GLEICHER, P.J.
This action against a law firm and one of its attorneys arises from events that transpired during a separation of business partners and their joint ownership interests in a company they had owned. Plaintiff, Alpha Capital Management, Inc. (ACM), contended that its counsel, defendants Dykema Gossett PLLC and Dykema attorney Paul Rentenbach, breached fiduciary duties and committed other actionable wrongs by representing a former ACM shareholder in a dispute concerning his buyout agreement. A jury found in favor of defendants on all counts alleged in ACM's complaint. ACM appeals as of right the trial court's entry of a judgment of no cause of action effectuating the jury verdict. We affirm.
In 1991, Ralph Burrell founded ACM to provide financial consulting services to businesses, pension funds, and nonprofit institutions. Initially, Burrell owned 55 percent of ACM's shares and Robert Warfield owned 45 percent. Within a year, Burrell and Warfield each owned 50 percent of ACM's shares. Soon after ACM's formation, the company hired Dawna Edwards as its portfolio manager. In 1996, ACM hired Napolean Rodgers as managing director of its fixed income portfolio.
Before starting ACM, Burrell had established a successful information systems and management consulting business called SymCon. Dykema served as SymCon's general counsel. Burrell and Warfield retained Dykema in 1991 to supply the legal services necessary to form ACM. After other Dykema lawyers completed ACM's corporate formation, Rentenbach provided ACM ongoing legal services.
In 1999, Burrell and Warfield began negotiating a buyout agreement contemplating that Burrell would buy Warfield's shares or vice versa. Rentenbach served as a "facilitator" during the negotiation sessions. Burrell recalled that at a meeting in mid-April 1999, Rentenbach turned to Warfield to "get approval" to answer one of Burrell's questions. Burrell felt "shocked" because "Rentenbach is the corporate attorney representing Alpha." After the meeting, Rentenbach informed Burrell that Warfield and Edwards had asked him to represent them. On April 15, 1999, Rentenbach wrote a letter to Burrell's personal counsel, former Michigan Supreme Court Justice CONRAD MALLETT, JR., advising that Rentenbach and Dykema sought to represent Warfield and Edwards "with respect to the negotiations that will take place regarding [Burrell's] proposed disengagement." Rentenbach requested that Burrell waive any conflict of interest that might arise from "our firm's representation of [Burrell] and his other business interest (Symcon, Inc.)." Burrell declined to waive the conflict, but Rentenbach continued to represent Warfield and Edwards. Rentenbach's billing records reveal that he proceeded to prepare draft agreements in contemplation of a buyout by one shareholder or the other, while Dykema sent ACM invoices for Rentenbach's time.
In July 2000, Burrell and Warfield signed a document entitled "Alpha Capital Management, Inc. Process for Separation/Buy-Out," which contemplated a three-phased stock purchase process. In phase I, Burrell would present an offer to Warfield, which Warfield could accept or counter. If Warfield did neither, phase II would commence, during which a facilitator would assist the parties in crafting a transaction. If that failed, in phase III Burrell would "make[ ] a final written offer to sell his shares to Mr. Warfield or to purchase Mr. Warfield's shares," and Warfield would "decide[ ] whether to buy Mr. Burrell's shares or to sell his shares to Mr. Burrell."
Phases I and II did not result in ACM's sale. On April 20, 2001, the parties embarked on phase III. In a document drafted by Burrell's counsel, entitled "Offer to Purchase and Stock Purchase Agreement," Burrell offered either to sell his ACM shares to Warfield or to purchase Warfield's shares.
Section 2 of the stock purchase agreement governed the "purchase price and payment" applicable to the seller's shares. Section 2.1 required an initial payment of $75,000 at the closing and § 2.2 mandated execution of a promissory note in the amount of $1,425,000, to be paid in 20 equal quarterly installments. Section 2.8 addressed what would happen if the buyer became "unwilling or unable to pay any remaining amounts owing to Seller[.]" In that event, the seller had 30 days in which to exercise an option "to obtain all ownership interests in" ACM for $1.00 "in full satisfaction of the Unpaid Amounts[.]" If the seller failed to exercise that option, "any claims of Seller to the Unpaid Amounts will be deemed to be waived and released as of the end of such 30 day period." The stock purchase agreement also contained mutual covenants not to compete effective for three years after the closing date.
