# Deutsche Bank National Trust Company v. Andrew Hargreaves

> Michigan Court of Appeals · January 30, 2020

URL: https://www.frixlaw.com/law-library/cases/4503298

## Case

- **Court:** Michigan Court of Appeals
- **Decided:** January 30, 2020
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4503298

## How later opinions describe it (automated extraction)

- stating that the failure to properly raise a claim of error before the trial court in a civil case normally constitutes a waiver of that claim and declining to exercise its discretion to review the unpreserved claim under the facts of that case

## Opinion text

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

DEUTSCHE BANK NATIONAL TRUST UNPUBLISHED
COMPANY, January 30, 2020

Plaintiff/Counterdefendant-
Appellee,

v No. 347040
Wayne Circuit Court
ANDREW HARGREAVES, LC No. 18-008390-CZ

Defendant/Counterplaintiff-
Appellant,

and

LAWRENCE M. HAVER,

Defendant,

and

JOAN HAVER, also known as JOAN SANBORN,

Defendant/Counterplaintiff.

Before: METER, P.J., and FORT HOOD and REDFORD, JJ.

PER CURIAM.

Defendant/counterplaintiff Andrew Hargreaves (Hargreaves) appeals as of right the trial
court’s order granting plaintiff/counterdefendant, Deutsche Bank National Trust Company
(Deutsche Bank) summary disposition of his counterclaims and the trial court’s order granting
Deutsche Bank immediate possession of property commonly known as 1951 Alanson, Westland,
Michigan (the Property). We affirm.

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I. FACTUAL BACKGROUND

On November 2, 1993, the Secretary of Veterans Affairs (the VA) entered into a land
contract for the sale of the Property to defendants Lawrence Haver (Lawrence) and Joan Haver
(Joan) (collectively, the Havers) under which they agreed to purchase the Property. The land
contract required the Havers to make a down payment and to pay the balance plus interest in
monthly installments. The land contract provided further in pertinent part as follows:

14. Delivery to and acceptance of this Agreement by Buyer shall
constitute delivery to and acceptance by Buyer of possession of the property
described herein and shall constitute an acknowledgment by the Buyer that he/she
has inspected and examined the property, is satisfied with its condition and Buyer
acknowledges that he/she is buying the property “as is.” . . .

15. Time is of the essence of this Agreement and if default be made and
continue for a period of thirty (30) days in the payment of any of the installments
of principal, interest, or any other items hereinbefore stipulated, when the same
become severally due hereunder, or in the payment of any other sum herein
agreed to be paid by Buyer, or if default be made in the performance by Buyer of
any other agreement, covenant, or obligation of Buyer hereunder, then in either,
or any of said events, the whole unpaid balance due under the terms of this
Agreement shall, at the option of Seller, immediately become due and payable
and Seller may, at his/her option, (a) terminate by simple declaration of the
election so to do, with or without notice, all of Buyer’s rights under this
Agreement and all of Buyer’s right, title, and interest in the property; or (b)
terminate all of Buyer’s right under this Agreement and all of Buyer’s right, title,
and interest in the property in any appropriate proceeding, legal or equitable, or
(c) enforce Buyer’s obligations hereunder in any appropriate proceeding, legal or
equitable. Buyer agrees to pay all costs and expenses, including a reasonable sum
for attorney’s fees incurred by Seller in terminating Buyer’s rights under this
Agreement or claims to the property or in enforcing any or all of the terms of this
Agreement, and in appropriate judicial proceedings, if any are initiated to
establish or maintain Seller’s right or title to, and possession of said property after
breach by Buyer, free of any title or claims of Buyer.

* * *

17. (a) Upon Seller exercising the right of termination as provided in
paragraph 15 hereof, all rights and interest hereby created and then existing in
Buyer and in all claiming under Buyer, shall wholly cease and determine. Buyer
shall thereupon quit and surrender to Seller, without demand, peaceful possession
of said property in as good condition as it is now, reasonable wear and tear alone
excepted. . . .

18. Upon (a) Payment in full of all sums agreed to be paid under this
contract; or (b) At Seller’s option, upon execution of a note and purchase money
mortgage, as provided in paragraph 19 hereof, the Seller shall execute and deliver

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a deed conveying to Buyer all the Seller’s right, title, and interest in said property,
subject to the exceptions indicated in paragraph 3 hereof, with covenant only that
the grantor has not done, committed or wittingly or willingly suffered to be done
or committed, any act, matter, or thing whatsoever, whereby the premises, or any
part thereof, is, are or shall be charged or encumbered in title, estate or otherwise.

* * *

22. If all or any part of Buyer’s interest in the property or this Agreement
be assigned without first obtaining the written consent of the Seller, the whole
unpaid balance payable under the terms of this Agreement shall immediately
become due and payable at the election of the Seller. . . . .

* * *

24. Failure or delay of the Seller to enforce any right or to exercise any
option hereunder available because of any default shall not operate as a waiver of
the right of the Seller to thereafter enforce such right or to exercise such option or
any other option, for this same or any other default.

* * *

The covenants in this Agreement contained shall be binding upon, and the
benefits and advantages hereunder shall inure to, the respective heirs, executors,
administrators, successors, and assigns of the parties hereto.

