MJC/Lotus Group V. Brownstown Twp.

• Decision Date: 31 May 2011
• Docket Number: Docket Nos. 295732,301043.,296499
• Citation: 293 Mich.App. 1,809 N.W.2d 605
• Parties: MJC/LOTUS GROUP v. BROWNSTOWN TOWNSHIP.CW Development LLC/Meadow Walk v. Grand Blanc Township.Toll Northville Limited Partnership v. Northville Township.
• Court: Court of Appeal of Michigan — District of US

293 Mich.App. 1

809 N.W.2d 605

MJC/LOTUS GROUP

v.BROWNSTOWN TOWNSHIP.CW Development LLC/Meadow Walk

v.Grand Blanc Township.Toll Northville Limited Partnership

v.Northville Township.

Docket Nos. 295732

296499

301043.

Court of Appeals of Michigan.

Submitted May 11, 2011, at Lansing.Decided May 31, 2011, at 9:00 a.m.

Hoffert & Associates, P.C., Farmington Hills (by Myles B. Hoffert, David B. Marmon, Julia S. Rosen, Gregory M. Elliot, and Paige R. Harley), for MJC/Lotus Group, CW Development L.L.C./Meadow Walk, Toll Northville Limited Partnership, and Biltmore–Wineman, L.L.C.

Giarmarco, Mullins & Horton, P.C., Troy (by Stephen J. Hitchcock and Geoffrey S. Wagner), for Brownstown Township.

Lyndon J. Lattie, Grand Blanc, for Grand Blanc Township.Hafeli Staran Hallahan & Christ, P.C. (by Laura M. Hallahan, Bloomfield Hills, and Amy K. Driscoll), and Rose & Abramson, P.C. (by Nevin A. Rose, Westland), for Northville Township.Bauckham, Sparks, Lohrstorfer, Thall & Seeber, P.C., Kalamazoo (by Robert E. Thall), for the Michigan Townships Association.McClelland & Anderson, L.L.P., Lansing (by Gregory L. McClelland and Melissa A. Hagen), for the Michigan Association of Realtors and the Michigan Association of Home Builders.

Before: MARKEY, P.J., and FITZGERALD and SHAPIRO, JJ.

PER CURIAM.

The three cases at issue here have been consolidated for the purpose of appellate review. In Docket No. 295732, petitioner MJC/Lotus Group (MJC), appeals as of right the Tax Tribunal's order denying MJC's motions for immediate consideration and summary disposition and granting summary disposition in favor of respondent Brownstown Township (Brownstown) on the ground that the tribunal lacked jurisdiction to review the 2005 taxable values of MJC's properties. In Docket No. 296499, petitioner CW Development L.L.C./Meadow Walk (CW) appeals as of right the tribunal's opinion and judgment affirming, in favor of respondent Grand Blanc Township (Grand Blanc), the 2004 taxable values of CW's properties for the tax years at issue on the ground that the tribunal lacked jurisdiction to review them. In Docket No. 301043, respondent Northville Township (Northville) appeals as of right the tribunal's opinion and judgment adjusting the taxable values of properties owned by petitioners Toll Northville Limited Partnership (Toll) and Biltmore Wineman, L.L.C. (Biltmore) for the tax years at issue. We hold that the tribunal lacks jurisdiction to indirectly review the accuracy of a property's taxable value in a year not under appeal notwithstanding that such value is used as a starting point to calculate the property's taxable value in a year properly under appeal. Accordingly, we affirm the judgments reached in Docket Nos. 295732 and 296499, but reverse the judgment reached in Docket No. 301043 and remand the case to the tribunal for further proceedings consistent with this opinion.

I. STANDARD OF REVIEW

The jurisdiction of the Tax Tribunal is set by statute, thereby raising a question of law, which we review de novo. Nicholson v. Birmingham Bd. of Review, 191 Mich.App. 237, 239, 477 N.W.2d 492 (1991). When examining a decision made by the tribunal, absent an allegation of fraud, our review is “ ‘limited to determining whether the tribunal erred in applying the law or adopted a wrong principle[.]’ ” Danse Corp. v. Madison Heights, 466 Mich. 175, 178, 644 N.W.2d 721 (2002), quoting Michigan Bell Tel. Co. v. Dep't of Treasury, 445 Mich. 470, 476, 518 N.W.2d 808 (1994) (alteration in Danse ). We treat the tribunal's factual findings as conclusive if “ ‘competent, material, and substantial evidence on the whole record’ ” supports them. Id. “Substantial evidence must be more than a scintilla of evidence, although it may be substantially less than a preponderance of the evidence.” Jones & Laughlin Steel Corp. v. City of Warren, 193 Mich.App. 348, 352–353, 483 N.W.2d 416 (1992).

