Grand Traverse County Land Bank Authority v. Verizon Wireless ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
GRAND TRAVERSE COUNTY LAND BANK UNPUBLISHED
AUTHORITY, May 9, 2017
Plaintiff/Counter Defendant-
Appellee,
v No. 332804
Grand Traverse Circuit Court
VERIZON WIRELESS, LC No. 2015-031276-CH
Defendant/Counter Plaintiff/Cross
Plaintiff-Appellee,
and
GREAT NORTHERN BROADCASTING
SYSTEM, INC.,
Defendant/Cross Defendant-
Appellant.
Before: SAWYER, P.J., and MURRAY and GLEICHER, JJ.
PER CURIAM.
The circuit court summarily granted Grand Traverse County Land Bank Authority a
declaratory judgment that a broadcasting tower sitting upon foreclosed real property was a
fixture that was transferred along with the land. Great Northern Broadcasting System, Inc.
contends that this judgment was erroneous. We discern no error in the lower court’s judgment
and thereby affirm.
I. FACTS
Great Northern Broadcasting System owns a 14-acre parcel in Grand Traverse County,
which is vacant except for a single radio/cell phone tower and a utility building. In 1990, Great
Northern entered a lease agreement with Verizon, allowing the cellular service provider to use
the existing 300-foot tower or to replace the existing structure. The lease began with a two-year
term that would be automatically extended for four five-year terms. The lease also required
Verizon to remove and carry away any tower it erected upon termination of the lease. Verizon
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could, however, “request[] permission not to remove” the tower and if Great Northern consented,
“title to the affected improvements [would] thereupon transfer to” Great Northern.
In 2000, Verizon exercised its option to replace the existing tower. It also constructed a
utility building on the property. The new 450-foot tower sits upon a concrete slab and is
balanced with three steel wires, “latched to three surrounding anchors.” In 2010, Verizon
notified Great Northern that it would not renew its lease. In 2013, a Verizon representative
informed Great Northern that Verizon did not intend to remove the tower and Great Northern
consented. Instead, Verizon removed its cellular servicing equipment from the tower structure.
In the meantime, Great Northern failed to pay property taxes in 2009. In 2010, the
company paid its current taxes, but did not remedy the 2009 shortfall of $3,698.79. Grand
Traverse County foreclosed on the property and secured a court judgment “vesting absolute title
to the real property” in the county treasurer. In this same timeframe, the county entered
unsuccessful negotiations with Verizon to purchase the cell phone tower on the land.
The county subsequently filed suit through the land bank, seeking a declaratory judgment
that the tower and any utility buildings on the property are fixtures that transferred to the county
during the foreclosure process. Great Northern contended that the tower was personal property,
not a fixture, because (1) the lease provided that the tower could be removed from the property,
(2) the county considered the tower personal property as it had offered to purchase the tower
from Verizon separate from the land, and (3) the tower was not permanently attached to the
ground and could be physically moved.
The circuit court ultimately granted summary disposition in the county’s favor,
classifying the tower as a fixture that was foreclosed upon with the land. Great Northern
appeals.
II. SUMMARY DISPOSITION
Great Northern continues to argue that the tower was personal property, not a fixture.
We review a trial court’s decision on a motion for summary disposition de
novo. Wayne Co v Wayne Co Retirement Comm, 267 Mich. App. 230, 243; 704
NW2d 117 (2005). . . .
A motion under MCR 2.116(C)(10) “tests the factual support of a
plaintiff’s claim.” Walsh v Taylor, 263 Mich. App. 618, 621; 689 NW2d 506
(2004). “Summary disposition is appropriate . . . if there is no genuine issue
regarding any material fact and the moving party is entitled to judgment as a
matter of law.” West v Gen Motors Corp, 469 Mich. 177, 183; 665 NW2d 468
(2003). “In reviewing a motion under MCR 2.116(C)(10), this Court considers
the pleadings, admissions, affidavits, and other relevant documentary evidence of
record in the light most favorable to the nonmoving party to determine whether
any genuine issue of material fact exists to warrant a trial.” Walsh, 263 Mich. App.
