FIRST MACOMB MORTGAGE CO V MICHAEL DAVID SCHWARTZ
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
FIRST MACOMB MORTGAGE CO.,
UNPUBLISHED
Plaintiff-Appellee,
v
No. 173988; 176208
Oakland Circuit Court
LC No. 91 414173 CK
MICHAEL DAVID SCHWARTZ
Defendant-Appellant,
and
DAVID L. LEVY,
Defendant.
Before: Gribbs, P.J., and Reilly and J. P. Adair*, JJ.
REILLY, J. (dissenting)
I respectfully dissent from the majority’s determination to reverse.
I agree with the majority that the Uniform Commercial Code does not apply to this guaranty of
payment of a debt secured by a real estate mortgage, and that First Macomb does not have a good faith
obligation under Michigan common law. I also agree that, according to the waiver provision in the
guaranty agreement, Schwartz waived any right to notification that the value of the property had
diminished.
However, I disagree with the majority that any obligation to provide notice of the decline in the
value of the property is somehow revived under Schwartz’ theory of avoidable consequences. First
Macomb did not have an obligation to protect the security or provide notice to the guarantor of
diminished value of the mortgaged property when the written waiver specifically negated any such
obligation. The relevant provision of the waiver provided that Schwartz
* Circuit judge, sitting on the Court of Appeals by assignment.
-1
waive[d] . . . (c) . . . notice of dishonor, . . . and all other notices whatsoever; and (d) all due
diligence in . . . protection of, or realization upon the Liabilities or any thereof, any obligation
hereunder, or any security for or guaranty of any of the foregoing.
In view of this waiver language, I do not believe that Schwartz was entitled to any notice
whatsoever, even to protect the security or to mitigate the damage that resulted from the decline in the
value of the security. There is no reason to believe that the guaranty agreement was a contract of
adhesion. Schwartz is bound by it.
Finally, even if we accept Schwartz’ claim that it was the obligation of First Macomb to provide
notice, in order to defeat First Macomb’s motion for summary disposition, it was incumbent on
Schwartz to show that, if given notice of the diminution of value of the security, he could have, and
would have, taken steps to avoid the diminution. No such evidence was provided.
For these reasons, I would affirm the trial court’s grant of summary disposition in favor of First
Macomb.
/s/ Maureen Pulte Reilly
-2
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
