Brunet v. City of Rochester Hills
| Docket Number | 354110 |
| Decision Date | 02 December 2021 |
| Parties | DANIEL BRUNET, Individually and as Representative of a Class of Similarly Situated Persons and Entities, Plaintiff-Appellant, v. CITY OF ROCHESTER HILLS, Defendant-Appellee. |
| Court | Court of Appeal of Michigan — District of US |
UNPUBLISHED
Oakland Circuit Court LC No. 18-164764-CZ
Before: Murray, C.J., and Jansen and Riordan, JJ.
Plaintiff Daniel Brunet, individually and as class representative appeals as of right the trial court's opinion and order granting defendant City of Rochester Hills's motion for summary disposition and denying his motion for partial summary disposition. This case concerns charges imposed by defendant for municipal water and sewer services. Defendant asserts that these charges are unlawfully excessive unreasonable, and in violation of MCL 141.91 and a now-amended municipal ordinance. We affirm.
Defendant operates a municipal water supply system, of which plaintiff is a customer.[1]The water system has two central purposes: (a) supply treated or "potable" water to municipal water customers, and (b) provide excess capacity for public fire protection. In March 2018, plaintiff filed a 10-count complaint against defendant, generally alleging that the water charges imposed by defendant on its customers since 2012 have been unlawful for the following two principal reasons. First, defendant accumulated surplus funds to allegedly pay for future capital improvements to its water system, and these surplus funds are unnecessary to provide service to the present water customers. According to plaintiff, defendant may only charge its water customers for the present costs of supplying water. Second, defendant charges its water customers for the fire protection component of its water system. However, because fire protection operates for the benefit of the general public, not only the water customers themselves, the general public should be charged for the fire protection.[2] Plaintiff also noted that defendant had an ordinance providing that the fire protection component would be paid by defendant itself from its general fund. Plaintiff requested that the trial court certify the instant action as a class action with plaintiff himself as the class representative of all persons or entities who paid the water charges at any time in the preceding six years. He further requested that defendant disgorge the excess funds that it had received to the putative class in equity and that the trial court declare that the water charges are unlawfully excessive to the extent outlined in the complaint.
In March 2019, the trial court certified the class, which it defined as "all persons and entities who/which have paid the City for water and/or sewage disposal service at any time since March 30, 2012 or who/which pay the City for water and/or sewage disposal service during the pendency of this action."
In December 2019, plaintiff moved for partial summary disposition, arguing that the water charges were unreasonable as a matter of law until November 2018 because defendant had the following ordinance in effect concerning the cost of fire protection services:
Plaintiff argued that although Rochester Hills Ordinance, § 102-124 essentially required that the fire protection component be paid for by defendant itself, defendant violated the ordinance during the class period until November 2018 by charging its water customers for this service.[3] Thus, plaintiff argued, he and the class were entitled to a refund for monies paid for the fire protection component.
Defendant moved for summary disposition of the entire complaint.[4] Defendant acknowledged that the fund for its water system had accumulated a substantial surplus of about $46 million in recent years. However, defendant asserted, the majority of the water system will need to be replaced in the upcoming five to 10 years, and it will likely use substantially all of its surplus funds to do so. Defendant explained that it always has intended to use the surplus funds for these upcoming capital improvement projects and that paying for the projects with cash is more fiscally responsible than doing so with bonds. Defendant argued that it was authorized by MCL 141.121 to charge its customers for these future capital improvement projects and that its water charges were reasonable in all respects. Defendant also argued that a municipal regulation passed in 1999 authorized charging its water customers for the fire protection component, so its water charges were not unlawful to that extent.
The parties presented competing evidence concerning the reasonableness of the water charges, with plaintiff's experts opining that the water charges were unreasonably excessive, and defendant's experts opining that the charges were reasonable. The trial court discussed this evidence in a 37-page opinion and ultimately granted summary disposition in favor of defendant. In relevant part, the trial court reasoned that the water charges did not violate MCL 141.91 because they were "user fees," not "taxes," under Bolt v City of Lansing, 459 Mich. 152; 587 N.W.2d 264 (1998); that the water charges were reasonable because plaintiff "has submitted no evidence of anything illegal or improper" and otherwise failed to overcome the presumption of reasonableness; and that plaintiff was not entitled to equitable relief with respect to the fire protection component of the water charges because his "sole evidence" in that regard was "an ordinance that was mistakenly left on the books and was arguably already overridden by lawful resolution."[5] Plaintiff now appeals.
Plaintiff first argues that the water charges are an unlawful tax in violation of MCL 141.91. We disagree.
We review de novo whether a municipal charge is a "tax." See Mapleview Estates, Inc v City of Brown City, 258 Mich.App. 412, 413-414; 671 N.W.2d 572 (2003). We also review de novo questions of statutory interpretation. PNC Nat'l Bank Ass'n v Dep't of Treas, 285 Mich.App. 504, 505; 778 N.W.2d 282 (2009). Finally, "[t]his Court reviews de novo a trial court's ruling on a motion for summary disposition." Hartfiel v City of Eastpointe, 333 Mich.App. 438, 444; 960 N.W.2d 174 (2020).
It is initially noted that plaintiff brought alternative claims for assumpsit and unjust enrichment.[6] "At common law, assumpsit was a proper vehicle for recovering unlawful fees, charges, or exactions-including unlawful utility charges-that the plaintiff had paid to a municipality under compulsion of local law." Youmans v Charter Twp of Bloomfield__, Mich. App__, __;__ N.W.2d __(2021) (Docket No. 348614); slip op at 27 (cleaned up). Id. (cleaned up). "Hence, an assumpsit claim is modernly treated as a claim arising under quasi-contractual principles, which represent a subset of the law of unjust enrichment." Id. (quotation marks and citations omitted). "Unjust enrichment is a cause of action to correct a defendant's unjust retention of a benefit owed to another." Wright v Genesee Co, 504 Mich. 410, 417; 934 N.W.2d 805 (2019). Consequently, if plaintiff is correct that the water charges violated MCL 141.91 (), he and the class would arguably be entitled to equitable relief to recover the charges unlawfully paid.
MCL 141.91 provides as follows:
Except as otherwise provided by law and notwithstanding any provision of its charter, a city or village shall not impose, levy or collect a tax, other than an ad valorem property tax, on any subject of taxation, unless the tax was being imposed by the city or village on January 1, 1964.
MCL 141.121 provides, in relevant part, as follows:
MCL 141.121 places "the amount of the charge within the sound discretion of the city officials, especially when considered in relation to the objectives of the program in maintaining the system and paying off the bonds in the manner required by statute." Yurek v City of Sterling Heights, 37 Mich.App. 386, 390; 194 N.W.2d 474 (1971) (cleaned up).
In Bolt v City of Lansing, 459 Mich. 152; 587 N.W.2d 264 (1998), our Supreme Court considered whether a "storm...
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