-1- 

### STATE OF MICHIGAN

COURT OF APPEALS

SPARTAN STORES, INC. and FAMILY FARE, LLC,

Petitioners-Appellants, FOR PUBLICATION October 30, 2014 9:00 a.m.

v No. 314669 Michigan Tax Tribunal CITY OF GRAND RAPIDS, LC No. 00-397618

Respondent-Appellee.

Before: S AAD , P.J., and O WENS and K. F. K ELLY , JJ.

S AAD , P.J.

Petitioners appeal the Tax Tribunal’s grant of summary disposition to respondent pursuant to MCR 3.116(C)(4). For the reasons stated below, we re verse and remand for proceedings consistent with this opinion.

I. NATURE OF THE CASE

This case involves an issue of first impression: the proper defi nition of the term “party in interest” as used in MCL 205.735a(6). Enact ed in 2006, MCL 205.735a allows a “party in interest” to a tax-assessment dis pute that involves specified types of property to bypass the board of review and protest the assessment directly before the Tax Tribunal.

Petitioner Spartan Stores, Inc. (“Spartan”) owns petitioner Family Fare, LLC (“Family Fare”), which operates a grocery store that leas es space in a shopping center. Both claim that they are a “party in interest” under MCL 205.735a(6), and therefore may challenge the assessment of the shopping mall before the Tax Tri bunal. Respondent, the city of Grand Rapids, maintains that, in general, onl y property owners or their agen ts, not leaseholders, may be considered a “party in inte rest” under MCL 205.735a(6), and th erefore petitioners may not challenge the assessment of the shop ping mall before the Tax Tribunal.

We agree with petitioners’ broader argument, and hold that a “party in interest” under MCL 205.735a(6) includes persons or entities with a property interest in the property being assessed. We do so because: (1) the plain meaning of the statute mandates this result; and (2) the stated purpose of MCL 205.735a is to remove pr ocedural barriers in property-tax disputes involving specifically defined busin esses, and defining the term “party in interest” to mean “persons or entities with a propert y interest in the property being a ssessed” effectuates this aim.-2- Therefore, we hold that Family Fare is a “party in interest” under MCL 205.735a(6), because it has a leasehold in the shopping center, and thus possesses a pr operty interest in the property being assessed. By application of the sa me principle, we rule that Family Fare’s copetitioner, Spartan, is not a “party in interest” because it does not have a property interest in the property being assessed. We accordingly reverse the trial court’s grant of summary disposition to respondents pursuant to MCR 2.116(C)(4), and remand for proceedings consistent with this opinion.

II. FACTS AND PROCEDURAL HISTORY

Petitioner Family Fare, LLC (“Family Fare”) is a Michigan business that is a wholly owned subsidiary of Spartan Stores, Inc. (“Spartan”). 1 It operates a grocery store in a shopping center at 4325 Breton Road in Grand Rapids, a nd leases its space from the shopping center owner, Jade Pig Ventures - Breton Meadows, LLC (“Breton Meadows”). Under the lease, Family Fare is responsible for 78.71 pe rcent of the shopping center’s taxes.

In 2010, Spartan filed a petition with the tribunal per MCL 205.735a to challenge Grand Rapids’ tax assessment of the property which Fam ily Fare leased. Grand Rapids responded with a motion for summary disposition under MCR 2.116(C )(4), and argued that the tribunal lacked jurisdiction because Spartan was not a “person in interest” under MCL 205.735a(6). Family Fare then filed a motion for inclusion in the suit as an additional party, because as the entity responsible for the property taxes at i ssue, it was a “party in interest.”

At first, the tribunal permitted Family Fare’s inclusion in the suit, reasoning that it was a “party in interest” because it “lease[d] the subj ect property and is responsible for payment of property taxes for said property.” But the tr ibunal reversed itself a nd granted respondent’s motion for summary disposition, because petitioner s supposedly failed to demonstrate that they were a “party in interest” under MCL 205.735a(6). Petitioners now appeal to our Court, and argue that the tribunal erred when it granted respondent’s summary disposition under MCR 2.116(C)(4) because they are a “party in interest” per MCL 205.735a(6).

