HAYWOOD HARRISON PC V JOSEPH R DELENE
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STATE OF MICHIGAN
COURT OF APPEALS
HAYWOOD HARRISON, P.C., formerly known
as D. HAYWOOD & ASSOCIATES, P.C.,
UNPUBLISHED
May 21, 2009
Plaintiff-Appellant,
v
JOSEPH R. DELENE, MICHAEL A. DELENE,
and WILLIAM A. DELENE,
No. 284509
Baraga Circuit Court
LC No. 07-005729-CH
Defendants-Appellees.
Before: Whitbeck, P.J., and Davis and Gleicher, JJ.
PER CURIAM.
Plaintiff Haywood Harrison, P.C. appeals as of right the trial court’s orders granting
defendants Joseph R. Delene, Michael A. Delene, and William A. Delene (collectively, the
Delene brothers) summary disposition. We affirm.
I. Basic Facts And Procedural History
In September 1997, Haywood Harrison obtained a judgment against its former legal
clients, Richard and Nancy Delene, in the amount of $122,297.31 in the Eaton Circuit Court.1 In
an effort to execute the judgment, Haywood Harrison obtained a sheriff’s deed against certain
real property owned by Richard and Nancy Delene for $123,358.93. The sheriff’s deed was
recorded on June 14, 1999, at the Baraga County Register of Deeds (Liber 36, Pages 368-370).
After obtaining the deed, Haywood Harrison learned that title to the property was clouded by
four mortgages in favor of Wells Fargo Bank and delinquent property taxes. In an effort to
protect its interest in the deeded property, Haywood Harrison paid $77,038.96 in delinquent
property taxes to prevent a scheduled forfeiture sale and paid Wells Fargo Bank $25,000 to
discharge the mortgages. The total amount paid in back property taxes and for discharge of the
mortgages was $102,038.96.
1
D Haywood & Assocs, PC v Delene, Eaton Circuit Docket No. 97-750-CK, September 16,
1997.
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In August 2000, Haywood Harrison filed a quiet title action in the Baraga Circuit Court
to clear any cloud on the title to the property.2 Judge Garfield Hood dismissed the case, finding
that the procedure that Haywood Harrison used to obtain the sheriff’s deed was invalid because
Haywood Harrison failed to advertise the impending sheriff’s sale in a publication printed within
Baraga County.3 On appeal, this Court upheld Judge Hood’s order, concluding that collateral
estoppel did not apply because the Eaton County order was a stipulated order between the parties
and not decided by the court.4 This Court also concluded that res judicata did not apply because
the Eaton County order was not a final judgment on the merits because it allowed for
modification by stipulations by the parties or further orders of the court and because it did not
settle the rights of the parties nor dispose of any issues, except stating that the sale was
adjourned.5 Last, this Court concluded that Haywood Harrison failed to comply with the MCL
600.6052 notice requirements.6
Haywood Harrison continued post-judgment collection of Richard and Nancy Delene,
obtained another order to seize property, and scheduled a sheriff’s sale for June 24, 2005. On
June 17, 2005, Richard and Nancy Delene filed an action in the Baraga Circuit Court to stop the
impending sheriff’s sale.7 But Judge Hood refused to stop the sale, which proceeded as
scheduled. At the sale, Richard and Nancy Delene’s sons, the Delene brothers, purchased the
property as high bidders at the sheriff’s sale for $168,300. A sheriff’s deed was issued on
September 27, 2006, and the deed was recorded on September 28, 2006, at the Baraga County
Register of Deeds (Liber 206, Page 6100).
Haywood Harrison then filed a counterclaim in the June 2005 action filed by Richard and
Nancy Delene, seeking to recover from Richard and Nancy Delene the $102,038.96 paid for the
delinquent taxes and discharge of mortgages. Haywood Harrison sought relief under the theories
of equitable subrogation and unjust enrichment. Both parties filed competing motions for
summary disposition. Judge Hood granted both motions in part and summarily dismissed the
case. Haywood Harrison appealed the dismissal to this Court, which upheld the order.8 This
Court first concluded that the trial court did not err in dismissing Haywood Harrison’s equitable
subrogation claim because Haywood Harrison was under no legal or equitable duty to make the
payments.9 This Court then concluded that the trial court did not err in dismissing Haywood
2
D Haywood & Assocs, PC v Fox, Baraga Circuit Docket No. 00-004832-CH, August 15, 2000.
