Case Name: FLYNN v KORNEFFEL
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1996-04-30
Citations: 451 Mich. 186
Docket Number: Docket No. 99238
Parties: FLYNN v KORNEFFEL
Judges: Brickley, C.J., and Boyle and Weaver, JJ., concurred with Riley, J.
Reporter: Michigan Reports
Volume: 451
Pages: 186–241

Head Matter:
FLYNN v KORNEFFEL
Docket No. 99238.
Argued December 7, 1995
(Calendar No. 7).
Decided April 30, 1996.
Rehearing denied 453 Mich 1201.
Wendell C. and Margaret A. Flynn sought to redeem their interest in certain real property that they were buying on land contract from Curtis G. and Maureen A. Korneffel, successors in interest to various vendors, following the entry of a judgment of forfeiture by the 33rd District Court, Donald L. Swank, J. The Flynns neither answered the complaint nor defended their interest in the summary proceedings. A week before the expiration of the redemption period, the Flynns scheduled a closing at a title company, but informed the vendors’ attorney only on the morning of the closing. When neither Mr. Korneffel nor his attorney appeared at the closing, the Flynns placed a check for the redemption amount in escrow with the title company, and hand delivered a letter to the Komeffels and their attorney that payment was conditioned on delivery of a warranty deed along with mortgage discharges.
The next day, the Komeffels obtained a writ of restitution in the district court. On the following day, the Flynns brought an action in the Wayne Circuit Court against the Komeffels to enforce their right of redemption. The court, Roland L. Olzark, J., restrained enforcement of the writ of restitution and, after a hearing, determined that because the proceedings originated in district court, the Flynns should return to that court to pursue their remedy. Thereafter, the district court denied the Flynns’ motion to set aside the default judgment, the circuit court dissolved its preliminary injunction and enforced the writ of restitution, and the district court, sua sponte, subsequently dismissed a motion by the Flynns to enforce the right of redemption, stating that it did not have jurisdiction to hear the motion. Ultimately, the circuit court restrained the Komeffels from enforcing the district court writ of restitution and denied them summary judgment.
The Court of Appeals, Michael J. Kelly, P.J., and Mackenzie and Brennan, JJ., affirmed in an unpublished opinion per curiam, and remanded the case to the district court for further fact finding (Docket No. 125687). On remand, the district judge enforced the writ of restitution. After remand, the Court of Appeals stated that the judgment of forfeiture was properly entered and ordered that the writ of restitution be enforced against the Flynns, extinguishing any right of redemption that the Flynns may have claimed under the land contract. The Flynns appeal.
In an opinion by Justice Riley, joined by Chief Justice Brickley, and Justices Boyle and Weaver, the Supreme Court held:
The Korneffels did not perpetrate fraud in obtaining the writ of restitution. In order to effectuate the right of redemption, the full amount, not merely an offer, must be tendered without qualification or condition. The Flynns’ placement of the judgment amount in escrow was merely an offer to redeem the property.
1. The equitable right of redemption is governed by MCL 600.5744(6); MSA 27A.5744(6). A vendee in default is provided ninety days in which to redeem where less than fifty percent of the purchase price has been paid. The entire balance is due within that period. Deviation from the statutory provisions is justified only under unusual circumstances, such as fraud, which must be proved by clear and convincing evidence.
2. Pursuant to the statute and applicable case law, the Flynns could have tendered the money required to redeem to the Komeffels in person or by mail by the end of the last day of the redemption period. Neither a reasonable closing date nor a time was ever communicated or agreed upon, however. Instead, the Flynns unilaterally scheduled a closing and notified the Korneffels at the eleventh hour. In addition, Mr. Flynn did not tender payment within the statutory period, and the district court found that Mr. Korneffel and his attorney did not refuse to make themselves available for payment. The placement of the redemption money into escrow under the particular circumstances of this case did not effectuate a redemption because the money was not “paid” to the Korneffels.
Affirmed.
Justice Levin, joined by Justices Cavanagh and Mallett, dissenting, stated that when the amount required to be paid to redeem from a forfeiture is not a periodic installment, but represents the entire unpaid balance of principal and interest, the vendor is obliged to deliver to the vendee — simultaneously in exchange for receipt of the amount required to fully pay the contract and to redeem from the forfeiture — a warranty deed conveying to the vendee a marketable title of the premises and discharges of any encumbrances created by the seller.
