Court Opinion

ID: 9671047
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:30:03.179007+00
Date Added: 2024-06-11T09:52:41.436861
License: Public Domain

*796Mackenzie, J.
(dissenting). I respectfully dissent. The parties agree that the property at issue is covered by a restrictive covenant dating back to 1958 which, among other things, permits three-fourths of the property owners within the subdivision to amend the restrictive covenant at any time. The covenant was amended on November 3, 1980, to include the following restrictions:
"1. All of the lots of this subdivision shall be owned, described and used for strictly private residential purposes only.
"2. No lot may be used for the operation of any business, enterprise, activity or service, profit or nonprofit, where the gross revenues, payments or other remuneration received by such businesses, enterprises, activities or services, or by the owners and/or operators of such businesses, enterprises, activities or services, exceed three thousand dollars ($3,000.00) per annum.
"3. No lot may be used for the operation of any state licensed residential facility, as that term is defined by Sections 125.216a, 125.286a and 125.583b of the Michigan Compiled Laws on January 1, 1980, such laws being more commonly referred to as MCLA Sections 125.216a, 125.286a and 125.583b. This restriction is to be liberally construed and is meant to exclude the operation of any State of Michigan-licensed facility that provides resident services for six (6) or less persons under 24-hour supervision or care for persons in need of that supervision or care, whether such residential facility is licensed pursuant to Public Act 287 of 1972, as amended, Public Act 218 of 1979, as amended, or pursuant to any Public Act of the State of Michigan that may be adopted in the future which supersedes or amends Public Act 287 of 1972 or Public Act 218 of 1979 in any way.
"4. No lot may be used for the operation of any business, enterprise, activity or service where the primary purpose of such business, enterprise, activity or service is to provide shelter, supervision and/or care to other persons in exchange for remuneration of any sort. This restriction shall not be interpreted so as to prevent *797any property owner within the Huron Woods Subdivision from renting or leasing his home to another person or persons, providing that the person or persons do not then use the home to provide shelter, supervision and/ or care to other persons in exchange for remuneration of any kind.”
Defendants Iserman acquired the property at issue before the 1980 amendments. Defendants argue that the 1980 amendments were invalid because they imposed retroactive reciprocal negative easements. Defendants rely on Sanborn v McLean, 233 Mich 227, 230; 206 NW 496 (1925):
"Reciprocal negative easements are never retroactive; the very nature of their origin forbids. They arise, if at all, out of a benefit accorded land retained, by restrictions upon neighboring land sold by a common owner. Such a scheme of restrictions must start with a common owner; it cannot arise and fasten upon one lot by reason of other lot owners conforming to a general plan.”
The difficulty with defendants’ argument is that the provision of the restrictive covenant permitting amendment predates defendants’ acquisition of the property at issue and apparently dates back to the time when all the property in the subdivision was in the hands of a common owner. Thus, the provision for amendment was itself a valid nonretroactive reciprocal negative easement.
Defendants rely on Sampson v Kaufman, 345 Mich 48; 75 NW2d 64 (1956). In that case the Court held that the renewal of certain provisions of a restrictive covenant by a vote of two-thirds of the property owners within a subdivision was invalid as creating retroactive reciprocal negative easements; however, in Sampson, renewal took place 21 months after the date specified in the *798original restrictive covenant for renewal. Sampson cannot be read as prohibiting renewal or amendment of provisions of a restrictive covenant in accordance with the provisions in the original restrictive covenant for renewal or amendment.
As the majority correctly points out, other jurisdictions which have considered the issue have generally recognized as valid the amendment of a restrictive covenant in accordance with the provisions in the original covenant for amendment. Recently, in Ardmore Park Subdivision v Simon, 117 Mich App 57, 62; 323 NW2d 591 (1982), this Court held that:
"[WJhere a deed restriction properly allows a majority, or a greater percentage, or owners within a particular subdivision to change, modify or alter given restrictions, other owners are bound by properly passed and recorded changes in the same manner as those contained in any original grant and restriction.”
The majority proffers a theory of estoppel and detrimental reliance. However, an examination of the record discloses that none of the elements of estoppel are present here. In Kole v Lampen, 191 Mich 156, 157-158; 157 NW 392 (1916), the Court stated:
"It is a familiar rule of law that an estoppel arises when one by his acts, representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts.”
See also Schudlich v Yankee, 272 Mich 482, 486; 262 NW 395 (1935); Fleckenstein v Citizens’ Mu*799tual Automobile Ins Co, 326 Mich 591, 599-600; 40 NW2d 733 (1950); Holt v Stofflet, 338 Mich 115, 119; 61 NW2d 28 (1953); Campbell v City of Troy, 42 Mich App 534, 540; 202 NW2d 547 (1972). There can be no estoppel unless the party asserting the defense has been misled to his prejudice by the conduct of the person against whom the defense is set up. Odgers v Lentz, 319 Mich 502, 507; 30 NW2d 43 (1947).
