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

revision until final publication in the Michigan Appeals Reports.

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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

MEAN PROPERTIES, LLC,

Plaintiff-Appellant,

UNPUBLISHED

January 12, 2023

v No. 357551

Wayne Circuit Court

CITY OF DETROIT, LC No. 20-003936-CB

Defendant-Appellee.

Before: CAVANAGH, P.J., and O’BRIEN and RICK, JJ.

PER CURIAM.

In this case involving defendant’s retention of insurance proceeds under MCL 500.2227, 

plaintiff, Mean Properties, LLC, appeals as of right the trial court’s order granting summary 

disposition in favor of defendant, the city of Detroit, under MCR 2.116(C)(7), (C)(8), and (C)(10). 

Concluding that all of plaintiff’s claims are predicated on its entitlement to the insurance proceeds 

under MCL 500.2227, and that plaintiff failed to file this action within the limitations period 

provided in that statute, we affirm.

I. BACKGROUND

This case involves a dispute between plaintiff and defendant over escrowed insurance 

proceeds held by defendant to pay for the demolition of real property in Detroit.

On January 9, 2013, the property, which was owned by plaintiff at the time, was damaged 

by fire. On April 16, 2013, plaintiff’s insurer, Cincinnati Insurance Companies, forwarded a check 

for $150,000 to defendant (which amounted to 25% of the insurance proceeds) pursuant to the 

requirements in MCL 500.2227. According to plaintiff’s complaint, plaintiff applied for a 

demolition permit for the property on or about July 8, 2013. Before the permit was issued, plaintiff 

was informed by one of defendant’s employees that a slab of concrete would be permitted to 

remain on the property even though this would be in violation of a city ordinance. Despite the 

employee’s representation, however, the issued permit did not provide for any exceptions to city 

ordinances. Nevertheless, in accordance with defendant’s employee’s representation, the 

demolition work was completed without removing the concrete slab from the property. On 

November 12, 2013, defendant’s Buildings, Safety Engineering, and Environmental Department 
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(BSEED) advised plaintiff’s demolition contractor that an inspection of the premises on July 31, 

2013, found violations on the property, namely that the concrete slab needed to be removed “as 

per code,” or administrative relief needed to be sought.

On August 31, 2016, plaintiff sold the property to the Michigan Department of 

Transportation without remedying the violations or obtaining administrative relief from the 

ordinance requirements. With the violation remaining, the escrowed insurance funds remained in 

defendant’s possession. When plaintiff reached out to BSEED’s Director about releasing the 

funds, plaintiff was informed that the demolition permit needed to be finalized before the funds 

could be released.

Plaintiff filed this action in March 2020 seeking recovery of the escrowed funds under 

various theories of relief. Plaintiff’s complaint alleged six counts. Defendant eventually moved 

for summary disposition and requested that plaintiff’s entire complaint be dismissed on several 

different grounds. The trial court granted defendant’s motion, holding that plaintiff’s cause of 

action was time-barred under MCL 500.2227(7), and further reasoning that the six counts alleged 

in plaintiff’s complaint must be dismissed on various other legal grounds. Plaintiff now appeals 

as of right.

II. ESCROWED INSURANCE PROCEEDS AND MCL 500.2227

This Court reviews de novo a trial court’s decision on a motion for summary disposition. 

El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 159; 934 NW2d 665 (2019). Defendant 

moved for summary disposition under MCR 2.116(C)(7), (C)(8), and (C)(10). As the trial court 

observed, all of plaintiff’s claims are predicated on the common argument that defendant’s 

retention of the insurance proceeds violated MCL 500.2227, and the court found that plaintiff’s 

action was not timely filed under MCL 500.2227(7). When an action is barred by a statute of 

limitations, summary disposition is appropriate under MCR 2.116(C)(7). In Dextrom v Wexford 

Co, 287 Mich App 406, 428-429; 789 NW2d 211 (2010), this Court set forth the standard for 

reviewing a motion under MCR 2.116(C)(7):

When reviewing a motion under MCR 2.116(C)(7), this Court must accept all wellpleaded factual allegations as true and construe them in favor of the plaintiff, unless 

other evidence contradicts them. If any affidavits, depositions, admissions, or other 

documentary evidence are submitted, the court must consider them to determine 

whether there is a genuine issue of material fact. If no facts are in dispute, and if 

reasonable minds could not differ regarding the legal effect of those facts, the 

question whether the claim is barred is an issue of law for the court. However, if a 

question of fact exists to the extent that factual development could provide a basis 

for recovery, dismissal is inappropriate.

