DENNIS DUBUC V DEPT OF ENVIRONMENTAL QUALITY
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
DENNIS DUBUC and CAROL DUBUC,
UNPUBLISHED
July 15, 2008
Plaintiffs-Appellees,
No. 277420
Court of Claims
LC No. 05-000105-MZ
v
DEPARTMENT OF ENVIRONMENTAL
QUALITY,
Defendant-Appellant.
Before: Sawyer, P.J., and Jansen and Hoekstra, JJ.
PER CURIAM.
Defendant appeals by leave granted an order of the circuit court granting partial summary
disposition in favor of plaintiffs. We affirm and remand.
In 2002, plaintiffs applied for a permit under the Wetlands Protection Act, MCL
324.30301 et seq. to fill wetlands on their property located in Kalkaska County. The property is
a 1.73-acre lot in a residential neighborhood. Plaintiffs intended to build a home on the lot.
Defendant denied the permit. Plaintiffs filed the instant action, seeking damages on a theory of a
taking of real property. Plaintiffs’ complaint alleged both a categorical taking and a regulatory
taking under the balancing test of Penn Central Transportation Co v New York City, 438 US
104; 98 S Ct 2646; 57 L Ed 2d 631 (1978). The trial court granted defendant partial summary
disposition, dismissing the categorical taking claim. This decision is not before us on this
appeal. Thereafter, the trial court granted summary disposition in favor of plaintiffs on the
regulatory taking claim on the issue of liability. The trial on damages was stayed pending the
outcome of this appeal.
A trial court’s grant of summary disposition is reviewed de novo to determine whether
the prevailing party was entitled to judgment as a matter of law. Maiden v Rozwood, 461 Mich
109, 188; 597 NW2d 817 (1999). In reviewing a motion brought under MCR 2.116 (C)(10), we
evaluate the evidence actually proffered in support or opposition of a claim to determine whether
there is a genuine issue of material fact to be presented to the jury or whether the moving party is
entitled to judgment as a matter of law. Id. at 119-121.
The Michigan Supreme Court described the Penn Central balancing test in K & K
Constr, Inc v Dep’t of Natural Resources, 456 Mich 570, 577; 575 NW2d 531 (1998), as
follows:
-1-
In . . . the balancing test, a reviewing court must engage in an “ad hoc,
factual inquir[y],” centering on three factors: (1) the character of the
government’s action, (2) the economic effect of the regulation on the property,
and (3) the extent by which the regulation has interfered with distinct, investmentbacked expectations.
Before considering these factors, however, it must be determined which parcel or parcels are to
be considered in determining if a taking has occurred:
The first step in our analysis is to determine which parcel or parcels
owned by the plaintiffs are relevant for the taking inquiry. The determination of
what is referred to as the “denominator parcel” is important because it often
affects the analysis of what economically viable uses remain for a person’s
property after the regulations are imposed. Plaintiffs urge us to focus our analysis
only on parcel one, while defendant argues that we must look at all four of
plaintiffs’ parcels as a single unit.
One of the fundamental principles of taking jurisprudence is the
“nonsegmentation” principle. This principle holds that when evaluating the effect
of a regulation on a parcel of property, the effect of the regulation must be view
with respect to the parcel as a whole.
***
This Court has previously found the nonsegmentation principle applicable
to two adjoining parcels of property with unity of ownership. [K & K, supra at
578-579.]
The determination of the appropriate denominator parcel, as K & K, supra at 580, explains, is
factual in nature:
Determining the size of the denominator parcel is inherently a factual
inquiry. As explained in Ciampitti v United States, 22 Ct Cl 310, 318-319 (1991):
“Factors such as the degree of contiguity, the dates of acquisition, the
extent to which the parcel has been treated as a single unit, the extent to which the
protected lands enhance the value of remaining lands, and no doubt many others
would enter the calculus. The effect of a taking can obviously be disguised if the
property at issue is too broadly defined. Conversely, a taking can appear to
emerge if the property is viewed too narrowly. The effort should be to identify
the parcel as realistically and fairly as possible, given the entire factual and
regulatory environment.
Defendant argues that the trial court misapplied the nonsegmentation principle in looking only to
the single lot at issue here as the denominator parcel. We disagree.
Defendant argues, somewhat disingenuously, that the proper denominator parcel is the
entire collection of seventeen parcels that plaintiffs previously owned in the vicinity. Defendant,
-2-
however, conveniently ignores the fact that plaintiffs never owned all of these parcels at the same
time. That is, it is not the case, as defendant would seem to like us to infer, that plaintiff once
owned a larger tract of land and thereafter subdivided it into seventeen parcels, with the subject
parcel being the last to be developed. Were this the situation, it would certainly weigh heavily in
defendant’s favor—the entire point of the nonsegmentation principle, as the Court in K & K
explained, is to prevent a developer from developing and selling off all but the affected portion
of a larger parcel and then claim that his (remaining) property has no economic value because of
regulatory taking.
But K & K and Ciampitti also warn against looking at too broad of a parcel as that may
disguise the effects of a regulatory taking. That is precisely what defendant would have us do
here. Defendant’s argument conveniently overlooks the fact that plaintiffs bought and sold these
parcels in various individual transactions over the course of more than fifteen years, beginning
with the purchase of a parcel on Hoiles Drive in 1985 upon which plaintiffs’ personal residence
stands. While it does appear that some of the seventeen parcels were originally part of a larger
parcel that was subdivided, it would appear both that it was a previous owner that had platted the
subdivisions and that plaintiffs had not bought the parcels as a group. Indeed, Dennis Dubuc’s
affidavit reflects purchases occurring in seven different years. In fact, according to the Dubuc
affidavit, after 1994 plaintiffs only owned the parcel upon which their personal residence sits
until the purchase of the parcel in 2001 that is the subject of this appeal. Furthermore, there is a
limited degree of contiguity (some, but not all, of the parcels are contiguous) and, while
presumably at some point in the past all were part of the same parcel, that is not the case at the
time the subdividing began and plaintiffs began purchasing and developing the various lots.
