Opinion
No. 352837
12-22-2020
VILLAGE OF SPARTA, Plaintiff-Appellant, v. CLARK HILL, PLC, GREGORY LONGWORTH, AND KENNETH LANE, Defendants-Appellees.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Kent Circuit Court
LC No. 19-001445-NM Before: FORT HOOD, P.J., and SAWYER and SERVITTO, JJ. PER CURIAM.
In this legal malpractice action, plaintiff appeals as of right the trial court's opinion and order granting summary disposition in favor of defendants. Plaintiff contends that defendants engaged in legal malpractice, negligent supervision, and fraud when they represented plaintiff in another lawsuit involving property taxes and advised plaintiff to settle with the property owner. Because we do not believe defendants incorrectly or inadequately advised plaintiff in that case, and because we see no avenue by which plaintiff might have been successful in that case, we affirm.
I. FACTUAL BACKGROUND
In January 2004, plaintiff entered into a Utility Road Agreement (URA) with the Grand Valley Land Property Corporation (Grand Valley) for plaintiff to make improvements related to the "Bedford Falls Development" (the development), with Grand Valley assuming responsibility for a portion of the cost. The URA anticipated that plaintiff and Grand Valley would subsequently enter into a special assessment agreement related to the remaining costs associated with the improvements. Thereafter, in December 2004, plaintiff's Village Council passed Resolution No. 04-33 by unanimous vote, which referenced the URA and indicated that Grand Valley was approved "to enter into a special assessment agreement with [plaintiff] in order for [plaintiff] to be able to" begin construction on the subject property. The resolution specifically indicated that it was "a resolution approving a utility and road improvements special assessment agreement between" Grand Valley and plaintiff. The agreement further stated that the council "hereby approves of and agrees to enter into a special assessment agreement, attached hereto as 'UTILITY AND ROAD IMPROVEMENTS SPECIAL ASSESSMENT AGREEMENT' with Grand Valley . . . for the payment of certain costs incurred by [plaintiff] for the improvements to 12 Mile Road as described in the Utility and Road Agreement . . . ."
The agreement specifically provided:
Prior to [plaintiff] engineers beginning any engineering design work for the 12 Mile Road Improvements, GRAND VALLEY shall deposit with [plaintiff] $35,000 cash or an approved letter of credit approved by [plaintiff's] Attorney. Prior to [plaintiff] awarding any construction projects, but not until Grand Valley is ready to proceed with the Bedford Falls project, Grand Valley shall have entered into a special assessment agreement with [plaintiff] for the remaining $315,000, and paid the $35,000 in cash.
In January 2005, plaintiff entered into the Utility Road Improvement Special Assessment Agreement (URISAA) with Grand Valley, obligating Grand Valley to make installment payments for the additional costs associated with the public improvements that would benefit the property. The agreement provided that "[t]he special assessment levied pursuant to this Agreement may be paid in 10 equal annual installments of principal plus interest on the unpaid balance commencing on the date the Village Council confirms the special assessment roll, or such later date designated in the resolution confirming the special assessment roll."
Grand Valley made installment payments pursuant to the URISAA for several years, but at some point defaulted on its obligations, resulting in the Kent County Treasurer instituting tax foreclosure proceedings in March 2010. Ultimately, in February 2011, a judgment of foreclosure was entered that extinguished all liens and encumbrances against the property "except future installments of special assessments," and delivered title of the property in fee simple to the Treasurer. In October 2011, the property was purchased in a foreclosure sale by Peterson Financial, LLC (Peterson).
Plaintiff claimed that Peterson was obligated to assume Grand Valley's special assessment obligations following the foreclosure sale, but Peterson disagreed. After Peterson refused to honor the URISAA and the special assessment, in March 2013, the Kent County Treasurer again instituted tax foreclosure proceedings. Petersen then, in November 2013, filed a complaint (the Petersen case) in the Kent County Circuit Court against plaintiff and the Kent County Treasurer seeking a declaration that the special assessment was not valid because plaintiff failed to properly confirm the special assessment roll, and therefore no special assessment actually existed that would have passed through the judgment of foreclosure to Petersen. Peterson contended, among other things, that because the special assessment was not properly levied, plaintiff had only ever had a contractual obligation with Grand Valley, and as those obligations pertained to Petersen, they were extinguished by the tax foreclosure.
