PETER S BOSANIC JR V MOTZ DEVELOPMENT INC
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STATE OF MICHIGAN
COURT OF APPEALS
PETER S. BOSANIC, JR., LISA KENDZIORSKIBOSANIC, FRANKIE K. BOSANIC and RILEY
K. BOSANIC by their next friend PETER S.
BOSANIC, JR., MARK NORCROSS, MICHAEL
and MARLENE STRAMPEL, ROBERT and
JULIE GILBREATH, HEIDI HUNTER, DIRK
FRAZIER, ROBERT and SHELLY MARSHALL,
III, MARK A. and DANA M. KROMER,
MATTHEW and CYNTHIA NIXON, STEVEN
and MARY CLISCH, DANIEL L. and KARI K.
ROY, and LUCAS ROY by his next friend KARI
K. ROY,
FOR PUBLICATION
December 4, 2007
9:00 a.m.
Plaintiffs-Appellees,
v
No. 271765
Clinton Circuit Court
LC No. 04-009795-NZ
MOTZ DEVELOPMENT, INC. d/b/a/ MOTZ
HOMES, and THOMAS C. MOTZ,
Defendants/Cross-Defendants/
Third-Party-Plaintiffs-Appellees,
and
MOTZ REALTY CO.,
Defendant,
and
THE CLINTON COUNTY DRAIN
COMMISSIONER, and THE PRAIRIE CREEKGUNDERMAN LAKE DRAIN DRAINAGE
DISTRICT,
Defendants/Cross-Plaintiffs/ThirdParty Plaintiffs-Appellants,
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Advance Sheets Version
and
CLINTON COUNTY ROAD COMMISSION,
Third-Party Defendant-Appellee,
and
STEPHEN-KEYES & ASSOCIATES, INC.,
Third-Party Defendant/Third-Party
Plaintiff,
and
RONALD L. ENGER, P.E.,
Third-Party Defendant.
Before: Owens, P.J., and Bandstra and Davis, JJ.
BANDSTRA, J.
Plaintiffs seek compensation from defendant Clinton County drain commissioner1
because of flooding that damaged their homes following an extraordinarily severe rainfall in
May 2004. They primarily claim that the drain system in their subdivision was seriously
undersized and that this resulted chiefly from a failure, during the design process in the late
1990s, to appropriately measure the acreage near the subdivision from which water would flow
into the system (the "tributary offsite acreage" [TOA]). The other defendants are the developer
and its engineers who assisted in designing and installing the drain system. The drain
commissioner had the statutory authority under the Drain Code, MCL 280.1 et seq., to review
the plans and design of the drain system and allegedly failed to do so appropriately, resulting in
the defective design. At issue on appeal is the motion for summary disposition by the drain
commissioner and the drainage district, which was denied by the trial court.
Defendant contends that summary disposition was warranted because the statute
providing an exception to governmental immunity, MCL 691.1417, does not itself provide a
cause of action, and plaintiffs have not alleged any separate cause of action. Alternatively,
1
The drainage district at issue here is also named as a defendant. However, because all the
allegations of liability are based on the commissioner's performance of his duties, "defendant"
herein refers to the commissioner.
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defendant argues that plaintiffs have failed to state a valid claim regarding the elements required
under the statute (if it provides a cause of action). We conclude that defendant is wrong on the
first issue (the statute providing an exception to immunity does provide a potential cause of
action) but that defendant is correct with respect to the second issue (the statute's requirements
are not satisfied under the facts alleged by plaintiffs). Thus, we reverse the order denying
summary disposition in favor of the drain commissioner and the drainage district and remand for
the entry of an order of summary disposition in their favor.
Basic Facts
The basic facts alleged by plaintiffs2 can be summarized as follows:
• The drain system in the Creekside subdivision where they live is seriously
undersized.
• One of the reasons for that defect was the failure of the developer to appropriately
consider the size and impact of the TOA on that system when the system was designed
and installed in the late 1990s.
