Asset Venture Group LLC v. Tfhsp LLC

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
ASSET VENTURE GROUP, LLC, UNPUBLISHED
March 2, 2023
Plaintiff-Appellant,
V No. 359663
Wayne Circuit Court
TFHSP, LLC, LC No. 19-012285-CH
Defendant-Appellee.
Before: K. F. KELLY, P.J., and MURRAY and SWARTZLE, JJ.
PER CURIAM.
The Artises originally owned 343 Eason Street in Highland Park, Michigan, but they
defaulted on their mortgage and foreclosure proceedings commenced. A sheriff’s sale was held
and defendant was the highest bidder for the property. The Artises then signed a quitclaim deed
for the property to plaintiff after the sheriff’s sale, and plaintiff attempted to redeem the property
during the redemption period following the sheriff’s sale. The trial court granted defendant
summary disposition for quiet title. We reverse and remand for proceedings consistent with this
opinion.
I. BACKGROUND
Defendant recorded its sheriff’s deed in the register of deeds, and it also recorded an
Affidavit of Purchaser to provide notice of the redemption amount. The next day, the Artises
executed a quitclaim deed conveying their interest in the property to plaintiff, a company owned
by Quinnon Martin who is the Artises’ cousin. Two weeks later, Martin paid the redemption
amount and signed a “Notice of Redemption in Progress” that stated that Martin “on behalf of” the
Artises redeemed the property. Approximately six weeks after Martin paid the redemption
amount, plaintiff recorded the quitclaim deed it received from the Artises. This occurred within
the statutory redemption period.
Defendant rejected the redemption amount when the redemption period expired because it
argued that plaintiff was not a proper redeeming party under MCL 600.3240(1). Plaintiff then
sued defendant for quiet title, and defendant argued that the quitclaim deed plaintiff acquired was
fraudulent because the Artises did not actually execute the deed.
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Plaintiff moved for summary disposition under MCR 2.116(C)(10), and it argued that
defendant’s sheriff’s deed was void under MCL 600.3240(1) because the redemption amount had
been paid to the register of deeds within the statutory redemption period. Plaintiff also submitted
an affidavit from one of the Artises who stated that they signed the quitclaim deed.
In response, defendant moved for summary judgment under MCR 2.116(I)(1) and (2),
asserting that it was entitled to quiet title by virtue of the sheriff’s deed. Additionally, defendant
argued that plaintiff could not have redeemed because it did not record the quitclaim deed until
after it paid the redemption amount.
The trial court found that under MCL 600.3240(1) there must be a recorded interest before
redemption could be valid, and the redemption was void. Further, plaintiff had no interest in the
property to redeem because plaintiff paid the redemption amount before recording the quitclaim
deed. The trial court granted defendant summary disposition under MCR 2.116(I)(1) and (2).
Plaintiff now appeals.
II. ANALYSIS
“We review de novo a trial court’s decision to grant or deny a motion for summary
disposition.” Sherman v City of St Joseph, 332 Mich App 626, 632; 957 NW2d 838 (2020)
(cleaned up). This Court reviews a motion brought under MCR 2.116(C)(10) “by considering the
pleadings, admissions, and other evidence submitted by the parties in the light most favorable to
the nonmoving party.” Patrick v Turkelson, 322 Mich App 595, 605; 913 NW2d 369 (2018).
“Summary disposition is appropriate if there is no genuine issue regarding any material fact and
the moving party is entitled to judgment as a matter of law.” Sherman, 332 Mich App at 632.
MCR 2.116(I)(2) provides, “If it appears to the court that the opposing party, rather than the
moving party, is entitled to judgment, the court may render judgment in favor of the opposing
party.”
Plaintiff argues that the trial court erred by considering the attempted redemption void
instead of voidable. Our Supreme Court, in Kim v JPMorgan Chase Bank, NA, 493 Mich 98, 115;
825 NW2d 329 (2012), held that “defects or irregularities in a foreclosure proceeding result in a
foreclosure that is voidable, not void ab initio,” and, “to set aside the foreclosure sale, plaintiffs
must show that they were prejudiced by defendant’s failure to comply with [the foreclosure stat-
utes].” Id. “To demonstrate such prejudice, [the plaintiffs] must show that they would have been
in a better position to preserve their interest in the property absent defendant’s noncompliance with
the statute.” Id. at 115-116. Thus, parties seeking to set aside a foreclosure sale must show that
they were prejudiced by the alleged fraud or irregularity. Id. at 115.
Plaintiff has not alleged, however, that there was fraud or irregularity. Instead, the defect
noted by the trial court was plaintiff’s attempt to redeem the property without first recording its
interest in the property. Thus, the trial court’s ruling regarding the statutory requirements of
redemption would not make the alleged redemption voidable under Kim, and plaintiff’s argument
is without merit.
