Plaintiff 2
Crooked Creek, LLC (2CC) owned property in Cass County subject to a mortgage
held by plaintiff Russian Ferro Alloys, Inc. (RFA). Defendant Cass County Treasurer
included the subject property in her annual tax foreclosure petition for
nonpayment of 2011 taxes, and the circuit court entered a tax foreclosure
judgment in early 2014, extinguishing plaintiffs’ property interests. Plaintiffs
assert that they never received notice of the foreclosure, and they were
damaged as a result by the loss of real property worth over $3.5 million.
Plaintiffs filed suit in the Court of Claims for monetary damages under MCL
211.78l, which allows the owner of a property interest that was extinguished by
a tax foreclosure to bring an action to recover monetary damages if the owner
claims that it “did not receive any notice required under this act. . . .” Following
plaintiffs’ presentation of proofs at trial, the Court of Claims granted
defendant’s motion for involuntary dismissal, finding that RFA was not entitled
to any notice. Regarding 2CC, the court found that (1) 2CC’s manager’s claim
that he did not receive notice was not credible, (2) 2CC was charged with
knowledge of the notice posted on the property, and (3) 2CC failed to present
any evidence of its damages. The Court of Appeals affirmed in a published opinion.
The Supreme Court has ordered oral argument on plaintiffs’ application for
leave to appeal to address whether 2CC (an owner of a
property interest that was extinguished by tax foreclosure after being accorded
notice sufficient to satisfy minimum due process requirements) can sustain an
action to recover monetary damages under MCL 211.78l(1) by claiming that
it “did not receive any notice required under this act” due to a lack of actual
notice and, specifically, whether constructive notice is sufficient to fall
within the confines of “any notice” under MCL 211.78l(1) such that 2CC
can be charged with knowledge of the notice that was posted to the subject
property during a time when 2CC was exercising control and dominion over it.
See In re Treasurer of Wayne Co for Foreclosure (Perfecting Church), 478
Mich 1 (2007).