Action for foreclosure of a land contract; Election of remedies doctrine; Barclae v Zarb; Gruskin v Fisher; Wilson v Taylor; Accord & satisfaction; Faith Reformed Church of Traverse City, MI v Thompson; Adequate notice of the alleged default; Waiver; Houston v Lud; Minchella v Fredericks

The court held that the trial court erred in barring plaintiff’s land contract foreclosure action based on “election of remedies, accord and satisfaction, and lack of adequate notice.” It also rejected defendant’s argument on appeal that plaintiff waived her right to seek foreclosure. It first determined that the trial court erred in ruling “plaintiff elected a remedy by filing a forfeiture action and agreeing to dismiss that action after defendant’s $130,000 payment.” It held that the “fact plaintiff did not just send a notice of forfeiture but filed a forfeiture action and dismissed that action after defendant paid $130,000 does not constitute an election of remedies. [She] would only have elected a remedy if the district court awarded her a judgment of possession and writ of restitution, neither of which occurred. Because [her] earlier forfeiture action did not bar her from seeking foreclosure, the trial court erred by granting defendant summary disposition under the election of remedies doctrine.” The court next concluded that defendant “did not establish an accord and satisfaction because the evidence did not show plaintiff accepted [his] payment under the condition [it] would fully discharge plaintiff’s claim.” The court noted that she notified him “she would exercise the land contract’s acceleration clause, requiring defendant to pay the full accelerated balance of approximately $2.9 million.” He asserted he paid her the $130,000 “before the parties dismissed her forfeiture action to discharge the full accelerated balance. But there was no record evidence that [he] communicated this alleged condition to plaintiff or that [she] accepted the payment with knowledge of the condition.” As to the trial court’s adequacy of notice ruling, the unambiguous land contract language did “not require notice of a default 45 days before filing a foreclosure action.” It added that plaintiff notified him “of his default before filing the forfeiture action, and [she] did not have to provide new notice before seeking foreclosure.” Finally, the court found there “was no evidence from which the trial court could have concluded plaintiff waived her contractual right to seek foreclosure.” Reversed and remanded.