Charter Township of Saginaw v. State Tax Commission

STATE OF MICHIGAN
COURT OF APPEALS
CHARTER TOWNSHIP OF SAGINAW, UNPUBLISHED
May 12, 2016
Plaintiff-Appellant,
v No. 325252
Saginaw Circuit Court
STATE TAX COMMISSION, LC No. 14-024036-AA
Defendant-Appellee.
Before: HOEKSTRA, P.J., and O’CONNELL and MURRAY, JJ.
PER CURIAM.
In this lawsuit challenging the State Tax Commission’s (STC) denial of a personal
property tax exemption, the Charter Township of Saginaw (“the township”) appeals as of right
the order of the Saginaw Circuit Court dismissing the township’s claims for lack of subject-
matter jurisdiction. Because the circuit court properly dismissed the case for lack of jurisdiction,
we affirm.
The present case involves the township’s efforts to challenge the STC’s denial of a
personal property tax exemption for Morley Companies, Inc. (“Morley”), a Michigan corporation
located in the township. In particular, under the General Property Tax Act (GPTA), MCL 211.1
et seq., “[t]he governing body of an eligible local assessing district . . . may adopt a resolution to
exempt from the collection of taxes under this act all new personal property owned or leased by
an eligible business located in 1 or more eligible districts or distressed parcels designated in the
resolution or an eligible Next Michigan business . . . .” MCL 211.9f(1). Once adopted, a
resolution must be filed with the STC, the state treasurer, and the president of the Michigan
strategic fund. MCL 211.9f(2). “Not more than 60 days after receipt of a copy of the
resolution,” the STC shall determine whether the new property is owned by an eligible business
and whether the eligible business is located in an eligible district. MCL 211.9f(3). If the
personal property meets this and other criteria set forth in MCL 211.9f(3), the state treasurer,
with the written concurrence of the president of the Michigan strategic fund, shall approve the
exemption resolution. MCL 211.9f(3). “A resolution is not effective unless approved” in this
manner. See MCL 211.9f(2). Moreover, an exemption cannot be granted after December 31,
2012 to eligible businesses in certain districts, including those districts, such as the township in
this case, which are “eligible” only because they contain a taxpayer entitled to tax credits under
MCL 207.809 of the Michigan economic grown authority act. See MCL 211.9f(2); MCL
211.9f(10)(f)(ix); MCL 211.9f(10)(k)(ii).
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Under these provisions, on July 9, 2012, the township adopted a resolution exempting
Morley from taxes on new personal property.1 According to Bridget Smith, the director of
planning and zoning services for the township, she mailed, or at least attempted to mail, this
exemption resolution to the STC on July 17, 2012. Approximately 18 months passed, and yet,
despite questions to the township from Morley, the township made no effort to follow-up with
the STC on the exemption until January of 2014 when the township finally made inquiries to the
STC. At that time, the STC informed Smith that it had not received the materials allegedly
mailed by the township.
The documents were sent, or resent, on January 30, 2014, and received by the STC in
February of 2014. The STC sent Morley a formal letter denying the exemption application on
June 4, 2014, explaining that Morley could not receive an exemption at that time because the
township was “not an eligible local assessing district” within the meaning of MCL 211.9f.2 With
regard to the ability to seek review of this decision, the June 4, 2014 letter stated:
A party aggrieved by the issuance or refusal to issue this exemption may appeal
the finding and order of the [STC] to the Circuit Court, within 60 days from the
date of this letter as provided in Public Act 306 of 1969, as amended.
On August 4, 2014, the township filed a complaint in Saginaw County Circuit Court.
The complaint involved two counts: (1) a request that the circuit court reverse the STC’s denial
of the exemption under the Administrative Procedures Act, MCL 24.201 et seq., and (2) a
request that the circuit court issue a writ of mandamus directing the STC to approve Morley’s
exemption.3 In response, among other arguments, the STC asserted that the circuit court lacked
subject matter jurisdiction. The township then amended its complaint to add claims for
injunctive relief and superintending control, asserting that the STC should be enjoined from any
action to prevent the exemption and that the circuit court should exercise superintending control
to order that the STC approve the resolution.
