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

revision until final publication in the Michigan Appeals Reports.

-1-

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

IGCFCO III, LLC,

Plaintiff-Appellee,

FOR PUBLICATION

August 8, 2024

9:05 a.m.

v No. 366535

Muskegon Circuit Court

ONE WAY LOANS, LLC, doing business as 

POWERLEND,

LC No. 2021-001755-CB

Defendant,

and

P&G HOLDINGS, LLC, WATERMARK 

BANQUET AND CONFERENCE CENTER, LLC, 

THE COFFEE FACTORY, LLC, and MOSES 

GROSS,

Defendants-Appellants.

Before: RICK, P.J., and JANSEN and LETICA, JJ.

PER CURIAM.

Defendants, P&G Holdings, LLC, Watermark Banquet and Conference Center, LLC, the 

Coffee Factory, LLC, and Moses Gross, appeal as of right an order memorializing a final 

deficiency judgment against them and in favor of plaintiff, IGCFCO III, LLC. We affirm.

I. FACTUAL BACKGROUND

Defendant Gross is the owner of P&G, a holding company that in turn owned several 

parcels of real property, including the Watermark Banquet and Conference Center, LLC, and the 

Coffee Factory, LLC. In March 2019, plaintiff gave defendants P & G and One Way Loans, LLC, 

doing business as Powerlend, a loan of $6,575,000. P & G put forth several of its properties, 

including Watermark and the Coffee Factory, as collateral for the loan. Additionally, to obtain the 
-2-

loan, defendants signed a security agreement, a promissory note, a credit agreement, a mortgage, 

and an assignment of all future leases, rents, and profits from the properties in favor of plaintiff.

Defendants defaulted on the loan in early 2021. In May 2021, plaintiff estimated that it 

was owed $9,183,920. On May 4, 2021, plaintiff filed a complaint against defendants, alleging 

one count of breach of contract against Powerlend and P&G as the borrowers on the loan and one 

count of breach of contract against Watermark, the Coffee Factory, and Gross as guarantors on the 

loan (Counts I and II). Plaintiff further alleged that it was entitled to judicial foreclosure (Count 

III) and requested that the trial court appoint a receiver for the property (Count IV). Defendants, 

excluding Powerlend,1answered plaintiff’s complaint in June 2021 and generally denied liability.

In January 2022, plaintiff filed a motion for entry of a consent judgment. The motion stated 

that the parties entered into a settlement agreement that resolved all of the pending claims. 

According to the settlement agreement, defendants were required to remit $8.4 million to plaintiff 

by January 7, 2022. “[I]f Defendants failed to make the required payments,” plaintiff explained, 

“the Consent Judgment, which was executed as part of the Settlement Agreement would be 

released from escrow and filed with this Court.” Defendants paid plaintiff $100,000, but defaulted 

on the remaining $8.3 million due as part of the agreement. Consequently, plaintiff requested that 

a default judgment for the remaining balance be entered by the court.

Plaintiff filed an amended motion to enter a consent judgment in February 2022. Plaintiff 

explained that on February 4, 2022, the parties signed an amended settlement agreement, under 

which defendants were required to pay $175,000 to plaintiff and sign a new proposed consent 

judgment. Defendants failed to uphold the terms of the amended settlement agreement; thus, 

plaintiff asked the trial court to enter the revised consent judgment. The revised consent judgment 

called for the court to enter a judgment in plaintiff’s favor in the amount of “$9,650,000 minus any 

amounts properly paid by Defendants” and awarding plaintiff the right to take possession of the 

subject properties. The parties signed the consent judgment, and it was ultimately entered in March 

2022.

In May 2022, plaintiff filed a motion to enforce the consent judgment. Plaintiff explained 

that as part of the terms of the judgment, defendants were supposed to remit a number of security 

deposits to plaintiff that corresponded to various rental agreements in an apartment complex on 

the Watermark property. Despite repeated demands, defendants had failed to do so. Plaintiff asked 

the trial court to grant its motion and order defendants to turn over all of the outstanding security 

 

1 The record indicates that in August 2021, plaintiff attempted to procure some kind of response 

from Powerlend, going so far as to file a motion for a second summons and notice to appear. 

Attached as appendices to the motion were several notarized affidavits of nonservice listing the 

known addresses for Powerlend’s offices and the dates that a process server attempted to contact 

Powerlend. An order granting the motion was subsequently entered. Powerlend never responded. 

