Mark Gottleber v. County of Saginaw

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to

revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

MARK GOTTLEBER and ROSE GOTTLEBER, UNPUBLISHED

August 1, 2019

Plaintiff-Appellants,

v No. 336011

Bay Circuit Court

COUNTY OF SAGINAW, LC No. 12-003406-CZ

Defendant-Appellee.

ON REMAND

Before: SAWYER, P.J., and CAVANAGH and FORT HOOD, JJ.

PER CURIAM.

In this inverse condemnation action, plaintiffs appeal as of right the trial court’s order

granting defendant summary disposition. This case returns to us on remand from our Supreme

Court “for consideration of an argument made by defendant but not directly addressed by [this]

Court regarding whether the defendant had a legal duty or obligation to continue pumping and

draining water on its land in order to sustain a particular groundwater level for the benefit of the

plaintiffs’ property.” Gottleber v Saginaw Co, ___ Mich ___; 927 NW2d 224 (2019). If we

conclude that defendant had no such duty, the Supreme Court has further directed us to consider

whether defendant “abused its legitimate powers” by taking “affirmative actions” that were

“directly aimed” at plaintiffs’ property. Id. For the reasons stated below, we again reverse and

remand for further proceedings in the trial court.

I. FACTUAL BACKGROUND

In 1994, plaintiffs purchased a 93-acre parcel of land next to the Saginaw River.

Plaintiffs farmed the land until 2006, and then leased the land to a tenant who continued to farm

the land from 2006 to 2009. It is undisputed that the land at issue would be a wetland if left in its

natural state. Like other farmers in the area, to make the land farmable, plaintiffs pumped water

from the land every April and May, and sometimes at other times depending on rainfall.

The dispute in this matter stems from a project between the United States Army Corps of

Engineers (USACE) and defendant. Evidence presented at trial indicates that—at the request of

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the state of Michigan, Bay County, and defendant—the USACE and defendant entered a Project

Cooperation Agreement that detailed a plan to construct and operate a Dredged Material

Disposal Facility (DMDF). The purpose of the DMDF was to serve as a disposal site for

materials dredged from the bottom of the Saginaw River, which requires periodic dredging in

order to function as a commercial shipping waterway. The USACE would select land on which

to place the DMDF and defendant was to acquire the land. The USACE would then construct,

operate, and maintain the DMDF. The USACE selected two parcels of farmland that adjoined

plaintiffs’ property for the project, defendant purchased those parcels, and the DMDF was

constructed. A pipeline now conveys materials dredged from the Saginaw River, including

water and contaminated sediment, to the DMDF, and after the contaminated sediment settles into

the DMDF, the remaining water is discharged back into the river.

As we noted in our prior opinion, the Michigan Department of Environmental Quality

required the construction of a Wetland Mitigation Area (WMA) to mitigate the environmental

impact of the DMDF. Gottleber v Saginaw, unpublished opinion of the Court of Appeals, issued

June 12, 2018 (Docket No. 336011), p 2. Defendant created the WMA by discontinuing

pumping that had been performed by previous landowners of the area directly surrounding the

DMDF. The WMA is next to the western border of plaintiffs’ property, and is separated from

plaintiffs’ property by a “railroad grade made out of soil.” Id. at 2-3.

Plaintiffs instituted their inverse condemnation action in 2012, contending that, beginning

in 2009, water began overflowing from the WMA and flooding plaintiffs’ property. Plaintiffs

provided an expert witness, Dr. Rick Harding, who opined that the construction of the DMDF

and the cessation of pumping that created the WMA each contributed to the flooding. Dr.

Harding testified that the railroad grade separating the WMA from plaintiffs’ property allowed

water to leak through it onto plaintiffs’ property, and that clay berms constructed around the

DMDF prevented groundwater from flowing west of the WMA toward the facility, causing

groundwater to flow to plaintiffs’ property instead. According to plaintiffs, flooding on their

property has prevented them from using the land for any economically feasible purpose, such as

leasing, selling, developing, or farming the land.

