Buchanan v. Metz

• Decision Date: 14 September 2015
• Docket Number: No. 12–CV–15511,12–CV–15511
• Citation: 132 F.Supp.3d 922
• Parties: John C. Buchanan, Jr., Plaintiff, v. James W. Metz II and Donovan Motley, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

132 F.Supp.3d 922

John C. Buchanan, Jr., Plaintiff,

v.James W. Metz II and Donovan Motley, Defendants.

No. 12–CV–15511

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

Signed September 14, 2015

Elizabeth A. Downey, Elizabeth A. Downey, P.C., Jeffrey T. Stewart, Seikaly Stewart & Bennett P.C., Farmington Hills, MI, for Plaintiff.

Joseph T. Froehlich, Mark E. Donnelly, Rock A. Wood, Michigan Department of Attorney General, Lansing, MI, for Defendants.

OPINION AND ORDER GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

GERALD E. ROSEN

, Chief Judge

I. INTRODUCTION

This civil rights litigation arises out of Plaintiff John C. Buchanan, Jr.'s involvement in attempting to redevelop a manufacturing plant into a film studio and claim a credit under Michigan's Film and Digital Media Tax Credit program. When the project was not approved by the Michigan Film Office, which was in charge of assessing claims under the program, the State initiated an investigation against Plaintiff and several of his associates, eventually resulting in criminal charges against Plaintiff. A Michigan state court subsequently dismissed those charges for want of probable cause. Plaintiff has now brought a cause of action in this Court, asserting claims under the Fourth Amendment and Michigan common law for malicious prosecution and false arrest. Plaintiff targets those claims against Defendants James W. Metz II, a former Special Agent with the Department of Attorney General, and Donovan Motley, an Assistant Attorney General assigned to litigate the case on behalf of the state. Plaintiff's complaints largely focus on his assertion that Metz and Motley decided to pursue charges against Plaintiff without probable cause and effectuated this by having Motley make false statements to a magistrate.

Both Defendants have now moved for summary judgment, asserting that there was probable cause to bring the charges, and that they are entitled to either qualified, absolute, or governmental immunity. Having reviewed and considered the Defendants Motions and supporting briefs, Plaintiff's response briefs, and the entire record of this matter, the Court has determined that the relevant allegations, facts, and legal arguments are adequately presented in these written submissions, and that oral argument would not aid the decisional process. Therefore, the Court will decide this matter "on the briefs." See Eastern District of Michigan Local Rule 7.1(f)(2). The Court's Opinion and Order is set forth below.

II. PERTINENT FACTS

A. Michigan's Film and Digital Media Tax Credit

This case arises out of the State of Michigan's tax incentives for the film industry. In 2008, the State Legislature enacted the "Film and Digital Media Tax Credit," which permits investors to claim a tax credit "for an investment in a qualified film and digital media infrastructure project ... equal to 25% of the taxpayer's base investment." M.C.L. § 208.1457(1–2)

(effective April 8, 2008).¹ The Michigan Film Office oversees the issuance of these credits, with the concurrence of Michigan's Treasurer. § 208.1457(1). A "qualified film and digital media infrastructure project" includes production and postproduction facilities, property and equipment related to the facility, and "any other facility that is a necessary component of the primary facility." § 208.1457(11)(d). Importantly, the tax credit defines a "base investment" as:

[T]he cost, including fabrication and installation, paid or accrued in the taxable year of tangible assets of a type that are, or under the internal revenue code will become, eligible for depreciation, amortization, or accelerated capital cost recovery for federal income tax purposes, provided that the assets are physically located in this state for use in a business activity in this state and are not mobile tangible assets expended by a person in the development of a qualified film and digital media infrastructure project. Base investment does not include a direct production expenditure or qualified personnel expenditure eligible for a credit under [a different provision of Michigan's film incentive, § 208.1455].

§ 208.1457(11)(a)

.

