Electro-Tech, Inc. v. H.F. Campbell Co.

• Decision Date: 01 August 1989
• Docket Number: ELECTRO-TEC,INC,Docket No. 81866
• Citation: 433 Mich. 57,445 N.W.2d 61
• Parties: , a Michigan corporation, Plaintiff-Appellant, v. H.F. CAMPBELL CO., a Michigan corporation, and City of Westland, Defendants-Appellees.
• Court: Michigan Supreme Court

Page 61

445 N.W.2d 61

433 Mich. 57

ELECTRO-TECH, INC., a Michigan corporation, Plaintiff-Appellant, v. H.F. CAMPBELL CO., a Michigan corporation, and City of

Westland, Defendants-Appellees.

Docket No. 81866.

Supreme Court of Michigan.

Argued Oct. 6, 1988.

Decided Aug. 1, 1989.

Page 62

[433 Mich. 60] Jackson & Laska, P.C. by Wilson M. Jackson, George Laska, Warren, for plaintiff-appellant.

Cummings, McClorey, Davis & Acho, P.C. by Owen J. Cummings, Gail P. Massad, Livonia, for defendant-appellee, City of Westland.

RILEY, Chief Justice.

Plaintiff-appellant applied to the City of Westland for permission to construct a manufacturing plant on its property. In exchange for site-plan approval and a subsequent building permit, the city council demanded the dedication of a strip of land adjacent to Newburgh Road for an unrelated roadwidening project. Although the plaintiff repeatedly requested that the council remove the restriction, it did not appeal the council's decision to a higher city authority. Nor did the plaintiff attempt to have the restriction lifted by way of a circuit court injunction or declaration.

At a council meeting on June 11, 1979, the council approved the plaintiff's site plan subject to five stated conditions, one being the dedication of land. The plaintiff refused to give away its property and submitted no revised site plan. Thus, the [433 Mich. 61] proposed building was never erected. However, the City of Westland, through formal condemnation proceedings, eventually acquired the strip of land abutting Newburgh Road.

Later, the plaintiff brought an action against the city under 42 U.S.C. Sec. 1983, alleging that the city "took" its property without just compensation and without due process of law in violation of the Fifth and Fourteenth Amendments. We are asked, in this case, to determine whether this property owner is entitled to recover damages under 42 U.S.C. Sec. 1983 for the alleged taking caused by the "wrongful" denial of a building permit. Accordingly, we must first determine the procedural prerequisites for such an action and whether this plaintiff has met them.

We hold that before proceeding under 42 U.S.C. Sec. 1983, a property owner must first obtain a final decision from the particular governmental entity that is alleged to have unconstitutionally taken his property and also attempt to obtain just compensation through inverse condemnation. In the instant case, because the conditional approval of the plaintiff's site plan was not the city's final disposition of the matter, we hold that the plaintiff's Sec. 1983

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claim was not ripe for adjudication. We need not reach, therefore, the question whether the council's actions actually constituted a "taking" within the meaning of the Fifth and Fourteenth Amendments. We affirm the decision of the Court of Appeals that the trial court erred in permitting the plaintiff to proceed to trial on its Sec. 1983 claim

I. FACTS AND PROCEEDINGS

Plaintiff-appellant, Electro-Tech, Inc., manufactures electrical and electronic products. Much of [433 Mich. 62] Electro-Tech's business involves contracts with the United States military. The company's manufacturing facility is located on Newburgh Road in the City of Westland.

Mr. Jack Beauchamp is the president and sole shareholder of Electro-Tech. In anticipation of securing additional contracts with the government and in order to more efficiently complete existing contracts, Mr. Beauchamp decided to build another manufacturing plant directly behind the existing facility. On October 26, 1978, Electro-Tech contracted with defendant, H.F. Campbell Company, to construct the new building. Pursuant to the agreement, Campbell was obligated to obtain a building permit and to complete construction by February 13, 1979.

On or about March 3, 1979, Mr. Beauchamp approved Campbell's site plan. However, before obtaining a building permit and actually beginning construction, Campbell was required to submit its plan for review by various city departments. The recommendations of these departments are then submitted to the planning commission for initial site-plan approval. The planning commission thereafter makes its recommendation to the city council for approval. After a site plan passes the council, the matter is finally submitted to the building department. The building department then examines the final site and building plans and, if approved, issues a building permit. ¹

On February 21, 1979, representatives of the various departments met to discuss Campbell's proposed site plan. At that meeting, the representatives compiled a list of thirteen items which were required to be included in the site plan before submission to the planning commission and [433 Mich. 63] city council. This list was forwarded by letter to Mr. Richard Wagner, the project director for Campbell. Although not included in the list, a recommendation was apparently made at this meeting to require, in exchange for site-plan approval and a subsequent building permit, the dedication of a twenty-seven-foot strip along the front of Electro-Tech's property for the widening of Newburgh Road. ² The instant lawsuit concerns this dedication requirement.

