Willis Cass LLC v. Renis II LLC ( 2023 )

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
WILLIS CASS, LLC, UNPUBLISHED
August 17, 2023
Plaintiff/Counterdefendant-Appellant,
v No. 361612
Wayne Circuit Court
RENIS II, LLC, LC No. 19-013175-CB
Defendant/Counterplaintiff-Appellee.
WILLIS CASS, LLC,
Plaintiff/Counterdefendant-Appellee,
v No. 362366
Wayne Circuit Court
RENIS II, LLC, LC No. 19-013175-CB
Defendant/Counterplaintiff-Appellant.
Before: BOONSTRA, PJ., and LETICA and FEENEY, JJ.
PER CURIAM.
These appeals arise out of a dispute between a commercial landlord and a commercial
tenant who entered into a nontraditional lease agreement. In Docket No. 361612, plaintiff Willis
Cass LLC appeals as of right the trial court’s May 13, 2022 opinion and order granting defendant
RENIS II LLC’s motion for summary disposition. In Docket No. 362366, defendant RENIS II
LLC appeals as of right the trial court’s July 14, 2022 opinion and order denying its motion to
reopen the case and award attorney fees. For the reasons set forth in this opinion, we affirm in
Docket No. 361612 and remand this matter for further proceedings in Docket No. 362366.
I. BACKGROUND
-1-
In June 2010, Midtown Development Group II, Inc., a limited liability corporation solely
owned and operated by Robert Slattery, entered into a 10-year “PARKING LOT LEASE”
agreement with defendant, a limited-liability company that does business as “Slows To Go,” for a
“20’ x 150’ strip of land located North of 4107 Cass Avenue” “to be used as a parking lot . . . ”1
[the “Slow’s Lot”]. As part of the lease, defendant negotiated an opportunity to purchase the
Slow’s Lot for $10,000. Notably, the lease required defendant to construct and develop a different
parking lot located nearby at 441 West Willis Street [the “West Lot”] for Midtown’s use as the
“base rent” for the Slow’s Lot.2
It did not take very long after they entered into that agreement for a dispute between
Midtown and defendant to arise. In fact, on June 21, 2011, just a year after they entered into the
agreement, Midtown began a string of emails with defendant ordering defendant to stop all work
on the parking lot: “Please stop all work on parking lot[.] [W]ork to date is unsatisfactory.”
Midtown stated that the fence was below grade and a lighter gauge than the fence on Slow’s Lot.
On June 29, 2011, Midtown via email declared defendant “in default” due to a dispute over the
quality of work done on the Slow’s Lot versus the West Lot and defendant’s “refusal” to “correct
the deficiencies.” After waiting a few weeks for defendant to cure the alleged default, Midtown
again emailed defendant that it was “in default” and threatened to “cancel the lease” if the default
was not cured. Unhappy with defendant’s actions, Midtown terminated the lease by e-mail on July
21, 2011: “Since we have been unable to agree on an equitable corrective action[,] I am rescinding
the lease. Please provide the documentation on the cost of the fence and paving on the leased
portion and the paving of the lot on 441 West Willis[;] I will reimburse you.”
Undeterred, defendant did not leave the property after the July 21, 2011 termination, and
Midtown did nothing to enforce its decision to terminate the lease. Instead, Midtown apparently
provided defendant more opportunities to cure before eventually threatening eviction proceedings
on November 10, 2011. Nothing ever came of this threat either. Instead, according to plaintiff’s
first motion for summary disposition in the trial court, defendant remained in possession of the
property for another year before Midtown terminated the lease again on October 15, 2012.
By the end of 2012, the dispute was far from over. In the middle of this dispute, Midtown
filed for bankruptcy on February 12, 2014. In March 2014 when it filed its bankruptcy Schedule
B, Midtown was required to list “[o]ther contingent and unliquidated claims of every nature,
including tax refunds, counterclaims of the debtor, and rights to setoff claims,” as well as an
“estimated value of each.” Midtown listed none. On Schedule G (Executory Contracts and
Unexpired Leases), Midtown again did not list its lease with defendant; instead, it described it as
1
The lease permitted defendant to develop and use the parking lot on the 20’ x150’ strip of land
north of Slow’s restaurant located at 4107 Cass Avenue [Slow’s Lot], pay all utilities for the Slow’s
Lot, pay $1,200 per year for property taxes, and provide Midtown with $600 in gift certificates
annually for food and “preferred seating” at one of defendant’s restaurants.
