Court Opinion

ID: 4378583
Source: CourtListenerOpinion
Date Created: 2019-03-20 09:05:38.66631+00
Date Added: 2024-06-11T14:21:58.831936
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

JUDY HORNAK, and KENNETH HORNAK,                                      UNPUBLISHED
                                                                      March 19, 2019
                Plaintiffs-Appellants,

v                                                                     No. 340960
                                                                      Saginaw Circuit Court
HORNAK FARMS, INC., F. RONALD                                         LC No. 14-024390-CH
HORNAK1, KEITH AMMAN, CRAIG HUFF,
AARON TITHOF, AMY WAUBEN, BRYAN
TITHOF, ELMER SCHNEIDER, BRIAN
SCHNEIDER, MICHAEL SCHNEIDER, and
SCHNEIDER FARMS, LLC,

                Defendants-Appellees,
and

KIRK AMMAN, and JEFFREY SCHNEIDER,

                Defendants.

Before: SAWYER, P.J., and CAVANAGH and K. F. KELLY, JJ.

PER CURIAM.

       In this action for partition and quiet title, plaintiffs appeal by right an order denying their
motion for summary disposition and instead partially granting summary disposition to all
defendants. Because the disputed property has since been deeded to plaintiffs, the sole issue
before us is whether the trial court properly determined that plaintiffs’ request for damages for
crop profits was barred by res judicata. We affirm.

                                         I. BASIC FACTS

1
    F. Ronald Hornak died while this appeal was pending.

                                                 -1-
       This case arises from a prolonged probate dispute between siblings Kenneth Hornak
(“Kenneth”) and F. Ronald Hornak (“F. Ron”) after the death of their mother, Vivian G. Hornak
(“Vivian”).

                                 A. PREVIOUS LITIGATION

       In September 2013, the Saginaw Probate Court entered an order in Docket No. 10-
125981-DE/CZ, approving a settlement agreement concerning the Vivian Hornak Estate. In
pertinent part, the probate court ordered:

       All real estate remaining in the ESTATE OF VIVIAN G. HORNAK,
       DECEASED, namely a 70.58 acre parcel on Ditch Road, Chesaning, Michigan
       shall be deeded by the personal representative to HORNAK FARMS, LLC.
       HORNAK FARMS, LLC shall then deed 50 acres of the parcel as identified by
       KENNETH HORNAK to him, free of any security interest for attorney fees and
       expenses, as soon as a land division application has been approved by Chesaning
       Township.

In signing the order, Kenneth agreed to “waive any and all claims against the Estate of Vivian G.
Hornak, deceased, F. Ron Hornak, Keith Amman, Craig Huff, Aaron Tithof, Amy Wauben and
Bryan Tithof, with prejudice.”

      Later, this Court summarized the litigation that ensued after the probate court’s
aforementioned order:

       The decedent [Vivian] left a will that was admitted to probate which included a
       specific devise of an 80-acre parcel of land and accompanying fixtures to [her
       grandchild.] The remainder of her property was to be distributed “one share for
       each child of mine who survives me and one share for the decedents, per stirpes of
       each child of mine who fails to survive me.”

               [Kenneth] thereafter produced four unrecorded deeds, two from 2010 that
       deeded all of the decedent’s property solely to him, and two from 2004 that
       deeded all of the decedent’s property to her and appellant jointly with “right of
       sole survivorship.” . . . We affirmed the probate court’s decision to set aside the
       deeds in In re Estate of Hornak, unpublished opinion per curiam of the Court of
       Appeals, issued July 5, 2012 (Docket No. 301912) [In Re Estate of Hornak I].

               Following this Court’s decision, an LLC was formed that was owned by
       all the heirs accounted for in the decedent’s will with the exception of [Kenneth],
       for the purpose of transferring most of the real property to the LLC. As of May
       21, 2013, all of the decedent’s property had been transferred to the LLC with the
       exception of a 70-acre parcel that had yet to be resolved. [In re Estate of Hornak,
       unpublished per curiam opinion of the Court of Appeals, issued April 23, 2015
       (Docket No. 319955), p 2 (In Re Estate of Hornak II)].

