Michigan Family Takes Property Rights Battle to U.S. Supreme Court
A family in Michigan claims they’ve lost their home over what they describe as a minor tax disagreement, and they are now bringing their case to the U.S. Supreme Court.
The estate of Scott Pung argues that officials in Isabella County engaged in “home equity theft” by foreclosing on their home, valued at nearly $200,000, to settle a tax-related debt that has grown from an initial $1,600 to $2,242 due to interest and penalties.
“I still can’t wrap my head around how we lost our house,” said Tia Pun. “We’ve always paid our taxes on time. That’s the crazy part. When that $1,600 wasn’t paid, they just filed for a lien on us.” She expressed disbelief at the situation.
This dispute dates back over ten years, when Tia and Mark Pun inherited a 3,000-square-foot home in suburban Michigan that belonged to Mark’s father. Despite keeping up with their tax payments, the county retroactively revoked their Family Principal Residence Exemption (PRE) because the estate didn’t submit an affidavit declaring the home as a primary residence.
A tax court later found that the family should have received exemptions for previous years, but county assessors rejected these exemptions for the 2012 tax year, claiming they were invalid. Michael Pun, who represents his brother’s estate, tried to settle the apparent tax bill but was told the amount was insufficient, leading the county to foreclose on their home.
“Mark and I were working hard on renovations, tearing down walls… I honestly thought it could never come to this,” Tia admitted. “I guess we were a bit naïve.”
In 2019, the county auctioned the home for $76,008, far below its appraised value of $194,400. The property was purchased by an investor who later sold it for $195,000. The county kept the remaining auction proceeds after paying about $2,000 in debts, but the family argues they lost over $118,000 in potential equity based on the home’s true market value.
The Pacific Law Foundation, which is representing the Pun estate, argues that the county’s methods were extreme: “Instead of placing a lien on the home or finding a less destructive way to recover unpaid taxes, they chose foreclosure and an auction,” said attorney Larry Saltzman. “Everything the family had established in that house was taken away.”
In its response, Isabella County rejected the claim that the home’s fair market value was as high as stated, arguing it didn’t reflect the actual market. The Pun Estate is raising constitutional questions related to the Fifth and Eighth Amendments.
“The core issue is how much the government should reimburse when it seizes property and takes more than what is owed,” Salzman noted.
This case comes after a recent Supreme Court decision that ruled against the government keeping excess profits from tax collections. However, the Pun estate argues for “just compensation” based on the property’s real value rather than the lower auction price.
For Tia Pun, the ramifications extend beyond financial loss. “The impact on our lives has been huge—emotionally and mentally,” she reflected. “It shattered our security and trust in local authorities.”
Community members have rallied around the family, expressing their disbelief over the situation and offering support.
Isabella County contends that the Supreme Court should dismiss the Pun’s valuation theory, as it lacks historical precedent. The county argues that “just compensation” under the Fifth Amendment would be met by returning the auction surplus rather than the market value of the home.
Matthew T. Nelson, an attorney for the county, emphasized that Michael Pun should have fulfilled his tax obligations over the years. He stated that the family received over $73,000 after the auction, claiming the family is asking for more than required by law.
The Supreme Court is expected to hold oral arguments in February regarding the case, Pun vs. Isabella County.