The land contract in this case expressly obliged the Korneffels to deliver to the Flynns a warranty deed of conveyance free from all encumbrances upon payment in full of all sums owing on the land contract. Absent delivery of such a deed and discharges of the mortgages, the Flynns would not have a marketable title justifying disbursement of the money by Lawyers Title. The Flynns needed and were justified in requiring simultaneous delivery of the deed and discharges because the land contract expressly provided that, upon full payment, the seller would convey a marketable title. This, coupled with the obligation implicit in contracts generally of good faith and fair dealing, obliged the Komeffels minimally to have available in the lawyer’s office such a deed and discharges to be exchanged for a Lawyers Title check.
The law provides that a vendee may insist on performance of an act by the vendor that is to be concurrent with payment in full by the vendee. The tender by Lawyers Title in behalf of the Flynns imposed no stipulation other than performance by the Korneffels of their contractual obligations to convey a marketable title upon receipt of full payment, a stipulation that the Flynns were legally entitled to impose. Because the stipulation concerned only the Komeffels’ express obligations under the contract, the tender was sufficient to redeem.
Justice Cavanagh, dissenting, stated that an installment land contract vendor has a limited duty to cooperate with a vendee’s attempts to redeem the property from forfeiture when the vendee is ready, willing, and able to effectuate redemption but for commercially reasonable conditions imposed by a third-party lender, and the conditions attached to the tender are a result of the vendor’s use of the property after executing the land contract.
When the sale of land is accomplished through the use of an installment land contract that provides for a balloon payment, it is not unreasonable to expect that the vendee will not be able to make the balloon payment absent obtaining another loan. Accordingly, a vendor should be on notice that a commercial lender will not loan funds sufficient to cover a balloon payment without proof of clear title. More importantly, where, as in this case, the vendor seeking forfeiture has created a postexecution cloud on the title that prevents the vendee from obtaining an unconditional loan to cover the default judgment, it would be manifestly unfair to allow the vendor to refuse to cooperate with the vendee’s redemption attempts and then reap the rewards of forfeiture by recovering the property in its improved condition as well as by keeping the payments already made. Tender should be excused. Unconditional tender was unnecessary because the vendees were ready, willing, and able to tender before the redemption period had expired but for the conditions imposed by their lender as a result of the vendors’ postexecution actions and because the vendors refused to cooperate in satisfying those conditions.
Philip A. Gillis for the plaintiffs.
Sean P Kavanagh and Murphy, Brenton & Spagnuolo, PC. (by Frederick J. Griffith, III), for the defendants.

Opinion:
Riley, J.
We granted leave to determine whether a writ of restitution issued by the 33rd District Court in this land contract forfeiture proceeding is enforceable. Specifically, we must decide whether the land contract vendees in default were prohibited by fraud from redeeming the property in question. Alternatively, we must determine whether the vendees exercised their statutory right of redemption by placing the default amount in escrow with a title insurance company on the afternoon of the last day of redemption. We are unable to conclude, on the facts of this case, that the vendors perpetrated fraud in obtaining the writ of restitution. Furthermore, in order to effectuate the right of redemption, the full amount, not merely an offer, must be tendered without qualification or condition. Kaiser v Weber, 301 Mich 609; 4 NW2d 29 (1942). Plaintiffs' placement of the judgment amount in escrow was merely an offer to redeem the property. We therefore affirm the decision of the Court of Appeals.
i
On February 1, 1980, Michael and Marylou Baghdoian purchased a large residence situated on a valuable parcel of waterfront property on land contract from Sam and Pamela Piunti. Plaintiffs in the present proceeding, Wendell and Margaret Flynn, pur chased the Baghdoians' interest and are the current vendees of the land contract. Subsequently, plaintiffs failed to pay a $376,040.71 balloon payment that became due on February 1, 1988.
Thereafter, the vendors, the Piuntis, declared the contract forfeit and began summary proceedings in the 33rd District Court. The Flynns neither answered the complaint nor defended their interest in the summary proceedings. On March 30, 1988, the district court entered a judgment of forfeiture and possession for breach of land contract. After entry of default, plaintiffs' ninety-day period of redemption commenced. To perfect this right, plaintiffs were obligated to pay approximately $450,000, inclusive of unpaid real estate taxes. While these proceedings were pending, the current defendants and vendors, Curtis and Maureen Komeffel, purchased the Piuntis' interest and were substituted in the summary proceedings action. The redemption period was scheduled to expire June 28, 1988.
