Petersen Financial LLC v. City of Kentwood
928 N.W.2d 245
Mich. Ct. App.2018Background
- Property in Kentwood was subject to multiple recorded special-assessment agreements (installment payments, covenants running with the land) tied to public improvements for a planned unit development.
- Owner defaulted; tax-foreclosure proceedings resulted in a final, unappealed judgment vesting title in the county treasurer; county treasurer sold the property at foreclosure sale to Petersen Financial LLC (plaintiff).
- Plaintiff sued city and Kent County treasurer seeking declaratory relief that four special-assessment agreements (three original agreements and one post-foreclosure amended agreement) were extinguished by the foreclosure judgment, and a separate slander-of-title tort claim for defendants’ continued assertion of liens.
- Circuit court granted defendants’ motion: dismissed Counts I–IV for lack of subject-matter jurisdiction (holding MTT had exclusive jurisdiction) and dismissed Count V (slander of title) on governmental-immunity grounds.
- Court of Appeals held circuit court erred on jurisdiction for Counts I–IV (these presented pure questions of law/statutory construction, not MTT fact-finding), remanded for declaratory relief on two counts and further proceedings on the other two; affirmed dismissal of slander-of-title claim under governmental immunity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether circuit court had subject-matter jurisdiction over claims asking whether foreclosure judgment extinguished past installments of special assessments (Counts I–III) | Foreclosure judgment under GPTA extinguished all prior special-assessment installments; circuit court can adjudicate statutory construction | MTT has exclusive jurisdiction over matters "relating to" special assessments | Circuit court had jurisdiction: Counts I–III raise pure statutory/construction issues, not factual issues requiring MTT expertise; MTT jurisdiction not triggered |
| Whether circuit court had jurisdiction over claim attacking amended VSADA executed post-judgment/pre-sale (Counts II & IV) | Amended VSADA was invalid/unenforceable; circuit court should decide contract/GPTA issues | MTT has exclusive jurisdiction because matter involves special assessments | Circuit court had jurisdiction over Count IV (contract-law/GPTA question); legal validity of amended VSADA remanded for resolution; standing and validity unresolved on record |
| Whether foreclosure judgment’s non-extinguishment proviso for future installments (MCL 211.78k(5)(c)) defeats plaintiff’s claims | Foreclosure extinguished past installments; amended agreement attempts to revive voided assessment | Defendants: amended agreement created enforceable future-installment obligations not extinguished by foreclosure | Court: proviso may apply if amended agreement valid; but if amended agreement is void, proviso is irrelevant; remand required to decide validity and standing |
| Whether slander-of-title claim (Count V) survives summary disposition despite governmental immunity | Defendants’ continued assertions and recorded claims maliciously clouded title; not shielded by immunity when asserting extinguished obligations | City actions (assessment, lien recording, collection) are governmental functions protected by GTLA; none of exceptions apply | Dismissal affirmed: the activities were governmental functions and plaintiff failed to plead an applicable statutory exception to governmental immunity |
Key Cases Cited
- Romulus City Treasurer v. Wayne County Drain Commissioner, 413 Mich 728 (describing MTT composition and expertise in tax fact-finding)
- Hillsdale County Senior Services, Inc. v. Hillsdale County, 494 Mich 46 (setting four-element test for MTT jurisdiction under MCL 205.731(a))
- Kadzban v. City of Grandville, 442 Mich 495 (definition and nature of special assessments)
- Highland-Howell Development Co., LLC v. Marion Township, 469 Mich 673 (MTT lacks expertise to adjudicate common-law contract claims; circuit court retains jurisdiction over contract/tort matters)