Superior Hotels v. Mackinaw Twp.

Citation282 Mich. App. 621,765 N.W.2d 31
Decision Date10 March 2009
Docket NumberDocket No. 276836.
PartiesSUPERIOR HOTELS, LLC v. MACKINAW TOWNSHIP.
CourtCourt of Appeal of Michigan (US)

Foster, Swift, Collins & Smith, P.C. (by Steven H. Lasher and Pamela C. Dausman), Detroit, for Superior Hotels, LLC.

MacArthur Law Firm (by Timothy P. MacArthur), Cheboygan, for Mackinaw Township.

Michael A. Cox, Attorney General, B. Eric Restuccia, Solicitor General, and Steven B. Flancher, Assistant Attorney General, for amicus curiae the State Tax Commission.

Before: MARKEY, P.J., and WHITBECK and GLEICHER, JJ.

PER CURIAM.

Respondent appeals by right the Michigan Tax Tribunal's ruling that the State Tax Commission (STC) lacked jurisdiction under MCL 211.154 to correct the taxable value of petitioner's commercial real estate for the tax years 2001 through 2003. The error arose over a two-year period when petitioner was building a motel on the subject property. During that time respondent's former assessor continued to calculate the property's taxable value on the basis of the taxable value of the motel established when it was only half completed, which was adjusted annually for inflation as permitted by MCL 211.27a. The STC entered an order in response to respondent's petition under § 154 to correct the taxable valuation of the property for tax year 2001 from $841,604 to $1,622,420, for tax year 2002 from $868,535 to $1,674,338, and for tax year 2003 from $881,563 to $1,699,453. Petitioner sought relief from the STC's order in the Tax Tribunal, which ruled that the STC lacked jurisdiction to correct an assessor's error in calculating taxable value because respondent had failed to show that the subject property was "incorrectly reported or omitted" within the meaning of § 154. We hold that because the Tax Tribunal erred as a matter of law, its judgment must be reversed.

I. SUMMARY OF FACTS AND PROCEEDINGS

The parties submitted this dispute to the Tax Tribunal on stipulated facts. The most pertinent are:

7. Superior Hotels began construction of a motel known as a "Baymont Inn" on the property in 1997 and completed construction of the hotel in 1998.

8. The Township assessed the subject property as 50% complete on December 31, 1997 and calculated the 1998 assessed value and taxable value accordingly.

9. For the 1999 tax year (December 31, 1998 assessment date), the Township assessed the subject property as 100% complete, but calculated the 1999 taxable value by applying the applicable inflation rate to the 1998 taxable value which 1998 taxable value was based on a 50% completion calculation.

10. The Township assessed the subject property as 100% complete for the 1999 tax year and such assessment was reflected on the assessment roll.

11. No portion of the subject property was "omitted" from assessment by the Township.

* * *

15. The Township filed Michigan Department of Treasury Form L-4154, Assessor or Equalization Director's Notice of Property Incorrectly Reported or Omitted from Assessment Roll (copy attached as Exhibit A) with the State Tax Commission alleging an error made by the Township in calculating the 2001, 2002 and 2003 taxable values for the subject property.

16. On March 7, 2005, Superior Hotels appeared before the State Tax Commission.

17. The State Tax Commission accepted the Section 154 petition filed by the Township and increased the 2001, 2002 and 2003 taxable values of the subject property as requested by the Township.

At issue in this case is MCL 211.154, the critical first sentence of which provides:

If the state tax commission determines that property subject to the collection of taxes under this act[1] ... has been incorrectly reported or omitted for any previous year, but not to exceed the current assessment year and 2 years immediately preceding the date the incorrect reporting or omission was discovered and disclosed to the state tax commission, the state tax commission shall place the corrected assessment value for the appropriate years on the appropriate assessment roll. [Emphasis added.]

