Three Rivers Metal Recyclers LLC v. Township of Fabius ( 2020 )

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
THREE RIVERS METAL RECYCLERS, LLC, UNPUBLISHED
DAVE RITZER d/b/a STEVE’S AUTO PARTS, and June 11, 2020
KEVIN ROBERTS d/b/a BROKERS SERVICE,
Plaintiffs-Appellants,
v No. 347583
St. Joseph Circuit Court
TOWNSHIP OF FABIUS, LC No. 16-001037-CH
Defendant-Appellee.
Before: K. F. KELLY, P.J., and FORT HOOD and SWARTZLE, JJ.
PER CURIAM.
Plaintiffs, Three Rivers Metal Recyclers, LLC (TRMR), Dave Ritzer d/b/a Steve’s Auto
Parts, and Kevin Roberts d/b/a Brokers Service, appeal as of right the trial court order denying in
part and granting in part defendant Fabius Township’s motion for summary disposition in this
action alleging an unconstitutional taking of property.1 Finding no errors warranting reversal, we
affirm. This appeal is decided without oral argument. MCR 7.214(E)(1)(b).
I. BASIC FACTS AND PROCEDURAL HISTORY
In December 2008, plaintiff purchased 14.3 acres zoned as I-1 Light Industrial in defendant
township. In October 2011, plaintiff applied for a special exception use permit (SEUP) for 5.1
acres of the property and proposed to operate a metal and aggregate recycling facility, specifically,
an auto junkyard with a car crusher. The township planning commission held multiple public
hearings. Ultimately, the planning commission retained McKenna Associates to prepare a report
1
Although three plaintiffs are designated as appellants, the trial court dismissed the individual
plaintiffs as well as the substantive and procedural due process claims in a written order filed on
September 17, 2018. The trial court decided the dispositive motion at two separate hearings held
months apart. Plaintiffs did not appeal the September 17, 2018 order, and therefore, this appeal is
limited to the claim of taking, and the singular “plaintiff” refers to TRMR only.
-1-
addressing how plaintiff’s site plan comported with ordinance requirements and sound planning
principles and to make recommendations. Amy Neary of McKenna Associates articulated 21
recommendations that included landscaping, proposed buildings and their location on the property,
paving, and application of standards and guidelines from industry recycling groups. Ultimately,
the planning commission approved the SEUP subject to the 21 conditions recommended by Neary.
Plaintiff appealed the planning commission’s decision to impose conditions on the SEUP
to the circuit court. Although it did not oppose all of the recommendations, plaintiff claimed that
the conditions were not derived from any standards established in the zoning ordinance. The
circuit court declined to rule on whether the conditions imposed complied with the statutory
requirements, but it instead held that the recommendations were not properly adopted in the
planning commission’s factual findings. Accordingly, the circuit court granted plaintiff’s request
for a SEUP free from the adopted conditions.
Defendant appealed the circuit court’s decision to this Court. In lieu of granting leave to
appeal, this Court concluded that the circuit court applied an incorrect legal principle, vacated the
lower court’s decision, and remanded “to consider and resolve plaintiff’s objections to the
conditions imposed on the special exemption use permit in light of the requirements in MCL
125.3504.”2 On February 15, 2015, the circuit court issued an order affirming in part and reversing
in part the decision of defendant’s planning commission and approving a SEUP with conditions.
The circuit court’s order delineated the recommended conditions by McKenna Associates and
either accepted or rejected the conditions.
On November 18, 2016, plaintiff filed the lawsuit underlying this appeal, alleging “inverse
condemnation for a regulatory taking of Plaintiffs’ property,” and deprivation of substantive due
process and the “right to fair and just treatment.” To summarize, plaintiff alleged that the
circumstances pertaining to the underlying zoning condition litigation resulted in a taking of
property. Specifically, it claimed that defendant’s approval of the SEUP by the planning
commission with the 21 conditions was improper. Although defendant appealed the decision to
this Court, after remand to the circuit court, plaintiff concluded that it prevailed because,
ultimately, the conditions imposed by defendant’s planning commission were wholly or partially
reversed by the courts. Accordingly, plaintiff filed a lengthy complaint delineating the conditions
adopted by the planning commission and alleging that “[s]aid condition was and is unconstitutional
as effecting a taking without just compensation[.]” Reduced to its essence, plaintiff alleged that
each of the conditions recommended by McKenna Associates constituted a regulatory taking
because the terms, such as requiring paving of the premises and limiting the hours of operation,
were an interference with the business and not legitimate regulation.
On July 27, 2018, defendant moved for summary disposition of the complaint pursuant to
MCR 2.116(C)(5), (7), (8) and (10).3 Pertinent to this appeal, defendant submitted that the taking
2
Three Rivers Recyclers, LLC v Twp of Fabius, unpublished order of the Court of Appeals, entered
June 10, 2014 (Docket No. 319932).
