Opinion
No. 347893
02-25-2020
PAMULA SHARP, Plaintiff-Appellee, v. ROBERT HILLERY, also known as ROBERT HILLARY, Defendant/Cross-Defendant-Appellant, and STACY HILLERY, Defendant-Appellant, and DETROIT LAND BANK AUTHORITY, also known as DETROIT LAND BANK COMMUNITY DEVELOPMENT CORPORATION, Defendant/Cross-Plaintiff-Appellee, and REGINALD B. SCOTT II, Defendant-Appellee, and MICHIGAN HOMEOWNER ASSISTANCE NONPROFIT HOUSING CORPORATION, Defendant.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Wayne Circuit Court
LC No. 17-015844-CH Before: REDFORD, P.J., and CAVANAGH and SERVITTO, JJ. PER CURIAM.
Defendants, Stacy and Robert Hillery, appeal as of right the stipulated order setting aside default and dismissing the cross-claim and the trial court's order that granted summary disposition to plaintiff in this land dispute. We reverse and remand.
I. FACTUAL BACKGROUND
Plaintiff lives at 2530 North LaSalle Gardens in Detroit, Michigan, and a vacant lot is located adjacent to plaintiff's property at 2524 North LaSalle Gardens. The Hillerys live on the same block at 2510 North LaSalle Gardens, a couple lots from the subject vacant lot. Following a tax foreclosure, the Wayne County Treasurer deeded the vacant lot to the Michigan Land Bank Fast Track Authority (MLBFTA) which later quitclaim deeded the vacant lot to defendant Detroit Land Bank Authority (DLBA), a public corporation created by the MLBFTA and Detroit under the land bank fast track act, MCL 124.751 et seq. Among other things, the DLBA acquires, disposes, and quiets title to vacant, abandoned, and derelict properties located in Detroit. The Hillerys became aware of the opportunity to purchase the subject lot from advertisements posted locally by the DLBA informing the public of a side lot fair hosted by the DLBA for the sale of vacant lots. The Hillerys applied to the DLBA to purchase the subject lot and the DLBA approved them and entered a purchase agreement with the Hillerys for their purchase of the subject lot on January 24, 2015. Under the terms of the purchase agreement, the DLBA promised to convey its interest in the property via a quitclaim deed at the closing. When the DLBA and defendants executed the purchase agreement, the subject lot lacked any recorded liens encumbering it. Seven months later, on August 20, 2015, the DLBA granted a future advance mortgage on the subject lot to defendant Michigan Homeowner Assistance Nonprofit Housing Corporation acting through the Michigan State Housing Development Authority (MSHDA) to secure a debt in the amount of $21,662.00. This lien related to demolition of the derelict house on the subject lot during 2014 following the tax foreclosure. MSHDA discharged the mortgage on April 18, 2016, and the discharge was recorded in the record title on November 28, 2017.
At the time of this transaction, the DLBA conducted vacant side lot sales under its Side Lot Policy that it adopted in 2014 which gave owners of contiguous property first priority to purchase adjacent side lots but also gave owner occupants on the same block second priority. Persons interested were required to apply to participate in the program. If a physically contiguous property owner did not bid on a vacant side lot property for sale, then any owner occupant located on the same block would be the winning bidder. Defendants applied to the program and purchased the subject side lot before the DLBA changed its policy on March 15, 2016. After that date, the DLBA's policy restricted its sales of vacant side lots to adjacent property owners only. Neither the DLBA's 2014 policy nor its 2016 amended policy required the DLBA to give notice to property owners regarding the sale of vacant side lots.
On June 1, 2017, the DLBA's director executed a quitclaim deed conveying the subject lot to Robert. The deed was recorded in the Wayne County Register of Deeds on June 2, 2017.