2
Construction of the West Lot at 441 West Willis was “as per the plans approved by the City of
Detroit Building & Safety Engineering Department dated 3/26/2010” and installation of “a six[-]
foot high black fence per Lessor’s specifications.”
-2-
a “Parking Lot lease” with “Robert Slattery.” Midtown never amended its bankruptcy petition in
this regard, and it never identified any potential lawsuits against defendant with respect to the lease
throughout the bankruptcy proceedings.3 The bankruptcy court confirmed Midtown’s plan of
reorganization and granted final approval of the disclosure statement on July 15, 2014. On August
15, 2014, one month after the bankruptcy court entered its confirmation order, Midtown declared
defendant “in default” again and made several demands for defendant to cure the alleged default
within 10 days. Defendant responded on September 19, 2014, informing Midtown that it was
sending notices to defendant’s old address and stating its intention to complete the concrete and
fence work on the West Lot “as soon as you allow us on your property.” On September 24, 2014,
Midtown terminated the lease for a third time:
[Defendant] failed to give notice to Midtown Development Group, Inc of
change of address, proper notice period according to the lease section 23 defaults
to the first attempted delivery which was August 16, 2014. Ten days to cure has
passed.
Therefore, [defendant] is in default, and Midtown Development Group, Inc
terminates the lease. [Emphasis in original.]
Unfortunately, this third termination notice did not mark the end of the lease or the parties’
disputes.
On May 22, 2015, Midtown’s attorney sent a letter stating that defendant defaulted in
performing improvements that the lease required, demanding payment of $21,499 for the
improvements Midtown completed, and advising that the lease would “terminate without further
notice” on June 30, 2015, if its demand for payment were not met:
We are counsel to Midtown Development Group, Inc. (“Midtown”). We
are authorized and directed to send you this notice on Midtown’s behalf. You have
previously received the enclosed letter from Midtown describing your default in
performing the improvements your lease required you to make. You did not make
the improvements, and as a result Midtown has done the work at a cost of $21,499.
Copies of the invoices are enclosed with this letter.
You continue to be in default under your lease. If that default is not cured
by payment of $21,499 and all other accruing rent obligations by June 30, 2015,
your lease will terminate without further notice. Please note that if you have not
cured the default by that date, you will no longer have the right to continue the lease
or to reinstate the lease by an untimely cure.
3
The June 12, 2014 Midtown Development Group, Inc’s Third Amended Combined Plan of
Reorganization and Disclosure Statement in the Chapter 11 bankruptcy proceedings referenced the
West Lot, Slow’s Lot, the parking lot lease and the details of the lease (see pages 32-33); this
document was drafted by Midtown’s attorneys. It referenced nothing with respect to any claims
Midtown had against defendants.
-3-
As with the prior “terminations,” i.e., the July 21, 2011 termination, the October 15, 2012
termination, and the September 24, 2014 termination, the June 30, 2015 termination (via the May
22, 2015 letter) did not resolve the parties’ disputes. On September 27, 2019, things changed,
however, when defendant decided to exercise its “Option to Purchase” under the lease. Less than
a week later, on October 2, 2019, plaintiff filed this lawsuit, identifying itself as the assignee of
Midtown’s rights under the lease. Plaintiff is a limited-liability company that is owned and
operated by Slattery.
After defendant filed a counterclaim, both parties amended their pleadings and engaged in
two rounds of summary-disposition briefing; the trial court ultimately decided to dismiss plaintiff’s
claims in full and rule in defendant’s favor “to the extent that it is entitled to enforce its option to
purchase, and shall become owner of the leased property upon payment of: (1) the purchase price
called for in the lease; and (2) the past-due money for property taxes and gift cards.” According
to that May 13, 2022 opinion and order, “[t]his ruling resolve[d] the last pending dispute between
the parties and closes the case.” But it did not, because less than two weeks later, on May 26,
2022, defendant filed a “Motion to Reopen Case and to Award Attorney Fees,” asking the trial
court to reopen the case to address its request for attorney fees under the lease’s “Lessors Fees and
Expenses” provision, a provision both parties referenced when originally seeking attorney fees.
