23-001412 and 24-004256.pdf
Congregation B'Nai Israel - Beth Yehudah Petitioner Vs. City Of Oak Park Respondent · 24-004256-TT
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STATE OF MICHIGAN GRETCHEN WHITMER GOVERNOR DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS LANSING MARLON I. BROWN, DPA DIRECTOR MICHIGAN TAX TRIBUNAL · 611 W. OTTAWA ST., LANSING, MI 48933 · 517-335-9760 PO BOX 30232, LANSING, MI 48909 · Other Carriers: 2407 N. GRAND RIVER AVE., LANSING, MI 48906 Congregation B’Nai Israel – Beth Yehudah, MICHIGAN TAX TRIBUNAL Petitioner, v MTT Docket Nos. 23-001412 & 24-004256 City of Oak Park, Presiding Judge Respondent. Jesse J. Kirchner ORDER GRANTING PETITIONER’S MOTION FOR SUMMARY DISPOSITION UNDER MCR 2.116(C)(10) ORDER DENYING RESPONDENT’S MOTION FOR SUMMARY DISPOSITION UNDER MCR 2.116(C)(10) ORDER SEVERING TAX YEARS 2024, 2025, AND 2026 AND ASSIGNING THEM TO MTT DOCKET NUMBER 24-004256 FINAL OPINION AND JUDGMENT INTRODUCTION Petitioner, a religious society, sought a property-tax exemption for a parsonage, for tax year 2023, under section 7s of the General Property Tax Act. Respondent disallowed the exemption on the basis that the parsonage was not exclusively owned by Petitioner during the relevant period. By operation of law, the appeal now also includes tax years 2024, 2025, and 2026. The parties have cross-moved for summary disposition. They agree on the material historical facts, but they disagree about the legal meaning of those facts. For the reasons below, the Tribunal grants Petitioner’s motion and denies Respondent’s motion and, therefore, renders judgment for Petitioner. FACTUAL BACKGROUND The property at issue, parcel number 52-25-30-126-021, is a residence located at 15110 Burton Avenue in Oak Park, a city in Oakland County. Since 2019, the property has been subject to the following transfers:
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MTT Docket Nos. 23-001412 & 24-004256 Page 2 of 10 • October 31, 2019: conveyed by warranty deed to Abraham Bleich, a rabbi, Tobi Bleich, his wife, and Maury Ellenberg.1 • November 6, 2019: conveyed by quitclaim deed to Petitioner.2 • February 15, 2021: conveyed by warranty deed to Rabbi Bleich.3 • April 19, 2021: conveyed by warranty deed to Petitioner.4 On March 23, 2021, Rabbi Bleich gave a mortgage on the property.5 On July 19, 2021, Rabbi Bleich and Petitioner entered into an employment agreement.6 Part 5 of the agreement, entitled “Compensation and Benefits,” includes the following term: b. Housing. The parties acknowledge the Congregation and the Rabbi entered into a certain Agreement in April of 2020 relating to the Rabbi’s current residence. The Rabbi shall be responsible for any and all expenses arising from or related to his current residence including, without limitation, any repairs and maintenance costs, mortgage payments, insurance premiums and utilities and that any amounts thereof paid by the Congregation shall, at Congregation’s election, either be reimbursed by the Rabbi or deducted from his gross base salary (i.e., subject to any required withholdings to the extent not designated as Parsonage). On January 31, 2023, Petitioner applied for an exemption for the property for the 2023 tax year, on the basis that the property was being used as a parsonage.7 On February 6, 2023, Respondent denied the exemption,8 articulating its reasons as follows: The reason for denial is the missing Agreement between the Congregation and the Rabbi that was established in April of 2020. Also, there is no dissolution information on what happens to the parsonage should there be a dissolution of the Congregation B’Nai Israel. 1. Respondent’s Motion for Summary Disposition (MSD), docket item 22, exhibit A. Docket items can be viewed at the Tribunal’s online docket, available at https://taxdocketlookup.apps.lara.state.mi.us/Details.aspx?PK=148982. 2. Respondent’s MSD, exhibit B. 3. Respondent’s MSD, exhibit C. 4. Respondent’s MSD, exhibit E. 5. Respondent’s MSD, exhibit D. 6. Petitioner’s MSD, docket item 21, exhibit C, at 5. 7. Respondent’s MSD, exhibit F. 8. Respondent’s MSD, exhibit G.