• The drain commissioner had an obligation to review the various plans pursuant to
which the drain system was designed and installed.
• The drain commissioner, while recognizing that the lack of appropriate
measurement was a problem in the design process, failed to require the developer to
properly measure the TOA and its impact but instead advised the developer to use an
estimation approach that was improper.3
2
Defendant's motion for summary disposition was based, in part, on MCR 2.116(C)(8) ("The
opposing party has failed to state a claim on which relief can be granted.") For purposes of that
argument, we accept plaintiffs' allegations as if they are true. Adair v Michigan, 470 Mich 105,
119; 680 NW2d 386 (2004); Alan Custom Homes, Inc v Krol, 256 Mich App 505, 508; 667
NW2d 379 (2003). Defendant further based his motion for summary disposition on MCR
2.116(C)(7) ("The claim is barred because of . . . immunity granted by law . . . ."), claiming
governmental immunity. The arguments with respect to MCR 2.116(C)(7) and (8) somewhat
conflate. Defendant's contention is really that plaintiffs have failed to state a claim on which
relief can be granted (MCR 2.116[C][8]) because, under the facts alleged, their claim is barred
because of governmental immunity (MCR 2.116[C][7]), since the exception provision of MCL
691.1417 is not satisfied. Defendant further claimed that summary disposition was appropriate
under MCR 2.116(C)(10), arguing that plaintiffs failed to establish genuine issues of material
fact with respect to some of the elements of MCL 691.1417(3). We need not consider that
argument on appeal in light of our conclusion that the trial court should have determined that the
facts as alleged by plaintiffs failed to state a claim on which relief can be granted.
3
Plaintiffs also allege that the drain commissioner made other, less substantial, mistakes in
(continued…)
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• The resulting undersized drain system was a significant-enough cause of the May
2004 flooding to allow plaintiffs to recover property-loss damages from the drain
commissioner.
The Statutory Scheme
In pertinent part, the relatively recently enacted statute4 plaintiffs rely on to bring this
action provides:
(2) A governmental agency is immune from tort liability for the overflow
or backup of a sewage disposal system unless the overflow or backup is a sewage
disposal system event and the governmental agency is an appropriate
governmental agency. Sections 16 to 19 abrogate common law exceptions, if any,
to immunity for the overflow or backup of a sewage disposal system and provide
the sole remedy for obtaining any form of relief for damages or physical injuries
caused by a sewage disposal system event regardless of the legal theory.
(3) If a claimant, including a claimant seeking noneconomic damages,
believes that an event caused property damage or physical injury, the claimant
may seek compensation for the property damage or physical injury from a
governmental agency if the claimant shows that all of the following existed at the
time of the event:
(a) The governmental agency was an appropriate governmental agency.
(b) The sewage disposal system had a defect.
(c) The governmental agency knew, or in the exercise of reasonable
diligence should have known, about the defect.
(d) The governmental agency, having the legal authority to do so, failed
to take reasonable steps in a reasonable amount of time to repair, correct, or
remedy the defect.
(e) The defect was a substantial proximate cause of the event and the
property damage or physical injury. [MCL 691.1417(2) and (3).]
(…continued)
reviewing the drain-system project, apart from the TOA issue. Our determination that plaintiffs'
allegations fail to state a claim on which relief can be granted applies equally to all the mistakes
plaintiffs allege.
4
MCL 691.1417 was enacted effective January 2, 2002, and has generated scant caselaw
analysis, none of which is very helpful on the issues presented, as discussed below. Plaintiffs do
not argue that any other statutory exception to governmental immunity applies to this case.
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To successfully bring an action, a plaintiff cannot merely satisfy subsection 2 but must, instead,
establish all the requirements of subsection 3. Willett v Waterford Charter Twp, 271 Mich App
38, 49-50; 718 NW2d 386 (2006).
