## Facts

- UAW-GM Human Resource Center contracted in December 1993 to hold an October 1994 convention at the Doral Resort and Country Club in Florida.
- The written “letter of agreement” contained a merger clause stating it merged all proposals, negotiations, and representations concerning the subject matter.
- The agreement did not include any term requiring that the resort’s employees be union-represented.
- The agreement included a liquidated damages provision requiring payment if the reservation was canceled for any reason other than specified exceptions (acts of God, government regulation, disaster, civil disorders, or other emergencies making it illegal to hold the meeting).
- After the contract was signed, the resort was sold to KSL, which replaced the union workforce with a nonunion workforce.
- When the convention sponsor learned in June 1994 that the workforce was no longer union, it canceled and demanded return of its deposit.
- KSL refused and retained the deposit under the liquidated damages provision.
- The convention sponsor sued for breach of contract, conversion, and fraud; KSL counterclaimed and sought summary disposition to enforce liquidated damages.
- The trial court granted summary disposition to the convention sponsor and denied KSL’s motion.

## Issues

1. Whether the contract’s merger clause rendered the agreement fully integrated and barred parol evidence of an alleged oral promise that the resort would be a union facility.
2. Whether cancellation based on the resort’s loss of union status fell within the contract’s specified cancellation exceptions so as to avoid liquidated damages.
3. Whether retaining the deposit under the liquidated damages provision could support claims for breach of contract, fraud, or conversion.

## Decision

- The Michigan Court of Appeals reversed the trial court’s grant of summary disposition to the convention sponsor.
- The court held the merger clause made the written contract fully integrated, precluding reliance on parol evidence of a separate “union hotel” promise.
- The court held the loss of union status did not fall within the contract’s listed cancellation exceptions; therefore, the liquidated damages provision applied.
- The court rejected the breach of contract, fraud, and conversion theories because KSL’s retention of the deposit was authorized by the contract.
- The case was remanded for determination of damages under the contract’s liquidated damages formula.

## Legal Principles

- An express merger (integration) clause generally makes a contract fully integrated and bars parol evidence offered to add to or vary the written terms concerning the same subject matter.
- A party may not avoid an integration clause by labeling an omitted term as an “independent, collateral” promise when it relates to the same transaction addressed by the writing.
- Where a contract specifies limited grounds for cancellation without liability, a cancellation for a non-listed reason triggers the agreed liquidated damages remedy if otherwise enforceable.
- Retention of funds pursuant to a contractual right typically defeats tort theories such as conversion and fraud that depend on wrongful deprivation or misrepresentation inconsistent with the contract’s allocation of rights.

## Conclusion

The court enforced the contract as written: the merger clause foreclosed proof of an unwritten union-status requirement, the cancellation did not qualify for the contract’s limited exceptions, and the liquidated damages clause controlled—requiring a damages determination in KSL’s favor and defeating the convention sponsor’s breach, fraud, and conversion claims.


UAW-GM Hum. Res. Ctr. v. KSL Recreation Corp., 228 Mich. App. 486, 579 N.W.2d 411 (Mich. Ct. App. 1998)