Royce v. Duthler
| Decision Date | 04 April 1995 |
| Docket Number | 168861,Docket Nos. 169796 |
| Citation | 531 N.W.2d 817,209 Mich.App. 682 |
| Parties | Stella ROYCE, Plaintiff-Appellant, v. Julius DUTHLER and Dorothy M. Duthler, Wayne Shabaz and Cynthia Shabaz, and Elliott Hansen, d/b/a Hansen Builders, Defendants-Appellees. Stella ROYCE, Plaintiff-Appellee, v. Julius DUTHLER and Dorothy M. Duthler, Defendants-Appellants, and Wayne Shabaz and Cynthia Shabaz, and Elliott Hansen, d/b/a Hansen Builders, Defendants-Appellees. |
| Court | Court of Appeal of Michigan — District of US |
Mika, Meyers, Beckett & Jones by Elizabeth K. Bransdorfer and David W. Charron, Grand Rapids, for plaintiff.
Schenk, Boncher & Prasher by Gary P. Schenk and Curtis D. Rypma, Grand Rapids, for Julius and Dorothy Duthler.
Willingham & Cote, P.C. by John L. Cote and Jane A. Kelpac, East Lansing, for Wayne and Cynthia Shabaz.
Before DOCTOROFF, C.J., and WHITE and GARBRECHT, * JJ.
This consolidated appeal stems from an action to quiet title instituted by plaintiff, Stella Royce, against defendants Julius and Dorothy Duthler, Wayne and Cynthia Shabaz, and Elliott Hansen 1 concerning rights to an easement across Royce's property and from an action filed by the Shabazes against Royce for damages resulting from Royce's interference with the Shabazes' contract to purchase a parcel of land from the Duthlers. We affirm the trial court's order granting Wayne and Cynthia Shabaz' motion for summary disposition and denying Royce's cross motion for summary disposition in Docket No. 162796, reverse the trial court's order enjoining the Duthlers and the Shabazes from using the easement across Royce's property in Docket No. 168861, and remand.
Before 1957, Walter and Mary Idema owned a parcel of land in Port Sheldon. They quitclaimed their interest in a portion of the south end of the parcel to the Association of the Diocese of Western Michigan (hereafter lot C). The Idemas also granted the church an easement across the Idemas' retained portion.
The Idemas sold the retained northern portion of the original parcel to Julius and Dorothy Duthler. The Duthlers subdivided the northern portion of the parcel into lot A, which was to the north, and lot B, which was between lot A to the north and lot C to the south. The Duthlers then sold lot A to Carson and Elizabeth Donley. The Donleys' buy-sell agreement provided that the driveway "east of the fork" is a permanent easement to the lot to the south of the subject property. Lots B and C are both to the south of lot A. The deed to lot A that was received by the Donleys did not reserve an easement over lot A for lot B's benefit.
The Duthlers and the Donleys also entered into an agreement granting the Donleys a right of first refusal, which stated that if the Duthlers decided to sell lot B, they had to provide the Donleys with written notice and with any documents concerning the sale. The Donleys would then have thirty days to consent to the sale or to purchase lot B themselves. If the Donleys failed to exercise their rights, the Duthlers were free to sell lot B "on the same terms and conditions and for the price set forth in the document."
On November 1, 1989, the Donleys sold their interest in lot A to plaintiff Stella Royce. They also assigned to her their interest in the agreement granting the right of first refusal.
In 1991, the Duthlers subdivided lot B into lots B-1 and B-2. Lot B-1 fronted on Lake Michigan and lot B-2 backed up to Lakeshore Ave. The easement now ran across only lot B-1.
On June 27, 1992, the Shabazes offered to buy lot B-1 from the Duthlers. A copy of their offer was sent to Royce and was received on July 9, 1991. On August 21, 1991, more than thirty days later, Royce informed the Duthlers that she would not exercise her right of first refusal. The closing date for the purchase of lot B-1 by the Shabazes was set for October 25, 1991.
On October 19, 1991, the Shabazes learned that Royce would block their use of the easement across lot A as a means of access to lot B-1.
On October 25, 1991, Royce filed suit against defendants to quiet title, alleging that neither the Duthlers nor the Shabazes had any easement rights across her property. Royce sought a declaration of defendants' rights and a permanent injunction preventing defendants from using the easement.
The Duthlers then offered the Shabazes an easement across lot B-2 so the Shabazes would have access to lot B-1 from Lakeshore Ave. The Duthlers offered the easement to Royce pursuant to the right-of-first-refusal agreement. Within thirty days, Royce exercised her rights under the agreement and sent the Duthlers a proposed easement. The proposed easement was different from the one offered by the Duthlers in that Royce had the discretion to establish a driveway on the easement. The Duthlers rejected this proposal.
On August 13, 1992, Royce offered to purchase lot B-1 under the terms extended to the Shabazes pursuant to the first-refusal agreement. The Duthlers rejected the offer. Royce then amended her complaint to add specific performance counts against the Duthlers and the Shabazes to compel the sale of lot B-1 to her pursuant to the agreement granting her a right of first refusal and recorded an affidavit with the Ottawa County Register of Deeds attesting to her right of first refusal in the property.
The Shabazes filed suit against Royce to quiet title and for money damages for tortious interference with a contract and slander of title. The Shabazes sought a declaration from the court that Royce's right of first refusal in lot B-1 terminated when she first declined to purchase the property. The Shabazes also filed a claim against the Duthlers for misrepresentation and breach of express and implied contract. All the actions were consolidated.
On August 24, 1992, the Shabazes moved for summary disposition against Royce with respect to Royce's claim for specific performance on the basis that her right of first refusal to lot B-1 terminated when she declined to purchase B-1 originally. Royce filed a cross motion arguing that her rights under the first-refusal agreement were revived by subsequent events and asking the court to declare her right to exercise her option and purchase lot B-1. The trial court granted the Shabazes' motion, ruling that Royce lost her rights to lot B-1 under the first-refusal agreement and that Royce was barred from claiming specific performance because she did not have clean hands. Royce appeals this ruling in Docket No. 162796.
The trial court considered whether an easement existed over Royce's property for the benefit of B-1 without a jury. At its conclusion, the court held that the Duthlers and the Donleys intended to create an easement over lot A for lot B's benefit, but further held that Royce did not have constructive notice of this intent or actual notice of the easement. The trial court determined that Royce was a bona fide purchaser for value without notice of the easement rights and was entitled to a permanent injunction forbidding defendants from using the easement. The Duthlers appeal this ruling in Docket No. 168861.
A trial of the Shabazes' damage claim for Royce's interference with the Shabazes' contract to purchase lot B-1 is pending the outcome of this appeal.
In the first issue on appeal, Royce challenges the trial court's granting of the Shabazes' motion for summary disposition with respect to her claim for specific performance of the sale of lot B-1 to her under the first-refusal agreement. Royce argues that because the Duthlers changed the terms and conditions of the sale of lot B-1 to the Shabazes after she had declined her option to purchase lot B-1 by offering...
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