Dearborn Hills Civic Ass'n v. Merhi

DEARBORN HILLS CIVIC ASSOCIATION, INC., Plaintiff-Appellee, v. MALIK MERHI and RANA MERHI, Defendants-Appellants.

No. 354905

Court of Appeals of Michigan

April 28, 2022

UNPUBLISHED

Wayne Circuit Court LC No. 18-016180-CH

Before: Letica, P.J., and Redford and Rick, JJ.

PER CURIAM.

In this dispute over the application of restrictive covenants to a residential home, defendants, Malik Merhi and Rana Merhi (the Merhis), appeal by right the trial court's orders compelling them to remove a fence from their property and to replace stone siding that they installed on the exterior of their home. On appeal, the Merhis argue that questions of fact precluded the trial court from granting plaintiff Dearborn Hills Civic Association, Inc.'s (the Association) motion for summary disposition. The Merhis also argue that the trial court erred when it denied their motion for reconsideration of its decision to enter the Association's proposed order because it included relief that was not supported by the trial court's oral ruling. For the reasons explained, we affirm the trial court's grant of the Association's motions for summary disposition and reconsideration, but vacate the June 26, 2020 order and remand for entry of a new order that comports with the trial court's oral ruling.

I. FACTUAL BACKGROUND

The Merhis purchased their home located within the Association in 2013 under a land contract. In 2016, the seller transferred title to the property by a warranty deed that expressly provided that the conveyed property is subject to any existing building and use restrictions.

The original owners of lots in the Dearborn Hills subdivisions agreed to restrictive covenants set forth in a Declaration of Restrictions (the Restrictions) which limit the development and alteration of properties within the subdivisions and assigned the Association the right to approve or disapprove plans for development or renovation of properties. The Restrictions provided that they shall run with the land and could be extended by the agreement of the owners of 65% of the area of the land subject to the original restrictions. The owners duly extended the Restrictions in 1999 through 2049 and recorded the Restrictions in the county register of deeds.

Article II of the Restrictions requires landowners to obtain the Association's approval in writing of the plans' conformity and harmony of the external design with existing structures within the subdivision before they erect or alter any building on the properties in the subdivision. Article X of the Restrictions precludes property owners from erecting fencing in front of the building line and allows only four-foot tall fences in the back of the building line "not constructed of solid board, and of such a character as not to obstruct the view."

In 2013, the Merhis erected fencing in their backyard. They also altered the facade of their home by installing stone siding on its exterior face in 2018. The Merhis did not submit any plans for their alterations for approval from the Association.

On September 8, 2018, the Association sent the Merhis a letter informing them that they violated the Restrictions by commencing a facade renovation without first submitting their plans to the Association for approval. The Association advised the Merhis that the stone facade they were erecting was nonconforming and would not be approved, and directed them to halt the renovation. The Association noted as well that the Merhis had installed a fence that violated the Restrictions. The Association asked the Merhis to remove the stone siding and fence. The record indicates that the City of Dearborn requires residents to submit a renovation permit application and obtain a permit for exterior facade renovations. The City's residential renovation information included with such applications states that if one's property is located within the Association, the Association's approval is required. The Merhis started their facade alteration project before seeking such a permit and after the Association notified them of their project's nonconformity. The record indicates that they applied for a permit on September 24, 2018, and the City issued them a renovation permit on December 3, 2018.^[1]

The Association offered to work with the Merhis on bringing the home into compliance with the Restrictions. However, after the Merhis failed to follow the Association's instructions, the Association sued the Merhis on December 21, 2018, to enforce the Restrictions. The Merhis's lawyer filed an answer in May 2019 on behalf of Malik but not Rana. The Association requested and obtained the entry of a default against Rana by the court clerk. The Association moved for entry of a default judgment against Rana who never took steps to have the default set aside and also moved for summary disposition against the Merhis under MCR 2.116(C)(10) in November 2019.

