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Homeowners Association May Be Liable to Adjoining Lot Owners for Failing to Maintain Seawall and Water Channel

            In Residents of Fresh Air Park Sub v Pointe Rosa Homeowners Assoc, unpublished per curiam opinion of the Court of Appeals, issued September 22, 2021 (Docket No. 355011), the Michigan Court of Appeals dealt with a situation where adjoining property owners sued a homeowners association for failing to maintain a seawall and channel waterway.  The Court held that (1) the plaintiff lot owners had sufficiently pled a nuisance claim against the homeowners association, and individuals living in that subdivision, regarding the homeowners association’s failure to maintain the seawall and channel, and (2) that the plaintiff lot owners had properly pled a claim for negligence against the homeowners association for failing to maintain the seawall and channel.  The Court of Appeals found that the trial court erred when it dismissed the nuisance and negligence claims.  Specifically, notwithstanding the plain language of the water easement, the Court of Appeals found that the homeowners association owed a separate duty to the plaintiffs not to cause damage to their property.

Background

            Plaintiffs are property owners in the Fresh Air Park Subdivision (“Fresh Air Park”) who sued neighboring homeowners in Pointe Rosa Subdivision No. 1 (“Pointe Rosa”), as well as the Pointe Rosa Homeowners Association, for nuisance, negligence, and declaratory relief regarding their failure to maintain a seawall running along a manmade canal. The seawall is state-owned. On the other side of the seawall is Elm Lane, a private road for plaintiffs to access their homes. At the heart of plaintiffs’ case is that Elm Lane and their homes have been subject to erosion and damage due to water intrusion from the failing seawall.

            Previously, however, the property rights to the canal and seawall were decided in the case of Fry v Kaiser, 60 Mich App 574; 232 NW1d 673 (1975). The Fry Court stated that “[d]efendants, dominant lot owners, have an easement right of way to use the channels for navigational purposes. They must maintain channel number one and the sea walls abutting it.” Id. at 6 (citing Fry, 60 Mich App at 580).

            Plaintiffs filed the instant action in 2019, claiming that the Pointe Rosa Homeowners Association allowed the seawall to fall into a state of disrepair such that infiltrating water was causing damage to plaintiffs’ homes and their access road. The trial court dismissed plaintiffs’ nuisance claim, focusing on Pointe Rosa’s limited easement interest in the channel for navigational purposes. It reasoned that the plaintiffs could not prove that defendant homeowners owned or controlled the seawall. While the seawall was state-owned, the land underneath the channel was owned by the developer, who granted Pointe Rosa a navigational easement interest. The trial court concluded that for the limited purpose of navigation, plaintiffs had neither demonstrated that the seawall was critical to the use of the channel for navigation, nor shown that its current condition impaired the navigational easement. The plaintiffs appealed the trial court’s decision to dismiss the case.

The Property Owners Set Forth a Valid Claim for Nuisance Against the Homeowners Association

            Ruling that the trial court erroneously dismissed the nuisance claim, the Fresh Air Park Court explained that the trial court should have analyzed whether the failure to maintain the seawall, and resulting damage, could be deemed a nuisance, that was separate and apart from the water easement. The Court of Appeals explained that “a private nuisance is a non-trespassory invasion of another’s interest in the private use and enjoyment of land.” Id. at 8 (citation omitted). It went on to state that a basis for nuisance liability would arise if:

(a) the other has property rights and privileges in respect to the use or enjoyment interfered with, (b) the invasion results in significant harm[,] (c) the actor’s conduct is the legal cause of the invasion, and (d) the invasion is either (i) intentional and unreasonable, or (ii) unintentional and otherwise actionable under the rules governing liability for negligent, reckless, or ultrahazardous conduct.

Id. at 10 (citations omitted).

            In addition, nuisance liability required that the plaintiffs establish possession and control “of the land on which the condition allegedly causing the nuisance exists or the challenged activity takes place.” Sholberg v Truman, 496 Mich 1, 7; 852 NW2d 89 (2014).

            Reviewing the issues settled in Fry, the Court turned to the dedicatory language establishing the easement interest, finding that their property interest was not merely limited to navigational purposes. Moreover, the Fry Court held that the Pointe Rosa “must maintain channel number one and the sea walls abutting it.” Fry, 60 Mich App at 580 (emphasis added). This easement interest sufficiently demonstrated that the Pointe Rosa Homeowners Association, and its members, had possession and control of the condition that was unreasonably interfering with Plaintiffs’ use and enjoyment of their homes and Elm Lane.

