City of Little Rock v. Alexander Apartments, LLC

Decision Date16 January 2020
Docket NumberNo. CV-18-1034,CV-18-1034
Citation592 S.W.3d 224,2020 Ark. 12
Parties CITY OF LITTLE ROCK, Appellant v. ALEXANDER APARTMENTS, LLC; Arkansas Community Organizations ; Melody Branch ; Carolyn Ford; Ingram Murphy; and Linda Wheeler, Appellees
CourtArkansas Supreme Court

Sherri Latimer and Shawn Overton, Office of the City Attorney, for appellant.

Quattlebaum, Grooms & Tull PLLC, Little Rock, by: Michael N. Shannon, for appellee Alexander Apartments, LLC.

Jason Auer, Legal Aid of Arkansas, for intervenor Ingram Murphy.

Dustin A. Duke and Kendall Lewellen, Center for AR Legal Services, for intervenors AR Community Organizations, Carolyn Ford, and Linda Wheeler.

Amy Pritchard, Little Rock, UALR Bowen Legal Clinic; and Impact Law, PLLC, by: Kyla Farler, for intervenor Melody Branch.

JOHN DAN KEMP, Chief Justice

The City of Little Rock (the "City") appeals the Pulaski County Circuit Court's order awarding damages under the Arkansas Civil Rights Act (ACRA) to appellees Alexander Apartments, LLC ("Alexander Apartments"), and Melody Branch, Carolyn Ford, Ingram Murphy, and Linda Wheeler (collectively the "tenants") after determining that the City violated those appellees' due-process rights under the Arkansas Constitution.1 For reversal, the City argues that the circuit court erred by finding that (1) it violated the due-process rights of Alexander Apartments and the tenants, (2) Vol. 1, § 108.1 of the Arkansas Fire Prevention Code and the City's ordinance adopting it are unconstitutional, and (3) Alexander Apartments and the tenants were entitled to their respective awards of damages. We affirm in part, and reverse and remand in part.

I. Facts and Procedural History

On March 14, 2014, Alexander Apartments purchased an apartment complex (the "complex") located at 6310 Colonel Glenn Road in Little Rock. The complex consisted of seventeen buildings with a total of 141 apartment units. At that time, less than one-third of the units were occupied, and all were in disrepair. Within two weeks of the purchase, City code-enforcement officers conducted inspections of each unit, and the City prepared an itemized list of life-safety and non-life-safety concerns for each unit. Alexander Apartments conferred with the City on a plan to make repairs but was unable to complete the repairs within the time frame imposed by the City. In June 2014, the City served Alexander Apartments with a citation to appear before the Environmental Division of the Little Rock District Court. Alexander Apartments then appeared in district court every thirty to forty-five days and gave status reports on its progress in remedying numerous existing building-code violations. Between March 2014 and December 2015, code-enforcement officers found ninety-nine units to be cleared of life-safety and non-life-safety violations and approved them for occupancy. A unit was cleared for occupancy by officers as late as December 2015.

On December 17, 2015, the district court conducted a status hearing, and the City raised allegations of new violations and moved to close the complex until the violations were remedied. At a December 21, 2015 hearing, the City withdrew its motion to close the complex. Little Rock Fire Chief Gregory Summers then handed Jason Bolden, the managing member of Alexander Apartments, a letter stating that

[o]n December 16, 2015 members of my staff assisted by Building Code inspectors of the Housing and Neighborhood Programs Department conducted fire and life safety code inspection of the above mention [sic] property in accordance with the 2012 International Property Maintenance Code and the 2012 Arkansas Fire Prevention Code. Numerous violations were discovered that cause a dire concern for the life safety of the occupants. Exposed wiring, evidence of raw sewage, absent and non-working smoke alarms, appearance of mold, carcass of a cat, water settling on the roof, plumbing and mechanical issues were all discovered during this inspection. Life safety is of utmost importance as it provides strategies to protect our citizenry and minimize the effects of fire and related hazards. Your facility is far from accomplishing the most basic safeguards against fire or other hazards and therefore as the Fire Chief I'm ordering this complex to cease operations until such time as all buildings are in compliance with the 2012 versions of the Arkansas Building and Fire Codes. All tenants have until Monday December 28, 2015 at 5:00 pm to vacate the property. You will be provided with a detail [sic] list of violations that must be complied with before re-occupying any buildings on the property. This order includes all buildings and operations conducted on the property. By close of business Monday December 28, 2015 all utilities will be disconnected.

