23-000882.pdf
Scott Paul Franzel, Petitioner V Township Of Watertown, Respondent · 24-003561-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 Scott Paul Franzel, MICHIGAN TAX TRIBUNAL Petitioner, SMALL CLAIMS DIVISION MTT Docket No. 23-000882 v Case Type: Valuation Watertown Township, Presiding Judge Respondent. Mark Perry FINAL OPINION AND JUDGMENT ORDER SEVERING 2024 TAX YEAR AND ASSIGNING IT DOCKET NUMBER 24-003561 Location of Hearing: Telephone Hearing Held on: April 8, 2024 Appearances on Behalf of Petitioner: Scott Paul Franzel Appearances on Behalf of Respondent: Jeannie Diaz SUMMARY OF JUDGMENT The subject property’s true cash value (TCV), state equalized value (SEV), and taxable value (TV), for the tax year at issue, shall be as follows: Parcel Number: 240-032-100-010-00 Year TCV SEV TV 2023 $270,800 $135,400 $99,771 The 2024 tax year shall be severed and assigned a new docket number. PROCEDURAL HISTORY Petitioner was required to protest the subject property’s assessment to the Board of Review (BOR). Petitioner protested the property’s assessment to the 2023 March BOR. Petitioner filed a Petition with the Tribunal on May 2, 2023, and Respondent filed an Answer on May 24, 2023. On December 20, 2023, the Tribunal issued an order scheduling a continued hearing because the testimony and evidence presented by the parties in the original hearing was insufficient to for the Tribunal to render a decision.
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MTT Docket No. 23-000882 Page 2 of 9 The amount of the state equalized value (SEV) or taxable value (TV) in dispute, as set forth in the pleadings, for all tax years at issue is within the jurisdictional limits of the Small Claims Division.1 Further, the property’s assessment for subsequent tax years is included in this proceeding.2 ISSUES AND APPLICABLE LAW The issues in this matter are: 1. Whether the subject property is assessed in excess of 50% of its true cash value (TCV). “The petitioner has the burden of proof in establishing the true cash value of the property.”3 The assessment of real property in Michigan shall not exceed 50% of its TCV.4 “True cash value” means “the usual selling price . . . .”5 “True cash value” means “fair market value.”6 The Tribunal is required to make an independent determination of TCV.7 “[T]he tribunal is not bound to accept either of the parties’ theories of valuation. It may accept one theory and reject the other, it may reject both theories, or it may utilize a combination of both in arriving at its determination.”8 The Tribunal is required to select the valuation methodology that is accurate and bears a reasonable relationship to the property’s TCV.9 2. Whether the TV exceeds the amount provided by MCL 211.27a. MCL 211.27a provides that a property’s TV is the lesser of the property’s SEV or capped TV, and a property’s capped TV is, absent a transfer of ownership, determined mathematically by taking into consideration the prior tax year’s TV, physical losses to the property, the lesser of the rate of inflation or 5%, and physical additions to the property, including omitted property (i.e., property not previously assessed). 3. What was the taxable status of the subject property land and improvements to the land provided by MCL 211.2(2). 1 See MCL 205.762(1). 2 See MCL 205.737(5)(b). 3 MCL 205.737(3); see also Kern v Pontiac Twp, 93 Mich App 612, 620; 287 NW2d 603 (1979). 4 Michigan Const 1963, art IX, sec 3. 5 MCL 211.27(1). 6 CAF Investment Co v State Tax Comm, 392 Mich 442, 450; 221 NW2d 588 (1974). 7 See Jones & Laughlin Steel Corp v City of Warren, 193 Mich App 348; 483 NW2d 416 (1992). 8 Id. at 356. 9 See Safran Printing Co v Detroit, 88 Mich App 376; 276 NW2d 602 (1979).
