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After Scott passed away in 2004 and his wife in 2008, their son Marc moved into the house with his own family.
State law was clear.
As long as a family member lived there, the exemption remained valid.
But Isabella County officials decided otherwise.
County assessors retroactively canceled the exemption, arguing paperwork had not been resubmitted after the deaths.
The family challenged the move in the Michigan Tax Tribunal.
They won.
The tribunal ruled the family had always qualified for the exemption.
The county ignored the ruling and denied it again anyway.
Paying a Debt That Never Existed
Michael Pung, managing his brother’s estate, attempted to resolve the matter.
He went to the county clerk to pay what he believed was legitimately owed.
He was told his payment was not enough.
The county was still charging taxes tied to the exemption it had already lost in court.
A dispute of about $1,600 ballooned into $2,242 after penalties and interest.
Despite the ruling in the family’s favor, Isabella County initiated foreclosure proceedings.
“We were remodeling the house, tore down walls,” Tia Pung explained. “Thinking that there’s not a chance in hell that they can actually take this house for this reason.”
They were wrong.
A Fire Sale That Destroyed Generational Wealth
In 2019, the county auctioned the home.
The county itself had valued the property at $194,400.
At auction, it sold for just $76,008.
An investor later resold the same house for $195,000, exposing how far below market value the county’s sale had been.
Isabella County took the roughly $2,000 it claimed was owed and kept the remaining proceeds.
Federal courts later forced the county to return about $73,000 in surplus funds.
But that did not come close to restoring what the family lost.
More than $118,000 in equity vanished because the auction was structured to produce bargain prices rather than fair value.
“Somehow we lost the house. I still don’t quite understand it,” Tia told Fox News. “The taxes had been paid. Never missed a payment. Never late.”
The Supreme Court Has Already Condemned This Practice
In 2023, the Supreme Court ruled unanimously in Tyler v. Hennepin County that governments cannot keep proceeds beyond what is owed in taxes.
Chief Justice John Roberts wrote, “The taxpayer must render unto Caesar what is Caesar’s, but no more.”
That ruling stopped outright equity theft.
But it left a critical question unanswered.
Does “just compensation” mean fair market value, or does it mean whatever a government fire sale happens to bring in?
The Pung case will answer that.
A National Problem Hiding in Plain Sight
After the Tyler decision, many states reformed their laws to protect homeowners.
Others did not.
In fourteen states, counties can still seize homes and sell them cheaply, knowing they have no obligation to recover real value.
The victims are often elderly homeowners, minorities, and families managing estates after the death of loved ones.
In Minnesota alone, over 1,200 people lost their homes between 2014 and 2020 for tax debts averaging a fraction of their property’s worth.
Counties have no incentive to maximize sale prices when doing so might require returning surplus funds.
County Officials Defend the Indefensible
Isabella County’s legal filings argue that requiring fair market compensation would make tax foreclosure “nonviable.”
County attorney Matthew Nelson claimed Michael Pung “had ample time and opportunity to avoid this foreclosure.”
That claim ignores the tribunal ruling that said the taxes were never owed.
Nelson also pointed out that the county returned $73,000, adding, “But that wasn’t good enough.”
In other words, families should be grateful for whatever scraps remain after government-caused losses.
Their legal briefs warn that requiring fair value would lead to “costly litigation.”
Translated, the system only works if families lack the power to fight back.
A Constitutional Line in the Sand
The Supreme Court will now decide whether the Fifth Amendment requires compensation based on real value, not manipulated auctions.
The Court will also consider whether wiping out $118,000 in equity to collect $2,242 violates the Eighth Amendment’s Excessive Fines Clause.
Pacific Legal Foundation attorney Christina Martin put it plainly.
“It’s unconstitutional to take more than what’s owed, and now the Supreme Court will answer the next logical question, which is, how much is due.”
A Community That Sees the Truth
For the Pung family, the loss went far beyond money.
“The loss of our home had a deep financial, emotional, and mental impact,” Tia said. “It took away the feeling of stability, peace of mind, and certainly our trust in local government.”
Their neighbors understand.
Because most Americans recognize theft when they see it, even when it comes wrapped in government paperwork.
On February 25, the Supreme Court will decide whether the Constitution still protects ordinary families or whether counties can legally strip Americans of everything they worked for under the banner of tax collection.
