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STATE OF MICHIGAN COURT OF APPEALS

BANK OF AMERICA, N.A., Plaintiff-Appellee, v BRIDGEWATER CONDOS, L.L.C., Defendant-Appellant.

UNPUBLISHED November 22, 2011

No. 299441 Kent Circuit Court LC No. 10-000289-CK

Before: WILDER, P.J., and HOEKSTRA and BORRELLO, JJ. PER CURIAM. Defendant, Bridgewater Condos, L.L.C.,1 appeals as of right the trial court's July 19, 2010 order granting summary disposition in favor of plaintiff, Bank of America, and entering judgment in favor of Bank of America. For the reasons stated in this opinion, we affirm. I. FACTS & PROCEEDINGS In April 2006, Michael Vorce, acting on behalf of Barrett Bruce Holdings, L.L.C. (BBH), entered into an agreement with Bridgewater to purchase unit three in its River House at Bridgewater Place condominium development, for which BBH paid a purchase deposit of $29,850. In July 2006, Vorce entered into a purchase agreement with Bridgewater for River House condominium unit 28, for which he paid a purchase deposit of $15,987. The purchase agreements signed by Vorce, individually and on behalf of BBH, are identical in all pertinent regards. The purchase agreements provided that the purchase deposits were to be held in escrow by Metropolitan Title Company subject to the terms of the purchase agreements and of an escrow agreement between Metropolitan Title Company and Bridgewater, incorporated by reference into the purchase agreements. The condominium development was not constructed at the time the purchase agreements were executed, and the agreements provided that Bridgewater would inform the purchaser of its closing date upon completion of the purchased unit. The agreement provided that the buyer "may withdraw without cause and without penalty" and

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Although the lower court pleadings identify defendant as "Bridgewater Condos, L.L.C.," defendant advises that its correct name is "Bridgewater Condos, L.C."

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cancel the agreement within nine days of receiving a copy of the recorded master deed and the other documents required by statute. On January 11, 2008, Vorce sent a letter to Metropolitan Title Company requesting, on his own behalf and on behalf of BBH, that the purchase deposits for both units be returned. Neither Metropolitan Title Company nor Bridgewater responded to Vorce's request for return of the purchase deposits. Instead of responding, Bridgewater advised Vorce by letter dated November 25, 2008, that it scheduled the closing for unit 28 on December 29, 2008. By letter dated February 20, 2009, Bridgewater advised Vorce that it scheduled the closing for unit three on March 9, 2009. Vorce did not appear at the scheduled closings, and the purchase of the units was never completed. By letter dated February 20, 2009, Bridgewater informed Vorce that it was contacting him in regard to his failure to appear at the December 29, 2008 closing for unit 28. The letter advised Vorce that his failure to appear at the closings was a default of the purchase agreement. The letter stated that Bridgewater would "proceed with any and all of its remedies pursuant to the purchase agreement" if Vorce did not cure the default within ten days. An identical letter dated April 14, 2009 was sent to Vorce regarding his failure to appear at the March 9, 2009 closing for unit three. Based on the record, it does not appear that Vorce responded to either letter regarding his failure to appear at the closings of the condominium units. Bank of America is a secured creditor of both Vorce and BBH pursuant to security agreements dated June 21, 2006 and April 10, 2007. Bank of America also holds a judgment, entered in November 2007, against Vorce, in an amount exceeding $1,000,000 and against BBH in an amount exceeding $200,000. On July 14, 2009, Bank of America sent a demand letter to Bridgewater asking it to pay the Vorce and BBH purchase deposit funds over to it. Bank of America asserted that the purchase agreements were invalid and that it was accordingly entitled to the purchase deposits paid by Vorce and BBH because it was a secured creditor of both parties. Bridgewater responded to Bank of America by letter dated July 22, 2009, and explained that the purchase agreements permitted it to retain any deposits as liquidated damages in the event of a default by the purchaser, and that Vorce and BBH defaulted. In its response, Bridgewater relied on the language of the purchase agreements and implicitly asserted the validity of the purchase agreements between it and Vorce and BBH. Bridgewater indicated that its position was that it was entitled to keep the deposits. By letter dated September 3, 2009, Bank of America responded to Bridgewater's refusal to turn the deposits over. Bank of America reiterated its position that the purchase agreements were invalid, and that as a result the deposits must be returned to the depositors. Bank of America explained that as a secured creditor of Vorce and BBH, it was entitled to the return of the deposits paid by Vorce and BBH. It appears from the record that Bridgewater did not reply to Bank of America's September 3, 2009 letter. In early January 2010, Bank of America commenced this action in the trial court seeking to recover the deposits that were paid by Vorce and BBH when the purchase agreements were executed. Bridgewater moved for summary disposition, seeking dismissal of Bank of America's claim. To support its motion for summary disposition, Bridgewater argued that Bank of America -2-

did not have any interest in the deposits because Bank of America's rights were dependent upon the rights of the depositors, Vorce and BBH, and the depositors no longer had any legal right or interest in the funds because the funds were released from escrow and forfeited by Vorce and BBH when each respectively defaulted on the purchase agreements. In response to Bridgewater's motion, Bank of America requested judgment pursuant to MCR 2.116(I)(2). Bank of America argued that the purchase agreements were invalid and that Vorce and BBH were entitled to return of the deposited funds; therefore, Bank of America was entitled to the funds as a secured creditor of both Vorce and BBH. The trial court granted summary disposition in favor of Bank of America. The trial court determined that the purchase agreements never became binding on Vorce and BBH because the agreements failed to comply with the requirements set forth in

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