David M Kessler v. Longview Agricultural Asset Management LLC ( 2023 )

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
DAVID M. KESSLER and CORTNEY KESSLER, FOR PUBLICATION
January 12, 2023
Plaintiffs, 9:20 a.m.
and
RIVER AG PROPERTIES, LLC,
Plaintiff-Appellant,
v No. 360375
Muskegon Circuit Court
LONGVIEW AGRICULTURAL ASSET LC No. 2021-003819-CH
MANAGEMENT, LLC,
Defendant-Appellee.
Before: GLEICHER, C.J., and K. F. KELLY and LETICA, JJ.
PER CURIAM.
In this foreclosure redemption action, plaintiff, River AG Properties, LLC, appeals as of
right the underlying order denying plaintiff’s motion for summary disposition under
MCR 2.116(C)(10) and granting partial summary disposition in favor of defendant Longview
Agricultural Asset Management, LLC, under MCR 2.116(I)(2).1 We affirm.
1
After the trial court ruled on this motion, defendant moved for summary disposition of the
remaining allegations addressing failure to post the appropriate notice and for allowing the sale to
occur as one parcel when 14 parcels were at issue. The trial court granted summary disposition of
the remaining claims. That second ruling is not at issue in this appeal.
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I. BASIC FACTS AND PROCEDURAL HISTORY
On September 14, 2021, father and daughter David M. Kessler and Cortney Kessler2 filed
a complaint seeking to determine an interest in real property in the Township of Montague, County
of Muskegon. The Kesslers alleged that they owned and resided on 14 parcels of property known
as “the farm,” and the property was used for farming. On December 11, 2018, David granted
defendant a mortgage against the farm for $525,000. The mortgage was purportedly terminated
in light of a foreclosure by advertisement and August 21, 2020 sheriff sale. On that date, the farm
was sold to defendant for $724,118.54. The Kesslers claimed that defendant failed to record the
sheriff’s deed within 20 days of August 21, 2020, as required by statute, and recorded the deed on
September 14, 2020. Therefore, the Kesslers asserted that they had until at least September 14,
2021 to redeem the farm, but defendant refused to allow redemption by claiming that any
redemption rights expired on August 21, 2021. Although the Kesslers were reportedly ready,
willing, and able to redeem the farm under MCL 600.3240, defendant failed to provide a payoff
amount for September 14, 2021. The Kesslers contended that they deposited $907,000 into escrow
on September 14, 2021, with the county register of deeds (ROD) because of defendant’s refusal to
recognize the Kesslers’s right of redemption and the refusal to provide a payoff amount calculated
as of September 14, 2021. The Kesslers alleged that they, in fact, redeemed the farm by paying
an amount greater than the redemption into escrow and were the farm owners. The Kesslers raised
two counts (1) declaratory action for title to property and (2) accounting, and they sought an order
quieting title to the farm in their name and extinguishing any interest of defendant as well as a
calculation of the true and accurate redemption amount. Shortly after the complaint was filed,
plaintiff alleged that it acquired an ownership interest, specifically a lease with an option to
purchase, in the farm from the Kesslers on September 14, 2021. By stipulation of the parties,
plaintiff was granted the right to substitute as a plaintiff and file a first amended complaint also
seeking declaratory relief regarding title to the property and an accounting.
The Kesslers and plaintiff (collectively plaintiffs) moved for partial summary disposition
under MCR 2.116(C)(10). The motion and brief reiterated the factual allegations raised in the
complaint. Plaintiff asserted that the period for redeeming the property began on September 14,
2020, the date of recording of the deed, and ended on September 14, 2021. Because the sheriff’s
deed was not filed on August 21, 2020, but on September 14, 2020, it was claimed that the delay
in the deed recording extended the redemption period. On September 14, 2021, plaintiffs
purportedly deposited $907,000 with the ROD, an amount in excess of that required to redeem the
property, and this resulted in the cancellation of the sheriff’s deed under MCL 600.3240. Because
the redemption amount was $871,111.46, plaintiff sought a refund of $35,888.51. Plaintiff
submitted that caselaw held that the redemption date commenced on the date of the actual
recording of the deed. In light of the failure to timely submit the sheriff’s deed to the ROD, the
redemption period allegedly did not expire until September 14, 2021. Because the amount
tendered exceeded the redemption amount, an accounting was requested to establish the refund
owed to plaintiffs.