On November 2, 2017, plaintiff sued Robert, the DLBA, its director, and the Michigan Homeowner Assistance Nonprofit Housing Corporation, alleging that defendants were not proper purchasers of the vacant lot under the DLBA's amended policy. Plaintiff later moved for summary disposition, and the trial court granted her motion on the grounds that (1) the DLBA could not sell the property to the Hillerys because a MSHDA lien existed at the time of sale that the DLBA mistakenly did not discover which prevented the DLBA from selling the property, and (2) the DLBA admitted that it failed to provide notice of the sale to adjacent property owners. The trial court's ruling voided the sale to the Hillerys, and the lot then sold to plaintiff, and the trial court entered an order confirming that sale.
II. STANDARD OF REVIEW
The trial court granted plaintiff's motion for summary disposition under MCR 2.116(C)(10). We review a trial court's decision to grant summary disposition de novo. El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152; 159; 934 NW2d 665 (2019). A motion granted under MCR 2.116(C)(10) "tests the factual sufficiency of a claim." Id. at 160 (emphasis in original). "When considering such a motion, a trial court must consider all evidence submitted by the parties in the light most favorable to the party opposing the motion." Id. "A motion under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact." Id. "A genuine issue of material fact exists when the record leaves open an issue upon which reasonable minds might differ." Id. (quotation marks and citation omitted). "A trial court may not weigh evidence when ruling on a summary disposition motion or make credibility determinations." Bank of America, NA v Fidelity Nat'l Title Ins Co, 316 Mich App 480, 512-513; 892 NW2d 467 (2016) (citations omitted). "Courts are liberal in finding a factual dispute sufficient to withstand summary disposition." Patrick v Turkelson, 322 Mich App 595, 605; 913 NW2d 369 (2018) (citation omitted).
III. ANALYSIS
Defendants argue that the trial court erred when it granted plaintiff summary disposition because they validly purchased the vacant lot. We agree.
A purchase agreement is a contract subject to the typical rules of contract interpretation. See Zurcher v Herveat, 238 Mich App 267, 291; 605 NW2d 329 (1999). "The terms of the contract are accorded their plain and ordinary meaning." Hastings Mut Ins Co v Safety King, Inc, 286 Mich App 287, 292; 778 NW2d 275 (2009). "If the contractual language is unambiguous, courts must interpret and enforce the contract as written because an unambiguous contract reflects the parties' intent as a matter of law." Id.
The record reflects that the DLBA adopted its original side lot policy on March 11, 2014, and amended the policy on March 15, 2016. The 2014 policy gave first priority to owners of real property physically contiguous to the side lot and second priority to owners of property located on the same block. The 2016 policy did away with the 2014 policy's priority provision. Under the 2016 policy, only owners of properties physically contiguous to the side lot were eligible purchasers. Neither policy contained a provision requiring giving notice regarding lot sales or specified any manner of giving notice. Nor did either policy restrict the conveyance of properties if a lien existed on the property.
Defendants argue that, because they signed a purchase agreement on January 24, 2015, the 2014 policy controlled their transaction with the DLBA, and because that policy applied, they validly purchased the subject lot as second priority purchasers as owners of real property located on the same block as the subject lot. Plaintiff contends that the 2016 policy controls because the DLBA did not transfer the property to Robert Hillery until June 2017, and the sale was not consummated until the date of transfer. Under the 2016 policy, defendants were not eligible purchasers because they did not own real property contiguous to the subject lot.
At the time of the Hillerys' January 2015 transaction, the DLBA's 2014 policy applied. The DLBA's later amendment of its policy did not specify that the new policy had retroactive effect or rendered void previously entered sales agreements. Under the DLBA's 2014 policy, the Hillerys were eligible to purchase vacant side lots in their neighborhood. The record reflects that the DLBA entered the purchase agreement with the Hillerys pursuant to its policy then in force. The DLBA promised to convey the subject lot by quitclaim deed and ultimately did so. The record reflects that the DLBA admitted that it executed purchase agreements when deeds were unavailable. No provision in the DLBA's policy prohibited the sale of the property to the Hillerys or prohibited the DLBA from conveying the property. Moreover, regardless whether the property was encumbered in any manner, the purchase agreement required the DLBA to convey the property by quitclaim deed and the Hillerys agreed to take the property as is and waived all warranties pertaining to the property's condition. The purchase agreement specifically represented that the Hillerys were not in violation of the " 'Rules for Purchasing a Side Lot' set forth on the BuildingDetroit.org website as of the date of the purchase of this Property" and the record reflects that the Hillerys complied with the DLBA's policy requirements for their purchase of the subject lot. The DLBA had authority under MCL 124.757 and MCL 124.773 to sell the property to the Hillerys and transfer it via quitclaim deed.
