NL Ventures VI Farmington, LLC v. City of Livonia

• Decision Date: 22 December 2015
• Docket Number: Docket No. 323144.
• Citation: 314 Mich.App. 222,886 N.W.2d 772
• Parties: NL VENTURES VI FARMINGTON, LLC v. CITY OF LIVONIA.
• Court: Court of Appeal of Michigan — District of US

314 Mich.App. 222

886 N.W.2d 772

NL VENTURES VI FARMINGTON, LLC

v.CITY OF LIVONIA.

Docket No. 323144.

Court of Appeals of Michigan.

Submitted Dec. 9, 2015, at Detroit.

Decided Dec. 22, 2015.

Approved for publication Jan. 28, 2016, at 9:00 a.m.

Honigman Miller Schwartz and Cohn LLP, Detroit (by Jason Conti and Gregory J. DeMars ) for plaintiff.

Donald L. Knapp, Jr., Detroit and Michael E. Fisher, Saint Louis for defendant.

Eric D. Williams, Beverly Hills for the Michigan Municipal League and the Michigan Townships Association.

Dykema Gossett PLLC, Ann Arbor (by Jill M. Wheaton, Kathryn J. Humphrey, and Mark D. Jacobs ) for the City of Detroit Water and Sewerage Department.

Before: SAWYER, P.J., and BECKERING and BOONSTRA, JJ.

PER CURIAM.

Defendant appeals the order granting summary disposition in favor of plaintiff, which invalidated accumulated water and sewer charges and liens against plaintiff's real property. Defendant further appeals the trial court's denial of its motion for summary disposition on plaintiff's remaining tort claims. Defendant's motion for summary disposition was premised on governmental immunity and the failure to state a viable claim. We vacate the trial court's order and remand for further proceedings.

The factual and procedural history of this litigation is not disputed. Rather, this appeal is focused on the interpretations of, and interrelationships among, various statutory schemes including (1) MCL 123.161 et seq., municipal water and sewage liens, (2) MCL 141.101 et seq., the Revenue Bond Act of 1933, and (3) Livonia Ordinances, § 13.08.010 et seq., the city of Livonia's water rate ordinance chapter.

Defendant first contends that the trial court erred by granting summary disposition in favor of plaintiff, which resulted in voiding and dismissing defendant's liens for unpaid water bills incurred by Awrey Bakeries, LLC (Awrey) while Awrey was a tenant on plaintiff's real property. Defendant argues that the trial court misconstrued and misinterpreted the meaning and interactions of the relevant statutory provisions in reaching its erroneous decision. Predictably, plaintiff lauds the trial court's decision and reasoning, emphasizing the correctness of the trial court's determination that defendant's failure to abide by or follow its own ordinance regarding the placement of water arrearages on the tax rolls necessitated voiding the liens, rendering them unenforceable.

Questions of statutory interpretation are reviewed de novo.

Omelenchuk v. City of Warren, 466 Mich. 524, 527, 647 N.W.2d 493 (2002), overruled in part on other grounds Waltz v. Wyse, 469 Mich. 642, 677 N.W.2d 813 (2004). A trial court's decision on a motion for summary disposition under MCR 2.116(C)(7) is also reviewed de novo. Fingerle v. City of Ann Arbor, 308 Mich.App. 318, 343, 863 N.W.2d 698 (2014), affirmed for reasons stated in concurring opinion (O'Connell, J.), majority opinion vacated 498 Mich. 910, 870 N.W.2d 920 (2015).

When reviewing a motion under MCR 2.116(C)(7), a reviewing court must consider all affidavits, pleadings, and other documentary evidence submitted by the parties and construe the pleadings and evidence in favor of the nonmoving party. To overcome a motion brought under MCR 2.116(C)(7), the plaintiff must allege facts warranting the application of an exception to governmental immunity. If no facts are in dispute, or if reasonable minds could not differ regarding the legal effect of the facts, the question whether the claim is barred by governmental immunity is an issue of law. [Id. (quotation marks and citations omitted).]

