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### STATE OF MICHIGAN

COURT OF APPEALS

CAMBRIDGE DEVELOPMENT GROUP,

Petitioner-Appellee, UNPUBLISHED August 13, 2015

v No. 321897
Tax Tribunal CITY OF ANN ARBOR, LC No. 00-460345

Respondent-Appellant.

Before: S AWYER , P.J., and M. J. K ELLY and S HAPIRO , JJ.

P ER C URIAM

.

In this dispute over the proper valuation of real property, re spondent, City of Ann Arbor, appeals by right the Tax Tribunal’ s final opinion and judgment. On appeal, the City argues that
the Tax Tribunal erred in several respects when it corrected th e valuation of four properties on grounds not raised by petitioner, Cambridge Development Group. We conclude that the Tax
Tribunal erred when it concluded that it had jurisdiction to co nsider the petition for tax years prior to 2013, erred wh en it concluded that it had jurisdictionto consider the petition as it applied to a parcel that Cambridge Development did not own at any point in the 2013 tax year, and erred
when it raised an issue on its o wn initiative without giving th e City an adequate opportunity to argue and present evidence on the issue. Accordingly, we vacat e the Tax Tribunal’s opinion and judgment as to four properties and remand for further proceedin gs consistent with this opinion.

I. BASIC FACTS

Cambridge Development owned three contiguous lots in Ann Arbor , Michigan, and constructed duplexes on each lot, which it split into two-unit condominiums on each lot; it built
the “Baldwin House” condominium s in 2007, the “Michigan House” condominiums in 2008, and
the “Maize and Blue House” condo miniums in 2009. The City assi gned new parcel numbers to the condominiums and taxed them as individual properties. The City assigned parcel numbers
09-09-33-104-040 and 09-09-33-104-041 to the Baldwin House cond ominiums, parcel numbers
09-09-33-104-042 and 09-09-33-104-043 to the Michigan House con dominiums, and parcel-2- numbers 09-09-33-104-0 44 and 09-09-33-104-04 5 to the Maize and Blue House condominiums. 1 Cambridge Development protested the assessor’s valuation of eac h condominium and the valuation of a vacant lot (parcel 09-09-33-104-035), which it a lso owned, to the board of review
in March 2013.

After it was unable to obtain the relief it requested, Cambrid ge Development petitioned the Tax Tribunal in July 2013. It argued that the assessor err ed when it assessed the condominiums by assigning each a percentage of the original lotsize that was greater than 50 percent. It maintained that the errors resulted in an incorrec t valuation for the lots from the date that the condominiums were assig ned tax identification numbers. It asked the Tax Tribunal to correct the lot sizes and the corresponding valuations for the condominiums from the date of the first erroneous assessment, which for some parcels would be as far back as 2008. Cambridge Development also argued that the assessor over-valued the condo miniums and vacant lot when compared to the values for sim ilar properties in the area.

In response to Cambridge Development’s petition, the City expl ained that it did not assign more than 50% of the lot to each condominium: “As a resu lt of not having exact dimensions for each unit, the assessor valued the lot as a whol e, and discounted the value by 50% . . . .” Because the lots were zoned R2A, which is for mul tifamily lots, the City applied a multiplier of 1.5 (150%) to the lots’ values to reflect the “po tential of higher density, or the highest and best use.” When the multiplier is halved, the adju stment factor for each parcel amounts to 75% of the lot’s base value. The City noted that th e 75% adjustment “appears on all
the land valuations” for the condominiums at issue.

In September 2013, the Tax Tribunal entered an order dismissin g Cambridge Development’s petition to the extent that it involved a request to correct the values for prior tax years. The Tax Tribunal stated that it did not have jurisdicti on to correct those assessments
under MCL 205.735a.

The Tax Tribunal held an evidentiary hearing in December 2013, and the referee issued his proposed opinion and judgmen t in January 2014. The referee determined that the petition should be dismissed as to parcels 43 and 44 because Cambridge D evelopment sold those properties prior to the tax year at issue. The referee determi ned that the City’s “cost approach” and evidence was “reliable and supports the true cash value” fo r the properties. The referee also determined that Cambridge Development failed to establish that the City’s assessor intentionally erred when it determined the appl icable lot size or that the Ci ty’s assessments were fraudulent.