II. THE TRIBUNAL LACKS JURISDICTION TO REVIEW TAXABLE VALUES IN YEARS NOT UNDER APPEAL

In each of the three consolidated cases, the petitioning party challenges as unconstitutional the taxable values of the subject properties in the year immediately preceding the first tax year under appeal. In Docket No. 295732, MJC challenges the subject properties' 2005 taxable values in its petition filed in tax year 2006, amended to include subsequent years. In Docket No. 296499, CW challenges the subject properties' 2004 taxable values in its petition filed in tax year 2005, amended to include subsequent years. In Docket No. 301043, Toll and Biltmore challenge the subject properties' 2000 taxable values in its petition filed in tax year 2001, amended to include subsequent years.

Docket No. 301043 provided the background for the issue at hand. The Tax Tribunal held the case in abeyance while Toll and Biltmore pursued a declaratory judgment action in the Wayne Circuit Court challenging the constitutionality of MCL 211.34d(1)(b)( viii ). The case reached the Michigan Supreme Court, which held as follows:

The issue is the constitutionality of MCL 211.34d(1)(b)( viii ), which, as written, defines “public services” as “additions” and, therefore, would allow for the taxation of the value added from the installation of public-service improvements, which are “water service, sewer service, a primary access road, natural gas service, electrical service, telephone service, sidewalks, or street lighting.” We agree with the analysis and the decision of the Court of Appeals, which declared MCL 211.34(1)(b)( viii ) unconstitutional. The Court of Appeals correctly concluded that the mere installation of public-service improvements on public property or on utility easements does not constitute a taxable “addition”—as that term was understood when the public adopted Proposal A—in this instance, involving infrastructure improvements made to land destined to become a residential subdivision. [ Toll Northville Ltd. v. Northville Twp., 480 Mich. 6, 13–14, 743 N.W.2d 902 (2008) ( toll northville ii ).]

Although the invalidity of MCL 211.34d(1)(b)( viii ) is not contested on appeal, there remain preliminary issues that must be addressed to decide the form of redress available to the parties in the instant actions.

The first question is whether the tribunal has subject matter jurisdiction to review the accuracy (here, the constitutional legitimacy) of the properties' taxable values in years not directly under appeal. The challenge is an indirect one by virtue of the mathematical formula that assessors use to compute a property's taxable value in a given year, the starting point of which is the property's taxable value in the immediately preceding year. The mathematical formula, set forth in MCL 211.27a(2)(a), provides that a property's taxable value in a given year equals “[t]he property's taxable value in the immediately preceding year minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions.” Petitioners in this case argue that the immediately preceding year's taxable values include “additions” for public-service improvements, which the Michigan Supreme Court declared unconstitutional. Therefore, according to petitioners, the tribunal must correct the constitutional errors, use the corrected taxable values to recalculate the taxable values in the first year under appeal, and similarly adjust the taxable values in subsequent years under appeal. We disagree.

Subject matter jurisdiction, which refers to the deciding body's authority to try a case of the kind or character pending before it, irrespective of the particular facts of the case, cannot be waived. Travelers Ins. Co. v. Detroit Edison Co., 465 Mich. 185, 204, 631 N.W.2d 733 (2001). Concerns regarding subject matter jurisdiction can be raised at any time, by any party, or sua sponte by the tribunal. Electronic Data Sys. Corp. v. Flint Twp., 253 Mich.App. 538, 544, 656 N.W.2d 215 (2002). Indeed, when the tribunal finds that it lacks subject matter jurisdiction, it is obliged to dismiss the case and may proceed no further except to effectuate such dismissal. Id. at 544, 656 N.W.2d 215.

MCL 205.735(3) provides, in relevant part, that the tribunal's jurisdiction “is invoked by a party in interest, as petitioner, filing a written petition on or before June 30 of the tax year involved.” Although the petitions in the instant cases are not themselves untimely, petitioners are attempting to use them to challenge the subject properties' taxable values from tax years not under appeal.

In Leahy v. Orion Twp., 269 Mich.App. 527, 711 N.W.2d 438 (2006), we addressed a similar situation in which a petition filed in 2003 challenged the subject property's 2003 assessed value on the ground that it had been incorrectly calculated in light of an error in the property's 2002 assessment. Id. at 528–529, 711 N.W.2d 438. In challenging the 2002 assessment in his 2003 petition, the petitioner “argued that the tax code requires property taxes to be based on the prior year's assessed value, so that the prior year's value must be the correct value.” Id. at 529, 711 N.W.2d 438. In rejecting the petitioner's argument, we held:

Petitioner cannot be aggrieved by the tribunal's finding that respondent erroneously computed the 2003 assessment. Rather, petitioner challenges the 2003 assessment to the extent that it remains premised on an incorrect starting point.... However, this challenge presents a collateral attack on a matter that is no longer subject to litigation. [ Id. at 530, 711 N.W.2d 438.¹]

We concluded that “the fixed assessment value must be used where, as here, a statutory assessment formula calls for the use of a now-unchallengeable assessed value.” Id. at 531, 711 N.W.2d 438. In addition, we noted that the tribunal correctly dismissed the claim for lack of jurisdiction, explaining that the petitioner only appealed his 2003 assessment and any attempt to challenge prior years' assessments would have been untimely under MCL 205.735. Id....