Claims of self-dealing in the administration of a condo project; Due process; Sua sponte grant of summary disposition; Whether defendant was permitted to fully brief & present its argument for reconsideration; Harmless error; Whether summary disposition was premature; Amendment of the master plan, by laws, & condo subdivision plan; MCL 559.190(2); Conversion; Valuation evidence; Jack Loeks Theatres, Inc v City of Kentwood; Hearsay

The court held that the trial court’s sua sponte grant of summary disposition for plaintiffs-condo owners did not violate defendant-original developer’s due-process rights. However, summary disposition was prematurely granted. Plaintiffs claimed defendant used its status as owner of a majority of the condos to amend the project’s master deed to incorporate two grass runways as a common element while at the same time removing a vacant parcel. The trial court granted summary disposition on the conversion claim and on the issue of liability on the claim in Count I, subpart D of their amended complaint. It also allowed them to rely on the property tax assessment records and the testimony of a township assessor (J) to establish the valuation of the vacant parcel. On appeal, the court rejected defendant’s argument that the trial court’s sua sponte ruling as to Count I, subpart D, violated its due-process rights as it ruled without providing an adequate opportunity to brief the issue and present its position. Defendant “fully briefed and presented its arguments regarding why the trial court erred when it sua sponte granted summary disposition on Count I, subpart D. [It] considered and rejected those arguments.” The court could not find that its “actions contravened” defendant’s due-process rights. However, “summary disposition was prematurely granted.” The trial court “made factual findings without the documentation necessary to do so being appending to [defendant’s] motion and plaintiffs’ answer.” Moreover, MCL 559.190(2) “expressly provides that ‘the master deed, bylaws, and condo[] subdivision plan may be amended, even if the amendment will materially alter or change the rights of the co-owners or mortgagees, with the consent of not less than 2/3 of the votes of the co-owners and mortgagees.’” The excision of the vacant parcel “was accomplished and approved by the vote of a super-majority the owners of the” units, including most of plaintiffs. “The trial court’s ruling fail[ed] to address what impact, if any, this vote and MCL 559.190(2) have on the viability of plaintiffs’ claim alleged in Count I, subpart D.” It also prematurely granted summary disposition for plaintiffs on Count II of their amended complaint, “which may be viewed as alleging conversion by [defendant] of specific, identifiable sales proceeds held by” defendant on behalf of plaintiffs. Whether defendant “held specific, identified funds entrusted to it by plaintiffs depends on what impact, if any, the owners vote and MCL 559.190(2) have on the viability of plaintiffs’ claimed entitle[ment] to a portion of the sales proceedings.” The trial court “has yet to address this potentially dispositive question.” Finally, the trial court erred by allowing J’s lay testimony as to the valuation of the vacant parcel. Reversed and remanded.