In support of its summary disposition motion, the Association argued that the undisputed evidence showed that the Merhis's home was part of the subdivision and subj ect to the Restrictions which were validly promulgated. The Association asserted that the Merhis plainly violated the Restrictions by failing to submit their plans for renovation to the Association. It maintained that none of the approximately 1, 250 homes within the subdivision featured a modern stone facade design like the Merhis installed on their home. The Association submitted photographs of numerous homes within the subdivision for comparison with images of the Merhis's home. The Association argued that the evidence established that the Merhis violated the Restrictions' Article II by installing stone siding not in conformity and harmony with the external design of existing homes in the subdivision. The Association also argued that the undisputed evidence established that the Merhis's fence exceeded the four-foot height restriction and its solid design obstructed the view which violated the Restrictions.

At the conclusion of the summary disposition motion hearing, the trial court ruled that the Merhis violated the restriction governing fences. Concerning the stone facade, the court stated that it was not "crystal clear about the stone," so it denied the motion. The trial court entered an order granting the Association summary disposition as to the fencing and ordered the Merhis to bring their fences into compliance with the Restrictions by June 30, 2020. The order, however, denied the Association summary disposition as to the stone facade and granted the Merhis's summary disposition on that issue. It then closed the case.^[2]

The Association timely moved for reconsideration on two grounds: (1) that the trial court lacked the authority to grant summary disposition in favor of Rana because she defaulted and a default judgment should have been entered against her; and (2) that the trial court committed a palpable error when it rejected the Association's authority to decide whether the stone facade was in conformity and harmony with the existing structures' exterior designs within the subdivision. The Association asked the trial court to reconsider its order and enter an order granting the Association's motion for summary disposition.

The trial court held a hearing on the motion for reconsideration. The court took the parties' appearances and then informed them that it reconsidered its previous ruling on the fence and facade issues and announced that "on reconsideration the Court is granting [the Association's] motion on both issues." The court ruled that the Mehris would have to change the facade and fence and directed the Association to submit an order. Defense counsel remarked that he had not filed a response, the Association presented nothing new, and he did not see the palpable error. The trial court responded that it had the option to change its ruling at any time.

The Association submitted a proposed order under the seven-day rule, MCR 2.602(B)(3), which granted the Association's motion for reconsideration and motion for summary disposition, and provided for the entry of a default judgment against Rana. The Merhis objected to the entry of the order. The trial court denied the Merhis's objections and entered the Association's proposed order on June 26, 2020. The Merhis moved for reconsideration and the trial court denied their motion. The Merhis now appeal.

II. STANDARDS OF REVIEW

We review de novo a trial court's decision on a motion for summary disposition. Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 Mich.App. 362, 369; 775 N.W.2d 618 (2009). We review de novo the trial court's interpretation and application of restrictive covenants. Conlin v Upton, 313 Mich.App. 243, 254; 881 N.W.2d 511 (2015). We also review de novo whether the trial court properly applied the common law applicable to covenants and equity. Id. Restrictive covenants are contracts. Bloomfield Estates Improvement Ass n , Inc v City of Birmingham, 479 Mich. 206, 214; 737 N.W.2d 670 (2007). "[T]he main goal in the interpretation of contracts is to honor the intent of the parties." Mahnick v Bell Co, 256 Mich.App. 154, 158-159; 662 N.W.2d 830 (2003). We review unpreserved claims for plain error. Kern v Blethen-Coluni, 240 Mich.App. 333, 336; 612 N.W.2d 838 (2000).

A motion under MCR 2.116(C)(10) tests the factual sufficiency of claims and the moving party bears the burden of establishing with admissible evidence its entitlement to judgment as a matter of law. Lear Corp v Dep't of Treasury, 299 Mich.App. 533, 536; 831 N.W.2d 255 (2013). If the nonmoving party fails to establish the existence of a genuine issue of material fact, the trial court must enter judgment for the moving party as a matter of law. Id. at 537. "A genuine issue of material fact...