Court Opinion

ID: 4302660
Source: CourtListenerOpinion
Date Created: 2018-08-10 09:07:39.285988+00
Date Added: 2024-06-11T14:30:54.090698
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

THOMAS C. DEWARD,                                                    UNPUBLISHED
                                                                     August 9, 2018
               Petitioner-Appellant,

v                                                                    No. 337608
                                                                     Michigan Tax Tribunal
CITY OF FARMINGTON HILLS,                                            LC No. 16-001047-TT

               Respondent-Appellee.

Before: RIORDAN, P.J., and K. F. KELLY and BOONSTRA, JJ.

PER CURIAM.

       Petitioner appeals by right an order of the Michigan Tax Tribunal (MTT), which affirmed
a special assessment district (SAD) created by respondent (“the City”). Finding no errors
warranting reversal, we affirm.

                                        I. BASIC FACTS

        Petitioner owns a home located in the Independence Commons Subdivision in the City of
Farmington Hills. The subdivision includes 4.4 miles of concrete roadway, last paved almost 50
years ago. In September 2015, consistent with its authority to determine the necessity of public
improvements under its City Charter, the City held a public hearing and adopted a resolution for
the repair of the subdivision’s roads.

         In April 2016, the City held a public hearing meeting, which petitioner attended, to
review the special assessment roll for the repaving of the subdivision’s roads. The total cost of
the project would be $8,370,187.85 and petitioner, as well as other residents in attendance,
objected to the assessment. Notwithstanding these objections, the City, under Section 9.05 of the
City Charter, approved the project and the special assessment district, allocating 20 percent of
the cost to the City, $1,651,374, and the remainder, $6,718,813.85, to the property specifically
benefited, i.e., the residents of the subdivision. Using the “average abutting frontage method,” a
total of $19,705 was allocated to each resident in the special district to be paid in 15 equal annual
installments.

        Petitioner objected to the SAD and on May 7, 2016, filed a petition in the MTT, alleging
that the SAD was invalid. Petitioner filed an 11-page explanation for basis of his appeal.
Petitioner argued, inter alia, that the assessment was illegal because the City failed to comply
with Sec. 25-8 of the Ordinance, which provides that the amount assessed to the City at large be

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placed on the assessment roll. Petitioner further argued that the City’s contribution to the overall
project was not limited to 20% of the costs. Petitioner also claimed that the City failed to
support the numbers and methodology used to calculate the assessment and that the assessment
was disproportionate to the benefit derived. Although acknowledging that he had the burden of
proof in rebutting the assessment’s validity, petitioner nevertheless declared: “I will not be
submitting a market value analysis of my home before and after the construction is complete. I
submit in advance that neither will the City. However, until the City meets the burden of proof of
supporting all the costs and the allocation of costs to the individual lots, I submit that the increase
in market value will not exceed $5,000.”

        The City responded that petitioner failed to demonstrate a substantial or unreasonable
disproportionality between the amount assessed and the resulting value. The City maintained
that the 20% limitation on the City’s contribution was valid and that its method of assessing
frontage was likewise valid. Moreover, though not required to do so, the City provided the MTT
with an appraisal of petitioner’s property with and without the improvement – a $20,000
difference.

        Petitioner offered rebuttal evidence after the hearing, wherein he attempted to discredit
the City’s appraisals. Petitioner offered his own schedules to demonstrate that his home was
actually worth less as a result of the SAD or, alternatively, that the benefit to his home was
approximately $2,500. However, the MTT judge concluded that petitioner’s rebuttal evidence
was “untimely and ineffective.” The judge ruled that petitioner failed to satisfy his burden of
proof rebutting the presumption of the SAD’s validity. It later denied petitioner’s motion for
reconsideration. Petitioner now appeals by right.

                                  II. STANDARD OF REVIEW

        “Review of a decision by the MTT is very limited.” Drew v Cass Co, 299 Mich. App.
495, 498; 830 NW2d 832 (2013). “Absent fraud, this Court’s review of a Tax Tribunal decision
is limited to determining whether the tribunal made an error of law or adopted a wrong legal
principle.” Leahy v Orion Twp, 269 Mich. App. 527, 529; 711 NW2d 438 (2006) (quotation
marks and citation omitted). “[T]he question whether and how much the value of land has
increased as the result of certain improvements is factual, to be determined on the basis of
evidence presented by the parties.” Kadzban v City of Grandville, 442 Mich. 495, 502; 502
NW2d 299 (1993). Such a factual question is resolved by the trier of fact, which is the MTT. Id.
at 502. “On review, this Court will reverse a decision of the Tax Tribunal only if its decision is
not supported by competent, material, and substantial evidence on the whole record.” Id.
“Substantial evidence must be more than a scintilla of evidence, although it may be substantially
less than a preponderance of the evidence.” Leahy, 269 Mich. App. at 529–530 (quotation marks
and citation omitted).