On February 24, 1994, the VA quitclaim deeded the Property to Bankers Trust Company
of California, as trustee on behalf of Vendee Mortgage Trust 1994-1, a trust established under
New York law. The deed expressly stated that the Property was conveyed “subject to an
installment contract for the purchase of said real estate dated November 2, 1993, between the
[VA] as vendor and Lawrence M. Haver and Joan Haver as vendees.” The trial court record
includes a title search performed by Carrington Title Services for Joan, having an effective date
of December 4, 2017. It indicates that the quitclaim deed was recorded, but a copy of the land
contract could not be located in the Wayne County Register of Deeds. The title search described
various later transfers of the Property including one that indicated that the Havers transferred the
Property on February 5, 2003, by quitclaim deed from themselves to the Lawrence M. Haver
Revocable Trust Agreement. On April 23, 2008, Joan, as successor trustee of the Lawrence M.
Haver Revocable Trust Agreement, transferred the Property to herself as trustee of the Joan
Leslie Haver Revocable Trust Agreement by fiduciary deed. Then, on December 30, 2013, the
Joan Leslie Haver Revocable Trust Agreement transferred the Property to Hargreaves by a
purported warranty deed. The title search did not disclose any conveyance of title to the property
to the Havers.

In May 2018, Deutsche Bank, as successor in interest to Bankers Trust Company of
California, as trustee of the Vendee Mortgage Trust 1994-1, brought summary proceedings in
district court on the grounds that the Havers forfeited the land contract and it had the right to
recover possession of the Property because no installment payments had been made on the land
contract since February 2013. Deutsche named Hargreaves and the Havers as defendants.
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Deutsche Bank alleged that the principal balance due equaled $29,190.99 and the total amount in
arrears equaled $33,423.54. Joan answered the complaint by admitting the allegation of the
existence of a land contract, but generally denied the remaining allegations. She asserted two
counterclaims in which she acknowledged the existence of the land contract and that the Havers
made payments to the VA until Bank of America began servicing the debt after which they paid
it. She alleged that Bank of America violated the Real Estate Settlement Procedures Act, 12
USC 2609(c), and the Fair Debt Collections Practices Act, 15 USC 1692d, related to servicing
and collection of her debt. Hargreaves answered the complaint by asserting that he lacked
knowledge or notice of a land contract when he purchased the Property and obtained a warranty
deed that was recorded in 2014. Hargreaves counterclaimed seeking equitable relief including
quiet title to the Property claiming that he had superior right to it by virtue of a warranty deed
from Joan.1 Hargreaves alleged that he lacked notice of any land contract and for unjust
enrichment because he paid $20,000 to purchase the Property and invested additional money to
improve it.2 Hargreaves alleged that the land contract constituted a mortgage loan and because
plaintiff treated it as a mortgage it waived any right to foreclose upon the Property under
summary proceedings. Hargreaves also moved for removal of the case to the circuit court. The
district court transferred the case to the trial court because Hargreaves asserted equitable claims
over which the district court lacked jurisdiction.

Deutsche Bank moved for and was granted summary disposition of Hargreaves’s
counterclaims because Joan lacked transferable title in 2013 when she attempted to convey the
Property to Hargreaves, and Hargreaves had notice of the land contract in the record title and
could have discovered it through a proper title search. The trial court also granted Deutsche
Bank’s motion for summary disposition for judgment of possession and entered an order that
Deutsche Bank could take immediate possession of the Property and obtain assistance from the
sheriff for execution of eviction.

II. STANDARDS OF REVIEW

We review de novo a trial court’s decision on a motion for summary disposition, Loweke
v Ann Arbor Ceiling & Partition Co, LLC, 489 Mich 157, 162; 809 NW2d 553 (2011), issues of
statutory construction, Estes v Titus, 481 Mich 573, 578-579; 751 NW2d 493 (2008), a trial
court’s ruling on equitable matters, including a quiet-title determination, Richards v Tibaldi, 272
Mich App 522, 528; 726 NW2d 770 (2006), and jurisdictional questions, Kar v Nanda, 291 Mich
App 284, 286; 805 NW2d 609 (2011). We review de novo a trial court’s ruling on a summary
disposition motion. In Bodnar v St John Providence, Inc, 327 Mich App 203, 212; 933 NW2d
363 (2019), this Court summarized the standard for summary disposition motions under MCR
2.116(C)(8) as follows:

1
Lawrence passed away in 2007 and Joan ultimately agreed by stipulation to dismiss her
counterclaims and relinquish any claim to the Property.
2
Hargreaves has not presented arguments on appeal regarding his unjust enrichment claim.

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Summary disposition is appropriately granted under MCR 2.116(C)(8)
when the opposing party has failed to state a claim upon which relief may be
granted. Dalley v Dykema Gossett PLLC, 287 Mich App 296, 304; 788 NW2d
679 (2010). A motion under MCR 2.116(C)(8) tests the legal sufficiency of a
complaint on the basis of the pleadings alone. Id. All well-pleaded factual
allegations are to be accepted as true and are to be construed in the light most
favorable to the nonmoving party. Johnson v Pastoriza, 491 Mich 417, 435; 818
NW2d 279 (2012). A party may not support a motion under MCR 2.116(C)(8)
with documentary evidence such as affidavits or depositions. Patterson v
Kleiman, 447 Mich 429, 432; 526 NW2d 879 (1994). However, when an action is
premised on a written contract, the contract generally must be attached to the
complaint and thus becomes part of the pleadings. Laurel Woods Apartments v
Roumayah, 274 Mich App 631, 635; 734 NW2d 217 (2007); see also MCR
2.113(C).

