Wilson v. Taylor

577 N.W.2d 100, 457 Mich. 232, 1998 Mich. LEXIS 1295

• Court: Michigan Supreme Court
• Decided: May 6, 1998
• Docket: 105906, Calendar No. 5
• Status: Published

Opinions

Cavanagh, J.

In this case, we are called on to decide whether a defendant against whom a land contract forfeiture judgment has been obtained must pay an amount, representing the monthly payments under the contract, in excess of the judgment to preclude entry of a writ of restitution.¹ For the reasons detailed below, we reverse the decision of the Court of Appeals and conclude that the writ of restitution in this case was issued improperly.

i

Defendants in this case are husband and wife. They entered into a land contract for a two-unit residential property with Lynette Marie Luft in August 1989. In January 1992, Luft assigned her interest in that contract to the plaintiffs, two attorneys. In April 1992, plaintiffs commenced a forfeiture action in the 12th District Court. Plaintiffs voluntarily dismissed that action, and then filed a second forfeiture notice in August 1992.² It is this action from which the present appeal arises.

On October 27, 1992, the defendants, who were not represented by counsel, consented to entry of judgment in favor of the plaintiffs for $2,000. In a brief hearing,³ both defendants acknowledged that $2,000 was “due and owing.” Ms. Taylor also replied affirmatively when the court inquired if she was familiar with the terms outlined in the judgment. The defendants agreed with the court that, because less than half the total contract had been paid, the redemption period would be ninety days. Finally, plaintiff Rappleye also agreed with the court that $2,000 was the redemption amount.

The plaintiffs drafted the judgment on a standard State Court Administrative Office approved form. Included in this judgment, in paragraph 6, “Further Orders,” was a provision that “all monies paid during redemption period shall first be applied to keep payments current and then to the outstanding judgment amount.” This provision was not specifically mentioned on the record by the parties or the court, nor did the parties sign this judgment in the space provided for approval of content and form.

Between October 27, 1992, and the end of January 1993, the defendants paid the plaintiffs a total of $1,800. On February 5, 1993, after the redemption period had expired, but before any further action in this matter, the defendants paid an additional $350 to the plaintiffs, bringing the total amount paid to $2,150. Nonetheless, the plaintiffs moved for issuance of a writ on the ground that, following the “further orders” language, and applying the bulk of the monies paid to the $1,600 that had become due under the contract,⁴ the defendants remained significantly in arrears.⁵

The district court held a hearing on the motion on February 9, 1993. At that hearing, the plaintiffs presented a stipulation, signed by the defendants, that the “outstanding balance which was due and owing has not been paid in full,” and agreeing that the defendants would have until February 18, 1993, to pay the $1,450 still owing, or a writ of restitution would be entered at any time thereafter. The stipulation was presented to the court at the hearing on the motion, and the court entered an order in accordance with it. The defendants again were unrepresented by counsel. The transcript of this hearing reveals that the court was aware of the “further orders” language, but at no time does it appear that the court was made aware of the fact that, at the time of the hearing, $2,150 had been paid to the plaintiffs.⁶

The defendants did not make any further payments before February 18, 1993, and, on that day, the plaintiffs applied for and received a writ of restitution ex parte. The application for the writ indicated the “No payment has been made on the judgment and/or no rent has been received since the date of judgment, except the sum of $1,400.00 received under the following conditions: per the judgment.”⁷

While plaintiffs undertook actions to evict the defendants, while simultaneously offering them the option of renting the premises, the defendants, for the first time, obtained counsel to represent them in this matter. Counsel immediately moved for a stay of and relief from the judgment. Following a hearing, the district court denied the motion.

Defendants appealed in the Jackson Circuit Court, which affirmed. In the course of this appeal, an appeal bond and escrow order was entered, requiring the defendants to continue their $400 land contract payments each month. The circuit court continued the appeal bond and escrow order to allow the defendants to proceed in the Court of Appeals. The defendants claim in this Court that they have continued to make every monthly payment since the entry of the escrow order, and the plaintiffs do not dispute that.

