                         STATE OF MICHIGAN

                          COURT OF APPEALS



CITY OF DEARBORN HEIGHTS,                                       UNPUBLISHED
                                                                November 17, 2016
              Plaintiff-Appellant,

v                                                               No. 327928
                                                                Wayne Circuit Court
WAYNE COUNTY TREASURER, WAYNE                                   LC No. 12-015619-CH
COUNTY, B&D FAMILY HOLDINGS, LLC, and
NSTAR COMMUNITY BANK,

              Defendants-Appellees.


In re Petition of WAYNE COUNTY TREASURER
for Foreclosure.


WAYNE COUNTY TREASURER,

              Petitioner-Appellee,

v                                                               No. 327950
                                                                Wayne Circuit Court
CITY OF DEARBORN HEIGHTS,                                       LC No. 11-007010-CH

              Intervenor-Appellant.


Before: M. J. KELLY, P.J., and MURRAY and BORRELLO, JJ.

PER CURIAM.

        These consolidated appeals, which are before this Court for a second time, concern
property located at 2525 S. Beech Daly Road in Dearborn Heights (the property). In Docket No.
327928, Dearborn Heights appeals as of right the trial court’s order granting summary
disposition in favor of defendants, the Wayne County Treasurer (the Treasurer), Wayne County,
and B&D Family Holdings, LLC (B&D), in its action to quiet title. In Docket No. 327950,




                                             -1-
Dearborn Heights appeals by delayed leave granted the trial court’s order granting summary
disposition in favor of the Treasurer in the related tax foreclosure lawsuit.1 For the reasons
stated in this opinion, we affirm.

                                        I. BASIC FACTS

        In June 2011, the Treasurer petitioned to foreclose the property because B&D was
delinquent on its taxes, interest, fees, and penalties. B&D and the Treasurer agreed that B&D
entered into a payment plan agreement on or about January 26, 2012. Under the agreement B&D
was required to fully pay the amount owed in four installment payments and in return the
redemption period for the property would extend into October 2012. Under the terms of the
payment plan, B&D stipulated to the entry of a judgment of foreclosure, which was later entered
on March 30, 2012 and filed on April 2, 2012. Subsequently, on July 3, 2012, the Treasurer
provided Dearborn Heights with a list of properties that were available for purchase; the subject
property was included on the list. On July 18, 2012, Dearborn Heights informed the Treasurer
that it wanted to purchase the subject property, and, on July 25, 2012, a Dearborn Heights
employee attempted to deliver a check for the property. The employee was informed that the
property was no longer available because the Treasurer and B&D had entered into a payment
plan “in the past month or so.”

       In November 2012, Dearborn Heights filed an action for quiet title, asserting that the
Treasurer had to accept payment for the property and convey it to Dearborn Heights. Although
B&D did not meet the deadlines for each installment payment, it successfully paid off the full
amount owed under the payment plan by October 2012. Accordingly, in December 2012, in the
foreclosure case, the Treasurer filed a certificate of redemption, and in January 2013, the trial
court vacated the foreclosure judgment in an ex parte order. Thereafter, B&D moved for
summary disposition in the quiet title case, whereas Dearborn Heights moved to intervene in the
foreclosure action. The trial court denied Dearborn Heights’s motion to intervene after
concluding that the city lacked standing. Further, the trial court granted B&D’s motion for
summary disposition in the quiet title action, finding that Dearborn Height’s suit was an
improper collateral attack on the foreclosure action.

