A Zoning Board of Appeals (“ZBA”) plays an important role in regulating the development of land. ZBAs interpret zoning ordinances, decide appeals from administrative decisions, and grant variances. A party aggrieved by a decision of a ZBA has the right of appeal to circuit court. A recent decision by the Michigan Supreme Court broadens the class of persons who can appeal decisions to, and from a ZBA.
In Saugatuck Dunes Coastal Alliance v Saugatuck Township, the Plaintiff, a coalition dedicated to the protection and preservation of the local coastal dunes, sought to challenge a decision of the Planning Commission granting approval of a condominium and marina project. The Plaintiff objected to the project claiming it would permanently alter dunes in the area and destroy coastal wetlands.
The Plaintiff appealed the Planning Commission’s approval of the project to the local ZBA. The ZBA ultimately decided that the Plaintiff lacked standing to pursue an appeal. Standing is the right of a person to invoke the power of a tribunal to adjudicate a claimed injury.
Plaintiff appealed the ZBA’s decision to circuit court. The circuit court sided with the ZBA. The case eventually made its way up to the Michigan Supreme Court.
The Court noted that the Michigan Zoning Enabling Act (“MZEA”) requires that a person seeking relief from a decision of a ZBA must be an“aggrieved” person or party. Previous cases had established a requirement that the aggrieved party must establish special damages different from those of others similarly situated property owners. In doing so, the special damage analysis became intertwined with a requirement for property ownership. As Saugatuck Dunes demonstrates, such a requirement can be an effective roadblock to public interest groups pursuing environmental policy objectives.
After reviewing the development of case law requiring ownership of property to pursue appeals to and from a ZBA, the Supreme Court overruled those cases to the extent they require an appealing party to own real property. Such a requirement amounts to an extra-statutory limitation on the term “aggrieved.” The Court stated nowhere in the MZEA is there a requirement limiting the right to appellate relief in zoning decisions to only real property owners. By using the broader phrase person or party aggrieved, the Legislature implicitly rejected the idea that standing is based on proximity to a proposed development.
The Court set forth three criteria necessary to meet the “aggrieved” standard under the MZEA. First, a party must have participated in the challenged decision by taking a position. The court noted participation could be established by submission of a letter or making a public comment at the hearing. Secondly, the party must have a legally protected interest or right that will likely be affected by the challenged decision. Finally, the party must provide evidence of special damages arising from the challenged decision in the form of an injury/burden that is different in kind/degree than others in the local community.
The Court remanded the matter back to the circuit court for reconsideration of the Plaintiff’s arguments in support of standing.
A recent decision by the Michigan Court of Appeals in Coosard v Tarrant, –N.W.2d–(2022) provides an interesting example of one court’s application of fraud to a set of disjointed facts.
Plaintiffs purchased a cabin from Defendant. An online listing for the property included a photograph showing a cabin with an attached porch, garage and fence. The listing did not mention the garage specifically. It did state however that all the buildings were included in the sale.
Defendant completed a Seller Disclosure Statement (“SDA”). It indicated: 1) the Defendant had no knowledge of any common features of the property that were shared with adjacent landowners such as fences or driveways, and 2) Defendant was not aware of any encroachments. The SDA did indicate that structural modifications were made using unlicensed contractors and no permits were pulled.
After closing, Plaintiffs discovered that the patio, garage, and fence were located on property belonging to the neighbors. The Defendant’s SDA had disclaimed any knowledge of boundary defects. At trial, the adjacent neighbors testified otherwise. They claimed that on two separate occasions, a family representative had notified Defendant of the encroachment and told him to remove his stuff from their property.
The trial court did not believe the Defendant knowingly lied about the encroachment on the SDA. It awarded summary disposition to the Defendant on the basis that it did not believe the Defendant’s conduct had risen to the level necessary to support a claim of fraud. In doing so, it stated the SDA was a giant red flag that there might be problems with the property.
The COA first addressed whether the dispute could be resolved by simply applying the AS-IS provision contained in the purchase agreement. An AS-IS provision transfers the risk of unknown defects to the buyer. While an AS-IS clause will not transfer the risk to a buyer where the seller has committed fraud, the risk will be transferred when the defect should have been discovered by the buyer but was not. The court claimed that whether the Plaintiffs had the means to discover the encroachment in light of the SDA involved consideration of the other information communicated to, or observed by Plaintiffs.
