in Re Petition of Ingham County Treasurer for Foreclosure

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
In re Petition of INGHAM COUNTY
TREASURER for Foreclosure.
INGHAM COUNTY TREASURER, FOR PUBLICATION
January 21, 2020
Petitioner-Appellant, 9:05 a.m.
V No. 346626
Ingham Circuit Court
FAIEK ZEINEH, LC No. 17-000439-CZ
Respondent-Appellee.
Before: BOONSTRA, P.J., and TUKEL and LETICA, JJ.
BOONSTRA, P.J.
Petitioner appeals by right the trial courts’ orders granting respondent relief from
judgment, setting aside a judgment of foreclosure, and denying reconsideration. We reverse and
remand for entry of an order denying petitioner’s motion for relief from judgment and for the
reinstatement of the judgment of foreclosure.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
In February 2018, petitioner foreclosed on the property known as 1024 Regent Street in
Lansing, due to unpaid property taxes. Petitioner sent notice of the delinquent taxes and
imminent foreclosure to the entity that held a recorded ownership interest in the property, as well
as to “occupant” at the Regent Street address. Petitioner also posted a notice of foreclosure
proceedings at the property and published a notice of foreclosure in a local newspaper.
Respondent was not notified and did not participate in the foreclosure proceedings, which
resulted in a judgment of foreclosure entered on February 21, 2018.
In June 2018, respondent filed a motion for relief from judgment, asserting that he had an
interest in the property by virtue of an unrecorded land contract, and that petitioner had erred by
not notifying him of the foreclosure proceedings. Specifically, he argued that in 2016 he had
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paid delinquent taxes on the property for tax year 2014, that this payment was recorded in
petitioner’s tax records, and that petitioner therefore had a statutory duty to send him notice of
the proceedings.
At a hearing held on the motion for relief from judgment, respondent conceded that
petitioner had no way of knowing about respondent’s land-contract interest, but petitioner
acknowledged that respondent had paid the 2014 taxes. The trial court granted respondent’s
motion and set aside the judgment of foreclosure, stating:
The question here is really one of notice, and I would agree that the land
contract should have been filed, except . . . many are not. People don’t think
about it until they actually pay off the property.
I do have the tax record where he was a known person because he did pay
taxes . . . for the tax year 2014. This is 2015 and prior years, so he would have
been known. I think that’s really the argument, and then do we have notice.
I’m going to set aside the default and grant [respondent’s attorney] what
he seeks. . . . [B]ut when there’s a question of whether a person gets to keep his
personal property or real property, as it may be, and there’s an issue of notice, I’m
going to read the statute in the favor of the person who thought they were doing
right, because these are very complicated matters, and I don’t think it’s as clear
when one section references another, and I have two very fine lawyers arguing
two very different things on the same statute. The statute . . . can be read both
ways . . . . [L]istening to the arguments, looking at the statute, I’m going to weigh
in favor of the individual, because the county has cashed [sic] money and really
was put on notice that there’s something more involved here, and they had the
record in their own file, so judgment is for [respondent].
The trial court subsequently denied petitioner’s motion for reconsideration. This appeal
followed.
II. STANDARD OF REVIEW
We review for an abuse of discretion a trial court’s decision on a motion for relief from
judgment, Dep’t of Environmental Quality v Waterous Co, 279 Mich. App. 346, 364; 760 NW2d
856 (2008), as well as on a motion for reconsideration, Kokx v Bylenga, 241 Mich. App. 655, 658-
659; 617 NW2d 368 (2000). “An abuse of discretion occurs when the decision results in an
outcome falling outside the range of principled outcomes.” Waterous Co, 279 Mich. App. at 380.
“A court by definition abuses its discretion when it makes an error of law.” In re Waters Drain
Drainage Dist, 296 Mich. App. 214, 220; 818 NW2d 478 (2012). We review de novo
constitutional issues and issues of statutory interpretation. Janer v Barnes, 288 Mich. App. 735,
737; 795 NW2d 183 (2010).
III. ANALYSIS
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Petitioner argues that it complied with the notice requirements of MCL 211.78i, and that
the trial court erred by setting aside the judgment of foreclosure on the ground that respondent
had not been provided notice of the proceedings. We agree.
A citizen’s right to due process of law is guaranteed under both the United States and
Michigan Constitutions. US Const, Am XIV, § 1; Const 1963, art 1, § 17. “Due process protects
vested property rights or entitlements.” Mich Ed Ass’n v State Bd of Ed, 163 Mich. App. 92, 98;
414 NW2d 153 (1987). Our Supreme Court has held that Michigan’s General Property Tax Act
(GPTA)1 contains an “extensive set of procedures for notice of the steps in the tax sale process”
that provides “a constitutionally sound procedure for sale of property because of nonpayment of
taxes.” Smith v Cliffs on the Bay Condo Ass’n, 463 Mich. 420, 428-429; 617 NW2d 536 (2000).
Under MCL 211.78g(1), “on March 1 in each tax year, . . . property that is delinquent for
taxes, interest, penalties, and fees for the immediately preceding 12 months or more is forfeited
to the county treasurer for the total amount of those unpaid delinquent taxes, interest, penalties,
and fees.” MCL 211.78k authorizes the trial court to issue a final judgment on a petition for
foreclosure after holding a hearing at which persons claiming interests in the property may
contest the validity or correctness of the taxes, interest, penalties, or fees at issue for specified
reasons. MCL 211.78j requires a foreclosing governmental unit to hold a hearing at least seven
days before the foreclosure hearing and allow persons with interests in property forfeited to the
county treasurer to show cause why the property should not be foreclosed upon.