3
Defendant’s motion for summary disposition also sought dismissal of the claims by the individual
plaintiffs and the procedural and substantive due process claims. It further asserted that all claims
-2-
of property without just compensation/inverse condemnation claim should be dismissed pursuant
to MCR 2.116(C)(8) and (10). Although the state and federal governments provide that a taking
of property for public use should not occur without just compensation, a plaintiff asserting inverse
condemnation must demonstrate that it was deprived of all economically viable use of its land.
Defendant asserted that the law pertaining to temporary takings was the same as permanent
takings, and a landowner must be denied of all use of the property. Specifically, defendant alleged
that plaintiff failed to show that it was deprived of the use of the property when it could have
developed the property in accordance with the I-1 light industrial zoning ordinance. Moreover, a
taking claim should not be permitted to penalize defendant for seeking an adjudication of the
zoning ordinance on appeal particularly where there was no extraordinary delay in obtaining the
ruling.
On August 20, 2018, plaintiff opposed the dispositive motion by claiming that a taking
occurred because defendant’s regulation went too far. Plaintiff asserted that defendant’s imposed
conditions on the land use permit “in exchange for exactions demanded by the governmental unit
from the property owner,” was improper and known as the doctrine of “unconstitutional
conditions.” Defendant could not exert its control over benefits, such as permits, to coerce a person
into giving up a constitutional right. Further, contrary to defendant’s assertion, plaintiff pleaded a
claim for inverse condemnation because the complaint alleged that each imposed condition
constituted an unconstitutional taking without just compensation, delineated the conditions’
negative effects, and showed the property’s decline in value as a result of the government’s abuse
of power. Plaintiff claimed that a temporary taking was not alleged.4 Lastly, plaintiff alleged that
township supervisor John Kroggel admitted that there was no economic consideration of the
conditions placed on the property or any economic benefit to defendant as a result. Thus, defendant
failed to advance a legitimate state interest for the conditions. Plaintiff requested that summary
disposition be denied.
On August 31, 2018, the trial court heard oral argument regarding the dispositive motion.
At this hearing, it dismissed the individual plaintiffs as well as the due process claims. The trial
court heard the remaining arguments and took the matter under advisement. On January 3, 2019,
the trial court held a hearing on the record to rule on the remaining summary disposition
challenges. The trial court examined the history of takings law and the tests and factors that
evolved over time and then concluded:
So then the question becomes, at what point can a property owner rely on a
land use regulation for the right to use property in a particular manner. The material
indicates that, in Michigan, the answer to this question is that complete reliance
were subject to a statute of limitation period of three-years. The trial court dismissed the individual
and due process claims, but held that a three-year statute of limitation period did not apply. These
rulings are not contested in this appeal.
4
In the lower court and in the brief on appeal, plaintiff contends that it raised a claim of permanent
taking, not a temporary taking. However, paragraph 78 of the complaint states, “The period of the
unconstitutional taking began March 20, 2012, and ended, at the earliest, December 26, 2013, or
alternatively, at the latest February 18, 2015.”
-3-
may occur only where a property owner has secured issuance of a building permit
and commenced on-site construction. And that refers to Justice Martin’s [sic]
concurring statement filed in connection with the denial of the application for leave
to appeal in Dorman v Township of Clinton, 477 Mich. 955.
The material goes on to refer to Justice Rehnquist’s opinion in Penn Central
where he provides the explanation to the concept relation [sic] to takings
jurisprudence.
It says, typical zoning restrictions made as true so limit the prospective uses
of a piece of property as to diminish the value of the property in the abstract because
it may not be used for the forbidden purpose. But any such abstract decrease in
value will more than likely be at least partially offset by an increase in value which
flows from similar restrictions as to use on neighboring properties. All property
owners in a designated area are placed under the same restrictions, not only for the
benefit of the municipality as a whole, but, also, for the common benefit of one
another. In other words, in the words of Mr. Justice Holmes speaking for the court
in Mahon, there is an average reciprocity of advantage.
Even where the government prohibits a noninjurious use, the court has ruled
that the taking does not take place if the prohibition applies over a broad cross-
section of land and, thereby, secures an average reciprocity of advantage.
It is for this reason that zoning does not constitute a taking. While zoning
at times reduced individual property values, the burden is shared relatively evenly
and is reasonable to conclude that, on the whole, an individual who is harmed by
one aspect of the zoning will be benefitted by another.
All right. So those are the basic confusing rules that I’ve tried to go through
in this case. What this case involves is a landowner-a corporation-that bought a
parcel, owned it for three years before seeking a special use exception permit to
install a recycling plant, which would have been outside the allowed uses under the
zoning but one of the specified special uses could be done.
