The opinion of the court was delivered by: Honorable David M. Lawson
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT, GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT, AND DENYING DEFENDANTS' MOTION TO STRIKE EXPERT WITNESS REPORT
The plaintiffs in this case seek redress from a Michigan township and its building and zoning administrator for interfering with and delaying by several years the plaintiffs' efforts to renovate a cottage into a permanent residence. The complaint seeks a declaratory judgment, an injunction, and damages on the theory that the defendants (1) retaliated against the plaintiffs in violation of the First Amendment for successfully appealing to state court a zoning board decision denying a variance; (2) violated the plaintiff's rights under the Equal Protection Clause by selectively enforcing certain land use ordinances; and (3) violated the plaintiffs' substantive and procedural due process rights by denying a variance and issuing a stop work order without providing notice to the plaintiffs and an opportunity to respond. The parties have filed cross motions for summary judgment, which were argued in open court on April 23, 2009 and taken under advisement. The defendants argue that the zoning administrator is entitled to qualified immunity, the plaintiffs have not proven that the actions were taken pursuant to an official policy or custom so as to establish municipal liability, the plaintiffs have no property interest that is protected by the Due Process Clause, the defendants' actions were not arbitrary so as to amount to a denial of substantive due process, the plaintiffs' equal protection claim must be dismissed because they have failed to show that they were treated differently than other similarly-situated individuals, and much of the plaintiffs' damages claim is barred by the statute of limitations. The defendants also move to strike the report of the plaintiffs' damages expert. The plaintiffs argue that the undisputed facts entitle them to relief because they have shown that the township officials acted pursuant to an official custom or policy, the defendants' issuance of a stop work order was intended to punish the plaintiffs for their successful appeal of the variance denial, the plaintiffs had a property interest in the continuation of their building project, and the defendants selectively enforced the land use ordinances in an arbitrary manner against them.
After carefully considering the arguments and the parties' submissions, the Court now finds as follows: first, the building and zoning administrator is not entitled to qualified immunity because she has been sued only in her official capacity, although her presence in the case is redundant since an official capacity action is tantamount to an action against the township, which already is a defendant; second, the plaintiffs have offered evidence sufficient to withstand summary judgment on the question of municipal liability; third, there is conflicting evidence on the defendants' motive in issuing the stop work order, so neither side is entitled to summary judgment on the First Amendment retaliation claim; fourth, the defendants are entitled to summary judgment on the Equal Protection selective enforcement claim because the plaintiffs failed to present any evidence that their requests for a variance and renewal of their building permit were treated less favorably than those of other similarly situated residents of Worth Township; fifth, the plaintiffs are entitled to summary judgment on their procedural due process claim because they had a protected property interest in proceeding with construction on their property after the grant of the variance by the Sanilac County circuit court and the defendants conceded that they gave no prior notice, as required by state law, before posting the stop work order on November 5, 2007; sixth, the defendants are entitled to summary judgment on the due process claim for denial of the variance because the plaintiff had no protectable property interest in the issuance of a variance and the denial of the variance was not arbitrary; seventh, the plaintiffs' claims for damages caused by events preceding September 11, 2005 are foreclosed by a three-year statute of limitations, although the Court's other rulings render that defense moot; and eighth, there are no grounds on which to strike the plaintiffs' expert witness report. Therefore, the Court will grant in part and deny in part each side's motion for summary judgment, and deny the defendant's motion to strike the report of the plaintiffs' economic loss expert.
Over ten years ago, plaintiffs George and Margaret Paeth purchased, by their description, "an old, abandoned cottage" in Worth Township as a second home. Instead of rehabilitating and selling it as originally planned, they apparently decided to renovate and keep it. In 1998, they embarked on their renovation plans, which included the addition of enclosed areas on the first floor, replacing the existing roof, and various other modifications. As renovated, the structure was to occupy the same footprint except for the northeast and northwest corners.
On the northwest corner, the covered porch was to become a part of the enclosed structure. Even before the modification, however, that part of the structure did not conform with the five-foot setback requirement in the ordinances then in place for the site (it appears that the setback requirement was changed to eight feet since the original permit was issued).
