Alleged fraud arising out of the sale of commercial property; Fraud, innocent misrepresentation, & silent fraud; Titan Ins Co v Hyten; Reasonable reliance; DBD Kazoo, LLC v Western MI, LLC; Duty to investigate; Effect of a no-reliance clause; Duty of disclosure; Mable Cleary Trust v. Edward–Marlah Muzyl Trust; Attorney fees; Fleet Bus Credit v Krapohl Ford Lincoln Mercury Co

The court held that the trial court did not err by granting summary disposition for defendant-seller, or by awarding attorney fees. Plaintiff alleged fraud, innocent misrepresentation, and silent fraud after plaintiff purchased a property from defendant and was later told by defendant’s former tenant that plaintiff owed $200,000 for tenant improvements. The court rejected plaintiff’s argument that the trial court erred by granting summary disposition because it reasonably relied on defendant’s statement that the money was paid when completing the closing. “The numerous events between the alleged misrepresentation and the closing of the transaction should have put plaintiff on notice that the tenant allowance needed to be investigated further. Plaintiff failed to duly investigate, so its reliance of the statement was not reasonable.” In addition, plaintiff’s “email to the seller, specifically asking for the confirmation of the payment for improvement expenses, is a supreme indication that plaintiff was aware that there might be an outstanding balance. Plaintiff should have been alerted to its need to investigate further when it did not get confirmation that any allowance owed was paid. Plaintiff cannot simply put aside its duty to exercise due diligence by using a ‘duty to disclose’ concept as a shield for inaction, specifically when plaintiff is put on notice that there is a reason to investigate.” The court also rejected plaintiff’s claim that the no-reliance clause did not protect defendant from a fraud claim in light of the timing and context of the transaction. Because the documents at issue “were signed after the misrepresentation and after the extended period of time specifically designated for an independent investigation, we disagree with plaintiff’s argument that the statement regarding the tenant allowance was done post-contractually.” The court next rejected plaintiff’s contention that defendant committed silent fraud when it failed to disclose that the $200,000 allowance was not paid. Plaintiff failed to show “that defendant’s single statement and its nonresponse to an email were ‘intended to deceive.’ Moreover, even silent fraud requires a showing of reasonable reliance.” The issue of “the outstanding reimbursement could have easily been discovered if plaintiff had exercised its right to contact the tenant during the due diligence period.” Finally, plaintiff claimed attorney fees “should not have been awarded because the trial court erred by deciding in favor of the defendant. However, the [trial] court did not error by granting summary disposition in favor of defendant, and therefore, it properly granted an award of attorney’s fees.” Affirmed.