City of Lansing v. Angavine Holding, LLC

• Decision Date: 14 October 2021
• Docket Number: 353784
• Citation: 339 Mich.App. 210,981 N.W.2d 372
• Parties: CITY OF LANSING, Petitioner-Appellee, v. ANGAVINE HOLDING, LLC, Respondent-Appellant.
• Court: Court of Appeal of Michigan — District of US

339 Mich.App. 210

981 N.W.2d 372

CITY OF LANSING, Petitioner-Appellee,

v.ANGAVINE HOLDING, LLC, Respondent-Appellant.

No. 353784

Court of Appeals of Michigan.

Submitted September 14, 2021, at Lansing.

Decided October 14, 2021, at 9:05 a.m.

James D. Smiertka, Laingsburg, F. Joseph Abood, East Lansing, Heather E. Sumner, and Gregory S. Venker for the city of Lansing.

Hallahan & Associates, PC, Bloomfield Hills, (by Laura M. Hallahan and Seth A. O'Loughlin) for Angavine Holding, LLC.

Before: Beckering, P.J., and Shapiro and Swartzle, JJ.

Swartzle, J.

The city of Lansing received an adverse decision by the State Tax Commission on whether property had been omitted from the city's general-property-tax assessment roll. The city appealed to the Ingham Circuit Court, and Angavine Holding, LLC, objected, arguing that the trial court did not have jurisdiction and the property had not been "omitted" within the meaning of MCL 211.154. The trial court rejected both arguments, and this appeal followed.

Our review of the record confirms that the State Tax Commission acted in a quasi-judicial capacity when it issued a final decision in this dispute. Even though the Commission's decision resulted in no change to the tax roll, its decision still "affect[ed]" a private right, triggering the right to judicial review found in Article 6, § 28 of Michigan's 1963 Constitution. As more fully explained below, the trial court had jurisdiction to hear the appeal from the Commission. Finding no other basis for reversal, we affirm.

I. BACKGROUND

Angavine owns commercial real estate located at 113 Pere Marquette in the city of Lansing. The company renovated its building in 2013, replacing office space on the first floor with eight apartments; Angavine received permits from the city for the renovation. The remodel did not alter the second floor, where 13 apartments were located. The property's first-floor remodel was assessed on the city's special-assessment roll before and after the remodel. The city did not, however, reassess the property's first floor for purposes of its general-property-tax assessment roll until 2019, leading to this dispute.

In November 2018, the city informed Angavine in writing that the remodeled space had not been included in the city's tax assessment for the property. The city explained that, based on its "income approach" to assessing property, Angavine should have paid additional taxes beginning in tax year 2014. Tax rules prohibited the city from seeking taxes over the entire period, however, so the city increased Angavine's tax liability for tax years 2016–2018. Angavine did not respond to the city's letter.

Given the lack of response, the city initiated proceedings before the State Tax Commission. Our Legislature has granted the Commission "general supervisory authority over the assessment of property for taxation." Superior Hotels, LLC v. Mackinaw Twp. , 282 Mich. App. 621, 632, 765 N.W.2d 31 (2009). A taxpayer or assessing authority can seek the Commission's correction of an assessment roll, MCL 211.152, and the Commission has jurisdiction to correct an assessment roll for omitted property, MCL 211.154.

After reviewing the parties’ submissions, staff for the State Tax Commission concluded that the first-floor apartments constituted omitted property:

The Assessor provided the record cards for the 2017 and 2018 tax years showing an income approach was used to value the subject property. Within the income approach, twelve one-bedroom and one two-bedroom apartments were identified. The 2017 and 2018 record cards submitted by the Assessor did not include any building area identified as ground-floor commercial office space or the eight flat apartments that are the subject of the Petition. Further, in examining the record cards, there is no indication of a change to the apartment count, size or quality as a result of building permits filed in 2011 for "interior tear-out" or "alterations for apartments." Similarly, in 2013, there is no indication of a change for eight plumbing, eight mechanical and eight electrical permits, nor was there a reduction given for the loss of office space in that tax year. Based on the information provided to-date, there is no indication that [the] disputed building area was valued for the 2017 and 2018 tax years.

The State Tax Commission dismissed the city's claim for tax year 2016 for lack of jurisdiction. With respect to tax years 2017 and 2018, despite the staff recommendation, the Commission concluded that the remodeled first-floor property did not qualify as omitted property.

