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Olsen v. Jude and Reed, LLC

Court of Appeals of Michigan

July 3, 2018

JUDE AND REED, LLC, Appellant.

          Berrien Circuit Court LC No. 16-000059-AA

          Before: Murray, C.J., and Hoekstra and Gadola, JJ.

          GADOLA, J.

         In Docket No 337724, appellant appeals by leave granted the order of the circuit court reversing the determination of the Chikaming Township Zoning Board of Appeals (ZBA) granting appellant's application for a nonuse zoning variance. In Docket No. 337726, appellant appeals as of right the same order of the circuit court. In both appeals, appellant challenges whether appellees[1] are aggrieved parties who may contest the final order of the ZBA. We reverse and remand.


         In 1957, Preston and Doris Sweet platted a 17-lot subdivision near Lake Michigan called the Merriweather Shores subdivision. In the following years, the Sweets conveyed some of the lots to buyers, while retaining other lots. This case involves Lot 6 of the subdivision. Lot 6 has 118 feet of frontage along Huntington Drive, is 82 feet deep, and has a total area of 9, 676 square feet.

         The subdivision is located in Chikaming Township. At the time Merriweather Shores was platted, the township did not have a zoning ordinance. The township thereafter enacted a zoning ordinance in 1964, and in 1981 enacted a new zoning ordinance. The parties agree that at some point after enactment of the 1981 ordinance, Lot 6 was rendered nonconforming because the ordinance required all lots to have a minimum area of 20, 000 square feet for buildability. Regarding nonconforming lots, § 4.02 of the 1981 ordinance provided:

If two or more lots or combination of lots and portions of lots with continuous frontage in single ownership are of record at the time of passage or amendment of this ordinance, and if all or part of the lots do not meet the requirements established for lot width and area, the lands involved shall be considered to be an undivided parcel for the purposes of this ordinance and no portion of said parcel shall be used or sold in a manner which diminishes compliance with lot width and area requirements established by this ordinance, nor shall any division of any parcel be made which creates a lot with width or area less than the requirements stated in this ordinance.

         In 1982, Doris Sweet, as survivor of Preston Sweet, conveyed the remaining lots to herself and to David Sweet as joint tenants with rights of survivorship. The parties do not dispute that in 1989, David Sweet, as survivor of Doris Sweet, conveyed Lots 8 through 10 to unrelated parties but maintained ownership of Lots 6 and 7. In 1996, a prospective buyer, David Zilke, was interested in purchasing Lots 6 and 7 from David Sweet. Combined, Lots 6 and 7 had an area of 19, 352 square feet, and Zilke requested a variance from the 20, 000 square foot minimum for buildability, and from the rear and side setback requirements. The ZBA denied the variance application, and Zilke declined to purchase the property.

         In 1998, the township adopted a new zoning ordinance, which remained in effect at the times relevant to this case. In 2011, the Berrien County Treasurer foreclosed on David Sweet's interest in Lot 7 for nonpayment of property taxes, and T&W Holdings, LLC purchased Lot 7 at a tax foreclosure sale. In 2013, the Berrien County Treasurer foreclosed on David Sweet's interest in Lot 6 for nonpayment of property taxes, and appellant purchased Lot 6 at a tax foreclosure sale.

         Seeking to build a residential cottage on Lot 6, appellant filed an application with Chickaming Township for a nonuse variance under § 4.02(C) of the zoning ordinance. Appellant requested a nonuse dimensional variance under § 14.02, which requires all R-1 lots to have a minimum lot area of 20, 000 square feet and a rear setback of 50 feet. Lot 6 had square footage of 9, 676, and would require a rear setback of 30 feet. Appellant argued that as a nonconforming lot, Lot 6 was eligible for a variance pursuant to § 4.02 and § 4.06 of the zoning ordinance and that without the variance, Lot 6 would be rendered unusable.

         Before the ZBA held a hearing to address appellant's application, the township sent notice to property owners who owned property within a 300-foot radius of Lot 6.[2] At the ZBA hearing, some of the neighboring property owners appeared by counsel to argue against the variance. Following public comment and extensive discussion by the ZBA members, the ZBA voted to approve the variance request.

