Court Opinion

ID: 2780995
Source: CourtListenerOpinion
Date Created: 2015-02-23 08:05:28.636872+00
Date Added: 2024-06-11T11:28:18.590690
License: Public Domain

STATE OF MICHIGAN

                          COURT OF APPEALS

GANSTINE FARMS, L.L.C.,                              UNPUBLISHED
                                                     February 19, 2015
              Plaintiff-Appellant,

v                                                    No. 315350
                                                     Lapeer Circuit Court
SIGNATURE BANK,                                      LC No. 12-045054-CH

              Defendant-Appellee.

ORVILLE J. GANSTINE and DOLORES E.
GANSTINE,

              Plaintiffs-Appellants,

v                                                    No. 315352
                                                     Lapeer Circuit Court
SIGNATURE BANK,                                      LC No. 12-045123-CK

              Defendant-Appellee.

XPLOR INDUSTRIAL COMPLEX, L.L.C.,

              Plaintiff-Appellant,

v                                                    No. 315354
                                                     Lapeer Circuit Court
SIGNATURE BANK,                                      LC No. 12-045282-CH

              Defendant-Appellee.

Before: OWENS, P.J., and JANSEN and O’CONNELL, JJ.

PER CURIAM.

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       In these consolidated cases, plaintiffs appeal as of right the trial court’s order granting
defendant Signature Bank’s motion for summary disposition pursuant to MCR 2.116(C)(10).
We affirm.

        The basic facts of this case are not in dispute. Orville and Dolores Ganstine obtained two
loans from Signature Bank (the bank) in 2007. They issued a promissory note for repayment of
the loans, and the note was secured by a future advance mortgage on their home property on
Church Road. The company plaintiffs, of which Orville Ganstine is the sole owner, also issued
guarantees for repayment of the Ganstines’ loans. The guarantees referred to the promissory
note, which in turn stated that it was secured by future advance mortgages on the company
plaintiffs’ properties.

        The Ganstines did not repay the loans, and the bank foreclosed the mortgages by
advertisement. The bank purchased the properties at sheriff’s sales and filed an action against
plaintiffs for the balance due on the loans. In response, plaintiffs filed the instant actions to
recover their properties. The trial court granted the bank’s motion for summary disposition
under MCR 2.116(C)(10). Plaintiffs now appeal, requesting this Court grant their request to
recover their properties.

        The trial court’s ruling on a motion for summary disposition is reviewed de novo on
appeal. Oliver v Smith, 290 Mich App 678, 683; 810 NW2d 57 (2010). “Summary disposition is
appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any material fact and
the moving party is entitled to judgment as a matter of law.” West v Gen Motors Corp, 469 Mich
177, 183; 665 NW2d 468 (2003). When reviewing a motion under subrule (C)(10), this Court
considers the pleadings, admissions, affidavits, and other relevant record evidence in the light
most favorable to the nonmoving party to determine whether any genuine issue of material fact
exists warranting a trial. Walsh v Taylor, 263 Mich App 618, 621; 689 NW2d 506 (2004). “A
genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to
the opposing party, leaves open an issue upon which reasonable minds might differ.” West, 469
Mich at 183.

        “The interpretation of a contract is . . . a question of law this Court reviews de novo on
appeal, including whether the language of a contract is ambiguous and requires resolution by the
trier of fact.” DaimlerChrysler Corp v G-Tech Professional Staffing, Inc, 260 Mich App 183,
184-185; 678 NW2d 647 (2003). “The cardinal rule in the interpretation of contracts is to
ascertain the intention of the parties.” McIntosh v Groomes, 227 Mich 215, 218; 198 NW 954
(1924). If a contract exists and the parties dispute its terms, the “court must determine what the
parties’ agreement is and enforce it.” G&A Inc v Nahra, 204 Mich App 329, 330; 514 NW2d
255 (1994). If the contract’s language is unambiguous, courts must enforce the contract as
written. DeFrain v State Farm Mut Auto Ins Co, 491 Mich 359, 372; 817 NW2d 504 (2012). A
contract is ambiguous when two provisions “irreconcilably conflict with each other,” Klapp v
United Ins Group Agency, Inc, 468 Mich 459, 467; 663 NW2d 447 (2003), or “when [a term] is
equally susceptible to more than a single meaning,” Mayor of Lansing v Pub Serv Comm, 470
Mich 154, 166; 680 NW2d 840 (2004). “However, if a contract, even an inartfully worded or
clumsily arranged contract, fairly admits of but one interpretation, it may not be said to be
ambiguous or fatally unclear.” Mich Twp Participating Plan v Pavolich, 232 Mich App 378,
382; 591 NW2d 325 (1998).

                                               -2-
        The trial court properly granted summary disposition regarding the bank’s foreclosure of
the Ganstines’ mortgage. The Ganstines applied for secured loans, they signed notes for the
loans indicating that the loans were to be secured by three mortgages and two guarantees, and
they signed a mortgage for the Church Road property. The mortgage identifies the property
involved and states that it is given to secure any debt incurred under promissory notes and
guarantees and any other existing obligations owed by the mortgagor to the bank. It is
undisputed that the Ganstines received the loans for which they applied and that they defaulted.
It is undisputed that the mortgage contained a power of sale provision.

