           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



WOODLAND CONDOMINIUMS                                            UNPUBLISHED
HOMEOWNERS ASSOCIATION, INC,                                     February 28, 2019

              Plaintiff/Counterdefendant-
              Appellee,

v                                                                No. 339850
                                                                 Genesee Circuit Court
FEDERAL NATIONAL MORTGAGE                                        LC No. 16-107570-CH
ASSOCIATION, also known as FANNIE MAE,

              Defendant-Appellant,

and

DITECH FINANCIAL, LLC,

              Defendant/Counterplaintiff/Cross-
              Plaintiff-Appellant,

and

FUTURE HOLDINGS, LLC,

              Defendant/Cross-Defendant,

and

MARY ANN WUJCIAK,

              Defendant.


Before: TUKEL, P.J., and SHAPIRO and GADOLA, JJ.

PER CURIAM.
        Defendants Federal National Mortgage Association (“Fannie Mae”) and Ditech Financial,
LLC (“Ditech”), formerly known as Green Tree Servicing, LLC, appeal by leave granted the trial
court’s order denying their motion for summary disposition pursuant to MCR 2.116(C)(10) (no
genuine issue of material fact). We reverse and remand for entry of summary disposition in
favor of defendants.

                                 I. FACTS AND PROCEEDINGS

        Plaintiff is the homeowners association for the Woodland condominium development.
Mary Ann Wujciak owned a condominium unit in the development. At all times relevant to
these proceedings, Ditech was the servicer of a mortgage owned by Fannie Mae that secured a
purchase money loan for the unit. The development was insured by a master policy issued by
Farm Bureau General Insurance Company to plaintiff covering the standard condominium unit
for fire and other damage. The Farm Bureau master policy identified plaintiff and Ditech as
parties with an insurable interest in Wujciak’s unit.

       The mortgage contract between Ditech and Wujciak contained the following provision
addressing insurance proceeds:

               In the event of loss, Borrower shall give prompt notice to the insurance
       carrier and Lender. Lender may make proof of loss if not made promptly by
       Borrower. Unless Lender and Borrower otherwise agree in writing, any
       insurance proceeds, whether or not the underlying insurance was required by
       Lender, shall be applied to restoration or repair of the Property, if the restoration
       or repair is economically feasible and Lender’s security is not lessened. During
       such repair and restoration period, Lender shall have the right to hold such
       insurance proceeds until Lender has had an opportunity to inspect such Property
       to ensure the work has been completed to Lender’s satisfaction, provided that
       such inspection shall be undertaken promptly. Lender may disburse proceeds for
       the repairs and restoration in a single payment or in a series of progress payments
       as the work is completed. Unless an agreement is made in writing or Applicable
       Law requires interest to be paid on such insurance proceeds, Lender shall not be
       required to pay Borrower any interest or earnings on such proceeds. Fees for
       public adjusters, or other third parties, retained by Borrower shall not be paid out
       of the insurance proceeds and shall be the sole obligation of Borrower. If the
       restoration or repair is not economically feasible or Lender’s security would be
       lessened, the insurance proceeds shall be applied to the sums secured by this
       Security Instrument, whether or not then due, with the excess, if any, paid to
       Borrower. Such insurance proceeds shall be applied in the order provided for in
       Section 2. [Emphasis added.]

Plaintiff’s bylaws, Article V, Sections 4, 5, and 8, state:

               Section 4. ASSOCIATION RESPONSIBILITY FOR REPAIR. Except
       as otherwise provided in the Master Deed and in Section 3 hereof, the Association
       shall be responsible for the reconstruction, repair and maintenance of the
       Common Elements. Immediately after a casualty causing damage to property for

                                                  -2-
       which the Association has the responsibility of maintenance, repair and
       reconstruction, the Association shall obtain reliable and detailed estimates of the
       cost to replace the damaged property in a condition as good as that existing before
       the damage. If the proceeds of insurance are not sufficient to defray the estimated
       costs of reconstruction or repair required to be performed by the Association, or
       if at any time during such reconstruction or repair, or upon completion of such
       reconstruction or repair, the funds for the payment of the costs thereof are
       insufficient, assessment shall be made against all Co-owners for the cost of
       reconstruction or repair of the damaged property in sufficient amounts to provide
       funds to pay the estimated or actual cost of repair. [Emphasis added.]

