MURRAY, J.
This appeal arises from litigation between plaintiff, Wells Fargo Bank, and defendant, Country Place Condominium Association, regarding unpaid condominium association fees. After considering the parties' competing motions for summary disposition, the circuit court entered a judgment ordering plaintiff to pay defendant $15,597.90, an amount representing condominium assessments and late fees for one condominium unit between March 8, 2011, and April 30, 2013, as well as attorney fees and costs. For the reasons that follow, we affirm.
The legal dispute started when plaintiff filed a three-count complaint against defendant requesting the removal of a condominium lien that defendant had filed concerning a condominium unit in Northville.
Plaintiff asserted that it was not responsible for association fees or attorney fees until after September 8, 2011, because under MCL 559.158 "the successors and assigns of the Sheriff Deed from a foreclosure of the first mortgage on a condominium unit, takes free and clear of all condominium liens and unpaid assessments as of the date of acquisition of title." Plaintiff further maintained that defendant had refused to discharge its recorded lien, which "constituted a cloud upon" plaintiff's title.
Defendant filed a countercomplaint alleging that it "duly levied assessments against" the condominium pursuant "to MCL 559.169 and the Condominium Bylaws...." According to the countercomplaint, when plaintiff acquired its interest in the condominium, it neglected to seek from defendant a statement outlining any "unpaid assessments, interest, late charges, fines, costs, and attorney fees" that the condominium seller owed, as authorized by MCL 559.211(2). The countercomplaint added that plaintiff had defaulted on its duty to pay the outstanding assessments on the condominium of $10,840.80, $1,000 for late charges, and $4,086.71 in legal fees and costs. The countercomplaint requested the entry of a foreclosure judgment or money judgment against plaintiff for the unpaid assessments and an award of costs and attorney fees to defendant.
Because both pleadings raised purely legal issues, the parties filed competing motions for summary disposition. The parties agreed that plaintiff purchased the property at a March 8, 2011 sheriff's sale and recorded its sheriff's deed on March 15, 2011, and that defendant recorded its condominium lien against plaintiff on September 20, 2011. It was likewise undisputed that the prior owner of the condominium did not redeem the property.
That conclusion did not end the inquiry, however. The court then moved on to a consideration of when plaintiff acquired title to the condominium, ultimately holding that it was on March 8, 2011, the date it purchased the property at the sheriff's sale:
In response, Plaintiff cites Ruby & Assocs., PC v. Shore Fin. Servs., 276 Mich.App. 110, 741 N.W.2d 72 (2007) [vacated in part on other grounds 480 Mich. 1107, 745 N.W.2d 752 (2008) ] for the notion that title vests upon expiration of the redemption period. Plaintiff's reliance on Ruby, however, is misplaced because it actually supports Defendant's argument. The Ruby Court reasoned:
As a result of these conclusions, the trial court dismissed plaintiff's claims of slander of title and recording of documents with intent to harass, and entered a final judgment in favor of defendant.
Plaintiff's main challenge to the trial court's holding is based on the premise that under Michigan law a sheriff's deed to a condominium purchased at a foreclosure sale does not convey full title to the property until the original purchaser's right of redemption expires. Under that theory, the prior condominium owner's right of redemption expired in September 2011, which then triggered plaintiff's fee obligations. As a result, plaintiff argues, the circuit court incorrectly held plaintiff responsible for association dues that accrued beginning on March 8, 2011. We conclude otherwise. The trial court's ruling was correct because under Michigan law the purchaser of a sheriff's deed acquires a particular title to the property: an equitable title. And, once the right to redemption is not exercised, that equitable title automatically becomes full legal title that is effective back to the date of the sheriff's sale.
This Court reviews de novo a circuit court's decision on cross-motions for summary disposition. Walsh v. Taylor, 263 Mich.App. 618, 621, 689 N.W.2d 506 (2004). A motion for summary disposition under MCR 2.116(C)(8) tests the legal sufficiency of a claim and should only be granted if: (1) the pleadings fail to state a claim on which relief may be granted and (2) no factual development could justify the
Instead of challenging the pleadings themselves, a motion brought pursuant to MCR 2.116(C)(10) "tests the factual support of a plaintiff's claim," Walsh, 263 Mich.App. at 621, 689 N.W.2d 506, and should be granted if no genuine issue of material fact exists "and the moving party is entitled to judgment as a matter of law." West v. Gen. Motors Corp., 469 Mich. 177, 183, 665 N.W.2d 468 (2003). "In reviewing a motion under MCR 2.116(C)(10), this Court considers the pleadings, admissions, affidavits, and other relevant documentary evidence of record in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists to warrant a trial." Walsh, 263 Mich.App. at 621, 689 N.W.2d 506. "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, 665 N.W.2d 468.
