Silich v. Rongers

• Decision Date: 08 August 2013
• Docket Number: Docket No. 305680.
• Citation: 840 N.W.2d 1,302 Mich.App. 137
• Parties: SILICH v. RONGERS.
• Court: Court of Appeal of Michigan — District of US

302 Mich.App. 137

840 N.W.2d 1

SILICH

v.RONGERS.

Docket No. 305680.

Court of Appeals of Michigan.

Submitted May 7, 2013, at Grand Rapids.

Decided Aug. 8, 2013, at 9:00 a.m.

Property Law Solutions, PLC (by Philip J. Sheridan, Douglas) for plaintiff.

Robert R. Kopen, Centreville, for defendant.

Before: SERVITTO, P.J., and WHITBECK and SHAPIRO, JJ.

PER CURIAM.

This case involves the partition of a cottage property on the St. Joseph River jointly owned by the parties. The trial court ordered that the property be sold, and plaintiff purchased the property at the subsequent auction. The trial court awarded 75 percent of the proceeds from the auction to defendant, after deducting the partition commissioner's expenses and $8,359.20 for plaintiff's attorney fees and costs “incurred obtaining the partition of the premises.” The court denied plaintiff's request for additional attorney fees arising from litigation of the partition, and also rejected defendant's argument that some of plaintiff's claims were frivolous. Plaintiff filed this appeal, seeking to divide the partition proceeds equally and also seeking his remaining attorney fees. Defendant filed a cross-appeal, also primarily seeking attorney fees. We hold that the trial court erred by granting defendant more than half of the proceeds because it was undisputed that plaintiff paid his share of all expenses after he became the coowner. We affirm the trial court's rulings regarding attorney fees.

I. FACTS

The property was originally purchased by defendant's father, Michael Rongers, along with Rudolph Silich, Jr. (Rudy Jr.), plaintiff's father. Rudy Jr. was Michael's son-in-law, married to Michael's daughter, Carole. Michael and Rudy Jr. added their wives' names to the property deed, so that Michael, his wife, his daughter (Carole), and Carole's husband (Rudy Jr.) each owned a share. Michael's wife and Rudy Jr. passed away, leaving Michael and Carole as the coowners. Michael sold his share of the cottage to defendant for $1 in 2000. Defendant is Michael's son and Carole's brother. Carole transferred her ownership share of the cottage to plaintiff, her son, by means of a quitclaim deed in 2007. Defendant is the uncle of plaintiff.

Neither Carole nor plaintiff used the cottage much between 1992 and 2007. Plaintiff admitted that there was a period when his parents did not pay their half of the property taxes, insurance, or maintenance expenses. Plaintiff admitted that his mother had originally intended to pay back any missed payments from her share of the cottage once the cottage was sold. He testified that she changed her mind when Michael transferred his full share to defendant instead of splitting it among all his children (including Carole).

Defendant testified that Carole admitted to him that she owed insurance and taxes for all the years that she and her husband had not helped pay them. Defendant stated specifically that he paid all insurance and taxes from 2000, when he acquired his interest, through 2005. He also testified that his father alone had paid for the land in 1960, along with 90 percent of the construction materials, and that Rudy Jr. had made only minor contributions at the time. Defendant reported that he and his father had handled maintenance through the years, including cleaning up after a flood, various storm damages, a raccoon infestation, and ice damage to the pier on the river. He stated that Carole first started contributing in 2006 or 2007, when the roof was replaced. However, defendant does concede that plaintiff later made contributions sufficient to cover his and Carole's share of the expenses going back to 2000.

The trial court found that the expenses were shared equally beginning in 2000, but that defendant still did all the work of maintaining the property. There was also an issue at trial regarding the personal property in the cottage. The trial court found that the vast majority of the personal property was owned exclusively by defendant or his family, except for a few pieces that defendant stipulated belonged to plaintiff's family.