In July 2003, Burrell notified Warfield that he could not make the quarterly payment required under the buyout agreement unless Warfield approved a secured loan "of up to $150,000 from SymCon to Alpha." Warfield did not respond to this letter, and Burrell did not make the July payment. On August 1, 2003, Burrell wrote to Warfield and again sought approval for a loan. Warfield replied on August 4, 2003, declining to approve the loan on the basis that "I am not required to consent to this type of a transaction under the stock buy-out agreement ... and this arrangement is unfair to the other creditors of Alpha Capital (principally me and Munder Capital) because no other creditor has a lien on Alpha's assets." Warfield's letter continued, "Since I have not received the payment due on July 31, I hereby declare Alpha Capital in default under the Note." On August 29, 2003, Warfield sent Burrell another letter stating in part, "Further, I am notifying Alpha and you that due to Alpha's non-payment of its obligations, my covenant not to compete with Alpha is no longer applicable, pursuant to the provisions of Section 6.1(i) of the Offer to Purchase and Stock Purchase Agreement dated April 20, 2001."
Burrell responded on September 24, 2003, informing Warfield that "by receipt of this letter ... I am issuing a Refusal Notice pursuant to Paragraph 2.8 of our agreement." The pertinent portion of ¶ 2.8 sets forth:
On October 10, 2003, Warfield declined to exercise his right to purchase ownership of ACM.
On November 4, 2003, ACM and Burrell sued Alpha Partners, Warfield, Edwards, and Rodgers in the Oakland Circuit Court seeking injunctive relief and damages. Honigman Miller Schwartz and Cohn represented the plaintiffs in the Oakland Circuit Court action and Dykema represented the defendants. The plaintiffs alleged that the defendants had violated the noncompete clauses in their contracts and the stock purchase agreement, misappropriated confidential information, breached their fiduciary duties to ACM, and tortiously interfered with ACM business relationships. The Oakland Circuit Court denied injunctive relief, and the parties ultimately settled the damages claims for a relatively small amount—a $60,000 payment to ACM and Burrell.
On April 28, 2006, ACM filed the instant case in the Wayne Circuit Court against Dykema and Rentenbach, alleging breach of fiduciary duty (count I), tortious interference with contractual relations and with prospective economic and business advantage (count II), and aiding and abetting Warfield in violating his covenant not to compete (count III). In June 2006, defendants moved for summary disposition pursuant to MCR 2.116(C)(7) and (8). They contended that the allegations in ACM's complaint arose solely from their prior attorney-client relationship with ACM, and that the statute of limitations barred this malpractice claim. In the alternative, defendants argued that the plaintiffs' release of the Oakland Circuit Court defendants in the prior litigation, Alpha Partners, Warfield, Edwards, and Rodgers, barred an "aiding and abetting" theory against defendants as a matter of law. They also averred that the covenant not to compete had dissolved before the formation of Alpha Partners.
ACM answered that the breach of fiduciary duty claim did not sound in legal malpractice, but rather was properly pleaded as a separate cause of action subject to a three-year period of limitations. ACM denied that the release barred its claims for aiding and abetting, and contended that the covenant not to compete remained in effect when defendants formed Alpha Partners. The trial court denied defendants' motion, and this Court
On May 19, 2008, a jury trial commenced. The trial concluded on June 3, 2008, when the jury returned a special verdict finding that: (1) defendants had not breached a fiduciary duty to ACM; (2) former employees of ACM tortiously interfered with contracts or business relationships of ACM; (3) defendants did not aid or abet the tortious interference; and (4) Warfield did not breach the covenant not to compete.
ACM initially contests the propriety of the trial court's denial of ACM's motion for partial summary disposition concerning its breach of fiduciary duty claim. Because the trial court considered documentation beyond the pleadings in reaching its ruling and denied the motion on the basis of the existence of conflicting questions of fact, we review the court's ruling under MCR 2.116(C)(10). Walsh v. Taylor, 263 Mich.App. 618, 621, 689 N.W.2d 506 (2004). This Court reviews de novo a trial court's summary disposition ruling. Id. "Summary disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law." West v. Gen. Motors Corp., 469 Mich. 177, 183, 665 N.W.2d 468 (2003).
ACM additionally asserts that the trial court should have granted a directed verdict or judgment notwithstanding the verdict (JNOV) regarding its breach of fiduciary duty count. We also review de novo a trial court's rulings on motions for a directed verdict and JNOV. Sniecinski v. Blue Cross & Blue Shield of Michigan, 469 Mich. 124, 131, 666 N.W.2d 186 (2003). "A motion for directed verdict or JNOV should be granted only if the evidence viewed in th[e] light [most favorable to the nonmoving party] fails to establish a claim as a matter of law." Id.
