Opinion
No. 348320
04-23-2020
JEHOVAH SHALOM CHURCH OF GOD, Petitioner-Appellant, v. CITY OF DETROIT, Respondent-Appellee.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Tax Tribunal
LC No. 19-000130-TT Before: CAVANAGH, P.J., and BECKERING and GLEICHER, JJ. PER CURIAM.
In this property tax dispute, petitioner, Jehovah Shalom Church of God (hereafter, "the Church") appeals as of right the order of the Tax Tribunal dismissing its petition for lack of subject-matter jurisdiction. We affirm.
I. RELEVANT FACTS AND PROCEEDINGS
On February 6, 2019, petitioner filed a petition with the Tax Tribunal seeking a tax exemption for the property at issue and correction of respondent's, City of Detroit's, assessment rolls. Petitioner identified itself as a "nonprofit corporation incorporated for the purpose of operating a church and school of spiritual leadership training," owning real property located at 1551 Burlingame in Detroit, Michigan. Petitioner purchased the property in April 2013, for $160,000, and immediately requested an exemption from property taxation on the basis of the property's use "as a house of public worship and for charitable purposes." The property was not taxed in 2014 or 2015. However, respondent's assessment department placed the property on the tax roll for tax year 2016 at an assessed value of approximately $370,000, which reflected an alleged true cash value more than four (4) times the purchase price to petitioner for the property. Petitioner asserted that it received no notice of the removal of the property's tax exemption or the return of the property to the tax rolls. Respondent kept the property on the tax rolls in tax year 2017, and petitioner asserted that it again received no notice. Petitioner contends that it first learned the property was on the tax rolls "late in 2018," when it received notice that the property was to be forfeited for petitioner's failure to pay outstanding property taxes.
According to petitioner, the property had previously been used as a church and had been exempt from ad valorem property taxation. Petitioner contends that it filed a property transfer affidavit with the Detroit Office of the Assessor, along with a request for exemption and supporting information.
Petitioner contends that because it was not taxed in 2014 and 2015, it had "no reason to doubt that its request for exemption had been approved."
While respondent notes that it is highly unlikely petitioner did not receive a single one of the statutorily mandated notices required in the property tax assessment process, it also agrees that for purposes of this jurisdictional analysis it accepts petitioner's factual assertions at face value.
The Tax Tribunal immediately dismissed the petition for a lack of subject-matter jurisdiction, explaining:
The Tribunal has considered the case file and finds that Petitioner filed a petition on February 6, 2019, asserting that Respondent removed the exemption under MCL 211.7s and 7o for the 2016 and 2017 tax years. The petition is untimely as it was not filed prior to May 31 of the tax years involved.
The Tribunal also has no authority over the appeal under MCL 211.53a, as Petitioner has failed to allege any fact that would establish a prima facie case indicating that the exemption was removed as the result of a clerical error (i.e., "an error of a transpositional, typographical, or mathematical nature") or a mutual mistake of fact (i.e., "an erroneous belief, which is shared and relied on by both parties, about a material fact that affects the substance of the transaction").
The Tribunal, likewise, has no authority over Petitioner's appeal under MCL 211.53b, as Petitioner has failed to allege any facts that would indicate that the removal of the exemption was the result of a qualified error, that Petitioners protested that qualified error to a July or December Board of Review, and that Petitioners filed their appeal within 35 days after a final decision, ruling, or determination by a July or December Board of Review, as required by MCL 205.735a(6).
Further, the Tribunal has no "equitable powers" to waive or otherwise extend the statutory deadline for the filing of this appeal. [Footnotes omitted.]
On February 26, 2019, petitioner filed a motion for reconsideration. It argued that due process required the Tax Tribunal to consider the petition because petitioner did not receive notice of assessments in either 2016 or 2017.
On March 13, 2019, the Tax Tribunal entered an order denying petitioner's motion for reconsideration. The Tax Tribunal determined that the facts of the case, even when considered in the light most favorable to petitioner, did not indicate that petitioner timely invoked the Tax Tribunal's jurisdiction.
