BRUCE J ESSEX V DALTON TWP
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STATE OF MICHIGAN
COURT OF APPEALS
MICHIGAN’S ADVENTURE, INC.,
FOR PUBLICATION
Plaintiff-Appellant,
v
No. 283770
Muskegon Circuit Court
LC No. 06-044715-CZ
DALTON TOWNSHIP,
Defendant-Appellee.
Advance Sheets Version
and
MUSKEGON COUNTY,
Intervenor-Appellee.
BRUCE J. ESSEX, MIDWAY SHEET METAL
d/b/a JSB SHEET METAL, INC., R.J.
WOODWORKING, INC., C & M STORAGE &
LEASING, L.L.C., MTA LAND COMPANY,
L.L.C., WOODWORKS UNLIMITED, INC.,
DALTON ENTERPRISES, INC., DORIS
KITTLE, DAVID L. SCOTT, ANGELA M.
SCOTT, and MICHAEL A. STAFFORD,
Plaintiffs-Appellants,
v
No. 283869
Muskegon Circuit Court
LC No. 06-044888-CZ
DALTON TOWNSHIP,
Defendant-Appellee,
Advance Sheets Version
and
MUSKEGON COUNTY,
Intervenor-Appellee
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Before: MARKEY, P.J., and BANDSTRA and MURRAY, JJ.
BANDSTRA, J.
In these consolidated cases and appeals, plaintiffs are taxpayers who own real property
against which defendant Dalton Township imposed what it called a “special assessment” to raise
money for a sewer project. The primary issue raised on this appeal, the resolution of which
disposes of the appeals, is one of jurisdiction: did the lower court here have jurisdiction to
decide whether the special assessments were properly imposed on plaintiffs or, instead, did the
Michigan Tax Tribunal (MTT) have exclusive jurisdiction to decide plaintiffs’ claims? We
conclude that the MTT had exclusive jurisdiction and, accordingly, we affirm the lower court
decision in part, reverse it in part, and remand.
Because the dispositive issue raised here is one of jurisdiction, it is not necessary to recite
at length either the facts giving rise to these cases or the substance of plaintiffs’ arguments
regarding the propriety of the special assessments. Briefly stated, plaintiffs’ contention is that
the special assessments imposed by the township to improve a sewer system far exceed any
benefit conferred by that sewer system on the properties against which the assessments were
made. Plaintiffs claim that their constitutional rights were violated in a number of ways and,
further, that the Township failed to follow proper procedures under the township public
improvement act, MCL 41.721 et seq.
As already noted, the dispositive issue raised on appeal is one of jurisdiction that
presents a question of law that we review de novo. White v Harrison-White, 280 Mich App 383,
387; 760 NW2d 691 (2008). The MTT has “exclusive and original jurisdiction” over “[a]
proceeding for direct review of a final decision . . . of an agency relating to assessment . . . [and]
[a] proceeding for a refund or redetermination of a tax levied under the property tax laws of this
state.” MCL 205.731(a) and (b). The MTT’s jurisdiction extends to taxpayers’ constitutional
arguments that a tax assessment is arbitrary and without foundation. Wikman v City of Novi, 413
Mich 617, 646-647; 322 NW2d 103 (1982). See Meadowbrook Village Assoc v Auburn Hills,
226 Mich App 594, 597; 574 NW2d 924 (1997) (“The Tax Tribunal may . . . consider claims that
an assessment is arbitrary or without foundation even if couched in constitutional terms.”);
Johnston v Livonia, 177 Mich App 200, 207; 441 NW2d 41 (1989) (“The tribunal may decide
claims framed in constitutional terms alleging that a tax assessment was arbitrary and capricious
and without foundation.”); Johnson v Michigan, 113 Mich App 447, 459; 317 NW2d 652 (1982)
(“[T]he tax tribunal has equitable jurisdiction and may consider constitutional questions relating
to the validity of property tax assessments.”); Grosse Ile Comm for Legal Taxation v Grosse Ile
Twp, 129 Mich App 477, 486; 342 NW2d 582 (1983) (Michigan Tax Tribunal has jurisdiction
over action alleging that township’s total property tax levy exceeded constitutional limitations).
