'What Do You Mean That I Can't Foreclose My Mortgage And Sue The Guarantor At The Same Time? Since When?'

The answer is, "since April 17, 2012." On that day, the Michigan Court of Appeals, Michigan's intermediate appellate court, issued its opinion in Greenville Lafayette, LLC v. Elgin State Bank (Case No. 308450), which reversed a decision of the Montcalm County Circuit Court on the scope of Michigan's "one action" rule applicable to mortgage foreclosure by advertisement proceedings, MCL 600.3204(1)(b). This statutory provision prohibits the commencement and continuation of foreclosure by advertisement proceedings when "an action or proceedings, at law" have been instituted "to recover the debt secured by the mortgage or any part of the mortgage." If such an action or proceeding has been commenced and is pending, it must be discontinued before the foreclosure proceeding can be begun. Alternatively, if such an action has resulted in the entry of a money judgment on the mortgage debt, then the foreclosure proceeding may only be commenced if an execution on that judgment "has been returned unsatisfied, in whole or in part." Id. The rationale for this rule is to prohibit harassment of the mortgagor by requiring it to defend two proceedings at once and to forbid a double recovery on the debt. See, e.g., Lee v. Clary, 38 Mich. 223, 227 (1878); Larzelere v. Starkweather, 38 Mich. 96 (1878).

In 1970, the Sixth Circuit Court of Appeals in United States v. Leslie, 421 F.2d 763 (6th Cir...