Defendants represented plaintiff in the Petersen case. Defendants initially filed, on behalf of plaintiff, a response to Petersen's complaint wherein they "denied as untrue" that a special assessment had not been "properly and effectively created. However, in November 2014, defendants delivered to plaintiff a memorandum wherein defendants advised plaintiff that plaintiff was unlikely to succeed in the litigation. Defendants noted that it would be prudent for plaintiff to settle the Petersen case. Thereafter, plaintiff stipulated to the entry of a settlement order wherein Petersen would agree to pay $10,000 to plaintiff "in full satisfaction of any and all alleged delinquent, current, and future installments of the Bedford Falls Special Assessment."
Years later, in February 2019, plaintiff instituted the present action against defendants, contending that plaintiff was not apprised of exactly what defendants were consenting to in the Petersen case, and that defendants caused plaintiff to settle the case and forfeit plaintiff's rights. Plaintiff contended that defendants erroneously believed that plaintiff would lose against Petersen because defendants erroneously believed that a special assessment had not been properly established, but that all requirements and procedures to establish a special assessment had been followed. Alternatively, plaintiff contended that defendants failed to litigate affirmative defenses that would have led to plaintiff's success in the Petersen case irrespective of any defects with the special assessment. Plaintiff's complaint specifically alleged professional negligence, fraud, and negligent supervision.
In August 2019, defendants filed a motion for summary disposition pursuant to MCR 2.116(C)(10), primarily alleging that the special assessment was never properly levied in this case, and that no genuine issues of material fact existed to suggest that plaintiff ever could have been successful in the Petersen case. Defendants further contended that the numerous affirmative defenses plaintiff claimed that defendants should have litigated in the Petersen case would not have made a difference in the outcome.
Ultimately, in January 2020, the trial court issued an opinion and order expressing its agreement with defendants. The trial court indicated that the procedure by which plaintiff could levy a special assessment that would have survived that tax foreclosure and impacted Petersen's rights had not been followed. No special assessment had ever actually been levied, and therefore plaintiff had no chance of success in the Petersen case. Because defendants' representation of plaintiff could not be said to have resulted in any harm or damages, the trial court concluded that each of plaintiff's claims necessarily failed. The trial court failed to address the alternative arguments raised by plaintiff concerning potential affirmative defenses to the Petersen case. This appeal followed.
II. ANALYSIS
"The trial court's ruling on a motion for summary disposition is reviewed de novo on appeal." ZCD Transp, Inc v State Farm Mut Auto Ins Co, 299 Mich App 336, 339; 830 NW2d 428 (2012). Summary disposition pursuant to MCR 2.116(C)(10) is appropriate where, "[e]xcept as to the amount of damages, there is no genuine issue as to any material fact, and the moving party is entitled to judgment or partial judgment as a matter of law." MCR 2.116(C)(10). A motion pursuant to MCR 2.116(C)(10) considers documentary evidence and "tests the factual sufficiency of the complaint." Dalley v Dykema Gossett, 287 Mich App 296, 304 n 3; 788 NW2d 679 (2010). In reviewing the motion, "this Court considers 'affidavits, pleadings, depositions, admissions, and documentary evidence filed in the action or submitted by the parties, in a light most favorable to the party opposing the motion.' " Sanders v Perfecting Church, 303 Mich App 1, 4; 840 NW2d 401 (2013), quoting Smith v Globe Life Ins Co, 460 Mich 446, 454; 597 NW2d 28 (1999), superseded in part on other grounds by statute as stated in Dell v Citizens Ins Co of America, 312 Mich App 734, 742 (2015). "[R]eview is limited to the evidence that has been presented to the circuit court at the time the motion was decided." Innovative Adult Foster Care, Inc v Ragin, 285 Mich App 466, 476; 776 NW2d 398 (2009).