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MTT Docket Nos. 23-001412 & 24-004256 Page 3 of 10 We also believe the Congregation only has present interest in the property while the Rabbi still retains certain ownership rights. On March 27, 2023, the local board of review determined that Petitioner did not qualify for the exemption.9 PROCEDURAL HISTORY The petition in this matter was filed May 23, 2023, seeking relief for tax year “2023 and any subsequent years.” By operation of law, the appeal now includes tax years 2024, 2025, and 2026.10 Respondent filed its answer on May 31, 2023. On November 17, 2023, each party moved for summary disposition, Petitioner under MCR 2.116(C)(8) and (10) and Respondent under (C)(10). Because the parties’ motions relate to and provide evidence for tax year 2023 alone, the motions will be treated as pertaining only to that tax year.11 JURISDICTION The Tribunal has the power to review Respondent’s denial.12 Where an assessment concerns property classified as residential real property, the Tribunal’s power to review may be invoked only after a protest before the local board of review and the filing of a petition by July 31 of the tax year involved.13 Here, Petitioner protested before the board of review on March 27, 2023, and filed its petition, which identifies 2023 as the tax year at issue, on May 23, 2023. Petitioner, therefore, has properly invoked the Tribunal’s jurisdiction. STANDARD OF REVIEW “A proceeding before the tribunal is original and independent and is considered de novo.”14 The Tax Tribunal Rules do not address summary disposition; therefore, MCR 2.116 governs.15 The parties have each moved for summary disposition under MCR 2.116(C)(10),16 which allows entry of judgment where “there is no genuine issue as to any material fact.” 9. Petitioner’s MSD, exhibit F. 10. See MCL 205.737(5)(a). 11. See Trinity Health-Michigan v Kentwood, __Mich App __ (2026) (Docket No. 367419); slip op at 3-4. 12. See MCL 205.731(a). 13. MCL 205.735a(3), (6). 14. MCL 205.735a(2); see also MCL 205.731(a). 15. See TTR 201(5). 16. Petitioner has also moved under MCR 2.116(C)(8), which lets a party move for summary disposition on the basis that “the opposing party has failed to state a claim upon which relief can be granted.” Such a motion may be granted only “when a claim is so clearly unenforceable that no factual development could possibly justify recovery.” El-Khalil v Oakwood Healthcare, 504 Mich 152, 159 (2019). It follows that a motion under subrule (C)(8) can lead only to a claim’s dismissal; it does not let a party prevail on its own
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MTT Docket Nos. 23-001412 & 24-004256 Page 4 of 10 A motion under subrule (C)(10) “tests the factual sufficiency of a claim.”17 Whether the facts giving rise to a claim are supported by the record depends on the evidence, including “affidavits, together with the pleadings, depositions, admissions, and documentary evidence then filed in the action or submitted by the parties.”18 If the relationship between evidence and fact depends on inference, the Tribunal must make “all legitimate inferences in favor of the nonmoving party.”19 If, by contrast, the parties disagree only about the meaning of a document like a contract or instrument of conveyance, neither party’s interpretation is procedurally privileged; instead, the Tribunal must interpret that document in accordance with neutral legal principles.20 The standard of “no genuine issue as to any material fact” is met where the parties do not dispute the historical facts. In those circumstances, there exist only questions of law, summary disposition is proper, and the Tribunal must “render judgment without delay.”21 The Tribunal may “render judgment in favor of the opposing party” if it appears to the Tribunal “that the opposing party, rather than the moving party, is entitled to judgment.”22 CONCLUSIONS OF LAW Petitioner has asserted that its property is exempt under the “parsonage” exemption in section 7s of the General Property Tax Act,23 which states in relevant part: Houses of public worship, with the land on which they stand, the furniture therein and all rights in the pews, and any parsonage owned by a religious society of this state and occupied as a parsonage are exempt from taxation under this act. The statute thus exempts a “parsonage owned by a religious society of this state and occupied as a parsonage.” A “parsonage” is “the home of a parson,” with the term “parson” signifying not only a Christian rector or clergyman but also certain persons ordained within the tradition of a “religious society of any faith, regardless of the claim. Here, Petitioner has moved for summary disposition of its own claim under subrule (C)(8), a result that is impossible under the law; accordingly, the Tribunal will not further discuss MCR 2.116(C)(8). 17. El-Khalil, 504 Mich at 160. 18. MCR 2.116(G)(5). 19. Skinner v Square D, 445 Mich 153, 162 (1994). 20. See, e.g., Michigan Department of Natural Resources v Carmody-Lahti Real Estate, 472 Mich 359, 370 (2005) (instrument of conveyance); Bronson Health Care Group v USAA Casualty Insurance, 335 Mich App 25, 32 (2020) (contract). 21. MCR 2.116(I)(1). 22. MCR 2.116(I)(2); accord Mothering Justice v Attorney General, 345 Mich App 282, 295 (2023) (“Because the parties do not dispute the material facts, the only question is which party is entitled to judgment as a matter of law.”), rev’d on other grounds by 515 Mich 328 (2024). 23. MCL 211.7s.
