MARY M BIBLER V ARCATA INVESTMENTS 2 LLC
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STATE OF MICHIGAN
COURT OF APPEALS
MARY MARGARET BIBLER,
UNPUBLISHED
December 6, 2005
Plaintiff-Appellee,
v
No. 263024
Calhoun Circuit Court
LC No. 04-003307-CH
ARCATA INVESTMENTS 2, LLC,
Defendant-Appellant,
and
NATIONAL LOAN INVESTORS, LP,
Defendant-Appellee,
and
CHICAGO TITLE OF MICHIGAN, INC, f/k/a
THE TITLE OFFICE, INC,
Defendant.
Before: Bandstra, P.J., and Neff and Markey, JJ.
PER CURIAM.
Defendant Arcata Investments 2 (Arcata), appeals by leave granted the trial court’s May
16, 2005 order granting summary disposition in favor of plaintiff, quieting title to the subject
property in plaintiff, subject to National Loan Investors (National’s) mortgage, and denying
Arcata’s counter-motion for summary disposition. The order appealed also directed that an
evidentiary hearing be held to determine the amount of plaintiff’s damages on her slander of title
claim against defendant Arcata. We reverse in part, affirm in part, and remand for further
proceedings consistent with this opinion.
I. Summary of Facts and Proceedings
This case involves a triangle of innocent parties created when plaintiff’s lender,
Commonpoint Mortgage (Commonpoint), failed to discharge an existing note and mortgage after
plaintiff refinanced her home. Unfortunately for the parties, Commonpoint was forced into
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chapter 7 bankruptcy1 soon after the refinancing transaction created the second note and
mortgage. The primary issue presented on this appeal is whether Arcata is a holder in due course
of the Bibler’s first note and mortgage, thereby cutting off defenses plaintiff and National would
have against Commonpoint, including prior payment.
On August 4, 1997, plaintiff and her then husband Larry Bibler executed a mortgage
(hereafter referred to as mortgage “A” or the “first” mortgage) and a fixed rate (18.9%) balloon
note to Commonpoint in the amount of $45,500 covering plaintiff’s residential property located
in Albion. On August 25, 1998, Commonpoint sold and assigned mortgage “A” and its
underlying note, as part of a pool of loans, to Arcata. Arcata did not record this assignment until
December 28, 1999.
On September 4, 1998, plaintiff and her then husband executed a second mortgage
(hereafter referred to as mortgage “B” or the “second” mortgage) and note to Commonpoint to
refinance the first note and mortgage. At closing, the settlement agent (The Title Office), issued
a check from the proceeds of the second loan to Commonpoint to pay and discharge mortgage A
and its underlying note. Commonpoint, however, did not forward the proceeds of the new loan
to Arcata to pay the prior mortgage and note. Rather, Commonpoint kept the proceeds and used
them for its own purposes. Mortgage B was recorded on October 2, 1998. On the same day,
Commonpoint sold and assigned mortgage B and its note to the Residential Funding
Corporation. This assignment was recorded on December 11, 1998. Residential Funding, in
turn, sold and assigned the second mortgage to National on March 27, 2000. The assignment
was recorded on May 16, 2000.
On October 21, 1998, an involuntary chapter 7 petition was filed against Commonpoint
in United States Bankruptcy Court for the Western District Of Michigan. See In re
Commonpoint Mortgage Co, 283 Bankr 469, 473 (WD Mich, 2002).
The Biblers filed a chapter 13 bankruptcy proceeding on March 3, 1999, which was
dismissed on October 21, 1999. Plaintiff filed a new chapter 13 petition as an individual on
February 3, 2000. Plaintiff’s judgment of divorce from Larry Bibler awarding her the subject
property was entered on September 26, 2000, and recorded the next day.
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Commonpoint Mortgage allegedly engaged in predatory lending practices in the so-called
“subprime” market, making loans to people with poor credit, and then selling the loans in the
secondary market. See VandenBroeck v Commonpoint Mortgage Co, 210 F3d 696, 698 (CA 6,
2000), affirming the district court’s order remanding to state court a federal action under the
Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USC 1961 et seq. See, also, In
re Commonpoint Mortgage Co, 283 Bankr 469, 472, 482 (WD Mich, 2002), certifying class
action status under Bankruptcy Rule 7023 for claims against Commonpoint in its chapter 7
proceeding by its Michigan loan customers between October 1, 1991 and October 1, 1997, that
alleged “Commonpoint: (1) charged fees for services that were never provided; (2) charged
excessive fees in breach of Commonpoint’s contractual and fiduciary duties; (3) charged ‘hidden
fees,’ which Commonpoint had a fiduciary duty to disclose; (4) charged illegal fees; and (5)
committed violations of the Michigan Consumer Protection Act (MCPA).” Here, the balloon
note (fixed rate) through which Arcata claims bears interest at yearly rate of 18.9 percent.