3
See MCL 600.6052.
4
D Haywood & Assocs, PC v Fox, unpublished opinion per curiam of the Court of Appeals,
issued October 21, 2004 (Docket No. 250574), slip op p 2, citing Van Pembrook v Zero Mfg Co,
146 Mich App 87, 103; 380 NW2d 60 (1985) (stating that collateral estoppel does not apply to
consent judgments because “nothing is adjudicated between . . . parties to a consent judgment.”).
5
Id. at slip op pp 2-3.
6
Id. at slip op p 3.
7
Delene v D Haywood & Assocs, PC, Baraga Circuit Docket No. 05-005461-CH, June 17, 2005.
8
Delene v D Haywood & Assocs, PC, unpublished opinion per curiam of the Court of Appeals,
issued May 18, 2006 (Docket No. 267209).
9
Id. at slip op pp 2-3.
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Harrison’s unjust enrichment claim because the tax sale purchaser, not Richard and Nancy
Delene, benefited from the payments that Haywood Harrison made.10 Haywood Harrison’s
application for leave to appeal to the Michigan Supreme Court was denied.11
In September 2007, Haywood Harrison then filed this action against the Delene brothers,
seeking again to recover the $102,038.96 that it paid and certain personal property. In its fourcount complaint, Haywood Harrison alleged theories of unjust enrichment, equity (constructive
trust/equitable lien), claim and delivery, and conversion. More specifically, Haywood Harrison
alleged that, in keeping with this Court’s prior opinion, the Delene brothers were the proper party
against which to bring its claims for unjust enrichment and equity. Haywood Harrison’s claims
for claim and delivery, and conversion were associated with certain personal property that it had
placed on the property after it obtained the original sheriff’s deed in June 1999. In August 1999,
Haywood Harrison transported an electric welder/generator and a 17-foot canoe to the property
and placed them in the garage located on the property for storage. Haywood Harrison also
placed furniture and fixtures in the home located on the property. But, as stated, the Delene
brothers purchased the property in June 2005 at the second sheriff’s sale. Haywood Harrison
then contacted William Delene to inquire when it could retrieve its personal property. William
Delene allegedly confirmed that the personal property was still there, in good condition, and that
the items would be available for pick-up after the redemption period ended in September 2006.
In November 2006, Haywood Harrison contacted William Delene to make arrangements
to pick-up its personal property. However, William Delene told Haywood Harrison that the
items were gone; allegedly, Richard Delene had stolen the property. Haywood Harrison claimed
that the stolen items had an estimated value of $8,700 and that it had suffered $2,000 in damages
for loss of use of the items. Haywood Harrison claimed its loss of the property was due to
William Delene’s unlawful detention of and refusal to return the property. Haywood Harrison
further alleged that William Delene’s conduct amounted to conversion because he had
wrongfully assumed and exercised dominion over Haywood Harrison’s personal property.
The Delene brothers moved for partial summary disposition under MCR 2.116(C)(7) and
(C)(10), alleging that the doctrines of res judicata and collateral estoppel barred Haywood
Harrison’s unjust enrichment and equity claims. The Delene brothers argued that Haywood
Harrison was merely seeking to relitigate the same issues that were already litigated in the prior
action brought by Richard and Nancy Delene, with whom the Delene brothers were in privity.
The Delene brothers further argued that they were bona fide purchasers and that there were no
records on file at the Baraga County Register of Deeds pertaining to the litigation involving
Haywood Harrison’s claims for repayment. Therefore, according to the Delene brothers, a
constructive trust/equitable lien could not exist against the property that they now owned when
they did not contribute in any way to the underlying conduct that led to Haywood Harrison’s
payments. The Delene brothers asserted that Haywood Harrison’s claims were frivolous.
10
Id. at slip op p 3, citing First of America Bank-Oakland Macomb, NA v Brown, 158 Mich App
76, 80; 404 NW2d 706 (1987) (“Under Michigan law, a purchaser at a sheriff’s sale takes the
property subject to all prior liens.”).
11
Delene v D Haywood & Assocs, PC, 476 Mich 869; 720 NW2d 317 (2006).
