STATE OF MICHIGAN
	DEPARTMENT OF LABOR AND ECONOMIC GROWTH
	MICHIGAN TAX TRIBUNAL

Occidental Development, LLC,
Petitioner,

v								MTT Docket No. 292745

Van Buren Township,
Respondent.					Tribunal Judges Presiding
Jack Van Coevering 
Michael A. Stimpson
Victoria L. Enyart
Richard A. Southern
Kimbal R. Smith III
Karen B. McComb
Patricia L. Halm

ORDER GRANTING PETITIONER’S MOTION FOR SUMMARY DISPOSITION

This matter is before the Tribunal on Petitioner’s Motion for Summary Disposition resulting from Respondent’s failure to timely respond to Petitioner’s Requests for Admission.  The Tribunal determines that the requests for admission are deemed admitted and that Petitioner’s Motion for Summary Disposition is granted.

A.  Summary of Facts

Petitioner, Occidental Development, L.L.C., is the owner of an apartment complex, parcel number 83-058-99-0013-701, known as Westlake Apartments (Westlake).  At the time Petitioner filed its Petition on July 5, 2002, Westlake consisted of 37 acres in Van Buren School District that included completed apartment units and units that were still under construction.   

For the 2002 tax year, Respondent, Van Buren Township, determined an assessed and state equalized value of the parcel to be $8,220,900 and a taxable value of $6,521,492.  Petitioner asserted in its appeal to the Tribunal that all values of the subject property should be $2,362,500.

On May 14, 2003, Petitioner served and filed its first set of Requests for Admission, which, inter alia, requested Respondent to admit that the 2001 taxable value for the subject property was $2,648,690, that Respondent improperly uncapped the value of the subject property in 2002, which should only have increased by the applicable inflation rate, and that the taxable value for 2002 should be, with additional new construction occurring in 2001, less than $3,200,000.  Petitioner also requested that Respondent admit that Respondent did not use the same valuation methodology for the subject property as it did for the other multi-family projects in Van Buren Township.  Shortly after Petitioner served and filed its first set of discovery requests, the parties filed motions to adjourn the prehearing.  The Tribunal granted the adjournment and Petitioner filed and served a second set of Requests for Admission on July 9, 2003, which requested that for the 2002 tax year Respondent admit that the assessed value of the subject property should be $2,900,000 to comply with the uniformity requirement of the Michigan Constitution.

On August 20, 2003 Petitioner filed, pursuant to Michigan Court Rule (MCR) 2.116(C)(10) and MCR 2.312(B)(1), the instant Motion for Summary Disposition, a Brief in Support of the Motion for Summary Disposition and three exhibits. Petitioner’s motion detailed that Respondent failed to answer the prior requests for admission, to object, or to request additional time to respond, and that the requests for admission should be deemed admitted.  

On September 5, 2003, Respondent filed a “Response to Petitioner’s Motion for Summary Disposition.”  Respondent’s entire response to Petitioner’s motion stated:

On May 20, 2003, the undersigned had a telephone conversation with one of Petitioner’s representatives. During the conversation, Petitioner’s representative stated that they were going to change direction of the case.  That they were going to drop the true cash value claim and add a uniformity claim. And that they were going to file a motion to amend and a motion to adjourn the pre-hearing.

On May 22, 2003, Respondent filed a motion to extend time for pre-hearing general call and valuation disclosure, based on this issue and because respondents had not received all requested documents.  At the same time, Petitioner also filed a Motion to Adjourn.

On July 7, 2003, the Tribunal issued an order granting Petitioner’s motion to adjourn.

It was not clear whether or not the previously requested items were still relevant.  However, in the interest of moving the case along, attached to this response is Respondent’s Response for Production of Documents, Respondent’s Response to Petitioner’s First and Second Requests for Admissions.

Granting Petitioner’s Motion for Summary Disposition would be overly harsh and unfair to respondent given the circumstances.   

In response to Petitioner’s requests for admission, Respondent admitted three requests and denied the remainder. Respondent’s attorney filed no supporting brief nor a supporting affidavit.   
B.  Conclusions of Law

1.  Application of the Michigan Court Rules to Tribunal Practice and Procedure

When it established the Tax Tribunal in 1974, the Legislature blended the accounting, appraisal, assessing and legal professions into a multi-disciplinary, specialized administrative court with the unique capacity of adjudicating tax matters of wide-ranging complexity and subject matter.  Representatives appearing before the Tribunal were not required to be practicing attorneys but were allowed to be, and frequently are, assessors, accountants and taxpayers themselves. The Tribunal’s administrative rules (TTR) serve to demarcate specific areas of procedure where it is necessary to preserve the Tribunal’s comprehensive adjudicatory setting and flexible access.  

