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Mauro v. County of Macomb

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

May 30, 2018

SIMONE MAURO, Plaintiff,
v.
COUNTY OF MACOMB and ANTHONY MARROCCO, Defendant.

          R. Steven Whalen, United States Magistrate Judge

          OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT MARROCCO'S MOTION FOR SUMMARY JUDGMENT

          Paul D. Borman, United States District Judge

         On March 19, 2012, Plaintiff Simone Mauro was jailed for contempt of court by Macomb County Circuit Judge John C. Foster after Mauro refused to comply with a court order that he transfer the personal property of a business that he partly owned. Defendant Anthony Marrocco was one of the parties adverse to Mauro in the larger litigation of which the contempt proceeding was a component. The next day, Mauro signed over the assets that were the subject of the court order, and he was promptly released.

         Mauro later filed suit in the Macomb County Circuit Court under 42 U.S.C. § 1983 against Macomb County and against Marrocco, both in his individual capacity and in his official capacity as Macomb County Public Works Commissioner. Mauro also asserted state-law claims of false imprisonment and intentional infliction of emotional distress against both defendants. The defendants removed the action from the Macomb County Circuit Court to this Court.

         Mauro has dropped his claims against Macomb County and his official-capacity claims against Marrocco. The remaining claims are Mauro's § 1983 claim, his false imprisonment claim, and his intentional infliction of emotional distress claim, all asserted against Marrocco in his individual capacity. As discussed below, Mauro has presented sufficient evidence to pursue his § 1983 claim that Marrocco retaliated against him for engaging in activity protected by the First Amendment. As to all other potential theories of that claim, and as to all other claims asserted, Mauro has failed to demonstrate the existence of a genuine issue of material fact, and therefore Marrocco is entitled to summary judgment.

         I. BACKGROUND

         Mauro's contempt incarceration, which is the primary basis for the claims asserted in this action, occurred amid an ongoing civil dispute in the Circuit Court of Macomb County over real and personal property associated with a golf and country club in Macomb, Michigan. The case ultimately went before the Michigan Court of Appeals, which issued an opinion on April 17, 2014 that sets forth facts relevant to nearly all of Mauro's allegations in this case. See generally Jode Investments LLC v. Burning Tree Properties, LLC, No. 310957, 2014 WL 1515267 (Mich. Ct. App. Apr. 17, 2014) (per curiam). As the parties do not appear to dispute the accuracy of that opinion's account of those facts, the factual recitation that follows will draw principally from the Michigan appellate court's April 14, 2014 opinion.

         A. Factual Background

         In 2004, Mauro, Marrocco, and several others formed two limited liability companies in order to purchase and operate the Burning Tree Golf and Country Club. Burning Tree Properties, LLC (“BT Properties”) would purchase the real property, and Burning Tree Investors, LLC (“BT Investors”) would operate the golf course and country club. Mauro and Marrocco each owned stakes in both BT Properties and BT Investors (collectively the “BT Entities”), albeit in different capacities: Mauro personally owned 25% of the BT Entities, while Marrocco was a member of a company called Jode Investments, LLC (“Jode”), which itself held a 25% stake in the BT Entities. See Jode Investments, 2014 WL 1515267, at *1.

         The BT Entities financed their purchase of the club with a $3.36 million loan issued by Fifth Third Bank (“Fifth Third”) in January 2005. The loan was secured by a mortgage on the real property that BT Properties had purchased, and by a security agreement covering all personal property of BT Investors, including its liquor license. The loan was guaranteed by BT Investors and by various individuals affiliated with the BT Entities, including both Mauro and Marrocco. See id.

         The BT Entities defaulted on the loan in early 2009, and Fifth Third acquired the real property for $1.5 million at a foreclosure sale in October of that year. Shortly thereafter, Fifth Third sued the BT Entities and various members of the BT Entities, alleging that all of the guaranties of the loan had been breached, and further alleging that it had the right to take possession of BT Investors' personal property in partial satisfaction of the remaining debt. (After Fifth Third foreclosed on the real property, the remaining debt was approximately $2 million.) See id.