Defendants do not dispute that they owed ACM a fiduciary duty premised on ACM's status as their former client. See Rippey v. Wilson, 280 Mich. 233, 243, 273 N.W. 552 (1937) (observing that "[t]he relationship between client and attorney is a fiduciary one, not measured by the rule of dealing at arm's length"); Meyer & Anna Prentis Family Foundation, Inc. v. Barbara Ann Karmanos Cancer Institute, 266 Mich.App. 39, 47, 698 N.W.2d 900 (2005) ("Damages may be obtained for a breach of fiduciary duty when a position of influence has been acquired and abused, or when confidence has been reposed and betrayed.") (quotation marks and citation omitted). Defendants insist that material questions of fact precluded a grant of summary disposition, a directed verdict, or JNOV with respect to whether they breached their fiduciary duty by working on behalf of Alpha Partners, Warfield, Edwards, and Rodgers in 2003.
Few Michigan cases elaborate concerning the substantive elements of a former client's breach of fiduciary duty claim against an attorney. ACM relies on the seminal Michigan case addressing an attorney's liability for breach of fiduciary duty, Fassihi v. Sommers, Schwartz, Silver, Schwartz & Tyler, PC, 107 Mich.App. 509,
The plaintiff in Fassihi, a radiologist, owned 50 percent of Livonia Physicians X-Ray, P.C., a closely held corporation. The defendant law firm represented Livonia Physicians and had drafted "all the agreements pertaining to membership in the professional corporation." Id. at 513, 309 N.W.2d 645. Dr. Rudolfo Lopez owned the other half of the corporation's shares. Id. at 511-512, 309 N.W.2d 645. Lopez had a prior agreement with St. Mary's Hospital that invested him with "personal and sole responsibility for staffing [its] radiology department." Id. at 513, 309 N.W.2d 645. Lopez and Fassihi practiced together for about 18 months before Lopez reached the decision that he no longer wished to associate with Fassihi. Id. at 512, 309 N.W.2d 645. Lopez asked the defendant, Livonia Physicians's lawyer, to ascertain how Fassihi "could be ousted from Livonia Physicians...." Id. In June 1975, an employee of the defendant delivered Fassihi a letter advising that Livonia Physicians's board of directors had met in Fassihi's absence and voted to terminate his employment. Id. at 513, 309 N.W.2d 645. Fassihi then learned that due to his "termination" from Livonia Physicians, he could no longer practice at St. Mary's Hospital. Id. Fassihi filed a complaint asserting that the defendant had "represented both Lopez individually and the professional corporation without disclosing to him this dual representation." Id.
This Court identified the "difficult question" of first impression presented in the case as "what duties, if any, an attorney representing a closely held corporation has to a 50% owner of the entity, individually." Id. at 514, 309 N.W.2d 645. The Court began its analysis by adopting the proposition that "the attorney's client is the corporation and not the shareholders." Id. Notwithstanding that no attorney-client relationship existed between Fassihi and the defendant law firm, the Court cautioned that this fact did not categorically preclude a fiduciary duty from arising between the law firm and Fassihi. Id. The Court explained:
The Court further noted the "difficulties" inherent in "treating a closely held corporation with few shareholders as an entity distinct from the shareholders." Id. at 516, 309 N.W.2d 645. "Instances in which the corporation attorneys stand in a fiduciary
This Court in Fassihi examined whether, by virtue of "close" attorney-shareholder interaction giving rise to "confidential relationships," a distinct fiduciary relationship existed between an attorney for a closely held corporation and a shareholder. Id. at 516, 309 N.W.2d 645. Because Fassihi and the defendant law firm lacked an attorney-client relationship, any liability on the part of the law firm arose on the basis of a cause of action—breach of fiduciary duty—separate and apart from the defendant's breach of a traditional duty of care. Here, the parties do not dispute that defendants and ACM had a fiduciary relationship through October 2001. Consequently, Fassihi does not resolve the issue at the core of the parties' dispute, whether defendants violated the fiduciary duty they owed to ACM by providing legal services to Warfield, Rodgers, and Edwards in 2003.
The common law has long recognized that an attorney's fiduciary duties extend to both current and former clients. For example, in T C Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F.Supp. 265, 268 (S.D.N.Y., 1953), the district court explained:
The United States Court of Appeals for the Sixth Circuit has declared it "well settled that an attorney who has acted for one party cannot render professional services in the same matters to the other party, and it makes no difference in this respect whether the relation itself has terminated, for the obligation of fidelity still continues." United States v. Bishop, 90 F.2d 65, 66 (C.A.6, 1937). In Consol. Theatres, Inc. v. Warner Bros. Circuit Mgt. Corp., 216 F.2d 920, 927 (C.A.2, 1954), the United States Court of Appeals for the Second Circuit held that Canon 6 of the American Bar Association Canons of Professional Ethics "is devised to protect the secrets and confidences reposed in the attorney by his clients," and required the disqualification of an attorney representing the plaintiff in an antitrust action "substantially similar" to matters on which the attorney had worked on behalf of the defendants.
