Oakland Hills Development Corp. v. Lueders Drainage Dist.

Decision Date21 July 1995
Docket NumberDocket No. 167306
Citation212 Mich.App. 284,537 N.W.2d 258
PartiesOAKLAND HILLS DEVELOPMENT CORPORATION, Plaintiff-Appellant, v. LUEDERS DRAINAGE DISTRICT and City of Rochester Hills, Defendants-Appellees.
CourtCourt of Appeal of Michigan — District of US

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.

PER CURIAM.

Plaintiff appeals as of right the 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 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 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.

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 began to make offers to purchase the upland property from Lueders. In July 1991, Lueders sold the uplands to Rochester Hills. This action followed.

In reviewing a grant of a directed verdict, we view the evidence and all reasonable inferences in a light most favorable to the nonmoving party to determine whether a factual question exists. A motion for a directed verdict should be denied if reasonable minds could differ with regard to whether the plaintiff has met the burden of proof. Rynerson v. Nat'l Casualty Co., 203 Mich.App. 562, 564, 513 N.W.2d 436 (1994).

Our first consideration is whether the Uniform Condemnation Procedures Act (UCPA), M.C.L. § 213.51 et seq.; M.S.A. § 8.265(1) et seq., governs precondemnation negotiations for the acquisition of property to be used for the purposes set forth in the Drain Code, M.C.L. § 280.1 et seq.; M.S.A. § 11.1001 et seq. Plaintiff argues that the trial court erred in concluding that there was no violation of the UCPA by Lueders. According to plaintiff, Lueders' failure to make a good-faith offer of just compensation for the wetland property and failure to reveal its appraisal of the property to plaintiff constituted a violation of the UCPA. Under the facts of this case we disagree.

Resolution of this issue involves construction of provisions of the Drain Code and the UCPA. It is a fundamental rule of statutory construction that the courts must ascertain and give effect to the intent of the Legislature and the purpose of enacting a statute. In re Kurzyniec Estate, 207 Mich.App. 531, 540, 526 N.W.2d 191 (1994). The Drain Code, which authorizes the securing of lands and rights of way for proposed drains, provides: "If the [lands or rights of way] cannot be secured by negotiation, then the drainage board may proceed under the provisions [governing condemnation]." M.C.L. § 280.470; M.S.A. § 11.1470. The language of this provision suggests that it is not until negotiations are unsuccessful that condemnation procedures under the UCPA must be followed.

We note, however, that § 5 of the UCPA, M.C.L. § 213.55; M.S.A. § 8.265(5), extends beyond providing procedures for condemnation and establishes requirements for the precondemnation negotiation process. The Drain Code, on the other hand, does not outline procedures for negotiation. Section 5(1) of the UCPA provides, in part:

Before initiating negotiations for the purchase of property, the agency shall establish an amount which it believes to be just compensation for the property and promptly shall submit to the owner a good faith offer to acquire the property for the full amount so established.... The amount shall not be less than the agency's appraisal of just compensation for the property. The agency shall provide the owner of the property and the owner's attorney with an opportunity to review the written appraisal, if an appraisal has been prepared, or if an appraisal has not been prepared, the agency shall provide the owner or the owner's attorney with a written statement and summary, showing the basis for the amount the agency established as just compensation for the property. If an agency is unable to agree with the owner for the purchase of the property, after making a good faith written offer to purchase the property, the agency may file a complaint for the acquisition of the property in the circuit court.... [M.C.L. § 213.55(1); M.S.A. § 8.265(5)(1).]

Reconciliation of this provision with the Drain Code requires application of additional principles of statutory construction. First, two statutes covering the same subject matter must be construed together to give meaning to both, if at all possible. Bauer v. Dep't of Treasury, 203 Mich.App. 97, 100, 512 N.W.2d 42 (1993), citing Borden, Inc. v. Dep't of Treasury, 391 Mich. 495, 218 N.W.2d 667 (1974). Where two statutes conflict, that which is more specific prevails. Bauer, supra, citing Imlay Twp. School Dist. v. State Bd. of Ed., 359 Mich. 478, 102 N.W.2d 720 (1960). Considering these rules of construction, we conclude that because the UCPA specifically governs an agency's purchase or condemnation of property and the Drain Code governs the securing of land in only a general manner, the UCPA should prevail over the Drain Code with respect to matters of obtaining property. This conclusion is consistent with the apparent intent of the Legislature of creating, through the UCPA, uniform procedures for condemnation by state and private agencies. See OAG, 1985-1986, No 6336, pp 213-214 (January 17, 1986).

Defendants assert that because their dealings with plaintiff involved a voluntary rather than involuntary transfer of property, the UCPA was not applicable. We disagree. This assertion contradicts the language of the UCPA. Clearly the act considers that attempts will be made by an agency to secure lands voluntarily before resorting to condemnation. Indeed, the evidence in this case demonstrates that plaintiff's land was first sought because of the drain commission's desire to have it become part of the Lueders Drain--obviously an involuntary transfer of property was imminent if it could not be secured voluntarily.

Lueders admits that no just compensation amount was established before negotiations began for the purchase of the wetland portion of the property. Furthermore, the evidence shows...

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