PER CURIAM.
These consolidated cases involve extensive, contentious proceedings surrounding the judicial foreclosure of a mortgage securing a commercial loan. In Docket No. 311326, defendants, NGPCP/BRYS Centre, LLC (the Centre) and NGP Capital Partners, LLC, appeal as of right the trial court's order granting summary disposition and judgment of foreclosure in favor of plaintiff, Mercantile Mortgage Bank Company, LLC. Because the trial court properly granted summary disposition after it determined that case evaluation did not resolve the claims against the Centre and Capital Partners by Mercantile Bank, but incorrectly determined the amount of the judgment for foreclosure, we affirm in part, vacate in part, and remand.
In Docket No. 313276, the Centre and Capital Partners appeal as of right the trial court's order determining the reasonableness of Mercantile Bank's attorney fees. We affirm.
On July 23, 2007, Mercantile Bank agreed to loan the Centre $744,000 as a business loan. Ford A. Grifo, Daniel J. Nemes, and Mark S. Provenzano (collectively, the personal guarantors) provided personal guaranties of up to 100% of the indebtedness, and Capital Partners provided an "unlimited" corporate guaranty. The Centre also provided an assignment of rents and a mortgage on property at 21139 Mack Avenue in Grosse Point Woods as security for the loan.
On December 09, 2009, Mercantile Bank filed a complaint against the individual guarantors, Capital Partners, and the Centre. Mercantile Bank alleged that the Centre breached the parties' contract by defaulting on the promissory note and business loan agreement. Mercantile Bank alleged breach of guaranty against the individual guarantors and Capital Partners, asserting that they had failed to pay the Centre's past-due amounts. Mercantile Bank sought damages and a judgment of foreclosure on the basis of the Centre's default.
The Centre, Capital Partners, and the personal guarantors filed a counter-complaint, alleging promissory estoppel, breach of contract, interference with business opportunities, fraudulent misrepresentation, and negligent misrepresentation. Contentious discovery proceedings followed.
On March 22, 2011, the parties attended a case evaluation. The case evaluation panel checked the boxes "Award" and "Unanimous," and hand-wrote 750,000 in the box labeled "Amount." In the box labeled "For Party," the evaluation panel hand-wrote "1" (Mercantile Bank), and in the box labeled "Against Party," the evaluation panel hand-wrote "2, 3, 4, 5, 6, 7, 8, & 9" (respectively: Nemes, Capital Partners, Provenzano, Grifo, the Centre, Nemes, Provenzano, and Grifo). The award sheet also contains the evaluators' signatures, but is otherwise blank.
A notification form, dated April 20, 2011, summarized the results. The summary form indicated in all capital letters that Mercantile Bank "rejects award #1," specifying that Mercantile Bank had accepted the award against the personal guarantors, but had rejected the award against the Centre and Capital Partners. The summary form also indicated that each defendant had accepted the award. The summary form indicated that the case evaluation had been "[r]ejected."
Before case evaluation, Mercantile Bank had filed a motion for summary disposition under MCR 2.116(C)(8) and (10), to which the Centre, Capital Partners, and personal guarantors had responded with general denials. On May 20, 2011, Mercantile Bank updated their motion for summary disposition, asserting that case evaluation had resolved its claims against the personal guarantors but not against the Centre and Capital Partners.
At the hearing on the motion, Mercantile Bank contended that it could accept the case evaluation award as to some defendants but not others, and therefore it could accept the award against the personal guarantors but not against the Centre and Capital Partners. The defendants asserted that Mercantile Bank could not partially accept the award and, therefore, had accepted the award in full against all the defendants.
The trial court ruled that the case evaluation did not resolve Mercantile Bank's claims against the Centre and Capital Partners, but did resolve Mercantile Bank's claims against the personal guarantors. The trial court granted Mercantile Bank's motion for summary disposition and ordered judicial foreclosure.
Following summary disposition, Mercantile Bank filed a proposed order granting
At the May 25, 2011 hearing on the motion, the trial court orally granted the Centre and Capital Partners' motion and ordered Mercantile Bank to furnish a bill of particulars. More contentious proceedings followed the trial court's oral ruling, including several competing motions. In the midst of the proceedings, the personal guarantors paid Mercantile Bank $760,109.62 on June 30, 2011, and the court dismissed them from the case.
During the proceedings, the Centre and Capital Partners opposed Mercantile Bank's bill of particulars because it included fees that related to the case evaluation and fees related to the personal guarantors. The Centre and Capital Partners also asserted that Mercantile Bank's bill of particulars regarding payments received was inadequate because Mercantile Bank had omitted the payment from the personal guarantors. The Centre and Capital Partners attached documentation, including Nemes's affidavit, in which he stated that Mercantile Bank had not applied the following payments to the debt: (1) $760,109.62 on June 30, 2011, (2) $62,100 under the assignment of rents, and (3) $42,000 paid in December 2009.
The trial court clarified that it had only meant to grant the Centre and Capital Partners' motion for a bill of particulars related to attorney fees, not to payments received. The trial court clarified that it was granting attorney fees under the parties' contract, not as a case evaluation sanction. The trial court ordered Mercantile Bank to exclude from its bill of particulars attorney fees related to the personal guarantors. In March 2012 and April 2012, the trial court held hearings on the reasonableness of attorney fees, ruled on the Centre and Capital Partners' objections to Mercantile Bank's bill of particulars, and eventually awarded Mercantile Bank attorney fees of $90,191.95.
