Agency, Inc, 468 Mich 359, 468
(2003) (internal citations omitted). Interpreting paragraph 12 to provide that defendants
will be billed monthly only for service charges for which they are liable under paragraph
8 gives effect to both paragraphs 8 and 12. We REMAND this case to the Wayne Circuit
Court for further proceedings to determine what portion of the credit card fees at issue
constituted service charges on credit card sales tickets that defendants submitted. Based
upon that determination, the circuit court shall reconsider plaintiff’s request for case
2
evaluation sanctions. In all other respects, leave to appeal is DENIED, because we are
not persuaded that the remaining questions presented should be reviewed by this Court.
CAVANAGH, J., not participating due to a familial relationship with counsel of
record.
I, Corbin R. Davis, 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.
October 1, 2008 _________________________________________
s0924 Clerk