Volume 27, No. 3; Fall 2000
GOVERNMENTAL
DAMAGES:
REAL ESTATE
AND RELATED DAMAGES
RESULTING FROM
INTENTIONAL AND
UNINTENTIONAL
GOVERNMENT ACTS
by Jerome P. Pesick and H. Adam Cohen*
I. INTRODUCTIONOur intricate system of law is based upon a fundamental concept: "wrongdoers shall pay." At least in the context of the civil action, payment is typically sought, and made, in the form of money damages. Like ordinary persons, governmental agencies are exposed to money damages in Michigan courts every day. Attorneys who regularly represent landowners, and governmental agencies alike, are particularly cognizant of this exposure. This article explores damages available to landowners and developers, against governmental agencies, in two particular settings: the classic condemnation action, and the "trespass-nuisance" action. It also summarizes the mother of all development disasters, otherwise known as Sandstone Associates Limited Partnership v City of Novi, a recent Circuit Court case of interest to practitioners in the area of governmental damages.
II. DISCUSSION
A. The Condemnation Action
The field of eminent domain is governed by a unique combination of constitutional, statutory, and case law. The Michigan Constitution provides that, "Private property shall not be taken for public use without just compensation therefore being first made or secured in a manner prescribed by law."1 But the Constitution does not elaborate on the meaning of the term "just compensation." Further, the statutory scheme which controls condemnation actions in the State of Michigan, known as the Uniform Condemnation Procedures Act ("UCPA"),2 is procedural only. The UCPA is not enabling legislation at all.3 It is primarily case law, therefore, that offers guidance on broad categories of damages, or just compensation, available in Michigan condemnation actions. Michigan’s Standard Jury Instructions on condemnation, which are distilled from these cases, also shed light on damages.4 Such damages include, but are not limited to, real estate-related damages, costs incurred to avoid business interruption, going concern damages, and damages pertaining to fixtures, equipment, and personalty.5
1. Real Estate-Related Damages
The Standard Jury Instruction on just compensation explains that the goal of just compensation is to "make the owner whole," no more and no less:
SJI2d 90.05 Just Compensation-Definition
Whenever private property is taken for a public purpose, the Constitution commands that the owner shall be paid just compensation.
Just compensation is the amount of money which will put the person whose property has been taken in as good a position as the person would have been in had the taking not occurred. The owner must not be forced to sacrifice or suffer by receiving less than full and fair value for the property. Just compensation should enrich neither the individual at the expense of the public nor the public at the expense of the individual.
The determination of value and just compensation in a condemnation case is not a matter of formula or artificial rules, but of sound judgment and discretion based upon a consideration of all of the evidence you have heard and seen in this case...
Comment
See State Highway Commissioner v Eilender, 362 Mich 697; 108 NW2d 755 (1961); In re Grand Haven Highway, 357 Mich 20; 97 NW2d 748 (1959); Fitzsimons & Galvin, Inc. v Rogers, 243 Mich 649; 220 NW 881 (1928); Consumers Power Co v Allegan State Bank, 20 Mich App 720; 174 NW2d 578 (1969).6
In the "classic" condemnation action, the governmental agency acquires the landowner’s property in its entirety, leaving no remainder, otherwise known as a "total taking." In such instances, the landowner is legally entitled to receive just compensation equal to the market value of the land taken.7 In cases involving total takings, wide disparities between owners’ and governments’ estimates of market value are frequently attributable to conflicting opinions of the subject property’s "highest and best use:"
SJI2d 90.09 Highest and Best Use
In deciding the market value of the subject property, you must base your decision on the highest and best use of the property.
By "highest and best use" we mean the most profitable and advantageous use the owner may make of the property even if the property is presently used for a different purpose or is vacant, so long as there is a market demand for such use.
