Michigan Court of AppealsJun 22, 1983
126 Mich. App. 640 (Mich. Ct. App. 1983)
126 Mich. App. 640337 N.W.2d 611

Docket Nos. 58336, 59547.

Decided June 22, 1983. Leave to appeal denied, 417 Mich 1100.45.

Thomas Rasmusson, for plaintiffs.

McShane Bowie (by Keith P. Walker), for Keith and Margaret Cline.

Before: MacKENZIE, P.J., and R.B. BURNS and E.A. QUINNELL, JJ.

Circuit Judge, sitting on the Court of Appeals by assignment.


Plaintiffs appeal as of right from the trial court's grant of a motion for directed verdict on behalf of defendants Cline. Plaintiffs also appeal from the trial court's grant of costs and attorney fees to the Clines pursuant to GCR 1963, 111.6.

The record indicates that the Petersons acquired title to the property in question in August, 1970, by warranty deed. The Petersons gave several mortgages on the property to secure debts. Certain mortgages given to First Security Bank and M.L.C. Corporation were foreclosed and the property was sold pursuant to a judicial decree in February, 1978, at a public auction. M.L.C. purchased the property for $50,000.

Frances Christensen and Otto H. and Geraldine C. Christensen purchased the property from M.L.C. as joint tenants for $37,000 by warranty deed dated February 16, 1979. By quitclaim deed dated February 21, 1979, Frances Christensen conveyed to Otto H. and Geraldine C. Christensen all of her interest in the property. Otto and Geraldine Christensen, by warranty deed dated October 19, 1979, sold the property to the Clines for $42,000, which was paid in full on October 19, 1979.

Plaintiffs thereafter brought suit to determine title in the land. The trial court found that the Clines were the owners of all legal and equitable title to the property and had superior title to any right or title claimed by any of the plaintiffs.

The trial court also awarded the Clines their reasonable expenses, including attorney fees, incurred in preparing to disprove, and in disproving, the facts alleged in counts I and IV of plaintiffs' complaint.

Plaintiffs first allege that the trial court abused its discretion in granting costs and attorney fees to the Clines pursuant to GCR 1963, 111.6. We disagree.

In Valley National Bank of Arizona v Kline, 108 Mich. App. 133, 142; 310 N.W.2d 301 (1981), we held that the intent of GCR 1963, 111.6 was to impose realistic costs against a party as a deterrent to bad faith pleading. However, actual bad faith is not a prerequisite for GCR 1963, 111.6 to be invoked. See Harvey v Lewis, 10 Mich. App. 23, 32; 158 N.W.2d 809 (1968); Fredal v Forster, 9 Mich. App. 215; 156 N.W.2d 606 (1967). Review of an award of costs pursuant to GCR 1963, 111.6 is governed by an abuse of discretion standard. Kline, supra, p 143; Three Lakes Ass'n v Kessler, 101 Mich. App. 170, 176; 300 N.W.2d 485 (1980).

In this case the trial court did not abuse its discretion in awarding attorney fees and costs to the Clines. There is not a scintilla of evidence to support the civil conspiracy alleged in count IV. As will be further discussed, infra, there was nothing to make out a claim for constructive forgery as alleged in count I. The allegations contained in plaintiffs' complaint against the Clines were unwarranted and should not have been brought. The trial court was within its discretion in granting costs and attorney fees pursuant to GCR 1963, 111.6.

Further, plaintiffs stipulated in open court that they would not appeal the amount of attorney fees awarded, but only the propriety of the award itself. On appeal plaintiffs now attempt to challenge the amount of attorney fees awarded. The stipulation made in open court is binding upon plaintiffs and operates as a waiver on appeal. Wyrzykowski v Budds, 325 Mich. 199; 38 N.W.2d 313 (1949); Hoste v Dalton, 137 Mich. 522, 525-526; 100 N.W. 750 (1904).

Plaintiffs next argue that the trial court improperly granted defendants' motion for a directed verdict, as there was evidence on the record which would establish plaintiffs' claim of constructive forgery. We cannot agree.

A forgery, whether actual or constructive, is a false making or material altering, with intent to defraud, of any writing which, if genuine, might apparently be of legal efficacy. McGinn v Tobey, 62 Mich. 252, 259; 28 N.W. 818 (1886). The essence of a forgery is some intent to defraud. See Leidel v Ballbach, 345 Mich. 201; 75 N.W.2d 860 (1956); Horvath v National Mortgage Co, 238 Mich. 354; 213 N.W. 202 (1927). This record is completely devoid of any evidence of an intent to defraud on anyone's part. The most that is presented is the fact that Frances Christensen made a mistake in signing the quitclaim deed. This does not make out a case of constructive forgery.

Additionally, Frances Christensen's failure to read the quitclaim deed is attributable to her alone. This state has long held that a person who signs and executes an instrument without inquiring as to its contents cannot have the instrument set aside on the ground of ignorance of the contents. Richeson v Wagar, 287 Mich. 79, 84; 282 N.W. 909 (1938); Sanborn v Sanborn, 104 Mich. 180, 184; 62 N.W. 371 (1895).

Plaintiffs also argue that the presence of the Petersons on the property was notice to the Clines of a competing interest in the property. They contend that the Clines' failure to inquire of the Petersons as to their interest in the property was at their own peril. We disagree. In an identical situation in Leidel v Ballbach, supra, the Supreme Court held that mere occupancy of the premises could not be notice to the buyers of a claim of an interest in the property when the occupant did not make any claim in the face of the property being sold. Leidel is dispositive of this case.

Plaintiffs argue further that an agreement between the Petersons and the Christensens, whereby the Petersons would eventually obtain title to the property after making the mortgage payments, would defeat the Clines' interest in the property. We disagree. MCL 565.29; MSA 26.547 requires every conveyance of real estate to be recorded. Since the alleged agreement between the Petersons and the Christensens was not recorded, it cannot defeat the interest of the Clines.

Plaintiffs have failed to establish that the trial court erred in finding legal and equitable title to the property to be vested in the Clines. Furthermore, we determine this appeal to be vexatious because it was taken "without any reasonable basis for belief that there was a meritorious issue to be determined on appeal". GCR 1963, 816.5(1)(a). We therefore assess punitive damages against plaintiffs and in favor of defendants Cline, in an amount equivalent to the expenses incurred by the Clines on appeal, including reasonable attorney fees. GCR 1963, 816.5(2). We retain jurisdiction and remand the case to the trial court for determination of the amount of punitive damages. Cogan v Cogan, 119 Mich. App. 476, 479; 326 N.W.2d 414 (1982).

Affirmed and remanded.