Crandell v. Hardy Cnty. Dev. Auth.
| Decision Date | 10 May 2019 |
| Docket Number | CIVIL ACTION NO. 2:18-CV-87 |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | JOHN OSBORNE CRANDELL III., Plaintiff, v. HARDY COUNTY DEVELOPMENT AUTHORITY, Defendant. |
This matter is before the undersigned pursuant to an Order of Case Referral (ECF No. 13) in conjunction with a Notice, Consent, and Reference of a Civil Action to a Magistrate Judge (ECF No. 27). On November 21, 2018, Defendant filed a Motion to Dismiss, currently pending before the undersigned. Also, pending before the undersigned is Defendant's Motion to Dismiss Plaintiff's Amended Complaint filed on March 29, 2019. (ECF No. 58). For the foregoing reasons, the undersigned DENIES Defendant's Motion to Dismiss Plaintiff's Complaint (ECF No. 16) as MOOT because an Amended Complaint was filed and GRANTS in part and DENIES in part Defendant's Motion to Dismiss Plaintiff's Amended Complaint (ECF No. 58), as delineated below.
Plaintiff alleged that the Economic Development Administration (hereinafter "EDA"), of the U.S. Department of Commerce, contracted with Hardy County Rural Development Association (hereinafter "HCRDA") to diligently pursue development over an Industrial Park, Wardensville Industrial Park, located in Hardy County, West Virginia.1 (ECF No. 56, at ¶ 1). As a part of the agreement, Hardy County was a recipient of $980,000.00 Grant earmarked for land and industrial development. According to Plaintiff, the EDA Grant required that any land that received benefits of the funds needed to follow "Industrial Covenants and Restrictions" that were approved by the Assistant Secretary of the EDA. Id. at ¶ 2.
Plaintiff alleged that since conferring the grant to HCRDA, HCRDA sold property that had covenants and restrictions which contained definitions that were inconsistent than those required by EDA; HCRDA "tolerated uses non-compliant to those Covenants and Restrictions on some properties"; HCRDA sold properties with unapproved, non-compliant covenants and Restrictions; HCRDA sold properties with deeds without covenants or restrictions; HCRDA sold property that was located in the Industrial Park but claimed to be adjoining to the Industrial Park; HCRDA developed properties to retain the profit of lease income; and, HCRDA did not report sales of properties to the EDA required. Id. at ¶ 4a-d.
Plaintiff alleged that there is a "discord" between the defined location of the Industrial Park, the area described in the Covenants and Restrictions of the Industrial Park, and the actual areas that are subject to the Covenants and Restrictions. Id. at ¶ 9. Plaintiff also alleged that HCRDA wrongfully advertised the Industrial Park as a "business district" and allowed for the development of buildings designed for this purpose.
Plaintiff further alleged that he listed Parcels 3 and 4 in the Industrial Park for sale. Plaintiff alleges that HCRDA told Plaintiff that his real estate agent that "real estate sales signage is not permitted." Id. at ¶ 13. Plaintiff also alleged that HCRDA informs the real estate agent thatthe lots "were approved for electronic manufacturing." Id. at ¶ 14. The advertised price of the property was $135,000 and the Hardy County Tax Assessor valued the property at $129,000.00. Id. at ¶ 15. Plaintiff alleges that HCRDA approved action to engage in a forced sale because Plaintiff had failed to abide by Clause 8 of the Covenants and Restrictions. Id. Plaintiff then alleged that he provided HCRDA with documentation regarding the permitting of an existing building, which had allegedly been completed within one-year allowed. Id. ¶ 16. Plaintiff stated that HCRDA changed the reason for the forced repurchase, identifying that Plaintiff's approved project did not occur within the required time. Id. at ¶ 17.
Plaintiff states that HCRDA's attorney discussed with Plaintiff's attorney the issue of real estate sales sign usage and a there was a negotiation of an offer price based on the professional appraisal. Id. at ¶ 18. Plaintiff alleges that approximately two weeks later, HCRDA's counsel denied the request for signage approval. Id. at ¶ 19. Plaintiff alleges that his attorney then contacted HCRDA's attorney requesting confirmation that the request for signage is denied and the right to repurchase was still in effect, which prohibited a private sale. Id. at ¶ 20. Plaintiff alleged that HCRDA then evaded or denied access to documents contained in FOIA requests made by Plaintiff's counsel. Id. at ¶ 22. Plaintiff alleged that HCRDA was told that certain documents, relating to the Special Conditions, were no longer kept, but then visited the officer a week later only to find the document but was further denied access to HCRDA's minutes. Id. at ¶ 22. Plaintiff then alleged that HCRDA then gave him one more day to access the documents and that would fulfill his right to access the record of a public entity. Id. at ¶ 25.
