Breach of contract claim asserting breach of a settlement agreement; Condition precedent; Effect of a merger clause; Alleged “substantial” breach by the other party; Absence of language providing that time is of the essence; McCarty v Mercury Metalcraft Co; Rescission; Mutual mistake; Lenawee Cnty Bd of Health v Messerly; Conversion; Reliance on MCL 440.3420; MCL 440.3102(1); A tort action based on nonperformance of a contractual duty; Heating, ventilation, & air conditioning (HVAC)

The court held that defendant did not materially breach the parties’ settlement agreement when it failed to deliver HVAC units within three days after plaintiff requested delivery. As a result, plaintiff was not entitled to be excused from performing its duties under the agreement. Further, the trial court did not abuse its discretion in denying plaintiff’s request for rescission based on an alleged mutual mistake. Finally, plaintiff failed to establish the elements of a conversion claim. Thus, the trial court did not err in ordering performance under the settlement agreement. As an initial matter, the court rejected defendant’s assertion the appeal was moot because plaintiff had accepted delivery of the HVAC units in compliance with the trial court’s order, finding that it was possible to fashion a remedy if plaintiff’s arguments were credited. It also did not interpret the settlement agreement as containing a condition precedent to defendant’s performance, as defendant contended. But it additionally found “no merit to plaintiff’s argument that it was excused from performing its contractual duties, or entitled to” rescind the agreement on the basis “defendant substantially breached” it first. The court noted that nothing in the agreement’s language indicated “the parties considered time to be of the essence, or that defendant’s failure to deliver within any specified timeframe would be such a substantial breach as to relieve plaintiff of its duties under the agreement.” Further, there was no indication “the ‘late’ delivery of the units otherwise imposed any hardship on plaintiff or amounted to a complete failure of consideration on defendant’s part.” The court additionally noted that defendant had partly performed under the “agreement by removing its construction lien.” The court concluded the circumstances supported a finding “that the parties did not intend for the time of performance to affect plaintiff’s rights such that time would be of the essence” and that the alleged “timeframe for delivery was not a material term of the” agreement. The court also determined that plaintiff failed to show a mutual mistake of fact sufficient to warrant rescission, and that plaintiff could not base its tort claim of conversion “on defendant’s alleged nonperformance of a contractual duty.” Affirmed.