Category: Michigan courts

ZBA’s denial of variance for billboard did not constitute unlawful prior restraint

by Rachel Greifenkamp

International Outdoor, Inc. v City of Roseville
(Michigan Court of Appeals, May 1, 2014)

In the City of Roseville, Michigan International Outdoor, Inc. (IO) applied to erect a billboard 70 feet high, 672 square feet total, 365 feet from property that was zoned residential. Due to regulations on billboards within city limits, the Building Department denied the application. IO appealed the decision to the Zoning Board of Appeals (ZBA) who also denied the application. IO then appealed to the circuit court, challenging the constitutionality of the ordinances.  After the circuit court also found in favor of the City, IO appealed to the State of Michigan Court of Appeals.

IO argued that the ordinances of the City of Roseville constitute an unconstitutional prior restraint because the city has not applied the stated objective standards for billboards found in the ordinance in a consistent manner. It maintained that the ZBA has ignored or waived those objective standards on an ad hoc basis, and relies solely on subjective criteria such as “in harmony with the general purpose of the sign ordinance,” “injurious to the neighborhood,” and “detrimental to the public welfare” when denying billboard applications.  These criteria, IO argued, have been found in previous court cases to be insufficiently precise and therefore unconstitutional prior restraint. The city countered that the circuit court was correct when it found the regulations on their face to be narrow, objective, and definite,  and that IO’s proposed billboard did not meet the standards of those regulations.

After noting that IO’s challenge was to the application of the ordinances by the ZBA, the court noted the key holdings in previous prior restraint cases:

  • A licensing scheme that gives public officials the power to deny use of a forum in advance of actual expression is a prior restraint on First Amendment liberties.
  • Any system of prior restraints on expression bears a heavy presumption against its constitutional validity.
  • A law subjecting the exercise of First Amendment freedoms to the prior restraint of a license must contain narrow, objective, and definite standards to guide the licensing authority.
  • Moreover, a licensing law that places “unbridled discretion in the hands of a government official or agency constitutes a prior restraint and may result in censorship.

Because IO could not meet the strict application of the narrow, objective, and definite terms of the city’s Sign Ordinance, it was required to present evidence that a variance from the ordinance was necessary; i.e., that a practical difficulty or unnecessary hardship existed. The record reflected that the ZBA applied this test in determining that a variance could not be granted.  the application of the test meant that the ZBA was not operating with unbridled discretion when it denied the variance.

Additionally, IO argued that commercial speech is protected under the First Amendment.  As such, any restriction or regulation must be advance a substantial government interest, and  the ordinance must be narrowly tailored to meet that interest. IO does not believe that it is narrowly tailored because the ZBA has the discretion to grant one request for a billboard otherwise restricted by the ordinance, but deny others. The court rejected this argument, noting that the stated purpose of the ordinance – “to protect the health, safety and welfare of the citizens of the City of Roseville, including but not limited to defining and regulating signs in order to promote aesthetics, to avoid danger from sign collapse and to regulate sign materials, avoid traffic hazards from sign locations and size, avoid visual blight and provide for the reasonable and orderly use of signs” – is a substantial governmental interest.  The court simply stated that IO provided “no relevant legal authority or factual support for its claim.

The circuit court’s decision in favor of the City of Roseville was affirmed.

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Horse rescue project considered “commercial production” under (MI) Right to Farm Act; case remanded to consider GAAMPs

by Rachel Greifenkamp

Township of Webber v Bruce Austin
(Michigan Court of Appeals, April 22, 2014)

In 2011 Bruce Austin began a horse rescue project in the Township of Webber, Michigan on commercially zoned property that he had purchased for this purpose. The Township filed a complaint against Austin, alleging that the project violated the regulations of the commercial zoning district.  The Township was granted a preliminary injunction forcing Austin to temporarily cease his horse rescue project. At trial, Austin utilized the Michigan Right to Farm Act (RTFA) as an affirmative defense, stating that even though he had not yet made a profit from the project, he intended to in the future. The trial court deemed the animal rescue operation to be a valid nonconforming use of the property and was not a nuisance, and that therefore the use of the property was protected by the Michigan RTFA.  Following the trial court’s judgment, Austin filed for costs and attorney fees as well as costs for the transport, care, and feeding of the horses during the trial. Austin was granted attorney fees and costs but was denied animal care costs. The Township appealed both the judgment and the attorney fee award to the Michigan Court of Appeals.

