In Welgosh v. City of Novi, et al.03.19.2015.unpub, the Michigan Court of Appeals provides a good explanation and outline of when a governmental entity (and individual governmental employees) might be liable to a property owner for condemnation through encroachments or other indirect actions that lead to property encroachment or other invasion of property rights.
Here, the alleged event that led to claims against the city was basement flooding. The property owners sued the builders and the city inspectors, including the city itself, when it was discovered that the foundation of their home was built below the recommended level to prevent water seepage and flooding.
The property owners alleged inverse condemnation against the city, and gross negligence against the city inspectors who allegedly approved the building project despite the deficiencies. The property owners sought compensation from the government for alleged “taking” of their property.
As the Court explains, the only way compensation can be awarded against the government for an invasion (or indirect (inverse) condemnation) of property rights is if the government action at issue was directly intended to cause the said invasion. The Court provides this rationale in explaining a previous case in which a roadbed ditching and culvert project led to runoff waters spilling over onto the property owner’s land. The spillage was incidental and no act on the part of the government or its individual employees was purposefully designed to have actually caused the diversion of water to be transferred to the property owner’s land.
The second aspect of this particular case that is of interest to anyone practicing in the area of municipal liability law in Michigan is the Court’s citation to the principle that in order to hold an individual governmental employee “grossly negligent” in avoidance of governmental immunity under Michigan’s governmental tort liability act, is to prove that the actor’s conduct was the, not just a, proximate cause of the injury complained of. Here, the proximate cause of the property owner’s damages was the building company’s construction of the foundation in an unsuitable area.
Finally, the Court cites to the decision I secured in the Michigan Supreme Court Odom v. Wayne County, explaining the “intentional tort” exception and the “good faith” test implicated in that decision was not properly before the court because the property owners failed to adequately allege the intentional tort.