MUSKEGON RENTAL ASS'N v. City of Muskegon, Docket No. 217854.

• Decision Date: 27 February 2001
• Docket Number: Docket No. 217854.
• Citation: 244 Mich. App. 45,624 N.W.2d 496
• Parties: MUSKEGON AREA RENTAL ASSOCIATION, Roger Nielsen, and Arthur Jasick, Plaintiffs-Appellants, v. CITY OF MUSKEGON, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

624 N.W.2d 496

244 Mich. App. 45

MUSKEGON AREA RENTAL ASSOCIATION, Roger Nielsen, and Arthur Jasick, Plaintiffs-Appellants, v. CITY OF MUSKEGON, Defendant-Appellee.

Docket No. 217854.

Court of Appeals of Michigan.

Submitted May 3, 2000, at Grand Rapids.

Decided December 26, 2000, at 9:05 a.m.

Released for Publication February 27, 2001.

Williams, Hughes, Corwin & Sininger, LLP (by Douglas M. Hughes and Enrika L.F. McGahan), Muskegon, for the plaintiffs.

Parmenter O'Toole (by G. Thomas Johnson), Muskegon, for the defendant.

Before BANDSTRA, C.J., and JANSEN and WHITBECK, JJ.

JANSEN, J.

Plaintiffs appeal as of right from an order granting summary disposition in favor of defendant pursuant to MCR 2.116(C)(10) and an order denying their motion for reconsideration pursuant to MCR 2.119(F)(3). We affirm in part, reverse in part, and remand for further proceedings.

This case involves the constitutionality of one of defendant's ordinances, more specifically a property maintenance code, amended in May of 1997. Plaintiff Muskegon Area Rental Association (MARA) is an organization that consists of approximately 145 members who own about 2,000 rental dwellings in the city of Muskegon. Approximately forty-five percent of the single-family dwellings in the city are rental properties. Plaintiffs Roger Nielsen and Arthur Jasick are two of the members of the MARA and are property owners in the city. Defendant has promulgated a property maintenance code, within its city ordinances, containing standards for the maintenance of all existing structures and for the building of any new structures or additions to structures in the city. Part of the property maintenance code requires a property owner to obtain a certificate of compliance before the owner may rent the property. The failure to obtain a certificate of compliance constitutes a civil infraction.

On May 27, 1997, defendant amended its requirements under the property maintenance code for obtaining a certificate of compliance for a rental dwelling. The amendment included the requirement that, before a property owner could obtain a certificate of compliance, the owner had to pay all amounts due concerning the properties, including property taxes. The relevant section provides:

The City shall issue a certificate of compliance for a rental dwelling when the city finds that the rental dwelling, its units and accessory structures and yards comply with the standards set forth in this code; however, no certificate of compliance shall be issued until all of the following fees and debts to the city have been paid in full:

(1) all previously billed property taxes;

(2) all current or past due special assessment installments;

(3) water or sewer bills outstanding;

(4) all charges against the property for mowing, cleanup, weed or debris removal and similar charges by the city;

(5) any fees, fines, penalties or debts of any sort arising from the provisions or enforcement of the Property Maintenance Code. [Muskegon Code of Ordinances, § 4-83(b).]

Plaintiffs filed this action on April 3, 1998, challenging the validity and constitutionality of this ordinance. Plaintiffs specifically challenged the requirement that all previously billed property taxes must be paid before defendant will issue a certificate of compliance for a rental dwelling. In their complaint, plaintiffs requested that the trial court declare subsection 4-83(b)(1) to be unenforceable and unconstitutional because (1) it was preempted by state law, (2) it conflicted with the city's charter, (3) it failed to afford substantive due process to the members of the MARA's, and (4) it did not afford equal protection of the law to the members of the MARA.

Plaintiffs subsequently moved for summary disposition; defendant answered and also moved for summary disposition. The trial court ultimately granted summary disposition in favor of defendant. The trial court found that the ordinance was not preempted by state law, did not conflict with defendant's charter, did not deny plaintiffs substantive due process, and did not deny plaintiffs equal protection of the law. Plaintiffs appeal from this decision.

"A motion for summary disposition under MCR 2.116(C)(10), which tests the factual support of a claim, is subject to de novo review." Smith v. Globe Life Ins. Co., 460 Mich. 446, 454, 597 N.W.2d 28 (1999). In reviewing a motion brought under MCR 2.116(C)(10), a court is to consider the pleadings, affidavits, depositions, admissions, and documentary evidence filed in the action or submitted by the parties in a light most favorable to the party opposing the motion. MCR 2.116(G)(5); Quinto v. Cross & Peters Co., 451 Mich. 358, 362, 547 N.W.2d 314 (1996). The court's task is to review the evidence and all reasonable inferences from it and determine whether a genuine issue of any material fact exists to warrant a trial. Skinner v. Square D Co., 445 Mich. 153, 161, 516 N.W.2d 475 (1994). A court may grant the motion if the record evidence shows that there is no genuine issue with regard to any material fact and the moving party is entitled to judgment as a matter of law. Quinto, supra, p. 362, 547 N.W.2d 314.

