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Dietrich v. Grosse Pointe Park

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

February 28, 2017

EDGAR J. DIETRICH, Petitioner,
GROSSE POINTE PARK, et al. Defendants.




         Plaintiff Edgar J. Dietrich (“Plaintiff”), acting in pro per, filed suit against Defendants City of Grosse Pointe Park, and its City Manager, Dale Krajniak (collectively “Defendants”) (Dkt. 1). The Complaint alleges that Defendants violated Plaintiff's Fifth Amendment right to due process. Plaintiff also alleges various state claims, including tortuous interference with business relationships, conversion, and breach of contract. Id. As described in greater detail below, Plaintiff alleges that these wrongs occurred during eviction and collection proceedings relating to a state court judgment.

         This matter is before the Court on Magistrate Judge Stephanie Dawkins Davis's Report and Recommendation dated January 12, 2017 (Dkt. 35), recommending that Defendant's motion to dismiss (Dkt. 20) be granted, that Defendant's motion for sanctions (Dkt. 24) be granted, and that Plaintiff's motion for summary judgment (Dkt. 31) be denied as moot.

         The law provides that either party may serve and file written objections “[w]ithin fourteen days after being served with a copy” of the Report and Recommendation. 28 U.S.C. § 636(b)(1). Plaintiff filed timely objections (Dkt. 36) to the Report and Recommendation. A district court must conduct a de novo review of the parts of a Report and Recommendation to which a party objects. See 28 U.S.C. § 636(b)(1). “A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge may also receive further evidence or recommit the matter to the magistrate judge with instructions.” Id.

         The Court has reviewed Magistrate Judge Davis's Report and Recommendation, and Plaintiff's objections thereto. For the reasons set forth below, Plaintiff's objections are OVERRULED, and the Report and Recommendation is ACCEPTED and ADOPTED as the opinion of the Court. Accordingly, Defendants' motion to dismiss (Dkt. 20) is GRANTED, Defendants' motion for sanctions (Dkt. 24) is GRANTED, and Plaintiff's motion for summary judgment (Dkt. 31) is DENIED AS MOOT. This matter is hereby re-referred to Magistrate Judge Davis to conduct a hearing, and then recommend an appropriate sanction for Plaintiff's Rule 11 violations.


         Plaintiff alleges that on January 1, 2006, Defendant Dale Krajniak, in his capacity as manager of the City of Grosse Pointe Park, entered into a lease with the Dietrich Family Trust (the “Trust”) for a building located at 15001 Charlevoix, Grosse Pointe Park, Michigan (Dkt. 1, Pg ID 3). This property became the location for La Chateau Art Gallery & Custom Framing (the “Gallery”) and all business transactions relating to the Gallery were transacted with Mr. Krajniak (Id.). Plaintiff worked as the manager of the Gallery.

         In his Complaint, Plaintiff acknowledges that, in 2005, Peter Tiernan, M.D. (“Tiernan”) obtained an $11 million legal malpractice judgment against him (Id. at ¶ 8). After winning this judgment against Plaintiff, Tiernan successfully petitioned Wayne County Circuit Court Judge Jeanne Stempien to put the Gallery - owned by the Trust and managed by Plaintiff - into receivership because the Gallery was being “utilized as a vehicle for transferring and hiding property which could be used to satisfy the Judgment” (Dkt. 20, Ex. A, Pg ID 97). On August 26, 2013, Judge Stempien entered an order appointing Basil Simon as the receiver of the Gallery to serve as “the agent of [the] Court … with full powers as Receiver over [the Gallery] and all of [its] businesses, assets and property....” (Id.).

         In an effort to halt the receivership and preserve his assets, Plaintiff filed a Chapter 7 bankruptcy petition on August 21, 2013. See E.D. Mich. Bankr. Case No. 13-57297. On October 29, 2013, the Bankruptcy Court entered an order denying Plaintiff's motion to enforce a mandatory stay under 11 U.S.C. § 362, holding that the appointment of Mr. Simon as a receiver over the Gallery remained in full force and effect (Id., Dkt. 87). Mr. Simon also is the duly acting and qualified Chapter 7 trustee of Plaintiff's bankruptcy case. That bankruptcy case has been extensively litigated, and is ongoing. During the receivership, and pursuant to the Wayne County Circuit Court's orders, Mr. Simon[1] apparently liquidated the Gallery's assets and accounted for the receipt of the proceeds of such sales to the Wayne County Circuit Court.

         Turning back to the Defendants in this case, on November 15, 2013, Plaintiff (through his son) filed a lawsuit in the Grosse Point Park Municipal Court. This suit requested to allow Plaintiff to enter the Gallery, and sought injunctive relief ordering Grosse Pointe's Department of Public Safety to stop “purposefully violating the lease between Plaintiff and the City of Grosse Pointe Park” (Dkt. 20, Ex. F). The Municipal Court dismissed that case with prejudice for lack of jurisdiction. (Id., Ex. G).

         Then, in January 2014, Plaintiff sued Defendants in this Court, claiming that he had been wrongfully deprived access to the Gallery. See E.D. Mich. Case No. 14-10264. Plaintiff was initially represented by an attorney in that case. Plaintiff's attorney voluntarily dismissed that case without prejudice. Plaintiff, then acting in pro per, filed a motion to reopen that case. In essence, Plaintiff argued that his prior counsel dismissed the case without first informing him of her intent to do so, and without his express permission, and that the dismissal should be vacated. This Court denied Plaintiff's motion to reopen the case, and noted that Plaintiff could simply re-file a new case if he wanted to reanimate that litigation. In so doing, however, this Court expressly cautioned Plaintiff to “to carefully review the arguments raised [by] Defendants …, particularly those related to the Rooker-Feldman doctrine” (Id. Dkt. 18, FN 1). The Court also reminded Plaintiff of his Rule 11 obligation to not file frivolous litigation.

         Grosse Pointe Park then initiated eviction proceedings against the Trust (the lessor of the Gallery) in 2014. On July 9, 2014, the Grosse Pointe Woods Municipal Court[2] entered an order terminating the lease and ordering the Trust to vacate the Gallery. After the Trust filed a claim of appeal, the parties entered into a release agreement on August 22, 2014. Plaintiff signed the release agreement individually, and on behalf of the Trust (Dkt. 20, Ex. M). The release provides:

The Dietrich Parties[3], including its predecessors, agents, successors, assigns, joint venturers, partners, current and former employees, servants, representatives, officials, attorneys, associates, and trusties of the foregoing persons, and any other party who may claim under or through them hereby knowingly and voluntarily release, forgive, absolve and discharge all rights, claims, demands, damages, actions, and causes of action, which The Dietrich Parties and its above-mentioned others now have or may have in the future, known or unknown, foreseen or unforeseen, arising from the claims which are the subject matter of the Lease, Eviction, and Appeal against the City and its past and present employees, ...

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