v No Kent Circuit Court

Transcription

1 S T A T E O F M I C H I G A N C O U R T O F A P P E A L S GRR CAPITAL FUNDING LLC, Plaintiff-Appellee, UNPUBLISHED September 19, 2017 v No Kent Circuit Court STEVEN D. BENNER, LC No CH Defendant-Appellant. Before: TALBOT, C.J., and O CONNELL and CAMERON, JJ. PER CURIAM. Defendant, Steven D. Benner, appeals as of right the April 27, 2016 order entering a consent judgment against him and in favor of plaintiff, GRR Capital Funding LLC. We affirm. I. FACTUAL BACKGROUND Defendant is the guarantor of a number of companies (the borrowers ) that executed and delivered mortgages to Comerica Bank for the purchase of commercial properties. Comerica filed a complaint against defendant in 2011 after the borrowers filed for Chapter 11 bankruptcy. On June 19, 2012, Comerica and defendant reached a settlement. The trial court would dismiss the case without prejudice, but Comerica retained the right to enter a predetermined consent judgment in the event that the borrowers defaulted under their plan of reorganization. In October 2013, Comerica claimed there was a default and sought entry of the consent judgment against defendant, but the trial court denied the request, concluding that the bankruptcy court should first rule on the matter. Thereafter, the bankruptcy court converted the Chapter 11 bankruptcy to a Chapter 7 liquidation. On April 27, 2014, Comerica, defendant, and the borrowers entered into a bankruptcy settlement agreement, which would release defendant from any personal guaranty as long as no one interfered with Comerica s ability to enforce its rights under the settlement agreement. The settlement agreement required the delivery of deeds in lieu of foreclosure, powers of attorney, and a confession for the appointment of a receiver. The documents would be held in escrow until the borrowers paid the settlement amount of $18.75 million in a single final settlement payment. If a default occurred, Comerica could record the deeds in lieu of foreclosure and obtain a receiver to sell the properties. -1-

2 Subsequently, the borrowers failed to remit payment, constituting a default under the settlement agreement. In light of the default, Comerica exercised its right to record the deeds in lieu of foreclosure and obtained a receiver. On September 9, 2014, a total of 21 properties went into the receivership estate. Around that time, Comerica obtained a personal protection order against defendant after serious threats were made against Comerica s employees. In December 2014, plaintiff purchased the note from Comerica for $18.75 million, and Comerica assigned its rights to plaintiff. Plaintiff then recorded the deeds in lieu of foreclosure, and the trial court entered an order substituting plaintiff for Comerica. On February 6, 2015, defendant filed a motion for an order vacating the deeds in lieu of foreclosure and for an order to hold plaintiff in contempt for violating the receivership stay. The trial court denied the motion, as well as defendant s subsequent motion for reconsideration. On July 8, 2015, plaintiff filed a motion to set aside the order of dismissal, reinstate the case, and enter a consent judgment against defendant. Plaintiff claimed that defendant had interfered with its ability to enforce the settlement agreement when it filed the February 6, 2015 motion, which constituted a default under 10.1(e) of the settlement agreement and allowed plaintiff to pursue all remedies against defendant as personal guarantor. Thus, plaintiff requested that defendant pay the original amount owed, which included interest and attorney fees, less the $18.75 million satisfied by the deeds in lieu of foreclosure. In an opinion and order, the trial court concluded that defendant chose a path of massive resistance when defendant opposed the appointment of a receiver, sought to vacate the deeds in lieu of foreclosure, sought a contempt order against plaintiff, and even opposed substituting Comerica with plaintiff. Therefore, the trial court granted plaintiff s motion and directed it to submit a proposed consent judgment. Plaintiff sought in its proposed consent judgment approximately $2.6 million, which represented a total indebtedness of $21.3 million 1 less the $18.75 million satisfied by way of the deeds in lieu of foreclosure. Defendant objected to the proposed consent judgment, claiming it did not conform to the terms of the settlement agreement. 2 After a hearing on the objection, the trial court entered the proposed consent judgment in favor of plaintiff. The trial court thereafter denied defendant s motion for reconsideration. On appeal, plaintiff challenges this Court s jurisdiction to hear this case. If this Court does have jurisdiction, defendant argues (1) the trial court lacked subject-matter jurisdiction to enter the consent judgment, (2) the consent judgment failed to conform to the settlement agreement, and (3) the award in the consent judgment was inaccurate. 1 Plaintiff was originally entitled to approximately $23 million, but it elected to forgo two years of accrued interest. 2 Between October 2015 and January 2016, defendant also filed numerous motions, along with several supplemental responses to plaintiff s motion. Defendant sought to amend the pleadings to add claims and defenses, as well as a permanent ex-parte injunction, a temporary restraining order against plaintiff, and multiple attempts to recuse the trial court judge. -2-

