September 6, 2017, Introduced by Senator SCHMIDT and referred to the Committee on Banking and Financial Institutions.
A bill to amend 1961 PA 236, entitled
"Revised judicature act of 1961,"
by amending sections 3204, 4001, 4011, 5726, 5728, and 6001 (MCL
600.3204, 600.4001, 600.4011, 600.5726, 600.5728, and 600.6001),
section 3204 as amended by 2014 PA 125 and section 4011 as amended
by 1994 PA 346, and by adding sections 3104 and 4010.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3104. (1) A person shall not file an action under this
chapter to foreclose a mortgage or land contract if the farm loan
mediation act applies to the debt that is secured by the mortgage
or the land contract indebtedness, unless both of the following
apply:
(a) The person has served a mediation notice under subsection
(2) on the mortgagor or land contract vendee and a copy on the
director of the department of agriculture and rural development.
(b) Foreclosure of the mortgage or land contract is allowed
under the farm loan mediation act.
(2) A mediation notice under subsection (1) must contain the
following language with the blanks properly filled in:
To: ....(name of mortgagor or vendee)....
You have defaulted on (a mortgage) (a land contract for the sale)
of the agricultural property described as....(size and reasonable
location, not legal description). The amount of the outstanding
debt on this property is....(amount of debt)....
As (holder of the mortgage) (land contract vendor),....(name of
mortgage holder or land contract vendor)....intends to foreclose on
the property described above.
You have the right to have the (mortgage) (land contract) debt
reviewed for mediation under the farm loan mediation act. If you
request mediation, a debt that is in default will be mediated only
once. If you do not request mediation, this debt will not be
subject to future mediation if the (mortgage holder) (land contract
vendor) enforces the debt.
If you participate in mediation, the Director of the Department of
Agriculture and Rural Development will provide an orientation
meeting and a financial analyst to help you prepare financial
information. If you decide to participate in mediation, it will be
to your advantage to assemble your farm finance and operation
records and to contact the Director of the Department of
Agriculture and Rural Development or an MSU Extension county office
as soon as possible. Mediation will be an attempt to arrive at an
agreement for handling future financial relations.
To have the (mortgage) (land contract) debt reviewed for mediation,
you must file a mediation request with the Director of the
Department of Agriculture and Rural Development within 14 days
after you receive this notice. The mediation request form may be
obtained from the website of the Department of Agriculture and
Rural Development or any MSU Extension county office.
From: ....(name and address of mortgage holder or land contract
vendor)....
Sec.
3204. (1) A Subject to
subsection (4), a party may
foreclose a mortgage by advertisement if all of the following
circumstances exist:
(a) A default in a condition of the mortgage has occurred, by
which the power to sell became operative.
(b) An action or proceeding has not been instituted, at law,
to recover the debt secured by the mortgage or any part of the
mortgage or, if an action or proceeding has been instituted, either
the action or proceeding has been discontinued or an execution on a
judgment rendered in the action or proceeding has been returned
unsatisfied, in whole or in part.
(c) The mortgage containing the power of sale has been
properly recorded.
(d) The party foreclosing the mortgage is either the owner of
the indebtedness or of an interest in the indebtedness secured by
the mortgage or the servicing agent of the mortgage.
(2) If a mortgage is given to secure the payment of money by
installments, each of the installments mentioned in the mortgage
after
the first shall must be treated as a separate and independent
mortgage. The mortgage for each of the installments may be
foreclosed in the same manner and with the same effect as if a
separate mortgage were given for each subsequent installment. A
redemption of a sale by the mortgagor has the same effect as if the
sale for the installment had been made upon an independent prior
mortgage.
(3) If the party foreclosing a mortgage by advertisement is
not the original mortgagee, a record chain of title must exist
before the date of sale under section 3216 evidencing the
assignment of the mortgage to the party foreclosing the mortgage.
(4) A person shall not publish a notice under section 3208 to
foreclose a mortgage of agricultural property if the farm loan
mediation act applies to the debt that is secured by the mortgage
unless both of the following apply:
(a) The person has served a mediation notice under subsection
(5) on the mortgagor and a copy on the director of the department
of agriculture and rural development.
(b) Foreclosure of the mortgage is allowed under the farm loan
mediation act.
(5) A mediation notice under subsection (4) must contain the
following language with the blanks properly filled in:
To: ....(name of mortgagor)....
You have defaulted on a mortgage of the agricultural property
described as....(size and reasonable location, not legal
description). The amount of the outstanding debt on this property
is....(amount of debt)....
As holder of the mortgage,....(name of mortgage holder)....intends
to foreclose on the property described above.
You have the right to have the mortgage debt reviewed for mediation
under the farm loan mediation act. If you request mediation, a debt
that is in default will be mediated only once. If you do not
request mediation, this debt will not be subject to future
mediation if the mortgage holder enforces the debt.
If you participate in mediation, the Director of the Department of
Agriculture and Rural Development will provide an orientation
meeting and a financial analyst to help you prepare financial
information. If you decide to participate in mediation, it will be
to your advantage to assemble your farm finance and operation
records and to contact the Director of the Department of
Agriculture and Rural Development or an MSU Extension county office
as soon as possible. Mediation will be an attempt to arrive at an
agreement for handling future financial relations.
To have the mortgage debt reviewed for mediation, you must file a
mediation request with the Director of the Department of
Agriculture and Rural Development within 14 days after you receive
this notice. The mediation request form may be obtained from the
website of the Department of Agriculture and Rural Development or
any MSU Extension county office.
From: ....(name and address of mortgage holder)....
Sec.
4001. Upon Subject to
section 4010, on an ex parte
application showing that the person against whom a claim is
asserted
is not subject to the judicial jurisdiction of the this
state or, after diligent effort, cannot be served with process as
required
to subject him the person to the judicial jurisdiction of
the
this state, the circuit court shall have the power may by
attachment
to apply to the satisfaction of the claim due or to
become
due any interest in things which that are subject to the
judicial
jurisdiction of the this state and belonging to the person
against whom the claim is asserted. A copy of the writ of
attachment
shall must be served upon on the person against whom
the
claim is made in the same manner as provided by Michigan court
rules
of the supreme court for service of process in other civil
actions in which personal jurisdiction over the defendant is not
required. The court may exercise the jurisdiction granted in this
section only if action is taken in accordance with Michigan court
rules
adopted by the supreme court to protect the parties.
Sec. 4010. (1) A person shall not apply for a writ of
attachment, garnishment, or execution against agricultural property
that is subject to the farm loan mediation act unless both of the
following apply:
(a) The person has served a mediation notice under subsection
(2) on the judgment debtor and a copy on the director of the
department of agriculture and rural development.
(b) Application for the writ is allowed under the farm loan
mediation act.
(2) A mediation notice under subsection (1) must contain the
following language with the blanks properly filled in:
To: ....(name of record owner)....
A judgment was entered against you in the....(name of court)....
on....(date of judgment).
As a judgment creditor,....(name of judgment creditor)....intends
to take action against the agricultural property described
as....(description of agricultural property).... to satisfy the
unsatisfied judgment in the amount of....(unsatisfied amount of
judgment)....
You have the right to have the debt reviewed for mediation under
the farm loan mediation act. If you request mediation, a debt that
is in default will be mediated only once. If you do not request
mediation, this debt will not be subject to future mediation if the
judgment creditor enforces the debt.
If you participate in mediation, the Director of the Department of
Agriculture and Rural Development will provide an orientation
meeting and a financial analyst to help you prepare financial
information. If you decide to participate in mediation, it will be
to your advantage to assemble your farm finance and operation
records and to contact the Director of the Department of
Agriculture and Rural Development or an MSU Extension county office
as soon as possible. Mediation will be an attempt to arrive at an
agreement for handling future financial relations.
To have the debt reviewed for mediation, you must file a mediation
request with the Director of the Department of Agriculture and
Rural Development within 14 days after you receive this notice. The
mediation request form may be obtained from the website of the
Department of Agriculture and Rural Development or any MSU
Extension county office.
From: ....(name and address of judgment creditor)....
Sec. 4011. (1) Subject to sections 4010, 4061, and 4061a, and
the conditions in subsections (2) to (10), the court has power by
garnishment to apply the following property or obligation, or both,
to the satisfaction of a claim evidenced by contract, judgment of
this state, or foreign judgment, whether or not the state has
jurisdiction over the person against whom the claim is asserted:
(a) Personal property belonging to the person against whom the
claim is asserted but which is in the possession or control of a
third person if the third person is subject to the judicial
jurisdiction
of the this state and the personal property to be
applied is within the boundaries of this state.
(b) An obligation owed to the person against whom the claim is
asserted if the obligor is subject to the judicial jurisdiction of
the
this state.
(2) Except as provided in sections 4061 and 4061a, the court
may exercise the jurisdiction granted in this section only in
accordance with the Michigan court rules. Except as otherwise
provided by sections 4061 and 4061a and the Michigan court rules,
the
this state and each governmental unit within the this state,
including but not limited to a public, municipal, quasi-municipal,
or governmental corporation, unincorporated board, public body, or
political subdivision, may be proceeded against as a garnishee in
the same manner and with the same effect as a proceeding against an
individual garnishee.
(3) A writ of garnishment may be issued before judgment only
as
provided in this subsection. Upon Subject to section 4010, on an
ex parte application showing that the person against whom the claim
is
asserted is not subject to the judicial jurisdiction of the this
state or, after diligent effort, cannot be served with process as
required
to subject the person to the judicial jurisdiction of the
this
state, a copy of the writ of
garnishment shall must be served
upon
on the person against whom the claim is made in the
same
manner as provided by the Michigan court rules for service of
process in other civil actions in which personal jurisdiction over
the
defendant is not required. Upon On
entry of judgment in the
principal
action, the obligation or property garnished shall must
be applied to the satisfaction of the judgment.
(4) A plaintiff shall not commence a garnishment proceeding
shall
not be commenced against the this state
or a governmental
unit
of the this state, including, but not limited to, a
public,
municipal, quasi-municipal, or governmental corporation,
unincorporated board, public body, or political subdivision, until
after the plaintiff's claim has been reduced to judgment.
(5) A plaintiff shall not commence a garnishment proceeding
shall
not be commenced against a person
for money owing owed to a
defendant
on account because of labor performed by the defendant
until after the plaintiff's claim has been reduced to judgment.
(6) A sheriff or other public officer is not subject to
garnishment for money or things received or collected by him or her
pursuant
to an execution or other legal process in the favor of the
defendant or because of any money in his or her hands for which he
or she is accountable merely as a public officer to the defendant.
(7)
A person shall not commence a garnishment proceeding shall
not
be commenced if the commencement of
such a the proceeding is
forbidden by a statute of this state.
(8) Except as otherwise provided in sections 4012 and 4061, a
plaintiff shall pay a fee of $1.00 to the garnishee at the time the
garnishee is served with a writ of garnishment.
(9) If the court or garnishee possesses money or property
pursuant to a writ of garnishment after the court releases the
garnishee
from liability under that the
writ, the court shall
convey or order the conveyance of the money or property to any of
the following, as the court determines appropriate:
(a) The defendant's attorney, if the defendant is represented
by counsel in the garnishment proceeding.
(b) The defendant, if the defendant is not represented by
counsel in the garnishment proceeding.
(c) The plaintiff.
(10) A writ of garnishment is not effective if both of the
following conditions are met:
(a) The plaintiff fails to provide the garnishee with
information sufficient for the garnishee to identify the defendant.
(b) The garnishee provides the court with written notice of
the insufficiency described in subdivision (a).
Sec.
5726. (1) A Subject
to subsection (2), a person entitled
to
any premises may recover possession thereof of the premises by a
proceeding under this chapter after forfeiture of an executory
contract for the purchase of the premises, but only if the terms of
the contract expressly provide for termination or forfeiture, or
give
the vendor the right to declare a forfeiture, in consequence
because
of the nonpayment of any moneys failure to pay money
required to be paid under the contract or any other material breach
of
the contract. For purposes of this chapter, moneys money
required
to be paid under the contract shall does not include any
accelerated
indebtedness by reason of that
results from a breach of
the contract.
(2) A person shall not declare a forfeiture of an executory
contract for the purchase of agricultural property or commence a
proceeding under this chapter to recover possession of the property
if the farm loan mediation act applies to the contractual
indebtedness unless both of the following apply:
(a) The person has served a mediation notice under subsection
(3) on the land contract vendee and a copy on the director of the
department of agriculture and rural development.
(b) Forfeiture of the land contract is allowed under the farm
loan mediation act.
(3) A mediation notice under subsection (2) must contain the
following language with the blanks properly filled in:
To: ....(name of vendee)....
You have defaulted on a land contract for the sale of the
agricultural property described as....(size and reasonable
location, not legal description). The amount of the outstanding
debt on this property is....(amount of debt)....
As land contract vendor,....(name of land contract
vendor)....intends to declare the contract forfeited and recover
possession of the property described above.
You have the right to have the land contract debt reviewed for
mediation under the farm loan mediation act. If you request
mediation, a debt that is in default will be mediated only once. If
you do not request mediation, this debt will not be subject to
future mediation if the land contract vendor enforces the debt.
If you participate in mediation, the Director of the Department of
Agriculture and Rural Development will provide an orientation
meeting and a financial analyst to help you prepare financial
information. If you decide to participate in mediation, it will be
to your advantage to assemble your farm finance and operation
records and to contact the Director of the Department of
Agriculture and Rural Development or an MSU Extension county office
as soon as possible. Mediation will be an attempt to arrive at an
agreement for handling future financial relations.
To have the land contract debt reviewed for mediation, you must
file a mediation request with the Director of the Department of
Agriculture and Rural Development within 14 days after you receive
this notice. The mediation request form may be obtained from the
website of the Department of Agriculture and Rural Development or
any MSU Extension county office.
From: ....(name and address of land contract vendor)....
Sec. 5728. (1) Possession may be recovered under section 5726
only
after the vendee or person holding possession under him the
vendee has been served with a written notice of forfeiture and has
failed
in the required time to pay moneys money required to be paid
under the contract or to cure any other material breach of the
contract.
Unless Subject to
subsection (3), unless the parties have
agreed in writing to a longer time, the person served with a notice
of
forfeiture shall have has 15 days thereafter before he is
required
after being served with a notice
of forfeiture under this
section
to pay moneys money required
to be paid under the contract
and cure other material breaches of the contract or to deliver
possession of the premises.
(2)
The A notice of forfeiture shall under this section must
state the names of the parties to the contract and the date of its
execution, give the address or legal description of the premises,
specify
the unpaid amount of moneys money
required to be paid under
the
contract and the dates on which payments thereof of the money
were due, specify any other material breaches of the contract, and,
unless
section 5276(2) applies, shall declare forfeiture of the
contract effective in 15 days, or any specified longer time, after
service of the notice, unless the money required to be paid under
the contract is paid and any other material breaches of the
contract
are cured within that time. The notice shall must be
dated
and
signed by the person entitled to possession, his or the
person's attorney or agent. If section 5276(2) applies, instead of
declaring forfeiture after 15 days, the notice must state that if
the parties do not reach a mediation agreement to continue the
contract under the farm loan mediation act or if the vendee does
not pay the money required to be paid under the contract by the
expiration of the 90-day period provided under section 5(2) of the
farm loan mediation act, the forfeiture will be declared after
expiration of the 90-day period provided under section 5(2) of the
farm loan mediation act.
(3) If section 5276(2) applies, the person entitled to
possession shall not declare the contract forfeited until
expiration of the 90-day period provided under section 5(2) of the
farm loan mediation act. If a mediation agreement is reached that
includes the continuation of the contract, with or without
restructuring the contract, the person entitled to possession shall
not declare the contract forfeited or commence proceedings under
this chapter unless the vendee subsequently breaches the continued
contract. If a mediation agreement is not reached or if an
agreement is reached that does not include the continuation of the
contract, the person entitled to possession may declare the
contract forfeited and commence proceedings under this chapter.
Sec.
6001. Whenever Subject to
section 4010, if a judgment is
rendered
in any court, execution to collect the same judgment may
be issued to the sheriff, bailiff, or other proper officer of any
county, district, court district, or municipality of this state.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No. 517
of the 99th Legislature is enacted into law.