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Haywood Harrison responded, arguing that neither res judicata nor collateral estoppel
barred its claims. More specifically, Haywood Harrison argued that the in personam nature of its
claim for unjust enrichment and the fact that the Delene brothers were not parties to the prior
action meant that the Delene brothers were not in privity with Richard and Nancy Delene. In
other words, Haywood Harrison argued, the Delene brothers’ privity argument was without merit
when Haywood Harrison was not asserting claims against the property but against the Delene
brothers themselves for the benefits they personally received from Haywood Harrison’s
mortgage and tax payments. As asserted in its complaint, Haywood Harrison pointed out that
this Court previously determined that the Delene brothers were the proper party against which to
bring its claims for unjust enrichment and equity. Haywood Harrison also explained that it could
not have added the Delene brothers as parties to the prior action because they did not acquire
possession of the land until 15 months after the sheriff’s sale. Haywood Harrison conceded that
its original levy against the property may have been procedurally deficient, but that deficiency
did not defeat Haywood Harrison’s reasonable belief that it had an interest in the property at the
time the payments were made. Last, Haywood Harrison argued that the Delene brothers’
contention that they were bona fide purchasers without notice was without merit because they
were the sons of Richard and Nancy Delene.
After hearing oral arguments on the motion, the trial court granted the Delene brothers’
motion under MCR 2.116(C)(7). The trial court explained that its decision was “based on what
the Court of Appeals has said in both of the cases that have gone up thus far,” as well as the
parties’ briefs on the motion for partial summary disposition.
The Delene brothers then moved for summary disposition again, this time under MCR
2.116(C)(8) and (C)(10), seeking dismissal of Haywood Harrison’s remaining claims of claim
and delivery, and conversion. The Delene brothers argued that Haywood Harrison’s claims were
essentially bailment claims, and on this point, the Delene brothers argued that they never
received nor were promised to receive any consideration from Haywood Harrison and that they
never had physical or legal possession of the subject items of personal property. The Delene
brothers noted that Haywood Harrison failed to describe the various items of furniture and
fixtures with particularity. The Delene brothers also argued that even if they were bailees of the
property, Haywood Harrison failed to allege that they were grossly negligent.
Haywood Harrison responded, arguing that, by restating Haywood Harrison’s pleadings
as bailment claims, the Delene brothers failed to assert any reason why the claims actually
pleaded by Haywood Harrison should be dismissed. Haywood Harrison argued that it
successfully pleaded claims for claim and delivery and conversion. More specifically, Haywood
Harrison argued that it successfully pleaded and supported a claim for claim and delivery
because it had the right to possession of its personal property, the Delene brothers unlawfully
detained the property, which was under their control, and that Haywood Harrison suffered
damages as a result. Haywood Harrison further argued that it successfully pleaded and
supported a claim for conversion because the Delene brothers wrongfully exerted dominion over
Haywood Harrison’s personal property and refused to return the property on demand.
After hearing oral arguments on the motion, the trial court granted the Delene brothers’
motion and dismissed the case. Specifically, the trial court’s order stated, “For the reasons
asserted by Defendants’ counsel, summary disposition is hereby granted as to Defendants
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Michael A. Delene and Joseph R. Delene pursuant to MCR 2.116(c)(8) [sic].
disposition is hereby granted as to all Defendants pursuant to MCR 2.116(C)(10).”
Summary
Haywood Harrison now appeals.
II. Motions for Summary Disposition
A. Standard Of Review
Under MCR 2.116(C)(7), a party may move for summary disposition on the ground that a
claim is barred by a prior judgment or other disposition of the claim before commencement of
the action. Under MCR 2.116(C)(8), a party may move for summary disposition on the ground
that the opposing party has failed to state a claim on which relief can be granted. And under
MCR 2.116(C)(10), a party may move for summary disposition on the ground that there is no
genuine issue with respect to any material fact and the moving party is entitled to judgment as a
matter of law.
Although review under MCR 2.116(C)(8) allows only consideration of the pleadings, our
review under MCR 2.116(C)(7) and (10) also must include consideration of all documentary
evidence submitted by the parties.12 More specifically, under MCR 2.116(C)(7), the plaintiff’s
well-pleaded factual allegations must be accepted as true and construed in the plaintiff’s favor,
unless the movant contradicts them with documentation.13 Under MCR 2.116(C)(10), the
moving party must specifically identify the undisputed factual issues and support its position
with documentary evidence.14 The trial court must consider all the documentary evidence in the
light most favorable to the nonmoving party.15
We review de novo a trial court’s rulings on motions for summary disposition,16 a trial
court’s application of res judicata,17 and the applicability of the doctrine of collateral estoppel.18
B. Res Judicata
1. Basic Principles
Haywood Harrison argues that the trial court erred when it found that the doctrine of res
judicata barred Haywood Harrison’s claims for unjust enrichment and equity. Res judicata bars
12
MCR 2.116(G)(5); Maiden v Rozwood, 461 Mich 109, 119; 597 NW2d 817 (1999); Johnson v
Detroit, 457 Mich 695, 701; 579 NW2d 895 (1998).
