Background
Shiree Broaden loaned Milton Tinnon $20,000. In June 2021, Tinnon executed a quitclaim deed transferring his Detroit property to Broaden. The parties also executed an exhibit stating that the property would be used as security for the loan and that Broaden would receive a 100% return when the money was repaid in about 30 days. According to Broaden, she could record the deed and take ownership if Tinnon did not repay her on time.
After nearly a year without repayment, Broaden recorded her deed on May 5, 2022. Tinnon then quitclaimed the property to CKT Enterprises, which recorded its deed later that month and sued to quiet title. CKT alleged that the deed to Broaden was intended as security for a loan and therefore constituted an equitable mortgage rather than an absolute conveyance. The trial court granted summary disposition to Broaden, dismissed CKT’s complaint, and quieted title in Broaden’s favor.
The Court’s Holding
The Court of Appeals reversed the grant of summary disposition and the order quieting title in Broaden’s favor. Although a party seeking to treat an absolute deed as a mortgage bears a heavy burden, the controlling question is the parties’ intent. Broaden, as the moving party, did not initially address CKT’s equitable-mortgage theory or demonstrate that the deed was not intended as a mortgage.
Even treating Broaden’s motion as asserting that CKT lacked evidence for an essential element of its claim, Exhibit “A” created a genuine issue of material fact. Its statement that the property “will be used as security” for the $20,000 loan supported an inference that the parties intended a mortgage, and Broaden submitted no affidavit or sworn testimony disputing that intent. The court declined to grant CKT summary disposition, however, leaving the issue for further proceedings on remand.
The court also concluded that Broaden waived her appellate standing argument by failing to raise it in her first responsive pleading. It declined to decide her unclean-hands theory because that request depended on factfinding the trial court had not performed, but stated that she could pursue the issue on remand.
Key Takeaways
- A deed absolute on its face may be treated as an equitable mortgage when the parties intended it to secure a debt.
- A written statement that property “will be used as security” can create a genuine factual dispute over whether a deed was an absolute transfer or a mortgage.
- A summary-disposition movant must support the motion with evidence and address the opposing party’s actual legal theory.
Why It Matters
The decision underscores that Michigan courts examine the substance and intended function of a real-estate transaction, not merely the form of the recorded instrument. A quitclaim deed does not necessarily establish absolute ownership when accompanying documents indicate that it was given as loan security.
The ruling also illustrates the importance of developing a factual record before seeking summary disposition in an equitable-mortgage dispute. Unchallenged documentary evidence concerning intent may be enough to require a trial or other further proceedings, even when no deposition testimony from the grantor has been presented.