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MTT Docket No. 23-000882 Page 3 of 9 “The taxable status of persons and real and personal property for a tax year shall be determined as of each December 31 of the immediately preceding year, which is considered the tax day, any provisions in the charter of any city or village to the contrary notwithstanding.” SUMMARY OF EVIDENCE A. Petitioner’s Evidence Petitioner’s contentions of TCV, SEV and TV: Parcel Number: 240-032-100-010-00 Year TCV SEV TV 2023 $25,000 $12,500 $12,500 Petitioner offered the following exhibits: 1. Evidence, filed on May 2, 2023 a. Fire investigation summary 2. Evidence, filed on May 5, 2023 a. 2023 Board of Review Decision 3. Evidence, filed on November 20, 2023 a. Photographs b. Town & Country Realty, LLC listings No exhibits were excluded from evidence. Based on the pleadings, admitted exhibits, and sworn testimony, Petitioner contends that the subject property is overvalued in light of the total loss of the home due to fire. The subject property burned down on January 9, 2023, and Petitioner questions how he can be assessed for a home that did not existing during 2023. Petitioner believes his taxes should be based on vacant land only. Petitioner provided testimony that the tax year 2023 values and taxes should be prorated because the home was destroyed by fire nine days after tax day. Petitioner further testified that the Tribunal has the discretion to make such adjustments. B. Respondent’s Evidence The property’s TCV, SEV and TV, as confirmed by the BOR, for the tax year at issue: Parcel Number: 240-032-100-010-00 Year TCV SEV TV 2023 $270,800 $135,400 $99,771 Respondent offered the following exhibits:
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MTT Docket No. 23-000882 Page 4 of 9 1. Evidence, filed on May 24, 2023 a. 2023 Board of Review Decision b. Petition to BOR & BOR decision c. March 2023 BOR Minutes d. 2023 property record card 2. Evidence, filed on November 20, 2023 a. Land value study b. Economic Condition Factor (ECF) study No exhibits were excluded from evidence. Based on the pleadings, admitted exhibits, and sworn testimony, Respondent contends that the law requires the home be assessed since it existed on December 31, 2022.10 Petitioner’s representative provided in a prepared statement, “[M]r. Franzel's house burned on January 9, 2023. His assess value on his property was established on December 31, 2022, tax day, for the coming year of $135,400. On his property there is still an unattached garage 30 x 32, an inground pool and 3/4 of his attached garage is still standing. As of tax day his value was $135,400.” Respondent’s representative provided testimony that there was no issue with the proposed 2023 values based on the situs and status of the property on tax day 2023. FINDINGS OF FACT The following facts were proven by a preponderance of the evidence: 1. The subject property is located at 2620 S Sandusky Rd., Sandusky in Sanilac County. 2. The subject property is classified as residential real. 3. This case was originally heard on October 25, 2023. 4. An Order for Rehearing was issued on December 20, 2023. 5. The subject property’s home burned down on January 9, 2023. 6. Petitioner submitted no evidence of value. 7. Respondent valued the subject property using the mass appraisal cost approach and submitted the 2023 property record card, ECF analysis, and land analysis in support of this approach. CONCLUSIONS OF LAW 10 MCL 211.2(2).
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MTT Docket No. 23-000882 Page 5 of 9 A proceeding before the Tax Tribunal is original, independent, and de novo.11 The Tribunal's factual findings are to be supported by competent, material, and substantial evidence.12 Further, “[i]t is the duty of the [T]ax [T]ribunal to select the approach which provides the most accurate valuation under the circumstances of the individual case.”13 In doing so, the Tribunal shall consider the three most common approaches to valuation - the capitalization of income approach, the sales comparison or market approach, and the cost-less-depreciation approach.14 2023 Tax Year Income Approach “In the income capitalization approach, the present value of the anticipated future benefits of property ownership is measured. . . . In direct capitalization, the relationship between one year’s income and value is reflected in either a capitalization rate or an income multiplier.”15 The subject property is a single-family home; therefore, the income approach is irrelevant. Sales Comparison Approach “The sales comparison approach is most useful when a number of similar properties have recently been sold or are currently for sale in the subject property’s market.”16 Neither party submitted the sales comparison approach to value. Cost Approach The cost approach “is particularly useful in valuing new or nearly new improvements and properties that are not frequently exchanged in the market.”17 Further, it is more useful when “a lack of market activity limits the usefulness of the sales comparison approach” and it is “especially persuasive when land value is well supported and the improvements are new or suffer only minor depreciation . . . .”18 As stated in the Proposed Order for Rehearing: [T]he subject property is, by law, correctly valued as of December 31, 2022. MCL 211.2 specifically states that “the taxable status of persons and real 11 MCL 205.735a(2). 12 See Antisdale v City of Galesburg, 420 Mich 265, 277; 362 NW2d 632 (1984); Dow Chemical Co v Dep’t of Treasury, 185 Mich App 458, 462-463; 462 NW2d 765 (1990). 13 Antisdale at 277; citing Pantlind Hotel Co v State Tax Comm, 3 Mich App 170; 141 NW2d 699 (1966). 14 See Meadowlanes Ltd Dividend Housing Ass’n v City of Holland, 437 Mich 473, 484-485; 473 NW2d 636 (1991); Pantlind Hotel Co, supra. 15 Id. 16 The Appraisal of Real Estate at 36. 17 Appraisal Institute: The Appraisal of Real Estate (Chicago, Appraisal Institute, 15th ed, 2020), p. 36. 18 The Appraisal of Real Estate at 530.
