e-Journal Summary

e-Journal Number : 51843
Opinion Date : 06/07/2012
e-Journal Date : 06/27/2012
Court : Michigan Court of Appeals
Case Name : Cordes v. Great Lakes Excavating & Equip. Rental, Inc.
Practice Area(s) : Real Property
Judge(s) : Per Curiam – Borrello, O’Connell, and Talbot
Full Text Opinion

Mortgage dispute; MCL 565.451a; Whether the affidavit at issue presented information outside the scope of the statute; MCL 565.453; Savidge v. Seager; Whether there was a factual issue as to the veracity of the information stated in the affidavit; The purpose and effect of Michigan's recording statutes; Johnson Family Ltd. P'ship v. White Pines Wireless, LLC


Holding that the recordation of the affidavit at issue (the O'Connor affidavit) established the respective rights of plaintiff-Cordes and defendant-JBN to the parcel, the court affirmed the trial court's order granting Cordes summary disposition. Cordes and JBN both claimed an interest in a single parcel of real property. Cordes sued to foreclose a mortgage on the parcel. JBN filed a counterclaim against him, seeking a declaration that he had discharged his mortgage interest and that JBN was the owner of the parcel. The material facts underlying the case were undisputed. The parties' competing interests arose from two mortgages executed by the parcel owner, defendant-Matthew O'Connor. O'Connor executed the first mortgage at issue in 1/04, in favor of Cordes. The mortgage was recorded. Cordes executed a discharge of the mortgage, which was recorded in 2005. He testified that he thought the discharge was for an equipment lien and was not for the real property parcel. Sometime after executing the discharge, he was informed that there was a mistake in the discharge and that a correction would be recorded to protect his interest in the parcel. O'Connor signed an affidavit which stated that the Cordes mortgage should not have been discharged and that the mortgage remained in effect with Cordes as the lender. The affidavit was recorded in 11/05. O'Connor executed the second mortgage at issue in 2006, in favor of a bank. The mortgage was recorded. In 2/09, the bank assigned the mortgage to JBN. In 4/09, O'Connor conveyed his interest in the parcel to JBN in a deed in lieu of foreclosure. The deed was recorded. Later in 2009, Cordes filed an action seeking to foreclose on his mortgage interest in the parcel. After some discovery, he moved for summary disposition. The trial court ruled that the O'Connor affidavit nullified the discharge as between Cordes and O'Connor. The trial court also determined that the affidavit, as a recorded document, placed the bank and JBN on notice that Cordes held an outstanding mortgage on the parcel. Both parties cited MCL 565.451a as the controlling statute to determine the validity and effect of the O'Connor affidavit. JBN argued that the O'Connor affidavit had no effect because it presented information that was outside the scope of the statute. The court disagreed. Paragraph 2 of the affidavit presented information within the scope of subsection (b) - "Knowledge of the happening of any condition or event which may terminate an estate or interest in real property." In the O'Connor affidavit, paragraph 2 read - "2. A document granting a discharge of liens for the Bank of Alpena and Kenneth H. Cordes over the premises is recorded at Liber 446, Page 53 with the Alpena County Register of Deeds." "The Cordes discharge referenced in the affidavit plainly presented a condition that could terminate an interest in the parcel." Thus, the affidavit contained information within the scope of MCL 565.451a(b). The court held that "the recorded documents (and in particular the affidavit) were sufficient to put interested persons on notice that the parcel was encumbered by a mortgage and that Cordes' discharge of the mortgage was erroneous."

Full Text Opinion