The Court of Appeals addressed three issues critical to the outcome (1) characterization of the horse rescue project as a nonconforming use, (2) the application of generally accepted agricultural management practices (GAAMPs) under the RTFA, and (3) the horse rescue project as “commercial production” under the RTFA.

Nonconforming use.  A nonconforming use is “a vested right in the use of particular property that does not conform to zoning restrictions, but is protected because the use lawful existed before the zoning regulation’s effective date.”…When a property is transferred to a new owner, the nonconforming use may continue but cannot be expanded…To be a valid continuation of a nonconforming use, the new owner’s use must be “substantially of the same size and the same essential nature as the use existing at the time of passage of a valid zoning ordinance.” The court concluded that because the commercial zoning designation was in effect prior to Austin beginning his project, and the project was significantly different than the previous use of the property (no livestock was raised or sold), the horse rescue project was not a nonconforming use.

GAAMPs.  The township argued that the precedent set in the recently decided case of  Lima Township v. Bateson requires that a person asserting the RTFA as a defense has the burden of proving that the activity at issue is a protected operation, and that it complies with the generally accepted agricultural management practices (GAAMPs). Because the trial court’s refusal to consider the GAAMPs is directly contrary to the Bateson holding, the court determined that remand for further proceedings was necessary.

Commercial production. Finally, the township contended that the trial court’s determination that Austin’s horse rescue project was a commercial production protected by the RTFA was incorrect. The RTFA only protects activities associated with the commercial production of farm products.  While the RTFA itself does not define “commercial production,” previous cases have stated that commercial production means “the act of producing or manufacturing an item intended to be marketed and sold at a profit….There is no minimum level of sales that must be reached before the RTFA is applicable.  The trial court concluded that Austin successfully proved that he intended to operate the horse rescue project as a commercial production, and that absent clear error, the Court of Appeals could not overturn that assessment. This portion of the judgment was held by the Court of Appeals.

The judgment was reversed by the Court of Appeals and the case was remanded for rehearing the trial court level.

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Unreasonable-to-repair provision in Brighton (MI) unsafe structure ordinance passes constitutional muster

Gary Taylor

by Gary Taylor

Bonner v. City of Brighton
(Michigan Supreme Court, April 24, 2014)

Under the City of Brighton, Michigan’s code of ordinances, if a structure is determined to be unsafe and the cost of repairs would exceed 100 percent of the true cash value of the structure when it was deemed unsafe, then the repairs are presumed unreasonable, the structure is presumed to be a public nuisance, and the city may order demolition of the structure without providing the owner an option to repair it.  The unreasonable-to-repair presumption can be overcome by presenting a viable repair plan, evidence from the landowner’s own experts that the repair costs would not exceed 100 percent of the property value, or evidence that the structure has some sort of cultural, historical, familial, or artistic value.

The City ordered Leon and Marilyn Bonner to demolish three unoccupied residential structures on their property after determining that repairs would exceed 100 percent of the true cash value of each of the structures (thereby providing the Bonner’s no option to repair).  The Bonners sued the City, and the circuit court and Michigan Court of Appeals determined that the above-discussed provisions of the Brighton Code of Ordinances violated property owners’ substantive and procedural due process rights.  The City appealed to the Michigan Supreme Court.

The Supreme Court determined that the Court of Appeals erred by failing to separately analyze the Bonners’ substantive and procedural due process claims. The substantive component of due process protects against the arbitrary exercise of governmental power, whereas the procedural component ensures constitutionally sufficient procedures for the protection of life, liberty, and property interests.