We find no merit to plaintiff's argument that the DLBA's 2016 amended policy applied to the DLBA and the Hillerys' January 2015 transaction. Nor do we agree that the 2016 amended policy rendered their 2015 transaction void. The DLBA's execution of the promised quitclaim deed after the amendment of its policy did not give the 2016 amended policy retroactive effect to void the transaction which complied with the previous existing policy that governed the transaction.
The Hillerys argue that the trial court also erred by granting plaintiff summary disposition on the ground that plaintiff lacked notice regarding the sale of the subject lot based on plaintiff's denial of receiving any notice and the DLBA's interrogatory response in which it stated that it did not give plaintiff notice. The record reflects that the Hillerys presented to the trial court the DLBA's responses to discovery in which it stated that it attempted to notify adjacent lot owners of the availability of side lots before the January 24, 2015 sale. The Hillerys also presented the trial court evidence that local media outlets advertised the upcoming side lot fair for the sale of vacant lots and reported that postcards were mailed to eligible buyers. The Hillerys also indicated to the trial court that the DLBA had no obligation to give notice under either its 2014 policy or its 2016 amended policy.
Plaintiff fails to cite any provision in either the 2014 policy or the 2016 amended policy indicating that the DLBA had any obligation to provide actual personal notice to adjacent lot owners like herself before conducting side lot fairs and sales of vacant side lots. Plaintiff attempts to rely on minutes from meetings of the DLBA Board of Directors that indicated adjacent property owners were to receive notices via postcard. These meeting minutes were not introduced in the trial court, and thus, cannot be considered on appeal. "This Court's review is limited to the record established by the trial court, and a party may not expand the record on appeal." Sherman v Sea Ray Boats, Inc, 251 Mich App 41, 56; 649 NW2d 783 (2002). Accordingly, plaintiff's reliance on such evidence is not supported by the record below.
Plaintiff also asserts that a lien existed on the property before it was sold to the Hillerys that precluded the sale of the property to them. Plaintiff attempts to rely on a construction contract to establish the existence of this lien. However, this construction contract was not introduced in the trial court, and thus, cannot be considered on appeal. Id. Regardless, plaintiff has failed to establish her contention that such a lien precluded the sale of the subject lot to the Hillerys. Neither the DLBA's 2014 policy nor its 2016 amended policy prohibited the conveyance of a side lot because of the existence of a lien. Further, the purchase agreement lacked such a provision. No provision of the land bank fast track act, MCL 124.751 et seq., prohibits a land bank authority from conveying a property subject to a lien. Accordingly, we find no merit to plaintiff's assertion.
The trial court erred by granting plaintiff summary disposition because the DLBA validly contracted with the Hillerys and their 2015 transaction was not void. Further, that transaction could not be rescinded because the DLBA's 2016 amended policy did not apply to that transaction and did not prohibit the DLBA from selling to nonadjacent property owners vacant side lots. The trial court also erred by ruling that the transaction was void for the DLBA's failure to provide plaintiff notice because the record before the court failed to establish that the DLBA had an obligation, statutory or otherwise, to provide such notice.
The Hillerys also argue that the sale of the vacant side lot to plaintiff failed to conform to the DLBA's requirements. Given our resolution of the foregoing, we decline to address this issue.
Reversed and remanded for further proceedings consistent with this opinion. On remand, the trial court shall quiet title to the subject property in the Hillerys, reinstate the valid quitclaim deed of the subject property to them, and enter an order in recordable form for recording in the county register of deeds consistent with this opinion. We do not retain jurisdiction.
/s/ James Robert Redford
/s/ Mark J. Cavanagh
/s/ Deborah A. Servitto