              Section 5. TIMELY RECONSTRUCTION AND REPAIR. If damage to
       Common Elements or a Unit adversely affects the appearance of the Project, the
       Association or Co-owner responsible for the reconstruction, repair and
       maintenance thereof shall proceed with replacement of the damaged property
       without delay, and shall complete such replacement within 6 months after the date
       of occurrence which caused damage to the property.

                                            * * *

               Section 8. PRIORITY OF MORTGAGEE INTERESTS. Nothing
       contained in the Condominium Documents shall be construed to give a
       Condominium Unit Owner, or any other party, priority over any rights of first
       mortgagees of Condominium Units pursuant to their mortgages in the case of a
       distribution to Condominium Unit Owners of insurance proceeds or
       condemnation awards for losses to or a taking of Condominium Units . . . .
       [Emphasis added.]

        On December 7, 2014, the subject unit was destroyed by a fire. Plaintiff obtained from
J.C. Chappell Construction (“Chappell”) a quote of $141,000 for the cost of restoring the
property. Plaintiff submitted to Farm Bureau a proof of claim. Plaintiff entered into a
restoration agreement with Chappell. On April 14, 2015, Farm Bureau issued a check for
$87,900, jointly payable to Ditech and plaintiff. Plaintiff’s agent, Anna Bincsik-Hawker,
endorsed the check on plaintiff’s behalf without restriction and delivered the check to Ditech.
Ditech deposited the funds into an escrow account pending receipt of further information
regarding plaintiff’s claim. On July 27, 2015, Ditech issued a check in the amount of $43,950,
payable to Wujciak, Chappell, and plaintiff, but the check was returned as undeliverable because
Wujciak’s address was unknown.

        In the meantime, Wujciak failed to make timely payments under her mortgage. A
balance of $106,469.91 remained due on Wujciak’s mortgage debt. Without informing plaintiff,
Ditech decided that restoration of the unit was not feasible because the insurance proceeds were
insufficient. Ditech initiated foreclosure by sheriff’s sale in December 2016. The proceeds from
the sheriff’s sale and the insurance payment satisfied Wujciak’s mortgage debt in full.

       Plaintiff thereafter brought this action against defendants for statutory and common-law
conversion, breach of contract, and assumpsit. These claims were based on plaintiff’s theory that

                                               -3-
Ditech’s original plan to apply the insurance proceeds to restoration precluded Ditech from
subsequently abandoning that plan on the ground that restoration was not feasible. Ditech
brought a countercomplaint for a declaratory judgment. Plaintiff moved for summary disposition
of Ditech’s counterclaim. Defendants also moved for summary disposition pursuant to MCR
2.116(C)(10), arguing that there was no genuine issue of material fact that restoration was not
feasible because the insurance proceeds were insufficient to cover the restoration costs. The trial
court jointly heard both motions and thereafter issued an opinion and order denying both motions
on the basis that there were questions of fact precluding summary disposition in favor of either
party. However, the court did not identify the question or questions that it found to be in dispute.

                          II. SUMMARY DISPOSITION ANALYSIS

                                 A. PROCEDURAL GROUND

        Preliminarily, we reject defendants’ unpreserved argument that procedural deficiencies in
plaintiff’s response to defendants’ summary disposition motion entitled defendants to summary
disposition as a matter of law.

        Defendants filed their motion for summary disposition shortly after plaintiff filed its own
motion for summary disposition under MCR 2.116(C)(10). Plaintiff’s brief in response to
defendants’ motion simply referenced plaintiff’s own motion and supporting brief, and the
exhibits submitted with plaintiff’s motion, to oppose defendants’ motion for summary
disposition. Defendants argue that plaintiff’s response to their motion was procedurally
deficient, entitling them to summary disposition as a matter of law. We disagree. We review de
novo issues involving the interpretation and application of court rules. Lech v Huntmore Estates
Condo Ass’n, 315 Mich App 288, 290; 890 NW2d 378 (2016).