The statute defines a "defect" to mean "a construction, design, maintenance, operation, or
repair defect." MCL 691.1416(e). It defines "appropriate governmental agency" to mean a
governmental agency that, at the time of a sewage-disposal-system event, owned or operated the
portion of the system that allegedly caused damage. MCL 691.1416(b).5 It defines "sewage
disposal system event" or "event" to mean "the overflow or backup of a sewage disposal system
onto real property." MCL 691.1416(k). It defines "sewage disposal system" to include "a storm
water drain system" such as is at issue here. MCL 691.1416(j). Finally, it defines "substantial
proximate cause" to mean "a proximate cause that was 50% or more of the cause of the event and
the property damage or physical injury." MCL 691.1416(l).
In construing this statute, the "'one basic principle that must guide our decision'" is that
"'the immunity conferred upon governmental agencies is broad, and the statutory exceptions
thereto are to be narrowly construed.'" Pohutski v City of Allen Park, 465 Mich 675, 689; 641
NW2d 219 (2002), quoting Nawrocki v Macomb Co Rd Comm, 463 Mich 143, 158; 615 NW2d
702 (2000) (emphasis in original).
Can MCL 691.1417 Itself Provide a Cause of Action?
The drain commissioner relies on an extremely strained reading of MCL 691.1417 to
contend that the statute does not itself provide plaintiffs any cause of action but, instead, some
independent cause of action must be pleaded (and plaintiffs failed to do so). Specifically he
relies heavily on the last five words of subsection 2: "regardless of the legal theory." While the
argument is difficult to comprehend or summarize, the contention is that the statute provides an
exception to immunity if its requirements are satisfied, but only if there is some other legal
theory upon which a claim for damages is based. In other words, defendant argues that the
statute does not itself provide a cause of action.
A plain reading of subsection 2 itself does not support that conclusion and, when
subsection 3 is also considered, that conclusion becomes even less tenable. Subsection 2
affirmatively and specifically states that the statute "provide[s] the sole remedy for obtaining any
form of relief for damages or physical injuries caused by a sewage disposal system event . . . ."
While perhaps not drafted as clearly as it could have been, subsection 2 can best be understood
as stating that this statutory scheme replaces any other common-law exceptions to immunity that
might otherwise exist for sewer overflow or backup actions, regardless of the legal theory giving
5
Defendant drainage district does not contest that it is an "appropriate governmental agency"
because it became the owner and operator of the subdivision drainage system, pursuant to an
agreement between the drain commissioner and the developer under the Drain Code, MCL
280.433 ("a 433 agreement").
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rise to those common-law exceptions. In other words, this statute constitutes the only exception
to governmental immunity legally recognized in Michigan with respect to these kinds of actions.
That the statute itself presents parties like plaintiffs here a potential cause of action is
further evidenced by subsection 3. It clearly provides that a "claimant may seek compensation"
if the listed requirements are satisfied. In sum, while some semantic challenges may exist, it is
difficult to imagine a statutory scheme that more clearly provides a potential cause of action.
See Willett, supra (applying MCL 691.1417 as providing a potential cause of action). Plaintiffs
can seek damages under the statute if they have stated valid claims with regard to its elements,
the question to which we now turn.
Do Plaintiffs State a Valid Claim Under MCL 691.1417(3)?
As noted earlier, defendant does not contest that plaintiffs have stated valid claims with
regard to a number of the elements found within MCL 691.1417(3). There is no question that
the May 2004 flooding constituted an "event" covered by the statute. Defendant admits that,
having entered into a 433 agreement by which the drainage district became the owner and
operator of the Creekside drainage system before May 2004, the drainage district is "an
appropriate governmental agency" under subsection a. Defendant does not argue that the
drainage system was not defective in its design, i.e., that it was not undersized, under subsection
b.
