                          STATE OF MICHIGAN

                           COURT OF APPEALS



LEWIS R. HARDENBERGH, JOHN T.                                      FOR PUBLICATION
HARDENBERGH, THOMAS R.                                             March 27, 2018
HARDENBERGH, and DOROTHY R.                                        9:10 a.m.
WILLIAMSON,

               Petitioners-Appellants,

v                                                                  No. 337039
                                                                   Tax Tribunal
DEPARTMENT OF TREASURY,                                            LC No. 14-000990-TT

               Respondent-Appellee.


Before: SAWYER, P.J., and BORRELLO and SERVITTO, JJ.

PER CURIAM.

       Petitioners appeal as of right the final judgment of the Tax Tribunal upholding the
Department of Treasury’s denial of petitioners’ request for waiver of interest under MCL
211.7cc(8). We affirm.

        The principal facts are not in dispute. Since at least 2005, Lewis R. Hardenbergh has
resided on land he owns in Manistee, Michigan. Contiguous to his property is another parcel
(the subject property), measuring approximately four acres and including a cottage occupied by a
caretaker of the property, a house, a log cabin, two garages, and three sheds. The subject
property was owned by Lewis’s mother, Flora, but upon her death in 2006, it transferred to her
children, petitioners.

        Upon acquiring the property in 2006, petitioners applied for a principal residence
exemption (PRE) given that Lewis’s property was contiguous to the subject property, although
none of petitioners intended to reside, or did reside, on the subject property. When Lewis
requested PRE status for the subject property David Meister, the county assessor, sought the
guidance of the Manistee County Equalization Director. The director informed Meister that “the
value attributable to the buildings on the Subject Property would not qualify for the PRE, but the
land itself would qualify for the PRE.” Because the value of the buildings amounted to 15
percent of the total taxable value of the property, petitioners claimed, and they were granted,
PRE status for 85 percent of the property.




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        In November 2013, the Manistee County Treasurer determined that the subject property
is not eligible for the PRE and, hence, denied the PRE for 2010 through 2013. The county issued
petitioners a corrected tax bill for $80,384.90, including $20,231.06 in interest.

        In February 2014, petitioners requested that respondent waive the interest, pursuant to
MCL 211.7cc(8), which permits respondent to waive interest in the instance that the county
assessor submits an affidavit attesting to an error enumerated in the statute. In their request,
petitioners noted that they had followed “the guidance [the assessor] received from the County
Director in claiming an 85% PRE exemption [sic].” Pursuant to statutory requirements, Meister
also submitted an affidavit requesting that respondent waive the interest and noting the reason
why the subject property had been allowed the 85 percent PRE. Respondent denied the interest
waiver request, stating, “Based on the information we received, it has been determined that
insufficient documentation was submitted to show that an assessor’s error occurred as required
by MCL 211.7cc(8).”

        Petitioners appealed respondent’s denial of the interest waiver to the Michigan Tax
Tribunal. 1 In their petition, petitioners pleaded that “the explanation submitted by the Assessor
outlined the facts and circumstances which . . . constitute an ‘other error’ by the Assessor
pursuant to [MCL 211.7cc(8).].” Petitioners further asserted that respondent made no findings to
support its determination denying the interest waiver and that its decision was arbitrary. In their
request for relief, petitioners requested that the Tribunal reverse respondent’s decision and order
that “the waiver of penalty interest be granted . . . .” Respondent countered that the “error” made
was not the type of error that MCL 211.7cc(8) contemplated, and petitioners’ request to waive
interest was based on equitable principles not contained in the statute.

        After a hearing, the Tribunal entered a Final Opinion and Order denying petitioners’
interest waiver request. It reasoned that that “other errors” are those akin to classification errors,
and further noted that it was not entirely persuaded that the error at the heart of the case was
made by the assessor. Petitioners now appeal.

       On appeal, petitioners first argue that the Tribunal’s interpretation of MCL 211.7cc(8)
was erroneous. We disagree.

