Dolores R Yanover Revocable Trust v. Betty Sue Hancock ( 2022 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
DOLORES R. YANOVER, Trustee of UNPUBLISHED
DOLORES R. YANOVER REVOCABLE TRUST, August 25, 2022
Plaintiff-Appellant,
v No. 357274
Wayne Circuit Court
BETTY SUE HANCOCK, LC No. 19-016638-CK
Defendant-Appellee.
Before: M. J. KELLY, P.J., and MURRAY and BORRELLO, JJ.
PER CURIAM.
In this action for breach of contract and mortgage foreclosure, plaintiff appeals as of right
the trial court’s order granting summary disposition in favor of defendant. We affirm in part,
reverse in part, and remand for further proceedings.
I. BACKGROUND
On May 21, 1990, plaintiff Dolores R. Yanover, trustee of the Dolores R. Yanover
Revocable Trust, loaned defendant (her neighbor) $60,000 in exchange for a note and mortgage
on defendant’s home in Northville. Though not relevant to the issue presented, the purpose of the
loan was to allow defendant and her special needs child to remain in the marital home after her
divorce. Under the mortgage and note, defendant owed a monthly payment to plaintiff, beginning
on June 21, 1990. The mortgage and note also contained a clause requiring the balance of the
mortgage note, if not paid off sooner, to become due on May 21, 1995. Sometime later, plaintiff
loaned defendant another $20,000, though no documents were signed to memorialize this loan.
Plaintiff never received any payments on the $60,000 mortgage. Because of this, on June
28, 2000, plaintiff prepared a letter for defendant to sign because she believed defendant needed
to be reminded that she still owed money to plaintiff. The letter read:
Dear Ms. Hancock,
I have one outstanding Note and Mortgage on your residence totaling
$60,000.00 principal, a copy of which is attached. The purpose of this letter is to
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reaffirm that the interest, which has never been paid and has accrued since 1990,
has not been forgiven. The total amount of interest currently due is $66,000 plus.
By signing the bottom of this letter, you are reaffirming that this debt not
only still exists, but that the interest continues to accrue.
Defendant signed the letter directly below the following statement: “I reaffirm the debt mentioned
above still exists and I acknowledge the fact that the interest continues to accrue on this debt.”
Sometime after this letter was signed, defendant paid plaintiff $30,000 dollars for the
unsecured loan—the $20,000 principal plus $10,000 in interest. Neither party knows exactly when
this occurred, but plaintiff testified this unsecured loan was paid off sometime in 2000. Consistent
with much of defendant’s testimony,1 she did not recall the $20,000 unsecured loan or if she had
paid off the unsecured loan.
Plaintiff filed a three-count complaint on December 3, 2019, alleging breach of contract,
unjust enrichment, and requesting foreclosure of the property. Defendant answered, pleading
affirmative defenses, including that the statutes of limitations barred plaintiff’s claims. Defendant
moved for summary disposition under MCR 2.116(C)(7), (C)(8), and (C)(10), which the trial court
granted, finding the statutory limitations period had already run for plaintiff’s claims. This appeal
followed.
II. STANDARD OF REVIEW
Although defendant moved for summary disposition under MCR 2.116(C)(7), (C)(8), and
(C)(10), the trial court’s reasoning for granting summary disposition in favor of defendant was
because the statute of limitations for each claim had run. Thus, we review the trial court’s decision
under MCR 2.116(C)(7). Williamstown Twp v Hudson, 311 Mich App 276, 288; 874 NW2d 419
(2015) (“[W]here a court’s opinion does not invoke the proper court rule supporting its ruling, we
may look to the substance of the holding to determine which rule governs.”).
“Pursuant to MCR 2.116(C)(7), a party may move to dismiss a claim on the ground that
the claim is barred by the applicable statute of limitations.” Frank v Linkner, 500 Mich 133, 140;
894 NW2d 574 (2017). Whether a cause of action is barred by the statute of limitations is a
question of law, which is reviewed de novo. Id. “When it grants a motion under MCR 2.116(C)(7),
a trial court should examine all documentary evidence submitted by the parties, accept all well-
pleaded allegations as true, and construe all evidence and pleadings in the light most favorable to
the nonmoving party.” Clay v Doe, 311 Mich App 359, 362; 876 NW2d 248 (2015) (quotation
marks and citation omitted).
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Defendant is in her nineties and has memory trouble, and as a result, her daughter, Carrie
Hancock, was granted durable power of attorney for defendant in 2016. In Carrie’s affidavit, she
explains defendant has suffered four strokes, and her mental and physical health are declining.
Carrie states defendant “is easily confused and overwhelmed during conversations,” and “doesn’t
remember people, dates, events, or facts with any regularity, and she has not been able to assist
[Carrie] or her counsel in defending this litigation.”