2
For ease of reference, the individual plaintiff David M. Kessler will be referred to as David and
Cortney Kessler will be identified as Cortney.
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Defendant filed a brief in opposition to the motion for partial summary disposition.
Defendant submitted that it was granted a mortgage on the disputed property by David in exchange
for a loan of $525,000 on December 11, 2018. However, he never made a single mortgage
payment, and the mortgage was foreclosed by advertisement. The sheriff’s sale occurred on
August 21, 2020, and the sheriff’s deed was provided to defendant. This deed expressly stated
that the redemption period was one year from August 21, 2020 unless the mortgaged premises and
property was redeemed in accordance with Michigan statutes. On August 19-20, 2021, Cortney
left a voice mail message and sent emails to defendant’s counsel. Cortney noted that the property
was in default, that the deadline for redemption was August 21, 2021, and that financing to redeem
had not been secured. She inquired if there was a “buy back” option or an extension of the
redemption period.
Defendant asserted that on August 21, 2020, the local sheriff’s office mailed the deed to
the Detroit Legal News, and the newspaper, in turn, sent the sheriff’s deed to the ROD. Thus, the
sheriff’s deed arrived at the ROD on August 27, 2020. However, on September 4, 2020, the Detroit
Legal News notified defense counsel that the sheriff’s deed was rejected for recording because
tax-exempt codes were missing from the deed. Defense counsel further confirmed that the ROD
required a transfer tax of $796.95 as a necessity to record the deed. On September 9, 2020, defense
counsel sent the Detroit Legal News, by overnight delivery, a check payable to the ROD to
resubmit the sheriff’s deed for recording. Ultimately, because the sheriff’s deed was not recorded
until September 14, 2020, plaintiff alleged that the redemption period did not expire until
September 14, 2021.
Defendant asserted that summary disposition was appropriate in its favor because the
Kesslers did not have standing. Cortney was not within the chain of title, and David lost his interest
when he did not redeem the property before the redemption period expired contrary to
MCL 600.3236. Moreover, David conveyed any interest to plaintiff through a quitclaim deed.
Furthermore, MCL 600.3240(12) governed the period of redemption and expressly provided that
it was one-year from the date of sale. Plaintiff relied on MCL 600.3232 that referenced deposit of
the sheriff’s deed with the ROD as soon as practical or within 20 days. The plain language of the
statutes demonstrated that the redemption period was one-year and depositing the sheriff’s deed
with the ROD did not extend the deadline. The caselaw cited by plaintiff relied on a predecessor
statute that was factually distinguishable. Therefore, summary disposition should be denied to
plaintiff and granted in favor of defendant under MCR 2.116(I)(2).
Following oral argument on the motion, the trial court ruled that MCL 600.3240(12)
expressly provided that the redemption period was one-year from the date of the sale. The trial
court rejected plaintiff’s position that MCL 600.3232 extended the redemption period, noting that
the statute merely required the deposit of the sheriff’s deed within 20 days of the sale. The trial
court denied summary disposition in favor of plaintiff and granted summary disposition to
defendant under MCR 2.116(I)(2). From this ruling, plaintiff appeals.
II. STANDARD OF REVIEW
A trial court’s ruling on a motion for summary disposition is reviewed de novo. Houston v
Mint Group, LLC, 335 Mich App 545, 557; 968 NW2d 9 (2021). Summary disposition is
appropriate pursuant to MCR 2.116(C)(10) where there is “no genuine issue as to any material
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fact, and the moving party is entitled to judgment or partial judgment as a matter of law.”