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MTT Docket Nos. 23-001412 & 24-004256 Page 5 of 10 nomenclature.”24 The parties don’t dispute that Rabbi Bleich, who ministers to Petitioner’s members, counts as a “parson” from this perspective; nor do they dispute that his home is, and is occupied as, a parsonage. For a parsonage to be exempt, it must be “owned by a religious society of this state.” The parties agree that Petitioner is a religious society formed under the laws of Michigan. The dispute comes down to whether Bleich’s home is “owned by” Petitioner. The evidence regarding ownership includes only transactional documents –contracts and instruments of conveyance – whose meaning is a question of law.25 The most salient document concerning Petitioner’s ownership is a warranty deed executed April 19, 2021.26 That deed states as follows (with punctuation modified for clarity): Abraham J. Bleich, whose address is 15110 Burton Street, Oak Park, MI 48273, conveys and warrants to Congregation B’Nai Israel – Beth Yehudah, a Michigan nonprofit organization whose address is 15400 West 10 Mile Rd., Oak Park, MI 48237, the following-described premises . . . Parcel ID: 25-30-126-021 C/K/A: 15110 Burton Street, Oak Park, MI 48237 … for the sum of less than [$100]. By its plain terms, the deed reflects that Bleich conveyed to Petitioner an interest in the subject property. The nature of the interest conveyed by the deed is articulated in MCL 565.151: That any conveyance of lands worded in substance as follows: “A.B. conveys and warrants to C.D. (here describe the premises) for the sum of (here insert the consideration),” the said conveyance being dated and duly signed, sealed and acknowledged by the grantor, shall be deemed and held to be a conveyance in fee simple to the grantee, his heirs and assigns, with covenant from the grantor for himself and his heirs and personal representatives, that he is lawfully seized of the premises, has good right to convey the same, and guarantees the quiet possession thereof; that the same are free from all 24. West Michigan Annual Conference of the United Methodist Church v Grand Rapids, 336 Mich App 132, 138 & n 2 (2021); see also Congregation B’Nai Jacob v Oak Park, 102 Mich App 724 (1981) (rabbis’ homes were parsonages). 25. See, e.g., Carmody-Lahti Real Estate, 472 Mich at 370; Bronson Health Care Group, 335 Mich App at 32. 26. Respondent’s MSD, exhibit E.
