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

• Decision Date: 09 January 2003
• Docket Number: Docket No. 223944.
• 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: Court of Appeal of Michigan — District of US

659 N.W.2d 615

253 Mich. App. 330

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. 223944.

Court of Appeals of Michigan.

Submitted May 14, 2002, at Detroit.

Decided October 4, 2002, at 9:10 a.m.

Released for Publication January 9, 2003.

Secrest, Wardle, Lynch, Hampton, Truex and Morley (by Thomas R. Schultz), Farmington Hills, for city of Novi.

Steinhardt Pesick & Cohen, P.C. (by H. Adam Cohen), Southfield, for Adell Children's Funded Trusts. Before: WHITBECK, C.J., and O'CONNELL and METER, JJ.

WHITBECK, C.J.

Plaintiff city of Novi appeals as of right from the trial court's order dismissing its condemnation action after the trial court determined that the proposed taking of certain property owned by the Robert Adell Children's Funded Trust, the Franklin Adell Children's Funded Trust, and the Marvin Adell Children's Funded Trust (the Adell trusts) primarily benefited a private interest, not the public. We affirm.

I. Basic Facts And Procedural History

It is apparently undisputed that the city of Novi has long experienced traffic congestion at the intersection of Grand River Avenue and Novi Road. According to the trial court, the city proposed to construct two roads to deal with this situation. The first was to be the "Ring Road" or "Crescent Boulevard," that would form a ring around the congested intersection. The second was to be A.E. Wisne Drive that was to serve as an "industrial spur" and that would traverse the Adell trusts' property.

As part of this road project, the city commenced a condemnation action pursuant to the Michigan Home Rule City Act¹ and the Uniform Condemnation Procedures Act,² principally to acquire property for the A.E. Wisne Drive. The Novi Expo Center sits on the Adell trusts' property, which they rent to the Novi Expo Center, Inc. When the Adell trusts filed their answer to the complaint, they also filed a motion that, according to the trial court, challenged both the public purpose and the necessity of the condemnation as it related to the A.E. Wisne Drive. The Novi Expo Center did not join in the motion. The Adell trusts argued that the city abused its discretion and committed clear legal error as well as fraud in seeking to condemn the property for the benefit of two private property owners, Wisne Corporation³ and General Filters, Inc. The Adell trusts also contended that the city lacked the proper enabling legislation to support the condemnation action.

In July 1999, the trial court conducted an evidentiary hearing on the Adell trusts' challenge to the public purpose and necessity of the condemnation, taking testimony from twelve witnesses. At the close of defendants' proofs, the city moved to dismiss the Adell trusts' claim that it was constructing the road "for a private purpose and not for a public purpose." The trial court delayed ruling on the motion until it heard further proofs.

When the trial court ultimately issued its opinion and order on November 17, 1999, it articulated the critical issue as "whether [the city's] actions constitute a taking of private property for private use and, therefore, violates [sic] the takings clause of the Michigan Constitution, Const. 1963, art. 10, § 2." The trial court then stated the applicable legal standard, starting with the relevant statute:

"With respect to an acquisition 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." MCL 213.56(2); MSA 8.265(6)(2). Upon challenging such a determination, the property owner bears the burden of proof to show a lack of public necessity by fraud, error of law or abuse of discretion. Detroit v. Lucas, 180 Mich.App. 47, 54, 446 N.W.2d 596 (1989),lv. den. 434 Mich. 918 (1990). See Kent County Rd. Comm'n v. Hunting, 170 Mich.App. 222, 229-30, 428 N.W.2d 353 (1988),lv. den. 432 Mich. 914, 441 N.W.2d 420 (1989).

The trial court ultimately found that defendants had "met their burden of showing that Plaintiff City's actions evidence a lack of public necessity by fraud, error of law and/or abuse of discretion." The trial court stated that "[a]pplying heightened scrutiny to the overwhelming evidence before this Court, the Court finds that the proposed industrial spur, A.E. Wisne Drive, is primarily for the benefit of Wisne, which benefit predominates over those to the general public." As a result, the trial court concluded that the proposed condemnation violated Const. 1963, art. 10, § 2.

