ESCANABA – The Delta County Board has decided to contribute $4,000 toward attorney fees for a pending U.S. Supreme Court case over how a Michigan county government seizes and sells property for unpaid taxes.

The Michael Pung v. Isabella County case began as a dispute over the foreclosure and sale of the Pung property in Isabella County after the 2004 death of owner Timothy Scott Pung, Michael’s father. According to online information, the county claimed an unpaid tax bill of $2,241.93, which Pung has said is incorrect.

The house then was sold at a tax auction for about $76,000, despite having a fair-market value of about $194,400. The county kept the entire amount, not just the claimed delinquent taxes.

Pung argued the county’s actions constitute “home equity theft,” violating the Fifth Amendment’s Takings Clause and the Eighth Amendment’s Excessive Fines Clause by retaining more than was owed.

The district court granted Pung summary judgment on the Takings Clause claim, ruling he was entitled to the surplus proceeds — the sale price minus the tax debt — but not to the greater loss in equity based on the property’s fair market value. The U.S. Court of Appeals for the Sixth Circuit affirmed the district court’s judgment on all claims, including the amount of compensation awarded, according to online accounts of the case.

The U.S. Supreme Court in October agreed to hear the case.

In an email from law firm Cummings, McClorey, Davis & Acho, Isabella County asked that each county with a population greater than 155,000 contribute at least $15,000 for attorney fees. For smaller counties, such as Delta, they requested at least $4,000.

“If the court grants fair market value for foreclosed properties, the costs to counties could be up to half a billion dollars. Further, foreclosure as we know it in the State of Michigan will end,” CMDA Attorney Allan Vander Laan stated in the email to Delta County.

“This case is going to set precedent for all of the cases in Michigan,” Delta County Administrator Emily DeSalvo said at the board meeting Tuesday.

DeSalvo also noted Delta County’s donated funds derive from the county’s delinquent tax fund, which as of 2025 takes on about $2.6 million in delinquent taxes each year.

Those funds are then paid to each taxing entity in the county. In an email exchange provided in the Delta County Board’s agenda packet, Delta County Treasurer Sherry Godfrey warned of the potential ruling in favor of Pung.

“If Delta County couldn’t enforce the collection of the delinquent taxes, Delta County would never be made whole for the estimated $2.6 million per year we pay out,” Godfrey wrote. “It would no longer make sense for counties to collect property taxes; they’d all go bankrupt.”

According to Godfrey, this lawsuit could force counties in the state to pay all money received from the sale of a foreclosed property to its former owner, as well as not collecting delinquent taxes on that property.

“Currently, in the State of Michigan, excess proceeds from properties sold after foreclosure are paid to former owners in a court claim process. These excess proceeds payouts are the sales price, minus the back taxes owed and minus a 5% administration fee. This lawsuit, Pung v. Isabella County, would increase the amount paid to former owners beyond the excess proceeds, to the FULL sale price, no subtractions,” Godfrey wrote in a statement to the Daily Press.

“This would mean the back taxes on the foreclosed parcel would not be covered by the sale of the property. Since Michigan counties foreclose properties as a final effort to collect property taxes, a ruling in favor of Michael Pung could affect the property tax collection process in the State of Michigan.”

The U.S. Supreme Court is expected to take briefs and arguments for the Michael Pung v. Isabella County case sometime in February or March, with a decision to be released in June.