III. STANDARD OF REVIEW

Where fraud is not claimed, we review the Tax Tribunal’s “decision for misapplication of the law or adoption of a wrong principle.” Wexford Medical Group v City of Cadillac , 474 Mich 192, 201; 713 NW2d 734 (2006). The tribunal’s findi ngs of fact are conc lusive “if they are supported by competent, material, and subs tantial evidence on th e whole record.” Id . (internal citations omitted). Though we “defer to the tribunal ’s interpretation of a statute that it is charged with administering and enforcing,” 2 when statutory interpretation is involved, we review “the tribunal’s decision de novo.” Id . at 202. The tribunal’ s grant or denial of a motion for summary

1 Actually, Family Fare is a wholly owned subsid iary of Seaway Food Towns, Inc., which is in turn a wholly owned subsidiary of Spartan Stores.

2 Inter Co-op Council v Dep’t of Treasury , 257 Mich App 219, 222; 668 NW2d 181 (2003).-3- disposition is also reviewed de novo. Briggs Tax Service, LLC v Detroit Public Schools , 485 Mich 69, 75; 780 NW2d 753 (2010).

The primary goal of statutory interpretation “is to discern and give effect to the intent of the Legislature.” Lafarge Midwest, Inc v Detroit , 290 Mich App 240, 249; 801 NW2d 629 (2010). “When ascertaining the Legislature’s inte nt, a reviewing court should focus first on the plain language of the st atute in question.” Fisher Sand and Gravel Co v Neal A Sweebe

, Inc , 494 Mich 543, 560; 837 NW2d 244 (2013) (footnotes om itted). The contested portions of a statute “must be read in relation to the statute as a whole and work in mutual agreement.” United States Fidelity Ins & Guarantee Co v Mi ch Catastrophic Claims Ass’n , 484 Mich 1, 13; 795 NW2d 101 (2009).

IV. ANALYSIS

A. LEGISLATIVE BACKGR OUND: THE GPTA AND TTA

The statute at issue, MCL 205.735a, is part of a set of laws that govern the appeal of property-tax assessments in Michigan. To corr ectly interpret MCL 205.735a, it must be placed in context with the two separate statutory fram eworks with which it inte racts: (1) the General Property Tax Act (GPTA), MCL 211.1 et seq .; and (2) the Tax Tribunal Act (TTA), MCL 205.701, et seq

. Among other things, the GPTA specifies a me thod by which “person[s] whose property is assessed on the assessment roll or [their] . . . agent[s]” may “protest” the assessment on their property before the board of review. MCL 211. 30(4); 2 Cameron, Michigan Real Property Law (3rd ed), § 28.19, p 1611. The boards of review are local-level bodies that are permitted to “correct the assessed value or tentative taxable va lue” of properties “in a manner that will make the valuation of the property relatively just and proper.” Id . Again, in general, the only parties who may bring a protest before th e board of review are “person[s] whose property is assessed on the assessment roll or [their] . . . agent[ s]”—i.e., property owners or their agents. 3 Id

. 4 Persons or entities who are not the property owner or his agent—for example, a commercial leaseholder who lacks the authorization of the property owne r—may not protest tax a ssessments at the board of review. Walgreen Co v Macomb Twp , 280 Mich App 58, 64–65; 760 NW2d 594 (2008).

However, the board of revi ew’s decision on a pr operty-tax assessment is not necessarily the final one. If the property owner or his ag ent so chooses, they may appeal the board’s

3 There are exceptions to this general rule, such as a tenant under a long-term lease that exceeds thirty-five years. MCL 211.27a(6)(g). See Walgreen Co v Macomb Twp , 280 Mich App 58, 66; 760 NW2d 594 (2008).

4 See also Walgreen Co , 280 Mich App at 63 (“when read as a whole, MCL 211.30 affords ‘taxpayers’ the opportunity to be heard on tax protests, but only ‘a person whose property is assessed on the assessment roll or his or her agent’ may actually make such a property tax protest before the board of review”) (emphasis in original).-4- decision to the Tax Tribunal, an admi nistrative body created by the TTA, MCL 205.701, et seq

. The TTA is separate and dis tinct from the GPTA, and the Tax Tribunal’s mandates and procedures are different than thos e of the board of review. See Walgreen Co , 280 Mich App at 65.

MCL 205.721 creates the Tax Tribunal, and specifi es that it is a “ quasi-judicial agency” which functions as an appellate forum for property-tax-assessment disputes. MCL 205.731(a) grants the Tax Tribunal “exclusive and original jurisdiction” over the following: “[a] proceeding for direct review of a final de cision, finding, ruling, determination, or order of an agency relating to assessment, valuation, rates, special asse ssments, allocation, or equalization, under the property tax laws of this state.”