       The Ganstines challenge the foreclosure on two grounds. First, they contend that the
mortgage did not actually secure any debt because it did not specifically describe the notes they
were intended to secure, as required by MCL 565.154. That statute, which describes the form of
mortgages, provides:

               A mortgage of lands that is worded in substance as follows: “A.B.
       mortgages and warrants to C.D., (here describe the premises) to secure the re-
       payment of” (here describe the indebtedness or obligations the mortgage secures)
       and is signed by the grantor, is a valid and enforceable mortgage to the grantee
       and the grantee’s heirs, assigns, successors, and personal representatives with
       warranty from the grantor and the grantor’s legal representatives, of marketable
       title in the grantor, free from prior incumbrances. If the indebtedness or
       obligations secured are described generally, such as “all indebtedness that A.B.
       now and in the future owes to C.D.”, and if the words “and warrant” are omitted
       from the form, the mortgage is valid and enforceable, but without warranty.

        The statute clearly states that a mortgage is valid and enforceable even if the debt it
secures is described generally rather than specifically. It is just that in such a situation, the
mortgagor does not warrant that he holds marketable title to the mortgaged property unless the
mortgage uses the words “and warrant.” Indeed, more than 150 years ago, our Supreme Court
rejected a claim that a “mortgage is invalid for want of certainty in the amount secured” where it
secured “all debts existing without specifying them.” Mich Ins Co of Detroit v Brown, 11 Mich
265, 271 (1863). Accordingly, we conclude that this argument is without merit.

        The Ganstines also challenge the foreclosure of their mortgage because it is a future
advance mortgage that secured future advances of no more than $233,000, which amount did not
correspond to the loan amounts of $486,000 and $192,000. However, plaintiffs have offered no
cogent argument to explain why that discrepancy creates a question of fact regarding the validity
of the mortgage or the bank’s right to foreclose. Therefore, the trial court properly dismissed the
Ganstines’ complaint.

        The company plaintiffs argue that the bank was not entitled to foreclose on all three
mortgages based on the Ganstines’ default on their notes. According to the company plaintiffs,
they executed guarantees, but the guarantees were unsecured and did not specifically identify the
mortgages. Because they did not have any other obligations to the bank and did not receive any
future advance loans, they owed nothing and thus could not have defaulted. Plaintiff companies
complain that irregularities exist in the loan guarantees, but they do not complain about the
validity of the mortgage documents they signed or any irregularities in the foreclosure process.

                                                -3-
        We conclude that the company plaintiffs’ legal position lacks merit. The problem with
plaintiff companies’ argument is their initial assumption that, because the guarantees state that
they are unsecured, the trial court must ignore them when construing the mortgages. That is not
correct. Where there is more than one agreement relating to the same subject matter and where
one document refers to another, the documents are to be construed together. Culver v Castro,
126 Mich App 824, 826; 338 NW2d 232 (1983).

        Construing the documents together, plaintiffs’ allegations that they did not guarantee,
execute, or pledge the property as security for the loans is meritless. The guarantees state that
they are guaranteeing payment of “each and every debt, liability and obligation of every type and
description,” including the debt described in “Promissory Note # 1214000000147 In the Amount
of $486,000.00 Dated 04/26/07.” The promissory note in turn states that it is “secured by: 3
mortgages dated: 04-26-07” and “supported by 2 guarantees dated 04-26-07.” The guarantees
explicitly referred to a promissory note secured by mortgages on each of the properties, which in
turn explicitly refer to the guarantees. Reading these documents together, it is abundantly clear
that plaintiff companies pledged property to secure their guarantees. It was not necessary for the
trial court to reform the documents to reach the result it reached. It needed only to construe the
documents together, which it did. Therefore, the trial court did not err when it determined that
the parties intended the guarantees to be secured by the mortgages.

       Even were we to conclude that the trial court erred, any error would be harmless. This
Court should not modify a decision of the trial court on the basis of a harmless error. MCR
2.613(A). The trial court’s error is harmless if it is not decisive to the outcome in a case. See
Ypsilanti Fire Marshal v Kircher, 273 Mich App 496, 529; 730 NW2d 481 (2007).

        After a sheriff’s sale is completed, a mortgagor must redeem property within a specific
period. MCL 600.3240. “If a mortgagor fails to avail himself of the right of redemption, all the
mortgagor’s rights in and to the property are extinguished.” Bryan v JP Morgan Chase Bank,
304 Mich App 708, 714; 848 NW2d 482 (2014); see Piotrowski v State Land Office Bd, 302
Mich 179, 187; 4 NW2d 514 (1942). Therefore, in order to recover their properties, plaintiffs
must prove that they redeemed their properties before the expiration of the statutory periods of
redemption. They have not done so. Plaintiffs do not even allege that they redeemed their
properties; instead, they allege improprieties in the loan process. Because plaintiffs have no right
to the relief they seek, any error in the trial court’s decision would be harmless.

       We affirm. The bank may tax costs as the prevailing party. MCR 7.219.

                                                             /s/ Donald S. Owens
                                                             /s/ Kathleen Jansen
                                                             /s/ Peter D. O’Connell

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