Karaus v. Bank of New York Mellon, 300 Mich. App. 9

Plaintiff Edward Karaus performed construction work for the Carefs on their property at 1258 Fabun Road, May 2004 through 2006, and repaired it 2006–2009; he recorded a lien on October 26, 2009 seeking $325,500 after acknowledging $80,000 paid.
Carefs refinanced in 2006; Home Loan Corporation loan of $1,000,000 secured by a mortgage, recorded June 5, 2007 and later assigned to Mellon; Mellon had not foreclosed at the time of the motion.
Plaintiff filed September 13, 2010 against Mellon, PNC Bank, and Carefs seeking foreclosure of the lien, breach of contract against Carefs, and unjust enrichment against all parties; default judgment entered against Carefs June 2, 2011 totaling $356,511.73.
Mellon moved for partial summary disposition on the lien (CLA, MCL 570.1114) arguing no written contract, asserting the property is residential; attached Caref affidavit claiming Carefs resided there.
Plaintiff argued the property was commercial/investment with tenants; contested Carefs’ intent to reside; Mellon argued statutory requirements satisfied by residential determination and lack of written contract.
Trial court granted Mellon's motions for summary disposition on both the lien and unjust enrichment, ruling the property was residential and there was no valid contract; plaintiff sought reconsideration but was denied.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the CLA lien is valid for this property as a residential structure.	Karaus contends the property was not residential; Carefs’ intent to reside is disputed; NXS, LLC ownership suggests investment.	Mellon asserts residential status under CLA with lack of written contract and tenants do not negate residential status.	There is a genuine issue of material fact about Carefs’ intent to reside; summary disposition on the lien was improper.
Whether Mellon was unjustly enriched at plaintiff’s expense.	Plaintiff argues Mellon benefited from the improvements and should be liable.	Mellon contends no benefit to Mellon and no adequate connection between plaintiff’s work and Mellon’s benefit.	Mellon did not receive an unjust benefit; summary disposition proper for unjust enrichment claim.

Kitchen Suppliers, Inc v Erb Lumber Co, 176 Mich App 602 (Mich. App. 1989) (clarifies residential structure definition when third-party under contract intends to reside)
Titanus Cement Wall Co, Inc v Watson, 158 Mich App 210 (Mich. App. 1987) (holds that ordinary residential status is controlled by statute, not dictionary definition, focusing on intent to reside)
Morris Pumps v Centerline Piping, Inc, 273 Mich App 187 (Mich. App. 2006) (defines elements of unjust enrichment and need to show a benefit and inequity)
Buell v Orion State Bank, 327 Mich 43 (Mich. 1950) (explains unjust enrichment concept and restitution principles)