Continental Paper & Supply Co. v. City of Detroit

545 N.W.2d 657, 451 Mich. 162

• Court: Michigan Supreme Court
• Decided: April 4, 1996
• Docket: 100464, Calendar No. 5
• Status: Published

Opinions

Weaver, J.

The issue before us is whether the City of Detroit is liable under the trespass-nuisance exception to governmental immunity for damages caused by a fire that originated at buildings to which the city did not have title.¹ We hold that the city neither owned nor controlled the buildings and therefore cannot be héld liable under the trespass-nuisance exception to governmental immunity. We reverse the judgment of the Court of Appeals and remand the case for entry of a judgment of dismissal.

On March 12, 1987, Continental Paper & Supply Company, Inc.’s, building was destroyed as the result of a fire set by an arsonist at an adjacent abandoned warehouse complex. Title to this warehouse complex had vested in the State of Michigan because of unpaid taxes. Before the fire, the city had begun taking steps to have the buildings condemned and demolished.² Continental and its insurer filed a tort action for property damage against the city on a theory of trespass-nuisance. The jury entered a verdict of $2,986,000 in favor of plaintiffs. The Court of Appeals³ affirmed the award. This Court then granted leave to appeal.⁴

This Court has recognized a limited trespass-nuisance exception to governmental immunity. Trespass-nuisance is “defined as trespass or interference with the use or enjoyment of land caused by a physical intrusion that is set in motion by the government or its agents and resulting in personal or property damage.” To establish trespass-nuisance the plaintiff must show “condition (nuisance or trespass); cause (physical intrusion); and causation or control (by government).” Hadfield v Oakland Co Drain Comm’r, 430 Mich 139, 169; 422 NW2d 205 (1988).

Two elements, condition and cause, have been established. See Buckeye Union Fire Ins Co v Michigan, 383 Mich 630; 178 NW2d 476 (1970). Thus, the only question before us is whether plaintiffs established control of the warehouses⁵ by the city. The Court of Appeals found that the evidence was “sufficient to allow a jury to determine defendant possessed the requisite ‘control’ over the premises such that defendant could be found liable for failing to abate the nuisance.”⁶ We disagree.

Plaintiffs’ theory of control is twofold. First, plaintiffs allege that the city “as a matter of reality” was the owner of the property. Second, plaintiffs contend that the city was in control of the warehouses by virtue of its efforts to have the buildings demolished.

We reject plaintiffs’ first theory of control⁷ because the city was not “as a matter of reality” the owner of the property. The record owners of the warehouse complex located at 2915 West Hancock Street were Clara K. Berger, A. Victor Bizer, and Samuel Berger, cotrustees (hereafter the Bergers). The Bergers apparently abandoned their property sometime in the early 1980’s. Because the Wayne County 1982 taxes were not paid, the property was offered at the annual county tax sale on May 7, 1985.⁸ The property was neither purchased nor redeemed. Therefore, title automatically vested in the state on May 6, 1986, subject to an additional six-month redemption period⁹ and the procedures set forth in Dow v Michigan, 396 Mich 192; 240 NW2d 450 (1976).

On November 12, 1986, the City of Detroit filed an application for conveyance of all properties located in the city that the state had acquired during the year. On January 13, 1987, the state’s deed to the property was recorded. The fire giving rise to this lawsuit occurred on March 12, 1987. On December 26, 1987, the state conducted the due process hearing required by Dow v Michigan, which extinguished any other person’s property rights in the warehouse complex. On April 1, 1988, the state conveyed title to the property to the City of Detroit.

Michigan’s Legislature has provided detailed requirements for transfer of real property,¹⁰ none of which took place before the fire. Despite plaintiffs’ contention that at the time of the fire “all that remained was the paperwork” to effect a transfer of title to the city from the state, this Court will not accept plaintiffs’ invitation to overturn centuries of certainty in real estate transactions.

Having rejected plaintiffs’ first theory of control, we now evaluate plaintiffs’ second theory of control. We hold that plaintiff did not establish control by pointing to the city’s efforts to have the buildings demolished.

2 Restatement Torts, 2d, § 387, p 297 states:

■ An independent contractor or servant to whom the owner or possessor of land turns over the entire charge of the land is subject to the same liability for harm caused to others, upon or outside of the land, by his failure to exercise reasonable care to maintain the land in safe repair as though he were the possessor of the land.

