873 N.W.2d 332
Mich. Ct. App.2015Background
- In 2007 Comerica made a ~$25 million loan to Marketplace secured by a mortgage on a shopping center; two individuals guaranteed Marketplace’s obligations.
- The mortgage included a rents-and-profits clause and an express successive-remedies clause permitting remedies to be pursued concurrently or successively.
- Comerica sued Marketplace and the guarantors in 2012 alleging default and guaranty breaches and sought a receiver; the action was dismissed with prejudice after case evaluation.
- Marketplace sued Comerica in 2013 alleging conversion, tortious interference, and seeking declaratory/injunctive relief and quiet title after Comerica allegedly directed tenants to pay rents to the bank.
- Comerica moved for summary disposition under MCR 2.116(C)(8)/(C)(10), arguing the prior settlement released the guarantors but not Marketplace’s mortgage obligations and that the mortgage’s successive-remedies clause permitted successive suits. The trial court granted Comerica; Marketplace appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ripeness | Marketplace: suit is ripe because Comerica already directed tenants to pay rents (actual injury). | Comerica: claim is premature, hypothetical until foreclosure. | Court: Ripeness satisfied; alleged diversion of rents is an actual injury. |
| Compulsory joinder (MCR 2.203(A)) | Marketplace: Comerica had to join foreclosure claims in the prior guaranty action because both arise from the mortgage. | Comerica: prior suit focused on guaranties; foreclosure need not be joined and successive remedies clause allows successive suits. | Court: MCR 2.203(A) did not require joinder—guaranty/receiver claims and foreclosure claims did not involve identical essential facts/evidence. |
| Res judicata (bar to enforcing mortgage) | Marketplace: prior adjudication bars Comerica from asserting mortgage remedies now (reverse/omission-based estoppel). | Comerica: res judicata would only be relevant as a defense in a subsequent foreclosure action; successive remedies clause allows new suit. | Court: Plaintiff may assert res judicata, but it does not apply here because the prior action did not involve the same transaction or essential evidence as a foreclosure action. |
| Summary disposition under MCR 2.116 | Marketplace: trial court erred in granting dismissal; Comerica cannot enforce mortgage after prior case. | Comerica: summary disposition appropriate because Marketplace’s res judicata theory fails and mortgage rights survive settlement with guarantors. | Court: Affirmed grant of summary disposition for Comerica; Marketplace’s suit premised on a faulty res judicata theory. |
Key Cases Cited
- Pierson Sand & Gravel, 460 Mich 372 (addresses de novo review of res judicata issues)
- Huntington Woods v Detroit, 279 Mich App 603 (ripeness and standing reviewed de novo)
- Maiden v Rozwood, 461 Mich 109 (standards for reviewing summary disposition)
- Kefgen v Davidson, 241 Mich App 611 (treatment of C(8) vs C(10) when outside facts considered)
- Comerica Bank v Cohen, 291 Mich App 40 (treatment of guaranty as contract)
- Stoken v J E T Electronics & Technology, 174 Mich App 457 (elements of breach of contract)
- Weathervane Window, Inc v White Lake Constr Co, 192 Mich App 316 (standards for appointment of a receiver)
- Senters v Ottawa Savings Bank, FSB, 443 Mich 45 (equitable considerations for judicial foreclosure)
- Mich Trust Co v Cody, 264 Mich 258 (judicial foreclosure principles)
- Adair v Michigan, 470 Mich 105 (elements and scope of res judicata)
- Fox v Martin, 287 Mich 147 (recognition that plaintiffs may assert preclusion principles)