DETROIT — A $900,000 home in Farmington Hills, Mich., must be bulldozed, at the owners' expense, because it sits on top of a leaking sewer pipe that could cause a sinkhole and disrupt sewer service to thousands of homes and businesses, according to a lawsuit filed in Oakland County Circuit Court.
Not so fast, say the homeowners, who note the house and its sewer connections were inspected and approved by both the City of Farmington Hills and the Oakland County Water Resources Commissioner's Office. They have countersued, asking to keep their home and to be shielded from any damage claims stemming from what they call "faulty municipal work."
They also are seeking to sue Farmington Hills and Flagstar Bank, which sold them the home as a foreclosure.
Oakland County Circuit Judge Nanci Grant is to hear arguments in the case later this month.
The case highlights the risk of sinkholes, like the one in Fraser that damaged three homes and disrupted sewer service to thousands of residents. Macomb County Public Works Commissioner Candice Miller estimates it will cost $78 million to fix.
A commission appointed by Gov. Rick Snyder last year concluded that Michigan must spend an additional $4 billion annually on infrastructure like water and sewer systems to ensure they meet the needs of a growing economy.
The 4,600-square-foot home on Howard Road sits on 1¼ acres. It includes elaborate stone work, leaded glass windows and an attached three-car garage. The unpaved street is designated a natural beauty road and a stream in the backyard separates the property from the Farmington Hills Golf Club.
In 1976, the property was empty when its then-owners granted a 20-foot easement through it to Farmington Hills for a sewer. Two years later, the Ten Mile Rouge Drainage District bought the easement and installed an 18-inch concrete sewer pipe through the property. The work included a manhole to give maintenance and repair crews access to the pipe.
In 2000, Richard and Marguerite Petersen bought the property and used a construction company owned by Richard Petersen, Kendillion Construction, to serve as general contractor on the project.
According to the suit, Kendillion or one of its subcontractors "intentionally removed a manhole chimney and cone constructed by the Water Resources Commission, which was part of the sanitary sewer and then capped the manhole."
The suit goes on to claim "the excavation for the manhole was backfilled and buried under what is now the concrete basement of the residence."
Inspections done with remote control cameras show the capped manhole is now leaking and causing erosion around the pipe. Repair crews from the Oakland County Water Resources Commissioner's Office, which operates the drain for Ten Mile Rouge, can't access it to fix because the house is sitting on top of it.
"With the leak in the manhole presently unrepairable, this unchecked hazard could create a sinkhole and could ultimately cause the collapse of the manhole beneath the home," the lawsuit claims. "Such a collapse could result in injury or death to any person in the home at the time."
What's more, a sewer pipe failure could force raw sewage to back up into the basements of nearby homes, businesses and rivers, according to the suit.
The commissioner's office researched moving the sewer line and estimated the cost at $885,000, which doesn't include the cost of buying property from neighbors for new easements. The commissioner's office is willing to move the line if the homeowners pay for it.
Otherwise, the house has to go, said Kelsey Cooke, a lawyer for Water Resources Commissioner James Nash.
"The drain code allows the commissioner to remove any obstruction in the easement of a drain and the house is an obstruction," she said.
Homeowner Sukhpal Dhillon declined to comment but his lawyers have asked Grant to send the case to mediation so the parties can work out a deal to keep the house.
Richard Peterson filed bankruptcy in July 2006 and in 2008 lost the home in a foreclosure.
Dhillon and his wife, Amarpreet Kaur Dhillon, bought it in August 2008 for $750,000 from Flagstar Bank, which had foreclosed on it. The Dhillons note in their countersuit that the home and its sewer connection were inspected and approved by both the City of Farmington Hills and the commissioner's office at the time of construction.
The building permit issued by the city included a $55 fee for a manhole inspection, according to pleadings made by lawyers for the Dhillons.
"If there was a problem with either the location of the home, or with its connections to the sewer line, they should have required that it be corrected before approving and signing off on the connection," the Dhillon's lawyer, Matthew Walker, wrote in the countersuit. "The Dhillons had nothing to do with the numerous inspections or approvals and they were not involved with the issuance of a final certificate of occupancy. All they did was purchase a nice home in a nice community."
Cooke said that the county's inspection included only the tap, the connection from the house to the sewer pipe. The inspector didn't look for the manhole and wasn't there to survey the pipe, Cooke said.
The Dhillons' lawsuit isn't the first time the Water Resources Commissioner's Office has sued to defend underground pipes. In 2004, it sued the Royal Oak Woman's Club claiming an elevator added to the back of the building encroached on a drain easement.
Oakland County Circuit Judge Wendy Potts confirmed the easement but declined to force the club to remove its elevator. Potts wrote that there was no evidence that the construction damaged the drain in any way and the commissioner's office didn't show that it was unable to maintain the drain.
Despite the construction of the elevator, then-Drain Commissioner John McCulloch called the ruling a victory that protected the easements.
John Basch, another lawyer for Nash, said that he thinks the Dhillon case is unique and unlikely to be repeated.
"It's just not likely to happen," Basch said. "They are just too good at identifying where the pipes are. This one is deliberate."
Follow John Wisely on Twitter: @jwisely
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