The photo of the fence in the online listing showed that while it was in good condition, it had been present for enough time to accumulate junk stacked near or against it. The neighbor’s pole barn was located beyond the fence. Tall trees grew between the fence and the pole barn suggesting the fence was the property line. The court noted the property was small and the natural tendency would be to assume that if there was an encroachment, it would have been quickly noticed and acted upon by either a governmental entity and/or person with superior title. The court concluded that because the Plaintiffs had knowledge that: 1) unpermitted modifications were made, 2) the SDA indicated Defendant was not aware of any encroachments, and 3) the garage and fence had been present for some time (based on the trees and junk), it was not unreasonable for the Plaintiffs to expect that the features present in the online photograph were part of the property. Therefore, the court did not believe the Plaintiffs should have discovered the defect.
The court then turned its focus on whether the Defendant committed fraud. It thought the neighbors were neglectful in failing to object to the fence and garage, and that could have reasonably induced Defendant to believe there was no encroachment. The only knowledge of the encroachment given to Defendant was: (1) a note duct-taped to his door, and (2) a single conversation with the neighbors. The court noted both of these communications appeared essentially “out of the blue,” and the evidence suggested they were both highly confrontational and unaccompanied by any supporting evidence. Furthermore, the testimony of the neighbors indicated they were not entirely clear about what they told the Defendant. While it might have been wise for Defendant to investigate the issue after receiving the neighbors’ communications, it would not have been unreasonable for Defendant to dismiss those communications.
Because there is no other evidence suggesting that Defendant was aware of any encroachment, by implication, Defendant did not knowingly commit fraud with the MLS listing. Therefore, the COA held the trial court’s grant of summary disposition in Defendant’s favor was proper.
As an aside, the court identified a potential lifeline for the Plaintiffs. It pointed to the possibility of an adverse possession claim against the neighbors. While the Plaintiffs themselves could not meet the 15-year statutory period to support a claim of adverse possession, under certain circumstances, a party may be able to tack on periods where the property was owned by their predecessors in title. The COA suggested that Plaintiffs look into whether the periods of ownership by Defendant and his predecessor in interest could be used to meet the 15-year period to support a claim for adverse possession.
Lessons learned? Both the trial court and COA were critical of the Plaintiffs and Defendant. They believed this dispute could have easily been avoid. The most prudent course of action for both parties would have been to obtain a survey prior to purchasing the property.
The Right to Farm Act (“RTFA”) was enacted to protect farmers. The Court in Northville Twp v Coyne, 170 Mich App 446 (1988) stated:
The Legislature undoubtedly realized that, as residential and commercial development expands outward from our state’s urban centers and into our agricultural communities, farming operations are often threatened by local zoning ordinances and irate neighbors. It, therefore, enacted the Right to Farm Act to protect farmers from the threat of extinction caused by nuisance suits arising out of alleged violations of local zoning ordinances and other local land use regulations as well as from the threat of private nuisance suits. Id. at 448.
Just how big is the umbrella of protection created by the RTFA? Not as big as one would think.
The RTFA protects farms or farm operations from nuisance suits in two ways. MCL 286.473 provides:
(1) A farm or farm operation shall not be found to be a public or private nuisance if the farm or farm operation alleged to be a nuisance conforms to generally accepted agricultural and management practices according to policy determined by the Michigan commission of agriculture.
(2) A farm or farm operation shall not be found to be a public or private nuisance if the farm or farm operation existed before a change in the land use or occupancy of land within 1 mile of the boundaries of the farm land, and if before that change in land use or occupancy of land, the farm or farm operation would not have been a nuisance.
Further protection is offered by MCL 286.473b. It provides that if a farm or farm operation prevails in any nuisance suit,the farm or farm operation may recover the actual amount of costs and expenses determined by the court to have been reasonably incurred in connection with the defense of the action, together with reasonable attorney fees.
The Court of Appeals considered the breadth of protection offered by MCL 286.473b in Township of Richmond v Rondigo LLC, 2013 WL 951100. It agreed the RTFA shields a farm or farm operation from a nuisance suit if the farm complies with generally accepted agricultural and management practices, GAAMPs for short. The Court then seemed to imply that the only way a farm or farm operation could recover fees under MCL 286.473b is if the farm or farm operation satisfied any applicable GAAMPs. In doing so, it ignored MCL 286.473(2) and any other potential nuisance claim that could be asserted against farmers.
