Koenig v. City of South Haven

Weaver, C.J.

([concurring). I concur with the lead opinion’s result that plaintiffs’ breach of contract count fails as a matter of law. However, I find that it is unnecessary to address whether plaintiffs’ daughter was a third-party beneficiary of the memorandum of understanding (mou) between the city of South Haven and the U.S. Army Corps of Engineers because I would hold that the MOU is not an enforceable contract for lack of valid consideration.

A third party may not enforce a promise if the underlying contract is infirm.1 Consideration is a *685basic ingredient of any contract. De Camp v Scofield, 75 Mich 449, 453; 42 NW 962 (1889). Consideration consists of either a benefit on one side or a detriment on the other. Plastray Corp v Cole, 324 Mich 433, 440; 37 NW2d 162 (1949). It is long established that “ ‘nothing can be treated as a consideration that is not intended as such by the parties.’ ” United Fruit Co v United States, 186 F2d 890, 895 (CA 1, 1951), quoting Fire Ins Ass’n v Wickham, 141 US 564, 579; 12 S Ct 84; 35 L Ed 860 (1891). I would hold that the city did not intend its agreement to operate the safety gates to be consideration for an enforceable promise, as witnessed by the terms of the agreement and the circumstances surrounding the agreement.

The dissent suggests that the mou is an enforceable contract because the city agreed to assume the responsibility for determining when the gates erected on the piers are to be opened and closed and to restrict the public from those structures during periods of inclement weather “in exchange” for the corps’ furnishing and installing the gates. However, I do not find that the language of the MOU supports the conclusion that either party considered this “exchange” to be consideration for an enforceable promise or an assumption of liability to third parties.

The language of the mou, which states that the city “shall” restrict the public from the piers during bad weather, does not, as suggested by the dissent, transform the city’s agreement to operate the gates into an enforceable promise. Considering the MOU in its *686entirety, the MOU merely purports to “establish general guidelines” for the city’s “furnishing of assistance ... in regulating the use” of the pier “during periods of inclement weather or when danger to persons or property exists.” The mou’s grant of “responsibility” relative to public safety on the pier is, by the terms of the MOU, discretionary. The MOU ultimately leaves to the city manager, or a person designated by him, when “said times,” i.e., inclement weather or danger to the public, exist, so that the gates should be closed.

I disagree with the dissent’s suggestion that the MOU imposed requirements on the city beyond that of MCL 281.1191; MSA 18.1287(191). The MOU states that it is the city’s responsibility to determine “when gates . . . are to be opened and closed” and that the city is to determine when “great danger to persons or property exists.” However, at the time the city signed the MOU, and indeed at the time the plaintiffs’ daughter was tragically swept from the pier in 1990, MCL 281.1191; MSA 18.1287(191) (repealed by 1995 PA 58) provided that during inclement conditions “any harbormaster, peace or police officer or other authorized official may rope off or barricade entry to” public docks, piers, wharfs, and retaining walls. Thus, when the city agreed to close the safety gates during conditions that it deemed dangerous, it assumed no obligation beyond what already existed by statute.

The circumstances surrounding the agreement also defy the existence of a bargained-for exchange. At the time the MOU was signed, the city already had jurisdiction over the pier in question. Before the January 1972 date of the MOU, the city’s jurisdiction over the pier was established by statute. For example, MCL *687780.51; MSA 28.861(101), enacted in 1965 and still effective today, provides:

A city or incorporated village, having a boundary running to the shoreline of any of the Great Lakes or connecting waters, through its peace officers, with or without a pertinent ordinance, may exercise concurrent jurisdiction as to such waters to enforce any criminal law of this state applicable to the conduct of persons in, on or over such waters ....

Further, MCL 3.341; MSA 4.612 similarly provided for the city’s concurrent jurisdiction on lands under federal control. The fact that the city already shared jurisdiction over the pier with the corps undermines the suggestion that the city’s agreement to operate the gates was a bargained-for exchange.

Finally, the record also supports the conclusion that the city did not intend its agreement to be consideration for an enforceable promise. The record reveals that the city had in fact erected warning signs at the entrance to the pier in August 1969, before its first correspondence with the Corps of Engineers in *688October 1969 regarding possible safety improvements for the piers. Further, the record reflects that the public used the navigational pier for recreation purposes before the MOU was signed and thus, the city did not derive any new recreational benefit for the public by the agreement.

I would conclude that the city did not intend that its agreement to operate the safety gates to be consideration for an enforceable promise. Considering the MOU as a whole, its terms do not support the existence of a bargained-for exchange. Nor do the circumstances surrounding the agreement, including the fact that the city had concurrent jurisdiction over the pier when the mou was signed and that it had already taken steps to protect the public from dangerous conditions on the pier before the MOU was signed, support the existence of a bargained-for exchange. For these reasons, I agree that plaintiffs may not enforce the mou as a matter of law.

MCL 600.1405(2)(a); MSA 27A.1405(2)(a) states:

The rights of a person for whose benefit a promise has been made, as defined in (1), shall be deemed to have become vested, *685subject always to such express or implied conditions, limitations, or infirmities of the contract to which the rights of the promisee or the promise are subject .... [Emphasis added.]

MCL 3.341; MSA 4.61 stated in pertinent part:

[T]he jurisdiction of this state is ceded to the United States of America, over all pieces or parcels of land within this state, which have been selected and acquired by the United States, for the purpose of erecting post offices, custom houses or other structures exclusively owned by the general government .... The cession is made upon the express condition that this state shall retain concurrent jurisdiction with the United States, in and over all lands acquired pursuant to this act and that all civil and criminal process issued by a court of competent jurisdiction, or officers having authority of law to issue process, and all orders made by the court, or a judicial officer duly empowered to make the orders, and necessary to be served upon a person, may be executed upon the lands, and in the buildings erected on the land in the same way and manner, as if jurisdiction had not been ceded. [Repealed by 1986 PA 201 and reenacted as MCL 3.258; MSA 4.115(8).]