GARY D MOREHOUSE V TWP OF MACKINAW

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STATE OF MICHIGAN COURT OF APPEALS GARY D. MOREHOUSE and SUSAN C. MOREHOUSE, UNPUBLISHED March 17, 2009 Petitioners-Appellees, v No. 281483 Tax Tribunal LC No. 00-317401 TOWNSHIP OF MACKINAW, Respondent-Appellant. Before: Murphy, P.J., and Fitzgerald and Markey, JJ. PER CURIAM. In this property assessment dispute, respondent appeals by right from the October 5, 2007 judgment of the Michigan Tax Tribunal holding that respondent did not have the authority to retroactively uncap and increase petitioners’ property value based on an oversight of paperwork in the assessor’s office. We affirm. Respondent first argues that the tribunal erred in ruling that it could not uncap and increase petitioners’ property value under MCL 211.53b. We disagree. “Absent fraud, this Court’s review of a Tax Tribunal decision is limited to determining whether the tribunal made an error of law or adopted a wrong legal principle.” Meijer, Inc v Midland, 240 Mich App 1, 5; 610 NW2d 242 (2000). The proper interpretation and application of a statute is a question of law that this Court reviews de novo. Ford Motor Co v City of Woodhaven, 475 Mich 425, 438; 716 NW2d 247 (2006). The relevant provisions regarding errors in property tax values, and the means of correction, are found in MCL 211.53b(1),1 which states in part: 1 All reference to MCL 211.53b is to that version applicable at the time in question, PA 2003 No 105, effective July 24, 2003. MCL 211.53b was last amended, with no impact on the facts of this case, by PA 2006 No 378, effective September 27, 2006. -1- (1) If there has been a clerical error or a mutual mistake of fact relative to the correct assessment figures, the rate of taxation, or the mathematical computation relating to the assessing of taxes, the clerical error or mutual mistake of fact shall be verified by the local assessing officer and approved by the board of review at a meeting held for the purposes of this section on Tuesday following the second Monday in December and, for summer property taxes, on Tuesday following the third Monday in July. . . . Except as otherwise provided in subsection (6) [relative to correcting the grant of a principal residence exemption], a correction under this subsection may be made in the year in which the error was made or in the following year only. Neither party argues that there was a mutual mistake, so the issue here is whether respondent’s failure to uncap the subject property values in 2001 was the result of a clerical error. Respondent argues that it was; petitioner2 disagrees. In Int’l Place Apartments v Ypsilanti Twp, 216 Mich App 104, 105; 548 NW2d 668 (1996), the petitioner built an apartment complex including five buildings numbered 18 through 22. The respondent assessed the apartment complex on December 31, 1986, at a time when the complex construction was only partially complete. Id. In 1989, the respondent discovered that a building permit was incorrectly filed and therefore did not prompt the assessor to reassess the petitioner’s apartment complex when all construction was complete. Id. at 106-107. Upon discovering the error, the respondent sent a letter to petitioner proposing to increase the assessment based on a clerical error requiring correction under MCL 211.53b. Id. at 106. The Court held that this mistake was not a clerical error requiring correction. The Court contemplated the definition of “‘clerical error,’” which is “generally ‘a mistake in writing or copying.’” Id. at 109, quoting Black’s Law Dictionary (6th ed). In considering a clerical error in context of MCL 211.53b, the Court noted that it “is directly referenced to use of the correct assessment figures, the taxation rate, and the mathematical computation relating to the assessment of taxes.” Id. Thus, “the statute itself refers to errors of a typographical, transpositional, or mathematical nature.” Id. The Court reasoned that the misfiling of a document is not a clerical error. Id. As in Int’l Place Apartments, respondent did not make a clerical error of a typographical, transpositional, or mathematical nature. From the evidence and testimony, it is apparent that respondent, or its agents, had sufficient information to recognize that a sale had been made, including the amount of the sale and the parcel numbers as included on the real property statement. The fact that this information was “lost in the shuffle” is not enough for respondent to claim clerical error. Lost paperwork, or the improper handling of paperwork, does not equate to a clerical error, as defined by case law. Therefore, the tribunal judge correctly ruled that respondent did not have authority under MCL 211.53b to uncap and increase petitioner’s property value. 