Opinion
No. 342533
02-12-2019
NAGESH PALAKURTHI, Plaintiff-Appellant, v. COUNTY OF WAYNE, RAYMOND J. WOJTOWICZ, and WAYNE COUNTY TREASURER, Defendants-Appellees, and LAWRENCE ROCCA, Defendant.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Court of Claims
LC No. 17-000073-MZ Before: SWARTZLE, P.J., and MARKEY and RONAYNE KRAUSE, JJ. PER CURIAM.
Plaintiff, Nagesh Palakurthi, appeals by leave granted from the order of the Court of Claims granting summary disposition to defendants Wayne County, the Wayne County Treasurer, and Raymond J. Wojtowicz (the County Treasurer), under MCR 2.116(C)(8) and (C)(10). We affirm.
Palakurthi v County of Wayne, unpublished order of the Court of Appeals, entered May 29, 2018 (Docket No. 342533).
I. BACKGROUND
This action arises from a judgment of foreclosure, entered in the circuit court on March 20, 2015, that extinguished plaintiff's recorded interest in real property at 42671 Preswick Court, Belleville, Van Buren Township, Wayne County ("the Property"). The tax foreclosure resulted from plaintiff's nonpayment of the winter 2012 property taxes. After entry of the judgment of foreclosure, plaintiff first filed an action in circuit court seeking an injunction to stop the foreclosure sale. The circuit court denied plaintiff's request for relief, specifically holding that plaintiff had "not been deprived of due process" and that the foreclosure judgment was valid. Plaintiff subsequently filed this action in the Court of Claims under MCL 211.78l , a provision of the General Property Tax ACT (GPTA), MCL 211.1, et seq., seeking to recover monetary damages arising from the judgment of property-tax foreclosure.
Plaintiff owned the Property and lived there with his family until 2005, when he moved to Oakland County. Several years after plaintiff moved out, Van Buren Township revoked the homestead exemption for the Property. The township's records indicate that all of the tax bills that the township sent plaintiff from 2007 through 2011 were returned as undeliverable.
After he moved out of the Property, plaintiff engaged a property manager to manage the premises and he rented it to third parties. Plaintiff additionally owned a number of other properties and he directed his administrative assistant to manage the annual financial obligations for his real-estate holdings. In an affidavit that he filed in the Court of Claims, plaintiff averred that he and his administrative assistant conducted all of plaintiff's business and personal affairs from his office at 26980 Trolley Industrial Drive, Taylor, MI 48180 (the "Taylor address").
Plaintiff did not specifically notify the township of the Taylor address until October 9, 2015, when he provided a slightly incorrect street number for that address. Plaintiff corrected the error on February 8, 2016. Plaintiff, therefore, failed to provide his correct business address to the township for an 11-year period after he moved from the Property.
The real property taxes on the Property became delinquent, causing the County Treasurer to initiate foreclosure proceedings (the "first tax sale"). Plaintiff claimed that he learned from his property manager that the County Treasurer posted a foreclosure notice at the Property, regarding the first tax sale. In response to the County's posting of the Property, plaintiff directed his administrative assistant to pay the County Treasurer the $11,117.85 in back taxes then owing. Plaintiff provided the Court of Claims with a receipt from the County Treasurer verifying that plaintiff paid the 2009 and 2010 property taxes, in the amount of $11,117.85, on December 5, 2011. Plaintiff averred that his administrative assistant paid the $11,117.85 in back taxes through the County Treasurer's website. Plaintiff also averred that, in order to make that online payment, his administrative assistant had to provide plaintiff's name, address, email address, and banking information, all of which was allegedly retained in the County Treasurer's website.
Plaintiff's affidavit in the Court of Claims confirmed that the County Treasurer's action of posting notice at the Property was sufficient to provide plaintiff with actual notice of the first tax sale, even though plaintiff did not live at the Property.
