Justia Real Estate & Property Law Opinion Summaries

The issue before the Supreme Court in this case was whether the execution of a lease of tangible personal property constitutes "use" for purposes of the Use Tax Act (UTA). Petitioner purchased an aircraft from one company and immediately executed a five-year lease to another company that already had possession of the aircraft. The Department of Treasury assessed a use tax against petitioner based on the lease transaction, and the Michigan Tax Tribunal ultimately upheld the assessment. The Court of Appeals reversed, holding that petitioner did not “use” the aircraft because it ceded total control of the aircraft to the lessee by virtue of the lease and the lessee had uninterrupted possession of the aircraft before and during the lease. The Supreme Court concluded that because the right to allow others to use one’s personal property is a right incident to ownership, and a lease is an instrument by which an owner exercises that right, it follows that the execution of a lease is an exercise of a right or power over tangible personal property incident to the ownership of the property. Therefore, that constitutes "use" for purposes of the UTA. Accordingly, petitioner "used" the aircraft in question for purposes of the UTA when it executed a lease of the aircraft in Michigan, regardless of whether it ever had actual possession of the aircraft. View "NACG Leasing v. Dept. of Treasury" on Justia Law

Devon Bailey sued Steven Schaaf, T.J. Realty, Inc. (doing business as Hi-Tech Protection), Evergreen Regency Townhomes, Ltd., Radney Management & Investments, and others for injuries suffered while at a friend's apartment in a complex owned and operated by Radney. Hi-Tech security guards William Baker and Chris Campbell were on duty and patrolling the complex on the night Bailey was injured. A resident had informed Baker and Campbell that Schaaf was threatening people with a gun at an outdoor gathering. Bailey alleged that Baker and Campbell ignored the warning. Sometime later they heard two gunshots; Schaaf shot Bailey twice in the back, rendering Bailey a paraplegic. Bailey alleged that Baker and Campbell were agents of Hi-Tech, and that Hi-Tech was an agent of Radney and Evergreen. Bailey asserted multiple claims against all defendants under theories of premises liability, negligent hiring and supervising, ordinary negligence, vicarious liability, and breach of contract. The trial court granted partial summary judgment to defendants; Bailey appealed. The Court of Appeals affirmed in part and reversed in part concluding in part that Evergreen and Radney owed Bailey a duty to call the police in response to an ongoing situation on the premises, extending the Supreme Court's decision in MacDonald v. PKT, Inc., (628 NW2d 33 (2001)) to the landlord-tenant context. In addition, the appellate court rejected Bailey's argument that he was a third-party beneficiary of the provision-of-security contract between Hi-Tech and Evergreen and that Hi-Tech did not owe Bailey a duty that was separate and distinct from Hi-Tech's duties under the Hi-Tech / Evergreen contract in effect at the time of Bailey's injuries. Upon review, the Supreme Court concluded that the Court of Appeals properly held that defendants were not entitled to summary judgment because, accepting Bailey's allegation as true, defendants had a duty to call the police. Bailey also alleged sufficient facts involving the existence of a contract for security services between the security company and the landlord, creating an agency relationship, and putting defendants on notice that their invitees and tenants faced a specific and imminent harm. The case was remanded to the appellate court for consideration of vicarious liability and negligence issues. View "Bailey v. Schaff" on Justia Law

Hillsdale County Senior Services, Inc. (HCSS) filed an action against Hillsdale County, seeking mandamus to enforce the terms of a property-tax ballot proposition that provided for the levy of an additional 0.5 mill property tax in Hillsdale County to fund HCSS. The Hillsdale County voters approved the proposition in 2008 to raise funds for the provision of services to older persons by HCSS. Defendant entered into a contract with HCSS from January 1, 2009 through December 31, 2010, but did not levy and spend the full, voter-approved, 0.5 mill. The circuit court granted plaintiffs' writ for mandamus and ordered defendant to levy the entire 0.5 mill for the length of time approved by the voters. In an unpublished opinion, the Court of Appeals reversed the order, concluding that the circuit court lacked subject-matter jurisdiction over the case because the Tax Tribunal had exclusive and original jurisdiction over the matter. HCSS appealed, and the Supreme Court, after its review, agreed that the circuit court lacked subject-matter jurisdiction. Accordingly the Court of Appeals was affirmed. View "Hillsdale County Senior Services Center v. Hillsdale County" on Justia Law

