City of Novi v. John L. Woodson and Karen J. Woodson

In this condemnation case, plaintiff, city of Novi, appeals as of right from the trial court's
order of final judgment following a jury verdict in favor of defendants, John and Karen
Woodson. Novi's issues on appeal also concern the trial court's order denying its motion in
limine. The Woodsons filed a cross appeal and argue that the trial court erred in failing to award
mediation sanctions and abused its discretion by ordering Novi to pay only a portion of the
Woodsons' expert witness fees. We affirm in part, vacate in part, reverse in part, and remand for
further proceedings consistent with this opinion.

I. Facts and Procedural History

In 1981, Louis and Mildred Gavar sold the Woodsons a lot measuring approximately
one-half acre (0.55586 acre), contiguous to West Road in the city of Novi. Mrs. Woodson
testified at trial that they bought the vacant lot to store wood and heavy equipment used in their
tree removal business. Before she bought the lot, Mrs. Woodson went to the offices of the city
of Novi to confirm that outdoor storage was permitted. Mrs. Woodson testified that a Novi
employee, "Mr. Bailey," told her that no site plan was necessary because their intended use was
the same as the prior owners' use of the lot. Accordingly, the Woodsons closed on the lot
purchase on December 31, 1981, without submitting a site plan to the planning board and
without obtaining a certificate of occupancy.

Between 1981 and 1996, the Woodsons' tree removal business grew and aerial
photographs of the property show that, over the years, their use of the property expanded
significantly. Mrs. Woodson testified that, in 1985, she learned that the zoning for the lot had changed to light industrial, but that the change did not affect their use of the land because their
use was a legal, nonconforming use that continued from the prior owners.1

During the winter of 1996-97, a representative from JCK and Associates (JCK) called
Karen Woodson to negotiate the purchase of her property on behalf of Novi. Novi determined
that it was necessary to extend Taft Road, north of Twelve Mile, for the use and benefit of the
public. The city engineers at JCK found it necessary to build the extension across the Woodsons'
property and, accordingly, offered the Woodsons $20,000 for the lot. The Woodsons refused to
sell and, on May 19, 1997, Novi submitted a good-faith offer to purchase the lot for $38,000.
The Woodsons rejected the good-faith offer and, on June 2, 1997, Novi passed a resolution
regarding the road extension and issued a declaration of taking on June 12, 1997.

Novi filed a complaint on July 30, 1997, and requested that the court enter an order
vesting title in the property in Novi if the Woodsons failed to file a motion to review the
necessity of the taking under MCL 213.56(1). Novi also requested a jury trial to determine the
amount of just compensation for the lot if the Woodsons continued to contest the amount of its
good-faith offer. On August 25, 1997, the Woodsons' attorney sent a letter to Novi's attorney
that stated that, under MCL 213.55(3), the Woodsons "reserve the right to claim just
compensation for [among other claims,]. . . business interruption damages and/or going concern
damages . . . ." The Woodsons did not contest the necessity of the taking, and, therefore, the trial
court entered a stipulated order vesting title in and granting possession of the lot to Novi,
effective October 14, 1997. The order further ordered Novi to pay the Woodsons the amount of
the good-faith offer, $38,000, and preserved the Woodsons' right to pursue additional
compensation in court.

Discovery proceeded and, on August 26, 1998, Novi filed a motion in limine to prohibit
the Woodsons from submitting evidence at trial regarding any damages other than for the fair
market value of the property. Specifically, Novi argued that the Woodsons' business interruption
damages claim was barred under subsection 5(3) of the Uniform Condemnation Procedures Act
(UCPA), MCL 213.55(3), which states that claims for such damages must be filed within ninety
days of the date the good-faith written offer was made or within sixty days of the date the
complaint was filed, whichever is later. MCL 213.55(3). Novi further asserted that the
Woodsons' letter of August 25, 1997, did not constitute a written claim for those damages and that the limitation period expired on September 29, 1997, sixty days after Novi filed its
complaint.2

The trial court ultimately denied Novi's motion in limine. A jury trial began on
September 13, 1999, and witnesses testified for both sides regarding the value of the property
and the Woodsons' business interruption damages claim. Following deliberations, the jury
awarded the Woodsons $160,000 for the taking and $90,000 for business interruption damages.
Thereafter, on December 2, 1999, the trial court entered a final judgment. The trial court ordered
that, in addition to the amount paid pursuant to the good-faith offer of $38,000, Novi must pay
$249,035, plus interest. The trial court also ordered Novi to pay the Woodsons $80,000 in
attorney fees, $9,531.25 in expert witness fees for their real estate appraiser, and $18,000 in
expert witness fees for their financial consultant.

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Click the case caption above for the full text of the Court's opinion.

Affirmed in part, vacated in part, reversed in part and remanded.

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