Estate of Marguerite Schubert v. Department of Treasury
322 Mich. App. 439
| Mich. Ct. App. | 2017Background
- Property at 823 S. Lakeshore Drive (Ludington) purchased in 1977; Marguerite Schubert claimed a principal residence exemption (PRE) starting in 1994 and continued to claim it through 2013.
- Department of Treasury audited in Aug 2013 and, in Nov 2013, denied the PRE for tax years 2010–2013, concluding the Midland apartment was Schubert’s principal residence.
- Petitioner (Schubert’s son/personal representative) submitted documents and testimony asserting Schubert spent most of the year at the Ludington home (seasonal resident elsewhere) and intended Ludington as her retirement residence.
- Department submitted records (driver’s license history, tax returns, voter registration, vehicle registration, PRE questionnaire marked “seasonally”) indicating Midland as Schubert’s primary residence for relevant years.
- Tax Tribunal weighed competing documentary evidence, found Midland was Schubert’s principal residence for 2010–2013, denied PRE for those years, and the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PRE requires ownership and occupancy for each claimed year | Schubert only needed to occupy on affidavit date; prior 1994 affidavit kept exemption in effect | PRE statute requires continued ownership and occupancy each claimed year; Dept. may review recent years | Court: PRE requires owner to both own and occupy the property as principal residence for each year claimed; Dept may audit 3 prior years |
| Whether Ludington or Midland was Schubert’s principal residence | Ludington was Schubert’s primary home (spent ~8 months/yr there); later documentary evidence ties her to Ludington | Dept showed tax returns, voter registration, ID, vehicle registration listing Midland for the relevant years | Court: Competent substantial evidence supports Tribunal’s finding that Midland was Schubert’s principal residence for the years at issue |
| Whether PRE continues despite residence in nursing/rehab without rescission | Petitioner relied on MCL 211.7cc(5) (nursing-home exception) and evidence of intent to return | Dept argued Schubert did not meet the statutory retention conditions while in rehab | Court: Petitioner failed to prove statutory retention elements; nursing-home exception did not save PRE for 2013 |
| Evidentiary weight and timeliness of documents submitted after audit | Many plaintiff documents were developed after the audit and are less probative; son’s testimony of intent insufficient to overcome documentary weight | Dept’s contemporaneous records (returns, registrations, PRE questionnaire) were persuasive | Court: Tribunal reasonably weighed evidence and credited Dept records; appellate court will not second-guess that credibility/weight determination |
Key Cases Cited
- Power v. Dep’t of Treasury, 301 Mich. App. 226 (2013) (burden and affidavit requirement for PRE)
- EldenBrady v. City of Albion, 294 Mich. App. 251 (2011) (statutory interpretation of PRE terms and definition guidance)
- Stege v. Dep’t of Treasury, 252 Mich. App. 183 (2002) (burden of proof on claimant for tax exemption)
- Drew v. Cass Co., 299 Mich. App. 495 (2013) (types of documentary evidence probative of residence; weight of evidence lies with Tribunal)
- Robinson v. City of Lansing, 486 Mich. 1 (2010) (avoid statutory constructions rendering language surplusage)