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Zenti v. City of Marquette

Court of Appeals of Michigan

July 25, 2019

RICO ZENTI, Petitioner-Appellee,
v.
CITY OF MARQUETTE, Respondent-Appellant.

          Tax Tribunal LC No. 17-003615-TT

          Before: Tukel, P.J., and Servitto and Riordan, JJ.

          TUKEL, P.J.

         Respondent, the City of Marquette, appeals as of right the final opinion and judgment of the Tax Tribunal. In its opinion, the Tax Tribunal held that the conveyance by five siblings, as joint tenants with rights of survivorship, to themselves, as tenants in common, was not a "transfer of property" under the General Property Tax Act (GPTA), MCL 211.1a et seq. For the reasons provided below, we affirm.

         I. BACKGROUND

         The facts of this case are simple and uncontested. On April 25, 1996, Rose Mary Zenti, the owner of the property at issue in this case, executed a quitclaim deed, which conveyed title to herself and her children (Peter J. Zenti, Kathleen Fudjack, Marilyn Siegel, Christine Emmendorfer, and petitioner, Rico Zenti, collectively "the children"), as joint tenants with full rights of survivorship. Rose Mary passed away on December 7, 2015, thereby leaving the children as the sole joint tenants with full rights of survivorship, and thus her one-sixth interest passed by operation of law to the children. On January 13, 2016, the children executed a quitclaim deed that conveyed the property to themselves, as tenants in common.

         On February 23, 2017, the children received a notice of assessment from respondent. The notice identified the new assessments for the taxable value, assessed value, and state equalized value for the property:

2016

2017

Change From Prior Year

Taxable Value

$126, 450

$246, 000

$119, 550

Assessed Value

$226, 700

$246, 000

$19, 300

State Equalized Value

$226, 700

$246, 000

$19, 300

         The notice further provided that there was a transfer of ownership of the property in 2016.

         On May 22, 2017, petitioner filed a petition with the Michigan Tax Tribunal Small Claims Division. Petitioner challenged the "Uncapping of Taxable Value," arguing that the property had been "inappropriately uncapped by the city Assessor."[1] Petitioner maintained that, given that he and the other grantees were children of Rose Mary, the transfer of her interest after her death was exempt under MCL 211.27a(7)(d) and (7)(u). Moreover, petitioner contended that the January 2016 conveyance was not a "transfer of ownership" but instead merely was "a change in the type of ownership estate held by each of the" children.

         The Tax Tribunal initially ruled that the 2016 transfer was not exempted and thus the property's assessments were properly uncapped. The tribunal rejected petitioner's contention that the January 2016 conveyance was not a transfer of ownership. The tribunal examined the definition for a "transfer of ownership" and ruled that petitioner, by transferring his right of survivorship and terminating the joint tenancy, gave up a present interest. Accordingly, this was a conveyance and, because the conveyance occurred via a deed, it was a transfer of ownership.

         The tribunal further held that the January 2016 transfer of ownership was not exempted under MCL 211.27a(7)(i) because when the joint tenancy was terminated, none of the people involved in the joint tenancy (i.e., the children) was an original owner of the property before the joint tenancy was created; the only person who met that criterion was Rose Mary, and she already had passed away and was not involved in the January 2016 transfer.[2] The tribunal also rejected petitioner's argument that the transfer was exempted under MCL 211.27a(7)(u).[3]Although the transferees were all brothers and sisters, the tribunal noted that "[t]he transfer was . . . from themselves to themselves" and held that the exemption did not allow for a transfer to oneself, as was the case here.

         Petitioner then filed a motion for reconsideration, which the Tax Tribunal granted. The Tax Tribunal ruled that it had erred when it found that the January 2016 transfer was not exempt under MCL 211.27a(7)(u). The tribunal ruled that under the definition of "transfer of ownership" in MCL 211.27a(6), the January 2016 transfer did "not constitute a conveyance of title to or a present interest in the property equal to the value of the fee ...


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