If this opinion indicates that it is “FOR PUBLICATION,” it is subject to 

revision until final publication in the Michigan Appeals Reports.

S T A T E O F M I C H I G A N

C O U R T O F A P P E A L S

CITY OF DEARBORN,

Plaintiff/CounterdefendantAppellee,

UNPUBLISHED

February 12, 2019

v No. 339704

Wayne Circuit Court

BANK OF AMERICA, LC No. 15-012788-CH

Defendant/Cross-DefendantAppellee,

and

WEST DEARBORN PARTNERS LLC,

Defendant/Counterplaintiff/CrossPlaintiff-Appellant.

Before: STEPHENS, P.J., and K. F. KELLY and TUKEL, JJ.

PER CURIAM.

Defendant/Counterplaintiff/Cross-Plaintiff/Appellant, West Dearborn Partners, LLC 

(“West Dearborn”), appeals an order quieting title to certain property (or “Parcel C”), in favor of 

Plaintiff/Counterdefendant/Appellee City of Dearborn (“the City”) and against any interests of 

West Dearborn and Defendant/Cross-Defendant/Appellee Bank of America (“BOA”).1 

 1 Though listed as an appellee, BOA has not filed a notice of appearance and is not participating 

in this appeal.
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I. BASIC FACTS

On April 23, 2003, the City and an entity known as West Village Commons, LLC (“West 

Village2“) entered into a development agreement whereby West Village would develop certain 

property for residential and office use. In exchange, the City agreed to procure all the necessary 

property for construction and construct parking garages. The City acquired the property and 

constructed the parking structures and, on May 9, 2005, sold Parcel C, as well as nearby Parcel 

A-3, to West Village by covenant deed, which included a declaration of covenants running with 

the land and its development. On May 11, 2005, BOA’s predecessor, Standard Federal National 

Association (“Standard Federal”), and West Village entered into a collateral assignment of 

developer’s rights whereby Standard Federal loaned West Village $2,975,000 in exchange for a 

mortgage on the property. 

West Village failed to fulfill its obligations, resulting in protracted litigation in City of 

Dearborn v Burton-Katzman Dev Co, Inc, Wayne County Circuit Court Case No. 09-001342-

CK.3 West Village filed for Chapter 7 bankruptcy in the United States District Court for the 

Eastern District of Michigan, Case No. 10-66748-MBM. On October 5, 2011, the bankruptcy 

court entered an order directing the Trustee to abandon the property via quitclaim deed to the 

City. Bankruptcy Judge Marci B. McIvor’s order provided: 

The Trustee is directed to promptly abandon the Debtor’s real property . . .via 

quitclaim deed to the City of Dearborn, in form reasonably satisfactory to title 

City of Dearborn and consistent with this Order, pursuant to sections 105(a) and 

554(b) of the Bankruptcy Code. Such abandonment shall not impair, and the 

Property shall remain subject to, all claims, liens, interests, rights and obligations 

of record. [Emphasis added.]

Thereafter, in consideration of $1, the City received Parcel C via quitclaim deed on October 17, 

2011. The deed was recorded on October 20, 2011.

The City brought a quiet title action against BOA, arguing that BOA’s failure to complete 

the development plans in accordance with the development agreement, covenant deed, and 

restrictive covenants resulted in an abandonment of its interest. In response, BOA indicated that 

it did not claim nor did it hold an interest in the subject property because it had assigned its 

interest to West Dearborn on March 31, 2011. The assignment was signed by BOA Senior Vice 

President Mark Mokelke.4 

 2 Though similarly named, there is no connection between West Dearborn and West Village.

3 See City of Dearborn v Burton-Katzman Dev Co Inc, unpublished opinion of the Court of 

Appeals, issued December 18, 2014 (Docket Nos. 309758 and 313213).

4 Although the assignment of mortgage is made in favor of “West Dearborn Partners, LLC” on 

the cover page, the signature page shows the assignee as “West Village Partners, LLC.” Again, 

West Dearborn and West Village are separate and unrelated entities.
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As a result of BOA’s answer, the City filed an amended complaint, adding West 

Dearborn as a defendant. The City alleged that the March 31, 2011, assignment to West 

Dearborn was never recorded and, therefore, West Dearborn failed to protect whatever interest it 

had in the property. As to BOA, the City alleged that, regardless of the assignment, BOA had 

relinquished its interest in Parcel C when it filed a discharge of mortgage with the Wayne County 

Register of Deeds on August 14, 2015. The discharge was the result of a separate lawsuit 

regarding the separate, but related, Parcel A-3. After a tax forfeiture in 2014, Parcel A-3’s new

property owner sued BOA for quiet title. Rather than cite to its lack of interest in the property, 

BOA vigorously defended itself as mortgagee. The trial court in that case ordered that BOA 

discharge its interest as to Parcel A-3. Ultimately BOA discharged its mortgage as to both Parcel 

A-3 and Parcel C. 