Plaintiff stated that, following the near-foreclosure of the Property related to the first tax sale, he instructed his administrative assistant to use the township's website to make all future payments for taxes assessed to the Property. Plaintiff provided the Court of Claims with a printout from the Township Treasurer's website that details the dates on which plaintiff made tax payments to the Township Treasurer. Because the township's records do not indicate the date on which payments were made to the County Treasurer, this document does not show the December 5, 2011 payment made to the county for the delinquent 2009 and 2010 taxes. This printout, however, does indicate that plaintiff paid the township (1) the summer 2011 taxes on October 31, 2011; (2) the winter 2011 taxes on December 9, 2011; and (3) the summer 2012 taxes on September 13, 2012. Plaintiff failed to pay the winter 2012 taxes.
On June 13, 2014, the Wayne County Treasurer filed a petition for foreclosure concerning a number of parcels of real property forfeited to the County Treasurer for nonpayment of 2012 property taxes (the "second tax sale"). During the course of the second tax sale, the County Treasurer sought a judgment for the forfeited, unpaid, delinquent 2012 taxes, along with interest, fees, and penalties. In addition, the County Treasurer sought a judgment vesting absolute title to the Property in the county.
As part of the forfeiture proceeding, the County Treasurer was required to initiate a search of records to identify owners of a property interest in the Property, MCL 211.78i(1), including tax records in the office of the county treasurer and the local treasurer, MCL 211.78i(6). After conducting that search of records, the County Treasurer was required to "determine the address reasonably calculated to apprise those owners" of the show-cause hearing and the foreclosure hearing, and was required to send notice of those hearings to those owners. MCL 211.78i(2).
In an attempt to apprise plaintiff of the show-cause and foreclosure hearings, defendants published notice in the Detroit Legal News, on December 2, 9, and 16, 2014. In addition, defendants sent a representative to visit the Property. Defendants provided an affidavit from their agent, describing his personal visit to the Property. The affidavit stated that the agent (1) visited the property on December 4, 2014, at 12:46 p.m.; (2) observed that the Property was "an occupied structure"; (3) was "not able to personally meet with the occupant"; and (4) placed notice "in a conspicuous manner on the property and a photograph of the property was taken."
Defendants also sent plaintiff notice of the foreclosure hearing, by certified mail, on December 19, 22, and 23, 2014. Defendants sent two of those certified mailings to the Property and sent the third to the homeowners' association in which the Property was located. The two certified-mail envelopes that defendants sent to the Property were returned by the United States Postal Service (USPS) as undeliverable. The USPS's tracking system indicated that it was unable to deliver the certified mail because plaintiff had "Moved, Left no address." Because the certified mail was returned unclaimed, defendants also sent plaintiff notice by first-class mail. Plaintiff denied that he received actual notice as a result of any of these forms of notice provided by defendants.
The circuit court entered a judgment of foreclosure on March 20, 2015, for the unpaid 2012 property taxes. Under the terms of the judgment of foreclosure, unless the taxes, interest, and penalties were paid by March 31, 2015, the Wayne County Treasurer was vested with absolute title to the Property. Plaintiff did not redeem the Property and the County Treasurer acquired title to the Property. On August 28, 2015, purportedly unaware that the County Treasurer had already foreclosed on and obtained title to the Property, plaintiff paid the summer 2015 property taxes to the Township Treasurer. The personal check with which plaintiff paid those taxes listed plaintiff's residential address in Bloomfield Hills.
Plaintiff averred that he first learned of the foreclosure proceeding for nonpayment of the winter 2012 property taxes on September 10, 2015. Plaintiff claimed that, on that date, one of the tenants "called me and informed me that he felt bad for not telling me sooner, but that the [Property] was being sold in a few days of his call." Plaintiff alleged that, upon receiving this information, he instructed his administrative assistant to go to the County Treasurer's office and pay the unpaid tax obligation to avoid the sale of the Property at auction. Plaintiff averred that the County Treasurer refused to accept payment because the Property was already being auctioned. Plaintiff averred that he visited the County Treasurer's website at 10:45 a.m. on September 11, 2015, and discovered that there had already been 61 bids on the Property and that the minimum bid to acquire the Property at that time was $166,000. The Property ultimately sold at auction for $168,000, and plaintiff's ex-wife was the winning bidder.
Plaintiff made inconsistent claims in the circuit court litigation and the Court of Claims litigation regarding when he first learned of the foreclosure proceedings.
