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Hass v. Melrose Township

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

January 23, 2017

DENNIS HASS, et al., Plaintiffs,
v.
MELROSE TOWNSHIP, et al., Defendants.

          AMENDED [1] OPINION AND ORDER

          HON. JANET T. NEFF United States District Judge.

         Pending before the Court is Defendant Melrose Township's “Motion for Summary Judgment pursuant to F.R.C.P 12(b)(6)” (Dkt 77), in which Defendants Shaynee Fanara, Robert Scholey and William Church concur (Dkt 78). Plaintiffs filed a response in opposition to the motion (Dkt 98), to which Defendant Melrose Township (Dkt 107) and Defendants Fanara, Scholey and Church (Dkt 108) filed replies. Also pending in this case is Plaintiffs' Motion to Strike (Dkt 109), to which Defendant Melrose Township filed a response in opposition (Dkt 111). Having conducted a Pre-Motion Conference in this matter and having fully considered the parties' motion papers, the Court finds that the relevant facts and arguments are adequately presented in these materials and that oral argument would not aid the decisional process. See W.D. Mich. LCivR 7.2(d). For the reasons discussed herein, the Court denies Plaintiffs' motion to strike and grants Defendant Melrose Township's dispositive motion.

         I. BACKGROUND

         Plaintiff Walloon Lake Water Systems Company (WLWS) is a privately owned municipal water system located in the State of Michigan, County of Charlevoix and incorporated in Melrose Township (“the Township”) (Compl. [Dkt 1], ¶ 9). Melrose Township is a governmental entity containing Walloon Lake Village (id. ¶ 19). Plaintiffs Dennis and Kathleen Hass own the WLWS (id. ¶ 39). According to Plaintiffs, “[w]ater tariffs run with the properties of customers and overdue customers have a lien applied to their property” (id. ¶¶ 40, 56).

         Plaintiffs allege that in the fall of 2011, after two customers filed complaints alleging that WLWS had filed false liens on their properties, the Charlevoix County Prosecutor initiated criminal charges against Dennis Hass, to wit: five felony counts involving extortion and encumbering real property without lawful cause (Compl. ¶¶ 42-43, 54). No charges were brought against Kathy Hass (id. ¶ 54). Plaintiffs allege that at a pretrial conference in October or November 2011 regarding the first set of charges against Dennis Hass, the assistant prosecutor made a written offer to reduce the charges to a misdemeanor if Dennis would agree to sell WLWS to the Township (id. ¶ 57). Dennis Hass refused the Township's offer (id.). According to Plaintiffs, the assistant prosecutor was not prepared at the preliminary hearing in February 2012 and decided to drop the charges (id.). Plaintiffs allege that “[t]here is also documentation that the Township director told the Prosecutor that Dennis would have to be charged again if he did not sell” (id. ¶ 58).

         Plaintiffs allege that several months later, on June 26, 2012, the Charlevoix County Prosecutor charged both Dennis and Kathleen Hass with extortion and racketeering (Compl. ¶ 60). According to Plaintiffs, the charges against Kathleen Hass were dismissed in November 2012 due to lack of evidence, but Dennis Hass was bound over for trial (id.). Plaintiffs allege that at the Preliminary Examination in September 2012, the racketeering charges against Dennis Hass were “dismissed [sic, reduced] to encumbrance of real property making the 2nd set of charges identical to the first set brought against him” (id. ¶ 61).

         On September 13, 2013, Dennis Hass, individually and on behalf of WLWS, agreed to an Assurance of Discontinuance with the Charlevoix County Prosecutor, and the charges against Dennis Hass were dismissed without prejudice (id. ¶ 63). Specifically, Dennis Hass agreed that

1. WLWS would no longer require customers to purchase replacement items where there is no showing that the prior parts were defective;
2. WLWS would no longer require customers to purchase replacement parts from WLWS;
3. WLWS would no longer require owners to pay water bills incurred by previous property owners;
4. WLWS would no longer place liens upon customers' properties for fees that were owed by prior property owners;
5. WLWS would no longer threaten to shut off or shut off water supply to customers for reasons other than non-payment of monies legally owed or due to health code related issues or as specified by the tariff;
6. WLWS would no longer require services to be paid for in advance unless there's a record of consistent late payments by a customer;
7. WLWS would no longer require customers to pay for maintenance of portions of the water system which are not their responsibility under the tariff; [and]
8. WLWS would no longer require other actions in violation of the tariff of WLWS.

