Romulus City Treasurer v. Wayne County Drain Com'r
| Decision Date | 02 July 1982 |
| Docket Number | Docket No. 62508,No. 5,5 |
| Citation | 322 N.W.2d 152,413 Mich. 728 |
| Parties | ROMULUS CITY TREASURER; Steven C. Berecz, Treasurer for Township of Brownstown, a public corporation; Dorothy York, Treasurer for Township of Van Buren, a public corporation; Richard F. Sullivan, Treasurer for Township of Huron, a public corporation; Paul A. Kraft, Treasurer for City of Riverview, a public corporation; Ann Bradley, Treasurer for Township of Canton, a public corporation; Clarence A. Hicks, Treasurer for the City of Lincoln Park, a public corporation; W. Curt Boller, for himself and others similarly situated; and Paul A. Kraft, for himself and others similarly situated, Plaintiffs-Appellees, v. WAYNE COUNTY DRAIN COMMISSIONER; Wayne County Board of Commissioners; County of Wayne and Wayne County Treasurer, Defendants- Appellants. Calendar |
| Court | Michigan Supreme Court |
Harry S. Ellman, Southfield, for plaintiffs-appellees.
George H. Cross, Corp. Counsel, County of Wayne, John K. Godre, Asst. Corp. Counsel, Detroit, for defendants-appellants.
The question presented in this case is whether the defendants were entitled to accelerated judgment on any of the following grounds: the circuit court lacked subject-matter jurisdiction; the treasurer plaintiffs lacked standing; or the statute of limitations barred the plaintiffs' claim. We hold, first, that this is, at least in part, an equitable action, not within the Tax Tribunal's exclusive jurisdiction, and thus properly brought in the circuit court. Secondly, we hold that the treasurer plaintiffs' standing may not yet be determined to be lacking because this case may present the extraordinary circumstances necessary for a township or city treasurer to have standing to challenge a county drain commissioner's actions. Thirdly, we hold that the 30-day period of limitation asserted by the defendants to bar this action is not applicable.
The plaintiffs are township and city treasurers, acting in their official capacities, and landowners. They instituted the present proceedings on July 2, 1976, challenging their 1975 drain taxes. 1 Plaintiffs allege that defendants have committed a constructive fraud by collecting money for administrative expenses through special assessment procedures. The monies collected through special assessments, plaintiffs contend, are to be placed in the Revolving Drain Fund, and the enumerated purposes of the fund do not include the payment of such expenses of the drain commissioner's office as the yearly services of clerks, stenographers, engineers and the assessing department. The complaint states that 78% of the money received through the special assessments provided for in Sec. 196 of the Drain Code of 1956 2 has been used for such administrative purposes. The complaint further states that several hundred thousand dollars, which are presently in escrow, were additionally earmarked for these administrative expenses. Plaintiffs contend that these expenses should only be paid out of funds received through general taxation, and that the collection of such money under the guise of the special assessment laws constitutes a constructive fraud. Plaintiff treasurers argue that to release to the county the funds collected and now in escrow would violate the public trusts and the duties of their offices. 3
Plaintiffs seek various forms of relief. They seek a declaration of the rights of the treasurer plaintiffs to bring this action and an accounting of the drain commissioner's records as they relate to the assessments in dispute and to the funds used for administrative expenses. They also seek a declaration that the disputed assessments are illegal and that the drain commissioner's administrative expenses must be paid from the county's general fund. Additionally, they request a preliminary injunction prohibiting the defendants from enforcing the special assessments and from using the Revolving Drain Fund for administrative expenses, and an order that the monies held in escrow be returned to the landowner plaintiffs.
Defendants filed a motion for accelerated judgment in which they claimed that the circuit court lacked subject-matter jurisdiction, that the claim was barred by a 30-day period of limitation, and that the treasurer plaintiffs lacked the legal capacity to sue. The circuit court granted accelerated judgment relative to the landowner plaintiffs' claims for tax refunds. The circuit court considered these claims to be within the exclusive jurisdiction of the Tax Tribunal and also to be barred because they were not timely brought. The court denied the motion relative to the treasurer plaintiffs' requests for injunctive and declaratory relief.