After plaintiffs filed their inverse condemnation action, the trial court granted defendant

summary disposition, concluding that (1) defendant had no liability with respect to the DMDF

because it was a federal project, and (2) even though the WMA was separately owned and

operated by defendant, the cessation of pumping water in the WMA did not constitute an

“affirmative act necessary to create liability” on the part of defendant. On appeal, this Court

rejected the position that defendant had no liability for the DMDF, noting that defendant was

heavily involved in the project. Gottleber, unpub op at 5-6. With respect to the WMA, this

Court wrote:

Although “inaction and omissions by the state cannot be found to

constitute a taking,” Attorney Gen v Ankersen, 148 Mich App 524, 562; 385

NW2d 658 (1986), the record evidence confirms that defendant did more than

simply stop pumping water to create the WMA—it also removed the tile draining

systems that were previously on the WMA land. Put another way, even though

defendant’s cessation of pumping may not be considered an affirmative action in

itself, see Ankersen, 148 Mich App at 562, defendant’s removal of the tile

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drainage systems was a deliberate and overt action that was more than mere

inaction or omission. Thus, defendant’s removal of the tile draining system,

along with its cessation of pumping the water on the WMA land, which had been

historically pumped and drained and which plaintiffs had relied on to be pumped

and drained, constituted an affirmative action sufficient for inverse condemnation

liability purposes. [Id. at 6 (footnote omitted).]

At the end of the quoted passage reproduced above, this Court wrote in a footnote:

While defendant argues that it had no legal duty or obligation to continue

pumping and draining the water on the WMA land in order to sustain a particular

groundwater level for plaintiffs’ benefit, the issue that we must decide is whether

defendant’s actions or inaction support a claim of inverse condemnation. At

most, defendant’s argument that it had no duty to pump its own property to

maintain lowered water levels goes to whether genuine issues of material fact

exist concerning whether defendant’s cessation of pumping and draining was

‘directly aimed at plaintiff[s’] property.” Marilyn Froling Revocable Living

Trust[ v Bloomfield Hills Country Club], 283 Mich App [264,] 294-295[; 769

NW2d 234 (2009). Indeed, although defendant asserts that “plaintiffs have no

legally enforceable right to require defendant to continue the artificial draining

and pumping of its land,” it is unclear whether defendant was aware that its

removal of the draining tiles and cessation of pumping would directly affect the

Gottleber property by increasing the groundwater levels in the area. Considering

the complexity of the facts and the existing record evidence concerning whether

defendant’s actions were “directly aimed” at the Gottleber property, there were

genuine issues of material fact that should be submitted and determined by the

jury. [Id. at 6-7 n 1.]

This Court went on to reject two arguments made by defendant: (1) that plaintiffs failed to

present evidence creating a question of fact regarding the cause of the flooding on their property,

and (2) that defendant was immune from liability because its actions were taken under the

supervision of, or in conjunction with, the USACE. Id. at 7-9.

Defendant filed a motion for reconsideration taking issue with the footnote in this Court’s

unpublished opinion regarding defendant’s argument that it had no duty to continue to pump or

drain water from the property it acquired. Defendant argued that this Court erroneously held that

whether such a duty existed was a factual question for the jury, when in truth, the existence of

such a duty would be a legal question. Plaintiffs contended in response that defendant’s

argument ignored the fact that defendant had taken affirmative actions to remove tile drainage

systems to change groundwater levels around the WMA and DMDF. This Court denied

reconsideration. Gottleber v Saginaw Co, unpublished order of the Court of Appeals, entered

July 13, 2018 (Docket No. 336011).

Defendant then sought leave to appeal to our Supreme Court. Among some other things,

defendant argued that it had no duty to artificially pump and drain the land it purchased, and that

this Court had refused to decide whether such a duty existed. Defendant contended that its rights

were the same as any landowner, and that accordingly, it had no duty to artificially change the

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natural flow of water for the benefit of adjoining landowners. Rather, adjoining landowners had

to accept whatever water naturally flowed to their property. Defendant further contended that,

while defendant could not artificially concentrate or increase the flow of water from its property

to adjoining lands, plaintiffs had failed to show that the flooding they were experiencing was

anything more than that caused by natural water flow. As explained, our Supreme Court has

now remanded the matter to this Court for consideration of the question whether defendant has a

duty to “continue pumping and draining water on its land . . . .” Gottleber, 927 NW2d at 224. If

this Court finds no such duty, this Court has been directed to then consider whether defendant “

‘abused its legitimate powers’ when it took ‘affirmative actions’ in the absence of any duty or

obligation that potentially were ‘directly aimed at the plaintiff[s’] property.’ ” Id. (citation

omitted).