The tribunal’s jurisdiction is strictly limited by MCL 205.735(3). First, the tribunal is only permitted to hear actions that have already been “protested before the board of review.” Covert Twp v Consumers Power Co , 217 Mich App 352, 355; 551 NW2d 464 (1996). Second, petitioners before the tribunal must be a “party in interest”—namel y, a “person[] with an interest in the property being assessed.” Jefferson Sch v Detroit Edison Co , 154 Mich App 390, 397; 397 NW2d 320 (1986). 5 Because of the interplay between th e GPTA (which specifies that only property owners or their agents may bring prot ests before the board of review) and the TTA (which only allowed parties that had appeared before the board of review to appear before the Tax Tribunal), historically it was unnecessary for courts to define MCL 205.735(3)’s use of “party in interest” with any more specificity, as the term necessarily encompassed only those parties that had protested before the board of review—i.e., the property owner or his agent. MCL 211.30(4). In other words, the board of revi ew’s strict limit on whic h parties could contest property-tax assessments served as a screen on wh ich parties could appeal those assessments to the Tax Tribunal, and necessarily limited the sc ope of MCL 205.735(3)’s “party in interest” to property owners or their agents.

B. MCL 205.735A

The Legislature upended this arrang ement in 2006, when it enacted MCL 205.735a, which allows specified parties to bypass the board of review and appeal property-tax assessments directly to the Tax Tribunal. The legislation ha d its origins in complaints from business owners, who disliked the fact that protest of a tax asse ssment began at a local board of review. Their concerns were threefold. First, property-ta x assessments of business property—which range from department stores to massive manufactur ing plants—are “quite complex,” and business owners believed that “many local boards of revi ew [did] not have the expertise to properly review business property tax disputes.” Hous e Legislative Analysis , HB 5854, August 23, 2006. Second, the GPTA’s byzantine procedural requireme nts resulted in a “multitude of filings,” which took a “great deal of tim e and resources to prepare.” Id . And third, because business owners often disagreed w ith the conclusions of the board of review, appearance before the board had “become a formality, in order to preserve . . . appeal rights to the tax tribunal.” Id

.

5 The term “party in interest ” as used in MCL 205.735(3) bear s no relation to the standingrelated term “real party in in terest” used in MCR 2.201(B). Walgreen Co , 280 Mich App at 65.-5- MCL 205.735a(4) addresses these concerns by mandating that:

(a) For an assessment dispute as to th e valuation or exemption of property classified under section 34c of the ge neral property tax ac t . . . MCL 211.34c, as commercial real property

, industrial real property , or developmental real property , the assessment may be protested before the board of review or appealed directly to the tribunal without protest before the board of review as provided in subsection (6).

(b) For an assessment dispute as to th e valuation or exemption of property classified under section 34c of the ge neral property tax ac t . . . MCL 211.34c, as commercial personal property, industrial personal property, or utility personal property, the assessment may be protested be fore the board of review or appealed directly to the tribunal wit hout protest before the board of review as provided in subsection (6), if a statement of assessa ble property is filed under section 19 of the general property tax act . . . MCL 211.19, prior to the commencement of the board of review for the tax year invo lved. [MCL 205.735a(4) (emphasis added).]

In turn, MCL 205.735a(6) specifies that if the property assessed is of the type mentioned above—and only if the property assessed is of the type mentioned above—“a party in interest,” may bypass the board of review and file a petition direc tly with the Tax Tri bunal “on or before May 31 of the tax year involved.” Accordingly, the tribunal has originaljurisdiction over taxassessment petitions that: (1) i nvolve “property classified un der MCL 211.34c” as commercial, industrial, or developmental real property, or commercial, industrial, or utility personal property; and (2) are brought by a “p arty in interest.” Id

. 6

1. “PROPERTY CLASSI FIED UNDER MCL 211.34C”

MCL 211.34c(2)(b) states that “commercia l real property includes the following”: “[p]latted or unplatted parcels used for commer cial purposes, whether wholesale, retail, or service, with or without buildings.”