A motion under MCR 2.116(C)(8) may be granted if a claim is clearly unenforceable and no
factual development could possibly justify recovery. El-Khalil v Oakwood Healthcare, Inc, 504
Mich 152, 160; 934 NW2d 665 (2019). But where the parties and trial court relied on matters
outside the pleadings, MCR 2.116(C)(10) is the appropriate basis for review. Silberstein v Pro-
Golf of America, Inc, 278 Mich App 446, 457; 750 NW2d 615 (2008) (citation omitted). A
motion for summary disposition under MCR 2.116(C)(10) challenges the “factual adequacy of a
complaint on the basis of the entire record, including affidavits, depositions, admissions, or other
documentary evidence.” Gorman v American Honda Motor Co, Inc, 302 Mich App 113, 115;
839 NW2d 223 (2013). A trial court’s grant of summary disposition under MCR 2.116(C)(10) is
proper when the evidence, “viewed in the light most favorable to the nonmoving party, show that
there is no genuine issue as to any material fact and the moving party is therefore entitled to
judgment as a matter of law.” Lowrey v LMPS & LMPJ, Inc, 500 Mich 1, 5; 890 NW2d 344
(2016). “A genuine issue of material fact exists when the record, giving the benefit of reasonable
doubt to the opposing party, leaves open an issue upon which reasonable minds might differ.”
Gorman, 302 Mich App at 116 (citation omitted). The interpretation of a deed is reviewed de
novo on appeal. In re Rudell Estate, 286 Mich App 391, 402-403; 780 NW2d 884 (2009). We
review de novo an equitable action, and we review the trial court’s findings of fact for clear
error. See Canjar v Cole, 283 Mich App 723, 727; 770 NW2d 449 (2009). Quiet-title actions are
equitable in nature. Id. The decision to grant equitable relief rests within the sound discretion of
the deciding court. See Tkachik v Mandeville, 487 Mich 38, 45; 790 NW2d 260 (2010).

III. ANALYSIS

A. STIPULATED DISMISSAL OF CLAIMS BETWEEN JOAN AND DEUTSCHE BANK

Hargreaves first argues that the trial court erred by entering a stipulated order dismissing
the claims between Joan and Deutsche Bank in violation of MCR 2.602(B) because the trial
court did not hold a hearing, he never approved the order, the order had not been submitted under
the seven-day rule, and the order had not been submitted to the trial court for settlement. We
disagree.

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“For an issue to be preserved for appellate review, it must be raised, addressed, and
decided by the lower court.” Mouzon v Achievable Visions, 308 Mich App 415, 419; 864 NW2d
606 (2014) (quotation marks and citation omitted). Because Hargreaves failed to raise this issue
below, it is unpreserved. “We review unpreserved challenges for plain error.” Total Armored
Car Serv, Inc v Dep’t of Treasury, 325 Mich App 403, 412; 926 NW2d 276 (2018). To establish
plain error, Hargreaves must show (1) that an error occurred, (2) that the error was plain, and (3)
that the plain error affected his substantial rights. Henderson v Dept of Treasury, 307 Mich App
1, 9; 858 NW2d 733 (2014). To merit relief, Hargreaves must establish prejudice, i.e., that the
error affected the outcome of the proceedings. Id.

MCR 2.504(A) governs voluntary dismissal of an action. MCR 2.504(A)(1) allows
dismissal without a court order when the parties stipulate to dismissal or when the plaintiff
dismisses an action before the adverse party serves an answer. Otherwise, “an action may not be
dismissed at the plaintiff’s request except by order of the court on terms and conditions the court
deems proper.” MCR 2.504(A)(2); Walbridge Aldinger Co v Walcon Corp, 207 Mich App 566,
570; 525 NW2d 489 (1994). Dismissal under this subrule is without prejudice unless the order
indicates otherwise. MCR 2.504(A)(2)(b). A trial court has discretion to grant requests for
voluntary dismissal but it should consider the competing interests of the parties, any resultant
inconvenience to the court, and protect defendants from abuse. African Methodist Episcopal
Church v Shoulders, 38 Mich App 210, 212; 196 NW2d 16 (1972).

In this case, the record reflects that, on October 12, 2018, Deutsche Bank and Joan
stipulated and agreed to the dismissal of all of Joan’s claims respecting the Property including
her land contract interest and any possessory interest she had. Further, Joan agreed to the entry
of an order of land contract forfeiture and possession against her. She stipulated to Deutsche
Bank’s possession of the Property. Pursuant to the stipulation, Joan agreed to dismiss her claims
against Deutsche Bank with prejudice. Deutsche Bank similarly agreed to dismiss its claims
against Joan related to her debt under the land contract and any claim for a deficiency. Deutsche
Bank and Joan also stipulated that Deutsche Bank had no responsibility to defend claims that
Hargreaves may have against Joan. Deutsche Bank and Joan electronically filed their stipulated
order on October 15, 2018. The trial court entered the order on October 16, 2018. That same
day, Deutsche Bank and Hargreaves appeared for a hearing at which the trial court indicated on
the record that the status of the case had been discussed in chambers, including the dismissal of
Joan’s counterclaims. The trial court made no reference to the order of land contract forfeiture
included in the stipulation, but its reference to the order and entry of the same indicates that the
trial court considered and agreed to grant the relief requested in the stipulated order by Deutsche
Bank and Joan.

MCR 2.602(B)(1) authorized the trial court to sign the order at the time it granted the
relief provided by the order. The trial court, therefore, addressed the issue with the parties, acted
well within its discretion, and appropriately entered the stipulated order between Deutsche Bank
and Joan. The order disposed of their competing claims. Entry of the order did not affect any
claims Hargreaves had against Joan. Hargreaves has neither established plain error nor that the
trial court’s entry of the stipulated order affected his substantial rights. Accordingly, he lacks
entitlement to relief in this regard.

