2 Crooked Creek, LLC v. Cass Cnty. Treasurer

• Decision Date: 14 March 2019
• Docket Number: No. 342797,342797
• Citation: 941 N.W.2d 88,329 Mich.App. 22
• Parties: 2 CROOKED CREEK, LLC and Russian Ferro Alloys, Inc., Plaintiffs-Appellants/Cross-Appellees, v. CASS COUNTY TREASURER, Defendant-Appellee/Cross-Appellant.
• Court: Court of Appeal of Michigan — District of US

329 Mich.App. 22

941 N.W.2d 88

2 CROOKED CREEK, LLC and Russian Ferro Alloys, Inc., Plaintiffs-Appellants/Cross-Appellees,

v.CASS COUNTY TREASURER, Defendant-Appellee/Cross-Appellant.

No. 342797

Court of Appeals of Michigan.

Submitted March 7, 2019, at Lansing.

Decided March 14, 2019.

Approved for publication July 2, 2019, at 9:05 a.m.

Barnes & Thornburg LLP (by Tracy D. Knox and Brian E. Casey ) and Kus Ryan, PLLC (by Cindy Rhodes Victor, Sterling Heights) for 2 Crooked Creek, LLC, and Russian Ferro Alloys, Inc.

Kreis, Enderle, Hudgins & Borsos, PC, Portage (by Thomas G. King and Nicholas J. Spigiel ) for the Cass County Treasurer.

Before: Sawyer, P.J., and Cavanagh and K.F. Kelly, JJ.

Per Curiam.

Plaintiffs, 2 Crooked Creek, LLC ("2CC") and Russian Ferro Alloys, Inc. ("RFA"), sought monetary damages under MCL 211.78l following defendant's tax foreclosure of certain property. Plaintiffs claimed that they had no notice of the foreclosure proceedings. The Court of Claims involuntarily dismissed plaintiffs' claims after considering plaintiffs' proofs during a bench trial, in accordance with MCR 2.504(B)(2). Plaintiffs now appeal by right. Finding no errors warranting reversal, we affirm.

I. BASIC FACTS

A. THE PRIOR APPEAL

A related case was previously before this Court and provides the relevant background to the case at bar. In re Cass Co. Treasurer Foreclosure Petition , unpublished per curiam opinion of the Court of Appeals, issued March 8, 2016 (Docket No. 324519), 2016 WL 901700 ( In re Cass Co. Treasurer ), was issued as a result of plaintiffs' appeal of the Cass Circuit Court decision in the underlying foreclosure action that plaintiffs assert gave rise to their claim for damages under MCL 211.78l in this case.¹

In July 2010, 2CC, an Indiana limited liability company, purchased a parcel of vacant land located in Penn Township, Cass County, Michigan, for $820,000. The real estate agreement effectuating the sale listed 2CC’s address as "36 Bradford Lane, Chicago, IL 60523," was executed by Sergei Antipov as "the Manager of Kava Management Company, LLC, the Manager of 2 Crooked Creek LLC," and was subsequently filed with the Cass County Register of Deeds. On July 20, 2010, the Cass County Register of Deeds recorded the Trustee’s Deed, which provided that subsequent tax bills should be sent to "2 Crooked Creek LLC" at "36 Bradford Lane, Chicago, IL 60523." "Antipov later attested that he lived at 36 Bradford Lane, Oak Brook, Illinois 60523, until June 15, 2011." Id . at 2.

Property taxes were not paid for the property for 2011. In 2013, [the Cass County Treasurer] initiated forfeiture and foreclosure proceedings on the property pursuant to the General Property Tax Act ("GPTA"), MCL 211.78 et seq. On January 14, 2013, Title Check, LLC (Title Check), acting as [the Cass County Treasurer’s] agent, sent a notice of forfeiture regarding 2011 real property taxes for the property in question, as required by MCL 211.78f. The January 14, 2013 notice letter was sent by certified mail, return receipt requested, to 36 Bradford Lane, Chicago, IL 60523 (the address identified in the deed for the receipt of tax bills). Because 60523 is actually the zip code for Oak Brook, not Chicago, notice of the letter was delivered on January 16, 2013, to 36 Bradford Lane, Oak Brook, IL 60523. The letter was left unclaimed, and on February 15 the letter was returned to Title Check marked "Unclaimed—Unable to Forward."

On April 9, 2013, [the Cass County Treasurer] prepared a certificate of forfeiture as required by MCL 211.78g, and recorded it with the Cass County Register of Deeds on April 12, 2013. On May 5, 2013, Title Check sent a notice of inspection via regular first class mail addressed to 2 Crooked Creek at 36 Bradford Ln, Oak Brook IL 60523.² The letter identified the property and stated that because of unpaid 2011 taxes, the property would be subject to inspection and posting of notice on June 17, 2013. The letter also stated that the property was in the process of foreclosure, and that anyone with an interest in the property should immediately contact [the Cass County Treasurer].

