Landon Holdings, Inc. v. Grattan Tp.

• Decision Date: 17 June 2003
• Docket Number: Docket No. 232406.
• Citation: Landon Holdings, Inc. v. Grattan Tp., 667 N.W.2d 93, 257 Mich. App. 154 (Mich. App. 2003)
• Parties: LANDON HOLDINGS, INC. and Donald Osborn, Plaintiff-Appellants/Cross-Appellees, v. GRATTAN TOWNSHIP, Defendant-Appellee/Cross-Appellant, and Michigan Townships Association and Cannon Township, Amici Curiae.
• Court: Court of Appeal of Michigan

667 N.W.2d 93

257 Mich. App. 154

LANDON HOLDINGS, INC. and Donald Osborn, Plaintiff-Appellants/Cross-Appellees, v. GRATTAN TOWNSHIP, Defendant-Appellee/Cross-Appellant, and Michigan Townships Association and Cannon Township, Amici Curiae.

Docket No. 232406.

Court of Appeals of Michigan.

Submitted March 12, 2003, at Grand Rapids.

Decided June 17, 2003, at 9:15 a.m.

Released for Publication August 11, 2003.

Varnum, Riddering, Schmidt & Howlett, LLP (by Teresa S. Decker, Randall W. Kraker, and Jude W. Pereira), Grand Rapids, and Fried & Saperstein, P.C. (by Harold S. Fried), Southfield, for the plaintiffs.

Mika, Meyers, Beckett & Jones, PLC (by William A. Horn and Ronald M. Redick), Grand Rapids, for the defendant.

Bauckham, Sparks, Rolfe, Lohrstorfer & Thall, PC (by John H. Bauckham and John K. Lohrstorfer), Kalamazoo, for the Michigan Townships Association.

John D. Tallman, Grand Rapids, for Cannon Township.

Before SCHUETTE, P.J., and SAWYER and WILDER, JJ.

SCHUETTE, P.J.

Plaintiffs Landon Holdings, Inc., and Donald Osborn appeal as of right an order granting defendant Grattan Township summary disposition under MCR 2.116(C)(10).¹ Defendant cross-appeals the trial court's order granting plaintiff partial summary disposition. We affirm the grant of summary disposition and find moot the cross-appeal.

I. FACTS

This case arose when plaintiffs challenged a provision in defendant's zoning ordinance requiring a special use permit for manufactured housing. Osborn owned property that Landon wished to purchase and develop. After the trial court found the special use requirement invalid, defendant amended its ordinance to create a manufactured housing district. The trial court considered the amendment in its evaluation whether the ordinance violated statutory and constitutional protections.

Plaintiffs filed a complaint against defendant on December 14, 1999, challenging the defendant's zoning ordinance as a violation of the Township Zoning Act, specifically M.C.L. § 125.297a; the Mobile Home Commission Act (MHCA), M.C.L. § 125.2301 et seq.; and constitutional guarantees of due process and equal protection. Osborn owned approximately two hundred acres near M-44 that Landon wished to purchase and develop as a manufactured housing community.² The ordinance in effect at that time allowed manufactured housing pursuant to a special use permit in areas zoned R-R residential. Osborn's property was zoned agricultural. Thus, Landon's proposed development would have required both rezoning and a special use permit.

The Mobile Home Commission approved defendant's zoning ordinance in 1990. The documents in the lower court record are not complete and primarily address setback and sewage requirements. However, they suggest that the commission was unconcerned with the special use requirement.

According to Township Supervisor Richard Herwyer, in his twelve years as a township official, defendant never received an application for a special use permit or rezoning to accommodate manufactured housing. However, in March 2000, the planning commission received a special use application from another company, Fundamental Equities, Inc., for manufactured housing in a residential district. In 1999, defendant began updating its master plan. The proposed plan stated that it would be appropriate for twenty percent of township dwelling units to be moderate density housing, including either multi-family or manufactured housing, if there were adequate land and interest.

Defendant did not file an answer to plaintiffs' complaint and instead moved for summary disposition under MCR 2.116(C)(8) and (10), arguing that (1) M.C.L. § 125.2307 only prohibits governments from imposing higher standards on individual mobile homes, not mobile home parks and (2) the ordinance did not violate M.C.L. § 125.297a or the constitution because it did not totally exclude manufactured housing. On May 30, 2000, after an April 28, 2000, hearing, the trial court denied defendant's motion and instead granted plaintiffs summary disposition regarding M.C.L. § 125.2307. The trial court held that the statute applied to mobile home parks and, further, that a special use permit requirement constituted an improper higher standard, relying on Bell River Assoc. v. China Charter Twp., 223 Mich.App. 124, 565 N.W.2d 695 (1997).

On June 16, 2000, defendant sought leave to appeal the order in the Court of Appeals and moved for immediate consideration. This Court denied leave to appeal on July 7, 2000. On September 26, 2000, the Supreme Court denied defendant's request for leave to appeal and for peremptory reversal.