            Under a nuisance theory, in further support of the causal connection between Pointe Rosa Homeowners Association’s failure to maintain and repair the seawall and the damage to the plaintiffs, the Court of Appeals considered plaintiffs’ engineering evaluation, which found that a portion of the timber seawall was nearly gone and that a combination of rising water levels and corrosion of the steel seawall was causing water to permeate through the wall and flood Elm Lane periodically, as well as nearby driveways and yards. Furthermore, the plaintiffs supported the fact that their use and enjoyment of Elm Lane and their properties was significantly interfered by the lack of proper seawall maintenance. Plaintiffs presented evidence that flooding made travel on their access road unsafe, that it created a health and safety risk for residents, and that it led to a decline in property values. Determining that the plaintiffs presented an abundance of factual evidence to support their theory in nuisance, the Court found that the plaintiffs’ claims should be allowed to proceed in the trial court.

The Property Owners Set Forth a Valid Claim for Negligence Against the Homeowners Association

            In Michigan, the elements of a negligence claims are as follows:

(1) the defendant owed the plaintiff a legal duty, (2) the defendant breached the legal duty, (3) the plaintiff suffered damages, and (4) the defendant’s breach was a proximate cause of the plaintiff’s damages. Chelik v Capitol Transp, LLC, 313 Mich App 83, 89; 880 NW2d 350 (2015). [Nyman v Thomson Reuters Holdings, Inc, 329 Mich App 539, 552; 942 NW2d 696 (2019).]

Residents of Fresh Air Park Subdivision at pp. 7–8.

            The Court of Appeals focused on whether the homeowners association owed a duty of care to the adjoining property owners to maintain the seawall and water easement.  While the trial court determined that a duty of care did not exist, because it was a contract issue, the Court of Appeals determined that the trial court should have determined whether a duty of care existed that was separate and distinct from any contractual obligations under the easement.  The court determined that the property owners pled a valid negligence claim, as the complaint indicated that the homeowners association breached its duty by allowing the seawall to fall into a state of disrepair that caused erosion and damage to plaintiff’s property.  Specifically, the Court of Appeals stated as follows:

This Court further noted that the common law recognizes a landowner’s right to the full enjoyment of his or her land, and liability in tort may be imposed for an interference with the occupation or use of land. In addition, this Court noted that a party to a contract breaches a duty separate and distinct from the contract when it creates a new hazard that it should have anticipated would impose a dangerous condition to third persons…

Id. at 8 (citation omitted)

            In determining that a negligence claim had been properly pled, the Court of Appeals determined that the homeowners association had a duty not to damage the plaintiff’s property, which was separate and apart from any easement rights. Specifically, the Court of Appeals stated that, “defendants’ contractual easement obligations simply do not extinguish their independent common-law duty to exercise reasonable care to avoid harm to plaintiffs or their property.” Id. at 9 (citation omitted)

Conclusion

            The express easement for navigational purposes that was held by the Pointe Rosa Homeowners Association, and its members, did not bar plaintiff’s claims for nuisance and negligence. The Court of Appeals explained that focusing on the enforcement of an easement interest was a flawed approach; rather, the relevant inquiry was whether the homeowners associations, and its members, had a separate duty of care not to damage the plaintiffs’ property.  Accordingly, this case demonstrates the importance of a homeowners association maintaining its common areas, as well as any easements that it is responsible for.  If easements or common areas are under the control of a homeowners association, and the easements or common areas damage property owned by third-parties, the homeowners association may be liable for the damage caused to the adjoining property.  In cases where it is unclear what the maintenance responsibility of the homeowners association is, or if it is unclear whether the homeowners association owns or controls certain property or waterways, it is advisable to get an opinion from a homeowners association attorney in order to properly plan future maintenance and avoid litigation.

        The attorneys of Hirzel Law, PLC focus their practice on condominium and homeowners association law. Our attorneys have extensive litigation and trial experience in state and federal courts involving commercial litigation issues and community association matters. We stand by our clients, offering quality legal representation and promptly responding to our clients’ needs. Contact Hirzel Law online or call 248-986-2921 to learn how our Michigan attorneys can help.

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