Elba Township brought an action against the Gratiot County Drain Commissioner seeking to enjoin the commissioner from consolidating the drainage districts associated with the No. 181-0 drain and its tributary drains. Elba Township argued that the consolidation proceedings had violated the Drain Code because the No. 181-0 drain petition for consolidation lacked the statutorily required number of freeholder signatures and the notice of the hearing by the board of determination had been deficient. Plaintiffs David Osborn, Mark Crumbaugh, Cloyd Cordray, and Rita Cordray intervened, similarly seeking declaratory and injunctive relief and claiming that the petition was defective and that the notice of the meeting of the board of determination was defective, resulting in a violation of their due process rights. With regard to the due process claim, plaintiffs’ primary complaint was that some of the property that would be affected by the drainage project lay outside the townships listed in the notice, although the notice stated that it was being sent to persons liable for an assessment. The drain commissioner moved for summary judgment, arguing that the appropriate number of signatures had been gathered and that the notice given appropriately informed those affected by the proposed consolidation of the date, time, and place of the board-of-determination hearing. Elba Township and plaintiffs filed cross-motions for summary judgment. The court granted the drain commissioner’s motion, finding that only 5 freeholder signatures were required on the petition rather than the 50 signatures the township claimed. Elba Township and the Osborn plaintiffs appealed. The Court of Appeals affirmed the trial court’s exercise of equitable jurisdiction, but reversed on the merits. Upon review, the Supreme Court concluded that the lower courts improperly exercised equitable jurisdiction over the signature-requirement question but properly exercised such jurisdiction over the question of notice. "The former question is purely statutory and, as such, there were no grounds on which the lower courts could properly exercise equitable jurisdiction. Though the exercise of equitable jurisdiction over the latter question was proper, we conclude that constitutional due process did not entitle plaintiffs to receive notice of the 'board of determination' hearing. The trial court’s order granting summary judgment for defendant was reinstated. View "Elba Township v. Gratiot County Drain Commissioner" on Justia Law

The issue before the Supreme Court in this case was the manner in which defendant JPMorgan Chase Bank, N.A. (Chase), the successor in interest to Washington Mutual Bank (WaMu), acquired plaintiffs' mortgage. Plaintiffs' mortgage was among the assets held by WaMu when it collapsed in 2008. Specifically, the issue was whether defendant acquired plaintiffs' mortgage by "operation of law" and, if so, whether MCL 600.3204(3), applied to the acquisition of a mortgage by operation of law. Upon review of briefs submitted by the parties and the applicable statutory authority, the Supreme Court held that defendant did not acquire plaintiffs' mortgage by operation of law. Rather, defendant acquired that mortgage through a voluntary purchase agreement. Accordingly, defendant was required to comply with the provisions of MCL 600.3204. Furthermore, the Court held that the foreclosure sale in this case was voidable rather than void ab initio. Accordingly, the Court affirmed in part and reversed in part the judgment of the Court of Appeals and remanded the case to the trial court for further proceedings. View "Kim v. J.P. Morgan Chase Bank, N.A." on Justia Law

Marcy Hill, Patricia Hill, and Christopher Hill brought an action against Sears, Roebuck & Co., Sears Logistic Services, Inc., Merchant Delivery, Inc., Exel Direct, Inc., Mark Pritchard, Timothy Dameron, and others, seeking to recover damages for injuries and property damage incurred when Marcy Hill released natural gas through an uncapped gas line and plaintiffs’ home burned down following Patricia Hill’s attempt to light a candle. Defendants were prior owners of the home and the parties who sold, delivered, and installed an electric washer and dryer purchased by Marcy Hill in 2003. Hill’s mother had directed the installers to place the washer and dryer in the same location where the prior owners’ gas dryer had been situated. The prior owners had turned off the gas to the line supplying their dryer, but had not capped off the line when they moved, taking their dryer with them. In 2007, four years after the electric dryer’s installation, during which time it had functioned without incident, Hill inadvertently opened the valve on the gas line. Marcy and Patricia Hill smelled gas throughout the day but did not act on this information, despite both women’s knowledge that the smell of natural gas required safety precautions. Plaintiffs’ home exploded that night when Patricia Hill attempted to light the candle with a lighter. Plaintiffs asserted that the installers had negligently installed the dryer and failed to discover, properly inspect, cap, and warn plaintiffs about the uncapped gas line. The court denied the retailers’, delivery companies’, and installers’ motions for summary judgment. The installers, Mark Pritchard and Timothy Dameron, appealed. The Court of Appeals affirmed. The retailers, delivery companies, and the installers filed separate applications for leave to appeal. Upon review of the matter, the Supreme Court concluded that the delivery and installation of the washer and dryer did not create a new dangerous condition with respect to the uncapped gas line or make an existing dangerous condition more hazardous. The hazard associated with the uncapped gas line was present when the installers entered the premises and when they left; the danger posed by the uncapped gas line was the same before and after the installation. Any liability of the retailers or the delivery companies would have resulted from their agency relationship with the installers. The circuit court erred by denying the summary judgment motions. The case was reversed and remanded for entry of an order granting defendants summary judgment. View "Hill v. Sears, Roebuck & Co." on Justia Law

