City of Lansing v. Edward Rose Realty, Inc.
| Citation | 502 N.W.2d 638,442 Mich. 626 |
| Decision Date | 01 March 1993 |
| Docket Number | Nos. 93256,93257,s. 93256 |
| Parties | CITY OF LANSING, Plaintiff-Appellant, Cross-Appellee, v. EDWARD ROSE REALTY, INC., Trappers Cove Apartments-Stage 3, Defendants-Appellees, Cross-Appellants, and The Riggs National Bank of Washington, D.C., Defendant. CITY OF LANSING, Plaintiff-Appellant, Cross-Appellee, v. EDWARD ROSE ASSOCIATES, INC., d/b/a Flint Building Company, Inc., Defendant-Appellee, Cross-Appellant, and American Federal Savings & Loan Association, and the Great West Life Assurance Company, Defendants. , |
| Court | Supreme Court of Michigan |
In this case we are asked to review a city ordinance providing for mandatory access to private property by the grantee of a city franchise for provision of cable television services. We hold the ordinance to be unreasonable and beyond the authority of the city to exercise the power of eminent domain.
In April 1974, the City of Lansing entered into a franchise agreement with Continental Cablevision, Inc., providing Continental with the nonexclusive right to operate its cable system in the City of Lansing. This agreement was amended several times and is currently in effect until the year 2004. Among other requirements, Continental agreed to provide nine designated access channels, an emergency override system, universal service, and to pay three percent of its gross revenues as a franchise fee to the city, retaining 0.35 percent of its gross revenues for funding of community cable services.
Defendants Rose own two apartment complexes, Trappers Cove and Waverly Park. In August 1980, Rose's predecessors in interest entered into a private agreement with Continental providing Continental with the exclusive right to install and operate its cable system for the properties. The agreement provided for amendment, modification, or cancellation if agreed to in writing by both parties, and established the rights and obligations of the parties upon termination. On December 23, 1986, Rose gave Continental notice of an intention not to renew the contract upon its expiration on June 30, 1987. 1 Rose also informed Continental of an intention to install a private cable system, a "satellite master antenna television system" (SMATV), which would provide comparable cable service to the tenants of the apartment complexes.
In March 1987, Continental submitted a proposed ordinance to the city that would prohibit an owner of a multiple-unit residential dwelling from interfering with a tenant's choice to receive cable service from the city's franchisee. On June 1, 1987, the city adopted ordinance 753, providing:
"No owner, agent or representative of the owner of any dwelling shall directly or indirectly prohibit any resident of such dwelling from receiving cable communication installation, maintenance and services from a Grantee operating under a valid franchise issued by the City."
If an owner refused access by the franchised cable service, upon request of the franchisee the city could commence condemnation proceedings. The franchisee was responsible for indemnification of all expenses and costs incurred by the city. Id.
Rose indicated that it would refuse access to Continental upon expiration of their agreement, and on June 11, 1987, Continental requested that the city commence condemnation proceedings. On August 31, 1987, the city council passed resolution no. 0446, providing that the city council deemed "multi-channel CATV service to Trappers Cover [sic] and Waverly Park to be in the public interest, and to constitute both a public use and a public purpose." Pursuant to the authority of ordinance 753, the city resolved to retain an appraiser to determine the fair-market value of Rose's property occupied by Continental, to make an offer to purchase the property, and to take steps necessary to acquire the property. 2 On November 9, 1987, the city council passed resolution no. 0557, confirming "its finding in Resolution 0446 that the service provided by Continental Cablevision, as a licensed franchisee, to residents of Trappers Cove and Waverly Park, is in the public interest, and constitutes a public use, a public purpose, and a public necessity." Resolution 557 also authorized the city attorney to take steps to acquire Rose's property pursuant to the Uniform Condemnation Procedures Act, M.C.L. § 213.51 et seq.; M.S.A. § 8.265(1) et seq., including offering to purchase the property from Rose or, failing an agreement regarding the purchase, filing a complaint asking the court to "ascertain and determine just compensation to be paid for the acquisition of the Property."
Following the inability of the parties to agree to the purchase, on March 3, 1988, the city filed two complaints for condemnation. Rose filed its answers and affirmative defenses, as well as motions to review necessity pursuant to M.C.L. § 213.56(1); M.S.A. § 8.265(6)(1). The two cases were consolidated, and a bench trial proceeded considering the necessity of the proposed taking.
The trial court denied Rose's motions to review necessity and upheld the validity of the condemnation proceedings. After the jury was impaneled to determine just compensation, Rose's application for leave to appeal to the Court of Appeals was granted and all proceedings in the trial court were stayed. The Court of Appeals reversed the judgment of the trial court, finding the proposed condemnation exceeded the city's authority to take private property through eminent domain. The Court concluded that "the primary beneficiary of the taking is not the public, but rather Continental Cablevision." 192 Mich.App. 551, 557, 481 N.W.2d 795 (1992). Further, "the proposed condemnation is an attempt by a private entity to use the city's taking powers to acquire what it could not get through arm's length negotiations with defendants." Id. at 558, 481 N.W.2d 795.
The city's application for leave to appeal to this Court was granted on November 4, 1992. 3
Resolution of the question posed in this case requires that we turn first to our state and federal constitutions, mandating that private property shall not be taken for public use without just compensation. Const. 1963, art. 10, § 2; U.S. Const., Am.V. Because a municipality has no inherent power to condemn property even for public benefit or use, 4 the power of eminent domain must be specifically conferred upon the municipality by statute or the constitution, or by necessary implication from delegated authority. 5
The city commenced this action for condemnation pursuant to the Uniform Condemnation Procedures Act, M.C.L. § 213.56; M.S.A. § 8.265(6), to secure for use by Continental that portion of Rose's property required for operation of Continental Cable services. However, the UCPA does not confer upon a city the power of eminent domain, but rather "provides standards for the acquisition of property by an agency, the conduct of condemnation actions, and the determination of just compensation." M.C.L. § 213.52(1); M.S.A. § 8.265(2)(1). Hence in order to employ the procedures of the UCPA, a city must be authorized to exercise its power of eminent domain by a statutory or constitutional delegation of such power. In the instant case, the city asserts authority to condemn Rose's property pursuant to a general statute applicable to acquisitions by state agencies and public corporations and the home rule cities act. M.C.L. § 117.1 et seq.; M.S.A. § 5.2071 et seq. M.C.L. § 213.23; M.S.A. § 8.13 provides:
"Any public corporation or state agency is authorized to take private property necessary for a public improvement or for the purposes of its incorporation or for public purposes within the scope of its power for the use or benefit of the public and to institute and prosecute proceedings for that purpose."
A public corporation or state agency 6 may commence condemnation proceedings when it has:
"declared ... public purposes within the scope of its powers make it necessary, and ... that it deems it necessary to take private property for such ... public purposes within the scope of its powers, designating the same, and that the improvement is for the use or benefit of the public." M.C.L. § 213.24; M.S.A. § 8.14.
In addition, the home rule cities act, M.C.L. § 117.4e; M.S.A. § 5.2078 provides:
The home rule act is to be liberally construed. Const. 1963, art. 7, § 34. 8 Although not a grant of authority, the home rule act provides a framework within which this Court reviews actions by a municipal corporation. 9
The city is authorized to condemn private property for any public use within the scope of its powers. The cited enabling statutes, however, do not specifically authorize the takings in the present case. There is no state statute identifying as a public use or purpose the mandatory access onto private property by a city-franchised cable television...
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