Michigan Props., L.L.C. v. Meridian Twp., 143085
| Decision Date | 14 June 2012 |
| Docket Number | No. 143085,No. 143086,No. 143087,No. 143281,143085,143086,143087,143281 |
| Parties | MICHIGAN PROPERTIES, L.L.C., Petitioner-Appellee, v. MERIDIAN TOWNSHIP, Respondent-Appellant. TOLL NORTHVILLE LIMITED PARTNERSHIP and BILTMORE WINEMAN LLC, Petitioners-Appellants, v. NORTHVILLE TOWNSHIP, Respondent-Appellee. |
| Court | Michigan Supreme Court |
Chief Justice:
Robert P. Young, Jr.
Michigan Supreme Court
Lansing, Michigan
Justices:
Michael F. Cavanagh
Marilyn Kelly
Stephen J. Markman
Diane M. Hathaway
Mary Beth Kelly
Brian K. Zahra
BEFORE THE ENTIRE BENCH
The cases before us involve the proper interpretation of the General Property Tax Act (GPTA), MCL 211.1 et seq. In Michigan Properties, LLC v Meridian Township, we address whether a tax assessor's failure to adjust the taxable value of a parcel of real property in the year immediately following its transfer1 precludes a March board of review from adjusting the taxable value in a later year.
We hold that the failure to adjust the taxable value in the year immediately following the transfer produced an erroneous taxable value because the taxable value was not in compliance with the GPTA. Further, the GPTA does not preclude a March board of review from correcting an erroneous taxable value that resulted from the failure of an assessor to adjust a property's taxable value in the year immediately following its transfer. Accordingly, we also hold that a March board of review may adjust the erroneous taxable value in a subsequent year in order to bring the current taxable value into compliance with the GPTA. The Court of Appeals held that the error in this case could not be remedied and, therefore, we reverse the judgment of the Court of Appeals and reinstate the Michigan Tax Tribunal's decision affirming the March board of review's correction of the tax rolls to reflect the properly adjusted taxable values.
Next, in Toll Northville Limited Partnership v Northville Township, we address whether the Tax Tribunal has the authority to reduce an unconstitutional increase in the taxable value of property when the erroneous taxable value was not challenged in the year of the increase.2 We hold that the Tax Tribunal does have the authority to reduce anunconstitutional previous increase in taxable value for purposes of adjusting a taxable value that was timely challenged in a subsequent year. The Tax Tribunal Act3 sets forth the Tax Tribunal's jurisdiction.4 Once its jurisdiction is properly invoked, the Tax Tribunal possesses the same powers and duties as those assigned to a March board of review under the GPTA, including the duty to adjust erroneous taxable values to bring the current tax rolls into compliance with the GPTA. Because the Court of Appeals erroneously held that the Tax Tribunal did not have jurisdiction to review taxable values in years not under appeal, we reverse the Court of Appeals' judgment and remand to that Court to consider Northville Township's remaining issues on appeal regarding the Tax Tribunal's valuation of the properties.5
A. FACTS AND PROCEDURAL HISTORY
Michigan Properties, L.L.C., purchased three apartment complexes located in Meridian Township in December 2004. Michigan Properties timely filed a required affidavit in January 2005, notifying Meridian's assessor of the transfers of ownership.Meridian's assessor failed to comply with MCL 211.27a(3)6 by not adjusting, or "uncapping,"7 the taxable values of the properties for tax year 2005 to reflect their posttransfer taxable values. As a result of this failure, the taxable values for tax year 2005 were entered into the tax rolls using pretransfer values that were not in compliance with MCL 211.27a(3).
In October 2006, Meridian sent a letter notifying Michigan Properties of the erroneous values. The letter informed Michigan Properties that it would receive a revised tax bill for tax year 2005 reflecting new taxable values because of the 2004 transfer and that the taxable values for tax year 2006 would be revised accordingly by Meridian's December board of review.8 Litigation ensued, and the parties ultimately entered into a consent judgment for each property in February 2007 pertaining to tax years 2005 and 2006. The consent judgments stipulated that Meridian reserved the right to petition the March board of review for tax year 2007, or for any year thereafter, to uncap the properties' taxable values because of the transfers in December 2004. Meridiansubsequently exercised its right to petition the March board of review to adjust the 2007 taxable values. The March board of review granted Meridian's requested relief, uncapping the taxable values for tax year 2007 on the basis of the December 2004 transfers of ownership.9
Michigan Properties filed the instant appeals of those decisions in the Tax Tribunal, arguing that the time frame for challenging the 2005 taxable values, and any subsequent values based on the 2005 assessments, had expired because Meridian had not timely challenged the 2005 assessments. Meridian moved for summary disposition, arguing that the March board of review had acted within its authority to bring taxable values into compliance with the GPTA pursuant to MCL 211.29 and MCL 211.30. The tribunal granted Meridian's motion for summary disposition.
