United States District Court, E.D. Michigan, Northern Division
IN RE MILFORD HOUSING LLC, Debtor.
VILLAGE OF MILFORD, Defendant, MILFORD HOUSING LLC, Plaintiff,
ORDER OVERRULING OBJECTIONS, ADOPTING REPORT AND
RECOMMENDATION, GRANTING JUDGMENT FOR DEFENDANT, AND
DISMISSING PLAINTIFF'S COMPLAINT
L. LUDINGTON United States District Judge
22, 2011, Plaintiff Milford Housing LLC filed a complaint
against Defendant Village of Milford asserting due process
and inverse condemnation claims in an adversary proceeding
before Bankruptcy Judge Daniel S. Opperman. The dispute
between the parties arises out of the condemnation and
destruction of an apartment building owned by Plaintiff.
After a bench trial was held, the parties submitted briefs
and proposed findings of fact and conclusions of law. On
March 26, 2015, Judge Opperman filed a report recommending
that judgment be granted for Defendant and that
Plaintiff's complaint be dismissed. ECF No. 1. On April
8, 2015, Plaintiff filed objections to Judge Opperman's
report and recommendation. ECF No. 3. Although Federal Rule
of Bankruptcy Procedure 9033(b) and Eastern District of
Michigan Local Rule 5.1.1(a) put the burden on Plaintiff to
obtain and file transcripts of the bench trial on this
docket, the transcripts were not filed until January 5, 2017.
On January 19, 2017, Defendants filed a response to
Plaintiff's objections. ECF No. 7. For the reasons stated
below, Plaintiff's objections will be overruled, the
report and recommendation will be adopted, and judgment will
be entered for Defendant.
Opperman has issued proposed findings of fact. See
Rep. & Rec. at 2-6, ECF No. 1. In its objections,
Plaintiff provides a copy of the proposed findings of fact it
submitted after the bench trial. Objs. at 2-8. That
reiteration of arguments previously made is not a
sufficiently “specific” objection to trigger de
novo review pursuant to Bankruptcy Rule 9033(d). Plaintiff
also provides several specific objections to Judge
Opperman's findings of fact. Id. at 9-10. Those
objections take issue with Judge Opperman's credibility
determinations and refusal to draw certain inferences in
favor of Plaintiff. Plaintiff's objections do not
specifically identify portions of Judge Opperman's
proposed findings of fact where he ignored important facts,
misconstrued testimony, or otherwise made objectively
incorrect statements. Because the objections challenge only
Judge Opperman's treatment of subjective issues of fact,
Judge Opperman's findings of fact will be summarized
below. Afterwards, Plaintiff's objections to particular
aspects of those findings of fact will be addressed.
property at issue was purchased by Plaintiff in June of 2000.
The property included a 24-unit apartment building and five
acres of land. Subsequent to Plaintiff's purchase of the
property, the apartment building repeatedly experienced
problems related to the boiler heating system, which resulted
in burst pipes and collapsed ceilings. In January 2003, cold
weather caused several water pipes to burst, saturating the
ceiling and causing collapse in areas. Randall Sapelak, the
Building Official for Defendant, inspected the building and
concluded that it was not a “dangerous building”
as defined by the relevant local ordinance. At the time,
there was no full-time, live-in building manager even though
that was required by the building's special use permit.
Trial Tr. I at 95-96. The pipes and ceilings were repaired.
Similar incidents occurred in March 2008 and December 2008.
After the March 2008 incident, an official with the Michigan
Department of Labor and Economic Growth opined that the
structure should be designated as “a dangerous and
unsafe building.” Trial Tr. I at 33, ECF No. 5. At the
time, Mr. Sapelak did not agree. However, when Mr. Sapelak
discovered that the ceiling collapses were occurring again in
December 2008, he decided that further action needed to be
December 30, 2008, Mr. Sapelak sent a letter to the attorney
for the Village of Milford in which he indicated his desire
to “‘close the place down or, if that can't
happen, have the building totally vacated until all repairs
are completed.'” Rep. & Rec. at 2. Mr. Sapelak
expressed his belief that “‘[t]he problem with
having it closed only temporarily is that the problems will
repeat themselves as long as the building is owned by the
same person that has it now.'” Id. He also
summarized the known problems with the building:
To date, I know the roof needs complete replacement and
probably some of the roof sheathing will have to be removed.
Some of the trusses may be compromised due to water damage.
Some ceilings and walls are missing drywall and heat in some
of the unoccupied units. Mold is in some of the ceilings.
Some of the brick outside has pulled away from the walls and
is open to the weather. A lot of external flashing needs
repair. I am not certain about the safety of any of the
interior mechanical systems.
Id. at 3.
weeks later, Mr. Sapelak prepared another letter wherein he
updated his opinions about the building's condition. He
stated that the building was “‘in immediate need
of repair” and needed to be vacated while being
repaired. Id. He identified the following issues:
“foundation sagging in both the east and south wings,
causing sinkage and leaving open air visible from some
apartments; varied and insufficient heating; water damage;
and the roof being in need of immediate repair.”
Id. Mr. Sapelak believed that at least the two
sagging wings would need to be demolished (if not the entire
building). He also recommended that: “‘if it is
restored that it is inspected monthly . . . due to the
current owner[']s history, while charging the owner for
the time involved.” Id.
During the bench trial, Mr. Sapelak testified that by January
22, 2009, he had concluded:
[T]his owner will not take care of this building. That
he's not interested in taking care of this building. My
opinion was he didn't care who you rented to. He
didn't care what kind of conditions whoever he rented to
lived in. He didn't care whether or not it was safe
enough for them to live in.
Trial Tr. I at 119.
memo Mr. Sapelak wrote on January 26, 2009, he recommended
Anything we can do to condemn the entire building until the
entire building is brought up to code and site plan
compliance by providing a live-in manager before even one
unit is reoccupied will be the best solution. Until that time
I would like to see the place vacated entirely (all units)
and to forbid any advertising of any rent space until that
Rep & Rec. at 3.
Sapelak then sent a letter to Plaintiff which listed the
conditions with the building, informed Plaintiff that it was
a dangerous building as defined by the ordinance, and ordered
that the building be demolished. Id. at 3-4. The
letter explained that a dangerous building hearing would be
held and that the Plaintiff would have the opportunity to
explain why the building should not be demolished.
hearing was held by building hearing officer Timothy Brandt.
Plaintiff argued at the hearing that it should be given the
opportunity to repair the building. Plaintiff estimated that
repairs would cost $125, 000 and testified that it had assets
which could be leveraged to pay for the repairs.
Brandt concluded that the structure was a dangerous building
under the ordinance and that it should be demolished by May
1, 2009. Plaintiff appealed that decision to the Village of
Sapelak prepared a letter which was presented at the appeal
hearing and stated:
Due to all of the problems associated with this site I can
only see this situation getting worse as time progresses.
Even though the owner seems to express that doing some work
with change the situation . . . I have no confidence that