It is unclear from the record whether the trial court entered a default against Powerlend or took 

some alternative action following the company’s complete failure to respond. Suffice it to say, 

however, that Powerlend does not participate in this appeal. 
-3-

deposits. On June 1, 2022, defendants filed a response to the motion to enforce the consent 

judgment, stating that they would agree to turn over the security deposits if plaintiff would identify 

the tenants who were allegedly moving out of the apartment complex. On June 9, 2022, the trial 

court entered an order granting the motion to enforce the consent judgment.

On June 21, 2022, plaintiff filed a motion to show cause, explaining that defendants had 

failed to comply with the court’s order enforcing the consent judgment, and asking the court to 

hold defendants in contempt. On July 11, 2022, the court entered an order stating that “the Plaintiff 

may submit an order directing each defendant to provide a representative to show cause at a court 

hearing why an order of contempt with sanctions should not be entered.” The order was submitted 

by plaintiff and signed by the trial court on July 19, 2022. A show-cause hearing was held in 

August 2022. Plaintiff’s counsel indicated that part of the reason the security deposits had not 

been turned over was due to defendant Gross failing to maintain a separate account for tenant 

security deposits in violation of state law. Gross agreed that he had failed to do so and stated at 

the hearing that he simply did not have the money to pay plaintiff the security deposits. The court 

noted that it sympathized with Gross’s situation but still found it troubling that he had “basically 

absconded with security deposits[,]” and elected to hold defendants in contempt. On September 2, 

2022, the trial court entered an order granting the motion to show cause and ordering defendants 

to pay plaintiff $27,377 in security deposits, along with $1,000 for attorney fees, within 30 days.

On September 27, 2022, plaintiff again filed a motion to show cause, noting that defendants 

still had not turned over the security payments and asking that they be held in contempt. A hearing 

on the motion was held in December 2022. The court held defendants in contempt once again, 

and an order was subsequently entered directing defendants to pay plaintiff $28,377 in security 

deposits and $1,623 in attorney fees.

In April 2023, plaintiff filed a motion for entry of a deficiency judgment. The motion 

stated that defendants still had not paid the money owed as directed by the court in its December 

2022 order granting plaintiff’s show-cause motion. Additionally, plaintiff explained that the 

property had been sold on December 22, 2022, for $5,275,000, which resulted in a net profit to 

plaintiff of $4,892,187. According to plaintiff, “[i]nterest on the Judgment Amount from the date 

of the Consent Judgment to the filing of this motion at the rate of thirteen percent (13%) per annum 

totals $500,000.00.” Plaintiff submitted an affidavit from Jeff Padden, plaintiff’s general counsel, 

in support of this figure. The proceeds of the sale, along with the $30,000 debt and the $500,000 

in unpaid interest created a deficiency of $5,287,812, which plaintiffs claimed defendants were 

required to pay to satisfy the consent judgment.

Defendants responded to plaintiff’s motion on May 23, 2023. Defendants argued that 

plaintiff was not entitled to a final deficiency judgment because it had not established that the sale 

of the property was commercially reasonable under Article 9 of the Uniform Commercial Code 

(UCC), MCL 440.9101 et seq. Defendants contended that plaintiff intentionally sold the property 

for a price far below market value and far below the asking price of $7,990,000. Defendants 

argued that plaintiff was only entitled to a deficiency judgment if the outstanding debt exceeded 

“the fair market price for the Watermark Properties plus any other rent and other recoveries already 

collected by plaintiff.” Defendants further contended that the amount of any judgment awarded 

plaintiff had to be reduced by the amount of any rents or recoveries received after plaintiff took 

possession of the property, and asked that the court allow limited discovery into these issues. 
-4-

Along with the motion, defendants submitted a lengthy list of exhibits discussing the property and 

information about property market values, as well as an unsworn and unnotarized copy of an 

affidavit from Moses Gross.

Plaintiff replied on May 25, 2023. Plaintiff argued that it sold the property in a 

commercially reasonable manner, using Coldwell Banker Richard Ellis (CBRE) as their real estate 

broker. CBRE engaged with AMN Group to list the property with a number of commercial real 

estate listing companies, and relisted the property once the original posting expired. When the 

property was relisted, plaintiff alleged that CBRE sent out more than 54,000 advertising e-mails. 

Plaintiff further stated that in late May 2022, CBRE received an offer on the property for $5.2 

million, and made a higher counteroffer that was rejected by the prospective buyer. Ultimately, a 

collective of companies—Shaw Walker Opportunity Zone Business 1, LLC, Shaw Walker 

Opportunity Zone Business 2, LLC, Shaw Walker Opportunity Zone Business 3, LLC, and Shaw 

Walker Opportunity Zone Business 4, LLC (collectively “Shaw Walker”)—offered to buy the 

property for $5,275,000. Plaintiff accepted the offer. According to plaintiff, “The offer to 

purchase by Shaw Walker of $5,275,000.00 was the best offer received for the purchase of the 

Property. CBRE and Plaintiff used their best efforts to secure the best price for the sale of the 

Property.”

