Central Advertising Co. v. City of Novi

• Decision Date: 10 July 1979
• Docket Number: Docket No. 78-3527
• Citation: 91 Mich.App. 303,283 N.W.2d 730
• Parties: CENTRAL ADVERTISING CO., a Michigan Corporation, Plaintiff-Appellant, v. CITY OF NOVI, a Michigan Municipal Corporation, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 730

283 N.W.2d 730

91 Mich.App. 303

CENTRAL ADVERTISING CO., a Michigan Corporation, Plaintiff-Appellant, v. CITY OF NOVI, a Michigan Municipal Corporation, Defendant-Appellee.

Docket No. 78-3527.

Court of Appeals of Michigan.

July 10, 1979.

Rehearing Denied Sept. 5, 1979.

Released for Publication Oct. 10, 1979.

Michael H. Perry, Lansing, for plaintiff-appellant.

David M. Fried, Monica Farris Linkner, Southfield, for defendant-appellee.

Before KAUFMAN, P. J., and BASHARA and GLASER, ^* JJ.

KAUFMAN, Presiding Judge.

Plaintiff appeals by right from a May 31, 1978, order granting summary judgment to defendant on the grounds of governmental immunity and from a June 12, 1978, order denying plaintiff's motion to amend its complaint to add certain city officials as defendants.

On May 20, 1974, Novi enacted a "Signs and Outdoor Advertising" ordinance which borrowed heavily from an Ann Arbor ordinance regulating signs.

The next day, May 21, 1974, the Supreme Court decided Central Advertising Co. v. Ann Arbor, 391 Mich. 533, 218 N.W.2d 27 (1974), Aff'd on remand, 394 Mich. 943 (1975). The Court concluded that the Ann Arbor sign ordinance operated to proscribe billboards altogether and that this action exceeded the authority of the city council under the home-rule act, M.C.L. § 117.4i(5); M.S.A. § 5.2082(5), and the city charter, Ann Arbor Charter, § 3.1(2)(f). However, since there were no findings of fact regarding each of the 177 plaintiffs affected by the ordinance, the matter was remanded to the trial court for specific findings. The trial court's findings and subsequent order were affirmed by the Supreme Court on June 19, 1975.

Thereafter, on February 3, 1976, Central petitioned the Novi Board of Appeals for a variance to erect a certain off-premises advertising sign. The petition was denied on March 2, 1976.

On October 1, 1976, Central commenced the instant action, seeking damages, injunctive relief and a declaration that:

" * * * Sections 2.01, 3.01 and 4.01 of the Defendant's Ordinance No. 74-68 to be (are) invalid for the reason that it prohibits and excludes Plaintiff's off-premises advertising signs from within the City of Novi." ¹

Central filed a six-count complaint which made various overlapping claims for damages based on defendant's intentional interference with plaintiff's business relationships and defendant's intentional violation of plaintiff's Federal constitutional rights to free speech, due process and equal protection. The civil rights claims apparently were based on 42 U.S.C. § 1983. ²

Plaintiff moved for summary judgment claiming that the ordinance was invalid as a matter of law because it prohibited all off-premises advertising signs within the City of Novi. On November 24, 1976, the trial judge granted partial summary judgment to plaintiff. The court enjoined the defendant from enforcing § 4.01(1)(1) of the ordinance but also held that off-premises advertising signs had to comply with § 3.01. See footnote 1.

Defendant appealed to this Court and plaintiff cross-appealed. On September 14, 1977, in an unpublished per curiam opinion (Docket No. 31153, Decided September 14, 1977 (unreported)), this Court relied on Ann Arbor, supra, and affirmed the trial court's determination that the ordinance impermissibly prohibited off-premises signs. However, the Court concluded that § 3.01 did not regulate off-premises signs and reversed the trial court on this issue. Leave to appeal was denied by the Supreme Court on November 30, 1977, and the case was returned to the trial court for consideration of the claims for damages. 402 Mich. 823 (1977).

On February 14, 1978, defendant moved for summary judgment claiming that plaintiff had failed to state a claim upon which relief could be granted because its claims were barred by governmental immunity. The trial court accepted defendant's argument on March 16, 1978, and ruled:

"This Court does not consider the action taken by the Defendant City of Novi in adoption of the ordinance in question which this Court later declared invalid to be a tort action and I am going to grant the motion for summary judgment to Defendant on the basis that the City of Novi is immune and does not come within the statutory exception to a municipal immunity for a tort action."