        Dearborn Heights appealed both cases to this Court, and we reversed and remanded for
further proceedings. City of Dearborn Heights v Wayne Co Treasurer, unpublished opinion per
curiam of the Court of Appeals, issued September 16, 2014 (Docket Nos. 315660; 315667). We
concluded that the trial court abused its discretion by denying Dearborn Heights’s motion to
intervene “because it deprived Dearborn Heights of the opportunity to protect its potential
interest in the property that was the subject of the foreclosure action.” Id. at 4. We also
concluded that the trial court erred by determining that the quiet title suit was an improper
collateral attack on the foreclosure action because (1) the quiet title action was filed before the
foreclosure suit was resolved, (2) Dearborn Heights was not a party in interest in the foreclosure
proceedings, and (3) Dearborn Heights did not have “due and legal notice” of the proceedings in


1
 In re Petition of Wayne Co Treasurer for Foreclosure, unpublished order of the Court of
Appeals, entered November 25, 2015 (Docket No. 327950).


                                                -2-
that case. Id. at 5. However, we declined to reach the merits, concluding that the trial court did
not address Dearborn Heights’s alleged disputes of fact and did not provide any reasoning to
support its decision of law. Id.

        On remand, Wayne County, the Treasurer, and B&D filed motions for summary
disposition in both cases. Relevant to this appeal, Wayne County and the Treasurer argued that
summary disposition was proper because the payment plan agreement facilitated the purpose of
the General Property Tax Act, MCL 211.1 et seq., which is to encourage the efficient and
expeditious return of delinquent properties to productive use. They also argued that it was
appropriate and necessary for the trial court to vacate the judgment of foreclosure because B&D
made the requisite payments under the payment plan agreement. They further argued that due
process required that the judgment of foreclosure be set aside because B&D justifiably relied on
the payment plan agreement, which provided that the property would be removed from
foreclosure if the requisite payments were made and no transfer of the property had occurred.
Wayne County and the Treasurer also argued that there were no material issues of fact regarding
the agreement that would preclude summary disposition because it was undisputed that there was
an agreement and that B&D substantially complied with it.

        Similarly, B&D argued that it had the right to enter into a payment plan agreement and its
payments were made in full to the satisfaction of Wayne County. B&D also argued that
Dearborn Heights had no standing to claim that B&D defaulted under the agreement because it
was not a party to the agreement or a third-party beneficiary. Additionally, B&D further argued
that the agreement failed to satisfy due process because it led the taxpayer to believe the
redemption period was extended and B&D relied on it by not paying its taxes by the statutory
redemption deadline. Finally, B&D asserted that the trial court’s order vacating the prior
judgment of foreclosure was retroactive, so no judgment of foreclosure existed and marketable
title was never held by Wayne County to allow it to sell the property to Dearborn Heights.

        On March 23, 2015, Dearborn Heights filed a response to B&D’s motion for summary
disposition. In relevant part, it argued that the property should have been sold to it because the
property was not redeemed within 21 days of entry of the judgment. It further argued that (1) the
payment plan agreement was not authorized by the General Property Tax Act, (2) the agreement
violated the Act because it gave B&D more time to redeem the property than permitted by the
Act, (3) the agreement was inconsistent with MCL 211.78m, which required the property to be
offered for sale, (4) the agreement was void as contrary to public policy, and (5) B&D defaulted
under the agreement. Dearborn Heights argued that the amended ex parte order was void and
defendants could not rely on due process because (1) B&D had notice of the tax foreclosure
lawsuit, (2) B&D expressly waived its right to notice and a hearing, (3) B&D did not have an
interest in the property because its interest was terminated, and (4) B&D did not have a property
interest in the property under Michigan law. Finally, Dearborn Heights argued that questions of
fact concerning the payment plan agreement precluded summary disposition given that there
were different versions of the agreement, different dates of entry given, and different dates of
payment provided.




                                               -3-
      On April 10, 2015, a hearing was held on the motions. With regard to whether the
payment plan agreement was authorized by the Act, the trial court stated:

               There is no question in this Court’s mind that the Treasurer can enter into
       installment payment agreement[s] with property owners. However, if this is done
       a Judgment of Foreclosure should not be entered until after the payment
       [agreement] is breached. This is because entering the Judgment of Foreclosure
       prior to that point will, in most cases, extend the redemption period or appeal
       period beyond the 21 days from the entry of the Judgment of Foreclosure
       permitted in [the statute]. This is what happened in the instant case.