The circuit court ordered briefing on the jurisdictional issue and held oral arguments. On
the record, the circuit court determined that, under MCL 205.731, the STC’s denial of a tax
exemption fell within the exclusive jurisdiction of the Michigan Tax Tribunal (MTT), such that
1
This was Morley’s second request for an exemption through the township. Previously, in July
of 2009, the township adopted a resolution to exempt Morley from taxes on new property, and
this resolution was approved pursuant to MCL 211.9f(3) in October 2009, resulting in Morley
obtaining a personal property exemption under the GPTA, effective through 2014.
2
In earlier correspondence, it was explained that Morley would have been eligible for the
exemption in 2012, but that the application was not received until 2014 and, after December 31,
2012, the township could not grant him the requested exemption. See MCL 211.9f(2).
3
Substantively, the township argued that its resolution was filed with the STC when Smith
mailed the documents in July of 2012, at which time the township was still an “eligible district”
such that the prohibition on granting exemptions after December 31, 2012 should not apply in
this case.
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the circuit court lacked subject-matter jurisdiction to consider the issue. For this reason, on
December 3, 2014, the circuit court issued an order dismissing the case for lack of subject-matter
jurisdiction. The township now appeals as of right.
On appeal, the township contends that the circuit court erred by concluding that it lacked
subject-matter jurisdiction and dismissing the case. The township concedes that the MTT has
jurisdiction to review property tax related decisions of an agency, such as the STC, and that the
township lost the right to pursue relief in the MTT by not filing suit within 35 days as required
by MCL 205.735(3). However, according to the township, the fact of the MTT’s jurisdiction
does not prevent the circuit court’s exercise of equitable jurisdiction and the present case
involves “extraordinary circumstances which remove it from review by the normal appeal
process” so as to justify the circuit court’s exercise of its equitable powers to decide the case. In
particular, the township contends that the STC’s misinformation, regarding the appropriate
forum and time for seeking review, merits the circuit court’s consideration of the case or, at a
minimum, an evidentiary hearing to determine whether equitable principles warrant the circuit
court’s exercise of jurisdiction.4 We disagree.
Whether the circuit court has subject-matter jurisdiction over a claim is a question of law
which this Court reviews de novo. In re Petition of Wayne Co Treasurer for Foreclosure, 286
Mich. App. 108, 110; 777 NW2d 507 (2009). Issues of statutory interpretation are also reviewed
de novo. Highland-Howell Dev Co, LLC v Twp of Marion, 469 Mich. 673, 675; 677 NW2d 810
(2004).
“Subject-matter jurisdiction concerns a court's abstract power to try a case of the kind or
character of the one pending and is not dependent on the particular facts of a case.” Harris v
Vernier, 242 Mich. App. 306, 319; 617 NW2d 764 (2000). The circuit court’s power is set forth
by statute and in Michigan’s constitution. Id. See also Const 1963, art 6, § 13; MCL 600.605.
Under these provisions, a circuit court’s jurisdiction is broad. Ashley Ann Arbor, LLC v Pittsfield
Charter Twp, 299 Mich. App. 138, 147; 829 NW2d 299 (2012). “Circuit courts are courts of
general jurisdiction, and have original jurisdiction over all civil claims and remedies except
where exclusive jurisdiction is given by the constitution or by statute to some other court or
where the circuit courts are denied jurisdiction by the constitution or statutes of this state.”
Cherry Growers, Inc v Agric Mktg & Bargaining Bd, 240 Mich. App. 153, 160; 610 NW2d 613,
(2000) (internal quotation marks and citation omitted).