At the outset, we note that plaintiff alleges legal malpractice, negligent supervision, and fraud. In an action for legal malpractice, the plaintiff has the burden of establishing (1) that an attorney-client relationship existed, (2) that there was negligence in the representation of the plaintiff, (3) that the negligence was a proximate cause of an injury suffered by the plaintiff, and (4) the fact and extent of the alleged injury. Coleman v Gurwin, 443 Mich 59, 63; 503 NW2d 435 (1993). "Negligent supervision, like all negligence claims, requires proof of a duty, breach, causation, and damages." Prime Rate Premium Fin Corp v Larson, 226 F Supp 3d 858 (ED Mich, 2016). "To establish a prima facie case of fraud, a plaintiff must prove that (1) the defendant made a material representation, (2) the representation was false, (3) the defendant knew that it was false when it was made, or made it recklessly, without any knowledge of its truth and as a positive assertion, (4) the defendant made the representation with the intention that the plaintiff would act on it, (5) the plaintiff acted in reliance on it, and (6) the plaintiff suffered injury because of that reliance." Zaremba Equip, Inc v Harco Nat'l Ins Co, 280 Mich App 16, 38-39; 761 NW2d 151 (2008).
Defendants raised the issue below that the no-duplication rule barred plaintiff from raising the negligent supervision and fraud claims where plaintiff was already raising the legal malpractice claim. The trial court did not address the issue, instead concluding that each individual claim failed on its merits. We agree, and because each individual claim may be disposed of on its merits, we need not address the no-duplication rule.
As defendants point out in their brief, and as was implicit within the trial court's opinion, one element that is dispositive of each of plaintiff's claims is shared among them all: in order to be successful on any of the above claims, plaintiff must establish that defendants' acts or omissions were the cause of plaintiff's perceived damages. As it pertains to this case, that entails plaintiff establishing that, but for defendants' perceived fraud or negligence, plaintiff would have been successful in the Petersen case. We agree with defendants and the trial court that plaintiff cannot establish that fact. That is, specifically because plaintiff cannot establish that the special assessment was properly levied by plaintiff, plaintiff cannot establish that it would have been successful against Petersen in the underlying lawsuit.
"A special assessment is a levy upon property within a specified district." Kadzban v Grandville, 442 Mich 495, 500; 502 NW2d 299 (1993). "[I]t is a specific levy designed to recover the costs of improvements that confer local and peculiar benefits upon property within a defined area." Id. The General Law Village Act, MCL 74.25 et seq., prescribes the rules by which a village such as plaintiff may levy a special assessment. Specifically, MCL 68.32 provides, in pertinent part:
The complete special assessment procedure to be used, including the time when special assessment may be levied, the kinds of local public improvements for which a hearing is required on the resolution levying the special assessments; the preparing of plans and specifications; estimated costs; the preparation, hearing, and correction of the special assessment roll; the collection of special assessments; the assessment of single lots or parcels; and any other matters concerning the making of improvements by the special assessment method, shall be provided by ordinance. The ordinance shall authorize additional assessments, if the prior assessment proves insufficient to pay for the improvements or is determined to be invalid, in whole or in part . . . .Plaintiff adopted such ordinances, which provide that special assessments "may be established to pay for the costs of any local village public improvement or repair." Sparta Ordinances, § 54-1.
The ordinances provide that the village first must "adopt a resolution to set up a special assessment." Sparta Ordinances, § 54-4. The village must give notice of any hearings related to the creation of the special assessment, Sparta Ordinances, §§ 54-7, 54-8; and thereafter, the village must hear any objections from property owners, Sparta Ordinances, §§ 54-5, 54-6; and develop, review, and approve plans with respect to anticipated costs, Sparta Ordinances, § 54-7. Thereafter,
The village council, after finally determining the special assessment district, shall direct the assessor to make a special assessment roll in which shall be entered and described all the parcels of land to be assessed, with the names of the respective owners thereof, if known, and the total amount to be assessed against each parcel of land, which amount shall be the relative portion of the whole sum to be levied against all parcels of land in the special assessment district as the benefit to the parcel of land bears to the total benefit to all parcels of land in the special assessment district. When the assessor completes the assessment roll, he shall affix thereto his certificate stating that it was made pursuant to a resolution of the village council adopted on a specified date, and that in making the assessment roll he has, according to his best judgment, conformed in all respects to the directions contained in such resolution and the statutes of the state. [Sparta Ordinances, § 54-9.]The Village Council must then confirm the special assessment roll following adequate notice and a hearing. Sparta Ordinances, § 54-10. It is established that an assessment does not become "final and conclusive" until "[a]fter the confirmation [of] the special assessment roll and all assessments thereon." Gaut v Southfield, 388 Mich 189, 195; 200 NW2d 76 (1972). See also Michigan's Adventure, Inc v Dalton Twp, 290 Mich App 328, 334; 802 NW2d 353 (2010); 16 Mich Civ Jur Local Improvements and Assessments § 78 (explaining that a municipality may enforce collection of a special assessment "after the assessment roll has been confirmed and is due and payable").
