Court Opinion

ID: 4508361
Source: CourtListenerOpinion
Date Created: 2020-02-19 10:06:02.74255+00
Date Added: 2024-06-11T09:37:41.728701
License: Public Domain

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

 KEVIN LOGAN, Individually and on Behalf of                            UNPUBLISHED
 All others Similarly Situated,                                        February 18, 2020

                Plaintiffs-Appellants,

 v                                                                     No. 333452
                                                                       Oakland Circuit Court
 CHARTER TOWNSHIP OF WEST                                              LC No. 2015-149134-CZ
 BLOOMFIELD,

                Defendant-Appellee.

                                          ON REMAND

Before: CAMERON, P.J., and SERVITTO and GLEICHER, JJ.

PER CURIAM.

         As noted in our prior opinion, “[p]laintiffs brought a self-styled class-action suit against
West Bloomfield Charter Township, challenging fees levied by the township’s building division”
and raising both equitable and legal claims. Logan v West Bloomfield Charter Twp, unpublished
per curiam opinion of the Court of Appeals, issued January 11, 2018 (Docket No. 333452) (Logan
I), slip op at 1. We vacated the circuit court order partially granting summary disposition in the
township’s favor. Id. The township applied for leave to appeal to the Supreme Court, which
ultimately vacated our judgment and remanded for reconsideration in light of Mich Ass’n of Home
Builders v City of Troy, 504 Mich. 204; 934 NW2d 713 (2019) (MAHB), and Genesee Co Drain
Comm’r v Genesee Co, 504 Mich. 410; 934 NW2d 805 (2019). Logan v West Bloomfield Charter
Twp, ___ Mich ___; 935 NW2d 42 (2019). MAHB and Genesee Co further support our previous
judgment and we again vacate the circuit court’s partial summary disposition order.
                                           I. BACKGROUND

       We succinctly outlined the relevant background of this case in Logan I, slip op at 1-2, as
follows:

                 Plaintiffs’ putative class action complaint against West Bloomfield Charter
         Township alleges that the township’s building division charged excessive fees,
         generated a profit, and deposited the extra money in the township general fund “to
         finance other operations.” The class representative1 asserted that he and others
         were forced to pay into this illegal municipal enterprise when applying for building
         permits. Through this system, plaintiffs alleged, the township violated the Stille-
         DeRossett-Hale single state construction code act (CCA), MCL 125.1501 et seq.
         Plaintiffs alleged that the township also violated the Headlee Amendment, Const
         1963, Art 9, § 31,2 by charging fees that exceeded the reasonable cost of its building
         division services as the fees had “the effect of a tax increase that was not authorized
         by a majority of the electorate . . . .” Plaintiffs ultimately raised four counts in their
         complaint: (1) statutory violation of the CCA, (2) violation of the Headlee
         Amendment, (3) unjust enrichment premised on the township’s violation of the
         CCA, and (4) a request for permanent injunctive relief against imposition of the
         challenged fees.

                 The circuit court summarily dismissed plaintiffs’ complaint in part upon the
         township’s motion. The court dismissed the class plaintiffs’ and Logan’s individual
         Headlee Amendment claims arising before September 16, 2014, on statute of
         limitations grounds pursuant to MCR 2.116(C)(7). Plaintiffs do not challenge this
         ruling.

                 The township contended that plaintiffs’ claims for unjust enrichment and
         for violation of the CCA were “derived from the Headlee Amendment Claim” and
         therefore were also time barred. Plaintiffs retorted that the claims were “distinct
         causes of action requiring different proofs.” The circuit court avoided deciding
         this issue, ruling instead that “there is no private cause of action for a refund or
         damages under the CCA” according to the plain language of the act and that “there
         is no cause of action for unjust enrichment arising out of the Headlee Amendment

1
    Kevin Logan raised individual claims as well.
2
    The Headlee Amendment provides:
         Units of Local Government are hereby prohibited from levying any tax not
         authorized by law or charter when this section is ratified or from increasing the rate
         of an existing tax above that rate authorized by law or charter when this section is
         ratified, without the approval of a majority of the qualified electors of that unit of
         Local Government voting thereon. . . .