Substantive Due Process.  Because property owners do not have a fundamental right to repair a structure deemed unsafe by a municipality before that structure can be demolished, the government’s interference with that right need only be reasonably related to a legitimate governmental interest. The Brighton ordinance did not constitute an unconstitutional deprivation of substantive due process because the ordinance’s unreasonable-to-repair presumption was reasonably related to the city’s legitimate interest in promoting the health, safety, and welfare of its citizens. Nuisance abatement is a legitimate exercise of police power, and demolition is a permissible method of achieving that end. The ordinance was not an arbitrary and unreasonable restriction on a property owner’s use of his or her property because the ordinances provided for circumstances under which the unreasonable-to-repair presumption could be overcome and repairs permitted.

Procedural Due Process.  The Supreme Court further determined that the  demolition procedures provided property owners with procedural due process by providing the right to appeal an adverse decision to the city council, as well as the right to subsequent judicial review. The City is not required to afford a property owner an option to repair as a matter of right before an unsafe structure could be demolished, nor is the City required to provide for a reasonable opportunity to repair the unsafe structure in order for the ordinance to pass constitutional muster.

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Michigan Right-to-Farm Act does not protect horses kept for personal use

by Kaitlin Heinen

Peggy Sue Brown v. Summerfield Township
(Michigan Court of Appeals,  August 23, 2012)

Peggy Sure Brown claimed that the Right to Farm Act (MCL 286.471) “preempts a township ordinance that prohibits her from keeping her horses on property less than one and a half acres.” The trial court, disagreed, finding that Brown was not engaged in a commercial farming operation.  She appealed.

The Right to Farm Act “states that a farm or farm operation must not be found to be a public or private nuisance if it conforms to ‘generally accepted agricultural and management practices’ (GAAMPs), according to policy determined by the state commission on agriculture. Local government may not enact or enforce an ordinance that conflicts with the Right to Farm Act or the GAAMPs.” (MCL 286.474(6)) So “any township ordinance, including a zoning ordinance, is unenforceable to the extent that it would prohibit conduct protected by the [Right to Farm Act],” which includes ordinances requiring minimum lot sizes.

The Right to Farm Act “preempts ordinances only to the extent that they impose restrictions on commercial farming operations,” which means that the Act does not apply to property owners who are not engaged in commercial operations for profit. A farm operation is defined “as activity conducted ‘in connection with the commercial production, harvesting, and storage of farm products.'” Brown referenced the subsection (MCL 286.472(b)) that mentions “the care of farm animals.” However, this subsection is listed in connection with possible farm activities conducted in a commercial operation. It is not an exception to the commercial requirement.

Brown offered no evidence that she kept her horses for profit (breeding, boarding, horse rides for fee, etc.). The Michigan Court of Appeals did not have to address  whether the farm operation provision creates a cause of action or provides a defense because the Right to Farm Act does not apply to Brown. The court  also did not have to address whether the farm operation provision applies to a new farming operation in property zoned as residential. The trial court rightly found it unnecessary to address the issues.

The Michigan Court of Appeals also held that the trial court rightly granted summary disposition on Brown’s substantive due process claim because the ordinance was not unreasonable.  The Court of Appeals affirmed the trial court on Brown’s equal protection claim as well, since she offered no evidence that she had been treated differently than any other person. The trial court’s decision was thus affirmed.

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Bridge company not a federal instrumentality; case can proceed in federal court

by Kaitlin Heinen

Commodities Export Company v. Detroit International Bridge Co.
(Federal 6th Circuit Court of Appeals, September 24, 2012)

In 1921, Congress gave the Detroit International Bridge Company’s predecessor permission to build and operate the Ambassador Bridge, which spans the Detroit River from Detroit, Michigan to Ontario, Canada. The Bridge Company is a private, not-for-profit corporation, incorporated under Michigan law. The Ambassador Bridge is also “the busiest commercial border crossing in North America,” where 26-30% of all trade between the United States and Canada occurs. Besides operating a compound for border inspections, the federal government has no involvement in the Bridge Company’s operations.

In the mid-1990s, the Bridge Company began work with the Michigan Department of Transportation on the “Ambassador Bridge/Gateway Project.”  The Bridge Company sought federal approval to build new toll plazas, a gas station, and a weigh station for trucks. In 2000, the Bridge Company asked the City of Detroit for zoning variances to complete these projects. The City denied the requests, but the Bridge Company went forward in the project. The City sued, but the Michigan Supreme Court held that the Bridge Company was a “federal instrumentality for the limited purpose of facilitating traffic over the Ambassador Bridge,” which meant that the Bridge Company was immune from the City of Detroit’s zoning regulations.