In the letter informing the city of the decision, the State Tax Commission included boilerplate language informing the parties of their appellate rights:

A person to whom property is assessed may appeal the State Tax Commission's determination within 35 days of the date of issuance to the Michigan Tax Tribunal. More information on how to file an appeal with the Michigan Tax Tribunal can be found at www.michigan.gov/taxtrib or by calling the Michigan Tax Tribunal at 517-335-9760. Local taxing authorities may appeal the State Tax Commission's determination within 21 days of the date of issuance to the circuit court of the county where the local taxing authority is located, or to the Ingham County Circuit Court. [Emphasis added.]

The city appealed to the Ingham Circuit Court, challenging the State Tax Commission's decision with respect to tax years 2017 and 2018. Angavine responded, arguing, first, that the trial court lacked jurisdiction over the city's appeal and, second, that the State Tax Commission did not err. With respect to the first argument, the city replied that Michigan's 1963 Constitution guaranteed it a right of judicial appeal from the Commission's decision. As for the second argument, the city reiterated its earlier position that the first-floor apartments qualified as omitted property under the law.

The trial court concluded that it had jurisdiction over the city's appeal under Article 6, § 28 of Michigan's 1963 Constitution and § 631 of the Revised Judicature Act, MCL 600.101 et seq. On the merits of the city's claim that the remodeled property qualified as omitted property, the trial court agreed with the city that the latter's income-based evaluation system required a new assessment after the 2013 remodel. The fact that the first-floor apartments appeared on the special-assessment roll had no impact on the city's general-property-tax assessment roll. Accordingly, the trial court reversed the State Tax Commission's decision.

This appeal followed.

II. ANALYSIS

On appeal, Angavine raises the same claims that it raised below—(1) the trial court lacked jurisdiction to hear the city's appeal from the State Tax Commission; and (2) the first-floor remodel did not qualify as omitted property. We take up each claim in turn, and, as explained below, we conclude that each one is without merit.

A. STANDARD OF REVIEW

We review de novo questions of law, including issues involving constitutional and statutory interpretation. Janer v. Barnes , 288 Mich. App. 735, 737, 795 N.W.2d 183 (2010) ; Stallworth v. Stallworth , 275 Mich. App. 282, 288, 738 N.W.2d 264 (2007). Our Supreme Court addressed the principles of constitutional interpretation in Studier v. Mich. Pub. Sch. Employees’ Retirement Bd. , 472 Mich. 642, 652, 698 N.W.2d 350 (2005) :

The primary objective in interpreting a constitutional provision is to determine the text's original meaning to the ratifiers, the people, at the time of ratification. This rule of "common understanding" has been described by Justice COOLEY in this way:

A constitution is made for the people and by the people. The interpretation that should be given it is that which reasonable minds, the great mass of the people themselves, would give it. "For as the Constitution does not derive its force from the convention which framed, but from the people who ratified it, the intent to be arrived at is that of the people , and it is not to be supposed that they have looked for any dark or abstruse meaning in the words employed, but rather that they have accepted them in the sense most obvious to the common understanding , and ratified the instrument in the belief that that was the sense designed to be conveyed."

In short, the primary objective of constitutional interpretation is to realize the intent of the people by whom and for whom the constitution was ratified. [Citations omitted.]

When interpreting our Constitution, "we apply the plain meaning of each term used therein at the time of ratification unless technical, legal terms were employed." Id.

B. JURISDICTION

Angavine first challenges the trial court's jurisdiction to hear the city's appeal from the State Tax Commission. "Subject-matter jurisdiction concerns the right of an adjudicative body to exercise judicial power over a class of cases; not the particular case before it, but rather the abstract power to try a case of the kind or character of the one pending." Petersen Fin. LLC v. Kentwood , 326 Mich. App. 433, 441, 928 N.W.2d 245 (2018) (cleaned up). Jurisdiction concerns itself about the nature of the case, not the truth or falsity of the allegations made by the respective parties. Id. at 433-434, 928 N.W.2d 245.

Angavine's jurisdictional argument is straightforward: First , the State Tax Commission's decision maintained the status quo with respect to Angavine's tax assessment, and therefore its private right was not affected, i.e., changed. Because Angavine's private right was not affected, the constitutional right of judicial review under Article 6, § 28 of Michigan's 1963 Constitution was not implicated. Second , because § 28 was not implicated, the city did not have a constitutional right of judicial review under § 28, and thus the city's right of review, if any, would have to be found in statute. Third , the Tax Tribunal Act, MCL 205.701 et seq., vests the Tax Tribunal with exclusive and original jurisdiction over appellate review of the ...