MCR 2.116(C)(10). When reviewing a motion for summary disposition challenged under
MCR 2.116(C)(10), the court considers the affidavits, pleadings, depositions, admissions, and
other admissible documentary evidence then filed in the action or submitted by the parties in the
light most favorable to the nonmoving party. MCR 2.116(G)(4), (G)(5); Buhl v City of Oak Park,
507 Mich 236, 242; 968 NW2d 348 (2021). Summary disposition is appropriately granted to the
opposing party under MCR 2.116(I)(2), if the trial court determines that the opposing party rather
than the moving party is entitled to judgment. West Mich Annual Conference of the United
Methodist Church v City of Grand Rapids, 336 Mich App 132, 138; 969 NW2d 813 (2021). To
the extent the propriety of summary disposition was premised on a controlling statute, statutory
interpretation presents a question of law subject to review de novo. Id.III. ANALYSIS
On appeal, plaintiff alleges that the failure to timely record the deed from the sheriff’s sale
extended the date to redeem the property. We disagree.
The rules of statutory construction provide:
We construe a statute in order to determine and give effect to the Legislature’s
intent. The goal of statutory interpretation is to discern the intent of the Legislature
by examining the plain language of the statute. If the language employed by the
Legislature is unambiguous, the Legislature is presumed to have intended the
meaning clearly expressed, and this Court must enforce the statute as written.
[Auto-Owners Ins Co v Dep’t of Treasury, 313 Mich App 56, 68-69; 880 NW2d
337 (2015) (citations and quotation marks omitted).]
Additionally, “rules of statutory construction require that separate provisions of a statute, where
possible, should be read as being a consistent whole, with effect given to each provision.”
Gebhardt v O’Rourke, 444 Mich 535, 542; 510 NW2d 900 (1994). Where a statute contains both
a general provision and a specific provision, the specific provision is controlling. Id. at 542-543.
In Trademark Props of Mich, LLC v Fannie Mae, 308 Mich App 132, 138-139; 863 NW2d
344 (2014), this Court addresses the import of foreclosure by advertisement:
Foreclosure of a mortgage containing a power of sale is permissible by
advertisement, provided the proceedings are instituted in accordance with the
foreclosure statutes. “A foreclosure of a mortgage extinguishes it . . . . [A]nd the
purchaser becomes the owner of an equitable interest in the mortgaged premises
which ripens into a legal title if not defeated by redemption as provided by law.”
“Statutory foreclosures should not be set aside without some very good reasons
therefor.” A “strong case of fraud,” irregularity, or “some peculiar exigency” is
required to set aside a statutory foreclosure sale. [Citations omitted.]
In Bryan v JPMorgan Chase Bank, 304 Mich App 708, 713; 848 NW2d 482 (2014), this Court
addressed redemption and the import of the failure to redeem:
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Pursuant to MCL 600.3240, after a sheriff’s sale is completed, a mortgagor
may redeem the property by paying the requisite amount within the prescribed time
limit, which here was six months. “Unless the premises described in such deed
shall be redeemed within the time limited for such redemption as hereinafter
provided, such deed shall thereupon become operative, and shall vest in the grantee
therein named, his heirs or assigns, all the right, title, and interest which the
mortgagor had at the time of the execution of the mortgage, or at any time
thereafter . . . .” MCL 600.3236. If a mortgagor fails to avail him or herself of the
right of redemption, all the mortgagor’s rights in and to the property are
extinguished. Piotrowski v State Land Office Bd, 302 Mich 179, 187; 4 NW2d 51(1942).
