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Michigan Supreme Court Lansing, Michigan

Opinion
FORD MOTOR COMPANY, Petitioner-Appellant, v CITY OF WOODHAVEN, and COUNTY OF WAYNE, Respondents-Appellees.

Chief Justice:

Justices:

Clifford W. Taylor

Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED JUNE 28, 2006

No. 127422

FORD MOTOR COMPANY, Petitioner-Appellant, v CITY OF STERLING HEIGHTS, Respondent-Appellee. No. 127423

FORD MOTOR COMPANY, Petitioner-Appellant, v TOWNSHIP OF BRUCE, No. 127424

_______________________________________ BEFORE THE ENTIRE BENCH CAVANAGH, J. These cases call on this Court to interpret the meaning and applicability of the phrase "mutual mistake of fact" as it is used in MCL 211.53a. In each of these cases, petitioner Ford Motor Company (Ford) filed a personal property statement with the appropriate taxing jurisdiction, the respective respondents. But Ford misreported some of the information in its personal property statements. Because respondents' assessors accepted and relied on Ford's personal property statements as accurate when calculating Ford's tax liability, respondents issued tax bills for amounts in excess of what would have been due had the statements been accurate. Ford paid the taxes, but it later sought refunds under MCL 211.53a when it discovered the errors, claiming the excessive taxes were paid because of a mutual mistake of fact. We hold that Ford has stated valid claims of mutual mistake of fact that were intended to be remedied under MCL 211.53a. In these cases, Ford and respondents shared and relied on an erroneous belief about a material fact that affected the substance of the transactions. Our conclusion is consistent with the Legislature's intent and the peculiar meaning the term "mutual mistake of fact" has acquired in our law. In dismissing Ford's petitions, the Michigan Tax

Tribunal (MTT) adopted a wrong principle and misapplied the law by failing to give the proper meaning to the legal term "mutual mistake of fact." Further, we 2


hold that the MTT abused its discretion when it failed to allow Ford to amend its petition against respondent Bruce Township. Therefore, we reverse the judgments of the MTT and the Court of Appeals, and we remand these cases to the MTT for further proceedings consistent with this opinion. I. Facts and Procedural History In each of these cases, Ford filed a personal property statement with the appropriate taxing jurisdiction, the respective respondents. But Ford mistakenly reported some of the information in its personal property statements and, therefore, overstated the quantity of taxable property it owned. Because

respondents' assessors accepted and relied on Ford's personal property statements as accurate when calculating Ford's tax liability, respondents issued excessive tax bills. Without any party realizing that the tax bills were excessive, Ford paid the amounts due and respondents accepted Ford's payments. Ford eventually discovered the errors in its personal property statements. Ford then filed three separate petitions with the MTT--one against the city of Romeo (which should have been filed against Bruce Township), one against the city of Sterling Heights, and one against the city of Woodhaven and Wayne County. In each petition, Ford argued that it paid excessive taxes because of a mutual mistake of fact and, thus, was entitled to a refund under MCL 211.53a. MCL 211.53a provides: Any taxpayer who is assessed and pays taxes in excess of the correct and lawful amount due because of a clerical error or mutual mistake of fact made by the assessing officer and the taxpayer may 3


recover the excess so paid, without interest, if suit is commenced within 3 years from the date of payment, notwithstanding that the payment was not made under protest. Even though Ford filed three separate petitions, our analysis of the issue presented in these cases is the same. But because each petition was treated separately by the MTT and the Court of Appeals, we will detail each petition's relevant history. A. Bruce Township After learning that it double reported certain assets, Ford filed a petition with the MTT against the city of Romeo.1 Specifically, Ford claimed in this petition that it was entitled to a refund from Romeo under MCL 211.53a because a mutual mistake of fact occurred regarding the taxability of Ford's personal property. After considering the matter, the MTT sua sponte issued an order dismissing Ford's petition. The MTT concluded that it lacked subject-matter jurisdiction under MCL 205.735 because Ford did not protest the assessments to the Romeo Board of Review.2 Further, the MTT held that the assessments at issue

Apparently, Ford double reported certain assets after it completed a saleleaseback transaction on these assets and failed to dispose of the assets' historical cost.
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MCL 205.735 provides, in relevant part:

