article courtesy of The Morning Sun
Comparing the seizure of his home to theft, a Gratiot County man has asked a federal court to rule that the county illegally profited from the action when it sold the property to satisfy a small tax lien.
Donald Freed owed $1,109 in past-due taxes and other fees on his home and 35 acres at 7706 Bliss Road in Elwell earlier this year when Gratiot County and its treasurer Michelle Thomas obtained a Michigan Circuit Court foreclosure judgement on the property, alleges a law suit filed last month in the U.S. District Court’s Eastern Region.
Freed was paying some percentage of the back taxes to Gratiot County, however was unaware of the implications of not paying the full amount because he is unable to read at a level necessary to understand notices mailed to him, the lawsuit contends.
Treasurer Michelle Thomas – who is named alongside the county as defendants in the suit – admitted through her attorney that she did not provide verbal notice of the foreclosure to Freed, a requirement of the process, according to the lawsuit.
The entire property, which was appraised at $97,000 by the county, sold to a third party for $42,000.
Citing the Fifth, Eighth and 14th Amendments, the lawsuit contends that the excess equity of the property beyond the tax arrears should be returned to Freed by federal right.
The Fifth and 14th amendments protect against a government entity taking a citizen’s property without fair compensation while the Eighth protects against excessive fines, Freed’s attorney Phillip Ellison wrote in a media release.
“This is part of a bigger set of cases I’m taking on, where treasurers are abusing tax laws to profit,” Ellison said.
The attorney said when he first talked to Freed – a 65-year-old man who has lived at the Elwell home “for decades” – he called the Gratiot County treasurer’s office and offered to pay the entirety of the past-due balance and the fees; the response he received from the person who answered the phone stunned him.
“She said that they had to sell the property to make a profit,” Ellison said. “That’s when I decided to fight for Mr. Freed.”
By law, “profits” from a county tax sale are placed into the county’s general funds, Ellison said.
“This case is troubling. It is troubling because of a public official sworn to uphold the public good and serve the citizenry would actually and intentionally steal from an average citizen who tried to correct an error,” Ellison said. “The word theft is too positive of word for what has happened; it is a ghastly and horrendous act.”
Thomas deferred questions from the Morning Sun to Gratiot County Administrator Tracey Cordes, who said she is unaware of the specifics of the Freed lawsuit because it is early in the legal process.
The county and Thomas were served Oct. 31 and have until Nov. 21 to file a response with the federal court.
The county utilizes a liability firm to respond to legal claims like those filed first in the circuit court and now in federal on behalf of Freed, Cordes said.
In general terms, money from forfeitures would be added to the county’s budget under a tax sales line item; in other words, any amount of the $42,000 sale of Freed’s property beyond the balance of taxes and fees is part of a county’s revenues, Cordes said.
As of the end of the 2016-17 fiscal year on Sept. 30 that line – the Delinquent Tax and 517 Tax Sale Fund – had a balance of $732,297, Cordes said.
That money can be used to supplement the general fund if needed through the year, though county commissioners did not do so last fiscal year.
