Krishna Krupa Inc v. City of Ferndale ( 2018 )

STATE OF MICHIGAN
COURT OF APPEALS
KRISHNA KRUPA, INC., UNPUBLISHED
August 14, 2018
Plaintiff/Counter-Defendant-
Appellee,
v No. 337224
Oakland Circuit Court
CITY OF FERNDALE, LC No. 2016-152020-CZ
Defendant/Counter-Plaintiff-
Appellant.
Before: SWARTZLE, P.J., and CAVANAGH and M. J. KELLY, JJ.
PER CURIAM.
Defendant appeals by leave granted1 an order denying defendant’s motion for summary
disposition of its counterclaim which alleged that plaintiff’s motel is a public nuisance that must
be abated under the “padlock” statute, MCL 600.3801 et seq., because it is used for illegal drug
activity and prostitution. We reverse and remand.
Plaintiff owns the Motorama Motel at 8 Mile Road and Woodward Avenue in Ferndale
and required a public lodging license to operate. In November 2015, plaintiff applied for
renewal of its license. Inspections by defendant’s fire marshal, police chief, and building
department revealed numerous building, fire, and safety code violations in most of the motel’s 60
rooms. The police chief further noted that over the previous three years, the police had
responded to numerous calls for criminal activity involving both the sale and use of illegal drugs,
as well as prostitution and assaults. In fact, the amount of time the police department spent at the
motel exceeded any other commercial location in the city. 2 Defendant’s police chief
1
Krishna Krupa, Inc v City of Ferndale, unpublished order of the Court of Appeals, entered June
28, 2017 (Docket No. 337224).
2
In his recommendation letter, the police chief referred to attached documents detailing some of
the more significant incidents at the motel occurring from January 2013 through November
2015. These incidents included the discovery and seizure of illegal drugs and drug
paraphernalia, drug overdoses, prostitution, thefts, assaults, firearm offenses, and domestic
violence.
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recommended the denial of plaintiff’s application for renewal of its public lodging license on the
grounds that the motel is a public nuisance that was unreasonably taxing the resources of the
city’s police department and was harmful to the safety and general welfare of the city.
Following notice to plaintiff, the matter was referred to the city council as the licensing
authority. At a city council meeting held in February 2016, several city residents spoke out
against renewing plaintiff’s license. Thereafter, defendant’s city council unanimously held that
there was substantial cause to adopt the police chief’s recommendation to deny plaintiff’s request
for renewal of its public lodging license.
Plaintiff appealed the decision, requesting a public hearing before the city council on
whether the license should issue. The hearing was held on March 1, 2016. Defendant presented
testimony from a city building official, the fire marshal, a police officer, and the police chief
regarding the several code violations and extensive criminal activity occurring at the motel.
Plaintiff’s owner and the operator of the motel testified that he was a victim of the location and
nature of the business, and did not encourage criminal activity on the premises. Five city
residents who owned homes near the motel testified against granting the license to plaintiff and
four men who lived at the motel testified in favor of granting the license so that they could
continue to live there. After hearing all of the evidence, the city council unanimously adopted a
resolution upholding its decision to deny plaintiff’s request for renewal of its public lodging
license.
On March 16, 2016, plaintiff sued. In Count I, plaintiff challenges the constitutionality of
defendant’s ordinance relating to the issuance of public lodging licenses and, in Count II, raises
an inverse condemnation claim premised on the denial of its request for the license. In Counts
III and IV, plaintiff seeks declaratory and equitable relief with regard to the alleged improper
denial of plaintiff’s request for renewal of its public lodging license so as to allow plaintiff to
continue to operate its motel without defendant’s interference.
