Tennine Corp. v. Boardwalk Commercial, LLC.

• Decision Date: 31 March 2016
• Docket Number: 324480.,Docket Nos. 323257
• Citation: 315 Mich.App. 1,888 N.W.2d 267
• Parties: TENNINE CORPORATION v. BOARDWALK COMMERCIAL, LLC.
• Court: Court of Appeal of Michigan — District of US

315 Mich.App. 1

888 N.W.2d 267

TENNINE CORPORATION

v.BOARDWALK COMMERCIAL, LLC.

Docket Nos. 323257

324480.

Court of Appeals of Michigan.

Submitted Dec. 2, 2015, at Lansing.

Decided March 31, 2016, at 9:00 a.m.

Kreis, Enderle, Hudgins & Borsos, PC (by Sean P. Fitzgerald, Grand Rapids and James D. Lance, Battle Creek), for Tennine Corporation.

Charron Law Office, Grand Rapids (by David W. Charron ), for Boardwalk Commercial, LLC; Boardwalk Condos, LLC; and Parkplace Properties of West MI, LLC.

Clarkson Law, PLLC, Troy (by Sarah A. Clarkson ), for Central Michigan Railway Company, The Straits Corporation, and Dark Properties, Inc.

Before: SAAD, P.J., and STEPHENS and O'BRIEN, JJ.

O'BRIEN, J.

In Docket No. 323257, plaintiff, Tennine Corporation, appeals as of right the trial court's opinion and order granting summary disposition in favor of defendant Central Michigan Railway Company (CMR).¹ We reverse the trial court's decision regarding CMR and remand for further proceedings consistent with this opinion. In Docket No. 324480, plaintiff appeals as of right the trial court's opinion and order granting the motion for costs and attorney fees in favor of defendants Boardwalk Commercial, LLC, Boardwalk Condos, LLC, and Parkplace Properties of West MI, LLC (the Boardwalk defendants). We affirm the trial court's award of actual costs and attorney fees to the Boardwalk defendants.

I. BASIC FACTS AND PROCEDURAL HISTORY

This case concerns real property located in Grand Rapids, Michigan, conveyed from the Berkey & Gay Furniture Company to the Grand Trunk Western Railroad Company (Grand Trunk) in 1914, and from Grand Trunk to defendant CMR in 1987. There is no dispute that this property was conveyed to CMR as a railroad right-of-way (ROW) and was to remain in CMR's possession "as long as" the property was used for railway purposes. The Railroad Code, MCL 462.101 et seq., defines a ROW as "the track or roadbed owned by a railroad and that property owned by a railroad which is located on either side of its tracks and which is readily recognizable to a reasonable person as being railroad property...." MCL 462.273(2).

The relevant portion of the ROW began at Monroe Street and continued south to Mason Street. William Tingley, plaintiff's general manager, averred that the northern portion of the ROW between Monroe Street and Walbridge Street was adjacent to plaintiff's property located at 1009 Ottawa Street NW. CMR purchased all rights, title, and interest in the ROW with the intention of using it as a railroad to transport paper to and from the building that housed the Grand Rapids Press. Its use as a railroad ceased after the Grand Rapids Press moved to another city in 2004. CMR then attempted to abandon the ROW and have it converted into a recreational trail.

Under federal law, CMR was required to file an application regarding its abandonment of the ROW with the federal Surface Transportation Board (STB). See 49 U.S.C. 10903(a)(1) (stating that a rail carrier intending to "abandon any part of its railroad lines" must file "an application relating thereto with the [STB]. An abandonment or discontinuance may be carried out only as authorized under this chapter"). That is, CMR could not abandon the ROW without authorization from the STB. In instances of railroad abandonment, federal law directed the STB to encourage the establishment of recreational trails "in furtherance of the national policy to preserve established railroad rights-of-way for future reactivation of rail service, to protect rail transportation corridors, and to encourage energy efficient transportation use...." 16 U.S.C. 1247(d).

On March 12, 2009, CMR applied to the STB for authorization to abandon the ROW and have it converted to recreational use under 16 U.S.C. 1247(d). Defendant Dark Properties, Inc., was created for the purpose of assisting CMR with transforming the ROW to recreational use after the STB authorized abandonment. However, the STB did not authorize CMR to abandon the ROW because negotiations were not completed.

Defendants Boardwalk Commercial, LLC, and Boardwalk Condos, LLC, acquired title to real property that was formerly part of the Berkey & Gay Furniture Company and constructed condominiums on the property. The southern segment of the ROW, which began at Walbridge Street and ended at Mason Street, was subject to a reversionary interest. On April 28, 2012, these defendants, Boardwalk Commercial and Boardwalk Condos, transferred their reversionary interest in the southern segment of the ROW to Parkplace Properties of West MI, LLC.

