Michigan Protection & Advocacy Service v. Babin

CourtUnited States District Courts. 6th Circuit. United States District Court (Western District Michigan)
Citation799 F. Supp. 695
Docket NumberNo. 90-70181.,90-70181.
PartiesMICHIGAN PROTECTION AND ADVOCACY SERVICE, INC., et al., Plaintiffs, v. Peggy BABIN, et al., Defendants.
Decision Date22 July 1992

799 F. Supp. 695

Peggy BABIN, et al., Defendants.

No. 90-70181.

United States District Court, E.D. Michigan, S.D.

July 22, 1992.

799 F. Supp. 696
799 F. Supp. 697
799 F. Supp. 698
799 F. Supp. 699
Dorothy M. Smith, Livonia, Mich., Stewart Hakola, Marquette, Mich., Jay D. Kaplan, Northville, Mich., for Michigan Protection

Mark S. Koppelman, Southfield, Mich., for Thomas Fortin and Paul Hebert.

Bruce Franklin, Troy, Mich., for Maquire.

Samuel M. Thompson, pro se.

Kevin A. McNulty, Detroit, Mich., for Nosh Ivanovic and Katrina Ivanovic.

Abraham Singer, Detroit, Mich., for Scott Babin.

Thomas W. Crammer, Bloomfield Hills, Mich., for F. Hammonds.

Kevin F. O'Shea, Detroit, Mich., for Peggy Babin.

James V. Carnago, Laura M. Beam, Troy, Mich., for Century 21 and John D. Kersten.

799 F. Supp. 700


ROSEN, District Judge.


This matter is before the Court on crossmotions filed by several of the parties in this multi-plaintiff, multi-defendant lawsuit. Plaintiff Michigan Protection and Advocacy Service ("MPAS")1, on behalf of fourteen Plaintiffs suffering from developmental disabilities, brings this action against fourteen Defendants. MPAS claims that Defendants have violated rights secured by the Fair Housing Amendments Act of 1988 ("FHAA"), 42 U.S.C. § 3601 et seq.2, and the Michigan Handicapper's Civil Rights Act, M.C.L. § 37.1101 et seq., and for conspiracy to violate those rights under 42 U.S.C. § 1985(3), and failure to prevent this conspiracy under 42 U.S.C. § 1986. Plaintiffs seek declaratory and injunctive relief together with compensatory and punitive damages.


In May 1988, Robin and Marie Hester ("Hesters") decided to sell their home at 2323 24 Mile Road in Shelby Township, Michigan ("the Home"). They signed an Exclusive Right-To-Sell Listing Agreement with Defendant Century 21 Town & Country ("Town & Country"). Defendant Florence Hammonds ("Hammonds"), a real estate agent employed by Town & Country, handled the listing which was to run from May 1, 1988 through August 1, 1988. In consideration for undertaking to find a purchaser, the Hesters agreed to pay Town & Country 6% of the sales price of the property as a commission.

Thereafter, Hammonds began marketing the property. This effort was unsuccessful. When the first listing expired, the Hesters signed another exclusive listing agreement which ran until November 3, 1988. Again, the effort to sell the Home was unsuccessful. The Hesters then signed a third listing agreement which ran until February 10, 1989.

On February 9, 1989, Hammonds offered to purchase the Home for $95,000, with a sales commission of $5700 to Town & Country. This offer was accepted. The closing took place on or about April 12, 1989 with Transamerica Title Insurance Company ("Transamerica") providing the title work. To pay for the Home, Hammonds secured a home equity loan of approximately $21,000 and a $78,000 mortgage. Her monthly payment on this mortgage was about $1100, with the first payment due in May 1989. According to Hammonds, the assumption of this second mortgage was a substantial financial burden.3

Apparently, Hammonds decided to buy the Home with the intent to lease it to the State of Michigan to be used as a group home for mentally handicapped adults.4 In November 1988, while acting as the Hesters' broker, she had inquired whether the Macomb-Oakland Regional Center ("MORC")—a division of the Michigan State Department of Mental Health ("State")—would be interested in leasing the Home if she were to purchase it. MORC was interested and a series of discussions with representatives from the State ensued. According to Hammonds,

799 F. Supp. 701
she was assured by the State in March 1988, through Don Booth, MORC's Property Development Coordinator, that a written lease would be executed and that she would begin receiving rental payments by May 15, 1989.5 Hammonds claims that she bought the Home in reliance on this promise to lease

Hammonds says there were numerous delays involved in her lease negotiations with the State, including the frequent illness of her contact person. The State also refused to commit to the amount of rent which would be paid on the Home. In response to these difficulties, Hammonds called her contact person's supervisor on or about April 28, 1989, asking him to intercede so as to accelerate the leasing process. He responded that he could not intercede, that the approval for the home had to go through different channels, including the Attorney General's office, and that the Home would not be ready to lease until at least July 15, 1989.

