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Michigan Supreme Court Lansing, Michigan

Opinion
NATHAN KLOOSTER, Petitioner-Appellee, v CITY OF CHARLEVOIX, Respondent-Appellant.

Chief Justice:

Justices:

Robert P. Young, Jr. Michael F. Cavanagh Marilyn Kelly Stephen J. Markman Diane M. Hathaway Mary Beth Kelly Brian K. Zahra

FILED MARCH 10, 2011 STATE OF MICHIGAN SUPREME COURT

No. 140423

BEFORE THE ENTIRE BENCH CAVANAGH, J. This case involves the General Property Tax Act (GPTA)1 and two particular circumstances in which a conveyance of property may or may not permit a taxing authority to "uncap" and reassess the value of that property. Specifically, we granted leave to appeal to address whether a "conveyance" as that term is used in MCL 211.27a(3) must be by means of a written instrument and whether, under MCL 211.27a(7)(h), petitioner's property was uncapped for purposes of property-tax
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MCL 211.1 et seq.

reassessment by either the death of the other joint tenant in January 2005 or the creation of a subsequent joint tenancy in September 2005. Klooster v Charlevoix, 486 Mich 932 (2010). We hold first that a "conveyance" for purposes of MCL 211.27a does not require a written instrument. Second, we hold that while the January 2005 termination of the joint tenancy caused by the death of a cotenant was within the joint-tenancy exception created by MCL 211.27a(7)(h) and was thus not a transfer of ownership that uncapped the property, the September 2005 conveyance from petitioner to himself and his brother as joint tenants did uncap the property, because the conveyance did not fall within the joint-tenancy exception. Therefore, we reverse the judgment of the Court of Appeals and hold that respondent, the city of Charlevoix, properly issued its 2006 notice of reassessment and that the Tax Tribunal reached the correct result, albeit for the wrong reason. I. FACTS AND PROCEDURAL HISTORY The facts are undisputed. In 1959, James and Dona Klooster acquired title to the subject property in the city of Charlevoix and held it as tenants by the entirety. On August 11, 2004, Dona quitclaimed her interest in the property to James, leaving James as the sole owner. On that same day, James quitclaimed the property to himself and his son, petitioner Nathan Klooster, as joint tenants with rights of survivorship. On

January 11, 2005, James died, leaving petitioner as the sole property owner by operation of law. On September 10, 2005, petitioner quitclaimed the property to himself and his brother, Charles Klooster, as joint tenants with rights of survivorship. In 2006, the assessor for the city of Charlevoix issued to petitioner and Charles

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Klooster a notice of assessment, taxable valuation, and property classification, indicating that, because of a transfer of ownership, the property's taxable value had been reassessed using the true cash value of the property. The notice did not state whether the

termination of the joint tenancy caused by the death of petitioner's father in January 2005 or the September 2005 creation of the joint tenancy between petitioner and his brother constituted the transfer of ownership. As a result of the reassessment, the taxable value of petitioner's property increased from $37,802 to $72,300. Petitioner appealed unsuccessfully to the city's board of review. Petitioner then appealed to the Tax Tribunal. The Tax Tribunal affirmed the reassessment, ruling that the transfer of ownership to petitioner by virtue of his father's death was a conveyance for purposes of the GPTA. Additionally, the Tax Tribunal ruled that the joint-tenancy exception from MCL 211.27a(7)(h) did not apply to the January 2005 transfer because petitioner was not an original owner or an already existing joint tenant before the August 2004 joint tenancy was created. The Tax Tribunal did not rule on the September 2005 conveyance. Petitioner appealed as of right in the Court of Appeals, claiming that the transfer of ownership caused by his father's death was not a conveyance, and that even if it had been, petitioner would have qualified for the MCL 211.27a(7)(h) exception from uncapping. The Court of Appeals reversed the tribunal, determining that a "conveyance" requires a transfer of title by a written instrument, and thus James's death and the resulting transfer of fee title to petitioner by operation of law did not constitute a transfer of ownership under the GPTA that would uncap the property. Klooster v Charlevoix, 286 Mich App 435, 441-443; 781 NW2d 120 (2009). We granted respondent's application 3

for leave to appeal. Klooster, 486 Mich at 932-933. II. STANDARD OF REVIEW AND RULES OF STATUTORY INTERPRETATION "In the absence of fraud, review of a decision by the Tax Tribunal is limited to determining whether the tribunal erred in applying the law or adopted a wrong principle; its factual findings are conclusive if supported by competent, material, and substantial evidence on the whole record." Mich Bell Tel Co v Dep't of Treasury, 445 Mich 470, 476; 518 NW2d 808 (1994). Issues of statutory interpretation are questions of law that are reviewed de novo. Brown v Detroit Mayor, 478 Mich 589, 593; 734 NW2d 514 (2007). The primary goal of statutory interpretation is to give effect to the Legislature's intent, focusing first on the statute's plain language. Sun Valley Foods Co v Ward, 460 Mich 230, 236; 596 NW2d 119 (1999). "The words of a statute provide `the most reliable evidence of its

intent . . . .'" Id., quoting United States v Turkette, 452 US 576, 593; 101 S Ct 2524; 69 L Ed 2d 246 (1981). When construing a statute, a court must read it as a whole. People v Jackson, 487 Mich 783, 791; 790 NW2d 340 (2010). III. STATUTORY BACKGROUND Resolving this case requires that we examine the January 2005 and September 2005 changes in the ownership of petitioner's property to determine whether respondent properly reassessed the property under the GPTA. We begin our analysis by briefly reviewing Proposal A and the GPTA before turning to the joint-tenancy exception and the specific conveyances at issue.

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A. PROPOSAL A AND THE GPTA In 1994, voters passed Proposal A, amending article 9,

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