The defendant in Rondigo filed an application for leave to appeal. That application was denied. Justice Markman dissented. He agreed that GAAMP compliant farms or farm operations are immune from characterization as a nuisance.While that is one way to fit under the RTFA umbrella of protection, it’s not the only way.Justice Markman observed that MCL 286.473b states a prevailing farm or farm operation in any nuisance action is entitled to expenses and that there is no language limiting an award of fees and costs to defendants who are GAAMP compliant. He concluded nothing in MCL 286.473(b) suggests that a farm or farm operation that is not compliant with GAAMPs but nonetheless prevails in a nuisance suit is somehow barred from receiving costs.
The benefits offered by the RTFA are even more restrictive when one considers the scope of existing GAAMPs. Some farming activities are not covered by a GAAMP. Drainage is one such area. While there are a couple minor references in the nutrient GAAMP, drainage issues are left to the Drain Code. If a farm or farm operation prevails in a nuisance suit alleging a drainage issue, the holding of Rondigo would bar any recovery of fees or costs. The financial impact of a nuisance suit filed against a farm or farm operation for a drainage issue would appear to not have any different financial impact than one for irrigation water use, which is covered by a GAAMP. If the goal is to protect farmers from the threat of extinction caused by nuisance suits, shouldn’t all nuisance suits be treated the same.
Many municipalities have enacted local tree ordinances that must be taken into consideration prior to new construction. These ordinances are usually permit driven and require approval to remove trees from one’s property. The ordinances typically involve some classification scheme of trees by either size or species. They may also impose obligations to plant replacement trees to offset the trees lost during construction.
The validity of a local tree ordinance was challenged in F.P. Development, LLC v Charter Township of Canton, 16 F.4th 198(2021). F.P Development purchased property adjacent to its existing site for expansion of its operations. Prior to construction, 159 trees were removed from the site. No permit was obtained prior to removal as required by the township’s Forest Preservation and Tree Clearing Ordinance. The Township learned of F.P.Development’s actions and issued a stop work order. After completing an investigation confirming the number of trees that had been removed, the Township gave F.P. Development the option of either planting replacement trees or depositing a rather large sum of money into the Township’s Tree Fund. F.P. Development did neither and filed suit challenging the validity of the Township’s ordinance.
F.P. Development claimed that the Township’s Tree Ordinance constituted a violation of the Takings Clause of the Fifth Amendment. The Takings Clause states that “private property” shall not “be taken for public use, without just compensation.” The district court held that the ordinance did violate the Takings Clause. The Court of Appeals agreed.
The court believed the Township’s effort to justify the detrimental effects of tree removal fell short of the threshold need to avoid a taking. The Township’s had asserted that the permit conditions “could” offset some of the harm caused by tree removal. The court pointed out that was different then asserting the harm “will, or likely to” offset the conditions. To meet constitutional scrutiny, permits issued by the Township needed to bear some relationship to the impact of the proposed development and furthermore, there must be some proportionality in the mitigation requirements. The ordinance’s mitigation requirements were set in stone and did not take into account the actual impact of the removal of the trees. Conclusory assertions of a general impact are not sufficient. There must be some individualized determination of the actual impacts to the site.
The holding in F.P. Development doesn’t appear to be the axe that sends tree ordinances to the mulch pile however. It does mean that governmental entities will have to do a better job of demonstrating how removal of trees causes harm to the surrounding area on an individualized basis. Canton Township used a broad justification to support its ordinance claiming its purpose was to promote an increased quality of life through regulation of trees. In contrast to Canton Township, the tree ordinance for Grand Rapids Michigan provides eleven specific factors that its ordinance is designed to address.
The benefits of trees are well known. The Food and Agriculture Organization of the United Nations has identified numerous benefits associated with the presence of trees such as increased property values, removal of carbon dioxide and improvements to water quality. An ordinance that weaves the known benefits of trees into its statutory framework and applies them to an individual piece of property would appear to address the deficiencies noted by the F.P. Development court.
