           If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                revision until final publication in the Michigan Appeals Reports.




                        STATE OF MICHIGAN

                            COURT OF APPEALS


SHOWER CURTAIN SOLUTIONS LIMITED,                                UNPUBLISHED
LLC,                                                             June 18, 2020

              Plaintiff-Cross-Appellant/Cross-
              Appellee,

v                                                                No. 346549
                                                                 Wayne Circuit Court
FIRST AMERICAN TITLE INSURANCE                                   LC No. 17-016515-CB
COMPANY,

              Defendant-Cross-Appellee,

and

SEAVER TITLE AGENCY, LLC,

              Defendant-Cross-Appellee/Cross-
              Appellant,

and

WILLYS OVERLAND LOFTS LIMITED
DIVIDEND HOUSING ASSOCIATION, LLC,
WILLYS OVERLAND, LLC, WILLYS
OVERLAND COMMERCIAL, LLC, and WILLYS
OVERLAND LOFTS ASSOCIATION.

              Defendants.


Before: GLEICHER, P.J., and SAWYER and METER, JJ.

PER CURIAM.

       Shower Curtain Solutions Limited, LLC (SCSL) purchased property separated from
property owned by Willys Overland Lofts Association (the Association) by an alley that was


                                             -1-
previously owned by the city of Detroit. When SCSL took possession, it discovered that the
Association had fenced off the entire alley. After paying $100,000 to secure an easement, SCSL
filed suit against the Association to quiet title to the northern half of the alley. The circuit court
granted summary disposition in SCSL’s favor. That ruling is not at issue on appeal.

        At issue in SCSL’s cross-appeal is the circuit court’s summary dismissal of SCSL’s breach
of contract and tort claims against its title insurance provider—First American Title Insurance
Company—and its title insurance agent—Seaver Title Agency, LLC—in First American’s and
Seaver’s favor. At issue in Seaver’s cross-appeal is the circuit court’s denial of the agent’s request
for attorney fees based on SCSL’s frivolous action against it. We affirm the circuit court’s
summary dismissal of SCSL’s claims, but reverse the order denying Seaver’s sanctions request
and remand for further consideration of that issue.

                                        I. BACKGROUND

       In 2015, SCSL purchased property located at 441 W. Canfield in Detroit. 441 W. Canfield
was separated from neighboring loft property owned by the Association by an alley that was
vacated by the city in 2007:




After taking possession, SCSL discovered that the Association claimed ownership over the entire
alley, precluding SCSL any access. Unaware of the city’s vacation of the alley, SCSL entered into
an agreement to secure an easement over the alley in exchange for $100,000. After learning of the
city’s vacation of the alley, SCSL claimed fee ownership of the northern half of the alley by
operation of law.

        SCSL filed a three-count complaint alleging (1) breach of contract against First American
and Seaver, (2) negligent misrepresentation against First American and Seaver, and (3) quiet title
against the Association and its parent companies. The circuit court granted summary disposition
to SCSL on its quiet title claim. SCSL now holds fee title to the northern half of the alley. The
Association has not appealed that ruling.

        However, the circuit court summarily dismissed SCSL’s breach of contract and tort claims
against First American and Seaver. The court found that the title insurance contract did not cover
the scenario presented in this case. And, the court ruled, Michigan law did not permit tort actions
against title insurers. SCSL appeals those decisions. Seaver then sought sanctions against SCSL,
asserting that the claims against it were frivolous. The court denied that request and Seaver now
appeals as well.


                                                 -2-
                                  II. SUMMARY DISPOSITION

     We review de novo a circuit court’s decision on a motion for summary disposition.
Gyarmati v Bielfield, 245 Mich App 602, 604; 629 NW2d 93 (2001).

               Summary disposition is proper under MCR 2.116(C)(8) if the nonmoving
       party has failed to state a claim on which relief can be granted. Such claims must
       be so clearly unenforceable as a matter of law that no factual development could
       possibly justify recovery. In reviewing the outcome of a motion under MCR
       2.116(C)(8), we consider the pleadings alone. We accept the factual allegations in
       the complaint as true and construe them in a light most favorable to the nonmoving
       party. [Kuznar v Raksha Corp, 481 Mich 169, 176; 750 NW2d 121 (2008)
       (quotation marks and citations omitted).]