Relevant to the present case, under MCL 205.731(a), the MTT has “exclusive and
original jurisdiction over . . . [a] proceeding for direct review of a final decision, finding, ruling,
determination, or order of an agency relating to assessment, valuation, rates, special assessments,
4
On appeal, the township also addresses the merits of its underlying complaint and, in particular,
the sufficiency of Smith’s affidavit as proof that the township complied with the filing
requirements of MCL 211.9f. However, the dispositive issue in this case is jurisdictional and,
like the circuit court, we will not address the merits of the township’s underlying claim. See
Detroit v Fruehauf Trailer Co, 339 Mich. 256, 264; 63 NW2d 666 (1954).
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allocation, or equalization, under the property tax laws of this state.” Following the plain
language of this provision, the MTT has exclusive jurisdiction when four elements are present:
(1) a proceeding for direct review of a final decision, finding, ruling,
determination, or order; (2) of an agency; (3) relating to an assessment, valuation,
rate, special assessment, allocation, or equalization; (4) under the property tax
laws. Where all such elements are present, the tribunal's jurisdiction is both
original and exclusive. [Hillsdale Co Sr Servs, Inc v Hillsdale Co, 494 Mich. 46,
53; 832 NW2d 728 (2013).]
Notably, “the tribunal's jurisdiction is determined by the subject matter of the proceeding, not on
the type of relief requested.” Id. at 60. Ultimately, when a matter falls within the MTT’s
exclusive jurisdiction, the circuit court is prohibited from exercising jurisdiction. Wikman v City
of Novi, 413 Mich. 617, 645-646; 322 NW2d 103 (1982).
The present case contains all four elements necessary to confer exclusive jurisdiction on
the MTT under MCL 205.731(a), and thus the circuit court was precluded from deciding the
case. In particular, this case involves a claim for direct review of the STC’s denial of a personal
property tax exemption under MCL 211.9f. It is undisputed that the STC ruling was a final
decision of the administrative agency empowered to make this exemption determination. See
MCL 205.703(a); MCL 211.9f(3). Further, personal property is subject to taxation in Michigan
under the GPTA, MCL 211.1, and the claimed personal property exemption under MCL 211.9f
of the GPTA thus relates to an assessment under Michigan’s property tax laws. See MCL
205.731(a); Kasberg v Ypsilanti Twp, 287 Mich. App. 563, 566-568; 792 NW2d 1 (2010); In re
Petition of Wayne Co Treasurer for Foreclosure, 286 Mich. App. at 111 (“The Tax Tribunal has
jurisdiction . . . to determine whether a taxpayer is entitled to a property tax exemption because
the determination relates to an assessment.”). Although the township seeks relief that is largely
equitable in nature, it is the subject-matter of the controversy, not the nature of the relief, which
determines the MTT’s jurisdiction. See Hillsdale Co Sr Servs, Inc, 494 Mich. at 60. Because the
four criteria for the MTT’s jurisdiction are present in this case, the MTT has exclusive
jurisdiction under MCL 205.731(a) and, as a matter of law, the circuit court thus lacked subject-
matter jurisdiction. See Wikman, 413 Mich. at 645-646.
In contrast to this conclusion, the township maintains that the circuit court should
nonetheless be allowed to exercise its general equitable jurisdiction in this case, or to at least
hold an evidentiary hearing on the equities, given the misinformation provided to the township
by the STC with regard to the time and method for appealing the STC’s denial of the exemption.
However, as noted, “[s]ubject-matter jurisdiction concerns a court's abstract power to try a case
of the kind or character of the one pending and is not dependent on the particular facts of a case.”
Harris, 242 Mich. App. at 319. Subject-matter jurisdiction cannot be waived by a party, and a
party cannot be estopped from raising the issue. In re Contempt of Dorsey, 306 Mich. App. at
581. In other words, the STC could not have somehow overridden legislative directives and
conferred subject-matter jurisdiction on the circuit court simply by providing misinformation.
