Knight v. Northpointe Bank

Decision Date24 January 2013
Docket NumberNo. 310206,310206
PartiesCHERYL KNIGHT, Plaintiff-Appellant, v. NORTHPOINTE BANK and NPB MORTGAGE, LLC, Defendants-Appellees.
CourtCourt of Appeal of Michigan — District of US

CHERYL KNIGHT, Plaintiff-Appellant,
v.
NORTHPOINTE BANK and NPB MORTGAGE, LLC, Defendants-Appellees.

No. 310206

STATE OF MICHIGAN COURT OF APPEALS

January 24, 2013


UNPUBLISHED

Kalkaska Circuit Court
LC No. 11-010912-CH

Before: SAWYER, P.J., and MARKEY and M. J. KELLY, JJ.

PER CURIAM.

In this real property dispute, plaintiff Cheryl Knight appeals by right the trial court's order dismissing her complaint for title to the disputed property free of any claim by defendants Northpointe Bank and NPB Mortgage (collectively the Bank). On appeal, we must determine whether the trial court erred when it determined that Knight's claim was untimely under the equitable doctrine of laches. Because we conclude that the trial court did not err when it applied laches to bar Knight's claim, we affirm.

I. BASIC FACTS

Knight's mother, Laurene Marian Coe, was a partner in Laurendal Enterprises, which owned 240 acres of real property in Kalkaska County, Michigan. In November 1997, Coe and another partner caused the partnership to transfer ownership of the property to Coe in her individual capacity through a warranty deed. Coe was widowed at the time and living in Florida.

Knight's sister, Charlene Diane Cutro, lived in Ann Arbor, Michigan. At some point prior to June 2001, Coe executed a power of attorney that gave Cutro the authority to transfer Coe's real property in Michigan.

In June 2001, Cutro executed a warranty deed on Coe's behalf that transferred 200 acres of the original property to Cutro. At the same time, Cutro used her power of attorney to grant herself an easement over that portion of a trail that crossed through the remaining 40 acres. The easement described a right of way "following the existing trail" that was 15 feet wide; the easement was for ingress and egress only.

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In February 2002, Coe executed a warranty deed transferring the remaining 40 acres to Knight along with an easement for ingress and egress. The forty-acre parcel included a house, pole barn, and shed. The easement covered a 15-foot right of way that followed an existing trail that wound over parts of both the 40-acre parcel and the 200-acre parcel. Coe executed the warranty deed and easement in Florida.

In June 2003, Coe executed two new warranty deeds—both on the same day—covering the same 240 acres that she already conveyed to her daughters, Cutro and Knight. In the deeds, Coe again transferred 200 acres to Cutro and 40 acres to Knight, but she also provided for an easement that differed from that contained in the original transfers: it was now 66 feet wide, 33 on either side of a line described in the deed, rather than 15 feet wide, and the easement was for ingress, egress, and utilities.1

In March 2005, Cutro borrowed $180,000 from the Bank. To secure the repayment of the debt, Cutro granted the Bank a mortgage on the 200 acres that she obtained from her mother. In October of the same year, Cutro transferred the 200-acre parcel to her trust.

Cutro died in October 2006 and Coe died in February 2007.

In August 2007, Cutro's daughter, Edith Enders, acting as the successor trustee to her mother's trust, transferred the 200 acre parcel to herself. Thereafter, Enders made payments on the Bank's note, but fell into arrears.

The Bank foreclosed on the 200 acre parcel and purchased it at a sheriff's sale in September 2010 for more than $193,000. The redemption period for the 200 acre parcel expired in October 2011 and the Bank began to seek a purchaser for the property.

In November 2011, Knight sued the Bank. In her complaint, Knight alleged that her sister, Cutro, was "disabled as a matter of law" from making the "self-dealing conveyance" of the 200 acre parcel to herself as the attorney-in-fact for her mother. Moreover, because the "defect" in Cutro's title was "plain on the face of the public record," the Bank could not claim to be a bona fide purchaser from Cutro. On the basis of these allegations, Knight asked the trial court to "decree" that she was the rightful owner of the property and that she owned it free of any claims by the Bank.

In March 2012, the Bank moved for summary disposition under MCR 2.116(C)(7). The Bank argued that Knight's complaint was untimely under the applicable period of limitations and under the equitable doctrine of laches. The trial court disagreed with the Bank's contention that the applicable period of limitations had passed,2 but agreed that Knight's decision to wait so long

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to sue prejudiced the Bank. Accordingly, in an opinion and order signed in April 2012, the trial court dismissed Knight's claim as untimely under the doctrine of laches.

This appeal followed.

II. SUMMARY DISPOSITION

A. STANDARD OF REVIEW

Knight argues on appeal that the trial court erred when it dismissed her claim under the equitable doctrine of laches. This Court reviews de novo a trial court's decision to grant summary disposition. Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 Mich App 362, 369; 775 NW2d 618 (2009). This Court also reviews de novo a trial court's decision to apply equitable doctrines such as laches. Blackhawk Dev Corp v Village of Dexter, 473 Mich 33, 40; 700 NW2d 364 (2005).

B. LACHES

With her complaint, Knight challenged whether Cutro validly transferred the 200 acres owned by their mother to herself. She also asked the trial court to determine, on that basis, that she owned the 200 acres free of any claim by the Bank. Thus, although she did not refer to her claim as one to quiet title, it is evident that Knight invoked the trial court's equitable power to quiet title. Beach v Township of Lima, 489 Mich 99, 106; 802 NW2d 1 (2011).

As our Supreme Court has explained, a complainant in equity must come to the court with a clean conscience, in good faith, and after acting with reasonable diligence: "'Nothing can call forth this court into activity but conscience, good faith and reasonable diligence; where these are wanting the court is passive, and does nothing.'" Henderson v Connolly's Estate, 294 Mich 1, 19; 292 NW 543 (1940), quoting Campau v Chene, 1 Mich 400, 405 (1850). If a plaintiff has not exercised reasonable diligence in vindicating his or her rights, a court sitting in equity may withhold relief on the grounds that the plaintiff is chargeable with laches. Lothian v Detroit, 414 Mich 160, 168; 324 NW2d 9 (1982). "[W]hen...

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