Nov. 26—MAPLETON — Peninsula Township and a group of wineries are trading accusations of bad faith in court after trustees rejected a settlement that would've ended a legal dispute between the two that started more than a year ago.
Wineries of the Old Mission Peninsula and 11 wineries filed suit in October 2020, claiming the township's ordinances regulating different winery-related businesses violate state law and the Constitution, as previously reported. Township officials, while acknowledging the ordinances needed changing, rejected the accusations and said they were in the middle of working out amendments when the wineries and association filed suit.
The two sides all but reached a settlement at a Sept. 13 mediation, but township trustees on Oct. 6 unanimously voted to reject the agreement — township Trustee Brad Bickle called it an "all-or-nothing" deal, according to court documents and previous reports.
Judge Paul Maloney of the U.S. District Court's Western Michigan District rejected arguments from the wineries and association that the township had already approved the settlement.
"While plaintiffs may have believed that the board's vote on whether to approve the settlement agreement was simply a formality, the vote — conducted at a meeting open to the public — was really a necessity required by the Michigan Open Meetings Act," Maloney wrote.
He also didn't agree with the wineries' and association's assertion that township trustees had a "constructive quorum" at that mediation session because three were present and the rest were available by phone. Maloney noted the township deliberately limited the number present to three to avoid violating the Open Meetings Act and that the argument from the wineries and association cited no law or past ruling.
Plus, none of the cases cited in the wineries' and association's brief supporting the motion to enforce the settlement were relevant to the current lawsuit, Maloney wrote — one involved private businesses that aren't subject to the Open Meetings Act, and another involving a local government concerned a case where a majority of the board stated at an open meeting that they supported the agreement in question there, for example.
Joseph Infante, an attorney for the wineries and association, said they're disappointed because they believed all sides had reached a settlement that they were happy with.
"We spent a lot of time negotiating a settlement that we thought was good for the township and was good for the wineries but the township decided to back out of the deal and not sign the agreement," he said.
Greg Meihn, the township's attorney, called the motion to enforce the settlement "outrageous," similar to what he said in a letter to Infante's law firm giving notice that he intended to ask the judge to sanction the plaintiffs for filing it.
The court will consider that, along with whether to sanction the township. The plaintiffs argued the township was negotiating in bad faith and without settlement authority, while the township asserted the plaintiffs should pay because they filed what Meihn termed a "frivolous" motion to enforce a settlement that hadn't been agreed to by all parties.
Maloney agreed to a Dec. 2 evidentiary hearing to consider both sides' motions for sanctions, but denied the township's request to hear testimony from the neutral mediator — court rules bar using any statements made during settlement negotiations to prove a party's liability, he wrote.
"If this court permitted the mediator to testify, it would set a disfavored precedent and break the presumption of confidentiality during negotiation," he wrote.
Infante said discovery in the case is ongoing, and motions for summary judgement are due Dec. 15.
"We're just trying to get to the end of discovery so we can all put it in the hands of Judge Maloney," he said.
Meanwhile, local nonprofit group Protect the Peninsula will appeal Maloney's decision not to allow them to intervene in the lawsuit. T. J. Andrews, an attorney for the group, said she disagrees with the judge's finding that Protect the Peninsula fell short on all three requirements to be allowed to intervene, including that whatever interest it has in the case is adequately represented by the township.
"While we think there may be some shared common interest of the township, I don't think that satisfies the adequate representation standard under the law," she said.
That appeal is headed to the U.S. Court of Appeals for the Sixth Circuit, Andrews said. She couldn't say when the court might decide — there's no scheduling order yet and briefs likely won't be in until spring 2022.
Meihn was similarly disappointed, he said, adding he believed allowing Protect the Peninsula to intervene would give township residents more of a voice.
The judge's decision not to let Protect the Peninsula join the case was expected, Infante said, and he agreed the group shouldn't have standing to join the lawsuit.
Township trustees also agreed to an audience member's suggestion made at the Oct. 6 meeting, where people packed a room in St. Joseph Catholic Church to capacity and a few left outside watched through open windows. They formed a citizens advisory council to suggest changes to the ordinances in question, changes that township residents could accept.
The wineries suing are Bowers Harbor Vineyard & Winery Inc., Brys Winery LLC, Chateau Grand Traverse LTD, Tabone Vineyards LLC, Two Lads LLC, Winery at Black Star Farms LLC and Villa Mari LLC.
Companies doing business as Bonobo Winery, Chateau Chantal, Hawthorne Vineyards and Peninsula Cellars also are involved, and all plaintiffs are members of Wineries of the Old Mission Peninsula except Bonobo Winery.