Purchasers of real estate frequently claim they were misled about the condition of a property. With the sizzling real estate market, sales are rushed and due diligence is often an afterthought. Purchasers are often surprised to learn that fraud requires something more than a misleading or false statement. The recent case of Plets v Triple L Land Development, LLC shines a light on the elements of an actionable fraud case.
The Plets Plaintiffs owned property that was formerly used for auto repair. Automotive service shops have historically used a variety of hazardous substances that could potentially contaminate the soil and groundwater. Plaintiffs agreed to sell the property to Defendant. The sales contract stated:
“This offer is contingent on … (2) receiving satisfactory evidence the land and soil …is free of contaminants and pollution and proof is provided.
Defendant ultimately purchased the property on a land contract.
Plaintiffs’ environmental consultant had collected soil and groundwater samples. It prepared a Phase II Report indicating the property was contaminated. There was a factual dispute as to whether the Phase II report had been provided to the Defendant. Plaintiffs’ real estate agent claimed she sent a copy of it to the Defendant’s agent. Defendant’s agent denied ever receiving that copy.
After the sale, Defendant sought to transfer the property to another party. The new purchaser performed its own Phase II Environmental Assessment of the property. It also confirmed the presence of contaminants in the soil and groundwater. Based on the new information, the Defendant stop paying the land contract. Plaintiffs sued the Defendant for breach of contract. Defendant counterclaimed and sought to void the land contract on the basis of fraudulent inducement.
The Trial Court granted summary disposition to the Defendant. The Court of Appeals was not convinced that Defendant had established a claim for fraud. It reversed and remanded the case for further proceedings.
To prove fraud, a party must establish six elements: (1) that the opposing party made a material representation; (2) that the representation was false; (3) that when the opposing party made the representation, the opposing party knew that it was false, or made it recklessly, without knowledge of its truth and as a positive assertion; (4) that the opposing party made the representation with the intention that the party would act upon it; (5) that the party acted in reliance upon it; and (6) that party suffered damage.
The COA agreed that the Defendant had established the first three elements of fraud. However, the Defendant was required to prove more than just a false representation. It also had to prove that (1) Plaintiffs made the false representation with the purpose of inducing Defendant to enter into the purchase; and (2) it purchased the property in reliance on Plaintiffs’ false representation.
The COA held that Defendant had failed to provide evidence unequivocally establishing reliance. If Defendant had received a copy of the Phase II Report from the Plaintiffs’ real estate agent, it would be difficult to claim reliance on any contrary representations of the Plaintiffs about the property’s condition. Conversely, if Defendant never received the Phase II Report, it could claim reliance on Plaintiffs’ representation that the property was clean because it had no other way of knowing the property was contaminated. The issue of whether Defendant was justified in relying on Plaintiffs’ representation would have to remain unresolved until it was determined whether the Defendant actually received a copy of the Phase II Report.
Answering the question of whether Defendant received a copy of the Phase II Report was also necessary to determine whether the Plaintiffs’ intended to defraud the Defendant. If the Phase II Report was sent to Defendant’s agent as Plaintiffs’ agent claimed, reasonable minds could conclude that Plaintiffs had no intent to defraud Defendant. On the other hand, because Plaintiffs did not correct Defendant’s misunderstanding about the true condition of the property, reasonable minds could also conclude the opposite.
As illustrated by Plets, it’s not enough to say the seller told me everything was fine but it wasn’t. That’s the beginning of the analysis, not the end. Each and every element of a fraud claim has to be proved. Sometimes, that is easier said than done.
The Michigan Court of Appeals has offered much needed guidance to those considering pursuing toxic tort claims. That guidance, found in the case of Powell-Murphy v Revitalizing Auto Communities Environmental Response Trust, 2020 WL 4722070 (2020), sets forth what a plaintiff must show to overcome the sometimes difficult causation requirement required in these type of claims.
Powell-Murphy involved workers at the United States Postal Service Metroplex Processing and Distribution Center in Pontiac, Michigan (the “Metroplex” facility). Plaintiffs claimed the Metroplex facility was built on land containing pools of contaminants. Decomposition of those contaminants resulted in the generation of methane and other toxic gasses. Plaintiffs alleged they were exposed to hazardous levels of those gases while working at the Metroplex facility and as a result, suffered a variety of physical ailments.