(id. ¶ 66). According to Plaintiffs, WLWS additionally agreed to “pay $7, 500 to the Charlevoix County Prosecuting Attorney's Office as restitution for the aggrieved parties, agreed not to engage in retaliatory actions against the customers of WLWS who were victims or alleged victims in People v. Hass, and agreed that the Charlevoix County Prosecuting Attorney may file a complaint with the Michigan Public Service Commission if (s)he believes that WLWS amends its tariff in an arbitrary and capricious way” (id. ¶ 67).

         On June 26, 2015, Plaintiffs initiated the present litigation with the filing of a two-count Complaint against the Township and the following other nine Defendants: Peter Wendling, attorney for the Village of Walloon Lake; Shaynee Fanara, formerly an assistant prosecuting attorney for Charlevoix County; Todd Reeves, a Deputy Sergeant of the Charlevoix County Sheriff's Office; William Church, a Deputy of the Charlevoix County Sheriff's Office; Robert Scholey, a detective with the Charlevoix County Sheriff's Office; and Bunny Marquart, Gale Charbonneau, Lena Carlisle and Maud Bray, all residents of Charlevoix County (Compl. ¶¶ 10-18). Defendants allege

I. Violation of Civil Rights-Fourth Amendment-42 USC § 1983-Arrest, Imprisonment and Prosecution Without Probable Cause
II. Violation of Fifth and Fourteenth Amendment-42 USC § 1983-Conspiracy to Deprive Plaintiffs of Property Without Due Process of Law

         Nine Defendants subsequently filed Answers to the Complaint (Dkts 18, 19, 23, 29, 32 & 46), and the Court entered an Order extending the time for Defendant Carlisle to serve a responsive pleading (Dkt 35). Further, Defendant Charbonneau filed a Counterclaim (Dkt 27), which Plaintiffs answered (Dkt 39).

         On March 7, 2016, the Court conducted a Pre-Motion Conference with counsel concerning four dispositive motions proposed by Defendants (Dkt 34, as supplemented by Dkts 40 & 47; Dkt 51; Dkt 52; Dkt 58). Plaintiffs did not then raise the topic of amending their Complaint, despite the fact that much of the Pre-Motion Conference was directed to an examination of Plaintiffs' pleading and resulted in the voluntary dismissal of not less than five Defendants, including Defendant Carlisle, as memorialized by the Court's subsequent Order (Dkt 70). Further, consistent with the discussion with counsel on the record about the proper sequencing of the proposed motions, the Court's Order set forth a briefing schedule that, in pertinent part, ordered the parties to begin briefing Defendant Township's motion to dismiss and/or for summary judgment on Plaintiffs' Complaint (id.).[2]

         In accordance with the dates set forth in the Court's briefing schedule, Defendant Township served its dispositive motion on Plaintiffs on March 31, 2016 (Dkt 71), and Defendants Church, Fanara and Scholey served their Concurrence on April 15, 2016 (Dkt 72). Plaintiffs were required to serve their response to the motion not later than April 28, 2016. On May 11, 2016, having apparently served no timely response to the dispositive motion, Plaintiffs instead filed a motion to amend their Complaint to “correct[] or eliminate[] many unclear or inaccurate assertions” (Dkt 76 at PageID.447).

         This Court denied Plaintiffs leave to amend their Complaint based on delay, lack of notice, and undue prejudice to the opposing parties (5/26/2016 Memo. Op. & Order, Dkt 92). This Court determined that Plaintiffs' request to amend was also properly denied based on futility inasmuch as the proposed amended complaint contained the same counts as the original complaint and the information purportedly needed to “correct[] or eliminate[] many unclear or inaccurate assertions” had long since been available to Plaintiffs, or would have been, with due diligence in this 2015 case (id.). The Court granted Plaintiffs an extension to file a response to Defendant Township's dispositive motion, which Plaintiffs subsequently filed on June 9, 2016 (Dkt 98). Despite this procedural history, Plaintiffs “incorporated by reference” their proposed First Amended Complaint in their response to Defendant Township's motion (id. at PageID.821). For the reasons previously stated in denying Plaintiffs leave to amend, the Court has not considered the allegations in Plaintiffs' proposed pleading in resolving Defendant Township's motion at bar.

         Last, on June 10, 2016, Plaintiffs filed a Motion to Strike (Dkt 109), seeking to strike the unsigned affidavit of Dennis Hass upon which their response relied (Dkt 98-2). Plaintiffs filed the motion “for the purpose of substituting a corrected and signed affidavit” (Dkt 109 at PageID.1559).

         II. ...


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