Fundamentally, however, the process within the Tribunal is a legal process, a process designed from procedural mechanisms long existing within Michigan courts. The Tribunal’s procedure in contested cases is thus unlike other Michigan administrative courts in that it has, since the TTRs were initially promulgated in 1975, both sanctioned formal discovery mechanisms in its rules and required the use of the MCRs.  TTR 111(4) provides that Michigan Court Rules “govern” the practice and procedure in the Entire Tribunal, “[i]f an applicable entire tribunal rule does not exist.”  1979 AC R205.1111(4).  As an administrative agency, the Tribunal is bound by and may not violate its own administrative rules. Seaman v Liquor Control Commission, 425 Mich 28, 37; 387 NW2d (1986).

Practically, the MCRs “govern” discovery practice at the Tribunal.  The examples of this interplay are instructive. While the TTRs mandate service of exhibits within fourteen days prior to the hearing, MCR 2.107(C)(3) governs the service of exhibits.  Tuttle v Township of Bear Lake, unpublished Court of Appeals opinion per curiam, January 16, 2002 (Docket No. 216803). While Tribunal rules exist regarding the exchange of valuation disclosures and other discovery tools, MCR 2.302 provides general discovery rules that “govern” the scope and other aspects of discovery at the Tribunal. Wayne County v State Tax Commission, unpublished Court of Appeals opinion per curiam, January 20, 2004 (Docket No. 240911) (stating on page 11, “the Michigan Court Rules govern where there is no direction in the TTRs,” and noting that while “scope of discovery” was referenced in TTR 260, the phrase was not defined).  The Tribunal has similarly concluded that MCR 2.116 governs dispositive motions because the TTRs contain no similar rule, notwithstanding a general rule regarding motions contained in TTR 230.  General Products Delaware Corp v Township of Leoni, 11 MTT 297, 305 (2001).  See also, Kern v Pontiac Township, 93 Mich App 612, 624; 287 NW2d 603 (1979).
Similar examples can be made regarding the use of depositions, interrogatories, production of document requests and requests for admission.  TTR 257 permits depositions on leave of the court or by agreement of the parties.  Aside from restrictions that the Tribunal may set regarding the taking of depositions, the conducting and use of depositions, either by leave or by agreement, is governed by far more extensive MCRs.  Though subdivisions (1) and (2) of TTR 255 summarize portions of MCR 2.309 governing interrogatories, the remaining detail supplied by MCR 2.309 is fully applicable to Tribunal proceedings.  As there is no TTR comparable to MCR 2.310 regarding requests for production of documents and inspections, MCR 2.310 governs requests for the production of documents.  MCR 2.312, which provides the procedure and use of requests for admission, also has no counterpart in the TTR.  As such, MCR 2.312 governs the requests for admission in the Tribunal. Lichnovsky v Michigan Dep’t of Treasury, MTT Docket No. 111497; 1989 WL 162964 (November 14, 1989); see also, Superior Industries International, Inc v Michigan Dep’t of Treasury, 10 MTT 783; MTT Docket No. 230853; 1998 WL 213228 (January 12, 1998).

The TTRs impose one restriction on discovery that the court rules do not:  discovery, by right, must be concluded before the prehearing conference unless the Tribunal, by leave, permits otherwise. TTR 270(10); TTR 275.   The Tribunal will consider a party’s request to extend discovery after the prehearing conference only upon a showing that the party has met the following conditions:

1.	The requesting party has diligently and timely sought all evidence necessary to the prosecution of its case.
2.	The requesting party has exchanged information in good faith.
3.	The requesting party has stipulated to all matters not privileged, which are relevant to the case, to the fullest extent to which complete or qualified agreement can and fairly should be reached.
4.	The reasons for an extension of discovery arose late in the case such that discovery could not have been completed prior to the prehearing conference, the requesting party would be prejudiced without an extension and that there exists good cause for not making the request for extension sooner.