On September 23, 2011, the trial court entered its order granting Mercantile Bank's motion for summary disposition, ruling that the Centre and Capital Partners were jointly and severally liable for $979,777.05. The trial court's order also contained a judgment of foreclosure, ordering a foreclosure sale of the mortgaged property unless the Centre and Capital Partners paid "[t]he entire unpaid balance of the Mortgage debt ... in the amount of $979,777.05 as of the date of this Order, plus interests, costs, attorney fees, and other amounts due and owing under the loan documents...."
On October 22, 2012, the trial court entered its order awarding Mercantile Bank $90,191.95 in attorney fees.
This Court reviews de novo the interpretation and application of our court rules.
Case evaluation is a mediation proceeding. During case evaluation, the parties submit and argue a concise summary of their factual and legal positions to a panel of three independent evaluators.
A party must file an acceptance or rejection to the panel's evaluation within 28 days.
"If all parties accept the panel's evaluation, the case is over."
The Centre and Capital Partners contend that the trial court erred by awarding additional judgments against them because it should have determined that the case evaluation resolved the case. Mercantile Bank responds that the trial court properly determined that the case evaluation did not resolve the case because it accepted the award against the personal guarantors, but rejected it against the Centre and Capital Partners. We disagree with both positions.
In cases involving multiple parties, MCR 2.403(L)(3) gives a party two options: "accepting all of the awards covering the claims by or against that party" or "accepting some and rejecting others." The grammar of this rule indicates that the
Here, the case evaluation panel did not follow MCR 2.403(K)(2), but instead issued a single award. Mercantile Bank attempted to partially accept and partially reject the single award. The court rules do not allow a party to partially accept and partially reject a single award.
However, the trial court did not err when it determined that case evaluation had not resolved the claims between the parties now on appeal. Mercantile Bank's improper response constituted a rejection of the case evaluation, so case evaluation did not resolve the parties' claims. We conclude that the trial court did not err when it granted Mercantile Bank's motion for summary disposition, because case evaluation had not resolved the claims between Mercantile Bank, the Centre, and Capital Partners.
This Court reviews de novo issues of law.
When a plaintiff files a complaint to foreclose on a mortgage, the trial court may order a foreclosure sale "sufficient to discharge the amount due on the mortgage on real estate ... plus costs."
The Centre and Capital Partners contend that the trial court erred when it stated in its order that the amount due was "$979,777.05 as of the date of this Order...." because its judgment failed to reflect payments that they made on the note. We agree.
In Dusseau v. Roscommon State Bank, the plaintiff sought to prevent the defendant from foreclosing on a mortgage until it credited the plaintiff for "the value of a
In this case, Mercantile Bank asserts that the trial court's order accurately reflected its oral ruling on May 24, 2011. Mercantile Bank confuses the trial court's ruling on its motion for summary disposition with the trial court's judgment of foreclosure. On May 24, 2011, the trial court granted Mercantile Bank's motion for summary disposition under MCR 2.116(C)(10). Because the Centre and Capital Partners failed to prove an issue of fact regarding damages, the trial court's September 23, 2011 order correctly reflects that summary disposition was granted for $979,777.05 in damages.
However, the trial court's September 23, 2011 order does not only contain a ruling on the motion for summary disposition. It also contains a judgment of foreclosure. As in Dusseau, here, the Centre and Capital Partners disputed the amount that it owed Mercantile Bank on the underlying debt in their motion to determine an application of payments. However, unlike in Dusseau, the trial court did not award the Center and Capital Partners a lower amount than the amount to which they were entitled. Instead, the trial court failed to make any determination.
We conclude that the trial court erred when it failed to rule on, thereby denying, the Centre and Capital Partners' motion for application of payments. On the judgment of foreclosure, the Centre and Capital Partners were entitled to credits for their partial payments and the payment made by the personal guarantors on the debt. As a result of its failure to determine whether and in what amount partial payments were made on the debt, the trial court's order did not accurately state the amount owed under the written instrument in the judgment of foreclosure.
However, unlike in Dusseau, we cannot simply remand for a correction of the judgment. Though it is clear from the record that the Centre and Capital Partners are entitled to some credit, it is unclear whether that credit should include an amount under the assignment of rents and the alleged December 2009 payment. We thus remand for the trial court to (1) determine what credits are due the Centre and Capital Partners, and (2) order judgment in the amount sufficient to discharge the debt, plus costs.
The Centre and Capital Partners contend that, because the case evaluation award included attorney fees, the trial court's attorney fee award requires them to pay some attorney fees twice. The Centre and Capital Partners premise their argument on the existence of an accepted case evaluation award. However, for the reasons previously stated, there was no accepted case evaluation in this case. And, in any event, judgment was never entered on the case evaluation. The court instead dismissed the personal guarantors from the case. We conclude that the Centre and Capital Partners' argument lacks merit.
The trial court properly determined that case evaluation did not resolve Mercantile
In Docket No. 311326, we affirm in part, vacate in part, and remand. In Docket No. 313276, we affirm. We do not retain jurisdiction. Neither party having prevailed in full, neither may tax costs.
FITZGERALD, P.J., and SAAD and WHITBECK, JJ., concurred.