Dearborn Hills Civic Ass'n v. Nasser

DEARBORN HILLS CIVIC ASSOCIATION, INC, Plaintiff-Appellant, v. GHENWA NASSER, JORAISH DAOUD also known as GORAISH DAOUD and JOURAISH DAOUD, and NASSER BEYDOUN, Defendants-Appellees.

No. 356608

Court of Appeals of Michigan

May 26, 2022

UNPUBLISHED

Wayne Circuit Court LC No. 19-007919-CH

Before: Borrello, P.J., and Shapiro and Hood, JJ.

PER CURIAM.

In this action stemming from a dispute over the enforcement of restrictive covenants, plaintiff appeals as of right the trial court's postjudgment order denying plaintiffs motion for attorney fees. For the reasons set forth in this opinion, we affirm.

I. BACKGROUND

This case involves a parcel of real property in the Dearborn Hills subdivision that is subject to a recorded Declaration of Deed Restrictions. The record contains a warranty deed indicating that the subject property was conveyed to defendants Jouraish Daoud and Ghenwa Nasser, as husband and wife, on November 15 2017. Plaintiff characterizes itself as a voluntary association of owners of property in Dearborn Hills, tasked with ensuring compliance with the recorded deed restrictions.

In July 2018, defendant Nasser Beydoun submitted an Architectural Plan Review Request Form to plaintiff seeking approval of plans for the subject property that included renovations and building an addition to the existing structure on the subject property. On the form, Daoud and Beydoun were listed as the "Applicant (Property Owner)." They signed this form that contained language indicating that they agreed to comply with plaintiffs approved plans and any conditions for that approval.

On June 4, 2019, plaintiff initiated this action, seeking to enforce certain deed restrictions related to a requirement to obtain plaintiffs approval of building and architectural plans before beginning construction or alteration of buildings on lots within the subdivision. In naming the defendants plaintiff asserted that Ghenwa Nasser was also known as "Beydoun Nasser." According to the complaint, plaintiffs had informed defendants that the plans for the subject property had been rejected because they did not conform to the requirements of the deed restrictions regarding conformity and harmony with the surrounding homes but defendants nonetheless sought a variance from the zoning board of appeals and received partial approval from the zoning board of the building plans that plaintiff had rejected. Plaintiff alleged that defendants had violated the deed restrictions by seeking to construct or alter a structure on the subject premises that did not conform to the requirements of the deed restrictions and without properly obtaining plaintiffs approval of the plans for intended alteration or construction. Plaintiff asserted claims against defendants for breach of the declaration of restrictions, breach of contract, and promissory estoppel.

Plaintiff sought injunctive relief in the form of an order requiring defendants to properly obtain plaintiffs approval, in accordance with the deed restrictions, of any proposed plans for construction or alteration on the property. Plaintiff additionally requested a judgment granting it an equitable award of attorney fees and costs based on defendants' "bad faith" breach of the restrictive covenants.

On September 13, 2019, after this litigation had been initiated, Beydoun purchased the subject property from Jouraish Daoud and Ghenwa Nasser. The property was conveyed to Beydoun by warranty deed. Plaintiff amended its complaint to add Beydoun as a separate defendant. Beydoun allegedly continued to submit revised plans to plaintiff that plaintiff also rejected. In its amended complaint, plaintiff maintained the same three claims against defendants and sought the same relief as described in the original complaint.

After filing its amended complaint, plaintiff moved for a preliminary injunction based on allegations that Beydoun had obtained a building permit and begun construction on the subject premises even though Beydoun's building plans had not been approved by plaintiff. The trial court entered a preliminary injunction order on July 30, 2020, enjoining defendants from any construction activity on the subject premises. The preliminary injunction was vacated on November 9, 2020, pursuant to a stipulation between the parties. The November 9 order specifically clarified, "While the parties have been unable to reach a settlement on the Dearborn Hills Civic Association's claims, the parties agree the preliminary injunction may be vacated."