Plaintiff filed an action in circuit court requesting an injunction to stop the foreclosure sale. In that lawsuit, plaintiff and defendants extensively briefed and argued whether attempts to notify plaintiff of the second tax sale satisfied plaintiff's due-process rights. The circuit court denied plaintiff's request to enjoin the foreclosure sale or to set aside the judgment of foreclosure. The circuit court's order specified that plaintiff had "not been deprived of due process and that the Foreclosure Judgment of March 20, 2015 is valid."
Plaintiff subsequently filed an action in the Court of Claims under MCL 211.78l , seeking to recover monetary damages arising from the judgment of foreclosure. Plaintiff alleged that defendants conducted the foreclosure and sale of the Property without meeting the due-process requirements of the GPTA and the due-process requirements of the federal Constitution.
Defendants moved the Court of Claims for summary disposition under MCR 2.116(C)(4), (5), (7), (8), and (10). Defendants argued that (1) the Court of Claims lacked jurisdiction to award monetary damages to plaintiff; (2) plaintiff's action was an impermissible collateral attack on the circuit court's foreclosure judgment; (3) the doctrines of res judicata, collateral estoppel, and laches barred plaintiff's action for damages; (4) the statute of limitations had expired; (5) plaintiff lacked standing; (6) governmental immunity barred plaintiff's claim; and (7) the County Treasurer provided plaintiff with due process by sending first-class and certified mail to the Property, sending an agent to personally visit and post the Property, and publishing a notice in the newspaper. Plaintiff opposed the motion for summary disposition, arguing that defendants failed to provide him with adequate notice of the tax-foreclosure sale and that defendants had therefore violated his due-process rights. Plaintiff argued that defendants should have examined their official tax files, including their online payment-system information, and should have sent the notices of the tax foreclosure to the Taylor address, rather than sending those notices to the Property.
The Court of Claims granted defendants' motion for summary disposition under MCR 2.116(C)(8) and (C)(10), noting that a property owner has two potential remedies once a judgment of foreclosure has been entered regarding his property: first, a property owner may move the circuit court to set aside a judgment of foreclosure, if the property owner has been deprived of the notice required by constitutional-due-process protections; second, a property owner may file an action in the Court of Claims to recover money damages, if the property owner did not receive any notice of the foreclosure proceedings, as required under the GPTA. See In re Treasurer of Wayne Co for Foreclosure, 478 Mich 1, 8-11; 732 NW2d 458 (2007). The Court of Claims held that the statutory cause of action for money damages under MCL 211.78l was the focus of the case before it and that the circuit court had already "determined that plaintiff was afforded notice in accordance with minimum due process standards."
The Court of Claims held that plaintiff received notice of the tax-foreclosure proceedings, as required by the GPTA, because defendants posted notice at the Property. As the Court of Claims stated:
[D]efendants have submitted documentary evidence establishing—and plaintiff has not contested the same—that, at a minimum, notice was received when it was posted on the property in accordance with the GPTA's provisions. Indeed, the notice was, by all accounts, conspicuously posted at a home owned by plaintiff and over which he exercised control by leasing it to tenants. Plaintiff is charged with having received the same. The failure of plaintiff's renters to pass on the notice, or plaintiff's failure to observe notice left on his property, cannot be attributed to defendants.
The Court of Claims, therefore, granted defendants' motion for summary disposition under MCR 2.116(C)(8) and (C)(10). Plaintiff now appeals.
II. ANALYSIS
A. STANDARDS OF REVIEW
"This Court reviews de novo a trial court's decision regarding a motion for summary disposition. This Court also reviews constitutional issues de novo." Sidun v Wayne Co Treasurer, 481 Mich 503, 508; 751 NW2d 453 (2008). In addition, this Court reviews de novo the proper interpretation of statutes. McCormick v Carrier, 487 Mich App 180, 188; 795 NW2d 517 (2010). Finally, the question whether the doctrine of res judicata bars a subsequent action is a question of law reviewed de novo. Pierson Sand & Gravel, Inc v Keeler Brass Co, 460 Mich 372, 379; 596 NW2d 153 (1999).
