HUGGETT v DEPARTMENT OF NATURAL RESOURCES
Docket No. 195548
Court of Appeals of Michigan
October 16, 1998
232 MICH APP 188
Submitted May 5, 1998, at Lansing. Decided October 16, 1998, at 9:00 A.M. Leave to appeal sought.
The Court of Appeals held:
1. The trial court properly refused to require the plaintiffs to exhaust administrative remedies in the dеpartment. The issue whether the proposed activity is exempt from the permit requirements of the WPA is a legal question that does not call for extensive findings of fact or technical expertise. Requiring the exhaustion of administrative remedies in this case would be nothing more than a formal step on the way to the courthouse.
2. The farming exemption from the wetland permit requirement applies only to wetlands already in agricultural use and does not apply to the plaintiffs’ wetland, which was not already in agricultural use. The WPA was intended to enable the state to assume the authority to administer the federal Clean Water Act. The WPA must be enforced in accordance with, and be just as or more stringent than, the Clean Water Act. The similarly worded federal farming
3. Because in a prior mortgage foreclosure action Huggett stipulated that the state‘s interest in the wetland was superior to the plaintiffs’ interest, res judicata bars relitigation of the issue whether the state‘s interest is nominal and unenforceable. In any event, the state‘s interest is not nominal. Adjoining landowners may place conditions on adjoining lands they transfer to protect their interest in preventing noxious business from being conducted thereon, or in having it improved in a certain manner. In this case, the state‘s interest in placing a condition on the use of the wetland it conveyed is not nominal because the state continues to own land adjoining the wetland.
4. Res judicata bars consideration of the issue whether the state‘s interest is unenforceable as being violative of the rule against perpetuities. In any event, rights of entry are generally not subject to the common-law rule against perpetuities. Michigan‘s statutory limitation placed on rights of entry is inapplicable because the plaintiffs’ terminable interest was initially created in a conveyance from the state.
Affirmed in part and reversed in part.
WHITE, P.J., concurring in part and dissenting in part, stated that res judicata does not bar consideration of the issue whether the state‘s reversionary interest is enforceable. The prior proceeding was a foreclosure action in which Huggett‘s stipulation served as acknowledgment that the state‘s interest would survive the foreclosure proceeding and that the state‘s interest is superior to that of Huggett as mortgagee, but did not serve as acknowledgment that the state‘s interest was superior to that of Huggett as fee owner.
1. ADMINISTRATIVE LAW — JUDICIAL REVIEW — EXHAUSTION OF ADMINISTRATIVE REMEDIES.
Exhaustion of administrative remedies is not an inflexible condition precedent to judicial consideration and may not be required where the question presented is one of law and does not call for extensive findings of fact or technical expertise.
2. ENVIRONMENT — WETLAND PROTECTION ACT — PERMITS — FARMING EXEMPTION.
3. ACTIONS — RES JUDICATA.
Res judicata bars relitigation of claims actually litigated and those claims arising out of the same transaction that could have been litigated; the test for determining whether two claims are identical for res judicata purposes is whether the same facts or evidence are essential to the maintenance of the claim.
D. Haywood & Associates, P.C. (by David J. Haywood and Mark A. Cooley), for the plaintiff.
Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, A. Michael Leffler and Stephen F. Schuesler, Assistant Attorneys General, for the defendant.
Before: WHITE, P.J., and SAAD and MARKEY, JJ.
MARKEY, J. Defendant appeals as of right a declaratory judgment in favor of plaintiffs. We affirm in part and reverse in part.
In 1982, the state of Michigan, through defendant, deeded the wetland at issue to Michigan National Bank (MNB) in exchange for a parcel of land owned by MNB. The deed from the state to MNB included a condition that the land be used for peat farming and that if the condition were violated, the state had the right to reenter and retake the land. Plaintiffs later became owners of the wetland after MNB assigned its mortgage interest in the land to plaintiffs, and plaintiffs foreclosed the mortgage. Plaintiffs seek to construct a 200-acre, $6 million cranberry farm. The construction will consist of, among other things, building dikes,
I
First, defendant claims that the trial court should have denied plaintiffs’ claims because of plaintiffs’ failure to exhaust the available administrative remedies. We disagree.