One year after the Michigan Supreme Court’s decision, Commodities Export Company filed suit against the City of Detroit and the United States in U.S. District Court, alleging that the Bridge Company had effected a regulatory taking by condemning and closing the only road that provided access to Commodities Export’s property. Commodities Export argued the City was liable for failing to protect them from the Bridge Company’s actions, and the United States was liable because it failed to control its federal instrumentality. Commodities Export also claimed that the Bridge Company is not a federal instrumentality because the United States has yet to declare it so. Commodities Export’s complaint asked for a mandatory injunction for the City to enforce its ordinances and the United States to declare whether or not the Bridge Company is a federal instrumentality.

Five months after the beginning of this suit, the Bridge Company sought permission to participate as amicus curiae, but was denied by the district court. Two months later, the Bridge Company sought permission then to intervene as a defendant. The Bridge Company claimed that the United States was not a proper party to the case, that the district court lacked jurisdiction over the United States, and that the case was the product of collusion between the City and Commodities Export. The United States filed a cross-claim against the Bridge Company in response.

The United States alleged that the Bridge Company had “misappropriated the status of ‘federal instrumentality.’” The United States also claimed that the Bridge Company “is not a federal instrumentality, of any kind, or any other type of arm, appendage, servant, or agent whatsoever of the United States,” and the Bridge Company’s representation as such is contrary to federal law. The Bridge Company filed a motion with counterclaims in response. The district court denied the Bridge Company’s motion and its motion for reconsideration, ordering the Bridge Company “to cease and desist from representing that [it is] any kind of federal instrumentality or other arm, appendage, or agency of the federal government, in state court, federal court, or elsewhere.”

One month later, Commodities Export voluntarily dismissed its remaining claims, citing a confidential settlement agreement with the Bridge Company. Dismissing the remaining claims would vacate the court’s federal instrumentality ruling, however. The United States objected. The Bridge Company also objected because a vacation of the ruling would allow the earlier opinions of the district court to stand, which were entered into without subject-matter jurisdiction. The district court granted Commodities Export’s dismissal but refused to vacate its earlier federal instrumentality ruling. The Bridge Company now appeals to the U.S. 6th Circuit Court.

In its determination of whether the federal courts have jurisdiction over the United States’ cross-claim, the U.S. 6th Circuit Court examined two issues: Article III’s case-or-controversy requirement and statutory subject-matter jurisdiction. “Under Article III [of the Constitution], the federal courts may exercise jurisdiction only if the parties have presented a live case or controversy…The United States easily clears this hurdle. Commodities Export haled the federal government into court…holding the United States liable for the wrongs of its instrumentalities.” The federal government faced the possibility of having to pay Commodities Export for the Bridge Company’s misconduct as a “federal instrumentality.” This causes a liability problem for the United States while the Bridge Company continues to claim that it is a federal instrumentality elsewhere, a problem which is certainly considered a controversy by the court. Also, the district court clearly had subject-matter jurisdiction. “‘The district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States.’ 28 U.S.C. § 1345. The United States brought this suit against the Bridge Company as soon as the Bridge Company intervened.” Therefore, federal courts have jurisdiction over the cross-claim in question.

The U.S. 6th Circuit Court next considered the impact of the Michigan Supreme Court’s federal instrumentality ruling. First, federal courts must defer state-court interpretation of state law. However, the Michigan Supreme Court dealt with a federal issue, arising under federal law that could cause liabilities for the federal government. “The effect of the Michigan Supreme Court’s holding was to prevent a city from enforcing its own zoning ordinance,” under the condition that the Bridge Company was a federal instrumentality. But the question of whether the Bridge Company is a federal instrumentality constitutes federal common law, which is appropriate for reconsideration, i.e., hearing the issues afresh, by the federal courts. Nevertheless after careful examination of federal instrumentality case law, the U.S. 6th Circuit Court reached the same conclusions as the lower courts.