"A motion for summary disposition under MCR 2.116(C)(8) tests the legal sufficiency of a claim by the pleadings alone," and this Court reviews a trial court's decision to dismiss a plaintiff's complaint under MCR 2.116(C)(8) "to determine whether the claim is so clearly unenforceable as a matter of law that no factual development could establish the claim and justify recovery." Averill v Dauterman, 284 Mich App 18, 21; 772 NW2d 797 (2009) (cleaned up). This Court accepts as true all factual allegations supporting the claim, as well as any reasonable inference or conclusions drawn from those facts. Id.
A motion for summary disposition under MCR 2.116(C)(10) tests the factual sufficiency of a claim. Lichon v American Universal Ins Co, 435 Mich 408, 414; 459 NW2d 288 (1990). MCR 2.116(C)(10) permits summary disposition when, except with regard to the amount of damages, there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law. In reviewing such a motion, this Court considers the pleadings, affidavits, depositions, admissions, and documentary evidence and grants the benefit of any reasonable doubt to the nonmoving party. Skinner v Square D Co, 445 Mich 153, 161-162; 516 NW2d 475 (1994). The court is not permitted to assess credibility, or to determine facts on a motion for summary disposition. Instead, the court's task is to review the record evidence, and all reasonable inferences therefrom, and decide whether a genuine issue of any material fact exists to warrant a trial. Id. "Like the trial court's inquiry, when an appellate court reviews a motion for summary disposition, it makes all legitimate inferences in favor of the nonmoving party." Id. at 162.
B. STATUTORY-NOTICE CLAIM
The GPTA extinguishes the rights of a property owner who fails to redeem property or contest a judgment of foreclosure within the period specified by statute. See MCL 211.78k(1)-(6). In In re Treasurer of Wayne Co for Foreclosure, 478 Mich App at 4, the Michigan Supreme Court recognized the jurisdiction of circuit courts to modify judgments of foreclosure when the foreclosing governmental unit deprives the property owner of due process by failing to provide the property owner with constitutionally adequate notice of the foreclosure. In addition to such a circuit court action, the GPTA also permits a cause of action for property owners who do not receive any notice of the tax foreclosure. Id. at 10, citing MCL 211.78l .
Plaintiff filed the lawsuit that is the subject of this appeal in the Court of Claims under MCL 211.78l , seeking to recover monetary damages arising from a judgment of property-tax foreclosure. That statute provides, in pertinent part:
(1) If a judgment for foreclosure is entered under section 78k and all existing recorded and unrecorded interests in a parcel of property are extinguished as provided in section 78k, the owner of any extinguished recorded or unrecorded interest in that property who claims that he or she did not receive any notice required under this act shall not bring an action for possession of the property against any subsequent owner, but may only bring an action to recover monetary damages as provided in this section.
(2) The court of claims has original and exclusive jurisdiction in any action to recover monetary damages under this section.
* * *
(4) Any monetary damages recoverable under this section shall be determined as of the date a judgment for foreclosure is entered under section 78k and shall not exceed the fair market value of the interest in the property held by the person bringing the action under this section on that date, less any taxes,
interest, penalties, and fees owed on the property as of that date. [Emphasis added.]
Furthermore, the reference in MCL 211.78l to "notice required under this act" refers to the requirements of several different statutory subsections of the GPTA. As accurately stated by the Court of Claims:
The GPTA sets forth a number of measures with which a foreclosing governmental entity (FGU) must comply in order to foreclose on a property because of unpaid property taxes. The notice process begins with mailings, see MCL 211.78b-c, certified mail of the date on which the property will be forfeited, see MCL 211.78f(1), and can include notice by publication, see MCL 211.78f(3). The required mailings must be sent to "the address reasonably calculated to apprise" the property owner of the proceedings. MCL 211.78i(2). Furthermore, the FGU or its representative "shall make a personal visit" to properties scheduled for foreclosure and shall attempt to personally serve occupants with notice of the statutory show-cause hearing or, at a minimum, post notice of the same in a "conspicuous manner on the property[.]" MCL 211.78i(3)(a)-(d).
