Heinrich v. City of Detroit, Docket No. 77-2906

• Decision Date: 19 June 1979
• Docket Number: Docket No. 77-2906
• Citation: 282 N.W.2d 448,90 Mich.App. 692
• Parties: Edgar William HEINRICH, Plaintiff-Appellant, v. CITY OF DETROIT, a municipal corp. and the Board of Education of the City of Detroit, a public corporation, Defendants-Appellees, and County of Wayne, Michigan, a municipal corporation and State of Michigan, Albert Lee, Auditor General, State of Michigan, Defendants.
• Court: Court of Appeal of Michigan — District of US

Page 448

282 N.W.2d 448

90 Mich.App. 692

Edgar William HEINRICH, Plaintiff-Appellant, v. CITY OF DETROIT, a municipal corp. and the Board of Education of the City of Detroit, a public corporation, Defendants-Appellees and County of Wayne, Michigan, a municipal corporation and State of Michigan, Albert Lee, Auditor General, State of Michigan, Defendants.

Docket No. 77-2906.

Court of Appeals of Michigan.

June 19, 1979.

Released for Publication Aug. 22, 1979.

Travis, Warren, Nayer & Burgoyne, P. C. by John M. Roche and George E. Ward, Detroit, for plaintiff-appellant.

Boris K. Yakima, Detroit, for City of Detroit.

Kenneth Hylton, Detroit, for Board of Education.

Aloysius J. Suchy, Detroit, for County.

Russell E. Prins, Asst. Atty. Gen., Lansing, for State, State Treas., Auditor Gen., Dept. DNR.

Before CAVANAGH, P. J., and D. E. HOLBROOK, Jr. and KAUFMAN, JJ.

CAVANAGH, Presiding Judge.

Plaintiff, Edgar William Heinrich, appeals as of right from the trial court's finding of no cause of action in favor of codefendants City of Detroit and Detroit Board of Education.

Plaintiff brought an action in inverse condemnation against defendants, alleging that various individual and joint acts by the defendants in the management of an urban renewal project affected his property so adversely as to amount to a de facto taking without just compensation.

Plaintiff owned a building on Canfield in the City of Detroit. In late 1962, the City approved a massive urban renewal plan, entitled, "University City Rehabilitation Project", to condemn and rehabilitate 304 acres in the area near Wayne State University. This plan was divided into five smaller projects; plaintiff's building was included in the third project, slated for educational/recreational use.

The University City plan contained two planning and survey phases prior to acquisition of property. It is apparent from the record that the financial involvement of the Federal government considerably protracted completion of all phases. The Federal government also obligated the City to publicize its urban renewal plans by means of public meetings. One such meeting, respecting Project 3, was held on July 21, 1962. Plaintiff's commercial tenants attended that meeting and were told to "expect the City knocking on their doors as early as 1965". One tenant testified that he had the impression from the meeting that the property would eventually be taken.

As of the date of that meeting, plaintiff's tenant, Esterling Tri-Craft Printing, had five years remaining on its lease. In late 1964, the president of that company called the City and received assurances that the condemnation would occur at least by 1967, the year the company's lease ended. However, in 1965, Esterling was acquired by another printing company who moved Esterling's operations, as well as those of five other similarly acquired companies, to its main plant. Until the expiration of its lease, Esterling used the plaintiff's building for storage and lesser operations. The trial court found that there was no evidence that Esterling would have remained after the expiration of its lease, nor that the impetus to sell out its holdings came from the threatened condemnation.

Also in 1965, the City informed the plaintiff, in response to his letter expressing his concern at the deterioration and vandalism of his property, that his building would not be acquired until 1968 or 1969. The City's letter distinctly conveyed the impression that plaintiff's building would be acquired, but that Federal funding requirements prevented early acquisition. After plaintiff's tenants moved out in 1967, plaintiff listed the building for rental, but did not acquire new tenants.

