DocketNumber: Docket Nos. 305970 and 306727
Citation Numbers: 299 Mich. App. 427
Judges: Borrello, Jansen, Whitbeck
Filed Date: 2/12/2013
Status: Precedential
Modified Date: 9/9/2022
These consolidated appeals arise from an order of the Michigan Tax Tribunal (the Tribunal) finding the taxable values of nine parcels of property in Waterford Township. In Docket No. 305970, petitioners
I. FACTS
A. BACKGROUND FACTS
In June 2004, the Country Club challenged the assessed and taxable values of nine parcels of property located on Elizabeth Lake Road in the Township. The Country Club uses eight of the nine parcels in combination as a golf course, and the ninth as a used car lot. As the case progressed, the Country Club moved to amend its petition to include assessments for 2005 and 2006. The parties ultimately did not dispute the value of the used car lot. The Township assessed the combined true cash value of the properties at $3,919,360 in 2004; $3,862,560 in 2005; and $4,223,440 in 2006.
B. ADMISSIONS AND MOTIONS FOR SUMMARY DISPOSITION
In May 2006, the Township requested that the Country Club admit several statements as fact. After the Country Club failed to respond to the request, the Township moved to deem the statements admitted. The Township also moved for summary disposition, arguing that on the basis of the admitted facts, the Country Club would be unable to obtain any relief. The Country Club responded that even if the Tribunal deemed the statements admitted, the admissions did not establish the true cash value of the property.
On September 1, 2006, the Tribunal deemed that the Country Club admitted the statements, including that
Both parties filed additional motions for summary disposition under MCR 2.116(0(10). The Tribunal determined that the Country Club’s motion was a motion for reconsideration, which it denied. It also denied the Township’s motion, asserting that the true cash value of the properties remained in dispute. The Country Club filed an additional motion for summary disposition, which it based on the property’s zoning restrictions. The Tribunal determined that the effect of the zoning restrictions was an issue of fact and denied the motion.
C. HEARING testimony
The hearing took place in January 2008. Michael Rende, the Country Club’s appraiser, first used the income approach to value the property. He calculated the net operating income of the property by deducting the property’s expenses from its gross income and capitalizing the result. Under that approach, Rende’s estimate of the combined true cash value of the properties was $190,000 in 2004; $120,000 in 2005; and $90,000 in 2006.
Rende also alternatively estimated the value of the land as if it were vacant and ultimately concluded that the property would be more valuable as vacant land. He testified that most of the parcels were zoned for commercial recreation and that there was little possibility
Lloyd Syron, an owner of the property, testified that he had received two offers to purchase the property, one for $11,000,000 that was contingent on rezoning and the other for $6,000,000. The Township’s appraiser, Raymond Bologna, later testified that these offers for sale occurred in 2002. Syron also testified that in 2005, he mortgaged the property for $600,000 and received a further $200,000 line of credit on it from the bank.
John Wood, the Township’s chief assessor, testified that his original assessments in 2004, 2005, and 2006 were accurate. Wood also testified that he believed that the Township would permit rezoning the property because there was a high demand for vacant property in the Township. Larry Lockwood, head of the Township’s planning division, testified that it was highly probable that the Township would permit rezoning.
Bologna testified that he used the income approach to appraise the property as it existed, and found that the true cash value of the property was $1,678,000 in 2004; $2,062,000 in 2005; and $2,676,000 in 2006.
D. THE TRIBUNAL’S FINDINGS AND CONCLUSIONS
The Tribunal ultimately concluded that the Township accurately assessed the property’s true cash value in 2004, 2005, and 2006. The Tribunal found that Rende’s appraisal was not credible because he used improper appraising methods. The Tribunal considered Bologna’s testimony, but noted that Bologna did not account for the possible costs and time required to rezone the property.
The Tribunal thoroughly considered the evidence concerning the highest and best use of the property and the effect of zoning on the property’s value. It found credible Lockwood’s testimony that it was likely that the property could be rezoned. However, the Tribunal ultimately found that the property did not “have an increased value for the potential of a different use without a zoning change . ...” It found that, though the best use of the property might change with a zoning change, the Country Club’s current use was appropriate.