II. ANALYSIS

The first question that our Supreme Court has directed us to address is whether defendant

has a legal duty to continue pumping and draining water in the same manner as was done by

prior owners of defendant’s property. Although we conclude that defendant does not have such a

duty, we nonetheless reaffirm our previous holding that summary disposition was not

appropriate, and that plaintiffs should have been permitted to pursue their inverse condemnation

claim.

In this case, defendant purchased the land on which the DMDF is situated. A

government entity that owns property is “entitled to the like protection in its property rights as

any natural person . . . .” People ex rel Bd of Detroit Park Comm v Detroit Common Council, 28

Mich 228, 240 (1873). As a general matter, a property owner has no right to complain about

natural water flows that come from neighboring properties. Bennett v Eaton Co, 340 Mich 330,

335-336; 65 NW2d 794 (1954). In addition, generally, property owners cannot complain that a

neighbor has stopped controlling water in a way done previously; there is no right to the

continued maintenance of an artificial water level. Hudson v Village of Homer, 351 Mich 73,

80-83; 87 NW2d 72 (1957) (owners of artificially created pond could alter the water level of the

pond between the artificial high-water mark and the natural level); Goodrich v McMillan, 217

Mich 630, 632-634; 187 NW 368 (1922) (landowner was under no duty to repair a dam that,

before failing, created desirable waterways over neighboring land).1 While the aforementioned

cases involved neighbors who wished to see artificially high water levels continue, we see no

reason why the same rule would not apply to a neighbor who has benefited from the maintenance

of artificially low water levels.

Thus, we would tend to agree that defendant would have been fully within its rights to

shut off the pumps, remove the existing drain tiles, and return the land to its natural state if that

was defendant’s desire. Had defendant done so, and had this caused some increase in water flow

to plaintiffs’ property, plaintiffs would have had no reason to complain. However, while a

1

We note that, although a party may make a claim to a prescriptive right to maintenance of an

artificial water level, plaintiffs have made no such claim in this case. Stidham v Algonquin Lake

Community Ass’n, 133 Mich App 94, 99; 348 NW2d 46 (1984).

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property owner is generally not obliged to alter natural water flows to the benefit of neighboring

property owners, it is equally true that a property owner “cannot lawfully concentrate such water,

and pour it through an artificial ditch or drain, in unusual quantities and greater velocity, upon an

adjacent proprietor.” Bennett, 340 Mich at 336 (quotation marks and citation omitted). Thus,

“public authorities have [no] right to divert the natural course of surface water so as to impose on

the land of one person the servitude which naturally belongs upon the land of another.” Id.

(quotation marks and citation omitted).

With that in mind, we turn to the second question posed by our Supreme Court: whether

defendant abused its legitimate powers by taking affirmative actions directly aimed at plaintiffs’

property. Essentially, what is being asked is whether plaintiffs may proceed on their inverse

condemnation claim. In Marilyn Froling Revocable Living Trust, 283 Mich App at 294-295, this

Court explained what a plaintiff must show to prevail on an inverse condemnation claim:

A taking for purposes of inverse condemnation means that governmental

action has permanently deprived the property owner of any possession or use of

the property. When such a taking occurs, the Michigan Constitution entitles the

property owner to compensation for the value of the property taken. A plaintiff

alleging inverse condemnation must prove a causal connection between the

government’s action and the alleged damages. For a taking to occur, “there must

be some action by the government specifically directed toward the plaintiff’s

property that has the effect of limiting the use of property.” In other words, the

plaintiff must prove that the government’s actions were a substantial cause of the

decline of the value of the plaintiff’s property and must establish that the

government abused its legitimate powers in affirmative actions directly aimed at

the plaintiff’s property. In determining whether a taking occurred, the form,

intensity, and deliberateness of the governmental actions toward the injured

party’s property must be examined. [Citations omitted.]

While defendant did not clearly make this point before this Court issued its prior opinion,

in defendant’s reconsideration motion, and more clearly, in its application to the Supreme Court,

defendant contended that no such claim could be made here because defendant acted within its

rights by turning off the pumps and eliminating the drainage system. Defendant explained that

plaintiffs would have no right to complain about any increased flow of water that would occur if

the land was returned to its natural state. From there, defendant argued that, because plaintiffs

failed to show precisely how much water flowing to their property exceeded that which would

naturally occur, plaintiffs’ claim could not survive defendant’s summary disposition motion.