Plaintiff additionally argued that the deficiency judgment should not be reduced by the 

amount of rent received after it took possession of the property, noting that there was not an 

industrial tenant renting the property from April through December 2022, causing a net loss of 

$500,000 in income to plaintiff. Plaintiff thus asked the court to enter the deficiency judgment as 

requested. Along with the response, plaintiff submitted an affidavit from James Barrons, senior 

counsel for Balbec Capital, LP, a private equity firm that handled financial business for plaintiff. 

Barrons attested to the amount of money plaintiff earned and lost after taking possession of the 

property in March 2022. Barrons further detailed the steps that plaintiff took to engage CBRE as 

a real estate broker and to sell the property, which largely mirrored plaintiff’s explanation of its 

efforts to sell the property.

The trial court held a hearing on the deficiency judgment on May 26, 2023. Defendants 

pointed out that it appeared that plaintiff sold the property quickly before the end of the year for 

tax reasons, and argued that plaintiff therefore did not sell the property in a commercially 

reasonable manner. Defendants also argued that plaintiff’s accounting of what was owed in the 

deficiency judgment was flawed. Plaintiff responded that the deficiency judgment amount was 

correctly calculated and that the property was sold in a commercially reasonable manner. The trial 

court ultimately agreed that plaintiff had presented sufficient evidence to support entering a 

deficiency judgment. It explained:

[T]he defendants in their response brief have attached exhibits. A couple of them 

are evaluations or assessments or appraisals of the property indicating a 7.9-

million-dollar value and a 12-million-dollar value. There’s also an unsigned 

affidavit by Defendant Moses Gross.

The plaintiffs have replied, filed a reply brief within an affidavit by . . . 

James Barrens [sic] that had several exhibits to it. They argue that they have listed 

the property with CBRE for 7.9 million in May of 2022. They were unable to get 
-5-

any offers until the 5.2 [million] from Shaw-Walker Group, who ultimately, I 

believe, purchased the property here. The Court would note that defendant was 

trying to sell the property prior to the entry of the deficiency or the consent 

judgement [sic]. The Court is going to apply or give significant weight to the James 

Barrens’ [sic] affidavit. It seems to have laid out fairly extensively all the steps that 

were taken that laid out the method, the manner, the time, the place, and the terms 

used to market the property.

So, the Court does find that the plaintiff complied with the requirements 

using commercially reasonable means to sell the property, and that an extended 

discovery period which plaintiff has requested would be futile. That the sale price 

of 2 point—of 5.275 million would be a fair market value . . . .

With regards to the issue as to the offset, with regards to the rent, there’s 

been really insufficient evidence presented by defendant that this is actually even 

part of the contemplated deficiency judgment. The Court is somewhat limited to 

the consent judgement [sic] of March 9th, 2022, so it’s not going to take it into 

consideration. And even if it did, I think that there’s been sufficient evidence 

presented in the—the affidavits presented by the—by both the initial brief and the 

reply brief of the plaintiff that the there was no probably [sic] profit earned during 

the time period of possession by the plaintiff.

A final deficiency judgment was entered on May 26, 2023. The trial court ordered 

defendants to pay plaintiff $5,287,812 with an interest rate of 13%, with total interest to be capped 

at $500,000. This appeal followed.

II. ANALYSIS

Defendants argue that the trial court abused its discretion by declining to grant an 

evidentiary hearing on the subject of commercial reasonableness under Article 9 of the UCC. They 

further contend that the court erred by concluding that the properties were sold in a commercially 

reasonable manner and that any rents received by plaintiff did not need to be factored into the 

calculation of the deficiency judgment. We disagree.

A. STANDARD OF REVIEW

This Court reviews for an abuse of discretion a trial court’s decision that an evidentiary 

hearing is not warranted. Estate of Carlsen v Southwestern Mich Emergency Servs, PC, 338 Mich 

App 678, 701; 980 NW2d 785 (2021). “An abuse of discretion occurs when the decision resulted 

in an outcome falling outside the range of principled outcomes.” Id. at 693 (quotation marks and 

citation omitted). To the extent that this issue concerns questions of law, including whether the 

sale of the property was commercially reasonable under Article 9 of the UCC and whether rents 

received are factored into the calculation of a deficiency judgment, the Court’s review is de novo. 

