Opinion ID: 845821
Heading Depth: 1
Heading Rank: 3

Heading: analysis

Text: These cases call on this Court to interpret MCL 211.53a. [6] Specifically, these cases require us to interpret the meaning and applicability of the phrase mutual mistake of fact as it is used in that statutory provision. As noted earlier in this opinion, MCL 211.53a provides: Any taxpayer who is assessed and pays taxes in excess of the correct and lawful amount due because of a clerical error or mutual mistake of fact made by the assessing officer and the taxpayer may recover the excess so paid, without interest, if suit is commenced within 3 years from the date of payment, notwithstanding that the payment was not made under protest. The primary goal of statutory interpretation is to give effect to the Legislature's intent. Title Office, supra at 519, 676 N.W.2d 207. The first step is to review the statute's language. Id. And if the statute is plain and unambiguous, then this Court will apply the statute as written. Id. Moreover, this Court is guided by MCL 8.3a, which provides: All words and phrases shall be construed and understood according to the common and approved usage of the language; but technical words and phrases, and such as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning. Here, we agree with the Court of Appeals majority and dissent that the term mutual mistake of fact is a technical term that has acquired a peculiar meaning under the law. Indeed, the term has a defined common-law meaning.
This Court follows the principle that when a statute dealing with the same subject uses a common-law term and there is no clear legislative intent to alter the common law, this Court will interpret the statute as having the same meaning as under the common law. Pulver v. Dundee Cement Co., 445 Mich. 68, 75, 515 N.W.2d 728 (1994). Moreover, common-law meanings are assumed to apply even in statutes dealing with new and different subject matter, to the extent that they appear fitting and in the absence of evidence to indicate contrary meaning. 2B Singer, Statutes and Statutory Construction (6th ed.), § 50:03, p. 152. Here, because there is nothing in MCL 211.53a or the General Property Tax Act (GPTA), MCL 211.1 et seq., that shows a legislative intent to alter the meaning the term mutual mistake of fact has acquired in our law, we will examine how Michigan's common law uses the term mutual mistake of fact. Additionally, we are also cognizant that it is a well-established rule of statutory construction that the Legislature is presumed to be aware of judicial interpretations of existing law when passing legislation. Pulver, supra at 75, 515 N.W.2d 728. Moreover, because mutual mistake of fact is a legal term, resort to a legal dictionary to determine its meaning may also be helpful. People v. Jones, 467 Mich. 301, 304-305, 651 N.W.2d 906 (2002). Mistake is defined as 1. An error, misconception, or misunderstanding; an erroneous belief. 2. Contracts. The situation in which the parties to a contract did not mean the same thingor when one or both, while meaning the same thing, formed untrue conclusions about the subject matter of the contractas a result of which the contract may be rendered void. [Black's Law Dictionary (7th ed.).] Moreover, mutual mistake is defined as 1. A mistake in which each party misunderstands the other's intent.  Also termed bilateral mistake. 2. A mistake that is shared and relied on by both parties to a contract.  