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156849 - Rafaeli, LLC v Oakland County

Rafaeli, LLC and Andre Ohanessian,


Christina Martin





(Appeal from Ct of Appeals)



(Oakland – Langford-Morris, D.)


Oakland County and Andrew Meisner,


John Bursch

Matthew Hodges





Plaintiffs lost their properties by forfeiture and foreclosure for unpaid 2011 property taxes pursuant to the General Property Tax Act, MCL 211.1 et seq. (GPTA).  After the foreclosure, the county sold the properties to third parties for substantially more than the amount of the underlying tax debts.  In accordance with the GPTA, the surplus proceeds from the sales were retained by the county and were not distributed to plaintiffs.  One plaintiff lost about $76,000 in surplus proceeds arising from a tax delinquency of about $6,000.  Another plaintiff lost about $24,500 in surplus proceeds arising from a tax delinquency of $8.41.  Plaintiffs brought a putative class action alleging that defendants violated the Takings Clauses of the Michigan and United States Constitutions (Const 1963, art 10, § 2 and US Const, Am V) by retaining the surplus proceeds.  The trial court granted summary disposition in favor of defendants because plaintiffs did not have any property interests in the surplus proceeds since they had forfeited the properties. The Court of Appeals affirmed in an unpublished opinion, with one judge concurring.  The Supreme Court has granted plaintiffs’ application for leave to appeal to address whether the defendants violated the Takings Clause of the federal or state constitution, or both, by retaining proceeds from the sale of tax foreclosed property that exceeded the amount of the tax delinquency in accordance with MCL 211.78m(8)(h). ​