No Mutual Mistake of Fact Concerning Transfer of Property by Land Contract
In Allesee v. Township of Bloomfield, Michigan Court of Appeals, No. 295188, February 15, 2011, a case involving a local real property tax dispute relative to a taxpayer's home, the Michigan Court of Appeals held that the Tax Tribunal did not err in dismissing the taxpayer's petition based on a finding that there was no clerical error or mutual mistake of fact, given that the taxpayer believed there was no transfer of ownership in 2002. The taxpayer alleged that a proper transfer did not take place until a warranty deed was executed in 2007 and that there was a mutual mistake of fact as to whether there had been a transfer of ownership in 2002. Under the taxpayer's theory, the alleged erroneous belief shared and relied on by the parties concerned the accuracy of the warranty deed and the underlying fact referenced in the warranty deed that the property was transferred in 2002 by way of a land contract.
There was a two-fold problem with the taxpayer's argument. First, the taxpayer's petition never clearly alleged that he mistakenly believed that the warranty deed was accurate, that a land contract had been entered into in 2002, or that there had been a transfer of property in 2002 that he erroneously believed occurred and relied on in paying additional tax amounts. More importantly, the taxpayer failed to submit an affidavit or any documentary evidence indicating that when he paid the additional taxes, he mistakenly believed that the warranty deed was accurate, that a land contract had been entered into in 2002, or that there had been a transfer of property in 2002 that he erroneously believed occurred and relied on in paying the reassessed tax amounts.
In this case, the taxpayer only submitted the property transfer affidavit of the previous owner of the house indicating that the warranty deed was prepared and given to the taxpayer, but this had no bearing on whether the taxpayer himself had an erroneous belief regarding whether a land contract had existed. An erroneous belief on the part of the taxpayer, not the previous owner, was a necessary component of establishing a mutual mistake of fact. Although the appellate court acknowledged that there appeared to be some merit to the taxpayer's argument that no transfer of ownership occurred in 2002, the statutory scheme and the failure by the taxpayer to submit the most basic of supporting proofs left the court with no other choice but to affirm the Tax Tribunal.