ISABELLA COUNTY — Another local property case is being weighed by the U.S. Supreme Court, potentially impacting those in similar situations around the state.
A Michigan family is arguing they’re entitled to more than $100,000 in equity they say was destroyed by Isabella County.
Michael Pung lost his family’s home to the county after a years-long dispute over $2,200 in unpaid taxes.
The family took issue with the foreclosure to begin with — but they also argued the county essentially robbed them of tens of thousands of dollars in revenue.
The home sold for $76,000, which the county initially kept. Federal courts in Michigan have so far ruled that Pung should receive those surplus proceeds, which total about $73,000.
Philip Ellison is an attorney representing Pung. He says the home was later valued at close to $200,000, leaving Pung feeling cheated out of nearly $120,000.
“It’s our position that Michigan’s auction system results in an outcome that undersells property for what it’s really worth,” Ellison said.
Courts have not agreed that the Pung family is entitled to damages or anything to make up for the potentially lost value of nearly $120,000 — but the Supreme Court could reconsider that aspect.
Matthew Nelson is an attorney representing Isabella County.
He argues in a statement that Pung received multiple notices about his obligations and ability to make his appeal in a certain timeframe.
Nelson also doesn’t take issue with Pung receiving the surplus proceeds that he’s already won.
“The treasurer paid the taxes owed and then returned the surplus of more than $73,000 to Mr. Pung – but that wasn’t good enough,” Nelson said. “After ignoring seven years of warnings – and opportunities – to redeem the situation, Mr. Pung demanded the county pay the fair market value for the House, more than twice as much as the county actually received from selling the property.”
The U.S. Supreme Court will hear arguments in the case on Feb. 25, and a ruling could come any time after that.
The court’s ruling could invalidate similar agreements around the state, or open the door for new legal challenges against county government.
“There is opportunity out there for people to get back some of what’s been taken from them,” Ellison said. “The Michigan Legislature has left it on a county-by-county basis to deal with, and some have dealt with it better than others. Hopefully everybody who’s been a victim of this can get their compensation back, but it’s been a long fight.”