By what conduct of plaintiffs were defendants misled? The restrictive covenant in effect at the time defendants acquired the property gave defendants notice that the covenant might be amended at any time by three-fourths of the property owners in the subdivision. There is no claim of any explicit or implicit representation by plaintiffs that the right to amend the covenant would not be exercised. There is no claim that plaintiffs failed to act promptly on learning of defendants’ plans. There is no claim that plaintiffs knew that defendants had entered into a lease when they acted to amend the covenant.
How have defendants suffered prejudice? This is not a case in which defendants claim to have made substantial improvements to the property on the supposition that their proposed use of the property would be permitted. Compare Boston-Edison Protective Ass’n v Teahen, 337 Mich 353, 358-359; 60 NW2d 162 (1953). Defendants have entered into a lease, but defendants have never claimed that they will suffer damages if the land use they envisioned when they entered the lease is forbidden. In this connection it should be noted that frustration of purpose and impossibility of performance are well-established defenses to an action for breach of contract; see 17 Am Jur 2d, Contracts, §§ 401, 402, 404, pp 847-850, 851-853.
*800Defendants also argue that the restrictions were contrary to public policy and therefore void. In Skutt v Grand Rapids, 275 Mich 258, 264-265; 266 NW 344 (1936), the Court explained:
"We adopt as did the trial judge the following from Pittsburg, CC & St L R Co v Kinney, 95 Ohio St 64; 115 NE 505 (1916).
" 'What is the meaning of "public policy?” A correct definition, at once concise and comprehensive, of the words "public policy,” has not yet been formulated by our courts. Indeed, the term is as difficult to define with accuracy as the word "fraud” or the term "public welfare.” In substance, it may be said to be the community common sense and common conscience, extended and applied throughout the State to matters of public morals, public health, public safety, public welfare, and the like. It is that general and well-settled public opinion relating to man’s plain, palpable duty to his fellow men, having due regard to all the circumstances of each particular relation and situation.
" 'Sometimes such public policy is declared by Constitution; sometimes by statute; sometimes by judicial decision. More often, however, it abides only in the customs and conventions of the people, — in their clear consciousness and conviction of what is naturally and inherently just and right between man and man. It regards the primary principles of equity and justice and is sometimes expressed under the title of social and industrial justice, as it is conceived by our body politic. When a course of conduct is cruel or shocking to the average man’s conception of justice, such course of conduct must be held to be obviously contrary to public policy, though such policy has never been so written in the bond, whether it be Constitution, statute or decree of court. It has frequently been said that such public policy is a composite of constitutional provisions, statutes and judicial decisions, and some courts have gone so far as to hold that it is limited to these. The obvious fallacy of such a conclusion is quite apparent from the most superficial examination. When a contract is contrary to some provision of the Constitution, we say it is *801prohibited by the Constitution, not by public policy. When a contract is contrary to statute, we say it is prohibited by a statute, not by a public policy. When a contract is contrary to a settled line of judicial decisions, we say it is prohibited by the law of the land, but we do not say it is contrary to public policy. Public policy is the cornerstone — the foundation — of all Constitutions, statutes, and judicial decisions, and its latitude and longitude, its height and its depth, greater than any or all of them. If this be not true, whence came the first judicial decision on matter of public policy? There was no precedent for it, else it would not have been the first.’ ”
Courts should act with caution in determining whether contracts are contrary to public policy and therefore void. Contracts should be declared void only in cases plainly within the reasons on which the doctrine rests. 275 Mich 264.
Defendants first seek an applicable public policy in certain zoning statutes. The following language appears as MCL 125.216a(2); MSA 5.2961(16a)(2), MCL 125.286a(2); MSA 5.2963(16a)(2), and MCL 125.583b(2); MSA 5.2933(2)(2):
"In order to implement the policy of this state that persons in need of community residential care shall not be excluded by zoning from the beneñts of normal residential surroundings, a state licensed residential facility providing supervision or care, or both, to 6 or less persons shall be considered a residential use of property for the purposes of zoning and a permitted use in all residential zones, including those zoned for single family dwellings, and shall not be subject to a special use or conditional use permit or procedure different from those required for other dwellings of similar density in the same zone.” (Emphasis added.)
The emphasized language shows that the Legislature expressly limited its declaration of policy to *802zoning. To apply the statutes to void a restrictive covenant would be to ignore the plain language of the statute.