Plaintiff's representative averred that on November 17, 2011, a work crew from Jaeger Salvage arrived at the site and demolished the tracks and rails on the northern and southern parts of the ROW. The crew stacked railroad ties on plaintiff's property. On November 18, 2011, the crew returned with two backhoes to continue the demolition. Soil from the ROW clung to the backhoes and was allegedly tracked onto plaintiff's property. Plaintiff's representative told the crew that the soil on the ROW was contaminated with hazardous chemicals and that the crew did not have permission to enter plaintiff's property. A crew member purportedly indicated that Beth Visser, an agent of the Boardwalk defendants, gave the crew permission to enter the property. The crew complied with plaintiff's request that it stop work, and the crew removed the railroad ties from plaintiff's property. This activity served as the impetus for this litigation.

Plaintiff gave notice of its intent to file a claim under Michigan's Natural Resources and Environmental Protection Act (NREPA), MCL 324.101 et seq. On July 30, 2012, plaintiff filed suit against defendants alleging violations of the NREPA, trespass, and nuisance. All defendants filed motions for summary disposition. Pertinent to the appeal, the trial court held that plaintiff did not have standing to raise the NREPA claim against CMR. Following the grant of summary disposition to the Boardwalk defendants, the trial court granted their request for actual costs, including attorney fees, under MCR 2.405, because plaintiff did not accept the Boardwalk defendants' offers of judgment. From these rulings, plaintiff appeals. On November 25, 2014, the appeals were consolidated "to advance the efficient administration of the appellate process." Tennine Corp. v. Boardwalk Commercial, LLC, unpublished order of the Court of Appeals, entered November 25, 2014 (Docket Nos. 323257 and 324480).

II. DOCKET NO. 323257

Plaintiff alleges that the trial court erred by concluding that it lacked standing to pursue the NREPA claim against CMR. We agree.

The question whether a party has standing presents a question of law reviewed de novo on appeal. Manuel v. Gill, 481 Mich. 637, 642–643, 753 N.W.2d 48 (2008). The standing doctrine's purpose is to determine whether a litigant has a sufficient interest in the matter to "ensure sincere and vigorous advocacy." Lansing Sch. Ed. Ass'n v. Lansing Bd. of Ed., 487 Mich. 349, 355, 792 N.W.2d 686 (2010) (quotation marks and citation omitted). The standing requirement ensures that only those with a substantial interest may litigate a claim in court. Trademark Props. of Mich., LLC v. Fed. Nat'l Mtg. Ass'n, 308 Mich.App. 132, 136, 863 N.W.2d 344 (2014). When a party's standing is contested, the issue becomes whether the proper party is seeking adjudication, not whether the issue is justiciable. Id. at 136, 863 N.W.2d 344. Standing is not contingent on the merits of the case. Id. Standing may be conferred by legislative expression or implied by duties that arise from the law. Lansing Sch. Ed. Ass'n, 487 Mich. at 357–358, 792 N.W.2d 686. A corporation has the power, in furtherance of its corporate purposes, to "[s]ue and be sued in all courts and participate in actions and proceedings, judicial, administrative, arbitrative, or otherwise, in the same manner as natural persons." MCL 450.1261(b).

The purpose of Part 201 of the NREPA, titled Environmental Remediation, MCL 324.20101 to MCL 324.20142, is "to provide for appropriate response activity to eliminate unacceptable risks to public health, safety, or welfare, or to the environment from environmental contamination at facilities within the state." MCL 324.20102(c). Under the NREPA, MCL 324.101 et seq., a plaintiff shall give a written notice advising of the intent to sue, the basis for the suit, and the relief requested at least 60 days in advance of filing a complaint. MCL 324.20135(3)(a). The notice must be sent to the Department of Environmental Quality (DEQ), the attorney general, and the proposed defendants.² Id. MCL 324.20135 addresses who may pursue a NREPA action and provides in relevant part:

(1) Except as otherwise provided in this part, a person, including a local unit of government on behalf of its citizens, whose health or enjoyment of the environment is or may be adversely affected by a release from a facility or threat of release from a facility, other than a permitted release or a release in compliance with applicable federal, state, and local air pollution control laws, by a violation of this part or a rule promulgated or order issued under this part, or by the failure of the directors to perform a nondiscretionary act or duty under this part, may commence a civil action against any of the following:

(a) An owner or operator who is liable under section 20126 for injunctive relief necessary to prevent irreparable harm to the public health, safety, or welfare, or the environment from a release or threatened release in relation to that facility.

(b) A person who is liable under section 20126 for a violation of this part or a rule promulgated under this part or an order issued under this part in relation to that facility.

The NREPA defines a "person" as "an individual, partnership, corporation, association, governmental entity, or other legal entity." MCL 324.301(h) (emphasis added). The circuit court has jurisdiction to remedy the NREPA...