                          STATE OF MICHIGAN

                           COURT OF APPEALS



RYAN M. HUIZENGA,                                                  UNPUBLISHED
                                                                   September 1, 2016
              Petitioner-Appellant,

v                                                                  No. 327682
                                                                   Michigan Tax Tribunal
CITY OF GRAND RAPIDS,                                              LC No. 14-006527-TT

              Respondent-Appellee.


Before: OWENS, P.J., and SAWYER and SHAPIRO, JJ.

PER CURIAM.

        Petitioner Ryan Huizenga appeals as of right the Michigan Tax Tribunal’s order
determining that the issues he raised in his motion for reconsideration were without merit and
setting the true cash value (TCV) of his property for tax year 2014 at $284,390. We vacate the
tribunal’s decision on reconsideration and remand for further proceedings.

       Huizenga purchased the subject property for $185,000. He presented evidence that the
previous owners had entered bankruptcy and that he had purchased it following a short sale
involving two banks, a bankruptcy trustee, and a short sale negotiator. He explained that he
offered $185,000 because of the condition of the property, but said that the banks fought him
over the price. After his offer, the property remained on the market for almost 15 months, but no
higher offers were made. Huizenga closed on the property in April 2013.1

        In January 2014, the City of Grand Rapids notified Huizenga that the taxable value (TV)
of the property for 2014 would be $188,300. Huizenga appealed the assessment to the assessor,
who, after review, decreased the property’s tentative TV to $157,000. Huizenga appealed the
assessment before the March Board of Review, which denied his appeal and confirmed the




1
  According to Huizenga, the property was marketed with a listing on MLS and with a sign in the
front yard.



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property’s TV for 2014 as $157,000. Huizenga thereafter filed a petition in the small claims
division of the Michigan Tax Tribunal, alleging that the assessed TCV and TV were excessive.2

        Huizenga and the City submitted valuation disclosures. The City’s valuation disclosure
included the property report card, which indicated that the TCV for the property was $314,085.
It also included an appraisal of the property completed by Cheryl Kooiman, an assessment
officer with the City. Kooiman’s appraisal used the sales-comparison approach to value the
subject property. There were eight comparable properties in Kooiman’s report and she made
adjustments for differences between the subject property and each comparable. According to her
appraisal, the TCV for the subject property was $260,000.

       Huizenga’s valuation assigned the property a TCV of $195,000 and included as support
photographic evidence documenting the interior and exterior condition of the home, quotes on
various repairs, three separate appraisals,3 a linear regression analysis Huizenga prepared that
estimated the sale price between $175,010 and $217,990, and photographs of the kitchens in the
sales comparables used in the appraisals. In his supporting memorandum of law, Huizenga
argued that his purchase of the home for $185,000 in an “arm’s length sale” also served as good
evidence of value, which was further buttressed by the significant repairs needed, the appraisals,
and the linear regression analysis.

        Following a hearing in the small claims division, the tribunal issued a judgment setting
the property’s TCV at $260,000. The tribunal found that the “sale price, under the
circumstances, did not represent the market value of the property,” but did not make an express
finding as to whether Huizenga’s purchase of the property for $185,000 was a forced sale or was
an arm’s-length transaction. The tribunal also rejected Huizenga’s linear regression analysis,
concluding that the analysis was skewed and was not a typical analysis. In determining the
subject property’s value, the tribunal relied on the five comparable properties that exceeded
3,000 square feet. These five properties, labeled P-1 (209 Charles), P-2 (423 Madison), P-4 (260
Paris), R-6 (238 Morris), and R-7 (319 College), were in the same market as the subject property
for age, square footage, and location, and sold for $235,000, $265,000, $275,000, $335,00,
$380,000 respectively.4 After considering aspects of these homes that made them different than



2
 In Michigan, property is assessed at 50 percent of its TCV. Const 1963, art 9, § 3; MCL
211.27a(1).
3
 One appraisal was performed by Brian Kaminski. The Kaminski appraisal used six comparable
sales and determined that the TCV for the subject property was $200,000. A second appraisal
was performed by Christos Tesseris. The Tesseris appraisal used six comparable sales and
determined the TCV for the subject property was $199,000. The third appraisal was performed
by Brian Grasmeyer. The Grasmeyer appraisal used three comparable sales and determined the
TCV for the subject property was $199,000.
4
  The tribunal wrongly labeled R-6 as “305 Madison.” However, given the judgment’s
description of the property, it is clear that R-6 refers to the property located at 238 Morris
Avenue SE.



                                               -2-
the subject property, and weighting those differences accordingly, the tribunal determined the
property’s TCV to be $260,000, in the “mid-range” of the comparable sales presented.