Comment
See St Clair Shores v Conley, 350 Mich 458; 86 NW2d 271 (1957); In re Condemnation of Lands in Battle Creek, 341 Mich 412; 67 NW2d 49 (1954); In re Dillman, 255 Mich 152; 237 NW 552 (1931); In re Widening of Fulton Street, 248 Mich 13; 226 NW 690 (1929); Ecorse v Toledo, C S & D R Co, 213 Mich 445; 182 NW 138 (1921).8
For example, suppose Mr. Smith owns a one-acre, vacant lot on a street corner. The municipality determines that it is necessary to acquire Mr. Smith’s property for purposes of a highway widening, or a school development, or city hall expansion, or any other public purpose. Mr. Smith’s property is zoned for residential use, and the city appraises it – based upon a highest and best use of residential development – at $5.00 per square foot. Mr. Smith’s appraiser, however, observes that the property sits on a corner, a gas station is located directly across the street, and the area is ripe for redevelopment. The appraiser determines that a reasonable possibility of rezoning for commercial use exists,9 and the property’s market value is actually closer to $15.00 per square foot. Reasonable minds can therefore view the property’s market value quite differently, and of course, the jury is free to award just compensation within the range established by the lowest figure submitted at trial, and the highest figure submitted, otherwise known as the "range of testimony."10
As explained above, divergent opinions of damages usually arise in total taking cases where the parties dispute the property’s highest and best use. Typically, cases involving partial takings, in which only part of a parcel is condemned and the landowner is left with a "remainder," are more complicated than total takings. In the context of partial takings, disparate valuation estimates often result from disagreements about damages suffered by the landowner’s "remainder." A simple example illustrates this point: Mr. Smith owns a grocery store. The municipality determines that it is necessary to acquire part of Mr. Smith’s parking lot for a gateway entrance to the neighborhood. The municipality performs a "part taken" appraisal, in which it merely multiplies the number of square feet taken by a square foot value, or "unit rate," reflected by sales of similar properties in the community.
Mr. Smith sees things differently. His appraiser does not merely perform a "part taken" analysis, but rather undertakes a full "before and after" appraisal. In short, instead of merely multiplying the number of square feet taken by a unit rate derived from the market, Mr. Smith’s appraiser essentially performs two appraisals: an appraisal of the entire property before the taking, and an appraisal of the property remaining after the taking.11 The difference equals just compensation, or damages. In this regard, Mr. Smith’s appraiser determines that, as a result of the city’s taking, Mr. Smith’s remainder is rendered non-conforming to the local zoning ordinance. Moreover, the appraiser observes that the gateway for which the property was taken will substantially reduce Mr. Smith’s visibility to passing traffic. In other words, the taking has caused damages to Mr. Smith’s remainder that transcend the mere square footage of land taken. Note that the UCPA establishes that, if the practical value or utility of the remainder is destroyed by the taking, the condemning agency must acquire the entire parcel.12
Finally, Mr. Smith realizes that the city’s taking may cause damages not only to his real estate, but to his business as well. That is the subject of the following section.
2. Business Interruption and Going Concern Damages
At least two broad categories of damages are available to businesses operating on condemned land: business interruption damages, otherwise known as "costs incurred to avoid business interruption," and going concern damages. The Michigan Court of Appeals has stated that a business operator may not recover for both business interruption and going concern damages, on the theory that the two categories are mutually exclusive.13
In the case of a total taking, a business owner is entitled to the going concern, or intangible, value of his/her business where that owner cannot realistically transfer the business to a new location.14 For example, if a McDonald’s restaurant site located in City X is acquired for a road widening, the condemnor could not conceivably claim that the restaurant should relocate to Michigan’s Upper Peninsula. The business sign may stay the same, the building itself might appear identical to that which existed at the former location, and the Upper Peninsula site might even enjoy superior traffic flow. But the business has not relocated at all; an altogether new business has commenced. Patrons of the old McDonald’s location will not drive to the new McDonald’s location for a sandwich. The customer base has changed, the old business was eliminated, and McDonald’s is entitled to just compensation for the going concern value of that former business.15
According to Michigan case law, whether a particular business can relocate is decided on a case-by-case basis.16 The recently-adopted Standard Jury Instruction on going concern also summarizes this rule:
The defendant claims that condemnation of the property destroyed the business. If you find that the defendant cannot relocate the business, the defendant is entitled to just compensation for the value of the business as a going concern. If you find that the business can be relocated, the defendant is not entitled to compensation for the value of the business as a going concern.17