We hold that it is this level of absolute control that the city must exercise in order to be liable under a theory of trespass-nuisance for property it does not own or possess.

On August 8, 1986, the city inspected the property and found that the property contained buildings that were in a dangerous and dilapidated condition. On October 10, 1986, the city issued a dangerous-building notice to the Bergers. On October 30, 1986, an administrative hearing was held, and the hearing officer recommended that the Detroit City Council order demolition of the buildings. On December 4, 1986, the city council directed the Bergers to demolish the buildings and directed the city engineering department to let a contract for demolition. The city was in the process of bidding when the fire occurred.

Plaintiffs rely on Oxenrider v Gvoic, 340 Mich 591; 66 NW2d 80 (1954), to say that these actions show the city had taken complete control of the abandoned warehouses. In Oxenrider, the plaintiffs adjacent building was damaged when the building owned by the defendant collapsed. This Court found that the owner of the building was not liable for damages caused by the building’s collapse because the city had taken complete control of the building. In Oxenrider, supra at 596-597, this Court found the key issue was “whether defendant was so excluded from possession and control of her property by the action of the city as to relieve her from legal obligation to demolish in whole or in part the dangerous structure.” “ ‘The city had erected a bridge over the sidewalk, had taken out a building permit in its own name, had officially recognized the danger and had negotiated with a licensed wrecking company to the point of accepting its bid and authorizing a contract.’ ” It is significant that in Oxenrider the owner was legally prevented from repairing her building or correcting its dangerous condition. In the instant case the city ordinances do not so restrict the owner. Oxenrider did not hold that the city was in control of the property, only that the owner was relieved of liability because she was not in control of it.

The circumstances in Hadfield v Oakland Co Drain Comm’r, supra, are also strikingly different from the case before us. In both the Hadfield,¹¹ and McCaul¹² cases, a situation was presented where the governmental authority had specifically designed and built a facility to serve a purpose for the government and the individuals of the city.

In this case, the city simply did not use the property. At no point did the city lease the property, collect rents, exclude people from the property, or invite them onto it. Nor did the city in any way prevent the owner from making any legal use of the property. As a result, we find that the city had not taken control of the buildings to the exclusion of all others. Therefore, liability should not be imposed.

Our resolution on this key issue makes it unnecessary to address the other issues raised by appellant. We reverse and remand this suit to the trial court for entry of the appropriate order of dismissal.

Brickley, C.J., and Boyle and Riley, JJ., concurred with Weaver, J.

1 Although the city did not have title to these buildings at the time of the fire, it did obtain ownership of them over a year later.

2 The city was acting under the authority found in Detroit Ordinance 290-H.

3 205 Mich App 404; 521 NW2d 844 (1994).

4 448 Mich 930 (1995).

5 Plaintiffs have never contended that defendant caused the fire.

6 Id. at 410.

7 Control may be found where the defendant creates the nuisance, owns or controls the property from which the nuisance arose, or employs another to do work that he knows is likely to create a nuisance. It may also be found where the governmental defendant is under a statutory duty to abate the nuisance. [Baker v Waste Management of Michigan, Inc, 208 Mich App 602, 606; 528 NW2d 835 (1995) (citation omitted).]

8 The sale was made pursuant to the authority of MCL 211.61 et seq.-, MSA 7.105 et seq.

9 The redemption period is governed by MCL 211.140; MSA 7.198.

10 See MCL 565.1 et seq.\ MSA 26.521 et seq.

11 In Hadfield, the Court was presented with a plaintiff whose crops were damaged because of overflowing drains that were placed in the ground by the Oakland County Drain Commissioner. This plaintiff, along with other individuals, had complained on numerous occasions to the drain commissioner about the effectiveness of the drains. Periodically, the drains would fill with mud and overflow, flooding the farmer’s fields. This Court found that there was evidence of a trespassory nuisance.

12 In a companion case, McCaul v Lake Odessa Village, a similar action was presented. Lake Odessa Village had established a water treatment sewage plant next to the plaintiffs land. This plant was defective, and sewage flowed from the plant onto the plaintiff’s land, causing damage. This Court found that there was sufficient evidence of a trespassory nuisance.