-1- 

### STATE OF MICHIGAN

COURT OF APPEALS

ROBERT MIEHLKE and GEORGE LAFATA,

Plaintiffs/Counter DefendantsAppellees, UNPUBLISHED February 14, 2017

v No. 330521 Manistee Circuit Court BAYVIEW CONDOMINIUM ASSOCIATION OF MANISTEE, LC No. 14-015337-CH

Defendant/Counter PlaintiffAppellant, and

COMMUNITY SHORES BANK,

Defendant/Counter Defendant/Third-Party Plaintiff, and

LINDEN COURT CORP, DENNIS W. DUNLAP, LINDA L. DUNLAP, JOHN D. CICHY, and KAREN F. CICHY,

Defendants/Counter Defendants, and

SAFE TITLE, INC.,

Third Party Defendant/Third-Party Plaintiff, and

OSBORN ABSTRACTING SERVICES NORTH, INC.,

Third Party Defendant/Third-Party Plaintiff-Appellee,

and-2- MARY KLUECK,

Third-Party Defendant.

Before: M URPHY , P.J., and S AWYER and S WARTZLE , JJ.

P ER C URIAM

. Bayview Condominium Association of Manistee (Bayview) appeals the trial court’s order of dismissal, arguing that the t rial court improperly found tha t Bayview no longer held a mortgage interest on the prope rty in question. We affirm.

This case involves real property located in Manistee. When it obtained title to the property, defendant Linden Court Corporation (Linden) granted a mortgage to defendant Community Shores Bank (CSB). Year s later, Linden granted a sec ond mortgage to defendantappellant Bayview; the second mortgage was junior to the one he ld by CSB. Both mortgages were properly recorded. Linden subsequently defaulted on the C SB mortgage and CSB foreclosed by advertisement. CSB purchased the property at a s heriff’s sale, and received a sheriff’s deed on October 20, 2011. Because CSB purchased the property for less than what remained on the original mortgage , Bayview’s junior interest wa s extinguished.

On September 20, 2013—nearly two years later—CSB recorded an a ffidavit of scrivener’s error, alleging that the legal description of the p roperty contained in th e sheriff’s deed was erroneous. The notice attached to the sheriff’s deed conta ined the following legal description:

Part of Government Lot 3, Section 1, Township 21 North, Range 17 West, City of Manistee, Manistee Count y, Michigan; Commencing at a po int here the East line of Arthur Street inter sects the South line of the Nor th 2/3 of said Government Lot; thence North 11°08’14” East 250.13 feet for the Point of Beginning; thence North 11°08’14” East 88.71 feet; thence North 14°58’21” East 61.29 feet; thence South 78°51’46” W est 118 feet to the Point o f Beginning.

The CSB mortgage, however, contai ned the following legal descri ption:

PART OF GOVERNMENT LOT THREE (3), SECTION ONE (1), TOWNSHIP TWENTY-ONE (21) NORTH, RANGE SEVENTEEN (17) WEST; COMMENCING AT A POINT WHERE THE EAST LINE OF ARTHUR STREET INTERSECTS THE SOUTH LINE OF THE NORTH 2/3 OF SAID GOVERNMENT LOT; THENCE NORTH 11°08’14” EAST 250.13 FEET FOR POINT OF BEGINNING; THENCE NO RTH 11°08’14” EAST 88.71 FEET; THENCE NORTH 14°58’21” EAST 61.29 FEET; THENCE SOUTH 78°51’46”-3- EAST 146.87 FEET; THENCE SOUT H 23°32’40” WEST 153.46 FEET; THENCE NORTH 78°51’46” WEST 118 FEET TO POINT OF BEGINNING. [1]

The affidavit purported to corre ct the omissions from the earli er notice.

Subsequently, CSB contracted to sell the property to plaintiff Robert Miehlke. The initial contract listed Miehlke as the buyer and CSB as the seller. CS B executed, as the seller, addendums to this contract on December 4 and 5, 2013.

It is evident that either CSB, one or both of the plaintiffs, or all three parties became concerned that the affidavit of s crivener’s error was not suffi cient to fix the description in the sheriff deed. On December 20, 2013, CSB executed another docum ent that stated in relevant part that CSB “hereby rescinds the Sheriff’s Sale.” On December 27, 2013, Linden and plaintiffs executed a third a ddendum to the CSB contract, listi ng both plaintiffs as buyers and Linden as the seller. Also on December 27, 2013, Linden, throu gh its representative Dennis Dunlap, executed a warranty deed granting the property to the p laintiffs. CSB recorded its purported rescission of the S heriff’s sale on January 3, 2014.