Plaintiff alleged that following those incidents, Plaintiff was sent a letter by HCRDA's attorney stating that he has not been abiding by the landscape maintenance conditions as requiredby the covenants, and further alleged that other land owners who are required to similarly maintain their landscape were not approached. Id. at ¶27. Further communication was made to discuss whether Plaintiff had sufficiently remedied the landscape issue. Id. ¶ 30. Plaintiff alleged that he did not get confirmation from HCRDA's attorney. Id. ¶ 34.
On August 29, 2018, Plaintiff filed a Complaint alleging that Defendant has failed to provide documents to him under West Virginia's Freedom of Information Act and HCRDA has committed fraud, conspiracy, and possession of false papers against the United States. (ECF No. 1). On September 20, 2018, Defendant filed its Answer denying the allegations contained in the Complaint. (ECF No. 9). On November 21, 2018, Defendant filed a Motion to Dismiss. (ECF No. 16). On December 21, 2018, Plaintiff filed his Response to Defendant's Motion to Dismiss (ECF No. 28). On January 7, 2019, Plaintiff filed a Motion to Amend the Complaint (ECF No. 33), which was granted on January 9, 2019. (ECF No. 38). On January 31, 2019, Defendant filed a Motion for Protective Order and Stay of Discovery until the final disposition of the pending Motion to Dismiss (ECF No. 50), which was granted on February 5, 2019. (ECF No. 51). On May 29, 2019, Defendant filed a Motion to Dismiss Plaintiff's First Amended Complaint. (ECF No. 58, 59). On April 23, 2019, Plaintiff filed a Response in Opposition of Defendant's Motion to Dismiss Plaintiff's First Amended Complaint. (ECF No. 63). On May 3, 2019, Defendant filed a Reply to Plaintiff's Response. (ECF No. 64).
On August 29, 2018, Plaintiff filed a Complaint before this court. (ECF No. 1). Plaintiff alleged that the above factual background constituted a violation of 13 C.F.R. § 314.4-Authorized Use of Project Property; 13 C.F.R. § 309.1-Redistributions under parts 303, 305, and206; Major Fraud Against the United States in violation of 18 U.S.C. § 1031; Conspiracy to commit offense or to defraud United States in violation of 18 U.S.C. § 371; Possession of False Papers to Defraud the United States in violation of 18 U.S.C. § 1002; Conspiracy Against Rights in Violation of 18 U.S.C. § 241; and Deprivation of Rights under Color of Law in violation of 18 U.S.C. § 242.
On November 21, 2018, Defendant filed its Motion to Dismiss and argued that the Complaint should be dismissed in its entirety for failure to state a claim. (ECF No. 16). Defendant next argued that that Plaintiff's cause of action pursuant to 13 C.F.R. §§ 314.3 and 309.1 must be dismissed because Plaintiff does not have standing to recover damages pursuant to these regulations. (Def. Mot. at 2). Defendant further argued that 18 U.S.C. §§ 241, 242, 371, 1031, and 1002 are criminal statutes that do not create a private cause of action. Id. 2-4.
Furthermore, Defendant argued that as a political subdivision, HCRDA has immunity from suit arising from the alleged intentional actions of Defendant. Id. at 4. Finally, Defendant argued that the Complaint should be dismissed for failure to state a claim and that Plaintiff's Complaint "contains nothing more than speculative legal conclusions that are unsupported by any applicable law to support his claims against Development Authority." Id. at 5.
On December 21, 2018, Plaintiff filed his Response to Defendant's Motion to Dismiss. Plaintiff argued that the facts supported in the Complaint and accompanying exhibits evidence that HCRDA's negative impact on the community. Plaintiff further states that West Virginia § 7-12-6 states the HCRDA can "sue and be sued" and that debts of this corporation is separate fromthe county commission. Plaintiff alleges that neither a Cort2 analysis nor a similar implied rights analysis was not done in Defendant's Motion. Plaintiff also alleged that Defendant "violated the contractual agreements of plaintiff's deed of property and attached Covenants and Restrictions, particularly but not limited to the loss of acreage of surrounding land in like industrial use and industrial use buffer zone, which is vital to the uses allowed by the Covenants and Restrictions."
Plaintiff also alleges that Defendant's argument regarding immunity under West Virginia Code § 29-12-5 are based on "irrelevant case law citations, omission of disqualifying sections within the same statutes cited by the defendant, ludicrous assertions which contort basic logic and justice, and impression of jurisdictionally of West Virginia Code in this Federal Court." Plaintiff further argues that the Economic Development Authority Requirements...
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