Summary
ruling that notice requirements were met when the defendant, after first sending two notices by certified mail, sent several more notices through first-class mail and published notice in a local newspaper
Summary of this case from Morris v. Wilmington Sav. Fund Soc'yOpinion
No. 340161
04-19-2018
CONSTANCE HAGIE, Plaintiff-Appellee, v. OCEANA COUNTY TREASURER, Defendant-Appellant.
UNPUBLISHED Oceana Circuit Court
LC No. 16-011859-CH Before: GLEICHER, P.J., and M. J. KELLY and CAMERON, JJ. PER CURIAM.
Defendant, the Oceana County Treasurer, appeals as of right the trial court's September 5, 2017 order setting aside the judgment of foreclosure and quieting title to real property in favor of plaintiff, Constance Hagie. We reverse and remand.
I. BACKGROUND
This case arises out of the tax foreclosure of plaintiff's property by the Oceana County Treasurer. In 2012, plaintiff's parents transferred to her their vacation property of 40 years located in Mears, Michigan. The property consists of three contiguous parcels of land with a mobile home located on the northern-most parcel. Plaintiff permanently resides in Spring Valley, Illinois, and she visits the Mears property a few times a year during the summer.
According to plaintiff, after the property was transferred to her in 2012, she sent a check for $2000 to the Oceana County Treasurer's Office instructing it to apply the funds to any open invoices concerning the property taxes. Gail Schulte, the accounting clerk in the treasurer's office, testified that she received the check in October 2014, but it was unsigned. She claimed that she scanned the check, put it in an envelope with a sticky note instructing plaintiff to sign the check, and returned it in the mail. Plaintiff testified that when she received the check, there was no sticky note in the envelope, and she assumed that because the check was not accepted, there were no past due property taxes. She also testified that the check was signed.
In 2014, defendant, through its contractor Centron Data Services, sent the first notice to plaintiff's address in Illinois regarding her 2012 delinquent taxes on the Mears property. Centron sent plaintiff the first notice in June 2014 and a second notice in September 2014. Plaintiff claimed she never received the notices. However, according to Schulte, the treasurer's office applied a payment to the full amount of the 2012 delinquent taxes for the three parcels, in addition to the partial amount of the 2013 delinquent taxes, on January 26, 2015. Defendant then, through its contractor Title Check, LLC, sent the first notice by certified mail for the balance of the 2013 delinquent taxes in January 2015. Because a partial payment was made for the 2013 property, only two of the three parcels were delinquent. A second notice was sent by certified mail in February 2015. On February 1, 2015, notices for each of the two parcels were addressed to "Occupant" and sent by first-class mail to the property in Michigan. According to Martin Spaulding, the general manager of Title Check, LLC, the first certified mailing sent to Illinois was marked as unclaimed on February 21, 2015, and the second certified mailing sent to Illinois was marked unclaimed on February 27, 2015. Spaulding explained that "unclaimed" mail is mail where the receivers "neglected, refused or were unwilling to accept the certified mail." He further explained that there was no indication that plaintiff's address was undeliverable or improper.
It is unclear from Schulte's testimony if plaintiff sent a check for the payment of any back taxes, similar to the check sent in 2014, or if payment was made by some other method. Plaintiff testified that she could not remember how the 2012 and a portion of the 2013 taxes were paid.
Only Parcel A and Parcel B were delinquent because the partial payment was applied to Parcel C.
According to Sheila Gowell, the Oceana County Treasurer at the time, the property was forfeited under the General Property Tax Act (GPTA), MCL 211.1a, et seq., on March 1, 2015. On June 5, 2015, a petition of foreclosure was filed. Title Check then sent notices by first-class mail for both parcels in early August 2015. On August 26, 2015, Title Check subcontracted a process server to conduct an inspection of the foreclosed property. The process server testified that she noticed a Jeep in the driveway when she walked up to the mobile home. She knocked on the door, waited, knocked again, and when no one answered, she posted a notice to the door with tape. She also took a photograph of the property, which included the Jeep in the driveway. After viewing the photograph, plaintiff testified that she did not recognize the Jeep.