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MTT Docket Nos. 23-001412 & 24-004256 Page 6 of 10 incumbrances, and that he will warrant and defend the title to the same against all lawful claims. Under that statute, an instrument conveys to a grantee a fee-simple ownership interest in a property where the instrument is “worded in substance” as a grantor “conveys and warrants” to the grantee the property for consideration and the instrument is “dated and duly signed, sealed and acknowledged by the grantor.” The form required by MCL 565.151 is substantially met by the April 2021 warranty deed from Bleich to Petitioner. It manifestly meets the wording requirement and is dated, signed, and acknowledged.27 Therefore, the deed is “a conveyance in fee simple to” Petitioner. It follows that Petitioner has an ownership interest in the subject property. Respondent would appear to agree with the Tribunal’s reasoning so far. But Respondent goes further, arguing that section 7s’s parsonage exemption requires a religious society to have “exclusive legal title,” which, per Respondent, Petitioner does not have because Bleich “retains an ownership interest.”28 Thus, Respondent’s argument consists of the following syllogism: The parsonage exemption requires exclusive ownership. Petitioner’s ownership of the property is not exclusive. ∴ Petitioner is not entitled to the parsonage exemption. The syllogism is valid, and the third part is true, only if the first two parts are true. Here, the truth of the first part, the major premise, isn’t clear.29 As for the second part, the minor premise, it is false because, as explained below, Petitioner’s ownership of the property is exclusive. Respondent’s argument about Bleich’s alleged interest starts with the mortgage30 and warranty deed31: By virtue of [the April 2021] warranty deed, Abraham Bleich represented that he was lawfully seized of the premises, has good right to convey the same, and that the property was free from all incumbrances. See, MCL 565.151. However, this representation was not accurate as Abraham Bleich remains personally obligated on a 2021 mortgage, senior to 27. The lack of a seal is not material to the deed’s effectiveness as a conveyance. See MCL 565.604. 28. Respondent’s MSD, at 12-13. 29. Whether section 7s requires exclusive ownership appears to be a question of first impression. It also is not an easy question. At first blush, the section’s text appears to be indeterminate as illustrated by the fact that the phrase “owned by” can be qualified adverbially using words like “solely” and “jointly.” See, e.g., MCL 211.7b(4)(b). The textual indeterminacy might make section 7s’s ownership requirement ambiguous such that it is susceptible to strict construction under TOMRA of North America v Treasury, 505 Mich 333, 339-345 (2020). 30. Respondent’s MSD, exhibit D. 31. Respondent’s MSD, exhibit E.
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MTT Docket Nos. 23-001412 & 24-004256 Page 7 of 10 the rights of Petitioner, encumbering the property. The same mortgage also prohibits a transfer of Abraham Bleich's interest in the property without the express consent of the mortgagee.32 Respondent thus posits that Bleich has broken two promises: (1) his covenant to Petitioner, implied by the warranty deed, that the property is “free from all incumbrances,”33 and (2) the mortgage’s prohibition on transfers without mortgagee consent. Even if Bleich violated those promises, Respondent is a stranger to the underlying documents and hasn’t shown that it is authorized to assert or vindicate the rights created therein. In any event, the remedy for breaking a warranty deed’s covenant is damages, not an unwinding of the conveyance.34 So too with the mortgage: transferring without consent might empower the mortgagee to declare the remaining balance due, but it doesn’t upset the transfer. Respondent further seeks evidence of Bleich’s ownership in an employment agreement entered into by Bleich and Petitioner in July 2021.35 Respondent writes: The employment agreement produced by Petitioner governs Abraham Bleich’s employment through 2024 . . . . In the interim, Abraham Bleich inexplicably remains personally responsible for all maintenance, insurance and utilities on the home that is allegedly owned by Petitioner funded by a salary from Petitioner that includes a tax-exempt allowance for housing expenses.36 Respondent characterizes as “inexplicable” Bleich’s responsibility for maintenance, insurance, and utilities in light of Petitioner’s ownership of the home. But Bleich’s responsibility is manifestly explicable by the fact that he agreed to take on that responsibility when he signed the 2021 agreement; moreover, in light of the mortgagee’s right to accelerate the mortgage upon transfer, it makes sense for Petitioner to protect itself against foreclosure by the mortgagee by requiring Bleich to make timely mortgage payments. The final thrust of Respondent’s argument is that Petitioner and Bleich have shielded from view aspects of their dealings, which, if brought to light, would show that Bleich retains an ownership interest. Respondent writes: Abraham Bleich originally purchased the property in 2019 for $185,000.00 and since that time, there have been three separate conveyances back and forth between Petitioner 32. Respondent’s MSD, at 12 (record citation omitted). 33. MCL 565.151. 34. See Reed v Rustin, 375 Mich 531, 535 (1965). 35. Petitioner’s MSD, exhibit C, at 5. 36. Respondent’s MSD, at 12.
