Attorney General v. Ankersen
| Decision Date | 22 April 1986 |
| Docket Number | 79829,Docket Nos. 68079 |
| Citation | 385 N.W.2d 658,148 Mich.App. 524 |
| Parties | ATTORNEY GENERAL for the State of Michigan; Gerald L. Hough, Director of the Department of Michigan State Police; Howard A. Tanner, Director of the Michigan Department of Natural Resources; and Natural Resources Commission, Plaintiffs-Appellants, v. B. Richard ANKERSEN, Individually; Oakland-Ankersen Associates, a Michigan limited partnership; Seven Sisters-Ankersen Associates, a Michigan limited partnership; Del Rey-Ankersen Associates, a Michigan limited partnership; Oakland Resource Recovery Systems, Inc., a Michigan corporation; Crittenden and Broderick, P.C., a Michigan professional corporation; Richard Crittenden, individually; William Broderick, individually; Boratan Company, a Michigan partnership; Paul Boraks, a partner of Boratan Company; David Tann, a partner of Boratan Company; and Gene P. Stanley, as trustee under the Gene P. Stanley Trust Agreement, Defendants-Appellees. ATTORNEY GENERAL for the State of Michigan; and Gerald Hough, Director of the Department of Michigan State Police, Plaintiffs, and Howard A. Tanner, Director of the Michigan Department of Natural Resources; and Natural Resources Commission, Plaintiffs-Counter-Defendants- Appellees, v. B. Richard ANKERSEN, individually; Oakland-Ankersen Associates, a Michigan limited partnership; Seven Sisters-Ankersen Associates, a Michigan limited partnership; Oakland Resource Recovery Systems, Inc., a Michigan corporation; Crittenden and Broderick, P.C., a Michigan professional corporation; Richard Crittenden, individually; William Broderick, individually; and Gene P. Stanley, as Trustee under the Gene P. Stanley Trust Agreement, Defendants, and Boratan Company, a Michigan partnership; Paul Boraks, a partner of Boratan Company; and David Tann, a partner of Boratan Company, Defendants-Counter-Plaintiffs-Appellants. 148 Mich.App. 524, 385 N.W.2d 658 |
| Court | Court of Appeal of Michigan — District of US |
[148 MICHAPP 531] Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., Stewart H. Freeman, Asst. Atty. Gen. in Charge, Thomas I. Schimpf, and Brent Simmons, Asst. Attys. Gen., for plaintiffs.
Moll, Desenberg, Bayer & Behrendt by Rodger D. Young, and Morris S. Friedman, Southfield, for appellees Boraton Co., Boraks and Tann.
Carsen, Fischer & Potts by David William Potts and Joseph John Montq, Jr., Birmingham, for appellees The Crittenden Group.
Before SHEPHERD, P.J., and R.B. BURNS and TAHVONEN *, JJ.
Plaintiffs, as the appropriate agents of the State of Michigan, commenced this action on February 14, 1977, seeking: (1) abatement of a nuisance caused by improper storage of hazardous industrial waste at 400 South Boulevard East in Pontiac resulting in a fire hazard; (2) imposition of a lien on the property and/or payment of costs for expenses incurred in investigating, securing and abating the hazard; and (3) indemnification from a surety company. Defendants in this suit are the various partnerships and [148 MICHAPP 532] individuals who owned and operated the waste disposal business on the premises and the former and current landowners of the property. By the time of trial, the issues were narrowed to imposition of a lien and payment of costs. Plaintiffs' theories of liability were based on (1) sections 8 through 18 and section 23 of the Fire Prevention Code, M.C.L. Sec. 29.1 et seq.; M.S.A. Sec. 4.559(1) et seq.; (2) section 2 of the Environmental Protection Act of 1970 (MEPA), M.C.L. Sec. 691.1201 et seq.; M.S.A. Sec. 14.528(201) et seq., and (3) section 6 of the water resources act, M.C.L. Sec. 323.1 et seq.; M.S.A. Sec. 3.521 et seq. Although the latter two statutes were set forth in the plaintiffs' pleadings, the issues containing them are not raised on appeal, and therefore we do not address their application to this case. We do not, however, preclude further argument on these statutes below where applicable.
On April 17, 1977, defendant Boratan Company and its partners, defendants David Tann and Paul Boraks, the owners of 400 South Boulevard East, filed a countercomplaint. Although the caption named all plaintiffs as counterdefendants, counterplaintiffs only alleged a claim against the Director of the Michigan Department of Natural Resources and the Natural Resources Commission. Counterplaintiffs claimed that counterdefendants participated in the creation of a nuisance and that their actions amounted to an uncompensated taking.