"Michigan, being above the 42nd parallel of north latitude, is prone to winter. . . . This case tests the extent of a premises owner's liability for [a] winter-related accident." In this case, plaintiff recognized the danger posed by ice on a sidewalk, yet chose to "confront the hazard" by walking across the ice to enter the premises. Plaintiff claimed that the premises' owners should be liable for her injuries, while the premises' owners argued that they are not liable because plaintiff's accident occurred as the result of an ordinary, open and obvious condition. "In many regards, this case is unremarkable both in its simplicity and its frequent occurrence in Michigan. Yet there has been some confusion surrounding the application of the open and obvious doctrine to wintry conditions." Upon review, the Supreme Court rejected plaintiff's argument that the hazard in this case was effectively unavoidable because plaintiff had a business interest in entering the premises. The Court reversed in part the judgment of the Court of Appeals and remanded the case to enter judgment in favor of the premises' owners. View "Hoffner v. Lanctoe" on Justia Law

This case involved the issue of the priority of competing liens between a court-appointed receiver and the holder of a first-recorded mortgage on real property located in DeWitt, Michigan. The receiver, Thomas Woods, sought to recover receivership expenses before the holder of the first-recorded mortgage, Dart Bank, satisfied its mortgage interest. In affirming the circuit court's order placing a first-priority lien on the property in the amount of the receiver's expenses, the Court of Appeals relied, in part, on the Supreme Court's decisions in "Bailey v Bailey" and "Fisk v Fisk" and its own decision in "Attica Hydraulic Exchange v Seslar," to hold that because Dart did not object to and benefited from the receivership, it "may be held responsible for the receivership expenses." The Supreme Court granted Dart's application for leave to appeal to determine whether the common-law rule that receivership expenses are entitled to first priority is controlling, notwithstanding that the holder of a prior recorded mortgage is statutorily entitled to priority under MCL 600.3236, and whether a mortgagee must explicitly consent to the receivership before the mortgagee may be required to pay the associated costs. Upon review, the Supreme Court declined to extend the common-law rule to the facts of this case. Rather, the Court held that MCL 600.3236 controlled and, by its plain language, requires that any liens preexisting the mortgage that is the subject of the foreclosure remain in the same order of priority as they existed at the time of the mortgage's execution. The Court also held that a mortgagee that forecloses consistently with MCL 600.3236 may waive its statutory right of priority and, if that occurs, the receiver may be entitled to compensation before the mortgagee, but only if the mortgagee's waiver is explicitly and unequivocally given. Because the Court of Appeals in this case failed to recognize the applicability of MCL 600.3236 and erroneously extended the holdings in "Bailey" and "Fisk" to support its conclusion that even in the absence of affirmative consent, Dart could nevertheless be required to pay the receiver's costs and fees, the Supreme Court reversed the appellate court's judgment and remanded the case to the circuit court for entry of an order releasing the escrow funds in favor of Dart. View "Price v. Kosmalski" on Justia Law

The issue in these consolidated cases involved interpretation of the General Property Tax Act. For this case, the Supreme Court addressed whether the Tax Tribunal has the authority to reduce an unconstitutional increase in the taxable value of property when the erroneous taxable value was not challenged in the year of the increase. Upon review, the Supreme Court held that the Tax Tribunal does have the authority to reduce an unconstitutional previous increase in taxable value for purposes of adjusting a taxable value that was timely challenged in a subsequent year. "The Tax Tribunal Act sets forth the Tax Tribunal's jurisdiction[;] once [. . .] properly invoked, the Tax Tribunal possesses the same powers and duties as those assigned to a March board of review under the GPTA, including the duty to adjust erroneous taxable values to bring the current tax rolls into compliance with the GPTA." Because the Court of Appeals erroneously held that the Tax Tribunal did not have jurisdiction to review taxable values in years not under appeal, the Supreme Court reversed the Court of Appeals' judgment and remanded the case back to that Court to consider Northville Township's remaining issues on appeal regarding the Tax Tribunal's valuation of the properties.

The issue in these consolidated cases involved interpretation of the General Property Tax Act. For this case, the Supreme Court addressed whether the tax assessor's failure to adjust the taxable value of a parcel of real property in the year immediately following its transfer precluded a March board of review from adjusting the taxable value in a later year. Upon review, the Court held that the failure to adjust the taxable value in the year immediately following the transfer produced an erroneous taxable value because the taxable value was not in compliance with the GPTA. Further, the GPTA did not preclude a March board of review from correcting an erroneous taxable value that resulted from the failure of an assessor to adjust a property's taxable value in the year immediately following its transfer. Accordingly, the Court also held that a March board of review may adjust the erroneous taxable value in a subsequent year in order to bring the current taxable value into compliance with the GPTA. The Court of Appeals held that the error in this case could not be remedied and, therefore, the Supreme Court reversed the judgment of the Court of Appeals and reinstated the Michigan Tax Tribunal's decision affirming the March board of review's correction of the tax rolls to reflect the properly adjusted taxable values.