Both parties appealed, the defendants by leave granted, to the Court of Appeals. The Court of Appeals reversed the partial accelerated judgment and otherwise affirmed the circuit court's order. Romulus City Treasurer v. Wayne County Drain Comm'r, 86 Mich.App. 663, 273 N.W.2d 514 (1978). The Court of Appeals held that because of plaintiffs' allegations of fraudulent conduct, the plaintiff treasurers' standing to sue could not be denied without a full evidentiary hearing. The Court also concluded that if fraudulent conduct on the part of the defendants could be proved, the claim would not be barred by the statute of limitations. It further held that since the Tax Tribunal lacked equitable jurisdiction, this case was properly brought in circuit court.
This Court granted leave to appeal and asked the parties to include within the issues to be briefed the question "whether the Michigan Tax Tribunal is the only forum in which relief can be sought for allegedly illegal drain tax assessments". 406 Mich. 976 (1979).
A
This case was heard and is being decided with Wikman v. Novi, 413 Mich. 617, 322 N.W.2d 103 (1982). Both cases raise questions concerning the scope of the Tax Tribunal's exclusive jurisdiction, and both involve special assessments. The plaintiffs in this case, however, make allegations that were not made in Wikman. They contend, inter alia, that the defendants have been collecting most of the money needed for the defendant drain commissioner's administrative expenses through special assessment procedures, and that the money presently being held in escrow has been similarly earmarked for such expenses. This, they contend, constitutes constructive fraud. We need not pass on the merits of this contention; we need only consider whether this is a claim that may properly be considered by a circuit court acting within its equitable jurisdiction.
Plaintiffs' claim of constructive fraud in this case differs from the claim in Wikman that the assessments were not levied according to the benefits received. The focus of the present claim concerns not the factual underpinnings of the pertinent assessments, but rather how funds collected pursuant to the special assessment laws may be spent. Any conclusion as to whether the funding of administrative costs through the special assessment procedures constitutes constructive fraud would involve both statutory construction and a consideration of the equitable doctrine of constructive fraud. Thus, Wikman is not directly on point and reconsideration of the provisions of the Tax Tribunal Act is necessary.
M.C.L. Sec. 205.731; M.S.A. Sec. 7.650(31) provides:
The tribunal that was created to exercise such jurisdiction was labeled a "quasi-judicial agency", M.C.L. Sec. 205.721; M.S.A. Sec. 7.650(21), whose membership is to be comprised of persons with various specified qualifications. Of the seven members, two must be attorneys with experience either in property tax matters or in judicial or quasi-judicial office. M.C.L. Sec. 205.722; M.S.A. Sec. 7.650(22). One member must be a certified assessor; one, an experienced professional real estate appraiser; and one, a certified public accountant with experience in state-local tax matters. Not more than three of the seven members are to be members of any one professional discipline and persons who are not members of any of the enumerated disciplines are required to have experience in state or local tax matters.
The expertise of the tribunal members can be seen to relate primarily to questions concerning the factual underpinnings of taxes. In cases not involving special assessments, the tribunal's membership is well-qualified to resolve the disputes concerning those matters that the Legislature has placed within its jurisdiction: assessments, valuations, rates, allocation and equalization. In special assessment cases, the tribunal is competent to ascertain whether the assessments are levied according to the benefits received. Although the tribunal, in making its determinations, will make conclusions of law, M.C.L. Sec. 205.751; M.S.A. Sec. 7.650(51), the matters within its jurisdiction under M.C.L. Sec. 205.731; M.S.A. Sec. 7.650(31) most clearly relate to the basis for a tax, and much less clearly to the proper uses which may be made of the funds once collected. Questions concerning how the funds collected may be expended do not appear to be implicated in disputes related to assessments, valuations, rates, allocation and equalization. The question presented here is whether the exclusive jurisdiction of the Tax Tribunal extends to such questions when the funds are collected pursuant to special assessment laws.
As to the declaratory and injunctive relief sought by plaintiffs, we conclude that the question whether the defendants may pay administrative expenses with funds that have been collected...
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Wikman v. City of Novi
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