The U.S. 6th Circuit Court ruled that the federal courts have jurisdiction over the United States’ cross-claim. No deference is owed the Michigan Supreme Court’s interpretation of federal common law. However, the U.S. district court correctly held the Detroit International Bridge Company is not a federal instrumentality. Likewise, the district court did not err in granting Commodities Export a voluntary dismissal motion without vacating the federal-instrumentality ruling in favor of the United States. The U.S. 6th Circuit Court affirmed the district court’s judgment.

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Lakeway easement interpreted as providing access, not a park

Gary Taylor

by Victoria Heldt

Bedford, et. al., v. Joan Yvonne Rogers, Joan Yvonne Rogers Trust
(Michigan Court of Appeals, April 17, 2012)

The long list of plaintiffs in this case is comprised of property owners within the Glen Eyrie subdivision located on Crystal Lake.  The plat (recorded in 1920) and the parties’ deeds established a 100-foot wide strip of land designated as the “lakeway” between the plaintiffs’ property and the edge of Crystal Lake.  The lots do not extend all the way to the water.  The lakeway was to be “dedicated to the common use of property owners in Glen Eyrie plat.”  Sometime after 1920, Crystal Lake Drive was constructed parallel to, and partially within, the lakeway.  Surveys done in 2001 and 2010 indicated that the border separating the property owners’ lots and the lakeway is located near the center line of Crystal Lake Drive.

Historically, some of the property owners built boathouses or storage units in the lakeway.  When Rogers purchased her lot in 1987 a 20 x 28-foot boathouse was built in the lakeway in front of her property.  In September 2009 she applied to the township for a permit to build a new 28 x 34-foot boathouse to replace the existing one.  The township granted the permit and Rogers began construction in October 2009.  The new “boathouse” was to include running water, heat, toilet facilities, a kitchenette, a workshop, and a second floor cupola.

As Rogers’ construction was in its early stages, the plaintiffs wrote a letter through an attorney asking Rogers to cease construction since the lakeway was reserved for the common use of property owners.  Rogers refused to stop the construction.  In December 2009 the Lake Township Zoning Administrator wrote her a letter stating the building violated the township’s zoning ordinance since it “includes substantial space designated by the Building Department as living quarters” and issued a stop work order.  Rogers appealed the administrator’s opinion and, in April 2010, the Board of Appeals voted that the boathouse constructed should be “allowed as a compatible non-commercial recreational facility.”  The Board did place certain conditions on the property that included the removal of certain residential features (e.g. a tub, shower, and certain fixed kitchen appliances).

In trial court, the plaintiffs filed a request for summary disposition citing trespass and nuisance.  They argued that the plat dedication granted property owners an “irrevocable easement over the lakeway property and prevented defendant from exclusively using the portion of the lakeway in front of her lot by constructing a new structure that expanded the footprint of the old boathouse.”  Rogers also filed for summary disposition, arguing she owned the portion of the lakeway in front of her property and had the right to make use of it.  The court noted that a tacit agreement existed among land owners that 100% of the lakeway was not dedicated for common use since most property owners built boathouses for personal use.  History supported that claim since most of the structures had existed for over 40 years.  The court acknowledged that the expansion of this boathouse by several feet would not further prevent other land owners from using and enjoying the lakeway.  It determined the expansion should be allowed.

On appeal the Court of Appeals first noted that a use under a plat dedication must be within the scope of the dedication and must not interfere with the owners’ use and enjoyment of the property.  In this case, the plaintiffs interpreted the plat dedication to create a park for common use by the lot owners.  This Court of Appeals disagreed.  The dedication stated that “the drive, court, spring road and lakeway” were dedicated for common use.  When interpreting language like this, it is in accordance with precedent to treat word groups in a list as having related meanings.  The drive, court, and spring road are all used as right-of-ways (access) for lot owners to travel to, from, and within the plat, not as a park (which implied open space without obstructions).  The Court stated that the lakeway is to be considered similar; i.e., as a right-of-way.  The Court further noted that the term “lakeway” suggests it should be used as a right-of-way rather than a park (since the word “way” is found within the term.)

