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Kircher v. City of Ypsilanti

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

April 17, 2018

David Kircher, Plaintiff,
v.
City of Ypsilanti, et al., Defendants.

          OPINION & ORDER DENYING LEAVE TO AMEND AND GRANTING DEFENDANTS' MOTION TO DISMISS

          SEAN F. COX, UNITED STATES DISTRICT JUDGE.

         This 2004 case was reassigned to this Court in 2017, when the Honorable Gerald Rosen retired. The case involves protracted state-court litigation between Plaintiff David Kircher, a property owner in Ypsilanti, Michigan, and the City of Ypsilanti and several of its officials. The case is currently before the Court on: 1) Plaintiff's motion seeking to file an amended complaint, which Defendants oppose; and 2) a Motion to Dismiss filed by Defendants, that asserts multiple grounds for relief. The motions have been briefed and the Court heard oral argument on April 12, 2018. For the reasons set forth below, the Court shall deny Plaintiff's motion seeking leave to amend, and grant Defendants' motion to dismiss, because the constitutional claims that Plaintiff wishes to pursue in this action are barred under the applicable preclusion doctrines.

         BACKGROUND

         A. Procedural Background

         Acting through counsel, George Ward, Plaintiff David Kircher filed this action on July 1, 2004, naming the following Defendants: 1) the City of Ypsilanti; 2) Cheryl Farmer, Mayor of Ypsilanti; 3) Charles Boulard, Building Inspector of Ypsilanti; 4) Jon Ichesco, Fire Marshall of Ypsilanti; 5) Robert Barnes, 6) Donald Shelton, Washtenaw County Circuit Court Judge; and 7) Timothy Connors, Washtenaw County Circuit Court Judge. The action was assigned to the Honorable Gerald Rosen.

         Plaintiff filed a First Amended Complaint on July 9, 2004, against the same Defendants. (D.E. No. 3). This is the operative complaint and it contains four separate counts - none of which are titled.

         Two Defendants, Judge Shelton and Judge Connors, filed an early Motion to Dismiss, based on judicial immunity and other grounds, that was granted by Judge Rosen. Thus, they are no longer in the case.

         The remaining Defendants filed a Motion to Dismiss or Stay action on September 10, 2004. (D.E. No. 17 & 18).

         On October 10, 2006, Judge Rosen issued an “Order Staying Case In Favor Of Parallel State Court Proceedings” (D.E. No. 37) wherein he “ORDERED that all proceedings in this case are STAYED until such time as the related state court actions have fully concluded, including any appeals that are pending or that the parties might elect to pursue.” (Id.). Judge Rosen remanded the matter to state court under the Younger abstention doctrine.

         Approximately ten years later, on November 9, 2016, Plaintiff filed a motion seeking to end the stay (D.E. No. 69), which this Court granted in an Order issued on May 12, 2017. (D.E. No. 78).

         On October 4, 2017, Plaintiff, who is now represented by new counsel, filed a “Motion for Leave to Amend Complaint and for Discovery” (D.E. No. 84). That motion is opposed by Defendants. Plaintiff attaches his proposed Second Amended Complaint as Exhibit A. It includes the same five Defendants but now has five separately-titled counts: 1) “Inverse Condemnation - Taking Of Property For Economic Rejuvenation and/or Economic Development” (Count I); 2) “Inverse Condemnation - De Facto Taking” (Count II); 3) “Inverse Condemnation - Unreasonable Delay In Acquiring Property” (Count III); 4) “Substantive Due Process” (Count IV); and 5) “Procedural Due Process” (Count V).

         On November 7, 2017, Defendants filed Motion to Dismiss, pursuant to Fed.R.Civ.P. 12(b)(1) and (b)(6). (D.E. No. 88).

         B. Standard of Decision

         Plaintiff has filed a motion seeking leave to file his proposed Second Amended Complaint, which asserts that the same claims against the same Defendants. Plaintiff asserts that he wishes to file this amended pleading in order to clarify the claims (by asserting them in titled counts) and by including additional factual allegations as to proceedings that have occurred since the time that Plaintiff filed his last complaint. Defendants agree that it raises the same claims as raised in the First Amended Complaint (see D.E. No. 85 at Pg ID 1227).

         Defendants oppose Plaintiff's motion on futility grounds. In addition, Defendants have filed a separate Motion to Dismiss, pursuant to Fed.R.Civ.P. 12(b)(1) and (b)(6).

         Amendment of a complaint is futile when the proposed pleading would not permit the complaint to survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6). Miller v. Calhoun Cnty., 408 F.3d 803, 817 (6th Cir. 2005).

         Accordingly, this Court must consider whether Plaintiff's proposed Second Amended Complaint can withstand a motion to dismiss. If it can, the Court should grant Plaintiff's motion for leave to file it and deny Defendants' Motion to Dismiss. If it cannot, then the Court should grant Defendants' Motion to Dismiss, deny Plaintiff's motion for leave, and dismiss the case.