In re Moukalled Estate, 269 Mich App 708, 713; 714 NW2d 400 (2006).
-6-

B. COMMERCIALLY REASONABLE SALE

Defendants first take issue with the court’s decision not to hold an evidentiary hearing in 

this matter and its conclusion that the sale of the property was commercially reasonable under 

Article 9 of the UCC. On appeal, plaintiff challenges the application of Article 9, claiming that 

the consent judgment in this matter controls. We agree with plaintiff that Article 9 does not apply 

to this case. Article 9 was specifically intended to create a security interest in personal property 

and fixtures on the land; it generally does not apply to transactions in which the collateral at issue 

is real property, as is the case here. See MCL 440.9109(4)(k); In re Estate of Moukalled, 269 Mich 

App 708, 716; 714 NW2d 400 (1998) (stating that “[A]rticle 9 does not apply to the creation or 

transfer of an interest in land.”); see also Berry v Main Street Bank, 977 F Supp 2d 766, 733 (ED 

Mich, 2013) (recognizing that other federal courts have held that the UCC does not apply to 

mortgage foreclosures, the court dismissed the plaintiff’s claims under Article 9 because it applies 

to personal property rather than real property).

We therefore agree with plaintiff that the consent judgment controls. According to the 

terms of the consent judgment signed by the parties, the property was required to be sold in “any 

commercially reasonable manner and means that [plaintiff] (or its designee) decides to use.” This 

Court has held that “[a] consent judgment is in the nature of a contract, and is to be construed and 

applied as such.” Laffin v Laffin, 280 Mich App 513, 517; 760 NW2d 738 (2008). In determining

the meaning of a contract, this Court “give[s] the words used in the contract their plain and ordinary 

meaning that would be apparent to a reader of the instrument.” Rory v Continental Ins Co, 473 

Mich 457, 464; 703 NW2d 23 (2005). If the terms are ambiguous or undefined, this Court may 

use dictionary definitions to ascertain their plain and ordinary meaning. Auto-Owners Ins Co v 

Seils, 310 Mich App 132, 145; 871 NW2d 530 (2015). The consent judgment does not define the 

term “commercially reasonable;” however, with regard to the sale of real property, the term 

generally means that the sale was “conducted in good faith and in accordance with commonly 

accepted commercial practice.” Black’s Law Dictionary (11th ed).

Upon review of the record, we conclude that plaintiff’s proof that the sale was 

commercially reasonable was sufficient to support the trial court’s decision to enter the deficiency 

judgment. In support of its original motion for entry of a deficiency judgment, plaintiff attached 

an affidavit from its general counsel, Jeff Padden, regarding the sale of the property, as well as a 

copy of a proposed deficiency judgment. Padden’s affidavit states that the net proceeds of the sale 

of the property amounted to $4,892,187. Plaintiff was additionally permitted by the trial court to 

file a reply to defendants’ response to the motion. As evidence that the sale was commercially 

reasonable, plaintiff submitted two show-cause orders previously entered by the court and

Barrons’s affidavit. Attached to the affidavit is a series of documents from CBRE describing the 

listing and indicating that the property was placed on the market for $7.9 million. The affidavit 

explains that plaintiff engaged CBRE, a highly esteemed real estate broker, to handle the sale. The 

property was previously listed with Core Realty for $12 million, but failed to sell at that price, so 

the parties agreed to a list price of $7.9 million.

The affidavit goes on to explain that CBRE engaged in an intensive marketing campaign 

in an effort to sell the property, but could not find a buyer interested in paying the $7.9 million list 

price. According to Barrons, prospective buyers declined to purchase the property for the list price 

for a multitude of reasons. He explained:
-7-

In CBRE’s opinion and experience, the factors leading to a lower price during the 

engagement with AMN[] included, among other things, the size of the Property, the 

mixed zoning, the vacancies, the costs of the necessary renovations (roughly 

500,000 square feet of raw and aging industrial space which needed to be 

renovated/demolished), and the weak demographics and slow growth of the 

Muskegon market.

CBRE received an offer for $5.2 million and attempted to counteroffer with a higher sale price, 

but the prospective buyer would not budge on the price. Ultimately, plaintiff agreed to sell the 

property to Shaw Walker for $5,275,000.

Plaintiff’s evidence shows that the property was placed on the market for $7.9 million by 

agreement between the parties, and indicates that the property failed to sell at a higher price. CBRE 

clearly attempted to get the best price possible, but there was simply no strong interest in the 

property given the amount of work that would have to be done on it in terms of renovation and 

demolition. Plaintiff provided objective proof that the sale was made in accordance with 

commonly accepted commercial practice and conducted in good faith. 

