Where a plaintiff with an option to purchase leased property moved for summary disposition, a judge’s decision to deny that motion should be upheld because there are questions of fact as to whether the defendant had unclean hands.
“Plaintiff, Scott Abrams, appeals as of right the trial court’s entry of a judgment of no cause of action in favor of defendant, Martin Yono. On appeal, Abrams challenges both the trial court’s decision following a bench trial, and the trial court’s earlier order denying his motion for summary disposition under MCR 2.116(C)(10). We affirm for the reasons stated in this opinion.
“In September 2015, Abrams and Yono entered into a four-year residential lease with an option to purchase. Under the terms of the lease, Abrams had the option to purchase the property for $346,600 ‘at any time during his tenancy.’ The option could only be exercised if (1) Abrams was not in default and (2) the lease had not been terminated under paragraphs 19 or 20 of the lease agreement. In March 2019, Abrams, through his lawyer, gave Yono written notice that he intended to exercise the option and purchase the property. At that time, Abrams was not in default and the lease had not been terminated under paragraphs 19 or 20 of the lease agreement. Abrams presented evidence showing that he was ready to close.
“Ultimately, however, the parties were unable to close because there was a cloud on the title as a result of the United States Attorney’s Office recording an affidavit relating to a matter affecting real property.
“In his motion for summary disposition, Abrams presented evidence supporting that there was a valid contract between the parties, that he was not in default at the time that he exercised his option, and that the parties did not close. He asserted that Yono breached the lease agreement by ‘refusing’ to close or provide marketable title. He did not, however, provide any support for his assertion that Yono ‘refused’ to close. Rather, he only submitted evidence showing that the parties were unable to close as a result of the United States Attorney’s Office recording an affidavit in the property’s chain of title. Further, Yono stated in an affidavit that he was never informed of the closing date. Thus, viewing the facts in the light most favorable to Yono, there is a question of fact as to whether Yono refused to close and whether the failure to close was a result of the United States Attorney’s Office’s affidavit.
“The trial court also found that summary disposition was improper because there were questions of fact regarding the applicability of the doctrine of laches. In order for laches to apply, ‘inexcusable delay in bringing suit must have resulted in prejudice.’ Because laches is an equitable doctrine, it is only available to individuals with ‘clean hands.’
“Yono asserted that Abrams claim was barred by laches. The trial court found that there were questions of fact that precluded it from making a finding as to whether there was prejudice as a result of Abrams’ delay in filing his complaint. The summary disposition record reflects that in March 2019, Abrams gave notice to Yono that he intended to exercise the option to purchase. The closing did not occur. Yono was not, in fact, ever notified of the date that the closing was scheduled with funds. Abrams moved from the property in June 2019, and did not have any communications between June 2019 and November 2021 when he filed his complaint for breach of contract. Thus, Yono did not believe that Abrams intended to purchase the property after Abrams had moved out. Viewed in the light most favorable to Yono, given the absence of communication from when Abrams moved out until he filed suit, Yono’s belief was reasonable. Based upon that belief, Yono encumbered the property with two mortgages and expended money on costly improvements to the property.
“Moreover, even if there were prejudice, the court also found that there was a question of fact with regard to whether Yono had unclean hands.
“In sum, although it is reasonable to infer that Yono had engaged in unlawful conduct in 2021, viewing the record in the light most favorable to Yono, it is also reasonable to infer that his 2021 pretrial diversion agreement is not proof that he was engaging in unlawful conduct in 2017. Moreover, the fact that unlawful conduct occurred at a home he owned and rented to Abrams in 2017, does not mean that he was engaged in any illegal conduct at that time. Because there are questions of fact as to whether Yono had unclean hands, the trial court did not err by denying summary disposition.”
Abrams v. Yono; MiLW 08-108055, 6 pages; Michigan Court of Appeals unpublished per curiam; Feeney, J., M. J. Kelly, J., Rick, J.; on appeal from Oakland Circuit Court; David H. Applebaum for appellant; Robert L. Levi for appellee.
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