Background
Two physicians—neurosurgeon Mohan and urologist Kumar—developed a business relationship beginning in the late 1990s. In 2019, they jointly acquired property at 15 Mile Road in Sterling Heights for approximately $2.4 million as 50-50 partners, intending to develop it into a surgical center. Mohan also brought surgical cases to Kumar’s facility in Farmington Hills/Rochester Hills, reportedly in furtherance of an alleged partnership agreement under which Mohan would receive two-thirds of net profits from cases he generated.
Over time, Mohan grew convinced he was not receiving his contractual profit share. When Kumar refused to provide accounting records and rebuffed his requests for resolution, Mohan sought to sell his interest. On June 17, 2023, the parties executed a Membership Interest Purchase Agreement, under which Mohan sold his 49% membership interest in the 15 Mile Center, LLC to Kumar for $915,000. The agreement contained broad language releasing each party from “any claim of any nature whatsoever, accrued or not accrued, known or unknown, from the beginning of time until the date of execution of this Agreement,” except as expressly preserved. The agreement also included integration clauses stating the parties were not relying on any representations outside the written document.
After execution, Mohan sued Kumar for breach of contract and unjust enrichment, claiming he had been denied his rightful share of revenues from the Farmington Hills facility. Mohan argued the release applied only to the 15 Mile property dispute, not to his earlier profit-sharing claims. The trial court granted Kumar’s motion for summary disposition, finding the broad release barred all claims. Mohan appealed.
The Court’s Holding
The Michigan Court of Appeals affirmed, holding that the release provision’s language is clear and unambiguous. The court noted that the release expressly covers claims “of any nature whatsoever” and does not limit itself to disputes involving only the 15 Mile Center. Although the Purchase Agreement specifically involved the 15 Mile property, the court found this fact did not restrict the scope of the accompanying release, and the parties were entitled to negotiate a comprehensive general release as part of the same transaction.
The court applied the parol evidence rule, holding that Mohan’s testimony about Kumar’s alleged assurance that Farmington Hills issues would be resolved after the transaction was impermissible. The Purchase Agreement’s integration clauses—stating the parties were not relying on any outside representations and that the agreement constituted the complete understanding—precluded Mohan from introducing evidence of prior oral agreements. The court emphasized that by including a merger clause, the parties deliberately nullified all prior claims and collateral agreements, including any that allegedly induced the transaction.
The court concluded that to the extent Mohan relied on alleged misrepresentations about resolving the Farmington Hills dispute later, such reliance was unreasonable given the explicit merger language. Had Mohan wished to preserve claims related to the Farmington Hills partnership, he could have incorporated such provisions into the written agreement.
Key Takeaways
- Courts enforce clear, unambiguous release language as written, absent fraud, duress, mutual mistake, or unconscionability.
- Parol evidence cannot be used to narrow the scope of a broad release provision or to introduce collateral agreements that contradict the integrated written contract.
- Integration and merger clauses operate to extinguish all prior claims and agreements, including oral assurances about future dispute resolution.
- The fact that a purchase agreement addresses one specific transaction does not limit the scope of a general release contained within that same agreement.
Why It Matters
This decision reinforces Michigan contract law’s strong deference to clear written terms and strict application of the parol evidence rule. For business owners exiting partnerships or selling interests, the ruling underscores the critical importance of being explicit in writing about which claims are or are not being released. Oral assurances about resolving disputes “later” are unenforceable against clear, written release language. Courts will not rewrite agreements to match a party’s subjective expectations when the plain language contradicts them.
The decision also serves as a cautionary reminder that integration and merger clauses are powerful tools that eliminate reliance on prior discussions or agreements. Parties must ensure that any carve-outs or reservations of rights are explicitly stated in the final written agreement. The court will not infer limitations from the subject matter of the transaction itself or rescue parties who leave potential claims unaddressed in the four corners of the contract.