Opinion
354118
06-17-2021
U.S. BANK TRUST, as Trustee of LSF9 MASTER PARTICIPATION TRUST, Plaintiff-Appellee, v. MARK GORGE, Individually and as Trustee of GORGE FAMILY TRUST, Defendant-Appellant, and UNITED STATES OF AMERICA, STATE OF MICHIGAN, and DISCOVER BANK, Defendants.
UNPUBLISHED
Oakland Circuit Court LC No. 2018-170130-CH.
Before: Murray, C.J., and Fort Hood and Rick, JJ.
Per Curiam.
Defendant Mark Gorge ("Gorge"), individually and as trustee of the Gorge Family Trust ("the Trust ") (referred to collectively as "defendant "), appeals as of right an opinion and order denying defendant's second motion for summary disposition and granting a motion for summary disposition filed by plaintiff regarding Count 2 of plaintiff s complaint in this mortgage foreclosure action. We affirm.
Because the other defendants listed in the caption are not involved in this appeal, we use the term "defendant" to refer to Gorge, individually and as trustee of the Gorge Family Trust.
I. BACKGROUND
This case concerns the proper ownership and foreclosure of real property consisting of a single-family residence located at 4489 South Willoway Estates Court in Bloomfield Township ("the property"). At issue is whether the Trust exists and has an ownership interest in the property.
When setting forth the factual background and procedural history, we sometimes refer to "the Trust" without using a qualifier such as "alleged." This is only for ease of discussion.
On August 13, 2001, Gorge purchased the property from Allan W. Ferguson and Mildred I. Ferguson (referred to collectively as "the Fergusons") through a land contract. On that date, a memorandum of land contract was signed by the Fergusons as well as by Gorge; the document indicated that Gorge was signing individually and as trustee of the Trust. A warranty deed was executed and escrowed at the same time. The memorandum of land contract was recorded in the Oakland County Register of Deeds on September 10, 2001.
Although the August 13, 2001 memorandum of land contract purported to memorialize a sale of the property to Gorge both individually and as trustee of the Trust, there is no evidence that the Trust existed at that time. Gorge claims to have created and executed the Trust more than two years later, through a November 1, 2003 Trust agreement, but only an unsigned, unexecuted copy was produced. The unsigned Trust agreement indicated that Gorge was both the settlor and the trustee of the Trust. Further, the unsigned Trust agreement contained the following language:
Settlor does hereby orally create a Declaration of Trust as to any assets intended to be assigned and transferred to this Trust and Settlor does assign, transfer, grant, convey and deliver to the Trustee(s) and the Trustee(s) do hereby acknowledge receipt, IN TRUST, of the property listed in Exhibit A, attached hereto and made a part hereof
Exhibit A of the unsigned Trust agreement listed the address and parcel identification number of the property at issue.
On November 25, 2003, Gorge executed and delivered to Washington Mutual Bank an adjustable rate note for the principal sum of $618, 750. On the same date, Gorge executed a mortgage on the property to Washington Mutual Bank in the amount of $618, 750 to secure repayment of the note; the mortgage was recorded in the Oakland County Register of Deeds on March 18, 2004. The note and the mortgage were executed by Gorge individually and did not mention the Trust's purported interest in the property. Gorge used the proceeds of the $618, 750 loan to pay off the land contract, and the previously escrowed warranty deed dated August 13, 2001, was recorded in the Oakland County Register of Deeds on July 7, 2006.
The mortgage on the property was assigned to JPMorgan Chase Bank via an assignment of mortgage that was recorded in the Oakland County Register of Deeds on August 26, 2013. The mortgage was then assigned to plaintiff through an assignment of mortgage that was recorded in the Oakland County Register of Deeds on January 30, 2017.
Beginning on November 1, 2015, Gorge defaulted on his monthly payments required under the note and mortgage. According to plaintiff, Gorge owes an outstanding principal balance of $557, 016.04, along with interest, late charges, advances, and other fees and costs. In preparing to seek foreclosure, plaintiff noticed that the record owner of the property was purportedly Gorge individually and as trustee of the Trust, but that the mortgage was executed only by Gorge individually. This presented a problem for plaintiff: the possibility that it could foreclose only on Gorge's individual interest in the property and not on the Trust's alleged interest.