Five days after defendant filed this motion in the trial court, plaintiff filed its claim of
appeal in this Court in Docket No. 361612. And on the same day that it filed its claim of appeal,
plaintiff also filed a response to defendant’s motion in the trial court, arguing that its same-day
filing of the claim of appeal prevented the trial court from substantively addressing defendant’s
motion. In its opinion and order dated July 14, 2022, the trial court agreed with plaintiff and held
“that MCR 7.208(A) precludes the Court from awarding the relief sought in this motion and,
therefore, the motion is denied.” Nevertheless, the trial court made it clear that its decision was
“without prejudice, and does not preclude Defendant from enforcing its claim for attorney fees in
subsequent proceedings . . . .” Defendant appealed this decision in Docket No. 362366.
II. ANALYSIS
A. JUDICIAL ESTOPPEL
In Docket No. 361612, plaintiff raises three issues, but this Court need only address one:
judicial estoppel. Plaintiff argues that the trial court either failed to address the application of
judicial estoppel to its claim to quiet title or, if it did, incorrectly concluded that the claim was
barred by judicial estoppel. In our view, the trial court reached the right outcome, even if its
decision did not substantively address the application of judicial estoppel to plaintiff’s quiet title
claim.
“Judicial estoppel is an equitable doctrine.” Szyszlo v Akowitz, 296 Mich App 40, 46; 818
NW2d 424 (2012). “[T]his Court reviews de novo equitable decisions.” Wengel v Wengel, 270
Mich App 86, 91; 714 NW2d 321 (2006). This Court also “review[s] de novo a trial court’s
summary disposition ruling.” Szyszlo, 296 Mich App at 46. A trial court’s decision to grant
summary disposition under the doctrine of judicial estoppel involves MCR 2.116(C)(7). Wells
Fargo Bank, NA v Null, 304 Mich App 508, 517; 847 NW2d 657 (2014). For purposes of a motion
under MCR 2.116(C)(7), a court is tasked with deciding “whether the moving party was entitled
-4-
to judgment as a matter of law.” Id. at 518. “The contents of the complaint are accepted as true
unless contradicted by documentation submitted by the movant.” Maiden v Rozwood, 461 Mich
109, 119; 597 NW2d 817 (1999).
“Judicial estoppel is an equitable doctrine, which generally prevents a party from prevailing
in one phase of a case on an argument and then relying on a contradictory argument to prevail in
another phase.” Spohn v Van Dyke Pub Sch, 296 Mich App 470, 479; 822 NW2d 239 (2012)
(quotation marks and citation omitted). “This doctrine is utilized in order to preserve the integrity
of the courts by preventing a party from abusing the judicial process through cynical
gamesmanship.” Id. at 479-480 (quotation marks and citation omitted). “For judicial estoppel to
apply, a party must have successfully and ‘unequivocally’ asserted a position in a prior proceeding
that is ‘wholly inconsistent’ with the new position now taken.” Szyszlo, 296 Mich App at 51,
quoting Paschke v Retool Indus, 445 Mich 502, 509-510, 519 NW2d 441 (1994).
“Under the prior success model of judicial estoppel, a party who has successfully and
unequivocally asserted a position in a prior proceeding is estopped from asserting an inconsistent
position in a subsequent proceeding.” Spohn, 296 Mich App at 480 (quotation marks and citation
omitted). “[W]ith this model of judicial estoppel, the mere assertion of inconsistent positions is
not sufficient to invoke estoppel; rather, there must be some indication that the court in the earlier
proceeding accepted the party’s position as true.” Id. (quotation marks and citation omitted). “The
prior success model, however, does not mean that the party against whom the judicial estoppel
doctrine is to be invoked must have prevailed on the merits.” Id. (quotation marks and citation
omitted). “This ‘prior success’ model ‘focus[es] less on the danger of inconsistent claims, than on
the danger of inconsistent rulings.’ ” Duncan v Michigan, 300 Mich App 176, 190; 832 NW2d
761 (2013), quoting Paschke, 445 Mich at 510 n 4.
