Milford Hills Props. v. Charter Twp. of Milford

• Decision Date: 02 September 2021
• Docket Number: 353489,353249
• Parties: MILFORD HILLS PROPERTIES, INC., and RPL OF MICHIGAN, INC., Plaintiffs-Appellees, v. CHARTER TOWNSHIP OF MILFORD, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

MILFORD HILLS PROPERTIES, INC., and RPL OF MICHIGAN, INC., Plaintiffs-Appellees, v. CHARTER TOWNSHIP OF MILFORD, Defendant-Appellant.

Nos. 353249, 353489

Court of Appeals of Michigan

September 2, 2021

UNPUBLISHED

Oakland Circuit Court LCNo. 2017-162642-CZ

Before: Letica, P.J., and Servitto and M. J. Kelly, JJ.

PER CURIAM.

These consolidated cases arise from a zoning dispute.In Docket No 353249, defendant, the Charter Township of Milford, appeals as of right the circuit court's opinion and order denying its motion for summary disposition insofar as defendant claimed governmental immunity in response to tort claims brought by plaintiffs, who are real estate developers frustrated at defendant's refusal to rezone certain property to accommodate their aspirations.In Docket No 353489, defendant appeals that same order by leave granted^[1] insofar as it denied defendant's motions for summary disposition in connection with plaintiffs' non-tort claims and also defendant's invocation of an arbitration agreement.We affirm the trial court's determination that defendant has not shown that the arbitration agreement should be enforced, but reverse the court's denial of summary disposition in connection with all of plaintiffs' claims.

I.FACTS

In or about 2002, defendant agreed to support plaintiffs' construction of a wastewater treatment plant in connection with plaintiffs' development of certain property.Plaintiffs sought approval of a plant with a capacity of 50, 000 gallons per day, but defendant insisted on a capacity of 70, 000 gallons per day.Plaintiffs agreed to construct a plant with the larger capacity on the condition that they retain the right to use the anticipated excess of 20, 000 gallons per day for the future development of property located on the west side of Milford Road.The parties entered into an agreement that stated that "the Township shall be obligated to use its 'best efforts' to expeditiously provide approval of all plans, paperwork, permits or otherwise to effectuate this Agreement."

In 2017, plaintiffs began the process of developing the property on the west side of Milford Road.They applied to defendant's planning commission to conditionally rezone the property to allow the construction of a development of a density that far exceeded the current zoning.Ultimately, the planning commission recommended that the request be denied, and defendant adopted that recommendation.

The trial court's order engendering these appeals noted the following particulars:

The parcels that make up the subject property are zoned for Restricted Office and Suburban Residential.Current zoning allows for the development of 22 homes and 340, 000 square feet of offices and necessary parking.Plaintiffs sought conditional rezoning of the subject property to build a single-family residential development.The initial plan presented by Plaintiffs was to build 178 homes.Plaintiffs reduced the number of homes in subsequent presentations.Following the denial by the [zoning board of appeals], Plaintiffs filed an Appeal (which was voluntarily dismissed) and the instant action.

Plaintiffs' complaint made issue of their rights to use any of their wastewater treatment plant's excess capacity in connection with development of real property they acquired, which they described as follows: "By the early part of 2017, the Plaintiffs had obtained ownership of or development rights over nine (9) parcels of land consisting of over 66 acres situated in the Charter Township of Milford, . . . and generally located west of Milford Road . . . ."Plaintiffs further reported that "[a] portion of the Property is currently being utilized for a single-family home, with the remainder being vacant land."

Plaintiffs set forth claims of breach of contract (Count I), promissory estoppel (Count II), taking without just compensation regarding the water-treatment plant (Count III) and the property (Count V), denial of substantive due process regarding the plant (Count IV) and the property (Count VI), tortious interference with prospective economic advantages (Count VII), fraudulent misrepresentation (Count VIII), and innocent misrepresentation (Count IX).Plaintiffs based their contract claim on the parties' June 5, 2003 Working/Development Agreement for Operation of Community Sewer System ("capacity agreement").That agreement recites that the parties earlier "entered into an 'Agreement to Assume Responsibility for Operation of Community Sewer System, '" the provisions of which are not here at issue.

