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Ford Motor Co. v. Trident Barrow Management 22 LLC

United States District Court, E.D. Michigan, Southern Division

March 20, 2018

FORD MOTOR COMPANY, Plaintiff,
v.
TRIDENT BARROW MANAGEMENT 22, LLC, Defendant.

          ORDER DENYING DEFENDANT'S AMENDED MOTION FOR CANCELLATION OF NOTICE OF LIS PENDENS [Doc. 31]

          Victoria A. Roberts United States District Judge.

         Ford Motor Company (“Ford”), filed a breach of contract claim against Trident Barrow Management, LLC (“Trident”) on November 11, 2016. Ford alleges that Trident's refusal to execute a restrictive covenant upon Ford's request breaches the express terms of an agreement between the parties. On July 21, 2017, Ford filed a notice of lis pendens, stating that the action had commenced and that it affects the real property concerning the restrictive covenant.

         Trident filed an amended motion for cancellation of the notice of lis pendens (“Motion”). That motion is DENIED.

         I. Background

         In December 2012, Ford sold Trident the majority of the acreage of the former Wixom Assembly Plant (“Wixom Site”), where Ford assembled automobiles from 1957 through 2007. On December 21, 2012, Ford and Trident entered into an Environmental Cooperation Agreement (“ECA”). It sets forth the obligations of Ford and Trident in remediating the environmental conditions of the Wixom Site. Under the ECA, Ford agreed to complete remedial actions to ensure that the Wixom Site complied with Michigan's Natural Resources and Environmental Protection Act (“NREPA”).

         On July 26, 2016, Ford sent Trident a letter saying that Ford had completed its on-site remediation work. Ford asked Trident to execute a restrictive covenant that would, inter alia, prohibit the Wixom Site from being developed for residential purposes, and for its groundwater to be used for drinking or irrigation purposes. The letter stated that the restrictive covenant to be signed by Trident, would need to be submitted to the Michigan Department of Environmental Quality (“MDEQ”) as required by the NREPA.

         Trident refused to execute the restrictive covenant, arguing that it was not obligated to because Ford had first materially breached the ECA by submitting erroneous reports to the MDEQ. Trident also argues that Ford's remediation activities had not been completed, meaning Trident's obligation to execute the restrictive covenant had not yet been triggered. This lawsuit followed.

         In its Motion, Trident argues that Ford's notice of lis pendens should be canceled because: 1) Ford's breach of contract suit does not affect title to real property; and 2) the harms to Trident caused by the notice far outweigh any purported benefit to Ford. Trident also argues that the Court should award it fees and costs it incurred in connection with this Motion.

         Ford contends that: 1) the restrictive covenant does affect title to the Wixom Site; and 2) the notice protects the interests of the public and Ford, and does not impose more than an existing contractual duty on Trident.

         II. Legal Standard

         The filing of a notice of lis pendens notifies prospective purchasers of real property of a legal action concerning the property, and warns potential purchasers that they take the property subject to any judgment rendered in the litigation. Chirco v. S. R. Acquisitions, LLC, 2000 U.S. Dist. LEXIS 23821, *6-7 (E.D. Mich. Aug. 2, 2000) (citing M.C.L. § 600.2701(1)). “Such a notice may be filed even if the action is brought in a federal court.” Id. at *7 (citing M.C.L. § 600.2735(1), which “applies to suits affecting title to real property in the federal courts”).

         III. Analysis

         A. The Restrictive Covenant Affects Title To The Wixom Site

         Trident argues that the Court should enter an order cancelling Ford's notice of lis pendens because Ford's suit does not affect Trident's title to the Wixom Site. Instead, according to Trident, the case concerns whether Ford completed the environmental remediation activities at the Wixom Site, such that Trident's obligations to execute the restrictive covenant ripened. Trident says its obligation to execute and file a restrictive covenant once remediation efforts are complete, is memorialized in the ECA, which itself is recorded and makes clear that the ...


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