WALGREEN CO V MACOMB TWPAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
July 31, 2008
LC No. 00-299458
Advance Sheets Version
Before: Owens, P.J., and O’Connell and Davis, JJ.
O’CONNELL, J. (dissenting).
I respectfully dissent. In my opinion, the Tax Tribunal improperly found that petitioner
had no standing. Additionally, the rules created by respondent’s board of review were invalid
and denied petitioner its due-process rights. I would reverse.
Whether a party has standing comprises a question of law that is subject to review de
novo. Lee v Macomb Co Bd of Comm’rs, 464 Mich 726, 734; 629 NW2d 900 (2001).
“[T]he doctrine of standing [is] a constitutional principle that prevents
courts of law from undertaking tasks assigned to the political branches. It is the
role of courts to provide relief to claimants, in individual or class actions, who
have suffered, or will imminently suffer, actual harm; it is not the role of courts,
but that of the political branches, to shape the institutions of government in such
fashion as to comply with the laws and the Constitution.” [Lee, supra at 735-736,
quoting Lewis v Casey, 518 US 343, 349; 116 S Ct 2174; 135 L Ed 2d 606 (1996)
In Lee, our Supreme Court adopted the same test to determine standing as that used by federal
“[T]he irreducible constitutional minimum of standing contains three
elements. First, the plaintiff must have suffered an ‘injury in fact’—an invasion
of a legally protected interest which is (a) concrete and particularized, and (b)
‘actual or imminent, not “conjectural” or “hypothetical.”’ Second, there must be
a causal connection between the injury and the conduct complained of—the injury
has to be ‘fairly . . . trace[able] to the challenged action of the defendant, and not .
. . th[e] result [of] the independent action of some third party not before the court.’
Third, it must be ‘likely,’ as opposed to merely ‘speculative,’ that the injury will
be ‘redressed by a favorable decision.’” [Lee, supra at 739, quoting Lujan v
Defenders of Wildlife, 504 US 555, 560-561; 112 S Ct 2130; 119 L Ed 2d 351
The “injury in fact” must be “both concrete and particularized, as well as actual and imminent, in
order to establish standing.” Rohde v Ann Arbor Pub Schools, 479 Mich 336, 349; 737 NW2d
158 (2007). Under this standard, petitioner clearly has an “injury in fact,” as it is the one
responsible for paying the taxes at issue.
Although the majority recognizes petitioner’s liability to the owner for the payment of the
taxes under the terms of the lease, it dismisses petitioner’s argument that it is “the real party in
interest” under MCR 2.201(B) on the basis of its conclusion that the owner is the “real party in
interest” because it ultimately remains liable to the township for payment of the taxes. “A real
party in interest is one who is vested with the right of action on a given claim, although the
beneficial interest may be in another.” Hoffman v Auto Club Ins Ass’n, 211 Mich App 55, 95;
535 NW2d 529 (1995). The lease explicitly gave petitioner the right to contest the validity of
any tax, making petitioner a real party in interest. That the property owner also has an interest
does not prevent petitioner from being a real party in interest. “‘Whether additional parties also
have an interest, such that their joinder is required or that plaintiff is prohibited from proceeding
without them, is not a question of real party in interest, but of necessary joinder under MCR
2.205.’” Id. (citations omitted). This Court has previously concluded that a lessee has standing
to bring suit on an issue affecting the property. Central Advertising Co v St Joseph Twp, 125
Mich App 548, 555; 337 NW2d 15 (1983). The defendant in Central Advertising Co had argued
that the plaintiff did not have an adequate property interest under which to establish the lawsuit,
but this Court held that the plaintiff as a lessee “has a sufficient interest in the outcome of the
litigation to assure sincere and vigorous advocacy.” Id.
Being both the real party in interest, pursuant to MCR 2.201(B), and having met the
requirements of standing, the Tax Tribunal erred in concluding that petitioner had no standing.
Separate from the question of standing is whether petitioner was authorized by statute to
bring its claim before the board of review. See, Rhode, supra at 343-355 (providing separate
analyses for the statutory requirements to bring suit and whether the plaintiffs had constitutional
standing, and concluding that while the former was met, the latter was not). On March 5, 2002,
respondent’s board of review adopted the following policy: “A person who is filing a petition to
appear before the Board of Review, on behalf of a property owner, must furnish written
authorization from the property owner appointing them as the agent/representative.” On March
6, 2003, the board of review adopted a more specific policy:
Resolution adopted requiring a person who is filing a petition to appear
before the Board of Review, on behalf of a property owner, must furnish written
authorization from the property owner appointing them as the
agent/representative. This Resolution was also adopted providing for all future
petitions submitted by a representative on behalf of the property owner must be
submitted with a Letter of Authorization signed by the property owner. The
Letter of Authorization must contain the parcel number for the parcel or parcels
being protested, a valid legible signature, a valid printed signature and must be
original signatures. [Emphasis added.]
Petitioner filed its written appeal with respondent’s board of review on March 1, 2003, and
included a petition. Because the appeal petition predated the adoption of the March 6, 2003,
resolution, I disagree with the majority that it is applicable. The text of the policy itself indicates
it is applicable to “future petitions,” and petitioner’s petition was submitted before its adoption.