² After the January 14, 2013 notice letter was delivered to Oak Brook instead of Chicago, [the Cass County Treasurer] addressed all subsequent notices to Oak Brook, rather than Chicago.

Title Check performed a title search of the property, which was completed on June 3, 2013. [The Cass County Treasurer] represented in its brief before the trial court that the title search was initiated on or before May 1. The title search revealed that the only recorded interests in the property were the deed and real estate agreement, an easement in favor of Indiana Michigan Power Company, and the certificate of forfeiture.

On May 28, 2013, KAVA Holdings, LCC, an Alaska limited liability company, of which 2CC is a wholly owned subsidiary, and RFA, an Indiana corporation, entered into a mortgage agreement regarding the property, in the amount of $3,500,000. The mortgage agreement was subsequently recorded with the Cass County Register of Deeds on July 10, 2013.

On June 5, 2013, [the Cass County Treasurer] filed a petition for foreclosure which sought to foreclose (for unpaid taxes) on approximately 579 separate parcels of real property described in Schedule A of the petition pursuant to MCL 211.78h(1), including the property owned by 2CC. The trial court scheduled a hearing on the petition for February 18, 2014.

On June 18, 2013, Katelin Makay, a land examiner working for Title Check, visited the property and determined that the property appeared to be occupied. She was unable to personally meet with any occupant, however, so she posted on the property, in a conspicuous manner, a notice of show cause hearing and judicial foreclosure hearing. Makay posted the notice in a window next to a double door of the house on the property, took a photograph of the posted notice, and attached that photograph to her inspection worksheet.

James Frye, president of Shoreline Development Company, attested that he was at the property on or shortly after June 18, 2013, because his company was building a house there for 2CC. He saw the notice of the show cause hearing and the judicial foreclosure hearing on a window next to the front door of the house, and he then directly contacted "a representative of 2 Crooked Creek, LLC by telephone and advised them of the posted notice and was advised by the representative of 2 Crooked Creek, LLC that the matter would be taken care of." Randy Bennett, principal of Bennett Painting, and Ed Lijewski, superintendent for Shoreline Development Company, both attested that they also were at the property on or shortly after June 18, 2013, saw the posted notice, and were present when Frye contacted a representative of 2CC about the notice.

However, Antipov stated in an affidavit that he and Douglas Anderson were the only representatives of 2CC, that Frye knew they were the only representatives of 2CC, and that Frye did not tell him at any time of any notice posted on the property. Anderson stated in an affidavit that he is the registered agent for 2CC, and that he regularly spoke with Frye, but that Frye at no time informed him of the notice posted on the property.

On August 20, 2013, Title Check sent a notice letter via first class mail of the show cause hearing and the judicial foreclosure hearing to 2CC at the 36 Bradford Lane address in Oak Brook. Title Check sent another notice letter via first class mail to the same address on October 30, 2013, which also indicated that notice of foreclosure would be published between December 2013 and February 2014.

On December 6, 2013, a notice of show cause hearing and judicial foreclosure hearing was sent via certified mail to 2CC at 36 Bradford Lane, Oak Brook, IL 60523. The December 6, 2013 notice letter, sent pursuant to MCL 211.78i(7), included the date the property was forfeited to [the Cass County Treasurer], a statement that 2CC could lose its interest in the property as a result of the foreclosure, a legal description, parcel number, and street address of the property, the person to whom the notice is addressed, the total amount to redeem the property as of March 1, 2013 ($14,743.24), the date and time of the show cause hearing (January 15, 2014), the date and time of the foreclosure hearing (February 18, 2014), and a statement that unless the forfeited delinquent taxes, penalties, interest and fees were paid on or before March 31, 2014, 2CC would lose its interest in the property and title to the property would absolutely vest with [the Cass County Treasurer]. Martin J. Spaulding, general manager of Title Check, stated in an affidavit that the December 6, 2013 notice letter was returned to Title Check on January 14, 2014 marked "Refused—Unable to Forward." On December 20, 2013, a copy of that same notice letter was sent via first class mail to 2CC at the same address.

On December 19, 2013, December 26, 2013, and January 2, 2014, a notice of show cause hearing and judicial foreclosure hearing was published in the Cassopolis Vigilant, a weekly newspaper circulated, printed, and published in Cass County, Michigan. The notice contained a list of properties subject to foreclosure, and indicated that 2CC owed $14,743.24 as of March 1, 2013, for the subject property, identified by parcel number. The notice also included the dates of the show cause hearing and the judicial foreclosure hearing, and indicated that title to the property would vest absolutely in the foreclosing governmental unit if the delinquent payments were not paid by March 31, 2014.

The show cause hearing took place in January 2014. The record does not indicate who did or did not appear at the hearing, but suggests that no one appeared on behalf of 2CC.

On February 18, 2014, the hearing on the petition for foreclosure was held as scheduled, at which no one appeared on behalf of 2CC to contest the foreclosure.

The trial court made the following findings of fact:

1.

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