JOY MANAGEMENT CO V OAKLAND COUNTYAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
JOY MANAGEMENT COMPANY and E. KARR,
November 6, 1998
OAKLAND COUNTY and OAKLAND COUNTY
Oakland Circuit Court
LC No. 96-522898-CZ
Before: Wahls, P.J., and Holbrook, Jr. and Fitzgerald, JJ.
Plaintiffs appeal as of right from an order of involuntary dismissal1 and from an order denying
their motion for class certification. We affirm.
Plaintiffs’ lawsuit alleged that the recording fees charged by the Oakland County Register of
Deeds constituted an unconstitutional tax. On appeal, plaintiffs first argue that the trial court erred in
entering an order of involuntary dismissal. Plaintiffs claim that they presented sufficient evidence to show
that the recording fees charged by the Oakland County Register of Deeds were not reasonably related
to the cost of the service provided. We disagree.
The $7 recording fee charged by defendants is authorized by MCL 600.2567(1) and (2); MSA
27A.2567(1) and (2). Legislative enactments are presumed to be constitutional, and the party
challenging the constitutionality of a statute bears the burden of overcoming that presumption. Gorney v
City of Madison Heights, 211 Mich App 265, 267; 535 NW2d 263 (1995). Statutorily enacted fees
are presumed reasonable, but may be found constitutionally infirm, if they bear no reasonable
relationship to the expense for which they are chargeable. Foreman v Oakland Co Treasurer, 57
Mich App 231, 237; 226 NW2d 67 (1974). Such infirmity, however, must appear on the face of the
statute itself, or be established by proper evidence. Id.
In this case, the trial court concluded that plaintiffs failed to overcome the presumption of
constitutionality. We review a decision to grant or deny a motion for involuntary dismissal under the
clearly erroneous standard. The decision will not be overturned unless the evidence manifestly
preponderates against the decision. Sullivan Industries v Double Seal Glass Co, 192 Mich App 333,
339; 480 NW2d 623 (1991).
Here, plaintiffs failed to overcome the presumption that the $7 fee was reasonable, and the trial
court did not err in dismissing plaintiffs’ claim. Our conclusion is supported by two separate analyses.
First, the evidence regarding the excess revenue generated in Oakland County was insufficient to show
that the statutory fee was unreasonable, even in Oakland County. As our Supreme Court stated long
In determining whether a fee required for a license is excessive or not, the
absence or amount of regulatory provisions and the nature of the subject of regulation
should be considered, and, if the amount is wholly out of proportion to the expense
involved, it will be declared a tax. If revenue is incidentally derived which is not so
disproportionate as to make the fee charged unreasonable, there can be no objection.
[Vernor v Secretary of State, 179 Mich 157, 168; 146 NW 338 (1914) (citations
Here, the evidence presented was insufficient to show that the amount of the fee was “wholly out of
proportion to the expense involved,” and the trial court properly dismissed plaintiff’s case on this basis.
Second, the fact that a statewide fee exceeds the cost of a service in one county does not
necessarily mean that the fee is unrelated to the service provided. Here, plaintiffs have produced no
evidence regarding the cost of processing real estate recordings in other counties. It is not difficult to
imagine that many Michigan counties process far fewer recordings each year than Oakland County, and
that their costs may well exceed the fees collected. Plaintiffs cite no authority for the proposition that a
legislative decision to mandate a statewide uniform fee is unconstitutional simply because the cost of
providing that service may vary from county to county. Indeed, we doubt that there is any authority for
such a rule. Thus, without evidence comparing total costs incurred to total fees collected in other
Michigan counties, plaintiffs could not show that the statutory fee was not reasonably related to the cost
of the service provided. Put differently, the fact that some counties, by virtue of the large number of
documents they process, operate more efficiently than other counties, does not make the legislatively
mandated fee unreasonable.
Plaintiffs also claim that the trial court erred in denying their motion for class action certification.
However, in light of our conclusion that the trial court properly dismissed plaintiffs underlying claim, the
class certification issue is now moot.
/s/ Myron H. Wahls
/s/ Donald E. Holbrook, Jr.
/s/ E. Thomas Fitzgerald
We note that defendants labeled their motion below as one for a directed verdict, and that the trial
court labeled its order as one granting a directed verdict. However, because this was a bench trial, the
parties concede that the order is more properly characterized as one for involuntary dismissal pursuant
to MCR 2.504(B)(2).
We acknowledge that the Supreme Court has, on at least one occasion, used language suggesting that
there is an absolute rule prohibiting the generation of any revenue whatsoever from fees:
We have on occasion opined on the necessity to distinguish between a fee and a
tax, but in most instances we needed to do so only in order to determine the
applicability of a constitutional or statutory limitation on a "tax." In doing so, we have
announced the rule that to pass the test of a "regulatory fee," an exaction must not
produce revenue in excess of the cost of the regulation. Bray v Dep't of State, 418
Mich 149, 160; 341 NW2d 92 (1983). [Rouge Parkway Associates v City of
Wayne, 423 Mich 411, 419; 377 NW2d 748 (1985).]
However, even a cursory reading of Rouge Parkway reveals that this statement was pure dicta.
Moreover, Bray does not establish such a rule. Rather, the Court in Bray simply noted that “it
is well settled law in this state that the amount of the fees charged must be related to the costs of
the regulation” citing Vernor, supra.