The facts surrounding the attempted redemption and subsequent procedural history are lengthy but important to the disposition of this case. During the redemption period, plaintiffs were able to obtain a loan from a third party, Consumers Petroleum Company, to redeem the property. A week before expiration of the redemption period, Mr. Flynn arranged a closing at Lawyers Title Insurance Company in Troy, Michigan. The closing was tentatively scheduled for June 28, 1988, the last day of redemption. During this time, it was discovered that the property in question had previously been encumbered.
One day before the expiration of the redemption period, on the afternoon of June 27, 1988, Mr. Flynn made a telephone call to Mr. Komeffel and told him that he had the money to redeem the property and would do so the following day. Mr. Flynn also advised Mr. Komeffel that he had a title commitment for the property and asked Mr. Komeffel whether he had the discharges of the mortgages. Mr. Komeffel replied that the mortgages had been paid. Mr. Flynn called Mr. Komeffel's attorney, Anthony Smereka, but he was out of town.
Mr. Flynn returned the call to Smereka the following morning between 9:30 and 10:00 A.M. Mr. Flynn told Smereka that he wanted both him and Mr. Korneffel to attend a closing in Troy. Mr. Flynn advised Smereka that he had a title insurance commitment that revealed undischarged mortgages and requested a warranty deed discharging the mortgages. Smereka was surprised that the discharges had not been recorded and told Mr. Flynn that he would investigate the problem and call him back in an hour.
The telephone conversation continued, however, and Smereka further inquired about the redemption money. Smereka told Mr. Flynn to tender the money if he had it and he would receive whatever was necessary for clear title. Although Mr. Flynn had set up the closing and made arrangements to borrow the redemption money a week earlier, he did not tell Mr. Korneffel or his attorney about the closing until this conversation on the morning of June 28, 1988. Smereka apparently hung up abruptly and did not call back.
After the telephone conversation, Smereka went on a previously arranged shopping trip with his wife. Before leaving, he advised his client of his telephone conversation with Mr. Flynn. Mr. Komeffel left his office, but told his staff to accept the redemption money from Mr. Flynn. Mr. Flynn later left several messages on Smereka's answering machine, advising him of the details of the closing for the first time. The closing was set for 2:00 P.M. that afternoon at Lawyers Title Insurance Company in Troy. Smereka did not learn these details until late in the afternoon when he checked his answering machine.
When it was clear that neither Smereka nor Mr. Komeffel would appear at the closing, plaintiffs placed a check for the redemption amount in escrow with Lawyers Title. At Mr. Flynn's request, Mr. Brink-man from the Lawyers Title Insurance Company prepared a letter late in the afternoon on June 28, 1988, addressed to Anthony R. Smereka at his office/residence in Northville, Michigan. The letter advised Smereka that the Flynns appeared at the office of Lawyers Title Insurance Company on that date and placed in escrow the sum of $466,510.95, plus additional money to compensate for any discrepancies. The letter conditioned payment on delivery of a warranty deed from the Komeffels along with mortgage discharges to Brinkman's office. Mr. Flynn then took a copy of the letter to the residences of Smereka and the Komeffels.
On the following day, June 29, 1988, the Komeffels obtained a writ of restitution in the 33rd District Court. However, on June 30, 1988, the Flynns filed a complaint in circuit court to enforce their right of redemption. The circuit court issued an order restraining enforcement of the writ of restitution obtained in district court. At a hearing on July 12, 1988, the circuit court judge determined that because the proceedings originated in district court, the Flynns should return to that court to pursue their remedy. The Flynns then motioned the district court to set aside the default judgment. On August 12, 1988, the district court issued a memorandum opinion denying the Flynns' motion to set aside the default.
On February 13, 1989, the circuit court dissolved its preliminary injunction and enforced the writ of restitution previously issued by the court on June 30, 1988. At the request of the circuit court judge, the Flynns filed a motion to enforce the right of redemption in district court on February 16, 1989. Meanwhile, the Flynns appealed the earlier decision of the district court denying their motion to set aside the default judgment to the circuit court. The district court dismissed the Flynns' motion to enforce the right of redemption sua sponte on March 2, 1989, stating that it was without jurisdiction to hear the motion.
Ultimately, on November 8, 1989, the circuit court restrained the Komeffels from enforcing the district court writ of restitution. In response, the Komeffels moved for summary disposition, MCR 2.116(C)(6), in the circuit court. The circuit court entered a dismissal of the action on January 12, 1990.
Plaintiffs filed an application for leave to appeal that decision with the Court of Appeals. In an unpublished per curiam opinion, the Court affirmed the decision of the circuit court, but remanded the matter to the district court for further fact finding. After an evidentiary hearing, the district judge issued an opinion enforcing the writ of restitution.
