Mortgage foreclosure; Foreclosure by advertisement; Bank of Am, NA v First Am Title Ins Co; Effect of a mortgage holder’s full credit bid to purchase the property at auction; Mortgagor’s claim for the amount paid in excess of the amount owed for the mortgage; MCL 600.3252; Conversion; Whether the sheriff’s deed should be set aside; Diem v Sallie Mae Home Loans, Inc; Prejudice; Wayne County Sheriff (WCS)

The court held that no surplus was owed to plaintiff-mortgagor after defendant-Toorak (assignee of the mortgagee’s interest) made a full credit bid to purchase the property at a public auction. And as no surplus funds existed, defendants were not liable for conversion. Further, the trial court did not err in declining to set aside the sheriff’s deed due to the mistaken bid amount, given that plaintiff failed to present any evidence of actual prejudice. Thus, the court affirmed the denial of plaintiff’s summary disposition motion and grant of summary disposition to Toorak and defendant-2020-1 Realty. Defendant-WCS conducted the auction. Toorak purchased the property using a credit bid of $234,600 “to satisfy plaintiff’s debt. No money was tendered to the WCS.” After receiving a sheriff’s deed, Toorak conveyed the property to 2020-1 Realty for $1. Plaintiff asserted “that Toorak breached the mortgage and promissory note by not paying the bid amount to the WCS or refunding plaintiff the amount paid in excess of the amount owed for the mortgage” (the surplus funds). It also contended “that Toorak and 2020-1 Realty unlawfully converted the surplus funds.” It alternatively argued “there was no consideration for the foreclosure sale and it must be set aside because Toorak did not pay the full bid amount.” Interpreting the statute governing the distribution of surplus funds after a mortgage foreclosure by advertisement, MCL 600.3252, the court noted that it did not define the term surplus. But it “provides that a mortgagor is entitled to be paid, on demand, any money remaining ‘in the hands of the officer or other person making the sale’ after the outstanding debt and the costs and expenses of the foreclosure are satisfied. The plain meaning of the phrase ‘in the hands of’ is in the possession of. Toorak’s credit bid was the only bid on the property[,]” which it was undisputed “satisfied the outstanding debt and the costs and expenses of the foreclosure and no money changed hands. Under these facts and circumstances, ‘actual payment to the sheriff would be an idle gesture.’” And after the debt was satisfied, the WCS did not hold any surplus funds.