Robert McMillan v. Susan Douglas

STATE OF MICHIGAN
COURT OF APPEALS
ROBERT MCMILLAN, FOR PUBLICATION
December 14, 2017
Plaintiff-Appellant, 9:10 a.m.
v No. 335166
Calhoun Circuit Court
SUSAN DOUGLAS, LC No. 2015-003425-AV
Defendant-Appellee.
Before: MARKEY, P.J., and HOEKSTRA and RONAYNE KRAUSE, JJ.
PER CURIAM.
Plaintiff Robert McMillan appeals by leave granted1 the circuit court order affirming the
decision of the district court to deny plaintiff’s request to recoup rent paid to his landlord,
defendant Susan Douglas, for the months when defendant rented the property to plaintiff without
a rental permit. Because the Battle Creek Code of Ordinances § 842.06(c) does not provide
plaintiff a private cause of action to enforce rental ordinances against defendant, we affirm.
Between August 2011 and October 2014, plaintiff rented residential property in Battle
Creek from defendant at a rate of $595 per month for a total of 39 months. During that time,
defendant did not have a valid rental permit for the property as required by the Battle Creek
Code of Ordinances. On October 23, 2014, plaintiff received an order to vacate the premises
because there was no current, valid rental permit. Plaintiff vacated the property on October 31,
2014, and subsequently filed suit against defendant.
Relevant to the present appeal, in the district court, plaintiff claimed that he was entitled
to the return of all rent paid to defendant during his tenancy because, under § 842.06(c),
defendant could not accept, retain or recover rent without a current, valid rental permit.
According to plaintiff, § 842.06(c) created a private cause of action allowing plaintiff to recoup
rental payments made to defendant. The parties stipulated to the facts involved, and the district
court ruled in defendant’s favor with regard to plaintiff’s claim to recoup rent under § 842.06(c),
concluding that the ordinance did not grant a private cause of action to tenants to recover rent.
1
McMillan v Douglas, unpublished order of the Court of Appeals, entered February 16, 2017
(Docket No. 335166).
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Plaintiff appealed the district court’s ruling to the circuit court, and the circuit court affirmed.
Plaintiff now appeals by leave granted.
On appeal, the issue before us is whether § 842.06(c) creates a private cause of action that
allows a tenant to demand the return of rent that was paid to a landlord during a period in which
the landlord did not have a valid rental permit. Plaintiff emphasizes that, under § 842.06(c),
defendant cannot accept, retain or recover rent without a valid rental permit. To enforce this
prohibition, plaintiff contends that it must be inferred that there is private right of action allowing
plaintiff to demand the return of rent. We disagree.
We review de novo a decision to grant summary disposition under MCR 2.116(A).
Stanley v Genesee Co Clerk, 258 Mich. App. 215, 218; 671 NW2d 116 (2003). The interpretation
and application of an ordinance also presents a question of law, which we review de novo. Great
Lakes Society v Georgetown Charter Twp, 281 Mich. App. 396, 407; 761 NW2d 371 (2008). The
rules of statutory construction apply to the interpretation of an ordinance. Goldstone v
Bloomfield Twp Pub Library, 479 Mich. 554, 568 n 15; 737 NW2d 476 (2007). “Thus, this
Court's goal in the interpretation of an ordinance is to discern and give effect to the intent of the
legislative body.” Morse v Colitti, 317 Mich. App. 526, 548; 896 NW2d 15 (2016). An ordinance
must be construed as a whole, Winchester v WA Foote Mem Hosp, Inc, 153 Mich. App. 489, 501;
396 NW2d 456 (1986), affording words their plain and ordinary meanings, Great Lakes Society,
281 Mich. App. at 408. “If the language used by the legislative body is clear and unambiguous,
the ordinance must be enforced as written.” Morse, 317 Mich. App. at 548.
Absent an express indication to the contrary, an ordinance imposing a public duty on a
property owner does not give rise to a private cause of action. See Levendoski v Geisenhaver,
375 Mich. 225, 228; 134 NW2d 228 (1965); Grooms v Union Guardian Trust Co, 309 Mich. 437,
440; 15 NW2d 698 (1944). Moreover, when a provision “creates a new right or imposes a new
duty unknown to the common law and provides a comprehensive administrative or other
enforcement mechanism or otherwise entrusts the responsibility for upholding the law to a public
officer, a private right of action will not be inferred.” Claire-Ann Co v Christenson &
Christenson, Inc, 223 Mich. App. 25, 31; 566 NW2d 4 (1997).
In this case, Chapter 842 of the Battle Creek Code of Ordinances regulates rental
housing. The stated purpose of regulating, permitting, and inspecting rental property as set forth
in Chapter 842 is to:
(a) Protect the health, safety, and welfare of persons affected by or subject to the
provisions of this chapter.