See Hillsdale Co Sr Servs, Inc, 494 Mich. at 63 n 3 (“[T]he parties to an action cannot confer
jurisdiction by their conduct or action[.]”); see also Martin v Secretary of State, 482 Mich. 956;
755 NW2d 153 (2008) (MARKMAN, J., concurring) (“Although it is unfortunate that plaintiff
received incorrect guidance, such guidance cannot alter the law of this state.”). Instead, the
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question of jurisdiction in this case is a statutory matter and, lacking in subject-matter
jurisdiction in the first instance, the circuit court was without jurisdiction to grant the township’s
requests for relief or to conduct an evidentiary hearing. See Universal Am-Can Ltd v Attorney
Gen, 197 Mich. App. 34, 37; 494 NW2d 787 (1992); Matter of Acquisition of Land for Cent Indus
Park Project, 177 Mich. App. 11, 18; 441 NW2d 27 (1989).
That being said, we note that in narrow and extraordinary circumstances, misinformation
from a party regarding the proper forum or time for filing might give rise to equitable concerns
when there is obvious confusion about the true state of the law. See, e.g., Ashley Ann Arbor,
LLC, 299 Mich. App. at 155. Such “unusual” cases may merit the “pinpoint application of equity
based on the particular circumstances surrounding the plaintiff's claim; namely, the preexisting
jumble of convoluted case law through which the plaintiff was forced to navigate.” Devillers v
Auto Club Ins Ass'n, 473 Mich. 562, 590 n 65; 702 NW2d 539 (2005). However, these equitable
concerns have led to remedies such that the equitable tolling of a statute of limitations, Ashley
Ann Arbor, LLC, 299 Mich. App. at 155, and not the remedy the township seeks in this case—
namely, the conference of jurisdiction on a court lacking in jurisdiction when it is plain that
jurisdiction rests exclusively with another tribunal. See Nicholson v Birmingham Bd of Review,
191 Mich. App. 237, 242; 477 NW2d 492 (1991) (rejecting the plaintiff's argument that the circuit
court possessed equitable jurisdiction over a request for an exemption when such a request was
clearly within the exclusive province of the MTT).
Moreover, the present case does not involve a confusing jumble of laws which would
justify the township’s reliance on any misadvise provided by the STC or otherwise give rise to
equitable concerns. As we have discussed, the MTT has exclusive jurisdiction under MCL
204.731(a). The township concedes5 this point and offers no basis, either in caselaw or the
statutory framework, to suggest that there was some outstanding confusion in the law or to
demonstrate that the township lacked the means of ascertaining the correct procedures for
appealing the STC’s property exemption decision. Cf. Martin v Secretary of State, 482 Mich. at
956, adopting Martin v Secretary of State, 280 Mich. App. 417, 437; 760 NW2d 726 (2008)
(O’CONNELL, J., dissenting); Ashley Ann Arbor, LLC, 299 Mich. App. at 155. In such
circumstances, even when a party is provided with misinformation, this cannot excuse a
disregard of clear statutory requirements. See Martin, 482 Mich. at 956. Courts simply will not
“create an equitable remedy for a hardship created by an unambiguous, validly enacted,
legislative decree.” Stokes v Millen Roofing Co, 466 Mich. 660, 672; 649 NW2d 371 (2002). In
sum, on the facts of this case, any misinformation provided by the STC does not excuse the
township’s failure to pursue relief in the appropriate forum in the required timeframe and this
mistake does not warrant the circuit court’s exercise of equitable jurisdiction over an issue within
the exclusive jurisdiction of the MTT. See Nicholson, 191 Mich. App. at 242. Because the circuit
court was without subject-matter jurisdiction, it properly dismissed the township’s complaint.
5
Specifically, the township acknowledges on appeal that “[t]here is, admittedly, authority that
review of administrative decisions regarding property tax matters is by appeal to the Tax
Tribunal.”
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Affirmed.
/s/ Joel P. Hoekstra
/s/ Peter D. O’Connell
/s/ Christopher M. Murray
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