        Huizenga moved for reconsideration, asserting that the tribunal (1) erroneously used a
property that did not exist, due to an error substituting “305 Madison” for 238 Morris; (2) used
actual sale prices instead of adjusted sale prices; and (3) wrongfully rejected his linear regression
analysis. The tribunal found that each challenge was without merit.5

        Nevertheless, the tribunal determined that it had erred when selecting the sales
comparables used to determine the property’s TCV.6 Specifically, the tribunal found that P-1
and P-4 should not have been included in the comparison based on their days on the market and
that P-2 should not have been selected because its sales date was too remote to the tax day at
issue to be a reliable indicator of value. The tribunal then considered additional sales
comparables that it had not previously included in the comparison—305 Morris and 438
Madison. The tribunal concluded that 305 Morris should be accorded little weight given the
significant differences between it and the subject property and that 438 Madison was properly
excluded as too remote to the tax day at issue. Of the two remaining sales comparables, the
tribunal found that R-7 had properly been given minimal weight because of its updated kitchen
and that the adjusted sales price of R-6 is the “most reliable indicator of value.” The tribunal
further found that it had erred by basing the property’s TCV on the “mid-range,” or average of
the comparable sales, because the average of such values does not meaningfully lead to a final
value. Accordingly, the tribunal assigned the property a TCV of $284,390.

       Huizenga first argues that the tribunal’s valuation is not based on competent, material,
and substantial evidence because no reasonable person could find that a property that sold for
$185,000 in an arm’s-length transaction is actually worth $284,390.7


5
  The tribunal member that made the initial decision in this case retired before hearing
Huizenga’s motion for reconsideration. As a result, the decision on reconsideration was made by
a different tribunal member.
6
  Mich Admin Code, R 792.10257 provides that the tribunal may reconsider any decision or
order upon its own initiative. Accordingly, although Huizenga did not challenge the selection of
sales comparables, the tribunal was free to revisit that determination during his motion for
reconsideration.
7
  “Review of a decision by the MTT is very limited.” Drew v Cass Co, 299 Mich App 495, 498;
830 NW2d 832 (2013). “In the absence of fraud, error of law or the adoption of wrong
principles, no appeal may be taken to any court from any final agency provided for the
administration of property tax laws from any decision relating to valuation or allocation.” Const
1963, art 6, § 28. Unless fraud is alleged, this Court reviews the tribunal’s decision for a
“misapplication of the law or adoption of a wrong principle.” Liberty Hill Housing Corp v City
of Livonia, 480 Mich 44, 49; 746 NW2d 282 (2008) (citation omitted). “The tribunal’s factual
findings will not be disturbed as long as they are supported by competent, material, and
substantial evidence on the whole record.” Drew, 299 Mich App at 499 (citation and quotations
omitted). Substantial evidence is “more than a scintilla of evidence, although it may be



                                                -3-
        The starting point for determining the TV of real property is to determine the property’s
TCV. Detroit Lions, Inc v City of Dearborn, 302 Mich App 676, 696; 840 NW2d 168 (2013). A
petitioner bears the burden of establishing a property’s TCV. MCL 205.737(3). TCV refers to
“the usual selling price at the place where the property to which the term is applied is at the time
of assessment, being the price that could be obtained for the property at private sale, and not at
auction sale . . . or at forced sale.” MCL 211.27(1). In other words, TCV “is synonymous with
fair market value.” WPW Acquisition Co v Troy, 250 Mich App 287, 298; 646 NW2d 487
(2002).

        Although Huizenga argued before the tribunal that he purchased the property in an arm’s-
length transaction despite the fact that it was a short sale, the tribunal never determined whether
the sale was an arm’s-length sale or whether it was a forced sale. If the sale was a forced sale,
then it would not be indicative of the TCV of the subject property and it would be proper for the
tribunal to not consider the sale price in its determination of TCV. If however the sale was an
arm’s-length transaction, then the sale price may be relevant to determining the property’s TCV.
See Prof Plaza, LLC v City of Detroit, 250 Mich App 473, 476; 647 NW2d 529 (2002).

        The fact that Huizenga purchased the property at a short sale is not dispositive on the
issue of whether the property was purchased in an arm’s-length transaction or in a forced sale.
“[A]n arm[’s]-length transaction is characterized by three elements: it is voluntary, i.e., without
compulsion or duress; it generally takes place in an open market; and the parties act in their own
self-interest.” Mackey v Dep’t of Human Servs, 289 Mich App 688, 699; 808 NW2d 484 (2010)
(citations and quotations omitted; second alteration in original). The Tax Commission’s Bulletin
6 of 2007 provides further guidance in determining whether foreclosure sales, or other similar
types of sales, are arm’s-length transactions. It indicates that the following should be considered
(1) “[a] determination as to whether the type of sale being reviewed is a measurable portion of
the market[;]” (2) “[a] determination that the sale property was properly exposed to the
market[;]” (3) “[a] physical inspection of the property to make a determination that the
assessment reflects the condition of the property at the time of sale . . . [;]” (4) “[r]eceipt of a
properly completed real property statement to determine the terms and conditions of the sale
unless adequate alternative statistical procedures are utilized to ensure the sales are an adequate
part of the market[;]” and (5) “[a] determination that the parties to the transaction were not
related and each was acting in their own best interest.” However, because the tribunal did not
resolve this issue, we cannot analyze Huizenga’s claim that the tribunal’s decision was not based
on substantial evidence because of the substantial difference between the sale price and the TCV
as determined by the tribunal on reconsideration. Accordingly, we remand to the tribunal to
make a determination as to whether the sale was an arm’s-length transaction or a forced sale.

