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REAL ESTATE 93: Plaintiff argues whether the land contract violates Michigan’s usury act.

Plaintiff owned real property that was secured by a mortgage loan. Defendant purchased the property at the sheriff’s sale after plaintiff defaulted on the loan. One day before the redemption period expired, plaintiff sold defendant her interest in the property, her redemption rights, and her rights to any surplus from the sheriff’s sale in exchange for an option to buy back the property.

Land Contract

Three months after the redemption period expired, plaintiff exercised her right to buy back the property by entering into a land contract with defendant. Plaintiff failed to pay defendant in accordance with the terms of the land contract. Defendant sent plaintiff a forfeiture notice and then filed a complaint for land contract forfeiture in the district court.

In response, plaintiff filed action in circuit court, requesting that the trial court void the land contract and create an equitable mortgage in favor of defendant. Plaintiff argues that there is a question of fact whether the land contract violates Michigan’s usury act. MCL 438.31c(6) limits the interest rate in certain land contracts to 11% and land contracts provide for a rate of interest not to exceed 11% per annum, which interest shall be inclusive of all amounts defined as the finance charge.

Surplus Funds

Plaintiff acknowledges that the land contract states on its face that the annual interest rate is 7%. But plaintiff argues that a blending approach must be undertaken to account for the surplus funds that defendant received pursuant to the Affidavit of Non-Redemption (AONR).

The land contract does not include any language incorporating the AONR or the surplus funds. The land contract plainly states that no payment was made toward the purchase of the property. And the AONR clearly and unambiguously states that, as consideration for the option to purchase the property outside the six[1]month redemption period, plaintiff wished to sell her interests in the real property along with redemption rights and rights to Surplus (overbid of $43,000) to defendant. A blending approach is not warranted by the facts of this case.

Contract not Usurious

Because it is clear from the face of the document that the land contract was not usurious, the trial court granted defendant’s motion for summary disposition under MCR 2.116(C)(10) as to plaintiff’s usury claim.

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FAMILY LAW 88: The trial court found that the children did not have an established custodial environment with defendant because, before the separation, he did not have a large role in the children’s lives.

The trial court credited plaintiff’s testimony that, before the parties’ separation, defendant spent minimal time helping to care for the children, so its finding that the children would not have looked to defendant for guidance, discipline, the necessities of life, and parental comfort during that time was not against the great weight of the evidence.

REAL ESTATE 89: RM had not included any language in the deed providing that the property was a joint tenancy with full rights of survivorship, the property instead became a tenancy in common.

RM drafted the deed without seeking counsel and mistakenly believed that, if either she or FK died, the property would fully pass to the surviving tenant. FK’s will provided that if his wife predeceased him—which she did—the personal representative of his estate should sell any residual property that he owned and divide the cash proceeds equally among his surviving children.

FAMILY LAW 83: A trial court can terminate a parent’s rights and permit a stepparent to adopt a child.

A trial court has discretion to terminate a parent’s rights and permit a stepparent to adopt a child when the conditions of MCL 710.51(6) are met. MCL 710.51(6)(b) requires the petitioner to establish that the other parent had the ability to visit, contact, or communicate with the children, and substantially failed or neglected to do so for a period of two years.

PROBATE 53: The trust agreement included an Incontestability Provision.

A settlor’s intent is to be carried out as nearly as possible. Generally, in terrorem clauses are valid and enforceable. However, a provision in a trust that purports to penalize an interested person for contesting the trust or instituting another proceeding relating to the trust shall not be given effect if probable cause exists for instituting a proceeding contesting the trust or another proceeding relating to the trust.

FAMILY LAW 82: Court stated it would terminate the personal protection order (PPO) after the parties present documentation of the initiation of the divorce proceedings.

However, the trial court concluded that these matters should, in fact, be in the province and the jurisdiction of the Family Division and in that respect, having issued a personal protection order, the Court stated it would terminate the personal protection order after the parties present documentation of the initiation of the divorce proceedings.

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