We agree with the trial court that the undisputed facts demonstrate that plaintiff’s action 

was not timely filed under MCL 500.2227(7). MCL 500.2227 provides, in pertinent part:

(1) If a claim is filed for a loss to insured real property due to fire, explosion, 

vandalism, malicious mischief, wind, hail, riot, or civil commotion and a final 

settlement is reached on the loss to the insured real property, an insurer shall 
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withhold from payment 25% of the actual cash value of the insured real property at 

the time of the loss or 25% of the final settlement, whichever is less. Until 

December 31, 2014, for residential property, the 25% settlement or judgment 

withheld shall not exceed $6,000.00 adjusted annually beginning June 1, 1999 in 

accordance with the consumer price index. Beginning January 1, 2015, for 

residential property, the 25% settlement or judgment withheld shall not exceed 

$12,000.00 adjusted January 1 of each year in accordance with the consumer price 

index. The director shall notify annually all insurance companies transacting 

property insurance in this state as to the new adjusted amount. At the time that 25% 

of the settlement or judgment is withheld, the insurer shall give notice of the 

withholding to the treasurer of the city, village, or township in which the insured 

real property is located, to the insured, and to any mortgagee having an existing lien 

or liens against the insured real property, if the mortgagee is named on the policy. 

For a judgment, notice shall also be provided to the court in which judgment was 

entered. The notice must include all of the following:

(a) The identity and address of the insurer.

(b) The name and address or forwarding address of each policyholder, 

including any mortgagee.

(c) The location of the insured real property.

(d) The date of loss, policy number, and claim number.

(e) The amount of money withheld.

(f) A statement that the city, village, or township may have the withheld 

amount paid into a trust or escrow account established for the purposes of this 

section if within 15 days after the mailing of the notice the city, village, or township 

states that the money should be withheld to protect the public health and safety; 

otherwise, the withheld amount shall be paid to the insured 15 days after the mailing 

of the notice.

(g) An explanation of the provisions of this section.

* * *

(3) Upon receipt of money and information from an insurer as prescribed 

in subsections (1) and (2), the local treasurer shall record the information and the 

date of receipt of the money and shall immediately deposit the money in a trust or 

escrow account established for the purposes of this section. The account may be 

interest-bearing. If a mortgage on the insured property is in default, the treasurer 

of the city, village, or township, upon written request from the first mortgagee of 

the property, shall release to the mortgagee all or any part of the policy proceeds 

received by the city, village, or township not later than 10 days after receipt of the 

written request by the mortgagee, to the extent necessary to satisfy any outstanding 

lien of the mortgagee.
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* * *

(5) Except as provided in subdivision (c), the policy proceeds deposited 

under subsection (3) shall immediately be forwarded to the insured when the 

authorized representative of the city, village, or township designated by the 

governing body of the city, village, or township receives or is shown reasonable 

proof of any of the following:

(a) That the damaged or destroyed portions of the insured structure have 

been repaired or replaced, except to the extent that the amount withheld under this 

section is needed to complete repair or replacement.

(b) That the damaged or destroyed structure and all remnants of the 

structure have been removed from the land on which the structure or the remnants 

of the structure were situated, in compliance with the local code requirements of 

the city, village, or township in which the structure was located.

(c) That the insured has entered into a contract to perform repair, 

replacement, or removal services for the insured real property and that the insured 

consents to payment of money directly to the licensed contractor performing the 

services upon completion. Money released under this subdivision may be 

forwarded only to a licensed contractor performing services on the insured 

property.

(6) Reasonable proof required under subsection (5) includes any of the 

following:

(a) Originals or copies of pertinent verifiable contracts, invoices, receipts, 

and other similar papers evidencing both the work performed or to be performed 

and the materials used or to be used by all contractors performing repair, 

replacement, or removal services for the insured real property, other than a licensed 

contractor subject to subdivision (b).

(b) An affidavit executed by the licensed contractor that has performed the 

greatest amount of repair or replacement work on the structure, or that has done 

most of the clearing and removal work if structure repair or replacement is not to 

be performed. The licensed contractor shall attach to the affidavit all pertinent 

contracts, invoices, and receipts and shall swear that these attached papers correctly 

indicate the nature and extent of the work performed to date by the licensed 

contractor and the materials used.

(c) An inspection of the insured real property to verify that repair, 

replacement, or clearing has been completed in accordance with subsection (5).