After the Tax Tribunal requested more information, the City su bmitted the requested information and again explained that it did not double tax the condominiums:

The City assesses R2A properties at a 1.50 multiplier because o f the potential of higher density buildings. . . . T he land is assessed as one wh ole lot then separated

1 For ease of reference, we shall refer to the properties by the last two digits of their parcel number. Thus, we shall refer to parcel number 09-09-33-104-041 as parcel 41.-3- per the master deed ownership percentage between the Condominiu m units, in
this case 50% of the lot value. Each unit shows a percentage A dj of 75% or 1.50 x .50% [sic] in the land calculations. The units are not being assessed for all of the land value, or assessed twi ce as the petitioner claims. . . . The land is assessed similar to all condominiums in the City.

In May 2014, the Tax Tribunal issued its final opinion and jud gment. It found that, although there was sufficient information to determine the dime nsions of each condominium, “the land was split fairly equally between the two parcels foll owing each of the splits.” For that reason, the City’s “50 percent reduction in the adjustment fact or would appropria tely reduce the land value to reflect the lot even though the frontage and/or d epth listed on the property record card was not reduced to reflect the actual dimensions of each p arcel.” The Tax Tribunal, nevertheless, found that the assessor erred when applying the 5 0 percent reduction. It explained
that the evidence showed that the assessor halved the 1.5 multi plier to reach the 75% adjustment even though the “record cards” fo r the properties showed that t hey had previously been assessed using a different base multiplier. Specifically, the Tax Tribu nal noted, the parent parcel for parcels 40 and 41 had previously been assessed using a 1.0 mult iplier and the parent parcel for parcels 42 and 43 and been assessed using a 1.3 multiplier. Th e Tax Tribunal found that the assessor had intended to halve the 1.0 and 1.3 multipliers resp ectively, rather than halve a 1.5 multiplier. The Tax Tribunal determined that these errors were “mathematical computational errors which qualify as clerical errors under MCL 211.53a” and that under that statute it had the authority to correct them for the previous three tax years. It also determined that the assessor properly halved the 1.3 multiplier for parcels 44 and 45.

The Tax Tribunal for the most part accepted the City’s evidenc e concerning the value of the lots at issue, but modified those values using the correcte d adjustment modifier. It also made some minor adjustments to the va lues for the pro perties not sub ject to the clerical errors. Finally, the Tax Tribunal adopted the ear lier proposed opinion and judgm ent to the extent that it did not conflict with the final opinion and judgment and it vacated the earlier order of pa rtial dismissal.

The City now appeal s in this Court.

II. JURISDICTION, DUE PRO CESS, AND CLERICAL ERRORS

A. STANDARDS OF REVIEW

On appeal, the City argues that the Tax Tribunal erred when it elected to correct the adjustment factor applied to parcels 40, 41, 42, and 43, for pr evious years. It maintains that the Tax Tribunal only had jurisdiction to consider whether those fo ur parcels were properly assessed for the previous tax year. It similarly contends that the Tax Tribunal deprived it of due process
when it elected to correct what it characterized as clerical er rors under MCL 211.53a without giving it notice and an opportunity to be heard on that issue. Finally, it maintains that there was no record evidence to support th e Tax Tribunal’ s finding that t he assessor intended to halve some multiplier other than 1.5 for the properties at issue.-4- Absent fraud, this Court’s review is limited to determining wh ether the Tax Tribunal erred in applying the law or adopted a wrong legal principle. Ford Motor Co v Woodhaven , 475 Mich 425, 438; 716 NW2d 247 (2006). The Tax Tribunal’s factual findings are final if supported by competent, material, and substantial evidence on t he whole record. Michigan Properties, LLC v Meridian Twp , 491 Mich 518, 527; 817 NW2d 548 (2012). This Court
reviews de novo whether the Tax Tribunal properly interpreted a nd applied the law to the facts. Huntington Nat’l Bank v Dani el J Aronoff Living Trust , 305 Mich App 496, 507; 853 NW2d 481 (2014). Finally, this Court reviews de novo whether the Tax Tr ibunal’s procedures sufficiently protected the City’s r ight to due process. Elba Twp v Gratiot County Drain Comm’r , 493 Mich 265, 277; 831 NW2d 204 (2013).

B. ANALYSIS

The City maintains that the Tax Tribunal lacked jurisdiction t o consider Cambridge Development’s petition as to parcels 40, 41, 42, and 43, becaus e Cambridge Development did not own the properties by the time it filed its petition and di d not have standing to petition the
Tax Tribunal for relief. The Tax Tribunal has exclusive and or iginal jurisdiction over a “proceeding for direct review of a final decision, finding, rul ing, determination, or order of an agency relating to assessment, valuation, rates, special assess ments, allocation, or equalization, under the property tax laws of this state.” MCL 205.731(a).

