Turner v. Lansing Tp.

• Decision Date: 27 July 1981
• Docket Number: Docket No. 49780
• Citation: 108 Mich.App. 103,310 N.W.2d 287
• Parties: Lester N. TURNER, Petitioner-Appellant, v. LANSING TOWNSHIP, Respondent-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 287

310 N.W.2d 287

108 Mich.App. 103

Lester N. TURNER, Petitioner-Appellant, v. LANSING TOWNSHIP, Respondent-Appellee.

Docket No. 49780.

Court of Appeals of Michigan.

July 27, 1981.

Released for Publication Oct. 1, 1981.

Lester N. Turner, pro se, Steven M. Basha, East Lansing, for plaintiff-appellee.

Michael A. Eschelbach, Patrick J. Berarado, Lansing, for defendant-appellant.

Before MAHER, P. J., and ALLEN and CYNAR, JJ.

ALLEN, Judge.

On June 7, 1978, Lester N. Turner, filed a petition with the Michigan Tax Tribunal alleging excessive assessment of certain partnership property in 1975, 1976, and 1977, and requesting relief from the Tribunal. No allegation was made that petitioner or any of the partnership owners has protested to the local Board of Review in any of the years on which appeal was taken. In October, 1979, respondent township filed a motion to dismiss the petition and on November 9, 1979, petitioner moved to file an amended petition adding allegations of fraud, misfeasance, and malfeasance and adding a protest of the assessment for 1978.

Following briefs and argument on the motions before a Hearing Officer, Julianna B. Wilson, the motion to amend the original petition was denied, and the motion to dismiss was granted on grounds that under § 35 of the Tax Tribunal Act, M.C.L. § 205.735(1); M.S.A. § 7.650(35)(1), an assessment must be presented to the Board of Review before the Tax Tribunal may acquire jurisdiction. On December 6, a proposed judgment was entered by the Hearing Officer denying the motion to amend and granting the motion to dismiss the petition. Petitioner then filed exceptions and appealed to the entire Tax Tribunal which, on January 30, 1980, entered an opinion and judgment affirming the findings of fact and conclusions of law of the Hearing Officer. From that judgment petitioner appeals of right.

The property in question was a bar-restaurant and a party store known as the Brass Monkey Bar and Party Store located in respondent township near the Red Cedar River. During the tax years for which the assessment is disputed, the property was owned by a partnership, of which petitioner was one of three partners. In 1975, the property was assessed at $23,400. On April 19, 1975, the Red Cedar River flooded, severely damaging the partnership property. The premises were not repaired or rebuilt, and the business has not operated since that time. In 1976, the assessment was raised to $43,500, and notice of the change in assessment was sent by mail to the address shown on the tax roll, viz., "Turner, Dickerson and Taylor, 3201 S. Cambridge, Lansing, Michigan 48910". No one representing the partnership appeared before the Board of Review to protest the 1976 assessment. In 1977, the property was again assessed at $43,500, and again the assessment was not protested. Nor was any protest made to the Board of Review of the 1975 assessment of.$23,500 despite the fact that according to petitioner the salvage value of property following the 1975 flood was only $5,000.

Petitioner concedes that § 35 of the Tax Tribunal Act and a consistent line of current decisions, ¹ require protest before the Board of Review before the Tribunal may acquire jurisdiction. However, petitioner argues that three judicially created exceptions have been made to the rule allowing review by the Tribunal: (1) where the party assessed has no notice of the assessment; (2) where the requirements of Board of Review appearance would be an exercise in futility; or (3) where local officials have committed constructive fraud. According to petitioner all three exceptions exist in the instant case. We examine petitioner's three claims of exception seriatim.

I. Notice.

Petitioner does not deny that notice of the 1976 increase was sent to one member of the partnership but claims that each member of the partnership must receive such notice. In Howland v. Davis, 40 Mich. 545 (1879), the Supreme Court held that notice to one partner was notice to all partners. Previously, the Supreme Court had held that a partnership is held to know conclusively any material fact known to any of its partners and to have notice of everything of which any partner had notice. Hubbardston Lumber Co. v. Bates, 31 Mich. 158 (1875). More recently, this Court, citing Moran v. Palmer, 13 Mich. 367 (1865), opined that each partner is a general partner of the others and what is known to one is supposedly known to all. Robbins v. Eotoff, 39 Mich.App. 589, 591, 197 N.W.2d 912 (1972). See also Osborn v. Osborn, 36 Mich. 48 (1877), and 60 Am.Jur.2d, Partnership, § 135, p. 62.