B. SUMMARY DISPOSITION OF HARGREAVES’S COUNTERCLAIMS

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Hargreaves also argues that the trial court erred by granting Deutsche Bank’s motion for
summary disposition of his counterclaims. We disagree.

The record reflects that the land contract and relevant deeds appearing in the Property’s
chain of title were attached to the parties’ respective pleadings and submissions in this case.
Accordingly, the trial court could appropriately consider those documents for purposes of
deciding Deutsche Bank’s motion.

In an action to quiet title, the claimant must establish a prima facie case of title in the
subject property; the burden then shifts to the adverse party to prove a superior interest. Beulah
Hoagland Appleton Qualified Personal Residence Trust v Emmet Co Road Comm, 236 Mich
App 546, 550; 600 NW2d 698 (1999). Although the parties disagree about the legal effect of the
recorded instruments in this case, there is no dispute regarding which instruments were recorded
in the chain of title. The record title for the Property indicates that America’s Lending Network,
Inc. acquired title to the Property and thereafter conveyed title to the Property to the VA in
February 1993. The VA quitclaim deeded its interest in the Property to Bankers Trust Company
of California, N.A., as trustee of the Vendee Mortgage Trust 1994-1, subject to the 1993 land
contract between the VA and the Havers. Deutsche Bank claims title to the Property as the
successor in interest by merger with Bankers Trust Company of California, N.A.

The Havers quitclaim deeded their interest in the Property to Lawrence’s trust, and after
Lawrence died, Joan, as the successor trustee of Lawrence’s trust, transferred the trust’s interest
in the Property to Joan’s trust. Joan’s trust later attempted to convey the Property by a purported
warranty deed to Hargreaves. Hargreaves contended that he held superior title to the Property
under that warranty deed.

Under MCL 565.1, conveyances of land may be made by deed. Under MCL 565.3, a
quitclaim deed suffices to pass all of the interest one holds in property that the grantor could
convey by a deed of bargain of sale. “A quitclaim deed is, by definition, a deed that conveys a
grantor’s complete interest or claim in certain real property but that neither warrants nor
professes that the title is valid.” Mich Dept of Natural Resources v Carmody-Lahti Real Estate,
Inc, 472 Mich 359, 377-378; 699 NW2d 272 (2005) (quotation marks, citations, and alteration
omitted). Under MCL 565.4, a deed holder may convey only the interest held. When a
conveyance is made by a warranty deed, it “shall be deemed and held to be a conveyance in fee
simple to the grantee, his heirs and assigns, with covenant from the grantor for himself and his
heirs and personal representatives, that he is lawfully seized of the premises, has good right to
convey the same, and guarantees the quiet possession thereof; that the same are free from all
incumbrances, and that he will warrant and defend the title to the same against all lawful claims.”
MCL 565.151. The “covenant of seisin is a covenant of ownership in fee simple.” 1 Cameron,
Michigan Real Property Law (3d ed), Deeds, § 10.21, p 361, citing Peck v Houghtaling, 35 Mich
127 (1876).

The record does not reflect that the Havers ever acquired legal title to the Property. The
record chain of title does not indicate any recorded deed that conveyed the Property to the
Havers. It indicates only that the Havers entered the subject land contract for purchase of the
Property by installments.

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The proper disposition of Hargreaves’s quiet title claim turned on the respective rights
held by the parties to the land contract and the legal effects of their later conveyances. A land
contract and a mortgage are not synonymous:

The term land contract is commonly used in Michigan as particularly referring to
agreements for the sale of an interest in real estate in which the purchase price is
to be paid in installments (other than an earnest money deposit and a lump-sum
payment at closing) and no promissory note or mortgage is involved between the
seller and the buyer. [Zurcher v Herveat, 238 Mich App 267, 291; 605 NW2d
329 (1999) (quotation marks and citations omitted).]

A land contract is a form of “executory contract in which legal title remains in the
seller/vendor until the buyer/vendee performs all the obligations of the contract while equitable
title passes to the buyer/vendee upon proper execution of the contract.” Id. at 291. Upon
complete performance of a land contract vendee’s contractual duties, i.e., complete payment of
the purchase price and satisfaction of any other conditions, the vendor is obligated to convey
legal title to the vendee. MCL 565.361(1).

Our Supreme Court “has consistently held that under a land contract, although the vendor
retains legal title until the contractual obligations have been fulfilled, the vendee is given
equitable title, and that equitable title is a present interest in realty that may be sold, devised, or
encumbered.” Graves v American Acceptance Mortg Corp, 469 Mich 608, 614; 677 NW2d 829
(2004). In Graves, our Supreme Court considered the rights incident to legal and equitable
ownership of land and explained that, in a land contract situation,

the vendee purchases the property upon signing the land contract and acquiring an
equitable interest therein. At that point, the vendee acquires “seisin” and a
present interest in the property that may be sold, devised, or encumbered. That
the vendee may ultimately default on the contract does not negate the fact that the
vendee has, in a real sense, purchased the relevant property. That legal title
remains in the vendor until full performance of all contractual obligations
likewise does not negate the fact that the vendee has already purchased the
property. The vendor’s legal title, . . . is only a trust coupled with an interest by
way of security for a debt[.] It represents but an ordinary money debt, secured by
the contract. [Id. at 616-617 (quotation marks and citations omitted).]