Cambridge Development petitioned the Tax Tribunal to review th e City’s final decision concerning several properties. It alleged that it developed th e properties and that the appeal was
“for correction of the lot size from the date of tax ID assignm ent on each property and a correction for the tax assessment for subsequent years to Cambr idge Development Group and its principles . . . in whose individual names the titles to severa l of the properties were quitclaimed . . . .” It petitioned on its own behalf and on behalf of its principles and it requested relief for years that it or its principles were par ties in interest and pa id taxes.

It is evident from Cambridge Development’s petition that it wa s contesting the City’s assessment of the properties at issue for the 2013 tax year in addition to earlier tax years. In order to properly invoke the Ta x Tribunal’s jurisdiction in an assessment dispute, Cambridge Development had to be a party in interest and file its petition on or before July 31 of the tax year involved. MCL 205.735a(6). The failure to properly invoke the Tax Tribunal’s jurisdiction in an assessment dispute precludes the Tax Tribunal from asserting its jurisdiction to hear the petition other than to dismiss it. See Leahy v Orion Twp , 269 Mich App 527, 532; 711 NW2d 438 (2006).

There is record evidence that Cambridge Development or one of its principles had an interest in parcels 40, 41, and 42 during the 2013 tax year. A s such, Cambridge Development properly invoked the Tax Tribuna l’s jurisdiction to consider th e assessment dispute for that tax year as to those properties. MCL 205.731(a); MCL 205.735a(6). Once the Tax Tribunal properly had jurisdiction to c onsider the petition, it also had the authority to grant other relief concerning the parcels at issue, w hich included the authority t o correct a clerical error and order the refund of excess taxes paid as a result under MCL 211.53a. See MCL 205.732(c) (authorizing the Tax Tribunal to grant “other relief . . . it d eems necessary or appropriate in the disposition of a matter over which it may acquire jurisdiction” ); Mich Properties , 491 Mich at-5- 543-545 (holding that the Tax Tribunal has the authority to cor rect a previous erroneous taxable value in order to bring the taxable value back into compliance with the law). However, the Tax Tribunal only had jurisdiction to consider clerical errors affe cting the tax for the 2013 tax year.

See Leahy , 269 Mich App at 532 (rejecting the contention that MCL 211.53 a allowed the petitioner to circumvent the jurisdictional limitations provide d under MCL 205.735 for disputes concerning assessments); see also Mich Properties , 491 Mich at 544 n 49 (agreeing that the taxpayer did not timely appeal the previous tax year, but expla ining that the taxpayer was not seeking a refund or reduction in taxes for the prior year; the taxpayer was merely asking the Tax Tribunal to consider the data from the prior years in determini ng whether the assessment was proper for the current year). As for parcel 43, the record sho ws that neither Cambridge Development nor any of its princip les held an ownership interes t in the 2013 tax year. Cambridge Development, therefore, did not properly invoke the T ax Tribunal’s jurisdiction to consider the assessment dispute wi th regard to that parcel, MCL 205.735a(6), and the Tax Tribunal lacked jurisdiction to provide any relief concerning t he assessment, Leahy , 269 Mich App 532. Consequently, the Tax Tribunal erred when it determin ed that it had jurisdiction to consider whether Cambridge Development was entitled to relief u nder MCL 211.53a for any year prior to the 2013 tax year and erred when it asserted juri sdiction to consider Cambridge Development’s peti tion as to parcel 43.

The City also argues that the Tax Tribunal erred when it found that the City’s assessor intended to halve the adjustment factor shown on the property c ards for the parent parcels rather than the 150% modifier the assessor actually applied. This Cou rt has held that a clerical error under the analogous provision in MCL 211.53b refers to “errors of a typographical, transpositional, or mathematical nature”—that is, “recording a number incorrectly on the assessment rolls or performing a mathematical error in arriving at the final assessment figure.” Int’l Place Apartments-IV v Ypsilanti Twp , 216 Mich App 104, 109; 548 NW2d 668 (1996). The fact that an assessor erred in determining what number to use d oes not establish that the assessor made a clerical error: “[T]he figure recorded on the assessment rolls was accurate in the sense that it was the number intended by the assessor, albeit that th e assessor may well have erred in the determination of what that number should be by failing to c onsider all relevant facts.” Id.

