United States District Court, E.D. Michigan, Southern Division
Mag.
David R. Grand Judge
OPINION AND ORDER GRANTING IN PART AND DENYING IN
PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND SUA
SPONTE GRANTING PARTIAL SUMMARY JUDGMENT FOR PLAINTIFF
[25]
JUDITH
E. LEVY UNITED STATES DISTRICT JUDGE.
This is
a case about a municipal ordinance. Like other cities in
Michigan, Defendant City of Allen Park maintains a property
management code to regulate its supply of rental housing
units. Under Chapter 10, Articles III and IV of the
City's Code of Ordinances, would-be landlords are
required to register rental property with the city and obtain
an inspection of the property prior to tenancy and once every
three years thereafter. As a landlord of property in the
city, Plaintiff Investment Realty Services, LLC is subject to
the terms and requirements of the city code.
In
February 2018, Defendant initiated criminal proceedings
against Plaintiff for failure to have its rental property
inspected prior to tenancy. Three months later, Plaintiff
filed this suit, challenging the property maintenance code as
unconstitutional, both facially and as-applied, on the
grounds that it coerces consent of warrantless searches
through the imposition of criminal penalties. After the close
of discovery, Defendant moved for summary judgment on all
claims, asserting that Plaintiff lacks standing to challenge
the code, the code does not provide for warrantless searches,
and even if it does, the code provides owners and landlords
sufficient precompliance review. (ECF No. 25.)
The
Court heard oral argument on December 5, 2019. Chapter 10,
Articles III and IV of Allen Park's Code of Ordinances
are unconstitutional on their face in that they impose
criminal penalties for failure to have a property inspected
without the opportunity for precompliance review of the need
for an inspection. For this reason, the Court gives notice of
its intent to grant summary judgment to Plaintiff on its
§ 1983 claim seeking injunctive and declaratory relief.
The Court grants Defendant's summary judgment motion with
respect to all other claims.
I.
Background
City
Code
Michigan
law empowers cities to adopt codes pertaining to building
safety. MCL 117.3(K). In particular, the law allows cities to
adopt preexisting codes, such as the International Property
Maintenance Code (IPMC). Id. The IPMC, in relevant
part, provides standards and enforcement procedures related
to the maintenance of rental property. The City of Allen Park
adopted the 2009 version of the IPMC. Allen Park, MI, Code of
Ordinances ch. 10, art. III, § 83.[1]
The
Code of Ordinances imposes obligations and outlines penalties
for noncompliance for landlords and owners who wish to rent
property within the City. Landlords and owners must register
residential rental property with the City “within 30
days after assuming ownership or control of the
property.” Ch. 10, art. IV, §117. Prior to being
certified for rental and subsequently every three years, all
residential real property must pass an inspection pursuant to
the IPMC, after which the property will receive a certificate
of inspection. Ch. 10, art. IV, §§ 119-121. The
IPMC empowers city officials to inspect property:
[W]here it is necessary to make an inspection to enforce the
provisions of this code, or whenever the code official has
reasonable cause to believe that there exists in a structure
or upon a premises a condition in violation of this code, the
code official is authorized to enter the structure or
premises at reasonable times to inspect or perform the duties
imposed by this code, provided that if such structure or
premises is occupied the code official shall present
credentials to the occupant and request entry. If such
structure or premises is unoccupied, the code official shall
first make a reasonable effort to locate the owner or other
person having charge or control of the structure or premises
and request entry. If entry is refused, the code official
shall have recourse to the remedies provided by law to secure
entry.
Intern.
Prop. Maintenance Code § 104.3 (2009). A landlord's
refusal to allow an inspection of rental property can lead to
criminal charges: “[A]ny person who refuses to allow an
inspection required under this article or interferes with the
code official in the discharge of his duties shall be guilty
of a misdemeanor.” Ch. 10, art. III, § 85(c).
There
is no appeals process for a landlord who wishes to contest
the need for an inspection prior to compliance. Although the
IPMC provides procedures through which a person may appeal
actions by code officials, Intern. Prop. Maintenance Code
§ 111 (2009), Allen Park, in adopting the IPMC, struck
this provision. Instead, the Code of Ordinances provides that
“[a]ppeals are controlled by article XIII, chapter 6 of
the Allen Park Code of Ordinances.” Ch. 10, art. III,
§ 84. Article XIII, Chapter 6 of the Allen Park Code of
Ordinances does not exist.
