Rental Properties Owners Ass'n v. Kent County Treasurer
308 Mich. App. 498
| Mich. Ct. App. | 2014Background
- Kent County Treasurer foreclosed numerous properties (2012–2013). Kent County and Grand Rapids purchased some foreclosed parcels (paying minimum bid) and then conveyed them to the Kent County Land Bank Authority (KCLBA).
- KCLBA filed expedited quiet-title and foreclosure petitions under the Land Bank Fast Track Act (MCL 124.751 et seq.); the trial court granted quiet-title and foreclosure judgments after notice and publication.
- Various private parties and developers (the “3830 G parties”) sued Treasurer, Kent County, Grand Rapids, and KCLBA seeking declaratory/injunctive relief and mandamus, alleging statutory violations (MCL 211.78m; MCL 124.755(6)), due-process and constitutional/fiduciary breaches, and that governmental entities acted as strawmen to avoid public auctions.
- Trial court denied the 3830 G parties’ motion to set aside the KCLBA quiet-title judgment and granted summary disposition for defendants in multiple consolidated actions.
- On appeal, the Court of Appeals affirmed: county and city purchases and transfers to KCLBA complied with MCL 211.78m and MCL 124.755; KCLBA’s expedited quiet-title procedures satisfied due process; mandamus was not available; and county sales to KCLBA did not breach county policies or fiduciary duties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MCL 124.755(6) / MCL 211.78m required a public auction before county or city could transfer foreclosed property to a land bank | Statutes and policy require public auction; county/city acted as strawmen to avoid auctions so plaintiffs were deprived of bidding rights | Statute permits state/city/county to buy pre-auction under MCL 211.78m(1); only the foreclosing governmental unit must conduct auctions under MCL 211.78m(2) | Affirmed for defendants: purchases by county/city prior to auction were permitted; subsequent sale to KCLBA did not violate statutes |
| Whether KCLBA’s expedited quiet-title process violated notice/due process requirements | KCLBA failed to follow procedural requirements (e.g., petition hearing date); plaintiffs denied required notice and opportunity to bid/be heard | KCLBA complied with MCL 124.759; posted/published notices and actual notice satisfied due process; statutory notice-rights limited to property interest owners | Affirmed: KCLBA’s procedures and notice met due-process floor; 3830 G parties were not entitled to the specific notice they claimed |
| Whether mandamus or other relief was available to compel sale by public auction | Plaintiffs had a clear legal right to an auction and defendant officials had a clear, ministerial duty to hold one | Defendants: no clear legal right because statute allows pre-auction purchases by public entities; mandamus requires a clear, ministerial duty that does not exist here | Affirmed: mandamus denied — plaintiffs lacked a clear legal right and defendants had no such ministerial duty |
| Whether prior KCLBA quiet-title judgment collaterally estopped plaintiffs’ subsequent suit | Plaintiffs argued foreclosure judgment did not preclude their auction/bid-related claims | Defendants argued quiet-title judgment barred relitigation of property title and related claims | Trial court erred to the extent it invoked collateral estoppel (parties not the same/had no full and fair opportunity), but error was harmless because dismissal was proper on other grounds; overall affirmance for defendants |
Key Cases Cited
- Krohn v Home-Owners Ins Co, 490 Mich 145 (statutory interpretation starts with plain language)
- In re Certified Question, 468 Mich 109 (if statute unambiguous, no judicial construction)
- US Fidelity & Guaranty Co v Mich Catastrophic Claims Ass’n, 484 Mich 1 (statutory language controls legislative intent)
- Haynes v Neshewat, 477 Mich 29 (definitions within statutory scheme control meaning)
- Mich Ed Ass’n v Secretary of State, 489 Mich 194 (courts may not read language into statute)
- Rutland Twp v City of Hastings, 413 Mich 560 (look-through to substance where municipal transactions are sham)
- Robinson v Detroit, 462 Mich 439 (courts cannot rewrite legislation)
- Dusenbery v United States, 534 US 161 (due process requires notice and opportunity to be heard)
- Republic Bank v Genesee Co Treasurer, 471 Mich 732 (due-process notice principles applied to tax sales)
- Spiek v Dep’t of Transp, 456 Mich 331 (standard for MCR 2.116(C)(8) motions)
- Henry v Dow Chem Co, 484 Mich 483 (court-rule interpretation follows statutory construction principles)
- Monat v State Farm Ins Co, 469 Mich 679 (elements and limits of collateral estoppel)