Plaintiffs applied for a permit to construct the cranberry farm. Defendant denied the application. Plaintiffs initiated contested case proceedings to challenge the denial of the permit, but before the conclusion of the contested case proceedings, plaintiffs filed the instant action in the circuit court.1 Michigan courts have long recognized the importance of the doctrine of exhaustion of administrative remedies. Int‘l Business Machines Corp v Dep‘t of Treasury, 75 Mich App 604, 608; 255 NW2d 702 (1977). Exhaustion of administrative remedies is not an inflexible condition precedent to judicial consideration, however, and will not
In Int‘l Business Machines Corp, this Court allowed the plaintiff to seek relief in the circuit court even though the available administrative remedies had not been exhausted because thе plaintiff did not challenge the propriety of the agency action taken (declaration of tax liability). Instead, the plaintiff argued that the agency had no authority to take any action in the first place. Because the plaintiff sought to avoid submitting the dispute to the agency procedures, the “very harm that plaintiff seeks to avoid would inevitably occur if plaintiff were required to exhaust administrative remedies before acсess to judicial review.” Id. at 610. This Court also considered whether the agency‘s statutory authority to act was clearly framed for the circuit court, whether extensive findings of fact were unnecessary, and whether a resolution of the issue did not demand special technical expertise. Id.; see also Universal Am-Can Ltd v Attorney General, 197 Mich App 34, 38-39; 494 NW2d 787 (1992) (holding that where the plaintiff claimed that the agency lacked statutory authority to regulate the plaintiff‘s activity, “both judicial economy and the interests of justice supported the plaintiff‘s actions in filing a complaint in the circuit court for declaratory relief“).
In the case at bar, we believe that plaintiffs’ claim in the circuit court was proper even though they had not exhausted the available administrative remedies. In the circuit court, plaintiffs did not challenge the propriety of defendant‘s denial of the permit but sought a declaration that defendant had no statutory
II
Next, defendant claims that the trial court improperly ruled that plaintiffs’ proposed activities were exempt from the permit requirements of the WPA. With regard to this issue we agree with defendant.
Farming, horticulture, silviculture, lumbering, and ranching activities, including plowing, irrigation, irrigation ditching, seeding, cultivating, minor drainage, harvesting for the
production of food, fiber, and forest products, or upland soil and water conservation practices. Wetland altered under this subsection shall not be used for a purpose other than a purpose described in this subsection without a permit from the department.
The trial court opined that this farming exemption “is not limited in scope to existing farming operations nor limited by the size of the project but includes all activities necessary to commence and to continue farming in a commercially viable manner and to bring land into agricultural production.” We disagree.
The fundamental purpose of statutory construction is to assist the court in discovering and giving effect to the intent of the Legislature. Ansell v Dep‘t of Commerce (On Remand), 222 Mich App 347, 355; 564 NW2d 519 (1997). Statutory exceptions operate to restrict the general applicability of legislative language and are strictly construed. See People v Brooks, 184 Mich App 793, 797; 459 NW2d 313 (1990), citing Grand Rapids Motor Coach Co v Public Service Comm, 323 Mich 624; 36 NW2d 299 (1949).
According to Senate Bill Analysis, SB 3, January 17, 1980, and House Legislative Analysis, HB 4049, February 6, 1979, the WPA was intended to enаble the state to assume authority to administer the federal Clean Water Act to Michigan‘s wetlands.2 In order for
Thе conclusion that the farming exemption was intended to apply to land in established use for agriculture, and was not intended to refer to new farming activities, is also supported by the language of the statutory exemption itself. The farming exemption lists “minor drainage” as an example of a permissible farming activity. According to the definition section of the WPA,
Also, Michigan courts recognize the principle of statutory construction that express mention in a statute of one thing implies the exclusion of оther similar things. Jennings v Southwood, 446 Mich 125, 142; 521 NW2d 230 (1994). The exemption statute,
III
Next, defendant claims that the issue whether the state of Michigan‘s interest in the land is nominal and unenforceable was barred by res judicаta because there was a stipulation in a prior proceeding that the state had an interest in the land superior to plaintiffs. We agree.