Plaintiffs first argue that the ordinance is preempted by the General Property Tax Act (GPTA), M.C.L. § 211.1 et seq.; MSA 7.1 et seq. Plaintiffs assert that M.C.L. § 211.60; MSA 7.104 preempts the ordinance. This statute provides in relevant part:

(2) Except as otherwise provided in this subsection, on the first Tuesday in May in each year, a tax sale for taxes levied before January 1, 1999 shall be held in the counties of this state by the county treasurers of those counties for and in behalf of this state. At the tax sale, property delinquent for taxes assessed in the third year preceding the sale or in a prior year shall be sold for the total of the unpaid taxes of those years. Not sooner than April 30, 2000 and April 30, 2001, the county treasurer may cancel the tax sale scheduled to take place on the first Tuesday in May 2000 and the first Tuesday in May 2001, respectively, if there are no outstanding bonds or notes issued by a county pursuant to sections 87b to 87e with respect to the delinquent taxes for which the sale is being conducted. [MCL 211.60; MSA 7.104 (emphasis added).]

"[A] municipal ordinance is preempted by state law if (1) the statute completely occupies the field that the ordinance attempts to regulate, or (2) the ordinance directly conflicts with a state statute." Rental Property Owners Ass'n of Kent Co. v. Grand Rapids, 455 Mich. 246, 257, 566 N.W.2d 514 (1997).

We agree with the trial court that the ordinance is not preempted by the GPTA for the reasons stated by the trial court. First, as noted by the trial court, nothing in M.C.L. § 211.60; MSA 7.104 prohibits efforts to collect delinquent taxes. Further, M.C.L. § 211.40; MSA 7.81 provides that all property taxes become a debt due directly from the property owner to the city, and there are different methods that may be utilized to collect delinquent taxes, such as lien foreclosure or the seizure and sale of the taxpayer's personal property. See, e.g., Detroit v. Walker, 445 Mich. 682, 693-694, 520 N.W.2d 135 (1994). Additionally, as noted by the trial court, the ordinance does not prohibit tax sales from occurring under M.C.L. § 211.60; MSA 7.104; rather, the ordinance merely provides an alternative means by which defendant may collect the delinquent taxes owed to it. As stated in Walker, supra, p. 690, 520 N.W.2d 135, home rule cities, such as defendant, may exercise all powers not expressly denied and "are empowered to form for themselves a plan of government suited to their unique needs, and, upon local matters, exercise the treasured right of self-governance." Most importantly, as also stated by the trial court, the ordinance applies only when the taxes are delinquent and a certificate of compliance is sought. Because the certificate of compliance is valid for four years, an owner of rental property may obtain both the certificate and delay the payment of property taxes for the three years "permitted" in the statute before a tax sale would occur.

Accordingly, we agree with the trial court that the ordinance does not directly conflict with the GPTA, nor does the GPTA completely occupy the field that the ordinance attempts to occupy. Consequently, the ordinance is not preempted by the GPTA.

Plaintiffs also contend that the ordinance is not authorized by, and conflicts with, defendant's city charter. As stated in Bivens v. Grand Rapids, 443 Mich. 391, 397, 505 N.W.2d 239 (1993):

An ordinance enacted by the governing body of a home rule city is valid only if it is consistent with the powers conferred by the state in its constitution and statutes, and if it falls within the scope of authority delegated by the electorate in the city's charter. See Const. 1963, art. 7, § 22.

Here, the relevant portions of Chapter XI of the Muskegon City Charter provide:

All the provisions of the general tax law of the State of Michigan, except as herein otherwise provided, shall apply to and control the assessment of property and the collection of taxes in the City of Muskegon. [§ 1.]

Collection fees, penalties and interest on taxes shall be collected by the City Treasurer in accordance with the provisions of state law. [§ 6.]

These charter provisions clearly declare that state tax law applies unless the charter provides otherwise. Defendant is authorized to promulgate ordinances such as § 4-83(b) pursuant to the state constitution, Const. 1963, art. 7, §§ 22, 34, and pursuant to the Home Rule City Act, M.C.L. § 117.1 et seq.; MSA 5.2071 et seq. Plaintiffs, however, contend that § 4-83(b) conflicts with the charter provision that requires the city treasurer to collect fees, penalties, and interest on taxes in accordance with state law. We find no conflict because the ordinance does not change the party assigned to collect the property taxes; rather, the ordinance...