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Plaintiff’s chapter 13 plan was completed on November 20, 2003. Plaintiff had not listed
note and mortgage A on her scheduled debts because she believed they had been paid and
discharged when note and mortgage B were created. On December 5, 2003, while her discharge
was pending, plaintiff filed an adversary proceeding against Arcata’s servicing agent (SN
Servicing Corp) seeking to determine the validity, priority and extent of mortgage A. Arcata
moved to dismiss the adversary proceeding on the ground of lack of jurisdiction. In an opinion
dated April 21, 2004, United States Bankruptcy Judge Jo Ann C. Stevenson agreed, finding that
a state court should determine which mortgage had priority and whether plaintiff could assert
defenses against Arcata such as laches and prior payment. Unpublished Opinion of the United
States Bankruptcy Court, Western District of Michigan, issued April 21, 2004 (Chapter 13, No.
SK 00-00800; Adversary Proceeding No. 03-81025).
On or about September 15, 2004, Arcata commenced foreclosure on the subject property
by advertisement, MCL 600.3201 et seq., claiming that on the original $45,500 debt arising from
note A there was then due and owing $102,416.48, including interest at 18.9% per annum.
Plaintiff filed this action in circuit court on September 16, 2004, alleging that under the common
law and statute, 15 USC 1641, she could assert any defenses to foreclosure available to her
against Commonpoint, including prior payment. Plaintiff sought an order to restrain foreclosure,
to quiet title, and damages for slander of title. On October 13, 2004, the trial court issued a
temporary restraining order precluding further foreclosure action until further order of the court.
Subsequently, the parties filed motions and cross-motions for summary disposition. The
trial court entertained arguments on the motions on January 31, 2005. Plaintiff and National
argued that they were entitled to partial summary disposition because the 1997 note, when read
together with mortgage A as one instrument, contained “undertakings” beyond “an unconditional
promise or order to pay a fixed amount of money, with or without interest or other charges”
payable to the “bearer or to order . . . on demand or at a definite time.” MCL 440.3104(1).
Therefore, plaintiff and National argued the 1997 note and mortgage A could not be a negotiable
instrument. For this reason, Arcata could not be a holder in due course, and was subject to all
defenses that plaintiff could assert against Commonpoint.
Plaintiff and National further argued that Arcata did not notify plaintiff in writing of its
assignment until October 29, 1998, and did not notify the public by recording the assignment
until December 28, 1999. Plaintiff and National both claimed to be prejudiced by Arcata’s late
notices, which came after plaintiff had executed the 1998 note and mortgage B to Commonpoint,
and after Commonpoint assigned mortgage B and its note to National’s predecessor. Based on
the delayed notices, plaintiff and National asserted Arcata was barred from enforcing the
mortgage A and its accompanying note by the doctrine of laches.
Arcata argued it had bought a pool of loans without notice that plaintiff’s note was in
default, i.e., it was a bona fide purchaser for value, or in the language of the Uniform
Commercial Code (UCC), a holder in due course. The note met the criteria of a negotiable
instrument under MCL 440.3104 because it was payable to order at the time it was issued and
payable at a definite time. Arcata argued the undertakings in the mortgage with respect to
protecting the collateral did not affect the negotiability of the note, which stands by itself with
the mortgage simply following the note as security for the promise to pay. The trial court noted
that, in essence, Arcata was asserting that it was plaintiff who must seek relief from an insolvent
bankrupt entity (Commonpoint), not Arcata.
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As for notice, Arcata argued that it did not have to record its assignment for it to be valid.
Further, Arcata claimed to have timely mailed to plaintiff a notice of the assignment within 15
days after the assignment as required by the Real Estate Settlement Procedures Act (RESPA), 12
USC 2605. In support of this argument, Arcata’s counsel noted that plaintiff in her deposition
acknowledged receiving a writing matching the description of a RESPA notice. But an
employee of Arcata’s servicing agent stated in an affidavit that the first written communication
sent to plaintiff was a “demand letter” on October 29, 1998.
