Ayesh v. Chaalan

SHAHENAZ RI AYESH and RAAFAT AYESH, Plaintiffs-Appellants, v. CLAUDIA TAISSIR CHAALAN, Defendant/Third-Party Plaintiff-Appellee, v. FEDERAL HOME LOAN MORTGAGE CORPORATION, Third-Party Defendant.

No. 354966

Court of Appeals of Michigan

September 30, 2021

UNPUBLISHED

Wayne Circuit Court LC No. 20-003764-CH

Before: Cavanagh, P.J., and K. F. Kelly and Redford, JJ.

PER CURIAM.

Plaintiffs appeal as of right the trial court's opinion and order denying their motion for summary disposition or alternatively, for leave to amend their complaint, and dismissal of their claims in this action to quiet title. We affirm.

I. FACTS AND PROCEDURAL BACKGROUND

Plaintiff Shahenaz Ayesh, purchased a home in Dearborn Heights, Michigan in 2007 and granted a purchase money mortgage on the property to her lender Washington Mutual Bank, FA. JPMorgan Chase Bank, National Association, the successor in interest by purchase from the FDIC as Receiver of Washington Mutual Bank, FA, acquired the mortgage in 2012 and later assigned it to Homeward Residential, Inc. which in turn assigned the mortgage to Ocwen Loan Servicing, LLC (Ocwen) in 2016 which also serviced the loan. On February 19, 2019, Ocwen sent a letter to Shahenaz indicating receipt of her request for mortgage assistance (RMA) and submitted documents. Three days later, however, Ocwen informed Shahenaz by letter that it closed review of the RMA because Ocwen no longer serviced the loan and that it would forward the submissions to the new loan servicer. During February 2019, PHH Mortgage Services (PHH) became Shahenaz's mortgage loan servicer.

Months later on August 30, 2019, because Shahenaz defaulted on the mortgage loan, PHH initiated a foreclosure by advertisement as permitted by the terms of the mortgage, and the Detroit Legal News published the notice of foreclosure by advertisement four consecutive weeks on August 30, 2019, September 6, 2019, September 13, 2019, and September 20, 2019. On September 6, 2019, PHH's foreclosure counsel, Potestivo & Associates, PC, posted a copy of the foreclosure notice in a conspicuous place on the subject premises. The published and posted foreclosure notice stated that the sheriffs sale would occur on October 3, 2019, the mortgage loan amount due on the date of notice, and that the statutory redemption period would commence upon the sheriffs sale of the subject property.

On October 3, 2019, PHH purchased the subject property at the sheriffs sale for $157, 000, and recorded the Sheriffs Deed on Mortgage Sale along with copies of the notices and affidavits of publication, posting, and purchase in the Wayne County Register of Deeds. PHH's recorded affidavit of purchaser stated that the last day to redeem the property would be April 3, 2020, and specified the redemption amount plus per diem interest that would accrue. On October 14, 2019, PHH sent Shahenaz a letter regarding her incomplete application for home owners assistance explaining that it had previously contacted her about applying for assistance and had provided her "an application and a list of outstanding items needed in order to complete [her] application." The letter advised Shahenaz that PHH had not received the outstanding items and the deadline to provide them had since passed. The letter also advised Shahenaz to call if she had any questions.

In late November 2019, PHH quitclaimed the subject property to third-party defendant, Federal Home Loan Mortgage Corporation (FHLM). In mid-December 2019, FHLM sold the property to defendant, Claudia Chaalan for $126, 160, and conveyed title to her via a covenant deed. She recorded her covenant deed in the Wayne County Register of Deeds on January 8, 2020.

On March 11, 2020, plaintiffs filed a complaint against Chaalan to quiet title to the subject property and alleged that Chaalan breached the statutory notice requirements of MCL 600.3208 by not posting the foreclosure notice, breached the RMA by foreclosing when they sought a financial accommodation, and that they were entitled to an injunction to stay and toll the expiration of the redemption period. On April 1, 2020, plaintiffs moved for an ex parte temporary restraining order (TRO) to stay the redemption period's expiration, or alternatively, to convert the foreclosure by advertisement to a judicial sale.^[1] The trial court granted plaintiffs' motion and entered a TRO that stayed and tolled the redemption period and ordered Chaalan to appear to show cause why a preliminary injunction should not be entered. Later, on June 10, 2020, the trial court extended the TRO, and again on June 18, 2020, extended it until June 30, 2020. In its June 18, 2020 order, the trial court set a schedule for plaintiffs to move for summary disposition, for Chaalan to respond, and for plaintiffs to reply. The trial court entered no further order respecting staying and tolling of the redemption period. Plaintiffs did not redeem the property and the redemption period, therefore, expired on June 30, 2020.