       “Review of a decision by the [Michigan Tax Tribunal] is very limited.” Drew v Cass Co,
299 Mich App 495, 498; 830 NW2d 832 (2013). 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). “The Tribunal’s


1
  Petitioners filed a separate, earlier appeal of the county treasurer’s decision to deny PRE status.
The Tribunal determined that petitioners were not entitled to the tax exemption, and this Court
affirmed, although declining to address the “unpreserved argument relating to the waiver of
interest based on ‘qualified error’ under MCL 211.7cc(8) . . . .” Hardenbergh v Co of Manistee,
unpublished opinion per curiam of the Michigan Court of Appeals, issued November 24, 2015
(Docket No. 322605), slip op at 8-9. The Michigan Supreme Court denied petitioners’
application for leave to appeal. Hardenbergh v Manistee Co, 499 Mich 969 (2016).


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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
substantially less than a preponderance of the evidence.” Leahy v Orion Twp, 269 Mich App
527, 529-530; 711 NW2d 438 (2006) (citation omitted). Finally, this Court reviews de novo
issues of statutory construction. Drew, 299 Mich App at 499.

        “Michigan’s principal residence exemption, also known as the ‘homestead exemption,’ is
governed by §§ 7cc and 7dd of the General Property Tax Act [GPTA], MCL 211.7cc and MCL
211.7dd.” Drew, 299 Mich App at 500 (citation and quotations omitted). The GPTA allows a
PRE in the instance that the property is owned and occupied as a principal residence. MCL
211.7cc(2). The owner of the property claims the exemption by filing an affidavit attesting that
the owner of the property owns it and occupies it as the owner’s principal residence. MCL
211.7cc(2). The act also authorizes the county to audit claimed exemptions. MCL 211.7cc(10).
In the instance the county denies a claimed PRE, the county treasurer issues a corrected tax bill
including interest. MCL 211.7cc(11).

       Under certain circumstances, the Department of Treasury may waive the interest accrued
in a corrected tax bill issued as a result of a rescinded PRE. MCL 211.7cc(8) provides, in
relevant part:

       The department of treasury may waive interest on any tax set forth in a corrected
       or supplemental tax bill for the current tax year and the immediately preceding 3
       tax years if the assessor of the local tax collecting unit files with the department of
       treasury a sworn affidavit in a form prescribed by the department of treasury
       stating that the tax set forth in the corrected or supplemental tax bill is a result of
       the assessor’s classification error or other error or the assessor’s failure to
       rescind the exemption after the owner requested in writing that the exemption be
       rescinded. [Emphasis added.]

The central dispute in this case is the meaning of “other error” in subsection MCL 211.7cc(8).
No Michigan case has interpreted the meaning of this phrase and, indeed, the parties cite no such
authority. This is thus an issue of first impression.

        “While [this Court] recognize[s] that tax exemptions are strictly construed against the
taxpayer because exemptions represent the antithesis of tax equality, we interpret statutory
language according to common and approved usage, unless such construction is inconsistent
with the manifest intent of the Legislature.” Denton v Dep’t of Treasury, 317 Mich App 303,
309; 894 NW2d 694 (2016) (citation and quotations omitted). When construing statutory
language, the Court’s goal is to discern the Legislature’s intent, the best indicator of which is the
language used. See, e.g. Andrie Inc v Dep’t of Treasury, 496 Mich 161; 853 NW2d 310 (2014).
Further, language should be understood in its grammatical context and “effect should be given to
every phrase, clause, and word in the statute.” Sun Valley Foods Co v Ward, 460 Mich 230, 237;
596 NW2d 119 (1999). However, “[t]ax laws generally will not be extended in scope by
implication or forced construction, and when there is doubt, tax laws are to be construed against
the government.” LaBelle Mgt, Inc v Dep’t of Treasury, 315 Mich App 23, 29; 888 NW2d 260
(2016).

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        Here, the GPTA does not define “other error.” When a statute does not provide a
definition, the Court may rely on the term’s ordinary meaning as defined in a dictionary. People
v Crippen, 242 Mich App 278, 283; 617 NW2d 760 (2000). An “error” is defined as “an act
involving an unintentional deviation from truth or accuracy . . . [;] a mistake . . . [;] an instance of
false belief . . . .”           Merriam-Webster Online Dictionary, https://www.merriam-
webster.com/dictionary/error. The term “error” is qualified by the word “other,” which is
defined as “being the one or ones distinct from that or those first mentioned or implied . . . .”
Meriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/other. In
essence then, the term “other error,” is a catch-all phrase that includes mistakes different than
those specifically mentioned in the statute.