These descriptions of an attorney's obligation to a former client derive from the principle that the attorney's duties of loyalty and confidentiality continue even after an attorney-client relationship concludes. But under the common
A number of courts around the country have examined the circumstances under which an adverse subsequent representation may be deemed substantially related to legal services done for a former client. Most commonly, courts have adopted a three-part test set forth in INA Underwriters Ins. Co. v. Nalibotsky, 594 F.Supp. 1199, 1206 (E.D.Pa., 1984):
The district court in INA Underwriters further elaborated,
Application of the INA Underwriters analysis to the instant facts yields a conclusion that material questions of fact precluded summary determination whether defendants breached their fiduciary duties to ACM. At trial, three witnesses testified about whether Rentenbach breached his fiduciary duties to ACM: Mallett, John Beckerman, and Charles Borgsdorf. These witnesses offered differing views regarding whether Rentenbach's work on behalf of Alpha Partners qualified as "substantially related" to the work he had done for ACM.
Mallett described the "continuing ethical responsibility" to a former client as follows:
He opined that "the establishment of a competing firm against [ACM] would have been directly adverse to Alpha Capital," and "I don't think the conflict gets any more direct than that." Mallett added that "if ... two corporations are competing in the same field, competing for the same client base and delivering the same product," a corporate counsel for one company could not ethically represent the other without a waiver. During his direct examination, Mallett did not specifically address whether Rentenbach's representation of Alpha Partners and its principals had a substantial relationship to defendants' representation of ACM. On recross-examination, Mallett acknowledged his awareness of MRPC 1.7 regarding conflicts of interest and a relevant comment to the rule:
Beckerman testified as ACM's primary liability expert.
Beckerman also expressed that defendants' assistance of Warfield, Edwards, and Rodgers in 2003 constituted "a grotesque breach of their own fiduciary duties." He explained that defendants established Alpha Partners while Warfield and "Warfield's confederates" remained employed at ACM:
Finally, Beckerman opined that defendants breached their duty of loyalty to ACM by representing Alpha Partners and the individual defendants in the Oakland Circuit Court litigation.
Borgsdorf, defendants' expert witness,
Given that the expert testimony diverged with respect to whether defendants' representation of ACM had a substantial relationship to the work they performed for Alpha Partners and its employees, the trial court properly denied ACM's motions for partial summary disposition, a directed verdict, and JNOV. Furthermore, applying the INA Underwriters factors to the evidence introduced at trial, substantial evidence supports the jury's conclusion that ACM failed to prove a breach of defendants' fiduciary duties. Neither Beckerman's trial testimony nor ACM's appellate brief identifies any confidential information in defendants' possession that somehow advantaged Alpha Partners. Even assuming that Rentenbach possessed confidential information concerning the Munder Capital debt, ACM neglected to explain how this confidential information advantaged Warfield. Without question, ACM and Alpha Partners had adverse interests. But Borgsdorf correctly noted that defendants apparently performed only the most routine, "bureaucratic" work on behalf of ACM, and that aside from sharing the same general nature, these legal services lack any substantial relationship to Rentenbach's activities on behalf of Alpha Partners. Accordingly, we reject ACM's position that as a matter of law defendants breached their fiduciary duties.
ACM next characterizes as erroneous the trial court's denial of summary disposition in its favor with respect to the complaint count asserting that Rentenbach "aided and abetted Warfield in violating" the stock purchase agreement's covenant not to compete. The trial court found that the contractual sections at issue, §§ 2.8 and 6.1(i), gave rise to "reasonable but conflicting interpretations," and continued, "Hence, the Court further finds that they are ambiguous. It further follows that summary disposition is inappropriate since further factual development is necessary to determine the intent of the parties." We again consider de novo this portion of the trial court's summary disposition ruling. Walsh, 263 Mich.App. at 621, 689 N.W.2d 506. We also review de novo questions involving the proper interpretation of a contract or the legal effect of a contractual clause. McDonald v. Farm Bureau Ins. Co., 480 Mich. 191, 197, 747 N.W.2d 811 (2008).
A contract must be interpreted according to its plain and ordinary meaning. St. Paul Fire & Marine Ins. Co. v. Ingall, 228 Mich.App. 101, 107, 577 N.W.2d 188 (1998). Our interpretation of contractual language is further guided by the following precepts:
"A contract is said to be ambiguous when its words may reasonably be understood in different ways." Raska v. Farm Bureau Mut. Ins. Co. of Mich., 412 Mich. 355, 362, 314 N.W.2d 440 (1982). The trier of fact must determine the meaning of an ambiguous contract. Badiee v. Brighton Area Sch., 265 Mich.App. 343, 351, 695 N.W.2d 521 (2005). However, if contractual language is unambiguous and no reasonable person could differ concerning application of the term or phrase to undisputed material facts, summary disposition should be awarded to the proper party. Rossow v. Brentwood Farms Dev., Inc., 251 Mich.App. 652, 658, 651 N.W.2d 458 (2002).
