Harbor Land Co. v. Grosse Ile Tp.

• Decision Date: 26 February 1970
• Docket Number: No. 1,Docket No. 6266,1
• Citation: 22 Mich.App. 192,177 N.W.2d 176
• Parties: , 1 ERC 1366 HARBOR LAND COMPANY, a Michigan corporation, Plaintiff-Appellee, v. TOWNSHIP OF GROSSE ILE, a Michigan public corporation, Defendant-Appellant
• Court: Court of Appeal of Michigan — District of US

Page 176

177 N.W.2d 176

22 Mich.App. 192, 1 ERC 1366

HARBOR LAND COMPANY, a Michigan corporation, Plaintiff-Appellee, v. TOWNSHIP OF GROSSE ILE, a Michigan public corporation,

Defendant-Appellant.

Docket No. 6266.

Court of Appeals of Michigan, Division No. 1.

Feb. 26, 1970.

Released for Publication June 4, 1970.

Leave to Appeal Denied Oct. 14, 1970.

Frederick S. Glover, Jr., Moll, Desenberg, Purdy, Glover & Bayer, Detroit, for defendant-appellant.

Joseph T. Brennan, Farmington, for plaintiff-appellee.

Before R. B. BURNS, P.J., and HOLBROOK and V. J. BRENNAN, JJ.

HOLBROOK, Judge.

This case involves an action for damages for breach of contract brought in Wayne county circuit court by Harbor Land Company, a Michigan corporation and plaintiff herein, against the defendant Township of Grosse Ile, a Michigan public corporation.

On January 10, 1955, James Rossin and Paul Ringler, directors of plaintiff Company and herein referred to as Sponsors entered into a written contract with the Township. The contract discloses that the Sponsors owned certain undeveloped acreage within the Township which they desired to subdivide, develop and improve for residential purposes so as to meet the requirements of the Federal Housing Act and the Michigan State Department of Health pertaining to disposal and treatment of sewage; that the Township was without sewers and facilities for sewage treatment and disposal and was at the time, financially unable to erect an adequate sewer system and sewage treatment and disposal plant. The Sponsors offered to provide sanitary sewers and treatment facilities for 500 homes which would serve all of Sponsors' land. The defendant Township required the proposed sewage facilities of Sponsors to be enlarged so as to serve 875 houses before approving the project. The Sponsors complied with the Township demands.

The Sponsors, pursuant to the contract terms, agreed to provide, at their own expense and upon their own premises, a sewage treatment plant to be approved by the State Health Department, the Wayne County Road Commission, the Board of Health and defendant Township, and to convey the same to the Township upon satisfactory completion. The contract provided in part that:

'3. * * * If new subdivisions be developed by owners other than the Sponsors herein who could use said plant, Then before permission to tie into the plant be given, the new developments shall pay to the Sponsors a pro-rata fee for the privilege of such use. The pro-rata fee to be approved by the Township.

'4. When the Department of Health of the State of Michigan shall have issued a construction permit for said plant, then the Township will direct the issuance of a building permit to the Sponsors for the construction of the plant.

'5. Sponsors will at their expense provide and plant appropriate trees and shrubs for landscaping the site and screening the building in an attractive manner. During the construction of the plant the Township will have same inspected periodically, and upon satisfactory completion, the Sponsors will convey to the Township by warranty deed the land upon which the plant will be situated, plus the necessary land for screening purposes, which deed will be accepted by the Township. Said warranty deed will have a reverter clause, so that if this plant should be abandoned, then the land will revert to the grantors. * * *' (Emphasis supplied.)

The parties entered into a separate operation agreement of same date as the contract.

On January 11, 1955, the Sponsors assigned all their right, title and interest in the contract to the plaintiff, and plaintiff did, pursuant to the contract, construct a sewage treatment plant and facilities which, at the insistence of defendant Township, were designed to provide a capacity to serve 875 houses instead of the projected 500 houses to be placed on the land of the plaintiff and its predecessors in interest. Upon completion of the plant and facilities, the same were conveyed to the Township.

The Township Board, in accordance with the contract, did, on July 10, 1956, adopt the following resolution:

'RESOLVED AND ADOPTED, that a tapping fee of $200.00 be paid to the Harbor Land Company for any new homes built outside of their Subdivision; that the Township protect the Harbor Land Company by not permitting anyone to tap into the sewer until they have paid their fee to the Harbor Land Company securing a letter stating that they have paid the fee before any permits be issued to tap.'

