Breach of contract; Res judicata; Collateral estoppel; Liability as a guarantor; Garnishment of an appeal bond; Dunn v Bennett; MCR 4.201(N)(4)(b); “Recovery”

The court held that plaintiff-SJI was barred by collateral estoppel from relitigating the issue of whether defendant-Coolidge breached the lease in this action. Also, SJI’s failure to pay rent as provided by ¶ 16 was a breach of the lease contract. Further, the circuit court did not err by imposing liability on third-party defendant-Baydoun as a guarantor. The case arose from a build-to-suit lease agreement. SJI first argued that the circuit court erred when it granted Coolidge’s “motion for summary disposition of SJI’s breach-of-contract claim” based on res judicata. The court concluded that SJI was barred from relitigating the underlying issue based on collateral estoppel. “SJI alleged a breach that resulted in the premises being noncompliant and ‘inoperative.’ This would qualify as a significant breach that would excuse the payment of rent. But, the district court decided this issue” in the eviction proceeding “when it ruled that Coolidge had committed no breach to excuse the payment of rent. It considered and rejected the precise issue presented in the instant case that Coolidge first substantially breached the lease.” SJI next argued the circuit court erred in granting Coolidge summary disposition on Coolidge’s breach-of-contract counterclaim. It was “undisputed that Coolidge validly terminated the lease on [4/5/21], for SJI’s failure to pay rent. Thus, the Term expired on that date. Because the Term was expired, SJI’s continued possession of the premises meant it was considered a holdover tenant under” ¶16 and it breached that provision of the contract. As to the circuit court’s imposition of liability on Baydoun as a guarantor, he argued “that because his obligation as guarantor only arises in conjunction with SJI’s contractual obligations, and because Coolidge’s breach-of-contract claim fails as a matter of law, he cannot be liable.” The court agreed “that the language of the guaranty makes it clear that Baydoun’s liability arises with SJI’s breach of the lease. The trial court properly granted summary disposition of Coolidge’s breach-of-contract counterclaim. It therefore follows that Baydoun is liable as a guarantor under the” agreement. Thus, the court affirmed summary disposition for Coolidge against Baydoun. Finally, SJI argued the circuit court erred in granting Coolidge summary disposition “on its attempt to garnish the $90,000 bond held by the district court.” The situation here was “similar to that in Dunn.” The court concluded “SJI was already entitled to the $90,000 bond. Although counsel helped it defend against Coolidge’s attempt to characterize the bond as an escrow bond, that successful defense did not transform the successful retention of the funds into a ‘recovery.’ As a result, the circuit court did not err by ruling that the attorney lien did not attach to the bond funds.” Affirmed.