They bought it knowing that it was zoned with that requirement. They
bought it knowing that the township could put various conditions on it. Their claim
is that the conditions put on it by the township, which were objected to, appealed,
and then later overturned, would be the basis, then, for the takings; and that the
additional cost necessitated by those during the period of time in which this did not
take place . . . (inaudible)
Long story short, I’m granting defendant’s motion for summary disposition
as I find that this case does not meet the factual basis for an inverse condemnation
as there was no taking.
The property was restricted. The township acted in full faith with the use
of an engineering company to establish rules for the benefit of the entire township;
-4-
That zoning is a permitted use by the township. It’s by statute.
The homeowner still had the use of the land for any other purpose. They
did not have loss of the land. There was no physical intrusion on the land.
Their complaint that each of those restrictions would have cost more money
should have been expected when they bought the property with the knowledge that
it had to have a special use exception permit, as they sought it, and that there would
be costs related to those.
The fact that some were later overturned or found needless or overburdened
does not make this a taking by the township.
For those reasons and for the reasons stated in the briefs and the motion, I
grant the motion for summary disposition pursuant to (C)(8) and (C)(10).
And, finally, there’s been a failure to state a cause of action as the facts in
this case do not meet the requirements of an inverse condemnation.
This ruling is the subject of this appeal.
II. SUMMARY DISPOSITION STANDARD
A trial court’s ruling on a motion for summary disposition is reviewed de novo. Bennett v
Russell, 322 Mich. App. 638, 642; 913 NW2d 364 (2018). A motion pursuant to MCR 2.116(C)(8)
tests whether the opposing party had failed to state a claim upon which relief can be granted.
Bedford v Witte, 318 Mich. App. 60, 64; 896 NW2d 69 (2016). When evaluating a (C)(8) motion,
this Court accepts all well-pleaded allegations as true and construes them in the light most
favorable to the nonmoving party. Id. Summary disposition is appropriate pursuant to (C)(8)
only when the claim is so clearly unenforceable as a matter of law that no factual development
could possibly justify a right of recovery. Id.
Summary disposition is appropriate pursuant to MCR 2.116(C)(10) where there is “no
genuine issue as to any material fact, and the moving party is entitled to judgment or partial
judgment as a matter of law.” MCR 2.116(C)(10). When reviewing a motion for summary
disposition challenged under MCR 2.116(C)(10), the court considers the affidavits, pleadings,
depositions, admissions, and other admissible documentary evidence then filed in the action or
submitted by the parties. MCR 2.116(G)(4), (G)(5); Puetz v Spectrum Health Hosps, 324 Mich
App 51, 68; 919 NW2d 439 (2018).
In McCoig Materials, LLC v Galui Constr, Inc, 295 Mich. App. 684, 693; 818 NW2d 410
(2012), this Court delineated the burden of proof on the respective parties to show a genuine issue
of material fact:
A trial court's ruling on a motion for summary disposition presents a question of
law subject to review de novo. Shepherd Montessori Ctr Milan v Ann Arbor
Charter Twp, 486 Mich. 311, 317; 783 NW2d 695 (2010). Summary disposition
pursuant to MCR 2.116(C)(10) is proper when there is no genuine issue of material
-5-
fact and the moving party is entitled to judgment as a matter of law. Rose v Nat'l
Auction Group, Inc, 466 Mich. 453, 461; 646 NW2d 455 (2002). The moving party
has the initial burden to support its claim for summary disposition by affidavits,
depositions, admissions, or other documentary evidence. Quinto v Cross & Peters
Co, 451 Mich. 358, 362; 547 NW2d 314 (1996). The burden then shifts to the
nonmoving party to demonstrate that a genuine issue of disputed fact exists for trial.
Id. The nonmoving party may not rely on mere allegations or denials in the
pleadings. Id. Affidavits, depositions, and documentary evidence offered in support
of, and in opposition to, the motion are considered only to the extent that the content
or substance would be admissible as evidence. Maiden v Rozwood, 461 Mich. 109,
120-121; 597 NW2d 817 (1999).
III. ANALYSIS
Plaintiff failed to meet its burden of establishing a regulatory taking arising from defendant’s
actions pertaining to zoning. Accordingly, the circuit court properly granted summary disposition
in defendant’s favor.
A. OVERVIEW OF ZONING LAW
Zoning ordinances are constitutionally permitted as a valid exercise of the police power.
Austin v Older, 283 Mich. 667, 674; 278 N.W. 727 (1938). “[Z]oning ordinances, when related to
the public health, morals, safety, or general welfare, are a valid exercise of the police power,
provided that such ordinances satisfy the legal test of reasonableness.” Detroit Edison Co v
Wixom, 382 Mich. 673, 686; 172 NW2d 382 (1969). “[T]he reasonableness of a zoning ordinance
and its consequent validity or invalidity must be determined on its own facts and surrounding
circumstances.” Id. at 687. Zoning is designed to protect the status quo as well as control the
future development in the best interests of the community. Austin, 283 Mich. at 675. “Zoning in
its best sense looks, not only backward to protect districts already established, but forward to aid
in the development of new districts according to a comprehensive plan having as its basis the
welfare of the city as a whole.” Id. (citation omitted). “The ultimate purpose of zoning ordinances
is to confine certain classes of buildings and uses to certain localities.” Id. (citation omitted).
