Real Property - Sale

Where a plaintiff has moved for summary disposition arguing that it is not liable for breach of a land contract because the defendant breached first by not owning the property it was to sell to the plaintiff and because the defendant owed delinquent taxes on the property, that motion should be denied.

“Canna Koala argues that it is not liable for breach of the disputed land contract because Defendant, FRS Muskegon, LLC, breached first by not owning the property it was to sell to Canna Koala and because FRS owed delinquent taxes on the property.

“For its first proposition, Canna Koala assumes without evidence, argument, or authority that a third party owned the disputed real estate until that party recorded a quitclaim deed conveying it to FRS in November 2021. The deed is dated January 30, 2019. A deed takes effect when it is delivered to the grantee, not from the time of its date, execution, or recording. Ligon v Detroit , 276 Mich App 120, 128; 739 NW2d 900 (2007). Canna Koala has not offered any evidence on when the deed was delivered. FRS asserts that delivery happened on January 30, 2019. But contrary to MCR 2.119(B)(1)(b), the averment on which it relies is vague and conclusory. Therefore, the question of whether FRS owned the disputed property when it agreed to sell that parcel to Canna Koala remains a question of fact.

“For its other proposition, Canna Koala relies on the contract’s terms at paragraph 14. The paragraph provides, however, that FRS warranted to Canna Koala that as of the date of the contract, there were no obligations or liabilities, including tax liabilities, relating to the property for which Canna Koala ‘would or will be liable.’ Canna Koala has presented no evidence to show that it has ever been liable for anything related to the disputed property that existed at the time the parties made the agreement.

“Having shown no evidence that it became liable to a tax debt that existed at the time it made the agreement with FRS, Canna Koala is not entitled to judgment on the question of whether FRS breached that contract.

“The question of who owned the property when FRS agreed to sell it to Canna Koala remains one of fact. And Canna Koala has not established that it took on a tax liability related to the property that existed when it agreed to buy that parcel from FRS. The motion is therefore DENIED.”

Canna Koala Group LLC v. FRS Muskegon LLC; MiLW 10-108061, 3 pages; Muskegon Circuit Court; Hoopes, J.

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