City of Grand Rapids v. Brookstone Capital, LLC

• Decision Date: 29 October 2020
• Docket Number: No. 350746,350746
• Citation: 334 Mich.App. 452,965 N.W.2d 232
• Parties: CITY OF GRAND RAPIDS, Plaintiff/Counterdefendant-Appellee, v. BROOKSTONE CAPITAL, LLC, Defendant/Counterplaintiff-Appellant, and 240 Ionia Avenue Limited Dividend Housing Association Limited Partnership, and 345 State Street Limited Dividend Housing Association Limited Partnership, Defendants-Appellants.
• Court: Court of Appeal of Michigan — District of US

334 Mich.App. 452

965 N.W.2d 232

CITY OF GRAND RAPIDS, Plaintiff/Counterdefendant-Appellee,

v. BROOKSTONE CAPITAL, LLC, Defendant/Counterplaintiff-Appellant,and240 Ionia Avenue Limited Dividend Housing Association Limited Partnership, and 345 State Street Limited Dividend Housing Association Limited Partnership, Defendants-Appellants.

No. 350746

Court of Appeals of Michigan.

Submitted October 8, 2020, at Grand Rapids.

Decided October 29, 2020, 9:05 a.m.

Elizabeth J. Fossel, Director of Civil Litigation, and Toby Koenig, Assistant City Attorney, for the city of Grand Rapids.

Loomis, Ewert, Parsley, Davis & Gotting, PC, Lansing (by Kevin J. Roragen ) for Brookstone Capital LLC, 240 Ionia Avenue Limited Dividend Housing Association Limited Partnership, and 345 State Street Limited Dividend Housing Association Limited Partnership.

Dana Nessel, Attorney General, Fadwa A. Hammoud, Solicitor General, and Lisa M. Barwick and Samantha L. Reasner, Assistant Attorneys General, for the Michigan State Housing Development Authority, amicus curiae.

Before: Letica, P.J., and K. F. Kelly and Redford, JJ.

Redford, J. Defendants, Brookstone Capital LLC (Brookstone), 240 Ionia Avenue Limited Dividend Housing Association Limited Partnership (240 Ionia), and 345 State Street Limited Dividend Housing Association Limited Partnership (345 State Street), appeal as of right the trial court's order granting plaintiff, the city of Grand Rapids, summary disposition under MCR 2.116(C)(10) and denying defendants’ competing motion for summary disposition under MCR 2.116(I)(2). We affirm.

I. FACTUAL BACKGROUND

Brookstone developed 240 Ionia and 345 State Street as affordable low-income housing projects pursuant to the Michigan State Housing Development Authority Act (the MSHDA Act), MCL 125.1401 et seq. , following approval by the Grand Rapids City Commissioners via adopted resolutions and approval by MSHDA. Some portions of 240 Ionia and 345 State Street are exempt from ad valorem property taxation under MCL 125.1415a, but both must pay plaintiff an annual service charge for public services in lieu of taxes. Plaintiff sued defendants for breaches of agreements for payments in lieu of taxes (PILOT) and unjust enrichment for their failure to pay the amount of charges billed by plaintiff for its 2015, 2016, and 2017 billing cycles as required under Grand Rapids Code, §§ 1.410 to 1.413 (the PILOT Ordinance) and plaintiff's resolutions approving the 240 Ionia and 345 State Street projects. Brookstone counterclaimed against plaintiff for a declaratory judgment that plaintiff had to calculate the PILOT payments for 240 Ionia and 345 State Street based on 4% of annual shelter rents of all occupants of the subject housing projects. Brookstone also asked the court to declare that plaintiff could not charge PILOT amounts based on the ad valorem tax rate for the units that were not rent or income restricted.

The parties disputed the interpretation and application of the MSHDA Act, particularly MCL 125.1415a, and the PILOT Ordinance. The parties filed opposing motions for summary disposition, and the trial court ruled in favor of plaintiff, giving rise to this appeal.

II. STANDARD OF REVIEW

We review de novo a trial court's decision on a motion for summary disposition. Sau-Tuk Indus., Inc. v. Allegan Co. , 316 Mich. App. 122, 135, 892 N.W.2d 33 (2016). We also review de novo a trial court's interpretation and application of a statute. Id. at 136, 892 N.W.2d 33. "Municipal ordinances are interpreted and reviewed in the same manner as statutes." Id. (citation omitted). Therefore, we review de novo a trial court's ordinance interpretation and apply the rules governing statutory interpretation to a municipal ordinance. Id.

III. ANALYSIS

A. OVERVIEW

Defendants argue that the trial court erred by ruling in favor of plaintiff because plaintiff calculated and charged ad valorem taxes for the market-rate units contrary to plaintiff's PILOT Ordinance. Defendants contend that the PILOT Ordinance bound plaintiff to charge 4% of the annual shelter rents for all occupied units in the subject housing projects, whether the tenants were low-income persons or families paying reduced housing charges or were persons or families paying the full market rate. Defendants further assert that the PILOT Ordinance complied with MCL 125.1415a. We disagree.

