Ashley Ann Arbor, LLC v. Pittsfield Charter Twp.

• Decision Date: 27 December 2012
• Docket Number: Docket No. 304904.
• Citation: 299 Mich.App. 138,829 N.W.2d 299
• Parties: ASHLEY ANN ARBOR, LLC v. PITTSFIELD CHARTER TOWNSHIP.
• Court: Court of Appeal of Michigan — District of US

299 Mich.App. 138

829 N.W.2d 299

ASHLEY ANN ARBOR, LLC

v.PITTSFIELD CHARTER TOWNSHIP.

Docket No. 304904.

Court of Appeals of Michigan.

Submitted July 10, 2012, at Lansing.

Decided Dec. 27, 2012, at 9:05 a.m.

Kemp Klein Law Firm, Troy, (by Richard Bisio) for Ashley Ann Arbor, LLC.

Reading, Etter & Lillich, Ann Arbor, (by John L. Etter) for Pittsfield Charter Township.

Before: GLEICHER, P.J., and SAAD and BECKERING, JJ.

GLEICHER, P.J.

Pittsfield Charter Township levied a special assessment against Ashley Ann Arbor, LLC (Ashley), to recover the cost of updating a drainage system that serviced Ashley's property. Ashley challenged the special assessment, contending that the drain updates prevented flooding on properties outside the special assessment district and did not benefit the properties subject to the tax. Ashley brought actions seeking to invalidate the special assessment in both the circuit court and the Michigan Tax Tribunal (MTT). After transfer of the MTT petition to the circuit court, the court summarily dismissed both claims. The issues before us concern the jurisdiction of the dispute and the timeliness of the claims.

We hold that the circuit court was the correct forum to hear Ashley's challenge as the special assessment arose under the Drain Code, MCL 280.1 et seq., and was therefore outside the MTT's exclusive and original jurisdiction. MCL 205.703(f); MCL 205.731. The circuit court improperly dismissed Ashley's challenge as the corporation timely raised it before the MTT, which then transferred jurisdiction to the circuit court. Moreover, Ashley's timely filing of its MTT petition tolled the period of limitations, rendering the circuit court's dismissal of Ashley's original complaint improper. We vacate the circuit court's summary dismissal orders and remand for consideration of Ashley's substantive claims.

I. BACKGROUND

Ashley owns undeveloped property north of Michigan Avenue in Pittsfield Township. In 2009, the township created a special assessment district to finance its obligations for the Michigan Avenue East Central Area Drainage District Project. Under the project, the Washtenaw County drain commissioner reconstructed and diverteda section of a stormwater drain because a previous reconstruction had forced overflow waters to pool on residential properties south of the assessment district. The drain commissioner apportioned $1,724,994.45 of the project costs to the township. The township paid half this obligation from its general fund and apportioned the remainder of the debt among the 37 property owners in the special assessment district. Ashley first objected to the special assessment at a March 24, 2009 public hearing before the township's board of trustees. In the hearing notice provided to the affected landowners, the township advised them of their right to “file a written appeal with the [MTT] within 30 days after confirmation of the special assessment roll.”

Ashley subsequently filed a petition in the MTT on April 22, 2009, challenging its inclusion in the special assessment district. Ashley complained in part that “[t]he improvement does not specially benefit the subject property,” “[t]he special assessment is not proportional to the benefit, if any, to the subject property,” and the lack of proportionality violated MCL 41.725(1)(d) of the public improvements act (PIA), MCL 41.721 et seq. The MTT scheduled Ashley's petition for a hearing on the September 16–30, 2011 “Prehearing General Call.”

While the MTT petition was pending, Ashley filed a separate complaint in the circuit court on December 13, 2010, raising the same challenges. On December 20, 2010, Ashley also filed a motion in the MTT to transfer the matter to circuit court. After receiving training to serve as a hearing referee in the MTT small claims division, Ashley's attorney learned for the first time that assessments imposed under the Drain Code are not within the MTT's jurisdiction and must be brought before the circuit court. Although it initially denied Ashley's motion, the MTT ordered the transfer on reconsideration. Specifically, the MTT ruled that the special assessment was made under the Drain Code and therefore that it lacked jurisdiction. The MTT noted that Ashley had timely filed its petition within 30 days of the township board's confirmation of the special assessment roll as required by MCL 41.726(3) of the PIA.

