TOLL NORTHVILLE LIMITED PARTNERSHIP LLC v. TOWNSHIP OF NORTHVILLE (2012)

This case returns from our Supreme Court for consideration of an issue that was not addressed when the case was previously before this Court. Respondent Township of Northville (Northville) appeals as of right Tax Tribunal Judge Victoria L. Enyart's October 19, 2010 opinion and judgment, adjusting the taxable values of properties owned by petitioners Toll Northville Limited Partnership (Toll) and Biltmore Wineman, LLC (Biltmore) for the 2001 and 2002 tax years.

Our Supreme Court set forth the relevant facts in this case, which it decided as a companion case to Michigan Properties, LLC v. Meridian Twp., 491 Mich. 518, 817 N.W.2d 548 (2012):

․ The underlying factual basis for the dispute between Toll Northville Limited Partnership and Northville Township began in 2000 when Toll, a residential developer, installed public-service improvements to a “parent” parcel that was to be divided into residential “child” parcels. The value of the public-service improvements, which were legally defined as “additions” pursuant to MCL 211.34d(1)(b)(viii ), was included in the taxable value for the parent parcel for tax year 2000, thereby substantially increasing the taxable value of Toll's property. Toll did not timely challenge the increase in taxable value for tax year 2000, and the parent parcel was divided into child parcels by tax year 2001. For 2001, the assessor proportionally split the addition to the taxable values among the resulting child parcels, so that each child parcel carried its portion of the addition of the value of the public-service improvements to the taxable value that had previously been assessed to the parent parcel.

Toll timely appealed the taxable values of the child parcels for tax year 2001 in the Tax Tribunal. Also, Toll filed a declaratory action in the circuit court to have MCL 211.34d(1)(b)(viii ), the basis for including public-service improvements as “additions,” declared unconstitutional. The Tax Tribunal held Toll's tribunal case in abeyance pending the outcome of the circuit court action. Toll was successful in its circuit court action, culminating in an opinion from this Court that unanimously declared MCL 211.34d(1)(b)(viii ) unconstitutional.

Following this Court's decision, the Tax Tribunal proceedings were reopened. The tribunal concluded that it lacked jurisdiction to amend the taxable value of the parent parcel for tax year 2000 because that value was not timely appealed. However, the tribunal prospectively amended the taxable value of the properties at issue to conform to this Court's decision. Thus, the tribunal removed the value of the public-service improvement additions from the parcels' taxable values for tax year 2001 and subsequent years. [Michigan Properties, LLC, 491 Mich. at 538–539, 817 N.W.2d 548 (footnotes omitted).]

Northville appealed, arguing that the Tax Tribunal erred as a matter of law in reviewing the accuracy of the 2000 taxable value determinations, and reducing the 2001 taxable values by the amount of the public-service additions. Northville also contended that the Tax Tribunal lacked jurisdiction to alter the 2000 taxable values, and alleged error based on principles of collateral estoppel, res judicata, and the law of the case. Lastly, Northville argued that the Tax Tribunal erred by ignoring a stipulation of the parties regarding the true cash values of the parcels. This Court consolidated this appeal with appeals in MJC/Lotus Group v. Brownstown Township, Docket No. 295732, and CW Development LLC/Meadow Walk v. Grand Blanc Township, Docket No. 296499. Toll Northville LP v. Township of Northville, unpublished order of the Court of Appeals, entered February 9, 2011 (Docket No. 301043).

On May 31, 2011, this Court issued a published opinion reversing the Tax Tribunal's decision and holding that the Tax Tribunal did not have authority to indirectly review and revise a previous year's taxable value for purposes of determining a timely appealed current year's taxable value. MJC/Lotus Group v. Brownstown Twp., 293 Mich.App. 1, 5, 809 N.W.2d 605 (2011), rev'd Michigan Properties, LLC v. Meridian Twp., 491 Mich. 518, 817 N.W.2d 548 (2012). We ordered the Tax Tribunal to reinstate the taxable values assessed by Northville. Id. at 16, 817 N.W.2d 548.

Toll and Biltmore sought leave to appeal in our Supreme Court. The Court granted leave, “limited to the issue whether the Court of Appeals correctly held that the Michigan Tax Tribunal had no jurisdiction to reduce an unconstitutional increase in the taxable value of property if the improperly increased taxable value was not challenged in the year of the increase.” Toll Northville LP v. Township of Northville, 490 Mich. 877, 803 N.W.2d 694 (2011).

On June 14, 2012, the Supreme Court reversed this Court's decision, and held that the Tax Tribunal has the authority and the duty to correct errors in previous years' taxable values:

In Toll Northville, we hold that the Tax Tribunal does have the authority to reduce an unconstitutional previous increase in taxable value for purposes of adjusting a taxable value that was timely challenged in a subsequent year. The Tax Tribunal Act sets forth the Tax Tribunal's jurisdiction. Once its jurisdiction is properly invoked, the Tax Tribunal possesses the same powers and duties as those assigned to a March board of review under the [General Property Tax Act, MCL 211.1 et seq.], including the duty to adjust erroneous taxable values to bring the current tax rolls into compliance with the GPTA․ [491 Mich. at 545–546, 817 N.W.2d 548.]

