Plaintiff Michael Dorman appeals as of right from the trial court’s order granting defendant Clinton Township’s motion for summary disposition pursuant to MCR 2.116(C)(10) 1 in this dispute regarding the rezoning of plaintiffs property. The trial court dismissed plaintiffs inverse condemnation action, in which plaintiff alleged that the township’s actions amounted to a regulatory taking and violated his right to substantive due process. We affirm.
I. FACTS AND PROCEDURAL HISTORY
Plaintiff is a licensed mortgage lender and broker who frequently speculates in real estate. In April of 2001, hе purchased the property at issue in this case for $273,000, after reading a newspaper advertisement for its sale, and viewing the property and speaking to the prior owner only once.
2
The property is located in a residential neighborhood in Clinton Township. It is
undisputed that the only access to the property is through residential roads; the
Plaintiff anticipated beginning a public storage business on the site. According to his preliminary proposal, plaintiff intended to renovate the existing structure into a climate-controlled, mini-storage facility and to construct two additional buildings on the property. He claimed that township officials encouraged his plan to develоp the property, and that the planning commission expressed its intent to recommend approval of his plan. Therefore, plaintiff began preparing the interior of the lodge for reconstruction. Plaintiff alleged that the township treasurer, William Sowerby, was opposed to his proposed development and actively pursued its rejec tion. Plaintiff contended that Mr. Sowerby questioned the propriety of the zoning classification during a Budget Ways and Means Committee meeting and, thereafter, convinced the township to rezone the property back to “Residential Multiple.” Following a public hearing, the planning commission recommended rezoning plaintiffs property. The township board ultimately voted to return the property to its original classification in light of recent residential development in the area and to prevent increased truck traffic on residential streets. 5 Plaintiffs proposed development was, therefore, rejected. 6 Plaintiff admits that he did not review the Master Plan or question the seemingly out-of-place zoning classification before closing on the sale of this property. 7
Plaintiff filed the instant action for inverse condemnation, challenging the validity of the township’s decision to rezone his property. He asserted that the township’s rezoning significantly decreased the value of his property. Therefore, he alleged that the rezoning amounted to a taking and that he was entitled to just compensation. He also challenged the legitimacy of the township’s stаted purpose in rezoning the property and its belated rezoning following the submission of his proposed site plan. Plaintiff contended that the township singled out his property specifically to
II. STANDARD OF REVIEW
We review a trial court’s determination regarding a motion for summary disposition de novo. 9 A motion under MCR 2.116(C)(10) tests the fаctual support of a plaintiffs claim. 10 “In reviewing a motion for summary disposition brought under MCR 2.116(0(10), we consider the affidavits, pleadings, depositions, admissions, or any other documentary evidence submitted in [the] light most favorable to the nonmoving party to decide whether a genuine issue of material fact exists.” 11 Summary disposition is appropriate only if there are no genuine issues of material fact and if the moving party is entitled to judgment as a matter of law. 12 We also review issues of constitutional law de novo. 13
Plaintiff challenges the trial court’s dismissal of his inverse condemnation action seeking just compensation for the taking of his property. Plaintiff contends that the township deliberately and improperly interfered with his proposed development by rezoning the prop-
III. INVERSE CONDEMNATION/REGULATORY TAKING erty to “Residential Multiple” following the submission of his proposed site plan. By limiting the potential use of this property, plaintiff asserts that the township greatly reduced its value and, therefore, effectively confiscated his property.
The Fifth Amendment of thе United States Constitution and Article 10 of the Michigan Constitution both prohibit the taking of private property for public use without just compensation.
14
Through its power of eminent domain, however, the state may follow the procedures outlined in the Uniform Condemnation Procedures Act
15
and condemn, or “take,” private property for public use by providing the requisite compensation.
16
A property owner may bring an inverse condemnation action seeking just compensation for a “de facto taking,” when the state fails to follow those procedures.