On January 31, 2021, the trial court entered a declaratory judgment and order granting plaintiffs motion for summary disposition with respect to its request for declaratory relief and denying plaintiffs summary disposition motion with respect to its request for injunctive relief. The trial court ruled that the declaration of restrictions constituted a valid restrictive covenant binding on all platted lots in the Dearborn Hills subdivision, that plaintiff was the entity properly charged with enforcing the terms of the declaration, that plaintiff had the authority to review building plans and had the sole discretion to determine the conformity and harmony of building plans so long as that discretion was exercised in good faith, that defendants substantially and materially breached the declaration by altering the subject premises without obtaining plaintiffs prior approval, and that defendants were contractually bound to complete any renovations and construction in accordance with plaintiffs approved plans and conditions for approval.

Subsequently, plaintiff moved for attorney fees on the ground that it had incurred legal expenses as a result of defendants' fraudulent or unlawful conduct. Plaintiff specifically alleged four instances of fraud committed by defendants during the course of the parties' dispute: (1) "Defendant Nasser Beydoun, as an agent of Defendants Ghenwa Nasser and Jouraish Daoud, falsely represented himself as the owner of the Subject Premises, and the Defendants then fraudulently concealed Beydoun's misrepresentation"; (2) "Defendants Daoud and Nasser committed fraud when they made a sham transfer of legal title to the Subject Premises to Nasser Beydoun, and the Defendants then fraudulently concealed the title transfer"; (3) "Defendant Beydoun, as an agent of Nasser and Daoud, committed fraud when he obtained legal title to the Subject Premises with no intent of complying with the contractual obligations that ran with the land"; and (4) "Defendant Beydoun, as an agent of Nasser and Daoud, committed fraud when he falsely stated he lived in the Subject Premises, to argue equity demanded vacatur of the preliminary injunction."

A hearing was held on February 26, 2021, at which the parties presented oral argument on plaintiffs motion for attorney fees. The trial court denied plaintiffs motion for attorney fees, noting that plaintiff did not "allege fraud or unlawful conduct in the Complaint," that there had been no evidentiary hearing regarding allegations of fraud, and that the applicable caselaw did not justify awarding attorney fees in this case. The court entered an order to this effect on March 10, 2021.

In denying plaintiffs subsequent motion to submit its appeal on less than the complete transcript, the trial court also provided further explanation of its reasoning for denying plaintiff's motion for attorney fees:

Plaintiff is appealing this Court's decision denying is [sic] motion for attorney fees. In its motion for attorney fees, Plaintiff alleged that it incurred attorney fees and expenses as a result of four specific instances of fraud and fraudulent concealment allegedly perpetrated by Defendants. Following oral argument, the Court denied the motion on the record. The Court noted that recovery of attorney fees has been allowed in limited situations where a party has incurred legal expenses as a result of another party's fraudulent or unlawful conduct, but pointed out that in the case at bar, the Court never make [sic] findings of fact regarding fraud, fraudulent concealment, or unlawful conduct, nor did Plaintiff allege fraud or unlawful conduct in its complaint. The Court noted that in cases in which the Court awarded attorney fees for fraud or unlawful conduct, such as Ypsilanti Charter Twp v Kircher, 281 Mich.App. 251; 761 N.W.2d 761 (2008), and Oppenhuizen v. Wennersten, 2 Mich App 288; 139 N.W.2d 765 (1966), the Court made findings of fraud and/or unlawful conduct during the pendency of those proceedings. There were no such findings in the present matter.

Plaintiff now seeks leave to submit its appeal of the aforementioned denial of its motion for attorney fees on less than the full transcript. Plaintiff contends that determination of its appeal can be made solely on the basis of the transcript of the February 26, 2021, proceedings. The Court disagrees. As previously described, Plaintiffs motion for attorney fees is premised on the argument that it incurred attorney fees and expenses as a result of fraud and unlawful conduct committed by Defendants. The motion was denied because, during the course of multiple hearings throughout the proceedings, this Court never made any findings that Defendants engaged in fraud or unlawful conduct. The Court considered the proceedings in toto when it made its ruling on Plaintiffs motion for attorney fees. A reviewing Court should also have the opportunity to review the full record and see that no findings of fraud or unlawful conduct were made in this case. Accordingly, IT IS HEREBY ORDERED that Plaintiffs motion to submit its appeal on less than the full transcript is DENIED.

II. APPELLATE JURISDICTION

Before addressing the merits of plaintiffs appellate arguments, we must first address Beydoun's challenge to this Court...