Charter Township of Lyon v Petty: The Exercise of “Discretion” in Enforcing Zoning Ordinances

Introduction

             Through the Zoning Enabling Act, MCL 125.3101, et seq., Michigan has delegated to its municipalities many of the functions related to the regulation and development of land.  With this delegation comes a responsibility to administer and enforce land use restrictions properly adopted by the municipality.  In many instances, however, strict enforcement (i.e., enforcement), of the zoning act could lead to practical difficulties for the municipality.  For example, to uniformly enforce its ordinances a municipality needs to have enough ordinance officers to identify violations and the resources to enforce the ordinance over judicial opposition from the violator.  A municipality, though, has finite resources, and many an ordinance officer will be faced with the eternal question: If an ordinance violation takes place in the woods but there is no one to see it, does it really occur?

The recent published decision Charter Township of Lyon v Petty, Docket Nos. 327685 & 327686 (Mich Ct App Oct 13, 2016), suggests that the Michigan Court of Appeals will afford municipalities a certain amount of deference in choosing to enforce, or to not enforce, its ordinances.  Even though it is a published decision, however, the holding and rationale of Charter Township of Lyon should be assessed against the risks faced by a municipality that exercises too much “discretion” in enforcing its zoning ordinances.

Charter Township of Lyon v Petty

             The defendants in the Charter Township of Lyon cases were two families (Petty and Hoskins) who owned adjacent properties in the Charter Township of Lyon.  Both sets of defendants had used their properties for decades in open violation of the township’s zoning ordinance.  Specifically, both sets of defendants maintained commercial operations on properties which had been zoned R-1 and which, under the township’s zoning ordinance, were to be used for single-family residence use only.  The Hoskins family had purchased a five acre property in 1970 and soon thereafter erected a pole barn in which they stored equipment and material for their landscaping business.  The Petty family had purchased a thirteen acre property in 1977 and soon thereafter commenced commercial operations.  According to the Court of Appeals:

It is undisputed that the Hoskins and Petty families operated their businesses without township interference for several decades despite that their uses were never permitted under their zoning classification.  Township of Lyon, Slip Op at 2.

Over time development increased in the township and a number of residents complained about the defendants’ operations.  In 2013 the township sent “zoning ordinance warning[s]” to Hoskins and Petty.  The township then sought judicial intervention to force the Hoskins and Petty families to cease their business operations.  With their answers, both sets of defendants filed motions for summary disposition asking the court to rule that the township was estopped to enforce the ordinance and that the township’s enforcement efforts were barred by laches due to the forty-three (43) and thirty-six (36) year periods of time that had elapsed since Hoskins had Petty had first begun using their properties.  The Court of Appeals summarized their argument as follows:

In defense of the township’s enforcement actions, the Hoskins and Petty families contended that the township’s decades-long pattern of ignoring their zoning violations, and the investments they made in their businesses as a result, precluded the township from taking enforcement action now.   Township of Lyon, Slip Op at 4.

In affirming the decision of the trial court to “uphold the township’s zoning authority[,]” the Court of Appeals attempted to clarify the requirements for establishing laches against the township.  The Court of Appeals began by stating that:

“[I]t is the policy of this state and a goal of zoning that uses of property not conforming to municipal zoning ordinances be gradually eliminated.”  Whether and when to enforce its zoning ordinance to effectuate this gradual elimination is a matter within a township’s discretion.  Township of Lyon, Slip Op at 3 (quoting Jerome Twp v Melchi, 184 Mich App 228, 231; 457 NW2d 52 (1990)).

The Court of Appeals then indicated that the doctrines of laches and estoppel were “judicially disfavored” and “rarely applied in the zoning context except in the clearest and most compelling circumstances.”  Township of Lyon, Slip Op at 4.  In addition, for both estoppel and laches, “a historic failure to enforce a particular zoning ordinance, standing alone, is insufficient to preclude enforcement in the present.”  Township of Lyon, Slip Op at 4.  “The application of the doctrine of laches requires the passage of time combined with a change in condition that would make it inequitable to enforce the claim against the defendant.”  Id. (quoting Yankee Springs Twp v Fox, 264 Mich App 604, 612; 692 NW2d 728 (2004)).  In Township of Lyon, the Court of Appeals emphasized the level of prejudice that must be demonstrated:

The prejudice necessary to establish a laches or estoppel defense cannot be a de minimis harm. . . . [T]he party fighting the zoning enforcement must show that he or she “made such a substantial change in position or incurred such extensive obligations and expenses that it would be highly inequitable and unjust to destroy the rights which he or she ostensibly had acquired.”  Courts have also held that the property owner must establish “a financial loss . . . so great as practically to destroy or greatly to decrease the value of the . . . premises for any permitted use.”  Township of Lyon, Slip Op at 5 (citations omitted).

Against this standard the Court of Appeals evaluated the prejudice asserted by the defendants, rejecting out of hand the Petty families’ defenses because they did not submit any expenditures to show prejudice.  The Court of Appeals then rejected the Hoskins families’ defense on the basis that $10,300 in expenditures were simply not sufficient enough to constitute a “substantial change in position” or “extensive obligations and expenses” to warrant a finding of prejudice sufficient to establish laches.  In Township of Lyon, the Court of Appeals focused on the potential prejudice that would be suffered by the defendants if the township were allowed to enforce its zoning ordinance notwithstanding a failure to enforce the ordinance for several decades, finding the alleged prejudice lacking.