Where the property is taken in its entirety, but the business can relocate, the owner may still be entitled to business interruption damages.18 Business interruption damages are available in cases of partial takings, as well. As noted by the Michigan Supreme Court, "Where there is a partial taking, and there is an interruption of business, or when the remaining part is of great value and can be rearranged, the cost of altering the building and all consequential damages reasonably flowing from the interruption of business may be considered in awarding compensation."19 The recently-adopted Standard Jury Instruction concerning business interruption provides that, "Just compensation includes damages caused by interruption of a business or avoiding interruption of the business."20
Business interruption expenses can be as diverse as the nature of the businesses affected and the problems these businesses encounter. No two businesses are exactly the same. Some examples include additional labor costs incurred as a result of the taking,21 acquisition of machinery and equipment as a result of the taking,22 rental expenses and advertising expenses,23 expenses of a temporary or interim location, parking and mileage, increased operational costs,24 and business interruption damages resulting from relocation of an entire business necessitated by a partial taking of real estate.25
3. Fixtures, Equipment, and Personal Property
A displaced property owner is automatically entitled to value-in-place compensation, or "market value," for his/her fixtures.26 Conversely, an owner ordinarily cannot obtain value-in-place compensation for personal property, but instead is entitled to the "detach-reattach," or relocation, costs concerning such personalty. In certain cases, the difference between value-in-place and detach-reattach compensation can be significant. Value-in-place compensation is typically based upon the value of a particular article as attached to the realty.27 Detach-reattach compensation reflects the cost of removing an article from a location, transporting it to a new location, and reinstalling it at that new location.28
Therefore, as a threshold matter, one must determine whether a particular article of property constitutes a fixture or personal property. This inquiry turns on a three-part test. The article is deemed a fixture where: (1) it is actually or constructively annexed to the realty; (2) its adaptation or application to the realty being used is appropriate; and (3) there is an intention to make the property a permanent accession to the realty.29 If the foregoing test is satisfied, the owner is entitled to just compensation equal to the value-in-place of the fixtures. Alternatively, the owner may elect to be compensated for fixtures on a detach-reattach basis if he/she prefers. If, however, an article fails the three-part "fixtures" test, the owner is limited to detach-reattach compensation; value-in-place is not available.30
B. Trespass-Nuisance
In 1988, the Michigan Supreme Court confirmed that the Governmental Tort Liability Act,31 otherwise known as the governmental immunity statute, is subject to an exception for "trespass-nuisance" claims. See Hadfield v Oakland County Drain Commissioner, 430 Mich 139; 422 NW2d 205 (1988). Hadfield defined the elements of a trespass-nuisance claim as "trespass or interference with the use or enjoyment of land caused by a physical intrusion that is set in motion by the government or its agents and resulting in personal or property damage."32 In April, 2000, however, Michigan’s high court cast doubt on the future of that exception in the form of CS&P, Inc. v City of Midland, 461 Mich 1005; 609 NW2d 174 (2000). In CS&P, the Michigan Court of Appeals had ruled that a plaintiff need not prove negligence as an element of the trespass-nuisance cause of action.33 The Michigan Supreme Court initially granted leave to appeal that issue, but then vacated its order because "the Supreme Court is no longer persuaded that the questions presented below should be reviewed."34
Two Justices, though, elaborated at some length on their ultimate decision to deny leave to appeal. In their concurring opinions, these Justices strongly implied that, by their estimation, the trespass-nuisance exception requires further judicial attention. In particular, at least one of the concurring Justices (Corrigan, J.) suggested that the exception might properly be limited to actions against the state.
At any rate, by vacating its prior Order Granting Leave to Appeal, the Supreme Court left intact the Court of Appeals’ decision in the CS&P case, which held that a plaintiff need not prove negligence as an element of the trespass-nuisance cause of action.35 Therefore, while the future of the trespass-nuisance claim may be somewhat tenuous, the claim remains a valid, and powerful, exception to governmental immunity in Michigan.
As its name suggests, the trespass-nuisance exception actually incorporates both trespass (direct trespass upon land) and nuisance (interference with use or enjoyment of land) principles. Recently, courts have shown disfavor towards blending trespass and nuisance theories against private, non-governmental defendants. These courts have bent over backwards to distinguish between such claims.36 In short, a claim of trespass requires the plaintiff to demonstrate an immediate intrusion of a physical, tangible object onto the land, in which case the claimant is presumptively entitled to recover at least nominal damages even absent proof of actual injury, and may recover additional damages for any injuries actually proven.37 Conversely, nuisance connotes a substantial and unreasonable interference with the plaintiff’s right to quiet enjoyment.38 In the case of nuisance, the plaintiff must actually prove damages; damages are not presumed as they are in a trespass case.
