Michael Pierce v. Partners for Payment Relief De III LLC
334517
| Mich. Ct. App. | Nov 9, 2017Background
- Jimmie and Patricia Pierce owned 848 Caton Ave as tenants by the entirety. In 2001 Patricia alone signed a promissory note for a loan; both spouses signed the mortgage; under Jimmie’s signature was the stamped phrase “For the purpose of subordinating all rights and interest including dower/homestead rights.”
- Patricia died in 2011; Jimmie died in 2012. No probate was opened for Patricia; Jimmie’s estate was opened and his personal representative quitclaimed the property to their son Michael in June 2013.
- PPR (successor to World Wide/GMAC) accelerated the loan in 2014 for default and served notice at the property; Michael signed for certified mail but was not named in foreclosure pleadings despite the recorded quitclaim.
- Michael sued to enjoin a foreclosure sale, arguing the note was extinguished as to Jimmie (he never signed the note), that PPR failed to present a claim in Patricia’s estate, and that PPR should be estopped from foreclosing because GMAC earlier offered a reduced payoff but refused to negotiate with Michael.
- The trial court found for Michael, held the mortgage and note null and void as to him, and quieted title in Michael; PPR appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of mortgage after Patricia's death when only she signed the note | Mortgage invalid as to Jimmie/Michael because Jimmie never signed the note, so obligation did not bind him; survivorship should have passed free of the debt | Mortgage valid because Jimmie consented by signing the mortgage, subordinating his entireties interest; mortgage encumbered survivor’s title | Held for defendant: Jimmie’s signature on the mortgage subordinated his interest, so the lien survived and encumbered Michael’s title |
| Whether PPR needed to file a claim in the decedent’s probate to enforce the mortgage | PPR waived rights by not pursuing the estate and thus cannot foreclose | PPR, as a secured creditor, was not required to file a claim against the estate to enforce a mortgage lien | Held for defendant: secured creditor need not file probate claim to enforce lien |
| Estoppel based on predecessor’s reduced-payoff offer and alleged refusal to accept Michael’s attempt to pay | Michael contends GMAC offered 90% forgiveness and then would not deal with him, so PPR is estopped from foreclosing | PPR says GMAC properly required dealing with the personal representative; no bad faith by lender and estoppel not shown | Held for defendant: trial evidence did not establish lender misconduct sufficient to estop foreclosure |
| Effect of the quitclaim deed Michael received from Jimmie’s estate | Michael argued he holds full title free of the mortgage because the note was void as to the surviving spouse | PPR argued the quitclaim conveyed only what the grantor had — title subject to the existing mortgage lien | Held for defendant: quitclaim conveyed title subject to Jimmie’s existing mortgage lien; Michael took property subject to the lien |
Key Cases Cited
- Tkachik v. Mandeville, 487 Mich 38 (2010) (describing tenancy by the entirety and survivorship; one spouse’s death vests title in survivor but lien can survive where both spouses consented)
- Townsend v. Chase Manhattan Mtg. Corp., 254 Mich App 133 (2002) (joint tenancy survivorship case where mortgage signed only by decedent was extinguished on transfer to survivor)
- Estes v. Titus, 481 Mich 573 (2008) (discussion of judgment liens and limitations on using entireties property to satisfy a single spouse’s liability)