When the continued use of property does not conform to the zoning, the conditions should be
phased out to expedite conformance with the zoning. Id.
All property is held subject to the right of the government to regulate its use in the
exercise of the police power so that it shall not be injurious to the rights of the
community or so that it may promote its health, morals, safety and welfare. * * *
Regulations may result to some extent practically in the taking of property, or the
restriction of its use and yet not be deemed confiscatory or unreasonable. * * *
Courts will not hold laws, ordinances, or regulations adopted under sanction of law
to be unconstitutional unless they are clearly unreasonable, destructive, or
confiscatory. [Austin, 283 Mich. at 677 (citations omitted).]
MCL 125.3201 codifies that local governments may enact zoning ordinances and regulate
land development to promote public health, safety, and welfare:
-6-
(1) A local unit of government may provide by zoning ordinance for the
regulation of land development and the establishment of 1 or more districts within
its zoning jurisdiction which regulate the use of land and structures to meet the
needs of the state's citizens for food, fiber, energy, and other natural resources,
places of residence, recreation, industry, trade, service, and other uses of land, to
ensure that use of the land is situated in appropriate locations and relationships, to
limit the inappropriate overcrowding of land and congestion of population,
transportation systems, and other public facilities, to facilitate adequate and
efficient provision for transportation systems, sewage disposal, water, energy,
education, recreation, and other public service and facility requirements, and to
promote public health, safety, and welfare.
(2) Except as otherwise provided under this act, the regulations shall be
uniform for each class of land or buildings, dwellings, and structures within a
district.
(3) A local unit of government may provide under the zoning ordinance for
the regulation of land development and the establishment of districts which apply
only to land areas and activities involved in a special program to achieve specific
land management objectives and avert or solve specific land use problems,
including the regulation of land development and the establishment of districts in
areas subject to damage from flooding or beach erosion.
(4) A local unit of government may adopt land development regulations
under the zoning ordinance designating or limiting the location, height, bulk,
number of stories, uses, and size of dwellings, buildings, and structures that may be
erected or altered, including tents and recreational vehicles.
A zoning ordinance is presumed valid. Kirk v Tyrone, 389 Mich. 429, 439; 247 NW2d 848
(1976). The party challenging the ordinance has the burden of proving that the ordinance is an
arbitrary and unreasonable restriction on the owner’s use of the property. Id. To succeed on a
challenge to the zoning ordinance, an aggrieved property owner must demonstrate that if the
zoning ordinance is enforced the consequent restrictions on the property preclude its uses for any
purposes to which it is reasonably adapted. Id.
Despite the designated zoning in a location, the legislative body may provide for special
uses in a zoning district. MCL 125.3502. “Special exception uses are uses of land which are
specifically permitted in a given district by the zoning ordinance, but only under certain
circumstances.” Reilly v Marion, 113 Mich. App. 584, 587; 317 NW2d 693 (1982). The grant of a
special exception does not involve making an exception to the ordinance, rather, it permits certain
uses which the ordinance authorizes under specific conditions. Room & Bd Homes & Family Care
Homes v Gribbs, 67 Mich. App. 381, 384; 241 NW2d 216 (1876). The legislative body may only
impose conditions related to the use of the land. Id. at 385. MCL 125.3504 codifies the reasons
for special land use, the approval process, and the reasonable conditions that may be imposed:
(1) If the zoning ordinance authorizes the consideration and approval of
special land uses or planned unit developments under section 502 or 503 or
-7-
otherwise provides for discretionary decisions, the regulations and standards upon
which those decisions are made shall be specified in the zoning ordinance.
(2) The standards shall be consistent with and promote the intent and
purpose of the zoning ordinance and shall insure that the land use or activity
authorized shall be compatible with adjacent uses of land, the natural environment,
and the capacities of public services and facilities affected by the land use. The
standards shall also insure that the land use or activity is consistent with the public
health, safety, and welfare of the local unit of government.
(3) A request for approval of a land use or activity shall be approved if the
request is in compliance with the standards stated in the zoning ordinance, the
conditions imposed under the zoning ordinance, other applicable ordinances, and
state and federal statutes.