         Appellees appealed the ZBA's decision to the circuit court, and the circuit court permitted appellant to intervene in the circuit court action. The ZBA moved to dismiss the circuit court action for lack of subject-matter jurisdiction, arguing that appellees lacked standing to challenge the ZBA's decision to grant the variance. Appellant joined the ZBA in the motion. Appellant and the ZBA argued that only an "aggrieved" party could appeal the ZBA's decision and that appellees were not aggrieved because they could not show that they suffered special damages. At the conclusion of the hearing on the motion, the trial court found that appellees had standing to appeal the ZBA decision to the circuit court, explaining:

I find in this circumstance that the Legislature has a scheme that implies it intended to confer standing on these litigants. The Zoning Enabling Act provides, in section 3103, that notice shall be given to persons-all persons who have real property that is assessed within 300 feet of the property that is [the] subject of the request, and it seems to me that in the context of the [appellees] challenging the actions of the Zoning Board of Appeals, I-I must find that this notice requirement implies that the Legislature intended to confer standing to those individuals so as to qualify as aggrieved part[ies] for the purposes of the appeal under 3606. . . . [W]ere this not true . . . only an applicant who's denied a variance would have standing to appeal save . . . they can show themselves to otherwise have a special interest, the door would be open to those individuals. But, again, is that only individuals within the 300 feet, or is that any ole person that can show some other-some other interest . . . . [M]y interpretation is that the Legislature wouldn't intend that result to only confer the-the appeal status, particularly as I said, within the context of the Statute indicating that they must give notice to these folks within 300 feet. And also specifically indicating what that notice has to have when and where written comments will be received concerning the request.

         The circuit court also noted that the ordinance generally required a 50-foot setback for a septic system, and the ZBA provided appellant with a 20-foot variance for the septic system. The circuit court noted, "that seems to me that arguably there may be a special interest with respect to that, particularly with the contiguous properties." The circuit court denied the motion to dismiss, concluding that "given the notice Statute, it seems that . . . [t]he Statute implies an intent to confer standing on [appellees]."

         After further proceedings, the circuit court reversed the ZBA's decision. The circuit court held that the ZBA did not have authority to grant the variance because appellant did not satisfy § 23.04 of the township's zoning ordinance, which permits the ZBA to grant a variance under specific conditions. Specifically, the circuit court found that any hardship was self-created, explaining:

In the instant case, this Court finds that the hardship was self-created. Although [appellant and the ZBA] insist that "it was the passage of time and application of the Zoning Ordinance to the existing lots of record that created the hardship," the analysis in [Johnson v Robinson Twp, 420 Mich. 115; 359 N.W.2d 526 (1984)] does not support that argument. When the 1964 Zoning Ordinance went into effect, Lot 6 was under common ownership and held continuous frontage with Lots 7, 8, 9 and 10 and thus, the lots were deemed as one lot for purposes of the Zoning Ordinance. Accordingly, Lot 6 was not a standalone lot and could not be considered a grandfathered nonconforming lot of record. The Sweets, the prior owners, then violated the Zoning Ordinance when they split Lot 6 and Lot 7 from the remaining lots and as a result, Lot 6 and Lot 7 could not be developed as standalone building sites. Like the plaintiff in Johnson, the zoning ordinance preceded the division of the property . . . . Moreover, it is worth noting that the Owner was a sophisticated buyer who was aware of the limitation on Lot 6 when it purchased the property for $6, 054.00. The property remains available for use in conjunction with an adjacent parcel. Therefore, the Zoning Board of Appeals erred when they granted the variance because the practical difficulty was one that was produced by the Sweets, the Owner's predecessor in title, and accordingly, Section 23.04.D. was not satisfied.

         Appellant claimed an appeal to this Court (Docket No. 337726), challenging the circuit court's determination that appellees were aggrieved parties able to appeal the decision of the ZBA to the circuit court. Appellant also sought leave to appeal the same order of the circuit court (Docket No. 337724), raising additional challenges to the circuit court's ...

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