Michigan family seeks justice after courts back illegal foreclosure profiteering

A tax assessor treating social media with more legal reverence than a judge’s ruling sounds unthinkable of Michigan. Yet, that’s exactly what happened to the Pung family of Michigan. They lost their home, their equity, and their rights over a tax bill that was improperly imposed.

Their fight for justice is now a constitutional property rights battle before the U.S. Supreme Court.

Scott Pung bought the family home for $125,000 in 1991. It was his American dream—a sprawling three-bedroom house in Isabella County’s Union Township, a small mid-Michigan community where he raised his kids, Katie and Marc.

“All my memories of that house are tied to my dad,” says Marc. “It was a big part of my life.”

When Scott died unexpectedly in 2004, his wife, Donnamarie, lived in the home until her death in 2008. Marc began raising his own family there with his wife, Tia, and their son, Eric. Because Marc was only 19 when his dad passed, his great-uncle Mike Pung handled the estate and property taxes—work that should have been routine.

It wasn’t.

“My nightmare started June 10th, 2010,” says Mike. “I received a letter in the mail saying, ‘We have denied your PRE.’” The PRE, or Principal Residence Exemption, is a local tax exemption for people who live in their own home. Scott properly claimed it in 1994 and the exemption applied for years without issue. But in 2010, township tax assessor Patricia DePriest abruptly revoked it retroactively for 2007–2009, claiming the estate should have refiled paperwork after Scott’s death.

Mike appealed, and in 2012, Michigan state courts agreed the exemption is valid as long as Scott’s heirs still lived in the home. No new paperwork required. Courts also overturned all PRE denials, including later ones for 2010 and 2011 that DePriest added during the tribunal dispute.

“In the meantime, they finally gave me the PRE for 2012,” says Mike. “I thought my nightmare had ended.”

It hadn’t.

When Mike went to pay the 2012 taxes, the clerk said his check, written for the amount on the bill, was short. DePriest had quietly revoked the exemption yet again—after the year’s tax rolls had closed—and never sent him an updated bill.

Summoned to the counter, she insisted it was because Marc didn’t live in Union Township. “I said, ‘What are you talking about?’” Mike recalls. “She said, ‘It’s all over Facebook.’”

DePriest was referring to Marc’s Facebook profile, created years earlier while on a temporary work assignment in Denver, a detail irrelevant to his Michigan residency.

“I was in Denver at the time so I put that I was from Denver,” says Marc.

Exasperated, Mike went to retrieve Marc. “I was gone 12 or 15 minutes. I came back with Marc and said, ‘I’ve been to Denver!’”

Marc presented his Michigan driver’s license and Mike paid the lawful amount, but none of it mattered. DePriest treated the home as delinquent, later telling a judge, “I don’t care what he says,” referring to the tribunal judge’s order.

Isabella County then pressed ahead with foreclosure to collect the disputed $1,600 tax debt that grew with interest and penalties to $2,242—the only “unpaid” tax in family history.

Meanwhile, DePriest turned over the “delinquent tax” account to the county. The county foreclosed, without the Pungs receiving any notice. In fact, the County mailed the letter that explained how they could redeem the property after the redemption deadline had passed.

The Pungs fought back and even tried to pay the tax they never owed. The county refused and in 2019 auctioned the home for $76,008—less than half its admitted fair market value of $194,400, a value confirmed when the buyer resold the home for $195,000—and kept every penny. More than $190,000 of the Pungs’ equity vanished overnight.

“I felt like I was in the Twilight Zone. We had just put $30,000 of renovations into it to make a safe, comfortable home for our growing family,” says Marc. “That got taken right from us.”

Marc and Tia faced eviction but they had steady jobs and eventually bought a new home. Still, the injustice was staggering and they weren’t backing down.

“It’s terrible to destroy somebody’s life,” declares Mike. “Right is right, wrong is wrong.”

For decades, Michigan law allowed counties to seize and sell foreclosed homes, and pocket the entire surplus, wiping out life savings, retirements, and family legacies.

Keeping more than what’s owed in foreclosure sales isn’t just immoral. It’s unconstitutional, affirmed in PLF’s victories at the Michigan Supreme Court in Rafaeli v. Oakland County (2020) and the U.S. Supreme Court in Tyler v. Hennepin County (2023).

But neither ruling addressed the heart of the Pungs’ ordeal: when the government unnecessarily takes a home to collect taxes, how much must it pay back? Full fair-market value? Or a fire-sale auction price? And taking a $200,000 home over a comparatively minuscule debt isn’t tax collection. It’s a fine.

The Pungs brought both takings and excessive fines claims in federal courts, which recognized the taking, but limited compensation to the auction surplus (about $73,000), and rejected the excessive fines claim.

Next stop, the nation’s highest court. Michigan attorney Phil Ellison led the Pungs’ fight through the lower courts to the Supreme Court where he’ll argue the case. PLF is serving as co-counsel in defending constitutional protections for the Pung family and families nationwide.

“When the government can take nearly an entire home’s value over a tiny—or nonexistent—tax debt, that’s not enforcement. It’s unconstitutional confiscation and punishment,” says PLF Senior Attorney Christina Martin. “The Supreme Court will decide whether families like the Pungs are protected from financial penalties that bear no relationship to what they supposedly owe.”

“My dad would be turning over in his grave if he knew this was happening,” Marc says. “I just want it to be right and not have anybody else go through this.”