When formulating the measure of damages applicable to any particular trespass-nuisance action, Michigan courts often refer to cases against non-governmental entities in which trespass and nuisance damages are discussed. In this regard, Kratze v Independent of Oddfellows,39 stands as an important precedent concerning the measure of damages available in a Michigan trespass action. The Kratze court summarized several noteworthy damage tests:
1. One injured by the trespass of another is entitled to compensation on two levels: general damages, and consequential or special damages.
2. General damages are such as the law implies, or presumes to have accrued, from the wrong "complained of."40
3. Special damages are not merely presumed or implied, but "really took place."41
4. Where the injury to land is permanent or irreparable, the general measure of damages is the diminution in value of the property.42
5. But where the injury is reparable, or temporary, the measure of damages is the cost to restore the property to its original condition, if less than the property’s pre-injury value.43
6. Finally, the Kratze court observed that the foregoing formula is "flexible in its application," with the ultimate goal being compensation for the harm or damage done.44
Therefore, consider a practical example involving a trespass-nuisance claim. Mr. Smith alleges that a governmental agency has caused flooding upon his vacant land. Mr. Smith further alleges that, but for the flooding, he intended to develop a state-of-the-art facility on that land, which would have produced enormous profits. Accordingly, Mr. Smith sues the governmental agency for trespass-nuisance, and seeks damages equal to the value of the land itself, plus "lost profits."
While some cases have held that lost profits are available in trespass actions,45 they strongly suggest that such damages are only available to actual businesses operating on the land.46 Furthermore, in accordance with the Kratze model of damages discussed above, it is likely that Mr. Smith’s damages would be capped at the value of the property prior to its injury, notwithstanding the flexibility of the damages rule. Indeed, in a post-Kratze decision the Michigan Court of Appeals held that, even where property has a unique value, such as a parcel bearing valuable trees, the measure of damages must not exceed the value of the property before the injury.47
C. Sandstone Associates Limited
Partnership v City of Novi
The Opinion and Order rendered in Sandstone Associates Limited Partnership v City of Novi, Oakland County Circuit Court Case No. 95-501532-CK, demonstrates that certain courts are willing to hold government to the same legal and economic standards as those applicable to ordinary citizens. By all accounts, the Sandstone case evidences gross abuse of power and control by a municipality and its agents to the financial ruin of a private developer.
1. Factual Summary48In 1991, Sandstone Associates Limited Partnership and the City of Novi entered into a Planned Unit Development ("PUD") agreement. The PUD provided for the creation of Decker Road, a five-lane road that would connect to Thirteen Mile Road on the north and Novi Road on the south. This road was planned to bisect Sandstone’s 296-acre, mixed-use development, and would provide the sole means of access to Phase I of that development.
In order to finance Decker Road’s construction, Novi approved the issuance of bonds, which Sandstone agreed to repay through future assessments collected under a special assessment district ("SAD"). Therefore, Sandstone would ultimately pay the total cost of the Decker Road construction.
Novi’s City Council approved the terms of the SAD, which referenced plans depicting the aforementioned Decker Road design. But in 1993, when Novi hired a road construction company to construct Decker Road, Novi unilaterally altered the road’s design (which it had previously approved) in a most dramatic way: Decker Road would intersect with neither Thirteen Mile Road nor Novi Road. These changes were not communicated to, or approved by, Sandstone itself.
In the meantime, Novi was planning an expansion of Novi Road south of Sandstone’s development. Novi wished to fund this separate project with a grant from the state, and that grant was dependent in part upon the SAD-funded Decker Road project within the Sandstone development. Specifically, Novi intended to use the SAD money, set aside for the Decker/Novi Road intersection, as its matching funds to support the state-funded Novi Road project. As the court put it, "The deletion of the Novi Road intersection from the [Decker Road] construction contract . . . thus effectively transferred the construction of that intersection to the future [state] Novi Road project."49
Moreover, Novi was also planning a future widening of Decker Road north of the Sandstone project. Novi decided to construct the Thirteen Mile Road/Decker Road intersection as part of that new project, rather than as part of the SAD Decker Road project. Novi thus deleted both of the planned Decker Road intersections from Sandstone’s project without Sandstone’s approval. The Decker Road construction was actually completed without the critical intersections; there was no outlet at Novi Road or Thirteen Mile Road. A construction service drive existed at Novi Road, but the city barricaded that drive to prevent through traffic. Likewise, Novi barricaded part of Thirteen Mile Road, prohibiting southbound access onto Decker Road and into Sandstone’s development. Therefore, as of October, 1993, Sandstone’s Phase I development was, for all intents and purposes, landlocked.