(1) A proceeding before the tribunal is original and independent and is considered de novo. For an assessment dispute as to the valuation of property or if an exemption is claimed, the assessment must be protested before the board of review before the tribunal acquires jurisdiction of the dispute under subsection (2) . . . . (2) The jurisdiction of the tribunal in an assessment dispute is invoked by a party in interest, as petitioner, filing a written petition (continued...) 4


were not the result of a mutual mistake of fact because the assessments were solely the result of Ford's failure to prepare accurate statements. Accordingly, the MTT reasoned that it did not have subject-matter jurisdiction under MCL 211.53a because there was no mutuality of mistake. In support of this conclusion, the MTT relied on its opinion in Gen Products Delaware Corp v Leoni Twp, 2001 WL 432245 (Docket No. 249550, March 8, 2001), and on the Court of Appeals majority opinion in Wolverine Steel Co v Detroit, 45 Mich App 671; 207 NW2d 194 (1973). Finally, the MTT opined that Ford should have sought relief from the Michigan State Tax Commission under MCL 211.154. Ford appealed to the Court of Appeals, but Romeo moved to dismiss the appeal because it was not the taxing jurisdiction that assessed Ford's personal property. While not addressing the merits of the petition, the Court of Appeals

(...continued) on or before June 30 of the tax year involved. Except in the residential property and small claims division, a written petition is considered filed by June 30 of the tax year involved if it is sent by certified mail on or before June 30 of that tax year. . . . In all other matters, the jurisdiction of the tribunal is invoked by a party in interest, as petitioner, filing a written petition within 30 days after the final decision, ruling, determination, or order that the petitioner seeks to review, or within 35 days if the appeal is pursuant to section 22(1) of 1941 PA 122, MCL 205.22. . . . An appeal of a contested tax bill shall be made within 60 days after mailing by the assessment district treasurer and the appeal is limited solely to correcting arithmetic errors or mistakes and is not a basis of appeal as to disputes of valuation of the property, the property's exempt status, or the property's equalized value resulting from equalization of its assessment by the county board of commissioners or the state tax commission.

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denied Romeo's motion, reversed the MTT order, and remanded the matter to the MTT to address the issue of the necessary joinder or substitution of the parties. Ford Motor Co v Romeo, unpublished order of the Court of Appeals, entered September 13, 2002 (Docket No. 240649). Ford then filed a motion with the MTT to amend its petition to substitute Bruce Township for Romeo, as well as to make minor corrections. Ford's proposed amended petition again maintained that under MCL 211.53a, it was entitled to a refund because its personal property was reported and assessed twice, which Ford claimed was a mutual mistake of fact. Further, Ford argued that the MTT had jurisdiction to hear the case under MCL 205.731(b).3 The MTT granted Ford's motion to substitute Bruce Township for Romeo. But the MTT denied Ford's motion for leave to file an amended petition and dismissed the petition on the ground that Ford had still failed to invoke the MTT's subject-matter jurisdiction. Once again, the MTT held that because there was not a mutual mistake of fact, it lacked jurisdiction under MCL 211.53a. Further, the

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MCL 205.731 provides: The tribunal's exclusive and original jurisdiction shall be:

(a) A proceeding for direct review of a final decision, finding, ruling, determination, or order of an agency relating to assessment, valuation, rates, special assessments, allocation, or equalization, under property tax laws. (b) A proceeding for refund or redetermination of a tax under the property tax laws.

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MTT concluded that it lacked subject-matter jurisdiction because the proposed amended petition covered two parcels of property; therefore, the proposed petition violated the MTT's rule of procedure, 1999 AC, R 205.1240, which prohibits a petition from covering more than one parcel.4 Ford appealed to the Court of Appeals. In a split, published decision, the Court of Appeals affirmed the MTT's order. 264 Mich App 1; 689 NW2d 764 (2004). First, the Court of Appeals majority opined that the MTT had subject-matter jurisdiction over Ford's petition because the MTT is vested with the power and authority to adjudicate tax refund cases, citing In re AMB, 248 Mich App 144, 166-167; 640 NW2d 262 (2001). But the Court of Appeals majority agreed with the MTT that Ford was not entitled to relief under MCL 211.53a because there was not a mutual mistake of fact. In this regard, the Court of Appeals referenced the history surrounding MCL 211.53a, as well as Black's Law Dictionary (7th ed), and opined that MCL 211.53a "requires that both the assessing officer and the taxpayer have the same erroneous belief regarding the same material fact, which belief directly caused both the excess assessment and excess payment of taxes." Bruce Twp, supra at 9. Notably, the Court of Appeals majority preferred its definition of "mutual mistake of fact" to that articulated by the MTT in Gen Products Delaware Corp, supra,

In its proposed amended petition, Ford identified two parcels of property, 50-043-900-015-00 and 50-043-800-900-11.