According to § 6.1(i) of the stock purchase agreement:
Section 2.8 identifies the buyer's obligations if it is "unwilling or unable to pay":
ACM insists that it did not breach its "obligation to pay" under the contract because the agreement contemplated an alternative form of performance, written notice of an inability to pay, that triggered the seller's right to buy the company for $1. However, the plain language of the contract refutes ACM's interpretation. Under § 6.1(i), the covenant not to compete "shall not apply, and Seller shall not be held liable for any breach thereof," if the buyer, ACM, breaches "any covenant or obligation contained in this Offer or any of the Related Agreements, including, without limitation, the obligation to pay and perform the Obligations." This language is not reasonably susceptible to more than one interpretation, and thus is not ambiguous. Because ACM indisputably breached its obligation to pay Warfield, the unambiguous contractual term precluded its enforcement of the seller's covenant not to compete. This result comports with Michigan law, specifically the principle that "one who first breaches a contract cannot maintain an action against the other contracting party for his subsequent
In support of ACM's position, it proffers an "alternative performance contract" theory, which we reject for multiple reasons. First, the case on which ACM principally relies does not support its argument. In McBain v. Pratt, 514 P.2d 823, 824-825 (Alaska 1973), an attorney executed a marital separation agreement in which he agreed to bequeath to a trust for the benefit of his children either his law practice or $42,000, representing the current worth of the law practice. In his final will, the attorney left the law practice to his new wife. Id. at 825. The Alaska Supreme Court determined that the measure of damages for the breach of the separation agreement was $42,000, holding that "the trust is entitled to damages measured according to the least onerous alternative[.]" Id. at 827. The Alaska Supreme Court explained that "`[a]n alternative contract is one in which a party promises to render some of two or more alternative performances either one of which is mutually agreed upon as the bargained-for equivalent given in exchange for the return performance by the other party[.]'" Id., quoting 5A Corbin on Contracts, § 1079, pp. 453-454 (1964). As described in McBain and by Professor Corbin, the alternative contract doctrine creates two or more mechanisms for performance of contractual obligations, but does not serve to excuse a contractual breach or to eliminate other contractual obligations.
Second, the contractual language here does not support ACM's contention that the parties entered into or intended an "alternative performance contract." Section 2.8 envisioned that if the buyer, ACM, was "unwilling or unable to pay any remaining amounts owing to Seller pursuant to the Promissory Note," the seller had the right to purchase ACM for $1, "in full satisfaction of the Unpaid Amounts[.]" If the seller elected not to purchase the company, "any claims of Seller to the Unpaid Amounts will be deemed to be waived and released. ..." The plain language of this clause reflects that if ACM breached its agreement to pay Warfield, he could either elect to buy the company or simply forego further payment. These elections describe alternative remedies for ACM's breach; they do not create alternative methods for Warfield's performance.
In summary, the trial court improperly submitted to the jury the special question, "Do you find that Robert Warfield breached the covenant not to compete?" On the basis of the analysis described above, ACM's failure to pay under the promissory note breached the stock purchase agreement and excused Warfield from abiding by the covenant not to compete. The trial court should have decided this issue as a matter of law in defendants' favor. But the court's error affords ACM no basis for relief because as a matter of law Warfield legally competed with ACM.
ACM additionally complains that the trial court improperly limited the total time for examinations of key witnesses Warfield and Rentenbach to 1.5 hours, allowing each side only 45 minutes, an "arbitrary and unreasonable" period given that (1) the relevant facts occurred over the course of 10 years, and (2) the limitation prevented ACM's counsel from adequately cross-examining Rentenbach regarding
Pursuant to MRE 611(a), "[t]he court shall exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to (1) make the interrogation and presentation effective for the ascertainment of the truth, (2) avoid needless consumption of time, and (3) protect witnesses from harassment or undue embarrassment." In Hartland Twp. v. Kucykowicz, 189 Mich.App. 591, 595, 474 N.W.2d 306 (1991), this Court emphasized that "[t]he mode and order of admitting proofs and interrogating witnesses rests within the discretion of the trial court." The trial court in Hartland, on the fifth day of a trial, limited witness examinations to one hour each for direct and cross-examination, but later amended its ruling to permit defense counsel more time with one expert witness. Id. at 596, 474 N.W.2d 306. On appeal, this Court held, "The record shows that the trial court properly exercised its discretion in limiting the time for examination of witnesses." Id.