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III. ANALYSIS
Plaintiff cites two separate statutes of limitations on appeal. First, the statute of limitations
for actions on a promissory note is MCL 440.3118, which states:
(1) Except as provided in subsection (5), an action to enforce the obligation
of a party to pay a note payable at a definite time must be commenced within 6
years after the due date or dates stated in the note or, if a due date is accelerated,
within 6 years after the accelerated due date.
Second, the statute of limitations to foreclose a mortgage is MCL 600.5803, which states, in
relevant part:
No person shall bring or maintain any action or proceeding to foreclose a
mortgage on real estate unless he commences the action or proceeding within 15
years after the mortgage becomes due or within 15 years after the last payment was
made on the mortgage.
Both the mortgage and note provided that monthly payments would begin on June 21,
1990, and the entire balance of the mortgage would be due May 21, 1995. Assuming, as plaintiff
has consistently stated in discovery, no payments were made by defendant on the mortgage note,
the limitations period for the promissory note began on May 21, 1995, and would end six years
after the mortgage’s due date, May 21, 2001. Assuming the same, the limitations period applicable
to foreclosure of the mortgage began on May 21, 1995, and would end 15 years after the due date,
or May 21, 2010.
Plaintiff argues that knowing whether a payment was made, and when, is crucial in
determining the limitations period for a foreclosure action. Thus, plaintiff argues, the trial court
erred when it determined the statute of limitations barred plaintiff’s claim because the trial court
necessarily had to resolve a question of fact to reach this conclusion. Plaintiff points to defendant’s
denial of plaintiff’s assertion that no payment was made on the $60,000 mortgage, arguing there
is a question of fact on whether any payment was made.
Plaintiff, however, consistently states in her affidavit and pleadings that she never received
any payment on the $60,000 mortgage, and consistently stated that the $30,000 payment received
from defendant was for the separate, unsecured loan. Accepting plaintiff’s well-pleaded
allegations as true, which this Court is required to do in reviewing a motion for summary
disposition under MCR 2.116(C)(7), and the affidavit signed by plaintiff, the trial court did not err
in concluding that no payment was made on the mortgage, and finding without more that the
statutory limitations period barred plaintiff’s claims. McLean v Dearborn, 302 Mich App 68, 72-
73; 836 NW2d 916 (2013).2
2
Although defendant’s advanced age and problems with her memory created contradicting
statements regarding payment, plaintiff’s position remained consistent that no payment was made
on the mortgage, and the trial court’s conclusions are consistent with plaintiff’s own testimony in
which she states multiple times no payment was ever received.
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This conclusion does not, however, resolve the matter. For what also comes into play is
the letter signed by defendant, which reaffirmed the existing debt, which plaintiff argues started a
new statutory limitations period. The June 28, 2000, letter was signed prior to the expiration of
the statute of limitations running on any claims, a point plaintiff’s counsel made during arguments
before this Court. Thus, MCL 600.58663, which governs revival of a claim, is inapplicable.
Nonetheless, the common law supports plaintiff’s argument. As recognized in a leading
treatise on the common law of contracts, a new promise to pay an existing debt that is not barred
by a limitations period is supported by consideration and restarts the limitations period:
If a debtor makes a new promise to the creditor to pay the existing debt (no bar
having yet arisen), this promise is enforceable, because it is sufficiently supported
by the existing legal duty of the promisor. This has been previously discussed in
prior § 211 of this treatise. In such a case the creditor’s remedy on the new promise
is not barred by statutory limitation until the lapse of the full period counting from
the time of breach of this new promise. Such a promise extends the time for
enforcement. [3 Corbin, Contracts (rev ed), § 9.5, p 255]
Case law applying the common-law adheres to this rule. See, e.g., US v Gardner, 528 F2d 715,
719 (CA 6, 1976); US v Upper Valley Clinic Hosp, Inc, 615 F2d 302, 306 (CA 5, 1980) (“Contract
law recognizes that a debtor’s new promise to pay an existing obligation begins anew the
prescriptive period.”); Bourisk v Amalfitano, 379 A2d 149, 152 (Me, 1977).
The question, then, is whether the June 2000 agreement acknowledged the existing debt.
“[N]o set form of words i[s] necessary to constitute a sufficient acknowledgment of indebtedness.”
In re Booth’s Estate, 326 Mich 337, 343; 40 NW2d 176 (1949). In In re Booth’s Estate, the Court
considered whether the decedent’s signature on a document constituted “a sufficient
acknowledgement” of indebtedness “to remove the bar of the statute of limitations.” Id. The letter
asked the decedent to “certify” the indebtedness by signing below the statement “[c]ertified to be
correct.” Id. at 341. The Supreme Court found his acknowledgment raised “a presumption of an
implied promise to pay the obligations.” Id. at 344.