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MTT Docket No. 23-000882 Page 6 of 9 and personal property for a tax year shall be determined as of each December 31 of the immediately preceding year, which is considered the tax day, any provisions in the charter of any city or village to the contrary notwithstanding.”19 The Michigan Supreme Court has repeatedly held that “the use of ‘shall’ in a statute generally indicates a mandatory and imperative directive.”20 Consequently, it is irrelevant for assessment purposes that the property burned down a mere nine days later.21 While it is unfortunate Petitioner’s home burned down a mere nine days into the 2023 calendar year, the home existed on December 31, 2022, and must be assessed for the 2023 tax year. The record card evidences Respondent’s cost-less-depreciation approach to value, which includes market adjustments through the use of an ECF. Respondent’s cost approach provides sufficient analysis of replacement costs, depreciation, and land value for the subject property, as supported by Respondent’s land value studies. Respondent’s cost approach appears to have been completed in conformance with the State Assessor’s Manual. As a result, the cost approach best values the subject property and is the most reliable evidence in this case. Based upon the findings of fact and conclusions of law, the property’s TCV, SEV, and TV for the 2023 tax year at issue is as listed in the Summary of Judgment section of this Final Opinion and Judgment. 2024 Tax Year The petitioner has “the burden of proof in establishing the TCV of the property” under MCL 205.737(3).22 The Michigan Court of Appeals stated in Alhi Dev Co v Orion Twp,23 that the petitioner must prove, by the greater weight of evidence, that one or more of the assessments in question were too high based upon the Tax Tribunal’s findings as to the true cash value.” The petitioner’s burden “encompasses two separate concepts”: (1) the burden of persuasion; and (2) the burden of going forward with the evidence.24 Generally, in a valuation case, to meet the burden of going forward with the evidence, the petitioner must present evidence for the Tribunal to consider in making its independent determination of value.25 Neither party provided any relevant evidence of value for the 2024 tax year. “The Tribunal may not automatically accept a respondent's assessment, but must make its own findings of fact and arrive at a legally supportable 19 Id. (emphasis added). See also Lockhart v Ontonagon Twp, 341 Mich App 588; 991 NW2d 261 (2022) and Vukich v City of St. Clair Shores, Unpublished per curiam opinion of the Court of Appeals, issued July 29, 2021 (Docket No. 354252). 20 Michigan Educ Ass'n v Sec'y of State, 489 Mich 194, 218 (2011) (quotation marks and citation omitted). 21 Proposed Order for Rehearing, p 4. 22 See also Kern v Pontiac Twp, 93 Mich App 612, 620; 287 NW2d 603 (1979). 23 Alhi Dev Co v Orion Twp, 110 Mich App 764, 768; 314 NW2d 479 (1981). 24 Jones & Laughlin Steel Corp v City of Warren, 193 Mich App 348, 355; 483 NW2d 416 (1992). 25 See Jones & Laughlin.
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MTT Docket No. 23-000882 Page 7 of 9 true cash value.”26 As such, the Tribunal shall sever the 2024 tax year, assign it a new docket number, and parties will be ordered to file pleadings specific to the 2024 tax year. JUDGMENT IT IS ORDERED that the 2024 tax year shall be SEVERED and assigned Docket No. 24-003561. IT IS FURTHER ORDERED that Petitioner shall file a petition pertaining to the 2024 tax year within 21 days of the entry of this Order.27 The petition shall note the docket number assigned by the Tribunal for the 2024 tax year and if filed utilizing the Tribunal’s e-filing system, must be filed on the assigned 2024 docket number as a “Severed Petition.” IT IS FURTHER ORDERED that the Tribunal shall issue a Notice of Docket after receipt of Petitioner’s petition. IT IS FURTHER ORDERED that the officer charged with maintaining the assessment rolls for the 2023 tax year shall correct or cause the assessment rolls to be corrected to reflect the property’s true cash and taxable values within 20 days of entry of this Final Opinion and Judgment, subject to the processes of equalization.28 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 26 Jones & Laughlin Steel Corp v City of Warren, 193 Mich App 348, 355; 483 NW2d 416 (1992) (Citing Pinelake Housing Cooperative v Ann Arbor, 159 Mich App 208, 220; 406 NW2d 832 (1987)); Consolidated Aluminum Corp v Richmond Twp, 88 Mich App 229, 232-233; 276 NW2d 566 (1979)). 27 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. 28 See MCL 205.755.
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MTT Docket No. 23-000882 Page 8 of 9 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%, and (xvi) after June 30, 2024, through December 31, 2024, at the rate of 9.50%. This Final Opinion and Judgment resolves all pending claims in this matter and closes this 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. By _______________________________________ Date Entered by Tribunal:
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MTT Docket No. 23-000882 Page 9 of 9 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 provide by those parties, attorneys, or authorized representatives. By: Tribunal Clerk