The parties to the subject land contract did not include the term “mortgage” anywhere
within the document and the Havers never executed a promissory note in relation to the
transaction. Because the Havers purchased the Property under a land contract, they held only an
equity ownership interest in the Property. When they quitclaim deeded their interest to
Lawrence’s trust, the trust acquired their equity ownership interest. When Joan, as successor
trustee of Lawrence’s trust, conveyed by fiduciary deed Lawrence’s trust’s interest, Joan’s trust
acquired the Havers’ equity ownership interest. Joan’s trust did not hold a fee interest, legal and
equitable title to the Property. To acquire full ownership and fee title to the Property, the terms
of the land contract had to be fulfilled. The Havers, Lawrence’s trust, and Joan’s trust failed to
ever do so. Moreover, the record title to the Property reflects that no conveyance of legal title to
the Havers, Lawrence’s trust, or Joan’s trust ever occurred. Therefore, they never acquired fee

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simple title to the Property. “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 Treasury Dept, 296 Mich App 336, 348; 820 NW2d 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 title and guarantees to the grantee the
right of quiet possession.” Id. (citation omitted). Here, the Havers, Lawrence’s trust, and Joan’s
trust lacked fee simple ownership and had no authority to convey fee simple title to the Property.
Accordingly, Joan’s trust could not convey fee title to the Property by warranty deed to
Hargreaves.

Hargreaves sought to quiet title in his favor as fee owner of the Property. Among other
things, he argued that, under Michigan’s race-notice statute, MCL 565.29, he had the highest
priority interest in the Property under the purported warranty deed from Joan’s trust. His
argument lacks merit because Joan’s trust could not convey fee title to him and a preexisting
superior interest was recorded in the record title.

“Michigan is a race-notice state, and owners of interests in land can protect their interests
by properly recording those interests.” Richards, 272 Mich App at 539 (quotation marks and
citation omitted). Under MCL 565.29,

[e]very conveyance of real estate within the state hereafter made, which shall not
be recorded as provided in [MCL 565.1 et seq.], shall be void as against any
subsequent purchaser in good faith and for a valuable consideration, of the same
real estate or any portion thereof, whose conveyance shall be first duly recorded.

In other words, “the holder of a real estate interest who first records his or her interest generally
has priority over subsequent purchasers.” Richards, 272 Mich App at 539. Because Bankers
Trust Company of California, N.A., as trustee of the Vendee Mortgage Trust 1994-1, acquired
the Property through the quitclaim deed from the VA recorded on April 1, 1994, Hargreaves
cannot claim an interest prior and superior to that recorded interest. The record title indicates
that he recorded his interest more than 20 years after Deutsche Bank’s predecessor acquired and
recorded its interest in the Property.

Hargreaves makes much of the fact that there was no recorded assignment of the VA’s
interest in the land contract, and that the Havers had possession of the Property for over 20 years
before he purchased it from Joan’s trust. Hargreaves’s argument lacks merit because “[t]he
conveyance of land by a vendor subject to an outstanding contract operates as an assignment to
the grantee of the contract between the vendor and the purchaser . . . .” Kramer v Davis, 371
Mich 464, 469; 124 NW2d 292 (1963) (quotation marks and citation omitted). Neither the VA
nor its successor in interest had any obligation to record a separate assignment of the land
contract because the conveyance of the Property itself by quitclaim deed operated as an
assignment of the VA’s interest in the land contract. Moreover, the VA’s quitclaim deed to
Bankers Trust Company of California, N.A., as trustee of the Vendee Mortgage Trust 1994-1,

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specifically stated that the conveyance was subject to the 1993 land contract between the VA and
the Havers.

The fact that the Havers physically possessed the Property for 20 years is not dispositive
because they owned an equitable interest that permitted them possession. Possession under a
land contract for 20 years, however, did not ripen into legal title nor could it. For the Havers, or
any of their successors, the terms of the land contract had to be fulfilled for them to acquire legal
title and fee ownership of the Property. Michigan law does not support Hargreaves’s contention
that he obtained superior title to Deutsche Bank. Hargreaves cannot establish any right to quiet
title to the Property in himself because the Havers could not convey a fee simple interest to him
since they did not own fee title. Because Joan’s trust did not own the Property in fee simple it
could not convey by warranty deed title to the Property. Hargreaves purported warranty deed,
based on an interest Joan’s trust never had, lacks validity and conveyed no legal estate or present
title to him.

Further, MCL 565.29 only protects a later interest holder who purchases in “good faith”
without actual or constructive notice of a defect in the grantor’s title. Coventry Parkhomes
Condo Ass’n v Fed Nat’l Mtg Ass’n, 298 Mich App 252, 256; 827 NW2d 379 (2012). For
purposes of determining interests in real property, notice refers to the following:

When a person has knowledge of such facts as would lead any honest man, using
ordinary caution, to make further inquiries concerning the possible rights of
another in real estate, and fails to make them, he is chargeable with notice of what
such inquiries and the exercise of ordinary caution would have disclosed.
[Richards, 272 Mich App at 539, quoting Kastle v Clemons, 330 Mich 28, 31; 46
NW2d 450 (1951).]

Notice does not require actual knowledge of another’s interest in property; the mere possibility
of the rights held by another will suffice. Penrose v McCullough, 308 Mich App 145, 153; 862
NW2d 674 (2014). A properly recorded interest provides constructive notice to all later interest
holders. Id.