The Tribunal rejected both parties’ appraisals. It rejected the Country Club’s appraisal as not credible, and rejected the Township’s appraisal because it was based on “hypothetical property” instead of on the property as it was zoned. The Tribunal then concluded that the property’s true cash value was accurate as initially assessed.
E. THE TOWNSHIP’S MOTIONS FOR COSTS
In September 2011, the Township also moved the Tribunal for costs (1) as the prevailing party and (2) for
II. TRUE CASH VALUE (DOCKET NO. 305970)
A. STANDARD OF REVIEW
This Court’s review of a decision by the Tribunal is limited.
B. LEGAL STANDARDS
The Michigan Constitution provides that true cash value is necessary to determine the tax applicable to real property.
The petitioner has the burden to establish the property’s true cash value.
C. APPLYING THE STANDARDS
The Country Club contends that the Tribunal improperly adopted the Township’s assessment, instead of independently determining the parcels’ true cash values. We do not agree that the Tribunal adopted the Township’s assessment without any basis.
We conclude that the Tribunal fulfilled its duly to make an independent determination of true cash value in this case. The Tribunal may adopt the assessed valuation on the tax rolls as its independent finding of true cash value when competent and substantial evidence supports doing so, as long as it does not afford the original assessment
In this case, competent, material, and substantial evidence supported the Tribunal’s determination. The Tribunal rejected Rende’s proposed valuation because it was not credible. The credibility of the witnesses is a matter for the Tribunal to determine.
Further, there is no indication that the Tribunal presumed that the original assessment was valid. Wood testified about his methods in his initial assessments, and testified that he believed that his assessment methods were accurate. We conclude that the Tribunal did not shirk its duties to independently determine the parcels’ true cash values.
III. COSTS (DOCKET NO. 306727)
The Township argues that the Tribunal erred when it denied the Township’s motion for costs because (1) the Township was the prevailing party, and (2) the Country Club’s action was frivolous.
1. STANDARD OF REVIEW
This Court reviews for an abuse of discretion a court’s ruling on a motion for costs to the prevailing party.
2. LEGAL STANDARDS
A subset of the Michigan Administrative Code sets forth the rules of practice and procedure for the Tribunal.
When a single cause of action is alleged, the prevailing party is “the party who prevails on the entire
3. APPLYING THE STANDARDS
In this case, the Tribunal determined that the Township “did not prevail in this case, because it requested an increase in true cash value, which did not happen.” We conclude that the Tribunal did not err in applying the law and did not adopt a wrong principle when it determined that the Township was not a prevailing party.
The Township did not show that its position improved as a result of the litigation. The Township’s position did not deteriorate as a result of the Country Club’s petition, but neither did its position improve. And, as noted by the Tribunal, the Township requested an increase in the taxable values of the parcels, but did not receive an increase. Thus, the Tribunal did not err when it determined that the Township was not a prevailing party and did not abuse its discretion when it denied the Township’s motion for costs.
B. FRIVOLOUS ACTIONS
1. STANDARD OF REVIEW
Generally, when reviewing whether an action is frivolous under MCR 2.625(A)(2), this Court reviews for
2. LEGAL STANDARDS
A court may find that a party’s action is frivolous under MCR 2.625(A)(2) when (1) the party initiated the suit for purposes of harassment, (2) “[t]he party’s legal position was devoid of arguable legal merit,” or (3) “[t]he party had no reasonable basis to believe that the facts underlying that party’s legal position were in fact true.”
3. APPLYING THE STANDARDS
The Township argues that the Country Club’s action was frivolous because, in light of its admissions, there were no disputed evidentiary issues to take to a hearing.
We conclude that the trial court’s finding that the Country Club’s request for a hearing was not frivolous was supported by competent, material, and substantial
In this case, the Tribunal found that the Country Club’s request for a hearing was not frivolous, even after its admissions, because the admissions did not establish the property’s true cash value. The Tribunal deemed that the Country Club admitted that the property was “properly assessed or assessed at below market value.” The Country Club’s admission does not specify what the true cash value of the property was and it is inherently self-contradictory — the property was either properly assessed or it was assessed below market value, but it cannot be both at the same time. We conclude that the Tribunal did not err when it determined that a hearing was still required for it to fulfill its statutoiy duty to determine the property’s true cash value.