Here, there was no genuine issue of material fact that the June 28, 2000, letter renewed the
debt. The letter clearly states that defendant endorsed the existing debt by signing below the
statement: “I reaffirm the debt mentioned above still exists and I acknowledge the fact that the
interest continues to accrue on this debt.” Equally important is defendant’s acknowledgment that
she was “reaffirming that this debt not only still exists, but that the interest continues to accrue.”
These statements were sufficient to raise “a presumption of an implied promise to pay the
obligation[].” In re Booth’s Estate, 326 Mich at 344. The “acknowledgment” signed by defendant
is not functionally different from the request to “certify” the debt in In re Booth’s Estate.
3
MCL 600.5866 states: “Express or implied contracts which have been barred by the running of
the period of limitation shall be revived by the acknowledgment or promise of the party to be
charged. But no acknowledgment or promise shall be recognized as effective to bar the running
of the period of limitations or revive the claim unless the acknowledgment is made by or the
promise is contained in some writing signed by the party to be charged by the action.”
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Turning to the second question, i.e., when the statutory limitations period began after the
renewal of the debt, plaintiff correctly argues that the letter renewed the debt such that the original
terms of the mortgage and note began anew at the date of signing. Corbin, § 9.5; Gardner, 528
F2d at 719; Upper Valley Clinic Hosp, Inc, 615 F2d at 306 (CA 5, 1980); Amalfitano, 379 A2d at
152. Thus, the five-year payment plan recommenced on June 28, 2000, making the final payment
due five years later, on June 28, 2005.
With respect to the foreclosure claim, MCL 600.5803 provides that “[n]o person shall bring
or maintain any action or proceeding to foreclose a mortgage on real estate unless he commences
the action or proceeding within 15 years after the mortgage becomes due or within 15 years after
the last payment was made on the mortgage.” In applying this language to an installment mortgage
like the instant one, our Court held that a foreclosure action was timely on any unpaid payments
that were due within 15 years of filing the complaint. Degen v Degen’s Estate, 80 Mich App 573,
581-582; 264 NW2d 64 (1978), relying upon Stringer v Gamble, 155 Mich App 295, 300; 118
NW 979 (1909). In Degen, plaintiff filed suit on July 21, 1976, to foreclose on an August 28, 1957
mortgage that required monthly payments until the debt was paid. Degen, 80 Mich App at 575.
Although some payments were made prior to 1960, none were made thereafter. Id. The trial court
dismissed the case, holding that the 15-year statute of limitations barred the suit since the last
payment was made before 1960. Id. at 577. This Court reversed, holding that installment
payments under a mortgage “the statute of limitations runs against foreclosure as to each
instalment from the time the instalment becomes due.” Id. at 581, quoting Anno, Statute of
limitations as affecting suit to enforce mortgage or lien securing debt payable in installments, 153
ALR 785, 787. Thus, using the same 15-year statute of limitations, the Court held that any unpaid
installment payments due after July 21, 1961 (15 years prior to filing the complaint) were
actionable. Id. at 582.
Here, plaintiff’s complaint was filed on December 3, 2019, alleging breach of contract,
unjust enrichment, and foreclosure. Applying the 15-year statute of limitations period under MCL
600.5803, plaintiff could seek foreclosure of the mortgage on any unpaid amounts due on or after
December 3, 2004. Degen, 80 Mich App at 582. The renewed contractual promise defendant
made on June 28, 2000, extended the contract such that defendant had five years, or until June 28,
2005, to make the full monthly payments required by the note. Consequently, plaintiff’s
foreclosure action was not time barred to the extent it is based upon any missed installment
payments due between December 3, 2004, and June 28, 2005.4 Because the statutes of limitation
for the breach of contract and unjust enrichment claims are much shorter, the trial court properly
dismissed those claims.
4
Yeiter v Knights of St Casimir Aid Society, 461 Mich 493; 607 NW2d 68 (2000), does not require
a different conclusion. For one thing, Yeiter did not involve a mortgage foreclosure, nor did it
address a subsequent renewal of a contract that was not yet barred by a limitations period.
Additionally, Yeiter’s rationale—that a payment under a contract that can no longer be sued upon
because of the statute of limitations restarts the statute—is consistent with the conclusion in Degen
regarding the running of the statute from each missed installment payment.
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Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. No costs, neither party prevailing in full. MCR 7.219(A). We do not retain
jurisdiction.
/s/ Michael J. Kelly
/s/ Christopher M. Murray
/s/ Stephen L. Borrello
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