(b) Ensure that rental unit owners, legal agents, and tenants are informed of and
adhere to all applicable code provisions governing the use and maintenance of
rental units.
(c) Establish standards for obtaining rental permits, inspection of rental units, and
the issuance of certificates of compliance for rental units. [Section 842.02.]
Notably, under § 842.04(a), “no dwelling shall be rented by any person unless there is first
issued a rental permit . . . .” The burden is on the owner of the property to “obtain a current,
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valid, rental permit.” § 842.04(b). Rental of a property without a permit results in several
consequences for landlords and tenants. Specifically, § 842.06 provides:
In addition to all other remedies provided for in this chapter or by any
other local ordinance, state statute, or federal law, the following shall apply when
there is no rental permit as required:
(a) Order to vacate. Failure to have a current, valid, rental permit subjects
the rental dwelling to being ordered vacated as provided in Section 842.12, until a
valid rental permit is issued.
(b) Failure to vacate. In addition to any other remedy available to the
City under law, including City ordinances, an owner, tenant, or other occupant
who fails to vacate a dwelling after having been given notice of an order to vacate
under this chapter is subject to the penalties set forth at Section 842.99.
(c) Abatement of rent. Where there is no current, valid, rental permit for
a dwelling, no rent shall be accepted, retained or recoverable by the owner or
lessor of the premises for the period.
Based on § 842.06(c), plaintiff now claims that he has a private cause of action for the
recoupment of rent because § 842.06(c) precludes an owner from accepting, retaining or
recovering rent in the absence of a current, valid, rental permit. However, this section gives no
express indication that a private cause of action exists for a tenant. Indeed, the word “tenant”
does not appear at all in § 842.06(c). Instead, the provision only provides for a limitation on the
rights and conduct of an “owner or lessor.” “Given that the ordinance purports only to limit the
rights of owners and lessors, doubt is immediately cast on plaintiff's contention that the
ordinance creates a cause of action in [his] favor.” Ballman v Borges, 226 Mich. App. 166, 169;
572 NW2d 47 (1997).2
Any claim that a private cause of action exists or should be inferred is further undercut by
consideration of the ordinance as a whole and in context. First, considering Chapter 842 as a
whole, the rental permit requirements impose a public duty on landlords, not an obligation owed
by a landlord to a tenant. See Levendoski, 375 Mich. at 228; Szkodzinski v Griffin, 171 Mich. App.
711, 713; 431 NW2d 51 (1988). More specifically, under § 842.04(b), it is certainly the owner’s
or lessor’s obligation to obtain a rental permit. However, this permit requirement provides a
public benefit that facilitates the inspection and policing of rental properties, not only for the
welfare of occupants of the properties, but also to confirm that the properties are not a nuisance,
2
Under Ballman, an ordinance preventing a landlord from recovering rent, such as § 842.06(c),
could be used as a “shield” by a tenant when being sued for unpaid rent, but it is not a “sword”
creating a private cause of action. Ballman, 226 Mich. App. at 169. While controlling with
respect to provisions preventing a landlord from recovering rent, Ballman is not entirely on point
with the current case because, unlike the ordinance in Ballman, § 842.06(c) also prevents a
landlord from “accepting” or “retaining” rent.
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§ 842.08(c)(2), and to ensure that there are no conditions on the properties posing a hazard to the
general public, § 842.12. In short, the permit requirement benefits the public as a whole. And,
because the permit requirement is a public duty, it does not give rise to a private cause of action
for a tenant. See Levendoski, 375 Mich. at 228.
Second, the rental permit requirement is not a common law obligation; and, read as a
whole, Chapter 842 provides for the administration and enforcement of this obligation by the
City, meaning that a private cause of action cannot be inferred. See Claire-Ann Co, 223 Mich
App at 31. As noted, under § 842.04(b), it is certainly the owner’s or lessor’s obligation to
obtain a rental permit, and Chapter 842 provides for various penalties and sanctions if a landlord
fails to obtain the necessary permit. However, Chapter 842 makes plain that it is not only the
landlord who faces prohibitions and repercussions as a result of rental property regulations.
Rather, one of the stated purposes of Chapter 842 is to “[e]nsure that rental unit owners, legal
agents, and tenants are informed of and adhere to all applicable code provisions governing the
use and maintenance of rental units.” § 842.02(b) (emphasis added). As a corollary to a
landlord’s obligation to obtain a rental permit, a tenant is prohibited from renting an unpermitted
rental dwelling. See § 842.04(a) (“[N]o dwelling shall be rented by any person unless there is
first issued a rental permit . . . .”). Further, both the landlord and the tenant are subject to
repercussions under § 842.06, including orders to vacate the property as well as a possible civil
infraction or misdemeanor conviction for failing to vacate.3 See § 842.06(a), (b); § 842.99. In
other words, Chapter 842 plainly contemplates action against the landlord as well as the tenant,
and such enforcement action is clearly entrusted to the City.
