Dean v. Michigan Dept. of Natural Resources

• Decision Date: 01 November 1976
• Docket Number: No. 1,1
• Citation: 247 N.W.2d 876,399 Mich. 84
• Parties: Penny DEAN, Plantiff-Appellant, v. The MICHIGAN DEPARTMENT OF NATURAL RESOURCES et al., Defendant-Appellees. ,
• Court: Michigan Supreme Court

Page 876

247 N.W.2d 876

399 Mich. 84

Penny DEAN, Plantiff-Appellant, v. The MICHIGAN DEPARTMENT OF NATURAL RESOURCES et al Defendant-Appellees.

No. 1, Nov. Term, 1976.

Supreme Court of Michigan.

Dec. 27, 1976.

Kenneth G. McIntyre, Detroit, for plaintiff-appellant.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Jerome Maslowski, Russell E. Prins, Asst. Attys. Gen., Environmental Protection and Natural Resources Division, Lansing, for State of Michigan, defendant-appellee.

WILLIAMS, Justice (To Reverse).

In the instant case, plaintiff has brought suit on two counts, alleging:

(1) that plaintiff's good-faith attempt to redeem her home during a one-year redemption period was in fact effective as a redemption, rendering the state's title void, and the state's conveyance of its title void; and

(2) that given the size of the delinquency, approximately $146.90, the good-faith effort of plaintiff to redeem her property, and the other facts of this case, the receipt by the State of Michigan of $10,000 for the sale of what had been plaintiff's home constitutes, under equity, unjust enrichment.

The trial court has granted an accelerated judgment for defendant under GCR 1963, 116 on both counts. We granted leave limited to the issue raised in Count II of plaintiff's complaint.

It is important to recognize that this suit never went to trial on the merits. No factual record was developed. No testimony was taken. The trial court made no finding as to laches or constructive fraud, and we cannot resolve such questions given the present posture of this case.

We hold that the trial court erroneously granted accelerated judgment as to the count in plaintiff's complaint based on the allegation that given the specific facts of this case, the receipt by the state of almost $10,000 in profit on the sale of what had been plaintiff's home constituted unfair enrichment in equity. We therefore reverse the trial court on this issue and remand for proceedings not inconsistent with this opinion.

I. Proceedings Below.

The events leading up to plaintiff's suit, as gleaned from plaintiff's complaint, defendant's answer, and the transcript of the proceedings before the Circuit Court entitled 'Motion for Accelerated Judgment' (Plaintiff's Appendix, A--44 to A--64) appear to be as follows.

In July, 1960, plaintiff purchased the home in question in Flint, Michigan with the proceeds from the life insurance policies of her recently deceased husband. (A--18)

Due to alleged illness, plaintiff was unable to and did not pay the 1964 city and county property taxes of $230.68 and $146.90 respectively in timely fashion. As a result, the State Treasurer filed a petition in Genesee County Circuit Court to enforce the payment of these delinquent taxes pursuant to M.C.L.A. § 211.61; M.S.A. § 7.105.

Apparently, under M.C.L.A. § 211.66; M.S.A. § 7.111, the state published notice of a hearing on the petition in a newspaper once a week for three consecutive weeks prior to the hearing.

On April 4, 1967, absent plaintiff Penny Dean, the Genesee County Circuit Court issued a judgment pursuant to M.C.L.A. § 211.67; M.S.A. § 7.112 that the amount of the taxes alleged to be delinquent in the State Treasurer's petition was valid, and that in default of payment, the property in question could be sold in a tax sale, and that if the property was bid in at such sale to the State, the State's title would become absolute at the end of the redemption period.

Sale of the property was held on the first Tuesday of May 1967 pursuant to M.C.L.A. § 211.70; M.S.A. § 7.115. Apparently, for want of other bidders said premises were sold and bid unto the State of Michigan. (A--33)

With the property sale held in May, 1967 began a one year redemption period, after which the title of the State would become absolute.

During the one year redemption period, plaintiff attempted to redeem her property through the payment of her delinquent taxes. Precisely what happened when Penny Dean tried to redeem is unclear, given that we are dealing here with an accelerated judgment, which has thus far precluded development of the facts underlying this suit.

Plaintiff's complaint indicates that plaintiff thought that she had successfully redeemed her property.