The Court of Appeals, in an unpublished per curiam opinion,⁸ affirmed in part and reversed in part. Finding the district court to have erred in the application of the “further orders” language, the Court of Appeals held that such language was an “improper ‘clog’ on defendants’ right of redemption.”⁹ The Court then affirmed the result, however, on the ground that the failure to make the monthly payments constituted a separate material breach and a proper ground for the issuance of the writ of restitution.

We granted leave to appeal to address this issue, which may affect a substantial number of land contract vendors and vendees, and invited the Michigan State Bar Real Property Law Section to file a brief amicus curiae.¹⁰ We now affirm in part, and reverse in part.

n

The question before us concerns the appropriateness of the Court of Appeals sanctioning the use of summary forfeiture proceedings to enforce the payments due on the underlying land contract that accrue after a judgment has been entered, but prior to the issuance of a writ of restitution. The Court of Appeals held that the failure to make such payments constituted a material breach under the contract sufficient to support the issuance of a writ of restitution. We review this question of law de novo. Cardinal Mooney High School v Michigan High School Athletic Ass’n, 437 Mich 75; 467 NW2d 21 (1991).

A

The concept of forfeiture in the land contract setting has undergone a substantial evolution under Michigan law. Originally, a common-law forfeiture ended the land contract. The seller was discharged from his duty to convey, and the purchaser was discharged from his duty to pay. See Stevens v Most, 251 Mich 23; 231 NW 47 (1930). In Stevens, this Court examined a situation similar to the instant case. The defendant in Stevens argued that the notice of forfeiture operated to terminate his duty to pay, and hence he should be able to redeem the contract by paying the amount stated in the notice of forfeiture.

This Court rejected that argument, reasoning:

This method would cause a multiplicity of suits and serve no useful end. We believe that the practice heretofore generally followed of including all amounts due up to the date of the judgment is correct, and carries out the intent and purpose of the present statute. [Id. at 27.]

This same concern resonated in the views of the circuit court below. While the argument was abandoned here, the plaintiffs did advocate such a concern below. While we agree that such a concern can, in some circumstances, be very legitimate, we do not find it so here.

In Gruskin v Fisher, 405 Mich 51; 273 NW2d 893 (1979), we addressed the area of land contract forfeitures as concerning the issue of election of remedies. We noted that, historically, the effect of the service of a notice of forfeiture was to end the contract, and, thus, was an election of remedies. Under modem summary proceeding practice, however, we found that a notice of forfeiture actually acted more as a condition precedent to the commencement of summary proceedings. In modem practice, including summary proceedings under the Revised Judicature Act, MCL 600.5701 et seq.; MSA 27A.5701 et seq., a seller may pursue alternative remedies until a writ of restitution has been entered, even after a judgment of possession has been entered. Id. at 66-67.

We have recently restated the belief that the Revised Judicature Act is a codification of the common-law rule of election of remedies, with some arguable modifications. Michigan Nat’l Bank, Trustee v Cote, 451 Mich 180; 546 NW2d 247 (1996). While we do not return to the issues underlying Gruskin or Cote today, we are confident that the option of instituting a foreclosure action, as opposed to a forfeiture action, existed for the plaintiffs when they filed their initial claim.¹¹ Indeed, we note that the plaintiffs earlier had filed and then dismissed a forfeiture action, for reasons that are not clear from the record. Whatever their reasons, the possibility of the need to file repeated forfeiture actions appears to have been more than an abstract concept to the plaintiffs. Nonetheless, they chose to forgo the acceleration advantages of a foreclosure action in favor of the ease of a summary forfeiture proceeding.