Defendants acknowledge that whether to hold an evidentiary hearing is an exercise of the 

trial court’s discretion, see Williams v Williams, 214 Mich App 391, 399; 542 NW2d 892 (1995), 

but nevertheless claim that an evidentiary hearing was necessary here because the trial court ruled 

on the deficiency judgment solely on the basis of Barrons’s affidavit. Defendants explain that the 

court should not have assessed the affidavit’s credibility or based its decision to grant the 

deficiency judgment on the affidavit alone. They additionally cite a number of cases addressing a 

trial court’s assessment of the credibility of affidavits at the summary disposition stage. See, e.g., 

SSC Assoc Ltd Partnership v Gen Retirement Sys of City of Detroit, 192 Mich App 360, 364-365; 

480 NW2d 275 (1991) (standing for the proposition that “where the truth of a material factual 

assertion of a moving party’s affidavit depends on the affiant’s credibility, there exists a genuine 

issue to be decided at trial by the trier of fact.”). Defendants acknowledge that the matter at hand 

was not decided in a motion for summary disposition, but argue that the same rules should 

generally apply.

Defendants present no authority to directly support the argument that they are entitled to 

an evidentiary hearing here. Absent any compelling legal authority, we thus conclude that the trial 

court did not abuse its discretion when it determined an evidentiary hearing was unnecessary. The 

trial court need not hold an evidentiary hearing if it can sufficiently decide an issue on the basis of 

evidence already presented. Vittiglio v Vittiglio, 297 Mich App 391, 406; 824 NW2d 591 (2012).2 

 

2 We further note that defendants did not present evidence that might have convinced the trial court 

that an evidentiary hearing was required. In support of their responsive brief, defendants submitted 

two exhibits concerning the property—one news article about the sale and one set of documents 

describing the property—and an unsworn, unnotarized affidavit from Gross. The news article and 

the property description do little to support the argument that the sale of the property was not 

commercially reasonable. Moreover, courts require affidavits to be sworn and notarized in order 

to be valid. Holmes v Mich Capital Med Ctr, 242 Mich App 703, 711; 620 NW2d 319 (2000). 
-8-

Plaintiff’s evidence was sufficient to show that the sale was commercially reasonable for the 

reasons stated; thus, defendants are not entitled to relief.

C. OFFSET OF DEFICIENCY JUDGMENT

Defendants also argue that the deficiency judgment should have been offset by the amount 

of rents and income received by plaintiff after plaintiff took possession of the property, and contend 

that the trial court erred by requiring them to establish that the offset should have been permitted. 

We find this argument unpersuasive. Defendants are not entitled to relief because they have not 

shown that they are entitled to an offset of the deficiency based on rents received by plaintiff.

While ruling on the motion for entry of a deficiency judgment, the trial court stated that 

“with regards to the rent, there’s been really insufficient evidence presented by defendant that this 

is actually even part of the contemplated deficiency judgment.” It further stated that “there’s been 

sufficient evidence presented in the . . . affidavits . . . that the there was no probably [sic] profit 

earned during the time period of possession by the plaintiff.” Defendants claim that the trial court 

erroneously shifted the evidentiary burden by stating that they presented insufficient evidence to 

show they were entitled to the offset. In support of their argument, defendants cite 

MCL 440.9626(b), which states that in a deficiency action, the secured party bears the “burden of 

establishing that the collection, enforcement, disposition, or acceptance was conducted” in 

accordance with Article 9 of the UCC.

We again note that Article 9 of the UCC does not apply to this case. See 

MCL 440.9109(4)(k) (“This article does not apply to . . . [t]he creation or transfer of an interest in 

or lien on real property[.]”). To prevail, defendants must instead demonstrate that the language of 

the consent judgment entitles them to an offset of the deficiency judgment. See Laffin, 280 Mich 

at 517. However, nowhere in the consent judgment signed by the parties is it stated that defendants 

are entitled to an offset of the deficiency judgment. The trial court thus did not err by finding that 

the deficiency judgment should not be offset based on rents received by plaintiff, and reversal is 

not required.

Affirmed.

/s/ Michelle M. Rick 

/s/ Kathleen Jansen 

 

After the trial court noted in its ruling that Gross’s affidavit was unsigned, defendants sought 

clarification, stating that they had filed a signed affidavit. The trial court responded, “whether it 

was signed or unsigned, [it was] not going to change [its] ruling. . . .” We agree.