City of Novi v. Robert Adell Children's Funded Trust

• Decision Date: 20 July 2005
• Docket Number: Docket No. 122985. Calendar No. 6.
• Citation: 701 N.W.2d 144,473 Mich. 242
• Parties: CITY OF NOVI, Plaintiff-Appellant, v. ROBERT ADELL CHILDREN'S FUNDED TRUST, Franklin Adell Children's Funded Trust, Marvin Adell Children's Funded Trust, and Novi Expo Center, Inc., Defendants-Appellees.
• Court: Michigan Supreme Court

701 N.W.2d 144

473 Mich. 242

CITY OF NOVI, Plaintiff-Appellant, v.ROBERT ADELL CHILDREN'S FUNDED TRUST, Franklin Adell Children's Funded Trust, Marvin Adell Children's Funded Trust, and Novi Expo Center, Inc., Defendants-Appellees.

Docket No. 122985. Calendar No. 6.

Supreme Court of Michigan.

Argued April 13, 2005.

Decided July 20, 2005.

Secrest Wardle(by Gerald A. Fisher, Thomas R. Schultz, and Stephen P. Joppich), Farmington Hills, MI, for the plaintiff.

Steinhardt Pesick & Cohen, Professional Corporation(by H. Adam Cohen, Jerome P. Pesick, and Jason C. Long), Southfield, MI, for the defendants.

TAYLOR, C.J.

In this land condemnation case where the city of Novi is attempting to take private property to construct a road, the first issue is whether the requirement of a public use, under Const. 1963, art. 10, § 2, is met when the proposed road will be available for use by the public but will be primarily used by a private entity that has contributed funds to the project.We conclude that such a road does qualify as a public use.The second issue is whether, under M.C.L. § 213.56, a court can find the city has abused its discretion in determining there is a public necessity for the condemnation when the city has not considered alternatives to the taking.We conclude that a failure of the city to consider alternatives was not an abuse of its discretion.Because the Court of Appeals incorrectly decided that the proposed road was not a public use, we reverse that decision.We also find no fraud, error of law, or abuse of discretion in the city's determination that there exists a public necessity to take defendants' property for the proposed project.Accordingly, we remand this matter to the trial court for entry of summary disposition in favor of plaintiff.

I

For many years traffic congestion at the intersection of Grand River Avenue and Novi Road in the city of Novi was a concern to the city because it represented a growing traffic hazard.As early as 1984 a study recommended a "ring road" around the intersection to relieve traffic congestion and provide access to vacant land not fronting on Grand River Avenue or Novi Road.The study also recommended a road, referred to here as the "spur road," from the northwest side of the ring road, that would access industrial establishments that were then accessed from Grand River Avenue.The study recommended the spur road because the employee traffic from the industries with access on Grand River Avenue was resulting in frequent accidents.The study noted that, but for "the need to resolve [this] critical traffic problem," the northwest quadrant of the ring road project "may have been abandoned altogether."

Wisne Corporation was one of the industrial entities that would be served by the spur road.¹The new spur road was to traverse property owned by defendants, even though Wisne Corporation owned property that could possibly be used for a new access road.Wisne at one point agreed to pay $200,000 toward the funding of the spur road, and the road was to be named A.E. Wisne Drive.

In August 1998, the Novi City Council passed resolutions declaring the necessity for taking defendants' property for the purpose of creating A.E. Wisne Drive.Plaintiff filed a condemnation complaint in September 1998 pursuant to the Uniform Condemnation Procedures Act, M.C.L. § 213.51 et seq.

Defendants filed a motion challenging the public purpose and necessity of the taking, pursuant to M.C.L. § 213.56.Defendants claimed that the taking was for the private purpose of benefiting Wisne, pointing out Wisne's financial support for the road and documents referring to the benefit Wisne would receive from the road.Defendants did not deny that the public would use the street.Rather, the thrust of defendants' argument was that the road was planned to primarily serve private entities and that the city wanted to include it in the plans because the funding Wisne agreed to provide would entitle the city to obtain state funding for the rest of the ring road project.Defendants also alleged that the taking was not necessary, and that the city exceeded its authority because the enabling legislation that gave it authority to condemn did not permit it to take property from one private owner and transfer it to another private owner.

