Michigan Nat. Bank v. Cote
| Decision Date | 23 April 1996 |
| Docket Number | Docket No. 101731 |
| Citation | 546 N.W.2d 247,451 Mich. 180 |
| Parties | MICHIGAN NATIONAL BANK, Trustee, Plaintiff-Appellee, v. Joanne Marie COTE, Frank P. Cote, Sherry L. Cote, and Francis J. Cote, Jointly and Severally, Defendants-Appellants. |
| Court | Michigan Supreme Court |
Luce, Henderson, Heyboer & Lane by David R. Heyboer, Port Huron, for defendant.
In a summary proceedings action under M.C.L. § 600.5701 et seq.; M.S.A. § 27A.5701 et seq., the plaintiff received a judgment and writ of restitution to recover property that had been sold under a land contract. The issue raised by the present appeal is whether, after having obtained such relief, the holder of the vendor's interest may obtain money damages for delinquent real estate taxes that the vendee was obligated to pay under the contract. The Court of Appeals followed Ames v. Maxson, 157 Mich.App. 75, 403 N.W.2d 501 (1987), and affirmed the circuit court's award of damages. We conclude that recovery of those delinquent taxes is barred by M.C.L. § 600.5750; M.S.A. § 27A.5750, and reverse.
In September 1986, the defendants purchased a parcel of real estate from the estate of Philip A. Touma. The estate's vendor's interest was assigned to plaintiff Michigan National Bank. On October 1, 1990, the plaintiff brought a summary proceedings action in district court to recover possession of the property as a result of an alleged breach of the terms of the land contract. On December 14, 1990, the parties stipulated to entry of a consent judgment in the amount of $81,937.74, which provided, among other things, that the defendants had ninety days to cure the material breaches of the contract. The judgment stated the amounts owing as $45,000 in payments under the contract, $36,858.74 in unpaid real estate taxes, and costs of $79. The defendants did not pay the judgment, and, on May 9, 1991, a writ of restitution was issued, and the plaintiff obtained possession of the premises. Plaintiff then filed a supplemental complaint, seeking a money judgment for the unpaid property taxes. Because the amount exceeded the jurisdictional limit of the district court, an order was entered transferring the case to the St. Clair Circuit Court on June 5, 1991.
On March 2, 1992, the circuit court granted summary judgment for the bank on its claim that it was entitled to recover the delinquent taxes. On June 6, 1992, a judgment in the amount of $35,859.17 was entered.
The defendants appealed, but on October 17, 1994, the Court of Appeals affirmed with an order stating:
Pursuant to MCR 7.214(E) and 7.216(A)(7), the Court dispenses with oral argument and affirms the judgment of the St. Clair Circuit Court in this cause. Ames v. Maxson, 157 Mich.App. 75, 403 N.W.2d 501 (1987), is neither distinguishable nor wrongly decided. Adamski v. Cole, 197 Mich.App. 124, 128 (1992).
The Court denied rehearing on November 30, 1994, and the defendants sought leave to appeal in this Court.
This case presents a straightforward question of interpreting M.C.L. § 600.5750; M.S.A. § 27A.5750, 1 which provides:
The remedy provided by summary proceedings is in addition to, and not exclusive of, other remedies, either legal, equitable or statutory. A judgment for possession under this chapter does not merge or bar any other claim for relief, except that a judgment for possession after forfeiture of an executory contract for the purchase of premises shall merge and bar any claim for money payments due or in arrears under the contract at the time of trial and that a judgment for possession after forfeiture of such an executory contract which results in the issuance of a writ of restitution shall also bar any claim for money payments which would have become due under the contract subsequent to the time of issuance of the writ. The plaintiff obtaining a judgment for possession of any premises under this chapter is entitled to a civil action against the defendant for damages from the time of forcible entry or detainer, or trespass, or of the notice of forfeiture, notice to quit or demand for possession, as the case may be. [Emphasis added.]
The question is whether the unpaid real estate taxes, which the land contract obligated the defendants to pay, 2 constituted "money payments due or in arrears under the contract at the time of trial" so that the judgment for possession bars a claim for their recovery.
As noted above, the Court of Appeals order relied on Ames v. Maxson, supra, which held that taxes that the vendee was required to pay to the taxing authorities do not constitute a claim for money payments due under the contract. 157 Mich.App. 75, 403 N.W.2d 501. While we do not find Ames distinguishable from the instant case, as urged by the defendants, we disagree with its conclusion. The plain language of the statute leads to the conclusion that the claim for unpaid taxes is barred. The taxes are "money payments." 3 At the time of the judgment they were "in arrears under the contract." Thus, a judgment for money damages to recover those amounts was barred by the forfeiture. 4 The fact that they were
payable to the taxing authorities rather than to the land contract vendor is of no consequence.
Accordingly, we reverse the order of the Court of Appeals and the judgment entered by the St. Clair Circuit Court, insofar as it awarded damages for nonpayment of real estate taxes. We remand the case to the circuit court for any necessary further proceedings.
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1 This section is, in effect, a codification--arguably with modifications (see Gruskin v. Fisher, 405 Mich. 51, 273 N.W.2d 893 (1979))--of the common-law rule that the forfeiture of an executory contract for purchase of land constitutes an election of remedies, precluding the vendor from later seeking damages for breach of contract. See, e.g., Balesh v. Alcott, 257 Mich. 352, 354, 241 N.W. 216 (1932)...
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