On May 12, 1989, Hammonds met with Booth and Dennis Bott, MORC's first line supervisor, to discuss her concerns about the rental of the Home, including the financial burden and the negative reaction from neighbors. According to Hammonds, at the conclusion of this meeting, Booth and Bott promised to contact Lansing to determine the reason for the delays and to call her that day with a response. They did not call her.

Meanwhile, on April 26, 1989, a MORC representative had sent residents in the vicinity of the proposed group home a letter informing them that the Home was to be used as a residence for five mentally retarded adults. The letter describes the program and advises interested persons to call MORC if they have any questions.6 In response, Defendant Peggy Babin, a resident living near the Home, called Hammonds on or about April 28, 1989. She was upset about the prospect of a group home, and, along with other neighbors, wished to speak with Hammonds about it. Five neighbors met at Hammonds's home the next day. They voiced their fears about the home and gave Hammonds a packet of negative information about group homes. Hammonds apparently assured them that the group home was a good idea and tried to assuage their fears.

A group of neighbors then began to engage in activities designed to prevent the institution of the group home in their neighborhood. They apparently believed that a group home would result in a depreciation of property values and threaten neighborhood safety. According to Plaintiffs, this group initiated a petition drive opposing the Home, arranged for media coverage of their opposition drive, threatened a boycott and picket of the Town & Country office where Hammonds worked7, and prepared and distributed packets of information detailing negative aspects of group homes. Plaintiffs add that Peggy Babin arranged for a public hearing on the subject of group homes to be held at the Shelby Township Hall on May 12, 1989. Peggy Babin counters that she arranged the meeting in conjunction with MORC. This meeting attracted almost 100 people, including MORC representatives, and was the scene of intense discussion and argument.8

On Friday, May 13, 1989, Defendant Nosh Ivanovic, who owned the house adjacent to the Home9, called Hammonds and offered her $100,000 for the Home.10

799 F. Supp. 702
Hammonds responded that she would think about it. On Monday, May 15, 1989, Hammonds made a counteroffer of $104,000 which was accepted. Hammonds claims that she waited until Monday because she had expected to receive a phone call from Bott or Booth on Friday, May 12, 1989, after her meeting with them. When they failed to call on Friday, as promised, and when they did not return her calls on Monday, she decided to accept the Ivanovics' offer. The closing took place on May 19, 1989 at Transamerica

Hammonds testified that she sold the Home to the Ivanovics because she feared that the State would not timely negotiate the rental of the Home and that she would thus be unable to make the mortgage payments on the Home. Plaintiffs dispute this and contend that the sale was at least partially motivated by the public opposition to the group home and fear that the sale of the Home to MORC would negatively affect Hammonds's employment as a broker.

Nosh and Katrina Ivanovic needed approximately $5000 to consummate the purchase of the Home from Hammonds. Defendant Scott Babin gave them this sum. To recoup this disbursement, he then solicited money from some neighbors, including Defendants Paul Hebert, Thomas Fortin, Peggy Babin, Michelle Rhodes, and Alan Rhodes.11 Scott Babin is accused of contributing approximately $5000.00 to the Ivanovics and then soliciting money from Hebert. Peggy Babin is accused of soliciting and collecting money from the Rhodes. Hebert is accused of soliciting money as well as contributing an undisclosed amount toward the purchase of the Home. Finally, Fortin is accused of contributing $500.00 to Hebert toward the purchase of the Home. Apparently, the Ivanovics never repaid Scott Babin.

MPAS filed the Complaint on January 23, 1990.12 On December 17, 1991 and December 19, 1991, the Court heard oral argument on the parties' motions. On January 6, 1992, the Court entered an Order permitting supplemental briefs on the question of the constitutionality, under the Commerce Clause, of the FHAA as it pertains to the alleged activities. The Court received briefs from Plaintiffs, the United States Department of Justice, as amicus curiae, and Defendants Peggy Babin and Maguire and Shelby Township.

Currently before the Court for consideration are cross-motions for summary judgment filed by Plaintiff MPAS and Defendants Peggy Babin, Hammonds, Nosh and Katrina Ivanovic, Kersten/Town & Country13, Thomas Fortin ("Fortin"), Joseph Maguire ("Maguire") and Shelby Township.

799 F. Supp. 703
Although the presence of cross-motions for summary judgment does not necessarily indicate that there are no genuine issues of material fact14, the Court finds that the factual disputes which do exist and are noted in the...

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