This leads us to dispose of the problem that so troubled the circuit court and was a basis of arguments for the plaintiff below. A land contract vendor in the plaintiffs’ position need never face the difficulty of being required to institute a multiplicity of suits. Such a vendor has another option: he may commence a foreclosure action. The Court hardly needs to concern itself with protecting the vendor from postjudgment defaults. The vendor has the option of protecting himself by instituting a foreclosure action.¹²

B

We note that while the defendants and amici curiae urge us to address the question of a clogging of the equity of redemption, we are in fact not properly presented with that issue. The Court of Appeals ruled in favor of the defendants on this issue, and the plaintiffs filed no appeal or cross-appeal on this issue. Before this Court, the plaintiffs present a one-sentence argument with no citation to authority. On its face it is unclear what issue, if any, that sentence attempts to raise. More importantly, a mere statement without authority is insufficient to bring an issue before this Court. It is not sufficient for a party “simply to announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority either to sustain or reject his position.” Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959).¹³ Accordingly, we need not address this issue, and therefore, decline to do so.¹⁴

To be thorough, however, and also to provide guidance to the bench and bar, as requested by the amici curiae, we note that to the extent that plaintiffs raise any question at all regarding the “further orders” language being viable, such language must fail as being contrary to the statute. MCL 600.5741; MSA 27A.5741 states:

If the jury or the judge finds that the plaintiff is entitled to possession of the premises, or any part thereof, judgment may be entered in accordance with the finding and may be enforced by a writ of restitution as provided in this chapter. If it is found that the plaintiff is entitled to possession of the premises, in consequence of the nonpayment of any money due under a tenancy, or the nonpayment of moneys required to be paid under an executory contract for purchase of the premises, the jury or judge making the finding shall determine the amount due or in arrears at the time of trial which amount shall be stated in the judgment for possession. In determining the amount due under a tenancy the jury or judge shall deduct any portion of the rent which the jury or judge finds to be excused by the plaintiff’s breach of the lease or by his breach of 1 or more statutory covenants imposed by section 39 of chapter 66 of the Revised Statutes of 1846, as added, being section 554.139 of the Compiled Laws of 1948. The statement in the judgment for possession shall be only for the purpose of prescribing the amount which, together with taxed costs, shall be paid to preclude issuance of the writ of restitution. The judgment may include an award of costs, enforceable in the same manner as other civil judgments for money in the same court. [Emphasis added.]

The statute clearly requires that the amount stated shall prescribe the amount to be paid to preclude issuance of the writ. Here the amount stated in the judgment was $2,000. The “further orders” language operated to circumvent this amount and purported to require that an amount in excess of the $2,000 stated actually would be required to prevent issuance of the writ. We find this language operated contrary to the statute, and, thus, was erroneously entered.

c

We now address the holding of the Court of Appeals that the failure to make monthly payments during the redemption period was a material breach sufficient to justify issuance of the writ of restitution. In so finding, the Court of Appeals relied on MCL 600.5744(6); MSA 27A.5744(6), which states:

When the judgment for possession is for nonpayment of money due under a tenancy or for nonpayment of moneys required to be paid under or any other material breach of an executory contract for purchase of the premises, the writ of restitution shall not issue if, within the time provided, the amount as stated in the judgment, together with the taxed costs, is paid to the plaintiff and other material breaches of an executory contract for purchase of the premises are cured.

While we agree that this subsection applies to this question, we find that the Court of Appeals erred in interpreting it. The statute quoted prevents the issuance of a writ of restitution if payment is made in an amount provided in the judgment and other material breaches are cured. The statute separates “nonpayment of moneys required to be paid,” from “any other material breach.” It clearly divides monetary and non-monetary breaches. It seems clear that whatever the other material breaches may be, they do not include the failure to make monetary payments.

To hold otherwise would nm contrary to the specific language of the statute and logic. A writ of restitution is issued only upon a failure to pay the amount specified in the judgment. To permit its issuance upon a failure to pay some other amount, under the context of a “material breach,” would be to allow the writ to be issued on the basis of a failure to pay an amount that has never been subject to proof before the court.

As we have already noted, MCL 600.5741; MSA 27A.5741 requires only that the amount of the judgment need be paid to preclude the issuance of the writ of restitution.¹⁵ While some other nonmonetary material breach, which was specified in the judgment for possession, might need to be cured to preclude the issuance of a writ of restitution, we hold that the amount specified in the judgment is the only monetary payment that needs to be made to preclude the issuance of a writ of restitution in a land contract forfeiture proceeding under the Revised Judicature Act. The Court of Appeals erred in holding otherwise.¹⁶

m

As we have noted, the Court of Appeals found that the reason relied on by the trial court for the issuance of the writ, the failure of the defendants to comply with the “further orders” language, was erroneous. We are not called on to review that decision. The sole remaining basis supporting the writ’s issuance, the holding of the Court of Appeals that the writ was properly issued on the basis of a material breach was error and is reversed. The writ of restitution is, therefore, quashed.¹⁷

Mallett, C.J., and Brickley and Kelly, JJ., concurred with Cavanagh, J.