Plaintiff's
Property at 15339 Euclid Avenue
Plaintiff
Investment Realty Services is a property management company
that owns or leases residential rental property in the City
of Allen Park. Investment Realty Services also transacts
business under the name SBYC Garner, LLC. (ECF No. 30-2.)
Christopher Garner both manages Plaintiff and is
Plaintiff's primary member. (ECF No. 25, PageID.185.)
On
October 13, 2017, Plaintiff purchased the residence at 15539
Euclid Avenue, Allen Park, Michigan. (ECF No. 25, PageID.185;
ECF No. 25-4, PageID.267.) On January 1, 2018, Plaintiff sold
the property to Itay 2017, LLC. (ECF No. 25, PageID.186; ECF
No. 25-8, PageID.299). Itay 2017 and Plaintiff promptly
entered into a lease agreement, which empowers Plaintiff to
fully manage the property: “[Itay] specifically
designates [Plaintiff] as [Itay's] Agent and grants
[Plaintiff] the full right and power to take any action with
respect to the Property that [Plaintiff] deems appropriate. .
. .” (ECF No. 25-11, PageID.364.) This includes the
power to sublease, sue, appeal property taxes, insure the
property, and take “any and all other acts, except
selling or mortgaging the Property, that [Itay] could perform
related to leasing and owning the Property.”
Id. On January 11, 2018, Plaintiff, under the name
SBYC Garner, subleased the property to a third party, David
Potts. (ECF No. 25, PageID.187.) On August, 21, 2018,
Plaintiff-again under the name SBYC Garner-subleased the
property to another third party, Obinna Kokeke. (ECF No.
30-4, PageID.800.) On June 1, 2019, Itay 2017 sold the
property back to Plaintiff. (ECF No. 25-8, PageID.299.)
Code
Enforcement
On
February 20, 2018, Allen Park sent Plaintiff a notice of the
requirements to register the property as a non-homestead,
non-owner-occupied rental property and to obtain a
certificate of inspection. (ECF No. 25, PageID.186; ECF No.
25-5, PageID.269). The notice reads, “Our records
indicate that you have not obtained a certificate of
inspection for this property. You must do so within 30 days.
Failure to do so will result in court action. If you no
longer own this property, please notify us at (313)
928-4441.” (ECF No. 25-5, PageID.269.)
Two
days later, despite the notice's thirty-day timeframe,
the City issued a citation to Plaintiff for three code
violations: 1. failure to register rental property; 2.
failure to obtain a rental inspection; and 3. failure to
obtain a rental certificate. (ECF No. 25-6, PageID.271). Each
alleged violation was a criminal misdemeanor. Id.
Importantly, the citation notes that a first notice was sent
on January 10, 2018, and that the February 20, 2018 notice
was sent in error. Id. Defendant included an
unsigned copy of this January 20 letter in its supplemental
brief.[2] (ECF No. 29-3.) Regardless, the City of
Allen Park dismissed the citation, citing the two-day gap
between the February 20 notice of violation and the criminal
charges. (ECF No. 25, PageID.186.)
Itay
2017, not Plaintiff, ultimately completed a Rental House
Registration on February 26, 2018, listing the tenant as
David Potts. (ECF No. 29-5, PageID.755.) Itay 2017 had the
property inspected and received notice of violations on April
10, 2018. (ECF No. 29-6, PageID.757.) Itay 2017 received a
certificate of compliance on August 2, 2018. (ECF No. 25-10,
PageIDs.360-62.) Garner Properties & Management, LLC paid
the $200 rental registration and inspection fee. (ECF No.
27-5, PageID.484.) Pursuant to Plaintiff's lease
agreements, Garner Properties & Management, L.L.C. billed
the fee to Plaintiff. (ECF No. 30-5, PageID.803.)
On May
1, 2018, Plaintiff filed its complaint in this case. (ECF No.
1.) Plaintiff uses the City's February 22, 2018 citation
as a means to bring a facial challenge to Allen Park's
rental property ordinance. Plaintiff challenges two
provisions that it refers to as the “Inspection
Provisions”: IMPC § 104.3 and Chapter Ten, Article
III, Section 85(c). IPMC § 104.3 gives code officials
vast authority to undertake inspections; Chapter Ten, Article
III, Section 85(c) imposes criminal penalties on property
owners who refuse to allow inspections. Plaintiff alleges
that the composite effect of these provisions is that
property owners who wish to rent property face a catch-22 of
either submitting to warrantless searches or facing criminal
penalties.
II.
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