Using the 2002 rule, I conclude that petitioner provided sufficient documentation to
proceed with its appeal before the board of review. Petitioner had a signed lease expressly
permitting it to contest the validity of the property taxes. That document is sufficient to
constitute written authorization from the property owner, appointing petitioner as the agent or
representative before the board of review. Therefore, I conclude that the board of review erred in
concluding that petitioner had no “standing” to protest the taxes.
Indeed, “[t]he right to a hearing by the assessor, sitting as a board of review, is one of
which a tax-payer cannot be lawfully deprived.” Village of Three Rivers Common Council v
Smith, 99 Mich 507, 509; 58 NW 481 (1894). A taxpayer is “a person who pays tax or is subject
to taxation.” Random House Webster’s College Dictionary (2001). Petitioner, as a person
obligated to pay the property taxes in question, was a taxpayer, and the board of review was
required to provide petitioner with a hearing.
Additionally, even if the March 6, 2003, policy did apply, I would conclude that it was
both invalid, as it was not authorized by the General Property Tax Act (GPTA), MCL 211.1 et
seq., and unconstitutional because it violated petitioner’s due-process rights.
A rule is invalid when it conflicts with the provisions of the governing statute. Michigan
Sportservice, Inc v Dep’t of Revenue Comm’r, 319 Mich 561, 566; 30 NW2d 281 (1948) (“The
provisions of the rule must, of course, be construed in connection with the statute itself. In case
of conflict, the latter governs.”). In this case, the rule adopted by respondent’s board of review
places an additional burden on the taxpayer that is not required by the statute. There is no
express authority in the GPTA permitting respondent’s board of review to exclude those who pay
the property taxes from being able to contest them. MCL 211.30(4) provides:
At the request of a person whose property is assessed on the assessment
roll or of his or her agent, and if sufficient cause is shown, the board of review
shall correct the assessed value or tentative taxable value of the property in a
manner that will make the valuation of the property relatively just and proper
under this act.
Leases provide a real-property interest. Adams Outdoor Advertising v East Lansing (After
Remand), 463 Mich 17, 33; 614 NW2d 634 (2000). See also Forge v Smith, 458 Mich 198, 206207; 580 NW2d 876 (1998) (noting that lease contract granted property interest in certain lots);
Thomas v Rex A Wilcox Trust, 185 Mich App 733, 738; 463 NW2d 190 (1990) (“Oil and gas
leases are considered real property interests.”); Central Advertising Co, supra (lessee had an
adequate property interest to give it standing to maintain a lawsuit involving a county ordinance
affecting the property). Accordingly, under the plain language of MCL 211.30(4), petitioner had
the right to protest the assessed value of the property, as petitioner had a property interest in the
taxed property as the lessee, making petitioner a “person whose property is assessed.”
Respondent’s board of review created a rule that prevented individuals who were otherwise
permitted under the statute to protest the validity of the property tax from being able to do so.
Because the statute does not provide them such authority, the rule is invalid and the statute must
prevail. Michigan Sportservice, Inc, supra.
In addition to being invalid, the rule adopted by respondent’s board of review is also
unconstitutional. Both the United States and Michigan constitutions prevent the taking of
property without due process of law. US Const, Am V; Const 1963, art 1, § 17. “The ‘property’
protected by the constitutions includes not only title, but all character of vested rights, including
possession, dominion, control, and the right to make any legitimate use of the premises.” Ligon
v Detroit, 276 Mich App 120, 124-125; 739 NW2d 900 (2007), citing Rassner v Fed Collateral
Society, Inc, 299 Mich 206, 213-214; 300 NW 45 (1941). Under the majority’s reasoning,
individuals with property interests in the taxed property (such as lessees) could be obligated to
pay property taxes and yet, so long as the property owner listed on the assessment roll refuses to
sign the required “Letter of Authorization” to the standards required by the board of review,
would never be permitted to contest their tax obligation before the board of review.1 When
coupled with the requirement that an assessment dispute concerning the valuation of property be
protested before the local board of review before the Tax Tribunal can acquire jurisdiction, MCL
205.735(1); Covert Twp v Consumers Power Co, 217 Mich App 352, 355; 551 NW2d 464
(1996), the rule adopted by respondent’s board of review and assented to by the majority opinion
denies access to the courts to an entire group of individuals with property interests, thereby
denying them of property without due process of law.
Because I conclude that petitioner had standing and was permitted to challenge the tax
assessment before the board of review, and that the rule implemented by the board of review was
both invalid and unconstitutional, I would reverse the decision of the Tax Tribunal.
/s/ Peter D. O’Connell
That petitioner’s lease required the property owner to execute any written documents required
to contest the validity of taxes is irrelevant. The property owner could refuse to perform its
obligation under the lease, preventing petitioner from ever being able to dispute its tax liability
before the board of review. In that event, although petitioner would have a contract claim
against the property owner, damages would be difficult or impossible to calculate, because there
is no way to determine what the board of review would have decided had petitioner been
permitted to appeal the taxes and what effect that would have had on future tax years.