On September 28, 1965, the Township rescinded the foregoing resolution and ceased requiring payment of the agreed tapping fees. On October 18, 1965 the Township Board voted to abandon plaintiff's Potawatomie Woods treatment plant when a treatment plant to be constructed by defendant, became operational. Accordingly, in that year, defendant Township did abandon the treatment plant constructed by plaintiff and proceeded to construct a new Township sewer system and treatment plant, into which plaintiff's sewer system was to be connected.

Mrs. Merele E. Solomon, a Supervisor for defendant Township since April, 1965, testified to the following facts regarding abandonment of plaintiff's plant. The Township had been informed by the Water Resources Commission that secondary sewage treatment would be required by 1970 so as to bring the water quality in the area surrounding Grosse Ile Township to a prescribed standard by that date; a stipulation to this effect was signed by the Township in March, 1966, several months after plaintiff had been informed of the Township's decision to abandon plaintiff's plant; consultation was had by Township Board members with the firm of Hubbull, Roth & Clark, consulting engineers, the Board apparently acting upon its recommendations as to what should be done to meet the requirements of the Water Resources Commission; and, the Board received from the Wayne County Road Commission official in charge of operation of plaintiff's treatment plant a breakdown of operation costs, upon defendant's request, which information was also allegedly considered by the Township in determining to abandon plaintiff's plant. Mrs. Solomon testified that, when abandoned, the sewage treatment plant constructed by plaintiff provided the same primary sewage treatment as did the plant later constructed by defendant Township.

The case was tried by the Honorable Cornelia G. Kennedy, without a jury. Upon stipulation of the parties, plaintiff's motion for temporary injunctive relief was denied and a temporary restraining order dismissed. In its opinion filed August 5, 1968, the trial court found defendant Township in breach of contract and awarded damages to plaintiff. Judgment for $37,000 was entered accordingly on September 5, 1968. Defendant appeals, raising several issues which we restate and consider as follows:

(1) Did the trial court commit error in finding that defendant Township properly entered into a binding contract containing an implied condition that the Township would continue operation of plaintiff's sewage treatment plant, including the collection of tap-in fees, during the plant's reasonable useful life?

The trial court, in accordance with GCR 1963, 517.1, as amended 1969, made findings of fact and conclusions of law thereon. In its opinion the trial court stated its findings in part as follows:

'* * * Plaintiff has alleged, and Defendant has admitted, that, 'a sewage treatment plant and facilities providing capacity for approximately 500 homes or 2000 people would have been adequate to serve the needs of the Plaintiff, but that the plant was increased in size at the insistence of the Defendant Township to serve approximately 875 homes and 3500 people and that such increase was a condition precedent imposed by the Defendant to their (sic) approval of this sewage disposal plant and this contract.' The area to be served was to be bounded by Horse Mill Road, East River Road, Stout Avenue and Canal Thoroughfare.

'Pursuant to the written agreement, Exhibit 1, Plaintiff constructed an interceptor sewer most of the length of Church Road and a sewage treatment facility at a total cost of approximately $129,000.00 and conveyed the same to the Township. It thus performed all its undertakings under the Agreement, Exhibit 1. Of this total, $20,995.51 was for the Church Road interceptor. The Agreement, Exhibit 1, was implemented by a resolution of the Township Board dated July 10, 1956, * * *.

'Thereafter the Township required applicants for building permits in the area covered by the agreement to show evidence that they had paid the $200.00 tap fee to Harbor Land Company before such a permit would be issued for all persons, except lot owners in Rossin-Ringler Subdivision No. 1 and Potawatomie Woods Subdivision which had been developed by Plaintiff. During the period prior to September 1965 permits were issued and Plaintiff received the $200.00 fee for each.

'Sometime in 1965 the Township of Grosse Ile undertook to build and put into operation a sewage treatment facility of its own. Initial contracts were let for the area excluding that served by the sewage treatment plant constructed by Plaintiff. Subsequently the Township determined that it would include the entire island in the area to be serviced by the new facility. It rescinded its resolution of July 10, 1956, abandoned the sewage treatment plant construction by Plaintiff, and ceased to collect tap-in fees.

'Plaintiff contends that under the agreement the Defendant is required to continue to collect tap-in fees for permits issued in the area between Horse Mill Road, East River Road, Stout Avenue, and Canal Thoroughfare, and that its announced refusal to do so constituted a breach of the agreement. Defendant, on the other hand, contends that the agreement did not require the Township of Grosse Ile to collect these fees for any specified or determinate period, and that it was required to collect the same only so long as new...