Cunningham v. City of Overland, State of Mo.

Decision Date14 November 1986
Docket Number86-1266,Nos. 86-1197,s. 86-1197
Citation804 F.2d 1066
CourtU.S. Court of Appeals — Eighth Circuit
PartiesJon P. CUNNINGHAM, dba The Jag Shop and Seiler Enterprises, Inc., dba Mike & Lou's Auto Body, Louis Seiler, President; Mollie Seiler; Secretary and Robert Methany, Manager, Appellees, v. CITY OF OVERLAND, STATE OF MISSOURI; Robert L. Dody, individually and officially as alderman; Tom P. Healey, individually and official capacity as alderman; Jean McCandless, individually and official capacity as alderman; and Nanette Sharp, individually and official capacity as alderman, Appellants. Jon P. CUNNINGHAM, d/b/a The Jag Shop and Seiler Enterprises, Inc., d/b/a Mike & Lou's Auto Body, Appellant, Louis Seiler, President; Mollie Seiler, Secretary; Robert Methany, Manager v. CITY OF OVERLAND, STATE OF MISSOURI; Board of Aldermen, City of Overland, Missouri; Robert L. Dody, individually and official capacity as alderman; Tom P. Healey, individually and official capacity as alderman; William C. Hohman, individually and official capacity as alderman; Nanette Sharp, individually and official capacity as alderman; Michael C. Emmendorfer, official capacity as alderman; Mark Brown, official capacity as alderman; Robert Thousand, official capacity as alderman; Norman Myers, official capacity as Mayor of City of Overland, Missouri, Appellees.

Eugene Buckley, St. Louis, Mo., for appellants.

David P. Oetting, Clayton, Mo., for appellees.

Before LAY, Chief Judge, and HEANEY and BOWMAN, Circuit Judges.

HEANEY, Circuit Judge.

Plaintiffs/appellees John P. Cunningham d/b/a The Jag Shop (Cunningham) and Seiler Enterprises, Inc., d/b/a Mike & Lou's Auto Body (Seiler Enterprises) brought this action under 42 U.S.C. Sec. 1983, against the City of Overland, Missouri, and certain individual members of the Overland Board of Aldermen (collectively referred to as appellants). Cunningham and Seiler Enterprises allege constitutional violations of their rights to substantive due process occurred when the Board of Aldermen (Board) denied their application for a merchant's license to do business at property Cunningham and Seiler Enterprises were under contract to purchase.

A jury returned a verdict for Cunningham and Seiler in the amount of $125,000 in actual damages and punitive damages in the following amounts against individual Board members: Jean McCandless, $25,000; Thomas Healey, $12,500; Robert Dody, $7,500; and Nanette Sharp, $5,000. The district court conditioned its denial of the Board's motions for judgment notwithstanding the verdict and a new trial on acceptance by Cunningham and Seiler Enterprises of a remittitur of actual damages to $104,599 and punitive damages to $5,000 against Jean McCandless, $1,500 against Robert L. Dody, $2,500 against Thomas Healey, and $1,000 against Nanette Sharp. Cunningham and Seiler Enterprises accepted the remittitur under protest. The district court entered judgment against the appellants. We affirm.

Cunningham owned a foreign auto repair shop and Seiler Enterprises a body repair shop. They shared rented space in a building on 9570 Page Avenue (Page Avenue property) in Overland, Missouri. In the summer of 1983, Cunningham and Seiler Enterprises, after learning that the Page Avenue property was to be sold, became interested in purchasing a building at 1901 Brown Road (Brown Road property), located about one mile from the Page Avenue property. The Brown Road property had 7,200 square feet of space as opposed to the Page Avenue property's 3,900. On July 26, 1983, Cunningham and Seiler Enterprises entered into a contract to purchase the Brown Road property for $92,500 from its owner, James Callahan. The purchase was contingent upon Cunningham and Seiler Enterprises securing a merchant's license from the City of Overland before August 15, 1983.

On August 1, 1983, Cunningham and Seiler Enterprises were notified that they should appear before the Board on August 8, 1983, at which time their application for a merchant's license would be considered. At the board meeting, Alan Spetner also appeared with a request for a merchant's license for the Brown Road property. At that time, Spetner had made an offer to purchase the Brown Road property and had discussed with Callahan the possibility of the sale if Cunningham's and Seiler Enterprises' contract failed. Spetner intended to operate a business by the name of Sports Energizers which printed letters and designs on t-shirts and sportswear.