On October 16, 2000, defendant again moved for summary disposition under MCR 2.116(C)(10). Defendant argued that plaintiffs' claims were moot because the township had amended its ordinance to create a zoning district in which manufactured housing was permitted without a special use permit. Defendant argued further that even if the issues were not moot, the trial court should apply the amended ordinance, which defendant asserted complied with M.C.L. § 125.297a, and also satisfied the requirements of due process and equal protection.

According to defendant's motion, the amendment was first discussed in May 2000, sometime between the April hearing and the trial court's order granting summary disposition. The proposed amendment was presented at a June 7, 2000, meeting of the township planning commission. The township board adopted it on June 12, 2000, and it became effective seven days after its June 14, 2000, publication in the local newspaper.

The new ordinance did not alter the special use sections, but added "`MHC' Manufactured Housing Community" to the list of zoning districts under Section 5.01 and created a new chapter, 9-A, which sets forth the conditions for establishing an MHC district and the procedures for review of site plans. At the trial court hearing, however, defendant did not challenge the assertion by plaintiffs' attorney that no land had actually been designated MHC. Rather, property owners must apply for rezoning to MHC.

On August 16, 2000, plaintiffs applied for rezoning, expressly declaring that they were not waiving their claim that the ordinance was invalid. The lower court record contains no further evidence regarding the status of the rezoning application.

On December 4, 2000, the trial court heard defendant's second motion for summary disposition. The court first determined that it could consider the amended ordinance. The court then held that, unlike the special use requirement, the new ordinance did not violate M.C.L. § 125.2307. The court further held that the new ordinance did not violate M.C.L. § 125.297a or constitutional guarantees because it did not totally exclude manufactured housing. In a January 12, 2001, order, the trial court granted defendant summary disposition regarding all claims. The trial court also gave plaintiffs twenty-one days to amend their complaint, in light of the amended ordinance, but plaintiffs declined to do so.

Plaintiffs now appeal the January 2001 order granting summary disposition and defendant cross-appeals the May 2000 order granting plaintiffs' motion for summary disposition regarding the old ordinance.

II. ADMISSION OF AMENDED ZONING ORDINANCE

Plaintiffs first argue that the trial court erred in admitting the amended ordinance into evidence because the amendment was made in bad faith. We disagree.

A. Standard of Review

This Court reviews for an abuse of discretion a trial court's decision to admit or exclude evidence of ordinance amendments during litigation. Keating Int'l Corp. v. Orion Twp., 395 Mich. 539, 548, 236 N.W.2d 409 (1975).

B. Analysis

In determining which version of a zoning ordinance a court should apply, "`the general rule is that the law to be applied is that which was in effect at the time of decision.'" MacDonald Advertising Co v. MacIntyre, sub. nom. MacDonald Advertising Co. v. City of Pontiac, 211 Mich.App. 406, 410, 536 N.W.2d 249 (1995), quoting Klyman v. City of Troy, 40 Mich.App. 273, 277, 198 N.W.2d 822 (1972); Lockwood v. Southfield, 93 Mich.App. 206, 211, 286 N.W.2d 87 (1979).

There are two exceptions to the general rule: (1) "A court will not apply an amendment to a zoning ordinance where... the amendment would destroy a vested property interest acquired before its enactment ...; and (2) a court will not apply the amendment where "the amendment was enacted in bad faith and with unjustified delay." Lockwood, supra at 211, 286 N.W.2d 87, citing City of Lansing v. Dawley, 247 Mich. 394, 396, 225 N.W. 500 (1929), and Keating, supra at 549, 236 N.W.2d 409. Here, plaintiffs do not claim a vested property right in this case and our analysis must focus on the second exception. "[T]he test to determine bad faith is whether the amendment was enacted for the purpose of manufacturing a defense to plaintiff's suit." Id.

Michigan courts have reviewed the bad faith exception several times. In Willingham v. Dearborn, 359 Mich. 7, 101 N.W.2d 294 (1960), the city denied the plaintiff a building permit on grounds not supported by the zoning ordinance. Id. at 9, 101 N.W.2d 294. The plaintiff sought a writ of mandamus on January 31, 1958, to compel issuance of the permit. Id. On July 24, 1958, the morning of the hearing on the issues, the defendant tried to introduce an ordinance that had been amended on June 3, 1958. Id. at 8-9, 101 N.W.2d 294. The trial court denied the defendant's motion and granted the plaintiff his writ. Id. at 9, 101 N.W.2d 294. Our Supreme Court, affirming the decision of the trial court, stated, "Indeed, the whole record considered, injustice to plaintiff might have resulted from any such last-minute order providing a defense which did not exist when the petition was filed." Id. at 10, 101 N.W.2d 294.

In Klyman, supra, this Court compared Willingham, supra, to Franchise Realty Interstate Corp. v. Detroit, 368 Mich. 276, 118 N.W.2d 258 (1962), noting the...