STATE OF MICHIGAN
COURT OF APPEALS
RICHARD WARNER and JOHANNA UNPUBLISHED
RICHARDSON, October 21, 2014
Plaintiffs/Counterdefendants-
Appellants,
v No. 316613
Marquette Circuit Court
SUZANNE S. SCHLAF, Individually and as LC No. 12-050910-CZ
Trustee of the SUZANNE S. SCHLAF TRUST,
Defendant/Counterplaintiff-
Appellee.
SUZANNE S. SCHLAF,
Plaintiff-Appellee,
v No. 316616
Marquette Circuit Court
ANNA WARNER, LAURA MERCIER, HENRY LC No. 06-044020-CH
JOHNSON, CARL JOHNSON, CHRISTINE
(KITTY) CHRISTENSEN, MILFORD
JOHNSON, and EILEEN JOHNSON,
Defendants,
and
RICHARD WARNER and JOHANNA
RICHARDSON,
Appellants.
Before: MURPHY, C.J., and SAWYER and M. J. KELLY, JJ.
PER CURIAM.
On December 12, 2006, a default judgment was entered granting Suzanne Schlaf fee
simple title to a vacant piece of land in Ishpeming, Michigan. On November 13, 2012, Richard
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Warner and Johanna Richardson filed a complaint requesting that the lower court set aside the
default judgment, and that it grant sanctions and attorney fees under MCR 2.114. The two cases
were consolidated and ultimately, the lower court set aside the default judgment as it pertained to
Warner and Richardson but not as it pertained to defendants in the quiet title action. It denied
the request for sanctions and attorney fees. Warner and Richardson now appeal by right. We
affirm.
This case involves a 160-acre parcel of undeveloped property. For purposes of this case,
the chain of title originates with Christ and Ellen Johnson, the great-grandparents of Warner,
Richardson and Schlaf. At death, Ellen Johnson passed equal 1/8th shares of the property to her
living children, one of whom was Inga Goldsby, who passed her 1/8th interest to her daughter,
Lyla Schultz, who in turn quit-claimed the interest to her daughter, Schlaf. Another initial
recipient was Anna Warner, the grandmother of appellants Warner and Richardson. Their
father’s estate was never probated so it is unclear whether his interest passed to them or to Hazel
Warner, his widow. Rae Elliot, who held another 1/8th interest, quit-claimed it to Schlaf in
1997, and Evelyn Caven, another interest holder, quit-claimed her interest to Schlaf in 1998.
In 2006, Schlaf initiated a quiet title action, allegedly believing that she was the last
living person with an interest in the property. She named Ellen Johnson’s heirs and all of their
unknown heirs, spouses, devisees and assignees as defendants. Schlaf averred 1) that she could
not locate known addresses for any of the relevant defendants; 2) that she had searched the
Marquette County Records and found no information concerning the status or identity of any
named or unnamed defendants; and 3) that she had been in sole possession of the property since
1976 and that no defendant had attempted to pay the property’s taxes. Schlaf sought a fee simple
title free and clear of any claim by the defendants. On October 6, 2006, the lower court ordered
defendants to answer and required that a notice of the suit be published in the Marquette Mining
Journal. On December 12, 2006, the lower court granted Schlaf a default judgment quieting title
to the property.
On November 13, 2012, Warner and Richardson filed a complaint claiming that Schlaf
had perpetrated a fraud on the lower court by making false statements in the 2006 quiet title
action. They asserted that Schlaf falsely claimed that she was the only person with an interest in
the property and that she had no way of contacting any of the defendants. In support of their
claim, they provided letters that they had received from Schlaf and her husband in 1987 and
1988. The letters were addressed to family members and provided updates on the property,
notified of timber harvests for the payment of property taxes, informed of excess timber harvest
revenue, and requested that younger generations of the family begin participating in the
property’s maintenance. In addition, Warner claimed that Schlaf’s husband called him in 2005
to confirm his mailing address. Warner and Richardson argued that this proved that Schlaf knew
of their interest in the property. Therefore, Warner and Richardson requested that the lower
court set aside the default judgment and sanction Schlaf under MCR 2.114 for filing a false and
frivolous claim. Moreover, during the proceedings they provided a quit claim deed that they had
received from Hazel Warner on March 5, 2013.