Title Check also sent notices by first-class mail shortly after the inspection, informing plaintiff of the scheduled show cause and foreclosure hearings. In November 2015, Title Check sent another set of notices by first-class mail informing plaintiff that she would be listed in the newspaper as having unpaid taxes. On December 15, 2015, Title Check sent by certified mail a statutorily mandated notice for each parcel informing plaintiff of the date for the show cause and judicial foreclosure hearings. Unlike the previous certified mailings, one was delayed in transit, but the other was received and signed by someone at plaintiff's residence in Illinois. According to plaintiff, she did not sign for any mail, she did not recognize the signature, and she claimed it does not look like a signature from anyone in her family. Additionally, she testified that her grandchildren denied signing for the mail.
According to Spaulding, the signature was made on an electronic device at delivery and is of poor quality. At trial, defense counsel elicited testimony from plaintiff that she has three adult children named Jacob, Andrea, and Alisha, as well as two grandchildren named Justin and Jacoby. The grandchildren live approximately four miles from plaintiff. At trial, defense counsel's theory was that the signature most likely belongs to someone whose name begins with the letter "J." The trial court did not make findings as to the signer's identity.
After sending the certified mailings notifying plaintiff of the show cause and foreclosure hearings, Title Check sent two more notices by first-class mail informing plaintiff again of the hearings. According to Spaulding, those notices were not required under the GPTA, but they were sent to ensure that the property owner was informed of the hearings. When asked why Title Check would not resend those notices by certified mail, he explained, "If they didn't claim the two in February and they didn't claim one of the two that fall, that early winter, the likelihood of them claiming yet another [certified] mailing seems just to self[-]answer the question."
On December 24, 2015, defendant published notice of the foreclosure proceedings in the Oceana Herald Journal. On December 31, 2015, a second notice of the foreclosure proceedings was published in the Oceana Herald Journal. On January 7, 2016, the third and final notice of the foreclosure proceedings was published. A show cause hearing was held on January 21, 2016, and January 22, 2016, but plaintiff was not present. On February 16, 2016, the trial court held a foreclosure hearing, at which plaintiff did not appear, and the trial court entered a judgment of foreclosure the same day.
Final notice was sent by first-class mail informing plaintiff that she had until March 31, 2016, to redeem the property by paying her taxes. Plaintiff did not redeem the property by March 31, 2016. According to plaintiff, she first learned about the foreclosure when a neighbor contacted plaintiff's son and informed him that there was a for sale sign posted on the property. Plaintiff claimed she immediately contacted defendant and offered to pay the 2013 taxes. By that time, she had paid Golden Township her property taxes for 2014 and 2015. According to Gowell, the GPTA barred the Treasurer's Office from accepting plaintiff's payment after the redemption period expired.
According to Gail Schulte, the current accounting clerk in the Oceana Treasurer's Office, Golden Township collects the property tax bills, but once those bills are delinquent, the Oceana Treasurer's Office is responsible for collecting the past due taxes and, if need be, instituting foreclosure proceedings. It was for this reason that plaintiff continued to pay her most recent taxes, but they were not applied to her 2013 delinquent tax bill.
Thereafter, plaintiff filed her complaint to set aside the judgment of foreclosure and to quiet title to real property, arguing she was denied due process because defendant failed to provide adequate notice of the foreclosure proceedings. The trial court denied defendant's motion for summary disposition, concluding that due to the fact one of the certified mailings was delayed in transit and never made it to plaintiff, there was a question of fact under MCR 2.116(C)(10) as to whether plaintiff was denied due process. A one-day bench trial was held on July 13, 2017. At trial, plaintiff adamantly denied receiving any mailings related to the foreclosure proceedings, and she believed at all times that she was current on her property taxes because she had paid the 2014, 2015, and 2016 taxes.
