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156018 - Van Buren Charter Twp v Visteon Corp

Van Buren Charter Township,

 

Kaveh Kashef

 

Plaintiff-Appellant,

 

v

(Appeal from Ct of Appeals)

 

 

(Wayne – Hughes, M.)

 

Visteon Corporation,

 

Phillip DeRosier

 

Defendant-Appellee.

 

Summary

In 2003, plaintiff Van Buren Charter Township issued municipal bonds to help finance the construction of defendant Visteon Corporation’s national headquarters in the township. In 2010, as defendant was emerging from bankruptcy, the parties entered into an agreement for a property tax reduction even though the parties anticipated that the agreed-upon reduction eventually would put plaintiff in a position where it would not be able to meet its bond repayment obligations. The agreement included a provision requiring defendant to enter into future good faith negotiations with plaintiff to determine the amount of any shortfall and to make a non-tax payment to assist plaintiff in meeting its bond repayment obligations. In 2013, plaintiff arranged for a cash-flow analysis that predicted a shortfall ranging from $23.7 million to $36.4 million sometime in 2017-2018, but later projected for 2019, when a portion of the debt was retired. Plaintiff demanded that defendant engage in negotiations to determine defendant’s payment obligations with respect to the projected shortfall. Although defendant met with plaintiff, defendant disputed that it had any obligation to negotiate until plaintiff experienced an actual bond payment shortfall, and, even if there is an actual shortfall, defendant argued that it may not owe plaintiff any amount. In July 2015, plaintiff filed this lawsuit against defendant, alleging breach of contract and seeking a declaratory judgment. Defendant moved to dismiss the lawsuit, arguing that it was not ripe for decision. The trial court granted the motion and dismissed the lawsuit “without prejudice.” The Court of Appeals affirmed in a published decision. The Supreme Court has directed oral argument on plaintiff’s application for leave to appeal to address whether the Court of Appeals: (1) properly determined that a declaratory judgment was not ripe under MCR 2.605; and (2) properly interpreted the contract to determine that “defendant is not obligated to perform [under the contract] until . . . a shortfall has occurred, and . . . property taxes paid by defendant are inadequate for plaintiff to pay that portion of the bonds that was used to fund the Village.” Van Buren Charter Twp v Visteon Corp, 319 Mich App 538, 548 (2017).​