            If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.




                          STATE OF MICHIGAN

                           COURT OF APPEALS



In re CLAIM FOR SURPLUS FUNDS.


BAERE CO,                                                          FOR PUBLICATION
                                                                   May 21, 2019
               Petitioner-Appellant,                               9:00 a.m.

v                                                                  No. 344016
                                                                   Kent Circuit Court
SPECIALIZED LOAN SERVICING, LLC,                                   LC No. 18-001745-CZ

               Respondent-Appellee.


Before: GLEICHER, P.J., and RONAYNE KRAUSE and O’BRIEN, JJ.

PER CURIAM.

       Petitioner, BAERE, Co., appeals as of right the order granting summary disposition in
favor of respondent, Specialized Loan Servicing, LLC (SLS). We affirm.

                                       I. BACKGROUND

        This case arises out of the foreclosure sale of property located in Grand Rapids, Michigan
(the property). The original property owner took out a mortgage on the property, and he died
approximately eleven years later. The mortgage was assigned to respondent SLS, and in the
meantime, petitioner BAERE purchased the property via quit claim deed from the original
property owner’s son. The mortgage eventually fell into default, whereupon respondent initiated
a foreclosure by advertisement. As of the day of the foreclosure sale, the amount of the
indebtedness on the mortgage was $51,915.75. Respondent made an initial bid of $20,300. The
successful bidder, non-party RDG New Homes, LLC, bid $50,000. Respondent received
$20,300 following the sale, and the Sheriff held the remaining proceeds. The parties both sought
the remaining $29,700 of “surplus” funds. After holding a hearing and considering the parties’
arguments, the trial court determined that petitioner was not entitled to any funds from the
foreclosure sale, because respondent’s mortgage was not satisfied by the proceeds of the sale.
Accordingly, the trial court granted respondent’s motion for the remaining $29,700 from the sale.
Petitioner appeals, arguing that the trial court misinterpreted MCL 600.3252.


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                                 II. STANDARD OF REVIEW

        We review a trial court’s ruling on a motion for summary disposition de novo. Auto Club
Group Ins Co v Burchell, 249 Mich App 468, 479; 642 NW2d 406 (2001). “A summary
disposition motion under MCR 2.116(C)(10) tests the factual support for a claim and should be
granted if there is no genuine issue as to any material fact and the moving party is entitled to
judgement as a matter of law.” Weingartz Supply Co v Salsco Inc, 310 Mich App 226, 232; 871
NW2d 375 (2015). A genuine issue of material fact exists when the record, “giving the benefit
of reasonable doubt to the opposing party, would leave open an issue upon which reasonable
minds might differ.” Shallal v Catholic Social Servs of Wayne Co, 455 Mich 604, 609; 566
NW2d 571 (1997). We also review de novo questions of statutory interpretation, with the goal
of ascertaining and applying the intent of the Legislature as expressed by the language of the
statute. In re $55,336.17 Surplus Funds, 319 Mich App 501, 506-507; 902 NW2d 422 (2017).

                                         III. ANALYSIS

       As noted, petitioner argues that the trial court misinterpreted MCL 600.3252 and
erroneously rejected petitioner’s claim that it was the only party entitled to the surplus funds.
We disagree.

       MCL 600.3252 provides, in its entirety:

                If after any sale of real estate, made as herein prescribed, there shall
       remain in the hands of the officer or other person making the sale, any surplus
       money after satisfying the mortgage on which the real estate was sold, and
       payment of the costs and expenses of the foreclosure and sale, the surplus shall be
       paid over by the officer or other person on demand, to the mortgagor, his legal
       representatives or assigns, unless at the time of the sale, or before the surplus shall
       be so paid over, some claimant or claimants, shall file with the person so making
       the sale, a claim or claims, in writing, duly verified by the oath of the claimant,
       his agent, or attorney, that the claimant has a subsequent mortgage or lien
       encumbering the real estate, or some part thereof, and stating the amount thereof
       unpaid, setting forth the facts and nature of the same, in which case the person so
       making the sale, shall forthwith upon receiving the claim, pay the surplus to, and
       file the written claim with the clerk of the circuit court of the county in which the
       sale is so made; and thereupon any person or persons interested in the surplus,
       may apply to the court for an order to take proofs of the facts and circumstances
       contained in the claim or claims so filed. Thereafter, the court shall summon the
       claimant or claimants, party, or parties interested in the surplus, to appear before
       him at a time and place to be by him named, and attend the taking of the proof,
       and the claimant or claimants or party interested who shall appear may examine
       witnesses and produce such proof as they or either of them may see fit, and the
       court shall thereupon make an order in the premises directing the disposition of
       the surplus moneys or payment thereof in accordance with the rights of the
       claimant or claimants or persons interested. [(emphasis added).]



