Court Opinion

ID: 4245709
Source: CourtListenerOpinion
Date Created: 2018-02-16 10:09:07.358231+00
Date Added: 2024-06-11T14:43:43.498672
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

CITY OF DEARBORN,                                                  UNPUBLISHED
                                                                   February 15, 2018
              Plaintiff-Appellee,

v                                                                  No. 336710
                                                                   Wayne Circuit Court
SHAEFA MOHAMED,                                                    LC No. 16-008130-AV

              Defendant-Appellant.

Before: TALBOT, C.J., and METER and TUKEL, JJ.

PER CURIAM.

       Defendant appeals by leave granted a January 6, 2017, order by the circuit court
dismissing this matter for lack of jurisdiction. We affirm.

        This appeal arose from a property-tax foreclosure and judgment of possession granted in
plaintiff’s favor. A March 20, 2015, uncontested judgment of foreclosure provided that fee
simple title to the property in question would vest in the Wayne County Treasurer unless
redemption occurred by March 31, 2015. On March 31, 2015, defendant entered into an
installment-payment plan but subsequently defaulted on that plan.

        Pursuant to a right of first refusal provided for in MCL 211.78m, a provision of the
General Property Tax Act (GPTA), MCL 211.1 et seq., the Wayne County Treasurer conveyed
the property to plaintiff by quitclaim deed on August 26, 2015. Defendant remained in the
home, and on September 28, 2015, plaintiff filed a notice to quit and sought to recover
possession of the property. In November 2015, plaintiff filed and served on defendant a district-
court complaint to recover possession of the property.

       On May 26, 2016, defendant moved for summary disposition of the district-court action
under MCR 2.116(C)(10). She argued that in conducting the tax foreclosure involving her
property, the Wayne County Treasurer violated her constitutional rights. She claimed, among
other things, that she did not receive adequate notice of the foreclosure proceedings and an
opportunity to appear. She argued that the deed conveyed to plaintiff was invalid and noted that

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she was participating in a federal action challenging the foreclosure.1 Defendant argued that the
summary proceeding for possession should be dismissed or stayed pending the outcome of the
federal action. In the alternative, she requested leave to file a counterclaim to quiet title to the
property. Plaintiff, in response, argued that defendant received adequate notice and, more
importantly, never challenged or appealed the judgment of foreclosure. Plaintiff argued that it
was entitled to summary disposition under MCR 2.116(I)(2).

        The district court held a hearing on June 16, 2016. Defendant argued that because title to
the property remained disputed and was being litigated in federal court, plaintiff’s action for
possession of the property should be dismissed without prejudice. In response, plaintiff argued
that it held title to the property after entry of the judgment of foreclosure and through Wayne
County’s conveyance of it to plaintiff under plaintiff’s right of first refusal. It emphasized that
the action in question was not an action to quiet title but was an action for possession, and it
noted once again that defendant neither appealed the judgment of foreclosure nor moved to set it
aside. The district court noted that “as far as the County is concerned . . . there was a default in
the payments” due under the installment-payment plan. The court stated that it was treating the
proceedings as a motion for summary disposition, and it stated, “the [c]ourt believes that there is
sufficient evidence to indicate that the [p]laintiff in this case is the proper title holder; they
complied with the Michigan Court Rules governing summary proceedings in landlord tenant
matters.” The court stated that “some other [c]ourt” may have to make a ruling regarding
foreclosure irregularities, but not the district court. The district court granted plaintiff a
judgment of possession.

         On December 16, 2016, defendant filed an appeal in the circuit court, arguing that the
district court should not have “conducted a summary proceeding . . . for possession despite
[defendant’s] claims concerning the validity of the tax foreclosure and her entitlement to present
equitable claims and defenses to preclude being dispossessed of her home.” She asked the
circuit court to vacate the judgment of possession and either order the dismissal of plaintiff’s
action or stay the proceedings pending the resolution of the title controversy. In its January 6,
2017, opinion and order, the circuit court dismissed defendant’s appeal for lack of jurisdiction,
finding that it had no jurisdiction to grant relief from the judgment of foreclosure. The circuit
court reasoned:

               Circuit courts are presumed to have original, subject-matter jurisdiction,
       except where exclusive jurisdiction is given to some other court, or where
       jurisdiction is expressly prohibited. MCL 600.605.