                           A. NEGLIGENT MISREPRESENTATION

        “A claim for negligent misrepresentation requires plaintiff to prove that a party justifiably
relied to his detriment on information prepared without reasonable care by one who owed the
relying party a duty of care.” Fejedelem v Kasco, 269 Mich App 499, 502; 711 NW2d 436 (2006).
SCSL asserted that defendants committed negligent representation by implying that the alley
adjacent to 441 W. Canfield was owned by the Association. The circuit court relied on Mickam v
Joseph Louis Palace Trust, 849 F Supp 516 (ED Mich, 1993), and Wormsbacher v Seaver Title
Co, Inc, 284 Mich App 1; 772 NW2d 827 (2009), to rule that claims against a title insurer and its
agents are governed by contract, not tort. The circuit court correctly determined that a plaintiff
may not sustain such a tort action against a title insurance agent such as Seaver or a title insurer
like First American.

         In Mickam, 849 F Supp 516, 518 (ED Mich, 1993), the plaintiffs brought suit in tort against
the defendant title insurance agent. After purchasing property from the sellers, the buyers learned
that the property was encumbered by federal and state tax liens. Id. at 519. The buyers then sued
the title insurance agent for negligence. The federal district court noted that title abstractors “who
negligently performs a title search” can be held liable under Michigan law. Id. at 521, citing
Williams v Polgar, 391 Mich 6; 215 NW2d 149 (1974). But, the court noted, “no Michigan court
has held that a title insurer or agent has a professional duty of care to those who employ them,
outside of their contractual obligations.” Mickam, 849 F Supp at 521.

         The Mickam court recognized that “[c]ourts in other jurisdictions are split on whether or
not a title insurer or agent can be liable in negligence like an abstracter.” Id. But the court found
“more persuasive” those jurisdictions limiting the insurer’s and agent’s duty to contract. Id.

                As in other states, parties in Michigan generally purchase title insurance,
       rather than relying on an abstract, because they prefer the certainty of insurance. In
       purchasing insurance, a buyer acquires a contractual right against the insurer for
       coverage of title defects. In purchasing an abstract, a buyer merely obtains an
       examination of title. With an abstract, a real estate buyer can obtain damages for
       title defects only through tort litigation. To protect the rights and expectations of
       the parties, a title insurer should be liable in accordance with the terms of the title



                                                 -3-
        policy only and should not be liable in tort. To hold otherwise does violence to the
        whole concept of insurance. [Id. at 521-522 (emphasis added).]

        In Wormsbacher v Seaver Title Co, Inc, 284 Mich App 1, 7; 772 NW2d 827 (2009), this
Court found Mickam persuasive and adopted its reasoning. The Court noted that, unlike some
jurisdictions, “Michigan distinguishes between title insurers and abstractors,” with each fulfilling
distinct roles. Id. While abstractors could be held liable in tort, title insurers could not. Id. at 8.

         Mickam and Wormsbacher could not be clearer—an injured party must rely on its title
insurance contract to bring suit against its title insurer or the insurer’s agent; there can be no action
in tort. SCSL’s arguments to the contrary and attempts to distinguish this case from Mickam and
Wormsbacher are unavailing. Accordingly, the circuit court properly dismissed SCSL’s negligent
misrepresentation claim.

                                   B. BREACH OF CONTRACT

         SCSL further challenges the circuit court’s summary dismissal of its contractual claims
against First American and Seaver. In dismissing the claim in defendants’ favor, the court first
ruled that a breach of contract action could not stand against Seaver because it was not a party to
the title insurance company. In relation to American Title, the court stated:

        When I look at the contract here I go to follow what the contract says . . . .

        . . . and what American Title was insuring they were not insuring the alley.

        The circuit court dismissed SCSL’s claims in defendants’ favor after SCSL filed a
summary disposition motion “Summary disposition may be granted in favor of an opposing party
under MCR 2.116(I)(2) if there is no genuine issue of material fact and the opposing party is
entitled to judgment as a matter of law.” City of Holland v Consumers Energy Co, 308 Mich App
675, 681-682; 866 NW2d 871 (2015), aff’d City of Coldwater v Consumers Energy Co, 500 Mich
158 (2017). This issue also involves the interpretation of a contract, which is a question of law
that we review de novo. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 463; 663 NW2d
447 (2003).

       A plaintiff claiming a breach of contract must prove “(1) that there was a contract, (2) that
the other party breached the contract, and (3) that the party asserting breach of contract suffered
damages as a result of the breach.” Doe v Henry Ford Health Sys, 308 Mich App 592, 601; 865
NW2d 915 (2014).