Here, when ACM called Burrell, its first witness, the trial court announced that it would limit Burrell's examination to "[a]n hour a side." The following colloquy ensued between the trial court and ACM's counsel:
The trial court did not enforce its one-hour ruling for the examinations of Burrell. ACM's counsel questioned Burrell for approximately 4-1/2 hours. Burrell's direct examination and cross-examination extended for three days of trial, in part because the examinations were interrupted for the testimony of another witness. The parties agree that after Burrell's testimony concluded, the trial court limited the entire time for additional witness examinations to 1.5 hours, 45 minutes for each side.
During ACM's counsel's cross-examination of Warfield, counsel inquired of the trial court about the time remaining and the trial court responded, "Fifteen minutes." When ACM's counsel objected that "this is not adequate considering the serious nature—," the trial court interjected, "I know, but we're moving on. We're moving on. We've wasted a lot of time in this trial, and the next witness is gonna be an hour. We'll move quickly through these witnesses." Counsel for ACM again objected to the time limitation the next day. After citing Hartland, the trial court responded, "I've been appealed on this issue many times, and I've always been affirmed. I pick the amount of time for each witness. Mr. Rentenbach will be an hour and a half witness. Mr. Eaton will be an [sic] one hour witness, that's half hour [sic] for each side."
After trial concluded, ACM filed an "offer of proof" with the court. This offer does not appear in the lower court record. However, the parties have referred to it extensively in their appellate briefs.
Under the specific circumstances presented here, the trial court did not abuse its discretion by limiting to 1.5 hours the parties' examinations of Rentenbach and Warfield. The record reveals that counsel had adequate time to develop the facts and issues at the center of the parties' dispute. Moreover, the trial court permitted ACM more than three hours for its examination of Burrell on the basis of counsel's pledge that he could complete the rest of the witness examinations in a half hour.
With respect to the trial court's offer of proof ruling, MRE 103(a) provides, in relevant part, as follows:
Because the trial court's refusal to permit ACM to make an offer of proof may have prevented ACM from fully exercising its right to challenge on appeal the trial court's time limitations, the trial court abused its discretion by ignoring or misapplying MRE 103(a)(2) and precluding ACM from presenting its offer of proof in a manner permitted by the court rules. The trial court's need to complete witness testimony, however urgent, does not absolve it from its obligation to permit an offer of proof in accordance with MRE 103(a)(2). Here, ACM later fully preserved its claim of appeal by filing a separate
ACM avers that the limited examinations prevented questioning of Rentenbach about several documents that Alpha Partners filed with the Securities and Exchange Commission, deposition testimony inconsistent with Rentenbach's trial testimony, and Rentenbach's involvement in drafting the covenant not to compete and a 2001 amendment to ACM's articles of incorporation. But because ACM has not explained the importance of these areas of inquiry or the manner in which their foreclosure prejudiced its case, we conclude that ACM has failed to prove that the trial court's time limitation affected its substantial rights. MCR 2.613(A).
ACM avers that the trial court improperly allowed defendants to repeatedly elicit testimony regarding the settlement of the prior Oakland Circuit Court litigation, in violation of MRE 408, and to make other prejudicial references to the merits of the Oakland Circuit Court litigation. "A trial court's decision whether to admit or exclude evidence will not be disturbed on appeal absent an abuse of discretion. The trial court abuses its discretion if its decision is outside the range of principled outcomes." Morales v. State Farm Mut. Auto. Ins. Co., 279 Mich.App. 720, 729, 761 N.W.2d 454 (2008) (citation omitted). To the extent that this issue involves the meaning of a Michigan Rule of Evidence, we consider this legal issue de novo. Waknin, 467 Mich. at 332, 653 N.W.2d 176.
ACM moved in limine to exclude at trial evidence or references to "case evaluation settlements, judicial opinions or rulings issued in ... the Oakland County Circuit Court." ACM maintained that the settlement-related references fell within the precluded category of evidence in MRE 408 and that the settlement-related remarks and other references to the Oakland Circuit Court litigation had no relevance to this case. MRE 401. The trial court denied ACM's motion in limine, explaining that "that other suit has [been] pled, so I believe it can be brought out," and that MRE 408 did not apply because "[t]hat rule refers to settlements in this case, not in another case[.]"
Pursuant to MRE 408:
The rationale of this rule "is that settlement discussions are best encouraged when parties can freely discuss their dispute and offer to compromise their litigation positions without fear that their settlement discussions might be used against them as evidence of the strength or weakness of their cases." 1 Robinson & Longhofer, Michigan Court Rules Practice, Evidence, § 408.1, p. 587.
ACM's complaint further averred that defendants' breaches of fiduciary duty "were a proximate cause of Alpha Capital's damages arising from Alpha Partner's theft of its business and of the litigation costs arising therefrom." In other words, ACM sought compensatory damages for the amounts it had expended in the prior lawsuit against Alpha Partners, Warfield, Rodgers, and Edwards.