                                          III. ANALYSIS

        A special assessment is a levy upon certain property in a specific district. Kadzban v City
of Grandville, 442 Mich. 495, 500; 502 NW2d 299 (1993). Although it is like a tax, it is not
levied for the purpose of raising revenue for general governmental purposes, but is instead levied
to defray the cost of specific local improvements. Ahearn v Bloomfield Charter Twp, 235 Mich

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App 486, 493; 597 NW2d 858 (1999). These special assessments are sustained on the theory
that they confer a peculiar and local benefit to the property assessed, such that the value of the
property in the defined area is enhanced by the improvement, as opposed to conferring a benefit
to the community at large. Kadzban, 442 Mich. at 500. As such, special assessments are
permissible only when the improvements result in an increase in the value of the land specially
assessed. Dixon Rd Group v Novi, 426 Mich. 390, 400; 395 NW2d 211 (1986).

        Petitioners challenging special assessments face a particularly heavy burden because
there is a presumption that special assessments are valid. Kadzban, 442 Mich. at 505. “Two
requirements must be met in order for a special assessment to be deemed valid: (1) the
improvement funded by the special assessment must confer a special benefit upon the assessed
properties beyond that provided to the community as a whole, and (2) the amount of special
assessment must be reasonably proportionate to the benefits derived from the improvement.”
Ahearn, 235 Mich. App. at 493. Regarding the latter, “a special assessment will be declared
invalid only when the party challenging the assessment demonstrates that “there is a substantial
or unreasonable disproportionality between the amount assessed and the value which accrues to
the land as a result of the improvements.” Kadzban, 442 Mich. at 502 (citation and quotations
omitted). “The essential question is not whether there was any change in market value, but
rather whether the market value of the assessed property was increased as a result of the
improvement.” Ahearn, 235 Mich. App. at 496. Our Court has explained:

       Common sense dictates that in order to determine whether the market value of an
       assessed property has been increased as a result of an improvement, the relevant
       comparison is not between the market value of the assessed property after the
       improvement and the market value of the assessed property before the
       improvement, but rather it is between the market value of the assessed property
       with the improvement and the market value of the assessed property without the
       improvement. The former comparison measures the effect of time, while the
       latter measures the effect of the improvement. [Id. at 496-497.]

        “[D]ecisions made by municipalities with respect to special assessments generally should
be upheld.” Dixon, 426 Mich. at 403. A petitioner challenging a special assessment “at a
minimum, must present credible evidence to rebut the presumption that the assessments are
valid.” Kadzban, 442 Mich. at 505. Only if the petitioner presents sufficient, credible evidence
to rebut the presumption does the burden of going forward shift to the municipality. Id. at 505 n
5. In fact, without a finding that a petitioner has presented credible evidence to rebut the
presumption of validity, the MTT has “no basis to strike down special assessments.” Id.

                   A. WHETHER THE SAD WAS PROPERLY FORMED.

      Petitioner first argues that the SAD was not properly formed because the City failed to
comply with its own Ordinance. Petitioner complains that, although the resolution provided that
80.77% of the cost would be paid by the SAD, no total cost was identified in the resolution.

       Sec 25-8 of the City Ordinance provides:

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               The city assessor shall, upon the council resolution pursuant to the
       preceding section, prepare a special assessment roll including all lots and parcels
       of land within the special assessment district designated by the council, and shall
       assess to each such lot or parcel of land such relative portion of the whole sum to
       be levied against all the lands in the special assessment district as the benefit to
       such lot or parcel of land bears to the total benefits to all lands in such district.
       There shall also be entered upon such roll the amount which has been assessed to
       the city at large.