MCL 41.726(1) also provides: "When a special assessment roll is reported by the supervisor to the township board, the assessment roll shall be filed in the office of the township clerk. Before confirming the assessment roll, the township board shall appoint a time and place when it will meet, review, and hear any objections to the assessment roll."
Notably, it should be stated that we generally presume the validity of "municipal decisions regarding special assessments." In re Petition of Macomb Co Drain Comm'r, 369 Mich 641, 649; 120 NW2d 789 (1963). It should also be noted that, as it specifically pertains to this case, the proper levying of a special assessment would have attached obligations to the subject property with special characteristics that could have impacted future property owners and taxpayers, such as Petersen, unlike an ordinary lien or encumbrance.
MCL 211.78k(5)(c) provides that, when a judgment of foreclosure is entered, it extinguishes "all liens against the property, including any lien for unpaid taxes or special assessments, except future installments of special assessment and liens record by this state or the foreclosing governmental unit . . . ." (Emphasis added.) With some inapplicable exceptions, the judgment further extinguishes "all existing recorded and unrecorded interests in the property." MCL 211.78k(5)(e). These rules "reflect a legislative effort to provide finality to foreclosure judgments and to quickly return property to the tax rolls." In re Treasurer of Wayne Co for Foreclosure, 478 Mich 1, 4; 732 NW2d 458 (2007). In keeping with the above, the judgment of foreclosure in this case, except for the short period of time in which redemption was made possible, delivered "good and marketable fee simple title to the property" to the Kent County Treasurer, and extinguished "[a]ll liens" against the property as well as "[a]ny existing recorded and unrecorded interest in the property" other than those preserved by statute. All of this is to say that, other than the affirmative defenses plaintiff believes should have been raised in the Petersen case that will be further addressed below, the parties do not dispute that the judgment of foreclosure extinguished all liens and encumbrances that might have passed to Petersen other than encumbrances related to properly levied special assessments. That is, temporarily ignoring plaintiff's alternative arguments, plaintiff's success in the underlying litigation was dependent on the validity of the special assessment outlined in the URISAA.
The trial court concluded that a special assessment had not been created because there was no evidence that plaintiff complied with the requirements of MCL 41.726(1), as well as plaintiff's own ordinances, when it sought to levy the special assessment in this case. We agree. Plaintiff has presented no evidence that the required confirmation of the special assessment roll took place, nor was any specific hearing related to the same ever noticed or taxpayers given an opportunity to object. And, to the extent that plaintiff seeks to argue that Resolution No. 04-33 functioned as the confirmation of the special assessment roll by the Village Council, that argument is untenable.
First, as the trial court aptly noted, the argument that Resolution No. 04-33 functioned to both authorize plaintiff to engage in a special assessment agreement and approve the specific special assessment roll ignores the requirements prescribed by statute and plaintiff's own ordinances to levy a special assessment and confirm a special assessment roll. See MCL 41.726 (speaking to the notice requirements for filing, reviewing, and confirming or otherwise disposing of a special assessment roll); Sparta Ordinances, § 54-10 (speaking to those same requirements and obligations on the part of the Village Council). We agree with the trial court that the statutes and ordinances contemplate multiple steps in the special assessment process, involving multiple noticed hearings and multiple opportunities for taxpayers to appear, express their thoughts, or object. Plaintiff has pointed to no law that would permit a village to curtail the required confirmation of the special assessment roll and treat authorization to engage in the preparation of a special assessment and confirmation of that specific special assessment as the same thing. And, the very language contained in Resolution No. 04-33 and the URISAA conflict with plaintiff's argument that Resolution No. 04-33 was meant to operate as a confirmation of the special assessment roll.