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because the majority believed that the MTT's characterization was "more complicated than necessary." Id. at 11.5 Proceeding under its own understanding of MCL 211.53a, the Court of Appeals majority then concluded that Bruce Township and Ford were not operating under the same mistake of fact. According to the majority, the mistake was not mutual because Ford's mistake concerned its erroneous belief that certain assets were taxable, whereas Bruce Township's erroneous belief was that Ford's personal property statement was accurate. Moreover, the Court of Appeals majority reasoned that there was no mutual mistake of fact giving rise to a remedy under MCL 211.53a because the excessive tax was a direct result of Ford's sole mistake. Additionally, the majority rejected the proposition that the treatment of the phrase "mutual mistake" in contract law cases was applicable to property tax cases. Therefore, the Court of Appeals majority held that the MTT properly concluded that Ford was not entitled to a refund under MCL 211.53a because there was no mutual mistake of fact. Moreover, the majority reasoned that the MTT properly denied Ford's motion to amend its petition because the amendment would have been futile in light of the MTT's conclusion that relief could not be granted under MCL 211.53a. Accordingly, the Court of Appeals majority held

The Court of Appeals majority also disagreed with the interpretation of MCL 211.53a set forth in Wolverine Steel Co, supra.

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that the MTT had the right and duty to dismiss Ford's petition, and it affirmed the order of the MTT. The Court of Appeals dissent, however, would have reversed the order of the MTT. The Court of Appeals dissent agreed with the majority that the MTT had subject-matter jurisdiction to adjudicate Ford's claim, but for slightly different reasons. According to the dissent, the MTT confused the issue of subject-matter jurisdiction with whether Ford stated a claim under MCL 211.53a for which relief could be granted. Further, the dissent opined that the MTT had subject-matter jurisdiction under MCL 205.731(b). So when the MTT dismissed Ford's petition on the basis that it lacked subject-matter jurisdiction because Ford failed to state a claim under MCL 211.53a, the dissent would have held that the MTT erred as a matter of law. Unlike the majority, however, the dissent reasoned that the MTT also erred in determining that Ford failed to allege a mutual mistake of fact under MCL 211.53a. The dissent reasoned that the MTT's interpretation of a mutual mistake of fact was excessively narrow and would effectively eliminate personal property from the scope of MCL 211.53a. Relying in part on Carpenter v Ann Arbor, 35 Mich App 608; 192 NW2d 523 (1971), the Court of Appeals dissent reasoned that both Ford and Bruce Township shared the same factual mistake, namely, that all the property listed in Ford's statement was taxable. Because both parties relied on this factual mistake, the dissent concluded, the parties operated under a mutual mistake of fact. Therefore, the Court of Appeals dissent would have reversed the 9


order of the MTT on the basis that the MTT erred in applying the law and adopting an incorrect legal principle. Additionally, the Court of Appeals dissent opined that the MTT did not have the authority to dismiss sua sponte Ford's petition. Again, the dissent noted that the MTT had subject-matter jurisdiction and, therefore, it should not have dismissed the petition on this ground. Further, the dissent asserted that the MTT's other basis for dismissing the petition, failure to state a claim under MCL 211.53a, was akin to a ruling under MCR 2.116(C)(8). According to the dissent, this was effectively a grant of summary disposition erroneously issued without briefing. Finally, the Court of Appeals dissent observed that the MTT's refusal to allow Ford to amend its petition was an abuse of discretion requiring reversal, and that Ford should be allowed to split the petition into two petitions to comply with the MTT's rule of procedure. B. Sterling Heights Like what occurred with its personal property statement filed with Bruce Township, Ford later learned that it double reported certain assets on its statement filed with the city of Sterling Heights. So Ford filed a petition with the MTT

against Sterling Heights, seeking a refund under MCL 211.53a because a mutual mistake of fact occurred. In lieu of an answer, Sterling Heights moved for

summary disposition under MCR 2.116(C)(8) and (10). Ford did not respond to Sterling Heights' motion. However, the MTT, for reasons virtually identical to those noted earlier in this opinion with regard to the Bruce Township petition, 10