On June 21, 2017, plaintiff filed a prior action against defendant in the Oakland Circuit Court ("the 2017 lawsuit" or "the 2017 case"), seeking to quiet title or to reform the mortgage. Plaintiff asserted in the 2017 lawsuit that Gorge, in his capacity as trustee of the Trust, was erroneously omitted as a mortgagor and that Gorge should have executed the mortgage as trustee of the Trust because the Trust has or may claim an interest in the property. In lieu of filing an answer in the 2017 lawsuit, defendant moved for summary disposition, arguing, inter alia, that Gorge intended for the mortgage to encumber only his individual interest in the property and not the interest of the Trust.
A hearing was held on competing motions for summary disposition in the 2017 lawsuit. The trial court found no evidence that the Trust was part of the mortgage agreement; the court noted that Gorge had agreed as part of the mortgage transaction to provide a warranty deed of the property from the Trust to himself, but that Gorge failed to follow through on this requirement. The trial court ruled that plaintiffs action was essentially for breach of contract and was barred by the applicable six-year statute of limitations:
. . . I find that this is a breach of contract action, that Mark Gorge did not follow through with his requirement under this agreement to get a warranty deed from the Trust to himself, the finan-financial institution missed it and should have brought a breach of contract action within the six years. So therefore, I find that the six-year statute of limitations applies and I'm granting defendant's motion for summary disposition and denying plaintiffs.
However, before the trial court ruled, the court indicated during an exchange with plaintiffs counsel that the mortgage encumbers Gorge's individual interest in the property and that plaintiff could still pursue foreclosure regarding Gorge's individual interest as well as partition of the property. Also, during the motion hearing, the parties and the court discussed the fact that defendant had not produced a signed copy of the Trust agreement; only an unsigned copy had been produced. The trial court noted that, if the Trust did not exist, then plaintiff would be able to foreclose on the entire property because there would be no owner of the property other than Gorge individually. But the court stated that the existence of the Trust did not matter for purposes of the motions for summary disposition that were before the court, and the trial court entered an order granting summary disposition to defendant in the 2017 case. Plaintiff did not file an appeal from the dismissal of the 2017 lawsuit.
Two months later plaintiff filed the present action. In Count 1, plaintiff sought judicial foreclosure of the mortgage with respect to Gorge's individual interest in the property. In Count 2, plaintiff asked for a declaratory judgment establishing that the Trust does not exist and has no interest in the property, while in Count 3 plaintiff asserted in the alternative that, if the trial court determined that the Trust exists and that its purported interest in the property is unaffected by the foreclosure, then after foreclosure, the property should be sold in lieu of partition and the proceeds of the sale should be disbursed in accordance with MCR 3.403(D).
In lieu of filing an answer to the complaint, defendant moved for summary disposition under MCR 2.116(C)(7), (8), and (10). Defendant argued that the action was barred by MCR 2.203(A), which provides for compulsory joinder of claims, as well as by res judicata and collateral estoppel, on the ground that this case arises from the same transaction as the 2017 case. Also, plaintiff could not seek partition because it did not own the property. Defendant further contended that his failure to produce a signed copy of the Trust agreement as required by a discovery order in the 2017 case was moot in the present case. The trial court denied defendant's motion for summary disposition, ruling that plaintiff could foreclose on the mortgage with respect to Gorge's individual interest in the property and, if plaintiff obtains Gorge's interest and becomes an owner of the property after a valid foreclosure, plaintiff would stand in Gorge's shoes with respect to partition. The court reserved its ruling regarding sale of the property in lieu of partition and allowed plaintiff to undertake discovery regarding the existence of the Trust. On December 13, 2019, the trial court entered a judgment of foreclosure with respect to Gorge's individual interest in the property.
The parties then filed competing motions for summary disposition on the issue of whether the Trust exists. The court determined that defendant had failed to present evidence demonstrating a genuine issue of material fact regarding whether the Trust existed. Further, because title to the property was vested solely in Gorge individually, and because the trial court had already granted summary disposition to plaintiff on the foreclosure claim in Count 1, the trial court had now resolved all remaining claims in the case. This appeal ensued.