On February 15, 2019, defendant filed a motion for summary disposition, seeking dismissal of the contract and promissory estoppel claims on the grounds that plaintiff"failed to establish a contract or promise to rezone the subject property," seeking dismissal of the tort claims "on grounds of governmental immunity," citing MCL 691.1407, and seeking dismissal of the constitutional claims "because there is no genuine issue of material fact that Defendant's zoning was not unreasonable, nor did it amount to a taking of Plaintiffs' Property."Proceedings were then stayed in deference to facilitation, which was not successful.

On December 18, 2019, plaintiffs filed a motion for summary disposition of Counts I through IV of their complaint on the ground that "there is no genuine issue as to any material fact sufficient for trial."Defendant followed with a second motion for summary disposition, in which it stated that "[i]n addition to the reasons set forth in Defendant's Motion for Summary Disposition, Defendants are entitled to dismissal of Plaintiffs' claims based on the arbitration language in the Capacity Agreement."After a hearing on the motions, the trial court issued an order stating that "neither party is entitled to summary disposition," because "[t]here are numerous genuine issues of material fact and Defendant has not shown that the arbitration agreement should be enforced under the facts presented."The court did not expressly address the issue of governmental immunity.

These appeals followed.

II.GOVERNMENTAL IMMUNITY

MCR 2.116(C)(7) authorizes motions for summary disposition premised upon "immunity granted by law . . . ."This Court reviews a trial court's decision on a motion for summary disposition de novo as a question of law.Ford Credit Int l, Inc v Dep 't of Treasury,270 Mich.App. 530, 534; 716 N.W.2d 593(2006).A motion for summary disposition based on governmental immunity is decided by examining all documentary evidence submitted by the parties, accepting all well-pleaded allegations as true, and construing all evidence and pleadings in the light most favorable to the nonmoving party.Tarlea v Crabtree,263 Mich.App. 80, 87; 687 N.W.2d 333(2004).

Under the governmental tort liability act, MCL 691.1401 et seq., governmental agencies are immune from tort liability for actions taken in furtherance of governmental functions, with limited, specific exceptions.MCL 691.1407(1)."[T]he immunity conferred upon governmental agencies is broad, and the statutory exceptions thereto are to be narrowly construed."Nawrocki v Macomb Co Rd Comm,463 Mich. 143, 158; 615 N.W.2d 702(2000)(emphasis in original)."A plaintiff filing suit against a governmental agency must initially plead his claims in avoidance of governmental immunity."Odom v Wayne Co,482 Mich. 459, 478-479; 760 N.W.2d 217(2008).

A "governmental agency" for this purpose includes "this state or a political subdivision."MCL 691.1401(a).A "political subdivision" includes a municipal corporation.MCL 691.1401(e)." 'Municipal corporation' means a city, village, or township or a combination of 2 or more of these when acting jointly."MCL 691.1401(d).A "governmental function" is "an activity that is expressly or impliedly mandated or authorized by constitution, statute, local charter or ordinance, or other law."MCL 691.1401(b).In this case, there is no dispute that defendant is a municipal corporation, or that its actions underlying this litigation were in furtherance of a governmental function.Even so, this issue has produced some unusual procedural history.

Two months after defendant claimed the appeal in connection with the governmental immunity issue, plaintiffs filed a motion in this Court to dismiss the appeal for mootness, explaining that, "[d]espite believing the tort claims to have merit, Plaintiffs/Appellees offered to dismiss the three tort claims with prejudice to streamline the issues for trial and to avoid appeal, and filed a motion for voluntary dismissal," but that defendant objected, and the trial court ordered a stay of proceedings "before the motion to dismiss was heard."

Plaintiffs' motion below, a copy of which plaintiffs provided to this Court, stated that "plaintiffs have determined that it is the best interest of justice to dismiss the claims set forth in counts VII, VIII, and IX, which are based on State tort theory, as the defendant is likely to prevail under the theory of governmental immunity pertaining to these claims only."Defendant's response in opposition to the motion below correctly stated that the trial court lacked jurisdiction to act on the motion while the claim of appeal was pending, seeMCR 2.614(D), and, alternatively, that "[h]aving litigated this matter through discovery, briefing and a hearing on a motion for summary disposition . . ., [the trial court's] issuance of a decision, and the filing of an appeal,"defendant"is entitled to a final decision that will provide full res judicata effect-that is, that can be used as the basis of issue and claim preclusion."In answering the motion that plaintiffs filed in this Court, defendant stated that it "is entitled to proceed with its meritorious appeal of three tort claims and to a...