Devils Lake Ventures LLC v. Devils Lake Highway Acreage LLC ( 2021 )

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
DEVILS LAKE VENTURES, LLC, UNPUBLISHED
February 4, 2021
Plaintiff-Appellee/Cross-Appellant,
v No. 349166
Lenawee Circuit Court
DEVILS LAKE HIGHWAY ACREAGE, LLC, and LC No. 16-005666-CH
A. J. BROWN,
Defendants-Appellants/Cross-
Appellees,
and
DELBERT THORBEN and STACEY THORBEN,
Defendants/Cross-Appellees.
Before: FORT HOOD, P.J., and CAVANAGH and TUKEL, JJ.
PER CURIAM.
Plaintiff filed this action to quiet title to bottomland property under water in Devils Lake
in Lenawee County. The bottomland property abuts plaintiff’s lakefront, upland property.
Defendants Devils Lake Highway, LLC, and A. J. Brown (collectively referred to as “defendants”)
acquired any rights that defendants Delbert Thorben and Stacey Thorben had to this bottomland
property. Following a bench trial, the trial court quieted title in favor of plaintiff, ruling that
plaintiff acquired littoral rights to the bottomland property as a result of its purchase of the upland
property along the shoreline. Defendants now appeal by leave granted.1 Plaintiff has filed a cross-
appeal, challenging the trial court’s exclusion of evidence and refusal to consider plaintiff’s
alternative claim for relief under a theory of acquiescence. We affirm.
1
Devils Lake Ventures LLC v Devils Lake Highway Acreage, unpublished order of the Court of
Appeals, issued July 31, 2019 (Docket No. 349166).
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The underlying facts are not in dispute. In 2014, plaintiff purchased five acres of land that
abuts Devils Lake in Lenawee County. Plaintiff purchased the property from U.S. Acquisition
Property XXV, LLC, following the bankruptcy of Fred Semelka, who had operated a marina on
the property for approximately 40 years. At issue in this case is the bottomland property that abuts
plaintiff’s shoreline, but is submerged under Devils Lake. Plaintiff brought this action to quiet
title to the disputed bottomland property, contending that it acquired riparian or littoral rights to
the bottomland property as part of its purchase of the upland property in 2014.
Defendants argued that plaintiff’s chain of title did not include the disputed bottomland
property because plaintiff’s chain of conveyances only conveyed the property up to “along the
water,” and plaintiff did not acquire any littoral rights to the disputed bottomland property.
Defendants argued that defendants Delbert Thorben and Stacey Thorben previously owned the
bottomland property pursuant to a federal land patent dating back to the nineteenth century, before
Michigan achieved statehood, and that the language of the deeds for the abutting Semelka property
did not convey any interest in the disputed bottomland portion.
The Thorbens became involved in this dispute because defendants entered into an
agreement with them in 2015 to acquire any rights they had to the bottomland portion that abutted
plaintiff’s property, on which Semelka had previously operated a marina. The Thorbens did not
know if they had any interest in the bottomland property, but they agreed to convey any interest
they had to defendants.
In 2015, the Thorbens and defendants were involved in separate litigation after the
Thorbens decided not to proceed with the closing of the sale of their interest in the disputed
bottomland property. Plaintiff unsuccessfully tried to intervene in that case. The Thorbens were
ultimately ordered to convey any interest they had in the bottomland portion to defendants in
accordance with their agreement. However, because plaintiff was not allowed to intervene in that
case, that litigation did not resolve any claim of interest that plaintiff had to the disputed
bottomland property. Plaintiff filed this action against defendants to quiet title to that property.
Following a bench trial, the trial court issued a written opinion in which it agreed that
plaintiff met its burden of establishing superior title to the disputed bottomland property. The
court agreed that plaintiff’s purchase of the upland property included littoral rights to the abutting
bottomland property. However, the court denied plaintiff’s request for relief on its alternative
claim for adverse possession and it refused to consider plaintiff’s additional theory of acquiescence
because that theory had not been properly pleaded.
I. RIPARIAN OR LITTORAL RIGHTS
In their only issue on appeal, defendants argue that the trial court erred by applying state
law regarding riparian or littoral rights to quiet title to the disputed bottomland property in favor
of plaintiff because the bottomland property originally derived from a federal land grant patent.
