Cornerstone Investments, Inc v. Cannon Township

585 N.W.2d 41, 231 Mich. App. 1

• Court: Michigan Court of Appeals
• Decided: October 23, 1998
• Docket: Docket 197297
• Status: Published

Opinions

Reilly, J.

Plaintiff appeals as of right from an order denying its motion for summary disposition and granting defendants’ motion for summary disposition. We reverse and remand.

This case arises out of plaintiff’s application to have a parcel of its property in defendant Cannon Township rezoned as a planned unit development (pud) district to allow for the development of seventeen single-family condominium units to be named, collectively, Egypt Valley Woods. The facts are essentially undisputed. In December 1991, defendant Cannon Township Planning Commission adopted, and the township board approved, an “Escrow Application Policy” designed to shift the cost of processing applications for commission action from the township to the applicants. The policy provided that a basic application fee would cover the costs associated with regular commission meetings and providing legal notice for a public hearing. All other expenses incurred in processing an application were to be paid directly from an escrow account. These expenses could include, but were not limited to, costs associated with subcommittee meetings, additional public hearings, and review by the township attorney, planner, and engineer. Under the policy, the initial escrow deposit was $1,000. Additional escrow funds could be requested by the commission at its discretion. The policy further provided that, after all the expenses were covered, any excess funds in the escrow account would be returned to the applicant without interest. Finally, no building permit or final township board approval would be granted until all escrow funds necessary to cover expenses were paid in full. On July 27, 1993, the township board adopted a “PUD Rezoning Application and Review Process” incorporating the 1991 Escrow Application Policy.

On October 20, 1993, plaintiff submitted an application to the commission for a zoning ordinance amendment with respect to the Egypt Valley Woods property, which plaintiff sought to have rezoned from “agricultural and suburban residential” to a pud district. Plaintiff paid a $350 application fee and made a $1,000 escrow deposit. Plaintiff made the escrow deposit under protest, contesting the legality of defendants’ Escrow Application Policy. Pursuant to the township’s ordinance concerning pud districts, the establishment of a pud district was subject to several considerations regarding the effect the proposed pud district would have on adjacent land uses and public safety. An applicant was required to submit a PUD plan containing, among other things, a map showing all proposed land uses and drawings of proposed buildings. Initially, the commission determined that plaintiff’s PUD plan was insufficient. However, after various amendments were made to the development plan, and additional deposits were made to the escrow account, the commission eventually approved plaintiff’s application. On June 13, 1994, the township adopted PUD ordinance 94-8Z, which rezoned the Egypt Valley Woods property from agricultural and suburban residential to a PUD district. Subsequently, plaintiff was notified that it owed the township additional funds for the application. When plaintiff refused to pay, the township informed plaintiff that no building permit would be issued for Egypt Valley Woods until the unpaid deposit was remitted.¹

Plaintiff then filed a complaint requesting (1) a declaratory judgment that the escrow policy is illegal and unenforceable, (2) an injunction enjoining defendants from enforcing the escrow policy and from withholding plaintiff’s building permit pursuant to the policy, and (3) restitution of the escrow deposit and payments, interest, and attorney fees. After the completion of discovery, plaintiff and defendants each filed motions for summary disposition pursuant to MCR 2.116(C)(10). The trial court, in granting defendants’ motion and denying plaintiff’s motion, ruled (1) that the township was authorized to adopt the PUD Rezoning Application and Review Process and the Escrow Application Policy, and (2) that the escrow policy used by defendants was fair and reasonable.

On appeal, plaintiff makes several arguments challenging the trial court’s decision to grant defendants’ motion for summary disposition. We review de novo a trial court’s decision to grant a motion for summary disposition. Pinckney Community Schools v Continental Casualty Co, 213 Mich App 521, 525; 540 NW2d 748 (1995). Summary disposition may be granted under MCR 2.116(C)(10) when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Foster v Cone-Blanchard Machine Co, 221 Mich App 43, 48; 560 NW2d 664 (1997).

