Ljeka Gojcevic v. US Bank National Association Na ( 2016 )

STATE OF MICHIGAN
COURT OF APPEALS
LJEKA GOJCEVIC, DJUSTA GOJCEVIC, and UNPUBLISHED
ANTON GOJCAJ, December 13, 2016
Plaintiffs-Appellants,
v No. 328943
Macomb Circuit Court
U.S. BANK NATIONAL ASSOCIATION, LC No. 13-004296-CK
Defendant-Appellee.
Before: JANSEN, P.J., and CAVANAGH and BOONSTRA, JJ.
PER CURIAM.
Plaintiffs appeal by right the order of the trial court granting defendant’s motion for
summary disposition pursuant to MCR 2.116(C)(10) and dismissing plaintiffs’ case. We affirm.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
Plaintiffs were the owners of real property in Macomb Township. In 2001, plaintiffs
executed a mortgage on the property in favor of Mortgage Electronic Registration Systems, Inc.
(MERS) as security for a loan of $190,000. In 2009, MERS assigned its interest in the mortgage
to defendant.
In 2010, plaintiffs defaulted on the mortgage by nonpayment. Plaintiffs applied for a
loan modification with defendant, and were accepted into defendant’s Home Affordable
Modification Program on a trial basis in July. Plaintiffs then made three payments of $882.59 to
defendant between July 2010 and November 1, 2010. Plaintiffs made no payments after
November 1, 2010.
Defendant’s Loss Mitigation notes indicate that at least one of plaintiffs made several
telephone contacts with defendant, in which defendant advised that plaintiffs should continue to
make trial plan payments while awaiting the receipt of loan modification documents.
Plaintiffs executed a Home Affordable Modification Agreement (“the Agreement”) on
June 21, 2011. Relevant to this appeal, the Agreement contained the following language:
I understand that after I sign and return two copies of this Agreement to the
Lender, the Lender will send me a signed copy of this Agreement. This
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Agreement will not take effect unless the preconditions set forth in Section 2 have
been satisfied.
1. My Representations and Covenants. I certify, represent to lender,
covenant and agree:
A. I am experiencing a financial hardship, and as a result (i) I am in
default under the Loan Documents or my default is imminent . . . .
* * *
G. I have made or will make all payments required under a trial period
plan.
2. Acknowledgments and Preconditions to Modification. I understand
and acknowledge that:
* * *
B. I understand that the Loan Documents will not be modified unless and
until (i) the Lender accepts this agreement by signing and returning a copy of it to
me, and (ii) the Modification Effective Date (as defined in Section 3) has
occurred.
3. The Modification. If my representations in Section 1 continue to be true
in all material respects and all preconditions to the modification set forth in
Section 2 have been met, the Loan Documents will become automatically
modified on NOVEMBER 1, 2010 (the “Modification Effective Date”) and all
unpaid late charges that remain unpaid will be waived. I understand that if I have
failed to make any payments as a precondition to this modification under a
workout plan or trial period plan, this modification will not take effect. The first
modified payment will be due on November 1, 2010.
The Agreement provided that the monthly payment amount, beginning November 1, 2010,
would be $882.59, but could be adjusted periodically in accordance with applicable law
governing escrow payments.
Plaintiffs continued to be in default on the mortgage. Although plaintiffs assert in their
brief on appeal that they made one payment in June 2011 in the amount of $882.59, they do not
dispute that they made no other payments. Plaintiffs were informed in October 2011 that they
were in default on their mortgage and that the mortgage had been referred for foreclosure. On
October 13, 2011, plaintiffs were informed that they could get out of default by making 11
missed payments, plus assorted fees, totaling $10,641.79.
Plaintiffs requested mediation regarding the foreclosure pursuant to the now-repealed
MCL 600.3205. Mediation was scheduled for December 2, 2011; however, plaintiffs did not
attend the mediation meeting. A sheriff’s sale was scheduled for February 2, 2012, but was
adjourned after plaintiff Ljeka Gojcevic filed for Chapter 13 bankruptcy. The bankruptcy was
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ultimately terminated unsuccessfully on June 26, 2012. The sheriff’s sale was set for January 4,
2013, but was delayed again after plaintiffs filed an action with the trial court to stop the sale.
On August 29, 2013, the action was dismissed for lack of progress. The foreclosure process
again resumed.