The statutorily prescribed notice requirements upon a change of assessment are:

"When the board of review makes a change in the assessment of property or adds property to the assessment roll, the person chargeable with the assessment shall be promptly notified in such a manner as will assure the person opportunity to attend the second meeting of the board of review provided in section 30." (Emphasis added.) M.C.L. § 211.29(7); M.S.A. § 7.29(7).

"The supervisor or assessor shall give to each owner or person or persons listed on the tax roll of the property a notice by first class mail of an increase in the assessment for the year. The notice shall specify each parcel of property, the assessed valuation for the year and the previous year, the net change in assessment, and the time and place of the meeting of the board of review. The notice shall be addressed to the owner according to the records of the supervisor or assessor and mailed not less than 10 days before the meeting of the board of review. The failure of the property owner to receive notice shall not invalidate an assessment roll or an assessment on property." (Emphasis added.) M.C.L. § 211.24c; M.S.A. § 7.24(3).

Petitioner's interpretation of the statutory notice requirements, that notice must be given to each partner rather than to the partnership itself, is unreasonable. Under petitioner's interpretation, all shareholders of a corporation whose property assessment is increased would have to be given notice of the increase. Since petitioner testified at the hearing before the Tax Tribunal that one of the partners, Mr. Taylor, lived at 3201 S. Cambridge, and since the unrebutted affidavit of the township assessor stated that notice was sent to the partnership at 3201 S. Cambridge, we find that proper notice was given.

II. Futility.

A second exception to the doctrine of the exhaustion of administrative remedies is found in the rule that the law will not require a citizen to undertake a vain and useless act. Where it is clear that appeal to an administrative body is an exercise in futility and nothing more than a formal step on the way to the courthouse, resort to the administrative body is not required. Trojan v. Twp. of Taylor, 352 Mich. 636, 638-639, 91 N.W.2d 9 (1958). The purpose of the doctrine of exhaustion of administrative remedies and the "futility" exception thereto is found in International Business Machines Corp. v. Dep't of Treasury, 75 Mich.App. 604, 610, 255 N.W.2d 702 (1977).

"Exhaustion of administrative remedies serves several policies: (1) an untimely resort to the courts may result in delay and disruption of an otherwise cohesive administrative scheme; (2) judicial review is best made upon a full factual record developed before the agency; (3) resolution of the issues may require the accumulated technical competence of the agency or may have been entrusted by the Legislature to the agency's discretion; and (4) a successful agency settlement of the dispute may render a judicial resolution unnecessary. See Judges of the 74th Judicial District v. Bay County, 385 Mich. 710, 727-728, 190 N.W.2d 219, 226 (1971).

"Exhaustion of administrative remedies is not an inflexible condition precedent to judicial consideration, however, and will not be required if review of the agency's final decision would not provide an adequate remedy, MCLA 24.301; MSA 3.560(201), i. e., if it would run counter to the policies which underlie the doctrine."

In the instant case, petitioner never protested the assessments or presented his case before the Board of Review even though more than three years had elapsed since the flood in April, 1975. ² The Board of Review was never given the opportunity to hear petitioner's objections and to take corrective action. The fact that the Board of Review never had the opportunity to review the alleged overassessment was not the fault of the Board of Review. Just why the partnership waited so long to protest is not explained. Obviously the partnership knew of the flood and knew that the 1975 assessment of $23,400 was substantially increased in 1976 and maintained at the higher level in 1977. Petitioner argues that since the damage caused by the flood was known to the Board of Review when it increased the assessment, petitioner could have offered nothing which would have changed the Board's mind. We disagree. Certainly the Board of Review would have no reason to know that even the 1975 assessment was considered by petitioner to be excessive. Many properties damaged by flooding are covered by insurance and, even if not insured, are repaired or restored to former value. Had the facts that the partnership did not intend to repair the damage or continue the business been presented to the Board of Review, it well may have adjusted the assessment. In Hutson v. Royal Oak, 28 Mich.App. 393, 395, 184 N.W.2d 558 (1970), this Court said:

"The basis of exhaustion of administrative remedies is the presumption that the administrative agency, if given a chance to pass upon the matter, will decide correctly and will not fail in the performance of its duty."

In the absence of facts to the contrary, we cannot assume that in the case before us the Board of Review, if given a chance to pass upon the matter, would have failed in its duty.

III. Motion to amend constructive fraud.

The third ground upon...