First, plaintiff argues that the township’s escrow policy is invalid because it is not authorized by any statutory or constitutional grant of power. We agree. Townships have no inherent powers, but have only those limited powers conferred on them by the Legislature or by the state constitution. Hanselman v Wayne Co Concealed Weapon Licensing Bd, 419 Mich 168, 187; 351 NW2d 544 (1984); Detroit Edison Co v Richmond Twp, 150 Mich App 40, 47-48; 388 NW2d 296 (1986). In addition to the powers expressly granted them, townships possess those powers necessarily or fairly implied in or incident to their express powers. See Const 1963, art 7, § 34; Independence Twp v Roy, 12 Mich App 107, 109; 162 NW2d 339 (1968). Pursuant to Const 1963, art 7, § 34, the powers conferred upon townships are to be liberally construed in their favor. Natural Aggregates Corp v Brighton Twp, 213 Mich App 287, 294-295; 539 NW2d 761 (1995). The Township Rural Zoning Act (trza.), MCL 125.271 et seq., MSA 5.2963(1) et seq., is the basic enabling act granting townships the power to pass zoning ordinances. Detroit Edison, supra at 48. The TRZA gives township boards very broad and general authority to zone “to promote public health, safety, and welfare.” MCL 125.271(1); MSA 5.2963(1)(1); Delta Charter Twp v Dinolfo, 419 Mich 253, 263; 351 NW2d 831 (1984); Detroit Edison, supra at 49.

Pud districts are authorized under § 16c of the TRZA, which provides that pud regulations established by a township must specify “[t]he conditions which create planned unit development eligibility, the participants in the review process, and the requirements and standards upon which applicants will be judged and approval granted.” MCL 125.286c(4)(b); MSA 5.2963(16c)(4)(b). While this language certainly implies that townships are authorized to establish “conditions” for PUD “eligibility” and “requirements” for pud “approval,” it does not specifically address funding for township actions or provide any express authority for defendants’ escrow policy. The permissible methods of funding township actions taken pursuant to the trza are addressed in § 25 of the act:

For the purpose of providing funds to carry out this act, the township board of an organized township may require the payment of reasonable fees for zoning permits as a condition to the granting of authority to erect, alter, or locate dwellings, buildings, and structures, including tents and trailer coaches, within a zoning district established under this act, both for the purpose of obtaining advance information as to building operations, locations, and proposed uses, and for the purpose of defraying the cost, in whole or in part, of the enforcement of this act in the township, and if the board has incurred or expects to incur any expense of public funds in carrying out this act, shall, for that purpose, in addition to the revenues of the fees, levy a sufficient tax, in addition to other taxes now authorized by law, upon the real and personal property subject to taxation in the township, and the taxes shall be collected as other taxes are collected. When the taxes or fees are collected, they shall be applied to the payment of any indebtedness incurred by the township subject to this act, and to no other purpose. However, the taxes assessed, levied, and collected shall not cause the limit of taxes established by law to be exceeded. [MCL 125.295; MSA 5.2963(25) (emphasis added).]

Section 25 expressly authorizes townships to charge “reasonable fees for zoning permits” as a condition of granting authority to a landowner to locate buildings within a particular zoning district, and the charging of such fees serves the purposes of (1) obtaining advance information about the proposed land uses and (2) defraying the costs of the enforcement of the trza, which includes the pud review process addressed in § 16c.

Plaintiff contends that the term “zoning permits,” as used in § 25 of the trza, refers to the building permits, which a township may require before granting a landowner permission to build a particular structure. Accordingly, plaintiff argues that § 25 does not authorize the township’s escrow policy, because the township charges an additional fee for building permits. Zoning regulations and building regulations are distinct areas of law. See 7A McQuillin, Municipal Corporations (3d ed), § 24.504, p 91. The primary purpose of building permits is to obtain compliance with the rules governing the construction, use, and occupation of particular buildings. See MCL 125.1504; MSA 5.2949(4), MCL 125.1510(6); MSA 5.2949(10)(6); see also 9A McQuillin, Municipal Corporations (3d ed), § 26.200, pp 171-172. In contrast, zoning ordinances are a mechanism for regulating land use by geographic area. See Gackler Land Co, Inc v Yankee Springs Twp, 427 Mich 562, 574, n 2; 398 NW2d 393 (1986); Frericks v Highland Twp, 228 Mich App 575, 582; 579 NW2d 441 (1998); Natural Aggregates, supra at 298; see also MCL 125.271; MSA 5.2963(1). Because § 25 specifically authorizes “zoning permits” (as opposed to “building permits”)² and speaks of a township granting authority to “locate” buildings, plaintiff’s argument that the permits referred to in § 25 are really “building permits” is not well taken.

