Carmack v. City of Detroit

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS FOR SANCTIONS (ECF NOS. 56, 58)

          MATTHEW F. LEITMAN, UNITED STATES DISTRICT JUDGE

         In 2018, Plaintiff Robert Carmack engaged attorney Andrew Paterson to file this civil action against the City of Detroit and Mayor Michael Duggan (among others). Paterson had a “hard” time getting his “arms around” Carmack’s story, and Paterson did not “know whether [there was] support [for] any of [the] stuff [Carmack said].” (11/29/2018 Hr’g Tr., ECF No. 50, PageID. 900-901.) Yet Paterson filed this action anyway. Paterson thereafter refused to concur in the Defendants’ requests that he dismiss certain baseless claims, violated an order of this Court prohibiting him from taking discovery, and twice attempted to mislead the Court on material matters. Paterson’s course of conduct warrants the imposition of sanctions under the Court’s inherent power. Accordingly, for the reasons explained in more detail below, the Court GRANTS IN PART AND DENIES IN PART the motions for sanctions filed by Mayor Duggan, the City of Detroit, and the Detroit Building Authority (the “DBA”) (see Motions, ECF Nos. 56, 58).^[1]

         I

         A

         On March 28, 2018, Paterson filed what he wrongly called a Verified Complaint against Mayor Duggan, the City of Detroit, and others.^[2] (See Compl., ECF No. 1.) Relevant to Mayor Duggan and the City of Detroit:

• Count I alleged that Mayor Duggan, the City of Detroit, and others retaliated against Carmack for Carmack’s exercise of his First Amendment rights when the Defendants took steps to demolish property Carmack allegedly owned at 8124 Michigan Avenue (the “8124 Property”). (See Id . at ¶¶ 13-51, PageID.4-12.);

• Count II alleged that the City of Detroit fraudulently and unlawfully conveyed title to the 8124 Property to another person in violation of state law. (See Id . at ¶¶ 81-94, PageID.18-20.);

• Count IV alleged that the City of Detroit fraudulently and unlawfully conveyed title to the 8124 Property to another person and took other actions related to the 8124 Property in violation of the Fifth Amendment. (See Id . at ¶¶ 95-108, PageID.20-23.);

• Count V alleged that the City of Detroit “unconstitutionally and unlawfully took physical possession of [Carmack’s] property without Due Process of law” and without providing Carmack a “Notice to Quit” in violation of the Fifth Amendment. (Id. at ¶111, PageID.23-24.);

• Count VI alleged that the City of Detroit committed a trespass under state law when it “proceeded with the unlawful demolition” of the 8124 Property. (See id at ¶¶ 119-25, PageID.25-26.);

• Count VII alleged that the City of Detroit converted Carmack’s property in violation of Michigan common law. (See id at ¶¶ 126-30, PageID. 27.);

• Count VIII alleged that the City of Detroit converted Carmack’s property in violation of Michigan Compiled Laws § 600.2919a. (See id at ¶¶ 131-37, PageID.28-29.); and

• Count IX sought attorney’s fees under 42 U.S.C. § 1988. (See Id . at ¶¶ 138- 40, PageID.29-30.)

         On May 10, 2018, Mayor Duggan and the City Detroit filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (See First Mot. to Dismiss, ECF No. 6.) Before filing that motion, their counsel held a “conference” with Paterson. (Id., PageID.52.) During the conference, defense counsel explained “the nature of the motion and its legal basis” and “requested … concurrence [from Paterson] in the relief sought” in the motion. (Id.) Paterson refused to grant concurrence. (See id.)

         In the motion to dismiss, Mayor Duggan and the City of Detroit argued that each of the counts of the Verified Complaint described above failed as a matter of law for the following reasons:

• Count I “fail[ed] to allege plausible facts to show, directly or indirectly, that any action was taken” by Mayor Duggan or the City of Detroit in retaliation for Carmack’s alleged exercise of his First Amendment rights. (Id., PageID.49.);

• Count I and Counts III through VIII failed to state a cognizable claim because they were “premised upon [Carmack’s] ownership” of the 8124 Property, and Carmack did not own that property. (Id., PageID.51.);

• The Court did not have jurisdiction over Carmack’s claims under the Rooker-Feldman doctrine. (See id.);

• All claims premised on Carmack’s alleged ownership of the 8124 Property were “barred by the principles of res judicata.” (Id.) Mayor Duggan and the City of Detroit explained that the Wayne County Circuit Court had entered a judgment of foreclosure on the 8124 Property that vested fee simple absolute in that property in the Wayne County Treasurer. (See id, PageID.51, 61.) They submitted a copy of the judgment as an exhibit to the motion. (See Judgment of Foreclosure, ECF No. 6-4.) They argued that because the judgment vested title to the 8124 Property in the Wayne County Treasurer, Carmack could not pursue claims based on his alleged ownership of that property. (See First Mot. to Dismiss, ECF No. 6, PageID.71.)

• The Court “lack[ed] jurisdiction to hear [the] Fifth Amendment taking claims” in Counts IV and V of the Verified Complaint because Carmack “ha[d] failed to exhaust his state law remedy of inverse condemnation.” (Id. at PageID.52.);

• The state-law tort claims in Counts VI, VII, and VIII were barred by Michigan’s Government Tort Liability Act, Michigan Compiled Laws § 691.1401 et seq. (See id); and

• The claim for attorney’s fees failed under 42 U.S.C. § 1988 because that statute “provides a remedy, not a cause of action.” (Id)

         B

         The Court held a telephonic status conference with counsel to discuss the motion to dismiss on June 6, 2018. (See Notice to Appear, ECF No. 14.) During that conference, the Court offered Paterson the opportunity to file an amended complaint on Carmack’s behalf. The Court directed Paterson to carefully review the claims made in the Verified Complaint in light of the arguments that Mayor Duggan and the City of Detroit raised in their motion to dismiss. The Court further instructed Paterson to determine whether it was appropriate to dismiss any of the claims brought in the Verified Complaint. Finally, the Court told Paterson to include in the amended complaint any additional factual allegations that could support Carmack’s claims.

         C

         Paterson filed what he wrongly called a Verified Amended Complaint on Carmack’s behalf on June 20, 2018.^[3] (See Am. Compl., ECF No. 16.) In that pleading, Paterson re-asserted each of the claims against Mayor Duggan and the City of Detroit that were the subject of the initial motion to dismiss described above. In many instances, Paterson repeated the claims verbatim from the Verified Complaint; in others, he made minor revisions.^[4] Paterson made two revisions to the Verified Amended Complaint that could reasonably be considered substantive:

• Paterson named the DBA as a Defendant for the first time; and

• Paterson added a claim against the City of Detroit, Mayor Duggan, and the DBA titled “Supplemental State Law Claim - Tortious Interference with Business Relationship or ...