Given that a tenant is subject to action by the City for the enforcement of Chapter 842,
we find unpersuasive plaintiff’s assertion that—without any express indication—it should be
assumed that a tenant has a private cause of action under § 842.06(c). That is, read as a whole,
Chapter 842 makes plain that tenants are not the enforcers of Chapter 842; rather, they are
subject to Chapter 842, which is enforced by the City.4 Indeed, recognizing that a tenant is
3
Under § 842.06(a) and § 842.12, an order to vacate requires everyone, including the tenant, to
vacate the premises unless “there is no condition in the property posing a hazard to life, limb,
property or safety of the occupants or the general public, and, the owner makes application [for a
rental permit].” See also § 1462.24. Pursuant to § 842.06(b), anyone who fails to vacate the
property—including the owner or tenant—is subject to penalties under § 842.99. Under §
842.99, failure to vacate after receiving notice is a municipal civil infraction and, if the order to
vacate involves an imminent danger to life, limb or property, the person who fails to vacate after
receiving notice is guilty of a misdemeanor. Additionally, with regard to a landlord, under §
842.99(e), “[f]ailure to obtain a rental permit as required . . . is a misdemeanor punishable by a
fine of up to five hundred dollars ($500.00) and/or ninety days in jail.” “Each day that a person
fails to obtain a rental permit is a separate violation.” § 842.99(e).
4
Insofar as the term “tenant” does not appear in § 842.06(c) in particular, the omission of this
term does not impliedly create a cause of action for tenants; rather, it makes plain that the actions
available to the City under § 842.06(c) relate only to owners and lessors, not tenants or others.
See Ballman, 226 Mich. App. at 169.
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prohibited from renting property that lacks a rental permit, it would be absurd to conclude that §
842.06(c) was intended to create a private cause of action that would allow a tenant to recoup
rent paid for a time period in which the tenant lived in the property in violation of § 842.04(a).5
Instead, reading Chapter 842 as a whole, we conclude that § 842.06(c) is subject to enforcement
by the City. 6 Consequently, in the absence of an express indication that a tenant has a private
cause of action against a landlord, we will not infer such a cause of action from § 842.06(c).
In sum, while a landlord is required to obtain a permit, this is a public duty and any
authority to seek redress for a landlord’s failure to obtain a permit rests with the City. 7
Consequently, plaintiff does not have a private cause of action against defendant, and the trial
court properly granted summary disposition under MCR 2.116(A).
5
A tenant is not without recourse against a landlord where there has been a violation of a duty.
By statute and under the common law, there are duties a landlord owes a tenant in terms of
habitability, including those duties set forth in MCL 554.139, and a tenant may file suit to seek
redress for a violation of these duties, see, e.g., Hadden v McDermitt Apartments, LLC, 287 Mich
App 124, 128; 782 NW2d 800 (2010). However, we do not read § 842.06(c) as creating a cause
of action for recoupment of rent, regardless of the condition of the property, simply because a
landlord lacked a rental permit. If the city commissioners intended to create such a windfall for
tenants, they easily could have expressed such intent.
6
It is true that § 842.06(c) does not mention enforcement by “the City,” but express reference to
the City was unnecessary when, as we have discussed, Chapter 842 as a whole contemplates
enforcement by the City against landlords and tenants. See generally § 842.06; § 842.12; §
842.99.
7
Plaintiff complains that the City’s enforcement provisions are not entirely clear because
Chapter 842 does not include a mandatory restitution provision requiring the City to return any
rent recouped to the tenant. We agree that Chapter 842, and § 842.06(c) in particular, is not a
model of clarity. For example, it is unclear what the City should do with the funds recouped
(i.e., whether the City may keep the funds or must return them to a tenant), whether § 842.06(c)
applies to the entire period for which a permit is lacking or only “the period” after a notice to
vacate is given under § 842.06, and whether the recouped rent is part of, or in addition to, the
hefty fines applicable for failing to obtain a permit, § 842.99(e). However, these issues are not
before us, and we offer no opinions on the procedures available to the City under § 842.06(c).
On appeal, plaintiff also asks us to determine whether the City has the authority to enact a private
right of action for tenants against landlords for the recoupment of rent when the landlord failed to
obtain a rental permit. Having determined that the City did not attempt to create such an
ordinance, we need not determine whether the City had the authority to do so. Cf. Bivens v
Grand Rapids, 443 Mich. 391, 396; 505 NW2d 239 (1993).
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Affirmed.
/s/ Jane E. Markey
/s/ Joel P. Hoekstra
/s/ Amy Ronayne Krause
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