(7) Except as otherwise provided in this subsection, if with respect to a loss, 

reasonable proof is not received by or shown to an authorized representative of the 

city, village, or township designated by the governing body of the city, village, or 

township within 120 days after the policy proceeds portion was received by the 
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treasurer, the city, village, or township shall use the retained proceeds to secure, 

repair, or demolish the damaged or destroyed structure and clear the insured 

property so that the structure and property comply with local code requirements 

and applicable ordinances of the city, village, or township. The city, village, or 

township shall return to the insured any unused portion of the retained proceeds. 

The city, village, or township may extend the 120-day time period under this 

subsection. A city, village, or township may retain and use policy proceeds for 

demolishing any property if on or before the effective date of the amendatory act 

that added this sentence the authorized representative had not received or been 

shown reasonable proof within 1 year after the insurer provided notice to the 

insured under subsection (1) and the insured property has been demolished. The 

insured may file a civil action against the city, village, or township for the return 

of the policy proceeds. An action filed under this subsection must be filed within 3 

years after the insurer provided notice to the insured under subsection (1) or 1 year 

after the effective date of the amendatory act that added this sentence, whichever 

is later. [Emphasis added.]

The parties do not dispute that the circumstances described in MCL 500.2227(5)(b) did not 

occur in this case—namely, that plaintiff, the insured, did not provide defendant with reasonable 

proof “[t]hat the damaged or destroyed structure and all remnants of the structure” had been 

removed from the land on which the structure had been situated in compliance with the governing 

local code requirements. Therefore, under MCL 500.2227(7), defendant was to “use the retained 

proceeds to secure, repair, or demolish the damaged or destroyed structure and clear the insured 

property so that the structure and property comply with local code requirements and applicable 

ordinances of the city, village, or township,” and return to plaintiff “any unused portion of the 

retained proceeds” after completion of the work. If a municipality fails to return retained proceeds, 

the statute provides that the insured can file suit for return of the proceeds under MCL 500.2227(7).

Defendant argued, and the trial court agreed, that plaintiff did not timely file this action for 

return of the policy proceeds. MCL 500.2227(7) provides that an action “for the return of the 

policy proceeds” must be filed “within 3 years after the insurer provided notice to the insured under 

subsection (1) or 1 year after the effective date of the amendatory act that added this sentence, 

whichever is later.” Documentary evidence established that the prescribed notice was provided by 

the insurer to plaintiff and defendant on March 22, 2013. The amendatory act referenced in the 

statute is 2014 PA 509, which became effective on January 14, 2015. The present lawsuit was not 

filed until March 13, 2020. Thus, plaintiff did not file this action for return of the policy proceeds 

within either (1) the prescribed three-year time period, or (2) one year after the effective date of 

the amendatory act. Accordingly, the trial court correctly held that the present action was not filed 

within the limitations period set forth in MCL 500.2227(7), and was therefore time-barred.

In an attempt to avoid the limitations period in MCL 500.2227(7), plaintiff sought recovery 

of the proceeds under other, independent theories of relief, none predicated on MCL 500.2227(7). 

Plaintiff alleged claims under theories of breach of an implied contract, negligence and respondeat 

superior liability, conversion, violation of vested rights, equitable estoppel, and unjust enrichment. 

However, to determine the “gravamen of an action,” courts will review the complaint as a whole, 

looking beyond “mere procedural labels” in an effort to discern the specific nature of the claim. 

Adams v Adams (On Reconsideration), 276 Mich App 704, 710-711; 742 NW2d 339 (2007). The 
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gravamen of each of plaintiff’s claims is that defendant was not entitled to retain the insurance 

proceeds under MCL 500.2227(7). Therefore, plaintiff was required to bring its action within the 

limitations period under that statute. Plaintiff cannot avoid the limitations period under that statute 

by relabeling its claims under other theories of relief.

In sum, all of plaintiff’s claims are predicated on its entitlement to the insurance proceeds 

under MCL 500.2227, and so its failure to file this action within the limitations period under that 

statute is dispositive of all of plaintiff’s claims. Accordingly, we affirm the trial court’s order 

granting defendant summary disposition on that basis.1

Affirmed.

/s/ Mark J. Cavanagh

/s/ Colleen A. O’Brien

/s/ Michelle M. Rick

 

1 While the trial court addressed alternative grounds that would support dismissal of plaintiff’s 

claims, it is unnecessary to address them because we are affirming the dismissal of plaintiff’s 

claims on the basis of the statute of limitations.