In conclusion, because ACM's theory of the case placed the Oakland Circuit Court settlement and its attendant legal fees at issue in the instant case, the trial court did not abuse its discretion by allowing defense
ACM also submits that contrary to law the trial court allowed defense expert Borgsdorf to testify regarding legal opinions, including about contract interpretation. We again review for an abuse of discretion the trial court's decision whether to admit or exclude evidence. Morales, 279 Mich.App. at 729, 761 N.W.2d 454.
Neither side challenged at trial the legal ethics expertise of Beckerman, ACM's expert, or Borgsdorf, defendants' expert. A review of Beckerman's and Borgsdorf's testimony reveals that the experts did not disagree with respect to the ethical standards guiding lawyers' behavior and conduct toward clients and former clients, just that the experts disputed the extent to which the relevant ethical principles applied to the facts of this case. In conformity with MRE 702 and MRE 703, the experts properly brought their specialized legal expertise to bear on the instant facts.
Concerning ACM's position that the trial court improperly allowed Borgsdorf to render legal opinions involving contract interpretation, ACM has waived appellate review of this assertion. In the course of Beckerman's testimony, which ACM introduced before Borgsdorf testified, ACM elicited over defendants' objection Beckerman's opinions about the interrelationship between §§ 2.8 and 6.1 of the parties' stock purchase agreement. As noted above, "error requiring reversal may only be predicated on the trial court's actions and not upon alleged error to which the aggrieved party contributed by plan or negligence." Lewis, 258 Mich.App. at 210, 670 N.W.2d 675.
According to ACM, notwithstanding that its counsel observed the court reporter motion to a juror and gesture "in a manner adverse to [ACM]," the trial court inexcusably refused to investigate the full extent of the improper communication or give the jury a curative instruction. However, after reviewing the record, we detect no substantiation by ACM that (1) the court reporter engaged in misconduct, (2) the reporter engaged in any conduct that affected the impartiality of a juror, (3) the trial court should have granted ACM an evidentiary hearing to further investigate any potential misconduct, or (4) the trial court's decision not to investigate further can be characterized as "inconsistent with substantial justice." MCR 2.613(A).
The entirety of the trial record devoted to ACM's counsel's allegation of impropriety by the court reporter consists of the following:
Even accepting ACM's counsel's perception that the court reporter occasionally had "made faces and acted disdained, corrected me in an inappropriate way," we perceive no potential substantial prejudice to ACM arising from the court reporter's conduct, especially in light of ACM's counsel's belief that the reporter had at some points apparently done the same things toward defense counsel. MCR 2.613(A). Regarding the reporter's perceived wave and mouth motion directed at a juror, given that (1) neither the trial court nor defense counsel detected the same behavior, and (2) ACM's counsel's failed to suggest any manner in which the reporter's wave, even assuming it occurred, may have threatened the juror's fairness and impartiality, the trial court did not abuse its discretion when it declined to remove the juror. People v. Unger, 278 Mich.App. 210, 259, 749 N.W.2d 272 (2008). Moreover, ACM presents no authority on appeal in support of its contention that the trial court should have investigated further the court reporter and potential juror bias.
Lastly, ACM submits that the trial court erred in multiple respects by rejecting several of its proposed jury instructions. We review de novo properly preserved instructional errors, Cox v. Flint Bd. of Hosp. Managers, 467 Mich. 1, 8, 651 N.W.2d 356 (2002), and consider the jury instructions as a whole to determine whether they adequately present the theories of the parties and the applicable law. Mull v. Equitable Life Assurance Society of the United States, 196 Mich.App. 411, 423, 493 N.W.2d 447 (1992), aff'd 444 Mich. 508, 510 N.W.2d 184 (1994). "[A] verdict should not be set aside unless failure to do so would be inconsistent with substantial justice. Reversal is not warranted when an instructional error does not affect the
After reviewing the record, we find that although somewhat incomplete and imperfect, the trial court's instructions fairly and accurately presented the theories of the parties and the applicable law. Any minor omissions or other deficiencies did not substantially prejudice ACM's case. MCR 2.613(A).
The trial court instructed the jury as follows regarding ACM's breach of fiduciary duty claim:
ACM requested the following additional instructions:
"Generally, a trial court may give an instruction not covered by the standard instructions as long as the instruction accurately states the law and is understandable, concise, conversational, and nonargumentative." Central Cartage Co. v. Fewless, 232 Mich.App. 517, 528, 591 N.W.2d 422 (1998); see also MCR 2.516(D)(4). But a trial court need not give a supplemental instruction if doing so would not "enhance the ability of the jury to decide the case intelligently, fairly, and impartially." Central Cartage, 232 Mich. App. at 528, 591 N.W.2d 422. Even if a requested supplemental instruction accurately states the law, a trial court does not abuse its discretion in rejecting it if the supplemental instruction adds nothing to an otherwise balanced and fair jury charge. Beadle v. Allis, 165 Mich.App. 516, 527, 418 N.W.2d 906 (1987).
