Hendee v. Putnam Twp.

Decision Date15 July 2010
Docket NumberCalendar No. 2.,137447.,Docket No. 137446
Citation786 N.W.2d 521,486 Mich. 556
PartiesJeffrey HENDEE, Michael Hendee, Louann Demorest Hendee, and Village Pointe Development LLC, Plaintiffs-Appellees,v.PUTNAM TOWNSHIP, Defendant-Appellant.
CourtMichigan Supreme Court

COPYRIGHT MATERIAL OMITTED

Myers & Myers, PLLC (by Roger L. Myers), Howell, for plaintiffs.

Foster, Swift, Collins & Smith, P.C. (by Thomas R. Meagher), Lansing, for defendant.

McClelland & Anderson, LLP (by David E. Pierson), Lansing, Honigman Miller Schwartz & Cohn LLP (by Norman Hyman), and Berry Reynolds & Rogowski PC (by Ronald E. Reynolds), Farmington Hills, for amici curiae the Real Property Law Section of the State Bar of Michigan.

Bauckham, Sparks, Lohrstorfer, Thall & Seeber, P.C. (by John K. Lohrstorfer), Kalamazoo, for amici curiae the Michigan Townships Association.

Johnson, Rosati, LaBarge, Aseltyne & Field, P.C. (by Carol A. Rosati), Farmington Hills, for amici curiae the Michigan Municipal League, the Michigan Municipal Risk Management Authority, and the Michigan Municipal League Liability and Property Pool.

WEAVER, J.

In this zoning case, Putnam Township (1) denied plaintiffs' request to rezone a 144-acre parcel from agricultural-open space (A-O) use to single-family, rural residential (R-1-B) use, (2) denied a request for a planned unit development (PUD) that would have permitted R-1-B development of the parcel and, (3) denied a use variance that would have permitted residential development of up to 95 lots. In light of these circumstances, we consider whether the trial court had jurisdiction to entertain a claim of exclusionary zoning and grant relief that would allow plaintiffs to use the property for a 498-unit manufactured housing community (MHC).

Plaintiffs' exclusionary zoning claim was premised on the notion that because the township's zoning map classified no appropriate land for MHC use and the township's master plan designated only unsuitable property for that use, the township's ordinance was facially invalid. The trial court agreed with plaintiffs and granted relief on the basis of a finding that the township had engaged in exclusionary zoning and that MHC development was an appropriate use of plaintiffs' property.

On appeal, the Court of Appeals majority affirmed in part. Concluding that plaintiffs had presented an apparently “facial” challenge to the constitutionality of the ordinance 1 because it did not include MHC development,2 the majority also determined that plaintiffs had presented an “as applied” challenge to the constitutionality of the ordinance. The majority found it unnecessary to determine whether the exclusionary zoning claim presented a facial challenge and whether it was subject to the rule of finality, however, “holding that further township proceedings would have been futile assuming application of the rule.” 3 The as-applied challenge was not subject to finality and ripeness requirements because, in light of the township's denial of plaintiffs' applications to rezone the property for a lower-density residential use, it would have been futile for plaintiffs to apply for approval of a 498-unit MHC.

We conclude that the trial court and the Court of Appeals majority (1) erred to the extent that they held that the township zoning ordinance was facially invalid because it unconstitutionally excluded a lawful use (MHC) and (2) erred by holding that the futility exception excused compliance with the finality rule and that the appropriate remedy was to enjoin the township from interfering with plaintiffs' development of a 498-unit MHC. An ordinance is not facially invalid merely because it does not authorize every conceivable lawful use, nor does a zoning authority's denial of an application for residential rezoning at a proposed lower-density level automatically establish that it would be futile for the property owner to apply for a higher-density use, such as MHC rezoning or a variance allowing MHC use. Because plaintiffs never submitted an application to the township for MHC rezoning or for a use variance that permitted construction of an MHC, plaintiffs' claim was not ripe for judicial review.4

I. FACTS AND PROCEDURAL BACKGROUND

Plaintiffs Jeffrey Hendee, Michael Hendee, and Louann Demorest Hendee own a 144-acre tract of land, formerly used as a dairy farm, in defendant Putnam Township. The land is essentially undeveloped, consisting of flat lands, hills, wetlands, and woods. The land was and is currently zoned A-O, which permits development as a farm or 10-acre single-family homes. The parties stipulated that the surrounding property to the east and south is zoned for agricultural use, that the property to the west is zoned for agricultural and medium-acreage residential estate use, and that the property is bordered on the west by a paved road and on the south by a gravel road. The township has no public water or sanitary-sewer service.

