Family Deposits $907,000 for a Farm 24 Days After the Statute's Year Ended

The record is a nine-page opinion of the Michigan Court of Appeals in Kessler v Longview Agricultural Asset Management, docket number 360375, issued January 12, 2023 and marked for publication. The Desk read all nine pages. What follows is what the opinion says, set beside what the people in it believed at the time.

The property is 14 parcels in the Township of Montague in Muskegon County that the opinion calls "the farm." On December 11, 2018 the owner gave the lender a mortgage for $525,000. The lender submitted that he never made a single mortgage payment. The mortgage was foreclosed by advertisement. The sheriff's sale was August 21, 2020. The farm was sold to the lender for $724,118.54.

Michigan gives a former owner a period to buy the property back. MCL 600.3240 sets it. The opinion quotes the two subsections that could apply to this farm and both carry the same words: "the redemption period is 1 year from the date of the sale." One year from August 21, 2020 is August 21, 2021.

The first document is the sheriff's deed. A separate statute, MCL 600.3232, tells the officer making the sale to endorse on the deed "the time when the same will become operative in case the premises are not redeemed," and says the deed shall be deposited with the register of deeds "within 20 days after such sale." The lender's account of the paperwork, as the opinion summarizes it, runs this way. The deed stated that the redemption period was one year from August 21, 2020. It arrived at the register on August 27. On September 4 the lender's lawyer was notified that it had been rejected for recording because tax-exempt codes were missing. The register required a transfer tax of $796.95. A check went out by overnight delivery on September 9. The deed was recorded on September 14, 2020. That is 24 days after the sale and four days past the 20 the statute allows.

The second document is a set of messages. By the lender's account, on August 19 and 20, 2021 the owner's daughter left a voice mail message and sent emails to the lender's lawyer. She noted that the deadline for redemption was August 21, 2021 and that financing to redeem had not been secured. She asked whether there was a "buy back" option or an extension.

The third document is a complaint filed on September 14, 2021. The family contended that on that day they deposited $907,000 into escrow with the county register of deeds. Their position was that the year began when the deed was recorded and so ended on September 14, 2021. The late recording and the late money share a number. The deed was recorded 24 days after the sale. The deposit came 24 days after August 21, 2021.

The family had two authorities to point to. The first was Lilly v Gibbs, an 1878 decision of the Michigan Supreme Court. In that case a deed was made and filed four days after the property was struck off, the register told the owner repeatedly that the time would run from the deposit of the deed, and the court held that the owner had been deprived of his right to redeem while the time was still current. The second was a 2014 opinion in which an earlier panel of the Court of Appeals read the two statutes together and concluded that the redemption period could be extended by MCL 600.3232. That opinion was unpublished. The 2023 panel wrote that unpublished decisions are not binding precedent, that it did not find the 2014 decision to be persuasive, and that it declined to adopt it. Of the 1878 case the panel wrote that since then "the foreclosure statutes have been amended many times."

In September 2021 a person reading the case law could find the state's highest court in 1878 and an appellate panel in 2014 on the side of the later date. A person reading the statute could find "from the date of the sale." The panel enforced the statute and affirmed.

Two pairs of sentences sit next to each other in the opinion and the Desk leaves them there. The statute says the deed shall be deposited within 20 days. The panel wrote that the statute "contains no remedy for the failure to make the deposit within 20 days" and that "there are no penalties for noncompliance." The sheriff is to write the date for redemption on the deed. The panel wrote that "there is no indication that it is binding." For the other deadline the panel quoted an earlier decision: if the owner does not redeem in time, "all the mortgagor's rights in and to the property are extinguished."

One figure in the opinion does not add up, and the figure is the court's. The opinion gives the deposit as $907,000 and the redemption amount as $871,111.46. It says the refund sought was $35,888.51. The first number minus the second is $35,888.54. The three cents are not explained anywhere in the nine pages.

The opinion does not say what the farm was worth, who farms it now or whether the $907,000 was returned.

Nothing to reconcile against. Filed as one account.

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Witnesses on file: one. The Desk went looking for a second account of these events and found only items that cite this same opinion: a state bar summary, a title insurer's bulletin and a trade group's post. It read them. None reports anything about these events that is not in the opinion. Everything above rests on a single source.

Copyright: Meridian, The Reconciliation Desk. This material may be reproduced freely by any party willing to be audited.