e-Journal Summary

e-Journal Number : 76094
Opinion Date : 08/26/2021
e-Journal Date : 09/13/2021
Court : Michigan Court of Appeals
Case Name : City of Detroit Downtown Dev. Auth. v. Lotus Indus., LLC
Practice Area(s) : Contracts Judges
Judge(s) : Per Curiam – Cavanagh, O’Brien, and Redford
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Issues:

Interpretation of a lease & personal guaranties; Whether summary disposition was premature; Counterclaim seeking a declaratory judgment; Waiver; Third-party complaint against a judge; Absolute judicial immunity; Serven v Health Quest Chiropractic, Inc; A chief judge’s authority & responsibility for directing, supervising, & administering the court’s business; MCR 8.110-8.112; The law of the case doctrine; Subject-matter jurisdiction; Authorization for probate judges to assist other courts & perform specific assignments; MCL 600.826(1); MCR 8.103; Disqualification of a judge; MCR 2.003; Sanctions for filing a frivolous motion; MCR 2.114; Downtown Development Authority (DDA)

Summary

Concluding that the lease at issue and defendants-Bridgewater and Gwendolyn Williams’s personal guaranties were unambiguous, the court held that they were liable for breach of the guaranties for not paying gross rent due and owing by defendant-Lotus. Partial summary disposition was not premature, and their counterclaim against plaintiffs-DDA and the City for declaratory judgment “lacked factual and legal support, and failed as a matter of law.” As to their third-party complaint against the chief Wayne Circuit judge, he had absolute judicial immunity. The court also upheld the denial of motions to disqualify him as well as the probate court judge assigned to review the denial of that motion. Finally, it upheld the imposition of sanctions for a frivolous motion. Under its lease with the DDA, Lotus had no right “to withhold any payment of the base rent or additional rent for any reason. No provision of the Lease permitted Lotus to pay base rent or additional rent into any escrow account. The Lease also unambiguously required Lotus to pay the base rent and additional rent without any right to setoffs, deductions, or recoupment. Lotus remained obligated to make its monthly payments of the base rent and additional rent regardless of any disputes or questions it had regarding the amount or the underlying costs the DDA incurred which served as the bases for the additional rent charges.” Likewise, under the terms of their respective guaranties, Bridgewater and Gwendolyn accepted the lease terms “and absolutely and unconditionally guaranteed payment of all base rent and additional rent owed by Lotus. They also specifically agreed that they would have no right to setoffs, deductions, deferments, or abatements of any kind. The record” did not indicate any amendment to the terms of the personal guaranties. Thus, pursuant to the lease and the personal guaranties, they “were contractually bound to pay all of the base rent and additional rent owed by Lotus with no right to any setoffs. The terms of the Lease to which they assented coupled with the terms of their personal guaranties required Gwendolyn and Bridgewater to pay the unpaid gross rent with no right to any setoffs or adjustments even if they disputed the amount or claimed the DDA breached the Lease.” Affirmed.

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