On March 29, 2016, defendant filed a counterclaim. Defendant alleged that several
incidents of criminal activity had occurred at plaintiff’s motel from 2013 through 2016 which
involved illegal drug use and sales, as well as prostitution. The most recent incident had
occurred on February 18, 2016, when the police arrested a suspect carrying 19 pre-packaged
rocks of cocaine and found a crack pipe with cocaine residue, two digital scales, sandwich bags,
and three cell phones in the suspect’s room at plaintiff’s motel. The police also determined that
the suspect’s mother, who stayed in the room with him, engaged in prostitution in that room. In
Count I, defendant seeks an injunction to abate a public nuisance under the “padlock” statute,
MCL 600.3801(1)(c), on the ground that plaintiff’s motel is used for the sale and use of illegal
drugs as evidenced by numerous attached police documents. In Count II, defendant seeks an
injunction to abate a public nuisance under MCL 600.3801(1)(a) and (b), on the grounds that
plaintiff’s motel is used for the purpose of prostitution and is used by prostitutes and other
disorderly persons as evidenced by numerous attached police documents. In Count III,
defendant seeks an injunction to abate a public nuisance under MCL 600.2940, on the ground
that plaintiff’s motel was operating without a public lodging license in violation of defendant’s
ordinances.
In October 2016, defendant filed a motion for summary disposition of its counterclaim
under MCR 2.116(C)(9) and (10). Defendant argued that it was entitled to a judgment and order
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of abatement under MCL 600.3815, because it filed its complaint within 90 days of acts that are
considered a nuisance—namely illegal drug and prostitution activities occurring on February 18,
2016 at the motel—and the material allegations of its complaint are true as established by the
documents attached to the counterclaim and to the motion. Defendant further argued that
plaintiff failed to state a valid defense to its nuisance claims thus there was no genuine issue of
material fact that the motel was being used for illegal drug activity and prostitution in violation
of MCL 600.3801. Moreover, defendant argued, plaintiff must be ordered to cease operating the
motel without a license which had been properly denied by the city council, i.e., the decision was
authorized by law and supported by competent, material, and substantial evidence on the whole
record. Numerous exhibits were attached to defendant’s motion, including police documents and
records related to the city council meetings.
Plaintiff responded to defendant’s motion for summary disposition, arguing that
defendant’s denial of plaintiff’s request for a public lodging license was based on defendant’s
desire to “modify the gateway to the city” and “do away with” plaintiff’s motel and another
neighboring motel to make room for redevelopment of the area. Toward that end, plaintiff
opined, defendant’s actions were intended to have the effect of driving down the value of
plaintiff’s property so that it could be acquired at a fraction of its worth. Plaintiff also argued
that it was improperly being held “accountable for crime at its motel which crime cannot be
circumvented by any action or inaction of Plaintiff.” In other words, plaintiff was not
responsible for the crime that occurred at its motel; it was committed by third parties, not
plaintiff, and should be prevented by proper policing. Moreover, plaintiff argued, defendant’s
conclusion that plaintiff was not suitable to have a public lodging license was not supported by
the evidence because, again, plaintiff was not responsible for the crimes committed at its motel.
And defendant’s public lodging license ordinance was unconstitutional. Accordingly, plaintiff
was entitled to summary disposition under MCR 2.116(I)(2).
A hearing was held on defendant’s motion for summary disposition, at which time the
parties argued consistent with their briefs. Thereafter, the court noted that defendant “has not
produced one single case that supports its position that a hotel owner is responsible for crime at
the hotel by paying guests or that a crime at the hotel gives rise to a nuisance attributable to the
plaintiff.” Without such case law, the court noted, it could not determine whether there was
competent, material, and substantive evidence supporting defendant’s position. Thus, the parties
were given additional time to supplement the record with case law that supported their respective
positions, after which the court would issue a written decision.
Defendant filed a brief listing six cases in support of its position that the property owner’s
knowledge of a nuisance use—such as illegal drug use and prostitution—is not a requirement to
seek abatement of the nuisance as plainly stated in MCL 600.3815(2). Plaintiff filed a brief
stating that no case law exists to support defendant’s legal position and the case law submitted by
defendant pertained to an irrelevant issue, i.e., whether the owner of a business must have
knowledge of the nuisance. Further, plaintiff argued, defendant must establish not only the
existence of a nuisance, but that it is directly attributable to plaintiff and its operation. And
defendant presented no evidence that plaintiff is responsible for the criminal activity at issue in
this case. Plaintiff cannot police and monitor what occurs in the motel rooms it rents.