(4) Reasonable conditions may be required with the approval of a special
land use, planned unit development, or other land uses or activities permitted by
discretionary decision. The conditions may include conditions necessary to insure
that public services and facilities affected by a proposed land use or activity will be
capable of accommodating increased service and facility loads caused by the land
use or activity, to protect the natural environment and conserve natural resources
and energy, to insure compatibility with adjacent uses of land, and to promote the
use of land in a socially and economically desirable manner. Conditions imposed
shall meet all of the following requirements:
(a) Be designed to protect natural resources, the health, safety, and welfare,
as well as the social and economic well-being, of those who will use the land use
or activity under consideration, residents and landowners immediately adjacent to
the proposed land use or activity, and the community as a whole.
(b) Be related to the valid exercise of the police power and purposes which
are affected by the proposed use or activity.
(c) Be necessary to meet the intent and purpose of the zoning requirements,
be related to the standards established in the zoning ordinance for the land use or
activity under consideration, and be necessary to insure compliance with those
standards.
(5) The conditions imposed with respect to the approval of a land use or
activity shall be recorded in the record of the approval action and remain unchanged
except upon the mutual consent of the approving authority and the landowner. The
approving authority shall maintain a record of conditions which are changed.
A zoning law may not deprive landowners of vested interests without just compensation.
US Const Am V, Am XIV, § 1; Mich Const, art 1 § 17. A zoning ordinance that renders property
nearly worthless is generally unreasonable and confiscatory. Detroit Edison Co, 382 Mich. at 691.
“[I]t is well established that a municipality is not required to zone property for its most profitable
use, and that ‘mere diminution in value does not amount to [a] taking.’ ” Dorman v Twp of Clinton,
-8-
269 Mich. App. 638, 646-647; 714 NW2d 350 (2006). A disparity in value may exist between
residential and commercial use, but a municipality is not required to support the latter use at the
expense of the former. Id. A plaintiff who asserts the denial of economically viable use of his
land must demonstrate more than the property was unsuitable for use as zoned or unmarketable as
zoned. Id.
Plaintiff raised a claim of regulatory taking of property through inverse condemnation.
Regulatory taking and inverse condemnation claims are frequently treated interchangeably, but
this treatment is not technically correct. Eminent domain is an inherent right of the state to
condemn private property for public use, and when exercising eminent domain power, the state or
its lawful delegate must pay the landowner just compensation. Merkur Steel Supply, Inc v City of
Detroit, 261 Mich. App. 116, 129; 680 NW2d 485 (2004). An inverse condemnation suit is brought
by a private property owner whose property was not formally taken for public use by the state, but
allegedly was damaged by a public improvement undertaking or other public activity. Id. Stated
otherwise, “[i]nverse condemnation is ‘a cause of action against a governmental defendant to
recover the value of property which has been taken in fact by the governmental defendant, even
though no formal exercise of the power of eminent domain has been attempted by the taking
agency.’ ” Id. (citation omitted). The Merkur Steel Court went on to explain the difference between
condemnation, inverse condemnation, and a regulatory taking:
When the government takes property by formal condemnation, it must
follow the procedures set out in the Uniform Condemnation Procedures Act
(UCPA), MCL 213.51 et seq.. However, no exact formula exists concerning a de
facto taking; instead, the form, intensity, and the deliberateness of the governmental
actions toward the injured party’s property must be examined. The plaintiff has the
burden of proving causation in an inverse condemnation action. A plaintiff may
satisfy this burden by proving that the government’s actions were a
substantial cause of the decline of its property. The plaintiff must also establish
that the government abused its legitimate powers in affirmative actions directly
aimed at the plaintiff’s property. Not all government actions may amount to a
taking for public use. The mere threat of condemnation and its attendant publicity,
without more, is insufficient. Before a court may conclude that a taking occurred,
it must examine the totality of the acts alleged to determine whether the
governmental entity abused its exercise of eminent domain to plaintiff’s detriment.
In contrast, a regulatory taking is one in which the government effectively
“takes” a person’s property by overburdening it with regulations. Land use
regulations effectuate a taking in two general situations: (1) where the regulation
does not substantially advance a legitimate state interest, or (2) where the regulation
denies an owner economically viable use of his land. The second type of taking is
further subdivided into two situations: (a) a “categorical” taking, where the owner
is deprived of “all economically beneficial or productive use of land,” or (b) a
taking recognized on the basis of the application of the traditional “balancing test”
established in Penn Central Transportation Co v New York City, 438 U.S. 104; 98
S. Ct. 2646; 57 L. Ed. 2d 631 (1978). For a categorical taking, a reviewing court need
not apply a case-specific analysis; instead, the owner should automatically recover
for the taking of its property. The person may recover for a physical invasion of
-9-
his property by the government, or where a regulation forces an owner to “
‘sacrifice all economically beneficial uses [of his land] in the name of the common
good.’ ” In regulatory takings other than categorical takings, the court must apply
a “balancing test.” With regard to this balancing test, a reviewing court must
engage in an “ad hoc, factual inquiry,” centering on three factors: (1) the character
of the government’s action, (2) the economic effect of the regulation on the
property, and (3) the extent by which the regulation has interfered with distinct,
investment-backed expectations. [Id. at 129-131; internal citations omitted].