By July, 1995, Novi had still failed to properly construct Decker Road and its attendant intersections as required under the PUD and SAD. Sandstone therefore filed an action against Novi in the Oakland County Circuit Court, the Honorable Barry L. Howard, presiding. The complaint sought injunctive relief to compel Decker Road’s completion pursuant to the SAD. After conducting hearings, the court granted preliminary injunctive relief to Sandstone, prohibiting further delay in the completion of the Decker/Novi Road intersection. The court also ordered Novi to establish certain access alternatives in the event that the intersection could not be completed timely. But, as the court states in its Opinion, "Novi did not immediately build out the Decker-Novi Road intersection but instead chose to wait, as they had planned all along, until the completion of the Decker Road project in the fall of 1996. During construction of the intersection in 1996, all access to the development at Novi Road was blocked."50
The court then held additional hearings and ordered the city to immediately cease construction on the Novi Road intersection until alternative access could be established for Sandstone, and also ordered Novi to remove its barricades. Again, Novi failed to comply with those orders.
Ultimately, Judge Howard presided over a nearly three-month trial on Sandstone’s claims for breach of the SAD Agreement, breach of the PUD, unconstitutional taking of Sandstone’s property, misappropriation of SAD funds, and violation of Sandstone’s substantive due process rights under 42 USC §1983. Sandstone sought judgments against the City of Novi itself and three of Novi’s top administrators in their individual capacities.
2. Breach of SAD Agreement
Neither the SAD nor the PUD Agreements contained a deadline by which Decker Road construction was to be completed. But based upon testimony submitted at trial, the Court imposed a "reasonableness" standard, finding that two years constituted a "reasonable time" by which to complete construction.51 Decker Road was not remotely completed within two years after Novi’s approval of the SAD, and the Court found that Novi did commit a breach of the SAD agreement.
Next, Sandstone argued that Novi had taken property without payment of just compensation. Among other factors, Sandstone argued that Novi’s (1) unilateral elimination of the Novi and Thirteen Mile Road intersections, and (2) its barricading of roads (thereby closing access to the development) amounted to a taking.
The Court held that, while Novi’s unilateral change to the road design was not a taking (instead it constituted a breach of contract), Novi’s imposition of the road barricades did establish a taking.52 Novi barricaded roads, erected signs reading "closed to through traffic," and violated court orders requiring Novi to open road access to the development. Although Novi argued that access was merely diverted and rendered "inconvenient," the court determined that Novi materially cut off access, causing a taking warranting just compensation.
Finally, Novi’s road construction activities actually caused flooding in the area of a proposed intersection within Sandstone’s development. Sandstone offered to cure the problem using SAD funds, but Novi refused and ordered Sandstone to pull permits and remedy the problem at its own expense. The court found Novi’s actions to be unwarranted. It ruled that Novi did, in fact, cause the flooding condition, which destroyed the value of part of the land and prevented Sandstone from building a particular road for some time, resulting in a temporary taking.