In all other respects discovery practice at the Tribunal is subject to the same general restrictions imposed under the court rules.  With the exception of requests for admission, discovery materials may not be filed with the Tribunal unless the materials are used in connection with a motion, used as an exhibit at trial, or the Tribunal requires the material to be filed.  MCR 2.302(H); MCR 2.312(F). Further, the Tribunal reserves the discretion to issue protective orders, pursuant to MCR 2.302(C), to protect litigants from annoyance, embarrassment, oppression, or undue burden or expense. 

MCR 2.302(C) has particular value to the Tribunal.  Through its relative informality, Tribunal procedure affords litigants, particularly non-attorneys, the ability to minimize the expense of litigation.  For this reason, the Tribunal expects litigants to attain the objectives of discovery through informal consultation before utilizing discovery.  However, once discovery has begun, the Tribunal must ensure that the benefits of informality are not undermined by unbounded discovery or that non-attorney representatives of other professional disciplines are placed at a disadvantage by opposing attorneys.   Minimally, this means that at the Tribunal MCR 2.302(C) requires discovery that is not cumulative, not duplicative, nor obtainable from some other source that is more convenient, less burdensome or less expensive and that the discovery is not disproportionate to the needs of the case, the issues at stake, the amount in controversy or the parties’ resources.  Litigants have an unfettered choice to determine, pursuant to the court rule, what discovery methods they wish to utilize.  The Tribunal will limit the frequency and use of those discovery methods if it determines that the discovery sought threatens to undermine the unique value of the Tribunal.  The Tribunal must not only follow the MCRs pertaining to discovery, but its limited resources and significant backlog support the use of an extrajudicial discovery process that narrows disputed tax issues without significant Tribunal intervention.

Both tax representatives in this case are attorneys.  Both have practiced before the Tribunal for a number of years and know the challenges the Tribunal faces in eliminating a significant backlog of Entire Tribunal cases with very limited resources. We therefore presume that both representatives fully understand discovery practice provided in the court rules and can be held to the strict requirements contained in those rules.

2.  Treatment of Requests for Admission in the Tribunal

Of the available methods of discovery permitted under the court rules, the request for admission is the most inexpensive, efficient and effective.

Admissions are sought, first to facilitate proof with respect to issues that cannot be eliminated from the case, and secondly, to narrow the issues by eliminating those that can be. … By encouraging admissions, the goal…[is to] expedite the pending action.
*     *     *
The purpose of MCR 2.312 is to limit areas of controversy and save time, energy, and expense which otherwise would be spent in proffering proof of matters properly subject to admission. 

Radtke v Miller, Canfield, Paddock & Stone, 453 Mich 413, 419, 425; 551 NW2d 698 (1996); citations omitted.

MCR 2.312, in pertinent part, provides as follows:

(A)  Availability; Scope.  Within the time for completion of discovery, a party may serve on another party a written request for the admission of the truth of a matter within the scope of MCR 2.302(B) stated in the request that relates to statements or opinions of fact or the application of law to fact, including the genuineness of documents described in the request.  Copies of the documents must be served with the request unless they have been or are otherwise furnished or made available for inspection and copying.  Each matter of which an admission is requested must be stated separately.

(B)  Answer; Objection.
(1)  Each matter as to which a request is made is deemed admitted unless, within 28 days after service of the request, or within a shorter or longer time as the court may allow, the party to whom the request is directed serves on the party requesting the admission a written answer or objection addressed to the matter….

(4)  If an objection is made, the reasons must be stated.  A party who considers that a matter of which an admission had been requested presents a genuine issue for trial may not, on that ground alone, object to the request….

(C)  Motion Regarding Answer or Objection.
The party who has requested the admission may move to determine the sufficiency of the answer or objection. … Unless the court determines that an objection is justified, it shall order that an answer be served.  If the court determines that an answer does not comply with the requirements of the rule, it may order either that the matter is admitted, or that an amended answer be served.  The court may, in lieu of one of these orders, determine that final disposition of the request be made at a pretrial conference or at a designated time before trial.  

(D)  Effect of Admission.
(1)  A matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of an admission.  For good cause the court may allow a party to amend or withdraw an admission.  The court may condition amendment or withdrawal of the admission on terms that are just.

(2) An admission made by a party under this rule is for the purpose of the pending action only and is not an admission for another purpose, nor may it be used against the party in another proceeding.

