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Mary McKenzie Trust v. Bartle

United States District Court, E.D. Michigan, Southern Division

September 30, 2016

MARY MCKENZIE TRUST, et al., Plaintiffs,
v.
DETECTIVE BARTLE, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS DETECTIVE BARTLE AND WATERFORD TOWNSHIP'S MOTION FOR SUMMARY JUDGMENT [#67]

          Denise Page Hood Chief Judge.

         I. INTRODUCTION

         Before the Court is a Motion for Summary Judgment filed by Defendants Bartle and Waterford Township [Docket No. 67, filed July 25, 2014]. Plaintiffs Mary McKenzie Trust, Michael Perry (individually and as trustee for the Mary McKenzie Trust), American Cycle Mart, Inc., American Discount Cycle Mart, Inc., MC Perry Enterprises, Inc., HMP Family LLC, and Car Buyer Direct, Inc. filed a Response to the Motion for Summary Judgment [Docket No. 79, filed September 15, 2014]. Defendants Bartle and Waterford Township filed a Reply to the Response [Docket No. 82, filed September 29, 2014].

         II. BACKGROUND

         On October 5, 2012, Plaintiffs filed the Complaint in this case. An Amended Complaint was filed on March 29, 2013 (Doc. # 19), containing seven counts: (1) 4th Amendment violation under 42 U.S.C. § 1983; (2) 5th Amendment violation and 14th Amendment violation under 42 U.S.C. § 1983; (3) Municipal Liability under 42 U.S.C. § 1983; (4) Conspiracy to violate civil rights; (5) Conversion; (6) Abuse of Process; and (7) Intentional Interference With Advantageous Economic Relationships. The Complaint alleges that Plaintiff was a successful businessman who had operated a variety of enterprises, which included repairing motor vehicles, selling and repairing motors vehicles, selling motorcycle apparel parts and accessories and leasing property. In 2004, Plaintiff moved his business to a larger location, with more space and the ability to set up displays outdoors.

         In 2008, Plaintiff Michael Perry (“Perry”) is alleged to have been operating a motorcycle dealership in Waterford Township. The name of that dealership is unclear though Defendants state that the business records indicate the name to be “American Cycle Mart.” Defendants assert that the license the dealership was operated under was for “American Discount Cycle Mart Inc” but that both companies, American Cycle Mart, Inc. (“ACM”) and American Discount Cycle Mart, Inc. (“ADCM”), exist independent of one another.

         The license issued for ADCM was issued to Perry's ex-wife and Co-Defendant, Cheryl Chuby (“Chuby”). Only Chuby was listed as a corporate officer on the application for ADCM and only Chuby was issued a dealer's license. Defendants note that the tax filings for ADCM for the years 2004 and 2005 also indicate that Chuby owned all of ADCM's stock.

         On November 10, 2008, Perry filed a report with the Waterford Township Police Department that property, including trailers, motorcycles, and motorcycle parts, had been stolen from ACM. Perry reported that he had located the stolen property and that it was being stored in Wixom, Michigan. Perry reported that Chuby had taken the property. Defendant Detective Bartle followed up on Perry's claims and contacted the Wixom Police Department. Detective Bartle was informed that the property Chuby had taken was licensed to her. Detective Bartle spoke to Chuby and confirmed that all of the business licenses, including the dealer's license for ADCM, were held in her name and determined that no action should be taken against Chuby because she was the licensed holder of the property.

         Prior to Perry's report of stolen goods, the Waterford Township Police Department had received various reports from customers of ACM and Perry that they had “not received money owed to them for the sale of their motorcycles or received titles to the vehicles they had purchased.” Detective Bartle's investigation ultimately led to the arrest, prosecution, and no contest plea of Perry to seven different counts, including larceny by conversion, embezzlement, and intent to pass false title.