at 621. “A genuine issue of material fact exists when the record, giving the
benefit of reasonable doubt to the opposing party, leaves open an issue upon
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which reasonable minds might differ.” West, 469 Mich. at 183. [Zaher v Miotke,
300 Mich. App. 132, 139-140; 832 NW2d 266 (2013).]
The test for determining whether something is a fixture on real property is old and well
established. “The term ‘fixture’ necessarily implies something having a possible existence apart
from realty, but which may, by annexation, be assimilated into realty.” Kent Storage Co v Grand
Rapids Lumber Co, 239 Mich. 161, 164; 214 N.W. 111 (1927). In Wayne Co v Britton Trust, 454
Mich. 608, 610; 563 NW2d 674 (1997), the Supreme Court “reaffirm[ed] the three-part test
enumerated in Morris v Alexander, 208 Mich. 387, 390-391; 175 N.W. 264 (1919), for
determining what constitutes a fixture.” Pursuant to that test, a court must consider, “ ‘[First],
annexation to the realty, either actual or constructive; second, adaptation or application to the use
or purpose to which that part of the realty to which it is connected is appropriated; and third,
intention to make the article a permanent accession to the freehold.’ ” Wayne Co, 454 Mich. at
615, quoting Morris, 208 Mich. at 390-391.
The cell tower was annexed to the realty. As described in Wayne Co, 454 Mich. at 615,
quoting 35 Am Jur 2d, Fixtures, § 5, p 703, annexation is:
“[T]he act of attaching or affixing personal property to real property and, as a
general proposition, an object will not acquire the status of a fixture unless it is in
some manner or means, albeit slight, attached or affixed, either actually or
constructively, to the realty. That is, if the object is not attached to the land or to
some structure or appliance which is attached to it, it will retain its character as
personalty even though intended for permanent use on the premises.”
The subject tower sat on a cement slab buried in the ground. It was held in place by three
wires that latched to anchors in the ground. Great Northern argues that it is possible to remove
the tower by unlatching the wires, negating annexation. However, property can be considered
affixed, and thus annexed, to property even where the attachment is “slight.” Wayne Co, 454
Mich. at 615. See, e.g., Wood Hydraulic Hoist & Body Co v Norton, 269 Mich. 341, 347; 257
N.W. 836 (1934) (a heating system); Colton v Mich Lafayette Bldg Co, 267 Mich. 122, 127; 255
N.W. 433 (1934) (window shades, awnings, and storm doors); Peninsular Stove Co v Young, 247
Mich. 580, 582-583; 226 N.W. 225 (1929) (a stove). Moreover, an item may be deemed
constructively annexed to the property due to “its size and character.” Granger Land
Development Co v Dep’t of Treasury, 286 Mich. App. 601, 610; 780 NW2d 611 (2009). A
heating system, window shades, awnings, storm doors, and stoves can all be removed from real
property with relative ease compared to a 450-foot tower sitting on a cement slab buried in the
ground. If such items can be considered annexed to the property, so too may a cellular tower.
“Adaptation” to the use or purpose of realty speaks to “ ‘the relationship between the
chattel and the use which is made of the realty to which the chattel is annexed.’ ” Wayne Co,
454 Mich. at 618, quoting Premonstratensian Fathers v Badger Mut Ins Co, 46 Wis2d 362, 369;
175 NW2d 237 (1970). As described in 35 Am Jur 2d, Fixtures, § 12, p 708, “ ‘An object
introduced onto the realty may become a fixture if it is a necessary or at least a useful adjunct to
the realty, considering the purposes to which the latter is devoted.’ ” Wayne Co, 454 Mich. at
619.
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The evidence in this case establishes that Great Northern only used the parcel for
transmitting radio signals (and previously for handling cellular traffic), employing the tower and
utility building. The remainder of the 14-acre parcel is vacant. Accordingly, viewing the
evidence in the light most favorable to Great Northern, the property has one purpose—
broadcasting signals via the tower. Therefore, the tower is “a useful adjunct to the realty,”
considering the realty’s purpose of broadcasting signals.