The trial court ruled in favor of plaintiff and National, finding that the note and mortgage
A must be read together, and therefore, the note was not a negotiable instrument. Further, the
trial court agreed that plaintiff and National were prejudiced by Arcata’s delay in giving notice
of the assignment from Commonpoint. After the trial court’s ruling from the bench on January
31, 2005, an order was not entered until May 16, 2005, when the trial court clarified that it had
intended to grant summary disposition in favor of plaintiff on her slander of title claim. The
parties stipulated to adjourn a hearing on damages pending resolution of this appeal.
II. Standards of Review
This Court reviews de novo a trial court’s decision to grant or deny summary disposition
to determine if a party is entitled to judgment as a matter of law. Maiden v Rozwood, 461 Mich
109, 118; 597 NW2d 817 (1999). A party’s motion brought under MCR 2.116(C)(10) tests the
factual sufficiency of a claim and must be supported by affidavits, depositions, admissions, or
other documentary evidence. MCR 2.116(G)(3)(b); Maiden, supra at 120. We must view the
substantively admissible evidence submitted at the time of the motion in the light most favorable
to the party opposing the motion. Id. at 120-121. It is proper to grant summary disposition when
no genuine issue regarding any material fact exists and the moving party is entitled to judgment
as a matter of law. West v Gen Motors Corp, 469 Mich 177, 183; 665 NW2d 468 (2003). “A
genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to
the opposing party, leaves open an issue upon which reasonable minds might differ.” Id.
A motion under MCR 2.116(C)(8) tests the legal sufficiency of the pleadings standing
alone. Maiden, supra at 119. The motion must be granted if no factual development could
justify plaintiff's claim for relief. Id.; Spiek v Dep’t of Transportation, 456 Mich 331, 337; 572
NW2d 201 (1998).
We also review de novo the interpretation of statutes and contracts. Burkhardt v Bailey,
260 Mich App 636, 646; 680 NW2d 453 (2004). Likewise, we review de novo equitable actions
such as to quiet title. Id.
III. The Note is a Negotiable Instrument
We find that the trial court erred by ruling the note and mortgage at issue must be read
together as one document rendering them nonnegotiable. The UCC controls whether a document
is a negotiable instrument. Here, the note satisfies the criteria of a negotiable instrument under
the UCC. The UCC permits reference to another document regarding the terms and conditions
of a security interest and also provides that acceleration clauses do not affect negotiability.
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MCL 440.3104(1) defines a “negotiable instrument” as
[a]n unconditional promise or order to pay a fixed amount of money, with or
without interest or other charges described in the promise or order, if all of the
following apply:
(a)
It is payable to bearer or to order at the time it is issued or first
comes into possession of a holder.
(b)
It is payable on demand or at a definite time.
(c)
It does not state any other undertaking or instruction by the person
promising or ordering payment to do any act in addition to the payment of money,
but the promise or order may contain an undertaking or power to give, maintain,
or protect collateral to secure payment, an authorization or power to the holder to
confess judgment or realize on or dispose of collateral, or a waiver of the benefit
of any law intended for the advantage or protection of an obligor.
Plaintiff and National do not contest that the note satisfies subparagraphs (a) and (b) but
contend when the mortgage is read together with the note as one instrument, the first clause of
subparagraph (c) is violated. But MCL 440.3106(2)(a) plainly states that a promise or order is
not made conditional (or nonnegotiable) by “a reference to another writing for a statement of
rights with respect to collateral, prepayment, or acceleration.” Thus, reference in the note to a
mortgage that secures its payment does not destroy the negotiability of the note. Further,
additional conditions in the mortgage, such as maintenance of hazard insurance, escrowing tax
and insurance payments, an occupancy requirement, or option to accelerate payment on the
transfer or sale of the property, do not destroy the negotiability of the note. Although a mortgage
is not a negotiable instrument because it does not contain an unconditional promise or order to
pay a sum certain, it does not affect the negotiability of a note because it “merely secures
payment of the negotiable instrument.” Mox v Jordan, 186 Mich App 42, 46; 463 NW2d 114
(1990). Thus, the trial court’s analysis is contrary to the UCC.
The trial court’s analysis is also contrary to our Supreme Court’s decision in Paepcke v
Paine, 253 Mich 636, 641; 235 NW2d 871 (1931), in which the Court stated the “better rule” for
determining negotiability.