We disagree.
An action to quiet title is equitable in nature. This Court reviews equitable actions de novo,
but any factual findings made by the trial court are reviewed for clear error. McFerren v B & B
Investment Group, 253 Mich App 517, 522; 655 NW2d 779 (2002). A court acting in equity
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“looks at the whole situation and grants or withholds relief as good conscience dictates.” Mich
Nat’l Bank & Trust Co v Morren, 194 Mich App 407, 410; 487 NW2d 784 (1992). In this case,
however, the parties’ dispute primarily involves whether the trial court correctly applied the law.
Questions of law are reviewed de novo. In re Capuzzi Estate, 470 Mich 399, 402; 684 NW2d 677
(2004).
The trial court accepted defendants’ argument that the Thorbens retained a small portion
of land that originated from a federal land patent, and that defendants acquired any interest held
by the Thorbens. It is undisputed, however, that plaintiff acquired the upland property that abuts
the submerged bottomland property in dispute. Defendants argue that because the submerged
portion originated from a federal land grant patent, before Michigan became a state, the trial court
erred by applying state law involving riparian or littoral rights to conclude that plaintiff had a
superior interest in the bottomland property that abuts its upland property. Instead, defendants
argue that title to the submerged bottomland portion of the land is controlled by the original federal
land grant patent.
The trial court held that plaintiff had riparian or littoral rights to the bottomland portion,
stating:
Plaintiff next argues that as upland owner, it has riparian rights to the
disputed subaqueous property. “A ‘riparian owner’ is one whose land is bounded
by a river and ‘riparian rights’ are special rights to make use of water in a waterway
adjoining the owner’s property.” Little v Kin, 249 Mich App 502, 504; 644 NW2d
375 (2002), aff’d, 468 Mich 699; 664 NW2d 749 (2003). Conversely, a “littoral
owner” is a property owner whose land abuts a lake. Dyball v Lennox, 260 Mich
App 698, 706; 680 NW2d 522 (2004). However, case law often uses the term
“riparian” generally to describe both riverfront and lakefront property. Id.“It is the general rule, with some exceptions, that the title of the riparian
owner follows the shoreline under what has been graphically called a moveable
freehold.” Klais v Danowski, 373 Mich 262, 275-76; 129 NW2d 414 (1964).
Defendants counter Plaintiff’s claim by arguing that riparian rights do not apply to
subaqueous property subject to a federal patent, as are the bottomlands here, and
rely on Klais to support that position.
However, Klais does not stand for the principle that owners of patented
lands have no riparian rights. Instead, Klais deals with the issues of (1) whether
the Great Lakes Submerged Lands Act applied to patented lands, and (2) who has
title to property created or lost when the water line changes. In answering the first
question, Klais held that the Great Lakes Submerged Lands Act did not apply to
patented lands. Id. at 277. The implications of this holding are that the State of
Michigan had no public interest in patented bottomlands, that the State could not
convey patented bottomlands, and that the State had no interest in controlling the
alteration of patented bottomlands.
With respect to the second issue, Klais held that “by reason of riparian
rights and the consequent right to accretions,” the property owners “gain by what
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comes through accretions or reliction but do not lose by erosion or evulsion that
which they own under the patent.” Id. at 279 (emphasis added). In making that
ruling, rather than determine that riparian rights do not apply to patented lands, the
Klais court reasoned that as the patent descriptions extend to the border of a lake,
“manifestly it was intended that riparian rights should be and they were included,”
and “it follows that what the patents covered then was upland lying landward of the
border of the lake.” Id. at 274-279 (emphasis added).
Additionally, riparian rights may not be severed from riparian land, though
the riparian landowner may grant an easement to non-riparian owners. Dyball, 260
Mich App at 706. See also Civic Ass’n of Hammond Lake Estates v Hammond
Lake Estates No 3 Lots 126-135, 271 Mich App 130, 133; 721 NW2d 801 (2006)
(holding that riparian ownership rights may not be transferred apart from riparian
land); Little, 249 Mich App at 513. “The titles to the beds are in the riparian
owners.” Wantz, 336 Mich at 116. “A deed or lease describing the boundary of a
parcel of land as running along the shore of a particular lake or watercourse conveys
or demises to the center of the lake or the thread of the watercourse. Bauman v
Barendregt, 251 Mich 67, 231 NW 70 (1930); Goff v Cougle, 118 Mich 307, 76
NW 489 (1898). In such circumstances, Michigan law presumes that the grantor
or lessor meant to transfer or lease riparian rights as well as upland.” 1 Cameron,
Michigan Real Property Law (3d ed), § 3.3, p 88.