In this proceeding, Petitioner contends that its first notice of the tax issue under dispute came in "late 2018." Although Petitioner does not provide a specific date or any documents to support its contention, the Tribunal finds that such materials are not necessary to determine if the proceeding is properly pending. Specifically, assuming Petitioner first received notice of Respondent's intent to foreclose on December 31, 2018, the Tribunal finds Petitioner still did not file its Petition with the Tribunal within the 35-day period under which it first had constructive notice of the assessment dispute, as its Petition to the Tribunal was not submitted until February 6, 2019, which is 37 days after the final date in 2018. A timely invocation of the Tribunal's jurisdiction after constructive notice of a tax dispute is crucial, as the law assists those who are vigilant with their rights, and not those who sleep upon their rights. The Tribunal finds that Petitioner failed to appeal its valuation or exempt status within 35 days of constructive notice of Respondent's assessment and/or denial. [Footnotes omitted.]Accordingly, the Tax Tribunal denied petitioner's motion for failure "to demonstrate a palpable error relative to the Order of Dismissal that misled the Tribunal and the parties and that would have resulted in a different disposition if the error was corrected." This appeal followed.
In its brief to this Court, petitioner asserts that the tribunal "held that the Church had 'constructive notice' of the removal of the tax exemption when the Church received notice of the tax foreclosure proceedings." Petitioner then argues at length that "constructive notice" does not satisfy respondent's statutory obligation under MCL 211.24c to provide notice of an increase in the "tentative state equalized valuation or the tentative taxable value for the year." Petitioner misconstrues the tribunal's statement, which was merely that the foreclosure notice petitioner received in "late 2018" provided petitioner with constructive notice "of the assessment dispute," i.e., of the existence of a tax dispute of some sort between petitioner and respondent. The tribunal was not addressing the sufficiency of respondent's tax-related notices to petitioner. --------
II. ANALYSIS
Petitioner concedes that its petition in the Tax Tribunal was untimely. Petitioner argues, however, that the untimeliness should be excused because respondent denied petitioner the right to due process when it failed to provide adequate notice to petitioner that it had removed the subject property's tax exemption and placed the property on the tax rolls for tax years 2016 and 2017. Petitioner asserts that due process requires the tribunal to consider the petition on the merits. We disagree. Because the Tax Tribunal did not have statutory authority to hear petitioner's petition, and because petitioner had notice of a tax dispute but did not timely avail itself of the opportunity to be heard, we affirm the Tax Tribunal's order of dismissal.
"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). This Court reviews de novo whether the Tax Tribunal has jurisdiction and whether a party's due-process rights have been violated. Elba Twp v Gratiot Co Drain Comm'r, 493 Mich 265, 277; 831 NW2d 204 (2013); Kasberg v Ypsilanti Twp, 287 Mich App 563, 566; 792 NW2d 1 (2010).
A. JURISDICTION
The Michigan Tax Tribunal is a creation of the Tax Tribunal Act, MCL 205.701 et seq. Michigan Props, LLC v Meridian Twp, 491 Mich 518, 541; 817 NW2d 548 (2012). The tribunal's primary functions "are to find facts and review the decisions of agencies within its jurisdiction." Wikman v City of Novi, 413 Mich 617, 629; 322 NW2d 103, 106 (1982). "The jurisdiction of the Tax Tribunal is granted by statute." Nicholson v Birmingham Bd of Review, 191 Mich App 237, 239; 477 NW2d 492 (1991). The tribunal's jurisdiction is set forth in MCL 205.735a(6), which provides in relevant part:
(6) The jurisdiction of the tribunal in an assessment dispute as to property classified under section 34c of the general property tax act, 1893 PA 206, MCL 211.34c, as commercial real property, industrial real property, developmental real property, commercial personal property, industrial personal property, or utility personal property is invoked by a party in interest, as petitioner, filing a written petition on or before May 31 of the tax year involved. The jurisdiction of the tribunal in an assessment dispute as to property classified under section 34c of the general property tax act, 1893 PA 206, MCL 211.34c, as agricultural real property, residential real property, timber-cutover real property, or agricultural personal property is invoked by a party in interest, as petitioner, filing a written petition on or before July 31 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, or determination. . . . [Emphasis added.]
However, before the tribunal acquires jurisdiction of an assessment dispute regarding the valuation of property under subsection (6), the petitioner must protest the assessment before the board of review. MCL 205.735a(3). In the absence of statutory authority to hear an appeal, the Tax Tribunal lacks subject-matter jurisdiction over the appeal. "Defects in subject-matter jurisdiction cannot be waived and may be raised at any time." Electronic Data Sys Corp v Flint, 253 Mich App 538, 544; 656 NW2d 215 (2002). Further, "[t]he lack of subject-matter jurisdiction is so serious a defect in the proceedings that a tribunal is duty-bound to dismiss a plaintiff's claim even if the defendant does not request it." Id. "Indeed, having determined that is has no jurisdiction, a court should not proceed further except to dismiss the action." Id. at 544-545.