West Dearborn filed an answer and counterclaim on December 28, 2015. West Dearborn 

argued that recording the March 31st assignment was of no consequence where the City had 

actual notice of West Dearborn’s interest. West Dearborn alleged that the bankruptcy 

proceeding demonstrated that the City was well aware of West Dearborn’s interest. As such, the 

City was not a bona fide purchaser and West Dearborn had superior rights to the property.5

Believing that the bankruptcy order would be of significant interest, West Dearborn filed 

a motion to confirm the scope of the bankruptcy court’s order in the bankruptcy court. On 

December 21, 2016, Bankruptcy Judge McIvor denied West Dearborn’s motion to confirm the 

scope of its previous order. Shortly thereafter, BOA, the City, and West Dearborn each filed 

competing motions for summary disposition. 

BOA continued to maintain that it had no claim to the property. Still, BOA felt 

compelled to respond to the City’s questioning of the veracity of the March 2011, assignment to 

West Dearborn. Specifically, BOA indicated that its employee, Sara Allen, as a result of an 

error, executed and caused to be recorded a discharge of construction mortgage as to Parcel C. 

For that reason, BOA executed a Confirmation, Release, and Waiver of Claim of Right to Real 

Property. Although BOA claimed no interest in Parcel C, it indicated that the parties were 

nevertheless unable to agree to a consent judgment. BOA argued that the validity of the 

assignment had no bearing on keeping BOA as a party.

The City argued that any interest West Dearborn had in Parcel C was extinguished by the 

bankruptcy court due to West Dearborn’s failure to record the assignment and any harm to West 

Dearborn from the bankruptcy court’s order was due to its own negligence or deliberate decision 

not to record the assignment. Although West Dearborn implied that it could not file earlier 

because it was unable to locate Mokelke to obtain his acknowledgement on the assignment, 

Mokelke’s contact information would have remained the same until his May 1, 2012 transfer to 

California. Sara Allen was still with his group and had the ability to reach him. The City further 

argued that, even if the bankruptcy court’s order did not extinguish West Dearborn’s interest, 

BOA’s August 2015 discharge did. The City also argued that the acknowledgments in the 

assignment were invalid. Finally, the City argued that equity demanded that West Dearborn’s 

 5 West Dearborn recorded the assignment on December 17, 2015.
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interest be extinguished or rescinded based on West Dearborn’s unreasonable and unjustifiable 

delay in recording the assignment over four years after it was signed.

West Dearborn noted that its attorney, Scott Lites, testified that he had to track down 

Mokelke to get his signature acknowledged in order to record the assignment and, because 

Mokelke had been transferred, Lites was unable to get the requisite acknowledgement page until 

July 2014. Lites didn’t feel any real urgency nor did he feel compelled to keep track of his 

efforts because, as far as he was concerned, the City acknowledged West Dearborn’s interests 

during the bankruptcy proceedings. When Lites recorded the assignment he knew that there was 

an error in the assignment – West Village instead of West Dearborn as signatory – but made no 

attempt to correct it because an assignee is not even required to sign the assignment; instead, it 

was BOA’s form and BOA was the assignor.

West Dearborn explained that it had decided to let certain condominium units (Parcel A3) “go down for unpaid property taxes.” BOA’s representative, Sara Allen, testified that, due to 

a brain injury, she had forgotten about the March 31, 2011, assignment when she drafted the 

discharge that was ordered in the separate quiet title action regarding Parcel A-3. Allen 

acknowledged that there was nothing for BOA to discharge, given the transfer to West Dearborn 

in 2011. An affidavit of scrivener’s error was filed on March 31, 2016, indicating that BOA 

didn’t mean to include Parcel C in the mortgage discharge. 

West Dearborn argued that its interest had priority over the City’s fee interest because the 

City was not a bona fide purchaser, having paid only $1 for Parcel C just months after West 

Dearborn paid $150,000. More importantly, West Dearborn argued that the City had actual 

notice of the assignment, as demonstrated by the bankruptcy court documents and transcripts. 