17
“While there is no exact formula to establish a de facto taking, there must be some action by the government specifically directed toward the plaintiffs property that has the effect of
An inverse condemnation claim may be based upon the government’s “regulatory taking” of private property. A regulatory taking occurs when the state effectively condemns, or takes, private property for public use “by overburdening that property with regulations.” 20 There are two situations in which a property owner is automatically entitled to just compensation: (1) “where the owner is deprived of ‘all economically beneficial or productive use of [his or her] land,’ ” or (2) when the government physically and permanently invades any portion of the property. 21 Where the government’s actions merely diminish the owner’s ability to freely use his or her land, the court must apply the balancing test set forth by the United States Supreme Court in Penn Central Transportation Co v New York City. 22 In determining whether such actions amount to a taking under Penn Central, the court must consider: “(1) the character of the government action, (2) the economic effect of the regulation on the property, and (3) the extent by which the regulation has interfered with distinct, investment-backed expectations.” 23
We agree with the trial court that plaintiff failed to create a factual dispute that the township zoning ordi
nance amounted to either a de facto or a regulatory taking of his property. Plaintiffs argument rested on the alleged reduction in the value of his property due to its rezoning to residential use. However, it is well established that a municipality is not required to zone property for its most profitable use,
24
and that “[m]ere diminution in value does not amount to [a] taking.”
25
“ ‘Disparity in values between residential and commercial uses will always exist’ yet, a municipality clearly is not required to favor the latter use at the expense of the former.
26
A plaintiff who asserts that
Plaintiff alleged, without providing any supporting evidence, that his proposed storage facility would be worth approximately $700,000. He further asserted thаt the township, by rezoning his property to residential use, effectively reduced the property’s assessed value to $148,000. Yet, plaintiffs own real estate appraisal expert, Gilbert A. Zook, stated that plaintiff could divide the property into eight residential lots priced at $45,000 each and sell the lots for a net profit of $11,200 after deducting costs. A property owner may present evidence that his or her property could be more profitable if put to a different use. Howеver, an owner may not base his or her claim for just compensation on uncertain and speculative expected profits. 28 Nothing in the record suggests that plaintiffs property is unsuitable for residential development. It is located in an established residential area in which single-family residential developments have recently increased. While plaintiff alleges that there is no market for such homes in the area, his own expert witness provided evidence to the contrary. Although plaintiff had high personal expectations for his mini-storage facility, this business could, potentially, have operated at a loss. Absent any supporting evidence, plaintiffs damages are too speculative to support his claim for just compensation. 29
Furthermore, plaintiff cannot establish that the township’s rezoning of his property interfered with legally recognized “distinct, investment-backed expectations” under
Penn Central.
Plaintiff conducted minimal research before expending a large sum of money on this property. He admitted that he closed on the prop
erty only 12 days after first visiting the property and speaking to the owner. A simple visual inspection of the area would have placed plaintiff on notice that his proposed development was inconsistent with the character of the neighborhood. Moreover, plaintiff did not have a constitutionally protected right to develop his property under the “Light Industrial” zoning classification. To claim a vested interest in a zoning classification, the property owner must “hold[] a valid building permit and [have] completed substantial construction.”
30
This Court has specifically
IV SUBSTANTIVE DUE PROCESS
Plaintiff also challenges the trial court’s dismissal of his due process claim against the township. Plaintiff alleged that he was denied his right to substantive due procеss by the questionable and arbitrary method by which the township rezoned his property to “Residential Multiple.” Plaintiff alleged that the “legitimate state interest” cited by the township in support of the rezoning was a mere pretext. He asserted that the decision was based solely on the personal motives of Mr. Sowerby.
A plaintiff who alleges an unconstitutional taking of his or her property may also challenge the validity of the zoning ordinance as a violation of his or her right to substantive due рrocess. We presume that a challenged zoning ordinance is valid. 35 However, a plaintiff may establish that a land use regulation is unconstitutional, either on its face or “as applied” by showing “(1) that there is no reasonable governmental interest being advanced by the present zoning classification or (2) that an ordinance is unreasonable because of the purely arbitrary, capricious, and unfounded exclusion of other types of legitimate land use from the area in quеstion.” 36
A facial challenge alleges that the mere existence and threatened enforcement of the ordinance materially and adversely affects values and curtails opportunities of all property regulated in the market.... An “as applied” challenge alleges a present infringement or denial of a specific right or of a particular injury in process of actual execution. [37]
Contrary to plaintiffs assertion, the rezoning of his property to “Residential Multiple” did advance a legitimate, reasonable governmental interest. The United States Supreme Court found nearly 80 years ago that preserving the residential nature of a neighborhood and limiting traffic for the safety of local residents are both legitimate interests that may be advanced by a zoning regulation. 41 Moreover, a basic goal of land use regulation is to segregate incompatible uses. 42 While plaintiff alleges that the rezoning of his property was prompted by Mr. Sowerby’s personal motives, we do not agree that the board’s ultimate decision was arbitrary and capricious.