As plaintiffs explained in response to the reconsideration motion filed in this Court, and

again to the Supreme Court, defendant’s argument ignores most of what is actually occurring on

defendant’s property. Several hundred thousand cubic yards of wet, dredged material is being

brought to the site and contained within an eleven-foot tall, artificially constructed dike. The

dike is constructed in such a way as to make it impermeable. On the other side of this dike is the

WMA, an artificially created wetlands area. This area was created to replace what would

otherwise be wetlands that are being filled in by the activities taking place in the DMDF. The

only thing separating the WMA from plaintiffs’ land is a railroad bed that, according to

plaintiffs’ evidence, is permeable. Clearly, neither the dredged materials, the eleven-foot-tall

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impermeable dike, or the WMA represent naturally occurring features. These all represent

artificial changes to the land.

While defendant may have been able to allow the land to return to its natural state by

turning off the pumps and removing the drainage system, it is not permitted to artificially

concentrate water and divert it to plaintiffs’ land. Bennett, 340 Mich at 336. And, although Dr.

Harding was not able to quantify precisely how much additional water is being diverted to

plaintiffs’ property as a result of these alterations, Dr. Harding nonetheless opined that these

changes caused significant flooding on plaintiffs’ property. Dr. Harding explained that the

railroad bed “likely retards, but does not prevent, the movement of water across the bedding

material because . . . the railroad bed consists of a mixture of different permeability materials.”

Dr. Harding explained that measurements of surface water elevations on either side of the

railroad bed confirm that it was not holding back water contained in the artificially created

WMA.

Dr. Harding also explained that construction of the DMDF required construction of the

eleven-foot-tall dike. Drain tiles that were formerly in the area where this dike was constructed

were removed. As a result, groundwater levels rose in the WMA. Because this impermeable

dike has been constructed, and because no other drainage exists, ground and surface water that

would have previously moved west from plaintiffs’ land to the land now owned by defendant

instead accumulates in the WMA. And, as explained, water that accumulates in the WMA

migrates through the permeable railroad bed and into plaintiffs’ property. In sum, according to

Dr. Harding, defendant has altered the natural flow of water, concentrating it in an area directly

adjacent to plaintiffs’ property, and the only barrier that might prevent that water from flowing

onto plaintiffs’ property is not up to the task.

Thus, it is not only removal of the drainage systems and turning off the pipes that is the

basis of plaintiffs’ claim of inverse condemnation. Rather, the claim is based largely on the

creation of the WMA. The WMA represents the artificial concentration of water next to

plaintiffs’ property, and plaintiffs have presented evidence showing that this concentration of

water has caused substantial flooding on their property. Moreover, the WMA was created, in

part, by removing the existing drainage system and ceasing pumping activities. As this Court

previously explained, while the cessation of pumping activities might not “be considered an

affirmative action in itself,” the removal of the tile drainage system “was a deliberate and overt

action that was more than mere inaction or omission.” Gottleber, unpub op at 6.

The point is not that defendant had a legal duty to pump or drain water. The point, rather,

is that the record evidence tends to show that, contrary to defendant’s more recent arguments that

it was simply returning the land to its natural state, defendant took these actions for a distinct

purpose—to create the WMA. Dr. Harding’s report indicates that the WMA has, in turn, caused

substantial flooding on plaintiffs’ property. As this Court previously explained, defendant’s

argument that it had no duty to pump or drain water is, at most, an argument going to the factual

question of whether defendant’s actions were directly aimed at plaintiffs’ property. See Marilyn

Froling Revocable Living Trust, 283 Mich App at 295 (“In determining whether a taking

occurred, the form, intensity, and deliberateness of the governmental actions toward the injured

party’s property must be examined.”). “Considering the complexity of the facts and the existing

record evidence concerning whether defendant’s actions were ‘directly aimed’ at the Gottleber

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property, there were genuine issues of material fact that should be submitted to and determined

by the jury.” Gottleber, unpub op at 7 n 1.

We again reverse the trial court’s order granting defendant summary disposition and

remand for further proceedings consistent with this opinion. We do not retain jurisdiction.

/s/ David H. Sawyer

/s/ Mark J. Cavanagh

/s/ Karen M. Fort Hood

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