Some years before the proceedings in this case, the Hendees had stopped using the land as a dairy farm because it was unprofitable. In 2002, they attempted to sell the land, intending to use the proceeds to fund their retirements, but they concluded that they could not get an acceptable price for the land because the A-O zoning classification limited its development potential. Plaintiff Village Pointe Development LLC agreed to purchase and develop the land, contingent on the property being rezoned from A-O to R-1-B.

On August 29, 2002, the Hendees filed an application with the Putnam Township Planning Commission to rezone their land from A-O to R-1-B. The township planning commission recommended denial of the rezoning application, but the Livingston County Planning Commission recommended approval with conditions, specifically, that cluster or PUD development be considered to protect the parcel's wetlands.

On April 23, 2003, the Hendees filed an application with the township for approval of a 95-unit PUD and rezoning to R-1-B. The township planning commission recommended denial of the application, and in May 2003 the county planning commission also recommended denial.

Following these denial recommendations, the Putnam Township Board remanded the application to the township planning commission for specific findings of fact. The planning commission held a hearing and presented its findings supporting denial, supplemented by letters from the township's community planner and consulting engineers, to the township board in December 2003. On December 17, 2003, the township board denied both the rezoning request and the application for the 95-unit PUD/R-1-B on the basis of the planning commission's findings.

The Hendees next applied to the township zoning board of appeals (ZBA) for a use variance to permit development of up to 95 one-acre residential lots on their land. Following hearings in February and March 2004, the ZBA denied the Hendees' variance request on March 22, 2004.

Although it is unclear when it occurred, at some point during the application process concerning the 95-unit PUD/R-1-B, the Hendees filed a new application to rezone the property to permit MHC development. The Hendees withdrew that application, however, after the township informed them that it would not process a new application for an MHC while the 95-unit PUD application was still pending.

On April 12, 2004, the Hendees, together with the proposed buyer/developer, Village Pointe, filed a complaint against the township, alleging that the refusal to rezone the property from A-O zoning to allow MHC development deprived plaintiffs of equal protection and substantive due process and constituted an unconstitutional taking and further alleging that the township's zoning was exclusionary, in violation of former MCL 125.297a, 5 because it excluded MHC zoning.

Importantly, plaintiffs abandoned the 95-unit PUD as “economically unfeasible.” Instead, they based their claim for injunctive relief prohibiting enforcement of the A-O zoning of their property on their earlier (withdrawn) request to rezone the property for an MHC,6 asking that the court enjoin the township from interfering with plaintiffs' development of a 498-unit MHC. On May 5, 2006, after a nine-day bench trial during January and March 2006, the trial court found in plaintiffs' favor on all claims and granted an injunction prohibiting the township from interfering with developmentof the MHC. The trial court also awarded costs and expert witness fees to plaintiffs.

The township appealed and, in an unpublished, split decision, the Court of Appeals affirmed the trial court's judgment enjoining the township from enforcing its A-O zoning and from interfering with plaintiffs' MHC development. 7 The majority reversed in part with respect to the as-applied constitutional claims (equal protection, substantive due process, and taking). Although the majority ruled that the claims were subject to the rule of finality but should not have been dismissed on that ground under the futility exception to that rule, it also concluded that those claims failed on the merits because the township “was advancing a legitimate governmental interest in maintaining the A-O classification,” it was “not acting arbitrarily or capriciously,” and “all avenues of use, and thus economic feasibility, were not explored and negated.” 8 The majority affirmed the trial court's ruling on plaintiffs' exclusionary zoning claim, however. The majority found it unnecessary to decide whether it was a facial claim that was not subject to the rule of finality. Instead, “assuming the contrary, the futility exception applied; the claim was ripe for suit.” 9 The majority implied that plaintiffs were free to pursue their exclusionary zoning claim because the ordinance unconstitutionally excluded a lawful use (MHC). The majority reasoned that, in light of the township's denial of plaintiffs' request for far less intensive residential rezoning (the PUD) and use variance...

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