In Electro-Tech, Inc v H F Campbell Co, 433 Mich. 57, 90; 445 NW2d 61 (1989), our
Supreme Court explained regulatory taking and that it may be temporary:
[T]he State of Michigan recognizes a cause of action for a de facto taking.
Const 1963, art 10, § 2; Hart v Detroit, 416 Mich. 488; 331 NW2d 438 (1982); In
re Urban Renewal, Elmwood Park Project, 376 Mich. 311; 136 NW2d 896 (1965);
Foster v Detroit, 405 F2d 138 (CA 6, 1968); In re Acquisition of Virginia Park, 121
Mich. App. 153; 328 NW2d 602 (1982); Detroit Bd of Ed v Clarke, 89 Mich. App.
504; 280 NW2d 574 (1979). An inverse or reverse condemnation suit is one
instituted by a landowner whose property has been taken for public use “without
the commencement of condemnation proceedings.” Hart, supra, p 494. Under
Michigan law, a “taking” for purposes of inverse condemnation means that
governmental action has permanently deprived the property owner of any
possession or use of the property. Id., pp 501-502. When such a taking has
occurred, the Michigan Constitution entitles the property owner to just
compensation for the value of the property taken. Id., p 494.
Further, Michigan law also recognizes a cause of action for inverse
condemnation in cases, like this one, without a physical taking of property, where
it is alleged that the effect of a governmental regulation is “to prevent the use of
much of plaintiff’s property . . . for any profitable purpose.” Grand Trunk W R Co
v Detroit, 326 Mich. 387, 392-393; 40 NW2d 195 (1949). For example, in Spanich
v Livonia, 355 Mich. 252, 259-265; 94 NW2d 62 (1959), this Court acknowledged
that the application of a zoning ordinance to a particular property can constitute an
unconstitutional taking.
[It is well established] that regulation that goes too far will be recognized as
a taking. Where government action works a taking, that necessarily implies the
constitutional obligation to pay just compensation. That the regulation was an
interim one or could be invalidated did not preclude an award for damages. The
Court held that “ ‘temporary’ takings . . . are not different in kind from permanent
takings, for which the Constitution clearly requires compensation.” Where
government activities effect a taking, the mere invalidation of the offending
ordinance does not relieve the government of its duty to provide compensation for
the period during which the taking was effective. The Court did not distinguish
between takings accomplished by the use of police power or by eminent domain.
The key consideration was whether there had been a taking. [Citations omitted and
emphasis in original.]
-10-
B. ANALYSIS OF PLAINTIFF’S ARGUMENTS
1. Inverse Condemnation - Taking
In Blue Harvest, Inc v DOT, 288 Mich. App. 267, 277-278; 792 NW2d 798 (2010), this
Court delineated the proofs for inverse condemnation:
“An inverse or reverse condemnation suit is one instituted by a landowner
whose property has been taken for public use without the commencement of
condemnation proceedings.” Electro-Tech, Inc v H F Campbell Co, 433 Mich. 57,
88-89; 445 NW2d 61 (1989) (citation and quotation marks omitted). “While there
is no exact formula to establish a de facto taking, there must be some action by the
government specifically directed toward the plaintiff’s property that has the effect
of limiting the use of the property.” Dorman v Clinton Twp, 269 Mich. App. 638,
645; 714 NW2d 350 (2006) (citation and quotation marks omitted). Generally, a
plaintiff alleging a de facto taking or inverse condemnation must establish (1) that
the government’s actions were a substantial cause of the decline of the property’s
value and (2) that the government abused its powers in affirmative actions directly
aimed at the property. Hinojosa v Dep't of Natural Resources, 263 Mich. App. 537,
548; 688 NW2d 550 (2004). “Further, a plaintiff alleging inverse condemnation
must prove a casual connection between the government’s action and the alleged
damages.” Id.
We conclude that plaintiff failed to meet its burden of demonstrating that an inverse condemnation
occurred through a regulatory taking. Specifically, plaintiff was required to show that defendant’s
actions were a substantial cause of the property’s decline in value. However, plaintiff did not
proffer an expert to testify regarding the amount paid for the property and any diminution in value
as a result of the conditions placed on the property to obtain the SEUP. A motion for summary
disposition must be made and supported by the moving party. McCoig Materials, LLC, 295 Mich
App at 693. In the present case, defendant presented meeting minutes, an opinion by McKenna
Associates, and its zoning ordinance. The property at issue had previously been used for
manufacturing, and a cleanup of the property occurred. Although plaintiffs initially labelled their
use of the land as a “recycling center,” they chose to seek a SEUP because their planned use of the
facility would involve a scrap/junk yard. This would necessarily bring to the property vehicles for
demolition that could result in the discharge of oil and other chemical fluids at the location.