Subsequently, the Court determined that “the scope of the dedication created an easement within the lakeway for common use of lot owners of the land as a right-of-way that allows lot owners to use the lakeway in the same manner as the drive, court, and spring road.”  Since Crystal Drive, which runs through the lakeway, satisfies the purpose of a right-of-way providing access, there is no need to prohibit obstructions such as boathouses from the lakeway.   The Court determined that the slightly larger boathouse would not prevent residents from using and enjoying the lakeway for its purpose as right-of-way any more so than the previous boathouse did.  Thus, it affirmed the trial court’s decision.

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Lake access provided through plat not interpreted to include boat docks

Gary Taylor

by Victoria Heldt

John J. Banacki v. David W. Howe and Jamie C. Howe, et al.
(Michigan Court of Appeals, March 20, 2012)

John Banacki, the Howes, and the remaining defendants are all residents of the Gilmore Lake Subdivision.  It consists of 62 lots, a street, a park, and two courts (East Court and West Court).  Lots 1-36 have water frontage on Magician Lake while the remaining 26 lots have frontage along Gilbert Street.  East Court is a 25-foot wide strip of waterfront land in between lots 12 and 13 and West Court is a similar strip of land between lots 29 and 30.  Banacki owns lot 13, while the defendants are the owners of lots 47, 48, 49, and 50.  When the property was platted in 1941, the dedication stated that “the park, street, and courts, as shown on said plat are hereby dedicated to the use of persons owning land adjacent to said park, street, or courts.”

Banacki filed a trespassing complaint regarding the defendants’ installation of a pier, boat lift, wooden dock, and decking adjacent to Magician Lake on the East Court.  He asserted that they do not have a right to use East Court or the adjacent lake frontage since they are not owners of land adjacent to East Court.  He further argued that defendants’ additions interfered with his ability to use and enjoy East Court and the adjacent property.  He sought an injunction to prevent future installation of such structures.  Banacki also pursued a quiet title to declare himself and another (Smit) the owners of the property adjacent to East Court.

The Howes and the rest of the defendants filed for summary disposition, arguing no trespass had occurred.  They asserted that the language of the plat dedication gave all persons owning land adjacent to any park, street, or court the right to use the parks, street, or courts.  They also argued they had a prescriptive easement for the use of East Court since their predecessors used the property in a similar fashion for 65 years without complaint.  Banacki responded by filing his own motion for summary disposition, arguing the language of the dedication clearly prevented anyone from the seasonal installation of boat lifts and the overnight mooring of boats  in East Court.  Therefore, the defendants’ actions interfered with all lot owners’ right to use East Court.  The district court concluded the defendants’ use of East Court exceeded the scope of the plat dedication and granted summary judgment in favor of Banacki.  This appeal followed.

The question in front of the Court was to what extent nonriparian land owners have access to East Court.  According to statute, a nonriparian owner has the right to “use the surface of the water in a reasonable manner for such activities as boating, fishing and swimming” as well as “to anchor boats temporarily.”  Any additional uses must be granted by easement, which defendants argued was given to them through the plat dedication.  Since the language was unclear, the Court looked to the way in which the land was used at the time of the plat dedication.  Defendants provided an affidavit of Jack Szymanski, a previous owner of lots 47-50 for over 50 years, who testified that he used East Court as “lake access” and for the “overnight mooring of boats, and seasonal installation and removal of a wooden pier and shore station.”  He further stated that his parents, the original owners of the property, used East Court in a similar way.  The Court noted, however, that the record did not show that these activities occurred at the time of the plat dedication.  Therefore, it relied solely on the language of the dedication.

Typically, the granted “use” of streets and alleys near navigable waters extends up to the edge of the water and includes public access to the water.  The Court consulted the common definition of a “court” and determined it should be treated in the same way.  It concluded that the defendants failed to prove that the plat dedication granted any other “use” outside of general public access to the water surface.  There was no evidence that the dedication allowed individual lot owners to monopolize East Court by permanently parking boats or installing decks and boat lifts within East Court.  In regards to the defendants’ supposed prescriptive easement, the Court noted that a prescriptive easement is usually appropriate only where an express easement has failed because of a defect.  This is not the case here.  It further compared a prescriptive easement to adverse possession, which requires an element of adversity.  There was no adversity or hostility present in this case.  Therefore, the Court concluded that no prescriptive easement was granted.  It affirmed the district court’s decision.