Hargreaves cannot claim good-faith purchaser status because he had constructive notice
that Joan’s trust lacked fee title and could not convey a fee simple interest in the Property. Id.;
Coventry Parkhomes Condo Ass’n, 298 Mich App at 256. Although the land contract between
the Havers and the VA was not recorded, the recorded 1994 quitclaim deed from the VA
explicitly conveyed title “subject to an installment contract for the purchase of said real estate
dated November 2, 1993, between the Secretary of Veterans Affairs as vendor and Lawrence M.
Haver and Joan Haver as vendee(s).” Further, the record title did not indicate a conveyance of
fee title by any form of deed to the Havers at any time. The Havers, therefore, only held an
equitable interest in the Property under the land contract. Consequently, Hargreaves was on
notice of the existence of Bankers Trust Company of California, N.A., as trustee of the Vendee
Mortgage Trust 1994-1’s prior and superior interest in the Property subject to the 1993 land
contract between the VA and the Havers.

Further, the lack of any conveyance of fee simple interest in the Property to the Havers,
Lawrence’s trust, or Joan’s trust, placed him on notice that Joan’s trust neither held fee title to

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the Property nor could convey such title to him by warranty deed. A reasonable person under the
circumstances, using ordinary caution, at the very least, would be aware that further inquiries
were required to determine the interests in the Property. See Penrose, 308 Mich App at 153;
Richards, 272 Mich App at 539. Hargreaves’s failure to attain actual knowledge of Deutsche
Bank’s superior interest did not negate the fact that the record title placed him on notice of others
holding interests superior to Joan’s trust’s limited interest in the Property. Hargreaves, therefore,
cannot claim bona fide purchaser status under the circumstances presented in this case. A bona
fide purchaser is one who has acquired a property interest for consideration and without notice of
claims of interest in the property by a third party. Richards, 272 Mich App at 539. The trial
court correctly discerned that Hargreaves’s claims lacked merit as a matter of law because his
claim to quiet title was clearly unenforceable. The record reflects that no genuine issue of
material fact existed in this regard. The trial court, therefore, did not err by dismissing
Hargreaves’s counterclaims against Deutsche Bank.

In its complaint, Deutsche Bank alleged that Joan last made a payment under the land
contract on February 1, 2013, leaving a principal balance unpaid and in arrears. Although Joan
initially disputed the balance due, she did not deny that she never fully satisfied her payment
obligations under the land contract. Further, she stipulated to the dismissal of her claims against
Deutsche Bank with prejudice which constituted an adjudication of her claims on the merits. Her
stipulation also conceded that she forfeited the land contract which triggered Deutsche Bank’s
right to enforce the land contract and take possession of the Property. The record reflects that
Deutsche Bank gave the Havers notice of forfeiture and then commenced summary proceedings
for possession of the Property. Hargreaves cannot establish that Joan was not in default and that
Deutsche Bank lacked entitlement to pursue possession of the Property because of the Havers’
defaults.

Hargreaves also argues that the equitable doctrine of laches served as a defense to
Deutsche Bank’s action and that it precluded Deutsche Bank from obtaining any relief. He
asserts that Deutsche Bank waited five years from the date on which its cause of action accrued
to commence this action and in so doing caused him prejudice because he purchased the Property
from Joan’s trust without notice of the unrecorded land contract. This argument lacks merit.

In Knight v Northpointe Bank, 300 Mich App 109, 114-115; 832 NW2d 439 (2013), this
Court explained the laches doctrine and the circumstances in which it may be invoked:

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 ground that the plaintiff is
chargeable with laches. Lothian v Detroit, 414 Mich 160, 168; 324 NW2d 9
(1982). “[W]hen laches appears, the court merely leaves the parties where it finds
them.” Duck v McQueen, 263 Mich 325, 328; 248 NW 637 (1933). This is so
because equity will not lend aid to those who are not diligent in protecting their

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own rights. Mogk v Stroecker, 243 Mich 668, 672; 220 NW 730 (1928). The rule
that equity aids the vigilant is designed to discourage laches by making it a bar to
relief and to prevent the enforcement of stale demands. Henderson, 294 Mich at
19.

Although considerations of timing are important when determining
whether laches applies to the facts, laches is not triggered by the passage of time
alone. Lothian, 414 Mich at 168. Laches is an equitable tool used to provide a
remedy for the inconvenience resulting from the plaintiff’s delay in asserting a
legal right that was practicable to assert. Dep’t of Pub Health v Rivergate Manor,
452 Mich 495, 507; 550 NW2d 515 (1996). As such, “when considering whether
a plaintiff is chargeable with laches, we must afford attention to prejudice
occasioned by the delay.” Lothian, 414 Mich at 168. It is the prejudice
occasioned by the delay that justifies the application of laches. Dunn v Minnema,
323 Mich 687, 696; 36 NW2d 182 (1949) (“This Court has repeatedly held that
mere delay in attempting to enforce a right does not constitute laches, but that it
must further appear that the delay resulted in prejudice to the party claiming
laches of such character as to render it inequitable to enforce the right.”).

For laches to apply, the person invoking the doctrine must establish inexcusable delay by
the plaintiff in bringing suit, and that the delay resulted in prejudice. Tenneco Inc v Amerisure
Mut Ins Co, 281 Mich App 429, 457; 761 NW2d 846 (2008). Equitable relief, however, “is not
strictly a matter of right, but rather a remedy, the granting of which rests in the sound discretion
of the court.” Bazzi v Sentinel Ins Co, 502 Mich 390, 409; 919 NW2d 20 (2018), quoting Amster
v Stratton, 259 Mich 683, 686; 244 NW 201 (1932). Further, “one who seeks equity must do
equity.” Id., quoting Windisch v Mortgage Security Corp of America, 254 Mich 492, 495; 236
NW 880 (1931).

