Contractual dispute involving the sale of real property; Legal vs equitable interest in property; Transfer of ownership; Signature Villas, LLC v Ann Arbor; Principle that the assets & property of a corporation belong to the corporation rather than to the stockholders; Bourne v Sanford; “Refinancing”; Summary disposition before the end of discovery; Limited liability company (LLC)

The court held that the trial court did not err by granting summary disposition for plaintiffs in this action involving a contract for the sale of real property. Plaintiffs sued defendant for breach of contract and promissory note. On appeal, the court rejected defendant’s argument that certain internal membership transactions by plaintiffs (a corporation and an LLC) constituted a transfer of an interest in the property. “To the extent defendant’s arguments turn on the erroneous belief that a transfer of shares in a corporation constitutes a transfer of any real interest in the corporation’s property, defendant’s arguments are untenable. It is therefore irrelevant whether the . . . transactions were at arms-length, or whether plaintiffs provided defendant with transfer documents and identification materials relevant to those transactions. Although we, like the trial court, appreciate defendant’s reasonable concerns with knowing the identity of the individuals involved in the sale of the property, such a requirement could easily have been drafted into the parties’ contracts.” The court also rejected defendant’s claim that the “transactions, and the money that exchanged hands in the process, was ‘fundraising . . . with the intent to pay off [defendant].’” It noted that “whatever plaintiffs’ intentions might have been, merely raising money—whether by ‘fundraising’ or some other means—does not constitute ‘refinancing’ a debt.” In addition, if plaintiffs “found a loophole in the contract that permits them to violate defendant’s expectations without violating any of the contract’s plain terms, then the contract was simply not adequately drafted to address all eventualities.” The court could not conclude that plaintiffs’ conduct violated the parties’ contracts. Finally, it rejected defendant’s contention that summary disposition should not have been granted before the conclusion of discovery. “[E]ven presuming all of the facts (and even all of the speculation) advanced by defendant to be true, those facts would still not entitle defendant to a pre-payment penalty under” the contracts. “No further discovery could benefit defendant.” The court could not “find error in the trial court’s decision not to hold plaintiffs in default of the contracts.” Affirmed.