13
Maiden, supra at 119; Smith v Kowalski, 223 Mich App 610, 616; 567 NW2d 463 (1997);
Gortney v Norfolk & W R Co, 216 Mich App 535, 538-539; 549 NW2d 612 (1996).
14
MCR 2.116(G)(3)(b); Maiden, supra at 120.
15
MCR 2.116(G)(4); Maiden, supra at 120.
16
Tillman v Great Lakes Truck Ctr, Inc, 277 Mich App 47, 48; 742 NW2d 622 (2007).
17
Washington v Sinai Hosp of Greater Detroit, 478 Mich 412, 417; 733 NW2d 755 (2007).
18
Minicuci v Scientific Data Mgmt, Inc, 243 Mich App 28, 34; 620 NW2d 657 (2000).
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a subsequent action between parties when the facts or evidence essential to the action are
identical to those essential to a prior action.19 The doctrine applies to both facts and law.20 More
specifically, res judicata requires that: (1) the prior action was decided on the merits; (2) the
decree in the prior action was a final decision; (3) the matter contested in the second case was or
could have been resolved in the first; and (4) both actions involved the same parties or their
privies.21 The burden of establishing the applicability of res judicata is on the party asserting it.22
2. Decision On The Merits
As the Delene brothers point out, Haywood Harrison appears to concede that this
requirement is met; on page 2 of its brief on appeal, Haywood Harrison states: “After successful
appeals, the Court’s Order [granting summary disposition and dismissing the action] arguably
decided those prior claims on the merits.” Moreover, this Court has held that “a summary
disposition ruling is the procedural equivalent of a trial on the merits that bars relitigation on
principles of res judicata.”23 Therefore, this requirement has been met.
3. Final Decree
Neither party disputes that the trial court’s prior order was a final decree that disposed of
all the claims and adjudicated the rights and liabilities between Haywood Harrison and Richard
and Nancy Delene.24
4. Potential Prior Resolution Of Present Matter
The test to determine whether the two actions involve the same subject is whether the
facts are identical in both actions or whether the same evidence would sustain both actions; if the
same facts or evidence would sustain both, the two actions are the same for the purpose of res
judicata.25 If different facts or proofs would be required, res judicata does not apply.26 Res
judicata bars litigation in the second action not only of those claims actually litigated in the first
19
Sewell v Clean Cut Mgt, Inc, 463 Mich 569, 575; 621 NW2d 222 (2001); Chestonia Twp v
Star Twp, 266 Mich App 423, 429; 702 NW2d 631 (2005).
20
Jones v State Farm Mutual Automobile Ins, 202 Mich App 393, 401; 509 NW2d 829 (1993).
21
Washington, supra at 418; Richards v Tibaldi, 272 Mich App 522, 531; 726 NW2d 770
(2006).
22
Baraga Co v State Tax Comm, 466 Mich 264, 269; 645 NW2d 13 (2002).
23
Cleary Trust v Edward-Marlah Muzyl Trust, 262 Mich App 485, 510; 686 NW2d 770 (2004).
24
See MCR 7.202(6)(a)(i).
25
Adair v Michigan, 470 Mich 105, 123-124; 680 NW2d 386 (2004), on rem 267 Mich App 583
(2005), vacated 474 Mich 1073 (2006), on rem 279 Mich App 507 (2008); Huggett v DNR, 232
Mich App 188, 197-198; 590 NW2d 747 (1998), aff’d 464 Mich 711 (2001); In re Koernke
Estate, 169 Mich App 397, 399; 425 NW2d 795 (1988).
26
PT Today, Inc v Comm’r of Financial & Ins Services, 270 Mich App 110, 146; 715 NW2d 398
(2006).
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action, but claims arising out of the same transaction that the parties, exercising reasonable
diligence, could have litigated but did not.27 “The transactional test provides that the assertion of
different kinds or theories of relief still constitutes a single cause of action if a single group of
operative facts give rise to the assertion of relief.”28
In the first proceeding, Haywood Harrison sought to recover from Richard and Nancy
Delene the funds that it expended to pay the delinquent taxes and discharge the mortgages on the
property once owned by Richard and Nancy Delene. Specifically, Haywood Harrison alleged
entitlement to reimbursement under the theories of equitable subrogation and unjust enrichment.
