Harris v. BEE Prop. Mgmt.
| Decision Date | 09 March 2023 |
| Docket Number | 359619 |
| Parties | VALERIE HARRIS, Plaintiff-Appellant, v. BEE PROPERTY MANAGEMENT, INC., and COMPASS ACQUISITIONS, LLC, Defendants-Appellees. |
| Court | Court of Appeal of Michigan — District of US |
UNPUBLISHED
Wayne Circuit Court LC No. 20-001463-CZ
Before: RICK, P.J., and M. J. KELLY AND RIORDAN, JJ.
Plaintiff appeals as of right the trial court's finding of no cause of action following a bench trial in this action in which plaintiff raised a number of claims against defendants relating to foreclosed property that she previously owned including a claim to quiet title to the property and a claim of fraud. On appeal, plaintiff challenges the trial court's finding that she did not have an equitable mortgage and was a month-to-month tenant. Plaintiff also challenges the court's finding that she failed to prove her claim of fraud. We affirm.
Plaintiff purchased a home in Detroit in May 2008 for $65,000 and secured a purchase money mortgage for the amount of the purchase price plus an additional amount for home improvements. Plaintiff defaulted on the mortgage loan and the lender foreclosed. The property was sold for $95,000 at a sheriff's sale on April 9, 2015. Plaintiff was unable to secure the funds required to redeem the property. During the summer of 2015, plaintiff was introduced to Michael Baumhaft the owner of defendant Bee Property Management, Inc. (Bee), by a broker who came to her home and discussed ways to save the property from foreclosure before the redemption period expired. Plaintiff made an arrangement with Baumhaft. Baumhaft would provide the funds to redeem the property, purchase the property from plaintiff, and give plaintiff an option to purchase the property.
Baumhaft solicited Jeffrey Van Dorn, the owner of Compass Acquisitions, LLC (Compass), to invest in plaintiff's property. On August 28, 2015, Compass made a written offer to purchase the property for $130,000.[1] On August 31, 2015, Bee entered an option agreement with plaintiff. The option agreement gave plaintiff the exclusive right to purchase the property for $160,000 within 24 months of the signing of the agreement as long as she was making timely monthly payments. Plaintiff was required to pay $2,250 in monthly option payments and to pay the property taxes and the monthly homeowner's association (HOA) fees. The agreement also gave plaintiff the right to possess the property during the 24-month option period if all payments were made. Bee had the right to cancel the agreement and initiate eviction proceedings if option payments were not made.
Baumhaft brought a cashier's check in the amount of $130,000 to the September 8, 2015 closing on the property. At the closing, the offer to purchase was modified. The purchaser was changed from Compass to Bee[2] and the sale price was changed to $111,500.[3] Plaintiff signed and accepted the purchase offer. Plaintiff also signed a warranty deed conveying the property to Bee. Bee quitclaimed its interest in the property to Compass at the closing.
Plaintiff was unable to secure the funds to exercise the option to purchase and the option agreement expired.[4] Plaintiff continued to reside in the home. At some point she stopped paying the property taxes and the HOA fees. Around October 2019 plaintiff stopped paying the $2,250 monthly payment. In January 2020, plaintiff received a notice to quit the premises.
On February 7, 2020, plaintiff filed an amended complaint against Bee and Compass. Relevant to this appeal, plaintiff sought to quiet title to the property on the ground that the September 8, 2015 warranty deed, along with the option agreement, "were intended to be used as a mortgage and not as a deed absolute on its face." According to plaintiff, the option agreement was a "two-year loan agreement with a balloon payment 'at the end.'" She alleged that under the equitable mortgage doctrine she had fee simple title to the property "free and clear of any and all claims of Compass." Plaintiff also raised a claim of fraud, intentional misrepresentation, and deceit. Plaintiff alleged that Baumhaft misrepresented the transaction to her and committed fraud when he told her that "she was not divesting herself of any rights, title, or interest in the property." She alleged that she relied upon the representations to her detriment and was "in the precarious position of losing her Property and her equity."