Subsequently, in its January 5, 1994, order, the Court of Appeals stated that the judgment of forfeiture was properly entered and that the writ of restitution should be enforced against plaintiffs. The Court held that the writ of restitution extinguished any right of redemption that plaintiffs may have claimed under the land contract. Plaintiffs filed leave to appeal in this Court, which was granted April 5, 1995. We affirm the decision of the Court of Appeals.
n
We must determine whether the writ of restitution is enforceable. The writ is not enforceable if defendants fraudulently prevented plaintiffs from redeeming the property. Alternatively, the writ may not issue if placement of the judgment amount in escrow on the last day of redemption constituted a valid redemption.
A
The equitable right of redemption is governed by MCL 600.5744(6); MSA 27A.5744(6):
When a judgment for possession is for nonpayment of money due under a tenancy or for nonpayment of moneys required to be paid under or any other material breach of an executory contract for purchase of the premises, the writ of restitution shall not issue if, within the time provided, the amount as stated in the judgment, together with the taxed costs, is paid to the plaintiff and other material breaches of an executory contract for purchase of the premises axe cured.
The Legislature has provided vendees in default a ninety-day period to redeem in cases in which less than fifty percent of the purchase price has been paid. MCL 600.5744(3); MSA 27A.5744(3). In order to comply with the statute and exercise this right of redemption, however, it is incumbent on the vendee in default to pay the entire balance within that period. This Court must apply the clear language of the statute "[a]bsent some unusual circumstances or additional considerations not within the ambit of the statute . . . ." Grossman Bldg Co v Elliott, 382 Mich 596, 603; 171 NW2d 441 (1969). In fact this Court has exercised its equitable power in unusual circumstances such as fraud to effectuate a redemption where one has not been executed within the statutory period. Marble v Butler, 249 Mich 276; 228 NW 677 (1930). These situations are necessarily limited because fraud requires proof by clear and convincing evidence. Id.
Two cases are instructive for purposes of determining what constitutes fraud. First, in Marble, the plaintiff and his co-vendees were in default for eleven consecutive monthly land contract payments. The defendant vendor served a notice of forfeiture and almost immediately commenced summary proceedings before a circuit court commissioner to regain possession of the premises.
Before the expiration of the redemption period, the vendor refused to reveal the amount remaining due on the land contract and failed to furnish an abstract of the property in accordance with the contract. Further, the vendee attempted to tender the entire balance due under the contract, and the vendor refused to accept the payment and execute a deed. The redemption amount, together with a copy of the contract and deed to be executed by the vendor, was filed with the clerk of the court.
The Court properly remanded the case "for further action in accordance with this opinion." Id. at 280. Marble presents an archetypal case of fraud that demonstrates the necessity of this Court's equitable intervention in cases of fraud. In Marble, the plaintiff tendered in earnest the full amount due under the contract, and it was refused.
Marble stands in sharp contrast to the case now before the Court. Here, there was no evidence on remand that a tender was made or refused by Mr. Komeffel or Smereka. In fact, the district court concluded that Smereka did not intentionally make himself unavailable to Mr. Flynn for purposes of redemption.
Similarly, in the second informative case, Gross-man, supra, the purchasers of a house on land contract defaulted, and the vendor foreclosed. Approximately two weeks before the statutory redemption period was scheduled to expire, the vendees' attorney wrote a letter to the vendor's attorneys requesting the vendor to execute a warranty deed. The vendees stated that they had found a purchaser for the property and that the bank had approved the loan. An attorney for the vendor responded that his client was not going to send the deed and that "[a]s far as [they] [we]re concerned, that [was] it." Id. at 601.
After the redemption period expired, the vendees filed a motion in circuit court requesting the plaintiff to execute a warranty deed and comply with the terms of the contract. The circuit court ordered the vendor to execute a valid warranty deed to fulfil the terms of the land contract. The Court of Appeals affirmed, and the vendor appealed in this Court.
This Court acknowledged the general rule that the right to redeem is a statutory, legal right that may not be enlarged or abridged by the courts. The Court noted that deviation from that rule is justified only under unusual circumstances such as fraud. Confirming that fraud must be proven by clear and convincing evidence, the Court held:
Granting defendant [vendee] every presumption of integrity and good faith, the only view we can take of the facts of this case is that the negotiations between the parties' attorneys came to an impasse. However, this situation does not amount to an act of fraud which would justify the intervention of equity. [Grossman, supra at 605.]