A court will often revise or nullify a contract based on a mutual mistake about a material term.Also termed (in sense 2) common mistake. [ Id. ] Further, mistake of fact is defined as [a] mistake about a fact that is material to a transaction. Id. Accordingly, it is discernable from the various definitions set forth above that the term mutual mistake of fact is not limited to one particular area of the law; however, it is most commonly applicable to the law of contracts. As such, we disagree with the Court of Appeals majority and the MTT that contract law, or any other area of the law for that matter, has no place in our duty to ascertain the Legislature's intent and give effect to the common-law term mutual mistake of fact. Many law students are introduced to the law of mistake in their first-year contracts course by reading our decision in Sherwood v. Walker, 66 Mich. 568, 33 N.W. 919 (1887)the famous barren cow case. In Sherwood, the parties contracted for the sale of a cow, and both parties believed and understood that the cow was barren and, thus, useless for breeding. After the contract was entered into, but before delivery, it was discovered that the cow was pregnant. Because the fertile cow was worth considerably more than the agreed-upon price, the defendants refused to deliver the cow. The plaintiff sued for replevin and secured a favorable judgment. On appeal, this Court reversed that judgment, opining that the trial court should have instructed the jury that if it found that both parties understood that the cow was barren at the time of contracting and it was later discovered that the cow was not barren, then the defendants had a right to rescind under a theory of mutual mistake of fact. Id. at 578, 33 N.W. 919. While acknowledging that this was a close case, this Court concluded: But it must be considered as well settled that a party who has given an apparent consent to a contract of sale may refuse to execute it, or he may avoid it after it has been completed, if the assent was founded, or the contract made, upon the mistake of a material fact,such as the subject-matter of the sale, the price, or some collateral fact materially inducing the agreement; and this can be done when the mistake is mutual. . . .    The difficulty in every case is to determine whether the mistake or misapprehension is as to the substance of the whole contract, going, as it were, to the root of the matter, or only to some point, even though a material point, an error as to which does not affect the substance of the whole consideration. Kennedy v. Panama, etc., Mail Co., L.R. 2 Q.B. 580, 588. [ Sherwood, supra at 576-577, 33 N.W. 919.] In light of these principles, this Court held that a mutual mistake of fact occurred. Specifically, the Sherwood Court reasoned that the mistake was mutual, and that the mistake went to the whole substance of the parties' agreement. In this regard, this Court observed that the parties would not have made the contract of sale except upon the understanding that the cow was barren; therefore, the mistake went to the very nature of the thing. Id. at 577, 33 N.W. 919. Our review of our precedents involving the law of mistake indicates that the peculiar and appropriate meaning that the term mutual mistake of fact has acquired in our law has not changed since Sherwood, supra . See, e.g., Lee State Bank v. McElheny, 227 Mich. 322, 327-328, 198 N.W. 928 (1924); Goldberg v. Cities Service Oil Co., 275 Mich. 199, 266 N.W. 321 (1936); Lake Gogebic Lumber Co. v. Burns, 331 Mich. 315, 49 N.W.2d 310 (1951); McCleery v. Briggs, 333 Mich. 522, 525, 53 N.W.2d 361 (1952); Gordon v. City of Warren Planning & Urban Renewal Comm., 388 Mich. 82, 88-89, 199 N.W.2d 465 (1972). And the term's meaning was not intended to be altered when the Legislature imported the common-law term mutual mistake of fact into MCL 211.53a. Accordingly, the phrase mutual mistake of fact must be construed and understood consistent with its peculiar meaning. Therefore, consistent with our case law, we interpret the phrase mutual mistake of fact in MCL 211.53a to mean an erroneous belief, which is shared and relied on by both parties, about a material fact that affects the substance of the transaction.