        Petitioner argues that the City failed to specifically lay out the cost allocation at a public
meeting. He complains that, in laying out only the percentages of costs percentages – 80.77% to
the residents and 19.23% to the City – the City abdicated its legal obligation under the ordinance.
Although petitioner argues that the SAD is invalid due to this perceived procedural irregularity,
there is nothing in the ordinance or in the law that requires the action petitioner seeks.
Moreover, by arguing that the City was required to lay out the specific cost to the City, petitioner
seeks to avoid the presumption of validity and attempts to impermissibly shift the burden of
proof to the City. Such a position is inconsistent with petitioner’s acknowledgement that he
bears the burden of proof and with extensive case law to that effect. Petitioner’s argument
directly contradicts the well-settled allocation of the evidentiary burden in challenges to special
assessments. A special assessment is presumed valid until a successful challenge is made, which
requires the challenging party to first present credible evidence to rebut that presumption.
Petitioner “at a minimum, must present credible evidence to rebut the presumption that the
assessments are valid.” Kadzban, 442 Mich. at 505. The initial burden of rebutting the
presumption of validity is clearly on petitioner, and petitioner’s argument to the contrary is
without merit.

B. WHETHER THE MTT IMPROPERLY FOCUSED ON THE BENEFIT CONFERRED TO
               THE EXCLUSION OF THE COST INCURRED.

        Petitioner next argues that total costs for the project were never made available to the
residents at a public meeting. In choosing to burden the residents with the costs of the project,
petitioner believed that the City should have been required to justify its costs.

       Although petitioner complains that the City failed to lay out and justify the costs
associated with the project at a public meeting, petitioner cites no provision of the Charter or
relevant ordinances requiring the City to do so. Petitioner fails to point to any specific language
in the City Charter or caselaw that respondent is to conduct a cost-benefit analysis pursuant to
any particular method, use of data, studies, or specific procedural steps. Instead, petitioner relies
on the general proposition that a special assessment cannot be levied absent some regard for the
amount of benefit that inures to the property and that some proportionality must exist between
the amount of the assessment and the benefit. Absent citation to the procedures required and an
explanation of the procedural steps violated, petitioner’s argument is nothing more than a
conclusory assertion that respondent unlawfully deviated from required procedures.

        More importantly, petitioner admits that this information was available to the public. He
writes: “The City did not provide any detailed breakdown of the total cost of the project. The

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City did not provide the City’s share of the total cost or the source of the City Funds. I obtained
this information through FOIAs.”

        The fact that the City did not undertake a cost-benefit analysis using a methodology that
petitioner would have preferred or otherwise make public the details of any such analysis
undertaken during the assessment process, does not mean that the City did not consider whether
the project would benefit properties in the special assessment district. Again, as previously
stated, the MTT could rely on the presumption of the special assessment’s validity until
petitioner effectively rebutted that presumption. Kadzban, 442 Mich. at 505 n 5.

 C. WHETHER THE CITY’S CONTRIBUTION WAS LIMITED TO 20% OF THE COSTS.

       Petitioner argues that the MTT erred when it concluded that the City charter limited
respondent’s contribution to 20% of costs.

        The Charter provides that not more than 20% of the costs of local road construction or
improvement shall be borne by the City residents at large or by the City’s general fund. But
petitioner notes that the Charter limiting the City’s contribution to 20% was approved before the
residents approved a special millage for road improvements to which the property owners
contributed. Petitioner sets forth that, had the City’s share been from the general fund, then the
20% cap would apply, but that the 20% limitation was inapplicable given the many sources of
funds that the City had available to be used exclusively for road improvement.

        Petitioner’s argument is fatally flawed for one reason – he conflates the terms
“assessment” and “tax.” As previously stated, a special assessment is a levy upon certain
property in a specific district. Kadzban, 442 Mich. at 500. Although it is like a tax, it is not
levied for the purpose of raising revenue for general governmental purposes, but is instead levied
to defray the cost of specific local improvements. Ahearn, 235 Mich. App. at 493. Special
assessments are sustained on the theory that they confer a peculiar and local benefit to the
property assessed, such that the value of the property in the defined area is enhanced by the
improvement, as opposed to conferring a benefit to the community at large. Kadzban, 442 Mich.
at 500.