Like other discovery mechanisms contained in the MCRs, requests for admission operate extrajudicially within the time and manner set by MCR 2.312.  For the same reason, routine or liberal exercise of judicial discretion is contrary to the language of MCR 2.312 and its underlying purpose. Janczyck v Davis, 125 Mich App 683, 689, 692; 337 NW2d 272 (1983); Medbury v Walsh, 190 Mich App 554; 476 NW2d 470 (1991).  Court involvement only occurs on motion from the parties and is restricted to objections raised, requests to shorten or lengthen the time for response, or requests to amend or withdraw a response.   

Admissions under MCR 2.312 are “judicial” admissions, operating as formal concessions in the pleadings or as stipulations that have the effect of withdrawing a fact from issue and dispensing the need for further proof.  Radtke, supra at 420; citations omitted.  MCR 2.312 (B) (1) plainly requires that a request for admission is deemed admitted unless the answering party files a written answer or objection within 28 days.  In other words, a party’s failure to respond results in an admission regardless of whether a timely response would have been a denial or an objection.  Janczyk, supra at 690.  

We are mindful that requests for admission may seem foreign to tax representatives who lack a legal background.  In such circumstances, we expect opposing attorneys to exercise reasonable efforts to ensure that non-attorneys receive a copy of MCR 2.312, that the requests are simple and clear, and that they fully conform to the scope of MCR 2.302 and MCR 2.312.  We have addressed this situation before in Lichnovsky, supra, where we deemed admitted an Assistant Attorney General’s requests for admission that had been made to a lay taxpayer.  We noted that with the requests for admission, the Assistant Attorney General also provided the taxpayer a copy of MCR 2.312.  

Respondent here provided no response to Petitioner’s requests for admission until months after the responses were due, as a response to Petitioner’s Motion for Summary Disposition. We hold that Petitioner’s requests for admission are deemed admitted due to Respondent’s failure to respond. Respondent’s failure to respond was not inadvertent.  Petitioner called Respondent regarding the requests, a fact which Respondent does not deny.  Indeed, in its response to Petitioner’s motion, Respondent made no claim that it was unaware of the requests for admission, but asserted instead that it believed the requests were irrelevant.  Rather than file an objection, Respondent deliberately did nothing.  We also find no prejudice to Respondent beyond what is clearly envisioned in MCR 2.312.  On the other hand, Respondent’s lack of response to the first set of requests necessitated discovery that Petitioner otherwise would not have needed to pursue.  We do not address whether the deemed admissions were otherwise objectionable because such inquiry is irrelevant, untimely, and has not been requested.

3.  Treatment of Motions for Summary Disposition in the Tribunal

Motions for summary disposition are governed by MCR 2.116.  A motion for summary disposition under MCR 2.116(C)(10) tests the factual support for a claim and must identify those issues regarding which the moving party asserts there is no genuine issue of material fact. Maiden v Rozwood, 461 Mich 109, 119; 597 NW2d 817 (1999).  JW Hobbs Corp v Mich Dep’t of Treasury, Court of Claims Docket No. 02-166-MT (January 14, 2004).  This particular motion has had a longstanding history in the Tribunal.  Kern v Pontiac Twp, supra; Beerbower v Dep’t of Treasury,  MTT Docket No. 73736 (November 1, 1985);  Lichnovsky v Mich Dep’t of Treasury, supra; Charfoos v Mich Dep’t of Treasury, MTT Docket No. 120510 (May 3, 1989); Kivela v Mich Dep’t of Treasury,  MTT Docket No. 131823.

The moving party has the initial burden of supporting its claim with affidavits, depositions, admissions and other documentary evidence. MCR 2.116(G)(3). The nonmoving party must by affidavits or other documentary evidence demonstrate specific facts showing that a genuine issue exists for trial.  MCR 2.116(G)(4).  The nonmoving may not rest on mere allegations or denials in his or her pleadings, and, if the nonmoving party “does not so respond, judgment, if appropriate, shall be entered against him or her.”  MCR 2.116(G)(4); see Quito v Cross & Peters, 451 Mich 358, 362-372; 547 NW2d 314 (1996); see also Charfoos, supra and Kivela, supra.  The trier of fact evaluates the motion in a light most favorable to the nonmoving party by considering the substantively admissible evidence actually proffered in opposition to the motion. Maiden, supra at 121.  The mere possibility that the claim might be supported by evidence produced at trial may not be considered.  Id.

