Tax foreclosure; Whether an easement was excepted from the effects of a judicial tax foreclosure under MCL 211.78k(5)(e); Penrose v McCullough; Principle that an easement in gross is an alienable (and thus transferable) property right; Heydon v MediaOne; Whether leasehold interests were extinguished by the foreclosure; Effect of assignments; Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co; Fixtures; Ottaco, Inc v Gauze; Michigan Nat’l Bank v Lansing; Global Signal Acquisitions IV, LLC (GSA)

The court held that the trial court did not err by finding the easement at issue was excepted from the effects of the judicial tax foreclosure, but did err by finding that the leasehold interests in the foreclosed property survived the foreclosure. It also held that the trial court properly found the cell tower at issue was not a fixture. The property here was subject to a judicial tax foreclosure. Plaintiffs-GSA and American Tower sought to quiet title. Defendant-Adamo filed counterclaims and a third-party complaint asserting numerous theories to challenge the validity of the interests held by each party. The trial court denied Adamo’s motion for summary disposition and granted summary disposition for GSA and American Tower. On appeal, the court rejected Adamo’s argument that the trial court erred by finding the easement was excepted from the effects of a judicial tax foreclosure under MCL 211.78k(5)(e). “Because Michigan recognizes exclusive easements when there is a clear intent to create such an interest, the mere fact that GSA had the right to use the easement area to Adamo’s exclusion does not render the easement invalid or otherwise affect its ability to survive judicial forfeiture.” In addition, “there was no evidence presented that GSA has attempted to transfer the easement to anyone; rather, it has merely continued leasing the easement area to third parties, consistent with its rights under the grant of easement.” The easement was “clearly visible inasmuch as the cell tower and ground-level equipment in the easement area are enclosed by a fence with a no-trespassing sign and secured with padlocks bearing American Tower’s name and contact information. The easement was also indisputably recorded in 2008, long before the judicial foreclosure.” But the court agreed with Adamo that the trial court erred by holding that the leasehold interests of other parties in the foreclosed property survived the judicial foreclosure. “Because GSA’s assignor could not have shielded the leases from the effects of the judicial tax foreclosure, neither could GSA through its easement.” Finally, the court rejected Adamo’s contention that the cell tower was a fixture and thus, ownership of the tower passed to Adamo when it acquired title to the property. The trial court “did not err by holding that the cell tower failed the third element of the fixture test, i.e., ‘intention to make the article a permanent accession to the freehold.’” Affirmed in part, reversed in part, and remanded.