         When a party files a motion for summary disposition under MCR 2.116(C)(10), “[t]he
moving party has the initial burden to support its claim for summary disposition by affidavits,
depositions, admissions, or other documentary evidence.” Lockwood v Ellington Twp, 323 Mich
App 392, 401; 917 NW2d 413 (2018) (quotation marks and citation omitted). Once that burden
is satisfied, “the party opposing summary disposition under MCR 2.116(C)(10) may not rely on
mere allegations or denials in pleadings, but must go beyond the pleadings to set forth specific
facts showing that a genuine issue of material fact exists.” Id. (quotation marks and citation
omitted). Defendants argue that the trial court should have granted their motion for summary
disposition because plaintiff failed to submit a properly supported response. Defendants rely on
MCR 2.116(G), which provides, in pertinent part:

              (3) Affidavits, depositions, admissions, or other documentary evidence in
       support of the grounds asserted in the motion are required

               (a) when the grounds asserted do not appear on the face of the pleadings,
       or

               (b) when judgment is sought based on subrule (C)(10).

              (4) A motion under subrule (C)(10) must specifically identify the issues as
       to which the moving party believes there is no genuine issue as to any material

                                                -4-
       fact. When a motion under subrule (C)(10) is made and supported as provided in
       this rule, an adverse party may not rest upon the mere allegations or denials of his
       or her pleading, but must, by affidavits or as otherwise provided in this rule, set
       forth specific facts showing that there is a genuine issue for trial. If the adverse
       party does not so respond, judgment, if appropriate, shall be entered against him
       or her.

Defendants argue that plaintiff failed to satisfy the requirements of subparagraph (G)(4) by filing
a response that merely referenced plaintiff’s own motion for summary disposition. Defendants
also argue that plaintiff failed to satisfy MCR 2.119(A)(2), which provides that “[a] motion or
response to a motion that presents an issue of law must be accompanied by a brief citing the
authority on which it is based.” Defendants further argue that plaintiff’s attempt to incorporate
by reference its brief in support of its own motion for summary disposition was ineffective
pursuant to MCR 2.113(G), which provides that “[s]tatements in a pleading may be adopted by
reference only in another part of the same pleading.”

        A motion for summary disposition brought under MCR 2.116(C)(10) “tests the factual
sufficiency of the complaint,” and “should be granted when there is no genuine issue regarding
any material fact and the moving party is entitled to judgment as a matter of law.” Lockwood,
323 Mich App at 400 (quotation marks and citation omitted). Even accepting that plaintiff’s
response to defendants’ motion could be considered procedurally deficient because, standing
alone, it did not properly set forth the factual support for plaintiff’s opposition to defendant’s
motion, we are not persuaded that this deficiency entitled defendants to summary disposition as a
matter of law under the circumstances of this case.

        Defendants and plaintiff had filed competing motions for summary disposition. The
motions involved the same legal and factual issues. The trial court had discretion to hear and
decide the motions at the same time, cf. Zaremba Equip, Inc v Harco Nat’l Ins Co, 302 Mich
App 7, 21; 837 NW2d 686 (2013), which it did. Moreover, a court hearing a summary
disposition motion may sua sponte render judgment in favor of the opposing party if it
determines that the opposing party is entitled to judgment. MCR 2.116(I)(2). Thus, regardless
of whether plaintiff failed to adhere to the formalities for responding to a motion by failing to file
an entirely separate brief in response to defendants’ motion, the trial court was still permitted to
consider plaintiff’s cross-motion for summary disposition, as well as that motion’s supporting
brief and exhibits, in determining whether plaintiff or defendants were entitled to judgment as a
matter of law.