In this case, Hargreaves lacks entitlement to equitable relief under the laches doctrine
because he cannot establish inexcusable delay by Deutsche Bank or that Deutsche Bank’s
conduct caused him prejudice. The record does not reflect that Deutsche Bank inexcusably
delayed seeking enforcement of its rights under the land contract. Deutsche Bank’s claims were
based upon the land contract, and the Havers’ nonpayment of their installment obligations which
constituted a breach of the terms of the land contract. A claim based upon a contract accrues
when the wrong is committed. MCL 600.5827. Deutsche Bank alleged that the Havers ceased
payment of the required installments as of February 2013 and it commenced summary
proceedings after giving the Havers notice of forfeiture in 2018. Deutsche Bank did not waive or
release any rights to enforce the land contract and it sought enforcement of its rights well within
the 15-year limitation period applicable to actions for possession of land. MCL 600.5801(4).
The land contract provided that failure or delay of enforcement of any right under the land
contract because of any default shall not operate as a waiver of the right to enforce. The record
does not indicate definitively why Deutsche Bank waited before declaring the land contract
forfeited and taking action to obtain possession of the Property. The record does indicate,
however, that its servicing agent, Bank of America, had customer relations managers contact the
Havers regarding their nonpayment of their debt in an effort to rectify the situation before taking
action to enforce rights under the land contract. Joan responded by having an attorney send a
letter on her behalf that incorrectly denied the existence of the debt. That appears to have

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triggered Deutsche Bank’s action to enforce its rights. Based upon the record before us, we
cannot say that Deutsche Bank inexcusably delayed enforcing its rights.

Moreover, of greater significance, the record reflects that the prejudice about which
Hargreaves complains resulted from Hargreaves’s own conduct. The Property’s record title
placed him on notice of the existence of the land contract and that fee title to the Property had
never passed and vested in the Havers. Because he had such notice, he had the obligation to
prudently inquire further and determine the interests in the Property before entering the
transaction with Joan’s trust. That he failed to do so and transacted to his prejudice cannot be
blamed upon Deutsche Bank. Further, the fact that he purchased a title policy from a title
insurance company that insured a purported fee simple interest in the Property does not negate
that the record title plainly gave him notice that an interest existed in the Property prior and
superior to the interest he hoped to acquire. The record reflects that a proper search of the
record title would have plainly disclosed the status of title to the Property and that Joan’s trust
could not convey to him by warranty deed a fee ownership interest. Although he believed that he
obtained fee title to the Property, in actuality, he did not. Equity will not lend aid to those who
are not diligent in protecting their own rights. Mogk, 243 Mich at 672. Under the circumstances
presented in this case, Hargreaves could not invoke the laches doctrine with a clean conscience
and in good faith because he failed to act with reasonable diligence to discover the prior and
superior interests in the Property. Therefore, he cannot establish prejudice attributable to
Deutsche Bank warranting the application of the laches doctrine in this case to prevent Deutsche
Bank from exercising its rights under the land contract. Accordingly, the trial court did not err
by declining to apply the laches doctrine nor by granting Deutsche Bank’s motion for summary
disposition of Hargreaves’s equitable counterclaims.

C. JUDGMENT OF POSSESSION

Hargreaves next argues that the trial court erred by granting Deutsche Bank’s motion for
judgment of possession by not complying with the procedures and requirements specified in
Michigan’s judicial foreclosure statute, MCL 600.3101 et seq. We disagree.

MCL 600.5741 authorizes district courts to enter judgments of possession if the plaintiff
proves entitlement to possession of land because of nonpayment of moneys under an executory
contract for purchase of the premises. MCR 4.201 authorizes district courts to conduct summary
proceedings in cases involving the forfeiture of land contracts. MCR 4.201 further authorizes
district courts to determine the rights of parties to possess properties subject to land contracts and
sets forth the requirements for judgments entered pursuant to such summary proceedings.

In this case, after giving the Havers notice of their forfeiture of the land contract,
Deutsche Bank initiated summary proceedings for possession of the Property in the district court
as permitted under MCL 600.5701 et seq. and as provided under MCR 4.201. Deutsche Bank
based the action on the Havers’ failure to perform their payment obligations. After Hargreaves
counterclaimed against Deutsche Bank and moved for removal, the district court removed the

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case to the trial court because Hargreaves asserted equitable claims that the district court ruled
deprived it of jurisdiction.3

Hargreaves argues that Deutsche Bank and the trial court needed to follow the procedures
and requirements specified in Michigan’s judicial foreclosure statute, MCL 600.3101 et seq.,
before the trial court could enter an order of possession of the Property for Deutsche Bank. He
argues without citation to authority that Deutsche Bank could not seek possession, the relief
requested in its complaint. Hargreaves argues that Deutsche Bank first had to obtain a judgment
on the underlying debt, obtain a determination by the trial court as to who personally had liability
under the land contract, and then, the trial court had to permit such liable defendant an
opportunity to bring the arrearage current, and if that did not occur, the trial court needed to
conduct a judicial sale of the Property, whereupon the proceeds would be applied to the
outstanding debt, and a person like himself, claiming an interest under the land contract vendee,
would be entitled to redeem the Property within six months from the sale.

