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In re Petition of Barry County Treasurer for Foreclosure (2024)

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In re Petition of Barry County Treasurer for Foreclosure (2024)

Citation: ___ Mich App ___; ___ NW3d ___ · Docket: No. 362316 (published) · Court: Michigan Court of Appeals · Decided: February 1, 2024

Note on parallel docket. A companion unpublished opinion involving the same Barry County foreclosure proceeding was issued simultaneously as Docket No. 360920, 2024 WL 386939 (Mich Ct App Feb 1, 2024). Docket 362316 is the published opinion that carries binding precedential weight under MCR 7.215(C)(2) and is the docket number cited throughout Michigan courts and this wiki. The two dockets address related — but separately appealable — questions arising from the same underlying foreclosure.

This decision is the key post-Rafaeli appellate precedent confirming that MCL 211.78t is the exclusive, constitutionally valid mechanism for a former Michigan property owner to recover surplus proceeds from a tax-foreclosure auction sale. It sits in the “Rafaeli progeny” line alongside In re Petition of Muskegon County Treasurer (Docket 363764, Oct. 26, 2023) and In re Petition of Alger County Treasurer (Docket 363803, Sep. 12, 2024), all of which enforce the statutory scheme against claimants who missed the July 1 notice-of-intent deadline.

Facts

A Barry County property owner died in 2018 without having paid the 2018 property taxes on a residential parcel. The Barry County Treasurer, acting as the Foreclosing Governmental Unit (FGU) under the General Property Tax Act (GPTA), MCL 211.78 et seq., obtained a judgment of foreclosure. The property was sold at a tax-foreclosure auction in August 2021 for approximately $40,000. After deduction of the tax delinquency, interest, penalties, fees, and the statutory sales commission, approximately$36,475 remained as surplus “remaining proceeds” within the meaning of MCL 211.78t(12)(b).

In April 2022 — roughly nine months after the auction — the decedent’s heir opened a probate estate. The estate’s personal representative shortly thereafter filed a motion in the Barry County Circuit Court foreclosure proceeding, seeking a court order compelling the Barry County Treasurer to disburse the surplus proceeds to the estate.

The estate argued, among other things, that: (1) MCL 211.78t was not the exclusive mechanism for recovering surplus; (2) if it was, the statute’s July 1 Notice-of-Intent (Form 5743) deadline was unconstitutional as applied, effecting a taking without just compensation; and (3) the death-saving provision, MCL 600.5852, tolled the July 1 deadline, giving the personal representative two years from the issuance of letters of authority to bring the claim.

The circuit court denied the motion. The estate appealed.

Holding

The Michigan Court of Appeals affirmed and held:

  1. MCL 211.78t is the exclusive mechanism by which a former owner of property sold at a tax-foreclosure auction may obtain surplus remaining proceeds. There is no freestanding constitutional or common-law back-door to surplus for owners — or their estates — who fail to comply with the statutory procedure.

  2. The statute is facially constitutional. Applying the Michigan statutory surplus-claim framework to bar an untimely claimant does not effect an unconstitutional taking under either the Michigan Constitution (Const 1963, art 10, § 2, as construed in Rafaeli) or the U.S. Constitution (Fifth Amendment). There is “no room for a successful Takings claim” when the Legislature has provided an adequate procedure for recovering the surplus and the claimant failed to use it.

  3. MCL 600.5852 does not toll the July 1 deadline. The death-saving provision of the Revised Judicature Act does not apply to the notice-of-intent filing requirement in MCL 211.78t(2). The Legislature, in enacting the GPTA’s surplus-claim scheme, provided its own exception for claimants who did not receive due process before foreclosure (MCL 211.78l(1), two-year window), which displaces the general death-saving provision.

Reasoning

1. Exclusive mechanism. The Court followed and applied In re Petition of Muskegon County Treasurer for Foreclosure (Docket 363764), which first announced the exclusivity rule. MCL 211.78t was the Legislature’s specific, comprehensive response to the Michigan Supreme Court’s holding in Rafaeli, LLC v Oakland County, 505 Mich 429; 952 NW2d 434 (2020). The Legislature created a single, defined pathway — Form 5743 filed by July 1, notice by the FGU in January, court motion between February 1 and May 15 — to give legal certainty to foreclosure sales and allow county treasurers to distribute surplus proceeds with finality. Permitting a parallel constitutional claim to reopen closed surplus windows would defeat that legislative purpose.

2. Facial constitutionality. The Legislature’s decision to condition surplus recovery on timely notice-of-intent compliance does not itself constitute a taking. Rafaeli established that retaining surplus proceeds without any procedure for the former owner to claim them was a taking. MCL 211.78t remedied that constitutional deficiency. A claimant who had the opportunity to file a notice and chose not to (or whose estate failed to do so) has not suffered a compensable deprivation — the statutory right to just compensation was available but not exercised. The Court found no violation of either the Michigan or federal Takings Clause on the facts presented.