Consistent with our interpretation of the legal term mutual mistake of fact as it is used in MCL 211.53a, the key issue in these cases is whether there was an erroneous belief shared and relied on by both Ford and respondents about a material fact that affected the substance of the transactions. Under our interpretation of MCL 211.53a, we hold that Ford has stated valid claims of mutual mistakes of fact that were intended to be remedied under MCL 211.53a. Here, there is little doubt that a mistake occurredthe personal property statements erroneously overstated the amount of Ford's taxable property, including reporting the same property twice. This resulted in excessive assessments that were paid in full. Further, the mistakes made in these cases are best characterized as mutual. In our view, each assessor's erroneous belief that Ford's personal property statement was accurate does not practically differ from Ford's belief that the statement was accurate. In other words, if Ford believed that it owned certain personal property and reported it properly at the time, then Ford believed that each statement was accurate. Similarly, if each assessor believed that Ford's statement was accurate, then the assessor likewise believed Ford owned certain personal property and reported it properly. As such, the parties shared a mistaken belief about a material fact that went to the very nature of the transactionthat all the personal property Ford claimed in its personal property statements was taxable. And the parties relied on this shared, erroneous beliefrespondents when they assessed the property, and Ford when it subsequently paid the excessive assessments. Therefore, we conclude that Ford has stated valid claims under MCL 211.53a under the theory of mutual mistake of fact because the parties shared and relied on their erroneous beliefs about material facts that affected the substance of the assessments. [7]
Further, the nature of personal property statements and the scheme set forth under the GPTA also compels our conclusion that a mutual mistake of fact occurred in these cases. Under the GPTA, personal property located within Michigan is subject to taxation by the applicable taxing authority. MCL 211.1; MCL 211.14. Further, MCL 211.10(1) provides that [a]n assessment of all the property in the state liable to taxation shall be made annually in all townships, villages, and cities by the applicable assessing officer . . . . To this end, MCL 211.19(1) provides: A supervisor or other assessing officer, as soon as possible after entering upon the duties of his or her office or as required under the provisions of any charter that makes special provisions for the assessment of property, shall ascertain the taxable property in his or her assessing district, the person to whom it should be assessed, and that person's residence. To assist the assessing officer in ascertaining the taxable personal property in his jurisdiction, MCL 211.19(2) provides that if the assessing officer believes that a person possesses taxable personal property, the assessing officer must require that person to make a statement of all his personal property. [8] Long ago, this Court observed that [t]he statements made by the property owners are not binding upon the assessors, and are for the purpose of assisting these officers in making a proper and fair assessment of the property. The valuations therein stated are not conclusive, and the assessor must exercise his own judgment in making the assessment. United States Radiator Corp. v. Wayne Co., 192 Mich. 449, 452, 158 N.W. 1030 (1916) (internal citation omitted). Indeed, MCL 211.24(1)(f) provides, in relevant part, that when the assessor makes and completes the assessment roll, [t]he assessor shall estimate the true cash value of all the personal property of each person, and set the assessed value and tentative taxable value down opposite the name of the person. It further states that [i]n determining the property to be assessed and in estimating the value of that property, the assessor is not bound to follow the statements of any person, but shall exercise his or her best judgment. Id. We are aware that it is understandably common for assessors to accept personal property statements as accurate and simply base their assessments on the information contained in these statements. However, this common practice does not relieve the assessor of the responsibility to ascertain the taxable property in his jurisdiction and to exercise his best judgment when making an assessment. Moreover, to help an assessor exercise his best judgment and, thus, make an accurate assessment, the GPTA gives the assessor many tools besides the ability to require a personal property statement from a property owner and subsequently rely on the submitted statement. [9] For example, if the assessing officer is satisfied that a personal property statement is incorrect, the assessing officer may examine, under oath, any person the assessing officer believes has knowledge of the personal property. MCL 211.22. Additionally, the assessing officer may send a written request to examine the taxpayer's property and books, and a certified personal property examiner of the taxing jurisdiction then conducts the examination and audits the records of the taxpayer. In sum, the GPTA requires the assessor to ascertain what personal property is in his jurisdiction and assess it accordingly. In doing so, the assessor must exercise his best judgment and has many tools available to better fulfill his statutory responsibility. And while the personal property statements greatly assist the assessor in carrying out that responsibility, the assessor is not bound by the taxpayer's personal property statement. MCL 211.24(1); United States Radiator Corp., supra at 452, 158 N.W. 1030. So when an assessor simply relies on a taxpayer's personal property statement and subsequently calculates the assessment on the basis of this information alonelike in these casesthe assessor is effectively adopting the personal property statement as his own belief of what the taxpayer owns. In other words, under these circumstances, there is a mutual understanding of what property the taxpayer owns, and this mutual understanding goes to the very nature of the transaction  an accurate tax assessment. Therefore, the GPTA and the assessment process itself lead us to the inescapable conclusion that mutual mistakes of fact occurred in these cases. In sum, in these cases, the MTT erred in applying the law and adopting a wrong legal principle. Specifically, the MTT's interpretation of MCL 211.53a is inconsistent with the peculiar meaning the term mutual mistake of fact has acquired in our law. Similarly, the Court of Appeals interpretation and application of MCL 211.53a is at odds with MCL 211.53a and, thus, was erroneous.