Further, defendant’s planning commission expressed concern regarding the hours of operation and
the aesthetics of the location. Defendant was required to enforce the zoning and special land uses
of the property in accordance with the public health, safety, and welfare in mind. MCL
125.3201(1); MCL 125.3504(2). Additionally, defendant needed to consider any neighboring
community and the impact of the operation of a junkyard, without restrictions, on the surrounding
community. Simply put, plaintiff failed to present expert testimony or other documentary evidence
to show that defendant’s conditions, as recommended by an independent consulting firm McKenna
Associates, caused a substantial decline in the value of plaintiff’s property. Thus, plaintiff failed
to demonstrate an inverse condemnation, particularly in light of the lack of an appropriate
evidentiary response to defendant’s proofs. McCoig Materials, LLC, 295 Mich. App. at 693.
2. Application of Penn Central
-11-
In Chelsea Inv Group LLC v City of Chelsea, 288 Mich. App. 239, 261-262; 792 NW2d 781
(2010), this Court delineated the “Penn Central” factors:
Both Takings Clause of the Fifth Amendment of the United States
Constitution and Const 1963, art 10, § 2 prohibit the taking of private property for
public use without just compensation. Cummins v Robinson Twp, 283 Mich. App.
677, 706; 770 NW2d 421 (2009). The Takings Clause do not prohibit the
government’s interference with a private individual’s property, but require that
interferences amounting to a taking be compensated. Id. Typically, the government
takes private property through formal condemnation proceedings. See Dorman v
Clinton Twp, 269 Mich. App. 638, 645; 714 NW2d 350 (2006). However,
governmental regulations that overburden a property may also constitute a
compensable taking. K & K Constr, Inc v Dep't of Natural Resources, 456 Mich.
570, 576; 575 NW2d 531 (1998). Regulatory taking claims that do not rise to the
level of a categorical taking are governed by the standard set out in Penn Central
Transportation Co v New York City, 438 U.S. 104; 98 S. Ct. 2646; 57 L. Ed. 2d 631
(1978). The balancing test announced in that case requires a reviewing court to
engage in an ad hoc factual inquiry, focusing on “(1) the character of the
government’s action, (2) the economic effect of the regulation on the property, and
(3) the extent by which the regulation has interfered with distinct, investment-
backed expectations.” K & K Constr, 456 Mich. at 577, quoting Penn Central, 438
U.S. at 124. “While there is no set formula for determining when a taking has
occurred under this test, it is at least ‘clear that the question whether a regulation
denies the owner economically viable use of his land requires at least a comparison
of the value removed with the value that remains.’ ” K & K Constr, 456 Mich. at
588 (citation omitted). Moreover, a mere reduction in the value of regulated
property is insufficient by itself to establish that a compensable taking has occurred.
Penn Central, 438 U.S. at 131; Dorman, 269 Mich. App. at 647.
We agree with the trial court that plaintiff has not satisfied the Penn Central
test. “The relevant inquiries regarding the character of the government’s action is
whether it singles [a] plaintiff[] out to bear the burden for the public good and
whether the regulation being challenged ‘is a comprehensive, broadly based
regulatory scheme that burdens and benefits all citizens relatively equally.’ ”
Cummins, 283 Mich. App. at 720 (citation omitted).
Thus, the test of Penn Central requires examination of “(1) the character of the government’s
action, (2) the economic effect of the regulation on the property, and (3) the extent by which the
regulation has interfered with distinct, investment-backed expectations.” Plaintiff failed to meet
the criteria of this test. Although defendant applied conditions to the SEUP, the trial court did not
make a finding that the character of defendant’s actions was preclusive or premised on animus
designed to sabotage the project. Plaintiffs’ employees alleged that planning commission
chairman Stanley Brueck was against the project and vowed to preclude its operation in defendant
township. However, irrespective of any alleged opposition to the project, defendant retained
independent firm McKenna Associates to evaluate the project and recommendations were made
to approve the project with conditions. Brueck was not the sole decider of the issue, and the
planning commission as a whole granted the SEUP with the conditions recommended by McKenna
-12-
Associates. Thus, the character of defendant’s actions does not indicate a plot to preclude or
sabotage plaintiff’s proposed use of the property.
Additionally, plaintiff failed to show the economic effect on the property with preserved,
admissible documentary evidence.5 Plaintiff made blanket allegations regarding the cost of the
conditions imposed. However, despite the conditions itemized in the complaint, plaintiff did not
produce an expert opinion regarding the cost of those items to create a genuine issue of material
fact regarding diminution of value as a result. This absence of evidence also precluded an analysis
of interference with plaintiff’s investment backed expectations. Thus, irrespective of plaintiff’s
disagreement with the trial court’s analysis of Penn Central, the summary disposition standard and
the three-factor test required plaintiff to present evidence to support the factors, and it did not do
so. Therefore, the trial court did not err in granting summary disposition to defendant.