In February 2011, only two months after filing its original circuit court action and securing the MTT transfer, Ashley filed a motion for summary disposition, arguing that there were no genuine issues of material fact and that it was entitled to judgment as a matter of law. The township responded that the circuit court lacked jurisdiction over both the original and transferred actions and therefore should dismiss both. If the special assessment was made under the Drain Code as contended by Ashley, the township argued that Ashley would be required to file an original action in the circuit court within 30 days of the March 24, 2009 township board meeting. The township argued that the MTT did not have the authority to transfer Ashley's 2009 petition to the circuit court and that Ashley's 2010 circuit court complaint was untimely, divesting that court of jurisdiction.

In the event that the special assessment was imposed under the PIA as contended by the township, then jurisdiction was proper in the MTT alone. In support of its belief that the special assessment fell under the PIA, the township relied on its board's resolution citing the PIA as authority to impose the special assessment against its property owners. The township further noted that although the Drain Code was integral to the county's approval of the drain project and the assessment of taxes against the township, the township switched gears and proceeded under the PIA.

Ashley responded that the MTT had already considered the jurisdictional issue and ruled that the township's special assessment was made under the Drain Code. Ashley reiterated the merits of its claim that the township's actions were within that code:

The only statutory authority that the Township has to assess property for this is under the Drain Code. If you look at their resolution approving this assessment ... it specifically mentions the Drain Code. They started this process by ... doing a petition to the Washtenaw County Drain Commissioner to convene a Drainage Board. They held a public hearing under the Drain Code, as required, for the approval of this project, the Township held that hearing, and the whole process is a two-step process where the Drain Board approves the project, does the project, and after that, they allocate the cost to the municipalities and the public entities that are benefited. They allocated about 90 some percent of the cost to the Township, some to the County, some to the city. The Township then, under the Drain Code, has an option of how they want to pay for that. They can pay for it out of their General Fund. They can charge various fees to people or they can, as they did here, impose a special assessment. In fact, the Township decided to split the cost between 50 percent to their General Fund and 50 percent to the special assessment in this case.

But the authority to do that, the authority to impose a special assessment is under the Drain Code. It's MCL 280.490, and I just want to read one sentence from that so that it's clear how the Township came to impose this assessment. This says, in the Drain Code, “If the legislative body of a public corporation which has been assessed under this chapter determines that a part of the lands in the public corporation will be especially benefitted by the drain project, the legislative body may cause that portion of the assessment under this chapter to be specially assessed according to benefits against the especially benefitted lands.” That's MCL 280.490(1). Subsection two of that goes on to say that they're to prepare a special assessment roll. This is all under the Drain Code.

Otherwise, they couldn't do this.

Ashley contended that the PIA authorizes the township to levy a special assessment for the township to make a public improvement. The improvement in this case, however, was made by the county drain commissioner. The PIA provides the procedures and methods for the township to create and implement project plans, actions that were taken by the county in this case. Ashley further noted that drain improvements are not included in the exhaustive list of projects subject to the PIA.

Ultimately, the circuit court dismissed both cases:

[T]he [MTT's] decision to transfer the case to the Circuit Court does not grant jurisdiction to this court. Further, if [Ashley] is correct that this is a special assessment under the Drain Code, then appeal is only proper in the Circuit Court. [Ashley's] tol[l]ing argument, however, is without merit because as [the township] persuasively argues, [Ashley] failed to file in a ... “court of competent jurisdiction,” within the 30–day time period. By way of example, if a claim is required to be filed in the Court of Claims and a party erroneously files in Circuit Court and then the statuteof limitations runs before the error is corrected, the tol[l]ing provision does not operate to save the claim. The ... complaint must be properly filed in order for tol[l]ing to operate. Based on [the township's] argument, ... and despite the [MTT's] conclusion, the [MTT] is not, “a court of competent jurisdiction,” if the Circuit Court has jurisdiction over the Drain Code matters. Alternatively, if, as [the township] argues, this is not a special assessment under the Drain Code and instead is a general assessment, this court does not have jurisdiction and the [MTT] is the proper forum. Either way, [Ashley's] case is not properly before this Court.¹

II. STANDARD OF REVIEW

This Court reviews de novo the trial court's decision to grant summary disposition. Latham v. Barton Malow...