The form of the note or bond may alone be considered in determining its
negotiability. The mortgage or trust agreement, unless referred to in a way to
incorporate its provisions into the note or bond, is but an incident thereto, and is
to be regarded as a security only. If the note or bond contains “an unconditional
promise or order to pay a sum certain in money” at “a fixed or determinable
future time” and is “complete and regular upon its face,” it may be enforced
according to its terms.
Moreover, the trial court erred by ruling acceleration clauses in the note and mortgage
rendered the note nonnegotiable. Before the adoption of the UCC, an acceleration clause in a
note or mortgage did not destroy the negotiability of the note. Northwest Finance Co v Crouch,
258 Mich 411, 413; 242 NW 771 (1932), citing Paepcke, supra. As adopted in Michigan, the
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UCC also recognizes that an acceleration clause will not destroy an instrument’s negotiability.
MCL 440.3106(2)(a) provides that a reference to an acceleration clause does not make a promise
or order conditional, and therefore, nonnegotiable. The official commentary in note 4 reads:
The section contains no specific language relating to the effect of
acceleration clauses on the certainty of the sum payable. Section 2(3) of the
original act contained a saving clause for provisions accelerating principal on
default in payment of an instalment [sic] or of interest, which led to doubt as to
the effect of other accelerating provisions. This Article (Section 3--109, Definite
Time) broadly validates acceleration clauses; it is not necessary to state the
matter in this section as well. The disappearance of the language referred to in
old Section 2(3) means merely that it was regarded as surplusage. [Emphasis
added.]
The UCC provision on definite time referenced in the commentary has been adopted in
Michigan as MCL 440.3108(2), which provides:
(2) A promise or order is “payable at a definite time” if it is payable on
elapse of a definite period of time after sight or acceptance or at a fixed date or
dates or at a time or times readily ascertainable at the time the promise or order is
issued, subject to rights of:
(a) Prepayment.
(b) Acceleration.
(c) Extension at the option of the holder.
(d) Extension to a further definite time at the option of the maker or
acceptor or automatically upon or after a specified act or event.
Accordingly, both under prior case authority and Michigan’s current version of the UCC,
accelerations clauses in the note or mortgage do not destroy the negotiability of the note.
In sum, the note here met the criteria of a negotiable instrument in MCL 440.3104. The
note’s reference to the mortgage, and additional “undertakings” in the mortgage, do not affect the
negotiability of the note. Finally, acceleration clauses in the note and the mortgage do not affect
the negotiability of the note. MCL 440.3108(2); Northwest Finance, supra. The trial court erred
by ruling otherwise.
IV. Holder in Due Course
Next, Arcata argues that because the note at issue was a negotiable instrument, and it
took the note for value, in good faith, and without notice it was overdue or dishonored, it was a
holder in due course of the note. MCL 440.3302(1). Further, subject to certain exceptions not
applicable here, a holder in due course of a negotiable instrument takes free of all defenses the
obligor may have against the original holder. MCL 440.3305. Arcata asserts that as a holder in
due course of a negotiable note secured by a mortgage, it takes the note and the mortgage free of
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all equities or defenses the mortgagor may have against the original mortgagee. See Bronson v
Stetson, 252 Mich 6, 8; 232 NW 741 (1930)(“A bona fide purchaser in due course of a
negotiable instrument takes the mortgage securing it free from all equities and defenses which
the mortgagor could have set up against the mortgagee.”).
This issue raises a plethora of legal and factual questions that are not yet ripe for this
Court to decide. The trial court found that Arcata could not be a holder in due course solely
because it ruled that the note and mortgage when read together as one instrument were not
negotiable. By definition, one cannot be a holder in due course unless one holds a negotiable
instrument. See MCL 440.3302(1)(“‘holder in due course’ means the holder of an instrument . .
. .”), and MCL 440.3104(2)(“‘Instrument’ means a negotiable instrument.”). The trial court did
not decide whether Arcata could be a holder in due course if the note was a negotiable
instrument and the mortgage a separate legal agreement. Because the trial court did not decide
this issue, appellate review is not appropriate at this time. Allen v Keatings, 205 Mich App 560,
564-565; 517 NW2d 830 (1994)(“Appellate review is limited to issues actually decided by the
trial court.”). This is especially the case if the trial court properly applied the doctrine of laches
to grant plaintiff equitable relief. If so, whether Arcata is a holder in due course is moot. Again,
in general, this Court will not decide moot issues. B P 7 v Bureau of State Lottery, 231 Mich
App 356, 359; 586 NW2d 117 (1998).