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MTT Docket Nos. 23-001412 & 24-004256 Page 8 of 10 and Abraham Bleich for nominal consideration. Petitioner refused to provide any information to Petitioner [sic] regarding the disposition of the property upon the dissolution [of] Congregation B'Nai Isreal [sic] or at the conclusion of Abraham Bleich's employment (presumably this is contained within the 2020 Housing Agreement Petitioner refuses to produce). Taken together, this documentary evidence suggests that Abraham Bleich retains an ownership interest in the property . . . .37 Respondent invites the Tribunal to “presume” that a so-called “2020 Housing Agreement” contains terms relating to the disposition of the property upon dissolution of Petitioner or conclusion of Bleich’s employment, insinuating that Bleich and Petitioner have a secret agreement that the property’s ownership would return to Bleich upon the occurrence of one or the other of those events.38 The Tribunal must decline Respondent’s invitation because it may not engage in conjecture or speculation about documents that are not part of the record.39 For the reasons above, there is no genuine issue as to any material fact in this matter, and Petitioner is entitled to judgment as a matter of law as to tax year 2023. JUDGMENT IT IS ORDERED that Petitioner’s Motion for Summary Disposition under MCR 2.116(C)(10) is GRANTED. IT IS FURTHER ORDERED that Respondent’s Motion for Summary Disposition under MCR 2.116(C)(10) is DENIED. IT IS FURTHER ORDERED that tax years 2024, 2025, and 2026 are SEVERED and ASSIGNED to MTT Docket No. 24-004256. IT IS FURTHER ORDERED that Petitioner shall file a petition for the 2024, 2025, and 2026 tax years within 21 days of the entry of this order. The petition shall note the 37. Respondent’s MSD, at 12-13. 38. Such an agreement between a parson and a religious society might make the parson, rather than the religious society, the property’s “beneficial owner,” which might warrant denial of the exemption. See Michigan Association of Regular Baptist Churches v Grand Rapids, 8 MTT 649 (Docket No. 173715), issued August 18, 1995. In Michigan Association, the Tribunal denied the parsonage exemption where the parson had sold the property to a religious society for nominal consideration and then entered into a lease prohibiting the religious society from marketing or selling the property and giving the parson the right to purchase the property for one dollar. To be clear, Michigan Association was not decided on the basis that section 7s requires exclusive ownership, but rather on the basis that the religious society “did not beneficially own the property.” 39. See Skinner v Square D, 445 Mich 153, 164 (1994). The Tribunal recognizes that Respondent sought the 2020 agreement in discovery and then moved to compel its production. See Respondent’s Motion to Compel, docket item 16, & exhibit A, at 4. The Tribunal denied that motion as untimely. Order Denying Respondent’s Motion to Compel, docket item 19.
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MTT Docket Nos. 23-001412 & 24-004256 Page 9 of 10 docket number assigned by the Tribunal and if filed utilizing the Tribunal’s e-filing system, must be filed on MTT Docket No. 24-004256 as a “Severed Petition.”40 IT IS FURTHER ORDERED that the officer charged with maintaining the assessment rolls for the tax years at issue shall correct or cause the assessment rolls to be corrected to reflect the property’s true cash and taxable values as finally provided in this Final Opinion and Judgment within 20 days of the entry of the Final Opinion and Judgment, subject to the processes of equalization.41 To the extent that the final level of assessment for a given year has not yet been determined and published, the assessment rolls shall be corrected once the final level is published or becomes known. IT IS FURTHER ORDERED that the officer charged with collecting or refunding the affected taxes shall collect taxes and any applicable interest or issue a refund within 28 days of entry of this Final Opinion and Judgment. If a refund is warranted, it shall include a proportionate share of any property tax administration fees paid and penalty and interest paid on delinquent taxes. The refund shall also separately indicate the amount of the taxes, fees, penalties, and interest being refunded. A sum determined by the Tribunal to have been unlawfully paid shall bear interest from the date of payment to the date of judgment, and