II. ANALYSIS
Defendant first presents arguments challenging the trial court's denial of his first motion for summary disposition. In particular, defendant argues that this action is barred by res judicata, collateral estoppel, and the mandatory joinder rule. Defendant further contends that plaintiff may not seek partition (or, more accurately, a sale in lieu of partition), and that the mortgage is unenforceable. And defendant contends that a discovery order in the 2017 case is now moot. As discussed below, defendant's arguments are unavailing.
A trial court's decision on a motion for summary disposition is reviewed de novo. El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 159; 934 N.W.2d 665 (2019). Also, "the application of legal doctrines, such as res judicata and collateral estoppel [, ]" is reviewed de novo. Estes v Titus, 481 Mich. 573, 578-579; 751 N.W.2d 493 (2008). Summary disposition under MCR 2.116(C)(7) is appropriate on the basis of, inter alia, a prior judgment or another disposition of the claim before commencement of the action. MCR 2.116(C)(7) is the correct subrule under which to review defendant's arguments regarding res judicata, collateral estoppel, and mandatory joinder.
Summary disposition may be granted under MCR 2.116(C)(7) when a claim is barred by res judicata or collateral estoppel. A motion brought under MCR 2.116(C)(7) may be supported by affidavits, depositions, admissions, or other documentary evidence. The contents of the complaint must be accepted as true unless contradicted by the documentary evidence, which must be viewed in a light
most favorable to the nonmoving party. If there is no factual dispute, the determination whether a plaintiffs claim is barred under a principle set forth in MCR 2.116(C)(7) is a question of law. [Allen Park Retirees Ass 'n, Inc v Allen Park, 329 Mich.App. 430, 443-444; 942 N.W.2d 618 (2019) (quotation marks and citations omitted).]
Defendant's first motion for summary disposition was also based on MCR 2.116(C)(8) and (10), arguing that plaintiff could not pursue a claim for partition (or sale in lieu of partition) and that the mortgage was unenforceable. Because the issue regarding partition (or sale in lieu of partition) does not require consideration of documents outside the pleadings, we review the decision under MCR 2.116(C)(8), whereas the issue regarding the enforceability of the mortgage involves consideration of evidence outside the pleadings and is reviewed under MCR 2.116(C)(10). See Candler v Farm Bureau Mut Ins Co of Mich, 321 Mich.App. 772, 776; 910 N.W.2d 666 (2017); AK Steel Holding Corp v Dep 't of Treasury, 314 Mich.App. 453, 463 n 7; 887 N.W.2d 209 (2016) ("It is well settled that regardless of the subrule cited by the trial court in granting summary disposition, this Court will review the court's order under the correct subrule.").
A motion under MCR 2.116(C)(8) tests the legal sufficiency of a claim based on the factual allegations in the complaint. When considering such a motion, a trial court must accept all factual allegations as true, deciding the motion on the pleadings alone. A motion under MCR 2.116(C)(8) may only be granted when a claim is so clearly unenforceable that no factual development could possibly justify recovery.
A motion under MCR 2.116(C)(10), on the other hand, tests the factual sufficiency of a claim. 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. A motion under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact. A genuine issue of material fact exists when the record leaves open an issue upon which reasonable minds might differ. [El-Khalil, 504 Mich. at 159-160 (quotation marks and citations omitted).]
A. RES JUDICATA
Defendant first argues that this action is barred by res judicata.
The doctrine of res judicata is intended to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and encourage reliance on adjudication, that is, to foster the finality of litigation. For res judicata to preclude a claim, three elements must be satisfied: (1) the prior action was decided on the merits, (2) both actions involve the same parties or their privies, and (3) the matter in the second case was, or could have been, resolved in the first. The burden of proving the applicability of the doctrine of res judicata is on the party asserting it. [Garrett v Washington, 314 Mich.App. 436, 441; 886 N.W.2d 762 (2016) (quotation marks, brackets, and citations omitted).]
