Jp Morgan Chase Bank Na v. Stacey Bayle ( 2016 )

STATE OF MICHIGAN
COURT OF APPEALS
JP MORGAN CHASE BANK, N.A., UNPUBLISHED
April 26, 2016
Plaintiff-Appellee,
v No. 325544
Muskegon Circuit Court
STACEY BAYLE, LC No. 13-049307-CH
Defendant,
and
BRENDA YONKMAN,
Defendant-Appellant.
Before: SAAD, P.J., and BORRELLO and GADOLA, JJ.
GADOLA, J. (concurring in part and dissenting in part).
I agree with the majority that Yonkman did not hold a vendor purchase money mortgage;
however, I respectfully disagree that there is a genuine issue of material fact regarding whether
Yonkman held a third-party purchase money mortgage. Accordingly, I would affirm the trial
court’s order granting JP Morgan’s motion for summary disposition in its entirety.
This Court reviews de novo a motion for summary disposition under MCR 2.116(C)(10),
which tests the factual support of a claim. Lakeview Commons Ltd Partnership v Empower
Yourself, LLC, 290 Mich App 503, 506; 802 NW2d 712 (2010). In reviewing a motion under
MCR 2.116(C)(10), courts consider any affidavits, pleadings, depositions, admissions, or other
documentary evidence submitted in a light most favorable to the nonmoving party. Quinto v
Cross & Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996). A trial court may grant a motion
for summary disposition under MCR 2.116(C)(10) if the evidence shows that there is no genuine
issue of material fact, and the moving party is entitled to judgment as a matter of law. Id.The moving party bears the initial burden of supporting its position with affidavits,
depositions, pleadings, admissions, or other documentary evidence. Quinto, 451 Mich at 362. If
the moving party satisfies its burden, the evidentiary burden shifts to the nonmoving party to
establish the existence of a genuine issue of material fact for trial. Id. When the burden of proof
on a dispositive issue rests on the nonmoving party, the nonmoving party may not rely on mere
allegations to survive summary disposition and must set forth specific facts and documentary
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evidence showing that a genuine issue of material fact exists. Id.; see also Etter v Mich Bell Tel
Co, 179 Mich App 551, 555; 446 NW2d 500 (1989).
A purchase money mortgage is a “mortgage or security device taken back to secure the
performance of an obligation incurred in the purchase of the property.” Graves v American
Acceptance Mtg Corp, 469 Mich 608, 613; 677 NW2d 829 (2004) (citation and quotation marks
omitted). To constitute a purchase money mortgage, “[t]he mortgage must have been given at
the time of purchase of the security so as to constitute one transaction, and the proceeds must
have been used by the mortgagor to purchase the security, in whole or in part.” Id. at 614.
Under Michigan’s race-notice statute, MCL 565.29, “the holder of a real estate interest
who first records his or her interest generally has priority over subsequent purchasers.” Richards
v Tibaldi, 272 Mich App 522, 539; 726 NW2d 770 (2006). However, if the holder of an interest
in real estate fails to record its interest, that interest is deemed void as against any subsequent
good faith purchaser for value, whose conveyance was first duly recorded. Coventry Parkhomes
Condo Ass’n v Fed Nat’l Mtg Ass’n, 298 Mich App 252, 256; 827 NW2d 379 (2012). “A good-
faith purchaser is one who purchases without notice of a defect in the vendor’s title.” Mich Nat’l
Bank & Trust Co v Morren, 194 Mich App 407, 410; 487 NW2d 784 (1992).
In this case, there is no genuine issue of disputed fact that the mortgage held by JP
Morgan is a third-party purchase money mortgage, or that Yonkman was aware of this mortgage
when Bayle purchased the subject property on June 14, 2007. Accordingly, if Yonkman’s
mortgage arose after closing, she could not be considered a subsequent good faith purchaser
without notice. The majority concludes, however, that there is a genuine issue of material fact
regarding whether Yonkman held a third-party purchase money mortgage, which, if true, would
mean that her interest arose simultaneously with JP Morgan’s interest, and she could not be
classified as a “subsequent purchaser” for purposes of the race-notice statute.
The record contains weighty evidence in support of JP Morgan’s contention that
Yonkman was not a third-party purchase money mortgagee whose interest arose simultaneously
with its own. The Yonkman mortgage is dated June 22, 2007, several days after Bayle
purchased the subject property. The majority asserts that the mortgage could not have been
executed on June 22, 2007, because it was recorded on June 19, 2007. However, the mortgage
was also notarized on June 22, 2007, and called for monthly loan payments by “the 22nd day of
each month.”1 Further, a U.S. Department of Housing & Urban Development (HUD) settlement
statement signed by both Bayle and Yonkman summarized the purchase transaction and
referenced the Chase mortgage, but did not acknowledge a mortgage in favor of Yonkman.
Bayle also agreed at the time she executed the Chase mortgage that the subject property was
“unencumbered, except for encumbrances of record.” Considering this evidence, JP Morgan
established its burden of proving that a mortgage in favor of Yonkman did not arise prior to or
1
Pursuant to MCL 565.201(1)(c), an instrument conveying an interest in property cannot be
properly recorded by the register of deeds of any county unless it bears the “name of any notary
public whose signature appears upon the instrument.”
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simultaneously with its own, and the burden shifted to Yonkman to demonstrate the existence of
a genuine issue of material fact for trial. See Quinto, 451 Mich at 362.
In response to JP Morgan’s motion for summary disposition, Yonkman presented only
her own affidavit, in which she stated that her mortgage was executed at closing on June 14,
2007, and that any references to June 22, 2007, were typographical errors. In my opinion,
Yonkman’s mere bald assertions, without more, were insufficient to give rise to a genuine issue
of material fact for trial. See Bennett v Detroit Police Chief, 274 Mich App 307, 318; 732 NW2d
164 (2006) (“[T]he nonmoving party may not rely on mere allegations or denials, but must set
forth specific facts that show that a genuine issue of material fact exists.”). Therefore, I would
affirm the trial court’s order granting summary disposition in favor of JP Morgan.
/s/ Michael F. Gadola
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