At the conclusion of trial, the trial court issued a written verdict. The trial court distinguished the facts of this case from the landmark cases Jones v Flowers, 547 US 220; 126 S Ct 1708; 164 L Ed 2d 415 (2006), and Sidun v Wayne Co Treasurer, 481 Mich 503; 751 NW2d 453 (2008). The trial court held:
[T]he facts of this case are distinguishable from the factual situation contemplated in Jones. Here, the first-class mail and the posting on the property were both completed prior to the notice of forfeiture hearing being sent by certified mail to the property owner at her primary address in Illinois. Pursuant to Jones, after a certified mailing is returned as unclaimed, the state must take additional action to ensure the requirements have been met. Simply posting a notice on the property is not sufficient, even understanding the in rem nature of these proceedings. The property owner is entitled to procedural due process. Based upon the record before the [c]ourt, the Oceana County Treasurer did not take any additional action after the certified mail was returned on Parcel B and was determined to be in-transit delayed on Parcel A. The failure of the Oceana County Treasurer to take any additional action as a result of this information demonstrates that the minimum standards required of due process were not met.On September 5, 2017, the trial court entered a final order setting aside the judgment of foreclosure quieting title to the real property and closing the case.
II. STANDARD OF REVIEW
"We review the trial court's findings of fact in a bench trial for clear error and conduct a review de novo of the court's conclusions of law." City of Flint v Chrisdom Props, Ltd, 283 Mich App 494, 498; 770 NW2d 888 (2009) (quotation marks and citation omitted). A finding is clearly erroneous if, although there is evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made. Heindlmeyer v Ottawa Co Concealed Weapons Licensing Bd, 268 Mich App 202, 222; 707 NW2d 353 (2005). "This Court also reviews constitutional issues de novo." Sidun, 481 Mich at 508.
III. DUE PROCESS ANALYSIS
On appeal, defendant argues the trial court erred in setting aside the judgment of foreclosure because plaintiff was not denied her constitutional right to due process. We agree.
The United States and Michigan constitutions preclude the government from depriving a person of life, liberty, or property without due process of law. US Const, Am XIV; Const 1963, art 1, § 17. When a governmental entity seeks to take property from an owner, that entity must comport with due process. Sidun, 481 Mich at 509. "A fundamental requirement of due process in such proceedings is 'notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.' " Id. (citation omitted). "[T]he means employed to notify interested parties must be more than a mere gesture; they must be means that one who actually desires to inform the interested parties might reasonably employ to accomplish actual notice." Id. However, " '[d]ue process does not require that a property owner receive actual notice before the government may take his property.' " Id., quoting Jones, 547 US at 226.
Relevant to this case, when a notice of tax proceedings is sent by certified mail and returned unclaimed, "the State must take additional reasonable steps to attempt to provide notice to the property owner before selling his property, if it is practicable to do so." Jones, 547 US at 225. The notice required will vary with the circumstances and conditions, including what information the government possesses. Id. at 227, 234. Reasonable steps may include posting notices on the property, publishing notice in the local newspaper, resending the notice by regular mail, or addressing the notice to the "occupant." Id. at 234-235. Due process does not require personal service. Dow v Michigan, 396 Mich 192, 211; 240 NW2d 450 (1976).
Defendant argues that the trial court erred because its attempts at providing notice were reasonably calculated, and even after the original certified mailings were returned unclaimed, it took additional reasonable steps to attempt notice. We agree. Because the initial certified mailings were unclaimed, defendant was required to take additional reasonable steps to provide notice. The record shows that after defendant's certified mailings were unclaimed, there were attempts to notify plaintiff by regular mail, through physical posting, and by publication in the local newspaper. These were additional reasonable attempts at notice. After the property was forfeited, Title Check sent two more notices by first-class mail in August 2015. In late August 2015, an inspector visited the property, and when no one answered the door, she left a notice posted to the door. In November 2015, another set of notices were sent by first-class mail. In December 2015, defendant sent the notices informing plaintiff of the show cause and foreclosure hearing by certified mail. Notice for Parcel A was lost in transit, but notice for Parcel B was accepted at plaintiff's Illinois address. While plaintiff claims she does not know who signed for the certified mail, the fact remains that there was no reason for defendant to question that the mailing was accepted.