In the present case, the parties dispute the period of redemption in light of MCL 600.3232
and MCL 600.3240. Plaintiff relies on MCL 600.3232 for its argument that it had one-year or
until September 14, 2021 to redeem the property. MCL 600.3232 addresses deeds of sale, deposits
with the register and entry upon redemption and provides:
The officer or person making the sale shall forthwith execute, acknowledge, and
deliver, to each purchaser a deed of the premises bid off by him; and if the lands
are situated in several counties he shall make separate deeds of the lands in each
county, and specify therein the precise amounts for which each parcel of land
therein described was sold. And he shall endorse upon each deed the time when
the same will become operative in case the premises are not redeemed according to
law. Such deed or deeds shall, as soon as practicable, and within 20 days after such
sale, be deposited with the register of deeds of the county in which the land therein
described is situated, and the register shall endorse thereon the time the same was
received, and for the better preservation thereof, shall record the same at length in
a book to be provided in his office for that purpose; and shall index the same in the
regular index of deeds, and the fee for recording the same shall be included among
the other costs and expenses allowed by law. In case such premises shall be
redeemed, the register of deeds shall, at the time of destroying such deed, as
provided in section [MCL 600.3244] of this chapter, write on the face of such
record the word “Redeemed”, stating at what date such entry is made, and signing
such entry with his official signature.
However, the plain language of MCL 600.3232 does not support plaintiff’s position that the
submission of the deed and its recording by the ROD is the dispositive date for determining the
commencement of the redemption period. The only part of the statute that addresses the
commencement of the redemption period refers to the officer or person making the sale:
The officer or person making the sale shall forthwith execute, acknowledge, and
deliver, to each purchaser a deed of the premises bid off by him; and if the lands
are situated in several counties he shall make separate deeds of the lands in each
county, and specify therein the precise amounts for which each parcel of land
therein described was sold. And he shall endorse upon each deed the time when
the same will become operative in case the premises are not redeemed according to
law. [Id.]
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This portion of the statute demonstrates that the officer making the sheriff’s sale was to prepare
separate deeds and specify the amount for which the parcel was sold. Then, the officer was to
“endorse upon each deed the time when the same will become operative in case the premises are
not redeemed[.]” See id. Thus, the only reference to the time period of redemption is to the actions
of the sheriff and the endorsement on the deed. The remainder of the statute does address the
timeframe for submitting the deed to the ROD and states that it shall be deposited with the ROD
within 20 days. The statute, however, contains no remedy for the failure to make the deposit within
20 days. Additionally, the statute then outlines the procedure the ROD must follow to record the
deed. And the ROD procedures do not correlate the recording of the deed to the redemption period
or state that the recording date becomes the period from which the redemption period runs.
Defendant relies on MCL 600.3240 which expressly addresses redemption periods and
contains a one year-period of redemption at MCL 600.3240(11) and (12). The statute provides, in
pertinent part:
(11) Subject to [MCL 600.3238], for a mortgage of property that is used for
agricultural purposes, the redemption period is 1 year from the date of the sale.
(12) If subsections (7) to (11) do not apply, and subject to [MCL 600.3238], the
redemption period is 1 year from the date of the sale.
Both MCL 600.3240(11) and MCL 600.3240(12) provide that whether the property at issue
is used for agricultural purposes or not, the redemption period is one-year “from the date of sale.”
The plain language of MCL 600.3240 does not provide it runs from the date of recording at the
ROD. Auto-Owners Ins Co, 313 Mich App at 68-69.
Plaintiff submits that MCL 600.3232 and MCL 600.3240 deal with the same subject matter,
and therefore, must be read in pari materia.3 Reading the two statutes together, plaintiff submits
that it is the date of recording by the ROD that determines the period of redemption. We disagree.
Rather, when a statute contains both a general provision and a specific provision, the specific
provision controls. Gebhardt, 444 Mich at 542-543. MCL 600.3232 is a statute of procedure that
delineates obligations on the sheriff following the sale, the time for delivery or deposit to the ROD
office, and the clerk’s responsibility for recording the deed until learning whether the property was
redeemed. Although the statute provides that the sheriff places the date of redemption on the deed,
MCL 600.3240(11) and (12) expressly provide that the redemption period is one-year from the
date of sale. Thus, MCL 600.3240 is the specific statute that governs redemption periods.
