Kubczak v. Chemical Bank & Trust Co.

Kelly, J.

I respectfully dissent. The issue in this case is whether, for purposes of determining premises liability, a mortgagee can be considered a “possessor” during the mortgage foreclosure redemption period. If so, can the mortgagor’s real estate agent be the mortgagee’s business invitee?

When evaluating a motion for directed verdict, the trial court must consider the evidence in the light most favorable to the nonmoving party. All reasonable inferences are made in the nonmoving party’s favor. Locke v Pachtman, 446 Mich 216, 223; 521 NW2d 786 (1994). Drawing all reasonable inferences in favor of the plaintiff, I find that there was sufficient evidence for the jury to hold the mortgagee liable. Therefore, I would affirm the decision of the Court of *665Appeals. The trial court did not err in denying defendant’s motion for directed verdict.

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The majority relies on the rarely cited case of Massachusetts Mut Life Ins Co v Sutton1 for the proposition that it is the policy of this state “to save to mortgagors the possession and benefits of the mortgaged premises, as against the mortgagees, until expiration of the period of redemption.” The next sentence of that opinion reads: “This court has attempted to guard the policy and protect the mortgagor against the opportunity for fraud, overreaching, or oppression by the mortgagee . . . "Id.

I believe that the mortgagee’s agent, W. Roger Mikusek, could have been guilty of fraud, overreaching, or oppression. There is evidence that, after the foreclosure sale, Mr. Mikusek led the Hineses to believe that they were not entitled to retain possession of the house during the redemption period.

Specifically, there was corroborated testimony that Mr. Mikusek told the Hineses to move out of the house. He demanded the key, and Mrs. Hines sent it to him. Although the bank denies these allegations, a jury could have found Mrs. Hines to have been the more credible witness.

Additionally, there is testimony that Mr. Mikusek asked the real estate agent to enter the house to ascertain whether it was adequately heated. The bank paid the utility bills for the house as they fell due after the Hineses moved out. The bank took these actions, no doubt, to protect its collateral; however, it *666was reasonable for the jury to use them as the basis for a finding that the bank took possession and control of the house.

Mr. Mikusek testified that the bank’s legal counsel instructed him that the bank had no legal right to possession of the property during the redemption period. But Mr. Mikusek’s handwritten note stating, “Hines, ours today, 11/3/89,” suggests that the bank did take possession after the foreclosure sale. Again, on the basis of this evidence, the jury reasonably could have found in the plaintiff’s favor.

Facts in evidence showing misrepresentations by the bank are that the Hineses moved out of the house in October, 1989, and never returned. They spent $3,975 to rent an apartment for six months, an expenditure they say was made necessary only by the bank having taken possession of the house. Mrs. Hines testified that she would not have rented an apartment had she believed herself entitled to remain in the house. She testified that Mr. Mikusek told her to “[j]ust get out or I will get you out personally.” Also, she testified that she was forced from her home and never would have left voluntarily. Rather, she left in reliance on Mr. Mikusek’s misrepresentations. The majority finds that these misrepresentations are irrelevant to the issue of premises liability. However, the jury may have concluded that they led to the ouster of the Hineses which resulted in the bank taking possession of the premises.

Even though a mortgagee normally is not entitled to take possession of property until after expiration of the redemption period, there was evidence here that that is what happened. It was reasonable for the jury to find that the mortgagee’s actions rose to the *667level of fraud, oppression, or overreaching. A mortgagee should not be allowed to shield itself from tort liability if it strong-arms a mortgagor into vacating his premises prematurely.

As this Court recently stated in Orel v Uni-Rak Sales Co, Inc,2 “Who had possession of a piece of land presents a factual issue for resolution by the jury.” A question of fact existed in this case concerning whether the mortgagee took possession and control of the property. A reasonable jury could have concluded that the Hineses were forced out of their house, and the bank then became the possessor by exercising control over it. Therefore, I would affirm the decision of the Court of Appeals.

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Next, the legal status of the plaintiff must be identified to permit a determination of the duty of care owed to her. The issue is whether the trial court erred in finding, as a matter of law, that if the mortgagee was a possessor of the house, plaintiff was mortgagee’s business invitee.

The mortgagee argues that, because it did not invite plaintiff onto the property, the plaintiff is not its invitee. The invitation to enter the premises need not be express. According to the standard jury instructions, “An invitation may be either express or implied.” SJI2d 19.01. It may be implied even though the mortgagee did not initially invite the plaintiff real estate agent onto the property.

Additionally, the mortgagee argues that the plaintiff is not its invitee because the plaintiff was not on the *668property for any business propose of the mortgagee. It points out the policy behind imposing a higher duty of care on one who invites a business visitor onto his premises. The policy is that an invitor potentially has some pecuniary gain from the visit and is the person in the best position to make the property safe at the time of the business visit. That policy is not advanced, it argues, by imposing the duty on a party who did not invite the person onto his premises for the party’s business purpose or pecuniary interest.

Here, plaintiff’s presence on the property had the potential of being economically beneficial to the mortgagee. Had she sold the house, the mortgagee would have benefited, because the proceeds of the sale would have satisfied the outstanding debt owed to it. Furthermore, the mortgagee was in the best position to make the premises safe, because it held the key to the house and was in control of the property.

The trial court did not err in determining that the plaintiff’s status in this case is that of a business invitee. As a real estate agent, she was invited to go onto real property for a purpose directly or indirectly concerning business dealings with the possessor of the land. 2 Restatement Torts, 2d, § 332, p 176. The bank was not required to directly initiate business dealings with her in order to render her a business invitee. Plaintiff’s efforts to sell the house were sufficiently connected with the bank’s business interests to render her the bank’s business invitee.

I am not suggesting that any realtor who shows a house at the request of its owner is a business invitee of the owner’s mortgagee or other lienholders. The present case is factually unusual. Under its particular *669circumstances, I find that the plaintiff was a business invitee of the bank.

I agree with the Court of Appeals that the evidence was sufficient to support the verdict that the bank was a possessor of the premises. I also agree that the trial court did not err in concluding as a matter of law that the plaintiff was a business invitee of the bank. Therefore, I would affirm the decision of the Court of Appeals.

Cavanagh, J., concurred with Kelly, J.

278 Mich 457, 461; 270 NW 748 (1936).

454 Mich 564, 569; 563 NW2d 241 (1997).