But even had the Tribunal erred when ruling in June 2006 that a hearing was still necessary to resolve the disputed factual issues in this case, we fail to see why the Country Club should be held accountable for the “unnecessary” hearing. Simply because the Tribunal ultimately rejected the Country Club’s facts and legal
The Township argues that this case is analogous to our decision in DeWald v Isola.
We conclude that, in light of the Tribunal’s ruling that a hearing was necessary, the record supports its finding that the Country Club’s hearing was not frivolous. We affirm that finding under the standards of review applicable to the Tribunal’s decisions.
We affirm.
It appears from the record that Rende’s true-cash-value estimates did not include the value of the ninth parcel.
These figures, and those valuing the property as vacant land, include the value Bologna attributed to the ninth parcel.
Mich Props, LLC v Meridian Twp, 491 Mich 518, 527; 817 NW2d 548 (2012).
Const 1963, art 6, § 28; Mich Props, 491 Mich at 427.
In re Payne, 444 Mich 679, 692; 514 NW2d 121 (1994); Wayne Co v Michigan State Tax Comm,, 261 Mich App 174, 186-187; 682 NW2d 100 (2004).
Const 1963, art 9, § 3.
MCL 211.27a(1).
MCL 211.27(1).
Huron Ridge LP v Ypsilanti Twp, 275 Mich App 23, 28; 737 NW2d 187 (2007).
MCL 205.737(3); Great Lakes Div of Nat’l Steel Corp v City of Ecorse, 227 Mich App 379, 389; 576 NW2d 667 (1998).
President Inn Props, LLC v Grand Rapids, 291 Mich App 625, 631; 806 NW2d 342 (2011); Meadowlanes Ltd Dividend Housing Ass’n v City of Holland, 437 Mich 473, 485; 473 NW2d 636 (1991).
Meadowlanes Dividend Housing Ass’n, 437 Mich at 484-486.
President Inn Props, 291 Mich App at 640.
See id. at 641-642.
Id. at 636.
Fansler v Richardson, 266 Mich App 123, 126; 698 NW2d 916 (2005).
Id.
Mich Props, 491 Mich at 527-528.
Mich Admin Code, R 205.1101 et seq.
MCL 24.201 et seq.
Mich Admin Code, R 205.1111(4); Signature Villas, LLC v City of Ann Arbor, 269 Mich App 694, 705-706; 714 NW2d 392 (2006).
Mich Admin Code, R 205.1145(i).
MCR 2.625(B)(2); LaVene v Winnebago Indus, 266 Mich App 470, 473-474; 702 NW2d 652 (2005).
Van Zanten v H Vander Laan Co, Inc, 200 Mich App 139, 141; 503 NW2d 713 (1993).
Forest City Enterprises, Inc v Leemon Oil Co, 228 Mich App 57, 81; 577 NW2d 150 (1998); see also Ullery v Sobie, 196 Mich App 76, 82; 492 NW2d 739 (1992).
Kitchen v Kitchen, 465 Mich 654, 661; 641 NW2d 245 (2002).
See State Farm Fire & Casualty Co v Johnson, 187 Mich App 264, 268-269; 466 NW2d 287 (1991), citing Sarin v Samaritan Health Ctr, 176 Mich App 790, 799; 440 NW2d 80 (1989) (“The trial court’s finding of fact that the court rule was not violated may not be set aside unless clearly erroneous.”).
Mich Props, 491 Mich at 527.
MCL 600.2591(3)(a).
Radtke v Miller, Canfield, Paddock & Stone, 453 Mich 413, 419-420; 551 NW2d 698 (1996).
Id. at 420.
MCL 205.737(1); President Inn Props, 291 Mich App at 640; Great Lakes Div of Nat’l Steel Corp, 227 Mich App at 389.
See Kitchen, 465 Mich at 662.
DeWald v Isola, 180 Mich App 129; 446 NW2d 620 (1989).
Id. at 131.
Id. at 135.
Id. at 137.
Id. at 136.