Consistent with Grossman, we uphold the district court's finding that there is no clear and convincing evidence of fraud in the present case. Therefore, we conclude that fraud will not prevent enforcement of the Komeffels' writ of restitution. Although Mr. Komeffel and Smereka had doubts regarding whether Mr. Flynn had the money to redeem, both were prepared to accept the redemption money if tendered. We believe that the present case is one similar to Grossman, where the "negotiations between the parties' attorneys came to an impasse." Id.
B
Having thus concluded that defendants did not perpetrate fraud, we must otherwise determine whether placement of the funds in escrow constituted a redemption. Plaintiffs analogize to Birznieks v Cooper, 405 Mich 319; 275 NW2d 221 (1979). In Birznieks, this Court held that the judgment to recover real property was "paid" when mailed on the final day of redemption.
The Court based its decision on the fact that the increasingly customary means of payment between creditor and debtor is by mailing personal checks. In an attempt to effectuate the remedial purpose of the redemption statute, the Court held that the words "within the time provided" and "paid" should be defined in accordance with the understanding of the vendees and tenants. Noting that land contract payments are routinely sent and received through the mail system, the Court reasoned:
The large number of cases where, because of a course of dealing, personal checks or mailing within the time provided or both have been treated as timely payment demon strates that there are no intractable problems in treating the mailing of personal checks as payment. [Birznieks at 334.]
The decision merely recognized the means by which the modem debtor renders payment. The Court concluded that this particular means of payment fully implements the remedial purpose of the statute.
Plaintiffs maintain that placement of the redemption money in escrow on the final day of redemption is actually preferable to the means of payment in Birznieks. We are, therefore, requested to conclude that plaintiffs "paid" the judgment amount by depositing it in escrow. We are persuaded, however, that relevant statute and case law require the opposite conclusion. In this case, we are constrained by Kaiser, supra, holding that an offer to redeem, pending presentment of a deed is not within the ambit of the statute or within this Court's equitable power.
In Kaiser, the plaintiff's attorney made a similar arrangement to obtain a loan to redeem forfeited property purchased on land contract. The plaintiff's attorney stated that payment would be made when the vendors delivered a deed to the property. It was admitted that no legal tender was made to the vendors or their attorney. The Court held that the vendee's willingness to tender payment was not sufficient:
"We would import into the law an unsafe and litigious element if we should hold an offer to perform, with ability to do so, accomplishes the purpose of a tender, or constitutes ground for equitable relief." [Id. at 616, citing Pappas v Harrah, 221 Mich 460; 191 NW 221 (1922).]
Tender must, therefore, be without qualification or condition. Id. Placement of the judgment amount in escrow in the present case amounted only to an offer to close pending fulfillment of the third-party conditions.
Additionally, as distinguished from Birznieks, placement of the redemption money in escrow on the final day of redemption without actual notification of the defendants is not a customary means of payment in contemplation of the parties. The conditions could only have been fulfilled if defendants knew about the closing. Details of the closing were never communicated directly to defendants. Plaintiffs had one week to communicate their intent to close and make their requests known to defendants. Moreover, plaintiffs had the same opportunity on the morning of June 28, 1988, when Mr. Flynn spoke to both Mr. Komeffel and Smereka. In this regard, we find the district court's opinion on remand instmctive:
Unfortunately, Flynn never explained to Komeffel or Smereka that he was borrowing the funds from a third party and that the third party had turned the money over to Lawyers Title Insurance Company and that the monies could only be disbursed upon the submitting of certain documents to finalize the transaction. It is apparent that Flynn chose to keep the details of his borrowing private from Komeffel and Smereka and did not disclose them to Komeffel or Smereka and chose to unilaterally schedule a closing date with Lawyers Title and then only informed the opposite side of such closing a day prior thereto and only advised the other side of the time of the closing by leaving a phone message on Smereka's recorder. Smereka did ask Flynn on June 28, 1988 as to whether he was borrowing the money and Flynn would not verify such fact. As a result, Flynn never told either Korneffel or Smereka of the necessity or reason for them to travel a distance to Lawyers Title to receive the redemption money. The court would also find that Korneffel and Smereka were not aware that Flynn was borrowing the redemption money from a third party and they were not aware that the monies were not authorized to be distributed for the purpose of the redemption without a deed and discharges being tendered in a hand-to-hand exchange.
We are, therefore, unable to extend the attenuated principles of Birznieks to the present case.
