The distinction between employees and independent contractors continues to be hotly discussed in both business and legal circles – and wit...Read More
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Part 2 of our Zoning and Land Use update is here. Our 2013 series on recent zoning and land use law developments concludes with this E-Letter. Zoning and land use law constantly changes, and interest in land development has returned to Michigan, as evidenced by our jam-packed October and November E-Letters. With the state’s economy improving, we can expect to see more zoning and land use law issues in the months ahead.
Township Discretion to Enforce Ordinances — a Two-Edged Sword
When enforcing an ordinance against a property owner or denying a special use permit or variance, a township may face legal claims that it has unfairly treated one property owner different than other owners. Such claims may sound threatening on the surface, but they rarely have a serious bite. Two legal principles are in tension whenever such claims are presented. The first is the township’s ability to select which cases it chooses to prosecute, which is called “prosecutorial discretion.” This is like a police officer’s discretion to watch ten cars speed past in excess of a 55 mph speed limit. Instead of stopping the car traveling at 57 mph, the officer halts the tenth car traveling at 70 mph. Townships have the same discretion to pursue certain violations under their ordinances and not others.
At the same time, though, townships must observe a second principle—equal protection—which requires that the township treat similarly situated individuals in the same manner. Townships may treat individuals differently if they have a “rational basis” for doing so. Typically, the rational basis relates to the some difference in characteristics from one individual to another. For example, a township blight ordinance may apply to overgrown weeds. One property owner may have grass 24” high, and a second property owner may have weeds at 36” high, abutting a four-foot thicket that has overgrown on an old garage. The overgrowth now harbors raccoons and woodchucks, which are causing destruction to the neighboring properties and spreading trash and other hazards. The township’s decision to enforce the ordinance against the second property owner rationally relates to eliminating the unsafe overgrowth on the garage, the aesthetic issues and the vermin infestation, which may not exist (at least not yet) on the first owner’s property.
Although townships usually have a rational basis for enforcing an ordinance against one property owner and not another, property owners frequently challenge enforcement actions for denial of equal protection. After receiving a warning or citation, the property owner immediately drives around and photographs every other property in the township violating the ordinance (yes, including the Township Clerk’s house). The property owner then waves the photographs in front of the township and court, declaring that he or she is being singled out by the township and not being treated equally to his or similarly situated neighbors who are also violating the ordinance. Since the township has prosecutorial discretion, the property owner has the burden to prove the equal protection claim, i.e., there is no rational basis why he or she is treated differently than his or her neighbors.
Townships should be aware of this claim and defense so they adhere to enforcement procedures that are equal to all property owners for similar violations of the township’s ordinances. The township is not prohibited from using its discretion to proceed against the property owner with most egregious violations, and it arguably should go after the most serious violations before it pursues the lesser ones. There are important safety and health concerns to the public with respect to the vermin infested overgrowth that are different than just overgrown grass. Any claim brought or defense raised by a property owner is meritless if the township has a rational basis related to a governmental interest, such as danger to occupants on the property, vermin infestation, property damage and aesthetic deterioration of the neighborhood. West Bloomfield Charter Township v Jacob, Michigan Court of Appeals (2013); Grucz v New Baltimore, Michigan Court of Appeals (2012).
Is Your Zoning Administrator an Employee or an Independent Contractor?
Employment law and zoning may seem unrelated at first glance, but employment law is important to all aspects of township governance. Many townships contract with private businesses for zoning administration, building inspection and planning, as opposed to hiring their own employees. Hiring and terminating contracted services can pose legal and financial risk for a township depending on how the services are performed and the relationship between the township and the business providing the service. Although contracted services can decrease costs to the township, the township must still ensure that the business is treated as an independent contractor and not an employee. If not, a business hired as an independent contractor might be determined to be an employee, which can cause the township to face high wage and hour claims, IRS issues and higher insurance premiums. Improper classification of employees opens the township to liability for unlawful or negligent acts of an employee. Other risks include unemployment liability, insurance liability, workers compensation and back taxes owed on wages.
Although there is no single factor that separates an independent contractor from an employee, to ensure that you have a bona fide independent contractor relationship with your zoning administrator or building inspector, the township should be mindful of the following:
To help avoid having the worker considered an employee, we recommend permitting any workers of the business to set his or her own day-to-day hours and not be told the precise manner in which to perform the contracted work. Instructing contracted workers on a daily or weekly basis as to where their services are needed, however, is not an indication by itself that the worker will be considered an employee. It’s understandable that the township must provide some direction.
