STATE OF MICHIGAN
48th CIRCUIT COURT IN ALLEGAN COUNTY
Case No: 10-46583-CH
Honorable GEORGE R. CORSIGLIA
Richard Livingston Schneiderman & Sherman
Plaintiff 23938 Research Drive, Suite 300
2594 Chase Farm Farmington Hills, MI 48335
Fennville, MI 49408
Tel 269-857-5383 Tel 248-539-7400
PLAINTIFF’S ANSWER TO DEFENDANT’S
MOTION FOR SUMMARY DISPOSITION
I BACKGROUND AND INTRODUCTION
The plaintiff contracted with a residential builder to construct this custom home in
2005. Around early September 2005 the builder disappeared from the project and after
some delay, the plaintiff picked up and restarted the work on the project in November
2005. The plaintiff uncovered more and more financial damages, eventually adding up
almost $90,000 in damages to finish the home.
The agreement required arbitration and a hearing was held in January 2007.
Although the award states that the expenses were well documented, with copies of all
receipts for work done submitted to the arbitrator, the arbitrator threw out the house plans
stating that they could not be used to determine damages. These were the only house
plans in existence and were used to pull permits, hire subcontractors, and order materials.
The arbitration award must comport with the terms of the contract that the arbitrator may
only award over a written contract, an arbitrator may not arbitrate matters not submitted
to arbitration, and the arbitrator failed to rule on two additional causes of action for fraud
A complaint was filed by Livingston in the 48th Circuit Court to have the court
review the arbitration award for errors and either modify or vacate the award in
accordance with MCR 3.602.
An attorney was retained and paid to represent this complaint in March 2007. By
October 2007 the attorney produced nothing. A subsequent attorney was retained and
paid with disappointing results. Sanctions were issued by the Attorney Grievance
Commission but already a year had been lost. The plaintiff moved the complaint forward
pro se to meet a deadline set in the pre-trial hearing that all dispositive motions were to
be filed by mid January 2008.
II STATEMENT OF FACTS
Payments on the home fell into arrears and the home was scheduled for
foreclosure on May 1, 2008. Huntington offered a “Workout Package” to allow
homeowners to gradually bring themselves out of arrears and prevent a foreclosure, as
opposed to the entire mortgage amount being payable and due immediately. At 2:21pm
Huntington Mortgage emailed Livingston to notify him that Huntington Mortgage was
not going to allow any “Workout Package” and that the foreclosure would move forward
as scheduled the next day at 9:00 am. (Exhibit 1).
With all of the investments Livingston and all the other creditors made to finish
the house, filing Chapter 11 would ensure that all creditors were treated equally and
fairly, with their interests represented by a U.S. Trustee of the U.S. Bankruptcy Court,
was the right action to take. A Chapter 7 filing in U.S. Bankruptcy Court costs $250 and a
qualified applicant can have all their debts discharged. That would be an extreme
measure and not appropriate yet as Livingston owed it to all the other creditors to
continue to solve the insolvency any way possible, including moving the arbitration
award complaint forward in the circuit court.
Chapter 11 filings are complicated and are summarily dismissed finding any
technical deficiencies, regardless of whether the application has merit or not. Many
requirements must be done before even filing a Chapter 11 petition, including attending a
bankruptcy education class. Of course with the short notice provided Huntington
Mortgage if was impossible to schedule and attend this class. Livingston’s tax returns
were so complicated, not only from the incredible amount of losses in 2006, but also
because a corporation was in operation and dissolved in 2008. The corporation was
created for tax benefits and with little income for the business the liabilities far
outweighed the benefits of the corporation. Only a CPA could file these tax returns,
another requirement for a Chapter 11 filing. However, with limited resources, Livingston
did not have the $4,000 to pay the CPA to file these returns. Thus another technical
requirement was not met. (Exhibit 2).
Bankruptcy attorneys charge businesses $30,000 to represent Chapter 11 cases –
cost prohibitive to small businesses. However, the trustee began to work with Livingston
to find an attorney that may represent this case. Discussions were under way with Mr.