         In April 2010, Marrocco and Anthony Fanelli (another member of Jode) entered into a settlement agreement with Fifth Third. In exchange for $2.1 million and a release of all claims against it, Fifth Third agreed to dismiss its claims against Marrocco and Fanelli without prejudice to its rights against the other guarantors, including Mauro. Fifth Third also agreed to quitclaim its interest in (or issue a redemption certificate for) the real property in favor of an entity to be named by Marrocco and Fanelli. Finally, Fifth Third agreed to terminate its Uniform Commercial Code financing statements as to BT Investors' personal property, and discharge any interest it had in the liquor license. See Id. at *2.

         Also in April 2010, Burning Tree Properties assigned all of its “right, title, and interest” in the real property, including its redemption rights, to a newly formed entity called Club Golf Properties, LLC (“Club Properties”).[1] The assignment was brought about by a group of members who together held a 70% interest in BT Properties: Marrocco, on behalf of Jode Investments; Mauro; and Salvatore DiMercurio, another co-owner of the BT Entities and guarantor of the loan. See id.

         A few months after settling with Marrocco and Fanelli, Fifth Third separately settled with Mauro and DiMercurio. Mauro and DiMercurio agreed to each execute a deficiency note for $70, 000 to cover their respective guaranties, and Fifth Third's claims against them were dropped. See id.

         The litigation that ultimately led to Mauro's contempt incarceration was initiated in January 2011. The issue in those proceedings that matters for present purposes is the disposition of BT Investors' personal property, including the liquor license.[2].

         The lawsuit began when Club Properties and Club Golf (collectively the “Club Entities”), filed suit against the BT Entities and also against the three members of the BT Entities besides Jode: Mauro, DiMercurio, and Sergio Gesuale (collectively the “BT Parties”). The plaintiffs alleged (inter alia) that a dispute had arisen over the dissolution of the BT Entities and the ownership of their property, and asked the court to (inter alia) declare that Club Golf owned the personal property formerly owned by BT Investors. See Id. at *2-3. A few months later, in April 2011, the BT Parties filed a counter-suit against Jode, the Club Entities, Marrocco, and Fanelli (collectively the “Club Parties”), which alleged that the Club Parties had wrongfully exercised dominion over BT Investors' personal property. See Id. at *3. The Club Parties then filed an amended complaint-now including Marrocco and Fanelli among the plaintiffs in addition to Jode and the Club Entities-again seeking dissolution of the BT Entities and a declaration that the Club Entities owned all real and personal property formerly owned by the BT Entities. See Id. at *3-4. The central issue, at least as to the claims regarding BT Investors' personal property, was whether, under the April 2010 settlement between Marrocco, Fanelli, and Fifth Third, Fifth Third had ever effectively transferred BT Investors' personal property to Marrocco, Fanelli, or Club Golf.

         In November 2011, the trial court concluded that the transfer of BT Investors' personal property had indeed been effective, and accordingly granted a motion for partial summary disposition filed by the Club Parties. Then in February 2012, based on that determination, the court ordered the BT Parties to assign BT Investors' liquor license to the Club Parties. See Id. at *4-5. The BT Parties moved for reconsideration of that decision on February 13, 2012. A hearing on the motion for reconsideration was scheduled for March 19, 2012. (See ECF No. 1-2 at 121-23, 126-28.)

         Eighteen days before the scheduled hearing on the BT Parties' motion for reconsideration, on March 1, 2012, the Club Parties filed a Verified Ex-Parte Motion for Order to Show Cause, in which the Club Parties requested that the court issue an order to show cause why Mauro should not be held in contempt for refusing to transfer BT Investors' personal property to the Club Parties, require Mauro to transfer the property, and award attorneys' fees and costs to the Club Parties. (ECF No. 1-2 at 55-61, Pg ID 60-66.) Macomb County Circuit Judge John C. Foster, who presided over the action, entered an Order to Show Cause the same day, ordering Mauro to appear before the court on March 19, 2012-the same date on which the BT Parties' motion for reconsideration had been scheduled to be heard-and to “show cause why he should not be held in Contempt of Court for his continued failure to comply with this Honorable Court's Rulings and Orders, and to show cause why the Court should not grant the additional relief as requested in the Verified Ex-Parte Motion for Order to Show Cause.” (ECF No. 1-2 at 53-54, Pg ID 58-59.)

