872 N.W.2d 699
Mich. Ct. App.2015Background
- Anton, Sowerby & Associates (broker) held an exclusive commercial listing with GAM and claimed a 5% commission after Mr. C’s Lake Orion (buyer) purchased property for $1.2M following a receivership.
- Broker recorded a CREBLA lien for $60,000; buyer and receiver funded a $75,000 escrow to cover the lien amount but broker refused to release the lien.
- Broker sued buyer and lender (Flagstar) to foreclose lien but did not name seller (GAM) or the receiver; buyer counterclaimed to quiet title and for slander of title.
- Circuit court held the CREBLA (MCL 570.581 et seq.) required extinguishment of the lien once an amount sufficient to satisfy it was escrowed, ordered lien removed, and left broker to pursue escrow funds by suing GAM/receiver.
- Circuit court granted summary disposition on buyer’s slander-of-title claim, found broker acted with malice by refusing to release lien after escrow and court orders, and awarded buyer special damages (including attorney fees and indemnified costs).
- Broker’s motions for reconsideration and to amend the complaint (to add the receiver) were denied; broker appealed and challenges were rejected on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether creation of an escrow account by buyer/seller that is sufficient to satisfy the broker’s recorded amount extinguishes the broker’s lien under CREBLA | Broker: escrow was created without broker’s agreement; broker is a party to the transaction and escrow required its consent | Buyer/Receiver: parties to the "transaction" are buyer and seller; CREBLA requires only that an amount sufficient to satisfy the lien be escrowed | Held: Escrow of amount listed in lien extinguished lien; broker not a required party to escrow and must release lien (affirmed) |
| Whether broker’s refusal to release lien violated CREBLA or instead implicated only contract remedies against seller | Broker: dispute over commission amount is a contract matter against GAM; CREBLA does not control broker’s release duty | Buyer: CREBLA explicitly extinguishes lien upon sufficient escrow and requires release; broker must pursue contract remedies against seller | Held: CREBLA controls release; broker must sue GAM/receiver to resolve commission amount; summary dismissal proper |
| Whether broker’s continued lien constituted slander of title (malice and special damages) | Broker: filing an invalid lien alone does not prove malice; broker asserted rights in good faith or relied on legal interpretation | Buyer: broker knowingly refused to release lien after escrow and court orders, causing special damages; malice shown by continued conduct | Held: Malice and special damages established as matter of law given broker’s refusal to release lien and defiance of court orders; slander-of-title claim sustained |
| Whether circuit court abused discretion by denying leave to amend complaint to add GAM’s receiver | Broker: sought to add receiver within limitations period to litigate proper commission amount; amendment should be freely allowed | Buyer: amendment was not presented as a proposed pleading; broker failed to specify claim or proposed amendment; amendment futile | Held: Denial proper—broker failed to submit proposed amended complaint or adequate claim; denial not an abuse of discretion |
Key Cases Cited
- Rambin v. Allstate Ins. Co., 495 Mich. 316 (de novo review of summary disposition)
- Tomecek v. Bavas, 482 Mich. 484 (statutory interpretation governed by plain language)
- Wurtz v. Beecher Metro. Dist., 495 Mich. 242 (legislative intent from unambiguous statute)
- Wells Fargo Bank v. Country Place Condo. Ass’n, 304 Mich. App. 582 (malice for slander of title requires intent to injure; good-faith lien prevents claim)
- B & B Investment Group v. Gitler, 229 Mich. App. 1 (special damages and attorney fees in slander-of-title claims)
- McCoig Materials, LLC v. Galui Constr., Inc., 295 Mich. App. 684 (party must dispel claimed malice in response to motion)
- Sullivan v. Thomas Org., P.C., 88 Mich. App. 77 (invalid lien can constitute a falsehood for slander of title)
- Weymers v. Khera, 454 Mich. 639 (standards for denying motion to amend)
- Biddle v. Biddle, 202 Mich. 160 (historical rule that purchasers’ equities trump broker liens)