        Defendants’ reliance on Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285
Mich App 362; 775 NW2d 618 (2009), is misplaced. In that case, this Court recognized that a
trial court does not have a duty “to independently consider all the evidence contained in the court
record” before granting a motion for summary disposition. Id. at 375-376. In this case, plaintiff
did not invite the trial court to conduct its own review of the record to determine if the evidence
supported finding that there was a genuine issue of material fact that precluded judgment for
defendants. Rather, plaintiff referenced the supportive evidence it submitted in support of its
own motion for summary disposition, which was properly before the court at the time it
considered and decided defendants’ cross-motion for summary disposition. Accordingly,
defendants are not entitled to relief on this basis. See id. at 377 (“[I]f a party refers to and relies

                                                 -5-
on an affidavit, pleading, deposition, admission, or other documentary evidence, and that
evidence is ‘then filed in the action or submitted by the parties,’ the trial court must consider
it.”).

                   B. SUBSTANTIVE MERITS OF PLAINTIFF’S CLAIMS

       Defendants argue that the trial court erred by finding that genuine issues of material fact
precluded summary disposition in their favor with respect to each of plaintiff’s claims. We
agree.

        This Court reviews de novo a trial court’s decision on a motion for summary disposition.
Lockwood, 323 Mich App at 400. When reviewing a motion under MCR 2.116(C)(10), the court
must consider all of the admissible evidence in a light most favorable to the nonmoving party.
Liparoto Constr, Inc v Gen Shale Brick, Inc, 284 Mich App 25, 29; 772 NW2d 801 (2009).
“However, the party opposing summary disposition under MCR 2.116(C)(10) may not rely on
mere allegations or denials in pleadings, but must go beyond the pleadings to set forth specific
facts showing that a genuine issue of material fact exists.” Lockwood, 323 Mich App at 401
(quotation marks and citation omitted). “A genuine issue of material fact exists when the record,
giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which
reasonable minds might differ.” Id. (quotation marks and citation omitted). A motion brought
under MCR 2.116(C)(10) is properly “granted when there is no genuine issue regarding any
material fact and the moving party is entitled to judgment as a matter of law.” Id. at 400
(quotation marks and citation omitted).

       Additionally, questions concerning the proper interpretation of a contract are questions of
law that we review de novo. McDonald v Farm Bureau Ins Co, 480 Mich 191, 197; 747 NW2d
811 (2008).

                                        1. CONVERSION

        The civil tort of conversion is defined as “any distinct act of domain wrongfully exerted
over another’s property in denial of or inconsistent with the rights therein.” Lawsuit Fin, LLC v
Curry, 261 Mich App 579, 591; 683 NW2d 233 (2004) (citation omitted). Statutory conversion
requires an additional showing that the defendant “employed the converted property for some
purpose personal to the defendant’s interests.” Aroma Wines & Equip, Inc v Columbian Distrib
Servs, Inc, 497 Mich 337, 358-359; 871 NW2d 136 (2015); see also MCL 600.2919a.

        “To support an action for conversion of money, the defendant must have obtained the
money without the owner’s consent to the creation of a debtor-creditor relationship and must
have had an obligation to return the specific money entrusted to his care.” Lawsuit Fin, 261
Mich App at 591 (quotation marks and citation omitted). Defendants argue that they cannot be
liable for conversion because Ditech was entitled to retain the insurance proceeds pursuant to the
mortgage contract and plaintiff’s bylaws. “In interpreting a contract, it is a court’s obligation to
determine the intent of the parties by examining the language of the contract according to its
plain and ordinary meaning.” In re Smith Trust, 480 Mich 19, 24; 745 NW2d 754 (2008). “If
the contractual language is unambiguous, courts must interpret and enforce the contract as
written, because an unambiguous contract reflects the parties’ intent as a matter of law.” Id.