In light of our holding that Ford has stated valid claims under MCL 211.53a, we must next decide whether the MTT abused its discretion when it failed to allow Ford to amend its petition against Bruce Township. This Court will not reverse a tribunal's decision to deny a party leave to amend a petition unless the decision constituted an abuse of discretion. Ormsby v. Capital Welding, Inc., 471 Mich. 45, 53, 684 N.W.2d 320 (2004). Further, a motion to amend should be granted unless one of the following particularized reasons exists: (1) undue delay, (2) bad faith or dilatory tactics, (3) repeated failure to cure deficiencies by amendment previously allowed, (4) undue prejudice to the opposing party, or (5) futility. Sands Appliance Services, Inc. v. Wilson, 463 Mich. 231, 239-240, 615 N.W.2d 241 (2000). Here, the MTT denied Ford's motion to amend because it lacked subject-matter jurisdiction and Ford's petition covered two parcels in violation of the MTT's rule of procedure. While the Court of Appeals majority concluded that the MTT had subject-matter jurisdiction to hear Ford's claim, the majority nonetheless found that the MTT did not abuse its discretion when it denied Ford's motion because the amendment would be futile in light of its conclusion that Ford failed to state a claim under MCL 211.53a for which relief could be granted. We disagree. Contrary to the conclusions reached by the MTT and the Court of Appeals majority, Ford has stated valid claims under MCL 211.53a. As such, futility is not a legitimate particularized reason by which the MTT could have denied Ford's motion to amend. Therefore, the MTT abused its discretion in this respect. Further, we believe that the MTT abused its discretion when it denied Ford's motion to amend on the basis that the amended petition would violate the MTT's rule of procedure. In this regard, we find the Court of Appeals dissent persuasive and adopt the following reasoning as our own: The other reason articulated by the tribunal for dismissal, that the petition covers two parcels of property rather than one, does not rise to the level of the particularized reasons articulated by the Supreme Court for denying a motion to amend a petition. Petitioner's original petition dealt with five parcels of property. In its proposed amended petition, petitioner limited the petition to two parcels of personal property. The tribunal stated that part of the reason it would not grant the motion to amend was that the proposed amendment violated tribunal rule 1999 AC, R 205.1240 requiring separate petitions for each parcel of property. Principles of statutory interpretation apply to construction of administrative rules. This Court must enforce the intent of the rule drafters by applying the meaning plainly expressed. Lacking ambiguity, judicial interpretation is not permitted. City of Romulus v. Dep't of Environmental Quality, 260 Mich.App. 54, 65, 678 N.W.2d 444 (2003). Therefore, we must enforce the plain language of the rule. The plain language of this rule requires petitioner to file two separate petitions for the personal property in question, because it is in different parcels. Even though the petition was flawed because it dealt with two parcels instead of one, the tribunal should not have dismissed the case and denied petitioner's motion to amend. The flaw in the petition does not rise to the level of undue delay, bad faith, repeated failure to cure deficiencies, undue prejudice, or futility. Respondent would not be prejudiced by an amendment separating this petition into two petitions because the facts would not change, and respondent was placed on notice by the original petition. There has been no previous amendment or bad faith on the part of petitioner. Finally, the amendment would not be futile. Given that none of the particularized reasons articulated by the Supreme Court for denying a motion to amend exists, the tribunal abused its discretion in denying petitioner's motion to amend. Sands Appliance Services, supra at 239-240, 615 N.W.2d 241. [ Bruce Twp., supra at 25-27, 689 N.W.2d 764 (Griffin, P.J., dissenting).]