in Re Surplus Proceeds From Sheriff Sale
327426
| Mich. Ct. App. | Oct 11, 2016Background
- Mortgagor defaulted on a Sterling Heights condominium mortgage; mortgagee CitiMortgage initiated a sheriff’s sale.
- Outstanding balance (including fees/interest/costs) was undisputedly $55,030.58.
- CitiMortgage made a partial credit bid of $20,572.80; Trademark Properties (petitioner) was the highest bidder at $31,572.80.
- Mortgagor assigned any surplus proceeds to petitioner; petitioner sought $11,000 (difference between petitioner’s bid and CitiMortgage’s partial credit bid).
- Macomb Circuit Court granted summary disposition for respondent (county), holding no surplus because sale proceeds were less than amount owing on the mortgage.
- Petitioner appealed; the Court of Appeals reviewed statutory interpretation and summary-disposition standards de novo and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there were "surplus money" under MCL 600.3252 | Surplus equals amount above mortgagee's initial partial credit bid; petitioner contends the $11,000 difference is surplus | Surplus is difference between amount owed on the mortgage/note (plus costs) and sale price; here sale price < amount owed, so no surplus | No surplus; court holds surplus measured against amount due on note plus costs, not partial credit bid |
| Whether statute requires using mortgagee's initial credit bid to determine surplus | Partial credit bid represents what mortgagee needed to satisfy the mortgage; excess over that bid is surplus | Statute does not reference initial credit bids; no authority requires treating partial bid as extinguishing debt | Court rejects reliance on partial credit bid; statute does not direct that method |
| Whether foreclosure extinguishes mortgage/note such that surplus is calculated against mortgage alone | Petitioner cites Powers to argue foreclosure extinguishes mortgage and surplus is excess above extinguished mortgage amount | Respondent and court read Powers to mean sale satisfies debt only to extent of sale proceeds, so deficiency can remain | Court follows Powers: foreclosure satisfies debt only to extent of sale proceeds; deficiency here remains, so no surplus |
| Whether respondent proved amount owed and whether petitioner raised a factual dispute | Petitioner argued amount was speculative and urged genuine-issue exists | Respondent produced documentation and sheriff affidavit showing $55,030.58 owed; petitioner produced no contrary evidence under MCR 2.116(G)(4) | Court finds no genuine factual dispute; respondent entitled to judgment as matter of law |
Key Cases Cited
- Bank of America, NA v. First American Title Ins. Co., 499 Mich 74 (addresses full-credit-bid rule and effect of credit bids)
- Dell v. Citizens Ins. Co. of Am., 312 Mich App 734 (standard of review for summary disposition)
- Weingartz Supply Co. v. Salsco, Inc., 310 Mich App 226 (summary-disposition evidentiary consideration)
- Kincaid v. Flint, 311 Mich App 76 (statutory interpretation principles)
- Powers v. Golden Lumber Co., 43 Mich 468 (foreclosure sale satisfies debt only to extent of sale proceeds)
- Rental Properties Owners Ass’n of Kent Co. v. Kent Co. Treasurer, 308 Mich App 498 (use of dictionary for statutory meaning)