Regardless, assuming that defendant was put on further notice that the mailing relating to Parcel A was lost in transit, there were other reasonable measures taken to effectuate notice. Defendant published three separate notices in the Oceana Herald Journal. After the first publication in December 2015, defendant sent by first-class mail two notices with information about the show cause and foreclosure hearings. According to plaintiff, she did not receive any of the notices of the proceedings despite the fact that each mailing was sent to the correct address. After the judgment of foreclosure was entered, two more certified mailings were sent in March 2016 before the redemption period expired, but plaintiff did not redeem the property. In roughly two years, defendant sent at least 14 mailings to plaintiff's correct address, which included four certified mailings and 10 first-class mailings. There were also two occupant mailings sent to the Michigan property, notice posted on the property, and notice published over three weeks in the local newspaper. The evidence presented at the bench trial clearly shows that defendant took those reasonable additional steps to effectuate notice once the initial certified mailings were returned unclaimed. In fact, many of the mailings were not required under the GPTA and were made solely as additional measures to ensure plaintiff received notice. We are hesitant to impose any further requirements on defendant, as any such measure would border on actual notice, which is clearly not required under federal and Michigan law.
Plaintiff sets forth a number of measures that defendant could have taken, including resending the certified mailings that were unclaimed or lost in transit, contacting her by telephone, or serving her with personal process. However, plaintiff's proposed reasonable further steps enter the realm of actual notice. The United States Supreme Court has outlined possible additional measures, including resending the notices by regular mail, by posting notice to the property, or by publication. Jones, 547 US at 234-235. All three measures were taken in this case. The trial court relies heavily on the fact that one certified mailing was lost in transit and apparently never arrived at plaintiff's address. However, the other certified mailing did arrive, and it was accepted by someone at that address. We discern no requirement that the foreclosing governmental entity ensure that the actual property owner signed for the certified mail. To the contrary, actual notice is not required, Sidun, 481 Mich at 509, nor is personal service of process, Dow, 396 Mich at 211. Moreover, "[t]he government's knowledge that its attempt at notice has failed is a circumstance and condition that varies the notice required." Sidun, 481 Mich at 511 (quotation marks and citation omitted). While defendant may have been on notice that one mailing was delayed, the fact remains that the government also knew that one certified mailing was signed for at the proper address. And even if the delayed notice still required further reasonable steps, they were taken in this case. The trial court erroneously found that defendant failed to mail any additional notices of the show cause and foreclosure hearings after the certified mailing was returned as "in transit delayed." The trial court stated in its written verdict, "Here, the first-class mail and the posting on the property were both completed prior to the notice of forfeiture hearing being sent by certified mail to the property owner at her primary address in Illinois." This is simply untrue. Two first-class mailings notifying plaintiff of the show cause and foreclosure hearings were sent after the certified mailings. Therefore, extra steps were taken to effectuate notice. In all, there were four additional mailings and a publication to the local newspaper after the certified mailing was lost, and we detect no error in the additional notices mailed to plaintiff. The trial court erred in holding that plaintiff was denied her constitutional right to due process.
While the trial court references a "forfeiture hearing," the actual proceedings at issue are the show cause and foreclosure hearings.
Defendant also claims that because there is no due process violation, the trial court is without jurisdiction to entertain plaintiff's case because it amounts to a collateral attack on the judgment of foreclosure. Our Supreme Court has held that challenging the judgment of foreclosure in a separate action on due process grounds is permitted. See In re Petition by Wayne Co Treasurer for Foreclosure, 478 Mich 1, 9-11; 732 NW2d 458 (2007) (Perfecting Church). We agree with defendant that the trial court would be without jurisdiction to entertain any other challenge to the judgment of foreclosure. However, because we reverse the trial court's order setting aside the judgment of foreclosure, this argument is irrelevant because plaintiff does not challenge the validity of the judgment of foreclosure on any other grounds. --------
Reversed and remanded for the entry of a judgment in defendant's favor. We do not retain jurisdiction.
/s/ Elizabeth L. Gleicher
/s/ Michael J. Kelly
/s/ Thomas C. Cameron