Before the instant action, plaintiff Huggett sued the state and a mortgagee seeking to foreclose on the interest of the mortgagee and also asking that the court “enter its order determining the rights of any of [sic] defendants Robert Bolline and State of Michigan and the United States Treasury, if any.” Subsequently, the parties stipulated that the state had an interest superior to any other party at bar. This stipulation was recited in the trial court‘s final order, where the trial court ruled, in part, that plaintiffs’ rights were subject to the state‘s interests.
Res judicata bars relitigation of claims actually litigated and those claims arising out of the same transaction that could have been litigated. Eaton Co Bd of Co Rd Comm‘rs v Schultz, 205 Mich App 371, 376; 521 NW2d 847 (1994). The test for determining whether two claims are identical for res judicata purposes is whether the same facts or evidence are essential to
Plaintiff Huggett‘s complaint in the prior proceedings sought the court‘s determination of the state‘s rights in the land. Plaintiff Huggett then stipulated the superiority of the state‘s interest. In the case at bar, plaintiffs sought to litigate the validity of the condition placed in the deed; however, plaintiff Huggett did not limit the prior proceeding to foreclosure. He specifically asked for a determination of the state‘s rights in the land. Because the rights of the state are essentially dependent on the validity of the condition in the deed, the same facts or evidence were essential to the maintenance of both claims, and the validity of the condition could have been litigated in the prior proceeding. It is inequitable to allow plaintiff Huggett to clearly set out a quiet-title claim against the state in a prior proceeding, concede the issue, and then subsequently argue that he did not have the ability to challenge the state‘s interest in the first place. Consequently, we find that in the instant action plaintiffs should have been precluded from challenging the state‘s interest in the property.
Moreover, even if the doctrine of res judicata did not apply, the condition placed on the land at issue is not nominal, and the state‘s interest in the land is enforceable.
When any conditions annexed to a grant or conveyance of lands are merely nominal and evince no intention of actual and substantial benefit to the party to whom or in whose favor they are to be performed, they may be wholly disregarded, and a failure to perform the same shall in no
case operate as a forfeiture of the lands conveyed subject thereto.
In Barrie v Smith, 47 Mich 130, 135; 10 NW 168 (1881), our Supreme Court stated:
The fair construction of this statute is that conditions in a conveyance which evince no intention of actual or substantial benefit to the grantor are merely nominal. Where the observance of the condition is an existing substantial benefit, or its breach works an actual substantial injury to the grantor it cannot be considered as nominal . . . .
Barrie also states that adjoining landowners may place conditions on adjoining lands they transfer to protect their interest in prеventing “noxious business from being conducted thereon, or in having it improved in a certain manner.” Id. at 134. We interpret Barrie as holding that adjoining landowners have a special interest in enforcing use conditions placed upon adjoining land they transfer, and that these conditions are not nominal. Because the land at issue adjoins state land, and the state put the condition on land adjoining land it owns, the state has a special interest in enforcing the condition, and the condition is not nominal.
IV
On cross appeal, plaintiffs claim that the state‘s interest in the land is unenforceable because it violates the rule against perpetuities. As previously discussed, plaintiffs are precluded from challenging the validity of the state‘s interest in the land at issue. Moreover, even if plaintiffs were not precluded from raising this issue, the claim must fail. Generally speaking, rights of entry are not subject to the com-
Affirmed in part and reversed in part.
SAAD, J., concurred.
WHITE, P.J. (concurring in part and dissenting in part). While it is clearly consistent with the public policy of this state, as expressed in subsection 30302(1)(c) of the wetlands protection act,
. . .
I do not agree that plaintiffs’ challenge to the state‘s reversionary interest in the property is barred by res judicata. The prior proceeding was a foreclosure action. The state was included as a party because of its reversionary interest in the property. Huggett stipulated the superiority of the state‘s interest. In so stipulating, Huggett acknowledged that the state‘s interest would survive the foreclosure proceeding and that his
I agree, however, that the state‘s reversionary interest is not based on conditions that are “merely nominal” “evinc[ing] no intention of actual and substantial benefit to” the state, and that the interest is not unenforceable as violative of the rule against perpetuities.