Thomas v. Dutkavich

803 N.W.2d 352, 290 Mich. App. 393
CourtMichigan Court of Appeals
DecidedOctober 28, 2010
DocketDocket No. 293229
StatusPublished
Cited by12 cases

This text of 803 N.W.2d 352 (Thomas v. Dutkavich) 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
Thomas v. Dutkavich, 803 N.W.2d 352, 290 Mich. App. 393 (Mich. Ct. App. 2010).

Opinion

Murphy, C.J.

Defendants Láveme and Marilyn Dutkavich appeal as of right the trial court’s order granting summary disposition in favor of plaintiff, Robert A. [396]*396Thomas, with respect to his action to quiet title to real property, a condominium unit, and his claim of slander of title. The order granting summary disposition in favor of Thomas also effectively dismissed a counterclaim filed by the Dutkaviches. This appeal requires us to interpret the Michigan judgment lien act (MJLA), MCL 600.2801 et seq., and to determine whether a judgment lien survives and can be foreclosed on after the judgment debtor’s conveyance of the encumbered real property to a vendee who had record notice of the lien, but no available closing proceeds were distributed to the judgment creditor in whole or partial satisfaction of the underlying judgment. The Dutkaviches, who were the underlying judgment creditors, had sought to levy or foreclose on the property, which Thomas had purchased from the underlying judgment debtor, Steve Pelletier, without any proceeds going to pay off the judgment lien despite sufficient funds being available to discharge the lien. The trial court found that Thomas was not at fault for Pelletier’s failure to use the closing proceeds to pay off the Dutkaviches, and the court ordered the discharge of the judgment lien. We hold that the MJLA, while not permitting the foreclosure of the judgment lien and not giving Thomas any statutory obligation to have made payment to the Dutkaviches, did require that the judgment lien remain attached to the property. We also hold, however, that outside the MJLA, the Dutkaviches may be able to levy on the property pursuant to MCL 600.6018, which is the traditional method of executing on realty to satisfy a judgment. A remand is necessary to explore the issue of levying pursuant to MCL 600.6018. Therefore, the trial court erred by discharging the judgment lien and erred by not considering MCL 600.6018. Consistently with our holding, the Dutkaviches’ counterclaim seeking to hold Thomas personally liable was properly dismissed; [397]*397Thomas’s slander-of-title claim should have been dismissed; Thomas’s quiet-title count should have been dismissed with regard to his request that the court discharge the judgment lien; and, with regard to levy and foreclosure under the quiet-title count, Thomas was entitled to the favorable ruling relative to the MJLA, but levying under MCL 600.6018 needs to be examined on remand. Accordingly, we affirm in part, reverse in part, and remand.

I., factual and procedural background

On December 6, 2004, in the Delta County Circuit Court, the Dutkaviches obtained a judgment against Steve Pelletier in the amount of $29,183.1 A warranty deed, executed on December 29, 2006, and recorded on January 24, 2007, indicates that Pelletier purchased the real property at issue, a condominium unit located in Schoolcraft County, from Miller Point Development, L.L.C. Pelletier is the only vendee named in the warranty deed. A future-advances mortgage, executed on December 29, 2006, and recorded on February 7, 2007, reflects that Pelletier, along with his wife Kelly Jo Pelletier, obtained a mortgage on the property from the State Savings Bank of Manistique (mortgagee bank).

On July 20, 2007, the Dutkaviches filed a notice of judgment lien with the register of deeds office in Schoolcraft County with respect to the condominium unit. The notice provided that the balance owing on the judgment had increased to $33,368. On September 12, 2007, a real estate closing was held in which Steve and [398]*398Kelly Jo Pelletier executed a warranty deed conveying the property to Thomas. The warranty deed was recorded the following day. The mortgage on the property held by the mortgagee bank, with the Pelletiers as mortgagors, was discharged the day before the closing. According to the warranty deed and the closing statement, the sale price for the property was $53,000. The settlement information contained in the closing statement indicates that, after taking into account the payment of taxes, title insurance, and closing fees, the Pelletiers were paid $51,784.2 None of the proceeds from the sale were distributed to the Dutkaviches; there was no effort to satisfy the judgment lien despite the undisputed fact that the notice of judgment lien had been recorded before the closing. The trial court record does not include any documentary evidence concerning conversations at the closing or how the closing was conducted, let alone evidence revealing why the parties decided to proceed without designating a payment for the Dutkaviches. The closing documentation reflects that Fox Real Estate, Inc., was involved in the transaction.

On January 18, 2008, pursuant to a request by the Dutkaviches, the Delta Circuit Court entered an order to seize property relative to the judgment, which now had grown to $33,556, given accruing interest and postjudgment costs. A report of collection activity under the order to seize property reveals that a deputy sheriff was unable to locate any personal property held by Steve Pelletier that exceeded the statutory exemption. About a week later, in February 2008, a notice of levy on real estate was executed and recorded by a deputy sheriff with the Schoolcraft County Sheriffs Department.

[399]*399On March 2, 2009, Thomas filed the instant quiet-title action in the Schoolcraft Circuit Court against the Dutkaviches and the Schoolcraft County Sheriff (SCS). Count I of the complaint, which pertained to all defendants, alleged that Thomas had purchased the property from the Pelletiers, that Steve Pelletier, but not his wife Kelly Jo, was subject to the Delta Circuit Court judgment obtained in favor of the Dutkaviches; that , the Dutkaviches had recorded the notice of judgment lien before the sale of the property to Thomas; and that the Dutkaviches, through the efforts of a deputy sheriff employed by the SCS, had recorded the notice of levy on real estate following the sale. Plaintiff further alleged, as part of count I, that he owned the property free and clear of the Dutkaviches’ interest and that, under MCL 600.2819, there could be no foreclosure on the lien and Thomas could not be held liable to the Dutkaviches. MCL 600.2819 provides:

There is no right to foreclose a judgment lien created under this chapter. At the time the judgment debtor makes a conveyance, as that term is defined in section 35 of 1846 RS 65, MCL 565.35, of, sells under an executory contract, or refinances the interest in real property that is subject to the judgment lien, the judgment debtor shall pay the amount due to the judgment creditor, as determined under [MCL 600.2807(3)], to the judgment creditor.

According to Thomas, because the notice of levy was recorded after he purchased the property and after Steve Pelletier no longer held any interest in the property, the notice of levy was invalid under the MJLA. In count II of the complaint, Thomas alleged slander of title against the Dutkaviches, claiming that they had refused to discharge the judgment lien despite his requests for discharge and that their refusal constituted malice. In his prayer for relief, Thomas asked the trial court to declare the judgment [400]*400lien and notice of levy void and order them discharged, to declare the warranty deed conveying the property to Thomas as superior to any interest held by the Dutkaviches, and to compensate Thomas for the damages and costs that he had incurred as a result of the slander of title.

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Bluebook (online)
803 N.W.2d 352, 290 Mich. App. 393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-v-dutkavich-michctapp-2010.