West Dearborn argued that actual knowledge prevented the City from claiming that it is a good 

faith purchaser under MCL 565.29. 

Even if the bankruptcy’s order was read as the City would like, West Dearborn 

maintained the pre-existing BOA mortgage was a lien or interest of record. West Dearborn 

argued: “the term ‘interest’ here as set forth both in the Order and Deed can clearly be construed 

to relate to the Mortgage itself and not as to who happens to hold the interest at any particular 

point in time.” The mortgage was given to the mortgagee and its assigns and “[s]ince the 

Mortgage is joined at the hip with the Note, and since West Dearborn was the holder of the Note 

during the Bankruptcy, it is also the holder of the Mortgage and survived the Bankruptcy.” West 

Dearborn believed that the City took the property subject to the mortgage and assignment, of 

which it had actual knowledge. Moreover, West Dearborn asserted that there was no law 

requiring an assignment be recorded unless the property was to be foreclosed by advertisement.

Finally, West Dearborn argued that BOA’s subsequent 2015 discharge had no effect on 

Parcel C because BOA had nothing to discharge.

The trial court granted the City’s motion for summary disposition and denied BOA’s and 

West Dearborn’s motions for summary disposition, finding that any interest West Dearborn had 

acquired was extinguished by the bankruptcy court’s order and West Dearborn’s failure to record 

the assignment. The trial court declined to reach the alternative arguments that BOA’s 2015 

discharge extinguished the assignment or that deficiencies in the assignment rendered the 
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assignment invalid. The trial court denied West Dearborn’s motion for reconsideration and 

West Dearborn now appeals as of right. 

II. ANALYSIS

On appeal, West Dearborn argues that the trial court erred in granting the City summary 

disposition.

“This Court reviews de novo a circuit court’s decision whether to grant or deny summary 

disposition.” Joseph v Auto Club Ins Ass’n, 491 Mich 200, 205; 815 NW2d 412 (2012). 

West Dearborn argues that the bankruptcy court’s order did not extinguish its interest in 

Parcel C because the original 2005 mortgage remained a lien “of record.” West Dearborn argues 

that, as the assignee, it stood in the place of BOA, the assignor, and priority for the assignment 

related back to date of the original mortgage. West Dearborn cites Coventry Park Homes Condo 

Ass’n v Federal Nat’l Mtg Ass’n, 298 Mich App 252; 827 NW2d 379 (2012) and Wilson v 

Campbell, 110 Mich 580; 68 NW 278 (1896), for the principle that “an assignee stands in the 

shoes of an assignor, acquiring the same rights and being subject to the same defenses as the 

assignor” and “[w]hen a mortgage is assigned, the assignee, for all beneficial purposes claimed 

under it by him, becomes a party to the mortgage, and stands in the place of the mortgagee.” 

Coventry, 298 Mich App at 256-257, citing Wilson v Campbell, 110 Mich at 588-589. West 

Dearborn also cites Equitable Trust Co v Milton Realty Co, 263 Mich 673, 676; 249 NW 

30(1933), arguing that when the note was sold and transferred to West Dearborn, the mortgage 

was automatically held by West Dearborn. “A transfer or assignment of the obligation operates 

as an assignment of the mortgage . . .” Id., citing Jones v Titus, 208 Mich 392; 175 NW 257 

(1999). 

West Dearborn argues that nothing in the bankruptcy court’s order impacted its right as 

an assignee of BOA. However, West Dearborn’s reliance on Coventry is misplaced in this case. 

Coventry concerned the interpretation of the Condominium Act and the priority of mortgages, 

not the interpretation, relevancy, and effect of a bankruptcy court’s order. And, while generally 

an assignment of the note includes a transfer of obligation under the mortgage, the situation 

before us is particularly unique. West Dearborn paid BOA roughly 10% of what was due on the 

mortgage and did so while the property was subject to the bankruptcy proceedings. West 

Dearborn took a significant risk in seeking the assignment when it did. While the 2005 mortgage 

itself was still “of record” at the time of the bankruptcy proceeding, the assignment giving West 

Dearborn any interest was not. West Dearborn acknowledged as much when, in response to the 

Trustee’s request to sell the property, West Dearborn requested:

