Michigan Supreme Court to Review Kim v JP Morgan Chase
On January 12, 2012, the Michigan Court of Appeals issued a unanimous decision in Kim v JP Morgan Chase Bank, 295 Mich App 200 (2012), in which it ruled that JP Morgan Chase Bank ("Chase") was not authorized to proceed with a sheriff's sale under Michigan's foreclosure by advertisement statute (MCL 600.3201, et. seq.) because Chase had not recorded its mortgage interest before the sheriff's sale occurred. See Varnum's February 27, 2012, Client Advisory.
Chase timely sought leave to appeal to the Michigan Supreme Court, and on May 9, 2012, the Court granted Chase's application. The Court ordered that its review of the case will be limited to the issues of: (i) whether Chase acquired the disputed loan by operation of law and, if so, whether MCL 600.3204(3) applies to acquisition of a mortgage by operation of law, and (ii) if the foreclosure procedures were flawed, whether the foreclosure is void ab initio or voidable.
The Court invited briefs amicus curiae briefs from the Michigan Association of Bankers, the Real Property Section of the State Bar of Michigan, and the Consumer Law Section of the State Bar of Michigan. Other interested parties will need to apply to the Court for permission to file briefs amicus curiae.
Varnum will continue to monitor this case and provide additional information as the matter progresses.