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STATE OF MICHIGAN COURT OF APPEALS

JED WUEBBEN and KATE WUEBBEN, Petitioners-Appellants, v TOWNSHIP OF FRANKLIN, Respondent-Appellee.

UNPUBLISHED December 22, 2011

No. 299573 Tax Tribunal LC No. 00-357783

Before: STEPHENS, P.J., and SAWYER and K.F. KELLY, JJ. PER CURIAM In this property tax liability action, petitioners, Jed Wuebben and Kate Wuebben, appeal as of right from a judgment of the Michigan Tax Tribunal (Tribunal) affirming the State Tax Commission's (Commission) retroactive reassessment of a parcel of property owned by petitioners for the years 2006, 2007, and 2008. We affirm. I. BASIC FACTS AND PROCEDURAL HISTORY Petitioners purchased a parcel of property with a mobile home on it and, beginning in 2005, began construction that included adding a garage, an outbuilding, and a house. Petitioners obtained all necessary permits for these structures and completed construction on the new home in 2007. That year, petitioners attended a Township Board Meeting on the subject of taxes. At the meeting, the township supervisor remarked that there would be no tax bill increases on new construction until a year after construction was completed. In 2008, petitioners sent the tax assessor a letter, indicating that they had not yet received notice of an assessment increase. The assessor advised petitioners that the assessed value of the property for 2008 would increase from $12,410 to $38,770 and that the taxable value of the property would increase from $9,800 to $34,245. Petitioners did not object to the assessment increases and paid all applicable taxes for 2008. They listed the property for sale. Petitioners closed on the sale of the property in September 2008, whereupon they were presented with delinquent tax bills for 2006 and 2007, along with an increased tax bill for 2008. In an order dated August 21, 2008, the Commission had retroactively reassessed petitioners' property pursuant to MCL 211.154, changing the values as follows: for 2006, the assessed value increased from $10,790 to $97,716 and the taxable value increased from $9,451 to $88,265; for 2007, the assessed value increased from $12,410 to $141,300 and the taxable value increased from $9,800 to $131,920; and, for 2008, the assessed value increased from $38,770 to $141,300 -1-

and the taxable value increased from $34,245 to $131,920. Petitioners filed a timely appeal of the Commission's order to the Tribunal. A hearing was held before a hearing referee on November 12, 2009. In a hearing that was not transcribed, the referee received testimony from petitioners and from the new county assessor. The referee found that not all of the structures were included on the tax roll for the years 2006, 2007, and 2008, but that "there is no evidence that Petitioner[s] incorrectly reported to the assessor the structures on their property;" rather, the structures were consciously omitted from the tax roll by the previous assessor, and petitioners "had no duty to beg the assessor to place the structures on the roll and, when she didn't, appeal to the board of review." Accordingly, the referee concluded that the property tax assessment was not subject to correction under MCL 211.154 and that the tax values for 2006 and 2007 should be returned to their original amounts. In a proposed opinion, the referee wrote: We do not believe that Respondent, which had the burden of showing that property had been incorrectly reported or omitted from the tax rolls has met that burden. It appears to us that the assessor deliberately did not update the property record card of the Petitioner[s'] property in 2006 and 2007 and 2008 and place various structures on the roll . . . We believe that was her conscious decision. She did not make a mistake. She just did not do her job. Petitioners filed limited exceptions to the referee's proposed opinion, primarily contesting the 2008 valuation. The Township filed no exceptions. On April 22, 2010, Judge Victoria Enyart issued a Final Opinion and Judgment. While accepting the referee's findings of fact, Judge Enyart nevertheless concluded that the "[a]ssessor's failure to properly assess the property does not . . . justify a reduction in the property's assessment for the tax years at issue absent evidence indicating that the property had, in fact, been included in the assessment or that the value of the omitted property was less than the value added to the assessment." Petitioners never submitted evidence to establish the true cash value for the years in question. The Tribunal, therefore, modified and adopted the proposed opinion, allowing retroactive assessments of petitioners' property in keeping with MCL 211.154. On May 7, 2010, petitioners filed a motion for reconsideration, arguing that Judge Enyart lacked the authority to reinstate the Commission's decision because MCL 205.762 only allowed the Tribunal to review exceptions to the referee's proposed order. Petitioners submitted limited exceptions and the Township submitted no exceptions, yet Judge Enyart effectively reversed the referee's proposed order and reinstating the Commission's original retroactive reassessments. Petitioners also argued that because there was no "under-reporting or omission" on the part of petitioners, there was no reason for a retroactive valuation for those years. Judge Enyart denied the motion on July 26, 2010, finding that her review powers were not limited by petitioners' exceptions; rather, MCL 205.762(2) clearly provided that the Tribunal could modify a hearing referee's proposed order. Judge Enyart also rejected petitioners' claim that since no mistake was made, retroactive valuation was prohibited: Contrary to Petitioners' contentions, Judge Enyart's "final opinion" was supported "by the facts and applicable law." More specifically, the Hearing -2-

Referee specifically found that "Petitioner[s] began construction on their property in 2005, partially completed it in 2006 and fully completed it in 2007." As such, the assessments at issue should have reflected the partial construction completed during 2005 for the 2006 tax year, the additional partial construction completed during 2006 for the 2007 tax year and the final partial construction completed during 2007 for the 2008 tax year. In that regard, the underlying issue has nothing to do with misrepresentations or incorrect reporting, as the [Commission] did not "correct an assessor's error in mistakenly undervaluing the property." Rather, the assessor did not, in fact, assess the partial construction and, as such, failed to include "previously existing tangible real property" in the assessments. As a result, the construction for each year constituted omitted property. Further, Petitioners did not submit sufficient and reliable evidence to establish the true cash value of the partial construction for each tax year at issue. As a result, the Tribunal has no evidence to indicate that the values adopted by the [Commission] for that construction are erroneous. [Citations omitted.] Petitioners appeal as of right, again raising the issues of whether the Tribunal had the authority to go beyond the exceptions in reviewing the referee's proposed opinion and whether the Commission could retroactively revalue petitioners' property absent a mistake or omission on petitioners' part. II. STANDARD OF REVIEW Our primary task in construing a statute is to discern and give effect to the intent of the Legislature. Shinholster v Annapolis Hosp, 471 Mich 540, 548

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