“A motion for summary disposition brought under MCR 2.116(C)(8) tests the legal sufficiency of the complaint on the basis of the pleadings alone.” Beaudrie v. Henderson, 465 Mich. 124, 129, 631 N.W.2d 308 (2001). “The purpose of such a motion is to determine whether the plaintiff has stated a claim upon which relief can be granted. The motion should be granted if no factual development could possibly justify recovery.” Id. at 129–130, 631 N.W.2d 308. “When deciding a motion for summary disposition under MCR 2.116(C)(10), a court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence submitted in the light most favorable to the nonmoving party.” Ernsting v. Ave. Maria College, 274 Mich.App. 506, 509, 736 N.W.2d 574 (2007). All reasonable inferences are to be construed in favor of the nonmoving party. Dextrom v. Wexford Co.,

287 Mich.App. 406, 415, 789 N.W.2d 211 (2010). “Summary disposition is proper under MCR 2.116(C)(10) if the documentary evidence shows that there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law.” Ernsting, 274 Mich.App. at 509, 736 N.W.2d 574. “This Court is liberal in finding genuine issues of material fact.” Jimkoski v. Shupe, 282 Mich.App. 1, 5, 763 N.W.2d 1 (2008). “A genuine issue of material fact exists when the record, giving the benefit of any reasonable doubt to the opposing party, leaves open an issue on which reasonable minds could differ.” Ernsting, 274 Mich.App. at 510, 736 N.W.2d 574. Because the trial court's ruling in this case is not premised on defendant's claim of governmental immunity and instead, appears to rely on information garnered extraneous to the pleadings, we review the motion under MCR 2.116(C)(10).

There is a dearth of published caselaw discussing the statutory provisions relevant to this matter. The most efficacious approach to unraveling the complexities of this case requires a study of the actual statutory language involved in an attempt to determine how the provisions are to be applied to the circumstances of this case. The starting point is the recognition of certain, basic tenets of statutory construction.

The primary goal of statutory interpretation is to give effect to the intent of the Legislature. This determination is accomplished by examining the plain language of the statute itself. If the statutory language is unambiguous, appellate courts presume that the Legislature intended the meaning plainly expressed and further judicial construction is neither permitted nor required. Under the plain-meaning rule, courts must give the ordinary and accepted meaning to the mandatory word “shall” and the permissive word “may” unless to do so would frustrate the legislative intent as evidenced by other statutory language or by reading the statute as a whole. [Atchison v. Atchison, 256 Mich.App. 531, 535, 664 N.W.2d 249 (2003) (citations omitted).]

The statutory provisions pertaining to municipal water and sewage liens appear in 1939 PA 178, MCL 123.161 et seq.¹ The purpose of MCL 123.161 et seq. is “to provide for the collection of water or sewage system rates, assessments, charges, or rentals; and to provide a lien for water or sewage system services furnished by municipalities as defined by this act.” The following provisions of the 1939 Act are relevant:

A municipality which has operated or operates a water distribution system or a sewage system for the purpose of supplying water or sewage system services to the inhabitants of the municipality, shall have as security for the collection of water or sewage system rates, or any assessments, charges, or rentals due or to become due, respectively, for the use of sewage system services or for the use or consumption of water supplied to any house or other building or any premises, lot or lots, or parcel or parcels of land, a lien upon the house or other building and upon the premises, lot or lots, or parcel or parcels of land upon which the house or other building is situated or to which the sewage system service or water was supplied. This lien shall become effective immediately upon the distribution of the water or provision of the sewage system service to the premises or property supplied, but shall not be enforceable for more than 3 years after it becomes effective. [MCL 123.162 (emphasis added).]

In accordance with MCL 123.163, “The lien created by this act may be enforced by a municipality in the manner prescribed in the charter of the municipality, by the general laws of the state providing for the enforcement of tax liens, or by an ordinance duly passed by the governing body of the municipality.” In turn, MCL 123.164 addresses the issue of notice with regard to liens created under this statutory scheme, stating: “The official records of the proper officer, board, commission, or department of any municipality having charge of the water distribution system or sewage system shall constitute notice of the pendency of this lien.”

Prioritization of liens created within this statutory scheme and a mechanism for lessors to avoid liability for the imposition of liens are discussed in MCL 123.165. The enforcement and collection of liens is addressed in MCL 123.166 as follows:

A municipality may discontinue water service or sewage system service from the premises against which the lien created by this act has accrued if a person fails to pay the rates, assessments, charges, or rentals for the respective service, or may institute an action for the collection of the same in any court of competent jurisdiction. However, a municipality's attempt to collect these sewage system or water rates, assessments, charges, or rentals by any process shall not invalidate or waive the lien upon the premises. [Emphasis added.]

Finally:

This act shall not repeal any existing statutory charter or ordinance provisions providing for the assessment or collection of water or sewage system rates, assessments, charges, or rentals by a municipality, but shall be construed as an additional grant of power to any power now prescribed by other statutory charter or ordinance provisions, or as a validating act to validate existing statutory or charter provisions creating liens which are also provided for by this act. [MCL 123.167 (emphasis added).]

Under the statutory provisions of 1939 PA 178, the trial court erred by dismissing and...