3 II. APPELLATE JURISDICTION We turn first to plaintiff s challenge to this Court s jurisdiction over the appeal. Plaintiff acknowledges that the appeal was timely, but it asserts that defendant is not able to appeal a consent judgment. We disagree. Plaintiff cites Dora v Lesinski, 351 Mich 579; 88 NW2d 592 (1958), for this proposition. Indeed, the Dora Court stated, It is elementary that one cannot appeal from a consent judgment, order or decree. Id. at 582. However, defendant objected to entry of the consent judgment, and his arguments on appeal are not addressed in the underlying consent judgment. See generally Nexteer Auto Corp v Mando America Corp, 314 Mich App 391, ; 886 NW2d 906 (2016) ( To waive a right, the language of [an agreement] must show an intent to plainly relinquish that right. ). Defendant s arguments instead relate to the trial court s subject-matter jurisdiction, whether the settlement agreement barred entry of the consent judgment, and the amount received to reduce liability. Thus, we reject plaintiff s jurisdictional challenge. III. SUBJECT-MATTER JURISDICTION Defendant argues that the trial court lacked subject-matter jurisdiction in this case and could not enter the consent judgment. We disagree. Whether the trial court had subject-matter jurisdiction is a question of law that this Court reviews de novo. Bank v Mich Ed Ass n-nea, 315 Mich App 496, 499; 892 NW2d 1 (2016). A court s subject-matter jurisdiction is determined only by reference to the allegations listed in the complaint, and [i]f it is apparent from the allegations that the matter alleged is within the class of cases with regard to which the court has the power to act, then subject-matter jurisdiction exists. Grubb Creek Action Comm v Shiawassee Co Drain Comm r, 218 Mich App 665, 668; 554 NW2d 612 (1996). The existence of subject-matter jurisdiction does not depend on the correctness of the trial court s ultimate legal conclusions. Usitalo v Landon, 299 Mich App 222, 228; 829 NW2d 359 (2012). The 1963 Michigan Constitution, art. 6, 1, establishes the circuit court as a trial court of general jurisdiction and authorizes the Legislature to establish courts of limited jurisdiction. Hodge v State Farm Mut Auto Ins Co, 499 Mich 211, 216; 884 NW2d 238 (2016). As set forth in MCL , Circuit courts have original jurisdiction to hear and determine all civil claims and remedies, except where exclusive jurisdiction is given in the constitution or by statute to some other court or where the circuit courts are denied jurisdiction by the constitution or statutes of this state. For instance, district courts have exclusive jurisdiction over all civil actions that do not exceed $25,000. MCL (1). On appeal, defendant claims that the bankruptcy court had sole jurisdiction over the case, but he cites no authority to support his position; thus, we deem the issue abandoned. See Liggett Rest Group, Inc v Pontiac, 260 Mich App 127, 138; 676 NW2d 633 (2003) ( This Court will not search for law to sustain a party s position where that party neglects to cite any supporting authority for its claim. ). Even if we were to address the issue, the trial court had subject-matter jurisdiction. Our cases have long held that courts are to determine their subject-matter jurisdiction by reference to the pleadings. Hodge, 499 Mich at 217. A review of the complaint -3-

