Defendant is a wholesale supplier of HVAC and plumbing-related equipment to licensed mechanical and plumbing contractors. Plaintiff, a commercial developer, contracted with defendant to deliver 90 HVAC units for installation in a new facility plaintiff planned to construct.
Claim of Lien
Defendant delivered the units. Defendant charged $243,238 for the units, but after defendant did not receive payment, it recorded a claim of lien against plaintiff’s property for $243,238, plus costs, a contractual time-price differential service charge of 1.5% a month, and actual attorney fees. Subcontractors also filed a construction lien.
Subcontractors filed a lien foreclosure action in circuit court. Defendant then filed a third-party claim to foreclose its lien. Overall, a significant number of disputed issues arose between the parties in the underlying litigation. Plaintiff challenged the markup placed on the units. Instead of charging defendant’s sales price of $243,238, subcontractor sought to charge plaintiff $375,000, which included overhead, storage costs, and a markup on the units.
Although subcontractors, plaintiff, and defendant attempted to negotiate a joint settlement, only defendant and plaintiff reached a final settlement agreement. Specifically, defendant agreed to discharge its construction lien in exchange for plaintiff’s payment of $185,000, and defendant was then to deliver the 90 HVAC units that remained in the subcontractors warehouse, along with component parts, to plaintiff’s warehouse.
Plaintiff paid defendant $185,000, and defendant discharged its lien in accordance with the agreement. After plaintiff requested delivery of the HVAC units, defendant arranged to deliver the units to plaintiff, but the subcontractor refused to release the units from its warehouse without plaintiff first satisfying subcontractor’s lien. Consequently, defendant was unable to deliver the units.
Breach of Settlement Agreement
Plaintiff thereafter filed suit against defendant for breach of contract and conversion, claiming that defendant had materially breached the settlement agreement by failing to deliver the units within three days of plaintiff’s request.
Plaintiff moved for summary disposition of its claims under MCR 2.116(C)(10). After a hearing, the trial court denied plaintiff’s motion, held the case in abeyance pending further proceedings in the underlying case, and ordered defendant to place the $185,000 at issue into an escrow account. Plaintiff and defendant both moved for reconsideration of the trial court’s order. Defendant also filed an emergency motion for relief from the trial court’s order, arguing that the subcontractor had now agreed to allow defendant to retrieve the units for delivery to plaintiff but that plaintiff was refusing delivery.
Motion for Reconsideration
The trial court entered an order granting defendant’s motion for reconsideration regarding the necessity of placing the $185,000 in escrow, denying the remainder of defendant’s reconsideration motion, and denying plaintiff’s motion for reconsideration. The order also required defendant to deliver the HVAC units and required plaintiff to complete its outstanding obligations under the settlement agreement.
Litigating Breach of Contract
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