Under MCR 3.403(C), the trial court also awarded plaintiff attorney fees. It limited the fees awarded to those involved in organizing the partition sale and excluded fees incurred in litigating the dispute between plaintiff and defendant regarding the distribution of sale proceeds and the personal property. Because the invoices submitted by plaintiff's attorney did not make this differentiation, the trial court simply awarded fees for twice the amount of time spent by the partition commissioner, reasoning that plaintiff's attorney would have needed more time than the commissioner in order to prepare his materials. The fees and costs awarded to plaintiff totaled $8,359.20. ¹

II. STANDARD OF REVIEW

Actions to partition land are equitable in nature. MCL 600.3301; In re Temple Marital Trust, 278 Mich.App. 122, 141, 748 N.W.2d 265 (2008). “[E]quitable actions are reviewed de novo with the trial court's findings of fact reviewed for clear error....” Id. at 142, 748 N.W.2d 265. Interpretation of a statute or court rule constitutes a question of law that is also reviewed de novo. Burkhardt v. Bailey, 260 Mich.App. 636, 646, 680 N.W.2d 453 (2004).

III. DIVISION OF PROCEEDS

While MCR 3.403(D)(3) provides that two parties who each own a 50 percent interest in property to be sold in lieu of partition will each receive 50 percent of the proceeds, MCL 600.3336(2) provides:

When partitioning the premises or dividing the money received from a sale of the premises among the parties the court may take into consideration the equities of the situation, such as the value of the use of the premises by a party or the benefits which a party has conferred upon the premises.

In this case, the trial court found that defendant had conferred sufficient benefits on the premises to deserve 75 percent of the proceeds from the sale.

Plaintiff argues that the trial court should have considered only benefits conferred on the premises after plaintiff became coowner with defendant, citing Fenton v. Wendell, 116 Mich. 45, 51, 74 N.W. 384 (1898), and Jones–Collier v. Cunningham, unpublished opinion per curiam of the Court of Appeals, issued April 22, 2010 (Docket No. 289915), 2010 WL 1629075.Fenton is not directly on point, and Jones–Collier is not binding. MCR 7.215(C)(1). Nonetheless, we find plaintiff's argument persuasive.

Fenton appears to be the only Michigan case involving a situation in which one of the parties at the time of partition was not a coowner at the time benefits were conferred on the property. In Fenton, the plaintiff sued for partition, naming Annie Wendell and her daughters, Eva and Romain, as defendants. The defendants had been living in the property, and Fenton argued that he was entitled to the rental value of the property because they had excluded him from using it, though he owned a 13/21 share of the property. Defendants argued that Fenton should be required to pay his share of improvements that Annie had made during the same period.

During the proceedings, Romain acquired Annie's and Eva's interests so that at the time of partition only Fenton and Romain had ownership interests in the property. Nevertheless, the circuit court concluded that assessments for rents or improvements were to be assessed between Fenton and Annie, the respective owners at the time in which the rents and improvements had been incurred.² The Supreme Court agreed that rents due to Fenton and the value of improvements made by Annie should each be charged and should be offset against each other. While the issue whether Romain could be made liable for the rents was not squarely before it, the Supreme Court did not criticize the circuit court's decision that the issue of rents and improvements was to be resolved between the parties who owned the property when they were incurred and not between their successors. Fenton, 116 Mich. at 48–51, 74 N.W. 384. The Jones–Collier Court cited Fenton in stating that a party should not be charged for costs that did not benefit that party. Jones–Collier, unpub. op. at 9.

Defendant offers no caselaw in support of the proposition that in a partition action a subsequent owner may be held liable, even in equity, for the debts of a prior owner. The trial court also did not cite any authority that would allow it to charge plaintiff with his parent's debts. It is particularly inappropriate to allow defendant more than half of the proceeds in this case because Carole Silich was still alive when this litigation began and he could have sued her to recover any benefits he conferred on her share of the property. Moreover, defendant himself did not gain an ownership interest in the property until 2000, yet he concedes that plaintiff has repaid his mother's share of the expenses going back to 2000–expenses that were not chargeable to plaintiff anyway. Thus the trial court actually compensated defendant for expenses incurred by defendant's predecessor in interest and charged plaintiff for the debts of his.

The statute allows adjustments for benefits conferred on the premises by “a party,” but when we remove the unequal contributions of the prior owners from the equation, defendant did not spend any more money on the property than plaintiff or Carole after he became coowner. Thus, there is no adjustment to be made on the basis of expenditures. There was testimony that defendant also personally performed maintenance work on the property, but those contributions were de minimis and mostly occurred before either party to this litigation had any ownership rights to the property. Further, any credit for maintenance work is counterbalanced by the fact that defendant enjoyed unfettered use of the property, rather than being forced to share it with Carole or plaintiff.

We hold that it was improper for the trial court to grant defendant more than 50 percent of the proceeds from the sale of the property when it was...