Here, it is undisputed that the property in question, the shopping center owned by Breton Meadows from which Family Fare leases space, is a “parcel used for commercial purposes.” Accordingly, a “party in interest” to the asse ssment of the property may appeal the assessment “directly to the tribunal without protest befo re the board of revi ew.” MCL 205.735a(4)(a).

2. “PARTY IN INTEREST”

6 Stated another way, an individu al or entity that is not a “party in interest” under MCL 205.735a(6) does not have standing to invoke the Tax Tribunal’s jurisdiction. Because this case involves a statutory cause of ac tion—in other words, a cause of action provided at law by the Legislature in MCL 205.735a(4)—it is inappropriate for us to a pply the common-law doctrine of standing. See Lansing Schools Ed Ass’n v Lansing Bd of Ed , 487 Mich 349, 372; 792 NW2d 686 (2010).-6- To repeat, neither MCL 205.735a, nor the TTA , of which MCL 205.735a is a part, define the phrase “party in interest.” Our Court has de fined the term—“a party that has an interest in the property being assessed” 7 —but it did so before passage of MCL 205.735a and in a way that offers little clarity. 8

If a term used in a statute is undefined, a c ourt may look to a dictionary for interpretative assistance. Klooster v City of Charlevoix , 488 Mich 289, 304; 795 NW2d 578 (2011). Because the terms at issue have a “unique legal meaning” and are located in a complicated statute on taxappeal procedure, we use a legal dictiona ry as opposed to a lay dictionary. See People v Thompson , 447 Mich 146, 151–152; 730 NW2d 708 (2007). “Party” is defined as “one who takes part in a transaction.” Black’s Law Dictionary (10th ed). “In” is a preposition meaning “under or based on the law of.” Id . In the context of a property dispute, “interest” means “a legal share in something; all or part of a legal or e quitable claim to or right in property.” Id

. Michigan courts have long held that leaseholds manifestly are “interests,” in that they are “part of a legal . . . claim to or right in property.” See Adams Outdoor Advertising v City of East Lansing , 463 Mich 17, 33; 614 NW2d 634 (2000) (K ELLY , J., concurring) (“leases are interests in real property”); In re Park Site on Private Claim 16, Detroit , 247 Mich 1, 4; 225 NW 498 (holding the Belle Isle Coliseum Company’s “lease hold interest” in land condemned by the City of Detroit to be a taking); and Lookholder v State Hwy Comm’r , 354 Mich 28, 35; 91 NW2d 834 (1958) (“the settled rule in Michigan [is] that a lease hold, and the rights derived from a leasehold, constitute ‘property’ for the taking of which just compensation must be made or secured”). Most importantly, for the purposes of our case, “the word ‘interest’ as applied to land embraces and includes leasehold intere sts and rights derived therefrom.” Lookholder , 354 Mich at 36.

Therefore, as used in MCL 205.735a(6), “party in interest” refers to a person or entity with a property interest 9 in the property being asse ssed. As “parties in in terest” under the statute, persons or entities with a property interest in th e property being assessed may directly appeal the assessment to the Tax Tribunal. MCL 205.735a(4).

7 Jefferson Sch , 154 Mich App at 397.

8 We also believe Walgreen Co ’s holding that the term “party in interest” as used in MCL 205.735(3) has no relation to the st anding-related term “real part y in interest” used in MCR 2.201(B) should be applied to the use of “party in interest” in MCL 205.735a(6). Walgreen Co

, 280 Mich App at 65. The Legislature chose to place MCL 205.753a in the same statutory framework as MCL 205.735(3), which i ndicates that they intended “par ty in interest” to have the same definition in each subsect ion of the statute. See Manuel v Gill , 481 Mich 637, 650; 753 NW2d 48 (2008) (holding that a court interprets a statute’s “words in their context and with a view to their place in the overall st atutory scheme”) (citations omitted).

