Docket No. 48450.
Decided March 4, 1981. Leave to appeal applied for.
Allan C. Schmid, Gust Triantafillou, and William G. Elliott, Jr., for plaintiffs.
William A. Crane, for Saginaw Township.
Merritt R. Jones, for Saginaw County Drain Commissioner and McCarty Road Drain Improvement Drainage District.
This action was brought in the Circuit Court for the County of Saginaw to challenge special assessments levied on the property of the plaintiffs in connection with the improvement of the McCarty Road Drain. On October 15, 1979, the circuit court entered an order granting accelerated and summary judgment on the ground that plaintiffs failed to comply with the statute of limitations. The trial court denied a motion for rehearing. Plaintiffs appeal as of right.
Certain allegations of fraud were made in the plaintiffs' complaint and will be discussed below. As an initial note, this Court will assume arguendo that the circuit court had valid equity jurisdiction based upon those allegations and address a jurisdictional matter not yet raised by the parties at the circuit level or upon appeal.
Since July 1, 1974, the Michigan Tax Tribunal has held original and exclusive jurisdiction pursuant to the enabling statute to review special assessment determinations. MCL 205.731(a); MSA 7.650(31)(a). The statute states:
"The tribunal's exclusive and original jurisdiction shall be:
"(a) A proceeding for direct review of a final decision, finding, ruling, determination, or order of an agency relating to assessment, valuation, rates, special assessments, allocation, or equalization, under property tax laws."
The issue of equity jurisdiction of the circuit courts in special assessment cases, including those involving drain assessments, is currently pending on appeal before the Michigan Supreme Court. See Romulus City Treasurer v Wayne County Drain Comm'r, 86 Mich. App. 663; 273 N.W.2d 514 (1978), lv gtd 406 Mich. 976 (1979), contra, Edros Corp v Port Huron, 78 Mich. App. 273 ; 259 N.W.2d 456 (1977). If the allegations of fraud are sufficient in the instant case to support equity jurisdiction, the issue pending on appeal is squarely presented to the Court.
However, this Court does not feel compelled to base its decision upon the lack of subject matter jurisdiction, an issue not raised by the parties. Dismissal based upon the plaintiffs' failure to comply with the statute of limitations was also proper.
The final order of determination was filed on August 2, 1978. The final order of apportionment was filed on October 16, 1978. Plaintiffs did not file their complaint until December 11, 1978, 56 days after the final order of apportionment, and 131 days after the final order of determination. The presently-applicable statute states:
"Neither the final order of determination nor the final order of apportionment shall be subject to attack in any court, except by proceedings in certiorari brought within 20 days after the filing of such order in the office on the chairman of the board issuing the same. If no such proceedings shall be brought within the time above prescribed, the drain shall be deemed to have been legally established and the legality of the drain and the assessments therefor shall not thereafter be questioned in any suit at law or in equity, either on jurisdictional or nonjurisdictional grounds." MCL 280.483; MSA 11.1483.
Clearly, plaintiffs have not complied with the time limits of the statute. Unless equity will allow, the plaintiffs' cause of action is barred.
An exception to the plain language of the Drain Code has grown up in Michigan under prior statutory language for cases where fraud is alleged and properly pled. An entire lack of jurisdiction could be challenged in a similar fashion. However, mere irregularities in the proceedings were to be settled under the statute. See Kinner v Spencer, 257 Mich. 142; 241 N.W. 240 (1932), Patrick v Shiawassee County Drain Comm'r, 342 Mich. 257; 69 N.W.2d 727 (1955). Plaintiffs argue that they have pled facts sufficient to fall within the exception to the 20-day statute of limitations.
Under the court rules of Michigan, fraud must be pled with specificity. GCR 1963, 112.2. Mere allegations or conclusions are not sufficient to apprise a defendant of the nature of the claim of fraud. In this case, the trial court noted the issue after extensive argument in motions and the oral argument for rehearing. A plaintiff does not have the right to a hearing to present proofs where the complaint is insufficient to plead the cause of action.
In addition, an essential element of the tort of fraud is reliance upon fraudulent representations or conduct which amounts to fraud at law. The aggrieved party must allege a causal link between the inequitable conduct of a defendant and the resulting harm. Plaintiffs have not alleged how they relied upon the "fraudulent" actions of the defendant to their detriment. The trial court had before it pleadings which indicated only that the plaintiffs strenuously objected to the special assessments as unfair. Neither the trial court nor the defendants were presented with specific allegations showing why the alleged improprieties could not have been dealt with with dispatch under the procedures set up by the Legislature in the Drain Code.
While this Court reaffirms the continuing existence of an exception to the Drain Code statute of limitations to be found in equity, it also recognizes that the severe time limitations incorporated by the Legislature into the Drain Code are not without purpose. The statute provides opportunities for review and protest which are to be invoked prior to the expenditure of any funds for the drain project. Bartnicki v Wayne County Drain Comm'r, 18 Mich. App. 200; 170 N.W.2d 856 (1969), lv den 382 Mich. 783 (1969). There must be an end to challenges to the legality of the establishment of a drainage district. The plain language of the Drain Code makes this evident. The judicial exception to the rule, developed over the years under prior versions of the code, remains valid, but it must be narrowly construed.
It is apparent from the record that the trial court was aware of the plaintiffs' allegations regarding fraud. It is also apparent that the trial court did not find this case to fall within the exception permitted by the statute and the case law. This Court has considered the pleadings in this case de novo; review of the pleadings confirms the ruling of the trial court.
Further, the trial court specifically found that the motion for accelerated and summary judgment was filed within the time provisions of the statute. We do not disagree.
Plaintiffs have also argued that the defendants should not be allowed to issue bonds without the approval of the electorate. The trial court held that the issue was not properly before it, since no allegations were made that the bonds were being issued or were being put up for sale. The plaintiffs have not adequately pursued this issue on appeal, and we affirm the trial court's holding that the issue as pled was not ripe for review.