B. The Development of the Lear Plant into a Film Production Facility

1. Alpinist and West Michigan Films Agree To Redevelop the Lear Plant

In 2006, Plaintiff had a discussion with his father, Jack Buchanan, Sr., in which he convinced Buchanan Sr. to enter into a business deal in which the two would purchase a former manufacturing plant just outside of Grand Rapids commonly known as the "Lear Plant" or "Hangar 42." Motley Interview with Jack Buchanan Sr., Dkt. # 67–9, at 1. To facilitate the transaction, the two formed Alpinist Endeavors, LLC ("Alpinist") a limited liability company jointly co-owned by the two. Id. They purchased the property for $4.2 million. Id. Plaintiff and his father had originally planned to sell the building, and according to Buchanan Sr., they had several interested purchasers ready to buy the property for $7 million, but Plaintiff believed they could make more money, leading to tension between Plaintiff and his father. Eventually, Plaintiff, without the input of his father, sought to find an investor to convert units 4 and 5 of the Lear Plant (the "Property") into a permanent film studio, which could enable Plaintiff to take advantage of the Film and Digital Media Tax Credit. See id. at 1–2; see also Pl.'s Compl, Dkt. # 49, at ¶¶ 15–21). In 2009, Plaintiff met with Joseph Peters, an unemployed individual who had previously interacted with Plaintiff, and the two came to an agreement that Peters would form and own a company called West Michigan Films, LLC ("WMF"), which would purchase the Property for $40 million. See Peters Dep., Dkt # 69–6, at 9–15; Pl.'s Compl., Dkt. # 49, ¶ 21(a). This initial plan was formed unbeknownst to Buchanan Sr., who did not find out about WMF until November 2009.²

2. The Tax Credit Application

Prior to Buchanan Sr.'s discovery of the plan, WMF filed an "Application and Agreement for Infrastructure Development Film and Digital Media Incentives" with the MFO on November 2, 2009. Application, Dkt. # 66–9. The application included a business plan, describing a "state of the art film production facility" with a floor area "in excess of 400,000 square feet" and projecting employment of up to 975 individuals. Id. at 2. The plan included a construction estimate of $23.72 million that would be necessary to convert the property to a "turnkey ready" film studio. Budget, Dkt. # 66–9. Further, the application contained a purchase agreement, signed by Plaintiff and Joseph Peters, executed on October 28, 2009, that purported to demonstrate a transfer of units 4 and 5 of the Lear Plant from Alpinist to WMF. Purchase Agreement, Dkt. # 66–10. The agreement contained a condition precedent stating that "Buyer shall not be obligated to close the transaction ... unless the following conditions shall have each been met prior to the closing ... Buyer shall have obtained a commitment for a Michigan Film Infrastructure Tax Credit of no less than $10,000,000." Id. at 5–6. In November 2009, the MEDC, the Michigan Film Office, and the Treasurer apparently provided a preliminary approval for WMF's application, subject to further examination of the Property. Pl.'s Compl., ¶¶ 30, 34.³

Following the submission of the application, the MFO interacted primarily with Peters, as the applicant and purchaser of the property designated to become the film studio. Peters's primary contact point was Janet Lockwood, the Film Commissioner of the MFO during the period of the WMF application. Peters also had frequent communication with Penny Launstein, an employee at the Michigan Economic Development Corporation (MEDC), which assisted the MFO in evaluating applications under the tax policy. Though both Launstein and Lockwood appeared to understand that they were communicating only with Peters and two other individuals aiding Peters and Plaintiff in the application process (who will be discussed below), Plaintiff sometimes ghostwrote communications for Peters, composing entire emails to Launstein and Lockwood, signed with Peters's name. For example, in one communication from Peters to Launstein describing the improvements that Alpinist was to make to the property prior to closing, Plaintiff wrote "we're not sure what the Seller's improvements are, but it's obviously a very big number." Studio Rehab Costs email, Dkt. # 67–12, Ex. E. Between the November 2009 application and the eventual May 2010 denial of the application, Launstein and Lockwood had dozens of communications with Peters, seeking final confirmation of WMF's purchase of the property, details regarding the improvements that were to be made to turn the property into a film studio, the costs of those improvements, and other information. See, e.g., Launstein Dep., Dkt. # 69–4, at 136–45; Peters Dep., Dkt. # 69–6, at 25–30. During this process, the Film Office repeatedly asked to conduct their own appraisal of the building to determine whether the $40 million purchase price was reasonable, and also asked for a detailed list of improvements made to the property in furtherance of turning it into a film studio, as well as invoices for those improvements. Peters Dep., at 2530. Plaintiff had access to dozens of such invoices, see Invoices, Dkt. # 68–7, but when Peters requested that they turn those invoices over to the Film Office, Plaintiff refused, Peters Dep., at 26–30.

Following the initial application to the MFO, Buchanan Sr. learned of, and approved of, the plan to redevelop the plant. Buchanan Sr. stated that in November (after the initial application, including the purchase agreement, had been filed), his attorney informed him that his son and Peters had made an agreement to develop the Property into a film studio. May 19, 2011 email from Jack Buchanan to Donovan Motley, Dkt. # 67–9. At the time, Buchanan Sr. had been working with potential buyers of units 3 and 4—the two units...