Plaintiff relies heavily on the Sixth Circuit’s opinion in
Nasierowski Bros Investment Co v Sterling
Hts
43
to support his contention that his right to due process was violated by Mr. Sowerby’s actions. However, the facts in
Nasierowski
are inapposite to this case. We note that the court in that case found a violation of the plaintiffs right to
procedural
due process. Mr. Nasierowski purchased his property following lengthy negotiations with city officials to ensure that his proposed commercial and warehouse development would bе approved.
44
The plaintiff invested significant time and money preparing the site plan and seeking a use variance from the city.
45
In the meantime, the planning commission drafted a new master zoning plan, which changed the zoning classification of the plaintiffs property from commercial to business use. The city assured Mr. Nasierowski that his proposed use was also consistent with the new classification.
46
The city conducted public hearings, and the city council expressed its intent to adopt the master plan as recommended. At the conclusion of the public hearings, the council went into an executive session and
determined to rezone plaintiffs property to office use.
47
This change was instigated by one,council member, who lived near the plaintiffs proposed development and desired increased residential development
There is no evidence in the instant case that Mr. Sowerby recommended rezoning plaintiffs property for personal motives. 50 The neighborhood was residential in nature and plaintiffs proposed development was clearly a nonconforming use. 51 Moreover, the township had engaged in “spot zoning” when rezoning the property to “Light Industrial” in the first instance. Removing that classification to bring the property into conformity with the remainder of the neighborhood was not an arbitrary or capricious act. Furthermore, the court in Nasierowski found that the property owner had a vested interest in the prior zoning classification, as he had undertaken significant action in reliance on the prior master plan. 52 As we have already noted, the plaintiff in this case did not have a vested interest in the prior classification. Unlike Mr. Nasierowski, who thor oughly researched the feasibility of his development and conditioned his purchase of the property on the approval of his site plan, Mr. Dorman rushed into this sale without determining whether his proposal might be rejected. Accordingly, the trial court also properly dismissed plaintiffs substantive due process claim.
V MOTION TO AMEND COMPLAINT/ADD AN EXPERT WITNESS
Sixteen months after filing his complaint, and following lengthy and acrimonious discovery, plaintiff hired new counsel and moved to amend his complaint to add a procedural due process claim. Shortly thereafter, plaintiff also moved to include an additional expert witness to testify regarding the calculation of his damages. Plaintiff challenges the trial court’s subsequent denial of both motions.
We review a trial court’s denial of a plaintiffs motion to amend his or her complaint for an abuse of discretion. 53 Leave to amend pleadings “shall be freely given when justice so requires.” 54 However, leave to amend should bе denied “where amendment would be futile.” 55 In support of his proposed amendment, plaintiff merely realleged that he was denied due process of law by the procedural irregularities in the rezoning of his property. As we have already determined that plaintiff did not have a vested interest in the prior zoning classification, plaintiffs procedural due process claim would also lack merit. Accordingly, the trial court properly denied his motion to amend.
The trial court also properly denied plaintiffs belated request to include an additional expert witness.
We review a trial court’s denial of a motion to add a
Pursuant to MCR 2.302(E)(1)(a)(ii), a party has “a duty seasonably to supplement” his or her responses to discovery requests to include the identity of additional expert witnesses. The court may, in its discretion, sanction a party under MCR 2.313(B)(2) for fаiling to reveal the identity of an expert witness in a timely fashion. 57 As a sanction under that subrule, the court may prohibit the party from “introducing designated matters into evidence... .” 58 In determining whether the barring of a witness is an appropriate sanction, the court should consider “whether the violation was wilful or accidental; the party’s history of refusing to comply with discovery requests or disclosure of witnesses; the prejudice to the party; the actual notice to the opposite pаrty of the witness; and the attempt to make a timely cure.” 59 In light of plaintiffs history of missing discovery deadlines and failing to timely complete discovery requests, it is unlikely that the township could have deposed this witness prior to trial. We recognize that this witness potentially could have provided further evidence allowing the trier of fact to calculate plaintiffs actual damages with more certainty. However, plaintiff never stated with particularity what evidence this witness would provide. Acсordingly, we cannot find that the trial court abused its discretion in determining that exclusion was warranted. 60
Affirmed.
Notes
Defendant also sought, and was granted, summary disposition pursuant to MCR 2.116(C)(7). However, defendant neither stated its grounds for seeking dismissal under that subsection nor argued in favor of that motion below. Accordingly, we will consider defendant’s motion solely under MCR 2.116(C)(10).
An entry in the township’s tax records described the “terms of sale” as an “arms length” transaction.