               [Defendant] has raised the issue that she was unable to challenge the
       Judgment of Foreclosure in the District Court. [She] asks that this Court, sitting
       as an appellate court, make a finding that the lower court erred in not allowing
       [her] to contest the vesting of title in the City. This it cannot do.

1
  In the federal action, defendant raised various claims, arguing, in part, that there had been a
taking without just compensation. The federal court subsequently dismissed the claims. An
appeal of that decision is pending.

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              The statutory scheme presented in the [GPTA] was designed to completely
       govern all proceedings involving the foreclosure of property in Michigan, to the
       exclusion of all other civil claims and remedies. [MCL 211.78k], subparts (5)(b)
       and (6) of the statute, indicate that property foreclosed by a judgment under the
       Act vests absolutely in the foreclosing governmental unit, and the foreclosing
       governmental unit shall have absolute title to the property.

               The Michigan Supreme Court has stated that the legislative intent behind
       the Act was to provide finality to foreclosed judgments, and to quickly return
       property to the tax rolls. . . . Judgments may not be modified other than through
       the limited procedures provided under the Act. . . .

              [Defendant] had several opportunities to challenge the foreclosure process,
       but chose not to file a written objection, or appear at the Show Cause Hearing or
       the Judicial Foreclosure Hearing. The Act also afforded [defendant] a third
       opportunity to object to the foreclosure. Under MCL 211.78k(7), the foreclosing
       governmental unit, or a person claiming to have a property interest in property
       foreclosed under the Act, may appeal the [c]ircuit [c]ourt’s Judgment of
       Foreclosure to the Michigan Court of Appeals.

              Appellant did not avail herself of any of the remedies provided under the
       Act. The Supreme Court has stated that if a property owner does not redeem the
       property or appeal the judgment of foreclosure within 21 days, MCL 211.78k(6)
       deprives the circuit court of jurisdiction to alter the judgment of foreclosure.

The circuit court concluded that plaintiff was a “bona fide purchase for value” under the GPTA
and that the court had no jurisdiction to alter the judgment of foreclosure. It dismissed the appeal
for lack of jurisdiction.

       Defendant argues that the trial court erred in its ruling because “the GPTA in no way
divests a circuit court of appellate jurisdiction over decisions from a summary proceeding
regardless of the fact that it may implicate a judgment of foreclosure entered pursuant to the
GPTA.” She claims that she never asked the circuit court to modify a judgment of foreclosure
but merely asked “whether it was proper for the district court to enter a judgment of possession
when the issue of title was being litigated in another court.”

        We review de novo constitutional issues, statutory interpretation, matters of subject-
matter jurisdiction, and grants of summary disposition. Harvey v State, Dept of Management &
Budget, Bureau of Retirement Servs, 469 Mich 1, 6; 664 NW2d 767 (2003); In re Petition by
Wayne Co Treasurer, 478 Mich 1, 6; 732 NW2d 458 (2007); Bank v Michigan Ed Assoc-NEA,
315 Mich App 496, 499; 892 NW2d 1 (2016).

        The GPTA governs the foreclosure of property for nonpayment of property taxes. MCL
211.78k addresses proceedings related to obtaining a judgment of foreclosure. MCL 211.78k(1)
refers to the filing of a petition for foreclosure pursuant to MCL 211.78h, notice of the
foreclosure hearing under MCL 211.78j, and other matters. MCL 211.78k(2) and (3) provide a
process by which persons claiming an interest in the property may challenge the validity or

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correctness of the unpaid taxes and otherwise object to the foreclosure.    MCL 211.78k further
provides:

               [(5)](g) A judgment entered under this section is a final order with respect
       to the property affected by the judgment and except as provided in subsection (7)
       shall not be modified, stayed, or held invalid after the March 31 immediately
       succeeding the entry of a judgment foreclosing the property under this section, or
       for contested cases 21 days after the entry of a judgment foreclosing the property
       under this section.

