Case Name: MIDDLETON DEVELOPMENT CORP v. GUST
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1972-12-06
Citations: 44 Mich. App. 71
Docket Number: Docket No. 12064
Parties: MIDDLETON DEVELOPMENT CORP v GUST
Judges: Before: R. B. Burns, P. J., and Holbrook and O’Hara, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 44
Pages: 71–82

Head Matter:
MIDDLETON DEVELOPMENT CORP v GUST
Opinion op the Court
1. Contracts — Parties’ Intention.
Operation of a boat livery by defendants on their property bordering a large lake created by plaintiff developer was contrary to the intention of the parties in their written agreement granting flowage rights over their land by defendants to plaintiff in exchange for plaintiff’s agreement to rough-grade a road around defendant’s land where a reading of the agreement shows that the whole purpose of it was to assure orderly development of a residential area fronting on a private lake to which only property owners would have access.
Dissent by Holbrook, J.
2. Contracts — Ambiguity—Public Easement — Judicial Interpretation.
The phrase "public easement”, as used in the parties’ written agreement prohibiting defendants from granting a public easement across their land to a large private lake created by plaintiff developer, is not inherently ambiguous and does not require judicial interpretation of its meaning; therefore, the trial court’s holding that defendants’ operation of a boat livery upon their property bordering the lake was not the permitting of a "public easement", in violation of their contract with plaintiff, was not error.
3. Contracts — Ambiguity—Judicial Interpretation.
Judicial construction or interpretation of contractual provisions is required only where a clear ambiguity exists.
4. Contracts — Ambiguity—Public Easement — Judicial Interpretation.
Defendants’ operation of a boat livery on their property bordering a large private lake created by plaintiff developer was not the permitting of a public easement in violation of their contract with plaintiff since defendants’ action did not create any rights in the general public nor did they convey any property interest to the general public, to a public service corporation, or to a public utility.
References for Points in Headnotes
17 Am Jur 2d, Contracts § 18 et seq.
17 Am Jur 2d, Contracts § 240 et seq.
17 Am Jur 2d, Contracts § 22.
Appeal from Gladwin, Robert H. Campbell, J.
Submitted Division 3 May 10, 1972, at Grand Rapids.
(Docket No. 12064.)
Decided December 6, 1972.
Complaint by Middleton Development Corp. against Donald Gust and Jean C. Gust for breach of contract and injunctive relief. Judgment for defendants. Plaintiff appeals.
Reversed.
Wilson & Stone, for plaintiff.
Hughes & Trucks, for defendants.
Before: R. B. Burns, P. J., and Holbrook and O’Hara, JJ.
Former Supreme Court Justice, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.

Opinion:
O'Hara, J.
Plaintiff real-estate developer desired to create one large lake from three small lakes then existing on the involved property. It proposed to do this by building a dam which would raise the water level. By virtue of a written agreement, dated October 1, 1965, defendants — who were the only land owners on the proposed lake besides the plaintiff — granted flowage rights over their land to plaintiff corporation in exchange for a promise to rough-grade a road around defendants' land.
Three years passed. The new lake reached a maximum water level. Plaintiff completed the construction of roads upon its property and obtained final state approval of the dam and subdivision plans. During this period, it sold several lakefront lots to the public.
Then plaintiff sought to complete its contractual obligation by constructing the road on defendants' property. This defendants would not allow. At best, they asserted, plaintiff had only a reasonable time within which to perform. Too much time had elapsed. Thus, the agreement was null and void. Consequently, they (defendants) were no longer bound and were free to commence operation of a boat livery upon the new lake.
At trial both parties argued as to whether operation of the boat livery constituted a breach of defendants' agreement not to permit a public easement across their land with access to the lake. The learned trial judge found no breach of the parties' agreement. This appeal of right by plaintiff followed.
Since we do not agree with the parties' formulation of the question on appeal, we thus state the issue: What was the intention of the parties as expressed in the written agreement?
The plaintiff is a corporate real estate developer. It conceived the residential development on Lake Lochbrae. It arranged the financing. It invested some $98,000 in the project. To date, over $200,000 in residential lots have been sold to the public. As such, the public relied on plaintiff's representation that only property owners had access to the lake.
The whole purpose of this agreement was to assure the orderly development of a residential area fronting on a private lake. To this end, defendants agreed that if they subdivided their land that they would not sell more than two rows of lakefront lots and that they would restrict their property in the same manner as plaintiff. Other provisions in the agreement similarly obligated defendants not to permit a public easement across this land to the lake.
To permit continued operation of the boat livery would adversely affect both plaintiff and those persons to whom it sold lots. It hardly need be said that potential buyers will not pay as handsomely for property fronting on a lake to which the public has access as they will for land adjacent to a body of water without public access. Nor would operation of the boat rental facility protect the reasonable reliance of previous purchasers as to the private character of the lake.
For the foregoing reasons, we reverse the trial court and direct reinstatement of the order restraining defendants from operating the boat livery. We further direct plaintiff to rough-grade a road on defendants' property if request therefor is made within a reasonable time.
Reversed. Plaintiff may tax costs.
R. B. Burns, P. J., concurred.