1 The land contract summary forfeiture proceedings in question are governed by the Revised Judicature Act, MCL 600.5701 et seq.; MSA 27A.5701 et seq.

2 Plaintiffs also commenced a third action in July 1993, after the circuit court ruled in plaintiffs’ favor following defendants’ appeal from district court in the present case. That case was dismissed for a lack of progress in April 1994, and is not involved in this appeal.

3 The record indicates that the entire hearing took two minutes to complete.

4 The $1,600 figure represented four months of land contract payments of $400 a month.

5 The math applied by the plaintiffs merits further discussion. The plaintiffs’ motion for issuance of the writ of restitution, in paragraph 3, claimed the defendants had paid a total of $1,400, in amounts of $600 on October 27, 1992, $400 on December 15, 1992, and $400 on January 8, 1993. In paragraph 4, the motion claimed that $1,600 had become due under the contract since entry of the judgment.

Plaintiffs’ brief on appeal to this Court includes an attachment consisting of canceled checks and money orders received from the defendants. While the three amounts above appear on instruments with dates close to those above, an additional $400 check dated November 5, 1992 is included, along with a $350 check dated February 5, 1993.

While it is apparent that the $350 check was issued after the date the plaintiffs’ motion was signed, the absence of any mention of the November 5, 1992, check is troubling. The motion claims that defendants have “failed to pay the monies which were due on the payments which accrued during the redemption period and have paid nothing toward the outstanding balance on the Judgment of Land Contract Forfeiture.” Discarding the $350 check as not yet having arrived, the plaintiffs were admittedly in receipt of $1,800 at the time this motion was drafted. The plaintiffs claim $1,600 was due under the “further orders” language. Even if we were to adopt the plaintiffs’ reasoning and math, the defendants would have paid the entire amount that had become due as monthly payments, plus $200 toward the judgment amount (and all this before the last $350 payment). The plaintiffs’ statements in the motion appear to be irreconcilable with the checks that plaintiffs have presented to this Court and admit they received.

6 The transcript reveals this hearing took three minutes to complete.

7 Again, the plaintiffs’ math invites inquiry. This application was signed on February 18, 1993, by which time the plaintiffs were in receipt of $2,150. While plaintiffs attempt to argue that some of these payments were to be applied to monthly payments, and others to the judgment amount, this position is in conflict with their claim that the “further orders” language is controlling and that all payments first must be applied to the monthly amounts accruing. Moreover, even following plaintiffs’ arguments as they are included in their brief on appeal does not lead to any situation where the amount received “under the judgment,” even if we somehow discount amounts applied to ongoing monthly payments, equals $1,400.

In short, it appears that both the motion and the application for the writ of restitution significantly understate the payments actually received, and the plaintiffs’ various competing rationales all fail to support the claims made in the application for the writ.

8 Issued January 5, 1996 (Docket No. 164978).

9 This portion of the decision of the Court of Appeals was not appealed by the plaintiffs, and, hence, is not before this Court.

10 454 Mich 921 (1997). The Court has benefited from the amici curiae briefs filed in this matter. Plaintiffs’ “brief’ is indeed just that, it contains one page of counter statement of facts and one sentence of argument with no citation of authority.

11 Likewise, under Gruskin, it seems that the plaintiffs could have elected to seek foreclosure rather than seek a writ of restitution. What the plaintiffs tried to do is what Gruskin spoke of at some length, take advantage of a less sophisticated party. Id. at 69, n 13. The plaintiffs sought the speed of forfeiture, but tried to also collect as much of the payments as would become due under the contract in the interim of the redemption period. Nothing in Gruskin strikes us as holding permissible the actions taken in this case. It is the next section of our analysis, however, that is dispositive.

