A recent Michigan Court of Appeals ruling in the lawsuit of two developers against Sylvan Township is mostly good news for the township, its lawyer, Gaetan Gerville-Reache, said in a recent press statement.

“We are pleased with the decision,” he said in the statement.

Norfolk Development Corp. won a $2.4 million judgment against the township in the circuit court that alleged breach of contract when the township chose to connect to a sewer treatment plant rather than construct its own facility.

Gerville-Raeche said the $2.4 million in damages awarded by the Washtenaw County Circuit Court, and claimed by the developers, were sent back to the lower court because the circuit court judge used the wrong contract to determine the amount of damages. The Michigan Court of Appeals' recent decision affirmed in part, vacated in part, reversed in part, and remanded further proceedings back to the Circuit Court.

“Our lawyer claimed it was a victory because a lot of it was sent back to the lower court to be reheard,” said Township Supervisor Bob Lange.

Gerville-Raeche said in his statement, “The opinion also essentially resolves some of the developers' claims in the township's favor and puts the parties back in the position they were in before the judge's summary disposition and damages orders were entered.”

According to Gerville-Raeche's statement, “There is no merit to NDC and Magellan's claims that they were harmed when the township chose to construct an interceptor for the greater community rather than a sewer treatment plant to serve only NDC's and Magellan's developments.”

How much the developers will have to pay for the township's sewer hookup (known as an interceptor) and when the developers had to start paying their sewer and water system special assessments are still open questions, which will likely have to be resolved in a trial, the statement says.

The judgment from the circuit court voided the $8 million special assessment district that was supposed to pay for the water plant and sewer connection, and was upheld by the appeals court.

“The township also accepts the fact that the special assessments for the interceptor have to be reassessed, but the opinion at least establishes that the developers will ultimately have to pay their fair share for the interceptor,” Gerville-Reache said.

There will be no further proceedings in the trial court, however, until the opportunity for appeal to the Michigan Supreme Court has been exhausted, the statement says. The plaintiff has until July 7 to decide if it will appeal.

Until then, the township plans to meet with Washtenaw County officials to discuss payments for the $9.4 million in bonds it owes for the utilities that were backed by the county’s full faith and credit.

The township only has enough money in its water and sewer fund to make the October interest-only payment of $176,000.

Township attorney Pete Flintoft said last week that even if the township can come to an agreement with the county to spread out the payments for the bonds for the sewer and water system, any millage would be put on a ballot for a township-wide vote.

The township may renegotiate the $10.6 million it owes for the bonds over 20 years, and the debt repayment would cost township residents about an additional 3.15 mills per year in taxes.

He said the board cannot impose a millage; the people will have to vote on it and if it’s turned down by the voters and the courts set a payment amount, “it will fall due in big chunks. The courts don’t have the ability to spread it out,” Flintoft said.

However, he said, it take a year or two before that point.

What’s still uncertain is what will become of the $1.2 million the township owes to the county, money it paid the township for the special assessment when the developers quit paying.

“We don’t know how much we’ll have to pay and when,” Lange said.

Sylvan Township officials and Gerville-Reache met in closed session Wednesday to discuss the Michigan Appeals Court ruling, which was rendered last month.

Gerville-Reache is an attorney with Warner Norcross & Judd LLP of Grand Rapids who was hired by the township for its appeal to the higher court.

Lisa Allmendinger is a reporter for AnnArbor.com. She can be reached at lisaallmendinger@annarbor.com. For more Chelsea area stories, visit our Chelsea page.