964 N.W.2d 378
Mich. Ct. App.2020Background
- New Covert Generating (owner of a combined‑cycle gas power plant in Covert Township, Van Buren County) challenged local assessments for tax years 2012–2016; consolidated proceedings included prior rulings for 2010–2011.
- Tax Tribunal and this Court previously resolved classification issues (turbines separated as personal property) and jurisdictional challenges for earlier years.
- For tax year 2016 the Tribunal held a contested valuation hearing; parties submitted competing appraisals (Duff & Phelps for petitioner; Concentric for Township/County).
- Tribunal found Duff & Phelps generally more reliable, adjusted certain cost and income approach items (switchyard deduction; intangibles; working capital; cost to finance; owner’s profit), and set true cash value at $509,500,000 with allocations between turbine and non‑turbine personal property.
- Tribunal also imposed sanctions under the court rules against the Township, County, and counsel for filing frivolous or improperly timed motions attacking jurisdiction and petitioner’s status; those sanctions were affirmed on appeal in part.
Issues
| Issue | Petitioner (New Covert) Argument | Respondents (Township/County) Argument | Held |
|---|---|---|---|
| Whether Tax Tribunal had jurisdiction when petitioner had filed protests before the board (and whether additional statements of assessable property were required) | Petitioner: protesting to the board satisfies MCL 205.735a(3); the statement‑filing condition in MCL 205.735a(4)(b) applies only to direct appeals without protest | Respondents: MCL 205.735a(4)(b) requires filing statements of assessable property as a prerequisite to Tax Tribunal jurisdiction for industrial personal property, even if the taxpayer protested to the board | Court: Affirmed Tribunal—statutory text and context show the §(4)(b) statement requirement limits only direct appeals; protesting to the board invokes jurisdiction under §(3) so Tribunal had jurisdiction |
| Whether petitioner was a "party in interest" (challenge that it was a "shell" and lacked standing) | Petitioner: record owner of assessed property and thus a party in interest entitled to invoke Tribunal jurisdiction | Respondents: petitioner was a shell entity with no employees/records and cannot be treated as a party in interest | Court: Affirmed Tribunal—record owner status suffices under Spartan Stores; respecting corporate separateness was appropriate absent veil‑piercing action |
| Proper construction of the statutory term "turbine" and valuation unit (isolated component vs. installed/functional turbine) | Petitioner: "turbine" should be valued in isolation (rotor/blades) and then excluded from industrial personal property; ancillary equipment should not be subsumed into turbine value | Respondents: turbine exclusion was broader and may encompass systems or necessary ancillary equipment for generation | Court: Affirmed Tribunal—"turbine" is an engine/machine rotated by fluid; statutory qualifiers limit the class (gas/steam/etc. used to generate electricity for sale) but do not expand the term to include all ancillary equipment; turbine value must be assessed as an installed, functioning component of the plant |
| Whether sanctions for motions were warranted and properly imposed | Petitioner: motions attacking jurisdiction/status were frivolous and aimed to delay/harass; sanctions appropriate | Respondents: motions raised arguable statutory questions; sanctions improper or excessive | Court: Affirmed Tribunal—Tribunal’s findings that several motions were frivolous or filed for improper purpose were not clearly erroneous; sanctions authorized and amounts not challenged on appeal |
Key Cases Cited
- Mich Props., LLC v. Meridian Twp., 491 Mich. 518 (2012) (standard of review for Tax Tribunal valuation decisions; review limited to fraud, legal error, or wrong principles)
- Spartan Stores, Inc. v. Grand Rapids, 307 Mich. App. 565 (2014) ("party in interest" includes entities holding property interests such as leaseholds; respect corporate separateness absent veil‑piercing)
- Meijer, Inc. v. Midland, 240 Mich. App. 1 (2000) (owner’s/entrepreneurial profit may be included in cost approach only if market would bear it)
- Meadowlanes Ltd. Dividend Hous. Ass’n v. Holland, 437 Mich. 473 (1991) (intangible assets not taxable; must be excluded from tangible property valuation where appropriate)
- Jones & Laughlin Steel Corp. v. Warren, 193 Mich. App. 348 (1992) (post‑valuation evidence is not automatically irrelevant; admissibility/weight are for the factfinder)
- In re Complaint of Rovas Against SBC Mich., 482 Mich. 90 (2008) (agency statutory interpretation: agency views entitled to respectful consideration but not controlling if statute is plain)
- Union Pacific R. Co. v. Brotherhood of Locomotive Engineers, 558 U.S. 67 (2009) (distinguishing jurisdictional prerequisites from claim‑processing rules)
- Black v. Dep’t of Social Servs., 195 Mich. App. 27 (1992) (definition of substantial‑evidence review: what a "reasoning mind" would accept as sufficient)