Toxic torts are a type of negligence action. In any negligence action, the plaintiff must show that but for the defendant’s actions, the plaintiff’s injury would not have occurred. In a toxic tort action, that requires the plaintiff to show that the complained of substance is capable of causing an injury AND the substance caused that injury. That can be a difficult hurdle to meet. The causes of many illnesses like cancer are not fully understood. In addition to the toxicity of a particular substance, exposure (concentration and duration) also plays a role. With these factors in mind, what is a plaintiff required to show to allow a jury to make a reasonable inference based on the facts.
The Powell-Murphy court stated the mere existence of a toxin in the environment is not enough to establish causation without proof that the particular level of exposure could cause the plaintiff’s symptoms. Quoting Justice Markman’s concurring opinion in Lowery v Enbridge, 500 Mich 1034, 1043 (2017), the court stated “causation requires not simply proof of exposure to the substance, but proof of enough exposure to cause the plaintiff’s specific illness.”
The court acknowledged plaintiffs had presented testing evidence to show the presence of methane in parts of the Metroplex facility had increased over pre-construction levels. However, the court noted the absence of any evidence of the specific levels of methane (or other potentially harmful toxins) in or around the Metroplex facility to which Plaintiffs were exposed. Without that information, the court concluded a fact-finder could not determine whether the alleged exposure could have caused plaintiffs’ injuries.
The lesson to be learned from Powell-Murphy is that all plaintiffs asserting a toxic tort claim must show the estimated amount and duration of exposure at issue before the fact-finder can reasonably conclude that exposure to the defendant’s toxin in the amount and duration alleged is capable of causing the alleged injury.
In Atlantic Richfield Company v Christian, 140 S. Ct. 1335 (2020), the U.S. Supreme Court touched upon the ramifications of being a Potentially Responsible Party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act, U.S.C.A. § 9601 et. seq. (“CERCLA”). Atlantic Richfield involved the Anaconda Copper Mining Company. Anaconda previously operated three copper smelters in Montana. Emissions from its smelters resulted in elevated levels of arsenic and lead being deposited over a widespread area some 300 square miles in size. Atlantic Richfield had purchased Anaconda in 1977. A few years later, the area around the smelters was designated a Superfund Site. Since that time, Atlantic Richfield has been working to remediate the Site.
A group of landowners brought suit against Atlantic Richfield in state court. Those landowners sought to recover restoration damages from Atlantic Richfield in order to clean up their property in conformance with their own cleanup plan. By design, the landowners’ plan was intended to achieve a degree of cleanup that exceeded what Atlantic Richfield and the EPA had agreed upon. While Atlantic Richfield’s plan would have allowed up to 250 ppm of arsenic to remain in the soil after cleanup, the landowners plan set the arsenic limit at 15 ppm. The landowners plan included excavation of contaminated soil down to two feet below grade; the EPA approved plan only required one foot of excavation.
Atlantic Richfield defended the action by claiming any award of restoration damages was improper because the landowners’ cleanup plan exceeded what was required under the EPA approved plan. In doing so, it claimed the landowners were PRPs. If the landowners were PRPs, their restoration plan would need EPA approval pursuant to Section 122(e) (6) of CERCLA, which governs inconsistent response actions.
The Montana Supreme Court held that the landowners were not PRPs and thus, no EPA approval of their restoration plan was needed. The U.S. Supreme Court disagreed. CERCLA imposes liability on status. The court noted that if a person owns property where hazardous substances are located, that person is a PRP regardless of whether they actually played a role in causing the contamination. Because there was no disputing that contaminants were located on the landowners’ property, the court considered them PRPs.
The statute of limitations had run against the landowners. Because they were no longer subject to a lawsuit for recovery of cleanup costs, the landowners claimed they could not be considered PRPs. The court stated the landowners could not simply escape their status as PRPs because they were no longer subject to suit. Even if a person is not subject to suit, they are still a PRP under CERCLA.
The landowners claimed if they were PRPs, the government would have an easement over their property requiring them to obtain EPA approval for ordinary improvements like installing a sandbox for their grandchildren. While acknowledging CERCLA’s broad definition of remedial action, the court noted its reach is limited. It called out to the grandchildren of Montana to rest easy. Remedial action does not include planting gardens, installing sprinklers or sandboxes.