Similarly, allegations that a taxing authority failed to follow statutory procedures for imposing
assessments fall within the jurisdiction of the MTT. Johnston, 177 Mich App at 207-208.
While all these cases undermine plaintiffs’ claim that the MTT did not have exclusive
jurisdiction over the constitutional and statutory questions they raise, none of them directly
confronted the Headlee Amendment argument that plaintiffs advance. That argument is
potentially problematic because, notwithstanding the exclusive jurisdiction of the MTT over the
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assessment and tax matters just discussed, the Headlee Amendment to the Michigan Constitution
and its enabling legislation specifically grant the courts jurisdiction over Headlee Amendment
challenges against the imposition of a “tax.” Const 1963, art 9, § 32; MCL 600.308a. However,
neither the Headlee Amendment nor the statute extend jurisdiction to special assessment disputes
and, generally, special assessments are not taxes for the purposes of constitutional tax
limitations. Kadzban v Grandville, 442 Mich 495, 500; 502 NW2d 299 (1993); Niles Twp v
Berrien Co Bd of Comm’rs, 261 Mich App 308, 323-324; 683 NW2d 148 (2004).
Plaintiffs claim that, even though defendant called the contested action here a “special
assessment,” defendant’s “true purpose” was not to provide sewer service specifically to the
affected properties but, instead, to undertake a “massive infrastructure improvement program”
for the general benefit of the broader community. Thus, plaintiff claims that this case really
involves the imposition of a “disguised tax” and that, at least with respect to their Headlee
Amendment claims against that tax, jurisdiction is properly vested in the circuit court. We
disagree.
“In determining jurisdiction, this Court will look beyond a plaintiff’s choice of labels to
the true nature of the plaintiff’s claim.” Manning v Amerman, 229 Mich App 608, 613; 582
NW2d 539 (1998). “A special assessment is a levy upon property within a specified district.
Although it resembles a tax, a special assessment is not a tax. In contrast to a tax, a special
assessment is imposed to defray the costs of specific local improvements, rather than to raise
revenue for general governmental purposes.” Kadzban, 442 Mich at 500 (citation omitted). In
Blake v Metro Chain Stores, 247 Mich 73, 77; 225 NW 587 (1929), our Supreme Court set out
the test for distinguishing the two:
“The differences between a special assessment and a tax are that (1) a
special assessment can be levied only on land; (2) a special assessment cannot (at
least in most States) be made a personal liability of the person assessed; (3) a
special assessment is based wholly on benefits; and (4) a special assessment is
exceptional both as to time and locality.” [citation omitted.]
Plaintiffs have conceded that, under factors (1), (2), and (4) of the Blake analysis, this case
involves special assessments; their only contention, under the third Blake factor, is that a tax is
involved here because the benefit being derived by the impacted parcels of property is greatly
disproportionate to the costs imposed against those parcels. In light of that concession, we do
not conclude that, notwithstanding the fact that the township called its action a special
assessment, it was so clearly a tax instead that jurisdiction was conferred on the court under the
Headlee provisions.
We note that the claims plaintiffs raise here are similar to those considered by our
Supreme court in Wikman, 413 Mich at 647:
Plaintiffs’ claim is that these special assessments were not made according
to the benefits received as required by law. The resolution of this claim involves
many fact determinations. The membership of the Tax Tribunal is structured to
provide it with experience in resolving these fact issues. The tribunal’s de novo
review gives it the opportunity to rectify any errors in the agency’s determination.
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Similar fact issues underlie plaintiffs’ claim here that the special assessments were, in fact, a
disguised tax, subject to the Headlee Amendment. Thus, it is appropriate for the Tax Tribunal to
initially consider plaintiffs’ claim of an alleged violation of the Headlee Amendment in the
context of their challenge to the special assessments. Any decision by the Tax Tribunal will be
subject to judicial review on appeal.
To the extent that the trial court determined it had subject-matter jurisdiction regarding
plaintiffs’ claims that defendant failed to properly follow statutory procedural requirements, we
reverse and remand. To the extent that the trial court otherwise determined that it was without
jurisdiction to hear plaintiffs’ claims, we affirm.
Neither party having fully prevailed, no costs should be imposed. MCR 7.219.
/s/Richard A. Bandstra
/s/Jane E. Markey
/s/Christopher M. Murray
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