In King v Munro, a published Michigan Court of Appeals case, the tenant signed a two-year lease, but escrowed rent and moved out because of black mold issues not addressed by the landlord. The landlord filed suit against the tenant for nonpayment of rent, which the tenant defended on the basis of the mold. At a pretrial hearing, the parties advised the district court that the the tenant would forfeit her security deposit, and the case was dismissed. The tenant subsequently filed suite against the landlord (and the broker) alleging that negligent maintenance of the home allowed black mold to grow, which made the tenant ill. The defendants moved for summary disposition arguing that, since the tenant raised the issue of the mold in the prior nonpayment of rent case, it was barred by res judicata or collateral estoppel. The trial court agreed and the tenant appealed.
The court of appeals reversed. The court found that black mold was not mentioned on the record in the first case, and the first case was dismissed, not litigated to judgment. There was thus no determination of the mold issue in the first case for collateral estoppel or res judicata purposes, and MCL 600.5750 provides that pending claims need not be raised in a summary disposition case. The court remanded to the trial court for further proceedings.
There are very limited circumstances under which a summary proceedings case against a tenant will bar a subsequent claim by the tenant.