Court Opinion

ID: 6478267
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:47:29.073193+00
Date Added: 2024-06-11T15:54:03.716126
License: Public Domain

BROOKS, Judge,
specially concurring.
I concur in the result reached by the majority, but would prefer to resolve this case according to principles of merger and extinguishment. In my opinion, that path is at once more defensible and more direct than the one taken by the majority. First, I am not persuaded that a residential developer may claim the statutory protection against deficiency judgments afforded to homeowners under Baker v. Gardner. Moreover, I am convinced that, under the peculiar facts of this case, to address any question regarding the application of Baker is to follow the proverbial red herring. I agree with the majority, however, that the issues involving merger and extinguishment have not been adequately presented or briefed in this case.
Nevertheless, I am unwilling to be distracted by questions concerning the nature of the property {i.e., whether or not it is of a type described in the anti-deficiency statutes), the character of the debt {i.e., whether purchase money or non-purchase mon*240ey), or the lienor’s chosen method of foreclosure (i.e., whether by trustee’s power of sale or judicial process) because I do not believe that the answers to these questions are dispositive. What matters is that Mid Kansas was the only lender.
In reviewing a case that is almost identical on its facts to the one now before us, the Michigan Court of Appeals stated:
At law, whenever a greater and lesser estate or a legal and equitable estate coincide in the same person, the lesser or equitable estate is destroyed by merger. Equity, however, will generally prevent a merger if the parties did not intend a merger, and an intent to avoid a merger will ordinarily be inferred where it is in the interest of the person holding the various estates to keep them separate. Plaintiff must look to equity here to prevent the merger which would be automatic at law____ [EJquity js 0f n0 assistance under the circumstances presented here, because plaintiff seeks to avoid a merger to enable it to obtain, in effect, a double recovery.
Board of Trustees v. Ren-Cen Indoor Tennis & Racquet Club, 145 Mich.App. 318, 325, 377 N.W.2d 432, 436 (1985) (citations omitted).
Mid Kansas, like the plaintiff in the case above, is attempting to obtain a double recovery. As the Michigan court observed, the price at a foreclosure sale is depressed in order to reflect outstanding prior liens. Id. The reason for this is illustrated by the instant case, where a third party who purchased the property at the trustee’s sale would have to satisfy the debts secured by the first deeds of trust in order to prevent Mid Kansas from asserting its superior claim to the property. As the only lender, Mid Kansas must not be permitted to obtain the price advantage of purchasing at the second-position trustee’s sale without the disadvantage of having to satisfy the debts secured by the first-position deeds of trust in order to obtain uninterrupted enjoyment of the property- See also Armstrong, Two Deeds of Trust in the Same Hands: A Hobson’s Choice of Foreclosure?, 3 Arizona State Bar Corporate, Banking and Business Section Newsletter 15 (May 1989).
I would reverse the trial court’s judgment and remand with instructions to enter judgment in favor of Dynamic.