David C Adkins v. Samuel O Gabor ( 2019 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
DAVID C. ADKINS and DEBRA A. UNPUBLISHED
GONZALEZ, October 17, 2019
Plaintiffs-Appellees,
v Nos. 342836
Wayne Circuit Court
SAMUEL O. GABOR and MARIA GABOR, LC No. 17-013954-CH
Defendants-Counterplaintiffs,
and
INTEGRITY FIRST REALTY, INC., doing
business as REMERICA UNITED REALTY-
NOVI,
Defendant,
and
CITY OF ALLEN PARK,
Defendant/Counterdefendant-
Appellant.
DAVID C. ADKINS and DEBRA A.
GONZALEZ,
Plaintiffs-Appellees,
v No. 342838
Wayne Circuit Court
LC No. 17-013954-CH
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SAMUEL O. GABOR, MARIA GABOR, and
INTEGRITY FIRST REALTY, INC., doing
business as REMERICA UNITED REALTY-
NOVI,
Defendants,
and
CITY OF ALLEN PARK,
Defendant-Appellant.
Before: METER, P.J., and O’BRIEN and SWARTZLE, JJ.
PER CURIAM.
In these consolidated appeals, defendant City of Allen Park appeals the circuit court’s
order denying its motion for summary disposition. We reverse.
I. BACKGROUND
This case involves the disposal of sewage at a single-family residence located in Allen
Park. Plaintiffs purchased the property from defendants Samuel and Maria Gabor. During the
sale process, plaintiffs were provided with a disclosure statement which they allege indicated that
the property was connected to the City’s sewer system. According to plaintiffs, after moving
into the home, they began experiencing respiratory difficulties, eye infections, and skin
irritations related to sewage gases therein. Plaintiffs hired a plumber, whom they claim
confirmed that sewer gases were escaping into plaintiffs’ basement. The plumber allegedly also
discovered that the property was not connected to the municipal sewer as indicated on the
disclosure statement, even though the City was billing plaintiffs for sewage disposal. Rather, the
property was connected to an Onsite Sewage Disposal System (OSDS),1 which, according to
plaintiffs, was later determined to be in such disrepair that it was completely failing. Plaintiffs
claimed that they were advised to abandon the OSDS and connect to the municipal sewer system.
Plaintiffs alleged that they attempted to address the issue with the City, but the City did
not take any action. Plaintiffs claimed that representatives of the City verbally acknowledged to
them that the City knew that the property was not connected to the municipal sewer and that at
least one seller of the property had previous communications with the City regarding the same
1
Consistent with its title, an OSDS uses natural processes to treat wastewater at the home, rather
than transporting the wastewater to a separate facility for treatment. The OSDS at issue in this
appeal is a septic tank and corresponding drain field.
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issue. Plaintiffs alleged that, despite its knowledge that the property was not connected to the
municipal sewer, the City continued to bill them for “sewage” on quarterly invoices.
Ultimately, plaintiffs filed a five-count complaint in the circuit court against several
defendants. Counts III and IV of this complaint were against the City. In Count III, plaintiffs
alleged that that the City violated Wayne County Ordinance 99-527 by failing to facilitate a
connection of the property to the municipal sewer and by failing to keep accurate records
regarding the existence of the OSDS. In Count IV, plaintiffs alleged that the City overbilled
them for sewer services that it knew were not being provided and that the City was unjustly
enriched by its retention of plaintiffs’ payment of these charges. The City filed a motion for
summary disposition arguing inter alia that it was immune from suit and that plaintiffs failed to
exhaust their administrative remedies before filing suit. This appeal followed the circuit court’s
denial of the City’s motion.
II. ANALYSIS
A. GOVERNMENTAL IMMUNITY
On appeal, the City first argues that it was entitled to summary disposition of plaintiffs’
Count III on the basis of governmental immunity. We review de novo the circuit court’s grant or
denial of summary disposition. Estate of Voutsaras v Bender, 326 Mich. App. 667, 671-672; 929
NW2d 809 (2019). Summary disposition is appropriate under MCR 2.116(C)(7) when the claim
fails because of “immunity granted by law.” Id. at 672 (internal citation, quotation marks, and
ellipsis omitted). “A party may support a motion under MCR 2.116(C)(7) by affidavits,
depositions, admissions, or other documentary evidence.” Id. (internal citation and quotation
marks omitted).
Governmental entities are generally immune from tort liability for acts taken “in the
exercise or discharge of a governmental function.” MCL 691.1407(1). Therefore, a
governmental entity “can only be subject to suit if a plaintiff’s case falls within a statutory
exception. As such, it is the responsibility of the party seeking to impose liability on a
governmental agency to demonstrate that its case falls within one of the exceptions.” Mack v
City of Detroit, 467 Mich. 186, 201; 649 NW2d 47 (2002). “A plaintiff pleads in avoidance of
governmental immunity by stating a claim that fits within a statutory exception or by pleading
facts that demonstrate that the alleged tort occurred during the exercise or discharge of a
nongovernmental or proprietary function.” Id. at 204.
