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REAL ESTATE 45: When can a party file a third-party claim?

Plaintiff purchased foreclosed property from the state. The former owner, defendant, did not give up their interests easily. Defendant recorded a lis pendens, refused to collect his personal belongings from the building, and generally harassed Plaintiff. Plaintiff filed suit and the circuit court quieted title in his favor.

Defendant does not challenge that judgment. He does contest, however, the circuit court’s assessment of attorney fees against him for raising a frivolous defense and the denial of his motion to file a third-party complaint against two city officials.

After the court issued its judgment, Defendant filed a motion to amend in order to file a third-party complaint against two city officials whom he claimed purposefully inflated the property values. The court denied this motion as futile and because he was engaged in dilatory tactics.

A party may file a third-party claim as of right within 21 days after his or her original answer is due. Otherwise, leave on motion with notice to all parties is required.

Trial courts should permit parties to amend pleadings after granting a motion for summary disposition under MCR 2.116(C)(8), (9), or (10) as provided by MCR 2.118, unless the evidence then before the court shows that amendment would not be justified.

A motion to amend should ordinarily be denied only for particularized reasons, including undue delay, bad faith or a dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party, or futility.

Defendant unduly delayed in filing his motion to amend to file a third-party complaint. Defendant asserted from the start of the current action that city officials had wrongfully caused the foreclosure by artificially inflating the value of his properties and could have timely moved to raise his claims against those officials. Defendant tried to game the system and caused undue delay by waiting until he lost in the quiet title action to file the third-party complaint motion.

Moreover, amendment to permit the third-party complaint would have been futile. The amendment of a pleading is properly deemed futile when, regardless of the substantive merits of the proposed amended pleading, the amendment is legally insufficient on its face. An amendment adding claims against a new third party is legally insufficient on its face if those claims would have failed as a matter of law.

A trial court had also already summarily dismissed Defendant’s claim that the city had improperly inflated property tax figures in a deliberate attempt to gain control of his properties.

Are you involved in a real estate dispute in Michigan? Are you seeking an efficient and effective resolution to a property litigation matter? Seek the advice of an experienced and skilled real estate litigation attorney at Aldrich Legal Services in Plymouth.

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