Opinion ID: 845821
Heading Depth: 2
Heading Rank: 1

Heading: Bruce Township

Text: After learning that it double reported certain assets, Ford filed a petition with the MTT against the city of Romeo. [1] Specifically, Ford claimed in this petition that it was entitled to a refund from Romeo under MCL 211.53a because a mutual mistake of fact occurred regarding the taxability of Ford's personal property. After considering the matter, the MTT sua sponte issued an order dismissing Ford's petition. The MTT concluded that it lacked subject-matter jurisdiction under MCL 205.735 because Ford did not protest the assessments to the Romeo Board of Review. [2] Further, the MTT held that the assessments at issue were not the result of a mutual mistake of fact because the assessments were solely the result of Ford's failure to prepare accurate statements. Accordingly, the MTT reasoned that it did not have subject-matter jurisdiction under MCL 211.53a because there was no mutuality of mistake. In support of this conclusion, the MTT relied on its opinion in Gen. Products Delaware Corp. v. Leoni Twp., 2001 WL 432245 (Docket No. 249550) (March 8, 2001), and on the Court of Appeals majority opinion in Wolverine Steel Co. v. Detroit, 45 Mich.App. 671, 207 N.W.2d 194 (1973). Finally, the MTT opined that Ford should have sought relief from the Michigan State Tax Commission under MCL 211.154. Ford appealed to the Court of Appeals, but Romeo moved to dismiss the appeal because it was not the taxing jurisdiction that assessed Ford's personal property. While not addressing the merits of the petition, the Court of Appeals denied Romeo's motion, reversed the MTT order, and remanded the matter to the MTT to address the issue of the necessary joinder or substitution of the parties. Ford Motor Co. v. Romeo, unpublished order of the Court of Appeals, entered September 13, 2002 (Docket No. 240649). Ford then filed a motion with the MTT to amend its petition to substitute Bruce Township for Romeo, as well as to make minor corrections. Ford's proposed amended petition again maintained that under MCL 211.53a, it was entitled to a refund because its personal property was reported and assessed twice, which Ford claimed was a mutual mistake of fact. Further, Ford argued that the MTT had jurisdiction to hear the case under MCL 205.731(b). [3] The MTT granted Ford's motion to substitute Bruce Township for Romeo. But the MTT denied Ford's motion for leave to file an amended petition and dismissed the petition on the ground that Ford had still failed to invoke the MTT's subject-matter jurisdiction. Once again, the MTT held that because there was not a mutual mistake of fact, it lacked jurisdiction under MCL 211.53a. Further, the MTT concluded that it lacked subject-matter jurisdiction because the proposed amended petition covered two parcels of property; therefore, the proposed petition violated the MTT's rule of procedure, 1999 A.C., R. 205.1240, which prohibits a petition from covering more than one parcel. [4] Ford appealed to the Court of Appeals. In a split, published decision, the Court of Appeals affirmed the MTT's order. 264 Mich.App. 1, 689 N.W.2d 764 (2004). First, the Court of Appeals majority opined that the MTT had subject-matter jurisdiction over Ford's petition because the MTT is vested with the power and authority to adjudicate tax refund cases, citing In re AMB, 248 Mich.App. 144, 166-167, 640 N.W.2d 262 (2001). But the Court of Appeals majority agreed with the MTT that Ford was not entitled to relief under MCL 211.53a because there was not a mutual mistake of fact. In this regard, the Court of Appeals referenced the history surrounding MCL 211.53a, as well as Black's Law Dictionary (7th ed.), and opined that MCL 211.53a requires that both the assessing officer and the taxpayer have the same erroneous belief regarding the same material fact, which belief directly caused both the excess assessment and excess payment of taxes. Bruce Twp., supra at 9, 689 N.W.2d 764. Notably, the Court of Appeals majority preferred its definition of mutual mistake of fact to that articulated by the MTT in Gen. Products Delaware Corp., supra, because the majority believed that the MTT's characterization was more complicated than necessary. Id. at 11, 689 N.W.2d 764. [5] Proceeding under its own understanding of MCL 211.53a, the Court of Appeals majority then concluded that Bruce Township and Ford were not operating under the same mistake of fact. According to the majority, the mistake was not mutual because Ford's mistake concerned its erroneous belief that certain assets were taxable, whereas Bruce Township's erroneous belief was that Ford's personal property statement was accurate. Moreover, the Court of Appeals majority reasoned that there was no mutual mistake of fact giving rise to a remedy under MCL 211.53a because the excessive tax was a direct result of Ford's sole mistake. Additionally, the majority rejected the proposition that the treatment of the phrase mutual mistake in contract law cases was applicable to property tax cases. Therefore, the Court of Appeals majority held that the MTT properly concluded that Ford was not entitled to a refund under MCL 211.53a because there was no mutual mistake of fact. Moreover, the majority reasoned that the MTT properly denied Ford's motion to amend its petition because the amendment would have been futile in light of the MTT's conclusion that relief could not be granted under MCL 211.53a. Accordingly, the Court of Appeals majority held that the MTT had the right and duty to dismiss Ford's petition, and it affirmed the order of the MTT. The Court of Appeals dissent, however, would have reversed the order of the MTT. The Court of Appeals dissent agreed with the majority that the MTT had subject-matter jurisdiction to adjudicate Ford's claim, but for slightly different reasons. According to the dissent, the MTT confused the issue of subject-matter jurisdiction with whether Ford stated a claim under MCL 211.53a for which relief could be granted. Further, the dissent opined that the MTT had subject-matter jurisdiction under MCL 205.731(b). So when the MTT dismissed Ford's petition on the basis that it lacked subject-matter jurisdiction because Ford failed to state a claim under MCL 211.53a, the dissent would have held that the MTT erred as a matter of law. Unlike the majority, however, the dissent reasoned that the MTT also erred in determining that Ford failed to allege a mutual mistake of fact under MCL 211.53a. The dissent reasoned that the MTT's interpretation of a mutual mistake of fact was excessively narrow and would effectively eliminate personal property from the scope of MCL 211.53a. Relying in part on Carpenter v. Ann Arbor, 35 Mich. App. 608, 192 N.W.2d 523 (1971), the Court of Appeals dissent reasoned that both Ford and Bruce Township shared the same factual mistake, namely, that all the property listed in Ford's statement was taxable. Because both parties relied on this factual mistake, the dissent concluded, the parties operated under a mutual mistake of fact. Therefore, the Court of Appeals dissent would have reversed the order of the MTT on the basis that the MTT erred in applying the law and adopting an incorrect legal principle. Additionally, the Court of Appeals dissent opined that the MTT did not have the authority to dismiss sua sponte Ford's petition. Again, the dissent noted that the MTT had subject-matter jurisdiction and, therefore, it should not have dismissed the petition on this ground. Further, the dissent asserted that the MTT's other basis for dismissing the petition, failure to state a claim under MCL 211.53a, was akin to a ruling under MCR 2.116(C)(8). According to the dissent, this was effectively a grant of summary disposition erroneously issued without briefing. Finally, the Court of Appeals dissent observed that the MTT's refusal to allow Ford to amend its petition was an abuse of discretion requiring reversal, and that Ford should be allowed to split the petition into two petitions to comply with the MTT's rule of procedure.