Court Opinion

ID: 4675904
Source: CourtListenerOpinion
Date Created: 2021-04-09 09:07:25.682741+00
Date Added: 2024-06-11T08:03:29.273584
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                            STATE OF MICHIGAN

                             COURT OF APPEALS

FIFTH THIRD BANK,                                                    UNPUBLISHED
                                                                     April 8, 2021
               Plaintiff-Appellee,

v                                                                    No. 351608
                                                                     Oakland Circuit Court
EMC2, INC and KENNETH C. DARGATZ,                                    LC No. 2017-158718-CB

               Defendants,
and

CHARRINGTON ESTATES, LLC,

               Appellant,
and

MARK KASSAB, Receiver,

               Appellee,
and

OAKLAND COUNTY TREASURER and
MCNAUGHTON-MCKAY ELECTRIC
COMPANY,

               Other Parties.

Before: MURRAY, C.J., and JANSEN and STEPHENS, JJ.

JANSEN, J. (concurring in part and dissenting in part).

        I concur with the majority’s conclusion that appellant, Charrington Estates, LLC
(Charrington), has standing because it was an aggrieved party eligible to appeal the trial court’s
final order. However, I respectfully dissent on the basis that, contrary to the majority, I would
conclude that the trial court erred by failing to find that the receiver’s possession and use of
Charrington’s real property constituted an expense of the receivership, and further, the trial court

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abused its discretion by denying Charrington’s request for payment of removal and cleanup
expenses. I would reverse and remand for further proceedings.

         In my view, the majority’s determination that the trial court’s finding that the amount of
compensation owed to Charrington was equitable is premature: the issue of how much
compensation Charrington may be entitled to under principles of equity is secondary to the issue
of how to classify any reasonable compensation owed to Charrington. I agree with Charrington’s
position that after the receiver was appointed and took possession of Charrington’s property,
Charrington began providing services to the receivership in the form of continued possession of
the premises in order to carry out the duties of the receivership. At this stage of the proceedings,
Charrington was the owner of the property, and not simply another unsecured creditor. Therefore,
I would conclude that the possession and use of Charrington’s property constituted a receivership
expense, and should have been included in the calculation of other receivership expenses such as
the cost of the auction and the auctioneer. I would conclude that Charrington is entitled to fair-
market rent for the possession and use of its property as an expense of the receivership.1
Additionally, I find it important to note that what plaintiff believes to be equitable compensation
is irrelevant when determining the total amount of receivership costs: if plaintiff believes that
Charrington’s compensation is inequitable, it is entitled to file an objection to any fees or expenses
sought by the receivership under MCR 2.622(F)(4).

        I would further conclude that the trial court abused its discretion by denying Charrington’s
request for reimbursement of removal and cleanup expenses. In my view, when the receiver took
possession of the premises and continued to use the premises to store and auction off EMC2, LLC’s
property, it became responsible for the condition of the premises, including any costs associated
with equipment removal, chemical disposal, and general cleaning. Contrary to the majority’s
conclusion, I do not agree that Charrington was responsible for providing the trial court with an
inventory of items left by EMC2, LLC. Rather, I would conclude that in order to be reimbursed
for reasonable expenses incurred, it was only required to submit an accounting of the costs actually
incurred for removal and cleanup after the receiver vacated the premises.

        On the basis of the foregoing, I would reverse and remand to the trial court to reconsider
the total costs of the receivership, including fair-market rent and reasonable reimbursement for
removal and cleanup expenses owed to Charrington.

                                                              /s/ Kathleen Jansen

1
  As Charrington concedes, any past-due rent owed by EMC2, LLC would be separate from any
fair-market rent payments Charrington is entitled to from the receivership.

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