Bayview informed plaintiffs that, in its view, CSB’s rescissio n was valid and, as a result, Bayview’s junior interest in the property was revived. Plainti ffs subsequently filed a declaratory action to clarify who held what interests in the property.

At a deposition, Dunlap stated that he talked to representativ es from CSB who informed him that they had an offer to buy the property and that Dunlap would need to be involved in the closing. Dunlap stated that he did not understand what his rol e in the process was. Specifically, Dunlap said:

We had previously I thought given the bank all of our interest. And we were working with the bank cooperatively to do the best we could to, you know, satisfy our debt. So what they wanted me to do was what they wanted me to do. And so that was basically my take on things and how I was approaching it. I was trying to help the bank unwind Linde Cour t’s involvement with them.

Dunlap further stated that he did not know what the terms of th e sales contract were, that he did not really know what it meant when he executed a “Deed in Lieu of Foreclosure,” that nobody explained why he was executing a warranty deed, and that he tho ught CSB was the seller of the property.

In another deposition, Michael Wood, Bayview’s president, test ified that Bayview was informed of the foreclosure proceedings pursuant to CSB’s mortg age and that he went to the mortgage sale but did not bid. He also testified that he recog nized the errors in the legal

1 We have italicized the calls that were omitted from the legal description contained in the foreclosure notice.-4- description on the sheriff’s deed, but that it did not have an effect on Bayview’s decision not to redeem the property.

Plaintiffs moved for summary disposition pursuant to MCR 2.116 (C)(10), seeking to have the trial court declare that Bayview no longer held a mort gage interest in the property. Plaintiffs argued that the forecl osure sale discharged Bayview’ s junior mortgage upon expiration of the redemption period. According to plaintiffs, the foreclo sure was valid because the legal description contained in the not ice of foreclosure was substant ially similar to the legal description contained in the mor tgage. Thus, plaintiffs argued , because the foreclosure was valid, it cannot be expunged by an affidavit filed after the re demption period expired. Bayview argued to the contrary that the rescission of the sheriff’s sal e was effective. Bayview asserted that a mortgagee can extend the redemption period, even after t he period has expired, and that CSB and Linden did so in this cas e, thereby resu rrecting Bayvie w’s junior mortgage.

The trial court granted plaintiffs’ motion. The court found t hat the original notice of foreclosure was not defective because the legal description con tained therein was substantially the same as the legal description contained in the mortgage. T he court also found that Bayview was not prejudiced by the errors contained in the notice. Thus , the court concluded that the foreclosure sale was valid and could not be set aside by an aff idavit. Bayview appeals, arguing, on the same grounds as it did below, that the trial court erron eously granted summary disposition in plaintiffs’ favor.

“Questions of law, actions to quiet title in equity, as well as decisions to grant or deny summary disposition, are reviewed de novo.” Trademark Prop of Mich, LLC v Fed Nat’l Mtg Ass’n , 308 Mich App 132; 138; 863 NW 2d 344 (2014). A summary-dispos ition motion pursuant to MCR 2.116(C)(10) “tests the factual sufficiency of the compl aint.” Klein v HP Pelzer Auto Sys, Inc , 306 Mich App 67, 75; 854 NW2d 521 (2014). The trial court sh ould grant the motion if “there is no genuine issue as to any material fact, and the mov ing party is entitled to judgment or partial judgment as a matter of law.” MCR 2.116(C)(10). When evaluating the motion, the court must consider “the affidavits, together with the pleadings, dep ositions, admissions, and documentary evidence then filed in the action or submitted by t he parties.” MCR 2.116(G)(5). “In deciding a motion brought under subrule (C)(10), a court co nsiders all the evidence, affidavits, pleadings, and admissions in the light most favorab le to the nonmoving party.” Hastings Mut Ins Co v Safety King, Inc , 286 Mich App 287, 291; 778 NW2d 275 (2009). “A genuine issue of material fact e xists when the record, giving t he benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ.” West v Gen Motors Corp , 469 Mich 177, 183; 665 NW2d 468 (2003).

