2 Crooked Creek, LLC v. Cass Cnty. Treasurer

• Decision Date: 16 March 2021
• Docket Number: No. 159856,159856
• Parties: 2 CROOKED CREEK, LLC, and Russian Ferro Alloys, Inc., Plaintiffs-Appellants, v. CASS COUNTY TREASURER, Defendant-Appellee.
• Court: Michigan Supreme Court

507 Mich. 1

967 N.W.2d 577

2 CROOKED CREEK, LLC, and Russian Ferro Alloys, Inc., Plaintiffs-Appellants,

v.CASS COUNTY TREASURER, Defendant-Appellee.

No. 159856

Supreme Court of Michigan.

Argued on application for leave to appeal October 7, 2020

Decided March 16, 2021

Kus Ryan, PLLC (by Cindy Rhodes Victor, Sterling Heights) and Barnes & Thornburg LLP (by Tracy D. Knox and Aaron D. Lindstrom, Grand Rapids) for plaintiffs.

Kreis, Enderle, Hudgins & Borsos, PC (by Thomas G. King, Portage, Nicholas J. Spigiel, Portage, and Charles L. Bogren ) for defendant.

Dana Nessel, Attorney General, Fadwa A. Hammoud, Solicitor General, B. Eric Restuccia, Deputy Solicitor General, and Matthew B. Hodges, Assistant Attorney General, for the people, amicus curiae.

Dykema Gossett PLLC, Lansing (by Theodore W. Seitz, Steven C. Liedel, and Kyle M. Asher ) and Kevin T. Smith Lansing, for the Michigan Association of County Treasurers, amicus curiae.

BEFORE THE ENTIRE BENCH (except Welch, J.)

OPINION

Zahra, J.

In this appeal, we address the monetary-damages provision of the General Property Tax Act (GPTA), MCL 211.1 et seq. , which, until recently, permitted an owner of an interest in real property extinguished by tax foreclosure to recover monetary damages upon a showing "that he or she did not receive any notice required under [the GPTA] ...."¹ Plaintiff 2 Crooked Creek, LLC (2CC) contends that the phrase "any notice" means "actual notice" and that the statute permitted recovery of monetary damages for anything short of receiving actual notice.² We conclude that the phrase "any notice" as it was used in MCL 211.78l (1) was not limited to actual notice but, instead, encompassed all constitutionally sufficient notice. Thus, while we affirm the result reached by the Court of Appeals, we clarify that the monetary-damages remedy in MCL 211.78l (1) provided an alternative avenue of relief available only to those former property owners and interest holders who did not receive constitutionally adequate notice of the foreclosure proceedings as required under the GPTA.³ Therefore, in order to bring a claim for monetary damages under MCL 211.78l (1) for not having received "any notice" under the GPTA, the claimant must first establish that notice did not satisfy the minimum requirements of due process.

I. BASIC FACTS AND PROCEEDINGS

In 2010, 2CC purchased property for development in Cass County. 2CC failed to pay the 2011 real-property taxes and, in 2013, forfeited the property to defendant, the Cass County Treasurer. From January through May 2013, defendant's agent, Title Check, LLC (Title Check), mailed via first-class and certified mail a series of notices to the address listed in the deed. These notices apprised 2CC of the unpaid property taxes, forfeiture, and possibility of foreclosure. The certified mail was returned as "Unclaimed—Unable to Forward," but the first-class mail was not returned.⁴ Meanwhile, 2CC constructed a home on the property, obtaining a mortgage for the construction from Russian Ferro Alloys, Inc.⁵

On June 18, 2013, Katelin MaKay, a land examiner working for Title Check, visited the property; determined it to be occupied; and being unable to personally meet with any occupant, posted notice of the show-cause hearing and judicial-foreclosure hearing on a window next to the front door of the newly constructed home.⁶ Title Check continued its notice efforts through the rest of 2013 and into 2014, mailing various notices as well as publishing notice in a local newspaper for three consecutive weeks. After no one appeared on 2CC's behalf at the January 15, 2014 show-cause hearing or the February 18, 2014 judicial-foreclosure hearing, the Cass Circuit Court entered the judgment of foreclosure. The property was not redeemed by the March 31, 2014 deadline, and fee simple title vested with defendant. 2CC learned of the foreclosure a few weeks later.

