We already know that in Rafaeli, LLC v. Oakland County, 952 N.W.2d 434 (2020), the Michigan Supreme Court held that a homeowner has a property interest in the equity in her home, and that if she fails to pay the full amount of her property taxes and the government forecloses, the government can't keep the proceeds in excess of the amount of the tax delinquency.
But did this ruling apply retroactively to cases where the foreclosure and sale (and the government keeping the change) occurred before the Rafaeli opinion was issued? That was the issue the Michigan Court of Appeals considered in Schafer v. Kent County, No. 356908 (Sep. 22, 2022).
Long story short: yes, the Rafaeli ruling is one upholding the Michigan Constitution, and did not so much establish a new principle of law as "returned the law to that which was recognized at common law and by the ratifiers of the Michigan Constitution of 1963 ... and should be given full retroactive effect." Slip op. at 5.
That retroactive effect is not limited:
We conclude that Rafaeli should be given full retroactive effect. We further conclude that Rafaeli applies to the instant case even if not given full retroactive effect because the instant case was filed after Rafaeli was decided. The parties are under the misconception that Rafaeli would need retroactive effect in order to apply to the instant case, apparently because the foreclosure sale at issue in the instant case occurred before our Supreme Court’s Rafaeli decision. But for the purposes of this analysis, the relevant date is when plaintiffs filed their complaint commencing the case, not when the underlying conduct at issue in the complaint occurred. See Stein, 432 Mich at 201. Therefore, because plaintiffs filed the instant case after Rafaeli was issued, Rafaeli applies regardless of whether that judicial decision is applied retroactively or prospectively.
Slip op. at 5-6 (footnote omitted).
Schafer v. Kent County, No. 356908 (Mich. Ct. App. Sep. 22, 2022)