“More specifically, in the context of bankruptcy proceedings,” three elements must be met
for the doctrine of judicial estoppel to apply. Spohn, 296 Mich App at 480. First, the plaintiff
must have “assumed a position that was contrary to the one that [it] asserted under oath in the
bankruptcy proceedings[.]” Id. at 480-481 (quotation marks and citation omitted). Second, the
bankruptcy court must have “adopted the contrary position either as a preliminary matter or as part
of a final disposition[.]” Id. at 481 (quotation marks and citation omitted). Third, the plaintiff’s
“omission” must not have “result[ed] from mistake or inadvertence.” Id. (quotation marks and
citation omitted). To determine whether the plaintiff’s conduct resulted from mistake or
inadvertence, courts consider three factors: (1) whether the plaintiff “lacked knowledge of the
factual basis of the undisclosed claims,” (2) whether the plaintiff “had a motive for concealment,”
and (3) whether “the evidence indicates an absence of bad faith,” which looks, “in particular, at
[the plaintiff’s] ‘attempts’ to advise the bankruptcy court of [the plaintiff’s] omitted claim.” Id.
(quotation marks and citation omitted; alterations in Spohn).
1. ASSUMPTION OF A CONTRARY POSITION
“[T]o establish the first requirement for the imposition of judicial estoppel, it must be
shown that the plaintiff assumed a position that was contrary to the one that [it] asserted under oath
in the bankruptcy proceeding[.]” Spohn, 296 Mich App at 481 (quotation marks and citation
omitted). In Spohn, the plaintiff “did not include her potential sexual harassment lawsuit on her
bankruptcy petition and did not amend that petition to list the possible cause of action while the
-5-
bankruptcy remained pending.” Id. “This failure to disclose the potential lawsuit was contrary to
the bankruptcy code,” this Court explained, “which requires a debtor to file a schedule of assets
and liabilities, a schedule of current income and current expenditures, and a statement of the
debtor’s financial affairs.” Id. This is because “[i]t is routinely recognized that a potential cause
of action constitutes an asset that must be included . . . .” Id.
In this case, as in Spohn, 296 Mich App at 481, it is undisputed that Midtown “did not
include [its] potential [claim to quiet title] on [its] bankruptcy petition and did not amend that
petition to list the possible cause of action while the bankruptcy remained pending.” Spohn, 296
Mich App at 481. Midtown filed its Schedule B (Personal Property) on March 10, 2014, and did
not accurately identify the lease, much less Midtown’s potential claims under it. On Schedule B,
Midtown was required to list “[o]ther contingent and unliquidated claims of every nature,
including tax refunds, counterclaims of the debtor, and rights to setoff claims,” as well as an
“estimated value of each.” Midtown identified none. Even on Schedule G (Executory Contracts
and Unexpired Leases), Midtown did not list its lease with defendant, describing it instead as a
“Parking Lot lease” with “Robert Slattery,” its—and plaintiff’s—sole owner and president.
Midtown never amended its petition in this regard, and even during the ”meeting of creditors/
Section 341 hearing” on March 19, 2014, Slattery downplayed the value of the lease, commenting
that defendant “pay[s] taxes and they give me $600 in food cards” and described his failure to
accurately list the lease as “just an oversight.” Therefore, the first requirement for judicial estoppel
was met.
2. ADOPTION OF THE CONTRARY POSITION
“To establish the second requirement for the imposition of judicial estoppel, it must be
shown that the bankruptcy court adopted the contrary position either as a preliminary matter or as
part of a final disposition[.]” Spohn, 296 Mich App at 483 (quotation marks and citation omitted).
Specifically, “[t]o establish ‘adoption,’ it must only be shown that the bankruptcy court confirmed
[the debtor’s] plan, which [does] not refer to [his or her] potential . . . lawsuit.” Id. (citation
omitted). In Spohn, “the second requirement of ‘adoption’ for judicial estoppel was established”
“[b]ecause it [was] undisputed that the bankruptcy court confirmed [the debtor’s] Chapter 13
plan . . . .” Id. In this case, it is likewise undisputed that the bankruptcy court confirmed
Midtown’s plan of reorganization and granted final approval of the disclosure statement on July
15, 2014. Therefore, the second requirement was met.
