After
receiving property (Parcel C) 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Appeals affirmed in an unpublished opinion.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 to address: (1) whether the bankruptcy court’s
October 5, 2011 order extinguished West Dearborn’s interest in Parcel C; (2)
whether BOA’s filing of a discharge of the mortgage in 2015 impacted any
interest West Dearborn had in Parcel C at that time; and (3) whether the
equitable arguments raised by West Dearborn require the reversal of the Court
of Appeals opinion.