On March 22, 1979, Mr. Wagner received a letter stating that the planning commission would recommend that the city council approve the site plan contingent upon, among other things, Electro-Tech's dedication of the strip adjacent to Newburgh Road. At trial, Mr. Beauchamp testified that, during the spring of 1979, he attended four or five council meetings protesting the city's demand.

Nonetheless, at a meeting on June 11, 1979, with Mr. Beauchamp in attendance, the city council approved the site plan, subject to five stated contingencies:

"1) Loading area should be clearly designated as such by striping and signage.

"2) A second access door in the new addition is required along the north side of the building for fire protection.

"3) Fire and Engineering requirements must be met on final engineering and building plans.

"4) Dedication of 27 feet wide, approximately 210 feet in front of K2da for future Newburgh Road right-of-way.

"5) The front greenbelt area is to be graded and sodded." (Emphasis added.)

Page 64

[433 Mich. 64] Neither Campbell nor Electro-Tech attempted to appeal ³ the decision of the city council or to take the matter directly to the building department. It is also established that Electro-Tech did not attempt to have the dedication condition removed by way of a circuit court injunction or declaration.

Soon after the meeting of June 11, however, Campbell began making revisions to the site plan to comply with the requests of the city council. Plaintiff claims that all of the contingencies except for the dedication were met. However, evidence adduced at trial suggests that Campbell never submitted a final site plan to the council or to the building department (which is ultimately responsible for issuing the building permit) and was, in fact, still revising through September of 1979.

Because of its failure to procure site-plan approval and a subsequent building permit, Campbell could not proceed with the construction of Electro-Tech's new plant. Without the additional work space, Electro-Tech alleged it could not bid on several upcoming contracts and was forced to subcontract work on existing contracts in order to meet government deadlines.

On October 15, 1979, the City of Westland sent Electro-Tech a letter offering to purchase the strip of land abutting Newburgh Road. Mr. Beauchamp rejected the initial offer, maintaining that the proposed purchase price was too low. In January of 1980, the city filed a condemnation action in Wayne Circuit Court. ⁴

On May 21, 1982, Electro-Tech brought this [433 Mich. 65] action against the City of Westland, ⁵ alleging that the city's "extortionary" demand and "wrongful" denial of the building permit violated both state and federal law. At the pretrial motions for summary disposition, the trial court dismissed Electro-Tech's state claims as being barred by governmental immunity.

On June 11, 1985, Electro-Tech proceeded to trial on its claim under 42 U.S.C. Sec. 1983. The jury returned a verdict in favor of Electro-Tech in the amount of $433,052. On July 9, 1985, the city moved for judgment notwithstanding the verdict, which was denied by order entered July 23, 1985.

The city appealed, raising four issues. Reaching only the first, the Court of Appeals reversed, holding that the trial court erred in permitting Electro-Tech to proceed to trial under 42 U.S.C. Sec. 1983. ⁶ Specifically, the Court of Appeals stated "that no violation of constitutional or federal law exists where plaintiff has merely been erroneously denied initial site approval and a building permit by a city council. Plaintiff must look for review of that decision within the state." 161 Mich.App. 622, 629, 411 N.W.2d 800 (1987).

On March 22, 1988, we granted leave to appeal limited to the issue whether the plaintiff's judgment under 42 U.S.C. Sec. 1983 should be reinstated. ⁷

II. DISCUSSION

Section 1983 ⁸ provides a civil remedy to persons [433 Mich. 66] deprived of constitutional rights by individuals acting under color of state law. In Parratt v. Taylor, 451 U.S. 527, 101

S.Ct. 1908, 68 L.Ed.2d 420 (1981), a state prison inmate lost a mail-order hobby kit, valued at $23.50, when a prison official negligently handled the prison mail. The inmate brought a Sec. 1983 action, claiming a deprivation of his property without due process of law in violation of the Fourteenth Amendment. ⁹ In deciding the fate of the respondent's claim, the United States Supreme Court stated

"[I]n any Sec. 1983 action the initial inquiry must focus on whether the two essential elements to a Sec. 1983 action are present: (1) whether the conduct complained of was committed by a person acting under color of state law; and (2) whether this [433 Mich. 67] conduct deprived a person of...