Behavioral Inst. of Ind. v. Hobart City of Com.

• Decision Date: 09 May 2005
• Docket Number: No. 04-2360.,04-2360.
• Citation: 406 F.3d 926
• Parties: BEHAVIORAL INSTITUTE OF INDIANA, LLC and 61st Avenue Building, LLC, Plaintiffs-Appellants, v. HOBART CITY OF COMMON COUNCIL, School City of Hobart, City of Hobart, Indiana, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

406 F.3d 926

BEHAVIORAL INSTITUTE OF INDIANA, LLC and 61st Avenue Building, LLC, Plaintiffs-Appellants, v. HOBART CITY OF COMMON COUNCIL, School City of Hobart, City of Hobart, Indiana, et al., Defendants-Appellees.

No. 04-2360.

United States Court of Appeals, Seventh Circuit.

Argued December 1, 2004.

Decided May 9, 2005.

Nathaniel Ruff (argued), Merrillville, IN, for Plaintiffs-Appellants.

John P. Bushemi, Merrillville, IN, Monica J. Conrad (argued), Bose, McKinney & Evans, Chesterton, IN, for Defendants-Appellees.

Before FLAUM, Chief Judge, and EVANS and SYKES, Circuit Judges.

SYKES, Circuit Judge.

In this appeal we review the district court's dismissal of the plaintiffs' complaint as time-barred by the statute of limitations. The case stems from a land use dispute in the City of Hobart, Indiana, over a proposed residential treatment facility for emotionally disturbed children. The plaintiffs' application for a zoning variance for the proposed facility was denied, a decision that was later overturned by the Indiana Court of Appeals on various state and federal constitutional grounds. In the meantime, however, the plaintiffs sold the property. They then filed suit in Indiana state court alleging causes of action under 42 U.S.C. § 1983 for violation of their federal due process and equal protection rights, as well as violations of the Indiana Constitution. The case was removed to the United States District Court for the Northern District of Indiana, which dismissed the § 1983 claims pursuant to Indiana's two-year personal injury statute of limitations. We affirm.

I. Background

A more detailed narration of events leading up to this action is provided in the Indiana Court of Appeals' decision in the plaintiffs' earlier case. See City of Hobart Common Council v. Behavioral Inst. of Ind., LLC, 785 N.E.2d 238 (Ind.Ct.App.2003). We take the pertinent facts from that opinion as well as the record before us. The Behavioral Institute of Indiana, LLC and 61st Avenue Building, LLC (collectively, "the Institute") applied to the City of Hobart for a land use variance permitting the operation of a sixty-bed, for-profit, court-ordered child placement facility for emotionally disturbed children in an area zoned for single-family residential and related uses. The previous occupant of the building had operated a psychiatric hospital under a conditional use permit that expired by operation of law when the occupant vacated the premises. A hearing on the Institute's request was held before the City's Board of Zoning Appeals ("the Board"), which heard testimony in support of and opposition to the Institute's application. At the conclusion of the hearing, the Board voted unanimously to recommend granting the variance.

In most Indiana counties the Board of Zoning Appeals is the final municipal authority on use variances, but in Lake County, where Hobart is located, and also in St. Joseph County, the ultimate decision-making authority on use variances, as well as special exceptions and special use permits, is vested in the municipality's legislative body. See IND. CODE ANN. § 36-74-918.6 (West 2004). In Hobart the legislative body is the Common Council. In accordance with the statute, the Council received the Board's nonbinding recommendation to grant the variance and scheduled a hearing on the matter.

Before the hearing was convened, the Hobart city engineer, who had testified against the variance before the Board, circulated materials to members of the Common Council in an effort to defeat the Institute's application. While some of this material merely recapitulated his earlier testimony, the city engineer also included previously unstated factual assertions concerning the likely effect of the Institute's proposed land use on surrounding property values and the safety risk to nearby residents. This material was not provided to the Institute. In addition, before the Council took up the variance request, at least two officials of the Hobart Schools—also an opponent of the variance—spoke with members of the Council to persuade them to vote against the variance, also without notice to the Institute. One of those school officials was herself a member of the Common Council. After a hearing and discussion of the Institute's request, the Council met and denied the variance on February 21, 2001.

