BillCam

SENATE BILL No. 516

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.

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.

(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.