4 indicates that Comerica, which was eventually substituted with plaintiff, sought to enforce a personal guaranty well in excess of $25,000, proving this was a proper action to litigate in circuit court. Additionally, the bankruptcy settlement agreement did not attempt to retain sole jurisdiction over matters arising from the settlement agreement. In fact, the settlement agreement provided that the parties could continue to file or participate in Other Enforcement Actions. More importantly, the instant case does not involve the enforcement of the bankruptcy settlement agreement; rather, the instant case involves the enforcement of defendant s personal guarantee, which is separate from the bankruptcy matter between the borrowers and plaintiff. IV. CONSENT JUDGMENT Next, defendant argues that the proposed consent judgment, which was eventually entered by the trial court, failed to conform to the subsequent bankruptcy settlement agreement. We disagree. We review the proper interpretation of an agreement de novo. Duffy v Irons Area Tourist Ass n, 300 Mich App 542, 546; 834 NW2d 508 (2013). Defendant misconstrues the agreement. First, defendant argues that 6.4 of the settlement agreement required plaintiff to sell certain real estate before it could hold him liable on the personal guaranty. The relevant parts of this provision merely involve the conditions under which defendant would be released from his guaranty. It does not state that there must be a sale of the real estate before defendant could be held liable on the guaranty. Second, defendant argues that he did not receive notice of default and that he should have been given an opportunity to cure any default. This argument is based on a misunderstanding of Under 10.1(e), a default would occur if defendant, as guarantor, took any action which impedes [plaintiff s] ability to enforce its rights under [the settlement agreement] or the Enforcement Documents, either directly or indirectly, including, without limitation, filing a bankruptcy petition or the commencement of any other legal, judicial or quasi-judicial proceedings. Defendant impeded plaintiff s ability to enforce its rights when he attempted to vacate the deeds in lieu of foreclosure, among other legal challenges. Because defendant defaulted under 10.1(e), he was liable as personal guarantor, and the settlement agreement provided no right to cure any default under 10.3(e). 3 V. JUDGMENT AMOUNT Finally, defendant argues (1) plaintiff originally sought $16 million, rather than $21.3 million against the borrowers in bankruptcy court, and (2) there is evidence that plaintiff paid $25 million, rather than $18.75 million, in consideration for the note securing the properties. For these two reasons, defendant claims he should be relieved of any personal obligation. We disagree. 3 Within this argument, defendant notes in passing such issues as a violation of the Fair Lending Act and the alleged fact that Comerica is seeking recovery of additional amounts. However, as the trial court noted, these issues are not relevant to this case. -4-

5 Defendant failed to preserve these issues because he did not raise them in a timely manner. See King v Oakland Co Prosecutor, 303 Mich App 222, 239 n 6; 842 NW2d 403 (2013) (explaining that a brief was filed after the December 17, 2010, opinion and order deciding the case and, thus, it did not timely raise the issue for purposes of preservation ); Int l Union, United Auto, Aerospace & Agricultural Implement Workers of America v Dorsey, 273 Mich App 26, 45; 730 NW2d 17 (2006) ( To preserve most issues, a party must object below. Objections must be timely. ). As the trial court noted, defendant had multiple opportunities to challenge the amount, and MCR 2.602(B)(3) does not allow him to raise new arguments in an attempt to relitigate the underlying issues. We decline to overlook the preservation requirements, see Nuculovic v Hill, 287 Mich App 58, 63; 783 NW2d 124 (2010) (explaining the circumstances in which this Court may overlook the preservation requirements), and do not address these issues, see In re Gerald L Pollack Trust, 309 Mich App 125, 153 n 8; 867 NW2d 884 (2015) (explaining that this Court need not address unpreserved issues). Affirmed. /s/ Michael J. Talbot /s/ Peter D. O'Connell /s/ Thomas C. Cameron -5-