The Supreme Court remanded the case for this Court to consider “Northville's alternative argument that the adjusted valuation set by the Tax Tribunal did not comport with a stipulation by the parties regarding the valuation.” Id. at 540, 803 N.W.2d 694 n39.¹

Northville argues that the Tax Tribunal erred in its calculation of many of the properties' taxable values because it failed to account for the values of new construction additions made to 58 of the 353 lots in 2000. Northville relies on a stipulation by the parties regarding the values of the additions. Northville also maintains that the addendum to the Tax Tribunal's opinion and judgment reflects only nine additions, and five of the values ascribed to those additions are not the values to which the parties stipulated. Northville argues that these errors in the computation of the 2001 taxable values caused inaccuracies in the calculation of the 2002 taxable values as well.

Whether the Tax Tribunal disregarded a clear and unambiguous factual stipulation by the parties is a legal question. See In re Nestorovski Estate, 283 Mich.App. 177, 183, 769 N.W.2d 720 (2009). This Court reviews legal issues de novo. Schwass v. Riverton Twp., 290 Mich.App. 220, 222, 800 N.W.2d 758 (2010). “Where parties agree to submit a case on stipulated facts, courts generally accept those facts as conclusive.” Kaiser Optical Systems, Inc. v. Dep't of Treasury, 254 Mich.App. 517, 520, 657 N.W.2d 813 (2002).

On the last day of the hearing, the parties informed the tribunal that they had stipulated to the cash values of the properties:

Ms. [Laura M.] Hallahan [counsel for Northville]: I think if we can go through some preliminary matters on a couple items, the parties have stipulated to the true cash value of every parcel under appeal in this matter and we will be filing a stipulation. I think the only issues remaining for this Tribunal to decide is whether the taxable value was properly calculated during the splits and combination of the parcels and whether the TV added for public service improvements in a year not under appeal should not be removed for the years that are under appeal. We've gone through and stipulated to most of the exhibits that will be introduced here today․ [W]e'll just go through them and I'll identify each one.

* * *

․ R–14 is the summary of the individual residential parcels, the parent-child split and tax year 2000–2001 taxable values. R–16 is the summary of the individual residential parcels for tax year 2001 and ′02 taxable values․

* * *

․ All those documents or all those exhibits have been stipulated to.

Mr. [David B.] Marmon [counsel for Toll and Biltmore]: That's correct. We stipulate to their admission.

Judge Enyart: All right.

The register of actions indicates that a stipulation was filed after the hearing.

The Tax Tribunal's addendum to its opinion and judgment charts the relevant values for each parcel in the years 2001 and 2002. In the “2001 Additions” column, the values of additions are provided for only nine parcels. The column listing the 2001 additions in Exhibit 14 includes values for more than fifty parcels. Additionally, five of the nine values of “2001 Additions” in the addendum are not consistent with the values in Exhibit 14 to which the parties stipulated. For example, the tribunal's addendum indicates a value of $287,600 for the 2001 additions to parcel no. 77–059–01–0009–000. Northville's Exhibit 14 indicates that the value is $13,600. The addendum's value of additions to parcel no. 77–059–01–0010–000 is zero, but Exhibit 14 show the value as $13,600. The 2001 additions to parcel no. 77–059–01–0012–000 is $13,600 in the tribunal's addendum, but is zero according to Exhibit 14. The addendum shows an additions value of $13,600 for parcel no. 77–059–01–0013–000, contrary to Exhibit 14's value of $22,700 for that parcel. The 2001 additions to parcel no. 77–059–01–0016–00 are valued at $328,900 on the addendum, but at zero on Exhibit 14.

Toll and Biltmore do not dispute Northville's challenge to the valuations of the properties on the basis that the Tax Tribunal failed to honor the parties' stipulation.² And we presume that the omission of the stipulated values from the addendum to the opinion and judgment was inadvertent. There is no indication in the record that the tribunal rejected the parties' stipulation. To the contrary, Judge Enyart was agreeable to the stipulation at the hearing and she referenced it in her opinion. Regardless of the reason for the omission, the tribunal's valuation of the properties does not comport with the parties' stipulation. Therefore, we reverse and remand for correction of this error.

Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

FOOTNOTES

1.  We interpret the scope of this remand to include only Northville's Issue IV on appeal which alleges error in the calculation of taxable values by failing to account for values to which the parties stipulated. The Supreme Court directed this Court to consider “the Tax Tribunal's valuation of the subject properties .” Michigan Properties, LLC, 491 Mich. at 546, 817 N.W.2d 548. Although Northville states its other issues in terms of valuation, they advance questions of law, i.e., collateral estoppel, res judicata, and law of the case. We note our Supreme Court's rejection of Northville's reliance on Leahy v. Orion Twp., 269 Mich.App. 527, 711 N.W.2d 438 (2006) to support its collateral estoppel claim, 491 Mich. at 533, 817 N.W.2d 548 n18, and Northville cites Leahy in support of its res judicata and law of the case arguments as well. Moreover, the Supreme Court has held as a matter of law that the Tax Tribunal not only has “the authority to reduce an unconstitutional previous increase in taxable value for purposes of adjusting a taxable value that was timely challenged in a subsequent year,” but also that the tribunal has a duty to do so. Michigan Properties, LLC, 491 Mich. at 546, 817 N.W.2d 548 (emphasis added). The related concepts of collateral estoppel and res judicata, as well as the law of the case doctrine, do not apply where, as here, our Supreme Court has recognized an affirmative duty to correct a previous determination of taxable values that later proves to be incorrect.

2.  Toll and Biltmore do not address this issue in their appellee brief.

PER CURIAM.