Hettinger to represent this case, even if it eventually converted to a Chapter 7.
While all this was happening in U.S. Bankruptcy Court, Huntington Mortgage
was “chomping at the bit” to remove the house from the Chapter 11 estate and in late
September 2009, Huntington Mortgage was granted a motion to remove the home from
the estate. This was based on a new law that assumes abuse when a petitioner files repeat
applications. In this case, the petitions were found to have merit and the trustee was
working with Livingston to find an attorney willing to represent a small business in a
Chapter 11 proceeding.
Eventually it was determined by the U.S. Bankruptcy Court that there was no
abuse in these filings. Without the single asset of the estate, the house at 2594 Chase
Farm, the case was converted to Chapter 7 and the debts of the petitioner were discharged
at a great loss to many creditors.
III LAW AND ARGUMENT
A. This Complaint was Timely Filed and Survives Any Statute of
The plaintiff became aware of the cause of action on February 24, 2010. The
instant action was filed April 23, 2010 and served first on the attorneys on May 7, 2010
and then directly on the defendant June 8, 2010. The sheriff’s deed states that the
redemption period expires on July 2, 2010, although it goes on to say “THIS DATE
MAY CHANGE AS SET FORTH IN SUBSEQUENT AFFIDAVITS OR AS
PROVIDED BY APPLICABLE STATE LAW.” (Exhibit 3).
The Michigan Land Title Standards of the State Bar of Michigan provides
instruction that the validity of a sale in a foreclosure by advertisement by be contested for
five years after the expiration of the redemption period. (Exhibit 4). A cause of action
may be filed challenging a foreclosure until July 2, 2015.
In Zachary v Deppner, COA 181310 (Exhibit 5) The Court of Appeals states the
“A challenge to the validity of foreclosure by advertisement proceedings
must be brought within five years from the expiration of the redemption
period. MCL 600.5801(1); MSA 27A.5801(1). Olmstead v Johnson, 313
Mich 57; 20 NW2d 809 (1945); See also Cameron, Michigan Real
Property Law, (2d Ed) § 18.91, p 748.”
“When the defendant claims title to land in question by or through some
deed made upon the sale of the premises by an executor, administrator,
guardian, or testamentary trustee; or by a sheriff or decree of a court or
legal tribunal of competent jurisdiction within this state, or by a sheriff
upon a mortgage foreclosure sale the period of limitation in 5 years. [MCL
600.5801(1); MSA 27A.5801(1).]”
Other decisions of the Supreme Court have held that a mortgagor must challenge
the validity of a foreclosure by advertisement promptly and without delay. See White v
Burkhardt, 338 Mich 235, 239; 60 NW2d 925 (1953); Fox v Jacobs, 289 Mich 619, 625;
286 NW2d 854 (1939). This challenge to the foreclosure was filed well before the
expiration of the redemption period, was without delay, and should be permitted.
B. Equitable Relief is Available:
1. To Remedy Defendant’s Fraud, Accident or Mistake,
2. When A Failing to Record Misled the Plaintiff ,
3. Damage Caused by Surprise or Unfairness Should Enforce
Requirement to Record.
The Court of Appeals is not bound to follow decisions decided before November
1, 1990 per MCR 7.215(I)(1); Yee v Shiawassee Co Bd of Comm’rs, 251 Mich App 379,
400; 651 Nw2d 756 (2002), yet the only published cases used in recent unpublished
opinions are those from the 1930s. They do provide some insight and instruction on what
to do when a mortgagor is damaged by a failing to timely file the deed from a foreclosure
sale. In Mendola v Harvey, COA 255697 (Exhibit 6) the Court of Appeals states:
“In Lilly v Gibbs, 39 Mich 394, 395 (1978) our Supreme Court termed the
failure to file ‘an irregularity which was apt to mislead and make
trouble.’ A difference of a few days between the sale and the recording
misled the register of deeds and brought on the controversy by precluding
the mortgagor from redeeming the property during the narrow time frame
between one year from the date of sale and the anniversary of the
recording. Id. at 396-397.”