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On February 22, 2017, the trial court issued its opinion and order denying defendant’s
motion for summary disposition of its counterclaim. The court held that it could not find that
competent, material, and substantive evidence supported defendant’s decision to deny the public
lodging license or that the decision was authorized by law. Further, the court held, plaintiff
stated a valid defense. Plaintiff then filed a motion seeking clarification of the court’s order and
an order granting dispositive relief in favor of plaintiff, which was denied. Defendant filed an
application for leave to appeal the trial court’s decision, which we granted.
On appeal, defendant argues that the trial court erred in denying its motion for summary
disposition of its counterclaim. We agree.
We review de novo a trial court’s decision on a motion for summary disposition.
Johnson v Recca, 492 Mich. 169, 173; 821 NW2d 520 (2012). A motion brought under MCR
2.116(C)(9) should be granted if a defendant fails to state a valid defense to a claim; only the
pleadings may be considered. Nicita v Detroit (After Remand), 216 Mich. App. 746, 750; 550
NW2d 269 (1996). On the other hand, a motion brought under MCR 2.116(C)(10) tests the
factual support of a claim. Spiek v Dept of Transp, 456 Mich. 331, 337; 572 NW2d 201 (1998).
The moving party must identify the matters that have no disputed factual issues, and has the
initial burden of supporting its position with documentary evidence. Quinto v Cross & Peters
Co, 451 Mich. 358, 362; 547 NW2d 314 (1996). The party opposing the motion must then
establish that a genuine issue of disputed fact exists. Id. After considering the documentary
evidence of record, in the light most favorable to the nonmoving party, the court determines
whether a genuine issue of material fact exists to warrant a trial. Walsh v Taylor, 263 Mich. App.
618, 621; 689 NW2d 506 (2004).
Defendant’s counterclaim is an original—not an appellate action—and raises three
statutory causes of action against plaintiff for abatement of a public nuisance. See MCL
600.3805. Thus, the trial court erroneously applied the limited standard of review accorded
appellate proceedings when it considered and denied defendant’s motion for summary
disposition. That is, defendant’s counterclaim is not contesting the decision by its own city
council to deny plaintiff’s application for renewal of its public lodging license; rather, defendant
is seeking injunctive relief to abate the public nuisance that is plaintiff’s motel. Specifically, in
Count I, defendant seeks an injunction to abate a public nuisance under MCL 600.3801(1)(c),
because plaintiff’s motel is being used routinely for the sale and use of illegal drugs as evidenced
by police documents and police witness testimony. In Count II, defendant seeks an injunction to
abate a public nuisance under MCL 600.3801(1)(a) and (b), because plaintiff’s motel is being
used routinely for the purpose of prostitution by prostitutes and other disorderly persons as
evidenced by police documents and police testimony. And in Count III, defendant seeks an
injunction to abate a public nuisance under MCL 600.2940 because plaintiff’s motel is operating
without a public lodging license in violation of defendant’s ordinances.
In its motion for summary disposition, defendant argued that it was entitled to a judgment
and order of abatement, closing the motel as mandated by MCL 600.3815(4), essentially because
plaintiff could not refute that it was a public nuisance considering the overwhelming evidence of
criminal activity routinely occurring on its property, including within 90 days of this action.
Further, defendant argued that the motel also should be ordered closed because it was undisputed
that plaintiff was operating without a license in violation of the local ordinance. In response to
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defendant’s motion, in relevant part, plaintiff argued that it could not he held accountable for the
crime that occurred at its motel. Plaintiff also challenged the city council’s denial of its request
for renewal of plaintiff’s public lodging license. In denying defendant’s motion for summary
disposition, the trial court apparently agreed with plaintiff’s argument that plaintiff could not be
held accountable under our nuisance laws for the criminal activity that occurs on plaintiff’s
property. We cannot agree.
Defendant’s counterclaim was brought under the authority of the public nuisance statutes.