After a bench trial, the trial court issued extensive written findings of fact and conclusions of law. With respect to plaintiff's quiet title claim, the court found, in relevant part, that the warranty deed that plaintiff signed was not an equitable mortgage. The court found that plaintiff did not exercise the option to purchase within 24 months, that she did not have a written lease, and that she was a month-to-month tenant of Compass. The court also found no cause of action with respect to plaintiff's claim of fraud, intentional misrepresentation, and deceit. The court found that Van Dorn did not make any representations to plaintiff to induce her to enter into any contract as it was undisputed that Van Dorn did not have any contact with plaintiff until December 2018, three years after the closing of the sale of the property. The court also found that plaintiff could not rely upon representations made by Baumhaft because the documents plaintiff signed were clear and unambiguous. Lastly, the court found that plaintiff did not prove damages. The court found that plaintiff "resided in the property and had use of the premises in exchange for her monthly payments."
"This Court reviews a trial court's factual findings in a bench trial for clear error, and reviews its conclusions of law de novo." Trahey v City of Inkster, 311 Mich.App. 582, 593; 876 N.W.2d 582 (2015). "A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire record is left with the definite and firm conviction that a mistake has been committed." Walters v Snyder, 239 Mich.App. 453, 456; 608 N.W.2de 97 (2000). An action to quiet title is an equitable action that is also reviewed de novo. Beach v Twp of Lima, 489 Mich. 99, 106; 802 N.W.2d 1 (2011).
An action to quiet title is equitable in nature and is "available to a party in possession of real property who [seeks] to clear the property's title as against the world." Adams v Adams, 276 Mich.App. 704, 711; 742 N.W.2d 399 (2007). In an action to quiet title, the plaintiff has the initial burden of establishing a prima facie case of title. Special Prop VI v Woodruff, 273 Mich.App. 586, 590; 730 N.W.2d 753 (2007). The plaintiff must present evidence that the plaintiff acquired and now possesses a legal or equitable interest in the property in question. Beulah Hoagland Appleton Qualified Personal Residence Trust v Emmet Co Rd Comm, 236 Mich.App. 546, 550; 600 N.W.2d 698 (1999). We conclude that the trial court properly found no cause of action with respect to the quiet title claim because plaintiff failed to establish that she acquired and possessed some interest, legal or equitable, in the property.
The statute that govern actions to quiet title, MCL 600.2932, provides, in pertinent part:
(1) Any person, whether he is in possession of the land in question or not, who claims any right in, title to, equitable title to, interest in, or right to possession of land, may bring an action in the circuit courts against any other person who claims or might claim any interest inconsistent with the interest claimed by the plaintiff, whether the defendant is in possession of the land or not.
The undisputed evidence established that plaintiff signed a warranty deed conveying the property to Bee. "The stability of written instruments demands that a person who executes one shall know its contents or be chargeable with such knowledge." Christy v Kelly, 198 Mich.App. 215, 217; 497 N.W.2d 194 (1992), quoting Sponseller v Kimball, 246 Mich. 255, 260; 224 N.W. 359 (1929). Thus, "[i]t is well established that a person cannot avoid a written contract on the ground that he did not attend to its terms, did not read it, supposed it was different in its terms, or that he believed it to be a matter of mere form." Rowady v K Mart Corp, 170 Mich.App. 54, 60; 428 N.W.2d 22 (1988). Specifically, "a person who signs and executes an instrument without inquiring as to its contents cannot have the instrument set aside on the ground of ignorance of the contents." Christensen v Christensen, 126 Mich.App. 640, 645; 337 N.W.2d 611 (1983).
"A person having all possible rights incident to ownership of a parcel of property has the entire bundle of sticks or a fee simple title to the property." Eastbrook Homes, Inc v Dep't of Treasury, 296 Mich.App. 336, 348; 820 N.W.2d 242 (2012) (citation omitted). "Important rights flowing from property ownership include the right to exclusive possession, the right to personal use and enjoyment, the right to manage its use by others, and the right to income derived from the property." Id. (citation omitted). "A warranty deed conveys the entire bundle of rights to the property from the grantor to the grantee in fee simple; it also includes the grantor's covenant that the grantor has good, marketable...
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