Novi warned potential purchasers of Sandstone’s lots that they would have to seek Novi’s approval of architectural matters before Novi would issue site plan approvals or building permits. Sandstone argued at trial that Novi’s actions exceeded its authority under the PUD Agreement. Sandstone further argued that Novi’s "warnings" caused it to lose purchasers for the parcels, and delayed the development. The Court agreed: "This Court does agree that under the PUD, the developer’s right to adjust the architectural standards is not unlimited. However, the proactive, micro-managing oversight employed the City of Novi, where no provision for such oversight was made in the PUD, was unreasonable."53
Similarly, the PUD Agreement referred to the applicable building setbacks to be implemented in the development. During the development process, however, Novi’s zoning ordinance officer decided that some of the proposed setbacks might violate state code. Sandstone actually obtained BOCA (Building Officials and Code Administrators International, Inc.) approval of the setbacks which, incredibly, Novi appealed (and lost). Again, the court found a breach of the PUD Agreement: "[O]nce approval was obtained by [Sandstone], Novi went beyond its basic obligation and affirmatively fought against the approval which was given by BOCA International. This action was an explicit rejection by Defendant Novi of setbacks which it had contractually approved in the PUD and thus was a breach of the contractual agreement."54
5. Misappropriation of SAD Funds
The court found that, if Novi mishandled the SAD funds, such as commingling them with other monies, such matters were within the sole jurisdiction of the Michigan Tax Tribunal, not the Circuit Court.55
6. Substantive Due Process
Finally, the court determined that Novi had violated Sandstone’s rights to substantive due process asserted through 42 USC §1983: "[W]hile the City’s actions in barring access to [Sandstone’s] property are legally cognizable as a ‘taking’ and the failure to complete Decker Road is treated in this Opinion as a breach of contract, the factual background of those issues provides substantial support for [Sandstone’s] substantive due process claims."56 Indeed, the court ruled that Novi’s actions were "arbitrary and malicious,"57 and that Novi unnecessarily caused Sandstone to haul fill into and out of the development area, improperly refused to grant building permits through an arbitrary application of the city ordinance "for the improper purpose of delaying the development,"58 violated a court order, denied Sandstone access to its property, failed to order city employees to abide by court order, falsely claimed a lack of jurisdiction over construction, and refused to post signs, instead requiring Sandstone to seek a zoning variance.59 Consider the following passages from the court’s Opinion:
It is the opinion of this Court that the City of Novi repeatedly used its governmental powers and ordinances to impede Sandstone’s right to develop its land.
***
It is evident to this Court that these two executive officials created a policy and pattern of delay and obstruction of plaintiff’s development. They intended to delay the project and deliberately ignored the property rights of Sandstone]. They acquiesced in the improper delaying conduct of their subordinates and thus implicitly authorized it.
***
Perhaps Novi’s course of conduct began as a way of delaying [Sandstone’s] development so that the Novi Road project could be undertaken without pressure to open Decker Road. The situation ultimately became what this Court can only describe as a vindictive struggle by Defendant Novi to "beat" [Sandstone]. The ammunition used was the arbitrary and capricious application of the City’s laws and ordinances. This is the very situation which the constitutional right to substantive due process was designed to remedy. Accordingly, this Court finds that the City of Novi violated the substantive due process rights of [Sandstone].60
7. Damages
The Court found that the damages "for each separate claim are seamlessly interwoven."61 Persuaded by Sandstone’s real estate financial experts, and unpersuaded by Novi’s litigation support professionals, the court awarded damages based upon the projected value of the development (had it been permitted to go forward), carrying costs, and mass re-grading costs. The total award approximated $40 million dollars.62 The court also indicated that it would award reasonable attorney’s fees, and that the issue of fees, costs, and interest would be addressed later.63
CONCLUSION
Depending upon the facts at issue in a condemnation action, the condemned property owner may be entitled to various broad categories of damages. With respect to real estate, the owner is entitled to just compensation equal to the market value of his/her property based upon the property’s highest and best use, including damages to the remainder in a partial taking. Business owners are also entitled to going concern damages where the business is realistically incapable of relocating. Where a condemned owner incurs costs to avoid business interruption, such costs are compensable, but Michigan courts have stated that going concern damages and business interruption damages are mutually exclusive. Finally, where an article of property constitutes a "fixture" according to Michigan’s three-part test, the owner is entitled to just compensation for the value-in-place of the article, unless the owner elects to receive detach-reattach compensation instead. Personal property is only subject to the detach-reattach measure of compensation.
Notwithstanding the questionable future of Michigan’s trespass-nuisance claim, it remains an important exception to governmental immunity in Michigan. Faced with such claims for damages, Michigan courts will refer to trespass and nuisance decisions against non-governmental agencies for guidance. In particular, both general and special damages are available depending upon the facts of a particular case, but courts will ordinarily impose a "cap" equal to the subject property’s pre-injury market value. This test, however, is flexible in its application.
Finally,
Sandstone Associates Limited Partnership v City of Novi evidences the
extreme scenario in which government abused its power and violated court orders,
causing enormous damage to a private developer. The trial court awarded damages
based upon theories of breach of contract, takings, and violations of due process
under 42 USC §1983. The damages were based upon loss of the development, carrying
costs, and re-grading expenses, totaling nearly $40 million dollars exclusive
of costs, interest, and attorney’s fees. This case sends a clear message that
certain courts will hold governmental agencies to the same standards applicable
to ordinary persons in the State of Michigan.
1. Const 1963, art 10, §2. The United States Constitution also prohibits a condemnor from taking private property without paying just compensation. US Const, Am V.
