Sewage holding tank pumped out by the city does not constitute “city sewer services”

by Hannah Dankbar

Charter Township of Haring v City of Cadillac
Michigan Court of Appeals, March 5, 2015

In the early 2000s the Charter Township of Haring signed an agreement with the city of Cadillac in accordance with MCL 124.22 which allows two or more local units of government to “conditionally transfer property for a period of not more than 50 years for the purpose of an economic development project” by means of “a written contract agreed to by the affected local units.” This contract conditionally transferred property in East Haring over to Cadillac so that Cadillac could provide public safety and infrastructure services for the property. The contract said that the property would belong to the city in 2053, however there was an early termination and reversal clause affecting part of the property, the Boersma parcel.

In relevant part, the early termination clause states:  For the [Boersma parcel], City water and/or City sewer services must be provided no later than 10 years from the effective date of this agreement. In the event that City water and/or City sewer services are not provided within the 10 year term provided above, then the real estate described in this paragraph shall be automatically removed from the terms of this agreement and the jurisdiction for such real estate shall immediately revert to the Township.

The contract was not specific about what constitutes “city water or sewer.” Cadillac did not put in a sewer pipeline that led to the wastewater treatment facility, rather the City installed a self-contained sewage holding tank and a truck was used to pump the sewage in order to transport it to the facility. Haring sued Cadillac in 2003 claiming a breach in the contract, and seeking termination of the contract for failing to install a sewer system.

The early termination clause specified that jurisdiction over the Boersma parcel would “immediately revert” to Haring Township if Cadillac failed to provide the Boersma parcel with “City water and/or City sewer services” within ten years of the agreement. The Township argued that the sewer services that Cadillac provides to Boersma are different, and of lower quality, than the services it provides to the other properties within their jurisdiction. Neither the early termination clause nor the wider contract defined “City sewer services.” The Court of Appeals referred to dictionary definitions of “city,” “sewer,” and “services” to ascertain the “plain and ordinary meaning” of the term as used in the agreement.

The infrastructure Cadillac installed on the Boersma parcel merely collects sewage in a holding structure, and leaves the sewage on the property. It does not “carry off waste water and refuse” to another location—the dictionary definition of what a “sewer” does…. The fact that Cadillac planned to upgrade the sewage infrastructure on the Boersma parcel militates against finding that the existing infrastructure satisfies the mandates of the early termination clause, because it indicates that Cadillac believes the existing infrastructure to be inadequate in some way—and perhaps not the “sewer” contemplated by the contract.

To meet the conditions of the agreement Cadillac must have installed a sewer pipeline that leads to the wastewater treatment plant within ten years of signing the agreement.  Accordingly, the Court of Appeals found that the property “immediately reverted[ed]” to the Township.

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