2 In the singular, petitioner refers to Gary Morehouse. -2- Respondent next argues that the tribunal erred in ruling that it had jurisdiction to hear this appeal. We disagree. The Tax Tribunal Act, MCL 205.701 et seq., outlines the subject matter jurisdiction of the tribunal, which states, in pertinent part as follows: The tribunal’s exclusive and original jurisdiction shall be: (a) A proceeding for direct review of a final decision, finding, ruling, determination, or order of an agency relating to assessment, valuation, rates, special assessments, allocation, or equalization, under property tax laws. (b) A proceeding for refund or redetermination of a tax under the property tax laws. [MCL 205.731.] The act also describes the procedural requirements for perfecting an appeal in the Tribunal. See Parkview Mem Assoc v City of Livonia, 183 Mich App 116, 121; 454 NW2d 169 (1990). The relevant statute states as follows: (2) A proceeding before the tribunal is original and independent and is considered de novo. For an assessment dispute as to the valuation of property or if an exemption is claimed, the assessment must be protested before the board of review before the tribunal acquires jurisdiction of the dispute under subsection (3), except as otherwise provided in this section for a year in which the July or December board of review has authority to determine a claim of exemption for qualified agricultural property or for an appeal of a denial of a principal residence exemption by the department of treasury in section 37(5) and (7). *** (3) The jurisdiction of the tribunal in an assessment dispute is invoked by a party in interest, as petitioner, filing a written petition on or before June 30 of the tax year involved. . . . In all other matters, the jurisdiction of the tribunal is invoked by a party in interest, as petitioner, filing a written petition within 35 days after the final decision, ruling, determination, or order that the petitioner seeks to review. . . . [MCL 205.735(2), (3).] Respondent argues that petitioner’s failure to file a petition in this case within 35 days of respondent’s final decision was made should be fatally defective and the tribunal should not have had jurisdiction to hear this appeal. In a prior decision, this Court strictly construed MCL 205.735, holding that “an untimely filing under MCL 205.735(2) deprived the Tax Tribunal of jurisdiction to consider the petition and the petition was properly dismissed.” Electronic Data Systems Corp v Flint, 253 Mich App 538, 543-544; 656 NW2d 215 (2002), relying on Szymanski v Westland, 420 Mich 301, 305; 362 NW2d 224 (1984). However, Electronic Data Systems Corp is distinguishable from the case at hand. The focus in Electronic Data Systems Corp was on the fact that the taxpayer had sent its -3- appeal petitions by first-class mail on June 30 of the tax year involved as opposed to by certified mail. Id. at 540. Thus, the notice at issue was that received by the tribunal, not by the taxpayer. We agree with the tribunal that this case is akin to Parkview Mem Ass’n v City of Livonia, 183 Mich App 116; 454 NW2d 169 (1990), and the jurisdictional issue should be decided consistent with its reasoning. In Parkview, the city mailed tax assessment notices to the petitioners two days after the last day board of review convened. Id. at 117-118. Parkview noted that “a condition precedent to the Tax Tribunal’s exercise of its jurisdiction to review the assessment of petitioners’ property was that petitioners protest the assessments to the board of review.” Id. at 118-119. In concluding that the petitioners’ claims should be heard, the Court reasoned as follows:: We adopt the Supreme Court’s remedial approach in [W & E Burnside, Inc v Bangor Twp, 402 Mich 950l; 314 NW2d 196 (1978)] here. Respondents’ notices of assessment were sent in violation of MCL 211.24c(5)[now subsection (4)] . . . . Under that statute the assessments remain valid. Nevertheless, respondents’ late notices were not given in a manner reasonably calculated under all the circumstances to apprise petitioners of the assessments and to afford them an opportunity to be heard. See Bickler v Dep’t of Treasury, 180 Mich App 205, 211; 446 NW2d 644 (1989). Petitioners will thus be denied due process unless they are given an opportunity to be heard. Id. Under the Supreme Court’s Burnside decision, petitioners are not entitled to challenge the assessments in circuit court despite respondents’ improper notice. Based on these considerations and consistent with the Supreme Court’s Burnside decision, we conclude that petitioners’ claims should be heard by the Tax Tribunal. [Parkview, supra at 120.] In the case at hand, as in Parkview, petitioners were not given adequate notice that their property’s assessment was going to be increased. Both parties