Plaintiff asserts that a television station housing large satellite dishes also borders the property. However, plaintiffs record citation does not support this fact.
It appears from the record that an agent of the defaulted mortgage lender purchased the property at the foreclosure sale before listing it on the open market. Plaintiff purchased the property from that owner.
The board also voted to rezone the parcel bordering plaintiffs property to the east from “Light Industrial” to “Residential Multiple” at the same timе.
It appears from the record that the township “tabled,” rather than officially rejected, plaintiffs proposed site plan. However, the township does not contest that its action amounted to a final decision.
In fact, plaintiff closed the sale only 12 days after first viewing the property and speaking with the owner.
Plaintiff moved for summary disposition pursuant to MCR 2.116(I)(2) (“If it appears to the court that the opposing party, rather than the moving party, is entitled to judgment, the court may render judgment in favor of the opposing party.”).
MacDonald v PKT, Inc,
Auto-Owners Ins Co v Allied Adjusters & Appraisers, Inc,
Singer v American States Ins,
MacDonald, supra at 332.
Harvey v Michigan,
Adams Outdoor Advertising v East Lansing (After Remand),
MCL 213.51 et seq.
Merkur Steel Supply, Inc v Detroit,
Peterman v Dep’t of Natural Resources,
Charles Murphy, MD, PC v Detroit,
Merkur, supra at 132.
K & K Constr, Inc v Dep’t of Natural Resources,
Adams, supra
at 23 (emphasis added), quoting
Lucas v South Carolina Coastal Council,
Penn Central Transportation Co v New York City,
K & K Constr, supra
at 577. The United States Supreme Court recently clarified in
Chevron
that the determination of whether a regulation fails to “substantially advance legitimate state interests” has no part in the takings analysis.
Chevron, supra
at _;
Equitable Bldg Co v Royal Oak,
Bell River Assoc v China Twp,
Gackler, supra
at 572-573, quoting
Brae Burn, Inc v Bloomfield Hills,
Bell River, supra at 133, quoting Bevan, supra at 403.
See Merkur, supra at 135.
Plaintiff cited
Sheffield Dev Co, Inc v Glenn Hts,
It must he kept in mind, however, that “[t]he takings clause ... does not charge the government with guaranteeing the profitability of every piece of land subject to its authority. Purchasing and developing real estate carries with it certаin financial risks, and it is not the government’s duty to underwrite this risk as an extension of obligations under the takings clause.” lid. (citation omitted).]
Plaintiff, an experienced real estate investor, should have been prepared for the financial risks involved in this project.
Seguin v Sterling Hts,
968 F2d 584, 590-591 (CA 6, 1992), citing
City of Lansing v Dawley,
Schubiner, supra
at 497, citing
Franchise Realty Interstate Corp v Detroit,
Gackler, supra at 574 (citation omitted).
Id. at 574-575.
Plaintiff failed to make any changes to the land even though the planning department wаrned him to construct a fence around the dumpster, to make improvements to the parking lot, and to construct a public access sidewalk. Plaintiff also failed to remove litter and debris from the property after he was warned that this condition was an ordinance violation.
Frericks v Highland Twp,
id.
37
Paragon Props Co v Novi,
Kropf v Sterling Hts,
Id. at 162-163.
Frericks, supra
at 607-608, quoting
Christine Bldg Co v Troy,
See Euclid, supra at 394-395 (finding the exclusion of apartment buildings from areas zoned for single-family residential use to be constitutional).
See Paragon, supra at 573, citing Euclid, supra at 386-390.
Nasierowski Bros Investment Co v Sterling Hts, 949 F2d 890 (CA 6, 1991).
Id. at 891.
Id.
Id. at 892.
id.
Id. at 891-892.
Id. at 893.
Compare id. at 896 (in which the councilman “offered no policy reasons” in support of his personal оbjection).
Although plaintiff has challenged the constitutionality of the ordinance on the basis of substantive due process, we note that plaintiff was properly notified of board and planning commission meetings and was represented by council through the entire process.
Id. at 897.
Jenks v Brown,
MCR 2.118(A)(2).
Jenks, supra at 420.
Beach v State Farm Mut Automobile Ins Co,
MCR 2.302(E)(2).
MCR 2.313(B)(2)(b).
Colovos, supra at 528.
As plaintiff has failed to convince this Court that he is entitled to relief on appeal, we need not consider whether it would have been appropriate to reassign this case to a different judge had we remanded to the trial court.