II. Standard Of Review

Although this court reviews de novo statutory and constitutional issues,⁴ we give "considerable weight" to the trial court's factual findings.⁵ A trial court's findings of fact may not be set aside unless clearly erroneous.⁶ "A finding of fact is clearly erroneous when, although there is evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been committed."⁷

III. The City's Appeal

In its brief on appeal, the city maintains that the proper public purpose of this desired construction project is to minimize a public hazard for individuals traveling on Grand River Avenue when traffic flows from the Wisne/PICO and General Filters facilities on a single, shared access to the public road. The city contends that, because A.E. Wisne Drive would be a public road and would aid traffic congestion problems in the area, there is concrete proof that the condemnation was primarily for the public's benefit. Thus, the city claims that the proposed taking was constitutional.

While the ultimate constitutional issue remained a central focus at oral arguments, counsel for the city and the Adell trusts also attempted to elucidate the difference between, on the one hand, the public purpose/public use of land being condemned and, on the other hand, the public necessity of the condemnation. The fog of terminology in the statutes and the opinions interpreting these statutes did not make the attorneys' task any easier. Thus, after first reviewing the law of takings, but before we consider whether the trial court correctly held that this was an unconstitutional taking, we examine the burden on a property owner with respect to challenging the public use of property that is the subject of a condemnation proceeding.⁸

IV. Takings Overview

The federal and state constitutions permit government takings of private property only with just compensation.⁹ However, regardless of compensation, the government may not take private property for a private purpose.¹⁰ In Poletown, Neighborhood Council v. Detroit,¹¹ the Michigan Supreme Court stated that "whether the proposed condemnation is for the primary benefit of the public or the private user" determines if the taking is constitutional. As the Poletown Court explained:

The power of eminent domain is restricted to furthering public uses and purposes and is not to be exercised without substantial proof that the public is primarily to be benefited. Where, as here, the condemnation power is exercised in a way that benefits specific and identifiable private interests, a court inspects with heightened scrutiny the claim that the public interest is the predominant interest being advanced. Such public benefit cannot be speculative or marginal but must be clear and significant if it is to be within the legitimate purpose as stated by the Legislature.¹²

V. The Adell Trusts' Burden

The city sought to condemn the Adell trusts' property pursuant to the process prescribed in the Uniform Condemnation Procedures Act (UCPA).¹³ The UCPA is just that, a procedural statute. It does not grant the power of eminent domain to a city. Rather, the UCPA "provides standards for the acquisition of property by an agency, the conduct of condemnation actions, and the determination of just compensation."¹⁴ In setting procedures, however, the UCPA appears to draw at least something of a distinction between public purpose/public use and public necessity:

(1) Within the time prescribed to responsively plead after service of a complaint, an owner of the property desiring to challenge the necessity of acquisition of all or part of the property for the purposes stated in the complaint may file a motion in the pending action asking that the necessity be reviewed. The hearing shall be held within 30 days after the filing of the motion.

(2) With respect to an acquisition 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.

(3) [W]ith respect to an acquisition by a private agency, the court at the hearing shall determine the public necessity of the acquisition of the particular parcel.¹⁵

Thus, the statute, in subsection 1 appears to allow a challenge both to the necessity for the acquisition and to the purposes stated in the complaint. Further, in subsection 2, the statute seems to make the determination of public necessity binding on the reviewing court, in the absence of a showing of fraud, error of law, or abuse of discretion. At the same time, subsection 2 is entirely silent on what effect, if any, the public agency's determination regarding public use/public purpose might have on the reviewing court. In other words, the UCPA does not place a burden on the property owner to disprove the agency's assertion that the taking serves a public purpose/public use, implicitly suggesting that the agency must positively demonstrate the public purpose/public use. This burden is consonant with the language in Const. 1963, art. 10, § 2.

Nevertheless, this Court in its dicta in Detroit v. Lucas¹⁶ essentially combined the separate concepts of public purpose/public use and public necessity as they are used in the UCPA. In Lucas, the city of Detroit, pursuant to the...