Malpractice claim versus real estate appraiser explained

Michael Dorman sued the appraiser he hired to support his inverse condemnation claim, Gilbert Zook.  Dorman had sued Clinton Township, claiming an illegal "taking" of his right to develop a parcel of real estate.  He claimed that he lost his case because Dorman mistakenly failed to account for the Michigan Land Division Act and subsequently conceded (wrongly) that Dorman could still secure a profit on his development by complying with the Township's zoning requirements.

The Court noted that while both parties agreed that Zook made an error, or failed to conform to the "standard of care," the proofs did not establish causation in fact.  In order for Dorman to recover damages from Zook for losing the underlying case, the "case within a case" requirement requires that Dorman show that he would have won the case, but for Zook's error. 

In this case, even though the appellate courts cited Zook's error as one reason for deciding the case in favor of the Township, they also held that "a simple visual inspection of the area would have placed plaintiff on notice that his proposed devleopment was inconsistent with the character of the neighborhood...[he] did not have a constitutionally protected right to develop his property under the 'light industrial' zoning classification."  Since Dorman had not completed "substantial construction" pursuant to a valid building permit, he could not establish a regulatory taking based on a vested property interest.  Therefore, Zook's error did not deprive him of a right of recovery from the Township, as it was not a "proximate cause" of his lawsuit defeat.

The appellate court did reverse the lower court's refusal to award case evaluation sanctions.  When a party who has rejected the case evaluation recommendation subsequently loses the case by means of a motion decided by the judge, the pertinent Court Rule allows the judge to decline to award sanctions "where the interest of justice requires."  In the instant case, the trial judge declined sanctions on the basis that the claim had been pursued "in good faith," which the appellate court held was an inadequate basis to refuse costs.