Michigan Properties appealed the Tax Tribunal's decision in the Court of Appeals. In a published decision, the Court of Appeals reversed the Tax Tribunal and held that the March board of review could not uncap the taxable values relating to the December 2004 transfers.10 Meridian sought leave to appeal in this Court. We granted leave to appeal, directing the parties to discuss "whether the failure of the taxing authority's assessor to adjust the taxable value of real property in the year immediately after a transfer of the property in accordance with MCL 211.27a(3) precludes the board of review fromadjusting the taxable value in a later year." Mich Props, LLC v Meridian Twp, 490 Mich 877 (2011).
B. STANDARD OF REVIEW
Review of decisions by the Tax Tribunal is limited. Mt Pleasant v State Tax Comm, 477 Mich 50, 53; 729 NW2d 833 (2007). "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. The Tax Tribunal's factual findings are final if they are supported by competent, material, and substantial evidence on the whole record. Id.; Meadowlanes Ltd Dividend Housing Ass'n v City of Holland, 437 Mich 473, 482; 473 NW2d 636 (1991). If the facts are not disputed and fraud is not alleged, our review is limited to whether the Tax Tribunal made an error of law or adopted a wrong principle. Meadowlanes, 437 Mich at 482-483. The cases before us present a question of statutory interpretation, which this Court reviews de novo. Wexford Med Group v City of Cadillac, 474 Mich 192, 202; 713 NW2d 734 (2006). When interpreting statutes, this Court must "ascertain and give effect to the intent of the Legislature." People v Koonce, 466 Mich 515, 518; 648 NW2d 153 (2002). In interpreting a statute, this Court avoids a construction that would render any part of the statute surplusage or nugatory. People v McGraw, 484 Mich 120, 126; 771 NW2d 655 (2009), citing Baker v Gen Motors Corp, 409 Mich 639, 665; 297 NW2d 387 (1980). When considering the correct interpretation, the statute must be read as a whole. Sun Valley Foods Co v Ward, 460 Mich 230, 237; 596 NW2d 119 (1999). Individual words and phrases, while important, should be read inthe context of the entire legislative scheme. Herman v Berrien Co, 481 Mich 352, 366; 750 NW2d 570 (2008).
C. ANALYSIS
The specific issue before us in Mich Props is whether the failure of a taxing authority's assessor to adjust the taxable value of real property in the year immediately following a transfer of the property, in accordance with MCL 211.27a(3), precludes a March board of review from adjusting the taxable value in a subsequent year.
Resolving this issue requires an analysis of the GPTA, which sets forth the parameters for determining taxable values of real property. These parameters are a direct response from the Legislature to the limitations on taxable values established in Proposal A of 1994, which amended article 9, § 3 of Michigan's Constitution.11 In Klooster, westated that "[t]he purpose of Proposal A was to limit tax increases on property as long as it remains owned by the same party, even though the actual market value of the property may have risen at a greater rate."12
Proposal A places a cap on the taxable value of a property so that, based on the previous year's taxable value, any yearly increase in taxable value is limited to either the rate of inflation or 5 percent, whichever is less.13 That cap on taxable value applies only to the current owner of the property, and the property's taxable value is uncapped when the property is transferred. The uncapped taxable value for the year after the transfer sets a new baseline value that is subject to a new cap. The GPTA is the enabling legislation that carries out the edicts of Proposal A.14
The GPTA provides a comprehensive system for the assessment of property for ad valorem tax purposes and the collection of those taxes. It also provides for the administration of the system. When read in conjunction, MCL 211.27a(2) and (3) provide the statutory framework to implement the capping and uncapping mechanismsrequired by Proposal A. To establish taxable values of property, MCL 211.27a contains parameters that comply with the requirements of Proposal A.
Unless a property's ownership has been transferred in the previous year, the calculation for the current taxable value is set forth in MCL 211.27a(2), which provides:
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