The trial court concluded that the order vacating the judgment of foreclosure violated MCL
211.78k(6) because the court lost jurisdiction after B&D did not redeem or appeal within 21 days
after the judgment was entered. The parties have not challenged that finding on appeal.

        The trial court, however, found that a due process claim could exist where the property
owner was misled regarding redemption rights.2 The trial court found that the Treasurer misled
B&D into believing that its property would be removed from the foreclosure judgment if it
complied with the payment plan agreement and that it was not necessary to redeem the property
within 21 days of entry of the judgment. Accordingly, based on the procedural due process
violation, the trial court set aside the judgment of foreclosure. The trial court additionally found
that there were no questions of material fact regarding the existence of and the date of the
payment plan agreement. Further, with regard to Dearborn Heights’s claim that B&D did not
comply with the agreement, the trial court stated that the Treasurer concluded that there was
substantial compliance and Dearborn Heights, who was not a party to the contract or a third-
party beneficiary, had no standing to raise the issue. Therefore, the trial court granted summary
disposition in favor of the Treasurer, Wayne County, and B&D, and denied summary disposition
in favor of Dearborn Heights. Dearborn Heights moved for reconsideration, which the trial court
denied. This appeal follows.

                                 II. SUMMARY DISPOSITION

                                 A. STANDARD OF REVIEW

       Dearborn Heights argues that the trial court erred by granting summary disposition in
favor of Wayne County, the Treasurer, and B&D. The parties’ motions for summary disposition
were filed pursuant to MCR 2.116(C)(8) and (10). The trial court did not state the subrule on
which it relied to grant summary disposition. However, because it considered material outside
the pleadings, “this Court will construe the motion as having been granted pursuant to MCR
2.116(C)(10).” Hughes v Region VII Area Agency on Aging, 277 Mich App 268, 273; 744
NW2d 10 (2007). We review de novo a trial court’s decision to grant summary disposition



2
  In doing so, the trial court rejected Dearborn Heights’s claim that the only due process
argument that could be raised in this case related to notice in the tax foreclosure suit.


                                                -4-
under MCR 2.116(C)(10). Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285
Mich App 362, 369; 775 NW2d 618 (2009).

       In reviewing a motion under MCR 2.116(C)(10), the trial court considers
       affidavits, pleadings, depositions, admissions, and other evidence introduced by
       the parties to determine whether no genuine issue of material fact exists and the
       moving party is entitled to judgment as a matter of law. The evidence submitted
       must be considered in the light most favorable to the opposing party. [McLean v
       City of Dearborn, 302 Mich App 68, 73; 836 NW2d 916 (2013) (citations and
       quotation marks omitted).]

“Questions of statutory interpretation are also reviewed de novo.” Elba Twp v Gratiot Co Drain
Comm’r, 493 Mich 265, 278; 831 NW2d 204 (2013). Similarly, “[w]hether due process has
been afforded is a constitutional issue that is reviewed de novo.” Id. at 277.

                                         B. ANALYSIS

                                       1. DUE PROCESS

        The trial court concluded that, although the payment plan agreement violated the General
Property Tax Act, the judgment of foreclosure could be set aside because B&D was denied due
process. It is well-established that a judgment of foreclosure can be set aside even after the
expiration of the statutory redemption period if the original property owner’s constitutional right
to due process was violated. See, e.g., In re Petition by Wayne Co Treasurer, 478 Mich 1, 10-
11; 732 NW2d 458 (2007) (Perfecting Church) (finding that the Legislature “cannot create a
statutory regime that allows for constitutional violations with no recourse” so the provision in the
General Property Tax Act that purports “to limit the circuit court’s jurisdiction to modify
judgments of foreclosure is unconstitutional and unenforceable as applied to property owners
who are denied due process.”); see also Gillie v Genesee Co Treasurer, 277 Mich App 333, 347-
355; 745 NW2d 137 (2007) (holding that although the General Property Tax Act did not give the
court authority to cancel a sale after expiration of the 30-day period, the sale could be cancelled
if the taxpayer was deprived of constitutionally adequate notice). In fact, MCL 211.78k(9)(e)
provides:

               (9) After the entry of a judgment foreclosing the property under this
       section, if the property has not been transferred under section 78m to a person
       other than the foreclosing governmental unit, a foreclosing governmental unit
       may cancel the foreclosure by recording with the register of deeds for the county
       in which the property is located a certificate of error in a form prescribed by the
       department of treasury, if the foreclosing governmental unit discovers any of the
       following:

                                              * * *

              (e) An owner of an interest in the property entitled to notice under section
       78i was not provided notice sufficient to satisfy the minimum requirements of due
       process required under the state constitution of 1963 and the constitution of the
       United States.
                                                -5-
MCL 211.78i(10) provides:

              The failure of the foreclosing governmental unit to comply with any
       provision of this section shall not invalidate any proceeding under this act if the
       owner of a property interest or a person to whom a tax deed was issued is
       accorded the minimum due process required under the state constitution of 1963
       and the constitution of the United States.

And MCL 211.78(2) provides:
               It is the intent of the legislature that the provisions of this act relating to
       the return, forfeiture, and foreclosure of property for delinquent taxes satisfy the
       minimum requirements of due process required under the constitution of this state
       and the constitution of the United States but that those provisions do not create
       new rights beyond those required under the state constitution of 1963 or the
       constitution of the United States. The failure of this state or a political
       subdivision of this state to follow a requirement of this act relating to the return,
       forfeiture, or foreclosure of property for delinquent taxes shall not be construed to
       create a claim or cause of action against this state or a political subdivision of this
       state unless the minimum requirements of due process accorded under the state
       constitution of 1963 or the constitution of the United States are violated.

In other words, if a person was not accorded the minimum due process required under the
Michigan and United States Constitutions, then proceedings under the General Property Tax Act
can be invalidated, including a judgment of foreclosure.

        Dearborn Heights raises several arguments as to why B&D is not entitled to relief on due
process grounds. First, Dearborn Heights argues that B&D had no property interest to support a
due process claim because B&D’s property interest was extinguished when it failed to redeem
the property within 21 days after entry of the judgment of foreclosure. However, in Perfecting
Church, 478 Mich at 5, 11, the Court enforced the church’s due process rights even after the
judgment of foreclosure was entered and the redemption period had passed. MCL 211.78k(9)(e)
also allows for a foreclosure to be canceled after entry of the foreclosure judgment if notice
sufficient to satisfy minimum due process requirements was not provided. Moreover, contrary to
Dearborn Heights’s claim that the payment plan agreement could not be used to support B&D’s
property interest, the payment plan agreement is not the basis for B&D’s property interest.
Instead, similar to the church in Perfecting Church, B&D has a property interest as the original
owner of the property.

        Dearborn Heights next argues that B&D was only entitled to process that was due under
the General Property Tax Act, i.e., to notice of the proceedings as provided for by the statute.
However, in Gillie, 277 Mich App at 354, this Court recognized that both constitutionally
adequate notice and statutory notice is required. Likewise, in Perfecting Church, 478 Mich at 9-
10, although the lack of notice was at issue, the Court referred to “minimum due process
requirements,” which include both notice and an opportunity to be heard. Several provisions of
the General Property Tax Act also refer to minimum due process. See MCL 211.78(2); MCL
211.78i(10). Here, it is undisputed that B&D received notice of the foreclosure proceedings, i.e.,
notice under the statute; however, B&D was denied the opportunity to present its objections

                                                -6-
based on the payment plan agreement, which the trial court found misled B&D to believe that the
redemption period was extended.