Defendants also seek an applicable public policy in a line of decisions of this Court which includes Bellarmine Hills Ass’n v Residential Systems Co, 84 Mich App 554; 269 NW2d 673 (1978), lv den 405 Mich 836 (1979); Jayno Heights Landowners Ass’n v Preston, 85 Mich App 443; 271 NW2d 268 (1978), lv den 405 Mich 828 (1979); Malcolm v Shamie, 95 Mich App 132; 290 NW2d 101 (1980); Leland Acres Homeowners Ass’n, Inc v R T Partnership, 106 Mich App 790; 308 NW2d 648 (1981); Beverly Island Ass’n v Ziner, 113 Mich App 322; 317 NW2d 611 (1982). The issue in these cases was not whether restrictive covenants were valid or void; rather, each case presented a dispute as to interpretation of a restrictive covenant. Each case turned on the particular language used in the covenant and the details of the facility at issue. In contrast, here the restrictive covenant expressly bars state-licensed residential facilities and prohibits the very type of facility that defendants propose to establish. These cases show that state-licensed residential facilities such as defendants planned to operate here are highly controversial; thus, we should not say that enforcement of the restrictive covenant here would be cruel or shocking to the average man’s sense of justice.
Defendants rely on the following statement in Bellarmine Hills, supra, pp 558-559:
"Unquestionably, promoting the development and maintenance of quality programs and facilities for the care and treatment of the mentally handicapped is a settled public policy of our state. That policy has both a constitutional and legislative foundation. But we must also recognize that restrictive covenants may constitute *803valuable property rights. Kaplan v Huntington Woods, 357 Mich 612, 617; 99 NW2d 514 (1959); Monroe v Menke, 314 Mich 268, 273; 22 NW2d 369 (1946). Further, it has been the policy of our judiciary to protect property owners who have complied with the restrictions from violations of the covenants by others. Wood v Blancke, 304 Mich 283, 287-288; 8 NW2d 67 (1943).” (Footnotes omitted.)
The Bellarmine Hills Court identified two competing public policies and used them as guides for its interpretation of the restrictive covenant. In view of the admonition in Skutt, supra, to act with caution in determining whether contracts are void as contrary to public policy and to apply the doctrine only in cases plainly within the reason on which the doctrine rests, we cannot give preclusive effect to one of two competing public policies.
In this connection, see Johnstone v Detroit, G H & M R Co, 245 Mich 65; 222 NW 325 (1928), in which defendant had obtained the condemnation of certain property for use as a railroad right-of-way in return for contributing its old right-of-way for highway purposes. The property obtained was subject to a restrictive covenant limiting its use to residential purposes. The Court held that in order to use the condemned property for a purpose violating the covenant, defendant would have to obtain releases from owners of other lots in the subdivision whose property was not physically taken or obtain condemnation of their interests. It was argued that enforcement of the covenant to prevent use of the property for public purpose was contrary to public policy; however, the Court rejected that argument in view of the public policy favoring covenants restricting use of property to residential purposes.
Defendants argue and the circuit judge held that *804judicial enforcement of the restrictive covenant would amount to a denial of equal protection. In Shelley v Kraemer, 334 US 1, 10-11; 68 S Ct 836; 92 L Ed 1161 (1948), the Court held that judicial enforcement of a restrictive covenant was state action and therefore judicial enforcement of a covenant requiring racial discrimination amounted to a denial of the equal protection of laws guaranteed by US Const, Am XIV. However, the Court qualified its decision as follows:
"It should be observed that these covenants do not seek to proscribe any particular use of the affected properties. Use of the properties for residential occupancy, as such, is not forbidden.- The restrictions of these agreements, rather, are directed toward a designated class of persons and seek to determine who may and who may not own or make use of the properties for residential purposes. The excluded class is defined wholly in terms of race or color; 'simply that and nothing more.’
"It is likewise clear that restrictions on the right of occupancy of the sort sought to be created by the private agreements in these cases could not be squared with the requirements of the Fourteenth Amendment if imposed by state statute or local ordinance.” (Footnote omitted.)
In contrast to the restrictions at issue in Shelley, the restrictions here proscribe a particular use of the affected properties, use as a state-licensed residential facility. No designated class of persons is excluded from ownership or use of the properties. Moreover, the restrictions here would not amount to a denial of equal protection if imposed by statute or ordinance. Compare Village of Belle Terre v Boraas, 416 US 1; 94 S Ct 1536; 39 L Ed *8052d 797 (1974), in which the Court upheld a zoning ordinance which restricted land use to one-family dwellings excluding lodging houses, boarding houses, fraternity houses, or multiple dwelling houses. The ordinance specified that more than two persons living together but not related by blood, marriage, or adoption did not constitute one family. The Court found the ordinance to be reasonable rather than arbitrary and to bear a rational relationship to a permissible state objective, namely, preservation of the single family character of the neighborhood.
In view of the foregoing, I would reverse and remand for entry of an appropriate injunction.