3. MISTAKE OR INADVERTENCE
“To establish the third requirement for the imposition of judicial estoppel, it must be shown
that the plaintiff’s omission did not result from mistake or inadvertence.” Spohn, 296 Mich App
at 483 (quotation marks and citation omitted). Again, to determine whether the plaintiff’s conduct
resulted from mistake or inadvertence, courts consider three factors: (1) whether the plaintiff
“lacked knowledge of the factual basis of the undisclosed claims,” (2) whether the plaintiff “had a
motive for concealment,” and (3) whether “the evidence indicates an absence of bad faith,” which
looks at, “in particular, [the plaintiff’s] ‘attempts’ to advise the bankruptcy court of [the plaintiff’s]
omitted claim.” Id. at 481 (quotation marks and citation omitted; alterations in Spohn).
-6-
In this case, as in Spohn, plaintiff “cannot legitimately dispute that [it] was aware and had
knowledge of the factual basis of the undisclosed claim.” Spohn, 296 Mich App at 483-484.
Indeed, as previously indicated, Midtown filed its Schedule B (Personal Property) on March 10,
2014, and did not accurately identify the lease, much less Midtown’s potential claims under it.
Midtown also failed to list “[o]ther contingent and unliquidated claims of every nature, including
tax refunds, counterclaims of the debtor, and rights to setoff claims,” as well as an “estimated value
of each.” In fact, even on Schedule G (Executory Contracts and Unexpired Leases), Midtown only
referenced a parking lot lease with Robert Slattery but not its lease with defendant or the alleged
default on the lease. Midtown never amended its petition even after the Section 341 hearing on
March 19, 2014, where it failed to mention none of Midtown’s disputes with defendant.
On appeal, plaintiff does not meaningfully argue that its failure to identify these claims was
the product of a mistake or inadvertence. Rather, it states that “it was not to necessarily be
contemplated that [defendant]’s breaches should require the need for the instant litigation, as it
would have and should have been expected that [defendant] would comply with the Lease and
correct their deficiencies that [led] to default.” Repeatedly, plaintiff asserts that “[t]he claims
present in the instant case only became known, practical, and exercisable after the bankruptcy of
[plaintiff’s] predecessor-in-interest was filed,” that its “claim for quiet title . . . only arose after the
June 30, 2015 termination of the Lease,” that “Midtown did not fail to disclose a known claim on
its bankruptcy petition because the present litigation began five . . . years after that bankruptcy
petition,” that “Midtown did not list this as a potential claim because it could not have
contemplated litigation five . . . years before it was filed,” and, ultimately, that “[t]he termination
of the Lease was a fact that occurred after the bankruptcy, thus judicial estoppel could not have
applied to such a fact.”
We reject these arguments. As this Court has previously made clear, a “debtor need not
know all the facts or even the legal basis for the cause of action” before the debtor is required to
identify and disclose it. Spohn, 296 Mich App at 482 (citation omitted). “[R]ather, if the debtor
has enough information . . . prior to confirmation to suggest that it may have a possible cause of
action, then that is a known cause of action such that it must be disclosed.” Id. (citation omitted;
emphasis added). In other words, “[a]ny claim with potential must be disclosed, even if it is
contingent, dependent, or conditional.” Id. (citation omitted; emphasis added). “Further, the duty
of disclosure in a bankruptcy proceeding is a continuing one, and a debtor is required to disclose
all potential causes of action.” Id. (quotation marks and citation omitted).
The record in this case establishes that plaintiff had more than enough information to
indicate that it may have a possible claim to quiet title against defendant before 2014. Spohn, 296
Mich App at 482. According to plaintiff’s “Timeline of Relevant Events”4, defendant built a
noncompliant fence on the West Lot in 2010, acknowledged the default and agreed to fix it in
2011, and still had not fixed the fence, grading, and other items by 2012. Slattery made it clear
from the outset that he wanted a new fence: “I want the same fence [on the West Lot that] you
installed for yourself [on the Slow’s Lot].”
4
Plaintiff filed its motion for summary disposition on December 4, 2020, and included a two-page
chart summarizing notable events in the parties’ history.
-7-
By June 21, 2011, the parties’ disputes had grown so contentious that Midtown ordered
defendant to stop all work on the parking lot. On June 29, 2011, Midtown declared defendant in
default of the lease. On July 21, 2011, Midtown terminated the lease for the first time. And in
October 2011, Midtown threatened eviction.