3
When analyzing MCL 600.3232 and MCL 600.2340, a prior panel of this Court applied in pari
materia, to conclude that the redemption period could be extended by MCL 600.3232. See WW
Mich Props v Repokis, unpublished per curiam opinion of the Court of Appeals, issued
September 23, 2014 (Docket No. 316555). Unpublished decisions are not binding precedent.
MCR 7.215(C)(1); Menard Inc v Dep’t of Treasury, 302 Mich App 467, 470 n 4; 838 NW2d 736(2013). We do not find the WW Mich Props decision to be persuasive and decline to adopt it as
our own. Rather, the decision is contrary to the plain language of the statutes and the specific
provisions of MCL 600.3240(11) and (12).
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Nonetheless, plaintiff submits that caselaw supports his position. In Lilly v Gibbs, 39 Mich
394 (1878), the disputed property was mortgaged to Noel Hollister and his wife for $500 on May 9,
1857. In October 1873, the defendant commenced foreclosure proceedings and published that
$71.93 was due. “[T]he premises were struck off on the 9th of January 1874, for $113.44 to
defendant.” However, “[n]o deed was made until January 13, 1874, four days later, and then it
was placed on file at the register’s office.” The sheriff endorsed the deed, indicating that it was
operative one year from January 9, 1874 unless the premises were redeemed. The parties disputed
whether the redemption period commenced on January 9, 1874 or January 13, 1874. Our Supreme
Court stated:
This delay in making and filing the deed gives rise to a question of much
difficulty. It was certainly an irregularity which was very apt to mislead and make
trouble. The statute is express that the deed shall be executed, delivered and
deposited in the register’s office forthwith. The amount bid as the consideration is
to be inserted and the time when it will be operative is to be endorsed. Comp L,
§ 6920. The regulation is one of importance.
New and peculiar relations, rights and duties arise on the completion of the
sale, and the statute appears to intend that the giving and depositing the proper deed
shall be incidents of the sale and the regular acts to consummate it. No other writing
is provided for as a contemporary memorial of the proceeding. Until the sale
redemption must be had against the mortgage, but after that, it is required to be
from the sale. The law does not contemplate any suspension of the right to redeem,
and supposes that a state of things is in constant existence in which redemption
would be practicable.
Prior to the sale the application must be to the party. He is then to accept
payment and redemption, and stringent regulations are provided to compel
satisfaction in case of valid tender. § 4246. The matter remains in private hands
and no officer is authorized or required to adjust and receive redemption.
As soon, however, as the sale is completed, new conditions arise. New
rights and duties attach immediately. No provision is made for a state of things
involving the rights and duties applicable before and after sale in any promiscuous
way. As soon as the sale occurs, the register may be applied to for redemption
against it. No delay seems to be provided for. The right is absolute, and no one
entitled can be regularly prevented, and the facts may be such as to make it very
important.
So long as the deed is not given, the full right to redeem against the sale
provided by the statute is impracticable. The register cannot act because he has
nothing before him to authorize or require him to do so and nothing on which he
can act.
The present case illustrates somewhat the mischief to arise from substantial
departures from the statute. The fact of striking off the property occurred on the
9th of January. The deed was not made and filed until the 13th of January.
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According to the theory and claim of the defense, the tenth, eleventh and twelfth
days next after the property was struck off were part of the redemption year and
covered time when as matter of law the complainant was entitled to redeem at the
register’s office and against the sale. And yet in fact, as conceded, the neglect on
the part of the agencies resorted to by the defendant to execute the power of sale
rendered it impossible to effect redemption through the register on either of those
days.
Finally, the disagreement between the date of the striking off of the property
and the date of the execution and filing of the deed, misled the register and
materially helped to bring on, if it did not wholly cause, this expensive controversy.