West Dearborn Partners LLC wishes for any Order of Sale to specifically 

provide that such sale of property is subject to not only the claims, liens and 

interest of record described in paragraph 9 of the Motion [to sell], but also subject 

to the interest of Bank of America now held by West Dearborn Partners LLC as 

assignee of Bank of America, including but not limited to the waived right of 

redemption. 
-6-

West Dearborn knew its unrecorded interest was at risk when it asked that any sale of property 

by the Trustee be subject not only to interests of record but also subject to West Dearborn’s 

unrecorded interest. The bankruptcy court’s order effectively extinguished any unrecorded 

interest when it later ordered the Trustee to abandon the property:

The Trustee is directed to promptly abandon the Debtor’s real property . . .via 

quitclaim deed to the City of Dearborn, in form reasonably satisfactory to title 

City of Dearborn and consistent with this Order, pursuant to sections 105(a) and 

554(b) of the Bankruptcy Code. Such abandonment shall not impair, and the 

Property shall remain subject to, all claims, liens, interests, rights and obligations 

of record. [Emphasis added.]

The bankruptcy court’s order itself required the assignment be recorded in order to have 

continued validity. 

Even if we accepted West Dearborn’s position that it stood in BOA’s shoes and had no 

obligation to record the assignment to protect its interest, then West Dearborn stood in BOA’s 

shoes when BOA later discharged the mortgage in 2015 as a result of a separate quiet title 

proceeding regarding Parcel A-3. West Dearborn argues that the discharge was invalid because 

BOA, having no interest in Parcel C, had nothing to discharge. West Dearborn wants to be 

relieved of any obligation to notify the world of its interest in Parcel C and yet be protected when 

chaos ensues. West Dearborn provides no satisfactory explanation for why it failed to record the 

assignment for over 4 1⁄2 years.

West Dearborn also raises equitable arguments. First, it claims that the City should be 

estopped from taking an inconsistent position from the position the City took in the bankruptcy 

court. West Dearborn argues that the City had actual notice of the 2011 assignment and West 

Dearborn’s interest in the property, as it indicated in the bankruptcy court, so it should not be 

allowed to now argue that West Dearborn had to further perfect its already perfected interest. It 

believes the City’s version of what was required by the bankruptcy court order is invalidated by 

the City’s own admissions. 

West Dearborn cites Mertz v Mertz, 311 Mich 46, 55; 18 NW2d 271 (1945), holding that 

equitable estoppel rests in broad principles of justice. “One may not take contradictory positions 

in asserting a right in court, if the assertion of plaintiff’s right in the first case involves a negation 

of the right as claimed in the second case.” Id. at 56. Permitting a party to do so “would make a 

mockery of legal proceedings, and be a travesty upon justice.” Id. at 58. “Judicial estoppel 

prevents a party from taking a position in a later proceeding that is inconsistent with a position 

that party took successfully in a prior proceeding.” Dykema Gossett, PLLC v Ajluni, 273 Mich 

App 1, 16; 730 NW2d 29 (2006), aff’d in part, vacated in part on other grounds 480 Mich 913 

(2007). However, “the mere assertion of inconsistent positions is not sufficient to invoke 

estoppel; rather, there must be some indication that the court in the earlier proceeding accepted 

that party’s position as true.” Id., quoting Paschke v Retool Industries, 445 Mich 502, 509–510;

519 NW2d 441 (1994).

In its August 16, 2011 objections to the Trustee’s proposal to sell the property, the City 

noted:
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18. The Sale Motion purports that the property will be sold subject to “all 

claims, liens, and interests of record without limitation,” including all terms and

conditions of the Covenant Deed and the Development Agreement. Sale Motion 

at ¶ 9. However, if the proposed sale were approved, the property would be sold 

in contravention of section 3.0l(e) of the Development Agreement and 

paragraph I(B) of the Covenant Deed, since it would be sold prior to 

completion of the development of Area C by Developer.

19. In the Sale Motion, [BOA] is identified as the holder of a mortgage on 

the Area C parcel. However, upon information and belief, [BOA] sold the note 

and mortgage associated with Area C to West Dearborn Partners, LLC (“West 

Dearborn Partners”) at the end of March 2011.

* * *

21. Notably, no explanation is provided by West Dearborn Partners as to 

why the documents effectuating the sale and transfer of the note and mortgage to 

West Dearborn Partners do not appear of record almost five months after the 

transaction.

Then, at the October 4, 2011 bankruptcy hearing, the City’s attorney indicated:

The other thing I wanted to highlight, your Honor, is the proposed order here. 

