Breach of contract; Res judicata; Failure to state a claim; Claim for monies had & received; Youmans v Charter Twp of Bloomfield; Unjust enrichment; Whether the defenses of unclean hands & recoupment were properly before the court

The court held that while dismissal of plaintiff’s contract breach claims was not warranted based on res judicata it was proper based on failure to state a claim. But it concluded the trial court erred in dismissing their claims for monies had and received and for unjust enrichment. The case arose “from a series of business dealings between” plaintiff-Iyad Isaac, his business, plaintiff-Isaac Investments, his deceased brother, Imad, and Imad’s business, defendant-Future Holdings (FH). The trial court granted FH summary disposition under MCR 2.116(C)(7) and (8). On appeal, the court first determined that res judicata did not apply here. Given that “the trial court’s prior order did not fully resolve whether plaintiffs could plead or prove a breach-of-contract claim against [FH] and the breach-of-contract claim asserted in the second amended complaint was authorized by the trial court’s prior order, the trial court erred to the extent that it dismissed plaintiffs’ breach-of-contract claim in the second amended complaint” based on res judicata. However, it was undisputed FH “was not a party to the promissory note that is the basis for plaintiffs’ breach-of-contract claim. Further, to the extent that [they] alleged that [FH] also promised to pay the debt evidenced by Imad’s promissory note, such a promise is unenforceable under the statute of frauds, . . . unless it is in writing and signed by the party charged with the promise. Plaintiffs did not allege the existence of any such writing signed by” FH. Further, any prior promises it “had made regarding repayment were superseded by the promissory note Iyad accepted.” But as to the claim for monies had and received, while “only Imad promised to repay the money, plaintiffs’ allegations indicate that the funds from Isaac Investments were actually transferred to” FH, and deposited into its “bank account. These facts, accepted as true, are such that equity may be able to intervene to allow plaintiffs to recover their funds from [FH], the party actually in possession of the $190,000 loaned by Isaac Investments with the expectation of repayment.” The court further held that their allegations of unjust enrichment were “not ‘so clearly unenforceable that no factual development could possibly justify recovery.’” It declined to consider the merits of FH’s unclean hands and recoupment defenses because they were not properly before it. Affirmed in part, reversed in part, and remanded.