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Refusal to rezone to multi-family not a due process violation; did not constitute exclusionary zoning

Gary Taylor

by Victoria Heldt

DF Land Development, LLC v. Charter Township of Ann Arbor
(Michigan Court of Appeals, November 17, 2011)

DF Land Development owned a 54-acre piece of property within Ann Arbor Charter Township (Township) that was zoned “A-1”.  This zoning classification allowed farming and agricultural use or one residential unit per every ten acres.  DF Land wanted the property rezoned to “R-7” so it could build multi-family residential units.  Its request was denied.  DF filed a substantive due process claim in court alleging that the denial to rezone the property constituted exclusionary zoning and a taking of the property.  The trial court granted summary judgment in favor of the Township and dismissed DF Land’s substantive due process and takings claims.

DF Land appealed, arguing that the refusal to rezone is arbitrary and capricious and that the current zoning was unreasonably restrictive.  They were of the opinion that it violated their substantive due process rights and was an “inverse condemnation of the property through regulation.”  The Court first noted that, in a review of a city ordinance, 1) the ordinance is presumed valid, 2) the challenger has the burden of proof to prove unreasonableness, and 3) the Court gives heavy weight to the trial court’s findings.  Additionally, in order to be successful in its claim, DF Land must show that no reasonable governmental interest is advanced by the zoning classification and that the ordinance is unreasonable “because of the purely arbitrary, capricious, and unfounded exclusion of other types of legitimate land use from the area in question.”

As to the question of whether the zoning ordinance serves a legitimate governmental interest, the Court found that it did.  The evidence presented showed that the ordinance worked to “preserve the rural character, natural features, and availability of open areas by limiting residential development on the property through density restrictions.”  According to precedent, this purpose constitutes a legitimate governmental interest.  It further found that the ruling was consistent with the historical use of the property, so it was not an arbitrary decision.  DF Land argued that the statute was too restrictive because it disallowed the property’s most economically viable use.  The Court dismissed that argument as irrelevant because a property does not, by law, need to be zoned for its most profitable use.

DF Land argued that the zoning ordinance was unlawfully exclusionary because it prohibited an R-7 zoning classification on the property.  The Court noted that an ordinance would only be considered exclusionary if it prohibited that zoning throughout the entire township.  Evidence demonstrated that 28-37% of the residential units in the township consisted of multi-family housing, so the R-7 zoning classification was not forbidden in the entire Township.  Therefore, the ordinance was not unjustly exclusionary.   The Court affirmed the trial court’s decision.

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Tear down your 9,000 sq. ft. mansion (and Happy Valentines Day!)

Gary Taylor

by Gary Taylor

Thom and Lockwood Hills HOA v. Palushaj
(Michigan Court of Appeals, February 14, 2012)

The Thoms live in the Lockwood Hills development in Macomb County. The Palushajs purchased the parcel of land adjacent to the Thoms. Several deed restrictions apply to the lots in Lockwood Hills. The relevant restrictions provide that any home built must be a minimum of 100 feet from any adjacent homes, and that any home built must be a minimum of 40 feet from the side lot line.
During construction of the Palushaj’s 9,000 square foot mansion, the Thoms approached them with concerns that the new home potentially violated these deed restrictions.  The Palushajs apparently sought the advice of counsel and concluded that the restrictions were no longer valid and did not apply to their planned construction. They proceeded with construction of their home as planned, which ended up located 80 feet from the Thom’s home and approximately 28 feet from the side lot line.  After litigation spanning years, the Court of Appeals in this case was faced with the question of the appropriate remedy for the violation of the deed restriction.  The court observed that

[D]eed restrictions are a form of a contractual agreement and create a valuable property right. If a deed restriction is unambiguous, we will enforce that deed restriction as written unless the restriction contravenes law or public policy, or has been waived by acquiescence to prior violations, because enforcement of such restrictions grants the people of Michigan the freedom ‘freely to arrange their affairs’ by the formation of contracts to determine the use of land.