                (6) Except as otherwise provided in subsection (5)(c) and (e), fee simple
       title to property set forth in a petition for foreclosure filed under section 78h on
       which forfeited delinquent taxes, interest, penalties, and fees are not paid on or
       before the March 31 immediately succeeding the entry of a judgment foreclosing
       the property under this section, or in a contested case within 21 days of the entry
       of a judgment foreclosing the property under this section, shall vest absolutely in
       the foreclosing governmental unit, and the foreclosing governmental unit shall
       have absolute title to the property. . . . The foreclosing governmental unit’s title
       is not subject to any recorded or unrecorded lien and shall not be stayed or held
       invalid except as provided in subsection (7) or (9).

               (7) The foreclosing governmental unit or a person claiming to have a
       property interest under section 78i in property foreclosed under this section may
       appeal the circuit court’s order or the circuit court’s judgment foreclosing
       property to the court of appeals. An appeal under this subsection is limited to the
       record of the proceedings in the circuit court under this section and shall not be de
       novo. The circuit court’s judgment foreclosing property shall be stayed until the
       court of appeals has reversed, modified, or affirmed that judgment. . . . [Emphasis
       added.]

       The circuit court determined that it did not have jurisdiction to disturb the judgment of
foreclosure. It viewed the relief requested by defendant as dependent on the validity of the
judgment of foreclosure. MCL 211.78k supports that determination. Defendant failed to pay the
delinquent taxes, interest, penalties, and fees in accordance with MCL 211.78k(6), and fee
simple title to the property vested in Wayne County, the foreclosing governmental unit.
Defendant did not file an appeal in this Court, pursuant to MCL 211.78k(7). Thus, Wayne
County held fee simple title to the property, and it properly conveyed the property to plaintiff,
which had exercised its right of first refusal pursuant to MCL 211.78m.

        Quite simply, pursuant to subsection (6), fee simple title to the property vested in Wayne
County and defendant did not appeal this vesting. Defendant relies on In re Petition by Wayne
Co Treasurer to argue that we may not rely on MCL 211.78k(6) to affirm the circuit court’s
ruling. In that case, the property owner challenged a judgment of possession that was entered
under the provisions of the GPTA. In re Petition by Wayne Co Treasurer, 478 Mich at 5-6. The
Court recognized that the GPTA “reflect[s] a legislative effort to provide finality to foreclosure
judgments and to quickly return property to the tax rolls,” but it found that when “the property
owner is not provided with constitutionally adequate notice of the foreclosure[,] . . . MCL

                                                -4-
211.78k(6) serves to insulate violations of [the constitutional rights to due process] from judicial
review and redress, thereby completely denying the property owner procedural due process.” Id.
at 4. It determined that, as applied to those property owners who have been denied due process
with regard to tax foreclosure, the provision limiting modification of judgments of foreclosure is
unconstitutional. Id. at 4, 10.

        We find In re Petition by Wayne Co Treasurer distinguishable from the present case. As
noted, the judgment of foreclosure was entered on March 20, 2015, and listed a redemption date
of March 31, 2015. Thereafter, on March 31, 2015, defendant entered into a “stipulated payment
agreement.” Defendant initialed a box stating, “I realize these payments must be made on/before
due dates.” Before her signature, the payment-plan document states: “By your signature you
hereby acknowledge that you have read the instructions and agree to the terms of this
agreement.” The document further states:

       If Taxpayer fails to pay at least 60% of the 2012 and prior TIPF by June 2,
       2015, this property will be foreclosed and offered to the State of Michigan,
       local municipality, county and/or auctioned. Taxpayer shall be in default of
       this Stipulated Agreement and cause the extended period of redemption to expire
       on that date, and the property shall vest in the Treasurer by the fee simple absolute
       title pursuant to the Judgment of Foreclosure to be filed upon default under
       Wayne County Circuit Court Case No. 14-007672-CH. Taxpayer hereby waives
       notice of and period to cure the default . . . .