In 1998, Worth Township had no building department of its own, so the plaintiffs applied for building permits to the County of Sanilac. To receive a building permit from the county, the plaintiffs first had to apply to Worth Township for a land use permit, which required the plaintiffs to procure a survey of the property. It was during the process of obtaining building permits in late 1998 that the plaintiffs came into contact with defendant Barbara Cutcher, the zoning administrator for Worth Township at the time.
The plaintiffs obtained a property survey that revealed the non-conformance of the cottage's northwest corner. They claim to have notified Cutcher of the setback issue before April 27, 1999 when they obtained the land use permit, and Cutcher "represented that it would not be a problem and that [the plaintiffs] should continue the development of [their] property." Pls.' Mot. for Prelim. Inj. [dkt. # 2], Ex. 1 (Affidavit of George T. Paeth) at ¶ 4.
Worth Township issued the plaintiffs a land use permit with no difficulty, and the county followed with a building permit on June 17, 1999. On July 27, 1999, Sanilac County's building department inspected and approved the foundation, and the house was framed shortly thereafter.
In November 1998, the plaintiffs applied for and received a well drilling permit from the Sanilac County Health Department. In 1999, they contracted with a well drilling company, but before work could begin the plaintiffs learned that Worth Township had revoked all permits on new wells due to the implementation of the township's new municipal water system. The plaintiffs then applied to tap into the water system, but their application was not addressed immediately.
As the plaintiffs explain it, in June 2001, in order to access the township's water mains, George Paeth contracted with an excavator who obtained a municipal water permit from Worth Township's water authority. The excavator began to trench, but a Worth Township inspector arrived on-site and shut down the excavator's operations without explanation. The inspector then revoked the plaintiffs' water permit without furnishing a justification. The plaintiffs did not connect to the township's water main until August 2002; the property was without water for nearly three years. The plaintiffs turned to neighbors during that time for their water needs. They contend that the absence of water on the property also impeded their ability to obtain construction loans.
The plaintiffs' troubles with Worth Township began in earnest in 2002, when the township formed its own building department. Barbara Cutcher had become the Worth Township Zoning and Building Administrator. She declared that the plaintiffs' building permit had expired in 2002. Cutcher alleges that she received that information from Sanilac County Inspector Strickler. The plaintiffs disagreed with her, stating that under the applicable National Building Code, a permit could not lapse unless either the permit holder failed to begin work within six months or construction halted for more than six months. Nonetheless, because the county officials insisted, the plaintiffs applied for another building permit, this time directly from Worth Township, which they received on July 7, 2003.
Cutcher contacted the plaintiffs again in June 2004 after they complained that their neighbors had constructed a fence on adjacent property without a permit. It was then that Cutcher notified the plaintiffs that her attention had been directed to their structure's noncompliance with the township's setback ordinance, which in the meantime increased from five feet to eight feet. Cutcher sent a letter stating:
Your original site plan shows that the house will be 8' from the lot line on the West side. I was requested to measure this out and find that you are 8' from the lot line on the Southwest corner but you are only 4' from the lot line on the Northwest corner. Our ordinance requires an 8 foot set back including overhangs. This is a serious problem. You must contact Lynn Laughlin as she does the Zoning enforcement.
Mot. for Prelim. Inj. [dkt #2], Ex. 7 (Letter from Barbara Cutcher to Margaret Paeth, June 17, 2004).
Cutcher testified that the letter was not her idea; rather former township supervisor Janice Putz instructed her to contact the plaintiffs. Cutcher testified at her deposition as follows:
A: Janice Putz was the supervisor and I remember a disagreement between myself and Janice, because she was telling me I should write this letter and I was disagreeing with her because it was a setback problem, that Lynn should write the letter because she was zoning. The supervisor insisted that because I issued the permit and I -- the original land use permit and I was zoning administrator at that time, it was my responsibility to write the letter. So I wrote the letter, but Lynn [Laughlin]... was zoning administrator at the time....
Q: Did Janice Putz tell you why this letter should be written?
A: Yes.... It had to do with the fence, the neighboring fence. Once that went up, the lot line was different than what the original survey showed it to be.......