                                     1. DEFENDANT SEAVER

        Summary disposition was warranted in Seaver’s favor. In Mickam, the plaintiff claimed
that the defendant title agent was liable under the title insurance policy. The court found the claim
“meritless” because the defendant was not the insurer under the policy. The court distinguished
that the defendant was an agent for the insurer and that, under Michigan law, “an agent is not liable
for the contracts it makes on behalf of a disclosed principle [sic].” Mickam 949 F Supp at 520.




                                                  -4-
        Mickam relied upon Hall v Encyclopedia Britannica, Inc, 325 Mich 35; 37 NW2d 702
(1949), and Huizenga v Withey Sheppard Assoc, 15 Mich App 628; 167 NW2d 120 (1969), in
support of its conclusion. In Hall, 325 Mich at 38, quoting Whitney v Wyman, 101 US 392; 25 L
Ed 1050 (1879), our Supreme Court held that “ ‘[w]hen the principal is disclosed, and the agent is
known to be acting as such, the latter cannot be made personally liable unless he agreed to be so.’ ”
And in Huizenga, 15 Mich App at 633, this Court stated, “It is a well accepted rule that where the
principal is disclosed and the agent is known to be acting as such, the agent cannot be made
personally liable unless he agreed to become personally liable.” This Court more recently
reiterated that “an agent who contracts with a third party on behalf of a disclosed principal is
generally not liable to the third party in the absence of an express agreement to be held liable.”1
Howard & Howard Attorneys, PLLC v Jabbour, 311 Mich App 524, 526; 880 NW2d 1 (2015).

        Ultimately, if Seaver had acted as First American’s agent, it could not be liable under the
policy. SCSL effectively ignores this aspect of the issue and instead relies on inapplicable caselaw
when cursorily stating that Seaver is liable as the agent that countersigned the policy. Rather,
Seaver Title Agency is mentioned only once in the policy and that is as countersignatory in
Schedule A.

        On the insurance policy at issue, Seaver’s name appears only one time; on Schedule A of
the policy, “SEAVER TITLE AGENCY” is listed as countersigning that document. The policy
identifies First American as the sole insurer. The act of countersigning the policy does not
demonstrate an express intent by Seaver to also be held liable on the contract. Therefore, under
well-established law, Seaver, as an agent of the disclosed insurer, cannot be held liable under the
contract.

                              2. DEFENDANT FIRST AMERICAN

        With regard to First American, SCSL argues that it should be able to rely on the bargained-
for terms of the insurance contract. That is true. But contrary to SCSL’s view, the agreed-upon
terms plainly do not include title to the alley.

        Relevant to this appeal, the title insurance policy covered loss from “[t]itle being vested
other than as stated in Schedule A,” as well as:

               2. Any defect in or lien or encumbrance on the Title. . . .

               3. Unmarketable Title.

               4. No right of access to and from the Land.




1
  This is contrary to the situation where an agent contracts for an undisclosed principal. In that
situation, the agent is personally liable for contractual obligations. Penton Publishing, Inc v
Markey, 212 Mich App 624, 626; 538 NW2d 104 (1995).


                                                -5-
The policy defines “Title” as “[t]he estate of interest described in Schedule A” and defines “Land”
as the following:

       The land described in Schedule A, and affixed improvements that by law constitute
       real property. The term “Land” does not include any property beyond the lines of
       the area described in Schedule A, nor any right title, interest, estate, or easement
       in abutting streets, roads, avenues, alleys, lanes, ways, or waterways, but this does
       not modify or limit the extent that a right of access to and from the Land is insured
       by this policy. [Emphasis added.]

Schedule A indicates that the policy insures fee title to the property as described in Exhibit A.
Exhibit A, in turn, describes the metes and bounds dictating the subject property’s boundaries.
The subject alley is not included in Exhibit A. The pertinent portion of the description shows that
the southern boundary of the property is along the “Northerly line of said 20 foot wide public
alley.” However, another alley that had been vacated by the city is included in the property’s
metes and bounds description. Therefore, although the description about the alley being “public”
was no longer accurate on account of the 2007 vacation, there is no question that the area
contemplated in the policy did not include the subject alley, public or otherwise.

        SCSL’s claim that the policy must cover all of 441 W. Canfield (including the northern
half of the subject alley) because it mentions “441 W. Canfield” is misguided. Under a general
heading on Schedule A, the policy identifies the area in question as “Commonly Known As: 441
W. Canfield, Detroit, MI 48207.” And “[i]t is elementary that upon the vacation of a street or
alley the land reverts to the abutting owner or owners.” Mich Central R Co v Miller, 172 Mich
201, 208; 137 NW 555 (1912); see also MCL 560.227a(2). However, more specific terms in a
contract control over general terms. DeFrain v State Farm Mut Auto Ins Co, 491 Mich 359, 367
n 22; 817 NW2d 504 (2012). The more specific provisions of this insurance policy limit the
insured property to the metes and bounds described in Exhibit A. And Exhibit A does not include
the alley in question.