the judgment shall bear interest to the date of its payment. A sum determined by the Tribunal to have been underpaid shall not bear interest for any time period prior to 28 days after the issuance of this Final Opinion and Judgment. Pursuant to MCL 205.737, interest shall accrue (i) after December 31, 2013, through June 30, 2016, at the rate of 4.25%, (ii) after June 30, 2016, through December 31, 2016, at the rate of 4.40%, (iii) after December 31, 2016, through June 30, 2017, at the rate of 4.50%, (iv) after June 30, 2017, through December 31, 2017, at the rate of 4.70%, (v) after December 31, 2017, through June 30, 2018, at the rate of 5.15%, (vi) after June 30, 2018, through December 31, 2018, at the rate of 5.41%, (vii) after December 31, 2018, through June 30, 2019, at the rate of 5.9%, (viii) after June 30, 2019, through December 31, 2019, at the rate of 6.39%, (ix) after December 31, 2019, through June 30, 2020, at the rate of 6.40%, (x) after June 30 2020, through December 31, 2020, at the rate of 5.63%, (xi) after December 31, 2020, through June 30, 2022, at the rate of 4.25%, (xii) after June 30, 2022, through December 31, 2022, at the rate of 4.27%, (xiii) after December 31, 2022, through June 30, 2023, at the rate of 5.65%, (xiv) after June 30, 2023, through December 31, 2023, at the rate of 8.25%, (xv) after December 31, 2023, through June 30, 2024, at the rate of 9.30%, (xvi) after June 30, 2024, through December 31, 2024, at the rate of 9.50%, (xvii) after December 31, 2024, through June 30, 2025, at the rate of 9.47%, (xviii) after June 30, 2025, through December 31, 2025, at the rate of 8.66%, (xviii) after June 30, 2025, through December 31, 2025, at the rate of 8.66%, (xix) after December 31, 2025, through June 30, 2026, at a rate of 8.48%, and (xx) after July 1, 2026, through December 31, 2026, at a rate of 7.85%. 40. Alternatively, the petition may be downloaded from the Tribunal’s website and mailed to the Tribunal via United States Postal Service at: Michigan Tax Tribunal, PO BOX 30232, Lansing, MI 48909. The petition may also be delivered to the Tribunal via overnight carrier (UPS, FedEx, or DHL) at: Michigan Tax Tribunal, 2nd Floor MTT, 2407 N. Grand River Avenue, Lansing, MI 48933. 41. See MCL 205.755.
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MTT Docket Nos. 23-001412 & 24-004256 Page 10 of 10 This Final Opinion and Judgment resolves the last pending claim and closes the case. APPEAL RIGHTS If you disagree with the final decision in this case, you may file a motion for reconsideration with the Tribunal or a claim of appeal with the Michigan Court of Appeals. A motion for reconsideration must be filed with the Tribunal with the required filing fee within 21 days from the date of entry of the final decision. Because the final decision closes the case, the motion cannot be filed through the Tribunal’s web-based e-filing system; it must be filed by mail or personal service. The fee for the filing of such motions is $50.00 in the Entire Tribunal and $25.00 in the Small Claims Division, unless the Small Claims decision relates to the valuation of property and the property had a principal residence exemption of at least 50% at the time the petition was filed or the decision relates to the grant or denial of a poverty or disabled veterans exemption and, if so, there is no filing fee. You are required to serve a copy of the motion on the opposing party by mail or personal service or by email if the opposing party agrees to electronic service, and proof demonstrating that service must be submitted with the motion. Responses to motions for reconsideration are prohibited and there are no oral arguments unless otherwise ordered by the Tribunal. Alternatively, you may file a claim of appeal with the Michigan Court of Appeals. If the claim is filed within 21 days of the entry of the final decision, it is an “appeal of right.” If the claim is filed more than 21 days after the entry of the final decision, it is an “appeal by leave.” A copy of the claim of appeal must be filed with the Tribunal to certify the record on appeal. There is no certification fee. Entered: October 22, 2026 By: /s/Jesse J. Kirchner jjk PROOF OF SERVICE I certify that a copy of the foregoing was sent on the entry date indicated above to the parties or their attorneys or authorized representatives, if any, utilizing either the mailing or email addresses on file, as provided by those parties, attorneys, or authorized representatives. By: Tribunal Clerk