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159691 - City of Dearborn v Bank of America

City of Dearborn,

 

Richard Patton

 

Plaintiff/Counterdefendant-Appellee,

Matthew McNaughton

v

(Appeal from Ct of Appeals)

 

 

(Wayne – Hughes, M.)

 

Bank of America,

 

 

 

Defendant/Cross-Defendant-Appellee,

 

and

 

 

West Dearborn Partners LLC,

 

Robert Kamenec

 

Defendant/Counterplaintiff/Cross-Plaintiff-Appellant.

 

Summary

After receiving property as the result of a federal bankruptcy court order, the City of Dearborn filed a quiet title action against West Dearborn Partners, LLC (West Dearborn) and Bank of America (BOA). BOA held a mortgage on the property, which purportedly was assigned to West Dearborn. The bankruptcy court order requiring the sale of the property to the City extinguished any interest in the property that was not of record. Although BOA’s interest in the mortgage was recorded at the time of the bankruptcy court order, West Dearborn’s assignment was not. BOA subsequently discharged the mortgage. All parties filed motions for summary disposition. The trial court granted the City’s motion, holding that West Dearborn’s interest in the mortgage was extinguished by the bankruptcy court order, and quieted title in the property to the City. The Court of Appeals affirmed in an unpublished opinion. The Supreme Court has ordered oral argument on West Dearborn’s application for leave to appeal to address: (1) whether the federal bankruptcy court’s October 5, 2011 order extinguished the appellant’s interest in Parcel C; (2) whether BOA’s filing of a discharge of the mortgage in 2015 impacted any interest the appellant had in Parcel C at that time; and (3) whether the equitable arguments raised by the appellant require the reversal of the Court of Appeals opinion.​