Pursuant to defendants' motions brought at the close of plaintiffs' proofs, the Oakland County Circuit Court rendered an opinion on October 18, 1982, finding in essence that the state was barred from recovering on its claim since the Department of Natural Resources (DNR) had participated in creating and continuing the hazardous conditions at 400 South Boulevard. The circuit court specifically found (1) that the actions of the DNR precluded [148 MICHAPP 533] the state from recovering against the original "innocent" landowners (Boratan Company, Boraks and Tann) and the subsequent purchaser of the real property (defendant Gene P. Stanley); (2) that the DNR welcomed and acquiesced in the attempts of defendant partnerships to rectify the situation; and (3) that plaintiffs had not succeeded in piercing the corporate veil of Ankersen Resources Systems, Inc., so as to ascribe liability to defendant B. Richard Ankersen. Further, the court found that the plaintiffs failed to provide unbiased expert testimony regarding the existence of a fire hazard and that plaintiffs failed to show "imminent danger", two elements found by the court to be necessary to invoke the relief provisions of the Fire Prevention Code. Accordingly, defendants' motions were granted and orders of dismissal were entered pursuant to GCR 1963, 504.2.
On November 22, 1982, plaintiffs filed a claim of appeal from the October 18, 1982, opinion and the orders dismissing their case. However, this Court returned the claim pursuant to GCR 1963, 518.2, now MCR 2.604, because the counterclaim of defendants Boratan, Co., Boraks and Tann, the property owners, was still pending.
On May 12, 1983, trial commenced on defendants' (property owners) counterclaim. In an opinion filed on June 12, 1984, the court found that counterplaintiffs had failed to plead facts in avoidance of governmental immunity and that the issue was dispositive of their claim. An order was entered on July 10, 1984, dismissing the counterclaim. Counterplaintiffs appeal the order as of right. Plaintiffs refiled their claim of appeal as of right from the 1982 opinion and orders of dismissal. On September 7, 1984, this Court, on its own motion, consolidated the appeals for hearing and decision.
[148 MICHAPP 534] We reverse the trial court's determination at the close of plaintiffs' proofs that plaintiffs were equitably estopped from recovering any of the cost of the abatement and remand for continuation of the trial. We also reverse the trial court's finding that Ankersen's actions were protected by the corporate veil. We further find that plaintiffs were not required to show "imminent danger" to invoke relief under the Fire Protection Code. We affirm the trial court's dismissal of the counterclaims.
An extended recitation of the facts follows because we believe the facts developed to date are essential for an understanding of our conclusion that the trial was terminated prematurely.
Defendant B. Richard Ankersen (Ankersen) designed and patented a pollution-free incinerator to dispose of hazardous waste and generate electricity as a by-product. He established and incorporated Ankersen Resources Systems, Inc. (ARS). On February 21, 1973, ARS entered into a five-year lease of 400 South Boulevard East in Pontiac with defendant Boraton Company and its partners, defendants David Tann and Paul Boraks landowners, with the intention of operating a waste disposal business on the premises. On April 26, 1973, after ARS had constructed an incinerator at the site, the Water Resources Commission of the DNR issued it a liquid industrial waste hauling license.
Large amounts of hazardous waste began accumulating at the site because the incinerator was inoperable for substantial periods of time while being "debugged". John Shauver, a DNR water quality supervisor, inspected the premises several times between July and October, 1973, and noticed the growing accumulation of hazardous wastes inside[148 MICHAPP 535] the building. Although concerned about the accumulation, Shauver apparently took no action because inside storage was being regulated by the Pontiac Fire Department and only outside storage was prohibited by the industrial waste hauling license. Beginning on October 5, 1973, Shauver observed repeated instances of waste being stored outside in violation of the conditions imposed by the license. Each time, Shauver ordered these containers removed and ARS complied. On March 21, 1974, ARS's waste hauling license was renewed in spite of the repeated violations. Shauver testified that it was the policy of the DNR to obtain voluntary compliance if possible. At the beginning of April, 1974, Shauver observed about 460 55-gallon drums being stored outside. They were not removed before Shauver's follow-up visit on May 21, 1974. On subsequent visits, Shauver saw that ARS had still not complied and that the inventory was increasing. Ankersen did not refuse to cooperate but consistently told Shauver that the incinerator would soon be operating and that the drums would then be cleaned up within two weeks.
In an effort to compel compliance, ARS was called before the Water Resources Commission on July 25, 1974. At that time approximately 2,500 drums were being stored outside. At the meeting, Ankersen indicated that the facility was being expanded and that there were problems with equipment. He urged that, if given additional time, he could easily take care of the...
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