Marlette Auto Wash, LLC v. Van Dyke SC Props., LLC, Docket No. 153979

• Decision Date: 19 March 2018
• Docket Number: Calendar No. 2,Docket No. 153979
• Parties: MARLETTE AUTO WASH, LLC, Plaintiff-Appellant, v. VAN DYKE SC PROPERTIES, LLC, Defendant-Appellee.
• Court: Michigan Supreme Court

501 Mich. 192

912 N.W.2d 161

MARLETTE AUTO WASH, LLC, Plaintiff-Appellant,

v.VAN DYKE SC PROPERTIES, LLC, Defendant-Appellee.

Docket No. 153979

Calendar No. 2

Supreme Court of Michigan.

Argued November 8, 2017

Decided March 19, 2018

Warner Norcross & Judd LLP (by Gaëtan Gerville-Réache) for plaintiff.

Bursch Law PLLC (by John J. Bursch ) and Kelly Law Firm (by David A. Keyes ) for defendant.

Couzens, Lansky, Fealk, Ellis, Roeder & Lazar, PC (by Ronn S. Nadis and Sarah Heisler Gidley ) Amici Curiae, for the Real Property Law Section of the State Bar of Michigan.

Foster, Swift, Collins & Smith, PC (by Richard C. Kraus ) Amici Curiae, for the Michigan Bankers Association and the Michigan Credit Union League.

BEFORE THE ENTIRE BENCH (except Clement, J.)

Wilder, J.

In this case, plaintiff claims a prescriptive easement for ingress and egress over defendant’s property on the basis of open, notorious, adverse, and continuous use of that property by a predecessor of plaintiff for at least 15 years. The question presented here is whether such use creates a prescriptive easement that is appurtenant, without regard to whether the previous owner of the dominant estate took legal action to claim the easement. The answer to that inquiry is yes.

MCL 600.5801(4), which provides for a 15-year period of limitations, is not contingent on whether the prior owner of the dominant estate took legal action to claim the prescriptive easement. Moreover, our caselaw establishes that one seeking to obtain record title of a prescriptive easement may establish that the elements were met by a prior owner in the claimant’s chain of title. When a prescriptive easement has vested under a previous property owner’s possession, the easement is appurtenant and is conveyed to subsequent owners in the chain of title without the need to show privity of estate. Wortman v. Stafford , 217 Mich. 554, 187 N.W. 326 (1922) ; Haab v. Moorman , 332 Mich. 126, 50 N.W.2d 856 (1952).

The Court of Appeals erred by requiring plaintiff to establish privity of estate with the previous owner, regardless of whether plaintiff could establish that the elements of a prescriptive easement were satisfactorily met by that prior owner. Moreover, the Court of Appeals erred by holding that the previous owner of the dominant estate must have taken legal action to claim the prescriptive easement in order for plaintiff to prove that a prescriptive easement had vested during the preceding property owner’s tenure. Title by adverse possession is gained when the period of limitations expires, not when legal action quieting title to the property is brought. See Gardner v. Gardner , 257 Mich. 172, 176, 241 N.W. 179 (1932) ; Matthews v. Natural Resources Dep’t , 288 Mich.App. 23, 37, 792 N.W.2d 40 (2010). We reverse the Court of Appeals judgment in part and remand to that Court for consideration of any outstanding appellate issues in this case.

I. FACTS AND PROCEEDINGS

In early 1988, Bernard and Evelyn Zyrowski owned a single unimproved tract of land at the corner of M-53 and Enterprise Drive (which later came to be known as Euclid Street) in Marlette, Michigan. The land was conveyed to B & J Investment Company, which was owned by Bernard Zyrowski and his son James Zyrowski. The land was split into two parcels.

In the summer of 1988, B & J Investment began construction of a car wash on one of the two parcels. The remaining parcel was sold to Marlette Development Corporation by land contract on October 5, 1988. The car wash began operating in 1989, and from that date onward customers of the car wash used the parking lot of the other parcel as one means of ingress to and egress from the car wash. In March 1990, Marlette Development’s land contract was paid off and the deed recorded. No easement was reserved for the benefit of the car wash property. Several months later, Marlette Development Corporation opened a shopping center on their property.