We review de novo issues of statutory interpretation. Echelon Homes, LLC v Carter Lumber Co,
472 Mich. 192, 196; 694 NW2d 544 (2005). In an effort to discern and give effect to the
Legislature’s intent, we examine the statute’s plain language. Id. If the language is
unambiguous, no judicial construction is required or permitted and the statute is enforced as
written. Id. (citation omitted).
The statutes pertaining to a public nuisance are fairly straightforward. MCL 600.3801
describes what is considered a “nuisance” and proscribes them as follows:
(1) A building, vehicle, boat, aircraft, or place is a nuisance if 1 or more of the
following apply:
(a) It is used for the purpose of lewdness, assignation, prostitution, or
gambling.
(b) It is used by, or kept for the use of, prostitutes or other disorderly
persons.
(c) It is used for the unlawful manufacture, transporting, sale, keeping for
sale, bartering, or furnishing of a controlled substance.
* * *
(2) All furniture, fixtures, and contents of a building, vehicle, boat, aircraft, or
place described in subsection (1) and all intoxicating liquors in the building,
vehicle, boat, aircraft, or place are also declared a nuisance.
(3) All controlled substances and nuisances shall be enjoined and abated as
provided in this act and the court rules.
(4) A person, or a servant, agent, or employee of the person, who owns, leases,
conducts, or maintains a building, vehicle, or place described in subsection (1) is
guilty of a nuisance.
(5) As used in this section, “controlled substance” means that term as defined in
section 7104 of the public health code, 1978 PA 368, MCL 333.7104.
MCL 600.3805 authorizes the abatement action as follows:
The attorney general, the prosecuting attorney or any resident of the county in
which a nuisance described in section 3801 is located, or a city, village, or
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township attorney for the city, village, or township in which the nuisance is
located may maintain an action for equitable relief . . . to abate the nuisance and
to perpetually enjoin any person . . . who owns, leases, conducts, or maintains the
building . . . or place from permitting . . . [it] . . . to be used for any of the
purposes or acts or by any of the persons described in section 3801. After an
injunction is granted under this section it is binding on the defendant throughout
this state.
MCL 600.3815 states some parameters for establishing that a nuisance exists and, once
established, mandates the entry of a judgment and order of abatement as follows:
(1) In an action under this chapter, evidence of the general reputation of the
building, vehicle, boat, aircraft, or place is admissible for the purpose of proving
the existence of the nuisance.
(2) In an action under this chapter, proof of knowledge of the existence of the
nuisance on the part of 1 or more of the defendants is not required.
(3) In an action under this chapter, it is not necessary for the court to find the
property involved was being used as and for a nuisance at the time of the hearing,
or for the plaintiff to prove that the nuisance was continuing at the time the
complaint was filed, if the complaint is filed within 90 days after any act, any
violation, or the existence of a condition described in section 3801 as a nuisance.
(4) In an action under this chapter, on finding that the plaintiff has satisfied the
burden of proof and that the material allegations of the complaint are true, the
court shall enter a judgment and order of abatement as provided in this chapter.
However, if the plaintiff seeks abatement of a nuisance by forfeiture or sale of a
vehicle, boat, aircraft, or other personal property, the plaintiff has the burden of
proving by clear and convincing evidence that the vehicle, boat, aircraft, or
property was used for or in furtherance of the activity or conduct that constituted
the nuisance as described in section 3801.
And MCL 600.3825, in relevant part, states what the order of abatement may include:
(1) If the existence of the nuisance is established in an action under this chapter,
the court shall enter an order of abatement as a part of the judgment in the action.
The order of abatement may order all of the following:
(a) The removal from the building or place of all furniture, fixtures, and
contents.
(b) The sale of the furniture, fixtures, and contents in the manner provided
for the sale of goods under execution.
(c) The effectual closing of the building or place against its use for any
purpose, and so keeping it closed for a period of 1 year, unless sooner released as
provided in this chapter.
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(d) Any other equitable relief the court considers necessary.