                                               -2-
A quitclaim deed to the land was given to Hornak Farms, LLC, on October 22, 2013. In Re
Estate of Hornak II, unpub op at 2. Thereafter, the following occurred:

             Subsequently, [Kenneth] filed an objection to . . . an accounting and
      [closure] of the estate, arguing in part that the estate should not be closed until he
      received a check for crops that had been harvested on 50 acres of the estate that
      was to be deeded to him as part of the settlement.

                                             * * *

               A hearing was thereafter held [for an accounting of the estate.] [It was]
      explained that the harvested crops [Kenneth] wanted money from were part of a
      sharecrop agreement with a farmer named Schneider. [Kenneth] neither disputed
      this at the hearing nor does he dispute it in his briefs filed with this Court in the
      present appeal. [All] that remain[ed was] for the LLC to deed the 50 acres to
      [Kenneth]. [F. Ron’s] attorney stated that the LLC was prepared to deed the 50
      acres as soon as appellant submitted a division of 50 acres that would be approved
      by the township. [F. Ron’s] attorney stated that the one division appellant had
      already requested would have left the LLC a landlocked parcel and that the
      township “basically laughed at it.”

              The probate court found that the agreement did not have any separate
      provision regarding the disputed harvested crops. The court also found that
      because the property belonged to the LLC and not the estate, the decedent’s will
      did not control that distribution. The court found that appellant had agreed as part
      of the settlement to waive any and all claims against the estate. The court
      approved . . . other distributions set forth in its previous rulings. The probate
      court also entered an order stating that all of [Kenneth’s] objections were
      overruled, [and denied his claim for damages for crop profits.] The same day, the
      court entered an order allowing the personal representative’s final account,
      discharged the personal representative, and closed the estate. [In re Estate of
      Hornak II, unpub op at 2-3.]

      On appeal to this Court from the probate court, Kenneth argued:

      [T]hat he is entitled to cash from the grain harvest on part of the 70 acres that was
      the subject of the settlement agreement [from the time the agreement was signed.]
      Because the agreement gave him 50 of the 70 acres, he argues, cash from the
      grain harvested on 50 acres of the land belongs to him. A necessary assumption
      of this argument is that growing crops are part of the real property that passes
      with a conveyance of the land. As support for his argument, appellant cites
      Blough v Steffens, 349 Mich. 365; 84 NW2d 854 (1957). [In re Estate of Hornak
      II, unpub op at 3.]

      This Court rejected Kenneth’s claim and explained that:

                                               -3-
        [i]n Blough, the owner of real property had entered into an agreement with
a third party to have the third party cultivate and grow crops on the owner’s land,
and in exchange the third party would receive 2/3 of the crop and the owner
would receive 1/3. Id. at 367. Prior to the harvest the owner sold the real
property to the defendant, who thereafter refused to allow the third party access to
harvest the crop. Id. at 367-368. The trial court and the Supreme Court
determined that the defendant had express notice that the prior owner and the
third party had entered the sharecrop agreement and there was an “oral
understanding to reserve the corn crop entered into prior to the sale of the farm.”
Id. at 369-370.

        [Kenneth] argues that it was both the presence of a sharecrop agreement
and an oral notice of that sharecrop agreement in Blough that served to sever the
crops from the real estate. He argues, accordingly, that in the absence of an oral
reservation, growing crops on conveyed property follow the conveyance and that,
therefore, he should receive the profit from the harvested crops. [Kenneth’s]
argument misperceives the facts of Blough. The Supreme Court did not find that
there was an express oral reservation, merely that the purchaser had knowledge of
a sharecrop agreement and that this knowledge created “an oral understanding”
that the crops were severed from the realty. Id.

        This Court has also determined that a “Christmas tree crop was
constructively severed from the real estate” by way of an agreement that third
parties “had a right of entry to spray, prune, care for, as well as to harvest and
remove” the trees. Groth v Stillson, 20 Mich. App. 704, 706-707; 174 NW2d 596
(1969). When the land on which the trees were growing was sold, the trial court
found that the purchasers “had notice of the sale of the trees to third parties prior
to their deed.” Id. at 706. Noticeably absent from the facts in Groth is a specific
reservation of the trees in the deed between the buyer and seller. See id. at 705-
706. What the Groth Court focused on was the fact that the seller and the third
parties considered the trees a crop and that the buyers of the real property had
notice of the sale of the trees prior to receiving the deed. Id. at 706. [In re Estate
of Hornak II, unpub op at 3-4.]

