851 N.W.2d 574
Mich. Ct. App.2014Background
- Plaintiffs (the Lelands and Grand/Sakwa) purchased ~220 acres zoned AR (Agriculture) and sought rezoning to SR-1 (higher-density residential); a 2003 board rezoning to SR-1 was overturned by referendum, leaving AR in place.
- Plaintiffs filed suit (Oct 22, 2004) claiming any zoning more restrictive than SR-1 was a regulatory taking; their rezoning and variance requests were denied.
- A new township board subsequently rezoned the property to LR (Low Density Residential), amended to permit 1 home per 2 acres (less intensive than SR-1 but more permissive than AR).
- The trial court applied the post‑suit LR ordinance as the operative law, held no taking (under Penn Central), and rejected plaintiffs’ due process and equal protection claims after a bench trial. Plaintiffs appealed.
- The appellate court affirmed: it held the trial court properly applied the post‑suit ordinance (no bad‑faith or vested‑rights exception), found the Penn Central factors favored the township, and rejected substantive due process and equal protection claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which zoning ordinance controls | Apply AR (or the classification in effect when suit filed); plaintiffs urged testing against the earlier regime | Apply the ordinance in effect at time of decision (LR); unless amendment destroyed vested rights or was predominantly adopted to manufacture a defense | The court applied the LR ordinance in effect at decision; no vested right existed and trial court did not clearly err in finding the rezoning was not predominately adopted to manufacture a defense |
| Regulatory taking under Penn Central | LR deprived plaintiffs of economically viable use compared to SR-1; Penn Central balancing should favor plaintiffs | LR did not constitute a taking: no physical invasion, LR permits substantial residential use (more than AR), diminution in value insufficient, and plaintiffs had notice of AR zoning | No taking: (1) character of action favored government (no physical invasion); (2) economic impact did not mandate a taking; (3) investment‑backed expectations weighed for defendant because plaintiffs bought with AR zoning and risk of referendum existed |
| Evidentiary rulings on valuation and expert testimony | Trial court erred excluding some lay testimony and should have barred defendant’s expert methodology; those errors prejudiced plaintiffs’ valuation proof | Evidence and expert testimony were admissible; disputes went to weight, not admissibility; trial court could rely on competing appraisals and testimony | No reversible error: most objections affected weight not admissibility; sufficient evidence existed to support the court’s valuation findings |
| Due process and equal protection claims | Rezoning to LR (after referendum) arbitrarily rendered property nonviable and singled out plaintiffs, violating substantive due process and equal protection | Rezoning served legitimate objectives (growth control, open space), LR provided more viable use than AR, action was not arbitrary or discriminatory | Claims denied: township advanced legitimate interests, rezoning was not arbitrary, and plaintiffs were not improperly singled out under the circumstances |
Key Cases Cited
- Klyman v. City of Troy, 40 Mich. App. 273 (rule: courts apply ordinance in effect at time of decision unless narrow exceptions)
- Lockwood v. Southfield, 93 Mich. App. 206 (vested‑rights and bad‑faith exceptions to applying post‑suit ordinance)
- Willingham v. Dearborn, 359 Mich. 7 (post‑suit ordinance adopted to retroactively justify prior denial; district noted as factually distinct)
- Franchise Realty Interstate Corp. v. Detroit, 368 Mich. 276 (post‑suit ordinances control)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (three‑factor regulatory taking test)
- Lucas v. S.C. Coastal Council, 505 U.S. 1003 (categorical taking standard)
- K & K Constr., Inc. v. Dep’t of Natural Resources, 456 Mich. 570 (Penn Central application; role of notice and investment‑backed expectations)
- Palazzolo v. Rhode Island, 533 U.S. 606 (notice of regulatory regime shapes expectations)
- Landon Holdings, Inc. v. Grattan Twp., 257 Mich. App. 154 (ordinance changes that manufacture a defense)