        The analysis, however, does not end here, since the term “other error” must be
understood in the context in which it is used and not in isolation. “A catch-all provision is
usually inserted into a statute to ensure that the language that immediately precedes it does not
inadvertently omit something that was meant to be included.” Sebring v City of Berkley, 247
Mich App 666, 674; 637 NW2d 552 (2001). Under the doctrine of ejusdem generis, courts will
interpret a catch-all phrase “to include only those things of the same type as the preceding
specific list.” Id.

         Here, the preceding type of error listed is a classification error. The other type of error
listed is a failure to submit an owner’s paperwork rescinding the PRE. In both instances, the
assessor has a duty to perform or take action under other statutory provisions. For example,
under MCL 211.34c(1), local assessors have a duty to annually classify parcels of property for
tax purposes, e.g., as residential, commercial, or agricultural. Similarly, MCL 211.7cc(4) and (5)
requires assessors to exempt principal residence property from collection of tax, or otherwise
rescind the exemption upon receipt of PRE rescission paperwork from the owner. Considering
that the types of actions listed include those for which a statutory duty exists requiring the
assessor to take some action, it is clear, applying the doctrine of ejusdem generis, that “other
errors” is limited to include all other errors that an assessor may undertake through a statutory
grant of authority. Indeed to interpret “other error” as otherwise broadly encompassing all
errors, as petitioners suggests, would make the listed errors of MCL 211.7cc(8) mere surplusage
and allow waiver of interest in those instances where an assessor acted ultra vires. Given that the
Legislature coupled “other errors” with specific enumerated errors for which a statutory duty
exists, thereby limiting the types of errors to those for which a statutory duty exists, petitioners’
broad interpretation is contrary to the legislative intent of the statute.

        While petitioners’ reliance on the assessor’s advice was unfortunate, to misadvise
regarding a property owner’s eligibility for the PRE is not the type of error that qualifies as an
“other error” under MCL 211.7cc(8). Nowhere do petitioners assert that an assessor has a
statutory duty to advise taxpayers regarding their eligibility for a tax exemption or to otherwise
claim the exemption for a taxpayer. In fact, it is expressly the taxpayer’s duty to claim the
exemption, MCL 211.7cc(2), which petitioners did. And, while petitioners’ attempt to
categorize the error as a “classification” error, this argument shows that petitioners
fundamentally misunderstand that it is a taxpayer’s duty to claim and prove entitlement to an
exemption, whereas it is an assessor’s duty to categorize property into certain classifications for
tax purposes, not to include exemptions. See MCL 211.34c. Stated differently, petitioners fail to


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recognize that “classification” has a particular legal meaning under the GPTA that does not
include categorizing property as exempt.

        Finally, MCL 211.7cc(8) provides that respondent may waive interest upon a proper
showing as set forth in that subsection. Use of the word “may” indicates that an action is
permissive, not mandatory. See, e.g., Veltman v Detroit Edison Co, 261 Mich App 685, 713; 683
NW2d 707 (2004). Even if, however, petitioners had established that the tax set forth in the
corrected tax bill was a result of the assessor’s “other error,” respondent was still not required to
waive the interest. In sum, the Tribunal did not commit an error of law by concluding that the
error in the instant case did not qualify as an “other error” under MCL 211.7cc(8) and petitioner
did not demonstrate entitlement to the relief requested.

       Petitioners next contend that the Tribunal erred in finding that it lacked authority to rule
whether respondent correctly applied the statute because it “lacks equitable jurisdiction.”
Because petitioners, however, are not entitled to reversal, the question of relief and whether the
Tribunal has the authority to order an equitable remedy is no longer relevant. We thus decline to
address this issue.

       Affirmed.



                                                              /s/ David H. Sawyer
                                                              /s/ Stephen L. Borrello
                                                              /s/ Deborah A. Servitto




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