Avoid Foreclosure in Michigan

Stella Sidun v Wayne County Treasurer, Michigan

Case Law
Case No. 131905
July 2, 2008

Helen Krist executed a quitclaim deed conveying her Hamtramck property to herself and her daughter, Stella Sidun specifying their postal address at Stolzenfeld-Warren, Michigan and at Dorchester-Birmingham, Michigan. The deed was properly registered with Wayne Registry of Deeds.

Both mother and daughter helped each other in leasing out and managing the property. The mother had to move from her Warren home to Birmingham residence of her daughter and her husband because she developed Alzheimer's disease. The husband of her daughter made arrangements relative to notices and utility bills to be sent to their residence at Birmingham. The Warren house was sold after Helen Krist moved out to join her daughter. The city assessor and county treasurer of Hamtramck was not informed of Krist's new address. The treasurer mailed to the Warren address tax bills for the Hamtramck property. The daughter failed to pay the property taxes. Consequently, the treasurer sent two notices for tax delinquency, one by first class mail and the other was by certified mail to the Warren address. Both were returned as undeliverable. The treasurer initiated foreclosure proceedings and sent the notice of show cause as well as the notice of foreclosure hearings at the Warren address. A notice was also posted on the property since the server could not personally serve it on the addressee as she was not in the property. The notice was also published in the local county newspaper. Krist died and foreclosure of the property was conducted. It was auctioned to the owner of the Warren residence (who bought it from Krist when she was still alive).

The daughter learned about the sale and filed a case before the court for having deprived her of her property without due notice and therefore violated her constitutional right to due process. The trial court ruled in favor of the treasurer and granted summary disposition. The court ruled that the treasurer complied with due notice considering that he made several attempts in sending notices to the plaintiff.

Plaintiff appealed to the Court of Appeals which hurriedly affirmed the decision of the trial court. Thus, plaintiff appealed to the Supreme Court of Michigan.

The only issue to be resolved is whether the treasurer sufficiently satisfied the requirements of due process in attempting to notify the plaintiff.

The Supreme Court granted the plaintiff's appeal and it reviewed the instant case de novo ruled that the attempts made by the county treasurer did not meet constitutional standards. Citing the Michigan Constitution specifically Article 1, Section 17 on due process which is patterned from the U.S. Constitution and the judicial pronouncements made in the cases of Mullane v. Central Hanover Bank & Trust Co. and Jones v Flowers, the Supreme Court ruled that the plaintiff is entitled to constitutional guarantee of due process before she is deprived of title over her property by the government. Due notice requires that "notice be 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" (Mullane v. Central, supra.). According to the Supreme Court, there must be reasonable methods employed to give notice to the parties and not a mere gesture. It is not required that actual notice is given since customary or other means may be employed. Notice by publication is only required when the party or parties are unknown and therefore the publication made at the instance of the treasurer in the county newspaper did not sufficiently satisfy the constitutional requirement. In the instant case, the parties were not unknown, in fact their names as well as their addresses are available, known, and at hand. Moreover, it specified that insofar as government is concerned, it must take additional steps in notifying parties. Although the treasurer was correct in sending the notice to the Warren residence for Krist, still he failed to send notice to the other owner, the plaintiff. It is the duty of the treasurer to refer and verify from the deed of the property. Clearly, he failed in doing so because if he did he would have noted that the names of Krist and of the plaintiff including their respective residences are specified and indicated. Birmingham is indicated as the residence of the plaintiff. The treasurer in sending the notices only to the Warren property assumed that both owners live in the same house.

Due process then is not merely sending notices but ensuring that the notices are sent in the proper addresses which are reasonably expected to addressees. Moreover, the treasurer sent only one notice to Krist in the Warren property and he failed to send notice to the plaintiff.

Thus, the plaintiff was deprived of due process and therefore that case was ordered remanded to the trial court for further hearing and the appellate court's decision was reversed.

Lesson Learned:This case originally was heard before the Circuit Court of Wayne County then the decision was appealed before the appellate court and finally to the Michigan Supreme Court (Lansing, Michigan).

The right to due process is one of the democratic principles upon which the government rests. As a constitutional right, it serves as a restraint in the vast powers of government in unduly interfering in the enjoyment of the rights and privileges of its citizens. In the instant case, plaintiff was deprived of such basic right because of the failure of the treasurer to ensure that she was duly notified of the tax deficiency and notice of foreclosure. Due process includes notice to parties and giving them an opportunity to be heard. The Court explained that giving notice to the party requires more than a mere gesture and in fact, if it is the government that should be the party giving said notice, it is required to exert more effort in ensuring proper serving of notice.

The plaintiff in the instant case was deprived of her property because she had reasonable expectation of the entitlement over the property but which was taken away from her without apprising her at all. The treasurer was in fact remiss in his duties in not referring to the deed to the property where he can easily inform himself of the correct and actual addresses of the parties instead of serving only one party in a former address.

Government action requires both substantive and procedural justifications before a person is deprived of her property. In this case, the county treasurer failed to observe and perform his duties.

Written by Kevin Levonas and Giselle G.