Central moved to file an amended complaint on May 3, 1978. Central wished to add members of the Novi City Council, Planning Commission, Board of Appeals and the Novi Director of Building and Safety as defendants.

On May 31, 1978, the trial court entered an order of summary judgment in favor of defendant. The trial court also denied plaintiff's motion to file an amended complaint. The corresponding order was filed June 12, 1978.

Thereafter, on June 15, 1978, plaintiff filed a motion for rehearing on the entry of summary judgment. Plaintiff argued that the trial court's ruling that defendant was immune from damage suits was erroneous in light of Monell v. Dep't of Social Services of City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), which had been decided on June 6, 1978. Plaintiff also moved to set aside the order denying its motion to amend the complaint. The motions were denied and plaintiff now appeals.

We are faced with two primary issues on appeal: Did the trial court properly grant summary judgment to the defendant because plaintiff failed to state a claim upon which relief can be granted? Did the trial court abuse its discretion in denying plaintiff's motion to amend its pleading by adding defendants?

In determining the propriety of summary judgment under GCR 1963, 117.2(1), we are limited to a review of the pleadings alone. Every well-pled allegation is assumed to be true. We must determine if plaintiff's claims are so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recovery. See Bashara, The Elusive Summary Judgment Rule: Sifting Through the Maze, 1976 Detroit Col.L.Rev. 397, 401-402. Since plaintiff is suing a governmental unit, it must plead facts in avoidance of governmental immunity to state an actionable claim. Butler v. Wayne County Sheriff's Dep't, 75 Mich.App. 202, 203, 255 N.W.2d 7 (1977).

Plaintiff's claims involve the tort of intentional interference with business and contractual relationships and alleged causes of action based on the deprivation of constitutional rights. We consider the tort claim first.

M.C.L. § 691.1407; M.S.A. § 3.996(107) is the controlling statutory provision for governmental immunity. This section provides:

"Except as in this act otherwise provided, all governmental agencies shall be immune from tort liability in all cases wherein the government agency is engaged in the exercise and discharge of a governmental function. Except as otherwise provided herein, this act shall not be construed as modifying or restricting the immunity of the state from tort liability as it existed heretofore, which immunity is affirmed."

Since none of the statutory exceptions apply to this case ³, we must determine if defendant was engaged in the exercise and discharge of a governmental function when it passed and enforced its sign ordinance.

The meaning of the phrase "engaged in the exercise and discharge of a governmental function" is an issue which has sharply divided our Supreme Court. However, in Parker v. Highland Park, 404 Mich. 183, 193-194, 273 N.W.2d 413, 416 (1978), three justices concluded:

" * * * We would limit the term 'governmental function' to those activities Sui generis governmental of essence to governing. This principle was recognized in Lykins v. Peoples Community Hospital, 355 F.Supp. 52, 53 (E.D.Mich., 1973):

" 'This court does not believe the statutory scheme contemplates immunity for the day-to-day operations of a hospital. The statute speaks of immunity for " governmental functions," and this court is of the opinion that while it may be an appropriate goal or objective of government to establish a hospital authority, it does not follow that the daily operations of such a hospital authority constitute a governmental function. Governmental functions more properly refer to the tasks of governing. There is, for example, a governmental character to activities such as the collection of taxes or the operation of a court system. But the services of healing offered by a public hospital are not governmental functions.' "

In a concurring opinion in Parker, supra, at 200, 273 N.W.2d at 419, Justice Moody offered a similar test:

"To delineate a complete and balanced definition of governmental function within a simplistic format would be presumptuous. However, as a basic guideline, the crux of the governmental essence test should be founded upon the inquiry whether the purpose, planning and carrying out of the activity, due to its unique character or governmental mandate, can be effectively accomplished only by the government. Unless liability would be an unacceptable interference with government's ability to govern, activities that fall outside this parameter, although performed by a government agency, are not governmental functions and therefore not immune."

There is no question that a municipal legislative body has a general grant of authority to control uses such as signs and billboards within its jurisdiction. Const.1963, art. 7, § 22 provides that municipalities shall have the power to adopt resolutions and ordinances relating to their municipal concerns, property and government. The home-rule act, M.C.L. § 117.1 Et seq.; M.S.A. § 5.2071 Et seq., further authorizes a municipality to provide in its charter:

"For licensing, regulating, restricting and limiting the number and locations of billboards within the city." M.C.L. § 117.4i(5); M.S.A. § 5.2082(5).

However, a home-rule city cannot altogether prohibit off-premises advertising signs. Central Advertising Co. v. Ann Arbor, supra.

The specific tortious activity alleged in the instant case is the enactment...