In March 2000, the village of Marlette closed the north entrance to the car wash from Euclid Street. After the entrance was closed, B & J Investment expanded the car wash, adding four additional car wash bays across that newly closed entrance. Closing the north entrance left two ways to access the car wash: (1) from M-53, and (2) through the shopping center parking lot. The M-53 access was problematic, however, because it required customers to drive through a (sometimes occupied) semi-truck car wash bay in order to access the western portion of the car wash property. Access to this portion of the property was necessary for all those customers wishing to use the automatic car wash bays or the four newly built self-service car wash bays. Local residents testified that they never saw anyone access the car wash by the M-53 entrance because it was a dangerous turn.

In April 2005, B & J Investment sold the car wash to Lipka Investments. At closing, Gary Lipka inquired how customers were to access the western portion of the car wash property. He was informed by Zyrowski that the car wash had been accessed through the shopping center parking lot since the car wash opened and that the parking lot was owned by the "Marlette Business Group." After talking to Zyrowski, Lipka believed that there would be no issue with the continued use of the parking lot because it had "been used for so long and never been blocked off...."

Approximately one year later, Lipka Investments defaulted on its loan with Tri-County Bank. Lipka Investments conveyed the car wash property to the bank in lieu of foreclosure on July 14, 2006. Shortly thereafter, the bank conveyed the property to GLCW, LLC, the property-holding entity of the bank. On September 28, 2006, GLCW entered into a lease and purchase agreement with plaintiff Marlette Auto Wash, LLC.

Six months later, Marlette Auto Wash purchased the property from GLCW. The purchase agreement did not include an easement, and Marlette does not allege that any statements were made regarding vehicular access at the time of purchase. Customers continued without interference to access the car wash by driving through the shopping center parking lot.

On May 22, 2013, defendant, Van Dyke SC Properties, LLC, purchased the shopping center property from Marlette Development Corporation. James Zyrowski, former co-owner of B & J Investment, is the sole owner of Van Dyke Properties. After undergoing renovations, the shopping center opened in November 2013. Shortly after opening the shopping center, defendant made clear that unless plaintiff contributed $1,500 per month to support the overall maintenance of the parking lot, defendant would park trailers at the property line, closing off access to the car wash. Plaintiff refused.

The following month, the village of Marlette encountered heavy snowfalls. After plaintiff plowed snow from its property onto defendant’s property, defendant blocked the western entrance to the car wash with snow, rendering the car wash property inaccessible for a day and a half. After that incident, plaintiff filed the present lawsuit, claiming an easement for ingress and egress through defendant’s parking lot. Defendant filed a counterclaim, seeking to quiet title and seeking monetary damages for parking lot maintenance, upkeep, and insurance.

A bench trial was conducted. At trial, James Zyrowski testified that he believed that B & J Investment had permission to use the parking lot for ingress to and egress from the car wash during the period that he and his father owned the car wash. This belief was based on a conversation that Zyrowski had with his father. Zyrowski did not recall when the conversation with the elder Zyrowski took place. Zyrowski was not present when the permission was allegedly given to his father, did not recall the year permission was given to his father, and did not recall any details regarding the scope of the permission. He acknowledged that B & J Investment never contributed any money toward the upkeep and maintenance of the parking lot.

In a written opinion, the trial court held that plaintiff had established a prescriptive easement for ingress and egress over defendant’s property. The court found, among other things, that a prescriptive easement benefiting the car wash had vested in 2005. The court further concluded, given its authority as a court of equity, that the person now trying to preclude the current owners of the car wash from using the parking lot access was the same person who used this same parking lot for access to his car wash when he owned the car wash property. The trial court excluded defendant’s evidence in support of its counterclaim seeking "amounts claimed for contributions for parking lot expenses," because the evidence was not disclosed to plaintiff before trial.

In an unpublished per curiam opinion, the Court of Appeals affirmed in part, vacated in part, and remanded for entry of judgment in defendant’s favor on the prescriptive easement issue. The Court of Appeals affirmed the trial court’s decision regarding defendant’s counterclaim, concluding that the trial court had not erred by excluding defendant’s evidence as a discovery sanction.

Concerning the easement claim, the Court of Appeals reversed, holding that the trial court had erred by granting a prescriptive easement because plaintiff had failed to establish privity of estate with the previous owner. Plaintiff argued that privity need not be established because the 15-year period elapsed during the time that Zyrowski owned the car wash, and a prescriptive easement vested to the benefit of all subsequent property owners. While the Court of Appeals acknowledged that a property interest acquired through adverse possession vests when the statutory period expires and not when the action was brought, the Court of Appeals held that plaintiff’s claim failed because "no previous owner of the car wash asserted a claim of prescriptive easement with regard to defendant’s property." Marlette Auto Wash, LLC v. Van Dyke SC Props., LLC , unpublished...