Our proposed order states very clearly in paragraph 2, among other things, that 

the abandonment – first of all, it contemplates a quit claim deed, and it says that 

such abandonment shall not impair and the property shall remain subject to all 

claims, liens, interests, rights, and obligations of record. The West Dearborn 

Partners, the mortgagee -- the holder of the mortgage and the note on the property, 

has indicated it wants to make sure that the property is subject to its rights and 

interests. This order already does that. So the rights of the holder of the mortgage 

are not prejudiced in any way by the abandonment here, and no other party other 

than the trustee has objected to the abandonment. And the trustee has just 

indicated that there is no value to the property to the estate, so we would suggest 

that our motion is proper, and we would ask that it be granted. 

West Dearborn’s position is problematic because (1) when considered in context, the City’s 

current position is not inconsistent with its prior position; and (2) the bankruptcy court did not 

rely on or accept any alleged statements as true before effectuating its order of abandonment. 

The City certainly questioned why the assignment had not been recorded. And the bankruptcy 

court’s order requiring that the property be abandoned had nothing to do with the validity of the 

assignment; instead, the focus was on whether the property was a burden to the bankruptcy 

estate. That was part of the reason the bankruptcy court declined to clarify its order and was 

content to let the order stand on its own.

Second, West Dearborn claims that the City’s position regarding the unrecorded 

mortgage is inconsistent with the City’s position regarding an unrecorded development 

agreement. The City had previously successfully argued that the unrecorded development 
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agreement applied to all future assigns, which stood in stark contrast with the City’s position that 

the assignment did not survive the bankruptcy court’s order. However, the mortgage documents 

expressly referenced the development agreement whereas the mortgage could not specifically 

mention and refer to an assignment that did not yet exist. More to the point, this case has 

nothing to do with the validity of the development agreement and, therefore, West Dearborn’s 

argument is wholly irrelevant. 

West Dearborn next argues that it had priority over the City’s fee interest because under 

MCL 565.29, the City was not a good faith purchaser. MCL 565.29 provides:

Every conveyance of real estate within the state hereafter made, which shall not 

be recorded as provided in this chapter, shall be void as against any subsequent 

purchaser in good faith and for a valuable consideration, of the same real estate or 

any portion thereof, whose conveyance shall be first duly recorded. The fact that 

such first recorded conveyance is in the form or contains the terms of a deed of 

quit-claim and release shall not affect the question of good faith of such 

subsequent purchaser, or be of itself notice to him of any unrecorded conveyance 

of the same real estate or any part thereof.

West Dearborn points to the fact that the city paid only $1 for Parcel C and MCL 565.34 defines 

“purchaser” as one who pays valuable consideration. West Dearborn also indicates that the City 

also had actual knowledge of the assignment prior to acquiring its interest. However, as 

previously stated, this case is unique. It is not a matter of priority as between the City and West 

Dearborn. Instead, the case is whether the bankruptcy court’s order extinguished West 

Dearborn’s unrecorded interest in the property.

West Dearborn further argues that the assignment was not fatally defective and that any 

alleged defect did not serve to defeat West Dearborn’s interest. Although the City alleged that 

the assignment was defective, this was not the basis of the trial court’s decision granting 

summary disposition in the City’s favor. The trial court noted: “The deficiencies in the 

assignment as noted by the City of Dearborn, are concerning. However, again, the Court need 

not make a ruling on the validity of the assignment because any interest held by West Dearborn 

Partners was extinguished by the bankruptcy court due to [West Dearborn’s] continued failure to 

correct the deficiencies and promptly record this assignment, their assignment.” This Court’s 

review should be limited to issues actually decided by the trial court. Heydon, 275 Mich App at

278; Love, 270 Mich App at 566 n 2. 

Finally, West Dearborn argues that equity compels reversal because allowing the City to 

own the property in fee and free from West Dearborn’s interest would result in a windfall to the 

City. However, West Dearborn fails to account for its own inexplicable failure to record the 

assignment more than 4 1⁄2 years, after receiving it March 2011. As the trial court noted: “[West 

Dearborn] clearly had . . . actual notice of the bankruptcy proceeding. [West Dearborn] filed a 

limited objection and Counsel for [West Dearborn] was present at the hearing. It is not the role 

of the Court to protect sophisticated parties and their Counsel from their own mistakes or 

deliberate actions taken to their detriment.”
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Affirmed. As the prevailing party, plaintiff/counter-defendant may tax costs. MCR 

7.219(A). 

/s/ Cynthia Diane Stephens 

/s/ Kirsten Frank Kelly 

/s/ Jonathan Tukel