       The differences between a special assessment and a tax are that (1) a special
       assessment can be levied only on land; (2) a special assessment cannot be made a
       personal liability of the person assessed; (3) a special assessment is based wholly
       on benefits; and (4) a special assessment is exceptional both as to time and
       locality. Also, in general, the amount of the special assessment must bear a
       reasonably proportionate relationship to the benefit accruing to the property
       assessed. [Niles Twp v Berrien Co Bd of Comm’rs, 261 Mich. App. 308, 323–324;
       683 NW2d 148 (2004).]

        Because a road improvement such as the one before the Court necessarily and
particularly benefits the residents of that particular neighborhood, the law is fashioned in such a
way that those residents bear the associated costs. The charter provision limiting the City’s
contribution to no more than 20% of the costs of the project is in keeping with this approach.

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Petitioner fails to distinguish between the assessment levy on the residents of the Independence
Commons Subdivision and the tax imposed on all of the City’s residents under the millage.

                               D. WHETHER AHEARN APPLIES.

        Petitioner argues that the MTT erred when it relied on Ahearn because Ahearn dealt with
a sewer-retention treatment basin required by federal law and, therefore, was not comparable to
the present situation involving voluntary road improvement.

       As previously discussed, Ahearn sets forth the relevant inquiry in determining whether an
improvement funded by a special assessment confers a special benefit upon the assessed
properties beyond that provided to the community as a whole. Under Ahearn, “[t]he essential
question is not whether there was any change in market value, but rather whether the market
value of the assessed property was increased as a result of the improvement.” Ahearn, 235 Mich
App at 496. The Court explained:

       Common sense dictates that in order to determine whether the market value of an
       assessed property has been increased as a result of an improvement, the relevant
       comparison is not between the market value of the assessed property after the
       improvement and the market value of the assessed property before the
       improvement, but rather it is between the market value of the assessed property
       with the improvement and the market value of the assessed property without the
       improvement. The former comparison measures the effect of time, while the
       latter measures the effect of the improvement. [Id. at 496-497.]

The Ahearn decision has been cited countless times. Petitioner offers no valid reason for
discarding Ahearn’s “with and without” analysis. The case is controlling regardless of the type
of project involved. Again, petitioner failed to rebut the presumption of validity. Therefore,
even if there was any reason to treat the present case differently from Ahearn (and we discern
none), petitioner still had the burden of demonstrating that the assessment did not confer a
special benefit to the residents of Independence Commons.

      E. WHETHER PETITIONER MET HIS BURDEN OF PROOF BY PRESENTING
      EVIDENCE THAT THERE WAS NO MARKET VALUE INCREASE WITH THE
                             IMPROVEMENT.

        Petitioner acknowledges that he erroneously believed that the City would not present any
evidence comparing the market value of his home before and after construction. He argues that
his rebuttal schedules showed that there was no increase in market value.

        However, without a finding that petitioner presented credible evidence to rebut the
presumption of validity, the MTT had “no basis to strike down special assessments.” Kadzban,
442 Mich. at 505. In fact, this Court has reversed the MTT when it reduced a special assessment
despite finding that the petitioners’ evidence was insufficient. In Storm v Wyoming, 208 Mich
App 45; 526 NW2d 605 (1994), the petitioners challenged a special assessment imposed by the
City of Wyoming. The MTT “specifically determined that the value report of petitioners’
appraisers was unpersuasive.” Id. at 47. But despite that finding, the MTT nevertheless accepted
the petitioners’ argument that the extent of the special benefits to their property was less than that
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determined by the city, and reduced the amounts of the special assessments. Id. This Court
reversed, holding that the MTT had no basis for “substitut[ing] its judgment for that of the
municipality” where it had specifically found the petitioners’ evidence “unpersuasive,” thus
meaning that the petitioners had failed to meet their burden of rebutting the presumption of
validity. Id. at 47-48. The same is true here. Petitioner failed to overcome the presumption of
validity. He only presented evidence in support of his position on rebuttal. The MTT properly
determined that petitioner’s schedules were untimely and that he failed to overcome the
presumption that the assessment was valid.

  F. WHETHER THE CITY’S METHOD OF ASSESSING COSTS TO INDIVIDUAL LOTS
                             WAS VALID.

       Petitioner next argues that the City’s method of calculating the assessment was faulty.