All of this occurred well before Midtown’s 2014 bankruptcy filings. Clearly, plaintiff was
undisputedly aware “that it may have a possible cause of action” that must be disclosed.” Spohn,
296 Mich App at 482 (citation omitted; emphasis added). But even if it was not enough on its
own, plaintiff’s “Timeline of Relevant Events” indicates that Midtown terminated the lease in
2012, more than a year before it filed for bankruptcy.
Furthermore, the bankruptcy court did not confirm Midtown’s reorganization plan until
July 15, 2014. Yet just two months after that, on September 24, 2014, Midtown apparently had
enough information to terminate the lease for a third time. Between the information that enabled
it to terminate the lease a few months after the confirmation order in the bankruptcy case and the
previous purported terminations of the lease on July 21, 2011 and October 15, 2012, plaintiff
“ha[d] enough information . . . prior to confirmation to suggest that it may have a possible cause
of action, then that is a known cause of action such that it must be disclosed.” Spohn, 296 Mich
App at 482 (citation omitted; emphasis added). Therefore, the third element is met as well.
Plaintiff claims that this outcome is at odds with a “good business practice.” According to
plaintiff, “[i]t would not be good practice for a lessor to resort to, or even contemplate, rushing to
court on matters that could be addressed (and in fact, were, at least in attempt on the part of
[plaintiff]) and should be addressed through simple business matters and discussions.” This
argument lacks merit. Perhaps plaintiff’s claim to quiet title was “contingent, dependent, or
conditional” on Midtown and defendant not resolving the dispute “through simple business matters
and discussions,” but the “contingent, dependent, or conditional” nature of a potential claim does
not relieve a debtor of the obligation to disclose it. Spohn, 296 Mich App at 482. Otherwise,
debtors could decline to disclose lucrative claims—or, put differently, assets—simply because
there was a possibility that the claim could be resolved out of court. That is not the standard that
applies to bankruptcy disclosures and, in fact, undermines the very rationale for it.
As this Court previously recognized in Spohn, the rationale for “[t]he disclosure obligations
of debtors” makes sense because they are “essential to the bankruptcy process:”
The rationale for . . . decisions [invoking judicial estoppel to prevent a party who
failed to disclose a claim in bankruptcy proceedings from asserting that claim after
emerging from bankruptcy] is that the integrity of the bankruptcy system depends
on full and honest disclosure by debtors of all of their assets. The courts will not
permit a debtor to obtain relief from the bankruptcy court by representing that no
claims exist and then subsequently to assert those claims for his own benefit in a
separate proceeding. The interests of both the creditors, who plan their actions in
the bankruptcy proceeding on the basis of information supplied in the disclosure
statements, and the bankruptcy court, which must decide whether to approve the
plan of reorganization on the same basis, are impaired when the disclosure provided
by the debtor is incomplete. [Spohn, 296 Mich App at 482 (citation omitted).]
-8-
Granting the relief plaintiff seeks would directly undermine this rationale. Plaintiff, via Midtown,
would be permitted “to obtain relief from the bankruptcy court by representing that no claims exist
and then subsequently to assert those claims for [its] own benefit in a separate proceeding.” Spohn,
296 Mich App at 482 (citation omitted). This Court’s decision in Spohn squarely prohibits plaintiff
from doing so. Therefore, plaintiff’s arguments in this regard lack merit.
Furthermore, when it comes to whether the plaintiff “had a motive for concealment,”
Spohn, 296 Mich App at 481 (citation omitted; alterations in Spohn), it is important to point out
the ways in which plaintiff’s owner has changed his positions throughout the two cases. In the
bankruptcy case, Midtown originally indicated to the bankruptcy court that its “Parking Lot lease”
was with “Robert Slattery,” not defendant. That was not true. Then, during the Section 341
hearing, Slattery downplayed the lease’s value, saying that the rent only included “taxes and “$600
in food cards,” i.e., “not a lot of money.” But during the case at bar, plaintiff alleges that the lease
was much more valuable, pointing to, among other things, a fence that it claims was worth more
than $20,000.