The first two elements of res judicata are satisfied because the 2017 case was decided on the merits and the two actions involved the same parties. At issue here is whether the claims in this case were or could have been resolved in the 2017 case.
"Our Supreme Court has taken a broad approach to the doctrine of res judicata, holding that it bars not only claims already litigated, but also every claim arising from the same transaction that the parties, exercising reasonable diligence, could have raised but did not." Id. at 442 (quotation marks and citation omitted). "[T]he determinative question is whether the claims in the instant case arose as part of the same transaction as did the plaintiffs claims in the original action." Id. (quotation marks, brackets, and citation omitted). "Whether a factual grouping constitutes a transaction for purposes of res judicata is to be determined pragmatically, by considering whether the facts are related in time, space, origin or motivation, and whether they form a convenient trial unit." Id. (quotation marks, brackets, ellipsis, and citations omitted).
The easier of the two questions is whether the issues in this case were resolved in the 2017 case. They were not. The present action involves claims for judicial foreclosure with respect to Gorge's individual interest in the property, a request for a declaration that the Trust does not exist, and a request for sale in lieu of partition. In the 2017 case, plaintiff sought to quiet title or to reform the mortgage. Plaintiff was seeking a ruling that any interest held by the Trust in the property was encumbered by the mortgage. The trial court ruled in the 2017 case that plaintiffs claim was essentially for breach of contract because Gorge failed to comply with a requirement of the mortgage transaction that he transfer the Trust's interest in the property from the Trust to himself individually. Because the 2017 case was not filed within the six-year limitation period applicable to actions for breach of contract, the trial court granted summary disposition to defendant on the basis of the statute of limitations. Although the trial court and plaintiffs counsel at the motion hearing in the 2017 case discussed the possibility of a future action for foreclosure with respect to Gorge's individual interest, as well as a claim for partition and the issue whether the Trust exists, the trial court did not adjudicate those matters in the 2017 case. Therefore, the claims involved in the present case were not resolved in the 2017 case.
This leaves the question whether the claims in the present case could have been raised in the 2017 case, i.e., whether the claims in the present case arose from the same transaction as the claims raised in the 2017 case. We conclude that the claims raised in the present case were not part of the same transaction as those raised in the 2017 case.
In Marketplace of Rochester Hills v Comerica Bank, 309 Mich.App. 579, 589; 873 N.W.2d 332 (2015) (Marketplace I), vacated in part on other grounds by Marketplace of Rochester Hills Parcel B, LLC v Comerica Bank, 498 Mich. 934 (2015) (Marketplace II ), this Court held that res judicata did not bar a mortgagee from seeking remedies under the mortgage because a prior action by the mortgagee against guarantors of the underlying loan for breach of the guaranty contract and against the mortgagor for appointment of a receiver did not arise from the same transaction as would an action for foreclosure under the mortgage. Although both the guaranty action and a foreclosure action would rest on the fact that the mortgagor had defaulted on the mortgage, and some facts thus overlapped between two such actions, there were other facts involved in each type of action that did not overlap. Marketplace I, 309 Mich.App. at 586-589. Hence, res judicata did not apply because the guaranty action did not arise from the same transaction as would an action under the mortgage. Id. at 589. In reaching this conclusion, the Supreme Court noted in Marketplace II that "[t]he proper test is whether the facts are related in time, space, origin or motivation, and whether they form a convenient trial unit," Marketplace II, 498 Mich. at 934 (quotation marks, brackets, ellipsis, and citation omitted), but nonetheless concluded that "[w]hen the same transaction test is properly applied to this case, the result reached by the Court of Appeals is correct." Id.