After a lengthy and sometimes heated debate involving Board members and Overland citizens, the Board voted five to three to deny the merchant's license application of Cunningham and Seiler Enterprises. Shortly thereafter, Cunningham and Seiler Enterprises filed a petition for review in a Missouri Circuit Court seeking reversal of the Board's action and a writ of mandamus ordering the Board to issue a merchant's license to Cunningham and Seiler Enterprises for the Brown Road property. On April 4, 1984, the circuit court held that the merchant's license had been wrongfully withheld. 1 The decision came too late, however, to save Cunningham's and Seiler Enterprises' contract because August 15, 1983, was the last day on which the contract could be cancelled under its merchant's license contingency. Thus, by the time the circuit court issued its decision, Cunningham and Seiler Enterprises had canceled their contract.

Upon cancellation of the contract by Cunningham and Seiler Enterprises, Spetner obtained a merchant's license to the Brown Road property and purchased it. Meanwhile, Cunningham and Seiler Enterprises purchased the Page Avenue property for $90,000.

On February 17, 1984, Cunningham and Seiler Enterprises brought the present action in federal district court. They alleged that their rights to substantive due process were violated by the city's denial of their application for a merchant's license to operate their business on the Brown Road property.

Since Littlefield v. City of Afton, 785 F.2d 596 (8th Cir.1986), it has been clear in this Circuit that applicants for building permits state substantive due process claims if they allege the governing authorities capriciously and arbitrarily impose an unconstitutional condition on the granting of a permit. Id. at 607. It is established in this case that the zoning regulations of the City of Overland permitted Cunningham and Seiler Enterprises to operate an auto repair and auto body shop at the Brown Road property. See Cunningham, 691 S.W.2d at 464 (holding the Board's denial of the use for an auto repair shop in an industrial district in this matter was "unreasonable and oppressive"). Cunningham and Seiler Enterprises also offered evidence establishing that once an applicant for a merchant's license complied with the proper procedures under Missouri law and Overland ordinances, that merchant's license should be and had been customarily granted as a matter of course by the City of Overland.

The merchant's license in this case is no different from the building permit in Littlefield in that the Board arbitrarily and capriciously placed an unconstitutional burden on Cunningham's and Seiler Enterprises' application for the merchant's license. Therefore, Cunningham and Seiler Enterprises had a substantive due process interest in that license which was violated.

Although the appellants do not directly assert the qualified immunity defense on appeal, it is apparent that no immunity should be available to the appellants in this case. The city attorney told the members of the Board before they voted that the "City has no grounds upon which they are legally entitled to turn [the license] down." This uncontested statement, along with numerous others, unequivocally informed the Board that it would be violating clearly established law by denying the merchant's license. See Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982).

DAMAGES

In a section 1983 action, both compensatory and punitive damages are available upon proper proof. Memphis Community School District v. Stachura, 477 U.S. ----, 106 S.Ct. 2537, 91 L.Ed.2d 249 (1986). The principles governing the propriety of compensatory and punitive damages under section 1983 are derived from the common law. Id. 477 U.S. at ----, 106 S.Ct. at 2542, 91 L.Ed.2d at 258. Generally, compensatory damages should attempt to place the plaintiff in a position similar to the one she or he would have been in had the violation not occurred. Id. 477 U.S. at ----, 106 S.Ct. at 2542-44, 91 L.Ed.2d at 258-59. Punitive damages, on the other hand, are awarded for the purpose of "punish[ing] the defendant for his willful or malicious conduct and to deter others from similar behavior." Id. 477 U.S. at ---- n. 9, 106 S.Ct. at 2542 n. 9, 91 L.Ed.2d at 258 n. 9 (citations omitted).

The appellants challenge the amounts of the compensatory and punitive damages arrived at after the district court's remittitur. 2 Because the appellants presented this issue in their motions for a new trial and judgment notwithstanding the verdict, it is preserved on appeal. Hollins v. Powell, 773 F.2d 191, 197 (8th Cir.1985).

Review of a verdict for excessiveness is generally an issue for the trial court. An appellate court should review the award only when the amount creates plain injustice or a monstrous or shocking result. Id. at 197 (citations omitted). In the instant matter, no such result is apparent. 3

First, the appellants argue that the jury improperly based part of its award on rental payments totaling $14,341 made by Cunningham and Seiler Enterprises for occupancy of the Page Avenue property from August 15, 1983, until it was purchased. According to the appellants, Cunningham and Seiler Enterprises would have had to make payments on a loan even if they had been able to purchase the Brown Road property. This argument, however, ignores that a loan payment would provide Cunningham and Seiler...

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    ...a plaintiff in a position similar to the one she or he would have been in had the violation not occurred." Cunningham v. City of Overland, Mo., 804 F.2d 1066, 1069 (8th Cir.1986). However, in order for a § 1983 plaintiff to obtain compensatory damages for a constitutional violation, the pla......
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