                                                -6-
        The plain language of the mortgage contract unambiguously imposes on Ditech the
requirement to apply the proceeds of the property insurance to restoration or repair of the subject
unit, (1) if the restoration or repair is economically feasible, and (2) if Ditech’s security is not
lessened. The plain language of plaintiff’s bylaws provides that the bylaws cannot take priority
over the rights of Ditech, as first mortgagee, pursuant to the mortgage contract. It is not disputed
that the cost of restoration of the subject unit was $141,000, or that Farm Bureau’s insurance
payout was $87,900. That left $53,100 unpaid on the restoration contract. Together with the
$12,000 paid for demolition, that left a net unpaid balance of $41,100 unpaid. These figures
support Ditech’s determination that restoration was not feasible because Ditech would be
required to pay approximately one-third of the cost of restoration merely to return the subject
unit to its status quo ante as security for the loan. Thus, Ditech’s security interest would be
lessened.

        Plaintiff argues that Ditech originally pursued a plan of restoration but abandoned that
course without informing plaintiff of its changed decision, and that this conduct should preclude
Ditech from contending that restoration was not feasible. Even if plaintiff’s frustration with the
events is understandable, the circumstances here do not provide a legal basis for concluding that
Ditech had no right to apply the insurance proceeds to Wujciak’s unpaid loan balance. The
mortgage contract did not require Ditech to give plaintiff notice or to consult with plaintiff
before applying the proceeds to Wujciak’s debt. The mortgage contract did not prohibit Ditech
from effectively rescinding the $43,950 check after it failed in its efforts to deliver the check to
Wujciak for her endorsement.

        Plaintiff also asserts that there is a question of fact regarding the feasibility of restoration
because the $87,900 payment would be supplemented by the insurance payments for debris
removal and depreciation, and by plaintiff’s $30,000 contribution. Plaintiff asserts that the
$144,000 sum of the $87,900 payment, its own $30,000 expenditure, the $12,000 insurance
payment for demolition and debris removal, and the depreciation check for $14,100, was
sufficient to pay Chappell’s $141,000 total cost. However, the notation in Farm Bureau’s record
that plaintiff “had to use” $30,000 from its own savings account because Ditech “has not
released any funds” indicates that plaintiff was not contributing part of the cost to supplement the
insurance deficiency, but instead acting on the expectation that it would eventually receive
payment from Ditech. There is no evidence that plaintiff attempted to negotiate a shared cost
arrangement with Ditech. Under these circumstances, plaintiff cannot establish a question of fact
whether Ditech should have known that restoration was feasible despite the substantial difference
between the insurance proceeds and restoration costs.

         Plaintiff also argues that defendants are estopped from claiming that reconstruction was
not feasible because defendants originally agreed to reconstruction by issuing the check for
$43,950 payable to Chappell, Wujciak, and plaintiff. “Estoppel arises where a party, by
representations, admissions or silence, intentionally or negligently induces another party to
believe facts, and the other party justifiably relies and acts on this belief, and will be prejudiced
if the first party is permitted to deny the existence of the facts.” Wigfall v Detroit, 322 Mich App
36, 43; 910 NW2d 730 (2017). Defendants did not misrepresent facts related to the feasibility of
reconstruction. Plaintiff and defendants had access to the same facts concerning Chappell’s
estimate and Farm Bureau’s resolution of the claim. The response to an e-mail in August 2016,
from Farm Bureau’s claims specialist, Thomas Nault, to plaintiff’s board member, Jacqueline

                                                  -7-
Gutierrez, showed that plaintiff expected payment in addition to the $87,900 and smaller
payments already received, contrary to the adjuster’s report issued on July 6, 2015. Defendant,
however, was not responsible for plaintiff’s misunderstanding.

        Accordingly, the trial court erred by denying defendants’ motion for summary disposition
with respect to plaintiff’s claims for conversion.

                                  2. BREACH OF CONTRACT

        To prevail on a claim for breach of contract, a plaintiff must prove the following
elements: “(1) there was a contract, (2) the other party breached the contract, and (3) the breach
resulted in damages to the party claiming breach.” Bank of America, NA v First American Title
Ins Co, 499 Mich 74, 100; 878 NW2d 816 (2016). “A valid contract requires five elements: (1)
parties competent to contract, (2) a proper subject matter, (3) legal consideration, (4) mutuality
of agreement, and (5) mutuality of obligation.” Id. at 101 (quotation marks and citation omitted).

