Church & Church, Inc. v. A-1 Carpentry

766 N.W.2d 30, 281 Mich. App. 330
CourtMichigan Court of Appeals
DecidedAugust 19, 2008
DocketDocket No. 275823
StatusPublished
Cited by21 cases

This text of 766 N.W.2d 30 (Church & Church, Inc. v. A-1 Carpentry) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Church & Church, Inc. v. A-1 Carpentry, 766 N.W.2d 30, 281 Mich. App. 330 (Mich. Ct. App. 2008).

Opinion

Per Curiam.

Plaintiff, Church & Church, Inc. (Church), appeals by leave granted the trial court’s entry of summary disposition in third-party defendants AKRS Properties Investment, LLC, and Ban Cassab’s favor and the dismissal of plaintiffs claims seeking [334]*334judicial foreclosure of its mortgages on five real properties. Defendant Fox Brothers Development Company appeals by leave granted the trial court’s entry of summary disposition in favor of cross-defendants Satish and Aarti Doshi (the Doshis) concerning a mortgage Fox Brothers held on the Doshis’ real property. Defendant C & R Plumbing & Heating, Inc. (C & R), appeals, also by leave granted, the trial court’s order of summary disposition in the Doshis’ favor discharging C & R’s construction lien on the Doshis’ property and its denial of C & R’s request to amend its complaint to add a claim against cross-appellee, the Homeowner Construction Lien Recovery Fund. We affirm.

This case finds its origin in a lawsuit filed by Church against a builder, Gemcraft Homes, Inc., for Gemcraft’s failure to pay Church for building materials it had supplied to Gemcraft for improvements to numerous properties in southeast Michigan. Church recorded liens and mortgages on certain properties for which materials were furnished. Seeking foreclosure of its mortgages and liens in the lawsuit, Church named the other lienholders, mortgagees, and those who otherwise had an interest in the properties as necessary defendants in the lawsuit, including Fox Brothers and C & R.

This case was eventually consolidated in the trial court with several other cases in which contractors, subcontractors, and suppliers had sued Gemcraft for, among other things, defaulting on mortgages and defaulting on contracts or subcontracts for materials or services provided in connection with the construction of multiple properties. These consolidated cases contain numerous claims, cross-claims, and counterclaims, and various parties sought foreclosure on mortgages and liens on a multitude of properties in the proceedings. The present appeals concern themselves with several of these foreclosure claims.

[335]*335CHURCH’S APPEAL

Relevant to this appeal, Church held construction liens on five properties owned by Gemcraft. Before initiation of this lawsuit, however, Church agreed to release its construction liens in exchange for the execution of mortgages on the properties in Church’s favor. Gemcraft apparently defaulted on the mortgages, and the five properties were among those for which Church sought judicial foreclosure in its lawsuit against Gem-craft.

Defendant Charter One Bank (Charter One) also held mortgages on these five properties and had recorded its mortgages before Church’s mortgages were recorded. Charter One was named as a defendant in Church’s lawsuit and filed a cross-claim against Gem-craft for, among other things, breach of contract and additionally sought judicial foreclosure on the five properties.

In April 2004, before the Church lawsuit was resolved, Charter One dismissed the foreclosure count of its cross-claim against Gemcraft. Approximately one month later, Charter One assigned its interest in and sold its loans on the subject properties to third-party defendant FGR Properties, LLC (FGR). FGR thereafter foreclosed on the properties by advertisement, and the properties were ultimately quitclaimed to AKRS Properties Investment, LLC, and its owner/president Ban Cassab.

In 2006, Church filed a motion for partial summary disposition, asserting that it was entitled to judicial foreclosure of its mortgages on the five properties, that the sale of the properties by FGR did not extinguish plaintiffs interest in the properties, and that the foreclosure by advertisement should be declared void. The trial court ultimately granted AKRS and Cassab’s coun[336]*336termotion for summary disposition, dismissing Church’s claims with respect to the five properties.

This Court reviews de novo a tried court’s decision regarding a motion for summary disposition. Arthur Land Co, LLC v Otsego Co, 249 Mich App 650, 661; 645 NW2d 50 (2002). A motion for summary disposition brought under MCR 2.116(C)(10) tests the factual support for a claim. Smith v Globe Life Ins Co, 460 Mich 446, 454; 597 NW2d 28 (1999). When reviewing a motion under this subrule, the court must consider all the documentary evidence in the light most favorable to the nonmoving party. Maiden v Rozwood, 461 Mich 109, 120; 597 NW2d 817 (1999). “Where the proffered evidence fails to establish a genuine issue regarding any material fact, the moving party is entitled to judgment as a matter of law.” Id.

On appeal, Church contends that MCL 600.3204 provides for foreclosure by advertisement (otherwise known as statutory foreclosure) only if that party has not already sued on the underlying debt. According to Church, Charter One’s cross-claim against Gemcraft for breach of contract is an action to recover the debt secured by the mortgages and Charter One’s dismissal of only the judicial foreclosure claim precluded FGR, pursuant to MCL 600.3204, from foreclosing on the properties by advertisement. We disagree.

MCL 600.3204(1) provides as follows:

A party may foreclose a mortgage by advertisement if all of the following circumstances exist:
(a) A default in a condition of the mortgage has occurred, by which the power to sell became operative.
(b) An action or proceeding has not been instituted, at law, to recover the debt secured by the mortgage or any part of the mortgage; or, if an action or proceeding has been instituted, the action or proceeding has been discontinued; [337]*337or an execution on a judgment rendered in an action or proceeding has been returned unsatisfied, in whole or in part.
(c) The mortgage containing the power of sale has been properly recorded.
(d) The party foreclosing the mortgage is either the owner of the indebtedness or of an interest in the indebtedness secured by the mortgage or the servicing agent of the mortgage.

There is no question that Charter One filed a cross-complaint against Gemcraft for breach of contract because of Gemcraft’s default on mortgages and loan documents concerning the properties at issue and for foreclosure of the mortgages held on the properties. However, Charter One dismissed its foreclosure claim and thereafter assigned its interest in and sold its loans on the subject properties to FGR. Despite Church’s contrary contention, Charter One’s actions in divesting itself of any and all rights, title, and interest in the subject properties acted as an implied dismissal of all its claims concerning the properties.

In Saph v Auditor General, 317 Mich 191, 202; 26 NW2d 882 (1947), an individual, who brought an action to cancel taxes on real property he held, deeded the property to another during the pendency of the lawsuit.

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Church & Church, Inc. v. A-1 CARPENTRY
766 N.W.2d 30 (Michigan Court of Appeals, 2008)

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Bluebook (online)
766 N.W.2d 30, 281 Mich. App. 330, Counsel Stack Legal Research, https://law.counselstack.com/opinion/church-church-inc-v-a-1-carpentry-michctapp-2008.