Nowhere in the trza is the term “zoning permit” statutorily defined. Unless defined in the statute, every word or phrase of a statute should be understood according to the common and approved usage of the language, taking into account the context in which the words are used. MCL 8.3a; MSA 2.212(1); Yaldo v North Pointe Ins Co, 217 Mich App 617, 621; 552 NW2d 657 (1996). When the words are not defined in the statute, a court may consult dictionary definitions. Id. Webster’s New Collegiate Dictionary (1977) defines “permit,” in part, as “a written warrant or license granted by one having authority.” Here, the goal of defendants’ pud Rezoning Application and Review Process is to obtain advance information about proposed land uses before deciding whether to grant approval for such uses, including the location of buildings. When the township board decides to approve a pud application, it does so by amending the zoning ordinance. Because an amendment of the zoning ordinance made at the request of an applicant seeking pud rezoning constitutes written permission to engage in a particular land use, the township is essentially granting a “zoning permit” when it so amends its zoning ordinance.

Although we are not persuaded by plaintiff’s “zoning permit” argument, we nevertheless conclude that the township’s method of funding its PUD Rezoning Application and Review Process oversteps its legislative grant of power. Section 25 of the trza specifically lists two methods a township may employ to raise revenue to fund actions taken pursuant to the trza. The first is by charging “reasonable fees for zoning permits,” and the second is by levying a property tax. See MCL 125.295; MSA 5.2963(25). On the facts of this case, we need only address the first option. Our concern is whether the word “fees” encompasses the sort of open-ended escrow deposits the township requires under its Escrow Application Policy. Because the term “fee” is not defined in the trza, we again turn to dictionary definitions for help in understanding the common and approved usage. Yaldo, supra at 621. Webster’s New Collegiate Dictionary (1977) defines “fee” as “a fixed charge.” Similarly, Black’s Law Dictionary (6th ed), citing Fort Smith Gas Co v Wiseman, 189 Ark 675; 74 SW2d 789 (1934), defines “fee,” in part, as “[a] charge fixed by law for services of public officers or for use of a privilege under control of government.” Finally, the Michigan Supreme Court has explained, albeit in a different context, that a fee, understood in its usual and ordinary sense, “is usually a fixed charge, a prerequisite charged as a recompense for labor and trouble.” People v Goulding, 275 Mich 353, 357; 266 NW 378 (1936). On the basis of the foregoing definitions, we construe the word “fees” as used in § 25 of the trza to mean a fixed or established charge.

Here, the township’s Escrow Application Policy is structured to allow the commission and its agents unfettered discretion in determining the costs accumulated in association with each individual application for PUD rezoning. Under the township’s policy, the cost of an application for PUD rezoning to any particular applicant is, essentially, whatever amount the commission deems to have been “necessary” after the application has already been processed. Accordingly, rather than charging an established amount, the township has created a system under which the ultimate price for the issuance of a zoning permit is inherently unpredictable. We conclude that this method of funding differs from that contemplated by the Legislature when it chose to expressly authorize the collection of “reasonable fees” in § 25 of the trza. Therefore, we hold that the township’s Escrow Application Policy is not authorized by a statutory or constitutional grant of power.

Because we have concluded that the township’s Escrow Application Policy is not authorized by the trza, we need not address plaintiff’s argument that the township’s escrow policy constitutes an illegal delegation of authority to administrative officials, or its argument that the escrow policy was never adopted as part of the township’s zoning ordinance.

We reverse and remand for entry of an order granting plaintiff’s motion for summary disposition. The trial court shall consider the further relief requested by plaintiff. We do not retain jurisdiction.

Cavanagh, J., concurred.

1 Defendant Andy Sparks is the township’s building inspector. As such, he is responsible for issuing building permits in the township.

2 Before March 1, 1979, § 25 of the trza used the term “building permits.” It was changed to “zoning permits” with the passage of 1978 PA 637.