“Finally, in Mills v Jirasek, 267 Mich 609, 610; 255 NW 402 (1934), our
Supreme Court considered the effect of a late filing that occurred in
September after a May foreclosure sale. The Court noted that earlier
decisions may have motivated an 1875 amendment to the statute setting
twenty days as the reasonable time after sale that a deed may be filed. Id.
at 613-614. It further noted that statutes regulating foreclosure sales and
subsequent recordings “were intended to prevent surprise or
unfairness, and they should be enforced in everything substantial.” Id.
at 614 (quotation, citation omitted).”
In Angeleri v B&P Group, Inc., COA 260134, (Exhibit 7)
The Court states:
“Foreclosure by Advertisement Does Not Bar All Equitable Relief”
“Neither this Court (of Appeals) nor our Supreme Court has been so harsh
as to prohibit any equitable considerations from affecting a trial court’s
ruling on a statutory matter. In Detroit Trust Co v George, 262 Mich 362,
364; 247 NW 697 (1933), or Supreme Court noted that, even when a
foreclosure is conducted pursuant to statute, equitable relief is still
available in cases of fraud, accident, or mistake. Id. quoting Palmer v
Palmer, 194 Mich 79, 80-81; 160 NW 404 (1916).”
“…equitable considerations necessitating deviation from the requirements
of (MCL 600.3240) are permitted in cases of fraud, accident, or mistake.”
The defendant’s own brief in support of their motion for summary disposition
even cites Michigan case law that states equitable considerations are appropriate in light
of “fraud, accident, or mistake”. Deutsche Bank Trust Co Americas v Spot Realty, Inc.
269 Mich App 607, 618; 714 NW2d 409 (2005). (Exhibit 8, page 5)
C. The Elements of Accident, Mistake, Surprise, & Unfairness have
Misled the Plaintiff, are Alleged in the Pleadings, and Supported by
On June 1, 2009 Schneiderman & Sherman sent a letter to Livingston that stated
the mortgagor owed $339,941.64. (Exhibit 9) On July 2, 2009, before 9:00am,
Livingston filed a bankruptcy case under Chapter 11 of the United States Bankruptcy
Code which automatically stayed actions against the debtor’s (Livingston’s) property.
This case filing would therefore stay Huntington Mortgage’s foreclosure sale scheduled
for the same day.
However, unbeknownst to Livingston, Huntington Mortgage moved forward and
conducted the foreclosure sale that day. Huntington Mortgage later moved to remove the
home from the Chapter 11 estate, but never included any information regarding the
foreclosure proceedings and would not respond to Livingston’s repeated attempts to
obtain any information regarding the foreclosure, including letters on September 15, 2009
and October 15, 2009. (Exhibit 10)
On 9/15/09 Livingston wrote:
“Can you fax me a copy of the documents pertaining to the
foreclosure sale. I stopped by the Register of Deeds and
there was no documentation on file. I also called the
Sherriff and the person in charge of the Sherriff’s sales did
not have any record of the sale.” “you can fax those
documents to 269-543-5042”
On 10/15/09 Livingston wrote:
“Please send documents created and other proof from the
Sherriff’s auction. For example, those documents that the
Sherriff’s department filled out.”
“Documents filed with the Register of Deeds.”
Brett Border and Schneiderman & Sherman did not answer any of
A phone call to the Sheriff’s auction revealed that the mortgagees prepare all the
documents and submit them to the Sheriff at the recurring day and time these sales take
place. The sheriff auctions the property, fills out the documents and gives them back to
the mortgagee. The sheriff does not use any kind of list to manage properties scheduled
for auction that day nor do they make any recordings of auctions conducted. The sheriff
acts as the auctioneer and hands all paperwork back to the mortgagee to have the
documents recorded. Even though the document is called a sheriff’s deed, the sheriff has
no ownership or control over the paperwork, nor does the sheriff maintain any record of
The Register of Deeds does not have any information on file about foreclosures
until the mortgagee records the sales deed from the sheriff’s auction and the plaintiff
made repeated calls to the Register of Deeds and finally desisted after phone call after
phone call produced no information.