3. Doctrine of Unconstitutional Conditions
Plaintiff also seemingly asserted that summary disposition was inappropriate because of
the doctrine of unconstitutional conditions. In AFT Mich v State, 497 Mich. 197, 225-228; 866
NW2d 782(2015), our Supreme Court delineated the doctrine:
Individuals may under most circumstances voluntarily waive their
constitutional rights. Individuals also have no constitutional right to receive any
particular governmental benefits. Falk v State Bar of Mich, 411 Mich. 63, 107; 305
NW2d 201 (1981) (opinion by RYAN, J.), quoting Elrod v Burns, 427 U.S. 347,
361; 96 S. Ct. 2673; 49 L. Ed. 2d 547 (1976). However, under limited circumstances,
the government may be prevented from denying a benefit to an individual because
that person has exercised a constitutional right; this is known as the “doctrine of
unconstitutional conditions.” Dolan v City of Tigard, 512 U.S. 374, 385; 114 S. Ct.
2309; 129 L. Ed. 2d 304 (1994). Not every condition attached to a governmental
benefit is an unconstitutional one, and although the exact boundaries of the doctrine
are difficult to define, the fundamental principle underlying the doctrine is clear:
the governmental cannot attach conditions to government benefits that effectively
coerce individuals into relinquishing their constitutional rights.
The United States Supreme Court has applied the doctrine of
unconstitutional conditions to claims arising under the Takings Clause of US Const,
Ams V and XIV and has created a specific test of sorts: a governmental benefit
given in exchange for a seemingly voluntary transfer of private property interests
to the government may violate the doctrine of unconstitutional conditions if the
condition lacks a nexus between the burden that the condition imposes on the
property owner and the government’s interest advanced by the condition, or if the
burden that the condition imposes is not roughly proportionate to the governmental
interest advanced by the condition. Thus far, the Court has only applied this test in
5
This Court granted defendant’s motion to strike exhibits that were not properly submitted in the
lower court record. Three Rivers Metal Recycling, LLC v Twp of Fabius, unpublished order of the
Court of Appeals, entered July 9, 2019 (Docket No. 347583).
-13-
the context of “land-use decisions conditioning approval of development on the
dedication of property to public use.” City of Monterey v Del Monte Dunes at
Monterey, Ltd, 526 U.S. 687, 702-703; 119 S. Ct. 1624; 143 L. Ed. 2d 882 (1999).
This Court has never applied the doctrine of unconstitutional conditions to
Const 1963, art 10, § 2. Because plaintiffs have not argued that we should analyze
their unconstitutional conditions argument in a manner in any way distinct from the
United States Supreme Court’s application of the doctrine to claims arising under
US Const, Ams V and XIV, we decline to do so here[.]
Again, plaintiff delineates caselaw holdings, but did not obtain expert opinions and evidence and
apply that evidence to the legal doctrines cited. The doctrine of unconstitutional conditions
precludes a government from denying a benefit to an individual exercising a constitutional right
by attaching unconstitutional conditions that coerce individuals to relinquish their rights. Id.
However, this doctrine is inapplicable to the facts at hand. Although defendant imposed conditions
on the SEUP, it did not coerce plaintiff to relinquish constitutional rights. Rather, zoning laws are
established by statute and require that the unit of government act within the confines of the public
good. To ensure that zoning meets the unit of government’s needs, there are planning commissions
and zoning boards that evaluate a landowner’s request to vary or acquire a special use for zoned
land. Further, there is an appeal process for any disagreement that arises as a result of the zoning
decision. Here, plaintiff went through the local administrative process with the planning
commission and the zoning board. These entities did not impose conditions on the property and
require that plaintiffs relinquish their legal right to appeal their decision in order to obtain the
SEUP. Under the circumstances, plaintiff failed to demonstrate the trial court erred in granting
summary disposition.
4. “As Applied” Challenge
Lastly, plaintiff alleged that the trial court improperly failed to address an “as applied”
legal challenge. However, this challenge was waived because it was not raised in the statement of
questions presented. Seifeddine v Jaber, 327 Mich. App. 514, 521; 934 NW2d 64 (2019); MCR
7.215(B)(5).
In summary, although plaintiff challenged the trial court’s decision, it delineated legal
principles without obtaining expert opinions addressing diminution in property value and applying
those opinions to the legal tests for determining inverse condemnation and taking. Therefore,
plaintiff also failed to meet the burden of demonstrating a genuine issue of material fact.
Accordingly, the trial court properly granted summary disposition pursuant to MCR 2.116(C)(10).
Affirmed.
/s/ Kirsten Frank Kelly
/s/ Karen M. Fort Hood
/s/ Brock A. Swartzle
-14-