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A mortgage is “[a] conveyance of an interest in real estate to secure the performance of an
obligation, typically a debt. The very purpose of mortgage foreclosure is to ensure that the
mortgagor’s debt, secured by a mortgage to a mortgagee, is satisfied.” In re $55,336.17 Surplus
Funds, 319 Mich App at 508 (quotation marks and citation omitted; alteration in original).

        Petitioner argues that respondent’s mortgage was satisfied once it received the $20,300
payment from the foreclosure sale. Petitioner points out, correctly, that a foreclosure sale
extinguishes the mortgage. Mortgage & Contract Co v First Mortgage Bond Co, 256 Mich 451,
452; 240 NW 39 (1932). Petitioner argues that respondent’s bid of $20,300 represented the
amount necessary to satisfy the mortgage. Petitioner argues that, therefore, any amount
exceeding this bid constituted surplus funds because the funds remained “in the hands of the
officer or other person making the sale.” Petitioner asserts that, in this case, MCL 600.3252 only
permits the mortgagor, or in this case petitioner as the mortgagor’s assignee, to obtain those
surplus funds.

         Petitioner’s argument depends on the meaning of the phrase, “after satisfying the mortgage
on which the real estate was sold.” MCL 600.3252. We must first decide whether the mortgage was
satisfied before we can determine if a surplus existed. The terms “satisfy” and “surplus” are not
defined in the statute. As a result, we will consult the dictionary to determine the common and
ordinary meanings of the words. See Krohn v Home-Owners Ins Co, 490 Mich 145, 156; 802
NW2d 281 (2011). The word “satisfy” is defined, in relevant part, as “to carry out the terms of
(as a contract): DISCHARGE,” and “to meet a financial obligation to.” Merriam-Webster’s
Collegiate Dictionary (11th ed). Merriam-Webster’s Collegiate Dictionary (11th ed) defines
“surplus,” in pertinent part, as “the amount that remains when use or need is satisfied.”

        We further observe that a mortgage is fundamentally a security for a debt or liability, and
extinguishment of the debt therefore extinguishes the mortgage. Ginsberg v Capitol City
Wrecking Co, 300 Mich 712, 717-718; 2 NW2d 892 (1942). However, the inverse is not true:
extinguishment of the mortgage does not necessarily extinguish the debt, unless the total amount
due under the terms of the mortgage is paid at the foreclosure sale. Dunitz v Woodford
Apartments Co, 236 Mich 45, 49; 209 NW 809 (1929); Bank of Three Oaks v Lakefront
Properties, 178 Mich App 551, 555; 444 NW2d 217 (1989). Because the amount due on the
mortgage was $51,925.75 at the time of the sale, and the successful bid was $50,000, the debt
was not extinguished. Furthermore, respondent was paid only $20,300, leaving $31,625.75
remaining due under the mortgage. Consequently, respondent would be permitted to pursue a
deficiency judgment against the original property owner’s estate as the debtor. See Bank of
America NA v First American Title Ins Co, 499 Mich 74, 88; 878 NW2d 816 (2016). Finally, we
note that the purpose of MCL 600.3252 is to protect the rights of others after the mortgagee has
recovered its debt. In re $55,337.17 Surplus Funds, 319 Mich App at 510-511.

        We conclude that, when the definitions of “satisfy” and “surplus” are read in context with
the case law, it is unambiguous that “satisfying the mortgage” refers to paying off the entirety of
the debt secured by the mortgage. In other words, satisfying a mortgage and extinguishing the
mortgage are not synonymous. It is therefore beyond dispute that respondent’s mortgage was
not “satisfied,” and no surplus funds existed for petitioner to seek.



                                                -3-
        In the alternative, petitioner argues that that the mortgage was satisfied once respondent
received the $20,300 payment from the foreclosure sale, because respondent expressly agreed to
that amount in its “bid sheet.” In other words, respondent agreed that the lesser amount would
satisfy the mortgage. Petitioner concludes that respondent agreed that its mortgage would be
satisfied and discharged in exchange for the $20,300, so any further amount of money must
necessarily constitute a surplus. Respondent contends that “[t]he bid sheet is not signed
document, it is not a contract, it is not an agreement and it is not a waiver of any deficiency.”
We agree with respondent that the “bid sheet” does not appear to be a contract or a binding
admission establishing the amount of the debt. We are aware of no law requiring mortgagees to
bid the full amount owed during a foreclosure sale, and we decline to create any such law.

                                       IV. CONCLUSION

        We conclude that the phrase “satisfying the mortgage” in MCL 600.3252 refers to paying
the entirety of the debt secured by the mortgage. We are aware of no legal requirement for
mortgagees to bid the full amount of any outstanding debt at a foreclosure sale, and the “bid
sheet” in this matter did not constitute a contract or admission. The trial court therefore correctly
denied the petition and granted respondent’s motion for the funds.

       Affirmed. Respondent, being the prevailing party, may tax costs. MCR 7.219(A).

                                                              /s/ Elizabeth L. Gleicher
                                                              /s/ Amy Ronayne Krause
                                                              /s/ Colleen A. O'Brien




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