The plaintiff finally made another phone call on February 24, 2010 to the Register
of Deeds to see if the foreclosure sale and the redemption terms had been recorded. It was
on this date that the plaintiff learned that the redemption amount was not the $339,941.64
stated in the last communication from Huntington Mortgage, but rather $178,115.00. In
other words, the plaintiff found out that the redemption amount was over $161,826 less
than what was last stated to the plaintiff, and this was found after losing a full eight
months of the redemption period. (Exhibit 11).
The sheriff has no ownership over recording the deed. There were no extra copies
of the sale on July 2, 2009 and all information was fully held by Schneiderman &
Sherman and Huntington Mortgage.
After receiving the information from the Register of Deed, the plaintiff read the
following statements on THE AFFIDAVIT OF PURCHASE AT FORECLOSURE
SALE TO BE RECORDED WITH SHERRIFF’S DEED. (Exhibit 11). This document
states the following:
3. “The last date this property can be redeemed is 07/2/2010. ANY
REDEEMING PARTY SHOULD NOT THAT THIS DATE MAY CHANGE AS SET
FORTH IN SUBSEQUENT AFFIDAVITS OR AS PROVIDED BY APPLICABLE
4. “The amount necessary to redeem the Property is $178,115.00 from the
date of sale to the date of redemption.”
5. “The Purchaser described herein has designated Schneiderman &
Sherman, P.C. as its designee responsible to assist an appropriate person redeeming the
Property in computing the exact amount required to redeem the Property and to receive
redemption funds. …Contact MARY KISH at Schneiderman & Sherman, at (248) 539-
In the defendant’s brief for summary disposition, the defendant reiterates that “In
order to redeem the property, a person would need to contact the office of Schneiderman
& Sherman, P.C. to request the specific amount needed to redeem the property.” (Exhibit
20, page 3). In other words, a homeowner can not pursue rights to redemption without
knowing what the terms of the redemption would be. Huntington Mortgage designated
Schneiderman & Sherman as the contact for the plaintiff, and Schneiderman & Sherman
would not respond to the plaintiff’s repeated efforts to obtain the necessary information.
In fact, on September 16, 2010, the defendant, for the first time ever, provided the terms
of the redemption. (Exhibit 12).
D. The Defendant’s Claims That They Were Confused by a Chapter 11
Stay Have No Merit.
The defendant claims that they could not file the deed because there was a
Chapter 11 stay in place. The weakness in this argument is that they moved forward with
the foreclosure anyway, so it would only seem logical to go ahead and file what they had
done and strike it if necessary. If there were any doubt about their ability to conduct the
foreclosure on that day the defendant could easily adjourn the sale date in accordance
with MCL 125.1449e (Exhibit 13). This statute states that the sale may be adjourned by
the “party in whose name the notice of sale is published by posting a notice of such
adjournment where the sale is to be made, and published in the newspaper in which the
original notice was published.” This action would have allowed Huntington Mortgage to
adjourn the sale without having to go through the entire process of notice as required
before a foreclosure may be scheduled. It would be clear to all parties involved, including
the mortgagor, when a foreclosure would actually be held and avoid the confusion that
resulted from the actions taken by Huntington Mortgage in this instance.
E. The Plaintiff’s Pleadings Make Specific Allegations and Request
Relief Available in a Court of Equity, Thus Their Motion for
Summary Disposition Pursuant to MCR 2.116(C)(8) Must Fail.