The Tax Tribunal first noted that the Legislature did not define the statutory terms "incorrectly reported" or "omitted," so it was permitted to construe those terms to determine whether the STC had jurisdiction under § 154. To ascertain the meaning of the term "incorrectly report," the Tax Tribunal relied primarily on Detroit v. Norman Allan & Co., 107 Mich. App. 186, 309 N.W.2d 198 (1981), and Eagle Glen Golf Course v. Surrey Twp., unpublished opinion per curiam of the Court of Appeals, issued April 19, 2002, 2002 WL 652105, (Docket No. 224810), one of several unpublished cases of this Court that have followed Norman Allan. Quoting from Eagle Glen, supra at 2, the Tax Tribunal opined that § 154 "permitted `assessments to be corrected only if a property's status is misrepresented, such as when a taxpayer incorrectly claimed that the property was tax-exempt.'" Superior Hotels, LLC v. Mackinaw Twp., 16 MTTR 119, 2007 WL 890975, (Docket No. 313228, February 23, 2007), at 123. The Tax Tribunal then reasoned on the basis of the stipulated facts, ¶ 11 and ¶ 15 in particular, that "neither the status of the property [as exempt or taxable] nor a purported omission was at issue." Id. at 123. Specifically, the Tax Tribunal ruled that respondent had conceded in ¶ 11 of the stipulated facts that there was no issue concerning "omitted" property in the present case. Id. Thus, the Tax Tribunal concluded that "[r]espondent's own stipulations of fact dictate that MCL 211.154 is not applicable to this matter." Superior Hotels, supra at 123.

In reaching its conclusion that § 154 did not confer jurisdiction on the STC in this case, the Tax Tribunal also relied on dicta in Centre Mgt v. City of Ferndale, unpublished opinion per curiam of the Court of Appeals, issued August 10, 2004, 2004 WL 1779117 (Docket No. 248266). The Tax Tribunal, quoting Centre Mgt, supra at 2, opined, "MCL 211.154 did not confer jurisdiction on the STC to correct an assessor's error in mistakenly undervaluing the property in previous years because MCL 211.154 does not apply to property conceded to be taxable but alleged to be improperly assessed."2 Superior Hotels, supra at 123. In addition, the Tax Tribunal quoted its own prior decision in Michigan Basic Property Ins. v. State Tax Comm., 15 MTTR 423 (Docket No. 296251, March 13, 2006) at 429, which in turn quoted Eagle Glen, supra at 3, stating "MCL 211.154 does not `confer jurisdiction on the state tax commission to correct an assessor's error in mistakenly undervaluing the property, because MCL 211.154 does not apply to property conceded to be taxable but alleged to be improperly assessed.'" Superior Hotels, supra at 123-124. On the basis of this authority, the Tax Tribunal ruled that § 154 does not grant jurisdiction to the STC "to correct an assessor's undervaluing the property for previous years." Id. at 124.

The Tax Tribunal further ruled that respondent's error in calculating the subject property's taxable value might arguably have been considered a "a clerical error or a mutual mistake of fact relative to the correct assessment figures, the rate of taxation, or the mathematical computation relating to the assessing of taxes," correctable under MCL 211.53b. But the Tax Tribunal opined that respondent's failure to appear before the board of review was fatal to correcting the assessor's error in calculating taxable value under that section. Superior Hotels, supra at 124. This same defect, the Tax Tribunal ruled, also deprived it of jurisdiction to correct the assessor's error in calculating taxable value. Id., citing MCL 205.735.

Accordingly, the Tax Tribunal entered judgment for petitioner reinstating the original taxable values for the subject property for the tax years 2001-2003. Superior Hotels, supra at 124-125. Respondent appeals as of right.

II. STANDARD OF REVIEW

Our review of the Tax Tribunal's decision is limited. Mt. Pleasant v. State Tax Comm., 477 Mich. 50, 53, 729 N.W.2d 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. Factual findings of the Tax Tribunal 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 N.W.2d 636 (1991). Thus, as here, where 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 the wrong legal principles. Id. at 482-483, 473 N.W.2d 636. The issue in this case presents a question of statutory interpretation, which this Court reviews de novo. Wexford Med. Group v. Cadillac, 474 Mich. 192, 202, 713 N.W.2d 734 (2006).

The primary goal of construing a statute is to determine and give effect to the intent of the Legislature. Mt. Pleasant, supra at 53, 729 N.W.2d 833. The first step in doing this is to review the language of the statute. United Parcel Service, Inc. v. Bureau of Safety & Regulation, 277 Mich.App. 192, 202, 745 N.W.2d 125 (2007). "If the statutory language is unambiguous, the Legislature is presumed to have intended the meaning expressed in the statute and judicial construction is not permissible." Mt. Pleasant, supra at 53, 729 N.W.2d 833. A statutory provision "is ambiguous only if it `irreconcilably conflict[s]' with another provision or when it is equally susceptible to more than a single meaning." Lansing Mayor v. Pub. Service Comm., 470 Mich. 154, 166, 680 N.W.2d 840 (2004) (citation omitted and emphasis in original).

In reading a statute, this Court must assign to every word or phrase its plain and ordinary meaning unless the Legislature has provided specific...

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