Court Opinion

ID: 3185796
Source: CourtListenerOpinion
Date Created: 2016-03-16 12:17:38.923403+00
Date Added: 2024-06-11T14:36:05.814344
License: Public Domain

STATE OF MICHIGAN

                             COURT OF APPEALS

TWO HUNDRED EIGHTY-FIVE WEST                                         UNPUBLISHED
HICKORY GROVE, LLC,                                                  March 15, 2016

               Plaintiff-Appellee,

v                                                                    No. 324300
                                                                     Oakland Circuit Court
ELBERT L. HATCHETT and LAURESTINE                                    LC No. 2014-138370-CH
HATCHETT,

               Defendants-Appellants,

and

UNITED STATES OF AMERICA and
DEPARTMENT OF TREASURY,

               Defendants.

Before: STEPHENS, P.J., and CAVANAGH and MURRAY, JJ.

PER CURIAM.

        In this action for judicial foreclosure, defendants Elbert and Laurestine Hatchett appeal as
of right the trial court’s orders granting summary disposition and entering judgment in favor of
plaintiff Two Hundred Eighty-Five West Hickory Grove, LLC. We affirm.

                                       I. BACKGROUND

       It is undisputed that defendants signed a mortgage and note with Alan Ackerman for
$840,000, on property owned by Laurestine at 285 West Hickory Grove, in Bloomfield
Township. In an attempt to sell the property to satisfy the loan, Ackerman sought out and found
willing purchasers and struck an agreement to sell the property to them on a land sale contract.
In order to do that, Laurestine assigned her interest in the property to Ackerman. The document
signed by Laurestine noted that the land sale contract was being secured by property owned by
the purchasers and referred to “Schedule A” for a list of those properties. Elbert averred that he
reviewed all documents signed by Laurestine. Copies of the assignment signed by Laurestine,
referencing Schedule A, were filed with the Macomb and Wayne County Registers of Deeds.
The Schedule A provided to the trial court by plaintiff contained reference to a multitude of

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properties owned by the purchasers, which would be used as collateral for the land sale contract.
Elbert averred that he never saw the Schedule A, and that it was not attached to the documents as
provided by plaintiff.

        Eventually, the purchasers stopped making payment on the land sale contract, and
Ackerman engaged in a two-year process of eviction by judicial foreclosure. The property
remaining unsold, Ackerman then sought reimbursement under the loan and mortgage agreement
with defendants. Defendants refused to pay. Ackerman then assigned the note and mortgage to
plaintiff, a Michigan LLC of which Ackerman was a manager. Plaintiff then brought the instant
action for judicial foreclosure.

        Later, plaintiff moved for summary disposition pursuant to MCR 2.116(C)(10), arguing
that defendants signed the note and mortgage, received the funds, and now refused to pay, and no
discovery should change that. Defendants responded by arguing that plaintiff’s complaint was
required to be dismissed because it did not include the promissory note, that without the
promissory note plaintiff could not prove it was entitled to enforce the note, and the trial court
had no way of determining whether the note was recourse or non-recourse. Substantively,
defendants argued that plaintiff was not a holder in due course pursuant to MCL 440.3302,
because Ackerman and plaintiff had concealed the various collateral properties from defendants,
and was therefore subject to personal defenses defendants had against Ackerman. At a hearing
scheduled on the motion, plaintiff failed to appear. Defendants and the trial court then realized
that plaintiff had filed a re-notice of hearing the day before but had not provided notice to either
defendants or the trial court. The trial court stated that it would adjourn the hearing until the
later date requested by plaintiff and defendants did not object or move for dismissal.

        Subsequently, plaintiff filed reply and supplemental reply briefs, to which it attached the
promissory note, arguing that it was a holder in due course because defendants were aware of the
myriad of collateral properties. Defendants argued that they were not, citing an affidavit by
Elbert stating he read all the documents signed by Laurestine and that Schedule A was not
present. The trial court found for plaintiff, stating that Elbert’s affidavit did not create a question
of material fact regarding defendants’ knowledge of the collateral properties, where plaintiff had
provided abundant documentary evidence. The trial court also ruled that, plaintiff having
provided the promissory note with its reply brief, defendants’ procedural arguments were
without merit. Shortly thereafter, the trial court entered judgment in favor of plaintiff, including
judicial foreclosure, money judgment, and deficiency judgment after a Sheriff’s sale.
Defendants now appeal.

                                           II. ANALYSIS

        Defendants offer both procedural and substantive grounds for reversal of the trial court’s
order granting plaintiff’s motion for summary disposition. “This Court reviews decisions on
motions for summary disposition de novo to determine if the moving party was entitled to
judgment as a matter of law.” Alcona Co v Wolverine Environmental Prod, Inc, 233 Mich App
238, 245; 590 NW2d 586 (1998). A motion for summary disposition pursuant to MCR
2.116(C)(10) “tests the factual sufficiency of the complaint.” Joseph v Auto Club Ins Ass’n, 491
Mich 200, 206; 815 NW2d 412 (2012). “The moving party has the initial burden of supporting
its position by affidavits, depositions, admissions, or other documentary evidence.” Neubacher v

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Globe Furniture Rentals, Inc, 205 Mich App 418, 420; 522 NW2d 335 (1994). Where the
moving party has properly supported its position, the burden then shifts to the opposing party.
Id. “Where the burden of proof at trial on a dispositive issue rests on a nonmoving party, the
nonmoving party may not rely on mere allegations or denials in pleadings, but must go beyond
the pleadings to set forth specific facts showing that a genuine issue of material fact exists.”
Quinto v Cross & Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996). “If the opposing party
fails to present documentary evidence establishing the existence of a material factual dispute, the
motion is properly granted.” Id. at 363. An affidavit that uses “conclusionary language . . .
[un]supported by underlying facts,” is “insufficient for purposes of MCR 2.116(C)(10).”
Jubenville v West End Cartage, Inc, 163 Mich App 199, 207; 413 NW2d 705 (1987).