The issues presented in this appeal concern the interpretation of both a state statute and a municipal ordinance. We review de novo the trial court's interpretation of both the MSHDA Act and plaintiff's PILOT Ordinance. Sau-Tuk, 316 Mich. App. at 136, 892 N.W.2d 33. As explained in Sau-Tuk :

When interpreting a statute, our primary goal is to give effect to the intent of the Legislature. If the language of a statute is unambiguous, we presume the Legislature intended the meaning expressed in the statute. A statutory provision is ambiguous only if it conflicts irreconcilably with another provision or it is equally susceptible to more than one meaning.... When construing a statute, we must assign every word or phrase its plain and ordinary meaning unless the Legislature has provided specific definitions or has used technical terms that have acquired a peculiar and appropriate meaning in the law.

Similarly, the goal of construction and interpretation of an ordinance is to discern and give effect to the intent of the legislative body. The most reliable evidence of that intent is the language of the ordinance itself, which must be given its plain and ordinary meaning. When the words used in a statute or an ordinance are clear and unambiguous, they express the intent of the legislative body and must be enforced as written. [ Id. at 136-137, 892 N.W.2d 33 (quotation marks and citations omitted).]

Courts "may not pick and choose what parts of a statute to enforce" but "must give effect to every word of a statute if at all possible so as not to render any part of the statute surplusage or nugatory." Id. at 143, 892 N.W.2d 33. Courts "may not speculate regarding legislative intent beyond the words expressed in [the] statute." Id. at 145, 892 N.W.2d 33 (quotation marks and citation omitted). "This Court reads the provisions of statutes reasonably and in context, and reads subsections of cohesive statutory provisions together."

Detroit Pub. Schs. v. Conn. , 308 Mich. App. 234, 248, 863 N.W.2d 373 (2014) (quotation marks and citation omitted).

When courts interpret statutes, they must first look to the specific statutory language to determine the intent of the Legislature, and if the language is clear and unambiguous, the plain meaning of the statute reflects the legislative intent and judicial construction is not permitted. Universal Underwriters Ins. Group v. Auto Club Ins. Ass'n , 256 Mich. App. 541, 544, 666 N.W.2d 294 (2003). "Judicial construction of a statute is only permitted when statutory language is ambiguous," and ambiguity exists "only if it creates an irreconcilable conflict with another provision or it is equally susceptible to more than one meaning." Noll v. Ritzer , 317 Mich. App. 506, 511, 895 N.W.2d 192 (2016). Courts may not infer legislative intent from the absence of action by the Legislature. McCahan v. Brennan , 492 Mich. 730, 749, 822 N.W.2d 747 (2012). "[A] legislature legislates by legislating, not by doing nothing, not by keeping silent." Id. (quotation marks and citation omitted). This Court defers "to a deliberate act of a legislative body, and does not inquire into the wisdom of its legislation." Bonner v. City of Brighton , 495 Mich. 209, 221, 848 N.W.2d 380 (2014) (citation omitted).

In In re Implementing Section 6w of 2016 PA 3341 for Cloverland Electric Coop. , 329 Mich. App. 163, 178, 942 N.W.2d 38 (2019), this Court explained the application of the in pari materia doctrine of statutory construction:

Statutes that relate to the same subject matter or share a common purpose are in pari materia and must be read together as one law to effectuate the legislative purpose as found in harmonious statutes. If two statutes lend themselves to a construction that avoids conflict, that construction should control. When two statutes are in pari materia but conflict with one another on a particular issue, the more specific statute must control over the more general statute.... [Quotation marks and citation omitted.]

In Summer v. Southfield Bd. of Ed. , 324 Mich. App. 81, 93, 919 N.W.2d 641 (2018), this Court explained, however, that the in pari materia doctrine is a rule of statutory construction that is not implicated if the language of the statute is unambiguous and the legislative intent is clearly expressed. In such circumstances, judicial construction is prohibited, and this Court must enforce the statute as written. Id. "Once the intention of the Legislature is discovered, this intent prevails regardless of any conflicting rule of statutory construction." Id. (quotation marks and citation omitted). In Voorhies v. Judge of Recorder's Court , 220 Mich. 155, 157-158, 189 N.W. 1006 (1922), our Supreme Court explained:

The rule, in pari materia , cannot be invoked here for the reason that the language of the statute is clear and unambiguous....

* * *

The rule, in pari materia , does not permit the use of a previous statute to control by way of former policy the plain language of a subsequent statute; much less to add a condition or restriction thereto found in the earlier statute and left out of the later one. The contention made, if allowed, would go beyond the construction of the statute, and engraft upon its provisions a restriction which the legislature might have added but left out....

"Statutes should be construed so as to prevent absurd results, injustice, or prejudice to the public interest." McAuley v. General Motors Corp. , 457 Mich. 513, 518, 578 N.W.2d 282 (1998). In In re Complaint of Rovas Against SBC Mich. , 482 Mich. 90, 103, 754 N.W.2d 259 (2008), our Supreme Court directed that

the construction given to a statute

...