      Huizenga also argues that the tribunal’s valuation is not based on competent, material,
and substantial evidence because it adopted, without explanation, the City’s adjustments to
comparable sales.


substantially less than a preponderance of the evidence.” Leahy v Orion Twp, 269 Mich App
527, 529-530; 711 NW2d 438 (2006) (citation omitted).




                                                -4-
        The Legislature has not prescribed a method for determining TCV and, instead, has listed
a number of factors to be considered in making a valuation determination. See MCL 211.27(1).
In the absence of legislative guidance regarding methodology, the tribunal and the courts have
recognized three acceptable and reliable methods of determining TCV: “(1) the cost-less-
depreciation approach, (2) the sales-comparison or market approach, and (3) the capitalization-
of-income approach.” Meadowlanes Ltd Dividend Housing Ass’n v City of Holland, 437 Mich
473, 484-485; 473 NW2d 636 (1991) (footnote omitted). “Variations of these approaches and
entirely new methods” may be utilized “if found to be accurate and reasonably related to the fair
market value of the subject property.” Id. at 485. “It is the duty of the Tax Tribunal to select the
approach which provides the most accurate valuation under the circumstances of the individual
case.” Antisdale v City of Galesburg, 420 Mich 265, 277; 362 NW2d 632 (1984).

        On reconsideration, the tribunal adopted the sales-comparison approach. Under this
method of determining true cash value, the tribunal analyzes “recent sales of similar properties,
compar[es] them with the subject property, and adjust[s] the sales price of the comparable
properties to reflect differences between the two properties.” Meadowlanes, 437 Mich at 485 n
19. Applying this approach, the tribunal evaluated the sales comparables in the four appraisals
submitted by the parties and selected several properties as appropriate to use in determining
value. The tribunal, however, then winnowed that list down further, ultimately finding that the
“most reliable indicator of value is the adjusted sales price of R-6.” The tribunal did not explain
what adjustments it made, why it made them, why the adjustments were necessary, or why the
rejected comparables could not be adjusted to account for the differences between them and the
subject property. Instead, the tribunal accepted without explanation the adjustments to R-6 that
were made by the City’s assessor. Notably, the assessor offered only a cursory explanation for
the adjustments to the eight comparables in her appraisal. With regard to R-6, the assessor
concluded that the adjusted value was $284,390, and the tribunal concluded that $284,390 was
the TCV was the subject property.

        Because the tribunal provided no reasoning in support of its wholesale adoption of the
City’s adjustments to R-6, it is not possible for us to determine whether the decision is supported
by competent, material, and substantial evidence. The fact that the City’s valuation contained an
adjustment to R-6 is insufficient given that (1) the assessor provided little explanation for the
adjustments and (2) the tribunal is required to make an independent determination of value. See
Jones & Laughlin Steel Corp v Warren, 193 Mich App 348, 355; 483 NW2d 416 (1992) (“The
tribunal may not automatically accept a respondent’s assessment, but must make its own findings
of fact and arrive at a legally supportable true cash value.”). Accordingly, we remand to the
tribunal to provide an explanation and findings of fact to support the adjustment to R-6 and its
conclusion that R-6’s adjusted sales price is the most reliable indicator of the subject property
value.8




8
  Our conclusion that substantial evidence does not support the tribunal’s determination renders
moot Huizenga’s assertion that the tribunal’s valuation was erroneous as a matter of law because
it exceeded the range of values that witnesses assigned the property. In any case, we note that



                                                -5-
        Finally, there is no merit to Huizenga’s remaining challenge, i.e., that the tribunal
committed an error of law by rejecting his proposed “linear regression analysis.” The tribunal is
charged with selecting the most accurate valuation methodology using its superior expertise. See
id. at 353. While Huizenga claims that linear regression analysis is the “most accurate” method
of valuation because it can be verified, he has not explained why, under the facts of this case, the
sales-comparison approach, which is a well-accepted and reliable method, is deficient. The tax
tribunal must select the valuation approach that provides the most accurate valuation under the
circumstances, Antisdale, 420 Mich at 276-277, and we give deference to the tribunal regarding
the appropriate method of valuation and the interpretation of statutes pertaining to valuation,
because these are matters within the tribunal’s area of expertise, see Schultz v Denton Twp, 252
Mich App 528, 529; 652 NW2d 692 (2002). Huizenga has not demonstrated why this Court
should stray from this principle.

        The order granting reconsideration and corrected final opinion and judgment is vacated
and this matter is remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction.



                                                             /s/ Donald S. Owens
                                                             /s/ David H. Sawyer
                                                             /s/ Douglas B. Shapiro




the tribunal’s valuation was within the range of evidence, as the property report card valued the
property at $314,085.



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