3. MCL 600.5852 inapplicable. MCL 600.5852(1) provides that if a person dies before or within 30 days after a cause of action accrues, the personal representative has two years from the date letters of authority are issued to bring the action. The estate argued this provision should toll the July 1 MCL 211.78t filing deadline. The Court rejected this argument: the GPTA’s own due-process exception (MCL 211.78l(1)), which gives a two-year window to challenge a foreclosure where constitutionally adequate notice was not provided, demonstrates that the Legislature knew how to create time-limit exceptions and did so selectively. The general saving provision of MCL 600.5852 does not override the specific, comprehensive statutory framework of MCL 211.78t. The Court also noted that the Alger/Iron County cases (decided September 12, 2024) reached the same conclusion on the same tolling argument.

Practical impact

For former owners and their estates: The MCL 211.78t clock is strict and does not wait for probate. If a property is tax-foreclosed while the owner is alive, the July 1 Notice-of-Intent deadline runs from the effective date of foreclosure — not from when an estate is opened or a personal representative is appointed. Heirs, beneficiaries, and estate administrators must monitor delinquent-tax proceedings for any property in which the decedent held an interest. Missing the July 1 deadline extinguishes the statutory surplus claim with no general-statute tolling escape valve.

For foreclosure purchasers and FGUs: A published, binding Michigan Court of Appeals opinion holds that MCL 211.78t is constitutional, exclusive, and not subject to tolling by MCL 600.5852. County treasurers distributing (or retaining) surplus proceeds after the statutory windows close are acting consistently with established appellate law. Purchasers at GPTA auction sales take with a clean statutory backstop on surplus claims.

Relationship to other Rafaeli progeny: The division of labor in Michigan surplus law as of 2026:

  • Barry County (and Muskegon County): MCL 211.78t is exclusive and constitutional when a public auction generates “remaining proceeds.”
  • Jackson v. Southfield NRI (Mich Sup Ct 2025, Docket 166320): When there is no public auction (ROFR/minimum-bid transfer), MCL 211.78t does not govern and the former owner’s remedy is inverse-condemnation under Rafaeli.
  • Alger/Iron County (COA 2024): Same exclusivity rule applied to additional constitutional challenges and to the MCL 600.5852 tolling argument in an estate context.

Good-law status

Still good law. As of last_verified 2026-06-10, the published opinion has been applied as binding precedent by subsequent Michigan Court of Appeals panels, including the September 12, 2024 Alger/Iron County consolidated opinion. Pacific Legal Foundation filed an Application for Leave to Appeal to the Michigan Supreme Court in October 2024 seeking review of the Alger/Iron County decision (which rests on and follows Barry County 362316). As of last_verified, no Michigan Supreme Court order granting leave or reversing the Barry County holding is known.

needs_verification: Confirm whether the Michigan Supreme Court granted or denied leave in the Alger/Iron County application (filed Oct. 2024, Michigan Supreme Court). If leave is granted or the holding is reversed, this page requires immediate updating.

Sources retrieved

  1. Justia — In Re Petition Of Barry County Treasurer For Foreclosure, Docket No. 362316, Michigan Court of Appeals (Published), 2024: https://law.justia.com/cases/michigan/court-of-appeals-published/2024/362316.html
  2. Mika Meyers law firm summary (primary-source corroborating secondary): https://www.mikameyers.com/michigan-court-of-appeals-concludes-that-statutory-process-to-claim-surplus-proceeds-resulting-from-tax-foreclosure-is-not-unconstitutional/
  3. In re Petition of Alger County Treasurer / In re Petition of Iron County Treasurer (Consolidated), Docket Nos. 363803/363804, Michigan Court of Appeals, Sep. 12, 2024 — official COA opinion PDF, explicitly following and citing Docket 362316: https://www.courts.michigan.gov/siteassets/case-documents/uploads/OPINIONS/FINAL/COA/20240912_C363803_45_363803.OPN.PDF
  4. Pacific Legal Foundation Application for Leave to Appeal, In re Alger County Treasurer, filed Michigan Supreme Court Oct. 24, 2024 (cites Barry County Docket 362316): https://pacificlegal.org/wp-content/uploads/2024/10/01.-Alger-County-Petition.pdf
  5. Michigan Legislature — MCL 211.78t full text: https://www.legislature.mi.gov/Laws/MCL?objectName=MCL-211-78T
  6. Rafaeli, LLC v Oakland County, 505 Mich 429; 952 NW2d 434 (2020) — foundational decision: https://www.courts.michigan.gov/siteassets/case-documents/uploads/OPINIONS/FINAL/SCT/156849_143_01.pdf

Applies in →

michigan — state-law holding under the GPTA and Michigan Constitution; no federal application.

  • rafaeli-v-oakland-county-2020 — foundational state constitutional holding; MCL 211.78t is the Legislature’s direct response
  • jackson-v-southfield-2025 — companion Rafaeli-progeny case; covers the ROFR/no-auction scenario where MCL 211.78t does not apply
  • tyler-v-hennepin-county — federal Fifth Amendment parallel to Rafaeli; adds a federal floor but does not displace state statute
  • jones-v-flowers — federal due-process notice standard; applicable when FGU notice is challenged as inadequate
  • mennonite-v-adams — mortgagee-notice standard; relevant to junior-lien holder notice challenges in GPTA proceedings

Legal information, not legal advice. This page summarizes a court decision for educational purposes and does not create an attorney-client relationship. Verify against the primary opinion and consult a licensed attorney in the relevant jurisdiction before acting. Last verified 2026-06-10.

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