The facts in the present action are not related in time, space, origin, or motivation to the facts in the 2017 case, and the factual groupings in this case and the 2017 case would not form a convenient trial unit. The facts in the 2017 case centered around the formation of the mortgage; plaintiff asserted that the Trust's alleged interest in the property was intended to be encumbered by the mortgage. The trial court ruled in the 2017 case that Gorge's failure to comply with a requirement of the mortgage transaction that he transfer the Trust's interest in the property from the Trust to himself individually constituted a breach of contract and that the action was untimely under the applicable statute of limitations for a breach of contract action. By contrast, the present foreclosure action centers on defendant's subsequent default under the mortgage, including his failure to make monthly payments. The other relief sought in this action is ancillary to the foreclosure claim. Plaintiffs request for a declaratory ruling regarding whether the Trust exists is pertinent in determining the extent of Gorge's individual interest in the property and thus the extent to which the property is subject to the foreclosure claim. And the request for sale in lieu of partition is related to the foreclosure claim because, if the Trust exists and has an interest in the property, then plaintiff could become a tenant in common with the Trust after foreclosure. Accordingly, plaintiffs claims in this action do not arise from the same transaction as the claims in the 2017 case, and plaintiffs claims in the present case are therefore not barred by res judicata.
B. COLLATERAL ESTOPPEL
"Collateral estoppel bars relitigation of an issue in a new action arising between the same parties or their privies when the earlier proceeding resulted in a valid final judgment and the issue in question was actually and necessarily determined in that prior proceeding." Leahy v Orion Twp, 269 Mich.App. 527, 530; 711 N.W.2d 438 (2006). "The doctrine bars relitigation of issues when the parties had a full and fair opportunity to litigate those issues in an earlier action." Id. "Collateral estoppel is a flexible rule intended to relieve parties of multiple litigation, conserve judicial resources, and encourage reliance on adjudication." Rental Props Owners Ass'n of Kent Co v Kent Co Treasurer, 308 Mich.App. 498, 529; 866 N.W.2d 817 (2014). "Generally, application of collateral estoppel requires (1) that a question of fact essential to the judgment was actually litigated and determined by a valid and final judgment, (2) that the same parties had a full and fair opportunity to litigate the issue, and (3) mutuality of estoppel." Id.
Questions of fact essential to this foreclosure action were not actually litigated and determined by a valid and final judgment in the 2017 case. The present action involves issues pertinent to a foreclosure claim, including regarding defendant's default under the mortgage, as well as issues regarding the existence of the Trust and the request for sale in lieu of partition. None of those issues were adjudicated in the 2017 case. Rather, the trial court in the 2017 case determined that Gorge's failure to transfer the Trust's alleged interest in the property to himself constituted a breach of contract and that the action was not filed within the period of limitation applicable to a breach of contract action. Accordingly, collateral estoppel is inapplicable.
C. COMPULSORY JOINDER
Defendant next argues that this action is barred by the court rule on compulsory joinder of claims, MCR 2.203(A), which provides:
In a pleading that states a claim against an opposing party, the pleader must join every claim that the pleader has against that opposing party at the time of serving the pleading, if it arises out of the transaction or occurrence that is the subject matter of the action and does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction.
"In determining whether two claims arise out of the same transaction or occurrence for purposes of MCR 2.203(A), res judicata principles should be applied." Garrett, 314 Mich.App. at 451. As explained earlier in regard to res judicata, plaintiffs claims in the present action do not arise out of the same transaction as the claims in the 2017 case. The same conclusion applies with respect to MCR 2.203(A). Therefore, the compulsory joinder rule does not bar the present action.
D. PARTITION
Defendant next argues that plaintiffs claim for partition is barred because plaintiff has no ownership interest in the property. Defendant's argument is moot. We conclude later in this opinion that defendant has failed to present evidence establishing that the existence of the Trust should be recognized. Therefore, the property is owned solely by Gorge individually. Any issue regarding plaintiffs request for a sale in lieu of partition is thus moot because there is no interest of the Trust in the property. But even if the Trust existed and had an ownership interest in the property, defendant's argument on this issue would fail.
As noted, plaintiff is actually seeking a sale in lieu of partition, but defendant repeatedly refers to plaintiff's claim as being a claim for partition.
