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04/01/76 DOW v. STATE MICHIGAN

April 1, 1976

DOW
v.
STATE OF MICHIGAN



Levin, J. Kavanagh, C. J., and Williams and Fitzgerald, JJ., concurred with Levin, J. Coleman, J., concurred in the result. Lindemer and Ryan, JJ., took no part in the decision of this case.

SYLLABUS BY THE COURT

1. Constitutional Law -- Due Process -- Liens -- Enforcement.

The Due Process Clause applies to a creditor's effort to enforce its lien through judicial proceedings or other state action against a defaulting debtor who has a right to the opportunity for a hearing or other safeguard against mistaken repossession (US Const, Am XIV).

2. Taxation -- Tax Sale -- Constitutional Law -- Due Process.

The Due Process Clause is a limitation on state action; a foreclosure of the state's statutory lien for unpaid property taxes clearly satisfies the state-action requirement because the state is the moving party utilizing process issued by state officials to enforce its claim (US Const, Am XIV).

3. Taxation -- Constitutional Law -- Due Process -- Property Interest.

The owner of real property and the purchasers from him under a land contract have a significant property interest within the protection of the Due Process Clause in respect to the assessment and collection of taxes.

4. Constitutional Law -- Due Process -- Procedural Requisites.

Due process is flexible and calls for such procedural protection as the particular situation demands, depending upon the importance of the interests involved and the nature of the subsequent proceedings; the Due Process Clause requires an opportunity for a meaningful hearing before the termination of the protected interest becomes effective (US Const, Am XIV).

5. Constitutional Law -- Due Process -- Notice.

Due process, in any proceeding which is to be accorded finality, requires notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections (US Const, Am XIV).

6. Taxation -- Tax Sale -- Due Process -- Notice.

Notice by publication is not constitutionally adequate in a foreclosure of the state's statutory lien for unpaid property taxes with respect to a person whose name and address are known or very easily ascertainable and whose legally protected interests are directly affected by the proceedings (MCL 211.61 et seq.; MSA 7.105 et seq.).

7. Taxation -- Tax Sale -- Due Process.

The state is prohibited by the Due Process Clause from taking a person's property for nonpayment of taxes without proper notice and opportunity for a hearing at which the person can contest the state's right to foreclose and can cure any default.

8. Taxation -- Tax Sale -- Due Process -- Notice -- Land Contract Purchasers.

Purchasers under a land contract are entitled to have the state employ such means as one desirous of actually informing them might reasonably adopt to notify them of pending proceedings to foreclose a statutory lien for nonpayment of taxes where the purchasers' interest is of record, the purchasers are in possession, or the assessor or treasurer is aware of their interest (MCL 211.61 et seq.; MSA 7.105 et seq.).

9. Taxation -- Tax Sale -- Due Process -- Notice.

Notice by mail to an address reasonably calculated to reach a person entitled to notice is adequate in proceedings to foreclose a statutory lien for nonpayment of taxes; if the mail is by registered or certified mail, return receipt requested, failure to effectuate actual notice does not preclude foreclosure and vesting of title on expiration of the redemption period (MCL 211.61 et seq.; MSA 7.105 et seq.).

10. Taxation -- Tax Sale -- Due Process -- Notice.

Constitutional notice requirements are satisfied in proceedings to foreclose a statutory lien for nonpayment of taxes by ordinary mail notice before the tax sale to the person to whom tax bills have been sent and to "occupant" and after the sale, formal notice to all owners of significant property interests of the constitutionally required opportunity for hearing and redemption (MCL 211.61 et seq.; MSA 7.105 et seq.).

The opinion of the court was delivered by: Levin

Plaintiffs Carl and Rose Dow, land contract purchasers of property from the titleholder, plaintiff Marie Parker Smith, brought an action to quiet title against the State of Michigan which had acquired title to the property at a tax sale for nonpayment of 1965 city taxes. Plaintiffs were not in possession of the property, had no actual notice of the tax sale and claim the tax sale was defective because notice of the tax foreclosure proceedings by publication was inadequate under the Due Process Clause. The Kent Circuit Court, John T. Letts, J., dismissed the complaint. The Court of Appeals, Danhof, P. J., and R. B. Burns, J. (J. H. Gillis, J., Dissenting) affirmed (Docket No. 14690). Plaintiffs appeal. Held:

1. The Due Process Clause requires that an owner of a significant interest in property be given proper notice and an opportunity for a hearing to contest the state's claim that it may take the property for nonpayment of taxes. The Due Process Clause is a limitation on state action, which is clearly involved where the state is the party moving to enforce its claim.

2. The titleholder of real property and land contract purchasers under him have a significant interest in property within the meaning of the Due Process Clause. They are entitled to an opportunity to be heard at a meaningful time and in a meaningful manner before the state may deprive them of their interests and they are entitled to notice reasonably calculated, under all the circumstances, to apprise them of that opportunity. Plaintiff Smith, the titleholder of record, and the Dows, if their interest was of record or if the assessor or treasurer was aware of it, were entitled to have the state employ such means as one desirous of actually informing them might reasonably adopt to notify them of the pendency of the proceedings.

3. Newspaper publication is not constitutionally adequate notice of the right to a hearing with respect to a person whose name and address are known or very easily ascertainable.

4. Personal service is not required. Notice by mail, directed to an address reasonably calculated to reach the person entitled to notice, is adequate. Mailing should be by registered or certified mail, return receipt requested, both because of the greater care in delivery and because of the record of mailing and receipt or non-receipt provided.

5. It would satisfy constitutional requirements if the state were to adopt a procedure providing for (1) ordinary mail notice before sale to the person to whom tax bills have been sent and to "occupant", and (ii) after sale to the state, formal notice to all owners of significant property ...


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