TWP OF MAYFIELD V CITY OF LAPEER
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STATE OF MICHIGAN
COURT OF APPEALS
TOWNSHIP OF MAYFIELD,
UNPUBLISHED
March 7, 2000
Plaintiff-Appellant,
and
JERRY E. TATE, BEVERLY A. TATE, RUSSELL
E. DARBEE, LINDA M. DARBEE, and PATRICIA
LAND,
Plaintiffs,
v
No. 212714
Lapeer Circuit Court
LC No. 96-02267 CK
CITY OF LAPEER,
Defendant-Appellee.
Before: Cavanagh, P.J., and Doctoroff and O’Connell, JJ.
O’CONNELL, J. (dissenting).
I respectfully dissent. I would conclude that the township has standing to bring the instant action
because it provided a franchise to defendant allowing defendant to sell sewer and water services to
residents of the township. As the majority correctly notes, a franchise tendered to a defendant to
provide public utility services constitutes a contract between the body offering the franchise and the
defendant providing the services. Constantine v Michigan Gas & Electric Co, 296 Mich 719, 728;
296 NW 847 (1941), quoting Lansing v Michigan Power Co, 183 Mich 400, 410-411; 150 NW
250 (1914). The majority concludes that this does not confer standing on the township because the
township has not alleged a breach of the franchise agreement. However, the township does claim that
the rates charged by defendant are unreasonably excessive. This claim arises out of the franchise
agreement and concerns the terms of that agreement. The township is in privity of contract with
defendant and brought an action to challenge defendant’s conduct under that contract. I would
conclude that this a sufficient interest in the outcome of the litigation to confer standing on the township.
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While the individual plaintiffs are not parties to this appeal, I would also conclude that a genuine
question of material fact exists regarding whether the rates were unreasonable. I discuss this issue
because I believe that the township has standing to argue that the rates were unreasonable, and the trial
court found no issue of material fact regarding the reasonableness of the rates. Defendant charges the
township residents one-and-a-half times the normal fee for utility services and also charges an additional
fee in lieu of city taxes. The individual plaintiffs presented an affidavit from an expert witness, who
stated that the fee in lieu of taxes was not customary and may not be reasonable, especially in light of the
fact that the township residents did not receive the same services as did the city residents for their
payment of taxes. Both the trial court and the majority conclude that this expert’s affidavit was too
equivocal to create a genuine issue of material fact, because he stated that the fee in lieu of taxes might
nonetheless be reasonable. However, the expert merely indicated that, if defendant used general city
tax revenue to fund its sewer and water services, then the fee in lieu of taxes might be reasonable in
amounts proportionate to the amount of general city tax revenue used to fund the services. Defendant
did not then present evidence that the fee in lieu of taxes was proportionate to the amount of general city
tax revenue used to fund it sewer and water services. Therefore, no evidence suggests that the fee was
structured in such a way that the expert would consider it reasonable. In the absence of this evidence, I
would conclude that the expert’s affidavit is sufficient to raise a genuine question of material fact
regarding whether the fee was unreasonable.
In reviewing the trial court’s decision to grant a motion for summary disposition under MCR
2.116(C)(10), we must view the documentary evidence in a light favoring the nonmoving party. Radtke
v Everett, 442 Mich 368, 374; 501 NW2d 155 (1993). This Court is liberal in finding a genuine issue
of material fact. Marlo Beauty Supply, Inc v Farmers Ins Group, 227 Mich App 309, 320; 575
NW2d 324 (1998). In light of this standard, I would conclude that a genuine issue of material fact
exists that would prevent entering judgment as a matter of law on the issue of the reasonableness of the
rates. Morales v Auto-Owners Ins Co, 458 Mich 288, 294; 582 NW2d 776 (1998).
Accordingly, I would reverse and remand for further proceedings.
/s/ Peter D. O’Connell
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