Plaintiff, as holder of the riparian land—or more accurately, littoral land—
is also holder of the riparian rights. Though Plaintiff’s deed—and the deeds held
by Plaintiff’s two most recent predecessors in title—does not contain language
granting interest south of the high water mark, Plaintiff nevertheless holds title to
the bottomlands in front of its upland property by operation of law. Plaintiff has
therefore established a prima facie claim of quiet title, and Defendant’s claim to the
disputed bottomlands must be evaluated in comparison.
The trial court then compared plaintiff’s and defendants’ competing claims to the disputed
bottomland property. It found that “[p]laintiff, as littoral owner and holder of littoral rights to the
bottomlands which abut its upland property, has title to said bottomlands by operation of law.”
The court found that defendants’ claim to the disputed bottomlands property was premised on the
judgment in the prior action against the Thorbens, in which the court awarded defendants title to
the disputed bottomlands as against the Thorbens. The trial court concluded that plaintiff had the
superior claim to the property because it recorded its deed in 2014, almost a year before defendants
entered into their purchase agreement to acquire any interest the Thorbens had in the bottomland
property, and before defendants acquired any recordable interest in the property based on the prior
judgment. The court also reasoned that defendants were not bona fide, good-faith purchasers of
the property because the Thorbens told defendants that they did not know if they had any interest
in the bottomland property. However, the court also stated: “Further, riparian rights cannot be
severed from the riparian lands, and as Plaintiff owns the littoral property, Plaintiff maintains
possession of the littoral rights to the bottomlands south of the littoral property, subject to standard
division of bottomlands of all littoral owners.”
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In denying defendants’ motion for reconsideration, the trial court rejected defendants’
argument that it was improper to rely on the law governing riparian or littoral rights to determine
title to the disputed bottomland property because that property was not submerged when the initial
federal land grant patent was issued. The trial court stated:
In general summary, Defendants allege that the Court committed palpable
error through misinterpretation of Klais v Danowski, 373 Mich 262; 129 NW2d 414
(1964) in the Court’s determination that riparian rights apply to the bottomlands at
issue, and through its reliance on that interpretation to award quiet title to Plaintiff.
Defendants base this allegation on the post-trial discovery that the bottomlands at
issue were, at the time of the initial federal patent, not submerged.
In Defendants’ view, the Court’s interpretation of Klais as holding that
owners of previously patented lands “gain by what comes through accretions or
relictions but do not lose by erosion or evlusion [sic, avulsion] that which they own
under patent” should result in the ultimate conclusion that the bottomlands of at
least the disputed portion of Devil’s Lake are not subject to ordinary riparian rights.
This is, Defendants argue, because “Klais explicitly states that the federal
government had the power to patent and convey territorial land, submerged or
unsubmerged, and that the conveyances survived the creation of the State of
Michigan, vesting title to any patented upland or bottomland to the individual and
any subsequent heir and grantees, etc.”
Absent further guidance from superior courts at this juncture, this Court is
not persuaded that its initial opinion, including its interpretation of Klais and
application to the case at bar, is incorrect. It is the opinion of the Court that the
portion of Klais in controversy is intended to address instances where the
description of a patented segment of land reaches the water’s edge, and the water
level changes over time. See Klais, 373 Mich at 278-279. In those circumstances,
“property owners tracing title back to a United States patent may reclaim the full
extent of the description therein, which they continued to own all the while, when
again above water, whether the emergence of the land be due to natural forces or
artificial means.” Id. This is a discrete issue, and particularly given the new
evidence submitted by Defendants that the subject property was not submerged at
the time of the patent (and did not contain any language in the patent connecting
the property to a water’s edge, as none existed at the time), it does not require the
Court to alter its prior ruling. The Court declines to extend the holding of Klais.
