Mark & Nancy Real Estate Company v. West Bloomfield Plaza LLC ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
MARK & NANCY REAL ESTATE COMPANY, UNPUBLISHED
November 21, 2017
Plaintiff-Appellant,
v No. 333325
Oakland Circuit Court
WEST BLOOMFIELD PLAZA, LLC, LC No. 2016-151398-CH
Defendant-Appellee.
Before: JANSEN, P.J., and CAVANAGH and GADOLA, JJ.
PER CURIAM.
Plaintiff appeals as of right an order granting defendant’s motion for summary disposition
under MCR 2.116(C)(8) in this easement dispute. We affirm.
I. FACTS
Plaintiff owned commercial real property “adjoining, abutting and contiguous” to the
commercial real property owned by defendant. Plaintiff asserted that, in 1989, plaintiff and
defendant’s predecessor entered into an informal verbal agreement that customers of either
business could enter and exit from access points on either property and could park on either
property. According to plaintiff, the informal verbal agreement was honored and utilized
“almost daily” by plaintiff, defendant, and defendant’s predecessor. When plaintiff had an
opportunity to “sell and/or redevelop” its property, it approached defendant and proposed
reducing the informal verbal agreement to writing. Plaintiff alleged that representatives for
defendant, Bryan and Charles Peruski, confirmed the verbal understanding and encouraged
plaintiff to draw up a written document. When presented with the written agreement, however,
defendant declared that it was not in its best interest to sign the agreement and refused to sign the
document. Plaintiff then sought a declaratory judgment that the informal verbal agreement
established an express easement or, in the alternative, that a prescriptive easement had been
formed.
Defendant filed a motion for summary disposition under MCR 2.116(C)(8), arguing that
plaintiff could not state a claim for an oral easement because easements are an interest in real
property that require a writing to satisfy the statute of frauds and no such writing existed.
Further, plaintiff could not establish a prescriptive easement claim because plaintiff’s use of
defendant’s property was permissive, not hostile. Plaintiff responded, arguing that performance
or part performance of an oral agreement for an interest in land took the matter outside of the
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operation of the statute of frauds, making a writing unnecessary. Plaintiff further argued that the
parties intended to create an easement; thus, even if the court found that the statute of frauds was
not satisfied with regard to an express easement, a prescriptive easement was formed because
there was an intended but imperfectly created servitude.
The trial court agreed with defendant, holding that a writing was required to form an
express easement and it was undisputed that no such written agreement existed. Further, because
plaintiff’s use of defendant’s property was not hostile, plaintiff could not prove the adverse
element of its claim for a prescriptive easement. Accordingly, the trial court granted defendant’s
motion for summary disposition under MCR 2.116(C)(8), finding that “[b]ased on the allegation
in the plaintiff’s complaint no factual development could possibly justify the relief requested and
the court finds that plaintiff’s claims are clearly unenforceable as a matter of law.” This appeal
followed.
II. ANALYSIS
A. STANDARD OF REVIEW
We review de novo a trial court’s decision to grant summary disposition under MCR
2.116(C)(8). Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). “A motion under
MCR 2.116(C)(8) tests the legal sufficiency of the complaint.” Id. at 119. “All well-pleaded
factual allegations are accepted as true and construed in a light most favorable to the nonmovant”
to determine whether the claims alleged are clearly unenforceable as a matter of law. Id.B. EXPRESS EASEMENT
As our Supreme Court held in Forge v Smith, 458 Mich 198; 580 NW2d 876 (1998):
An easement is an interest in land that is subject to the statute of frauds. In order
to create an express easement, there must be language in the writing manifesting a
clear intent to create a servitude. Any ambiguities are resolved in favor of use of
the land free of easements. [Id. at 205 (footnotes omitted).]
Here, plaintiff admits that no writing existed to memorialize the alleged verbal agreement
between the parties to create an easement. In fact, plaintiff concedes in its complaint that
defendant refused to sign any such written agreement.
Nevertheless, plaintiff argues that part performance of an oral agreement for an interest in
land takes the agreement outside of the operation of the statute of frauds and requires specific
performance. Plaintiff cites to Schultz v Huffman, 127 Mich 276; 86 NW 823 (1901), in support
of its argument. In Schultz, the plaintiff entered into a verbal agreement with the defendant to
share the cost of acquiring an easement to drain their lands into the drainage ditch of other
landowners, which would require the extension of the ditch to the parties’ properties. Id. at 277-
278. Eventually, the plaintiff filed a lawsuit to collect the defendant’s share of the cost, but the
defendant refused to pay because he was never given the written easement setting forth his right
to drain across the other landowners’ land. Id. at 279. The plaintiff argued that he was entitled
to payment because of his “part performance,” apparently by actually extending the ditch. Id. at
278, 280. But the trial court agreed with the defendant’s position, holding that the plaintiff failed
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to perform his end of the agreement by securing an easement in writing for the defendant; thus,
defendant was also not obligated to perform. Id. at 279-280. It is clear that the facts in the
Schultz case are not comparable to the facts in this case.