As the Court of Claims noted, "the circuit court already determined that plaintiff was afforded notice in accordance with minimum due process standards." Therefore, the Court of Claims focused its analysis on plaintiff's statutory claim for monetary damages. The statute allows a plaintiff to bring such a cause of action only when the plaintiff "did not receive any notice required under this act." MCL 211.78l(1) (emphasis added). In In re Treasurer of Wayne Co for Foreclosure, 478 Mich App at 10, the Michigan Supreme Court described an action for monetary damages under MCL 211.78l as one "that is not constitutionally required," and as one that can be filed in cases where the foreclosing governmental unit complied with constitutionally required due process but failed to comply with the statutory-notice provisions. As explained by this Court in Gillie v Genesee Co Treasurer, 277 Mich App 333, 353 n 10; 745 NW2d 137 (2007), statutory-notice rights established by the GPTA "can be violated, giving rise to an action for money damages, yet minimum due process may have been satisfied."
The Court of Claims held that defendants were entitled to summary disposition of plaintiff's statutory claim for monetary damages because defendants posted notice of the foreclosure at the Property. Therefore, even viewing the evidence in the light most favorable to plaintiff, the Court of Claims concluded that it was impossible for plaintiff to establish that he did not receive any of the different types of notice required under the GPTA, as required for a plaintiff to state a viable claim under MCL 211.78l(1).
We affirm for the reasons stated by the Court of Claims. Because plaintiff cannot bring a cause of action for monetary damages under MCL 211.78l , unless he "did not receive any notice" required by the GPTA, plaintiff's claim failed as a matter of law and the Court of Claims properly granted defendants' motion for summary disposition.
C. CONSTITUTIONAL-NOTICE CLAIM
Despite the fact that the Court of Claims only decided plaintiff's statutory-notice claim, plaintiff primarily argues on appeal that defendants failed to provide him constitutionally adequate notice. As defendants correctly point out, plaintiff's constitutional-notice claim is barred by the doctrine of res judicata because the circuit court directly resolved that question and plaintiff did not appeal the circuit court's decision.
The doctrine of res judicata "operates to prevent the relitigation of facts and law between the same parties or their privies." Hackley v Hackley, 426 Mich 582, 584; 395 NW2d 906 (1986) (cleaned up). This doctrine "was judicially created in order to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication." Id. "As a general rule, res judicata will apply to bar a subsequent relitigation based upon the same transaction or events." Pierson Sand & Gravel, 460 Mich at 380-381. The doctrine applies in a subsequent action between the same parties, and "not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time." Hackley, 426 Mich at 585 (cleaned up).
In this case, it is undisputed that plaintiff filed a circuit court action against defendants, seeking an order enjoining the foreclosure sale or an order setting aside the foreclosure. In that case, the circuit court held that plaintiff "had not been deprived of due process and that the Foreclosure Judgment of March 20, 2015 is valid." Because the constitutional adequacy of the notice that defendants' provided to plaintiff was directly addressed and decided in that prior lawsuit between these parties, we conclude that plaintiff was barred from relitigating that question in the Court of Claims.
Because we conclude that plaintiff's constitutional-notice claims are barred by the doctrine of res judicata, we decline to address plaintiff's arguments that defendants should have searched the Qualified Voter File and should have conducted an online search for his name, in order to locate another address where plaintiff could be found. Furthermore, we note that plaintiff never raised these arguments in the Court of Claims, and appellate consideration of unpreserved claims of error is disfavored. People v Frazier, 478 Mich 231, 241; 733 NW2d 713 (2007).
D. PLAINTIFF'S DISCOVERY REQUESTS
Finally, plaintiff argues that the Court of Claims improperly granted summary disposition before the close of discovery. Because plaintiff did not raise this issue in his statement of questions presented, we need not address the issue. "Independent issues not raised in the statement of questions presented are not properly presented for appellate review." Bouverette v Westinghouse Electric Corp, 245 Mich App 391, 404; 628 NW2d 86 (2001). Furthermore, plaintiff waived appellate review of this issue because plaintiff signed a stipulation in which he agreed to the toll the time for defendants to respond to his discovery requests until after the Court of Claims issued its ruling on defendants' motion for summary disposition. See People v Carter, 462 Mich 206, 214; 612 NW2d 144 (2000) (holding that waiver is the intentional relinquishment or abandonment of a known right).
Affirmed. Defendant, having prevailed in full, may tax costs under MCR 7.219.
/s/ Brock A. Swartzle
/s/ Jane E. Markey
/s/ Amy Ronayne Krause