Petitioner sought a tax exemption for property classified as commercial real property for tax years 2016 and 2017. Pursuant to MCL 205.735a, in order for the Tax Tribunal to have subject-matter jurisdiction over such request, petitioner first had to protest the assessments before the board of review, and then file its written petition in the Tax Tribunal before May 31 of the respective tax years involved. Petitioner contends that because respondent did not timely notify it that respondent had placed the subject property back on the tax roll in tax years 2016 and 2017, it could not protest the assessments before the board of review or file a timely petition in the tribunal. Regardless, as the petition was not timely filed, the Tax Tribunal lacked jurisdiction under MCL 205.735a(6) to consider it. See Szymanski v Westland, 420 Mich 301, 303-305; 362 NW2d 224 (1984) (discussing that the filing deadlines of MCL 205.735, the precursor to MCL 205.735a, were jurisdictional). Contrary to petitioner's assumption, the tribunal is without jurisdiction to consider appeals filed outside the deadlines imposed by statute. Electronic Data Sys Corp, 253 Mich App at 548 (indicating that the Tax Tribunal "does not have powers of equity" and, therefore, "does not have the authority to grant a request for a delayed appeal").
Regarding petitioner's motion for reconsideration, the tribunal considered whether it could exercise subject-matter jurisdiction under that portion of MCL 205.735a(6) which states, "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, or determination." The tribunal determined that it could not because petitioner had not filed its petition within 35 days of receiving a "final decision, ruling, or determination." The tribunal recounted that petitioner claimed it first discovered the alleged assessment error in "late 2018," but did not file its petition until February 6, 2019. Assuming that petitioner received a "final decision, ruling, or determination" in the form of the foreclosure notice as late as December 31, 2018, petitioner did not file its petition within 35 days of that date. Therefore, the Tax Tribunal lacked jurisdiction under MCL 205.735a(6) to consider petitioner's appeal.
Not stopping there, the Tax Tribunal also considered whether it had jurisdiction over the petition under the General Property Tax Act, MCL 211.1 et seq. The General Property Tax Act provides, in pertinent part:
Any taxpayer who is assessed and pays taxes in excess of the correct and lawful amount due because of a clerical error or mutual mistake of fact made by the assessing officer and the taxpayer may recover the excess so paid, without interest, if suit is commenced within 3 years from the date of payment, notwithstanding that the payment was not made under protest. [MCL 211.53a.]Clerical error "refers to errors of a typographical, transpositional, or mathematical nature." Int'l Place Apartments-IV v Ypsilanti Twp, 216 Mich App 104, 109; 548 NW2d 668 (1996). Mutual mistake of fact "mean[s] an erroneous belief, which is shared and relied on by both parties, about a material fact that affects the substance of the transaction." Ford Motor Co v Woodhaven, 475 Mich 425, 442; 716 NW2d 247 (2006).
The fact that petitioner did not pay its property tax assessments for 2016 and 2017, let alone "taxes in excess of the correct amount," would render MCL 211.53a immediately inapplicable. Nevertheless, the Tax Tribunal went on to consider whether the petition alleged facts establishing that either a clerical error or a mutual mistake had occurred. The tribunal determined that neither had occurred, and petitioner does not challenge that conclusion on appeal. Thus, the Tax Tribunal correctly determined that it lacked jurisdiction under MCL 211.53a.
Next, the tribunal looked at the possibility of exercising jurisdiction under MCL 211.53b, which provides that, if there has been a "qualified error," a taxpayer may initiate an action with either the July or December board of review in order to correct the qualified error. The taxpayer can then appeal the determination of the board of review by filing a written appeal with the department of treasury within 35 days. MCL 211.53b(4). A qualified error includes "[a]n error regarding the correct taxable status of the real property being assessed." MCL 211.53b(8)(f).
Assuming without deciding that petitioner's assertion that the property should have been exempt from taxation because it was used "as a house of public worship and for charitable purposes" identifies a qualified error, petitioner did not, and according to petitioner, could not, initiate an action with the July or December board of review or appeal the board of review's determination within 35 days, both of which are required under the statute. Thus, the Tax Tribunal lacked jurisdiction over petitioner's claims under the General Property Tax Act, as well as under the Tax Tribunal Act.