Further, we note that in Grossman, supra, it was not incumbent on the vendors to meet the demands of the vendees in default. Instead, it was the responsibility of the vendees to pay the defaulted amount without condition. Pursuant to the facts of this case, the vendors, therefore, had no further obligation than to accept payment upon tender. Grossman, supra.
The unilateral act of depositing redemption funds in escrow at the eleventh hour is clearly not within the purview of the statute. Moreover, it is uncontested that both parties knew the mortgages were discharged and that clear title could be passed. In fact, the Komeffels' warranty deed from the Piuntis was recorded and the deed did not show outstanding mortgages.
The dissent would engraft upon the statute an obligation to convey "marketable title" even though plaintiffs had not met their obligations under the statute. Marketable title, as used by the dissent, evidently would obligate the vendors to produce that which would fulfill the requirements of a third-party lender. Because such a case is not before us, we do not decide the case in which a vendee notifies the vendor in a reasonable manner and within a reasonable time of a third-party lender's conditions on disbursement of redemption funds.
The funds must be paid to the vendor. In the present case, the funds were not paid to the vendor. The Flynns were prohibited from making an unconditional tender by the conditions placed on disbursement of the money by the third-party lender. Even assuming an obligation to comply with the conditions, the vendor must have sufficient notice of the conditions. Certainly, that notification must be directly communicated to the parties. Communication by means of an answering machine on the afternoon of the final day of redemption is not sufficient. The circumstances of this case simply do not appeal to the conscience of the Court. Grossman, supra at 603. This result is compelled if we are to remain faithful to the well-established rule that "the right to redeem under present statutes is a legal right and can neither be enlarged nor abridged by the courts." Id.
m
Pursuant to the statute and case law cited, plaintiffs could have tendered the money in person or by mail to defendants by the end of the last day of the redemption period. In the present case, neither a reasonable closing date nor a time was ever communicated or agreed upon. Instead, plaintiffs unilaterally scheduled a closing and notified defendants of the closing and their responsibilities at the eleventh hour.
Although the right to redeem is statutory, a court may exercise its discretion in unusual circumstances such as fraud to extend the redemption period. We uphold the findings of the district court and conclude no fraud was perpetrated by defendants. Mr. Flynn did not tender payment within the statutory period, and the district court found that Mr. Korneffel and his attorney did not refuse to make themselves available for payment. Additionally, the placement of the redemption money into escrow under the particular circumstances of this case did not effectuate a redemption because the money was not "paid" to defendants. The decision of the Court of Appeals is affirmed.
Brickley, C.J., and Boyle and Weaver, JJ., concurred with Riley, J.
MCL 600.5744(6); MSA 27A.5744(6).
The Flynns also purchased an adjacent lot not subject to the land contract in question in the present case. The Flynns previously defaulted on this piece of property, but redeemed it subsequent to forfeiture proceedings.
The Flynns had not only defaulted in making the final balloon payment, but had also failed to malee monthly payments on the land contract, and had not paid real estate taxes on the property for a series of years.
MCL 600.5744(3); MSA 27A.5744(3) provides:
When the judgment for possession is based upon the forfeiture of an executory contract for the purchase of the premises, the writ of restitution shall not be issued until the expiration of 90 days after the entry of judgment for possession if less than 50% of the purchase price has been paid or until the expiration of 6 months after the entry of judgment for possession if 50% or more of the purchase price has been paid.
The ensuing factual history is based on the district court's findings of fact on remand from the Court of Appeals. Unpublished opinion of the 33rd District Court, issued August 12, 1993. A trial court's findings of fact are subject to considerable deference on review. MCR 2.613(C) states:
Findings of fact by the trial court may not be set aside unless clearly erroneous. In the application of this principle, regard shall be given to the special opportunity of the trial court to judge the credibility of the witnesses who appeared before it.
Unable to find clear error, we uphold the district court's findings of fact. See also Beason v Beason, 435 Mich 791, 799-803; 460 NW2d 207 (1990).
Justice Levin's dissent nevertheless purports to make its own findings of fact when it bases its decision in substantial part on the fact that the Komeffels did not uphold their general duties to perform in " 'good faith' " and of " 'fair dealing.' " Post at 212-213. This assertion is belied by the express finding of the district court that neither Korneffel nor his attorney "exhibited bad faith."
Flynn did not tell his attorney, Anthony Smereka or Mr. Korneffel that he had arranged the closing.
