Woodbury v. Res-Care Premier, Inc.

814 N.W.2d 308, 295 Mich. App. 232
CourtMichigan Court of Appeals
DecidedJanuary 19, 2012
DocketDocket No. 297819
StatusPublished
Cited by7 cases

This text of 814 N.W.2d 308 (Woodbury v. Res-Care Premier, Inc.) 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
Woodbury v. Res-Care Premier, Inc., 814 N.W.2d 308, 295 Mich. App. 232 (Mich. Ct. App. 2012).

Opinion

Per Curiam.

In this property action, defendant Res-Care Premier, Inc., appeals as of right the trial court’s grant of summary disposition to plaintiffs, Scott and Jeanne Woodbury and Center Woods, Inc., after concluding that Center Woods had the right of first refusal to purchase the property known as #2 Center Woods and that defendant Ruth Averill failed to provide sufficient notice of the sale to Center Woods, as certain building and use restrictions require. The trial court’s decision thereby voided the sale between Averill and Res-Care. We reverse and remand.

[234]*234I. FACTS

A. THE PARTIES

Res-Care is a state-licensed operator of adult-foster-care facilities. Its name is short for “Respect and Care,” and its mission is “to assist people to reach their highest level of independence.” Res-Care provides rehabilitation and residential services to individuals with mental or developmental disabilities.

Defendant Ruth Averill purchased the property commonly known as #2 Center Woods (the property) in 1991 and subsequently sold it to Res-Care on September 25, 2009. That sale is at the heart of this litigation.

Plaintiffs Scott and Jeanne Woodbury are the owners of the property commonly known as #3 Center Woods, which is next door to the property.

Plaintiff Center Woods was incorporated as a nonprofit corporation in 1941. It was automatically dissolved under MCL 450.2922 in 1993 when it failed to file its annual report and failed to pay the annual filing fee for the second consecutive year. On October 13, 2009, the same day this action was filed, Center Woods filed renewal-of-existence papers with the state of Michigan.

B. THE ARTICLES OF AGREEMENT

In 1941, articles of agreement were entered into by the owners of the properties in the Center Woods Subdivision and filed in the property records. The articles provided, in relevant part, as follows:

NOW THEREFORE, IT IS AGREED by and between the parties hereto that all land in Center Woods, a subdivision .. . consisting of Lots One (1) to Twelve (12), inclusive, shall be subject to the following restrictions and covenants:
[235]*235These covenants are to run with the land and shall be binding on all parties and all persons claiming under them and shall remain in full force and effect until such time as they shall be modified or repealed by agreement entered into by the owners of at least seventy-five per cent (75%) of the lots contained in said plat.
If the parties hereto, or any of them, or their heirs or assigns shall violate, or attempt to violate, any of the covenants herein, it shall be lawful for any other person or persons owning any real property situated in Center Woods Subdivision to prosecute any proceedings at law or in equity against the person or persons violating, or attempting to violate, any such covenant.
Invalidation of any one of these covenants, or any part of any covenant, by judgment or court order shall in no way invalidate any of the other provisions which shall remain in full force and effect.
1. Center Woods shall be maintained as residential property only and no property shall be used for any trade, commercial, industrial, or any other use whether or not herein specified, except for single family dwellings.
12. All property owners in Center Woods shall be members of Center Woods, Inc., a non-profit corporation, organized to provide for the improvement and maintenance of Center Woods as a desirable residential community.
15. No property in Center Woods may be sold, assigned, mortgaged or conveyed to or let, leased, rented or occupied by Hewbrews, [sic] or by any persons other than those of the Caucasian (white) race.
16. No property in Center Woods shall be sold without first giving Center Woods, Inc. thirty (30) days notice thereof and first opportunity to purchase said property at a price equal to a bonafide offer.

[236]*236C. THE TRANSACTION

On July 10, 2009, Averill entered into a contract with Moshen H. Zadeh for the purchase of the property for $170,000. Closing was set for August 15, 2009. Zadeh was an investor of Res-Care. On July 20, 2009, Averill sent a memo addressed to Jack Short, the head of the homeowner’s association, and “Center Woods Association,” which provided:

My home is scheduled for “closing” of sale: August 14, 2009[.] And I expect to [be] moving on that date.
Since I have NOT received notification of three previous sales in The Woods ... I assume this stipulation is no longer necessary.
I do not know the buyer,. .. my realtor is Mary Klein, and the buyer’s realtor is Keller Wms (Flint office) [.]
Thank you for all your TLC of The Woods ... it has been a delightful place to live for eight years.

No one contacted Averill or her realtor regarding the pending sale. Zadeh was unable to obtain financing, so Res-Care decided to purchase the property on its own without Zadeh under the exact same terms as the Zadeh offer. Closing was scheduled to be on or before September 30, 2009, and actually occurred on September 25, 2009.

On October 7, 2009, Averill sent another memo to Short and Center Woods Association, but this time also addressed it to Suzanne Short and the Woodburys. The memo provided, in relevant part:

Subject: The sale of my home was delayed until September 18th[.] I am scheduled to move Monday, October 12th.
New Owner: ResCare Premier, Inc.....
Local Manager: Laura L. Smith ....
[237]*237When the identity of the buyers was revealed I talked personally with both Ron Lee and Tim Braun regarding zoning. They told me that “group homes” are exempt from the law and cannot be refused or discriminated from a neighborhood.
Tim Braun has enacted a Saginaw Township registry of rental homes to keep aware of the percentage of non-owners. I have sent him the names of the people who are responsible for the property and the maximum of six residents, who will have 24[-]hour supervision. They must comply with State mandated safety measures which have been installed.
During inspection, Laura emphasized that they expect to be “good neighbors”, and plan to invite neighbors to an open house when they are settled. Best Wishes.

When Jeanne Woodbury received the letter, she researched Res-Care on the Internet. Concerned that the home would be occupied by “troubled youth/sex offenders,” she sent an e-mail to Smith at the address provided in the second notice. Two days later, an “emergent” meeting of the homeowners in Center Woods and a board of directors meeting for Center Woods were held. Averill was not invited. At the meeting, the board was authorized to take steps to prevent “this improper use,” and the board authorized Woodbury to be “a committee of one, to meet with” a real estate specialist attorney, with legal action expected to be filed “within a day or two.”

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Related

Scott Woodbury v. Ruth Averill
Michigan Supreme Court, 2014
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304 Mich. App. 599 (Michigan Court of Appeals, 2014)
Barclae v. Zarb
834 N.W.2d 100 (Michigan Court of Appeals, 2013)

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Bluebook (online)
814 N.W.2d 308, 295 Mich. App. 232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/woodbury-v-res-care-premier-inc-michctapp-2012.