         In the course of the March 19, 2012 hearing, Judge Foster held Mauro in contempt, ordered that Mauro be remanded to the county jail until he executed the assignment of the personal property, and ordered him to pay fees and costs. See Jode Investments, 2014 WL 1515267, at *5. An article published two days later in the Macomb Daily, which Mauro included as an exhibit to the Complaint in this action, described the proceedings in the following way:

Mauro, standing before the judge in a suit and tie, without an attorney present, was hauled off to jail on Monday after [Judge] Foster warned him that he was ordered to sign over the assets months ago. As a deputy led him out of the courtroom, Foster advised:
“Mr. [Mauro], you have the keys to the jail cell in your hands. All you have to do is sign those documents.”
Before he was led away, Mauro noted that he had “vehemently” disagreed with Foster's past rulings in the case and he called the new motion seeking the imposition of jail and fines “an attempt by Mr. Marrocco to intimidate me and harass me.”
Mauro, who told the court he has filed for personal bankruptcy, added:
“Your honor, you expect me to transfer $787, 000 in assets to Mr. Marrocco, for no financial consideration?”
. . .
Marrocco, who has been battling with the Board of Commissioners in his role as public works commissioner, was pleased with Foster's decision.
“It's like with the Board of Commissioners, when I'm right, I'm right, ” he said as he left the courtroom. “I don't (mess) around. This guy deserves jail.”

(ECF No. 1-2 at 90, Pg ID 95.)

         After Mauro executed the assignment the next day, Judge Foster ordered his release. (See Jode Investments, 2014 WL 1515267, at *5; ECF No. 33, Def.'s Mot. Ex. 5, Jode Investments Docket at Pg ID 737.)

         In June 2012, having granted the Club Parties' motions to dissolve the BT Entities, the court dismissed the remaining claims and closed the case. See Jode Investments, 2014 WL 1515267, at *5. The BT Parties moved for reconsideration, but the court struck the motion as untimely in July 2012. See Id. at *6.

         The parties cross-appealed. The BT Parties appealed various aspects of the trial court's decision, including the order to assign the liquor license and the order that Mauro be incarcerated for contempt. The Club Parties appealed the trial court's denial of their requests for costs and sanctions against the BT Entities. See Id. at *1.

         The Michigan Court of Appeals ruled on the cross-appeals in the April 17, 2014 opinion. Relevant to the instant case, the appellate court reversed the trial court's determination that Fifth Third had effectively transferred BT Investors' personal property (including the liquor license) to Marrocco and Fanelli, finding that the bank never took the affirmative steps necessary to dispose of the personal property after the BT Entities defaulted on the loan, and concluded that the trial court “erred when it order[ed] Burning Tree Investors to transfer those assets to a third party without compensation.” Id. at *10. As to Mauro's contempt incarceration, the Court of Appeals stated simply: “The Burning Tree entities and Mauro ask this court to ‘reverse' the trial court's order that Mauro be incarcerated for contempt. However, it is clear that Mauro is no longer incarcerated. Therefore, this claim of error is moot, and we decline to address it.” Id. at *12.

         After further proceedings on remand, the trial court held that the four members of the BT Entities-Mauro, Jode, DiMercurio, and Gesuale-were each entitled to 25% of the assets of the BT Entities, including the value of the liquor license, which the trial court valued at $653, 280.68 in total. (See Pl.'s Resp. Ex. 4, July 8, 2016 Macomb County Circuit Court Opinion at 2-20, Pg ID 994-1012.)

         B. Procedural History

         Mauro filed the initial Complaint in this action against Macomb County and Marrocco in the Macomb County Circuit Court on April 18, 2016 (ECF No. 1-2 at 4-30, Pg ID 9-35 (“Compl.”)). Mauro alleged that his “wrongful imprisonment was calculated to intentionally cause [him] to suffer emotional distress, humiliation, embarrassment and loss of reputation, ” and that it did in fact have that effect. (Compl. ¶¶ 51, 53-54.) He further alleged that “Defendant Marrocco's comments in The Macomb Daily article were intended to further cause Mauro to suffer emotional ...


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