On July 6, 2020, plaintiffs moved for summary disposition or, alternatively, to amend their complaint to add Ocwen, PHH, and FHLM. Plaintiffs argued that the foreclosure had been wrongful because of the failure to post notice of the foreclosure and follow the requirements of MCL 600.3204. Plaintiffs asserted that the sheriffs sale had been improper due to fraud because Chaalan's predecessors failed to notify them of the foreclosure which they contended required setting aside the sheriffs sale and starting the foreclosure process from the beginning. Plaintiffs stated that they might have been able to procure money to reinstate the loan and keep the property. Plaintiffs also asserted that Chaalan's predecessors failed to adequately respond to plaintiffs' RMA while pursuing foreclosure. Alternatively, plaintiffs moved to add Ocwen, PHH, and FHLM as defendants but did not specify what claims they sought to raise against them.

Chaalan opposed plaintiffs' motion on the ground that she held title to the subject property under a recorded covenant deed granted to her by FHLM for the consideration she paid. Chaalan relied on Shahenaz's mortgage's provisions which specified that her lender could accelerate the debt and foreclose by advertisement and presented a copy of the recorded covenant deed along with evidence of the propriety of the foreclosure and sheriffs sale including the duly executed and recorded Sheriff s Deed on Mortgage Sale, Affidavit of Publication, Affidavit of Posting, Evidence of Sale, Non-Military Affidavit, and Affidavit of Purchase. Chaalan asserted that, at no time, had she committed any wrongdoing and had no liability to plaintiffs. Chaalan, therefore, requested that the trial court dismiss plaintiffs' case in its entirety.

The trial court dispensed with oral argument pursuant to MCR 2.119(E)(3) and entered an opinion and order on September 22, 2020, denying plaintiffs' motion for summary disposition or to amend their complaint. After briefly summarizing the factual background of the case, the trial court ruled that, under MCL 600.3236, Chaalan "obtained a valid title to the property." The trial court explained that, "[a]fter a valid sheriffs sale" and "expiration of the redemption period," the deed "becomes a valid deed vested in the purchaser, who may then grant or assign to someone else, 'all the right, title, and interest' in the property." The trial court stated that plaintiffs failed to "convince the Court that [Chaalan] can in any way be held responsible for any claims of wrongdoing prior to the sheriffs sale." Moreover, noting plaintiffs' claim that "they were not properly notified of the sheriffs sale," the trial court stated that plaintiffs submitted "no affidavit . . . nor is the complaint verified, thus there is no support for this allegation." The trial court also concluded that plaintiffs failed to demonstrate "how [Chaalan] is responsible if there were defects in the sale." Additionally, the trial court concluded that plaintiffs' request for leave to amend the complaint to add Ocwen, PHH, and FHLM "would be futile" because "adding them [would] not give [p]laintiffs any right to possession." This appeal followed.

II. STANDARDS OF REVIEW

Plaintiffs moved for summary disposition under MCR 2.116(C)(8) and (C)(10). "When a motion seeks summary disposition under both (C)(8) and (C)(10), but the parties and trial court rely on matters outside of the pleadings, we review the matter through the lens of (C)(10)." Mazzola v Deeplands Dev Co, LLC, 329 Mich.App. 216, 223; 942 N.W.2d 107 (2019). We review de novo a trial court's decision whether to grant or deny a motion for summary disposition. Ingham Co v Mich. Co Rd Comm Self-Ins Pool, 321 Mich.App. 574, 579; 909 N.W.2d 533 (2017), remanded on other grounds by 503 Mich. 917 (2018).

A motion under MCR 2.116(C)(10) tests the factual sufficiency of the complaint. In evaluating a motion for summary disposition brought under this subsection, a trial court considers affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the motion. Where the proffered evidence fails to establish a genuine issue regarding any material fact, the moving party is entitled to judgment as a matter of law. [Maiden v Rozwood, 461 Mich. 109, 120; 597 N.W.2d 817 (1999) (citations and quotation marks omitted).]

"We review de novo questions of statutory interpretation." Hay ford v Hay ford, 279 Mich.App. 324, 325-326; 760 N.W.2d 503 (2008). We review for an abuse of discretion a trial court's decision on a motion to amend a complaint. Long v Liquor Control Comm 'n, 322 Mich.App. 60 67; 910 N.W.2d 674 (2017). "An abuse of discretion occurs when a court chooses an outcome outside...