         Defendants filed a summary judgment motion arguing that: (1) Plaintiffs lack standing to sue; (2) the Heck doctrine precludes Plaintiffs from challenging the search warrants; (3) many of Plaintiffs claims are barred by the statute of limitations; (4) Detective Bartle is entitled to qualified immunity; (5) Waterford Township is entitled to immunity; and (6) Detective Bartle is entitled to qualified immunity regarding the state law claims.

         Plaintiffs counter that they do have standing to bring this suit and a challenge to the search warrants does not impugn Perry's criminal conviction. They also maintain that neither Detective Bartle nor Waterford Township are entitled to qualified immunity.

         On December 10, 2015, Plaintiffs dismissed Defendant Chuby.

         II. STANDARD OF REVIEW

         A court should grant summary judgment if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986). A fact is material if it could affect the outcome of the case based on the governing substantive law. Id. at 248. A dispute about a material fact is genuine if on review of the evidence, a reasonable jury could find in favor of the nonmoving party. Id.

         The moving party bears the initial burden to demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant meets this burden, the nonmoving party must "go beyond the pleadings and … designate specific facts showing that there is a genuine issue for trial." Id. at 324. The Court may grant a motion for summary judgment if the nonmoving party who has the burden of proof at trial fails to make a showing sufficient to establish the existence of an element that is essential to that party's case. See, Muncie Power Prods., Inc. v. United Tech. Auto., Inc., 328 F.3d 870, 873 (6th Cir. 2003). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252. "Conclusory allegations do not create a genuine issue of material fact which precludes summary judgment." Johari v. Big Easy Restaurants, Inc., 78 F.App'x 546, 548 (6th Cir. 2003).

         When reviewing a summary judgment motion, the Court must view the evidence and all inferences drawn from it in the light most favorable to the nonmoving party. Kochins v. Linden-Alimak, Inc., 799 F.2d 1128, 1133 (6th Cir. 1986). The Court "need consider only the cited materials, but it may consider other materials in the record." Fed.R.Civ.P. 56(c)(3). The Court's function at the summary judgment stage "is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249.

         III. ANALYSIS

         A. Standing

         First, Defendants contend that Plaintiff HMP Family, LLC (hereinafter “HMP”), does not have standing to be involved in this lawsuit. HMP was not a legal entity until 2010, and the assets at issue were allegedly converted and stolen in November 2008. The assets could not have been taken from HMP since it did not exist at the time.

         Plaintiffs state that HMP does have standing because prior to her death, Perry's mother, loaned ACM money and secured those loans by placing liens on motorcycles owned by ACM. When Perry's mother died, assets from her estate, which included the accounts receivable, were used to create HMP. HMP is a successor in interest and has the ability to challenge the alleged illegal seizure of property.

         There is a question of fact as to whether HMP has standing. A successor in interest is defined as “someone who follows another in ownership or control of property. A successor in interest retains the same rights as te original owner, with no change in substance.” Bryan A. Garner, Black's Law Dictionary 1660 (10th ed. 2014). Since HMP stands in the shoes of Perry's mother, it may have a lien on the property that was allegedly illegally seized. The parties do not cite any case law that support their positions. The Court did not find any caselaw that answers this decisive question. Summary judgment is denied regarding the proposition that HMP lacks standing.

         Second, Defendants argue that the Mary McKenzie Trust (the “Trust”) does not have standing as to any claim in this lawsuit that is a derivative of its ownership interest in the other named Plaintiff corporations. The Trust claims ownership interests in MC Perry Enterprises, Inc. (“MCP”), ACM, ADCM, and Car Buyer Direct, Inc. (“CBD”). As a shareholder of the entities, the Trust does not have standing in this lawsuit. Rather, the corporation must bring suit for injuries sustained by the corporation.

         Plaintiffs concede that because the individual named corporations are suing in their corporate capacity, the Trust as a shareholder, lacks standing to pursue claims for alleged injuries to ACM and MCP because “an action to redress injuries to a corporation cannot be maintained by a shareholder in his own name but must be brought in the name of the corporation.” NBD Bank, N.A. v. Fulner, 109 F.3d 299, 301 (6th Cir. ...


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