We have before indicated that there is an important procedural difference between an agreement to engage in a special assessment and a subsequent confirmation of a special assessment roll. See Damghani v Kentwood, unpublished per curiam opinion of the Court of Appeals, used April 16, 2019 (Docket No. 341213), p 9, p 9 n 4 (noting that, in that case, an agreement between a city and a property owner in anticipation of a special assessment did not itself establish a special assessment, "rather it stated that the special assessment would be determined by the City Commission in its discretion").
By its own terms, Resolution No. 04-33 was "A RESOLUTION APPROVING A UTILITY AND ROAD IMPROVEMENTS SPECIAL ASSESSMENT AGREEMENT BETWEEN GRAND VALLEY . . . AND [PLAINTIFF] AND DIRECTING THE VILLAGE PRESIDENT AND CLERK TO EXECUTE SAID CONTRACT." Plaintiff has pointed to no law to say that this resolution, permitting plaintiff to contract specifically with Grand Valley, should function as a confirmation of a special assessment roll, that would then potentially bind taxpayers other than Grand Valley and future owners of the subject property to a special assessment. And, when the URISAA was thereafter executed, it explicitly referenced a confirmation of the special assessment roll that would occur in the future: "The special assessment levied pursuant to this Agreement may be paid in 10 equal annual installments of principal plus interest on the unpaid balance commencing on the date the Village Council confirms the special assessment roll, or such later date designated in the resolution confirming the special assessment roll." First, that the document refers to "the special assessment levied pursuant to this Agreement" indicates that plaintiff understood that the URISAA was an agreement between plaintiff and Grand Valley to levy a special assessment, but that its execution was not itself the action that would effectively levy that assessment. This is further evidenced by the document's references to a future confirmation of the special assessment roll, which then would have levied the special assessment. It is undisputed that a future confirmation never took place.
In light of the above, we cannot discern error on the trial court's part when it concluded that plaintiff never levied a special assessment that would impact the rights of future property owners and taxpayers, and that might have survived the judgment of foreclosure. Moreover, we agree with the well-reasoned opinion of the trial court, wherein it noted:
Though precedent directs the court to presume such assessments are valid, [it] cannot justify validity of those assessments in the face of fatal procedural shortfalls. To do so would render the procedural requirements optional with regard to special assessments' treatment in tax foreclosure. The Court cannot selectively ignore compulsory statutory language ("shall").
As an aside, we note plaintiff's suggestion in relation to its argument that a valid special assessment existed in this case that it could have succeeded in the underlying litigation irrespective of the validity of the special assessment on the basis that both Michigan statutes and its own ordinances permit it to reassess special assessments under certain circumstances. MCL 68.32 provides that ordinances involving special assessments "shall authorize additional assessment, if the prior assessment proves insufficient to pay for the improvement or is determined to be invalid." And, indeed, plaintiff's ordinances authorize the same:
Whenever any special assessment shall, in the opinion of the village council, be invalid by reason of irregularities or informalities in the proceedings, or if any court of competent jurisdiction shall adjudge such assessment to be illegal, the village council shall, whether the improvement has been made or not, whether any part of the assessment has been paid or not, have power to proceed from the last step at which the proceedings were legal and cause a new assessment to be made for the same purpose for which the former assessment was made. [Sparta Ordinances, § 54-18.]However, plaintiff's analysis of the issue ends here, and plaintiff does not explain how or whether it would have actually been permitted to reassess a special assessment against Petersen. A special assessment cannot be levied for improvements made years before the assessment is confirmed, Smith v Garden City, 372 Mich 189, 195; 125 NW2d 269 (1963), nor may a governmental authority generally levy a special assessment after rights and obligations related to the same have been extinguished in a tax foreclosure, Keefe v Drain Comm'r of Oakland Co, 306 Mich 503, 512-514; 11 NW2d 220 (1943). See also Clark v Royal Oak, 325 Mich 298, 310; 38 NW2d 413 (1949) (explaining that a governmental entity cannot levy supplemental assessments after obtaining a property through a tax foreclosure because the foreclosure sale frees the property "not only from all prior taxes and special assessments, but also . . . [from] the possibility of further assessments for benefits to the land by public improvements made prior to the [entity] acquiring title"). It should also be noted that there is no evidence that plaintiff ever attempted to impose a subsequent special assessment on the property, nor that this issue was at the center of the Petersen case. Accordingly, this argument is without merit.
