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CONTRACTS 2: Leave to amend pleadings should be given freely.

Plaintiff’s mother entered into a land contract to purchase a home, but never lived in the home.  Plaintiff lived in the home and made the payments. Plaintiff was not a party to the contract, and her mother never assigned her rights under the contract to plaintiff. Plaintiff fell behind on the payments in 2004 and received delinquency notices from 2005 until 2014, when the home was eventually paid off.

Plaintiff believed that defendants failed to apply sums to the delinquency and that they harassed her with notifications that she was behind on her payments. On May 18, 2016, plaintiff and her mother filed a complaint against defendants, asserting fraud, negligence, negligent misrepresentation, negligent infliction of emotional distress, breach of contract, and breach of the Fair Credit Reporting Act, 15 USC 1681 et seq.

While defendants did not assert lack of standing as a defense in their original answer, they later sought and received leave to amend their answer to do so. The circuit court ultimately granted defendants’ motion for summary disposition, which was based in part on plaintiff’s lack of standing.

In a responsive pleading, a party must (1) state an explicit admission or denial, (2) plead no contest, or (3) state that the pleader lacks sufficient information to form a belief as to the truth of the allegation. MCR 2.111(C).  If a party does not deny an issue, it is effectively admitted. MCR 2.111(E)(1). Courts must view pleadings as a whole to determine whether the answer is sufficiently specific so that a plaintiff will be able to adequately prepare his case.

A review of the answer in this case indicates that defendants clearly stated their belief that plaintiff’s claims were meritless because they had committed no wrongdoing and because plaintiff had supported her complaint with an incomplete and marked up payment ledger. Defendants denied that plaintiff had paid off the land contract in July 2014. Defendants admitted they had sent correspondence to plaintiff, but they denied the correspondence was improper.

Defendants denied that they had harassed plaintiff. Further, when defendants stated that plaintiff’s allegations contained a legal conclusion to which no response was required, it was an explanation for why defendants were denying the allegation as untrue.  The defendants’ responses in their answer were sufficient to indicate that they intended to proceed on the basis that, while they had sent notices to plaintiff, those notices were not harassment and had not caused damages. Defendants’ answer also indicated that they would argue that the mother had breached the contract and had not actually overpaid on it. For these reasons, the circuit court did not commit a clear or obvious error by failing to strike defendants’ answer as insufficient.

Plaintiff next contends that the circuit court erred when it allowed defendants to amend their answer so they could add the affirmative defense of standing.

The circuit court did not abuse its discretion when it granted defendants’ motion to amend their answer. It is a fundamental rule of civil procedure in this state that leave to amend pleadings should be given freely.

In this case, although the mother testified that she signed the land contract with the belief that plaintiff would be making payments, the contract itself contains no statement that it was for the benefit of plaintiff. Accordingly, plaintiff did not have standing to sue as a third-party beneficiary to the contract because she was not an intended third-party beneficiary. For these reasons, the circuit court did not err when it granted summary disposition on the basis that plaintiff lacked standing to pursue contractual claims.

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FAMILY LAW 83: A trial court can terminate a parent’s rights and permit a stepparent to adopt a child.

A trial court has discretion to terminate a parent’s rights and permit a stepparent to adopt a child when the conditions of MCL 710.51(6) are met. MCL 710.51(6)(b) requires the petitioner to establish that the other parent had the ability to visit, contact, or communicate with the children, and substantially failed or neglected to do so for a period of two years.

PROBATE 53: The trust agreement included an Incontestability Provision.

A settlor’s intent is to be carried out as nearly as possible. Generally, in terrorem clauses are valid and enforceable. However, a provision in a trust that purports to penalize an interested person for contesting the trust or instituting another proceeding relating to the trust shall not be given effect if probable cause exists for instituting a proceeding contesting the trust or another proceeding relating to the trust.

FAMILY LAW 82: Court stated it would terminate the personal protection order (PPO) after the parties present documentation of the initiation of the divorce proceedings.

However, the trial court concluded that these matters should, in fact, be in the province and the jurisdiction of the Family Division and in that respect, having issued a personal protection order, the Court stated it would terminate the personal protection order after the parties present documentation of the initiation of the divorce proceedings.

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