It is unclear from the trial court’s opinion and order what analysis lead to the erroneous
conclusion that defendant did not establish that plaintiff’s motel constituted a public nuisance
under MCL 600.3801(1)(a), (b), and (c) as set forth in Counts I and II of defendant’s
counterclaim. Defendant offered a plethora of evidence, including documentary evidence and
police witness testimony, establishing that there was extensive criminal activity—including
illegal drug use and sales as well as prostitution—routinely occurring at plaintiff’s motel, as well
as within 90 days of the filing of its counterclaim. See MCL 600.3815(3). And although it could
be sufficient evidence under MCL 600.3815(1), the evidence presented here was not simply
“general reputation” evidence. Plaintiff did not deny the accuracy or veracity of that evidence of
criminal activity; rather, plaintiff simply claimed that it could not be held accountable for that
criminal activity. The trial court agreed with plaintiff; we do not.
“It is well established that nuisance abatement, as a means to promote public health,
safety, and welfare, is a valid goal of municipal police power.” Rental Prop Owners Ass’n of
Kent Co v City of Grand Rapids, 455 Mich. 246, 254-255; 566 NW2d 514 (1997). The nuisance
abatement statutes are designed to eliminate the use of property in connection with the conduct
proscribed in MCL 600.3801 to protect the community. State ex rel Cahalan v Bernstein, 57
Mich. App. 204, 207-208; 226 NW2d 56 (1974). This Court, and our Supreme Court, has
squarely held that a property owner’s participation, acquiescence, or knowledge with regard to
the nuisance activities is not necessary for the statutory scheme and abatement remedy to apply.
For example, in State ex rel Patterson v Weaver, 74 Mich. App. 462, 463-466; 254 NW2d 68
(1977), the owner of leased premises claimed not to know or acquiesce in the use of its premises
as a house of prostitution, but this Court held that the nuisance was abatable under the padlock
statute, MCL 600.3801 et seq.3 Likewise, in Bernstein, 57 Mich. App. at 205-206, the owner of a
bar that was used as a meeting place for prostitutes claimed to have done all that he could do to
prevent such use, but this Court held that the nuisance was abatable under the padlock statute.
More recently, in Michigan ex rel Wayne Co v Bennis, 447 Mich. 719; 527 NW2d 483 (1994),
our Supreme Court reiterated that innocence is not a defense to a statutory claim for abatement of
a public nuisance when it held that a wife’s interest in a motor vehicle, that had been used by her
husband in a manner that violated MCL 600.3801, could be abated although she did not know or
consent to such use. Id. at 737-742. The Bennis Court held that nuisance abatement statute
“expressly obviates the requirement that an owner consent to or acquiesce in the illegal use of
property.” Id. at 739.
It is clear, then, that nuisance abatement can occur even when there is no wrongdoing on
the part of the property owner. See Bernstein, 57 Mich. App. at 208. As the Bernstein Court
3
Weaver, 74 Mich. App. at 463-464, citing MCL 600.3815(2), People ex rel Wayne Prosecuting
Attorney v Tate, 306 Mich. 667, 669; 11 NW2d 282 (1943), People ex rel Wayne Prosecuting
Attorney v Bitonti, 306 Mich. 115, 119; 10 NW2d 329 (1943), and State ex rel Attorney General v
Robinson, 250 Mich. 99, 103; 229 NW2d 403 (1930).
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noted, the concept of fault as relates to a nuisance was explained by our Supreme Court in
Buckeye Union Fire Ins Co v Mich, 383 Mich. 630, 636; 178 NW2d 476 (1970):
Primarily, nuisance is a condition. Liability is not predicated on tortious conduct
through action or inaction on the part of those responsible for the condition.
Nuisance may result from want of due care (like a hole in a highway), but may
still exist as a dangerous, offensive, or hazardous condition even with the best of
care.
Thus, the singular focus of our nuisance law is on the fact that the nuisance exists, i.e., that the
property is being used to facilitate the proscribed acts regardless of how that situation came to
exist. The protection of the public is the paramount concern.