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        violation.”3 In relation to the latter, the court ruled that equitable relief was
        precluded in plaintiffs’ Headlee Amendment claim because “there is already a fully
        [sic], complete, and adequate legal remedy.” Accordingly, the court dismissed the
        CCA and unjust enrichment claims under MCR 2.116(C)(8). Only plaintiffs’
        request for injunctive relief to prevent future excessive fees remained.

                We granted leave to appeal limited to the issue of whether the circuit court
        erred when it dismissed plaintiffs’ unjust enrichment claim premised on the
        township’s alleged violation of the CCA (not the Headlee Amendment as
        incorrectly posited in the circuit court’s opinion) pursuant to MCR 2.116(C)(8).
        Logan v Charter Twp of West Bloomfield, unpublished order of the Court of
        Appeals, entered November 30, 2016 (Docket No. 333452). Plaintiffs contend that
        the circuit court erred because: (1) they were permitted to plead alternative and
        inconsistent causes of action, and (2) the circuit court incorrectly ruled that
        plaintiffs were precluded from raising a claim of unjust enrichment premised on
        MCL 125.1522(1) where that statute did not expressly provide a legal remedy for
        violations of its provisions.

        We ultimately concluded in Logan I, slip op at 4, that MCL 125.1522(1) of the CCA did
not preclude a plaintiff from raising an unjust enrichment claim relating to a violation of the statute.
We further held that under the court rules, plaintiffs could raise inconsistent claims in their
complaint—one for unjust enrichment in relation to a violation of the CCA and one for a legal
remedy in relation to a violation of the Headlee Amendment. Id.

                                           II. ANALYSIS

       Genesee Co and MAHB further support that the circuit court improperly summarily
dismissed plaintiffs’ unjust enrichment claim stemming from the township’s violation of the CCA.

        Relevant to the current matter, in MAHB, 504 Mich. at 207, the Supreme Court held that
the city of Troy violated MCL 125.1522(1) of the CCA by charging excessive fees for the city’s
Building Inspection Department’s public services in order to generate a revenue to pay off the
department’s existing deficit. Just as we found in Logan I, the Supreme Court determined in
MAHB that MCL 125.1522(1) does not include an “express or implied monetary remedy” for its
violation. MAHB, 504 Mich. at 208. But, the Court concluded, the trade associations who filed
suit against the city could “seek declaratory and injunctive relief to redress present and future
violations.” Id.

        The background of MAHB is different in one important aspect from the current case. In
MAHB, the plaintiffs filed suit against the city alleging CCA and Headlee Amendment violations,
just as here. However, the plaintiffs did not seek relief in the form of unjust enrichment. Instead,
they sought injunctive and declaratory relief to end the building department’s illegal practices. Id.
at 209. The Court held that MCL 125.1522(1) “does not explicitly provide for a private cause of

3
 Plaintiffs had not sought equitable relief in connection with its Headlee Amendment claim,
however, only in relation to their challenge under the CCA.

                                                  -3-
action” and that there was “no indication that the Legislature intended a monetary remedy for a
violation” of the statute. MAHB, 504 Mich. at 223, 225. The Court further noted that a private
cause of action would be precluded by the Governmental Tort Liability Act (GTLA), MCL
691.1401 et seq. MAHB, 504 Mich. at 224. However, the Court continued, a private cause of
action for monetary damages was not “the only mechanism” for enforcing the statute. Id. at 225.
The plaintiffs could enforce the statute through a preliminary injunction preventing the further
collection of excessive fees until the debate was settled in court. Id. The plaintiffs could assert an
“actual controversy” as they claimed their “economic interests” were affected by the fees and
therefore could seek a declaratory judgment that the fees were illegal and could not be assessed in
the future. Id. at 225-226.