On October 25, 2013, plaintiffs filed the instant suit, seeking injunctive relief to stop the
sheriff’s sale, and alleging claims for (1) breach of the loan modification agreement, (2)
intentional interference with plaintiffs’ right of quiet enjoyment of the property, (3) wrongful
foreclosure, (4) intentional infliction of emotional distress and (5) quiet title. The trial court
entered an injunction halting the sheriff’s sale pending the outcome of the litigation. Defendant
moved for summary disposition in March of 2014. Plaintiffs responded with their own motion
for partial summary disposition on April 21, 20141. A hearing was held on defendant’s motion
that same day. However, the trial court’s decision on both motions was held in abeyance
pending an attempt by the parties to settle the case using a private facilitator, which effort was
unsuccessful. The trial court issued its opinion and order on June 19, 2015, granting summary
disposition in favor of defendant, pursuant to MCR 2.116(C)(10), on all of plaintiffs’ claims,
denying plaintiff’s motion for partial summary disposition, dismissing plaintiffs’ case, and
awarding sanctions for asserting a frivolous claim (relative to Count II of plaintiffs’ complaint—
interference with right to quiet enjoyment). The trial court denied plaintiffs’ motion for
reconsideration.
Plaintiffs thereafter filed a motion with the trial court to hold defendant in contempt of
court and to stay the foreclosure proceedings pending the appeal, arguing that defendants had
violated the court rules by proceeding with the foreclosure proceedings before the expiration of
the 21-day period that follows entry of judgment as provided for in MCR 2.614(A)(1). The trial
court denied plaintiffs’ motion on August 19, 2015. Plaintiffs filed their claim of appeal with
this Court, seeking to appeal both the August 19, 2015 order and the trial courts’ earlier order of
summary disposition. This Court dismissed the portion of the claim of appeal related to the
August 19, 2015 order, on the grounds that it was not a final order subject to appeal by right.2
Plaintiffs then moved this Court to stay the proceedings below pending resolution on appeal of
the remaining summary disposition issues, which motion this Court denied.3
1
It is not clear what issues plaintiffs were reserving for trial, although plaintiffs’ motion for
summary disposition did not make explicit reference to their intentional infliction of emotional
distress claim.
2
Gojcevic v US Bank Nat’l Assoc NA, unpublished order of the Court of Appeals, issued August
25, 2015 (Docket No. 328943).
3
Gojcevic v US Bank Nat’l Assoc NA, unpublished order of the Court of Appeals, issued
October 29, 2015 (Docket No. 328943).
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II. SUMMARY DISPOSITION STANDARD OF REVIEW
We review de novo a trial court’s decision on a motion for summary disposition. Moser
v Detroit, 284 Mich App 536, 538; 772 NW2d 823 (2009). Summary disposition is proper under
MCR 2.116(C)(10) if “there is no genuine issue as to any material fact, and the moving party is
entitled to judgment . . . as a matter of law.” “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.” West v Gen Motors Corp, 469 Mich 177, 183; 665 NW2d
468 (2003). We consider the affidavits, pleadings, depositions, admissions, and other
documentary evidence in the light most favorable to the nonmoving party. Liparoto Constr, Inc
v Gen Shale Brick, Inc, 284 Mich App 25, 29; 772 NW2d 801 (2009). All reasonable inferences
are to be drawn in favor of the nonmovant, Dextrom v Wexford County, 287 Mich App 406, 415;
789 NW2d 211 (2010). If it appears that the opposing party is entitled to judgment, the court
may render judgment in favor of the opposing party. MCR 2.116(I)(2); Bd of Trustees of
Policemen & Firemen Retirement Sys v Detroit, 270 Mich App 74, 77-78; 714 NW2d 658
(2006). 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 could differ.
Allison v AEW Capital Mgt, LLP, 481 Mich 419, 425; 751 NW2d 8 (2008).
III. BREACH OF THE AGREEMENT
Plaintiffs first argue that defendant breached the Agreement by treating plaintiffs as
though they were in default and by improperly proceeding to foreclosure. We disagree. In
addition to reviewing the trial court’s grant of summary disposition de novo, the proper
interpretation of a contract is a question of law that we review de novo. Coates v Bastian
Brothers, Inc, 276 Mich App 498, 503; 741 NW2d 539 (2007).
Contractual language is to be interpreted according to its plain and ordinary meaning; if
the language of a contract is unambiguous, we are to construe and enforce the contract as written.
Id. Here, plaintiffs argue that the Agreement is at the very least ambiguous, because the
Modification Effective Date had already passed by the time the Agreement was executed, that it
was not the intent of the parties that plaintiffs enter into a contract that would immediately place
them in default, and further that they received no benefit from the Agreement as construed by the
trial court. We disagree.
First, nothing in the Agreement indicates that plaintiffs were relieved of their obligation
to make monthly payments on the debt secured by the mortgage, or explicitly obligates
defendant to provide the Agreement to plaintiffs for execution before the Modification Effective
Date. The Agreement explicitly contemplates that the modification will take effect on the
Modification Effective Date. It does not state that the Agreement must be executed before the
Modification Effective Date in order to take effect. Nor is it required that plaintiffs not be in
default before executing the Agreement—to the contrary, plaintiffs explicitly represented in
Section 1 of the Agreement, as a precondition to the Agreement taking effect, that they were
either in default or nearing default. That section also contemplates that plaintiffs may not have
made all of their trial period payments, in which case they represented that they “will make”
those payments in the future.