9 Again, “property interest” is defi ned as: “a legal share in something; all or part of a legal or equitable claim to or right in property.” Black’s Law Dictionary (10th ed).-7- Grand Rapids makes two well-taken argumen ts against this interpretation of MCL 205.735a(6), but both must nonetheless be rejecte d. The city points to the GPTA’s strict requirements on which parties may appear before the board of review, and suggests that a similarly limited approach—i.e., one where a “party in interest” must be a property owner or his agent—is a proper reading of this new section of the TTA. But this interpretation ignores MCL 205.735a’s legislative background, which stated an intent to remove procedural and formalistic obstacles from appeals on tax-assessment of co mmercial property. Barring a large leaseholder tenant—which, ultimately, is the actual entity that bears the financial burden of the tax—from contesting the assessment does not effectuate these aims. And, in any event, had the Legislature wanted to use the more stringent jurisdictional limitation language from the GPTA, it was free to do so. The fact that it did not militates against a statutory interpretation that imports the GPTA’s definitions to the TTA. 10

We are also unconvinced that interpreting MCL 205.735a to allow commercial leaseholders to contest assessments before the tribunal will open the floodgates to meritless actions. Business tenants are adept at negotiating with their landlord and co-t enants—and would do so over which party was best si tuated to contest the assessmen t. Furthermore, the tribunal may consolidate cases if multiple leaseholders challenge an assessment. In other words, ruling that a commercial leaseholder is a “party in in terest,” and thus is allowed to contest an assessment before the Tax Tribunal, does not “invi te all kinds of appeals by political activist groups, by numerous tax-levying units of lo cal government, and perhaps by disgruntled neighbors.” Jefferson Sch , 154 Mich App at 397. Instead, it gives business entities the streamlined method to protest a property-tax assessment e nvisioned by the Legislature’s enactment of MCL 205.735a.

3. APPLICATION

Here, Family Fare is a “party in intere st” per MCL 205.735a(6). It has a leasehold—a property interest, i.e., “a legal share in something; all or part of a legal or equitable claim to or right in property” 11 —in the shopping center, which was assessed by Grand Rapids and is the subject of this dispute. Accordingly, it is a “party in interest” unde r MCL 205.735a(6), and it may invoke the Tax Tribunal’s jurisdiction unde r MCL 205.731(a) to disput e Grand Rapids’ tax assessment of the shopping center.

The same cannot be said of Spartan, Family Fare’s ultimate owner. 12 While Spartan, as Family Fare’s corporate parent, certainly has a financial interest in the tax assessment of the shopping center, it does not have a property interest in the assessment of the shopping center. It

10 See Mich Ed Ass’n v Secretar y of State (On Rehearing) , 489 Mich 194, 217–219; 801 NW2d 35 (2011) (noting the absence of a specific remedy fr om statute indicated that Legislature did not intend for that remedy to be provided).

11 Black’s Law Dictionary (10th ed).

12 As noted, Family Fare is a wholly owned subsid iary of Seaway Food Towns, Inc., which is in turn a wholly owned subsidiary of Spartan Stores.-8- does not own the property—Breton Meadows does. And it did not sign the lease—Family Fare did. 13 Because Spartan lacks a property interest in the shopping center, it is not a “party in interest” under MCL 205.735a (6), and it cannot protest the assessment of the shopping center directly before the Tax Tribunal.

V. CONCLUSION

Accordingly, we hold that Fam ily Fare, as a party with a property interest in the property being assessed, is a “party in interest” under MCL 205.735a(6), and that the Tax Tribunal has jurisdiction over its app eal. The tribunal’s grant of summa ry disposition to respondent under MCR 3.116(C)(4) is therefore reversed, and we re mand for proceedings consistent with this opinion. We do not retain jurisdiction.

Reversed and remanded.

/s/ Henry William Saad /s/ Donald S. Owens /s/ Kirsten Frank Kelly

13 Again, Family Fare and Spartan are separate corporate entities. Spartan unconvincingly argues that we should disregard this formal separation because: (1) the businesses share a headquarters address and high-level management st aff; and (2) Family Fare is “simply another brand, a ‘retail banner’” of Spartan. In other words, Spartan asks us to ignore the corporate form because it is inconvenient for Spartan’s current interests to acknowledge that the two businesses are distinct entities. This approach co ntravenes Michigan law, which states: [i]t is a well-recognized principle that separate corporate entities will be respected. Michigan law presumes that, absent some abuse of corporate form, parent and subsidiary corporations are separate and distinct entities. This presumption, often referred to as a ‘cor porate veil,’ may be pierced only where an otherwise separate corporate existence has been used to ‘subvert justice or cause a result that is contrary to some other clearly overriding public policy. [ Seasword v Hilti , Inc, 449 Mich 542, 547–548; 537 NW2d 221 (1995) (internal citations omitted).]

Consistent with Michigan law, th e separate corporate forms of Sp artan and Family Fare must be respected.