Wendell Flynn ordered a title commitment on June 24, 1988. It is undisputed that the commitment showed that the property was used by the Piuntis as collateral for several mortgages to Trenton Bank and Trust Company. The mortgages amounted to a cumulative sum of approximately $505,000. Additionally, the commitment showed an assignment of the seller's interest in the land contract to Trenton State Bank as collateral for a $425,000 loan. It is unclear whether this was additional security for the existing loans or security for a new loan. The title commitment also showed that Mr. Flynn deeded his interest in the subject property to Joe Stewart as security for a loan in the sum of $189,500.
However, a recorded warranty deed from the Piuntis to the Komeffels indicated that the mortgages, as well as the back taxes, had been paid. In fact, Flynn had been told by Lawyers Title that a deed without restrictions had been recorded from, the Piuntis to the Komeffels, which evidenced that the mortgages had been discharged.
However, the evidence at the fact-finding hearing showed that Flynn did not have the money to redeem in his name or at his immediate disposal at the time this call was made.
Plaintiffs assert that defendants' attorney, Anthony Smereka, should not have been allowed to testify at the remand hearing because Mr. Komeffel previously asserted an attorney-client privilege when Smereka was noticed for deposition. In letters to plaintiffs' counsel, Philip Gillis, dated September 21, 1988, and March 27, 1989, defendants' counsel, Leo Carrigan, Jr., did not assert the attorney-client privilege, but rather inquired about what matters Gillis expected to question Smereka. It appeared that the information was essential to Mr. Komeffel in order to determine whether to exercise a valid waiver of the privilege. There is no evidence in the record that Gillis responded to the letters. Therefore, the attorney-client privilege was not clearly asserted by Mr. Komeffel.
Moreover, we agree with the district judge on remand. In allowing Smereka to testify at the evidentiary hearing, the judge noted that no final decision had been made by the circuit court with regard to Mr. Korneffel's attorney-client privilege. Therefore, it was not finally determined that he could claim the privilege. The judge stated that the privilege would not likely apply to all contact between Mr. Komeffel and Smereka. The judge further noted that Smereka had considerable contact with third parties that would not be subject to an attorney-client privilege. Finally, Smereka was called as an adverse witness at the evidentiary hearing by plaintiffs, the Flynns. For these reasons, we conclude that the district judge properly allowed Smereka to testify at the evidentiary hearing.
Upon his return on the evening of June 27, 1988, Smereka attempted to return Mr. Flynn's call. Mr. Flynn was not home, therefore Smereka left a message.
During their conversation that morning, Mr. Flynn still did not communicate any details of the closing because the third-party loaner had not yet turned the money over to Lawyers Title Insurance Company. Mr. Flynn testified that he did not want to discuss the details with Mr. Korneffel or Smereka until he had the cashier's check in his possession.
There was no evidence from which the district court on remand could conclude that Smereka intentionally made himself unavailable for purposes of redemption.
Smereka told Mr. Komeffel that he did not have to attend the closing and that he was entitled to continue the ordinary activities of his day.
The district court found, however, that Mr. Flynn did not have the redemption money in his possession until approximately 2:30 p.m. on June 28, 1988.
Mr. Flynn arrived at Smereka's office/residence at approximately 6:00 p.m. and handed Smereka the envelope with the letter from Brinkman. Mr. Flynn then went to the Komeffels' home and, upon finding no one home, left a copy of the letter in their door.
See n 22.
The temporary restraining order was continued to allow the Flynns to obtain relief in that court.
The circuit court concluded that the Flynns had an adequate remedy in the district court in either a motion for relief from judgment or a restraining order pursuant to MCL 600.8302; MSA 27A.8302.
In a letter addressed to Circuit Court Judge Roland Olzark, District Judge Donald Swank considered the issue to be on appeal to the circuit court. He stated that the court did not have further jurisdiction to entertain the motion because the record on appeal had been forwarded to the circuit court on February 16, 1989.
(C) Grounds. The motion may be based on one or more of these grounds, and must specify the grounds on which it is based:
(6) Another action has been initiated between the same parties involving the same claim.
The court dismissed the case, but without prejudice with regard to the district court action.
