537 N.W.2d 258 (Mich.App. 1995), 167306, Oakland Hills Development Corp. v. Lueders Drainage Dist.

Docket Nº:Docket No. 167306.
Citation:537 N.W.2d 258, 212 Mich.App. 284
Opinion Judge:PER CURIAM.
Party Name:OAKLAND HILLS DEVELOPMENT CORPORATION, Plaintiff-Appellant, v. LUEDERS DRAINAGE DISTRICT and City of Rochester Hills, Defendants-Appellees.
Judge Panel:Before HOOD, P.J., and SAWYER and GRANT, [*] JJ.
Case Date:September 15, 1995
Court:Court of Appeals of Michigan

Page 258

537 N.W.2d 258 (Mich.App. 1995)

212 Mich.App. 284



LUEDERS DRAINAGE DISTRICT and City of Rochester Hills,


Docket No. 167306.

Court of Appeals of Michigan.

September 15, 1995

Page 259

July 21, 1995

Submitted May 9, 1995, at Detroit.

Released for Publication Sept. 15, 1995.

Page 260

[212 Mich.App. 286] Miller, Canfield, Paddock & Stone by Joseph F. Galvin and Joanne B. Faycurry, Detroit, and Vlcko, Lane, Payne & Broder, PC by Andrew J. Broder and Carol L. Fossee, Bingham Farms, for plaintiff.

Kohl, Secrest, Wardle, Lynch, Clark & Hampton by William P. Hampton and Thomas R. Schultz, Farmington Hills, for Lueders Drainage Dist.

Campbell, Keenan, Harry, Cooney & Karlstrom by Robert L. Sharbaugh and Thomas L. Gruich, Clarkston, for City of Rochester Hills.

Before HOOD, P.J., and SAWYER and GRANT, [*] JJ.


Plaintiff appeals as of right the [212 Mich.App. 287] trial court's granting of defendants' motion for a directed verdict. We affirm in part and reverse in part.

This case involves negotiations with respect to an eighty-three-acre parcel of property located in Rochester Hills. Although the facts are rather lengthy and complicated, the parties stipulated certain facts, which were made a part of the final pretrial order. Approximately thirty-nine acres of the property are uplands suitable for construction, while the remaining forty-four acres are wetland. Plaintiff's predecessor in interest in the property was WX22, a corporation that assigned its interests to plaintiff in 1991. In June 1988, acting pursuant to an option agreement that was entered into in May 1987, WX22 purchased the property from a private landowner.

Simultaneous with exercising its option on the property, WX22 entered into an option agreement with Bernard Glieberman, giving Glieberman the option to purchase approximately fifty-two of the eighty-three acres, and Glieberman tendered a down payment of $525,000. This agreement was amended in October 1988. The amendment decreased the $1,600,000 purchase price of the fifty-two acres to $1,575,000 and gave Glieberman an additional option of purchasing the remaining wetland acreage for $100,000. Glieberman's right to rescind the agreement and receive a return of his down payment was secured by a $475,000 promissory note by WX22 to Greenpointe Condominiums, of which Glieberman was the principal, and a mortgage on the entire eighty-three acres. This note and mortgage were amended, adding a $125,000 loan from Greenpointe to WX22.

Before WX22's purchase of the property in 1988, the Oakland County Drain Commissioner had begun consideration of the need to improve the [212 Mich.App. 288] existing drain currently serving the property, an "open" drain known as the Sprague Drain. It was eventually determined that part of the wetland portion of the eighty-three acres would be needed for the construction of a new drain. Negotiations were initiated for the acquisition of the desired land. During these negotiations, which continued after WX22 purchased the property, WX22 pursued plans to develop the upland

Page 261

portion with multiunit condominiums. In June 1989, WX22 and Glieberman sent Lueders Drainage District (Lueders) an initial draft proposal of an agreement to sell the wetland portion to Lueders for $100,000. Throughout the next year, Lueders and WX22 continued to negotiate the sale of the wetlands and the approval of development plans and permits for WX22's proposed project. On March 22, 1990, Lueders adopted a resolution authorizing condemnation of the wetland acreage and an easement area. On April 6, 1990, a representative of the Oakland County Drain Commissioner wrote to WX22 that it was offering $110,000 as just compensation for the wetland property and a screening fence.

Glieberman chose not to exercise his option. WX22 and Lueders entered into a purchase agreement, which required Lueders to pay off the mortgage held by Greenpointe in the event WX22 defaulted. As security for Lueders' payment of that mortgage, WX22 was to place the deed to the uplands in escrow. Under this agreement, WX22 was given a six-month period in which to repay the money extended by Lueders and effectively repurchase the upland acreage. This agreement also included a provision for the sale of the wetland portion by WX22 to Lueders for $110,000, but was conditioned by three matters related to WX22's development of the upland property.

[212 Mich.App. 289] WX22 defaulted on the Greenpointe mortgage. Lueders made payment to Greenpointe, according to the purchase agreement, and entered into a mortgage with WX22. During the following months, a dispute arose concerning WX22's right to redeem. Plaintiff...

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