Effect of foreclosure on a mortgage; Wilmington Sav Fund Soc’y, FSB v Clare; Deficiency; Bank of Am, NA v Fidelity Nat’l Title Ins Co; Claim on an installment contract; MCL 600.5836; Sparta State Bank v Covell; Limitations period for breach of contract; MCL 600.5807(9); Laches; Williamstown Twp v Sandalwood Ranch, LLC

Holding that the trial court erred by finding the statute of limitations barred plaintiff’s claims, the court reversed and remanded for the trial court to proceed consistent with this opinion, including determining whether laches barred the claims instead. Plaintiff foreclosed on defendant’s property and took possession of the property after defendant failed to redeem it. Plaintiff then sued defendant for past due payments and principal balance. The trial court granted summary disposition for defendant, finding plaintiff’s claims were time-barred. On appeal, the court agreed with plaintiff that the trial court erred by granting summary disposition for defendant based on its finding that the note was accelerated by the foreclosure of the senior mortgage. “The foreclosure of the senior mortgage extinguished the junior mortgage, but the debt associated with the junior mortgage, and accrual of interest on that debt, continued. It simply continued without collateral.” As such, the trial court’s findings to the contrary were erroneous and plaintiff still had a claim under the note. It also agreed with plaintiff that the trial court erroneously found that the loan at issue was not an installment loan and, as a result, erroneously found its claims were barred by the statute of limitations. “Under the cross-default provision, [plaintiff] could have accelerated the notes once [defendant] defaulted, but there is no indication that it did (at least until the time of filing its complaint).” Thus, the “installment payments that became past due within the last six years before the filing of the complaint are not barred by the statute of limitations.” Finally, noting that the trial court did not address the issue of whether laches barred the claims, but indicated there may be a factual dispute, the court instructed the trial court to “address the laches issue in the first instance.”