        Again, our focus must be on the proportionality of the amount assessed and the value
accrued to petitioner’s property. In Dixon, our Supreme Court held that special benefits must be
reflected by an increase in market value. “[A] determination of the increased market value of a
piece of property after the improvement is necessary in order to determine whether or not the
benefits derived from the special assessment are proportional to the cost incurred.” Dixon, 426
Mich. at 401. The holding in Dixon did not call for a “rigid dollar-for-dollar balance between the
special assessment and the amount of the benefit” but rather “a reasonable relationship between
the two.” Id. at 402–403. This Court should only “intervene where there is a substantial or
unreasonable disproportionality between the amount assessed and the value which accrues to the
land as a result of the improvements.” Id. at 403. The Supreme Court also rejected alternative
methods of calculating benefits that did not take into account an increase in the market value of
the property assessed. Id. at 398–401.

        In Kadzban, the Supreme Court reiterated its holding in Dixon and held that “a special
assessment will be declared invalid only when the party challenging the assessment demonstrates
there is a substantial or unreasonable disproportionality between the amount assessed and the
value which accrues to the land as a result of the improvements.” Kadzban, 442 Mich. at 502
(citation and quotation marks omitted). In Kadzban, the Supreme Court reviewed a special
assessment cost per property owner, and evidence from the defendant municipality that the
properties increased in value after the improvement. Id. at 499, 506–507. The language in
Kadzban clearly places the burden on petitioner to demonstrate disproportionality. Here,
petitioner effectively refuses to even attempt to meet his burden of proof, arguing instead that it
is an impossible burden to meet. Such a position is inconsistent with Dixon and Kadzban.

             G. WHETHER THE MTT WAS BIASED AGAINST PETITIONER.

        Petitioner argues that he did not receive a fair and impartial decision because of the
MTT’s bias. He points to the fact that one of the City’s experts was a recent member of the
MTT, that an email accidentally sent to petitioner demonstrated the chief clerk’s frustration with
petitioner, and the fact that the City received special treatment from the MTT because the MTT
allowed the City to pay only $25 for 80 motions.

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       “Due process requires that an unbiased and impartial decision-maker hear and decide a
case.” Mitchell v Mitchell, 296 Mich. App. 513, 523; 823 NW2d 153 (2012). “A trial judge is
presumed unbiased, and the party asserting otherwise has the heavy burden of overcoming the
presumption.” Id. Petitioner’s claim is without merit.

        First, petitioner failed to provide this Court with a transcript of the proceedings. Pursuant
to MCR 7.210(B)(1)(a), it was petitioner’s responsibility to provide the transcript. By failing to
provide this Court with the pertinent portion of the record, namely the transcript of the hearing
that would ostensibly show actual or perceived bias, petitioner has not made it possible for the
Court to properly review this issue. Although petitioner is acting in propria persona, he is to be
held to the same standards as an attorney. Baird v Baird, 368 Mich. 536, 539; 118 NW2d 427
(1962).

       Second, petitioner does not argue that MTT Judge Lasher was personally biased against
him. Instead, petitioner impugns the entire process. As in the MTT, petitioner takes a “David
and Goliath” position. He believes that it is impossible for a petitioner in a special assessment
case to prevail. That is not true. But the fact remains that petitioner failed to overcome the
presumption that the assessment was valid.

     H. WHETHER THE MTT SHOULD ESTABLISH GUIDELINES FOR SPECIAL
    ASSESSMENT CASES SO THAT PETITIONERS MAY MEET THEIR BURDEN OF
                                PROOF.

        Finally, petitioner argues that unless this Court directs the MTT to establish a complete
set of guidelines in special assessment cases to enable petitioners to meet the burden of proof in
establishing market value “with and without” road improvements, petitioners do not stand a
chance of meeting their burden of proof in such cases.

         This is an error-correcting court. W A Foote Mem Hosp v Michigan Assigned Claims
Plan, 321 Mich. App. 159; 909 NW2d 39 (2017). Petitioner does not identify any error in this
issue and there is nothing to review. This Court does not ordinarily issue advisory opinions, nor
will it decide a question “in or on which there is no real controversy.” Rozankovich v Kalamazoo
Spring Corp, 44 Mich. App. 426, 428; 205 NW2d 311 (1973). This Court does not have the
authority to order the legislature or the MTT to establish a complete set of guidelines in special
assessment cases to enable petitioners to meet the burden of proof in establishing market value
with and without road improvements.

       Affirmed.

                                                              /s/ Michael J. Riordan
                                                              /s/ Kirsten Frank Kelly
                                                              /s/ Mark T. Boonstra

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