       4. It is acknowledged by the undersigned Taxpayer and/or representative
       that any right the Taxpayer may have to contest or object to the Petition of
       Foreclosure or any Judgment based upon said Petition to foreclose the
       property . . . including the right, if any, to a hearing . . . is hereby knowingly
       and voluntarily waived. [Underlining and bolding in original.]

The lower-court record contains an August 18, 2015, letter written from an occupant of the home
“on behalf of [defendant].” The letter writer admits that defendant missed payments and
“attempted to pay off the outstanding balance” in July 2015. In addition, and more significantly,
at a November 25, 2015, hearing, defendant’s son, explicitly “speaking on her behalf,” admitted
that defendant defaulted on the payment agreement.

        Under the unique circumstances of this case, In re Petition by Wayne Co Treasurer is
distinguishable as a matter of law; indeed, that case applies to “cases where the taxing authority
has denied the taxpayer due process,” id. at 11, and uncontested facts show that such a denial did
not occur in the present case.2

2
  While the circuit court may have worded its ruling differently, because it technically had
jurisdiction over the appeal from the district court, it did correctly rule that the judgment of
foreclosure was not subject to being vacated. We affirm a court that reaches the correct outcome
for an incorrect reason. Taylor v Laban, 241 Mich App 449, 458; 616 NW2d 229 (2000).

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         Defendant argues that “[t]he [d]istrict [c]ourt erred by denying [defendant’s] motion to
dismiss or stay the summary proceedings pending the outcome of the federal action and to
otherwise permit her to assert equitable claims and defenses regarding title.”3 She states that
“entry of the judgment of possession in this case was improper because [defendant] was
litigating the issue of title in another court.” Defendant, however, cites only nonbinding caselaw
in support of her argument.4 The unpublished case on which defendant primarily relies involved
significant procedural irregularities and ample evidence of a competing claim to title of the home
in question. No such circumstances are present here. In light of the dearth of caselaw or other
authority provided, and under the factual circumstances—with defendant entering into an
explicitly-worded payment agreement as discussed above and defaulting on that agreement—we
find no basis on which to disturb the lower-court rulings in this case.

       Affirmed.

                                                              /s/ Michael J. Talbot
                                                              /s/ Patrick M. Meter
                                                              /s/ Jonathan Tukel

3
  As stated in footnote 2, infra, defense counsel did not ask the court, at the district-court motion
hearing, to rule on the equitable issues but argued only that the case should be dismissed or
stayed because of the federal action.
4
  Defendant does cite three published Michigan cases (dealing with mortgage foreclosures):
Federal National Mortgage Ass’n v Wingate, 404 Mich 661; 273 NW2d 456 (1979),
Manufacturers Hanover Mortgage Corp v Snell, 142 Mich App 548; 370 NW2d 401 (1985), and
Reid v Nusholtz, 264 Mich 220; 249 NW 831 (1933). However, these cases are inapposite.
Federal National Mortgage Ass’n, 404 Mich at 672, involved one issue: whether appeal bonds
concerning a mortgage foreclosure were reasonable. While the Court tangentially discussed “the
availability of invalidity of foreclosure as a defense to summary proceedings,” it did not rule on
the issue. Id. at 676. In Manufacturers Hanover Mortgage Corp, 142 Mich App at 553, the
Court did state that “[t]he district court has jurisdiction to hear and determine equitable claims
and defenses involving the mortgagor’s interest in the property,” but, significantly, at the June
16, 2016, hearing, defense counsel in the present case argued that the district court should not
determine the equitable claims and that the case should simply be dismissed or stayed in light of
the action in federal court. Similarly, Reid, 264 Mich at 224, referred to “test[ing] the validity of
[a foreclosure] sale in the summary proceedings,” but again, defense counsel did not advocate for
this and instead argued for a dismissal or stay based on the federal action.

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