Ultimately, this Court concluded in In re Estate of Hornak II that
the sharecrop agreement with farmer Schneider severed the crops from the realty
and required that they be treated as goods or personal property, not as part of the
realty. It is not important that the crops were not orally reserved. What is
important is that appellant had knowledge of the sharecrop agreement at the time
he entered the settlement agreement.1
______________________________________________
1
 Additionally, even if appellant’s argument that growing crops pass to the owner
of the real estate is accepted, he does not yet own the real estate. While he has an
interest in the property by means of the settlement agreement, the current title
owner is the LLC. [In re Estate of Hornak II, unpub op at 4.]

                                                 -4-
                                   B. PRESENT LITIGATION

        While the probate case was pending in this Court, this action was initiated in Saginaw
Circuit Court in September 2014. After the release of this Court’s opinion in In re Estate of
Hornak II, plaintiffs amended their complaint alleging that the LLC and individual defendants
had purposefully interfered with obtaining township approval and, as a result, defendant had
been defrauded of receiving crop profits on the portion of land that should have been his.
Plaintiffs simultaneously filed a motion for summary disposition requesting that the court enter
an order awarding them crop income that they were purportedly owed from the parcel.
Defendants opposed plaintiffs’ motion. In December 2016, the Saginaw Circuit Court granted
defendants summary disposition, and dismissed with prejudice plaintiffs’ claim against them for
crop profits based on res judicata.

       Plaintiffs now appeal by right.

                                          II. ANALYSIS

       This Court reviews de novo whether summary disposition was properly granted. Maiden
v Rozwood, 461 Mich. 109, 119; 597 NW2d 817 (1999). Likewise, we review de novo the
determination whether res judicata bars applies to a claim. Washington v Sinai Hosp of Greater
Detroit, 478 Mich. 412, 417; 733 NW2d 755 (2007), citing Pierson Sand & Gravel, Inc v Keeler
Brass Co, 460 Mich. 372, 379; 596 NW2d 153 (1999).

       Res judicata is meant to “relieve parties of the cost and vexation of multiple lawsuits,
conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on
adjudication.” Pierson Sand & Gravel, Inc, 460 Mich. at 380.

               Res judicata bars a subsequent action between the same parties when the
       evidence or essential facts are identical. A second action is barred when (1) the
       first action was decided on the merits, (2) the matter contested in the second
       action was or could have been resolved in the first, and (3) both actions involve
       the same parties or their privies.

               Michigan courts have broadly applied the doctrine of res judicata. They
       have barred, not only claims already litigated, but every claim arising from the
       same transaction that the parties, exercising reasonable diligence, could have
       raised but did not. [Bryan v JPMorgan Chase Bank, 304 Mich. App. 708, 715; 848
       NW2d 482, lv den 497 Mich. 869 (2014), quoting Dart v Dart, 460 Mich. 573,
       586; 597 NW2d 82 (1999) (citations omitted).].

        In the probate matter, Kenneth had no right to the crop profits when he merely had a legal
interest in the land on which the crops grew. In re Estate of Hornak II, unpub op at 3-4. Here,
plaintiffs claim that the individual defendants, and subsequently the LLC that was composed of
the individual defendants and held the land, conspired or worked in concert to obstruct the land
transfer to them, and deprived them of crop profits from the land. Plaintiffs artfully craft their
argument by discussing whether “conditions precedent” of the settlement agreement were met or
forfeited, but, in reality both cases involve the central issue of whether plaintiffs had any interest

                                                 -5-
in the crops. The probate court’s dismissal of Kenneth’s claims against defendants in 2013, and
more specifically, its decision to overrule his objection to the settlement based on his claim for
damages for crop profits, constitutes an adjudication on the merits. This Court’s 2015
affirmance of the probate court’s orders further substantiates that the 2013 probate court case
was fully adjudicated.

       Affirmed.

                                                            /s/ David H. Sawyer
                                                            /s/ Mark J. Cavanagh
                                                            /s/ Kirsten Frank Kelly

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