Cove Creek Condo. Ass'n v. Vistal Land & Home Dev., LLC

• Citation: 950 N.W.2d 502,330 Mich.App. 679
• Decision Date: 19 December 2019
• Docket Number: No. 343144,No. 342372,342372
• Court: Court of Appeal of Michigan (US)
• Parties: COVE CREEK CONDOMINIUM ASSOCIATION, Plaintiff/Counterdefendant-Appellee, v. VISTAL LAND & HOME DEVELOPMENT, LLC, and Maria A. Cervi and Americo Cervi Revocable Living Trust, Defendants/Counterplaintiffs-Appellants. Cove Creek Condominium Association, Plaintiff/Counterdefendant-Appellant, v. Vistal Land & Home Development, LLC, and Maria A. Cervi and Americo Cervi Revocable Living Trust, Defendants/Counterplaintiffs-Appellees.

330 Mich.App. 679

950 N.W.2d 502

COVE CREEK CONDOMINIUM ASSOCIATION, Plaintiff/Counterdefendant-Appellee,

v.VISTAL LAND & HOME DEVELOPMENT, LLC, and Maria A. Cervi and Americo Cervi Revocable Living Trust, Defendants/Counterplaintiffs-Appellants.

Cove Creek Condominium Association, Plaintiff/Counterdefendant-Appellant,

v.Vistal Land & Home Development, LLC, and Maria A. Cervi and Americo Cervi Revocable Living Trust, Defendants/Counterplaintiffs-Appellees.

No. 342372

No. 343144

Court of Appeals of Michigan.

Submitted July 9, 2019, at Detroit.

Decided December 19, 2019, 9:00 a.m.

Hirzel Law, PLC (by Kevin M. Hirzell, Joe Wloszek, and Brandan A. Hallaq, Farmington) for plaintiff.

Gerald A. Fisher, Kim Thomas Cappello, and Martin J. Fisher for defendants.

Before: Ronayne Krause, P.J., and Meter and Stephens, JJ.

Stephens, J.

In Docket No. 342372, defendants/counterplaintiffs, Vistal Land & Home Development, LLC (Vistal), and The Maria A. Cervi and Americo Cervi Revocable Living Trust dated February 12, 2016 (the Trust) (collectively, defendants), appeal as of right the order granting summary disposition in favor of plaintiff/counterdefendant, Cove Creek Condominium Association, Inc. (plaintiff), dismissing all claims in defendants’ second amended counterclaim, and denying defendants’ motions for summary disposition. The gravamen of this matter is a dispute as to which version of MCL 559.167 of the Condominium Act, MCL 559.101 et seq. , applies. The statute was amended several times during the existence of the condominium project. In Docket No. 343144, plaintiff appeals as of right the order denying its motion for attorney fees and costs. We affirm in both appeals.

I. BACKGROUND

This case arises from plaintiff's claims for declaratory and other relief related to former Units 1 through 14 of the Cove Creek Condominium project (the Condominium or the project). The Condominium was established by the recording of the master deed on April 21, 1989, and was composed of 31 units. It is undisputed that Units 15 to 31 were designated as "must be built," were constructed, and are currently owned, while Units 1 through 14 were identified as "need not be built" and were never constructed. The first unit was sold sometime in 1989.¹ On May 17, 1989, Lifestyle Homes, the original developer of the project, transferred its interest by quitclaim deed to Cove Creek Limited Partnership (Cove Creek LP). On September 15, 2004,² Cove Creek LP executed a deed transferring Units 1 through 14 to Vistal Cothery, LLC.³ On November 6, 2006, Vistal Cothery, LLC, executed a deed conveying Units 1 through 14 to Vistal. Additional purported conveyances occurred in 2012; ultimately, however, on October 25, 2016, Vistal quitclaimed its interest in Units 1 through 14 to the Trust.⁴ The day before, on October 24, 2016, plaintiff filed a complaint against defendants. In Count I, plaintiff sought a declaration that Units 1 through 14 no longer existed, that all land on which Units 1 through 14 were to be constructed was part of the general common elements, and that defendants did not have the right to withdraw Units 1 through 14.⁵ Plaintiff relied on, and the trial court applied, MCL 559.167(3), as amended by 2002 PA 283, effective May 9, 2002, of the Condominium Act, MCL 559.101 et seq. , which read:

Notwithstanding section 33, if the developer has not completed development and construction of units or improvements in the condominium project that are identified as "need not be built" during a period ending 10 years after the date of commencement of construction by the developer of the project, the developer, its successors, or assigns have the right to withdraw from the project all undeveloped portions of the project not identified as "must be built" without the prior consent of any co-owners, mortgagees of units in the project, or any other party having an interest in the project. If the master deed contains provisions permitting the expansion, contraction, or rights of convertibility of units or common elements in the condominium project, then the time period is 6 years after the date the developer exercised its rights with respect to either expansion, contraction, or rights of convertibility, whichever right was exercised last. The undeveloped portions of the project withdrawn shall also automatically be granted easements for utility and access purposes through the condominium project for the benefit of the undeveloped portions of the project. If the developer does not withdraw the undeveloped portions of the project from the project before expiration of the time periods, those undeveloped lands shall remain part of the project as general common elements and all rights to construct units upon that land shall cease. In such an event, if it becomes necessary to adjust percentages of value as a result of fewer units existing, a co-owner or the association of co-owners may bring an action to require revisions to the percentages of value under section 95. [ MCL 559.167(3), as amended by 2002 PA 283 (emphasis added).]^{[6 ]}

On November 3, 2016, the Trust informed plaintiff that it had withdrawn Units 1 through 14 from the project. The Trust relied on MCL 559.167(3), (4), and (5), as amended by 2016 PA 233. The 2016 version of the statute, effective September 21, 2016, provides, in relevant part:

(3) Notwithstanding section 33, for 10 years after the recording of the master deed, the developer, its successors, or assigns may withdraw from the project any undeveloped land or convert the undeveloped condominium units located thereon to "must be built" without the prior consent of any co-owners, mortgagees of condominium units in the project, or any other party having an interest in the project. If the master deed confers on the developer expansion, contraction, or convertibility rights with respect to condominium units or common elements in the condominium project, then the time period is 10 years after the recording of the master deed or 6 years after the recording of the amendment to the master deed by which the developer last exercised its expansion, contraction, or convertibility rights, whichever period ends later. Any undeveloped land so withdrawn is automatically granted easements for utility and access purposes through the condominium project for the benefit of the undeveloped land.

(4) If the developer does not withdraw undeveloped land from the project or convert undeveloped condominium units to "must be built" before expiration of the applicable time period under subsection (3), the association of co-owners, by an affirmative ²/₃ majority vote of the members in good standing, may declare that the undeveloped land shall remain part of the project but shall revert to general common elements and that all rights to construct condominium units upon that undeveloped land shall cease. When such a declaration is made, the association of co-owners shall provide written notice of the declaration to the developer or any successor developer by first-class mail at its last known address. Within 60 days after receipt of the notice, the developer or any successor developer may withdraw the undeveloped land or convert the undeveloped condominium units to "must be built". However, if the undeveloped land is not withdrawn or the undeveloped condominium units are not converted within 60 days, the association of co-owners may file the notice of the declaration with the register of deeds. The declaration takes effect upon recording by the register of deeds. The association of co-owners shall also file notice of the declaration with the local supervisor or assessing officer. In such an event, if it becomes necessary to adjust percentages of value as a result of fewer condominium units existing, a co-owner or the association of co-owners may bring an action to require revisions to the percentages of value under section 95.

(5) A reversion under subsection (4), whether occurring before or after the date of the 2016 amendatory act that added this subsection, is not effective unless the election, notice, and recording requirements of subsection (4) have been met. [ MCL 559.167(3) through (5), as amended by 2016 PA 233 (emphasis added).]

On December 9, 2016, plaintiff filed a first amended complaint, which addressed events that occurred after the filing of the complaint. Nevertheless, plaintiff's Count I continued to seek declaratory relief against the Trust under MCL 559.167, as amended by 2002 PA 283. On November 21, 2016, defendants moved for summary disposition under MCR 2.116(C)(8) on Count I, arguing that plaintiff's claim solely relied on the 2002 version of MCL 559.167, which was repealed and restated, effective September 21, 2016. Defendants argued that the 2016 amendment applied retroactively and did not divest plaintiff of any vested rights. Plaintiff replied that the 2016 amendment only applied to current "need not be built" units and did not revive former "need not be built" units that had already ceased to exist. It also argued that applying the 2016 amendment retroactively would abrogate vested property rights and violate the due-process rights of co-owners. Plaintiff contended that summary disposition should be granted in its favor under MCR 2.116(I)(2).

On January 11, 2017, a hearing was held on defendants’ motion for summary disposition regarding Count I. Defendants argued that plaintiff's claim that the constitutionality of the 2016 amendment was not properly before the court. Plaintiff argued that if the motion was decided in its favor, then the other claims in the complaint and in defendants’ counterclaim⁷ were moot. On February 10, 2017, the trial court issued an opinion and order denying defendants’ motion for summary disposition on Count I and granting summary disposition in favor of plaintiff pursuant to MCR 2.116(I)(2). The court applied the 2002 version of MCL 559.167 and concluded that all the land on which Units 1 through 14 were to have been...