In July 2014, 2CC moved to set aside the foreclosure judgment on due-process grounds. These efforts failed, however, because the circuit court concluded, and the Court of Appeals agreed, that defendant's combined efforts of mailing, posting, and publishing notice under the GPTA provided 2CC with notice sufficient to satisfy the requirements of due process.⁷ At the same time 2CC moved to set aside the foreclosure judgment, it filed this separate action in the Court of Claims for monetary damages under MCL 211.78l (1), alleging that it had not received any notice required under the GPTA. After denying defendant's motion for summary disposition under MCR 2.116(C)(7) (prior judgment),⁸ the Court of Claims held a bench trial. At the close of 2CC's proofs, the court granted an involuntary dismissal in favor of defendant, holding, in relevant part, that 2CC had received at least constructive notice of the foreclosure proceedings when MaKay posted notice on the home at a time when 2CC "was exercising dominion and control over the property by contracting for the construction of a home on the property."⁹ 2CC appealed as of right, and the Court of Appeals affirmed in an opinion later approved for publication.¹⁰ 2CC filed an application for leave to appeal in this Court. In lieu of granting leave, we ordered oral argument on the application limited to the issue of

whether [2CC] (an owner of a property interest that was extinguished by tax foreclosure after being accorded notice sufficient to satisfy minimum due process requirements) can sustain an action to recover monetary damages pursuant to MCL 211.78l (1) by claiming that it "did not receive any notice required under this act" due to a lack of actual notice and, specifically, whether constructive notice is sufficient to fall within the confines of "any notice" under MCL 211.78l (1) such that 2CC can be charged with knowledge of the notice that was posted to the subject property during a time when 2CC was exercising control and dominion over it. See In re Treasurer of Wayne Co. for Foreclosure (Perfecting Church) , 478 Mich. 1 (2007).^{[11 ]}

II. STANDARD OF REVIEW AND APPLICABLE RULES OF STATUTORY INTERPRETATION

The issue presented in this case is one of pure statutory interpretation, which this Court reviews de novo.¹² This Court's role in interpreting statutory language is to "ascertain the legislative intent that may reasonably be inferred from the words in a statute."¹³ "In doing so, courts must give effect to every word, phrase, and clause in a statute and avoid an interpretation that renders nugatory or surplusage any part of a statute."¹⁴ "Unless statutorily defined, every word or phrase of a statute should be accorded its plain and ordinary meaning, taking into account the context in which the words are used."¹⁵ "When the statutory language is clear and unambiguous, judicial construction is not permitted and the statute is enforced as written."¹⁶

II. ANALYSIS

A. THE GPTA AND MCL 211.78l

The GPTA authorizes a foreclosing governmental unit to seize tax-delinquent property through foreclosure and to then sell it to recoup unpaid real-property taxes, penalties, interest, and fees. Before the foreclosure judgment is entered, the GPTA provides various procedural safeguards to afford those with an interest in the property notice of the foreclosure by mail, by publication, and by a personal visit to the property,¹⁷ and it provides an opportunity to be heard via a show-cause hearing and a judicial-foreclosure hearing.¹⁸ Once the foreclosure judgment enters and the redemption and appeal periods expire, fee simple title to the property vests in the foreclosing governmental unit.¹⁹ Once entered, circuit courts generally may not alter a judgment of foreclosure. Nonetheless, MCL 211.78l (1) provided divested property owners and interest holders who claim they did not receive any notice required under the GPTA an action for monetary damages:

If a judgment for foreclosure is entered under section 78k and all existing recorded and unrecorded interests in a parcel of property are extinguished as provided in section 78k, the owner of any extinguished recorded or unrecorded interest in that property who claims that he or she did not receive any notice required under this act shall not bring an action for possession of the property against any subsequent owner, but may only bring an action to recover monetary damages as provided in this section.^{[20 ]}

2CC argues that it is entitled to monetary damages under MCL 211.78l (1) because "any notice" means "actual notice," such that the statute provided relief when a claimant received anything less than actual notice of the foreclosure proceedings. By using the term "any," however, it is clear that the Legislature intended to encompass all types of notice required under the GPTA, not just actual notice.²¹ Indeed, a review of other provisions of the GPTA demonstrates that the Legislature did refer to "actual notice" in some instances.²² The use of "actual notice" in other provisions as opposed to the use of "any notice" in MCL 211.78l (1) indicates that the Legislature likely intended to differentiate between "actual notice" and "any notice."²³ Further, the legal definition of "notice" is not constrained to situations in which a person receives actual notice; a person may be deemed to have received notice regardless of whether actual awareness exists.²⁴

2CC tries to rebut these commonsense conclusions by focusing on the word "receive," arguing that because other forms of notice act as a substitute for actual notice, only actual notice can be received.²⁵ The word "receive" is defined as follows:

1. to take into one's possession (something offered or delivered) .... 2. to have (something) bestowed, conferred, etc. .... 3. to have delivered or brought to one .... 4. to get or be informed of .... 5. to be burdened with; sustain .... 6. to hold, bear, or contain .... . to take into the mind; apprehend mentally .... 8. to accept from another, as by hearing .... ^{[26 ]}

Clearly then, the plain meaning of "receive" is not...