AJAY SHAH V FLAGSTAR BANK FSB
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STATE OF MICHIGAN
COURT OF APPEALS
AJAY SHAH and BHARATI SHAH,
UNPUBLISHED
November 29, 2007
Plaintiffs-Appellants,
v
No. 272689
Oakland Circuit Court
LC No. 2005-067613-CZ
FLAGSTAR BANK, FSB,
Defendant-Appellee.
Before: Meter, P.J., and Kelly and Fort Hood, JJ.
KELLY, J. (concurring in part and dissenting in part.)
I respectfully dissent from the majority’s conclusion that defendant was not entitled to
summary disposition plaintiffs’ wrongful foreclosure and breach of contract claims. In all other
respects, I concur with the majority.
A trial court's decision on a motion for summary disposition is reviewed de novo as a
question of law. Ardt v Titan Ins Co, 233 Mich App 685, 688; 593 NW2d 215 (1999). Contract
interpretation likewise presents a question of law, calling for review de novo. Archambo v
Lawyers Title Ins Corp, 466 Mich 402, 408; 646 NW2d 170 (2002). The primary goal in
contract interpretation is to ascertain and effectuate the intent of the parties. Old Kent Bank v
Sobczak, 242 Mich App 57, 63; 620 NW2d 663 (2003). To determine the parties' intent, we read
the document as a whole and attempt to apply its plain language. Id. Where the contractual
language is not ambiguous, its construction is a question of law for the court. See id at 63-64.
In my opinion, defendant was entitled to summary disposition on plaintiffs’ claim that
defendant failed to comply with the requirements of paragraph 21 of the mortgage. Paragraph 21
provides in relevant part:
Acceleration; Remedies. Lender shall give notice to Borrower prior to
acceleration following Borrower’s breach of any covenant or agreement in this
Security Instrument . . . The notice shall specify: (a) the default; (b) the action
required to cure the default; (c) a date, not less that 30 days from the date the
notice is given to Borrower, by which the default must be cured; and (d) that
failure to cure the default on or before the date specified in the notice may result
in acceleration of the sums secured by this Security Instrument and the sale of the
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Property. The notice shall further inform Borrower of the right to reinstate after
acceleration and the right to bring a court action to assert the non-existence of a
default or any other defense of Borrower to acceleration and sale. If the default is
not cured on or before the date specified in the notice, Lender, at its option, may
require immediate payment in full of all sums secured by this Security Instrument
without further demand and may invoke the power of sale and any other remedies
permitted by applicable law. …
Defendant’s notice was in compliance with paragraph 21. On January 9, 2004, defendant wrote
to plaintiffs regarding their mortgage:
Your failure to make timely payments on the mortgage note has caused a default
in your mortgage with Flagstar Bank. In order to cure the default, we must
receive payments for the months of October, 2003 through January, 2004, totaling
$2529.13. This amount includes late charges.
This default must be cured by paying this amount in certified funds on or before
thirty (30) days from the date this letter is mailed. If you fail to cure this default
on or before this date, Flagstar Bank may accelerate your indebtedness by
declaring the entire amount due and payable immediately. Flagstar Bank would
also be able to proceed with the sale of the property.
If you are able to meet certain conditions set forth in the Mortgage regarding the
borrowers right to reinstate a mortgage, you may be able to reinstate this
mortgage after acceleration. You also have the right to bring a court action to
assert the non-existence of a default or any other defendant you might have to
acceleration of the debt and sale.
The notice also stated in bold capital letters that if payment was received after January 30,
plaintiffs must include the February payment as well.
Although plaintiffs contend that the requirement of certified funds was an extra condition
not mandated by the mortgage document, defendant retained the right to specify “the action
required to cure the default.” Requesting certified funds is not prohibited by the mortgage
document and, in light of the circumstances presented in this case, certainly a reasonable
condition. Although the trial court did not specifically make any findings on plaintiffs’
paragraph 21 claim, we will not reverse if the right result is reached. FACE Trading, Inc v Dep’t
of Consumer & Industry Services, 270 Mich App 653, 678; 717 NW2d 377 (2006).
Moreover, the trial court properly granted summary disposition to defendant on plaintiffs’
claim that the foreclosure sale was defective. MCL 600.3204 sets forth the prerequisites of a
foreclosure by advertisement, which include “(a) A default in a condition of the mortgage has
occurred, by which the power to sell became operative . . . .” Here, plaintiffs failed to provide
any documentary evidence that the October 2003 or January 2004 payments were made. And, at
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no time until after the sheriff’s sale had been concluded, did plaintiffs ever contest that the
mortgage was in default.1 Even if their affidavits could be considered as something more than
simply the reiteration of allegations made in their complaint, they do not contest the failure to
timely pay either October 2003 or January 2004. Under the plain terms of the mortgage,
defendant was entitled to accelerate the debt and exercise its power of sale. Although they
eventually did send in a payment with certified funds, it did not include the February 2004
amount due. Accordingly, the default was never cured. The trial court did not err in granting
summary disposition.
I would affirm.
/s/ Kirsten Frank Kelly
1
In fact, after title had passed to defendant, plaintiffs entered into a purchase agreement,
negotiated with the assistance of their attorney, to buy back the property. No claim was made
that the foreclosure was improper. It was only after plaintiffs financing fell through that any
claim was made that the foreclosure was improper. Plaintiffs have simply waited too long to
contest the default and sale. See, Jackson Investment Corp v Pittsfield Products, Inc, 162 Mich
App 750; 413 NW2d 99 (1987).
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