In this case, the City twice informed the Tax Tribunal that it adjusts the value of property
zoned R2A at 150% of its value t o reflect the potential for hig her density housing and that it halved that factor when applied to the condominiums at issue to reflect the fact that each lot had two condominiums. The Tax Tribunal accepted that this was a fa ir way to individually assess the parcels, but found that the assessor halved the wrong adjus tment factor. It reached that conclusion from the evidence that the record cards for the pare nt parcels reflected that the City used a different adjustment factor in the past. The record car ds also show that the City did use the original adjustment factor from the parent parcel when asse ssing parcels 44 and 45; and it did so despite its representation that it uses a 1.5 adjustment fac tor for properties zoned R2A. The fact that the City used a different adjustment factor in the pa st does not by itself support an inference that the assessor intended to use that factor, but wh en considered in light of the evidence that the City used the original factor for parcels 44 and 45, the totality of the evidence supports an inference that the City’s assessor might have inten ded to use the adjustment factor from the parent parcels, but mistakenly inserted the 1.5 factor into the calculation. Nevertheless, although there was some support for the Tax Tribunal’s finding, on this record we decline to-6- consider whether the evidence am ounted to competent, material, and substantial evidence on the
whole record. Michigan Properties, LLC , 491 Mich at 527.

Cambridge Development challenge d whether the City could proper ly use an adjustment factor greater than 50% for the p arcels, but did not allege or argue that the City’s use of a 75% adjustment factor was the result of a clerical error. It also did not check the box on its petition indicating that it was “Appeali ng a purported Clerical Error or Mutual Mistake of Fact.” The first mention of a possible clerical error was in the Tax Tribunal’s final opinion and judgment. By raising this issue on its own initiative and without notice to the parties, the Tax Tribunal deprived the City of the opportuni ty to explain why it did not halve the original adjustment factor when it determined the appropriate factor for parcels 40, 41, a nd 42. We agree with the City’s contention that the better practice would have been for the Tax Tribunal to advise the parties of the potential issue and give the m an opportunity to present evi dence and arguments before rendering its decision. See Bonner v Brighton , 495 Mich 209, 235; 848 NW2d 380 (2014) (stating that, at a minimum, due process requires that the part ies be given notice and a meaningful opportunity to be heard). Had the Tax Tribunal give n the City the opportunity to fully address this issue, the City might have been able to demo nstrate that the adjustment factor actually used was the correct factor. For this reason, we conc lude that this matter should be
remanded to the Tax Tribunal for reconsideration of the petitio n as it applies to parcels 40, 41,
and 42.

III. CONCLUSION AND RELIEF

The Tax Tribunal erred when it asserted jurisdi ction to consid er Cambridge Development’s petition as to parcel 43. Because Cambridge Deve lopment did not properly invoke the Tax Tribunal’s jurisdi ction to consider the assessme nt dispute with regard to that parcel, the Tax Tribunal should have dismissed the petition as to it. See MCL 205.735a(6). Similarly, the Tax Tribunal lack ed jurisdiction to consider whe ther Cambridge Development was entitled to relief under MCL 211.53a for any year prior to the 2013 tax year because Cambridge Development did not timely cha llenge the previous assessments. Id. Finally, although there was evidence that might support an inference that the City’s assess or used the wrong base adjustment factor when calculating the adjustment factor applicable to par cels 40, 41, and 42, and that the use was inadvertent, because the Tax Tribunal did not give the City an adequate opportunity to argue and present evidence on this issue, we decline to affirm on this record.

Accordingly, we vacate the Tax Tribunal’s final opinion and ju dgment with regard to parcels 40, 41, 42, and 43, and remand this matter to the Tax T ribunal for further proceedings. On remand, the Tax Tribunal shall amend its final opinion and j udgment to dismiss for lack of jurisdiction Cambridge Developmen t’s petition as to parcel 43, and as to parcels 40, 41, and 42 for all tax years prior to the 2013 tax year. The Tax Tribunal shall also give the parties an opportunity to argue and present additional evidence concerning whether the City’s use of a base 150% adjustment factor for parcels 40, 41, and 42, was accurate or the result of a clerical error. The Tax Tribunal may hold an additional evidentiary hearing on the issue if it so chooses. After giving the parties the opportuni ty to be heard on this issue, t he Tax Tribunal shall reconsider Cambridge Development’s petition as to parcels 40, 41, and 42 f or the 2013 tax year in full and shall amend its final judgment and opinion to include its new f indings and conclusions of law.-7- Because we are remanding this case to the Tax Tribunal, we dec line to consider the City’s claim that the Tax Tri bunal erred by failing to recogniz e that parcels 41 and 42 were uncapped as a result of transfers in ownership. On remand, the Tax Tribunal shall consider this issue and amend its opinion and judgment accordingly. In all o ther respects, we affirm the Tax Tribunal’s final opinion and judgment.

Affirmed in part, vacated in par t, and remanded for further pr oceedings consistent with this opinion. We do not ret ain jurisdiction.

/s/ David H. Sawyer /s/ Michael J. Kelly /s/ Douglas B. Shapiro