Plaintiff also raises a number of alternative arguments that it raised below but that the trial failed to address. In order to fully resolve the issues raised on appeal, we elect to address those arguments. We also decline to punish plaintiff "for the omission of the trial court," and therefore treat these arguments as preserved. Dell, 312 Mich App at 751 n 40 (quotation marks and citation omitted).
Plaintiff first asserts that Peterson waived all challenges to the validity of the special assessment. The argument essentially is as follows: (1) Grand Valley initially waived any right to challenge the URISAA by making payments pursuant to the agreement, (2) following the judgment of foreclosure, Petersen was on notice of the URISAA and Grand Valley's payments pursuant to the agreement because the agreement was on file with the Kent County Register of Deeds, (3) by purchasing the property while on notice of the URISAA and Grand Valley's waiver, Petersen too can be said to have waived any challenges to the nature of the special assessment proceedings or the special assessment itself. First, and as further described below, plaintiff has conflated challenges to the applicability of the URISAA—a special assessment agreement—to Petersen, with challenges to the validity of the procedure employed to actually levy a special assessment. Plaintiff itself acknowledges that its argument arises out of the application of contractual principles, but then ignores the fact that whether the URISAA was a contract to which Petersen was beholden and whether a special assessment was properly levied in this case are squarely two different things. Thus, even assuming Grand Valley waived its right to challenge its contractual obligations under the URISAA, plaintiff has provided no law or logical argument to suggest that Grand Valley's contractual obligations would have survived the judgment of foreclosure and passed on to Petersen. As explained above, the contractual obligations would have been extinguished by the judgment of foreclosure, and only a valid special assessment would have vested similar obligations in future property owners following a tax foreclosure. See MCL 211.78k(5)(c). To that end, it does not comport with logic to argue that (1) Petersen waived any argument that he was not subject to the URISAA, and therefore (2) Petersen waived any argument that a special assessment was otherwise levied through actions taken by plaintiff outside of the URISAA. And, as defendants aptly points out, even again assuming Grand Valley waived its right to challenge its contractual obligations, this is not to say that Grand Valley waived any rights related to a special assessment that was never actually levied. Particularly in light of plaintiff's failure to address the effects of the tax foreclosure on any rights that might have derived from the URISAA, this argument is without merit.
The URISAA provides:
4. Consent to Special Assessment. Grand Valley consents to the special assessment and acknowledges and agrees that the real property to be assessed in the Property will receive a benefit from the Improvements equal to or greater than the assessment to be placed on the real property.Plaintiff asserts that, by acquiescing to this provision in the URISAA and subsequently making payments pursuant to the agreement, Grand Valley necessarily expressed its understanding that the URISAA was valid, and waived any subsequent challenge to the same.
Plaintiff next asserts that, irrespective of whether the special assessment in this case was properly levied, plaintiff would have been successful in the Petersen case because Petersen's complaint was barred by statutes of limitations. However, as defendants point out, Petersen filed a complaint in the underlying action seeking declaratory relief, and it is well-settled that "[l]imitations statutes do not apply to declaratory judgments." Taxpayers Allied for Constitutional Taxation v Wayne Co, 450 Mich 119, 128; 537 NW2d 596 (1995) (quotation marks and citation omitted).