        As noted, in the current case, plaintiffs are individuals who seek the return of excessive
fees assessed in violation of the CCA. But plaintiffs have not sought redress directly under the
statute; rather, plaintiffs claimed that the township was unjustly enriched by the funds collected in
violation of the statute. MAHB does not address whether such an unjust enrichment claim would
be permitted in response to a violation of the CCA.

        In Genesee Co, the Supreme Court considered the nature of an unjust enrichment claim.
In that case, the defendant county served as the administrator for its employees’ Blue Cross
healthcare plan. Blue Cross conducted a multiyear audit and discovered that the county had
collected “millions of dollars” more insurance premiums from its employees than it should have
charged. The plaintiff, the county’s drain commissioner, filed suit seeking his pro rata refund of
the premium overpayment, raising claims in contract and tort (conversion and fraud). Genesee
Co, 504 Mich. 414-415. In an amended complaint, the plaintiff added an unjust enrichment count
based on the county’s wrongful retention of the overpayed insurance premiums. Id. at 416. The
trial court dismissed the plaintiff’s tort claims as barred by the GTLA, and this Court affirmed that
ruling. This Court and the Supreme Court agreed with the trial court, too, that the unjust
enrichment claim was not barred by governmental immunity. Id.

       The Court described unjust enrichment as follows:

                Unjust enrichment is a cause of action to correct a defendant’s unjust
       retention of a benefit owed to another. It is grounded in the idea that a party shall
       not be allowed to profit or enrich himself inequitably at another’s expense. A claim
       of unjust enrichment can arise when a party has and retains money or benefits which
       in justice and equity belong to another. [Id. at 417-418 (cleaned up).4]

The remedy for a tort and sometimes a contractual breach, the Court held, is compensatory
damages. Id. at 419. But, “[t]he remedy for unjust enrichment is restitution.” Id. at 418.

4
  This opinion uses the parenthetical (cleaned up) to improve readability without altering the
substance of the quotation. The parenthetical indicates that nonsubstantive clutter such as brackets,
alterations, internal quotation marks, and unimportant citations have been omitted from the
quotation. See Metzler, Cleaning Up Quotations, 18 J App Pract & Process 143 (2017).

                                                 -4-
               Unjust enrichment . . . doesn’t seek to compensate for an injury but to
       correct against one party’s retention of a benefit at another’s expense. And the
       correction, or remedy, is therefore not compensatory damages, but restitution.
       Restitution restores a party who yielded excessive and unjust benefits to his or her
       rightful position. [Id. at 419 (cleaned up).]

The Court alternatively explained, “[U]njust enrichment claims based in equity [historically]
involved remedies other than money judgments, including the establishment of constructive trusts,
equitable liens, subrogation, and accounting.” Id. at 421. Ultimately, the Court asserted:

              Unjust enrichment has evolved from a category of restitutionary claims with
       components in law and equity into a unified independent doctrine that serves a
       unique legal purpose: it corrects for a benefit received by the defendant rather than
       compensating for the defendant’s wrongful behavior. Both the nature of an unjust-
       enrichment action and its remedy—whether restitution at law or in equity—
       separate it from tort and contract. [Id. at 422.]

        The current matter is similar to Genesee Co in that while the plaintiffs in both actions do
seek money from the defendants, the money is not meant as compensation. Rather, plaintiffs in
this action, like the plaintiff in Genesee Co, seek the return of monies paid over to defendant that
should not have been charged in the first instance and therefore was unjustly held by defendant.
Requesting the return of the funds was not a tort or contract action, but an action to divest the
township of benefits unjustly retained. As the relief sought is equitable in nature, the claim is not
barred by MAHB. Accordingly, we again conclude that the circuit court improperly dismissed
plaintiffs’ unjust enrichment claim.

        We vacate the summary disposition judgment in relation to plaintiffs’ unjust enrichment
claim and remand for further proceedings consistent with this opinion. We do not retain
jurisdiction.

                                                              /s/ Thomas C. Cameron
                                                              /s/ Deborah A. Servitto
                                                              /s/ Elizabeth L. Gleicher

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