The best picture of what happened, however, is provided in a discussion between the trial judge and plaintiff's attorney at the proceeding to resolve defendant's motion for accelerated judgment. It should be emphasized that plaintiff's attorney was himself uncertain of the facts, relying in part on what one of the defense attorneys had told him. (A--52)

In any case, it appears that in Flint 'a person goes in ordinarily and pays his city and county taxes at one and the same place in the city.' (A--53) Apparently, plaintiff 'went to that same office (where both city and county taxes are ordinarily paid) and she said, in essence, how much money do you want,' she paid that amount, and went away believing that she had redeemed her home.

It is not clear what, if anything, was told to plaintiff by the person accepting the delinquent city tax money. Plaintiff has as yet had no opportunity to testify as to this matter. She did receive a document stamped redeemed from the city.

Unfortunately for plaintiff, apparently when one attempts to redeem property in Genesee County, one does not go to one and the same office to pay off the city and the county as is the case in timely payment of taxes. One must go to a separate office to redeem the property in question from the county. (A--52)

There is no indication of what notice, if any, of this variation in procedure was given plaintiff. Once again, there has been no opportunity to receive testimony on this question.

The defendant, Department of Natural Resources, alleges that on May 7, 1968, the redemption period expired and the title of the property in question vested absolutely in the State of Michigan, in spite of plaintiff's allegedly good faith attempt to redeem.

We do not know whether plaintiff continued to believe her home had been redeemed during the balance of the redemption period.

In any case, on June 3, 1968, a deed was executed which pursuant to M.C.L.A. § 211,67a; M.S.A. § 7.112(1) conveyed the property from the State Treasurer to the State of Michigan, and that deed was recorded on July 31, 1968.

From July, 1968 through September, 1971 plaintiff continued to live in what had been her home, paying rent in amounts ranging from $100.00 to $200.00.

On April 3, 1969 the property was conveyed to defendant Dudley Adle, a private investor, for the sum of $10,000. Sometime in 1971, Adle sold the property to Albert Adams, also a defendant here.

On October 4, 1972, plaintiff filed the instant suit in Ingham County Circuit Court charging 1) that the State's deed was ineffective because of an effective redemption by plaintiff in 1968 and 2) that the State had been unjustly enriched in the circumstances of this case in retaining the $10,000 received in the sale of the property.

On October 18, 1972, defendant Department of Natural Resources moved to dismiss plaintiff's complaint on the grounds (A--32 to A--35) of prior judgment and statute of limitations. On December 8, 1972, a hearing was held on this motion. At that hearing, defendant's attorney made very clear the nature of his motion:

'Your Honor * * * I have filed a motion to dismiss, but actually it's in the nature of a motion for accelerated judgment. It's not denominated as such but, in essence, our motion really is that the Plaintiffs are estopped to attempt to set aside the entire transactions involved here by reason of not having taken an appeal from the judgment that was entered in the Circuit Court for the County of Genesee relative to this property in the tax foreclosure proceedings relating to the delinquent county tax * * *.

'Additionally we claim that this matter is res judicata of the matters which were set forth in the complaint * * *.' (A--45)

Clearly the thrust of defendant's motion for accelerated judgment under GCR 1963, 116 seems to be that plaintiff is precluded from bringing suit because of res judicata or collateral estoppel arising from the judgment in Genesee County Circuit Court, and because plaintiff did not try to annul the State's deed within the 6 month period described below.

On October 3, 1973, the trial court issued an opinion granting an accelerated judgment to defendant. (A--4)

The trial court supported its conclusion on two grounds.

First, the trial court cited M.C.L.A. § 211.431; M.S.A. § 7.661 which provides in part as follows:

After the expiration of 6 months from and after The time when any deed made to the state under the provisions of section 127 or Section 67a of Act 206 of the Public Acts of 1893, being the general tax law, and acts amendatory thereto, Shall have been recorded in the office of the register of deeds for the county in which the land so deeded shall be situated, The title of the state in and to the same shall be deemed to be absolute and complete, and no suit or proceeding shall thereafter be instituted by any person claiming through the original or government title To set aside, vacate or annul the said deed or the title derived thereunder * * *.' (Emphasis added.)

In the instant case, the deed conveying to the State was executed pursuant to section 67A in June, 1968, and recorded in July of that year, as noted above.

The trial court concluded that 'while Plaintiff claims unjust enrichment . . . it is apparent that her suit in fact is one directed at vacating and annulling the deed and the title derived thereunder' (A--5). Given this conclusion, and the fact that plaintiff's suit had been commenced after the 6 month statutory period, the court felt that an accelerated judgment was in order due to the running of the statute of limitation. ¹ Second, the trial court concluded 'that plaintiff's action is in fact nothing more than a collateral ...