Livonia Hotel, LLC v. City of Livonia, Docket No. 237609.

• Decision Date: 23 December 2003
• Docket Number: Docket No. 237609.
• Citation: 673 N.W.2d 763,259 Mich. App. 116
• Parties: LIVONIA HOTEL, LLC, Plaintiff-Appellant, v. CITY OF LIVONIA and Building Official of Livonia, Defendant-Appellees.
• Court: Court of Appeal of Michigan — District of US

673 N.W.2d 763

259 Mich. App. 116

LIVONIA HOTEL, LLC, Plaintiff-Appellant, v. CITY OF LIVONIA and Building Official of Livonia, Defendant-Appellees.

Docket No. 237609.

Court of Appeals of Michigan.

Submitted September 10, 2003, at Detroit.

Decided October 21, 2003, at 9:00 a.m.

Released for Publication December 23, 2003.

Honigman, Miller, Schwartz & Cohn, L.L.P. (by Norman Hyman), Bingham Farms, for the plaintiff.

Sean P. Kavanagh, City Attorney, and Cathryn K. White, Chief Assistant City Attorney, Livonia, for the defendants.

Before: OWENS, P.J., and RICHARD ALLEN GRIFFIN and SCHUETTE, JJ.

PER CURIAM.

In this zoning case, plaintiff appeals as of right from the October 11, 2001, order of dismissal with prejudice entered by the Wayne Circuit Court. We reverse and remand.

I. Facts

Plaintiff owns and operates a Quality Inn hotel on Plymouth Road in Livonia. Plymouth Road, a major, heavily traveled, east-west thoroughfare that runs the entire length of the city, is zoned and used for commercial and industrial uses. There are a number of restaurants on Plymouth Road, many of which serve beer, wine, and other alcoholic beverages.

The Quality Inn hotel was initially developed as a Holiday Inn hotel in 1967. At the time, the Livonia Zoning Ordinance (LZO) permitted a two-story structure to be constructed within the existing C-2 zoning designation. According to defendant city, the LZO in effect at the time required that waiver use approval be obtained in order to operate a hotel. As a result, the property owners filed and were granted a waiver use permit in 1967 allowing the construction of the two-story Holiday Inn hotel.

The waiver use approval granted in 1967 was limited to hotel use because the LZO, at the time, provided that restaurants were permitted uses in C-2 zoning districts. Further, the restaurant or lounge on the property was permitted to serve alcoholic beverages, apparently pursuant to the class B hotel liquor license held by the Holiday Inn.

In 1968, the year after the Holiday Inn was constructed, the LZO was amended to provide that restaurants were allowed only as waiver uses (rather than permitted uses) in C-2 zoning districts. In addition, the LZO has since been amended to allow hotels as permitted uses (rather than waiver uses) in C-2 zoning districts.

The LZO requires a separate waiver use approval in order to use a class C liquor license in connection with a restaurant in a C-2 zoning district. According to Mark Taormina, the city's planning director, "[t]he requirement that waiver use approval must be obtained in order to utilize a Class C liquor license in a C-2 zoning district was in effect when the Holiday Inn was constructed in 1967 and the requirement has remained continuously in effect since then." City records indicate that waiver use approval has never been granted for a class C liquor license at the property in question. In 1997, the LZO was amended to enlarge the class of liquor licenses that require waiver use approval in C-2 zoning districts and now includes tavern, club, class A hotel and class B hotel licenses, and microbrewers and brewpubs, as well as class C licenses. However, before the LZO was amended in 1997, a waiver use approval was not required for the use of a class B hotel liquor license at the property.

Since 1967, the property in question has been used as a hotel, becoming a Ramada Inn for a time, then a Terrace Inn, and finally a Quality Inn. Until some time in 1995, a restaurant and a lounge/night club occupied part of the hotel. Both the restaurant and the lounge/nightclub were licensed to sell alcoholic beverages for consumption on the premises. As already stated, the restaurant and the nightclub were apparently permitted to sell alcoholic beverages pursuant to the hotel's liquor license. The restaurant and the night club were uses accessory to the hotel and were permitted as waiver uses under the Livonia zoning ordinance.

In 1995, plaintiff purchased the property in question. "In 1995, the operator of the restaurant and night club vacated the premises." Since the closure of the restaurant and the nightclub in 1995, plaintiff has kept the hotel liquor license current and attempted to obtain a new operator for the restaurant. Despite numerous efforts, plaintiff was unsuccessful in attracting a restaurant operator to reopen the restaurant until May 2000. On September 6, 2000, plaintiff entered into a lease with Hooters of Livonia, Inc., to operate a restaurant in the restaurant portion of the premises. The Hooters restaurant would serve beer and wine, but not liquor, using Hooters own class C liquor license.