With the exception of the instruction regarding "Substantially Related Matters," ACM's proposed jury instructions accurately state the law relating to an attorney's fiduciary duty and the circumstances under which it may be breached. However, neither the existence of a fiduciary duty nor the last date that defendants performed legal services was the subject of dispute at trial. The experts for both sides testified extensively that attorneys owe their current and former clients a fiduciary duty, and that the duty prohibits the use of confidential information obtained from one client in a manner adverse to another. The experts spent considerable time discussing whether Rentenbach's representation of ACM qualified as "substantially related" to the legal work he performed for Alpha Partners. And the parties agreed that defendants continued to provide legal services to ACM until Burrell terminated the attorney-client relationship in 2001. Because the parties never disputed the legal principles described in ACM's requested supplemental jury instructions, the instructions would not have enhanced the jury's ability to intelligently and fairly decide the case. Accordingly, the trial court did not abuse its discretion by refusing to read ACM's proposed supplemental fiduciary duty instructions.
The trial court instructed the jury as follows with regard to Michigan's Rules of Professional Conduct:
This instruction applies to the facts of the case and accurately states the law. ACM correctly observes that "to the
Count II of ACM's complaint alleged that defendants aided and abetted Warfield's, Edwards's, and Rodgers's breaches of their fiduciary duties to ACM, and that Rentenbach's actions made him "a joint tortfeasor with Warfield, Edwards and Rodgers." The trial court instructed the jury as follows regarding this claim:
ACM contends that the trial court should have supplied additional instructions describing in detail the nature of the fiduciary relationships between ACM and Warfield, Rodgers, and Edwards. However, ACM's lengthy proposed supplemental instructions are neither concise nor conversational. Moreover, even if they qualified as proper supplemental instructions, the trial court's failure to read them was harmless given the jury's finding that Warfield, Rodgers, and Edwards tortiously interfered with ACM's contractual and business relationships.
In the instructions concerning counts II and III of ACM's complaint, the trial court limited the jury's consideration of the facts to the time period "during or after September, 2003." Although ACM correctly asserts that the evidence demonstrated that Rentenbach had conferred with Warfield, Rodgers, and Edwards in August 2003, ACM averred in at least one trial court filing that "Defendants' actions upon which the breach of fiduciary duty claim is based began in September, 2003. ..." "A party may not take a position in the trial court and subsequently seek redress in an appellate court that is based on a position contrary to that taken in the trial court." Czymbor's Timber, Inc. v. Saginaw, 269 Mich.App. 551, 556, 711 N.W.2d 442 (2006) (quotation marks and citations omitted), aff'd 478 Mich. 348, 733 N.W.2d 1 (2007).
ACM insists that the trial court erred by failing to instruct the jury about alternative performance contracts and other "basic legal principles of contract interpretation." However, because Burrell's breach of the stock purchase agreement precluded his enforcement of the covenant not to compete, as discussed supra at 363-68, ACM's argument on this ground lacks merit.
ACM further suggests that the trial court committed error requiring reversal when it "failed to give ... requested instructions regarding the legal effect of any intervening conduct of persons not a party to the action, and ... regarding the jury's consideration of evidence of a settlement." In 2003, the Committee on Model Civil Jury Instructions deleted M. Civ. J.I. 15.05, an instruction addressing the intervening conduct of a person not a party to the action. The committee explained, "The instruction was deleted because the effect of nonparty fault is addressed in M. Civ. J.I. 15.03. ..." ACM did not request that the trial court give M. Civ. J.I. 15.03. Accordingly, the trial court committed no error substantially prejudicing ACM to the extent that it neglected to read the jury an intervening conduct instruction.
ACM urged the trial court to instruct the jury that it "must not consider the fact that there was a settlement in the prior case as having any bearing" on the jury's determination of ACM's claims in the instant case. Although this proposed instruction accurately stated the law, the trial court's refusal to give it was not inconsistent with substantial justice. ACM presented abundant evidence about the Oakland Circuit Court litigation, but virtually no information regarding the small settlement achieved. After reviewing the trial court's instructions as a whole in light of the evidence introduced at trial, we simply cannot conclude that the trial court's refusal to give a supplemental settlement instruction substantially prejudiced ACM.
The trial court refused to read the case theories submitted by the parties. According to MCR 2.516(A)(5), "The court need not give the statements of issues or theories of the case in the form submitted if the court presents to the jury the material substance of the issues and theories of each party." The trial court did not abuse
Affirmed.
The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed.