Preview:

STATE OF MICHIGAN COURT OF APPEALS

CHRISTOPHER J. YATOOMA, Plaintiff-Appellee, v RUSSELL E. BARKER, a/k/a RUSSELL BARKER, a/k/a RUSS BARKER, METROSWEEP ENVIRONMENTAL SERVICES, INC., METROSWEEP, INC., METRO SWEEP CONTRACTING SERVICES, L.L.C., and CEO CAPITAL GROUP, LLC, Defendants, and INDEPENDENT BANK CORPORATION, INDEPENDENT BANK, and INDEPENDENT BANK EAST MICHIGAN, Defendants-Appellants.

UNPUBLISHED December 28, 2010

No. 294932 Oakland Circuit Court LC No. 2008-096649-CK

Before: BECKERING, P.J., and TALBOT and OWENS, JJ. PER CURIAM. Defendants Independent Bank Corporation, Independent Bank, and Independent Bank East Michigan (hereinafter the "Bank") appeal by leave granted the trial court's order denying their motion for summary disposition, which was premised on MCR 2.116(C)(10). We reverse and remand for further proceedings.

I. UNDERLYING FACTS AND PROCEDURAL HISTORY At issue in this case is whether plaintiff Christopher J. Yatooma had a secured interest in a right of first refusal. On July 17, 2006, Ronald C. Omilian, United Soils, Inc., Earth Products, Inc., Earth Supplies, Inc., and C.A.R.D. Properties, L.L.C., entered into a loan agreement with -1-

Yatooma associated with his lending them $230,000. The loan agreement stated in pertinent part: Security: This Loan Agreement and all obligations of Borrower under it are secured by all of the assets and personal property of Borrower. This security interest attaches the Creditor's interest to all collateral, including, without limitation, all of the issued and outstanding stock and membership interests of the following business entities: C.A.R.D. Properties L.L.C., Earth Products, Inc., Earth Supplies Inc., and United Soils, Inc. This Security Interest shall be duly recorded with the State of Michigan in Five (5) separate UCC Financing Statements for each individual parties named in the beginning of the agreement who collectively comprise the Borrower. [Emphasis added.] A Uniform Commercial Code ("UCC") Financing Statement was subsequently filed that purported to cover, among other things, the following collateral: All of the assets and personal property of the debtor, including, without limitation, a) all of debtors [sic] Accounts, Equipment, Inventory, Chattel Paper, General Intangibles, Deposit Accounts, Documents, Instruments, Goods, Fixtures, Investment Property, and Letter-of-Credit Rights; b) all property, tangible or intangible, in which Debtor now has or later acquires any rights . . . . [Emphasis added.] The Bank had also made substantial loans to the above entities. On December 7, 2006, United Soils filed for Chapter 11 bankruptcy. The Bank filed a motion for relief from the bankruptcy stay, which was granted consistent with a stipulation. On February 12, 2007, the Bank and various Omilian entities, including United Soils, entered into a Voluntary Surrender of Assets Agreement ("VSA Agreement"). Pursuant to this agreement, United Soils (and other entities) surrendered their assets to the Bank. The following "Right of First Refusal" clause was in the agreement: Upon the Bank agreeing to sell all or any part of the Collateral . . . to any third party in a private sale, the Bank shall give Omilian and United Soils' counsel, Michael I. Zousmer, Esq. written notice of the purchase price and terms of such sale . . . and Omilian or any entity controlled by him shall have seven (7) days from receipt of Bank's Notice to inform the Bank in writing, that he, or an entity controlled by him, agrees to purchase such Sale Assets on the same terms and conditions as set forth in the Bank's Notice . . . . Ultimately, the Bank provided notice that it had agreed to sell part of the collateral to another entity. Omilian's counsel responded, advising that AKO Enterprises

Download CHRISTOPHER J YATOOMA V RUSSELL E BARKER.pdf

Michigan Law