NICOLA VULJAJ V VICTOR CAMAJ
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STATE OF MICHIGAN
COURT OF APPEALS
NICOLA VULJAJ,
UNPUBLISHED
October 1, 2009
Plaintiff-Appellant,
v
No. 286526
Wayne Circuit Court
LC No. 06-624626-CK
VICTOR CAMAJ and ROBERT SCOTT
MARTIN,
Defendants-Appellees.
Before: Murphy, P.J., and Meter and Beckering, JJ.
PER CURIAM.
Plaintiff appeals as of right from the trial court’s order granting defendants’ motion for
summary disposition. We affirm. This appeal has been decided without oral argument pursuant
to MCR 7.214(E).
The subject of this dispute is a five-story, commercial building in downtown Detroit. The
building was at one time owned by Nua Vuljaj, a cousin of plaintiff, who incorporated the Coney
Island restaurant that operated in the building. In 2001, Nua sold the building to defendant
Camaj. However, property taxes were not paid in 2003 and 2004, and the property went into
forfeiture proceedings. At nearly the last minute, defendant Martin paid the delinquent taxes and
penalties to save the property from being seized by the county, and Camaj agreed to lease the
property to Martin with an option to purchase.
Plaintiff, believing that he had a right to the property with which the sale to Martin
interfered, sued both defendants, alleging seven counts: quiet title, constructive trust, breach of
contract, tortious interference with a contract, civil conspiracy, and damages. Plaintiff’s claim
was based on his belief that he and Nua had an understanding that the property was in Nua’s
name only because plaintiff had bad credit, but that plaintiff was nonetheless the owner.
According to plaintiff’s deposition testimony, although his name was never on the title to the
property, he paid the bills. He and Nua were partners, and plaintiff put $200,000 of mostly
borrowed money into building the restaurant, although he had no proof of the amount he actually
invested. When Nua had trouble paying for the building, he sold it to Camaj; however, the same
arrangement with plaintiff was to continue; plaintiff ran the restaurant and was to pay the
mortgage and bills.
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Camaj moved for summary disposition, arguing that plaintiff could not have a legal
interest in the property because conveyances of real estate must be in writing, MCL 566.108, and
that plaintiff did not have an equitable interest justifying the imposition of a constructive trust.
Camaj asserted that the case plaintiff cited for that principle, Arndt v Vos, 83 Mich App 484; 268
NW2d 693 (1978), was inapplicable because it involved a plaintiff who had held title to the
property but deeded it to the defendant to secure a loan.1
The trial court found that because there was no writing expressing an intent to convey a
property interest to plaintiff, plaintiff’s only possible remedy was that of a constructive trust.
However, even if the oral agreement existed, plaintiff had not performed his part and so
equitable considerations did not favor him. The trial court granted summary disposition in favor
of both defendants.
In this Court, plaintiff argues that the trial court erred in deciding that a constructive trust
was not proper. Plaintiff contends that the transaction between Camaj and Nua was intended to
include plaintiff as an owner. Plaintiff’s principal point is that a constructive trust can be
imposed where the defendant title-holder is guilty of some wrongdoing that renders it
unconscionable for him to retain legal title. Racho v Beach, 254 Mich 600, 606-607; 236 NW
875 (1931).
We review de novo a trial court’s decision to grant or deny a motion for summary
disposition. Spiek v Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). A trial
court’s determination regarding whether to impose a constructive trust is also reviewed de novo
on appeal. Winchell v Mixter, 316 Mich 151, 159; 25 NW2d 147 (1946). MCR 2.116(C)(10)
provides for summary disposition where there is no genuine issue regarding any material fact,
and the moving party is entitled to judgment or partial judgment as a matter of law. A trial court
may grant a motion for summary disposition under MCR 2.116(C)(10) if the pleadings,
affidavits, and other documentary evidence, when viewed in a light most favorable to the
nonmovant, show that there is no genuine issue with respect to any material fact. Quinto v Cross
& Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996), citing MCR 2.116(G)(5). “[T]he
court’s task is to review the record evidence, and all reasonable inferences therefrom, and decide
whether a genuine issue of any material fact exists to warrant a trial.” Skinner v Square D Co,
445 Mich 153, 161; 516 NW2d 475 (1994). Where the opposing party fails to present
documentary evidence establishing the existence of a material factual dispute, the motion is
properly granted. Quinto, supra at 363. "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." West v Gen Motors Corp, 469 Mich 177, 183; 665 NW2d
468 (2003). A court may only consider substantively admissible evidence actually proffered
relative to a motion for summary disposition under MCR 2.116(C)(10). Maiden v Rozwood, 461
Mich 109, 121; 597 NW2d 817 (1999).