MCL 600.3304 provides, "All persons holding lands as joint tenants or as tenants in common may have those lands partitioned." Defendant contends that plaintiff may not seek partition because plaintiff is not yet an owner of the property. This argument ignores the trial court's actual decision, which reserved any ruling on plaintiff's request for a sale in lieu of partition until after the foreclosure occurs. The trial court did not allow plaintiff to pursue a sale in lieu of partition before becoming an owner. Defendant fails to address the trial court's ruling or to explain how or why it was erroneous. "When an appellant fails to address the basis of a trial court's decision, this Court need not even consider granting relief." Seifeddine v Jaber, 327 Mich.App. 514, 522; 934 N.W.2d 64 (2019). Defendant "cannot leave it to this Court to make his arguments for him. His failure to adequately brief the issue constitutes abandonment." Id. at 521 (citation omitted).
E. DISCOVERY
Defendant next argues that a discovery order in the 2017 case requiring him to produce a copy of the Trust agreement is moot in the present case. Defendant "has waived this issue by failing to include it in his statement of questions presented." Seifeddine v Jaber, 327 Mich.App. 514, 521; 934 N.W.2d 64 (2019). In any event, the argument cannot succeed. In both the 2017 case and this case, defendant has produced an unsigned copy of the Trust agreement but not a signed copy. Whether defendant has presented enough evidence to create a genuine issue of material fact regarding the existence of the Trust hinges on what evidence has been produced in this case, not on any discovery order that was entered in the 2017 case. The trial court did not rely on the discovery order in the 2017 case when ruling on the summary disposition issues here. Defendant's argument regarding the mootness of the discovery order does not establish any error.
Defendant next argues that the mortgage is invalid and unenforceable. Defendant says that the trial court's order granting summary disposition to defendant in the 2017 case provided that plaintiff had no mortgage interest with respect to the property, even in regard to Gorge's individual interest. Defendant is incorrect; the trial court made no such determination in the 2017 case, and there is no language to that effect in the trial court's summary disposition order in that case.
Defendant also says that, if Gorge and the Trust each held an ownership interest in the property, then the mortgage is invalid because the Trust did not sign the mortgage. Defendant is wrong again. Defendant's argument that the mortgage is invalid as a matter of law because the Trust never signed the mortgage fails given that, as explained later, defendant has not established that the existence of the Trust should be recognized. But defendant's argument on this point would fail even if the Trust existed at the time of the purported conveyance by warranty deed in 2001. MCL 554.44 provides, "All grants and devises of lands, made to 2 or more persons, except as provided in the following section, shall be construed to create estates in common, and not in joint tenancy, unless expressly declared to be in joint tenancy." The August 13, 2001 warranty deed purportedly conveying the property to the Trust and Gorge contains no express declaration of a joint tenancy. Hence, to the extent that Gorge and the Trust each held an interest in the property, they were tenants in common. A tenant in common may mortgage his interest in the property. Ruppe v Steinbach, 48 Mich. 465, 468; 12 N.W. 658 (1882). The interest of a tenant in common is subj ect to levy and sale upon execution. Mich State Bank of Eaton Rapids v Kern, 189 Mich. 467, 469; 155 N.W. 502 (1915). Accordingly, even if the Trust existed, and even if Gorge and the Trust each held an ownership interest in the property, Gorge could mortgage his interest without the Trust's consent. Defendant's challenge to the validity of the mortgage therefore fails.
MCL 554.45 states, "The preceding section shall not apply to mortgages, nor to devises or grants made in trust, or made to executors, or to husband and wife." That exception is inapplicable in regard to the August 13, 2001 warranty deed, and the alleged November 1, 2003 Trust agreement did not contain a grant or devise of land to two or more persons that would fall within MCL 554.44.
F. THE TRUST
For his next argument defendant asserts that the trial court erred in granting summary disposition to plaintiff on Count 2 on the ground that there is no genuine issue of material fact regarding whether the existence of the Trust should be recognized.
