Background
CMM Holdings and related entities, controlled by Jason and Abigail Johnson, entered development arrangements with Tribella Properties and related entities, controlled by Joseph and Tanae Klewicki. The projects included Troy Burne, Foxglove, and Marquee Court. In 2018, the parties signed a “Payback Agreement” stating that CMM owed Tribella $625,826.04 for unpaid subcontractors, suppliers, and borrowed funds, plus monthly interest. CMM provided quitclaim deeds to properties as collateral.
After CMM sued in 2023, Tribella counterclaimed. The circuit court granted Tribella partial summary judgment, concluded that CMM had breached the Payback Agreement by making no required payments, reformed the collateral deeds into mortgages, and entered a foreclosure judgment. It also dismissed the individual Klewickis from CMM’s claims. CMM later sought relief from judgment based on depositions it took after summary judgment.
The Court’s Holding
The Court of Appeals affirmed. It held that the Payback Agreement unambiguously obligated CMM to repay a fixed principal amount of $625,826.04, plus interest. The agreement’s references to an “approximate” underlying project amount and an “estimated” total did not make the agreed repayment obligation fluid. Nor did the provision directing CMM’s share of any net project-sale proceeds to its balance create an offset where the projects had no net proceeds.
The court also upheld reformation of the deeds into mortgages. The written agreement clearly and convincingly showed that the deeds were delivered as collateral, not unconditional conveyances, and Tribella’s pleading of a foreclosure claim adequately gave notice of the requested relief. Finally, the court held that the circuit court properly denied relief based on purported newly discovered evidence because CMM could have deposed the Klewickis before summary judgment and therefore had not shown diligence.
Key Takeaways
- A contract can establish a fixed repayment amount even when it describes figures used to reach that amount as approximate or estimated.
- Deeds intended as security may be reformed into mortgages when clear and convincing evidence establishes that intent.
- Post-summary-judgment deposition testimony is not newly discovered evidence when the moving party could have obtained it earlier through diligent discovery.
Why It Matters
The decision reinforces that courts will enforce the objective terms of a repayment-and-collateral agreement despite informal drafting when its payment, interest, maturity, and collateral provisions point to a definite obligation.
It also underscores the importance of completing essential discovery before summary-judgment briefing. A party generally cannot use evidence obtainable through earlier depositions to reopen an adverse judgment.