Court of Appeals Confirms Agency Requirements to Strictly Fulfill Statutory Requirements

In 2019, I was the prevailing attorney in a published opinion reiterating existing precedent requiring that “the laws which regulate such [condemnation proceedings] must be strictly followed, and especially that every jurisdictional step, and every requirement shaped to guard the rights and interests of parties whose property is meant to be taken, must be observed with much exactness” and requiring dismissal of cases in which owners beyond the fee owner of the properties were excluded due to a lack jurisdiction. The Court of Appeals recently expanded upon the holding of that case.

In Michigan Gas Utilities Corp v Midlam , Cotrustees of Earl R Midlam & Hazel M Midlam Trust, the property owner “did not disclose that it had a lessee despite” the agency requesting that information and where the farmer tenant “did not record the lease with the county.” The agency “argued that the trial court had subject-matter jurisdiction over the condemnation proceedings because” the agency “was only required to send a good-faith offer to owners of record, which did not include” the farmer tenant.

The Court of Appeals confirmed the following standards relating to the requirement that the agency make pre-suit offers. I am particularly fond of this paragraph because I was the prevailing attorney in both cited cases.

We have previously recognized that “the tendering of a good-faith offer is a necessary condition precedent to invoking the jurisdiction of the circuit court in a condemnation action.” Lenawee Co v Wagley, 301 Mich App 134, 160; 836 NW2d 193 (2013) (quotation marks and citation omitted). The UCPA requires agencies seeking to condemn land “to provide a good-faith offer to acquire the properties to all persons or entities with an interest in the properties.” Bd of Co Rd Comm’rs for Co of Washtenaw v Shankle, 327 Mich App 407, 416; 934 NW2d 279 (2019) (emphasis added). In Shankle, we explained that “[i]n order to initially invoke the trial court’s jurisdiction, strict compliance with the statutory language of the UCPA require[s] that the fee owners and any other owners of legal property interests be given a good-faith offer.” Id. at 417. We concluded that the trial court in that case never acquired subject-matter jurisdiction because the plaintiff failed to strictly comply with the UCPA.

The Court of Appeals correctly rejected the agency’s argument that it was not required to name the tenant because the fee owner had not disclosed it, noting that the agency enjoyed the statutory power to compel provision of financial documents that would have revealed the tenant’s existence. If the agency had “pursued the processes outlined in MCL 213.55(2), a good-faith written offer to known owners would be permitted under MCL 213.55(1).” In my opinion, the Court of Appeals did not go far enough. A property owner’s ability to participate in an eminent domain proceeding should not be limited because if another owner fails to disclose its existence. 

It is critical to understand the intricacies of eminent domain procedure, including the rights of all tenants or other owners. For that reason, property owners should consult with attorneys who specialize in this area of the law. 

If you face any eminent domain issues, please do not hesitate to contact me.