        The trial court concluded that a due process violation can be based on inadequate notice
with respect to appellate rights or, in this case, redemption rights. In Walters v Reno, 145 F3d
1032, 1042-1043 (CA 9, 1998), the court held that forms issued to aliens charged with civil
document fraud violated due process because they, among other things, failed to advise aliens of
the need to request a separate hearing in order to contest deportability and failed to inform them
that failing to request a hearing could result in immediate deportation. Similarly, in Day v
Shalala, 23 F3d 1052, 1065-1066 (CA 6, 1994), the court held that a notice that misled claimants
by equating a new application with an appeal violated due process. In Gonzalez v Sullivan, 914
F2d 1197, 1203 (CA 9, 1990), the court concluded that a notice was inadequate where it did not
clearly indicate that the request would become final if no request for reconsideration was made.
See also Herrada v City of Detroit, 275 F3d 553, 558-559 (CA 6, 2001) (distinguishing between
false and misleading statements pertaining to the right to request a hearing or to appeal an
adverse decision, which constitute a due process violation, with statements relating to penalties
for refusing to act, which do not constitute a due process violation).

        Dearborn Heights argues that the cases relied upon by the trial court, Day and Gonzalez,
are distinguishable because they involved notices that were required to provide accurate
information, whereas this case involves a contract that violated the General Property Tax Act.
However, the payment plan agreement is not being enforced, nor is it the basis for B&D’s
property interest. What is of significance is the provision of the agreement that erroneously
informed B&D that it did not have to redeem the property by the statutory redemption date.
Thus, even though the agreement was found to be unenforceable, it provided B&D with false and
misleading information, similar to the notices in the other cases. In other words, B&D was
misled to believe that it did not have to redeem the property by the statutory deadline and that its
property would be removed from foreclosure if it complied with the payment plan agreement.
The misleading information about the right to redeem the property, regardless of its form,
constitutes the basis for the due process violation.

        Dearborn Heights also argues that B&D was not entitled to notice of state-law remedies
that are available in public sources, and that B&D could not rely on the inaccurate information
provided when the law was available in the relevant statutes. However, the information
regarding B&D’s redemption rights was provided as part of an agreement between the parties,
which purported to extend the period for redemption granted by the GPTA. It was necessary for
the information to be provided regarding the purported extension in order to state the
consideration provided by the Treasurer in exchange for B&D’s payment. Moreover, the trial
court determined that payment plans are allowed under the GPTA, but the problem in this case
was that the judgment of foreclosure should not have been entered until B&D defaulted. This,
however, was not necessarily clear from the statutes. Thus, B&D could reasonably rely on the
information provided in the agreement even though it was inaccurate under the circumstances.

       Finally, Dearborn Heights claims there was no due process violation because B&D did
not detrimentally rely on the payment plan agreement. See Day, 23 F3d at 1066 (allowing the
reopening of claims only for individuals who detrimentally relied on the inadequate notices); and
Walters, 145 F3d at 1044 (considering whether there was prejudice as a result of the

                                                -7-
constitutionally deficient proceedings). In this case, however, B&D submitted an uncontroverted
affidavit indicating that it would have redeemed the property by the statutory deadline if it had it
not been informed that the redemption date was extended. And although Dearborn Heights
argues that there was no detrimental reliance because B&D failed to comply with the payment
plan agreement, the affidavit submitted by B&D shows that B&D detrimentally relied on the
agreement by not redeeming the property by the statutory redemption date. Thus, there was
evidence that, had B&D not entered the agreement, the outcome of the proceedings would have
been different. The events after the expiration of the statutory redemption period are, therefore,
irrelevant because the detrimental reliance occurred before the expiration of the redemption
period.3

                                      2. ISSUES OF FACT

        Dearborn Heights next argues that summary disposition is inappropriate because there
remain disputed issues of material fact with regard to whether a payment plan agreement actually
exists and, if so, when it was entered into. It is plain that whether a payment plan agreement
exists and the date it was entered into are material facts because if there was no agreement, then
B&D had nothing to rely on for its due process claim, and if the agreement was entered after the
statutory redemption period expired then there could be no detrimental reliance.