"Declaratory relief is a mere procedural device by which various types of substantive claims may be vindicated. There are no statutes which provide that declaratory relief will be barred after a certain period of time. Limitations periods are applicable not to the form of the relief but to the claim on which the relief is
based." [Id., quoting Luckenbach Steamship Co v United States, 312 F2d 545, 548 (CA 2, 1963).]Plaintiff asserts that Petersen attempted to "thwart the statute of limitations by labeling its counts as 'Declaratory Relief,' but that the gravamen of the claims was based in the formation of the special assessment agreement and subject to limitations prescribed in MCL 205.735a(6), or alternatively, that Petersen's claims were tantamount to contractual challenges that were subject to limitations prescribed by MCL 600.5807(9). Plaintiff simply does not make sense of this assertion in its brief on appeal, nor do any of the cases relied upon by plaintiff for the assertion involve claims for declaratory relief. See Adams v Adams, 276 Mich App 704, 710; 742 NW2d 399 (2007); Fritz v Monnich, unpublished per curiam opinion of the Court of Appeals, issued May 20, 2003 (Docket No. 235562), pp 1-2.
Moreover, MCL 205.735a involves assessment disputes brought before the Michigan Tax Tribunal generally involving the valuation of assessments or claims of exemption of property, as well as the jurisdiction of the Tax Tribunal. MCL 205.735a(1) through (6). Petersen's complaint involved none of the above, and sought a declaration in the circuit court that he was neither bound by nor subject to the URISAA, and that a special assessment was never properly levied against his property. In that same vein, the claims were clearly for declaratory relief and they were not tantamount to claims that the URISAA should be rescinded or was otherwise unenforceable such that MCL 600.5807(9) would be implicated. Suffice it to say, this argument is also without merit.
Lastly, plaintiff contends that it would have succeeded in the underlying litigation with Petersen if defendants had litigated a defense—or more appropriately, a counterclaim—of unjust enrichment. "The essential elements of an unjust enrichment claim are (1) receipt of a benefit by the defendant from the plaintiff, and (2) which benefit it is inequitable that the defendant retain." Meisner Law Group PC v Weston Downs Condo Assoc, 321 Mich App 702, 721; 909 NW2d 890 (2017). Defendants assert, and we agree, that Petersen, while perhaps receiving a benefit as a result of purchasing the subject property via a tax foreclosure sale, benefited in manner that is precisely permitted by law. Moreover, Michigan caselaw provides that "not all enrichment is necessarily unjust in nature." Morris Pumps v Centerline Piping, Inc, 273 Mich App 187, 196; 729 NW2d 898 (2006).
A third party is not unjustly enriched when it receives a benefit from a contract between two other parties, where the party benefited has not requested the benefit or misled the other parties . . . . Otherwise stated, the mere fact that a third person benefits from a contract between two other persons does not make such third person liable in quasi-contract, unjust enrichment, or restitution. Moreover, where a third person benefits from a contract entered into between two other persons, in the absence of some misleading act by the third person, the mere failure of performance by one of the contracting parties does not give rise to a right of restitution against the third person. [Id. (quotation marks and citation omitted).]Additionally, if it could be said that a party is unjustly enriched when they benefit from a tax foreclosure's removal of liens and encumbrances, the very purpose of properly levying special assessments would be moot. And lastly, it must be noted that plaintiff has provided no caselaw to explain how and to what extent unjust enrichment could apply under circumstances such as this. None of the cases referenced by plaintiff even remotely involve a governmental body's failure to properly levy a special assessment, nor a party taking a property following a tax foreclosure and a subsequent finding that the party benefited unjustly from the fact that the foreclosure process extinguished encumbrances and liens.
In light of all of the above, we conclude that the trial court did not err in granting defendants' motion for summary disposition. Plaintiff was required to establish that, but for defendants' malpractice, negligence, or fraud, plaintiff could have been successful in the underlying litigation with Petersen. Plaintiff has not established that it could have been successful, particularly in light of the trial court's conclusion that there were no genuine issues of material fact as to whether a special assessment was ever properly levied in this case. Lastly, plaintiff's alternative arguments largely ignore the implications of the tax foreclosure that occurred in this case, and plaintiff has failed to provide adequate authority to suggest that any one of the alternative arguments could have been successful in the Petersen case.
Affirmed.
/s/ Karen M. Fort Hood
/s/ David H. Sawyer
/s/ Deborah A. Servitto