Joel Dorfman v. Pierce Martin LLC
333428
| Mich. Ct. App. | Sep 26, 2017Background
- Six-unit condominium at 180 Pierce Street: four residential units (Units 1–4) and two commercial units (Units 5–6). Pierce Martin LLC owned Units 5 and 6. The Association (all co‑owners) and its Board (Scaglione president, Hanna vice‑president) administer the project under a master deed and bylaws.
- In mid‑2010 the Sassons proposed exterior improvements: a ~3‑ft expansion of Unit 5 onto adjacent general common element landscaping (≈ 365 sq ft) and outdoor seating; renderings and a written approval letter dated September 12, 2010 signed by Hanna as vice‑president accompanied the plan.
- Rogers emailed that he would “go along” with whatever Hanna and Scaglione agreed; Hanna testified to a conference call and personal contacts indicating Board and owner acquiescence; City permits were later obtained and public hearings held.
- After learning the commercial use would be a restaurant/bar, Dorfman and Rogers sued alleging violations of the Condominium Act, the master deed/bylaws, nuisance, trespass and fraud; trial was bifurcated to decide whether defendants obtained approval to occupy the common element space.
- Trial court directed a verdict for defendants on the approval issue and later granted defendants summary disposition; parties settled counterclaims and this appeal followed (Association, Scaglione, and Rogers appeal; court holds Association has appellate standing but Scaglione and Rogers individually are not aggrieved parties).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to appeal | Association lacked authority to appeal because bylaws required 75% co‑owner pre‑litigation approval to incur litigation expense | Appeal is continuation of litigation; Association may timely appeal final judgment | Association has standing to appeal; Scaglione and Rogers are not aggrieved parties and lack appellate standing |
| Whether there was approval to use common element (directed verdict) | No valid approval: required formal co‑owner vote and amendment under condo documents and Condominium Act | Valid approval evidenced by Hanna’s signed Sept. 12, 2010 letter, Board action and co‑owner acquiescence; Board authorized exterior alterations | Directed verdict for defendants affirmed: record viewed favorably to plaintiffs still shows Board approval and owner acquiescence to expansion/use |
| Validity under Condominium Act and condo documents | Any approval was void because it (1) conveyed common element or altered co‑owners’ undivided interests, (2) violated statutory provisions (MCL 559.136, 559.137) and bylaws, (3) required amendment or supermajority vote | Approval modified common area use but did not transfer ownership or alter undivided interests; bylaws and statute allow Association to authorize exterior modifications; procedures by phone/email were consistent with prior practice | Summary disposition for defendants affirmed: approval deemed a modification/use authorization (common area remained common), not an illegal conveyance, and not invalid under cited statutory provisions |
| Statute of Frauds / procedural formality | Sept. 12 letter failed statute of frauds because it effected an interest in land absent a deed | No transfer of estate/interest occurred; letter granted use/modification, not conveyance; procedural noncompliance does not negate substantive approval | Statute of frauds inapplicable because no estate/interest was created or conveyed; failure to follow formal meeting procedures did not void approval given circumstances |
Key Cases Cited
- Krohn v. Home Owners Ins. Co., 490 Mich 145 (discusses standard of review for directed verdict)
- Silberstein v. Pro‑Golf of America, Inc., 278 Mich App 446 (standard for reviewing directed verdict; view evidence most favorably to nonmoving party)
- Federated Ins. Co. v. Oakland Co. Rd. Comm., 475 Mich 286 (definition of "aggrieved party" for appellate standing)
- Quinto v. Cross & Peters Co., 451 Mich 358 (standards for reviewing MCR 2.116(C)(10) summary disposition)
- Auto Club Group Ins. Co. v. Burchell, 249 Mich App 468 (de novo review of summary disposition)
- Smith v. Globe Life Ins. Co., 460 Mich 446 (C(10) testing factual sufficiency)
- Tuscany Grove Ass’n v. Peraino, 311 Mich App 389 (distinguishable discussion about board authority to commence litigation)