A motion for summary disposition pursuant to MCR 2.116(C)(8) tests the legal
sufficiency of the complaint. Dolan v Continental Airlines/Continental Express, 454
Mich 373, 380 (1997). “All well pleaded allegations are accepted as true, and construed
most favorably to the non moving party.” Wade v Dep’t of Corr, 439 Mich 158, 162, 163
(1992). A motion under MCR 2.116(C)(8) may be granted only where the claims alleged
are “so clearly unenforceable as a matter of law that no factual development could
possibly justify recovery.” Wade, supra at 163. A mere statement of conclusions,
unsupported by factual allegations, is not sufficient to state a cause of action. ETT
Ambulance Svc Corp v Rockford Ambulance, Inc, 204 Mich App 392, 395 (1994). When
deciding a motion brought under this section, a court may consider only the parties’
pleadings. MCR 2.116(G)(5).
The plaintiff’s pleadings include these statements: (Exhibit 14)
6. “Foreclosure proceedings were initiated, and a date set for sale of the premises
was in the notice of publication for May 1, 2008 at 9:00 am.
7. The defendant offered the plaintiff a “Workout Package” to avoid foreclosure.
8. The plaintiff worked in good faith to provide information requested from the
defendant for this “Workout Package”.
9. April 30, 2008 at 2:21 pm the defendant sent an email to the plaintiff that the
defendant would not allow the plaintiff to participate in this program.
10. The plaintiff received a bankruptcy stay on May 1, 2008 at 8:16 am from West
Michigan United States Bankruptcy Court before the sheriff’s auction to stop the
18. June 1, 2009 the defendant sent a statement to the plaintiff with a balance owing
on the mortgage of $339,941.64.
19. Foreclosure proceedings were initiated, and a date set for sale of the premises was
in the notice of publication for July 2, 2009 at 9:00 am.
21. The plaintiff again filed for Chapter 11 Bankruptcy protection the morning before
the sheriff’s auction.
22. On July 2, 2009 at 9:00 am, holding the bidding open until 10:00am, the property
was sold by the Sheriff of Allegan County back to the defendant for the amount of
24. In accordance with MCL 600.3130 the statute of limitations required the sheriff’s
deed be filed by July 22, 2009.
25. On July 23, 2009 the defendant filed a motion for relief from the bankruptcy stay.
26. There was no documented evidence included in this motion that a foreclosure sale
ever took place. There was no information regarding the actual sale and the terms
of the redemption.
27. On September 15, 2009 the plaintiff requested from the defendant a copy of the
documents created for the Sheriff’s sale as proof a sale actually took place as well
as the redemption terms. This request was sent via fax and email to the
28. The defendant sent no response to this request.
31. On October 15, 2010 the plaintiff once again sent a request to the defendant for
the terms of redemption. There was no response.
32. On February 22, 2010 the plaintiff received from the register of deeds a faxed
copy of the documents the defendant filed recording the sheriff’s sale. This
information included the terms of the redemption. The property can be redeemed
33. In reviewing the defendant’s actions, specifically regarding the plaintiff’s rights to
redemption, the plaintiff’s rights to redemption have been infringed in that the
complete terms of the redemption were withheld intentionally from the plaintiff
and even after the plaintiff made specific requests to the defendant.
“Finding that the redemption period stated on the sheriff’s deed does not reflect the
full redemption period as allowed by law, plaintiff respectfully requests that this
Honorable Court order that redemption period begins once the plaintiff received the
terms of the redemption.”
********************** END OF PLEADINGS **********************
The plaintiff has already presented existing cases in our Michigan Supreme Court
and The Court of Appeals that a court of equity may modify a redemption period and, in
extreme cases, void a foreclosure sale due to procedural irregularities after the sale has
already occurred, and within five years after the end of the redemption period. The instant
case meets those standards and qualifies for some equitable relief.
The next question in the defendant’s motion for summary disposition under MCR
2.116(C)(8) is whether the allegations are specific enough. The allegations state a specific
action, response, or non response, by a specific person at a specific time. The allegations
are stated with required specificity.
F. The Defendant’s Motion for Summary Disposition Under MCR
2.116(C)(10) Does Not Meet The Requirements to be Granted.