Had Deutsche Bank initiated a land contract foreclosure action in the circuit court, the
foreclosure statute would have applied. Deutsche Bank, however, never sought foreclosure. We
are unaware of any caselaw or other authority that requires that a circuit court, upon removal of
summary proceedings for possession of a forfeited land contract, must apply the judicial
foreclosure statute and impose the strictures of a judicial foreclosure proceeding upon a plaintiff
who elected not to go through that process. Further, in this case, the land contract vendee, Joan,
stipulated that the land contract had been forfeited, gave up any possessory interest she had, and
dismissed her claims against Deutsche Bank with prejudice. Deutsche Bank in turn stipulated
that it would hold Joan harmless for the debt and agreed not to seek a deficiency judgment
against her. Moreover, at a hearing held by the trial court, Deutsche Bank affirmed that it sought
no deficiency in this action and only sought to obtain possession of the Property. Finding no
Michigan law that imposes upon Deutsche Bank the obligation to judicially foreclose the
forfeited land contract, or any Michigan law that provides that a summary proceeding for
possession upon removal becomes an action for judicial foreclosure of a land contract, we find
no merit to Hargreaves’s contentions. Accordingly, the trial court did not err in this regard.

Hargreaves also contends for the first time on appeal that the summary proceedings were
defective because Deutsche Bank failed to serve him with the statutory notice of forfeiture. We
disagree.

MCL 600.5728 provides:

(1) Possession may be recovered under section 5726 only after the vendee
or person holding possession under him has been served with a written notice of

3
MCR 4.201(G) specifies that a district court is not required to remove a summary proceedings
case upon the filing of a counterclaim for equitable relief, but if a counterclaim exceeds the
court’s jurisdictional limit, the district court must remove that portion of the action to the circuit
court. MCR 4.202(I)(4) provides similarly that the district court must remove that portion of the
action if a money claim or counterclaim exceeds the court’s jurisdictional limit.

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forfeiture and has failed in the required time to pay moneys required to be paid
under the contract or to cure any other material breach of the contract. Unless the
parties have agreed in writing to a longer time, the person served with a notice of
forfeiture shall have 15 days thereafter before he is required to pay moneys
required to be paid under the contract and cure other material breaches of the
contract or to deliver possession of the premises.

(2) The notice of forfeiture shall state the names of the parties to the
contract and the date of its execution, give the address or legal description of the
premises, specify the unpaid amount of moneys required to be paid under the
contract and the dates on which payments thereof were due, specify any other
material breaches of the contract and shall declare forfeiture of the contract
effective in 15 days, or specified longer time, after service of the notice, unless
the money required to be paid under the contract is paid and any other material
breaches of the contract are cured within that time. The notice shall be dated and
signed by the person entitled to possession, his attorney or agent.

MCL 600.5730 specifies that service of the notice of forfeiture may be made on the
vendee or person holding possession under him. Both MCL 600.5728(1) and MCL 600.5730
use the disjunctive term “or,” which this Court has recognized as permitting a choice between
alternatives. Ellison v Dep’t of State, 320 Mich App 169, 179; 906 NW2d 221 (2017). Thus,
under the plain language of these statutory provisions, a land contract vendor may seek
possession after providing the vendee notice. The record reflects that Deutsche Bank provided
Joan the requisite notice in February 2018. She did not cure her material breach of the land
contract which gave Deutsche Bank the right to initiate summary proceedings. Because the
record indicates that Deutsche Bank properly served the notice of forfeiture on the vendees by
first-class mail, Hargreaves cannot establish plain error on the basis of Deutsche Bank’s failure
to give him notice of the land contract forfeiture.

Hargreaves also argues that the trial court erred by entering the judgment of possession
without determining the amount due under the land contract and stating the amount in the
judgment as required under MCL 600.5741, and in so doing, the trial court deprived him of the
right to redeem the Property from forfeiture. Hargreaves, however, failed to raise this before the
trial court.

Michigan generally follows a raise or waive rule of appellate review. Walters v Nadell,
481 Mich 377, 387-388; 751 NW2d 431 (2008). Although the Michigan Supreme Court has
held that this Court must review unpreserved errors in criminal cases for plain error affecting the
defendant’s rights, see People v Carines, 460 Mich 750, 763; 597 NW2d 130 (1999), it has not
established a similar holding for civil cases. See Walters, 481 Mich at 387-388; see also Johnson
Family Ltd Partnership v White Pine Wireless, LLC, 281 Mich App 364, 377-378; 761 NW2d
353 (2008) (stating that the failure to properly raise a claim of error before the trial court in a
civil case normally constitutes a waiver of that claim and declining to exercise its discretion to
review the unpreserved claim under the facts of that case). Nevertheless, this Court has the
discretion to overlook preservation requirements. See Smith v Foerster-Bolser Constr, Inc, 269
Mich App 424, 427; 711 NW2d 421 (2006) (stating that this Court may overlook preservation
requirements where the failure to consider the issue would result in a manifest injustice, or if

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consideration is necessary for a proper determination of the case, or if the issue involves a
question of law and the facts necessary for its resolution have been presented). But this Court
will exercise its discretion sparingly and only where exceptional circumstances warrant review.
Booth Newspapers, Inc v University of Michigan Bd of Regents, 444 Mich 211, 234 n 23; 507
NW2d 422 (1993). In this case, Hargreaves waived this issue for review and we decline to
consider this claim of error because we do not find the existence of exceptional circumstances
warranting our review.

Affirmed.

/s/ Patrick M. Meter
/s/ Karen M. Fort Hood
/s/ James Robert Redford

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4503298. Public record. Not legal advice.