MCL 211.78i, which is at the heart of the issue in this case, sets forth procedures for
identifying and notifying property owners in connection with these show cause and foreclosure
hearings. MCL 211.78i(1) requires a foreclosing governmental unit to “initiate a search of
records identified in subsection (6) to identify the owners of a property interest in the property
who are entitled to notice under this section of the show cause hearing . . . and the foreclosure
hearing . . . .” MCL 211.78i(6) states that “[t]he owner of a property interest is entitled to notice
under this section of the show cause hearing . . . and the foreclosure hearing . . . if that owner’s
interest was identifiable by reference to any of the following sources;” it then specifies, in
subpart (a), “[l]and title records” on file with the register of deeds, and, in subparts (b), (c), and
(d), “[t]ax records” on file with, respectively, the county treasurer, the local assessor, and the
local treasurer.
MCL 211.78i(2) states that a foreclosing governmental unit, after searching the records
identified in subsection (1), “shall determine the address reasonably calculated to apprise those
owners of a property interest of the show cause hearing . . . and the foreclosure hearing . . . and
shall send notice . . . by certified mail, return receipt requested, not less than 30 days before the
show cause hearing . . . .”
Here, the parties agree that respondent’s land contract was not recorded, and that the only
record connecting respondent’s name to the foreclosed property was the tax record showing his
payment of delinquent taxes for the 2014 tax year. We conclude that the plain language of
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MCL 211.1a et seq.
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MCL 211.78i(1) and (6) did not require petitioner to send notice of the foreclosure to petitioner
merely because he had once paid delinquent taxes on the property.
The primary purpose of statutory construction is to ascertain and give effect to the intent
of the Legislature. Haworth, Inc v Wickes Mfg Co, 210 Mich. App. 222, 227; 532 NW2d 903
(1995). “[T]he meaning of the Legislature is to be found in the terms and arrangement of the
statute without straining or refinement, and the expressions used are to be taken in their natural
and ordinary sense.” Gross v Gen Motors Corp, 448 Mich. 147, 160; 528 NW2d 707 (1995).
When construing a statute, a court should presume that every word has some meaning, Tiger
Stadium Fan Club, Inc v Governor, 217 Mich. App. 439, 457; 553 NW2d 7 (1996), but we may
not read requirements into a statute that do not appear in its plain language, Nickola v MIC Gen
Ins Co, 500 Mich. 115, 125; 894 NW2d 552 (2017).
Again, MCL 211.78i(1) calls for a foreclosing governmental unit to “initiate a search of
records identified in subsection (6) to identify the owners of a property interest in the property
who are entitled to notice.” (Emphasis added). MCL 211.78i(6) states that an “owner” whose
“interest was identifiable by reference” to certain records is entitled to notice of the foreclosure
proceedings. In other words, MCL 211.78i(1) requires a foreclosing entity to search the records
identified in MCL 211.78i(6), not merely for the names of persons or entities connected in any
way to the property under threat of foreclosure, but for records that reveal an ownership interest.
Respondent admits that his ownership interest in the property was not recorded. The mere fact
that a record existed of respondent’s payment of one year’s delinquent taxes on the property was
insufficient to identify any ownership interest. A person or entity may pay property taxes on
property that they do not own. The plain language of MCL 211.78i does not require petitioner to
send notification of foreclosure to every person or entity who has ever made a tax payment on a
property at risk of foreclosure, and we will not read such a requirement into the statute. Gross,
448 Mich. at 160; Nickola, 500 Mich. at 125; Smith, 463 Mich. at 430 (“The courts lack the
authority to create new notice requirements.”).
Respondent knew that his interest in the property was unrecorded, and could have taken
steps to make sure that he was kept informed of potential risks to his interest. Indeed,
MCL 211.78a(4) specifically provides a mechanism by which persons such as respondent could
ensure their receipt of notice merely by paying “an annual fee not to exceed $5.00 . . . to the
county treasurer and specifying “the address to which the notice shall be sent.” We conclude
that petitioner diligently satisfied the statutory notice requirements of the GPTA. Respondent
chose to disregard at his own risk “the costly and laborious record systems instituted to protect
[his] rights in the property,” and the trial court erred by granting him relief from judgment on the
ground that he had not received adequate notice. First Nat’l Bank of Chicago v Dep’t of
Treasury, 280 Mich. App. 571, 593; 760 NW2d 775 (2008) (O’CONNELL, J., dissenting) reversed
for reasons stated in the dissenting opinion by 485 Mich. 980 (2009).
Again, the notice procedure proscribed by the GPTA has been found to be
constitutionally valid. See Smith, 463 Mich. at 428-429, see also First Nat’l Bank of Chicago v
Dep’t of Treasury, 485 Mich. 980; 77 4 NW2d 912 (2009) (YOUNG, J., concurring) (“[T]he
constructive notice provided by recording a certificate of forfeiture pursuant to MCL 211.78g(2)
provides constitutionally adequate notice for those property interests that are unknown and not of
record at the time the property is forfeited to the county treasurer.”). Petitioner followed that
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procedure. We conclude that respondent was not deprived of a statutory or constitutional right to
notice of the foreclosure proceedings. The trial court erred by concluding otherwise. See Smith,
463 Mich. at 430.
Because we hold, for the reasons stated, that the trial court erred by granting respondent
relief from judgment, we decline to consider petitioner’s additional arguments in favor of
reversal.
Reversed and remanded for entry of an order denying petitioner’s motion for relief from
judgment and for the reinstatement of the judgment of foreclosure. We do not retain jurisdiction.
/s/ Mark T. Boonstra
/s/ Jonathan Tukel
/s/ Anica Letica
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