Next, plaintiff argues that defendant did not have standing to challenge the validity of the
quitclaim deed. “The purpose of the standing doctrine is to assess whether a litigant’s interest in
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the issue is sufficient to ensure sincere and vigorous advocacy.” Lansing Sch Ed Ass’n v Lansing
Bd of Ed, 487 Mich 349, 355; 792 NW2d 686 (2010) (cleaned up). Our Supreme Court has set
forth the following test:
[A] litigant has standing whenever there is a legal cause of action. Further,
whenever a litigant meets the requirements of MCR 2.605, it is sufficient to estab-
lish standing to seek a declaratory judgment. Where a cause of action is not
provided at law, then a court should, in its discretion, determine whether a litigant
has standing. A litigant may have standing in this context if the litigant has a special
injury or right, or substantial interest, that will be detrimentally affected in a manner
different from the citizenry at large or if the statutory scheme implies that the Legis-
lature intended to confer standing on the litigant. [Id. at 353.]
Simply put, defendant, as the purchaser of the property at the sheriff’s sale, acquired an
equitable interest in the property that was contingent on redemption. The quitclaim deed that
plaintiff acquired from the Artises would impact defendant’s interest in the property if plaintiff
used that quitclaim deed to redeem the property. Accordingly, defendant had a substantial interest
in challenging plaintiff’s attempted redemption in order to perfect its title to the property, the
subject matter of this controversy, which would ultimately determine its interest in the property.
Lastly, plaintiff argues that the trial court erred by ruling that only a party with a recorded
interest may redeem the property under MCL 600.3240, which governs the redemption phase of
the foreclosure proceeding and provides, in part, as follows:
(1) A purchaser’s deed under section 3232 is void if the mortgagor, the
mortgagor’s heirs or personal representative, or any person that has a recorded
interest in the property lawfully claiming under the mortgagor or the mortgagor’s
heirs or personal representative redeems the entire premises sold by paying the
amount required under subsection (2) and any amount required under subsection
(4), within the applicable time limit prescribed in subsections (7) to (12), to the
purchaser or the purchaser’s personal representative or assigns, or to the register of
deeds in whose office the deed is deposited for the benefit of the purchaser.
Therefore, under MCL 600.3240(1), “[a] redemption is complete when one having the right
to redeem pays in proper time, to a proper person, the sum which was bid with interest from the
time of the sale at the rate per cent. borne by the mortgage . . . ” Heimerdinger v Heimerdinger,
299 Mich 149, 155; 299 NW 844 (1941) (cleaned up). The plain language of MCL 600.3240(1)
limits the proper person to the mortgagor, the mortgagor’s heir or personal representative, or “any
person that has a recorded interest in the property lawfully claiming under” them. Thus, under the
plain language of the statute, plaintiff failed to comply strictly with the requirements of MCL
600.3240(1) because it did not have a recorded interest in the property at the time it tried to redeem
the property.
Plaintiff’s attempted redemption, however, may have nevertheless substantially complied
as a valid redemption. Even though the quitclaim deed was not recorded at the time that plaintiff
attempted to redeem, plaintiff did record the deed within the applicable redemption period. The
Supreme Court has recognized that substantial compliance with the statutes regulating foreclosure
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sales may be sufficient, especially in the absence of prejudice to the rights of other parties, or any
compromise of the statutory purposes. Mills v Jirasek, 267 Mich 609, 614-615; 255 NW 402(1934).
The statutes [regulating statutory foreclosure sales] were intended to
prevent surprise or unfairness, and they should be enforced in everything sub-
stantial. Courts cannot disregard any of their positive provisions. But on the other
hand those provisions cannot be enlarged or unreasonably construed so as to render
mortgage sales unsafe, or to make bidding hazardous. The law was designed to
encourage and not to destroy recourse to these simple and cheap remedies; and
while no substantial rights should be disregarded, substantial regularity is all that
should be held imperative. [Id. at 614 (quotation marks and citation omitted).]
Whether plaintiff substantially complied with the statute was not contemplated by the trial
court, and we decline to decide this issue on appeal without the trial court first deciding it. Senters
v Ottawa Savings Bank, 443 Mich 45, 54; 503 NW2d 639 (1993) (cleaned up). Therefore, this
issue is remanded to the trial court for proceedings to determine if plaintiff substantially complied
with MCL 600.3240, as well as any other further proceedings as required.
III. CONCLUSION
Reversed and remanded for proceedings consistent with this opinion. We do not retain
jurisdiction.
/s/ Kirsten Frank Kelly
/s/ Christopher M. Murray
/s/ Brock A. Swartzle
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