Here, plaintiffs failed to plead any exception to governmental immunity in their
complaint; similarly, plaintiffs failed to allege that the City was engaged in a nongovernmental
or proprietary function. Accordingly, plaintiffs’ complaint was insufficient to plead in avoidance
of governmental immunity. Therefore, the City was entitled to summary disposition under MCR
2.116(C)(7).
Plaintiffs argued before the circuit court and now argue on appeal that governmental
immunity does not apply because the City’s employees engaged in gross negligence. MCL
691.1407(1), however, unambiguously “provides immunity to a governmental agency without
regard to an employee’s gross negligence.” Yoches v City of Dearborn, 320 Mich. App. 461, 476;
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904 NW2d 887 (2017). Therefore, because plaintiffs failed to plead an exception to
governmental immunity, any alleged gross negligence on the part of the City’s employees does
not alter our conclusion that the City was entitled to summary disposition under MCR
2.116(C)(7).
Plaintiffs argue that they should have an opportunity to amend their complaint to correct
any pleading deficiencies with respect to governmental immunity. In making this argument,
however, plaintiffs have not shown that they can plead a statutory exception to immunity.
Therefore, we reject plaintiffs’ request to remand for an opportunity to amend. Rather, on
remand, the circuit court shall enter an order granting summary disposition to the City on Count
III of plaintiffs’ complaint.
B. ADMINISTRATIVE REMEDIES
Regarding Count IV of plaintiffs’ complaint, the City argues that it was entitled to
summary disposition under MCR 2.116(C)(4) because plaintiffs failed to exhaust their
administrative remedies before filing suit.2 A circuit court is without subject-matter jurisdiction
if the plaintiffs have failed to exhaust their administrative remedies, thereby entitling the
defendant to summary disposition under MCR 2.116(C)(4). Papas v Mich Gaming Control Bd,
257 Mich. App. 647, 656; 669 NW2d 326 (2003). We review de novo whether the circuit court
properly assumed jurisdiction. Id. at 656-657.
Where an administrative grievance procedure is provided, exhaustion of that remedy is
required before the circuit court can review a case. Mich Supervisors Union OPEIU Local 512 v
Dep’t of Civil Service, 209 Mich. App. 573, 576-577; 531 NW2d 790 (1995). See also MCL
24.301. A plaintiff may seek judicial review without exhausting administrative remedies only if
review of the agency’s decision would not provide an adequate remedy or if pursuing the
administrative remedy would be futile. Id. at 577.
Section 48-117 of the Allen Park Code of Ordinances authorizes the city council to adopt
sewage rates and fees by county ordinance. In turn, Section 48-250 addresses rate-charge
appeals, stating in relevant part:
[A]n individual user may appeal the rate charges for service rendered or
other matters related thereto. This public hearing shall be at a regular council
meeting or a special council meeting called for this purpose. Individuals may, at
any time, address questions relative to the rates charged to a member of the city’s
administrative staff before said public hearing and, if not satisfied with
information secured, may address concerns to the mayor and council at the public
hearing. [Allen Park Ordinances, § 48-250.]
2
We note that Count IV of plaintiff’s complaint is not a tort claim and therefore does not fall
within the purview of MCL 691.1407(1).
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The Ordinances also provide that, parties who believe they are aggrieved by the county in
enforcing the sewage provisions may appeal to the director for relief, and are entitled to a
hearing on the request with a disinterested officer. Allen Park Ordinances, §§ 48-588 to 48-591.
Plaintiffs argue that Section 250 applies only to the setting of rates, not a dispute over
charges. We disagree. As noted above, the ordinance provides for the appeal of “rate charges
for service rendered or other matters related thereto.” Allen Park Ordinances, § 48-250. The
plain meaning of the phrase “charges for service rendered” indicates that the appeal process is
not limited to the general service rate, but also applies more specifically to individual charges
residents receive for services. In any event, an individual’s dispute over a bill for sewage
services would logically fall within the catchall phrase “other matters related thereto.” It is
undisputed that plaintiffs did not avail themselves of the appeal process set forth in Section 250.
Moreover, plaintiffs did not avail themselves of the grievance procedure set forth in Sections 588
through 591 and there is nothing in these sections from which we can conclude that the grievance
procedure applies only to rate setting.
Therefore, because plaintiffs failed to exhaust their administrative remedies and have
made no showing that review of any administrative decision would be inadequate to afford them
relief, the circuit court was without subject-matter jurisdiction to entertain plaintiffs’ Count IV.
Accordingly, the City was entitled to summary disposition on Count IV of plaintiffs’ complaint
under MCR 2.116(C)(4).3
III. CONCLUSION
We reverse the circuit court’s denial of summary disposition and remand this case to the
circuit court for entry of an order granting defendant City of Allen Park’s motion for summary
disposition on Counts III and IV of plaintiffs’ complaint. We do not retain jurisdiction.
/s/ Patrick M. Meter
/s/ Colleen A. O’Brien
/s/ Brock A. Swartzle
3
We agree with the trial court that questions of fact exist regarding whether the City knew of the
OSDS when it billed plaintiffs for sewage services; however, the existence of a factual question
does not grant the circuit court jurisdiction to decide a case and therefore does not alter our
conclusion that the City was entitled to summary disposition on Count IV of plaintiffs’ complaint
under MCR 2.116(C)(4).
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