MCL 566.106 provides:
1
At the motion hearing, Martin orally concurred in Camaj’s motion.
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No estate or interest in lands, . . . nor any trust or power over or
concerning lands, or in any manner relating thereto, shall hereafter be created,
granted, assigned, surrendered or declared, unless by act or operation of law, or
by a deed or conveyance in writing, subscribed by the party creating, granting,
assigning, surrendering or declaring the same, or by some person thereunto by
him lawfully authorized by writing.
MCL 566.108 provides in part:
Every contract for . . . the sale of any lands, or any interest in lands, shall
be void, unless the contract, or some note or memorandum thereof be in writing,
and signed by the party by whom the . . . sale is to be made, or by some person
thereunto by him lawfully authorized in writing[.]
In Arndt, supra at 487, this Court explained the general features and dimensions of a
constructive trust, stating:
Constructive trusts are creatures of equity and their imposition makes the
holder of the legal title the trustee for the benefit of another who in good
conscience is entitled to the beneficial interest. They are distinguished from
express and resulting trusts in that they do not arise by virtue of agreement or
intention, but by operation of law. Constructive trusts, while infinite in their
variety, are imposed only where it would be inequitable to do otherwise.
[Citations omitted.]
In Racho, supra at 606-607, our Supreme Court discussed the particular circumstances in
which a constructive trust can be imposed:
It is true that in the absence of fraud, accident, or mistake, parol testimony
is inadmissible to establish a trust in real estate. However, when it is shown that
title has been obtained through fraud, misrepresentation, concealment, undue
influence, duress, taking advantage of one’s weakness, or necessities, or any other
similar circumstances which render it unconscionable for the holder of the legal
title to retain and enjoy the property, and there are no intervening rights of bona
fide purchasers, equity will impress a constructive trust on the property and turn it
over to the one to whom it rightfully belongs. This rule has been frequently
applied in cases of agents who take advantage of their fiduciary relationship and
thus secure the property of their principal. [Citations omitted.]
In Kent v Klein, 352 Mich 652, 656-657; 91 NW2d 11 (1958), the Michigan Supreme
Court indicated that the statute of frauds does not bar a court from imposing a constructive trust
under appropriate circumstances, and it emphasized that wrongdoing is unnecessary:
But what of the statute of frauds? Defendant urges again and again that
she made no promise whatever to hold in trust, that nothing was said about a trust,
and, as a clincher, that even if she had so orally promised the promise would have
been unenforceable under the statute of frauds. Her conclusion is that she keeps
the land.
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What is overlooked in all of this is the fact that the constructive trust is not
a trust at all, any more than a quasi-contract is a contract. Both are remedial
devices. The constructive trust, as it was put by Mr. Justice Cardozo, “is the
formula through which the conscience of equity finds expression. When property
has been acquired in such circumstances that the holder of the legal title may not
in good conscience retain the beneficial interest, equity converts him into a
trustee.” It arises by operation of law. That defendant made no promise to hold
in trust is utterly irrelevant. The constructive trust is as contemptuous of promises
not made as of promises broken. . . . Fraud in the inception we do not require,
nor deceit, nor chicanery in any of its varied guises, for it is not necessary that
property be wrongfully acquired. It is enough that it be unconscionably withheld.
Nor is it necessary, to move the chancellor's conscience, that plaintiffs have
suffered a loss, although in most cases there is both a loss to the plaintiffs and a
like gain to the defendant. [Citations omitted.]