The manner of payment should be limited to an hourly rate for a predetermined number of hours or a flat fee for the completion of the agreed to services. The payment for services should not include compensation for medical benefits or vacation or sick time. The township should always issue 1099 tax forms as well.
As for the township’s ability to hire, fire and discipline the worker, such control over the worker can tend to show that the worker is an employee. Although this factor alone will not turn an independent contractor into an employee, understandably, the township must maintain some level of control over the worker to minimize the township’s risk predicated on unlawful and negligent acts of the worker and to verify that needed services are being performed. Furthermore, given that the township would always retain the right to terminate the contract underlying the service relationship, the ability to fire and hire the worker will be with the township. We recommend that the township refrain from disciplinary procedures of any type, and thus, solely rely on its ability to terminate the service contract. If services are not being performed as contemplated, the township, after ensuring it is not breaching any terms of the service contract, should consider terminating the contract and seeking help elsewhere.
There are a myriad of other factors that a court will weigh to decide whether the worker is an independent contractor, including whether the worker is referred to as an independent contractor, not an employee, and whether any documents referencing the service are labeled as independent contractor agreements. Giera v Belleville, Michigan Court of Appeals (2012). For more information on this subject, see our June 2013 E-Letter and our August 2012 E-Letter.
Recovering Costs of Blight and Nuisance Abatement
Enforcement of blight and nuisance ordinances is crucial to maintain clean, safe, healthy and aesthetically pleasing communities. If enforcement culminates in court action, the township has already made a critical determination that the violations are significant and warrant incurring legal fees and court costs to abate. The finality of the court action should result in the issuance of an order requiring the property owner to abate the violations. Not all property owners willingly comply.
Once it has a court order abating the nuisance, the township must sometimes force compliance with the order. The township can return to court and request that the property owner be held in “contempt of court” until compliance is reached. Compliance is typically obtained by civil fines or even jail terms. But compliance is not guaranteed and additional attorney fees and court costs will be incurred.
With skillful legal counsel, a better alternative exists. Orders requiring the violations to be abated should contain clauses that permit the township to enter the property and abate the violations itself if the owner does not. Most townships contract services to assist with abatement. Although additional expenses are incurred, the township has the legal right to recover its costs for abating the violations and charging the costs against the property owner and against the property itself.
To ensure recovery, townships should be prepared for two objections that the property owner may raise: (1) the services detailed on the bill were not performed and (2) a less expensive alternative was available. Townships need to document the costs incurred and the services performed. We recommend that townships provide the court with detailed bills (documenting services performed and labor costs) and photographs documenting the clean-up and abatement. This information will defeat any claims by the property owner that services charged for were not completed.
The property owner may still argue the costs requested should be lowered because a more cost effective approach was available. A recent Michigan Court of Appeals’ decision found little merit in this argument, since the property owner could have avoided all costs by either not violating the ordinance, or by complying with the court’s order. Although the township has to incur additional costs in a case like this, the township should ultimately recover its costs and have the blight or nuisance violation abated. Bloomfield Hills v Froling, Michigan Court of Appeals (2012).
Motocross Parks Do Not Boost Crop Yields
Not all townships deal with regulating motocross parks designed for racing dirt bikes and other all-terrain vehicles (ATVs) around a track. Even so, some landowners operate, or attempt to operate, the parks on agriculturally zoned land. How can townships regulate the parks with their current zoning and regulatory ordinances? Although the answer is not clear-cut, generally motocross parks are in violation of a township’s zoning ordinance and nuisance ordinance.
The specific characteristics of the park will determine whether it violates the zoning ordinance. If the park is a highly intensive operation, designed for racing multiple bikes, or receives a profit, the park will be considered more than mere recreational use of the property. The park will violate the zoning ordinance since it is more than an accessory use and will not enhance the primary use of farming. It is difficult for any property owner constructing or maintaining a motocross park to establish that motocross riding and construction of tracks is dependent on or relates to farming. Now this does not limit the use of ATVs for farming purposes, such as hauling wagons, spraying soybeans or corn, and providing feed to cattle.
In addition to enforcing the zoning ordinance, the dust, odor and noise created by riding around the track may constitute a nuisance under a township’s nuisance ordinance, justifying an additional reason why the motocross park must cease to operate. Ida Township v Southeast Michigan Motorsports, Michigan Court of Appeals (2013).
— Christopher S. Patterson firstname.lastname@example.org
Fahey Schultz Burzych Rhodes PLC, Your Township Attorneys, is a Michigan law firm specializing in the representation of Michigan townships. Our lawyers have more than 130 years of experience in township law, and have represented more than 130 townships across the state of Michigan. This publication is intended for our clients and friends. This communication highlights specific areas of law, and is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.
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