Respondent has left little to the imagination.  In response to the motion for summary disposition, Respondent filed no supporting affidavit, exhibits or other documentation except its untimely filed responses to Petitioner’s Requests for Admission.  The responses, as we have indicated above, are inadmissible and create no issue of fact.  Respondent’s casual discussion of its impression of the direction of the case contained in its “Response to Petitioner’s Motion for Summary Disposition” provides no reference to an admissible fact, and, far more importantly, fails to assert that a genuine issue of material fact exists.  Respondent has not only failed to provide sufficient rebuttal evidence, but has failed to meaningfully oppose the motion.

We agree with Petitioner that Respondent has incontrovertibly admitted that the subject property’s correct 2002 assessed and taxable value is $2,900,000, and that, as of December 31, 2001, the true cash value of the property must be $5,800,000.  

Therefore, the Tribunal finds that the parties’ contentions of true cash value, and the assessed and taxable values of the subject property as shown on the rolls for the 2002 tax year are as follows:

Assessed Value	State Equalized Value	Taxable Value	Petitioner’s Contention of True Cash Value	Respondent’s Contention of True Cash Value	
$8,220,900	$8,220,900	$6,521,492	$4,725,000	$16,441,800	

The Tribunal further finds that the revised true cash value, assessed value, state equalized and taxable value for the subject property for the 2002 tax year are:

Assessed Value	State Equalized Value	Taxable Value	True Cash Value	
$2,900,000	$2,900,000	$2,900,000	$5,800,000	

IT IS ORDERED that Petitioner’s Motion for Summary Disposition is GRANTED.
 
IT IS FURTHER ORDERED that the subject property’s true cash value, assessed, and taxable value shall be revised for the tax year at issue, subject to the processes of equalization, as provided for above.
 
IT IS FURTHER ORDERED that the officer charged with keeping the assessment rolls for the tax years at issue shall correct or cause the assessment rolls to be corrected to reflect the property’s revised assessed and taxable value provided above, subject to the processes of equalization, within 20 days of the entry of this Order.

IT IS FURTHER ORDERED that the officer charged with collecting or refunding the affected taxes shall collect taxes and any applicable interest or issue a refund as required by this Order within 20 days of the entry of this Order.  If a refund is warranted, it shall include a proportionate share of any property tax administration fees paid and of penalty and interest paid on delinquent taxes.  The refund shall also separately indicate the amount of the taxes, fees, penalties, and interest being refunded. A sum determined by the Tribunal to have been unlawfully paid shall bear interest from the date of payment to the date of judgment and the judgment shall bear interest to the date of its payment.  A sum determined by the Tribunal to have been underpaid shall not bear interest for any time period prior to 28 days after the issuance of this Order.  As provided by 1994 PA 254 and 1995 PA 232, being MCL 205.737, as amended, interest shall accrue for periods after March 31, 1985, but before April 1, 1994, at a rate of 9% per year.  After March 31, 1994, but before January 1, 1996, interest shall accrue at an interest rate set monthly at a per annum rate based on the auction rate of the 91-day discount treasury bill rate for the first Monday in each month, plus 1%.  After December 1, 1995, interest shall accrue at an interest rate set each year by the Department of Treasury.  Pursuant to 1995 PA 232, interest shall accrue (i) after December 31, 1995, at a rate of 6.55% for calendar year 1996, (ii) after December 31, 1996, at a rate of 6.11% for calendar year 1997, (iii) after December 31, 1997, at a rate of 6.04% for calendar year 1998, (iv) after December 31, 1998, at the rate of 6.01% for calendar year 1999, (v) after December 31, 1999, at the rate of 5.49% for calendar year 2000, (vi) after December 31, 2000, at the rate of 6.56% for calendar year 2001, (vii) after December 31, 2001, at the rate of 5.56% for calendar year 2002, (viii) after December 31, 2002 at the rate of 2.78% for calendar year 2003, and (ix) after December 31, 2003 at the rate of 2.16% for calendar year 2004.

		MICHIGAN TAX TRIBUNAL
		By:     	Jack Van Coevering 
		By:	Michael A. Stimpson
		By:	Victoria L. Enyart
		By:	Richard A. Southern
		By:	Kimbal R. Smith III
		By:	Karen B. McComb
Entered:  March 4, 2004		By:	Patricia L. Halm