Freeman v. Wozniak

• Decision Date: 19 September 2000
• Docket Number: Docket No. 203737.
• Parties: Olga FREEMAN, a Legally Incapacitated Person, by her Special Conservator, Public Administrator, Walter Sakowski, Plaintiff-Appellee, v. John WOZNIAK, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

617 N.W.2d 46

241 Mich. App. 633

Olga FREEMAN, a Legally Incapacitated Person, by her Special Conservator, Public Administrator, Walter Sakowski, Plaintiff-Appellee, v. John WOZNIAK, Defendant-Appellant.

Docket No. 203737.

Court of Appeals of Michigan.

Submitted December 14, 1999, at Detroit.

Decided July 11, 2000, at 9:00 a.m.

Released for Publication September 19, 2000.

Stephen J. Remski, Livonia, for the plaintiff.

Jerald R. Lovell, Mt. Clemens, for the defendant.

Before MARK J. CAVANAGH, P.J., and HOLBROOK, JR., and MICHAEL J. KELLY, JJ.

PER CURIAM.

Defendant appeals as of right from a judgment of the circuit court setting aside a mortgage foreclosure sale and canceling a sheriff's deed of mortgage sale. We reverse.

Plaintiff was the fee simple owner of a residential home located in Detroit. In July 1991, plaintiff executed and delivered a mortgage to Sterling Mortgage and Investment Company (hereinafter Sterling) on the residence as security for a $7,100 promissory note also executed in favor of Sterling. Sterling then conveyed and assigned all its rights and interests in these two documents to defendant and Agnes Rzeppa.¹

Plaintiff ceased making payments on the promissory note in February 1994. On June 23, 1994, defendants sent a letter to plaintiff informing her that she was four months in arrears and owed a total of $553.32.² The letter also stated that plaintiff needed to send the total due "immediately to avoid foreclosure proceedings." That amount was never tendered. On August 8, 1994, defendants began foreclosure proceedings by advertisement. Notice of foreclosure was published for five successive weeks in the Detroit Legal News.³ Notice was also posted on the front door ofplaintiff's residence on August 20, 1994. The mortgage foreclosure sale took place on September 16, 1994, at which time defendant and Rzeppa purchased the property for $6,543.38. Plaintiff did not redeem the property during the subsequent six months. Thereafter, the sheriff's deed was executed and recorded, thereby conveying plaintiff's interest in the property to defendant and Rzeppa.

On April 17, 1995, defendant and Rzeppa received a judgment for possession of the property from the district court. Plaintiff's motion to set aside that judgment was denied, and a writ of eviction was then issued. Thereafter, plaintiff's daughter, Maria Freeman, was appointed plaintiff's temporary guardian by the Wayne County Probate Court. On plaintiff's motion for rehearing, the district court set aside the judgment of possession and vacated the writ of eviction.

Plaintiff then filed in the circuit court a complaint to set aside the foreclosure. The circuit court, on September 15, 1995, denied defendant's and Rzeppa's motion for summary disposition. Additionally, the circuit court issued an order mandating that plaintiff pay to defendant and Rzeppa $450 a month beginning in November 1995, as well as a one-time payment of $750 that was due on or before November 10, 1995. Plaintiff was also required to obtain fire and liability insurance. In their November 27, 1995, motion to dismiss plaintiff's complaint, defendant and Rzeppa alleged that none of the payments had been made, nor had the insurance been obtained. When plaintiff failed to respond to this motion, the circuit court granted summary disposition to defendant and Rzeppa for failure to comply with the earlier order. On plaintiff's motion for reconsideration, the circuit court set aside the dismissal and reinstated the case for trial

The case was then submitted to the circuit court on a set of stipulated facts and the deposition testimony of Sara Gelberd, M.D. Dr. Gelberd first saw plaintiff on February 21, 1994. Dr. Gelberd concluded from her meeting with plaintiff that she was suffering from "[d]ecreased memory loss with dementia." Dr. Gelberd noted that her subsequent examinations of plaintiff indicated that the dementia was worsening.⁴ Dr. Gelberd recommended to plaintiff's family at the time that plaintiff be placed in a senior center during the day where she could receive greater supervision. There is no indication that such an action was ever taken by the family. On March 30, 1994, Dr. Gelberd recommended that plaintiff be placed in an even "more supervised setting." This recommendation was rejected.

The circuit court found that at the time plaintiff defaulted on her mortgage, she was incompetent as a result of dementia. Thus, although the statutory notice requirements had been satisfied, the trial court determined that the notice "did not serve its purpose in light of plaintiff's incompetency." Relying on its equitable powers, the court set aside the foreclosure sale.

Defendant argues on appeal that there was no legal basis for the court's setting aside the foreclosure sale. While stipulating the fact that plaintiff was incompetent during the foreclosure proceedings, defendant asserts that plaintiff is without a remedy because she has not alleged fraud, accident, or mistake. We agree. The issue whether a mortgage foreclosure may be set aside because of the mortgagor's incompetence during the...