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Carmens Auto Sales III, Inc. v. City of Detroit

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

March 15, 2018

CITY OF DETROIT, et al., Defendants.




         On May 11, 2016, the City of Detroit towed eighty-five vehicles belonging to Carmen Auto Sales that were illegally parked on a vacant, Detroit lot. Carmen Auto believed it had leased the lot from a company called First United Enterprises. But as of May 11, 2016, First United had yet to finalize the lot's purchase from the City.

         Detroit police officers knew the lot from a prior investigation. When they saw all of the cars parked on it, they grew suspicious. After triple-checking to make sure Detroit owned the lot, the police called Gene's Towing to impound the cars. Gene's Towing called B&G Towing for help.

         Carmen Auto did not reclaim the cars. Instead, they filed suit against the towing companies, the City of Detroit, a Detroit Police Lieutenant, and a city inspector. In the meantime, the cars were sold at public auction.

         All Defendants now move for summary judgment. For the reasons that follow, the motions will be granted.


         Sometime in 2015, First United Enterprise Corporation offered to buy a vacant lot from the City of Detroit. (R. 31, PID 984.) First United wanted to use the vacant lot to store excess inventory for a used car dealership. (Id.) In December 2015, First United and Detroit's Planning and Development Department entered into a purchase agreement outlining the sale's terms. (Id.; R. 26, PID 855.) The purchase agreement required approval by the Detroit City Council. (R. 31, PID 984; R. 26, PID 855). On January 19, 2016, the City Council adopted a resolution allowing the sale to go forward. (R. 31, PID 964, 988; R. 26, PID 856-58.) Importantly, the resolution did not finalize the sale; in fact, the resolution made clear that any sale would not be final until Detroit's Corporation Counsel approved the deed.[1] (R. 31, PID 986; R. 26, PID 857.)

         On February 23, 2016, the Planning and Development Department prepared and executed a draft deed. (R. 26, PID 859; R. 31, PID 990.) As required, the deed went to the Corporation Counsel's office for final approval. (R. 26, PID 850; R. 31, PID 963.) But the Corporation Counsel's office rejected the deed due to “an error in the legal description of the property to be conveyed.” (R. 26, PID 851.) Corporation Counsel returned it to the City Council. (Id.)

         By April 2016, the City Council fixed the errors and sent a corrected deed to the Corporation Counsel's office. (R. 26, PID 851, 861-64.) On May 19, 2016, the Corporation Counsel's office signed off on the corrected deed. (R. 26, PID 865.) It then forwarded the deed to the Detroit Building Authority, who, on May 27, 2016, recorded it in the Wayne County Register of Deeds. (R. 26, PID 853.) So on or about May 27, 2016, the City of Detroit legally conveyed the vacant lot's title to First United. (R. 26, PID 714.)

         But First United did not wait until May 27, 2016 to begin using the lot. About a month earlier, First United attempted to lease the lot to Carmen Auto. (R. 31, PID 965-66.) On April 28, 2016, Carmen Auto began storing used cars on the lot. (Id.)

         At the time, Detroit Police Lieutenant Jonathan Parnell supervised the Detroit Police Department's Commercial Auto Theft unit. (R. 26, PID 755.) On May 11, 2016, Parnell noticed cars parked in the vacant lot. (Id.) He was familiar with this vacant lot: months earlier his department conducted an investigation into an unlawful auto scrapping business operating on it. (R. 26, PID 756.) As part of the scrapping investigation, Parnell learned the city owned the lot. (Id.)

         So on May 11, 2016, when Parnell saw cars parked on what he believed was still a city-owned lot, he began another investigation. (R. 26, PID 757.) Parnell ran a title search on the vehicles, and none came back stolen (but none were titled to Carmen Auto, either). (R. 26, PID 769, 771.) Then Parnell called two city inspectors to see if the city still owned the property. (R. 26, PID 764.) One of the city inspectors, Jeff Bou, arrived at the lot soon after. (Id.) Bou also knew the lot from the previous investigation, and had paperwork indicating the city still owned the lot. (R. 26, PID 809.) To confirm the paperwork, made a series of calls to government offices and determined that Detroit still owned the lot. (R. 26, PID 846.)

         Once Bou and Parnell confirmed that the city still owned the lot, Parnell cut a chain lock on the lot's gate (R. 31, PID 979), and called Gene's Towing to remove the vehicles (R. 26, PID 762). Gene's Towing had a towing contract with Detroit. (R. 26, PID 772.) Due to the size of the job, Gene's Towing contacted B & G Towing to help. (R. 26, PID 762.)

         Not long after the tow trucks arrived, “various people” claiming to be representatives for Carmen Auto arrived and told Parnell the lot had been purchased. (R. 26, PID 765, 846.) One of the individuals produced either a purchase agreement or the City Council resolution approving the purchase agreement. (Id.; R. 26, PID 831-32.) To check on the validity of the purchase agreement, Parnell once again phoned city inspectors and city offices to see if the sale had gone through. (R. 26, PID 842.) Parnell's second round of phone calls confirmed that the sale was not final and the lot still belonged to Detroit. (Id.)

         After Parnell's second round of calls, another Carmen Auto representative claimed to have a lease agreement for the lot. (R. 26, PID 766.) Parnell asked to see it. (R. 26, PID 766.) Parnell also urged the representative to bring title information for the vehicles. (R. 26, PID 766-771.) About an hour later, the representative returned, but without any paperwork. (R. 26, PID 766-67.)

         Even so, Parnell made a third round of calls to again make sure the city owned the lot. (R. 26, PID 768.) This time he called officials with Detroit and Wayne County. (Id.) All confirmed that Detroit owned the lot. (Id.) And none of the “various people” who arrived at the lot ever produced documentation showing that an entity other than Detroit owned it. (R. 26, PID 835, 847.) Nor did any of these Carmen Auto representatives ever produce a lease agreement, title information for the vehicles, or a permit to store used cars on the lot. (R. 26, PID 843.)

         As parking the vehicles on a city-owned lot violated city ordinances (R. 26, PID 827), Parnell ordered the towing operation to continue (R. 26, PID 769-71). He made clear to Carmen Auto's representatives that the impound was not part of a criminal investigation. (R. 26, PID 780- 81.) Parnell also told the towing companies the cars were not “‘on hold' for evidentiary purposes.” (R. 24, PID 286.)

         Once the towing companies removed all eighty-five vehicles, Parnell explained to Carmen Auto's representatives that they should contact the towing companies to arrange the release of the vehicles. (R. 26, PID 780.) Parnell says he told Carmen Auto representatives “numerous” times how, where, and when to retrieve the towed vehicles. (R. 26, PID 780-81.) Yet Carmen Auto never recovered the vehicles. So they sat in the towing companies' yards for two or three months and were eventually sold at public auction. (Compare R. 24, PID 281 with R. 24, PID 286.)

         Not long after the sale, Carmen Auto sued the towing companies, the City of Detroit, Parnell, and Bou. Carmen Auto brought claims under 42 U.S.C. § 1983 because they say the tow operation violated their Fourth Amendment due process rights. (R. 1, PID ...

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