        Dearborn Heights argues that there is a question of fact regarding the existence of the
agreement because two different versions of the agreement were produced during discovery.
The two versions contain different paragraph numbers, have a different number of pages, and
have different signatures. The provisions of the agreement, however, are identical in both
versions. Moreover, Diane Darga, the Department Manager for Taxpayer Assistance of the
Treasurer’s Office, submitted an affidavit explaining that the Treasurer’s system was
programmed to print two agreements, which were separately executed. She further explained
that “a glitch in the programming” caused the second version of the agreement to be incorrectly
numbered. Moreover, both parties to the agreement have presented evidence that they entered
into an agreement. Accordingly, there is no question of fact regarding whether there is an
agreement.




3
  Even assuming that B&D was required to comply with the agreement in order to establish
detrimental reliance, the Treasurer determined that B&D substantially complied with the
agreement and Dearborn Heights does not have standing to challenge whether B&D complied
with the agreement because Dearborn Heights was not a party to the agreement and, therefore,
cannot enforce any obligations created by the agreement. Clark v Dalman, 379 Mich 251, 260;
150 NW2d 755 (1967), impliedly overruled on other grounds by Fultz v Union-Commerce
Assoc, 470 Mich 460; 683 NW2d 587 (2004), as stated in Lakeland Regional Health Sys v
Walgreens Health Initiatives, Inc, 604 F Supp 2d 983, 999 (W D Mich, 2009). Nor was
Dearborn Heights a third-party beneficiary of the agreement. See Schmalfeldt v North Pointe Ins
Co, 469 Mich 422, 428; 670 NW2d 651 (2003).


                                                -8-
        Dearborn Heights next asserts that there is a question of fact regarding when the
agreement was entered. B&D initially responded to an interrogatory by stating that “it entered
into a payment plan agreement with the Wayne County Treasurer on or about March 31, 2012.”
B&D, however, amended its answer to indicate that it entered the agreement on January 26,
2012. Further, the affidavit of Tom Rosco, an employee of Dearborn Heights, does not create a
question of fact regarding the date of entry. Rosco stated that, on July 25, 2012, an employee of
the Treasurer’s Office, Robin G. King, informed him that the payment plan agreement had been
entered “in the past month or so.” King’s unspecific statement—that the agreement was entered
in the past month or so—does not create a question of fact, particularly given that the copies of
the agreement that were produced were both dated January 26, 2012. Finally, we note that two
of the payment dates in the agreement were before June 2012 and it is unlikely that the
agreement was entered after the payment dates stated in the agreement. Likewise, the tax
receipts show a payment was made on January 26, 2012, the same date that is on both versions of
the agreement.

        Finally, Dearborn Heights contends that there was evidence of different dates on which
B&D’s payments were made, which creates a question of fact regarding whether payments were
in fact made by B&D in compliance with the agreement. Dearborn Heights refers to B&D’s
answers to interrogatories, in which it gave different dates of payment than those written on one
version of the agreement. However, it is undisputed that the Treasurer found that B&D
substantially complied with the agreement. Dearborn Heights does not have standing to
challenge that finding.4 Moreover, the Treasurer could waive strict compliance with the payment
dates, which was a condition in its favor, Cobbs v Fire Ass’n of Philadelphia, 68 Mich 463, 464;
36 NW 222 (1888), and it clearly did so by accepting the late payments and filing the certificate
of redemption. Thus, there is no question of fact that B&D complied with the agreement.

          Affirmed.

                                                           /s/ Michael J. Kelly
                                                           /s/ Christopher M. Murray
                                                           /s/ Stephen L. Borrello




4
    See note 3, supra.


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