Home Title Connect LLC v. Mill Creek LLC

CourtMichigan Court of Appeals
DecidedNovember 20, 2024
Docket367033
StatusUnpublished

This text of Home Title Connect LLC v. Mill Creek LLC (Home Title Connect LLC v. Mill Creek LLC) 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
Home Title Connect LLC v. Mill Creek LLC, (Mich. Ct. App. 2024).

Opinion

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

HOME TITLE CONNECT LLC, doing business as UNPUBLISHED TITLE CONNECT, November 20, 2024 11:11 AM Plaintiff-Appellant,

v No. 367033 Genesee Circuit Court MILL CREEK LLC, VAIL INVESTMENT GROUP LC No. 23-118551-CB LLC, SIERRA SERVICES GROUP LLC, DANNY NEWBERRY, and JEFF A. CARTER,

Defendants-Appellees.

Before: K. F. KELLY, P.J., and CAVANAGH and RIORDAN, JJ.

PER CURIAM.

Plaintiff, Home Title Connect LLC, doing business as Title Connect, appeals as of right the trial court’s order granting defendant Mill Creek’s motion for summary disposition. Plaintiff on appeal also challenges the trial court’s denial of its motion for reconsideration and the court’s prior dismissal of the other defendants, Vail Investment Group LLC, Sierra Services Group LLC, Danny Newberry and Jeff A. Carter, for lack of personal jurisdiction. For the reasons provided below, we affirm.

I. FACTS

This action arises from a real estate transaction for two parcels of property located in Genesee County. In the October 27, 2021 purchase agreement, the initial purchaser of the property was listed as nonparty individual Rajesh Kumar, the seller was Mill Creek LLC, and the purchase price was $3,300,000. Kumar apparently later assigned his rights as the purchaser to nonparty Mongia Capital Michigan LLC. Plaintiff was selected, presumably by Mongia, to act as the escrow agent and title company for the transaction. Mill Creek agreed to pay “[g]eneral real estate taxes and special assessments relating to the Property payable during the year in which Closing occurs,” which was to “be prorated with respect to the Property as of the date before the Date of Closing.” The members of Mill Creek, which were Vail Investment Group LLC (Vail) and Sierra Services

-1- Group LLC (Sierra),1 authorized Danny Newberry to sign and execute any necessary documents related to the sale of the property.

In anticipation of closing, plaintiff filled out an ALTA Seller’s Settlement Statement. One of the items to be listed was the payment of the 2021 summer taxes. Because the information from the treasurer was not available at the time the form was filled out, plaintiff entered a placeholder of $1 for each of the parcels. The real estate transaction closed on December 28, 2021, without any updates for the taxes. Contrary to the $1 amounts reflected in the settlement statement, the amount of 2021 summer taxes owed was in excess of $70,000.2 At some point afterward, this discrepancy in the taxes was discovered, and a demand was made to Mill Creek to pay the owed taxes, but Mill Creek refused. In October 2022, plaintiff paid the delinquent taxes.

Plaintiff filed suit against defendants. The complaint initially was filed in Oakland Circuit Court, but the parties agreed to transfer the case to Genesee Circuit Court. Plaintiff alleged five counts: Count I–Breach of Contract, Count II–Implied Indemnity at Common Law, Count III–Tort Liability, Count IV–Common Law & Statutory Conversion, and Count V–Fraudulent Conveyance Doctrine.

For Count I, plaintiff alleged that defendants were obligated to pay the 2021 summer taxes and were obligated to deliver the warranty deed to the purchaser free and clear of all liens and encumbrances, yet failed to do so. For Count II, plaintiff alleged that under the common law, defendants were liable to plaintiff for indemnification because defendants, not plaintiff, were at fault for failing to reimburse plaintiff for their tortious conduct. In Count III, plaintiff alleged that defendants had a duty to disclose to plaintiff that they had not paid the 2021 taxes and that they breached that duty. In Count IV, plaintiff alleged that defendants’ intentional retention of the money at issue constitutes both common law and statutory conversion. Finally, for Count V, plaintiff alleged that under the fraudulent conveyance doctrine, defendants were liable to plaintiff for the transfers from the entity defendants to the member defendants.

On May 3, 2023, Vail, Sierra, Newberry, and Carter (collectively, “the member defendants”) moved for dismissal for lack of personal jurisdiction under MCR 2.116(C)(1). The member defendants noted that Vail is a Colorado company with no ties to Michigan and that Sierra is a Wyoming company with no ties to Michigan. Further, both Newberry and Carter resided in Colorado and had no property, operations, or business in Michigan. The member defendants maintained that they were not parties to the purchase agreement and, as such, had no substantial contacts with Michigan. They were either members of Mill Creek or members of the members of Mill Creek. They argued that jurisdiction was not proper under Michigan’s long-arm statutes or under concepts of due process. In response, plaintiff argued that because Mill Creek certainly was

1 Danny Newberry signed the resolution on behalf of Vail, and Jeff A. Carter signed the resolution on behalf of Sierra. 2 Plaintiff later conceded that because of when the taxes were due and when the closing occurred, the buyer and seller were each responsible for approximately 50% of the taxes owed.

-2- conducting business in Michigan, then its members (and the members of those members) were as well.

The trial court ruled from the bench in favor of the member defendants. The trial court ruled that because the term “transaction” in Michigan’s long-arm statutes are to be construed very broadly, the member defendants met the statutory requirements. But the trial court nonetheless ruled that because of the lack of quality of the contacts (the member defendants were not acting for themselves during the transaction), the contacts were not substantial enough to satisfy due process, and it granted the motion to dismiss on the basis of a lack of personal jurisdiction.

In a separate motion, Mill Creek also moved under MCR 2.116(C)(8) and (10) for summary disposition of plaintiff’s five claims.3 Mill Creek argued that with there being no contract between it and plaintiff, and with plaintiff not being a third-party beneficiary of the contract, the Count I breach-of-contract claim fails as a matter of law. Regarding Count II’s implied-indemnity claim, Mill Creek argued that such a claim fails because plaintiff must be without any fault to maintain a claim. With plaintiff acknowledging that it erroneously put the $1 amounts in the settlement statement, it cannot be said that plaintiff was without fault. For Count III, Mill Creek argued that any claim for tort liability fails because it had no duty to correct the errors of plaintiff. Mill Creek also argued that the tort claim fails under the economic-loss doctrine, which precludes actions in tort where a claimant seeks to recover economic damages resulting from a commercial transaction. In a separate section of its brief, Mill Creek maintained that because Mongia, as the purchaser, was responsible for a portion of the at-issue 2021 summer taxes, any of plaintiff’s theories that survived summary disposition would apply against Mongia as well. Mill Creek therefore argued that should any of the claims survive the motion for summary disposition, Mongia must be joined to prevent prejudice to Mill Creek.

In response, plaintiff, in pertinent part, presented an assignment, which plaintiff suggested that purchaser, Mongia, assigned the claims to plaintiff. The assignment, however, assigned “only those claims that are against” Vail, Sierra, and Newberry. Thus, on its face, the assignment did not assign any claims Mongia had against Mill Creek.

The trial court again rendered its ruling from the bench.

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Bluebook (online)
Home Title Connect LLC v. Mill Creek LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/home-title-connect-llc-v-mill-creek-llc-michctapp-2024.