A recent published opinion could greatly affect the ability of Michigan municipal corporations to protect their property ownership interests from claims for adverse possession or acquiescence brought by private parties. While this case does not specifically address eminent domain issues, it is relevant. Adverse possession and acquiescence claims can in an eminent domain suit if owners assert that they enjoy rights in property titled in the government and make damage claims for the loss of those rights.
In Waisanen Family Trust v Superior Twp, 305 Mich App 719 (2014), the Court of Appeals rejected the defendant township's appeal of the trial court's determination that it was not entitled to statutory protection from the plaintiff's quiet title action based on alternate theories of adverse possession and acquiescence. In this case, a trust owned property abutting a lake access roadway dedicated to public use. The lake access road was part of a 1925 platted subdivision located in Superior Township in Chippewa County. At the time the predecessor to the trust bought the property in 1971, the property contained a break wall and a residence. The plaintiff constructed an addition to his home on the property about ten years later. The township ultimately conducted a survey in 2008 of all its lake access roadways and discovered that the break wall encroached approximately ten feet onto the public street and the home's addition encroached about three feet.
To protect its investment in the property, in 2009 the trust filed an action in circuit court to quiet title to the portions of the road upon which the break wall and addition encroached. The township, as defendant in the action, then brought a counterclaim for possession of the same portions of the road seeking to remove the break wall and addition. The circuit court ruled in favor of the plaintiff, finding that it had satisfied the elements of adverse possession, or in the alternative, had acquired title through acquiescence.
At issue on appeal was the applicability of MCL 600.5821(2). MCL 600.5821 provides in relevant part:
(1) Actions for the recovery of any land where the state is a party are not subject to the periods of limitations, or laches. However, a person who could have asserted claim to title by adverse possession for more than 15 years is entitled to seek any other equitable relief in an action to determine title to the land.
(2) Actions brought by any municipal corporations for the recovery of the possession of any public highway, street, alley, or any other public ground are not subject to the periods of limitations.
For decades, practitioners believed this statute provided protection to both the state and municipalities from individuals claiming title to property owned by the government in claims of adverse possession or acquiescence. Consistent with this belief, the township here argued that its land was not subject to the plaintiff's claims to title. With its ruling in Waisanen, however, the Court of Appeals has upended the traditional notion and opens the door for condemned property owners to assert that they enjoy compensable property rights in land titled in the name of municipal corporations.
Noting the different language used in subsections 1 and 2, the Court held that only the state is not subject to the 15-year period of limitations in all actions in which a person is seeking to quiet title to land. Municipal corporations, on the other hand, are only protected in actions brought by them for the recovery of possession of public land. Therefore, a municipality that brings a counterclaim for possession in an existing action, rather than originally bringing an action on its own, does not qualify for the protection provided in MCL 600.5821(2). The Court's interpretation of the statute thus creates situations where the municipality's ability to claim the statute's protection turns on which party wins the race to the courthouse, a consequence that did not go unnoticed by the Court.
The Waisanen case has not been appealed by Superior Township nor has the Michigan Legislature taken any action in response to the invitation by the Court of Appeals to do so. Therefore, at this point in time, it remains binding law.
If you are approached by a municipal corporation such as a city about an eminent domain issue, it is critical that you communicate with a condemnation specialist well versed in both the law of that specialty but other legal concepts that could arise. Feel free to contact me if you have any questions.