City of Dearborn Heights v. Wayne County Treasurer
327928
| Mich. Ct. App. | Nov 17, 2016Background
- Property at 2525 S. Beech Daly Rd. was subject to a tax-foreclosure petition by the Wayne County Treasurer after tax delinquencies by B&D Family Holdings, LLC (B&D).
- B&D and the Treasurer executed a payment-plan agreement (dated January 26, 2012), under which B&D would make installment payments and the Treasurer would not transfer the property; a foreclosure judgment was nonetheless entered and later vacated after B&D completed payments and the Treasurer filed a certificate of redemption.
- City of Dearborn Heights sought to purchase the property in July 2012 but was told the property was unavailable because of the payment plan; the city then filed a quiet-title action claiming it should have been sold after the statutory 21-day redemption window.
- The trial court vacated the foreclosure judgment based on a procedural due-process violation (finding the Treasurer misled B&D about the need to redeem within 21 days) and granted summary disposition for the Treasurer, Wayne County, and B&D; Dearborn Heights appealed.
- The Court of Appeals affirmed, holding (inter alia) that (1) a foreclosure judgment may be set aside for a constitutional due-process violation even after the statutory redemption period, (2) the payment-plan documents and related evidence did not create genuine factual disputes material to the due-process ruling, and (3) Dearborn Heights lacked standing to challenge B&D’s compliance with the agreement.
Issues
| Issue | Plaintiff's Argument (Dearborn Heights) | Defendant's Argument (Treasurer/Wayne Co/B&D) | Held |
|---|---|---|---|
| Whether the foreclosure judgment could be set aside after statutory redemption period due to due-process violation | Judgment was final and redemption period expired; B&D had no protectable interest after 21 days so no due-process basis to vacate | A judgment may be set aside if the owner was denied minimum constitutional due process; B&D had a property interest as original owner and was misled | Held: Judgment could be set aside for due-process violation; constitutional protections can invalidate GPTA proceedings post-redemption period (affirmed). |
| Whether B&D was denied minimum due process by misleading payment-plan terms about redemption/appeal rights | The payment plan was unauthorized and unenforceable; any misinformation cannot create a due-process claim | The payment-plan contained misleading information that B&D detrimentally relied on, depriving it of the opportunity to contest or redeem within the statutory period | Held: The agreement’s misleading statement about redemption rights supported a due-process violation because B&D detrimentally relied on it. |
| Whether material factual disputes exist about the existence, date, or performance under the payment plan | Multiple versions/dates of the agreement and inconsistent payment dates create factual issues precluding summary disposition | Agreement existence and date are supported by documents/affidavits; Treasurer found substantial compliance and could waive strict dates | Held: No genuine material factual dispute; evidence supported existence/date and substantial compliance; Dearborn Heights lacks standing to challenge compliance. |
| Whether Dearborn Heights had standing to challenge B&D’s compliance or enforce the payment plan | City asserted a right to purchase after statutory sale procedure was not followed; could challenge the validity of post-judgment events | City was neither a party to the payment plan nor a third‑party beneficiary and thus lacks standing to enforce/attack performance | Held: Dearborn Heights lacked standing to contest B&D’s compliance with the payment plan. |
Key Cases Cited
- In re Petition by Wayne County Treasurer, 478 Mich 1 (2007) (court may set aside foreclosure proceedings that violate constitutional due process)
- Gillie v. Genesee County Treasurer, 277 Mich App 333 (2007) (both statute and constitutional notice requirements are relevant to tax-foreclosure proceedings)
- Walters v. Reno, 145 F.3d 1032 (9th Cir. 1998) (misleading notice/forms about procedural rights can violate due process)
- Day v. Shalala, 23 F.3d 1052 (6th Cir. 1994) (notice that equates distinct remedies or misleads about appeal process can violate due process)
- Gonzalez v. Sullivan, 914 F.2d 1197 (9th Cir. 1990) (inadequate notice that fails to indicate finality/remedy requirements violates due process)
- Herrada v. City of Detroit, 275 F.3d 553 (6th Cir. 2001) (distinguishing misleading statements about hearing/appeal rights from mere penalty information)