12 The dissent fears that vendors will find themselves on a “litigation treadmill” (post at 255), apparently because foreclosure proceedings are inherently more complex than summary procedure forfeiture remedies, and hence not a realistic alternative. We disagree. The Legislature has granted vendors two alternative remedies, one that is very rapid, but does not allow for a recovery of all payments due under the contract, and one that is more complex, but does allow a full recovery. We simply decline to judicially legislate some provisions from the latter into the former. Despite having previously filed a case against defendants, then dismissing it, plaintiffs still elected a summary forfeiture proceeding. Even so, as we noted in Gruskin, supra at 66-67, the option of pursuing a foreclosure remedy remained open to the plaintiffs, even after the entry of a judgment of possession. If, before the entry of the writ, plaintiffs had decided that the four months’ worth of payments were more important to them than immediate possession of the property they had the option to commence a foreclosure proceeding. Rather, they chose to seek a writ of restitution, and, hence, forgo any amount greater than the specifically stated judgment amount.

The dissent’s citation of Gruskin for the proposition that forfeiture proceedings should not be encouraged arrives without the necessary context. As we noted immediately before that statement, “[land contract] sellers do not seek a return of property, but payment.” Gruskin at 63. We noted the availability of summary forfeiture proceedings, which “move expeditiously and generally accomplish their purpose of persuading the purchaser to cure the delinquency.” Id. at 64. “If it appears that the purchaser does not desire or intend to perform and is willing to surrender his equity, then the seller must make a decision and, under the statute, is put to an election of remedies. He may accept possession or, if he wishes to obtain a deficiency judgment, abandon the summary proceedings in favor of foreclosure action.” Id. Contrary to the dissent’s implication, our decision in Gruskin hardly amounts to a wholesale disfavoring of foreclosure actions.

13 While Justice Voelker’s statement expresses the point in a most eloquent fashion, this has been the rule in Michigan long before his statement, and long after. See, e.g., Arrand v Graham, 297 Mich 559; 298 NW 281 (1941), and Speaker-Hines & Thomas, Inc v Dep’t of Treasury, 207 Mich App 84, 90-91; 523 NW2d 826 (1994).

14 The dissent of Justice Taylor suggests that we are, in effect, being wilfully blind of the possible effect of Flynn v Korneffel, 451 Mich 186; 547 NW2d 249 (1996). We disagree. We are called on only to answer a simple question: Did the Court of Appeals err in determining that the failure to pay the monthly payments was a “material breach” under MCL 600.5744(6); MSA 27A.5744(6). We find the answer to clearly be yes, and note that a close reading of Justice Taylor’s dissent finds that he does not disagree. The difference, then, is that we are content merely to conclude the task at hand, rather than continue onward toward some particular conclusion, or decide the applicability of a particular case to the facts before us, where that case was not even cited by any of the parties or amici curiae. Accordingly, we should not, and do not, express any opinion regarding the effect of Flynn to these circumstances, as we are simply not called on to do so.

15 As well it should. Were we to adopt the dissent’s view, we would be condoning the use of a writ of restitution to hold a party liable for amounts never subject to proof before the trial court. The mere fact that defendants offered no defenses to the payments due before the entry of judgment does not preclude the possibility that legitimate defenses might exist to some all the payments otherwise due after the entry of judgment.

It seems clear that the court should not be authorizing the entry of a writ on the basis of the owing of an amount that has never been (1) accurately ascertained, or (2) even been proven to be owed before the court.

16 We again note that none of the parties have raised the issue what effect, if any, the defendants’ payment of the last $350 after the period of redemption should have on this case. Accordingly, we are not called on to address this matter and decline to do so.

17 To the extent the dissent seems to find our decision to call into question all manner of contracts, we simply do not do so. This case is decidedly unusual, and the factual situation herein is likely not to be repeated often. Which is not to say, of course, that land contract forfeiture cases are uncommon. We today simply restate our Gruskin explanation of the differences between summary forfeiture and foreclosure proceedings, and the availability of each. Individual vendors must select their remedies on the basis of their situations.