V. Application of the Equitable Doctrine of Laches
General principles of law and equity are applicable to the UCC unless the Code
specifically contains a contrary provision. MCL 440.1103; Conagra, Inc v Farmers State Bank,
237 Mich App 109, 131; 602 NW2d 390 (1999). Further, the equitable remedy of foreclosure is
subject to equitable defenses in “unusual circumstances,” or in cases of fraud. Mitchell v
Dahlberg, 215 Mich App 718, 724; 547 NW2d 74 (1996). Here, although plaintiff has raised a
colorable claim of laches, National has not. Arcata’s failure to record its assignment did not
prejudice National because when National’s predecessor obtained its assignment of the second
mortgage, the first mortgage had been recorded and not discharged. But federal law (RESPA)
required that Commonpoint notify plaintiff of the first mortgage’s assignment to Arcata “not less
than 15 days before the effective date of transfer” and Arcata was required to notify plaintiff “not
more than 15 days after the effective date of transfer.” 12 USC 2605(b)(2), (c)(2). If plaintiff
did not receive either the RESPA “goodbye” or “hello” before refinancing, a factual basis exists
for the trial court’s finding that this failure resulted in prejudice to her, which, in turn, justifies
the trial court’s invocation of the doctrine of laches to grant equitable relief.
Laches is an equitable affirmative defense primarily based on changed circumstances,
which render inequitable the granting of relief to a dilatory plaintiff. Yankee Springs Twp v Fox,
264 Mich App 604, 611; 692 NW2d 728 (2004). Although the alleged dilatory party here is
defendant Arcata, it is appropriate for plaintiff to assert the defense to Arcata’s affirmative effort
to foreclose the mortgage by advertisement. Laches may arise from a party’s failure to do what
one is required to do by law to protect its rights, which under the circumstances misleads or
prejudices an adverse party rendering enforcement of its rights inequitable. School Dist No 14 v
School Dist No 1, 266 Mich 479, 485-486; 254 NW 174 (1934). Thus, laches may apply where
the passage of time combines with a change in circumstances making it inequitable to enforce a
claim. Yankee Springs Twp, supra at 612. Here, federal law requires that a mortgagor of a
“federally related mortgage” be given notice of an assignment of the mortgage at least 15 days
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before and not more than 15 days after the assignment. 12 USC 2605. The record appears to
support the conclusion that plaintiff did not receive a RESPA notice of the assignment of her first
mortgage before she granted a second mortgage. Although the time gap between Commonpoint
assigning plaintiff’s first mortgage to Arcata and plaintiff granting the second mortgage is only
10 days, “‘[i]t is the effect, rather than the fact, of the passage of time that may trigger the
defense of laches.’” City of Troy v Papadelis (On Remand), 226 Mich App 90, 97; 572 NW2d
246 (1997), quoting Great Lakes Gas Transmission Co v MacDonald, 193 Mich App 571, 578;
485 NW2d 129 (1992).
We note that while this Court reviews de novo a trial court’s equitable decisions and
underlying factual findings for clear error, Yankee Springs Twp, supra at 611, the trial court also
must exercise its discretion in deciding whether to grant equitable relief in a particular case.
Amster v Stration, 259 Mich 683, 686-687; 244 NW 201 (1932); Oosterhouse v Brummel, 343
Mich 283, 290; 72 NW2d 6 (1955). “Equitable relief by way of cancellation [of a land contract]
is not strictly a matter of right, but rather a remedy the granting of which rests in the sound
discretion of the court.” Amster, supra at 686. With respect to granting equitable relief, our
Supreme Court in Youngs v West, 317 Mich 538, 545; 27 NW2d 88 (1947), quoted 30 CJS, pp
328-329, as follows:
“Broadly speaking the sound discretion of the court is the controlling
guide of judicial action in every phase of a suit in equity. So the granting of
equitable relief is ordinarily a matter of grace, and whether a court of equity will
exercise its jurisdiction, and the propriety of affording equitable relief, rests in the
sound discretion of the court, to be exercised according to the circumstances and
exigencies of each particular case. Of course, this discretion is not an arbitrary
one, but must be exercised in accordance with the fixed principles and precedents
of equity jurisprudence, and in accordance with the evidence.”