Here, the deposition testimony of defendants Camaj and Martin indicate that their
transaction involved a lease with an option to purchase and that no transfer of legal title had yet
occurred; therefore, Camaj remains the legal titleholder. As part of their transaction, Martin
agreed to pay off $80,000 to $90,000 in outstanding debts owed on the building, which
encompassed delinquent tax, utility, and mortgage payments. Martin indeed paid off these debts.
The balance on the mortgage was approximately $511,000 at the time of the transaction between
Camaj and Martin. The deposition testimony suggests that Martin is making lease payments on
the property in an amount of the monthly mortgage, approximately $5,000, and that Martin, in
order to save Camaj some time and effort, is actually paying the “lease” amount directly to the
lender, thereby paying down the mortgage debt. The deposition testimony also indicates that,
between July 2001 and March 2006, plaintiff was making the monthly $5,000 mortgage
payments on the loan, except for three months of payments that were made by Camaj. Plaintiff
conceded that he had become two to three months delinquent in the mortgage. Following the
2001 transaction, plaintiff made numerous tax and utility payments, but he acknowledged that he
had now become delinquent as to such payments.
We hold that equity supports the trial court’s conclusion that it would not be
unconscionable to deny plaintiff the relief sought. Plaintiff testified that Camaj signed off on the
deed and mortgage purely as a favor to plaintiff; Camaj received no financial benefit from the
arrangement. Plaintiff also testified that he was aware that Camaj’s credit was being ruined by
the delinquencies and that foreclosure would have occurred, further damaging Camaj’s credit.
Plaintiff’s flippant response was that Camaj could have pursued bankruptcy, yet this would have
done great damage to Camaj’s credit. Plaintiff himself had made efforts to sell the building,
which included negotiations with Martin until Martin discovered that Camaj was the legal
titleholder. At the point of time summary disposition was granted, Camaj was still legally
obligated under the mortgage, hoping and relying on Martin’s continued ability to pay the
monthly lease. Martin himself appears to be a completely innocent party in this case, and we
find nothing inappropriate in the fact that Martin proceeded to negotiate with the legal titleholder
instead of plaintiff. Also, the record does not indicate that Camaj received any extra financial
benefit from the transaction with Martin, other than the benefit of having the delinquent
payments taken care of and the monthly mortgage payments made.
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We are not unsympathetic to the fact that plaintiff paid thousands of dollars over the
years in mortgage, utility, and tax payments. However, the payments had become severely
delinquent and Camaj had a reasonable basis to protect himself, as he was the mortgagor and
legal titleholder on the hook for the payments. If a constructive trust was imposed, the legal
fiction would place Camaj in the position of a trustee, holding the fee simple for the benefit of
plaintiff, with the ultimate result being an ordered conveyance of the property to plaintiff. At
first glance, this might appear to be a fair and equitable result, with plaintiff stepping into the
shoes of Camaj. However, we cannot ignore the reality of the Camaj-to-Martin transaction and
plaintiff’s argument that the building is worth considerably more than the amount agreed to by
Camaj and Martin, which argument indicates plaintiff’s intention to profit by a later sale if the
building were conveyed to him under the constructive trust doctrine. But this would inequitably
injure Martin, depriving him of the benefit of his bargain relative to the transaction with Camaj.
If plaintiff obtained the relief sought, minimally he would need to pay Martin for all of the funds
expended to pay off the delinquencies, but this would still be inequitable to Martin who now
possesses the property and runs his own business thereon. Although equity might dictate that a
simple change of ownership from Camaj to plaintiff might be fair if the transaction with Martin
remained in place, plaintiff did not seek nor demand such relief. In plaintiff’s prayer for relief in
the complaint, he seeks a declaration granting him fee simple title and a declaration voiding the
lease option executed by Camaj and Martin. Equity does not demand such relief under the
circumstances of this case.
Affirmed.
/s/ William B. Murphy
/s/ Patrick M. Meter
/s/ Jane M. Beckering
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