         “In determining whether to grant a Rule 12(b)(6) motion, the court primarily considers the allegations in the complaint, although matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint, also may be taken into account.” Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001).

         Here, there have been extensive proceedings in the state court that are relevant to Plaintiff's claims and Defendant's Motion to Dismiss. What follows is the factual history, taken from the allegations in Plaintiff's proposed Second Amended Complaint, the orders and opinions entered in the state court case, and facts stipulated to by the parties.

         C. Relevant Facts

         Pursuant to this Court's directive, both Plaintiff and Defendants submitted statements of material facts, so that they could acknowledge the numerous facts that are not in dispute. (D.E. Nos. 91-28 & 95). The Court shall refer to those submissions as “Pl.'s Stmt.” and “Defs.' Stmt., ” followed by the corresponding paragraph number.

         Plaintiff David Kircher is a graduate engineer of the University of Michigan, a licensed electrical mechanical contractor and licensed master electrician, and a former Ypsilanti City council member. (Pl.'s proposed Sec. Am. Compl. at ¶ 1).

         Plaintiff's claims in this action relate to three state-court actions concerning three properties owned by Plaintiff in Ypsilanti, Michigan.

         1. The Cross Street Property

         The “Cross Street Property, ” 510 W. Cross Street, is a residential apartment complex that Plaintiff purchased in the 1960's. (Pl.'s proposed Sec. Am. Compl. at ¶ 46-47). In 2000, Defendant Robert Barnes owned the remaining properties on the Cross Street block and Barnes's principal place of business was 520 W. Cross Street. In 2000, Barnes made an offer to Plaintiff to buy the Cross Street Property, but Plaintiff refused to sell it to Barnes. (Id. at ¶¶ 48-49). Plaintiff alleges that, “[s]tarting in approximately 2001, Defendants intended to transfer the Cross Street Property from [Plaintiff] to Barnes for the purpose of making a better economic use of the property;” “[s]pecifically, the Defendants desired to transfer the Cross Street Property to Barnes to enable Barnes to turn the property into a sorority or fraternity house.” (Id. at ¶¶ 50-51).

         On May 14, 2001, the City of Ypsilanti (the “City”) and the Fire Marshal for the City, Jon Ichesco (“Ichesco”), filed a “Complaint for Nuisance Abatement and/or Raze the Building and Order to Show Cause” regarding the Cross Street Property. (Pl.'s & Defs.' Stmts. at ¶ 1). The Cross Street Complaint was filed under MCL 29.23, part of the Fire Prevention Code. (Id. at ¶ 2).

         On August 20, 2001, the circuit court entered an Order for Fire and Building Code Compliance. (Pl.'s & Defs.' Stmts. at ¶ 3; see D.E. No. 91-9). That “Order for Fire and Building Code Compliance Repairs” stated that, the “parties having appeared in Court for a Show Cause hearing, ” the Court was ordering certain relief and attached a list of 224 repair items. It provided that a “valid certificate of occupancy must be obtained from the building inspection department before any unit in the building may be occupied.” It also stated, in Section G, that Plaintiff, “Harvey Hutchison, Jon Ichesco, will meet within two weeks to resolve as many issues as possible with the understanding that the parties will litigate the rest at an evidentiary hearing on 08-30-01 at 2:00.” (D.E. No. 91-9 at Pg ID 1776). That evidentiary hearing was adjourned, however, because the parties entered a stipulated order. (See D.E. No. 91-2 at Pg ID 1696).

         The City requested, and the circuit court ordered, that the Cross Street Property be vacated. (Pl.'s & Defs.' Stmts. at ¶ 4).

         On November 21, 2001, Harry Hutchinson, Director of the City's Department of Public Works, sent a letter to Kircher specifying repairs that needed to be made to the Cross Street Property before a certificate of occupancy would be issued. (D.E. No. 91-19 at Pg ID 1859). Although prior evidentiary hearings had been scheduled, they had not occurred for various reasons, including stipulated orders from the parties and a cancellation by the circuit court. On May 28, 2002, the circuit court held an evidentiary hearing, during which testimony was taken regarding the Cross Street Property. That evidentiary hearing was the only evidentiary hearing regarding the Cross Street Property prior to any appeals to the Michigan Court of Appeals. (Pl.'s & Defs.' Stmts. at ¶ 9).

         On June 14, 2002, the circuit court entered an Order giving the City the exclusive right to repair the building and fire code violations at the Cross Street Property. (Pl.'s & Defs.' Stmts. at ¶ 10). The June 14, 2002 circuit court order specified five repairs to be made by the City. (Id. at ¶ 11).