Q: Okay. Did you protest to Ms. Putz that hey, they've had a permit since 1999, we're now five years into that, you know, what is the need for the setback?
A: I can't remember what discussion went on.
Q: Okay. Did you think it was appropriate to send this letter, Exhibit 4?
A: I thought it was inappropriate for me to send it. I felt the letter needed to be sent, but I felt it was the zoning administrator's position, not mine.
Q: You thought the contents were correct in that letter, correct?
A: Yes, the contents were correct.
Defs.' Mot. for Sum. J. [dkt. # 20], Ex. C (Cutcher dep.) at 71-72.
The plaintiffs insist that Cutcher knew about the structure's nonconformity at the time their original permit was issued, and therefore the township should be estopped from making the arguments to the contrary. In Cutcher's June 17 letter, however, she notified the plaintiffs that their permit had been extended to July 2004. In response, the plaintiffs submitted a variance application on June 22, 2004, asking the township to reconsider the necessity of a variance because the work was performed "in good faith and in accordance with previously approved permits." Pls.' Mot. for Prelim. Inj. [dkt # 2], Ex. 8 (Zoning Bd. of Appeal App. for Variance), at 2.
The next day, Worth Township's new zoning administrator, Lynn Laughlin, requested another certified survey of the plaintiffs' property. The plaintiffs complied, and the updated survey showed a distance of three feet and six inches between the northwest corner of the structure and the westerly property line. The roof overhang extended for approximately another foot. According to the defendants, the 2004 survey differed markedly from the 1999 survey; the 1999 survey incorrectly depicted the location of the northwest corner of the structure relative to the westerly lot line, and therefore Cutcher relied on incorrect information in approving the plaintiffs' land use permit in 1999.
Laughlin then requested an explanation of "what it is that [the plaintiffs] are requesting" so that the county could include the narrative into the notices of a hearing. Pls.' Mot. for Prelim. Inj. [dkt # 2], Ex. 11 (Laughlin Letter, Sept. 1, 2004). On January 6, 2005, the plaintiffs submitted a statement explaining that they should not be required to apply for a variance because they began construction in reliance on permits the township previously issued, which did not expire. The plaintiffs allege that Edward Smith, the township supervisor, invited Mr. Paeth to meet on a Saturday when the building department was closed, and during that meeting Smith "made representations to Mr. Paeth to the effect that granting the variance would not be a problem and that proper procedure would be followed." Pls.' Mot. for Prelim. Inj. [dkt # 2], at 5.
The hearing on the variance request finally took place on May 18, 2005, eleven months after the application. About sixty people attended the meeting. Board members read several neighbors' letters into the record. Most opposed the construction for a variety of reasons: some based on the prolonged construction time, others because of a belief that the plaintiffs disregarded the building ordinance, and others because of the perception that the plaintiffs never obtained valid permit to begin with, or expanded their renovation beyond the original allowances. The plaintiffs allege that the board members selectively read only the disapproving comments. Thomas Gilbert, the ZBA chairman at the time, could not explain "why the people who were for the variance were not heard." Pls.' Mot. for Sum. J. [dkt. # 22], Ex. 16 (Gilbert dep.) at 35. Cutcher also apparently provided adverse commentary to the ZBA.
The ZBA voted unanimously to deny the request for a variance, which meant that the Paeths had to remove the offending portion of the structure to bring the project back into compliance. The ZBA also rejected the plaintiffs' argument that they did not have to renew their building permits and could continue construction under the old permits. The county took the position that building permits are valid only for one year after issuance, regardless of continuation of construction activity.
Margaret Paeth testified that the hearing was a sham because the ZBA had decided to deny the variance long before the hearing. She testified that she overheard the township treasurer tell someone in the crowd that the issue had already been determined, and the hearing was just a formality:
Q:... did you hear the Township treasurer say anything in reference to your appeal?
A: She said to whomever she was speaking to, not to worry, that it had already been determined or already been decided.
Q: How do you know that she was referencing your appeal?
A: Because everyone in the room was engaged in what it was all about....
Q: Did you hear commentary regarding anything -- discussion about anything other than your ...