Lastly, the landowners claimed it was unfair to treat them as PRPs because they never received notice of those settlement negotiations between Atlantic Richfield and the EPA. Once again, the court did not believe the landowners could simply escape their status as PRPs because they were not provided notice of settlement negotiations. EPA has a policy of not suing innocent landowners which the court suggested explained why the EPA did not include them in settlement negotiations. Even if the landowners should have received notice, the Court held that lack of notice was not determinative of their status as PRPs. In the end, the court held that EPA approval of the landowners’ cleanup plan was required.
If a tree falls in the woods, someone may not hear it, but somebody might pay for it if that tree was cut on property of another without permission. Michigan has a statute making it a trespass to remove trees from the land of another. MCL 600.2919 states:
Any person who:
(a) cuts down or carries off any wood, underwood, trees, or timber or despoils or injures any trees on another’s lands, …without the permission of the owner of the lands, or on the lands or commons of any city, township, village, or other public corporation without license to do so, is liable to the owner of the land or the public corporation for 3 times the amount of actual damages.
Treble damages apply when the trespass is willful as opposed to casual or involuntary. If a person knows where the property line is, or it is visibly marked, and one enters anyways without the owner’s permission, that trespass is willful.
In the process of removing larger trees, many smaller ones can be damaged. In Skeels v Starrett, 57 Mich 350, 354 (1885) the court held where the action was for wrongful cutting, and it was alleged that removal of timber injured the remaining timber, the value of the remaining timber was also an element of damages.
In addition to cleanup of the property being a compensable damage, it is subject to trebling. The court in Miller v Wykoff, 346 Mich 24, 26-27(1956) stated that damages subject to trebling could also include cleanup costs to remove the tree tops, debris and fill in the stump holes on the property that was logged.
All things considered; it would seem to be a lot less expensive to get one’s wood supply from a local lumber yard than an unwilling land owner.
I’d like to thank my team members from the Tuscola County Democratic Committee and Republican Buzz for helping me on Saturday, September 21st. You guys were awesome. We removed so much junk from one mile of the river, we couldn’t transport all of it to the takeout point and were forced to stage the rest along the river. Glad to report the staged material was removed this week. A big thanks goes out to Gene Suuppi of the Cass City Greenway for organizing another successful cleanup. Well done my friend. Nothing would make him happier than seeing more people at next year’s cleanup…
In Henry v Dow Chemical 2017 WL 239069, the Michigan Court of Appeals addressed the application of the statute of limitations to claims arising from the presence of dioxin contaminationalong the Tittabawassee River in Saginaw County. The plaintiffs claimed they sustained injuries in 2002 when the MDEQ released a series of bulletins advising residents of proposed cleanup activities. The defendant claimed information about the dioxin contamination was known to the public in the early 1980sand the cause of action accrued in 1984 at the latest. The Court of Appeals held the bulletins issued by the MDEQ in 2002marked the creation of the damageelement necessary to support the plaintiffs’ claims for nuisance and negligence.
The holding of the Court of Appeals was reversed by the Michigan Supreme Court in Henry v Dow Chemical Co., 501 Mich 965 (2018). The Court stated a claim accrues at the time the wrong upon which the claim was based was done regardless of the time when the damage occurred. The claimed “wrong” was the presence of dioxin in the soil of Plaintiffs’ property. Thus, the plaintiffs’ claims accrued the date that dioxin was first present on their property.
In Robinson v MT Clark, Inc. 2018 WL 6252544, in reliance on Dow, the Michigan Court of Appeals dismissed the plaintiff’s claim for ingestion of water contaminated with gasoline constituents. The plaintiff claimed the statute of limitations began to run when she was notified that her well water was contaminated. The Court held the statute of limitations began to run seven years earlier when she moved into her house. At that time, she began to ingest the water that admittedly tasted bad due to contaminants already present in the well. The Court of Appeals agreed that the plaintiff’s claims were time barred.
Similarly, in Burton v Michigan Sugar Company, 2019 WL 1211455, the plaintiffs sued the defendant in 2016 on account of odors emanating from its sugar beet processing plant. While the severity of the odors increased in 2013 [three years before the suit was filed], the evidence showed that noxious odors were being released over a decade before. As such, the Court of Appeals held that plaintiffs’ claims were time barred and ordered that they be dismissed.
It appears that the door opened by the Court of Appeals in Dow is now officially shut.