The parties' competing motions for summary disposition involved underlying issues of statutory construction, which this Court considers de novo. Whitman v. City of Burton, 493 Mich. 303, 311, 831 N.W.2d 223 (2013). The Whitman Court reiterated the primary rules governing statutory construction:
The circuit court concluded that, pursuant to MCL 559.158, plaintiff's obligation for unpaid condominium assessments began when plaintiff acquired title to the condominium unit on March 8, 2011. The entirety of MCL 559.158 reads:
Because there is no statutory definition of the phrase "acquisition of title" under MCL 559.158, the circuit court properly resorted to a dictionary, Johnson v. Pastoriza, 491 Mich. 417, 436, 818 N.W.2d 279 (2012), which defines "acquire" as "to come into possession or ownership of; get as one's own." Random House Webster's College Dictionary (1996). "Title" has a particular legal meaning,
The circuit court's analysis and conclusion were consistent with the plain language of the statute, MCL 559.158, and caselaw from our Supreme Court that explains the nature of the title obtained at a sheriff's sale. First, the statute. As noted in the preceding paragraph, "acquire" means coming into possession or control of something, while "title" means the legal evidence of a person's ownership of a certain parcel of land, usually denoted by a deed. Therefore, as a result of the sale, plaintiff did come into "possession or control of" title to the unit, for it obtained and recorded a deed to the property that afforded it an ownership interest in that property.
Importantly, that ownership interest takes the form of an equitable title that is capable of being sold or assigned. For, according to the Court in Dunitz v. Woodford Apartments Co., 236 Mich. 45, 49, 209 N.W. 809 (1926), after the sheriff's sale "the purchaser becomes the owner of an equitable interest in the mortgaged premises," which is "an interest or title, equitable in character," that becomes absolute once the redemption period expires. Importantly, the Dunitz Court pointed out that the sheriff's deed purchaser can sell or assign the equitable title interest during the redemption period. Id. at 49-50, 209 N.W. 809. See also Gerasimos v. Continental Bank, 237 Mich. 513, 518-520, 212 N.W. 71 (1927). Thus, plaintiff did obtain an equitable title that conveyed an ownership interest in the property that was capable of being assigned or sold. See also In re Young, 48 B.R. 678, 681 (Bankr. E.D.Mich., 1985) ("A foreclosure sale does effect a transfer of title: equitable title."). As we have previously stated, a "[f]oreclosure causes equitable title to vest in the purchaser, while legal title remains in the mortgagor until the redemption period expires." Ruby, 276 Mich.App. at 118, 741 N.W.2d 72.
It is true, as plaintiff points out, that the original mortgagor could physically remain in the condominium during the foreclosure period, as she still had legal title for the unit. Ruby, 276 Mich.App. at 118, 741 N.W.2d 72. But that fact does not alter our analysis of whether the sheriff's deed purchaser acquires title prior to expiration
Plaintiff contends that "the concept of relation back has nothing to do with the vesting date, but is merely a legal fiction/doctrine to show a continuity of title," and cites Whipple v. Farrar, 3 Mich. 436 (1855), and Clark v. Hall, 19 Mich. 356 (1869), in support of that proposition.
In light of the foregoing, we hold that plaintiff acquired title to the unit on March 8, 2011. Though that title was not absolute legal title until after expiration of the redemption period, plaintiff nonetheless had possession of a legal interest in the unit during the redemption period in the form of an equitable title.
Plaintiff also cites In re Receivership of 11910 South Francis Rd., 492 Mich. 208, 222-223, 821 N.W.2d 503 (2012), a recent decision interpreting MCL 600.3236, the current provision that "describes the legal effect of a sheriff's deed obtained at a foreclosure sale upon the expiration of the applicable redemption period":
In re Receivership is not inconsistent with Stout or Sanford. Those decisions clarify that the title held by the purchaser of a sheriff's deed at a foreclosure sale is an equitable one that can be sold or assigned, and that once no redemption occurs, it becomes an absolute title (as stated above in In re Receivership) that relates back to the sale date. Because plaintiff undisputedly obtained a sheriff's deed at a March 8, 2011 foreclosure sale, the circuit court properly ruled as a matter of law that under these undisputed facts plaintiff acquired title for purposes of MCL 559.158 on that same date.
