Negligent/innocent misrepresentation; Zaremba Equip., Inc. v. Harco Nat’l Ins. Co.; Fraudulent/intentional misrepresentation; Requirement that plaintiffs plead a fraud claim with particularity; MCR 2.112(B)(1); Cooper v. Auto Club Ins. Ass’n; Breach of contract claim; Miller-Davis Co. v. Ahrens Constr., Inc.; Elements of a valid contract; AFT MI v. Michigan; Whether the plaintiffs were third-party beneficiaries of the contract between defendant-Stout Risius Ross (SRR) & the General Retirement System of the City of Detroit (GRSCD); Schmalfeldt v. North Pointe Ins. Co.; Denial of motion to amend pleadings; Cole v. Ladbroke Racing MI, Inc.; Futility; Weymers v. Khera; Formall, Inc. v. Community Nat’l Bank of Pontiac

The court concluded that there were no genuine issues of material fact to support that defendant-SRR engaged in negligent or innocent misrepresentation, and the plaintiffs’ fraud claim failed for the same reasons as their negligent misrepresentation claim. Further, a waiver letter did not constitute a contract between SRR and plaintiffs. Thus, their breach of contract claim failed as a matter of law. They also were not third-party beneficiaries of the contract between SRR and nonparty-GRSCD, and the trial court did not abuse its discretion in denying as futile their motion to amend their complaint. Thus, the court affirmed the trial court’s grant of summary disposition to SRR. Plaintiffs have a business interest in a corporation that GRSCD retained to manage some of its assets. GRSCD later hired SRR to perform a forensic audit of an investment that GRSCD had made at the corporation’s recommendation. Due to prior dealings, SRR sent a letter to the GRSCD and one of the plaintiffs “requesting that they sign a ‘formal waiver of any potential conflicts.’” After SRR completed its audit, GRSCD sued the corporation and the plaintiffs individually. Plaintiffs then filed this action against SRR. The court concluded that they failed to “allege any facts to support the third, fourth, and fifth elements of their misrepresentation claim.” There were “no facts to support that SRR made a false representation with the intent to induce plaintiffs to rely on that representation” or to support that they “relied on any of SRR’s representations in a manner that injured plaintiffs and benefitted SRR.” Further, they “failed to plead their fraud claim with particularity.” As to their breach of contract claim, “there was no consideration that passed between the parties and SRR did not have any obligation to plaintiffs under the terms of the waiver.” As to their third-party beneficiary argument, “SRR, as the promisor in the GRSCD-SRR audit contract, did not undertake to give or do or refrain from doing anything directly to or for plaintiffs.” It “undertook to perform an audit for the GRSCD. None of the benefits of that contract were intended to flow to” plaintiffs, who were “simply the owners of the investment firm that managed” the investment to be audited.