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Further, as the trial court pointed out, there is nothing absurd or impossible about
plaintiffs’ entering into a modification agreement that would immediately place them in default.
Under the original loan documents, plaintiffs already were in default from nonpayment. By
executing the Agreement, plaintiffs received the benefit of a lower interest rate and monthly
payments as well as a waiver of late charges. The fact that they continued to be in default does
not mean they received no benefit from the Agreement, as they were given the opportunity to get
out of default by making their missed monthly payments at a new, lower amount, and to move
forward making lower payments at a lower rate of interest. Although it was indeed impossible
for plaintiffs to avoid default simply by making a timely monthly payment upon executing the
Agreement on June 21, 2011, that impossibility arose simply because plaintiffs had made no
payments while waiting to execute the Agreement, despite never having been told not to
continue to make payments under the original contract, and in fact despite defendant’s advice
that they continue to make payments at the trial period rate4 while waiting to sign the Agreement.
Plaintiffs’ predicament thus is one of their own making.
Finally, we decline to find that defendant breached the Agreement by requiring a monthly
payment of $891.41 rather than the $882.59 recited in the Agreement, as the Agreement
explicitly states that the payment may be recalculated according to escrow laws, and plaintiffs
have presented no evidence that defendant improperly calculated this new payment of
approximately ten dollars more per month (which is still substantially lower than the original
$1,200+ payment required under the original loan documents). In sum, the trial court did not err
by finding the Agreement to be unambiguous, Coates, 276 Mich App at 503, or by determining
that no genuine issue of material fact existed on this claim, West v Gen Motors Corp, 469 Mich
at 183.
IV. PROMISSORY ESTOPPEL
Plaintiffs next argue that the trial court improperly granted summary disposition to
defendant, because defendant should have been estopped from defaulting plaintiffs as of the
Modification Effective Date. We disagree. The applicability of an equitable doctrine is
reviewed de novo on appeal. See Knight v Northpointe Bank, 300 Mich App 109, 113; 832
NW2d 439 (2013).
Promissory estoppel is “a distinct cause of action.” Novak v Nationwide Mut Ins Co, 235
Mich App 675, 686; 599 NW2d 546 (1999). Plaintiffs did not plead a claim for promissory
estoppel in their complaint, nor did they seek to amend their complaint to add such a claim.
Further, to the extent that plaintiff argued the elements of promissory estoppel before the
trial court, the elements of promissory estoppel were not established.
4
As stated, the trial payment amount appears from the record to have been $882.59. Plaintiffs
made payments in that amount for three months following their acceptance into the loan
modification program, and provide no explanation for why they did not continue making
payments in that amount after November 1, 2010, especially when advised to do so by defendant.
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The elements of promissory estoppel are (1) a promise, (2) that the promisor
should reasonably have expected to induce action of a definite and substantial
character on the part of the promisee, and (3) that in fact produced reliance or
forbearance of that nature in circumstances such that the promise must be
enforced if injustice is to be avoided. [Id. at 686-687.]
Here, plaintiffs appear to argue that defendant made promises to induce them into not
making payments on their mortgage until they received the loan modification documents and
executed the Agreement. This argument is contradicted by the record. Although plaintiffs argue
that they “made over a hundred telephone calls to Appellee and no one listened,” the record
indicates that, at least in January 2011, plaintiffs were advised to continue making payments
while awaiting receipt of the loan modification documents. Further, even if defendant had
ignored plaintiffs, there is no evidence of any affirmative statement by defendant that could be
interpreted as telling plaintiffs not to make payments on the mortgage while awaiting the loan
modification documents. Finally, there is no record evidence that defendant promised to provide
the loan modification documents by November 1, 2010, or that, even if such a promise was
made, it was made to induce plaintiffs not to make payments until they received the documents.
We conclude that the trial court’s failure to recognize a claim for promissory estoppel did not
render its grant of summary disposition erroneous. Id.; West v Gen Motors Corp, 469 Mich at
183.
V. QUIET TITLE
Plaintiffs next argue that the trial court erred by granting summary disposition in favor of
defendant on their quiet title claim. Again, we disagree. The purpose of a quiet title action is to
determine the superior right of title amongst parties claiming an interest in real property. Beach
v Twp of Lima, 489 Mich 99, 102; 802 NW2d 1 (2011). This claim simply has no applicability
to a defaulting mortgagor who claims that a mortgagee has wrongfully foreclosed on a property.