In short, none of the factors identified in K & K and Ciampitti are present here with
respect to the subject parcel. Plaintiffs acquired it after having divested themselves of all the
remaining parcels in the area (save for their personal residence), it was never part of a larger
parcel owned by plaintiffs, and although it is contiguous with some parcels that plaintiffs had
previously owned, it is not contiguous with a parcel that plaintiffs owned contemporaneously
with the subject parcel.
Indeed, to accept defendant’s argument, we would have to create a rule that the
appropriate “denominator parcel” should include all parcels that the landowner ever owned in the
area even if not at the same time. Such a rule would create a disincentive to a developer ever
revisiting an area that they previously had developed lest they inadvertently create a larger
“denominator parcel.” This is not the purpose served by the nonsegmentation rule. By keeping
in mind that the nonsegmentation rule is designed to prevent the owner of a larger parcel from
creating a taking where none otherwise exists by subdividing the larger parcel in such a way that
the wetlands are isolated into a smaller parcel that is thus taken, we see that the rule has no
application here. Plaintiffs simply did not isolate a portion of their larger property so as to create
a taking.
For these reasons, we conclude that the trial court did not improperly overlook the
appropriate application of the nonsegmentation principle. Rather, it has no applicability here.
Simply put, the appropriate denominator parcel is the single lot at issue here.
Having determined that the parcel itself is the appropriate denominator parcel, we may
now turn our attention to the three-prong balancing test. This Court, in K & K Constr, Inc v
-3-
Dep’t of Environmental Quality, 267 Mich App 523, 529; 705 NW2d 365 (2005) (K & K II),
restated the test as follows:
Stated another way, if the land-use regulation, like traditional zoning and
wetland regulations: (1) is comprehensive and universal so that the private
property owner is relatively equally benefited and burdened by the challenged
regulation as other similarly situated property owners, and (2) if the owner
purchased with knowledge of the regulatory scheme so that it is fair to conclude
that the cost to the owner factored in the effect of the regulations on the return on
investment, and (3) if, despite the regulation, the owner can make valuable use of
his or her land, then compensation is not required under Penn Central.
With respect to the character of the government action (Penn Central) or the equally
benefited burdened (K & K II) factor, this Court in K & K II, supra at 562-563, concluded that
the far-reaching general applicability of the WPA weighs heavily against the finding of a
regulatory taking. But, we agree with the trial court that the remaining factors weigh in favor of
finding that a taking has occurred. With respect to the investment-backed expectations (Penn
Central) and whether plaintiffs purchased with the knowledge of the regulatory scheme (K & K
II), it is true that the WPA was in place well before plaintiffs purchased the parcel. While a
factor to be considered, the fact that property was acquired after the regulatory scheme went into
place alone does not resolve the inquiry in favor of defendant. K & K II, supra at 555. Here, the
parcel is located in a residential area, with houses on either side, in an environment where
defendant had granted similar permits in the past, including for the parcels on either side of the
subject property. It was reasonable for plaintiffs to conclude that the subject parcel would be
similarly treated and a permit issued.
Finally, there is the factor of the economic impact of the regulation (Penn Central), or as
K & K II phrases it, whether the owner can make valuable use of the land despite the regulation.
Plaintiffs’ expert appraiser opined that, absent the regulation, the parcel was worth $27,500 and,
with the regulation (i.e., denial of the permit), the parcel was unmarketable. Defendant
essentially presents two arguments on this issue. First, defendant blatantly misrepresents the
opinion of plaintiffs’ appraiser. In its brief, defendants claims that plaintiffs’ appraiser found
that the lot has a value of $27,500 if the lot was undevelopable, a $7,500 increase over the
purchase price. In fact, plaintiffs’ appraiser opined that the lot was worth $27,500 if it was
developable and worthless if it remained undevelopable due to the permit denial.
Defendant’s second argument is even less persuasive. Defendant argues that the opinion
of its expert should be accepted. But its expert based his opinion on the diminution of the value
of all of the parcels in the area that plaintiffs ever owned. That is, it was based upon the
presumption that all seventeen parcels constitute the appropriate denominator parcel, an
argument that we have rejected. Moreover, that expert’s opinion stated that the overall value of
the parcels was $1,080,000 if the subject parcel is buildable, but only $1,030,000 if the subject
parcel remains unbuildable. In other words, defendant’s expert would seem to imply that the
difference in value to the parcel is $50,000, even more so than that given by plaintiffs’ expert.
In sum, we agree with the trial court that the effect of the regulation is to deny plaintiffs
the complete economic use of the land.
-4-
For the above reasons, we conclude that the trial court did not err in concluding that there
was a regulatory taking and granting summary disposition in favor of plaintiffs on the issue of
liability. Therefore, the matter may proceed to trial on the issue of damages.
Affirmed and remanded to the trial court for further proceedings consistent with this
opinion. We do not retain jurisdiction. Plaintiffs may tax costs.
/s/ David H. Sawyer
/s/ Kathleen Jansen
/s/ Joel P. Hoekstra
-5-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