       Defendants assert that they were entitled to summary disposition on plaintiff’s claim for
breach of contract because there was no evidence of a contract between plaintiff and defendants.
We agree.

        Plaintiff addresses this argument indirectly, by stating that Ditech “breached the contract
implied by the mortgage by applying the proceeds of Woodland’s insurance to Wujciak’s loan.”
Plaintiff does not identify any transaction, document, or communication in which plaintiff and
Ditech entered into a contract. “It is not enough for an appellant in his brief simply to announce
a position or assert an error and then leave it up to this Court to discover and rationalize the basis
for his claims, or unravel and elaborate for him his arguments, and then search for authority
either to sustain or reject his position.” Mudge v Macomb Co, 458 Mich 87, 105; 580 NW2d
845, 854 (1998) (quotation marks and citation omitted).

        Here, plaintiff was not a party to the mortgage contract between defendants and Wujciak.
Plaintiff claims that the mortgage contract language did not give Ditech discretion on whether to
apply the insurance proceeds, but plaintiff does not claim status as a third-party beneficiary to the
contract. Plaintiff and Ditech were parties to the insurance policy as insureds, but the policy
does not govern application of proceeds toward repair cost and debt satisfaction.

        For these reasons, the trial court erred by denying defendants’ motion for summary
disposition with respect to plaintiff’s claim for breach of contract.1




1
  In light of our decision on this issue, it is unnecessary to address defendants’ additional
argument that any oral contract would have been unenforceable under the statute of frauds, MCL
566.132.


                                                 -8-
                                        3. ASSUMPSIT

       Defendants argue that they were entitled to summary disposition of plaintiff’s claim for
assumpsit because assumpsit has been abolished as a form of action. In Fisher Sand & Gravel
Co v Neal A Sweebe, Inc, 494 Mich 543, 564; 837 N W2d 244 (2013), our Supreme Court
recognized that “assumpsit as a form of action was abolished” with the adoption of the General
Court Rules in 1963. The Court further stated, however, that “notwithstanding the abolition of
assumpsit, the substantive remedies traditionally available under assumpsit were preserved.” Id.
Consequently, plaintiff’s use of the term “assumpsit” in labeling its claim does not warrant
dismissal if plaintiff otherwise substantively pleaded a valid claim. See also Adams v Adam (On
Reconsideration), 276 Mich App 704, 710-711; 742 NW2d 399 (2007) (“It is well settled that
the gravamen of an action is determined by reading the complaint as a whole, and by looking
beyond mere procedural labels to determine the exact nature of the claim.”).

        Plaintiff alleged in Count III that (1) it was the owner of the insurance proceeds with the
right to immediate possession of the funds for restoration costs; (2) defendants were holding the
funds; and (3) defendants were unjustly enriched by exercising dominion over the funds. In
substance, this claim was a reiteration of plaintiff’s conversion claim. This is a valid theory of
relief, but as already addressed, there is no evidentiary support for plaintiff’s claim that
defendants were not entitled to apply the funds to satisfy the mortgage debt. Accordingly, the
trial court should have granted defendants’ motion for summary disposition with respect to this
claim.

                                       III. CONCLUSION

       All of plaintiff’s claims against defendants lacked evidentiary support because the
mortgage contract authorized defendants to apply the insurance proceeds toward satisfaction of
Wujciak’s mortgage debt if restoration and repair of the property was not feasible. There was no
genuine issue of material fact that restoration was not feasible because the insurance proceeds
were insufficient to pay the restoration cost of $141,000. The trial court therefore erred by
denying defendants’ motion for summary disposition on plaintiff’s claims. This matter is
remanded for entry of an order granting defendants’ motion for summary disposition.

        Reversed and remanded for entry of an order granting summary disposition in favor of
defendants, as to plaintiff’s claims. We do not retain jurisdiction. Defendants, as the prevailing
parties, may tax costs pursuant to MCR 7.219.

                                                            /s/ Jonathan Tukel
                                                            /s/ Douglas B. Shapiro
                                                            /s/ Michael F. Gadola




                                                -9-