In 1999, the trial court held a three-day evidentiary hearing and bench trial, during which a dozen witnesses testified.The parties stipulated that the existing access drive used by Wisne was hazardous and that it was going to be eliminated as a result of part of a bridge improvement project undertaken by the Oakland County Road Commission on Grand River Avenue.²

The circuit court concluded that the proposed taking was unconstitutional.The court applied the heightened scrutiny test set forth in Poletown Neighborhood Council v. Detroit,410 Mich. 616, 304 N.W.2d 455(1981),³ concluding that although the project "further[ed] a benefit to the general public," it benefited a specific, identifiable, private interest, and this private benefit predominated over the benefit to the general public.Although the trial court did not expressly say so, presumably it found that under Poletown such a predominant private benefit removed the project from the realm of constitutional, public uses.Without further explanation, the court then held that "Plaintiff City's actions evidence a lack of public necessity by fraud, error of law and/or abuse of discretion," and thus the proposed taking was unconstitutional.

In analyzing plaintiff's appeal, the Court of Appeals also relied on Poletown, recognizing that it was bound to do so. 253 Mich.App. 330, 343, 659 N.W.2d 615(2002).It noted that both the majority opinion and Justice Ryan's dissent in Poletown regarded the concept of public necessity as being separate and distinct from that of public use or public purpose.Although it found that the trial court had erred by conflating the two concepts, the Court found this error harmless because it agreed with the trial court that the private interest predominated over the public interest, making the proposed taking unconstitutional.The Court found the public benefit to be "speculative and marginal" and the private interest "specific and identifiable," primarily to the benefit of Wisne.It affirmed the judgment of the trial court, concluding that, under the Poletown heightened scrutiny test, plaintiff failed to show the project was a public use.

We granted the city of Novi's application for leave to appeal after issuing our decision in Wayne Co. v. Hathcock,471 Mich. 445, 684 N.W.2d 765(2004).471 Mich. 889, 687 N.W.2d 297(2004).

II

Under the Michigan Constitution, private property shall not be taken for public use without just compensation.Const. 1963, art. 10, § 2.This provision precludes condemnation of private property for private use, even though some "public interest" may be said to be served by such private use.Hathcock, supra at 472, 684 N.W.2d 765;Portage Twp. Bd. of Health v. Van Hoesen,87 Mich. 533, 49 N.W. 894(1891).We review de novo the question whether a proposed taking is constitutional.Hathcock, supra at 455, 684 N.W.2d 765.

The statutes under which plaintiff was proceeding are the Home Rule City Act, M.C.L. § 117.1 et seq., and the Uniform Condemnation Procedures Act, M.C.L. § 213.51 et seq.The former authorizes plaintiff to condemn private land for boulevards and streets, among other uses, M.C.L. § 117.4e, and the latter provides the procedures plaintiff must follow for condemnation.Defendants' challenge to the proposed taking was made pursuant to M.C.L. § 213.56, which allows the owner of the property to be taken "to challenge the necessity of acquisition of all or part of the property for the purposes stated in the complaint" by filing a motion asking that the necessity be reviewed.M.C.L. § 213.56(1).The statute also provides that when the proposed taking is by a public agency, "the determination of public necessity by that agency is binding on the court in the absence of a showing of fraud, error of law, or abuse of discretion."M.C.L. § 213.56(2).We review the trial court's factual findings for clear error, but its legal conclusions are reviewed de novo.Federated Publications, Inc. v. City of Lansing,467 Mich. 98, 106, 649 N.W.2d 383(2002).⁴

III

There does not appear to be any dispute that plaintiff, in its charter, has claimed for itself the condemnation powers granted it by the Legislature under the Home Rule City Act.The act authorizes plaintiff to take private property for the purpose of a public road.M.C.L. § 117.4e. Defendants also do not question that the ring road part of the project is a public road.The heart of this case is whether the spur road part of the project constitutes a private use requiring rejection of part or all of the road project.Plaintiff asserts that the planned spur road is a public use and that defendants have not successfully challenged the necessity of the project.We agree.

This Court recently clarified Michigan's law concerning public use in Hathcock, supra.However, we declined to provide a "single, comprehensive definition of `public use ....'"Hathcock, supra at 471, 684 N.W.2d 765.We overruled Poletown's heightened scrutiny test because it violates our Constitution, and instead set forth the three-factor test proposed by Justice Ryan in his dissenting opinion in Poletown.Under Hathcock, when land condemned by a public agency is transferred to a private entity, we do not weigh the relative benefits but instead analyze the facts to see if any of three conditions are met.⁵However, such a transfer of property is not proposed here; the city will retain ownership of the land.Thus, although Hathcock informs us that we are not to use Poletown's heightened scrutiny test, it does not provide us with the elements to apply when the public agency retains ownership and control.

Plaintiff urges us to hold...