To determine whether a landowner intended to make an object a fixture, “[t]he intention
which controls is that manifested by the objective, visible facts.” Mich Nat’l Bank, Lansing v
Lansing, 96 Mich. App. 551, 554; 293 NW2d 626 (1980). “The surrounding circumstances
determine the intent of the party making the annexation, not the annexor’s secret subjective
intent.” Wayne Co, 454 Mich. at 619. The relevant time is when the object was attached to the
real property. See Lord v Detroit Savings Bank, 132 Mich. 510, 511; 93 N.W. 1063 (1903) (“If
this property is part of the realty, it became so at the time it was annexed thereto.”). “The
permanence required is not equated with perpetuity. It is sufficient if the item is intended to
remain where affixed until worn out, until the purpose to which the realty is devoted is
accomplished or until the item is superseded by another item more suitable for the purpose.”
Mich Nat’l Bank, 96 Mich. App. at 554.
Here, the lease provided that Verizon could build a new tower, and that the term of the
lease would extend 22 years unless Verizon chose to terminate it. The lease further provided that
once it expired, Verizon agreed to remove the tower. The terms of the lease, therefore, indicate
that the tower would stand during the term of the lease. In other words, the intent of the parties
was that the tower would remain in place until Verizon accomplished “the purpose to which the
realty [was] devoted.” This suggests an intent to make the tower a fixture.
Great Northern asserts that the county’s attempts to purchase the tower are evidence that
it understood the tower was personal property. Without considering the merits of this inference,
we note that the treatment of a fixture as personal property by a third party does not affect its
status. Indeed, in the context of trade fixtures, the Mich Nat’l Bank Court explained, “Although
as between lessor and lessee trade fixtures might be personal property, as to third parties they are
properly considered as a part of the realty.” Id. at 556. Moreover, Verizon and Great Northern
contemplated at the time of construction that Verizon may leave the tower in place permanently,
further suggesting their intent to make the tower a fixture on the land.
Because the tower was attached to the property, was a useful adjunct to the property’s use
for radio signal broadcasting, and the lease contemplated the tower would remain in place while
Verizon used it (and potentially forever), the circuit court did not err in determining that the
tower was a fixture.1
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Given this conclusion, we need not consider Great Northern’s alternative arguments that its
rights to the tower under the lease were not extinguished by the tax foreclosure, MCL
211.78k(5)(e), or that Verizon had abandoned the tower.
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III. MOTION FOR RECONSIDERATION
Great Northern further contends that the circuit court erroneously denied its motion for
reconsideration. We review “a trial court’s decision on a motion for reconsideration for an abuse
of discretion.” Woods v SLB Prop Mgt, LLC, 277 Mich. App. 622, 629; 750 NW2d 228 (2008).
A trial court abuses its discretion when its “decision falls outside the range of reasonable and
principled outcomes.” Ypsilanti Charter Twp v Kircher, 281 Mich. App. 251, 273; 761 NW2d
761 (2008).
MCR 2.119(F)(3) governs reconsideration motions as follows:
Generally, and without restricting the discretion of the court, a motion for
rehearing or reconsideration which merely presents the same issues ruled on by
the court, either expressly or by reasonable implication, will not be granted. The
moving party must demonstrate a palpable error by which the court and the
parties have been misled and show that a different disposition of the motion must
result from correction of the error.
Additionally, “we can find no abuse of discretion in the denial of a motion for reconsideration
that rests on testimony that could have been presented the first time the issue was argued.”
Churchman v Rickerson, 240 Mich. App. 223, 233; 611 NW2d 333 (2000).
Great Northern argued in its motion for reconsideration that negotiations between the
county and Verizon showed that both entities treated the tower as personal property. In support,
Great Northern attached a letter from the county to Verizon, stating “[i]f [Verizon] does not
intend to continue to operate and maintain this tower, then arrangement will need to be made to
remove said tower and restore the property to its previous condition, at [Verizon’s] expense.”
Great Northern also attached an e-mail purportedly from a Verizon representative stating that
Verizon owned the tower, and correspondence between the county and Verizon wherein the two
entities attempted to negotiate a bill of sale for the tower. Of import, Great Northern never
asserted that any of the cited evidence was not available to it when arguing against the county’s
motion for summary disposition. As this evidence could have been presented the first time the
issue was argued, i.e. at the summary disposition phase, we discern no abuse of discretion in the
circuit court’s decision not to grant reconsideration based on this evidence.
We affirm. Grand Traverse County Land Bank Authority, as the prevailing party, may
tax costs pursuant to MCR 7.219.
/s/ David H. Sawyer
/s/ Christopher M. Murray
/s/ Elizabeth L. Gleicher
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