950 N.W.2d 502
Mich. Ct. App.2019Background
- Cove Creek master deed recorded in 1989 with 31 units; Units 15–31 were "must be built" and constructed; Units 1–14 were designated "need not be built" and were never built.
- Under MCL 559.167(3) as amended in 2002, undeveloped "need not be built" land became general common elements and rights to build ceased if the developer failed to withdraw or develop within the statutory period (10 years), so developer rights had lapsed well before 2016.
- Plaintiff (the condominium association) sued in October 2016 seeking a declaratory judgment that Units 1–14 no longer existed and the land was common elements; defendants (successor developers/owner trust) claimed the 2016 amendment to MCL 559.167 authorized withdrawal and argued it applied retroactively.
- The trial court applied the 2002 version, found developers’ rights had vested in the association by operation of law (i.e., rights lapsed), and granted summary disposition for plaintiff; defendants’ later counterclaims for tax reimbursement, quiet title, adverse possession, etc., were dismissed on summary disposition.
- Defendants appealed the statutory retroactivity, due-process, and takings rulings (Docket No. 342372); plaintiff appealed denial of sanctions/attorney fees for defendants’ pleadings and discovery motions (Docket No. 343144).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 2016 amendment to MCL 559.167 applies retroactively | 2016 amendment should not revive former "need not be built" units that already reverted; no retroactivity | 2016 amendment (esp. use of “occurring”) applies retroactively and validatesTrust’s withdrawal | Court: 2016 amendment not retroactive to completed reversions; 2002 version governs and vested rights had already vested in association |
| Whether applying 2002 statute deprived defendants of due process | Association: statute conditions retention of rights on developer action; defendants had notice and opportunity to act | Defendants: statute deprived them of vested property without notice/hearing | Court: No due-process violation; statute reasonably conditioned retention of rights on affirmative acts; legislative notice sufficient |
| Whether 2002 statute effected an unconstitutional taking | Defendants: permanent transfer of title without compensation | Association: lapse resulted from developers’ failure to act, not state taking | Court: No taking—property right lapsed by inaction of owner, not governmental confiscation; no compensation required |
| Whether trial court abused discretion in denying sanctions and fee awards to plaintiff | Association: defendants’ counterclaims, motion to strike, motion to compel were frivolous/improper—fees required | Defendants: claims and motions had arguable factual and legal merit; discovery/motion practice defensible | Court: No abuse of discretion; many counterclaims had arguable merit and motions were substantially justified; denial of fees affirmed |
Key Cases Cited
- Davis v. State Employees’ Retirement Bd., 272 Mich. App. 151 (remedial statutes presumption and limits on retroactivity)
- City of Kentwood v. Estate of Sommerdyke, 458 Mich. 642 (legislature may condition retention of property rights on performance of affirmative acts; due process principles)
- Rataj v. City of Romulus, 306 Mich. App. 735 (standard of review for summary disposition)
- Attorney Gen. v. Michigan Pub. Serv. Comm., 249 Mich. App. 424 (vested rights and due process analysis)
- Waisanen v. Superior Twp., 305 Mich. App. 719 (elements and proof required for adverse possession)
- Ollig v. Eagles, 347 Mich. 49 (equitable estoppel context and relief for mistaken improvements)
- Mays v. Snyder, 323 Mich. App. 1 (inverse condemnation requires governmental defendant)