In this case, plaintiff admittedly had notice and knowledge of the criminal activities that
routinely occurred at its motel requiring police involvement. According to the undisputed
evidence, plaintiff’s motel was the “business address” for drug traffickers and prostitution rings,
as well as a haven for drug users, prostitutes, and other disorderly persons. But plaintiff
disowned any responsibility for the dangers associated with its motel, claiming merely to be a
“victim” of the location and nature of the business. 4 While plaintiff claims to be “innocent” with
respect to the flourishing criminal enterprises housed under its roof, it remains that plaintiff’s
motel exists as a “dangerous, offensive, and hazardous condition” that warrants abatement. See
Buckeye Union Fire Ins Co, 383 Mich. at 636. Plaintiff’s motel endangers the health and safety
of the public, including the people who stay in that motel as well as the people living in the
surrounding neighborhood and community.
In summary, defendant stated statutory claims for abatement of a public nuisance and
sufficiently established those claims entitling it to summary disposition of Counts I and II under
MCR 2.116(C)(10), regardless of whether plaintiff’s request for renewal of its public lodging
license was or was not properly denied. See MCL 600.3815(4). Plaintiff’s motel is being used
to facilitate the sale and use of illegal drugs and prostitution, criminal activities which fall
squarely within the contemplation of the public nuisance abatement statute. See MCL 600.3801.
Therefore, defendant was entitled to an order of abatement of this dangerous condition—the
entirety of the motel—for up to one year. See MCL 600.3825(1)(c). Accordingly, the trial court
erroneously denied defendant’s motion for summary disposition as to Counts I and II of
defendant’s counterclaim and that decision is reversed.
We next address the trial court’s denial of defendant’s motion for summary disposition as
to Count III. In Count III of its counterclaim, defendant alleges that plaintiff is operating its
4
Plaintiff’s primary security plan is to rely on the local police to prevent the criminal activity
occurring on its property. Plaintiff’s plan is unreasonable, short-sighted, and proves the wisdom
of the public nuisance statute. It plainly does not occur to plaintiff that the manner in which it
operates its motel may be attracting the criminal activity. For example, plaintiff may be
attracting crime through its reputation for having deficient surveillance and monitoring of guest
activities in the parking lot and common areas, as well as through its rental and registration
policies and practices. In any case, plaintiff’s stance that it is the “city’s problem” is untenable.
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motel without a public lodging license in violation of city ordinances which constitutes a
nuisance under MCL 600.2940. Plaintiff’s application for renewal of that license had been
denied by the city council, in part because of the extensive criminal activity that occurred at
plaintiff’s motel and in part because of numerous building, fire, and safety code violations. In
denying defendant’s motion for summary disposition, the trial court concluded that the city
council’s decision to deny plaintiff a license was not authorized by law or supported by
competent, material and substantial evidence. While unclear, it appears the trial court’s decision
was based at least in part on the faulty premise that plaintiff could not be held accountable for
criminal activity that occurs at its motel. In any case, because plaintiff’s motel was an abatable
public nuisance under MCL 600.3801 et seq., we need not consider whether plaintiff’s motel was
also an abatable nuisance under MCL 600.2940, as alleged in Count III of defendant’s
counterclaim. Even if plaintiff was operating without a public lodging license because its
request for one was wrongfully denied by defendant’s city council—and we are not saying that it
was—defendant is still entitled to a judgment and order of abatement closing down plaintiff’s
motel as a public nuisance. Thus, we need not consider the issue whether the trial court also
erred in denying defendant’s motion for summary disposition as to Count III of its counterclaim.
Accordingly, the trial court is directed to enter an order granting defendant’s motion for
summary disposition of its counterclaim under MCR 2.116(C)(10), enter a judgment and order of
abatement enjoining plaintiff’s continued operation of its motel, MCL 600.3815(4), and enter
any other order that may be necessary with respect to the closure of the motel, MCL 600.3825.
Reversed and remanded for proceedings consistent with this opinion. We do not retain
jurisdiction.
/s/ Brock A. Swartzle
/s/ Mark J. Cavanagh
/s/ Michael J. Kelly
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