2. MCL 213.51 et seq; MSA 8.265(1) et seq.
3. MCL 213.52(1); MSA 8.265(2)(1); Lansing v Edward Rose Realty, 192 Mich App 551; 632; 481 NW2d 795 (1992), aff’d, 442 Mich 626; 502 NW2d 638 (1993).
4. Jury instructions do not establish substantive law. Scalabrino v Grand Trunk WR Co, 135 Mich App 758, 763; 356 NW2d 258 (1984).
5. With respect to personal property, displaced owners are sometimes entitled to "moving costs" under the Allowances for Moving Personal Property from Acquired Real Property Act, MCL 213.351; et seq; MSA 8.214(1) et seq. An analysis of that statute is beyond the scope of this article.
7. Consumers Power Co v Allegan State Bank, 20 Mich App 720, 744-745; 174 NW2d 578 (1969), aff’d, 388 Mich 568; 202 NW2d 295 (1972); SJI2d 90.06.
9. See State Highway Commissioner v Eilender, 362 Mich 697; 108 NW2d 755 (1961); SJI2d 90.10.
11. See State Highway Commissioner v Sabo, 4 Mich App 291, 294; 144 NW2d 798 (1966).
13. Detroit v Larned Associates, 199 Mich App 36, 42; 501 NW2d 189 (1993); Detroit v Michael’s Prescriptions, 143 Mich App 808, 819 n.2; 373 NW2d 291 (1985). This article will not explore the "mutually exclusive" theory’s propriety, or lack thereof.
14. Department of Transportation v Campbell, 175 Mich App 629, 631; 438 NW2d 267 (1988); Larned Associates, 199 Mich App at 42.
15. See Michael’s Prescriptions, supra, for further discussion on this point.
16. I n re Acquisition of 306 Garfield, 207 Mich App 169, 186; 523 NW2d 644 (1994); Larned Associates, 199 Mich App at 42; Michael’s Prescriptions, 143 Mich App at 819-820.
17. In re Grand Haven Highway, 357 Mich 20; 97 NW2d 748 (1959); Detroit v Hamtramck Community Federal Credit Union, 146 Mich App 155; 379 NW2d 405 (1985).
19. In re Slum Clearance, 332 Mich 485, 495; 52 NW2d 195 (1952), citing other authorities.
21. In re Grand Haven Highway, 357 Mich at 33.
22. Department of Transportation v McNabb, 204 Mich App 674, 675-677; 516 NW2d 83 (1994).
23. Larned Associates, 199 Mich App at 42.
24. Hamtramck Federal Credit Union, 146 Mich App at 158-163.
25. Michigan Highway Commissioner v Great Lakes Express, 50 Mich App 170, 170-179; 213 NW2d 239 (1973).
26. Wayne County v Britton T, 454 Mich 608; 563 NW2d 674 (1997).
27. Britton Trust, 454 Mich at 610 n.1.
28. Britton Trust, 454 Mich at 610 n.1.
29. Britton Trust, 454 Mich at 610.
30. Britton Trust, supra; SJI2d 90.21.
31. MCL 691.1401 et seq; MSA 3.996(101) et seq.
32. Hadfield, 430 Mich at 169.
33. See CS&P, 229 Mich App 141; 580 NW2d 468 (1998).
36. See Ramik v Darling Int’l, Inc., 60 F Supp2d 680 (ED Mich, 1999); Adams v Cleveland-Cliffs Iron Company, 237 Mich App 51; 602 NW2d 215 (1999).
37. Adams, 237 Mich App at 73.
38. Adams, 237 Mich App at 72.
39. 422 Mich 136; 500 NW2d 115 (1993).
41. Kratze, 442 Mich at 148-149.
44. Kratze, 442 Mich at 149, citing Schankin v Buskirk, 354 Mich 490, 494; 93 NW2d 293 (1958).
45. See Ramik v Goodyear Tire & Rubber Company, 342 Mich 244; 69 NW2d 731 (1955).
46. Ramik, supra; Bigelow v Reynolds, 68 Mich 344; 36 NW 95 (1888).
47. Szymanski v Brown, 221 Mich App 423, 430-31; 562 NW2d 212 (1997).
48. The following factual summary is extracted from Judge Barry L. Howard’s opinion and order in Sandstone, hereinafter referred to as "Opinion."