By 1969, all acquisition efforts relating to Projects 3, 4 and 5 ended due to lack of funding. In 1967, the Detroit riots caused extensive damage in the neighborhood near plaintiff's property, although his building and the block in which it stood were not harmed. In 1968, with the building still vacant, plaintiff was unable to pay his property taxes. The State of Michigan acquired title in a tax sale, and deeded the property to the City in 1973. Plaintiff's property subsequently was incorporated into the expansion of a local high school.

The trial court found no evidence that the City and the Board acted in concert to deprive plaintiff of his property. The trial court found that although the defendant Board of Education was at all times interested in acquiring this property, it took no active steps to do so until after the City failed to proceed with acquisition under Project 3. It also held that while the threatened condemnation may have hindered plaintiff's ability to rent the building, he had failed to establish that the City's actions as opposed to the general area blight and the destruction caused by the 1967 riots were The or even the greater cause of this inability. It concluded, therefore, that no de facto taking occurred.

In addition to challenging as clearly erroneous the trial court's finding of fact that no taking occurred, the plaintiff asserts that the trial court erred in defining both the proper standard of causation to be applied in inverse condemnation cases and the nature of the plaintiff's burden of proof in such actions.

It is well settled in Michigan law that a "taking" of private property for public use may occur without absolute conversion of the property in question. It includes as well

"(c)ases where the value is destroyed by the action of the government, or serious injury is inflicted to the property itself, or exclusion of the owner from its enjoyment, or from any of the appurtenances thereto. In either of these cases it is a taking within the meaning of the provision of the Constitution."

Pearsall v. Board of Supervisors, 74 Mich. 558, 561, 42 N.W. 77, 77-78 (1889); In re Urban Renewal, Elmwood Park Project, 376 Mich. 311, 136 N.W.2d 896 (1965); Foster v. Detroit, 254 F.Supp. 655 (E.D.Mich.1966), Aff'd 405 F.2d 138 (CA 6, 1968). The plaintiff's alleged loss of revenue and inability to rent his property would fall within this definition, assuming that he can establish the causal connection between his loss and the City's actions in carrying out its urban renewal programs. ¹

Related to this issue of causation it is further apparent that not all government actions may amount to a taking for public use. In those cases finding a taking, the courts examined both the intensity and form of the accompanying publicity and the deliberateness of specific actions directed at a particular plaintiff's property by the city to reduce its value. Madison Realty Company v. Detroit, 315 F.Supp. 367, 371 (E.D.Mich.1970). See also, Richmond Elks Hall Ass'n v. Richmond, Redevelopment Agency 561 F.2d 1327 (CA 9, 1977). The mere threat of condemnation and its attendant publicity, without more, is insufficient. Therefore, before a court may conclude that a taking occurred, it must examine the totality of the acts alleged to determine whether the governmental entity abused its exercise of legitimate eminent domain power to plaintiff's detriment. Sayre v. City of Cleveland, 493 F.2d 64, 69 (CA 6, 1974), In re Urban Renewal, Elmwood Park Project, supra, 376 Mich., at 318, 136 N.W.2d 896. ²

Finally, even where abuses can be established, a causal connection must be drawn between the government's actions and an individual's alleged loss. In City of Muskegon v. DeVries, 59 Mich.App. 415, 420, 229 N.W.2d 479 (1975), Lv. den. 394 Mich. 787 (1975), it was held that a plaintiff in inverse condemnation must prove that the government's actions were The cause of the taking. The Court in that case cited no precedent for its conclusion. However, establishment of a causal link, in cases involving a city's management of an urban renewal program, may be hindered by the presence of other factors affecting a property's viability, such as neighborhood deterioration, urban blight and commercial obsolescence. Ironically, these factors may have provided the impetus for the urban renewal program in the first place and yet obscure even a plaintiff's legitimate right to compensation. See Foster, supra, at 662.

In our view, the City of Muskegon analysis (which apparently was followed by the trial court in the instant case. ³) takes too narrow an approach to the question of causation. We are persuaded that the better view is stated in Foster v. Detroit, supra, at 665, and relied on in Madison Realty Company v. Detroit, supra, at 371. A plaintiff may recover in inverse condemnation where:

"(t)he actions of the defendant * * * Substantially...