According to plaintiff, when the city was contacted in connection with the work of preparing the premises for Hooters' occupancy, the city's building official informed John Glasnak, plaintiff's managing representative, that plaintiff would be required to obtain a new waiver use approval because the prior restaurant use had been discontinued for over one year, and, thus, the right to operate a restaurant had been "abandoned" under § 18.18 of the LZO. Plaintiff stated that it "never even considered the idea of abandoning the restaurant use."

Plaintiff filed a waiver use petition with the city on November 2, 2000. Plaintiff was required to file a waiver use petition because the city claimed that the prior restaurant use had been discontinued for more than one year. However, according to plaintiff, it already had waiver use approval for a restaurant. Hooters also filed a waiver use petition. A separate waiver use petition was required because Hooters wanted to use its class C liquor license in connection with the operation of its restaurant and because there had not been a previous use of such a license at this location.

The planning commission conducted a public hearing on both petitions on December 12, 2000. At the conclusion of the public hearing, the planning commission recommended that both petitions be denied.

The city council then considered the waiver use petitions at a public hearing conducted on March 28, 2001, and a regular meeting held on May 2, 2001. The city council approved the waiver use petitions, each by a four-to-three vote, at its regular meeting on May 2, 2001. On May 7, 2001, the mayor vetoed the city council's approval of the waiver use petitions.

On June 15, 2001, plaintiff and Hooters filed a seven-count complaint seeking a declaratory judgment, that would state, in pertinent part, that plaintiff "has a lawful vested right to the proposed restaurant on the premises, which has not been abandoned" and seeking an order requiring the city to issue "a certificate of occupancy and such other approvals and permits as are required to permit the operation of the proposed Hooters restaurant within the restaurant portion of the premises upon presentation of plans which comply with the City's building code." On July 2, 2001, defendants answered the complaint and set forth their affirmative defense, requesting that judgment be entered against plaintiff and Hooters for no cause of action. On August 2, 2001, plaintiff and Hooters moved for summary disposition under MCR 2.116(C)(9) (defendants have failed to state a valid defense to the claims asserted against them) and MCR 2.116(C)(10) (no genuine issue of material fact). In their response on August 29, 2001, defendants requested that plaintiff and Hooters' "appeal" be dismissed as "procedurally improper," and, alternatively, that summary disposition be granted in favor of defendants pursuant to MCR 2.116(C)(8) (failure to state a claim on which relief can be granted) and (C)(10).

A hearing regarding the parties' crossmotions for summary disposition was held on September 6, 2001. After hearing argument, the trial court denied plaintiff's and Hooters' motion for summary disposition. In pertinent part, the trial court stated:

Clearly the City had the right to require—first of all, the restaurant was abandoned.

Secondly, the license itself was a Class C license which is a new non conforming [sic] use. So clearly the proper procedure the plaintiff had applied to the zoning—or the Planning Commission and then go to City Council, which they did. The City Council denied it by a four to three vote the mayor vetoed, and the city council decided not to override the veto, and the majority was one vote short.

As far as the legal procedures, that was perceived or conducted by the city in accordance with the law. The proper procedures were there. He had to go before the Planning Commission, City Council, and then has the right to do so. Plaintiff came up with one vote short with the City Council. So the motion for summary disposition is denied.

* * *

The City had the right to reject [the waiver petitions]. They need one more vote. The bottom line here is the claim of Livonia Hotel, which is Hooters, came up one vote short with the City Council and Mayor. Proper legal procedure was followed; they don't have the vote. That's the bottom line.

On October 8, 2001, the trial court entered an order dismissing the case with prejudice.

II. Jurisdiction

In their appeal brief, defendants argue that plaintiff is not entitled to an appeal as of right under MCR 7.203(A), but is required to seek leave to appeal under MCR 7.203(B), because the decision challenged by plaintiff "is properly the subject of a Circuit Court appeal from the decision of the City Council pursuant to Const. 1963, art. 6[,] § 28." As set forth in Const. 1963, art. 6, § 28:

All final decisions, findings, rulings and orders of any administrative officer or agency existing under the constitution or by law, which are judicial or quasijudicial and affect private rights or licenses, shall be subject to direct review by the courts as provided by law. This review shall include, as a minimum, the determination whether such final decisions, findings, rulings and orders are authorized by law; and, in cases in which a hearing is required,

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