Kyle Shaw Residential Props. v. City of Lansing

• Decision Date: 04 November 2021
• Docket Number: 354760
• Parties: KYLE SHAW RESIDENTIAL PROPERTIES, LLC, Petitioner-Appellant, v. CITY OF LANSING, Respondent-Appellee.
• Court: Court of Appeal of Michigan — District of US

KYLE SHAW RESIDENTIAL PROPERTIES, LLC, Petitioner-Appellant,
v.
CITY OF LANSING, Respondent-Appellee.

No. 354760

Court of Appeals of Michigan

November 4, 2021

UNPUBLISHED

Tax Tribunal LC No. 20-000404-TT

Before: Ronayne Krause, P.J., and Cameron and Rick, JJ.

Per Curiam

Petitioner Kyle Shaw Residential Properties, LLC, appeals the final judgment of the Michigan Tax Tribunal (MTT), which determined the value of petitioner's property in Lansing, Michigan, for the 2020 tax year. We affirm.

I. BACKGROUND

In August 2018, the subject property was sold to JP Morgan Mortgage Acquisition Corporation (JP Morgan) in a foreclosure sale for $39, 847. JP Morgan later listed the property for sale, and petitioner purchased it for $42, 500 in September 2019. Respondent City of Lansing valued the true cash value (TCV) of the property at $152, 600, resulting in a taxable value (TV) of $76, 300 for the 2020 tax year. Petitioner disagreed with these values and petitioned the Board of Review (BOR) for relief. The March 2020 BOR found that the property was properly valued and left the TCV and TV unchanged.

Petitioner appealed this decision to the MTT, arguing that the TCV of the property was $50, 000 and that the TV of the property was $25, 000. Respondent filed an answer and requested that the MTT affirm the BOR's decision. However, respondent later changed its position and asserted that the TCV of the property was $112, 500. After holding a hearing and considering the evidence submitted by the parties, the MTT concluded that the TCV of the property was $115, 000 and that the TV was $57, 500 for the 2020 tax year. This appeal followed.

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II. STANDARDS OF REVIEW

In New Covert Generating Co, LLC v. Twp of Covert, 334 Mich.App. 24, 45;___ N.W.2d___ (2020), this Court observed:

This Court's review of agency decisions involving property tax valuations is quite limited: "In the absence of fraud, error of law or the adoption of wrong principles, no appeal may be taken to any court from any final agency provided for the administration of property tax laws from any decision relating to valuation or allocation." Const 1963, art 6, § 28 . . . . This Court reviews de novo whether the Tax Tribunal erred as a matter of law when interpreting and applying statutes Makowski v. Governor, 317 Mich.App. 434, 441; 894 N.W.2d 753 (2016). Agency interpretations of a statute are entitled to "respectful consideration, but they are not binding on courts and cannot conflict with the plain meaning of the statute." In re Complaint of Rovas Against SBC Mich, 482 Mich. 90, 117-118; 754 N.W.2d 259 (2008)

"When the Tribunal's findings of fact are supported by competent, material, and substantial evidence on the whole record, those findings are conclusive." Estate of Schubert v. Dep't of Treasury, 322 Mich.App. 439, 447; 912 N.W.2d 569 (2017). "Substantial evidence must be more than a scintilla of the evidence, although it may be substantially less than a preponderance of the evidence." Forest Hills Coop v. City of Ann Arbor, 305 Mich.App. 572, 588; 854 N.W.2d 172 (2014) (quotation marks and citation omitted).

III. ANALYSIS

Petitioner argues that the TV for the 2020 tax year is inaccurate because the property's TCV was improperly assessed. We disagree. MCL 211.27a provides in relevant part as follows:

(1) Except as otherwise provided in this section, property shall be assessed at 50% of its true cash value under section 3 of article IX of the state constitution of 1963.

(3) Upon a transfer of ownership of property after 1994, the property's taxable value for the calendar year following the year of the transfer is the property's state equalized valuation for the calendar year following the transfer.

"[TCV] is synonymous with fair market value." WPW Acquisition Co v. City of Troy, 250 Mich.App. 287, 298; 646 N.W.2d 487 (2002). "Therefore, the assessment must reflect the probable price that a willing buyer and a willing seller would arrive at through arm's length negotiation." Huron Ridge LP v. Ypsilanti Twp, 275 Mich.App. 23, 28; 737 N.W.2d 187 (2007). An arm's-length negotiation "is characterized by three elements: it is voluntary, i.e., without compulsion or duress; it generally takes place in an open market; and the parties act in their own self-interest." Mackey v. Dep't of Human Servs, 289 Mich.App. 688, 699; 808 N.W.2d 484 (2010) (quotation marks and citations omitted).

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[T]o determine [TCV], the property must be assessed at its highest and best use. . . . Highest and best use is defined as the most profitable and advantageous use the owner may make of the property even if the property is presently used for a different purpose or is vacant, so long as there is a market demand for such use. [Menard, Inc v. City of Escanaba, 315 Mich.App. 512, 522; 891 N.W.2d 1 (2016) (alteration in original; emphasis, quotation marks, and citations omitted).]

While "...