B. DUE PROCESS
Petitioner argues that the tribunal's failure to exercise subject-matter jurisdiction under the circumstances resulted in the violation of petitioner's due-process rights. "[T]here can be no question that, at a minimum, due process of law requires that deprivation of life, liberty, or property by adjudication must be preceded by notice and an opportunity to be heard." Bonner v Brighton, 495 Mich 209, 235; 848 NW2d 380 (2014). While a "trial court has the authority to grant summary disposition sua sponte under MCR 2.116(I)(1)," it "may not do so in contravention of a party's due-process rights." Al-Maliki v LaGrant, 286 Mich App 483, 489; 781 NW2d 853 (2009).
Petitioner relies on Parkview Mem Ass'n v Livonia, 183 Mich App 116; 454 NW2d 169 (1990), to support its contention that "an untimely filing of a petition will be excused when a notice of assessment is not sent in accordance with due process." Decided before November 1990, Parkview is not binding on this Court. MCR 7.215(J)(1). In addition, Parkview considered the requirements of MCL 205.735 to be "procedural requirements for the perfection of an appeal of an assessment." Parkview, 183 Mich App at 121 (emphasis added). This Court, however, has now made it clear that "MCL 205.735 is a jurisdictional statute and the time requirements for filing appeal petitions are jurisdictional in nature." WA Foote Mem Hosp v City of Jackson, 262 Mich App 333, 338; 686 NW2d 9 (2004) (emphasis added). Parkview's assertion that MCL 205.735 sets forth procedural, rather than jurisdictional, requirements therefore cannot survive this Court's decisions in Electronic Data Sys Corp and WA Foote Mem Hosp.
Petitioner also relies on Lamkin v Hamburg Twp Bd of Trustees, 318 Mich App 546; 899 NW2d 408 (2017), to contend that "even in a sua sponte dismissal, parties are still entitled to an opportunity to be heard under due process." In Lamkin, this Court reversed a trial court's sua sponte dismissal of a case for lack of standing before the plaintiff had even served the complaint on the defendant. Id. Relevant to the instant case, this Court determined that the circuit court committed "a fatal procedural flaw necessitating reversal" when it failed to notify the plaintiff that it was contemplating summary disposition of her claims. Id. at 551. Of particular significance to petitioner is the Court's observation that such a quick dismissal left the Court with nothing to substantively review on appeal, and the Court's instruction on remand that the "circuit court must allow the parties to develop a reviewable record before reaching a judgment, summary or otherwise." Id. at 552. Petitioner observes that the record in this case is likewise undeveloped, and argues that the tribunal should at least have allowed for petitioner to serve respondent and the parties to submit briefs and evidence before deciding "on a possible sua sponte dismissal."
The case at bar is distinguishable from Lamkin. The circuit court in Lamkin had subject-matter jurisdiction of the matter before it; it just erred in dismissing the matter as it did. For reasons already stated, the tribunal correctly determined that it did not have subject-matter jurisdiction over petitioner's petition. When a court lacks subject-matter jurisdiction it "is so serious a defect in the proceedings that a tribunal is duty-bound to dismiss a plaintiff's claim even if the defendant does not request it." Electronic Data Sys Corp, 253 Mich App at 544. "Indeed, having determined that it has no jurisdiction, a court should not proceed further except to dismiss the action." Id. at 544-545. Accordingly, the Tax Tribunal was duty-bound to dismiss the petition sua sponte, and petitioner's due-process rights were not violated.
Here, it is undisputed that petitioner had notice that taxes were assessed for 2016 and 2017 when it received a foreclosure notice in late 2018. Even assuming that petitioner first received that notice as late as December 31, the last day of 2018, it still failed to timely file its petition. Petitioner had 35 days from the date it received notice of the foreclosure to file a petition with the Tax Tribunal. Petitioner did not do so. Instead, petitioner waited at least 37 days to file its petition. Under these circumstances, petitioner's due-process rights were not violated because the lack of notice of assessments did not impact petitioner's ability to timely file a petition once it learned that its property had been taxed. Petitioner had notice of a tax dispute and an opportunity to be heard; it simply failed to timely avail itself of that opportunity.
Affirmed.
/s/ Mark J. Cavanagh
/s/ Jane M. Beckering
/s/ Elizabeth L. Gleicher