Opinion Date: 10/16/2012
Issues: Foreclosure by advertisement; Whether the defendant-condo association complied with its duties under Article II, § 6 of the association's bylaws; The Condominium Act (MCL 559.101 et seq.); MCL 559.108; The master deed and incorporated bylaws as a contract between the condo owners and the condo association; Rossow v. Brentwood Farms Dev., Inc.; Determining the parties' intent; In re MCI Telecomm. Complaint; Interpreting the bylaws' language; DeFrain v. State Farm Mut. Auto. Ins. Co.; Altman v. Meridian Twp.; Hastings Mut. Ins. v. Safety King, Inc.; MCL 559.208; "Waiver"; "Prejudice"; Applicability of the doctrine of "substantial compliance"; Plunkett v. Department of Transp.; Defective statutory notice; Sweet Air Inv., Inc. v. Kenney; Foreclosure by advertisement based on contract; Cheff v. Edwards; "Shall"; Walters v. Nadel; Strict compliance with contractual terms; Quality Prods. & Concepts Co. v. Nagel Precision, Inc.; Whether defendant's breach of its contractual duty rendered the sheriff's sale invalid; Michigan Trust Co. v. Cody
Court: Michigan Court of Appeals (Unpublished)
Case Name: Gorosh v. Woodhill Condo. Ass'n
e-Journal Number: 52962
Judge(s): Per Curiam – Fitzgerald, Meter, and Boonstra
Holding that the defendant-condo association breached its express contractual duty to provide additional notice to the plaintiff-condo owner of his right to request a judicial hearing by suing defendant, the court concluded that plaintiff was entitled to have the sheriff's sale set aside as a matter of law. Thus, the court reversed the trial court's order granting defendant summary disposition, vacated the order of possession, and granted plaintiff summary disposition on his claims to quiet title and set aside the sheriff's sale. Plaintiff did not primarily live in the condo, and had instructed defendant that any notices should be sent to his address in another Michigan city. He was in arrears on his association dues in 1/10. The amount originally owed was $1,992.78. In 2/10, plaintiff submitted two checks to defendant totaling $1,525. However, at that point defendant had already accelerated plaintiff's condo dues obligations, and had charged him another $3,465. Before plaintiff's partial payment, defendant recorded a lien against his condo interest in the total amount of $5,544.28. Defendant initiated a foreclosure by advertisement in 3/10. The redemption period expired on 10/22/10. Plaintiff did not redeem during this time period. Defendant was the highest bidder and acquired the condo. The sheriff's deed indicated that defendant paid $5,135.41, although the affidavit of the auctioneer attached by defendant did not list the amount of the highest bid or identity of the highest bidder. Plaintiff received notice that an eviction proceeding was initiated against him in district court in 11/10. He offered to redeem the property for the amount due, but defendant rejected the offer. Plaintiff alleged that a default judgment was entered against him in the eviction proceeding. He then filed suit in the circuit court asserting claims for quiet title, declaratory relief, and to set aside the foreclosure sale. The default judgment was later set aside by the district court after plaintiff moved to do so based on lack of notice. The district court case was then consolidated with this case in the circuit court. Defendant's primary argument was that plaintiff was not prejudiced by any defect in the notice provided to him. While defendant referenced the doctrine of substantial compliance, the court held that the doctrine did not apply. While the court has held that "defective statutory notice renders a foreclosure sale voidable, not void," a foreclosure by advertisement is based on contract. "Nothing in the contractual language of the bylaws indicates that substantial compliance with the duties imposed therein is sufficient, or that an aggrieved co-owner must show they were prejudiced by the association's breach of its duties. The bylaws indicate that defendant 'shall' inform plaintiff that he is entitled 'to request a judicial hearing by bringing suit against the association.'" The court noted that "shall" generally designates a mandatory provision. Defendant could not show that it complied with its explicit contractual duty.
Full Text Opinion