As applied to the present case, whether plaintiff was not notified as required by RESPA
of the assignment to Arcata of her first mortgage before plaintiff granted the second mortgage is
a factual question reviewed for clear error; whether the circumstances here are sufficiently
unusual to legally justify equitable relief from foreclosure is reviewed de novo; and whether the
trial court properly granted equitable relief must be reviewed for an abuse of discretion.
The trial court, in essence, applied “the broad doctrine that equity regards and treats as
done what in good conscience ought to be done.” Haack v Burmeister, 289 Mich 418, 425; 286
NW 666 (1939)(citation omitted); see, also Pittsfield Twp v Saline, 103 Mich App 99; 302
NW2d 608 (1981), quoting 77 Am Jur 2d, Vendor and Purchaser, § 317, pp 478-479. The court
succinctly noted the underlying reality of this case was that ultimately either plaintiff or Arcata
must seek relief from Commonpoint, an insolvent, bankrupt entity. Arcata’s position was that
although requiring plaintiff to do so may be harsh, that is what the law required. But what is fair
and equitable is that plaintiff’s payment to Commonpoint should have discharged the mortgage
assigned to Arcata. It addition, plaintiff’s payment to Commonpoint should have been
forwarded to Arcata. But as between an unsophisticated borrower, plaintiff, and sophisticated
money merchants engaged in the business of trading high-interest rate mortgages for investment
purposes, it is not an abuse of discretion for the trial court to decide the equities favor plaintiff
and to place the risk of loss which occurred in this case with a sophisticated investor, Arcata.
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The record is unclear, however, whether the trial court determined as matter of law,
because reasonable minds could not differ, that plaintiff did not receive a RESPA notice before
granting the second mortgage. Therefore, remand is necessary to clarify this factual issue.
Further, the critical time period in this case is the 10 days between the assignment to Arcata of
the first mortgage and plaintiff’s refinancing by granting a second mortgage. Because the trial
court granted relief on the basis of Arcata’s delay in giving notice of its assignment, which it
categorized as months or years rather than 10 days, remand is also necessary so that the trial
court may clarify whether it would still grant equitable relief on the basis of Arcata’s failing to
notify plaintiff of its assignment before plaintiff granted the second mortgage. In sum, on
remand, the trial court must determine: (a) did plaintiff receive a RESPA notice of the
assignment of the first mortgage before she refinanced and, (b) if not, was such failure sufficient
to move the court to grant plaintiff equitable relief. If the trial court answers each question in
favor of plaintiff, we hold that the circumstances of this case are sufficiently “unusual” that it
would not be an abuse of discretion for the trial court to grant plaintiff equitable relief on the
basis of laches.
In summary, we remand this case to the trial court for further proceedings to clarify
whether plaintiff was notified as required by RESPA of the assignment to Arcata before she
granted the second mortgage. If the answer is no, the trial court must determine whether the 10day gap between the assignment and the second mortgage is sufficient to warrant granting
equitable relief to plaintiff under the doctrine of laches.
VI. Slander of Title
We find that the trial erred by granting summary disposition on this issue to plaintiff.
Instead, the trial court should have granted summary disposition to Arcata because on this record
plaintiff cannot establish the necessary element of malice.
Slander of title in Michigan is based on both the common law and statute. MCL 565.108;
B & B Investment Group v Gitler, 229 Mich App 1, 8; 581 NW2d 17 (1998). “To establish
slander of title at common law, a plaintiff must show falsity, malice, and special damages, i.e.,
that the defendant maliciously published false statements that disparaged a plaintiff's right in
property, causing special damages.” Id. Malice is the crucial element, which may be either
actual or implied. Glieberman v Fine, 248 Mich 8, 12; 226 NW 669 (1929); Gehrke v Janowitz,
55 Mich App 643, 648; 223 NW2d 107 (1974). Here, plaintiff relies on implied malice,
contending Arcata acted intentionally without just cause or excuse. But the record shows that
Arcata had a good faith reasonable belief that it was a holder in due course of the note and that it
could, therefore, lawfully enforce the mortgage that secured payment of the note it had received
by assignment. Because, on this record, plaintiff cannot establish the necessary element of
malice, her slander of title claim must fail.
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VII. Conclusion
We reverse in part, affirm in part, and remand for further proceedings consistent with this
opinion. We do not retain jurisdiction. No costs are awarded because no party fully prevailed.
/s/ Richard A. Bandstra
/s/ Janet T. Neff
/s/ Jane E. Markey
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