Howard Elandt v. Sallie Mae Home Loans Inc
322299
| Mich. Ct. App. | Oct 1, 2015Background
- Plaintiffs purchased undeveloped Rochester Hills property in 2006 with an $800,000 mortgage from Sallie Mae Home Loans; property was an investment (not primary residence).
- Plaintiffs defaulted in 2011; defendant initiated foreclosure by advertisement and conducted a sheriff’s sale in March 2012.
- Plaintiffs sued in June 2012; while negotiating with defendant the March 2012 sale was withdrawn and the trial court entered a default judgment in plaintiffs’ favor voiding the March 2012 sale.
- Plaintiffs continued not to pay after negotiations failed; defendant commenced a new, separate foreclosure by advertisement in September 2013.
- Plaintiffs sued again in November 2013 seeking to enjoin the new sale, arguing res judicata/collateral estoppel (and related rules) barred the September 2013 foreclosure and that MCL 600.3224 was violated; trial court granted defendant’s motion for summary disposition and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars the Sept. 2013 foreclosure | The June 2012 default judgment (voiding the March 2012 sale) precludes another foreclosure | The 2013 foreclosure is a separate action addressing post‑June‑2012 defaults and so is not barred | Rejected: res judicata does not apply because the actions involve different time periods and claims |
| Whether collateral estoppel prevents the 2013 foreclosure | The same issues were already decided in 2012 so cannot be relitigated | The issues in 2013 (post‑June‑2012 defaults) were not litigated or necessary to the 2012 judgment | Rejected: collateral estoppel inapplicable — the contested facts were not actually determined in 2012 |
| Whether MCR 2.603(A)(3) (effect of default) precludes defendant from proceeding | The 2012 default order bars defendant from any further foreclosure proceedings | The 2012 default applied only to the March 2012 foreclosure; defendant’s 2013 foreclosure is distinct | Rejected: rule does not bar the separate 2013 foreclosure |
| Whether MCL 600.3224 (separate‑lot sale rule) was violated | Plaintiffs contend the parcel consists of separate lots and thus cannot be sold together | Defendant notes the city rejected subdivision; at foreclosure the property was occupied/treated as one parcel | Rejected: statute inapplicable because the mortgaged premises were not distinct lots occupied separately |
Key Cases Cited
- Hogg v. Four Lakes Ass’n, Inc., 307 Mich. App. 402 (standard of review for summary disposition)
- Spiek v. Dep’t of Transportation, 456 Mich. 331 (MCR 2.116(C)(8) legal‑sufficiency test)
- Maiden v. Rozwood, 461 Mich. 109 (use of evidence on MCR 2.116(C)(10))
- Estes v. Titus, 481 Mich. 573 (res judicata and collateral estoppel standards)
- Bryan v. JPMorgan Chase Bank, 304 Mich. App. 708 (definition and application of res judicata)
- Rental Properties Owners Ass’n of Kent County v. Kent County Treasurer, 308 Mich. App. 498 (collateral estoppel elements)
- Masella v. Bisson, 359 Mich. 512 (purpose of MCL 600.3224 — protection when lots are distinct)
- Cox v. Townsend, 90 Mich. App. 12 (application of separate‑lot sale rule)