The court emphasized that it was “not faced with a situation where by innocent mistake a house was built that slightly encroached into the setback zone. Rather, we have a substantial,
intentional and flagrant violation of the setback requirements…”  In light of this, the court determined that demolition of all or part of the home to bring it into compliance with the deed restrictions was the only adequate remedy available to be imposed by the courts.

OBSERVATION:  This is a case involving violation of home owners association covenants.  Would the court have been as merciless if it were a zoning violation?

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Local ordinance permitted to define “available public sanitary sewer system” more broadly than state statute

Gary Taylor

by Victoria Heldt and Gary Taylor

Roger Newell and Arelene Newell v. Village of Otter Lake, County of Lapeer
(Michigan Court of Appeals, November 15, 2011)

The Newells own property in the Village of Otter Lake on which sits a structure with a working septic system.  In 2004, the Village created a special assessment for its public sanitary sewage system.  The Newells were assessed $10,475; however, they were of the opinion that the assessment should not be applied to them so they filed a complaint with the Michigan Tax Tribunal.  During the time between when the Newells filed their complaint and the time of their hearing, the Village enacted an ordinance that changed the definition of an “available public sanitary sewer system.”  Under the new definition any public sewer system that “crosses, adjoins, or abuts a parcel upon which a structure is located” is considered an “available public sewer system” regardless of how many feet the system was from the structure it services or could potentially service.  This ordinance differed from the previously governing state statute (MCL 333.12751 (c)), which “available public sanitary sewer system as  “a public sanitary sewer system located in a right of way, easement, highway, street, or public way which crosses, adjoins, or abuts upon the property and passing not more than 200 feet at the nearest point from a structure in which sanitary sewage originates.”

At the Tax Tribunal trial, the Newells argued that the assessment was unjust because they received no benefit from the sewer system (they did not connect to it, nor did they need to connect to it).  The tribunal upheld the assessment and the Newells paid it.   Since they did not connect to the system, however, they refused to pay the operation and maintenance fees that were due each quarter thereafter.  When they were notified of their delinquency on the operation and maintenance fees, the Newells filed a claim in circuit court arguing that the ordinance was preempted by the previously governing state statute, that the fee violated the Headlee Amendment, and that the assessment violated the right to equal protection under the Michigan Constitution.  The court ruled in favor of the Village, finding that the preemption claim could have been resolved in the tax tribunal hearing so the court was prohibited from ruling on it.  Additionally it found that, although a municipality is not allowed to enact ordinances that conflict with state statutes, it is free to make ordinances that expand on them.

On appeal, the Newells again made a preemption claim arguing that the state statute preempted the Village’s ordinance.  They were of the opinion that they were not required to connect to the public sewer system (per the state statute MCL 333.12751 (c)) because their structure was located more than 200 feet from it.  The Court disagreed, finding that the Village’s ordinance was not in conflict with the state statute but merely expanded on it, which is allowable.  Thus, the Village’s ordinance was not preempted by the state statue.  The Court further noted that, in matters of public health such as a sewer system, municipalities act as an agent of the state in the regulation of such systems.

Citing People v. Llewellyn, the Newells additionally argued that this area of regulation was one in which state law has exclusive jurisdiction.  This argument rested on the fact that MCL 333.12751 was not included in the list of sections that the statute specified as being expandable by municipalities.  The Court rejected this argument, finding that the statute clearly anticipated changes by local governments.  It further found that the fact that the section was not listed did not equal a declaration that the state’s statutes were the exclusive governing power in that area.

The Newells also argued that the fee violated the Headlee Act, which prohibits municipalities from enacting a tax that was not authorized by state law, and from increasing an already authorized tax without a majority vote.  The Court found that since the fee is “serving a regulatory and not a revenue-raising purpose,” it is not considered a tax.  Consequently, the Headlee Act does not apply to it.  The Court affirmed the lower court’s decision in favor of the Village.

Fees, Michigan courts, Preemption, Public sewer and/or water services, special assessments, Taxes , , ,
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