The lower court found that it did not have personal jurisdiction over Warner and
Richardson at the time it issued the default judgment because they were not properly notified of
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the 2006 quiet title action. As a result, it set aside the default judgment under MCR 2.116(C)(3)
to the extent it foreclosed any interest they might have in the property. The court also stated:
Now, I’m setting this aside not on the basis of fraud on the court. . . . I don’t find
from the undisputed facts that Suzanne Schlaf in any way committed a fraud on
the court. . . . She and her husband were in fact the caretakers of the property, had
in fact paid property taxes on it, or had taken care of seeing the timber was cut,
did attempt to provide distribution to other interested parties, did exercise
diligence in looking at the chain of title in the Register of Deeds office, did
exercise diligence in determining whether or not there was any probate, and
concluded, wrongly I think, in my judgment, that [Warner and Richardson] had
no interest in the property. And they brought this quiet title action not to seek any
great personal gain, but to try to get some – get the title clarified to this property.
And I just cannot conclude from these undisputed facts that there was any
wrongful or fraudulent intent here.
As a result, the lower court denied the request for sanctions, granting only nominal statutory
costs. Finally, the lower court denied the request to set aside the default judgment as it pertained
to the defendants in the 2006 quiet title action because the remaining defendants were not before
the court asking for relief.
I. THE DEFAULT JUDGMENT
Warner and Richardson argue that the lower court erred in denying their request to set
aside the 2006 default judgment as it applies to the remaining defendants. We disagree. Warner
and Richardson lack standing to request relief from the default judgment on behalf of the
remaining defendants. “To have standing, a party must have a legally protected interest that is in
jeopardy of being adversely affected.” Barclae v Zarb, 300 Mich App 455, 483; 834 NW2d 100
(2013). The interest must be based on a plaintiff’s own legal rights, and not on the legal rights or
interests of third parties. Id. Here, the only legally protected interests of Warner and Richardson
are their own potential shares in the property. While they may be affected by the division of the
property amongst other family members, they do not have standing to bring a claim based on the
rights of the remaining defendants. “A real party in interest is one who is vested with a right of
action in a given claim, although the beneficial interest may be with another.” MOSES Inc v
SEMCOG, 270 Mich App 401, 415; 716 NW2d 278 (2006). Warner and Richardson simply
cannot base their claim on property rights owned by the remaining defendants. See Walgreen Co
v Macomb Twp, 280 Mich App 58, 66; 760 NW2d 594 (2008). If any of the remaining
defendants wish to have the default judgment set aside, they themselves must come before the
lower court.
II. SANCTIONS
Warner and Richardson also argue that the lower court erred in denying their request for
sanctions. Again, we disagree. This Court reviews a lower court’s finding that an action is not
frivolous for clear error. Kitchen v Kitchen, 465 Mich 654, 661-662; 641 NW2d 245 (2002). “A
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decision is clearly erroneous where, although there is evidence to support it, the reviewing court
is left with a definite and firm conviction that a mistake has been made.” Id.
Under MCR 2.114(E), a party to an action may be sanctioned for submitting a claim not
grounded in fact or warranted by existing law. Similarly, under MCR 2.114(F), a court may
sanction a party for pleading a frivolous claim or defense. “The purpose of imposing
sanctions . . . is to deter parties and attorneys from filing documents or asserting claims and
defenses that have not been sufficiently investigated and researched or that are intended to serve
an improper purpose.” BJ’s & Sons Const Co, Inc v Van Sickle, 266 Mich App 400, 405; 700
NW2d 432 (2005).
It is undisputed that Schlaf and her husband have served as the sole caretakers of the
property for nearly 40 years. Similarly, it is undisputed that Schlaf searched the Marquette
County Register of Deeds and found no other recorded interest in the property. As a result, it
was reasonable for Schlaf to conclude that she was the sole owner of the property after she
acquired quit claim deeds from the only other apparent, living owners, Rae Elliot and Evelyn
Caven. Similarly, it was reasonable for Schlaf to conclude that Warner and Richardson had no
interest in the property because their father’s estate could have passed to his second wife and not
to his children. The letters were nearly 30 years old and only evidenced that Schlaf knew that
Warner and Richardson were part of the extended family. If Schlaf genuinely and reasonably
believed that they had no ownership interest in the property, then she likewise reasonably
believed that they did not need to be named as defendants in the 2006 quiet title action and were
thus not entitled to notice.
Schlaf may have wrongly concluded that she was the only living person with an interest
in the property. However, Warner and Richardson have failed to establish that Schlaf
intentionally made false or misleading statements, or otherwise acted with an improper purpose.
As a result, the lower court did not err in denying the request for sanctions.
Affirmed.
/s/ William B. Murphy
/s/ David H. Sawyer
/s/ Michael J. Kelly
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