Defendant contends, however, that subsection 3(d) of the statute cannot be satisfied
because, under the facts as alleged by plaintiffs, defendant had no legal authority to repair the
defect in the drainage system before the 2004 flooding of plaintiffs' homes.6 Defendant relies on
the scheme presented by the Drain Code. To fully comprehend defendant's argument in this
regard requires a general understanding of the Drain Code, especially its provisions limiting how
repairs of a drain system may be initiated and how the cost of repairs is to be allocated.
Generally, the cost of any repair made to a drain system must necessarily be borne by persons
who use the drain system. Thus, the statutory scheme can best be understood as balancing the
potentially competing interests of drain-system users worried about defects in drain systems,
drain commissioners who might want to overbuild or over-improve a drain system, and assessed
taxpayers who may not want to incur costs associated with such improvements.
Specifically, MCL 280.191 requires that, if a drain system presents a problem, at least
five property owners within the drainage district must petition the commissioner in writing for a
repair. (Alternatively, a similar petition can be filed by a city, village, or township.) Once a
petition has been filed, the statute provides that a three-member "board of determination" must
review the petition, and it requires procedures designed to protect the due process rights of
6
Defendant also contends that, under MCR 2.116(C)(10), plaintiffs failed to establish genuine
issues of material fact regarding whether defendant had sufficient knowledge of the defect, MCL
691.1417(3)(c), and whether the defect was a substantial enough proximate cause of the flooding
under MCL 691.1417(3)(e). As noted earlier, we need not reach the merits of those claims.
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affected persons. MCL 280.191; MCL 280.72. The board makes a determination regarding the
necessity of a repair, MCL 280.72(3), and aggrieved persons who dislike the determination may
seek review in circuit court, MCL 280.72a. If the determination is in favor of making a repair,
the drain commissioner may undertake the project, and project costs are apportioned to persons
and entities who benefit from it. MCL 280.151.
Considering this statutory scheme, we conclude that defendant's claim that he was
without "the legal authority to . . . repair, correct, or remedy the defect" at or before "the time of
the event" has merit. Before the "event," the May 2004 flood, no petition had been filed and, of
course, no decision by a board of determination directing defendant to "repair, correct, or
remedy" the problem in the drain system had been made. In the absence of those prerequisite
actions, defendant had no authority to address the defect in the drain system. Although a petition
for repair was ultimately filed by some of the plaintiffs and others, that occurred after, and as a
result of, the flood; it certainly did nothing to empower defendant to take prior corrective action
to prevent the flood.
In sum, the facts as alleged by plaintiffs do not establish that defendant drain
commissioner had the legal authority to take any action to address the design defect that
plaintiffs allege existed in the drain and contributed to the May 2004 flooding.7 Thus, plaintiffs
failed to state a valid claim that the requirement of MCL 691.1417(3)(d) was satisfied, and the
trial court erred in failing to grant summary disposition to the drain commissioner and the
drainage district.8
We reverse and remand for entry of an order granting the drain commissioner and the
drainage district that relief. We do not retain jurisdiction.
/s/ Richard A. Bandstra
/s/ Donald S. Owens
/s/ Alton. T. Davis
7
We note that the statute does not seem to "fit" the facts as alleged by plaintiffs for other reasons
as well. For example, the statute imposes liability on a governmental agency only for a failure to
"repair, correct, or remedy" a defect. MCL 691.1417(3)(d). The allegations here are that
defendant failed in his responsibilities overseeing the design and installation of the drain system.
We question whether the authority defendant had under the Drain Code to oversee that process
also gives rise to a duty or obligation for which defendant could be held liable. But even
assuming it does, the statute providing an exception to immunity does not make defendant liable
for unreasonably failing to prevent the creation of a design defect; it only imposes an obligation
to reasonably "repair, correct, or remedy" an existing defect. In any event, we need not, and do
not, decide the merits of this or any other statutory argument defendant could have made but did
not.
8
In light of this determination, we need not consider the other arguments raised by defendant.
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