e-Journal Summary Search Details
 
State Bar of Michigan
home member area contact us


research & links

  e-Journal Summary
Opinion Date: 10/25/2012
e-Journal Date: 10/29/2012
Full Text Opinion

Practice Area(s):   Real Property

Issues: Priority dispute; Whether the plaintiff-condo association's lien for unpaid association fees and dues had priority over the mortgage assigned to the defendant; Whether defendant was liable to plaintiff for all unpaid assessments, fees, late charges, interest, and attorney fees levied against the condo unit; The Condominium Act (MCL 559.101 et seq.); MCL 559.208(1); "First mortgage of record"; Statutory interpretation; McCormick v. Carrier; "Record" defined (MCL 559.110(1)); Common meaning of "first"; "Race-notice"; Richards v. Tibaldi; MCL 565.29; A "good-faith purchaser"; Michigan Nat'l Bank & Trust Co. v. Morren; Assignee standing in the shoes of an assignor; Nichols v. Lee; Wilson v. Campbell; Applicability of the principle of "expressio unium est exclusion alterius"; Dave's Place, Inc. v. Liquor Control Comm'n; Applicability of MCL 559.211; "Purchaser" (MCL 565.34)
Court: Michigan Court of Appeals (Published)
Case Name: Coventry Parkhomes Condo. Ass'n v. Federal Nat'l Mtg. Ass'n
e-Journal Number: 53089
Judge(s): Per Curiam – O’Connell, Donofrio, and Beckering

Holding, inter alia, that under the plain meaning of MCL 559.208(1), the mortgage assigned to defendant-FNMA had priority over the plaintiff-condo association's lien for unpaid association fees and dues, the court reversed the trial court's order granting plaintiff summary disposition in this priority dispute. The court also held that MCL 208.211 did not apply because the statute does not apply to an assignment of a condo unit mortgage since it deals with the conveyance of a co-owner's interest and not a mortgagee's interest. W, a co-owner of a unit in plaintiff's condo complex, entered into a mortgage agreement with a bank. The mortgage was recorded on 8/18/05. On 6/17/09, plaintiff recorded a lien on W's condo unit for unpaid association fees and dues. On 7/20/10, the bank assigned its interest in the mortgage to FNMA. FNMA recorded the assignment on 9/9/10. Plaintiff later sued FNMA to foreclose on its condo-association lien and to obtain from FNMA unpaid condo assessments and fees in the amount of $5,673.10, plus late charges and fines. Plaintiff moved for summary disposition under MCR 2.116(C)(10), arguing that under the Condominium Act its lien had priority over the mortgage assigned to FNMA and FNMA was liable for all unpaid assessments, fees, late charges, interest, and attorney fees levied against W's condo unit. FNMA argued that it was entitled to summary disposition because its mortgage had priority over plaintiff's lien and that it was not liable to plaintiff for dues and assessments since FNMA was merely a holder of a security interest and not a co-owner of W's condo unit. The parties agreed that the Condominium Act governed the dispute. Under the plain language of MCL 559.208(1), a "first mortgage of record" has priority over a condo-association lien if the "first mortgage of record" was recorded before the condo-association lien. However, a condo-association lien would have priority over a second mortgage even if the second mortgage was recorded before the condo-association lien. The Condominium Act does not define "first mortgage of record." The court concluded that the plain meaning of the term as used in MCL 559.208(1) "is the mortgage that is recorded before all others with respect to time pursuant to the laws of this state relating to the recording of deeds." W's mortgage to the bank was the first mortgage of record under MCL 559.208(1), and it was recorded before plaintiff's lien was recorded. Even though the bank assigned its interest in the mortgage to FNMA, "the mortgage was still the first mortgage of record because it was recorded before any other mortgage pursuant to the laws of this state relating to the record of deeds." And it was still a first mortgage of record recorded before plaintiff's lien was recorded. "The assignment to FNMA did not change this." Thus, despite the assignment to FNMA, the mortgage had priority over plaintiff's lien because it was a first mortgage recorded before plaintiff's lien was recorded. The court concluded that nothing in the text of MCL 559.208(1) supported a finding that the mortgage, once assigned to FNMA, was no longer a first mortgage of record.

Full Text Opinion

Search Again

     

 

follow us
Follow Us on Facebook Follow Us on LinkedIn Follow Us on Twitter Follow the SBM Blog

 

©Copyright 2014

website links
Contact Us
Site Map
Website Privacy Statement PDF
Staff Links

SBM on the Mapcontact information
State Bar of Michigan
306 Townsend St
Lansing, MI 48933-2012
Phone: (517) 346-6300
Toll Free: (800) 968-1442
Fax: (517) 482-6248