City of Hancock v Heuter

             To a certain extent, Township of Lyon contrasts with the approach taken by the Court of Appeals in City of Hancock v Heuter, 118 Mich App 811, 817-818; 325 NW2d 591 (1982).  In City of Hancock, the Court of Appeals had placed the focus of the inquiry on the municipality against whom the defense was asserted, rather than the prejudice suffered by the alleged violator from the city’s failure to enforce the ordinance.  In City of Hancock the city had sought to enforce a zoning ordinance which would have prohibited a residential building from being used for three tenants instead of two.  The Court of Appeals found the zoning map relied on by the city to establish the date of the zoning change insufficient, thereby determining the use to be a lawful nonconforming use, but then also found that laches prevented application of the ordinance against the defendant.  In its decision, the Court of Appeals used the following standard:

 Laches is an affirmative defense which depends not merely upon the lapse of time but principally on the requisite of intervening circumstances which would render inequitable any grant of relief to the dilatory plaintiff.  For one to successfully assert the defense of laches, it must be shown that there was a passage of time combined with some prejudice to the party asserting the defense of laches.  Laches is concerned mainly with the question of inequity of permitting a claim to be enforced and depends on whether the plaintiff has been wanting in due diligence.  City of Hancock, 118 Mich App at 817-818 (emphasis added).

In finding laches applicable, the Court of Appeals used the fact of the defendants’ violation as the means to establish prejudice when coupled with prior notice of the use by the city, stating:

Also, the city manager testified that he was informed prior to 1979 that the home contained there apartment units.  In 1979, he inspected the house.  However, the city’s complaint was not filed until August 20, 1980.  On these facts, we find that, although the city had notice in 1972 of what it considered a zoning ordinance violation under the 1962 zoning ordinance, it failed to take any action for an undue length of time.  City of Hancock, 118 Mich App at 818.

             Township of Lyon could be viewed as an implied acceptance of the practical difficulties faced by a municipality in enforcing its zoning ordinances.  Namely, that by ensuring that the emphasis in any laches analysis is on the prejudice suffered by the violator as opposed to the municipality’s lack of diligence in enforcing the zoning ordinance, the Court of Appeals gives meaning to its statement that “[w]hether and when to enforce its zoning ordinance to effectuate [the] gradual elimination of [nonconforming uses] is a matter within a township’s discretion.”  Township of Lyon, p. 3.  However, any municipality that perceives this case as a shift in application of the laches doctrine, or that relies on this approach too heavily in exercising its “discretion” does so at its own peril.

 Equal Protection

             The “equal protection clauses of the Michigan and United States constitutions provide that no person shall be denied the equal protection of the law.”  Lima Twp v Bateson, 302 Mich App 483, 503; 838 NW2d 898 (2013); see also US Const, Am XIV; Const 1963, art 1, § 2.  The “Equal Protection Clause requires that all persons similarly situated be treated alike under the law.”  Id.  A so-called “’class of one’ may initiate an equal protection claim by alleging that he or she ‘has been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment’”  Lima Twp, 302 Mich App at 503.  In the Sixth Circuit, “[a] ‘class of one’ plaintiff may demonstrate that a government action lacks a rational basis in one of two ways: either by negativing every conceivable basis which might support the government action or by demonstrating that the challenged government action was motivated by animus or ill-will.’”  Warren v City of Athens, 411 F3d 697, 710-711 (6th Cir 2005) (emphasis added).  Accordingly, even if an ordinance violator is unable to satisfy the elements of laches or estoppel, a failure on the part of a municipality to enforce its ordinances equally could still lead to liability for the municipality on an equal protection claim.

 Summary

             As zoning enforcement officers decide which violations to enforce, and which not to enforce, and as complaints mount from residents in areas where nonconforming uses may have been tolerated as “out of sight out of mind,” in Township of Lyon the Court of Appeals appears to have expressed a willingness to afford a municipality a certain amount of discretion in making these decisions.  However, in exercising this “discretion,” a very real potential for liability on an equal protection claim exists if the violator is able to establish that the municipality has treated him (or her) differently from others similarly situated and that the municipality is motivated by animus or ill will.  City of Athens, 411 F3d at 710.  Accordingly, while potentially helpful to a municipality in seeking to enforce ordinances not previously enforced, Township of Lyon could, potentially, also suggest an unwarranted sense of security in the exercise of governmental discretion.

Matthew W. Heron is an attorney with the law firm of Cummings, McClorey, Davis & Acho, P.L.C. where he focuses his practice on dispute avoidance, condominium law, commercial litigation, commercial real estate, land use, large contractual disputes, and title litigation. He has extensive litigation and trial experience in state and federal courts involving commercial litigation issues and real estate matters.  He can be reached at (734) 261-2400 or mheron@cmda-law.com.  You can also follow him on Twitter at @mwheron75.