By Alethia Kasben
Gongwer News Service
Local governments litigating the disbursement of tax-foreclosure sales are not allowed attorney fees or other cost recoupment under the General Property Tax Act, the Court of Appeals ruled this week.
The panel in Montcalm County Treasurer v. Rivera et. al. (COA Docket No. 370785), in a published case dated Monday, upheld a lower court ruling on the disbursement of funds and the attorney fee issue.
An opinion written by Judge Kristen Frank Kelly and signed by Judge Sima Patel and Judge Kathleen Feeney, said the case raised an issue of first impression on the interpretation of the General Property Tax Act and whether a foreclosing governmental unit is entitled to recover attorney fees and costs incurred for post-sale proceedings.
The case involved multiple properties that were foreclosed upon and sold by the Montcalm County treasurer. The former property owners filed timely notice to receive proceeds from the sale that exceeded the amount of property tax and other fees owed.
However, the county argued it was entitled to recover a significant amount of fees and expenses it incurred in connection with the foreclosure of the properties.
For one property, the former owners sought $19,693 after the sale, and the county said it was entitled to almost $17,000 for reimbursement. For the other property in the case, the former owners sought $36,343, and the county said it was entitled to almost $13,000 in reimbursements.
The trial court found the former owners were entitled to the full claims for remaining proceeds and rejected the county's request for post-sale fees.
The Court of Appeals panel agreed, writing the law does not "extend to the recovery of legal expenses incurred in litigation related to the disbursement of remaining proceeds."
Gongwer News Service
Local governments litigating the disbursement of tax-foreclosure sales are not allowed attorney fees or other cost recoupment under the General Property Tax Act, the Court of Appeals ruled this week.
The panel in Montcalm County Treasurer v. Rivera et. al. (COA Docket No. 370785), in a published case dated Monday, upheld a lower court ruling on the disbursement of funds and the attorney fee issue.
An opinion written by Judge Kristen Frank Kelly and signed by Judge Sima Patel and Judge Kathleen Feeney, said the case raised an issue of first impression on the interpretation of the General Property Tax Act and whether a foreclosing governmental unit is entitled to recover attorney fees and costs incurred for post-sale proceedings.
The case involved multiple properties that were foreclosed upon and sold by the Montcalm County treasurer. The former property owners filed timely notice to receive proceeds from the sale that exceeded the amount of property tax and other fees owed.
However, the county argued it was entitled to recover a significant amount of fees and expenses it incurred in connection with the foreclosure of the properties.
For one property, the former owners sought $19,693 after the sale, and the county said it was entitled to almost $17,000 for reimbursement. For the other property in the case, the former owners sought $36,343, and the county said it was entitled to almost $13,000 in reimbursements.
The trial court found the former owners were entitled to the full claims for remaining proceeds and rejected the county's request for post-sale fees.
The Court of Appeals panel agreed, writing the law does not "extend to the recovery of legal expenses incurred in litigation related to the disbursement of remaining proceeds."
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