As such, Defendants have failed to demonstrate a palpable error by which
the Court and the parties have been misled, and failed to show that a different
disposition of the motion must result from correction of the error, pursuant to MCR
2.119(F).
On appeal, defendants argue that because the disputed bottomland property was originally
conveyed by a federal land grant patent and the property was not submerged when the patent was
issued, the trial court should not have resorted to state law regarding riparian and littoral rights.
We disagree.
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First, the trial court did not err by applying riparian or littoral rules to the bottomland
property, which undisputedly was submerged and abutted plaintiff’s upland property at the time
the trial court quieted title. Contrary to what defendants argue, the decision in Klais, 373 Mich
262, does not compel a different result. That case involved rights to the bottomland of a Great
Lake, which the state holds in public trust. The issue in Klais involved whether federally patented
land passed to the state upon Michigan’s admission to the Union. The Court held that the Great
Lakes Submerged Lands Act2 applied only to unpatented land, id. at 277, and therefore, a
patentee’s right to the land, whether above or beneath the water, was not affected by the creation
of the state of Michigan. Id. at 274-275. Thus, the Court concluded that the original patentee did
not lose title to what was granted by the federal government due to changes to the character of the
property, such as rising lake levels or erosion, and therefore, the state of Michigan had no claim to
patented lands as they became submerged, as a matter of statutory law. Id. at 278-279. This case
is distinguishable because it does not involve any claim that submerged land is held in public trust
and is subject to the Great Lakes Submerged Lands Act.
Defendants also rely on Palmer v Dodd, 64 Mich 474, 474-475; 31 NW 209 (1887), which
involved a trespass by the defendant onto the plaintiff’s land. Both parties acquired their lands
through federal patents. While the Court in Palmer stated that “[t]he principles which govern the
rights of riparian proprietors do not apply to defendant’s grant,” that was because “[n]o part of the
land granted to him in the description contained in his patent was bounded by a lake or other
water.” The case does not stand for the proposition that state law regarding riparian rights cannot
otherwise be applied to submerged land derived from a federal land patent that abuts lakefront
property.
As explained in 1 Cameron, Michigan Real Property Law (3d ed), § 3.2, p 87, in the context
of discussing the ownership of bottomland property, state law will apply if the original grant from
the federal government does not provide otherwise:
Unless there are reservations or exceptions in the pertinent grant from the
federal government, the laws of the state determine the extent and nature of the
ownership of riparian proprietors. As stated in Packer v Bird, 137 US 661, 669
(1891), “whatever incidents or rights attach to the ownership of property conveyed
by the government will be determined by the States” in which the streams are
situated. See Grand Rapids Ice & Coal Co v South Grand Rapids Ice & Coal Co,
102 Mich 227, 232, 60 NW 681 (1894) (“soil under the water of the inland lakes”
in Michigan does not belong to general government or to State). In other words, if
the title of a person claiming under a federal patent, which by its terms bounds the
land on the margin of a body of water, extends beyond the edge of the lake or
watercourse, the extension is by virtue of state law. [Footnote omitted.]
See also Gregory v LaFaive, 172 Mich App 354, 361; 431 NW2d 511 (1988).
2
“The Great Lakes Submerged Lands Act, formerly MCL 322.701 et seq., is now part of
Michigan's Natural Resources and Environmental Protection Act, MCL 324.101 et seq.” Glass v
Goeckel, 473 Mich 667, 673 n 3; 703 NW2d 58 (2005).
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In sum, defendants’ request that this Court allow the bottomland abutting plaintiff’s
property to be severed and treated as a separate parcel does not find support in existing law.
Contrary to what defendants argue, the fact that the disputed bottomland property was originally
part of a federal patent did not foreclose the trial court from applying this state’s law of riparian
and littoral rights to determine the present dispute involving submerged property on an inland lake.
Accordingly, we affirm the trial court’s order quieting title to the disputed property in favor of
plaintiff
II. PLAINTIFF’S CROSS-APPEAL
Because we have affirmed the trial court’s decision quieting title to the disputed bottomland
property in favor of plaintiff, it is unnecessary to decide plaintiff’s issues on cross-appeal.
Affirmed.
/s/ Karen M. Fort Hood
/s/ Mark J. Cavanagh
/s/ Jonathan Tukel
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