Slattery also stated, or at least heavily implied, during the 341 hearing that the lease was
ongoing. Yet, in this case, plaintiff claimed that Midtown terminated the lease for the first time
on October 15, 2012, and the evidence suggests that Midtown actually terminated for the first time
more than a year earlier.5
As this Court explained in Spohn, 296 Mich App at 485, “in accordance with caselaw, a
presumption regarding a motive to conceal exists because ‘[i]t is always in a . . . petitioner’s interest
to minimize income and assets’ in order to secure payment directly rather than to the debtor’s
estate.’ ” (Quotation marks and citation omitted.) And plaintiff’s failure to initially disclose its
possible lawsuit or to later amend its bankruptcy schedules suggest a motive for concealment. Id.
In light of Midtown’s, plaintiff’s, and Slattery’s changing positions in the two cases, there is
nothing to support the idea that plaintiff overcame this presumption.
Plaintiff claims that “Slattery corrected the innocent mistake on the record in bankruptcy
court.” It is true that, “[w]hen considering whether ‘the evidence indicates an absence of bad
faith,’ courts will look, in particular, at the plaintiff’s ‘attempts’ to advise the bankruptcy court of
the omitted claim.” Spohn, 296 Mich App at 486-487 (citation omitted). “More specifically,
courts primarily examine a plaintiff’s efforts to correct the bankruptcy schedules and to make the
bankruptcy court aware of any initially undisclosed claims.” Id. at 487 (emphasis added). But, in
Spohn, the fact that the debtor “did not inform the bankruptcy court of the potential sexual
harassment lawsuit or make any attempts to amend her bankruptcy petition” “support[ed] that [the
debtor] was acting in bad faith.” Id. Midtown also made no attempts to inform the bankruptcy
court about any potential claims and did not amend the bankruptcy schedules.
5
Even in this case, plaintiff has seemingly changed its position regarding when the lease
terminated, switching from the argument that it terminated the lease on October 15, 2012, on
September 24, 2014, and on June 30, 2015, in the trial court to the argument that it terminated the
lease on June 30, 2015, in its brief on appeal, without mentioning the other dates.
-9-
Furthermore, plaintiff’s argument about supposedly correcting an innocent mistake
misstates the record. Again, Slattery downplayed the lease’s value during the bankruptcy case.
Slattery did not mention any potential claims Midtown may have had against defendant, did not
mention that Midtown and defendant had been in a contentious back-and-forth over a fence at the
West Lot purportedly worth more than $20,000, did not mention the fact that Midtown purportedly
terminated the lease multiple occasions, and did not mention that defendant never left the property
after each of those purported terminations. Ultimately, Midtown’s and Slattery’s failure to give
any indication of a potential—and, in fact, the ongoing—dispute with defendant “supports that
[Midtown] was acting in bad faith.” Spohn, 296 Mich App at 487.
In sum, because Midtown did not identify any possible claims that it may have had against
defendant in the bankruptcy proceedings, because the bankruptcy court adopted Midtown’s
reorganization plan without knowledge of those potential claims, and because Midtown’s omission
of those potential claims was not the product of a mistake or inadvertence, the trial court correctly
held that plaintiff’s claim to quiet title was barred by judicial estoppel, even if the trial court did
not specifically address that claim on its own. In light of this conclusion, we need not address the
substance of plaintiff’s claim to quiet title, the 15-year statute of limitations that applied to it, or
the trial court’s analysis of those issues.
B. ATTORNEY FEES
In Docket No. 362366, defendant asks this Court to remand this matter to the trial court to
substantively address defendant’s request for attorney fees under the lease’s “Lessor’s Fees and
Expenses” provision. The trial court declined to do so, concluding “that MCR 7.208(A) precludes
the Court from awarding the relief sought in the motion and, therefore, the motion is denied.” But
“once the appeal is resolved, or if the Court of Appeals otherwise returns jurisdiction over the
matter to this Court,” the trial court explained, defendant would be permitted to “enforc[e] its claim
for attorney fees . . . .” In light of our foregoing analysis, we grant defendant’s request, but make
it clear that our decision to do so does not imply whether defendant is entitled to attorney fees
under the lease’s “Lessor’s Fees and Expenses” provision.
III. CONCLUSION
In Docket No. 361612, we affirm the trial court’s May 13, 2022 opinion and order. In
Docket No. 362366, we remand this matter for further proceedings with respect to defendant’s
request for attorneys so that the trial court can substantively address the issue for the first time.
Affirmed and remanded. We do not retain jurisdiction.
/s/ Mark T. Boonstra
/s/ Anica Letica
/s/ Kathleen A. Feeney
-10-