As noted by defendant, the “part performance rule” was set forth by the Michigan
Supreme Court in Kent Furniture Mfg Co v Long, 111 Mich 383, 389-390; 69 NW 657 (1897):
“[W]here, under an agreement to convey land, the purchase money has been paid, and possession
has been taken, these acts of part performance are sufficient to take the case out of the statute of
frauds, and to entitle the purchaser to a decree for specific performance.” In that case, the
plaintiff gave up its right to use a certain railroad track—which was to be removed, in exchange
for the right to use a new railroad track being laid by the defendants. Id. at 388-389. But when
the plaintiff attempted to use the new track, the defendant claimed that the agreement “was
resting in parol [and] could not be enforced.” Id. at 389. Our Supreme Court held that the parol
defense could not be asserted because the plaintiff had fully performed its part of the agreement
by surrendering its rights in the old railroad track and, thus, had the right to insist that the
defendant be compelled to specifically perform its part of the agreement by allowing the plaintiff
to use the new track. Id. at 389-390.
In this case, there appears to have been a mutually beneficial verbal agreement between
the parties that their customers could drive and park on their properties without obstruction.
However, plaintiff did nothing to its detriment in exchange for or in reliance on that purported
agreement. The fact that plaintiff allowed the use of its property by defendant’s customers in
exchange for use of defendant’s property for plaintiff’s customers does not warrant the
application of the “part performance rule.” In other words, there is no reason that “it would be a
fraud upon [plaintiff] to allow the other party to repudiate the contract” by raising the statute of
frauds as a defense. Brummel v Brummel, 363 Mich 447, 452; 109 NW2d 782 (1961).
Therefore, equity may not intervene and order specific performance of an alleged oral
agreement. Id.; Kent Furniture Mfg Co, 111 Mich at 389-390. Accordingly, the trial court
properly held that plaintiff’s claim—that an enforceable express easement existed even though
the statute of frauds was not satisfied—fails as a matter of law because no factual development
could possibly justify recovery.
C. PRESCRIPTIVE EASEMENT
Plaintiff argues in the alternative that a prescriptive easement existed and that the trial
court erred when it concluded that the adverse or hostile use element for a prescriptive easement
was not met. We disagree.
“An easement by prescription results from use of another’s property that is open,
notorious, adverse, and continuous for a period of fifteen years.” Plymouth Canton Community
Crier, Inc v Prose, 242 Mich App 676, 679; 619 NW2d 725 (2000). “Adverse or hostile use is
use inconsistent with the right of the owner, without permission asked or given, use such as
would entitle the owner to a cause of action against the intruder.” Goodall v Whitefish Hunting
Club, 208 Mich App 642, 646; 528 NW2d 221 (1995) (citation omitted). Thus, the term
“hostile” does not require or even imply ill will. Id. (citation omitted). A plaintiff seeking a
prescriptive easement “bears the burden to demonstrate entitlement to a prescriptive easement by
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clear and cogent evidence.” Matthews v Dep’t of Natural Resources, 288 Mich App 23, 37; 792
NW2d 40 (2010).
First, to the extent that plaintiff attempts to argue that a prescriptive easement was
established by an “intended but imperfectly created servitude,” such argument is without merit.
While a prescriptive easement may arise when people try but fail to create a servitude because of
some technicality, 1 that did not occur in this case. In other words, for example, the facts in this
case are distinguishable from those of Mulcahy v Verhines, 276 Mich App 693; 742 NW2d 393
(2007), where this Court held that a prescriptive easement was established by an intended but
imperfectly created servitude. In that case, the previous property owner sought to divide up his
property and the city’s approval of the site plan was conditioned on the existence of an easement
agreement. Id. at 695-696. The property owner agreed to the city’s terms, had the easement
agreement drafted, but then failed to sign and record the easement agreement. Id. at 696. When
a subsequent dispute arose over whether an easement existed, id. at 697, this Court ruled in favor
of an easement holding that, in light of the evidence, it was clear that the property owner
“intended to create an easement but inadvertently failed to sign and record the easement
agreement.” Id. at 701. And because the use was under an intended but imperfect express
easement, i.e., the use was by a claim of right when no right existed, it was sufficiently adverse
to establish a prescriptive easement. Id. at 702.
In this case, unlike in Mulcahy, there was no intention to create an easement agreement
which, but for an inadvertent mistake, would have resulted in an express easement. In fact,
defendant specifically refused to enter into any such easement agreement. Therefore, plaintiff’s
argument that a prescriptive easement was established by an intended but imperfectly created
servitude is without merit.
Second, plaintiff argues that the use of defendant’s property was sufficiently adverse to
establish the element of hostile or adverse use for a prescriptive easement. Again, we disagree.
Plaintiff conceded in its complaint that its use of defendant’s property was with permission given
by defendant’s predecessor and defendant. The element of adverse or hostile use cannot be met
when permission has been given. Plymouth Canton, 242 Mich App at 679. Further, plaintiff did
not use defendant’s property under a claim of right when no right existed, i.e., under an intended
but imperfectly created servitude. See Mulcahy, 276 Mich App at 702. Therefore, plaintiff’s
claim that the trial court erred in concluding that the adverse or hostile use element was not met
fails as a matter of law because no factual development could possibly lead to a different
conclusion.
1
See, e.g., 1 Restatement Property, 3d, Servitudes, § 2.16, comment a, p 222.
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Accordingly, the trial court properly granted defendant’s motion for summary disposition
and dismissed the entirety of plaintiff’s complaint.
Affirmed. Defendant is entitled to costs as the prevailing party. MCR 7.219(A).
/s/ Kathleen Jansen
/s/ Mark J. Cavanagh
/s/ Michael F. Gadola
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