The Institute filed a petition for a writ of certiorari in the Lake County Superior Court, alleging that the Council violated its right to due process and equal protection and seeking an order directing the Council to issue a variance. The court concluded that the Institute's due process and equal protection rights in fact had been violated for the reasons suggested above. The court held that applicants for zoning variances in Lake and St. Joseph Counties are entitled to the same due process protections as applicants in all other counties in Indiana. In addition, finding substantial evidence that the Institute had met the statutory requirements for a land use variance, the court approved the Board's recommendation and ordered the Common Council to grant the variance.

The Indiana Court of Appeals affirmed the lower court's constitutional holdings but held that the court had exceeded its powers by ordering the issuance of the variance. The Court of Appeals remanded the case with instructions to return it to the Common Council for further proceedings consistent with due process. City of Hobart, 785 N.E.2d at 243. The Council dutifully set the matter for a new hearing, but by that time the Institute had sold the property.

The Institute then brought the present action in Lake County Superior Court, alleging causes of action under 42 U.S.C. § 1983 for violation of its federal due process and equal protection rights. The complaint also alleged claims pursuant to Article I, Section 23 of the Indiana Constitution and asserted a separate cause of action for intentional violation of the plaintiffs' "rights to substantive due process under the 14th Amendment." The injury underlying each legal claim was the same: the defendants' denial of the Institute's request for a use variance. The defendants removed the case to federal district court and immediately filed a motion to dismiss all claims, asserting various grounds, including expiration of the two-year statute of limitations on the § 1983 claims. See Hondo, Inc. v. Sterling, 21 F.3d 775, 777 (7th Cir.1994) (appropriate vehicle to challenge complaint for failure to comply with applicable statute of limitations is a motion under FED. R. CIV. P. 12(b)(6)); but see Perry v. Sullivan, 207 F.3d 379, 382 (7th Cir.2000) (defendant need not raise statute of limitations in motion under Rule 12(b)(6) if it was raised in the defendant's answer to the complaint). The district court held that the § 1983 claims were untimely and dismissed the case with prejudice.¹

II. Discussion

Section 1983 claims are subject to the statute of limitations for personal injury actions in the state in which the alleged injury occurred. Wilson v. Garcia, 471 U.S. 261, 276-80, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985); Wilson v. Giesen, 956 F.2d 738, 740 (7th Cir.1992). The Supreme Court has further held that in cases where state law provides for multiple statutes of limitations for different types of personal injury, the general or residual statute is the one applicable to § 1983 claims. Owens v. Okure, 488 U.S. 235, 249-50, 109 S.Ct. 573, 102 L.Ed.2d 594 (1989). Indiana's personal injury statute of limitations is two years, see IND. CODE ANN. § 34-11-2-4 (West 2004), and Coopwood v. Lake County Community Development Department, 932 F.2d 677 (7th Cir.1991), so the statute of limitations on the Institute's § 1983 action is also two years.

While state law determines the length of the limitations period, federal law determines the date of accrual of the cause of action. Kelly v. City of Chicago, 4 F.3d 509, 511 (7th Cir.1993). A claim accrues for § 1983 purposes "`when the plaintiff knows or should know that his or her constitutional rights have been violated.'" Id. (quoting Wilson, 956 F.2d at 740). This inquiry proceeds in two steps. First, the court must identify the injury. Next, it must determine the date on which the plaintiff could have sued for that injury. "That date should coincide with the date the plaintiff `knows or should have known' that his rights were violated." Id.

The Institute contends that it suffered an injury only when it sold the property for which it had sought the variance. In support of this contention, the Institute argues that by selling the property it no longer was able to avail itself of the remedy it won from the Indiana Court of Appeals—namely, a reconsideration of its variance application by the Common Council consistent with due process. If the Institute's argument is correct, it would mean that a person can sue for self-inflicted injuries, a proposition that contradicts the most basic premises of our legal system. If the Institute were alleging that the defendants somehow forced the sale of the building, then that sale might constitute a separate and cognizable injury, but it has made no such allegation.

In the alternative, the Institute argues that it first knew it had suffered an injury and its § 1983 claims only accrued when the Indiana Court of Appeals held that applicants for variances before legislative bodies in Lake and St. Joseph Counties are entitled to the same due process as applicants for similar permits in other counties in the state. Under this reasoning, it was not until the Court of Appeals issued its decision in the certiorari action that the denial of the Institute's variance became an injury in the legal sense.

But the Institute's own actions belie its argument. The Institute clearly believed it had suffered a federal constitutional injury when it sought certiorari review of the denial of its variance application. In that action, the Institute asserted federal due process...