The defendant insisted that the space between the act of striking off the property
and the deposit of the deed must be deemed a part of the redemption year, and
consequently that on the arrival of January 9th, 1875, the right to redeem was
terminated, and the register, although of a contrary opinion until the expiration of
that time, was actually brought by defendant to accept his view. Moreover,
complainant had repeatedly applied to the register and had been constantly
instructed by him that the time would run until the 13th of January, being a year
from the deposit of the deed. This advice seems to have been confided in, and in
fact complainant offered redemption to the register between the 9th and 13th of
January, 1875, and was refused. The door was in fact closed against amicable
redemption.
The reasonable view to take of the statute is that it regards the execution
and deposit of the proper deed as the consummation of the sale, and as marking the
true time, when there is no unreasonable delay, for the commencement of the
redemption year, and the time for dating the beginning of the period in the
certificate for the deed to become operative. Still we are not to be understood as
saying there may not be so long delay in filing the deed as to render the whole
proceeding, as one of foreclosure, void. In the present case complainant was
deprived of his right to redeem whilst the time was still current therefor. [Id. at
395-398.]
We conclude that the Lilly decision is not applicable to the present case. Since 1878 when
the Lilly decision was rendered, the foreclosure statutes have been amended many times. In its
current form, MCL 600.3240 expressly delineates the time period for redemptions and in
MCL 600.3240(12) the general rule is that there is a one-year period of redemption that
commences from “the date of the sale.” The Lilly decision does not provide grounds to reverse
the trial court. Instead, the specific time periods of MCL 600.3240 address the uncertainty detailed
in Lilly and prevent it from recurring.
The parties also dispute the application of Mills v Jirasek, 267 Mich 609, 610; 255 NW
402 (1934). In Mills, the plaintiff filed a bill to quiet title to lands she claimed as a result of a
sheriff’s deed. The deed was executed May 23, 1931 after a mortgage foreclosure by
advertisement and was not deposited with the ROD until September 14, 1931. The defendant
never made an attempt to redeem the property but refused to recognize the validity of the plaintiff’s
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interest because of the failure to record the deed within 20 days from the date of sale. Id. Our
Supreme Court declined to grant the defendant relief, stating:
In this case no showing is made of any damage suffered by the mortgagor
as a result of the failure to deposit the deed. If damage had been shown, it seems
certain that the appellant would have been entitled to relief, and the sale might have
been held invalid. The query may be made, Where shall the line be drawn if this
deed is held valid? When the parties resort to a court of equity, we may, in such
case, determine their rights, within the rules, of course, with regard to the particular
situation before us.
We see no reason to allow appellant the benefit of a new foreclosure merely
because he insists upon a technical and strict construction of the statute. The
equities are not with his position. It may be true that appellee, or some[]one acting
for her, has acted inadvertently in the matter, but no harm has been done the parties
or anyone claiming through them. The situation appeals to the conscience of the
court. We hold that the provisions of the statute as to the time of recording are
directory and, under the circumstances of the instant case, defendant is estopped to
question the validity of plaintiff’s deed. [Id. at 615.]
We conclude that the Mills decision is not determinative of this appeal. In Mills, there was no
analysis of whether an express period of redemption was governed by statute, such as
MCL 600.2340, and the decision was rendered on principles of equity such as estoppel. That is,
because the defendant did not seek to redeem the property regardless of the date of redemption, he
could not challenge the plaintiff’s interest.
As noted, MCL 600.3232 delineates the procedural obligations on the sheriff and the clerk
at the ROD. There are no penalties for noncompliance contained within the statute. Moreover,
although the sheriff is to write the date for redemption on the deed, there is no indication that it is
binding. The statute does not hold that the recording date by the ROD commences the period.
Rather, only MCL 600.3240 delineates the commencement for the period and states that it runs
from “the date of the sale.” MCL 600.3240 is the specific statute and controls over the general
procedure delineated in MCL 600.3232. The caselaw cited by plaintiff does not warrant a
disposition contrary to the plain language of the statutes.
Affirmed.
/s/ Elizabeth L. Gleicher
/s/ Kirsten Frank Kelly
/s/ Anica Letica
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