Foreclosure; Dispute over surplus proceeds; Summary disposition under MCR 2.116(C)(10); Dextrom v. Wexford Cnty.; Jimkoski v. Shupe; Whether the mortgage was ambiguous as to the interest rate; Norman v. Norman; A mortgagor’s ability to recover surplus proceeds; Kennedy v. Brown

The court held that the trial court plainly erred by deciding that there was no genuine issue of material fact as to the mortgage interest rate. “The parties’ course of conduct, the ledger, the CPA’s affidavit, and the mortgage were insufficient to show that the interest rate was indisputably simple interest.” Thus, it was error to grant appellee-RJMC’s motion for partial summary disposition. Appellant-Dario Mortgages argued that the documentation provided by RJMC with its motion created an issue of material fact even without Dario’s response. The court agreed. In its motion, “RJMC contended that there was a surplus and that it was entitled to this surplus. In support, it submitted the mortgage, the handwritten ledger, and an affidavit from a CPA. The mortgage provided that the interest rate was 12% per year and would be paid based on the promissory note’s terms; however, it did not explicitly identify the interest rate. The promissory note was not provided to the trial court.” At first glance, it appeared that, “without examining the promissory note, the trial court could not be fully informed about the mortgage’s terms or the interest rate.” Dario argued that the mortgage was ambiguous as to “the interest rate and that the trial court, by failing to consider the promissory note, improperly granted RJMC’s motion.” The court determined that the CPA’s affidavit did not assist RJMC in establishing that the interest rate was simple. But it did not agree with Dario that the mortgage was ambiguous. The court concluded that the mortgage language was similar to the language at issue in Norman, and that Norman’s holding and reasoning was analogous to this case. The court noted that “the general rule in Michigan is that simple interest governs in” situations such as this. “However, one of the listed Norman exceptions is the parties’ course of dealing,” and the court believed this exception applied here and created an issue of fact as to the interest rate. From the parties’ course of conduct, “there was an implication of compound versus simple interest.” The court also noted that “the ledger was used as a starting point for RJMC’s and its CPA’s calculations for the surplus.” Thus, it determined that “the $860,473.04 that RJMC and its CPA arrived at was not necessarily accurate.” This was another example of the uncertainty as to “the interest rate and RJMC’s failure to adequately show no genuine issue of fact regarding it.” Reversed and remanded.