        SCSL avers in its reply brief that “the function of the title company is to give the insured
the protection which he reasonably had a right to expect.” However, as our Supreme Court has
stated, “The rule of reasonable expectations clearly has no application to unambiguous contracts.”
Wilkie v Auto-Owners Ins Co, 469 Mich 41, 60; 664 NW2d 776 (2003). And that is because “one’s
alleged ‘reasonable expectations’ cannot supersede the clear language of a contract.” Id.; see also
Raska v Farm Bureau Mut Ins Co of Mich, 412 Mich 355, 362; 314 NW2d 440 (1982) (“[T]he
expectation that a contract will be enforceable other than according to its terms surely may not be
said to be reasonable.”).

        Therefore, under the plain terms of the contract, either through its definition of “Land” not
including any abutting alleys or through the specific metes and bounds description, the policy did
not insure title with regard to the alley in question.

                                        III. SANCTIONS

       Seaver challenges the circuit court’s denial of its request for sanctions based on its
characterization of SCSL’s breach of contract claim against it as frivolous. We review for clear



                                                -6-
error a trial court’s determination whether an action was frivolous. Kitchen v Kitchen, 465 Mich
654, 661; 641 NW2d 245 (2002). “A decision is clearly erroneous where, although there is
evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake
has been made.” Id. at 661-662.

       Seaver argued below that SCSL’s breach-of-contract claim against it was devoid of legal
merit, and therefore, was frivolous, which required that sanctions be imposed under MCL
600.2591 and MCR 2.114(D).2 MCL 600.2591(3)(a) provides for sanctions when

               (ii) The party had no reasonable basis to believe that the facts underlying
       that party’s legal position were in fact true.

               (iii) The party’s legal position was devoid of arguable legal merit.

MCR 1.109(E)(5)-(6) provides for sanctions when a party or its attorney signs a pleading which is
filed for an improper purpose or knowing that it is not “well grounded in fact” or “warranted by
existing law or a good-faith argument for the extension, modification, or reversal of existing law.”

         In ruling on Seaver’s request, the circuit court merely stated that the issue was not a “slam
dunk” and that it only “give[s] sanctions on slam dunks.” Although not articulately stated, the
court essentially found that SCSL did not bring a frivolous claim. A review of the binding caselaw
on this issue reveals that the issue actually was a slam dunk. The longstanding and well-established
law is clear that an agent is not liable on a contract when the agent’s principal is disclosed. See
Hall, 325 Mich at 38; Howard & Howard, 311 Mich App at 526; Huizenga, 15 Mich App at 633;
Mickam 949 F Supp at 520. That is exactly the situation here. To raise a claim that so contrary to
that precedent without citing any ground to overrule that precedent was frivolous. With SCSL
offering nothing of substance to show how the binding precedent should not apply, we are left with
a definite and firm conviction that the circuit court erred in denying Seaver’s request for sanctions.

        SCSL relies on the principle that counsel’s good-faith efforts to pursue novel or arguable
legal theories shields it from sanctions. See FMB-First Mich Bank, 232 Mich App at 719 (stating
that the framework of MCL 600.2591 and the court rules is to deter parties from advancing
frivolous claims “without stifling their good-faith efforts at pursuing novel or arguable legal
theories”). But SCSL’s reliance on this principle is misplaced. Given the sheer lack of substance
behind its responses, a court could not find that SCSL’s breach-of-contract claim was made in
pursuit of any novel or arguable legal theory.

      Accordingly, we affirm the circuit court’s grant of summary disposition in Seaver Title
Agency’s and First American Title Insurance Company’s favor, but reverse the ordering denying



2
  At the time Seaver filed its request for sanctions, MCR 2.114 was in effect, but shortly thereafter,
it was repealed, effective September 1, 2018. The contents of former MCR 2.114 have been
relocated to MCR 1.109; specifically, MCR 2.114(D) has been retained identically at MCR
1.109(E)(5). Because this change was in effect at the time the trial court made its decision, we
will subsequently refer to the rules as they appear in MCR 1.109.


                                                 -7-
Seaver’s request for sanctions. We remand for further proceedings consistent with this opinion.
We do not retain jurisdiction.



                                                          /s/ Elizabeth L. Gleicher
                                                          /s/ David H. Sawyer
                                                          /s/ Patrick M. Meter




                                              -8-