"[A]n express trust in real property must be in writing, under the hand of the party to be charged." Children of Chippewa, Ottawa & Potawatomy Tribes v Regents of Univ of Mich, 104 Mich.App. 482, 491; 305 N.W.2d 522 (1981); see also Howe v Webert, 332 Mich. 84, 93-94; 50 N.W.2d 725 (1952) ("It is the rule in Michigan that a trust in real estate cannot be established by parol evidence."). Defendant contends that the Trust was created by a November 1, 2003 Trust agreement, which Gorge claims to have signed, but a signed copy of that document has not been produced. The existence of a lost document may be recognized only if the trial court is provided with proof of the document's execution, loss, and inability to be retrieved, as well as evidence establishing the substance of the document. See Thompson v Flint & Pere Marquette R Co, 131 Mich. 95, 99-101; 90 N.W. 1037 (1902); Henry v Gates, 118 Mich. 379, 381; 76 N.W. 765 (1898).
Defendant has not provided enough evidence to demonstrate a genuine issue of material fact regarding whether the Trust exists. There is no evidence that the Trust existed in 2001 when the warranty deed and land contract were executed. Again, Gorge claims to have created the Trust more than two years later when he allegedly signed the November 1, 2003 Trust agreement. Further, there is no basis to conclude that the Trust ever existed. No signed copy of the November 1, 2003 Trust agreement has been produced. Aside from Gorge's self-serving testimony, there is no evidence substantiating that he ever signed or executed the Trust agreement.The affidavit of Sidney L. Frank, Gorge's former attorney, regarding his document retention policies and inability to find the original or signed copy of the Trust agreement in his files and safe strongly indicates that the Trust agreement was never signed.
Defendant's reliance on the title commitment is misplaced. Although the title commitment required a conveyance of the property from the Trust to Gorge individually as part of the mortgage transaction, it is speculative to suggest that this means that the title agent saw a signed copy of the Trust agreement and therefore concluded that the Trust owns the property. It is at least equally possible that the language in the title commitment reflected a perceived possible cloud on title given the recorded land contract memorandum identifying the purchaser as Gorge individually and as trustee of the Trust. Speculation is insufficient to avoid summary disposition. Ghaffari v Turner Constr Co, 268 Mich.App. 460, 464; 708 N.W.2d 448 (2005).
But even if Gorge's testimony alone were enough to create a genuine issue of material fact regarding whether he signed the document, defendant has failed to present evidence that the allegedly signed document was irretrievably lost. "Those relying upon a lost document must establish the execution of the document, its loss, and a diligent but unsuccessful search for it in places where it is most likely to be found." Thompson, 131 Mich. at 99-100. Defendant has no agreement. Gorge's assertion that plaintiff stole the document from Gorge's home lacks any substantiation; indeed, it lacks support even in Gorge's own complaint that he filed on the matter in the 48th District Court against entities that he apparently believes are associated with or agents of plaintiff. In that complaint, Gorge did not even refer to or ask for the return of the signed Trust agreement. Thus, Gorge did not make a diligent effort to seek return of the signed Trust agreement.
Nor is there evidence that defendant undertook a diligent search for the signed document from other persons or entities. Gorge's own testimony indicates that his copy of the allegedly signed Trust agreement, which he claims without substantiation was stolen, was not the only signed copy; he testified that he gave a signed copy to the title company. And Frank's averments regarding his document retention policies reflect that he would have had a signed copy if the document had truly been executed. It is speculative to suggest that Frank irretrievably lost the signed document; an equally possible explanation is that the document was never really signed and that this is why no signed copy is in Frank's possession. Speculation is insufficient to avoid summary disposition. Ghaffari v Turner Constr Co, 268 Mich.App. 460, 464; 708 N.W.2d 448 (2005). Overall, defendant has failed to present evidence establishing that the Trust agreement was executed and irretrievably lost and that the Trust should be recognized as existing.
Finally, defendant argues that the trial court erred by entertaining defendant's argument that, under MCL 700.7506(1)(a), any interest of the Trust in the property would be encumbered by the mortgage. But the trial court did not discuss or decide this issue. Thus, it is unclear why defendant raises the issue on appeal, given that it could provide an alternative ground for affirmance. Because we conclude that the trial court properly granted summary disposition to plaintiff on Count 2 of the complaint on the ground that the existence of the Trust should not be recognized, we need not reach any issue regarding MCL 700.7506(1)(a).
Affirmed.
Christopher M. Murray, Karen M. Fort Hood, Michelle M. Rick, JJ.