A mortgagee may foreclose on a mortgage by advertisement, but the proceedings must be instituted according to the foreclosure statutes. Trademark Prop of Mich , 308 Mich App at 138. A proper foreclosure sale extinguishes the mortgage and the pur chaser becomes the owner of an equitable interest in the property subject only to the right of redemption. Id. at 138-139. If the mortgagor or other interest holder does not redeem, this intere st ripens into legal title and destroys all junior int erests in the property. Id

. By statute, every notice of foreclosure by advertisement must include a “description of the mortgaged premises that substantially conforms with the des cription contained in the-5- mortgage.” MCL 600.3212(d). “The property to be sold must be described in the notice with such a reasonable degree of certainty that the public by the ex ercise of ordinary intelligence may be enabled to identify it, and may be directed to the means of obtaining an exact description if desired.” Provident Mut Life Ins Co of Philadelphia v Vinton Co , 282 Mich 84, 88; 275 NW 776 (1937).

This Court has held that a de fect in notice re nders a foreclos ure sale voidable, not void.

Sweet Air Investment, Inc v Kenney , 275 Mich App 492, 502; 739 NW2d 656 (2007) (internal quotation marks and citation omitted). To set aside a foreclos ure sale, the party opposing that sale “must show that they were prejudiced” by the defect in not ice. Kim v JPMorgan Chase Bank, NA , 493 Mich 98, 115; 825 NW2d 329 (2012). “ To demonstrate such prejudice, they must show that they would have been in a better position to preserve their interest in the property absent” the defect. Id . at 115-116. The trial court should not set aside a foreclosu re sale absent “a strong case of fraud or irregularity, or some peculiar exige ncy.” Kubicki v Mtg Electronic Registration Sys , 292 Mich App 287, 289; 807 NW2d 433 (2011) (internal quotatio n marks and citation omitted).

In this case, the trial court properly concluded that the lega l description contained in the notice substantially conformed to the description contained in the mortgage, and that, even if the notice was defective, no party seeking to set aside the foreclo sure sale suffered any harm as a result. The legal description contained in the notice left out some calls that were in the legal description contained in the mortgage. The result was that thi s description only described part of the property, not the entire parc el. However, because this not ice correctly referenced part of the property, and because the correct legal description was contain ed in the mortgage, a person of ordinary intelligence would be a ble to identify the property an d obtain an exact description if desired. Accordingly, the descri ption was not legally deficien t.

Even if it were deficient, Bayview had actual notice of the fo reclosure sale and its representative attended that sa le. Indeed, Bayview’s president testified that Bayview would not have done anything differently had the notice contained the cor rect legal description. Additionally, no party provided th e trial court with any eviden ce that the missing information precluded any interested party from attempting to purchase the property or that the missing information affected the results of the foreclosure sale in any way. Accordingly, no party has shown any prejudice from this description.

Therefore, we agree with the trial court that the foreclosure sale was valid. This sale extinguished both Linden’s and Ba yview’s interest in the proper ty and rendered CSB its legal owner. Because the foreclosure sale involved here was not void , CSB’s subsequent “rescission” of that sale was therefore ineffective. See Trademark Prop of Mich , 308 Mich App at 142 (concluding that a mortgagee’s filing an affidavit that a forec losure sale is void does not revive a previously extinguished mortgage if the foreclosure sale was va lid). Accordingly, because Linden owned no interest in the property at the time of its pur ported transfer of the property to plaintiffs, we conclude that the trial court properly determine d that CSB was the legal owner of the property.-6- On appeal, Bayview argues that C SB’s “rescission” of the forec losure sale was not in fact an attempt to rescind the sale as void but rather an agreement between Linden and CSB to extend the redemption period. The document CSB recorded does not, how ever, make any reference to a redemption period. Moreover, no representative from Linden sig ned this document and, when deposed, Linden’s representative did not testify to any redempt ion agreement. Rather, he stated that he thought that CSB owned a ll the interest in the property , that he thought CSB was the seller of the property, and tha t he did not rea lly understand w hy he was executing the documents. Accordingly, we conclude that the record clearly shows that CSB and Linden did not agree to extend the redemption period.

Affirmed.

/s/ William B. Murphy /s/ David H. Sawyer /s/ Brock A. Swartzle