granted the Sterling Heights' motion to dismiss. For example, the MTT held that Ford did not properly invoke the MTT's subject-matter jurisdiction because Ford failed to protest the assessments to the Sterling Heights Board of Review. Moreover, the MTT likewise held that Ford's incorrect reporting on its personal property statement was not a mutual mistake of fact made by both Ford and Sterling Heights. Therefore, the MTT held that it also lacked subject-matter jurisdiction under MCL 211.53a. In a split, unpublished opinion per curiam, the Court of Appeals affirmed. Ford Motor Co v Sterling Hts, unpublished opinion per curiam of the Court of Appeals, issued October 5, 2004 (Docket No. 246379). The Court of Appeals decision was issued on the same day and by the same panel, resulted in the same split, and employed virtually the same reasoning as in the decision in Bruce Twp, supra. C. Woodhaven and Wayne County Similar to what transpired with its personal property statements noted above, Ford later learned that its statement to the city of Woodhaven was inaccurate. In this personal property statement, Ford discovered that certain assets that it listed were classified incorrectly, not taxable personal property, retired, or idle. After this discovery, Ford filed a refund petition with the MTT against Woodhaven and Wayne County under MCL 211.53a, alleging that a mutual mistake of fact occurred. Woodhaven and Wayne County then moved to dismiss the petition under MCR 2.116(C)(4), asserting that the MTT lacked subject-matter 11


jurisdiction under MCL 211.53a. The MTT granted the motion to dismiss for the same reasons it dismissed Ford's other two petitions. In a split, unpublished opinion per curiam, the Court of Appeals affirmed. Ford Motor Co v Woodhaven, unpublished opinion per curiam of the Court of Appeals, issued October 5, 2004 (Docket No. 246378). Likewise, the Court of Appeals decision was issued on the same day and by the same panel, resulted in the same split, and employed the same reasoning in the decisions in Bruce Twp, supra, and Sterling Hts, supra. Ford sought leave to appeal in all three cases, arguing that the MTT and the Court of Appeals erred in interpreting and applying MCL 211.53a, as well as in denying Ford's motion to amend its Bruce Township petition. This Court granted leave to consider the judgments of the Court of Appeals. 474 Mich 886 (2005). II. Standard of Review Absent fraud, our review of a decision by the MTT is limited to determining whether the MTT erred in applying the law or adopting a wrong legal principle. Catalina Marketing Sales Corp v Dep't of Treasury, 470 Mich 13, 1819; 678 NW2d 619 (2004). Further, the central dispute in these cases involves the proper interpretation and application of a statute, MCL 211.53a. This is a question of law that we review de novo. Title Office, Inc v Van Buren Co Treasurer, 469 Mich 516, 519; 676 NW2d 207 (2004).

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III. Analysis These cases call on this Court to interpret MCL 211.53a.6 Specifically, these cases require us to interpret the meaning and applicability of the phrase "mutual mistake of fact" as it is used in that statutory provision. As noted earlier in this opinion, MCL 211.53a provides: Any taxpayer who is assessed and pays taxes in excess of the correct and lawful amount due because of a clerical error or mutual mistake of fact made by the assessing officer and the taxpayer may recover the excess so paid, without interest, if suit is commenced within 3 years from the date of payment, notwithstanding that the payment was not made under protest. The primary goal of statutory interpretation is to give effect to the Legislature's intent. Title Office, supra at 519. The first step is to review the statute's language. Id. And if the statute is plain and unambiguous, then this Court will apply the statute as written. Id. Moreover, this Court is guided by MCL 8.3a, which provides: All words and phrases shall be construed and understood according to the common and approved usage of the language; but technical words and phrases, and such as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning.

Apart from brief references in Spoon-Shacket Co, Inc v Oakland Co, 356 Mich 151; 97 NW2d 25 (1959), and Booker v Detroit, 469 Mich 892 (2003) (Young, J., dissenting), this Court has not had formal occasion to interpret MCL 211.53a.

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Here, we agree with the Court of Appeals majority and dissent that the term "mutual mistake of fact" is a technical term that has acquired a peculiar meaning under the law. Indeed, the term has a defined common-law meaning. A. The Common-law Meaning of Mutual Mistake of Fact This Court follows the principle that when a statute dealing with the same subject uses a common-law term and there is no clear legislative intent to alter the common law, this Court will interpret the statute as having the same meaning as under the common law. Pulver v Dundee Cement Co, 445 Mich 68, 75; 515 NW2d 728 (1994). Moreover, "common-law meanings are assumed to apply even in statutes dealing with new and different subject matter, to the extent that they appear fitting and in the absence of evidence to indicate contrary meaning." 2B Singer, Statutes and Statutory Construction (6th ed),

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