Turning now to the specific tort claims, plaintiff argues that defendant's maintenance of the condominium assessments lien even after plaintiff completed its foreclosure on the unit was unlawful and slanderous. According to plaintiff, defendant's September 2011 amendment of the lien, which sought association fees extinguished by plaintiff's mortgage foreclosure, qualified as another slander of plaintiff's title. We conclude, as did the circuit court, that because defendant possessed an honest belief in the validity of its claim for the unpaid condominium association fees and advocated for a reasonable interpretation of the statutes, plaintiff's slander of title claims fail as a matter of law.
A common-law slander of title claimant "must show falsity, malice, and [pecuniary damages or] special damages, i.e., that the defendant maliciously published false statements that disparaged a plaintiff's right in property, causing special damages." B & B Investment Group v. Gitler, 229 Mich.App. 1, 8, 581 N.W.2d 17 (1998). "The same three elements are required in slander of title actions brought under MCL 565.108." Id. The third count of plaintiff's complaint sought damages under MCL 600.2907a, which contemplates liability for a "person who violates ... [MCL 565.25] ... by encumbering property through the recording of a document without lawful cause with the intent to harass or intimidate any person...."
"[T]he crucial element is malice." Gehrke v. Janowitz, 55 Mich.App. 643, 648, 223 N.W.2d 107 (1974). A slander of title claimant must show some act of express malice, which "implies a desire or intention to injure." Glieberman v. Fine, 248 Mich. 8, 12, 226 N.W. 669 (1929). "Malice may not be inferred merely from the filing of an invalid lien; the plaintiff must show that the defendant knowingly filed an invalid lien with the intent to cause the plaintiff injury." Stanton v. Dachille, 186 Mich.App. 247, 262, 463 N.W.2d 479 (1990). A plaintiff may not maintain a slander of title claim if the defendant's "claim under the mortgage [or lien] was asserted in good faith upon probable cause or was prompted by a reasonable belief that [the defendant] had rights in the real estate in question...." Glieberman, 248 Mich. at 12, 226 N.W. 669.
Defendant asserted its entitlement to summary disposition on its countercomplaint because plaintiff had not stated a valid defense and concededly had made no payments toward the outstanding assessments or related expenses and fees on plaintiff's unit. Defendant theorized that (1) plaintiff was responsible for all assessments arising after it obtained title to the unit on March 8, 2011, the date of the sheriff's deed; and (2) plaintiff was responsible for preforeclosure assessments pursuant to MCL 559.211 because the foreclosure sale qualified as a conveyance under MCL 559.211(1) and MCL 565.35, and MCL 559.211(1) obligated a condominium purchaser to pay all outstanding assessments and related expenses and fees due from the purchase date. Defendant also noted that plaintiff failed to seek a written
Prior to our opinion today, only one published decision had addressed MCL 559.211, Coventry Parkhomes Condo. Ass'n v. Fed. Nat'l Mtg. Ass'n, 298 Mich.App. 252, 261-263, 827 N.W.2d 379 (2012). In that decision we rejected an argument nearly identical to one of defendant's theories in this case: the plaintiff's assertion "that under MCL 559.211, [the defendant] is liable to [the plaintiff] for all unpaid assessments, interest, late charges, fines, costs, and attorney fees because [the defendant] is a `purchaser' under MCL 565.34." Id. at 261, 827 N.W.2d 379. Initially, this Court noted that while MCL 565.34 defined "`purchaser' as including an assignee of a mortgage," that definition did not extend beyond the chapter containing MCL 565.34, and thus did not apply to the Condominium Act. Id. We then concluded:
Although Coventry Parkhomes Condo Ass'n tends to undercut one theory that defendant espoused in the circuit court, this Court issued its decision in Coventry Parkhomes Condo Ass'n on October 25, 2012, which was after defendant filed its countercomplaint in December 2011, after defendant pursued summary disposition beginning in June 2012, and after the circuit court entered its summary disposition ruling in August 2012.
The circuit court properly dismissed plaintiff's complaint pursuant to MCR 2.116(C)(10) on the basis of plaintiff's failure to prove malice because (1) no binding authority undermined defendant's legal contentions in the circuit court, (2) defendant's proffered positions in the circuit court rested on arguably rational interpretations of the Condominium Act, and (3) no other evidence of malice as a basis for defendant's conduct in enforcing its lien exists in the record.
Affirmed.
No costs to either party, a question of public importance being involved. MCR 7.219(A).
HOEKSTRA, P.J., and RIORDAN, J., concurred with MURRAY, J.