Tax foreclosure sale proceeds; Rafaeli, LLC v Oakland Cnty; Constitutionality of MCL 211.78t as applied to claimants; In re Petition of Muskegon Treasurer for Foreclosure; Failure to comply with the notice requirement in MCL 211.78t(2); Foreclosing governmental unit (FGU)

Noting that it was bound by Muskegon Treasurer, the court held that the trial court in this case concerning tax foreclosure sale proceeds erred in “ruling that presale notice of the right to claim remaining proceeds did not satisfy due process.” Further, based on this error, the trial court erred in determining that petitioner-county treasurer’s “retention of claimants’ remaining proceeds resulted in an unconstitutional taking.” Thus, the court reversed the “order granting claimants’ amended motion for the disbursement of remaining proceeds and” remanded for entry of an order denying their motion. “Like the respondents in Muskegon Treasurer, what claimants really wanted is a different, i.e., postsale, process.” But as the court observed there, while “some states had adopted the type of process advocated by claimants, that was not the system that Michigan’s Legislature adopted. ‘So long as the statutory scheme adopted by our Legislature comports with due process—as MCL 211.78t does—whether such a scheme makes sense or not, or whether a “better” scheme could be devised, are policy questions for the Legislature, not legal ones for the Judiciary.’” Pursuant to Muskegon Treasurer, the trial court erred in ruling “that our Legislature’s statutory scheme for returning remaining proceeds did not satisfy due process because it required petitioners to send notices regarding remaining proceeds to property owners before the tax-foreclosure sales. [Its] erroneous due-process determination was the basis for [its] conclusion that petitioner’s retention of claimants’ remaining proceeds, including the 5% sales commission, was an unconstitutional taking.” The reasoning that applied in Muskegon Treasurer applied here. “Claimants failed to avail themselves of a validly enacted, constitutional process for recovering remaining proceeds; therefore, they did not suffer a compensable taking.” The court noted that its “holding in Muskegon Treasurer speaks to both facial challenges and as-applied challenges to our Legislature’s scheme for returning remaining proceeds. An FGU’s compliance with the notice requirements in MCL 211.78 is essential to due process.” Although the record here raised “questions about the level of petitioner’s compliance with MCL 211.78’s notice requirements. . . . claimants’ only argument about the inadequacy of the process was that it was not a postsale process.”