agree that petitioners were not informed of the increase until after the December 2004 board of review meeting had taken place. As a result of the approval of the December 2004 board of review and the actions of the assessor, petitioners’ property values were increased for tax years 2002, 2003, and 2004. Petitioner testified that when he contacted the assessor regarding the increased assessment value in January 2005, he was told that the assessor would discuss the situation with his predecessor. Respondent did not notify petitioners of the increase and did not inform petitioners of their right to an appeal with the tribunal if the claim were filed within the statutory time limit. Respondent’s assessor did not meet the requirements of MCL 211.27b(6) for notification after a property value was increased and did not send notice to petitioners before the December board of review. Respondent simply sent petitioners new tax bills for years 2002, 2003, and 2004 showing an outstanding balance and presumably notifying them of the increase in the taxable value of the property. In sum, in order to protect petitioners’ due process rights and consistent with Burnside, we adopt and follow the approach set forth in Parkview, except for that portion of Parkview’s analysis that concludes the requirements of MCL 205.735 are procedural, not jurisdictional. -4- Respondent next argues that petitioners’ failure to file a property transfer affidavit authorized respondent to uncap and increase petitioners’ property values. We disagree. MCL 211.27a(10) controls the manner in which the assessor is to be notified that a property transfer has taken place. The register of deeds of the county where deeds or other title documents are recorded shall notify the assessing officer of the appropriate local taxing unit not less than once each month of any recorded transaction involving the ownership of property and shall make any recorded deeds or other title documents available to that county’s tax or equalization department. Unless notification is provided under subsection (6), the buyer, grantee, or other transferee of the property shall notify the appropriate assessing office in the local unit of government in which the property is located of the transfer of ownership of the property within 45 days of the transfer of ownership, on a form prescribed by the state tax commission that states the parties to the transfer, the date of the transfer, the actual consideration for the transfer, and the property’s parcel identification number or legal description. MCL 211.27a(6) lists various means of conveying title to a present interest in property, including: (b) A conveyance by land contract. The taxable value of property conveyed by a land contract executed after December 31, 1994 shall be adjusted under subsection (3) for the calendar year following the year in which the contract is entered into and shall not be subsequently adjusted under subsection (3) when the deed conveying title to the property is recorded in the office of the register of deeds in the county in which the property is located. Here, petitioners entered into a land contract with the seller and recorded a land contract memorandum on October 22, 2001. Thereafter, petitioners’ agent filled out a property transfer affidavit as required under MCL 211.27a(10). Both parties concede that the parcel identification number on the property transfer affidavit was incorrect. But, because the petitioners’ entered into, and recorded, a land contract, the assessor should have been notified pursuant to § 27a(6). MCL 211.27b(10) provides, “Unless notification is provided under subsection (6), the buyer . . . shall notify the appropriate assessing office.” (Emphasis added.) Because the land contract was recorded with the register of deeds, notice should have been provided through the register of deeds, even if the property transfer affidavit did not trigger the usual internal procedures for notifying the assessor. MCL 211.27b provides that if a buyer does not notify the appropriate assessing office of a transfer of ownership of property as required under MCL 211.27a, then that property value can be adjusted under MCL 211.27a(3). The testimony and evidence presented does not clearly establish that respondent did not receive sufficient notice of petitioners’ purchase of the property. -5- Thus, the tribunal was correct to conclude that respondent failed to establish that it did not have notice of petitioners’ purchase of property in October 2001, and this conclusion is supported by competent, material, and substantial evidence. Mount Pleasant v State Tax Comm, 477 Mich 50, 50; 729 NW2d 833 (2007). We affirm. /s/ William B. Murphy /s/ E. Thomas Fitzgerald /s/ Jane E. Markey -6-

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