After dismissal of that case, Haywood Harrison then brought this second action, again seeking to
recover the same funds from the Delene brothers and again alleging unjust enrichment and
equity.
As the Delene brothers point out, both actions involved the same real estate, the payment
of the same funds, the same motivation for Haywood Harrison making the payments, and the
same motivation behind Haywood Harrison seeking recovery. In sum, the same set of operative
facts gave rise to the assertion of relief in both actions. Therefore, this requirement has been
met.
5. Same Parties Or Privies
Here, the prior proceeding involved claims between Haywood Harrison and Richard and
Nancy Delene. The present action involved Haywood Harrison’s claims against the Delene
brothers. Therefore, Haywood Harrison argues that the parties to the two actions are not the
same. However, the parties to the second action need be only substantially identical to the
parties in the first action, in that the rule applies to both parties and their privies.29
Privity requires a substantial identity of interests and a relationship in which the interests
of the nonparty were presented and protected by the litigant.30 As to private parties, a privy
includes a person so identified in interest with another that he represents the same legal right.31
It also includes one who, after rendition of the judgment, has acquired an interest in the subject
matter affected by the judgment through one of the parties, as by inheritance, succession, or
purchase.32
27
Adair, supra at 121.
28
Washington, supra at 420 (quotation and citation omitted).
29
Peterson Novelties, Inc v City of Berkley, 259 Mich App 1, 12; 672 NW2d 351 (2003).
30
ANR Pipeline Co v Dep’t of Treasury, 266 Mich App 190, 214; 699 NW2d 707 (2005).
31
Adair, supra at 122; Peterson Novelties, supra at 12-13.
32
Peterson Novelties, supra at 13.
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Here, the Delene brothers acquired an interest in the real property affected by the prior
judgment when they purchased it at the sheriff’s sale. And a buyer at a sheriff’s sale takes the
property subject to all prior rights and liens.33 Therefore, this requirement has been met.
Accordingly, we conclude that the trial court did not err when it found that the doctrine of
res judicata barred Haywood Harrison’s claims for unjust enrichment and equity. Further, given
our resolution of this issue, we need not address Haywood Harrison’s claims under the doctrine
of collateral estoppel.
C. Claim And Delivery And Conversion
Haywood Harrison argues that the trial court erred in dismissing its claims for claim and
delivery, and conversion. “MCL 600.2920(1) provides that a civil action for ‘claim and
delivery’ may be brought to recover possession of any goods or chattels that have been
unlawfully taken or unlawfully detained and to recover damages attendant to the unlawful taking
or detention.” “The tort of conversion is defined as ‘any distinct act of domain wrongfully
exerted over another’s personal property in denial of or inconsistent with the rights therein.’”34
Conversion is an intentional tort.35
Here, when Haywood Harrison contacted William Delene after the sheriff’s sale, William
Delene told Haywood Harrison that it was welcome to come retrieve its personal property once
the redemption period expired and the Delene brothers acquired full possession of the property.
However, upon expiration of the redemption period, it was discovered that Haywood Harrison’s
personal property was gone. As averred in the Delene brothers’ affidavits in support of summary
disposition, they never had physical or legal possession of the personal property. Haywood
Harrison offers no valid argument or evidence in support of its claim that any of the Delene
brothers unlawfully took or detained Haywood Harrison’s personal property, nor that they
intentionally exerted wrongful dominion over the personal property.
Affirmed. The Delene brothers, being the prevailing party, may tax costs pursuant to
MCR 7.219.
/s/ William C. Whitbeck
/s/ Alton T. Davis
/s/ Elizabeth L. Gleicher
33
McKay v Kulburn, 42 Mich 614; 4 NW 539 (1880); First of America Bank-Oakland Macomb,
NA, supra at 80.
34
Head v Phillips Camper Sales, 234 Mich App 94, 111; 593 NW2d 595 (1999), quoting
Foremost Ins Co v Allstate Ins Co, 439 Mich 378, 391; 486 NW2d 600 (1992).
35
Mich Nat’l Bank v Mich Livestock Exchange, 432 Mich 277, 282; 439 NW2d 884 (1989).
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