In presenting a motion for summary disposition under MCR 2.116(C)(10), “the
moving party has the initial burden of supporting its position by affidavits, depositions,
admissions, or other documentary evidence.” Neubacher v Globe Furniture Rentals, Inc,
205 Mich App 418, 420 (1994).
The defendant never addresses the fact that the plaintiff made repeated efforts to
get the redemption terms from the defendant, and those requests were ignored. None of
the evidence would support a defense had they attempted to defend themselves from
The defendant’s first three exhibits are nothing more than reproductions of the
mortgage on file at the Register of Deeds. The plaintiff is not contesting the mortgage.
The defendant’s exhibits 4, 5, and 6 support the defendant’s accounting of the
Chapter 11 proceedings. Although the Chapter 11 stay and its relevance was once a legal
question, it was decided by U.S. Bankruptcy Court in September. Nothing precluded the
defendant from acting in good faith and updating the plaintiff regarding the foreclosure
proceedings. After that date, the plaintiff contends that the defendant is liable in that they
were assigned the responsibility for providing necessary redemption information to the
plaintiff and the defendant ignored the plaintiff’s requests.
The defendant then includes a copy of the sheriff’s deed. There is nothing in these
documents that explains why Brett Border and Schneiderman & Sherman did not respond
to the plaintiff’s genuine requests to get the information necessary to work on redeeming
the property. Exactly the opposite, the deed actually states that Schneiderman & Sherman
is the entity to contact for necessary redemption information.
None of these documents defend themselves against the allegations in the
complaint, specifically allegations 8, 9, 26, 27, 28, 31, 32, and 33.
The plaintiff provides several documents supporting the allegations made in the
pleadings. “All evidence should be considered in the light most favorable to the
nonmoving party.” Brown v Brown, 478 Mich 545, 551, 552 (2007).
Exhibit 8 demonstrates that Huntington Mortgage took actions in an attempt to
discourage the plaintiff from seeking legal counsel regarding the impending foreclosure
on the house. The Huntington Mortgage presented a “Workout Package” with no sincere
intent to actually allow the plaintiff to participate in such a program, and then just hours
before the foreclosure revealed that they would not offer such a program.
Exhibits 10, 11, 12, and 13 demonstrate that there was confusion over the
redemption terms and that the plaintiff made genuine efforts to get accurate information.
The defendant does not offer any argument or evidence that disputes the relevancy of the
arguments and the supporting evidence. An affidavit from Brett Border, who received the
information requests from the plaintiff, would defend the defendant against the primary
basis for this complaint. An affidavit from this witness was not submitted. Nobody at
Huntington Mortgage or Schneiderman and Sherman, other than Brett Border, possesses
the personal knowledge of these facts required to submit an affidavit.
Discovery has not commenced in this case, nor has the court conducted a pre-trial.
“Generally, motions based on MCR 2.116(C)(10) should not be filed until discovery is
completed.” Colista v Thomas, 241 Mich App 529, 537 (2000).
The plaintiff has provided a legal basis to file this complaint in a court of equity
as well as potential remedies available to circuit courts. The plaintiff is the only party to
present the facts supporting the claim that the defendant’s actions constitute at the very
least accident or mistake, that the failing to record or provide requested information
misled the plaintiff, and that surprise and unfairness caused damage to the plaintiff in that
not knowing the terms of the redemption prejudiced the plaintiff’s ability to work on
redeeming the property. Therefore equitable relief is available.
After a hearing on a motion for summary disposition a court may order
1. judgment for the moving party, MCR 2.116(I)(1);
2. judgment for the nonmoving party, MCR 2.116(I)(2);
3. an immediate trial on disputed issues, subject to the requirements in MCR
4. postponement until trial of a hearing and decision on the matters, MCR
In light of the fact that the defendant does not defend against the allegations and
does not present any evidence relevant to the dispute, the plaintiff respectfully requests
that this Honorable Court enter judgment for the nonmoving party in accordance with
MCR 2.116(I)(2) AND
Adjusts the redemption period to reflect the evidence proffered that the
foreclosure was unknown and the terms were unknown until February 22, 2010 and
therefore the redemption period runs from that date.
Date Richard Livingston
2594 Chase Farm
Fennville, MI 49408