There is no dispute that plaintiffs hold title to the subject property, subject to the mortgage
interest held by defendant. Plaintiffs do not argue that defendant does not possess a mortgage
interest in the property, and their arguments that defendant has wrongfully foreclosed and
breached the Agreement are better addressed in other claims. The trial court did not err by
granting summary disposition to defendant on this claim. West v Gen Motors Corp, 469 Mich at
183.
VI. WRONGFUL FORECLOSURE, INTERFERENCE WITH RIGHT TO QUIET
ENJOYMENT, INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
With regard to their remaining claims, plaintiffs make an omnibus argument; essentially,
plaintiffs contend that the trial court erred by dismissing all of these claims because defendant
acted in a malicious or grossly negligent manner in delivering the loan modification documents
to plaintiffs after the Modification Effective Date had passed, in allegedly ignoring plaintiffs’
repeated attempts to contact defendant about the loan modification, and in seeking foreclosure on
the property. We disagree. We have substantially discussed many of these arguments above,
and only add that the record is devoid of any evidence that would support plaintiffs’ contention
that defendant acted willfully and recklessly by foreclosing on the property while ignoring
plaintiffs’ attempts to contact defendant. The Loss Mitigation Notes introduced at trial indicate
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that there were numerous contacts between plaintiffs and defendant, including at least two
separate occasions when plaintiffs were advised to continue making payments while awaiting the
loan modification documents. Further, the mere fact that the Agreement was finalized months
after the Modification Effective Date, while perhaps irregular, did not deprive plaintiffs of any
benefit, for the reasons discussed above. We therefore conclude that the trial court did not err by
dismissing all of these claims on the grounds that plaintiffs failed to establish a genuine issue of
material fact with regard to their elements. West v Gen Motors Corp, 469 Mich at 183.
Further, with regard to Count II (intentional breach of the right to quiet enjoyment), we
conclude that the trial court did not clearly err by imposing sanctions for a frivolous claim
pursuant to MCR 2.114(F) and MCL 600.2591. We review a trial court’s finding of
frivolousness for clear error. See Kitchen v Kitchen, 465 Mich 654, 661; 641 NW2d 245 (2002).
Whether a claim is frivolous within the meaning of MCR 2.114(F) and
MCL § 600.2591 depends on the facts of the case. MCL 600.2591(3) defines
“frivolous” as follows:
(a) “Frivolous” means that at least 1 of the following conditions is met:
(i) The party's primary purpose in initiating the action or asserting the defense was
to harass, embarrass, or injure the prevailing party.
(ii) The party had no reasonable basis to believe that the facts underlying that
party's legal position were in fact true.
(iii) The party's legal position was devoid of arguable legal merit. [Id. at 662.]
Here, plaintiffs’ claim for breach of their right to quiet enjoyment was devoid of arguable legal
merit. “[T]he covenant of quiet enjoyment is breached only when the landlord obstructs,
interferes with, or takes away from the tenant in a substantial degree the beneficial use of the
leasehold.” Slattery v Madiol, 257 Mich App 242, 258; 668 NW2d 154 (2003) (quotation marks
and citations omitted) (emphases added). Plaintiffs have provided this Court with no authority,
and this Court has found none, for the application of this legal theory to a foreclosure on a
mortgage. We therefore conclude the trial court did not clearly err by awarding sanctions
relative to Count II of plaintiffs’ complaint. Kitchen, 465 Mich at 661.
VII. “FACILITATION/BIAS”
Plaintiffs next make an argument, which they entitle “Facilitation/Bias,” that in making
its ruling the trial court improperly relied on statements from the private facilitator. We are
unable to find any evidentiary support for this assertion in the record provided to this Court, nor
do plaintiffs specify when or where any statements were made by the facilitator to the trial court
or what the statements supposedly were. The transcripts and the trial court’s orders do not refer
to any communications or reports from the facilitator. Parties may not leave it to this Court to
search for the factual basis to sustain their position. Begin v Mich Bell Tel Co, 284 Mich App
581, 590; 773 NW2d 271 (2009), overruled in part on other grounds in Admire v Auto-Owners
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Ins Co, 494 Mich 10; 831 NW2d 849 (2013). We therefore decline to further address plaintiffs’
argument relative to this claim.
VIII. VIOLATION OF MCR 2.614
Finally, plaintiffs allege that the trial court erred by denying their post-summary
disposition motion to hold defendant in contempt of court for violating MCR 2.614. As stated in
our August 25, 2015 order,5 this issue is not properly before the Court, and we decline to address
it further.
Affirmed. As the prevailing party, defendant may tax costs. MCR 7.219(A).
/s/ Kathleen Jansen
/s/ Mark J. Cavanagh
/s/ Mark T. Boonstra
5
Gojcevic v US Bank Nat’l Assoc NA, unpublished order of the Court of Appeals, issued August
25, 2015 (Docket No. 328943).
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