        Defendants first argue that the trial court committed procedural error that required
reversal. First, defendants argue that the trial court should have dismissed plaintiff’s complaint
for failure to include the promissory note with its complaint. Specifically, defendants assert that,
pursuant to MCR 2.113(F)(1), the trial court should have dismissed plaintiff’s action.
Nevertheless, defendants fail to contemplate that, pursuant to MCR 2.116(I)(5), even if the trial
court had summarily disposed of plaintiff’s claim, plaintiff would have been permitted to amend
its pleadings. Considering plaintiff later filed the promissory note prior to any decision on the
motion, it stands to reason that plaintiff could have easily cured any defect in the complaint.
Satisfied that the same result would have occurred in either circumstance, defendants have
provided no grounds for reversal. See MCR 2.613(A).

        Next, defendants argue that plaintiff’s motion for summary disposition should have been
dismissed when plaintiff failed to appear at the original hearing. Defendants have waived this
issue. “Failure to timely raise an issue in the trial court generally waives review of that issue on
appeal.” In re Gerald L Pollack Trust, 309 Mich App 125, 150; 867 NW2d 884 (2015). At the
hearing, defendants did not move the trial court to enter any sanctions against plaintiff for failing
to attend the hearing, nor did they object when the trial court stated it would adjourn until a later
date. Defendants’ silence on the issue results in its waiver. See id. In any event, MCR
2.119(E)(4)(b), which defendants solely rely upon, does not permit the trial court to dismiss
plaintiff’s motion as a sanction for failing to attend a hearing.

        In their last procedural argument, defendants assert that the trial court erred in permitting
plaintiff to raise new grounds of argument in its reply briefs. While it is true that “[r]eply briefs
must be confined to rebuttal[,]” Kinder Morgan Michigan, LLC v City of Jackson, 277 Mich App
159, 174; 744 NW2d 184 (2007), this Court’s ability to review this issue is hindered by
defendants’ failure to provide this Court with the relevant transcript. Defendants refer to a
hearing regarding plaintiff’s motion for summary disposition where, both parties agree, there was
a discussion and decision by the trial court regarding reply briefs to be filed by plaintiff.
Nevertheless, defendants have shirked their duty to provide this Court with the relevant
transcript, MCR 7.210(B)(1)(a), and we therefore are unable to consider it. PT Today, Inc v
Comm’r of Office of Fin and Ins Svcs, 270 Mich App 110, 151-152; 715 NW2d 398 (2006).
Even so, any such error would have been harmless pursuant to MCR 2.613(A), because
defendants were given a full and fair opportunity to respond to the reply brief, and because the
trial court had the power, pursuant to MCR 2.116(I)(1), to sua sponte enter an order granting
summary disposition in favor of plaintiff in light of the newly presented evidence and argument.

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For those reasons, the trial court’s procedural error (if any) in allowing new arguments was not
“inconsistent with substantial justice[,]” and do not require reversal. MCR 2.613(A).

        There being no procedural grounds for reversal, we now turn to defendants’ argument
that there was a genuine issue of material fact regarding defendants’ knowledge of the various
properties pledged as security interest for the land sale contract between Ackerman and the
purchasers.

        The facts presented exhibit that Laurestine signed a legal document assigning her interest
in real property to Ackerman, and that document referenced an attached Schedule A, for a list of
properties that secured the land sale contract. Elbert averred that he reviewed all documents
signed by Laurestine. Plaintiff provided that document, along with Schedule A, to the trial court.
Additionally, plaintiff made an unrebutted assertion that the document and Schedule A had been
filed, in their entirety, with the Wayne and Macomb County Registers of Deeds. The only
evidence provided by defendants was an affidavit by Elbert, in which he averred that defendants
had not seen Schedule A and that Ackerman had attempted to conceal those collateral properties
from defendants. Notably, defendants failed to provide any evidence of what they believed
Schedule A to actually entail (considering they do not dispute that the document signed by
Laurestine did reference Schedule A) or any other documentary evidence regarding the alleged
concealment by Ackerman. Further, Elbert’s averment is simply unsupported by the surrounding
facts, considering Laurestine signed the document referencing Schedule A, and defendants have
never provided an explanation of what they believed Schedule A to entail. As such, Elbert’s
affidavit amounted to “conclusionary language . . . [u]nsupported by underlying facts,” that was
not sufficient to defeat the summary disposition motion. Jubenville, 163 Mich App at 207. See
also Quinto, 451 Mich at 363. As such, defendants have provided no grounds for reversal.

       Affirmed.

                                                            /s/ Mark J. Cavanagh
                                                            /s/ Christopher M. Murray

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