Alexander Apartments objected to the orders given in the letter, and the district court ruled that it had no jurisdiction over the matter. That same day, a copy of the letter was wedged in the door of each apartment at the complex, and the City placed a notice on each door, ordering the occupants to vacate their apartments by December 28, 2015. The letter and notice did not offer any process by which the tenants could challenge the City's action.

On December 21, 2015, Alexander Apartments filed a complaint against the City and moved for a temporary restraining order (TRO), alleging that the City violated its due-process rights under both the Arkansas and the United States Constitutions by taking its property without notice and without providing an opportunity to be heard. Alexander Apartments also alleged that, as of that date, it had no notice of the issues that, according to the City and the fire chief, warranted closing the complex. Thus, it sought written notice of the alleged violations. The next day, the tenants and ACO filed a motion to intervene as a matter of right in the lawsuit. They also filed a third-party complaint against the City and Alexander Apartments and moved for a TRO. Also on December 22, the City provided Alexander Apartments with a written list of violations.

On December 23, the circuit court granted the TRO requests, prohibiting the City from terminating utilities or requiring that Alexander Apartments and the tenants relocate. The circuit court found that Alexander Apartments and the tenants had shown good cause to believe that the City ordered the closure of the complex without proper procedural protections under the Arkansas and the United States Constitutions and that a forced closure would cause them immediate and irreparable harm. On December 29, the circuit court held a hearing and ruled from the bench the following day that the TRO would remain in effect until the final trial. On January 15, 2016, the circuit court entered an order continuing the TRO until a final hearing in the matter.2 The circuit court also granted the tenants' motion to intervene, but it reserved ruling on ACO's intervention.

On January 20, ACO and the tenants filed an amended third-party complaint seeking declaratory and injunctive relief. They alleged that the City had violated the tenants' due-process rights under the Arkansas Constitution and asserted multiple claims against Alexander Apartments. The tenants also sought actual and punitive damages.

On August 23, 2016, ACO and the tenants moved for summary judgment on their due-process claims against the City. They sought declarations that, as a matter of law, the City had violated the tenants' due-process rights by taking their property without adequate notice or an opportunity to be heard and that Arkansas Residential Fire Code § 108 and Little Rock ordinance § 8-579 were unconstitutional. They also sought a permanent injunction prohibiting the City from dispossessing the tenants of their rental units and utility services without providing adequate notice and an opportunity to be heard.3

On February 14, 2017, the circuit court held a hearing on that motion for summary judgment. On July 10, the circuit court found that (1) the City violated the tenants' state due-process rights by failing to provide predeprivation notice of a procedure to challenge the City's actions and by failing to provide the tenants with an opportunity for a postdeprivation hearing, and (2) the Arkansas Fire Prevention Code ("Fire Code") violates the tenants' state due-process rights because it does not establish any mechanism for review of decisions made by the City's fire officials.4 The circuit court also enjoined the City from depriving tenants of their property rights without adequate notice and an opportunity for a pre- or postdeprivation hearing. It reserved the issue of damages for trial.

On September 19, 2017, Alexander Apartments amended its complaint to seek a permanent injunction prohibiting the City from closing the complex without notice and an opportunity for review of the fire official's actions and to seek damages under the ACRA for violations of its due-process rights. Alexander Apartments then moved for summary judgment, claiming entitlement to judgment as a matter of law on its due-process claim because the City provided no opportunity to be heard on the order closing the complex. The City cross-moved for summary judgment, arguing that there was no due-process violation because Alexander Apartments filed suit before the City could provide a postdeprivation hearing and that it had an opportunity to be heard in the circuit court less than forty-eight hours after receiving the fire chief's order, which resulted in the TRO. Following a hearing on the cross-motions for summary judgment, the circuit court entered an order on November 29, 2017, granting Alexander Apartments' motion and denying the City's. It found that the City violated Alexander Apartments' due-process rights under the Arkansas Constitution and that it was entitled to damages under the ACRA.

On August 29, 2018, the circuit court entered an order awarding Alexander Apartments $432,744.33 for lost revenue and expenses...

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