Plaintiffs contest the validity of the Court of Appeals action remanding the case to the 33rd District Court for an evidentiary hearing. Plaintiffs claim that this was a circuit court action, that the district judge never had jurisdiction over the case, and that the remand to the district court was therefore improper. Plaintiffs' contention is undermined by proper analysis of the procedural history of the case. The summary proceedings were properly instituted in district court which had original jurisdiction over the action. MCL 600.5704; MSA 27A.5704. Plaintiffs, however, attempted to enforce their right of redemption by commencing the circuit court action. Plaintiffs improperly term their action a "collateral attack." The writ of restitution had been properly issued by the district court. Therefore, the only means by which the circuit court could obtain jurisdiction was by appeal from the district court. MCR 7.101(A)(2). The circuit court action was properly abated. MCR 2.116(C)(6). We conclude that the Court of Appeals properly upheld dismissal of the circuit court action and properly remanded the action to district court.
Thus, the Court of Appeals attained jurisdiction of all issues because it is clear that the same issues were raised in district and circuit courts. We find the Court of Appeals holding persuasive in this regard:
Here, the parties are the same in both the district court and circuit court actions, and both actions arise out of a dispute over whether the parties have satisfied the terms of their land contract. Further, by granting district courts jurisdiction to enforce writs and orders, the summary forfeiture proceedings statute, MCL 600.5732; MSA 27A.5732, evinces a legislative intent that the district court's summary proceedings jurisdiction may continue until the writ of restitution is executed. See also 52A CJS, Landlord & Tenant, § 783, p 195 ("The court issuing the warrant has supervision and control over it until there has been a full and final execution"). Because both the district court and the circuit court possessed concurrent jurisdiction over the enforcement of the writ of restitution, the circuit court action was properly abated. [Unpublished opinion per curiam, issued March 30, 1993 (Docket No. 125687), slip op at 2 (citation omitted).]
We note that plaintiffs' attorney essentially conceded that the same issues were before both courts when he asserted the following at a July 20, 1988, hearing before the district court judge: "I just want a Judge in a fair proceeding to decide whether we made tender."
Furthermore, plaintiffs' allegation that the district judge acted as a master in chancery in violation of Const 1963, art 6, § 5 is without merit. Moreover, plaintiffs' citations to Karibian v Paletta, 122 Mich App 353; 332 NW2d 484 (1983), and Brockman v Brockman, 113 Mich App 233; 317 NW2d 327 (1982), are irrelevant The district judge in the present case in no way acted as a master in chancery. The facts of Brockman are not on point. The error in Brockman was the trial judge's appointment of a retired judge to sit as an acting circuit court judge to make findings of fact and conclusions of law. The Court of Appeals concluded that the acting judge was "without any constitutional or statutory authority to appoint [the former judge] to sit as the court and try this matter." Id. at 237. In Karibian, the Court did not even reach the issue of a master in chancery. The district judge had jurisdiction on remand and did not act as a master in chancery.
We reject plaintiffs' due process argument based on the Court of Appeals denial of briefing and oral argument. MCR 7.214(E)(1)(c) allows a decision without oral argument where "the appeal is without merit; the panel may enter without oral argument an appropriate order or opinion dismissing the appeal, affirming, reversing, or vacating the judgment or order appealed from, or remanding the case for additional proceedings."
448 Mich 908.
We note that fraud is not the only unusual circumstance warranting exercise of this Court's equitable power.
See Palmer v Palmer, 194 Mich 79; 160 NW 404 (1916).
The plaintiff bought out the interest of his co-vendees, his parents. The plaintiff alleged a conspiracy between one of the co-vendees and the vendor. The Court found that such allegations were supported by the plaintiff's supplemental bill that showed that the vendee tendered the entire balance due under the land contract and it was refused by the vendor.
The vendees were going to redeem the property in order to sell it.
The Court quoted Wood v Button, 205 Mich 692, 703; 172 NW 422 (1919), which held:
"The right to redeem from a foreclosure at law is a legal right, is created by the statute, and can neither be enlarged nor abridged by courts. A redemption is complete when one having the right to redeem pays in a proper time, to a proper person." [Grossman, supra at 603.]
In fact, there was testimony and evidence that Mr. Komeffel did not want Mr. Flynn to redeem because the property was worth more than the redemption amount.
We therefore refuse plaintiffs invitation to overrule Grossman, because it properly applies the clear language of the statute.
See also Leonard, v Woodruff, 259 Mich 434; 243 NW 252 (1932).
Notwithstanding the fact that the Flynns were in default and thus "beyond the contract," Birznieks, supra at 329, the land contract expressly obligates conveyance of a warranty deed "free from all other encumbrances." It is uncontested that the property was free from encumbrance.
We note that the Court of Appeals in Karakas v Dost, 67 Mich App 161; 240 NW2d 743 (1976), held that a vendee may redeem property from foreclosure by payment either to the vendors, the vendors' attorney, or the court.