         On June 25, 2002, the City's Building Official, Charles Boulard, sent a letter to Kircher stating that it was responding to “the plethora of inspection requests that you have made of the Building Department over the last several weeks.” (D.E. No. 91-18). The letter referenced requests relating to several properties. As to the Cross Street Property, it said:

Address: 510 W. Cross
Request: Inspection of the chimney of the structure by Building Inspector Avram
Response: Request cannot be honored. It is my sincere belief that performing the requested inspection would be contrary to the spoken and written orders of the Court.

(Id.).

         On July 22, 2002, Kircher appealed the circuit court's June 14, 2002 order to the Michigan Court of Appeals. (Pl.'s & Defs.' Stmts. at ¶ 13).

         On November 21, 2002, the City hired Barnes & Barnes to make the five repairs enumerated in the June 14, 2002 order to the Cross Street Property. (Pl.'s & Defs.' Stmts. at ¶ 14). Barnes charged Kircher $54, 376.74 for those five repairs. (Id. at ¶ 15).

         After completing the five repairs enumerated in the circuit court's June 14, 2002 order, Barnes continued making additional repairs and renovations to the Cross Street Property. (Pl.'s & Defs.' Stmts. at ¶ 16). As of November 14, 2003, Barnes claimed that the amount owed by Kircher for repairs at the Cross Street Property was $95, 559.50. (Pl.'s & Defs.' Stmts. at ¶ 17). On November 14, 2003, Barnes filed a complaint to foreclose judicial lien on the Cross Street Property and to determine interests in real property. (Pl.'s & Defs.' Stmts. at ¶ 18).

         On December 17, 2003, the City and Barnes filed a joint motion requesting authority from the circuit court to reconfigure the Cross Street Property into a sorority or fraternity house. (Pl.'s & Defs.' Stmts. at ¶ 19).

         At a hearing in February of 2004, the attorney for the City stated that the purpose of the circuit court's order giving the City authority to make repairs to the Cross Street Property to get a certificate of occupancy was intended to mean that the City had authority to make the property “economically viable.” (Pl.'s & Defs.' Stmts. at ¶ 20).

         As of February 11, 2004, Barnes had demolished the interior of the Cross Street Property. (Pl.'s & Defs.' Stmts. at ¶ 21).

         On February 11, 2004, the circuit court denied the City and Barnes' request to reconfigure the Cross Street Property into a sorority or fraternity house. (Id. at ¶ 22).

         Undeterred, on March 17, 2004, Barnes applied to the City for a special use permit to use the Cross Street Property as a sorority or fraternity house. (Id. at ¶ 23).

         On April 27, 2004, the Court of Appeals remanded the case back to the trial court. With regard to the Cross Street Property, the Court of Appeals stated: “the order does not provide for the trial court's approval of the amount charged to defendant for the repairs. In light of the harsh consequences of defendant's failure to pay, the order must provide that charges to defendant shall be reviewed by the trial court to determine whether they are appropriate and reasonable before defendant is required to pay.” (Id. at ¶ 24).

         On May 25, 2004, the City approved Barnes' request for a special use permit to use the Cross Street Property as a sorority or fraternity house. (Id. at ¶ 25).

         On July 1, 2004, Plaintiff filed his Complaint in the United States District Court for the Eastern District of Michigan concerning constitutional violations regarding the Cross Street Property. (Id. at ¶ 26). On July 9, 2004, Plaintiff amended his Complaint as of right to state constitutional claims regarding the Cross Street Property, the Perrin Property, and the Thompson Building. (Id. at ¶ 27).

         Barnes charged at least another $163, 926.58 to Kircher between April 8, 2003 and January 19, 2005 for repairs and renovations to the Cross Street Property. The circuit court did not review the nature of the repairs, the plans, or the proposed costs, prior to the repairs or renovations being made by Barnes. No evidentiary hearing occurred regarding the $163, 926.58 claimed to be due for repairs and renovations prior to Kircher's first appeal to the Michigan Court of Appeals. (Pl.'s & Defs.' Stmts. at ¶¶ 29-30).

         After the Court of Appeals April 27, 2004 Order remanding the cases to circuit court, the circuit court held an evidentiary hearing on July 22, 2004 for the repairs made to the Thompson Building and Cross Street Property, together with an evidentiary hearing regarding the foreclosure sales of each of those properties. (Id. at ¶ 31). The circuit court expressly stated that it was not addressing any constitutional issues at the July 22, 2004 evidentiary hearing. (Id. at ¶ 32).

         After testimony at the July 22, 2004 evidentiary hearing regarding the Thompson Building, the evidentiary hearing was adjourned to December 10, 2004 to address the Cross Street Property. (Id. at ¶ 33).

         On September 2 - 3, 2004, Kircher filed England Reservations in each of the City's nuisance abatement ...


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