Epicurean Devs., LLC v. Summit Twp.

• Decision Date: 19 September 2018
• Docket Number: Case No. 18-10685
• Parties: EPICUREAN DEVELOPMENTS, LLC, and THE CLUB AT 4200, LLC, Plaintiffs, v. SUMMIT TOWNSHIP, JAMES DUNN, MEGHAN DOBBEN, DOUG HOYT, BOB DUBOIS, MIKE TRUDELL, TODD EMMONS, MIKE WAY and JOHN WORDEN, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

EPICUREAN DEVELOPMENTS, LLC, andTHE CLUB AT 4200, LLC, Plaintiffs, v. SUMMIT TOWNSHIP, JAMES DUNN, MEGHAN DOBBEN, DOUG HOYT,BOB DUBOIS, MIKE TRUDELL, TODD EMMONS,MIKE WAY and JOHN WORDEN, Defendants.

Case No. 18-10685

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

September 19, 2018

Honorable Nancy G. Edmunds

ORDER AND OPINION GRANTING DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS

This matter comes before the Court on Defendant Summit Township's ("Township") and Defendants Dunn, Dobben, Hoyt, Dubois, Trudell, Emmons, Way, and Worden's (collectively "Defendants") July 18, 2018 Motion for Judgment on the Pleadings, based on Collateral Estoppel and Res Judicata, as well as a series of affirmative defenses. The Township is a Michigan municipal corporation located in Jackson County, Michigan. Defendants Dunn, Dobben, Hoyt, Dubois, Trudell, Emmons, and Way, were at all times relevant, the elected officials of the Township ("Elected Officials"). Defendant Worden was at all times relevant the zoning official for the Township. Plaintiff Epicurean Developments and Plaintiff The Club at 4200 (collectively "Plaintiffs") filed a response August 12, 2018 and Defendants filed a reply brief August 27, 2018. The Court heard oral arguments on September 12, 2018.

I. BACKGROUND

This case arises out of Plaintiffs' attempts to obtain building permits and approvals to use their property located at 4200 Sprint Arbor Road, Summit Township, Michigan (the "Property"), in a C-2 zoning district, for a proposed swingers club. The Michigan Court of Appeals (MCOA) has already examined the same set of occurrences in previous litigation and some of their factual findings are included here below.

In January 2015, Plaintiffs applied to the Township for a building permit to renovate the Property. "[P]laintiffs' website [www.theclubat4200.com] specifically advertised the upcoming venue as a 'New York style dance club which features state of the art club sound and active lighting system [sic] tantalizing the senses. . . .[w]ith high ceilings and a modern atmosphere. . . .this dance club will leave you breathless.' " Epicurean Developments, LLC v. Summit Twp., No. 329060, 2017 WL 786880, at *9 n.9 (Mich. Ct. App. Feb. 28, 2017). "[P]laintiffs were not forthcoming with their proposed use, failing to check the 'night club' box under the list of nonresidential uses outlined on the application. . . .Instead, they checked "other" and vaguely described their proposed use as a 'private membership club.' " Epicurean Developments, LLC v. Summit Twp., No. 329060, 2017 WL 786880, at *9 n.9 (Mich. Ct. App. Feb. 28, 2017).

In February 2015, believing Plaintiffs only planned a private membership club, the Township issued a building permit approving renovation of the 10,000 square foot building "to use as 'private membership club' per building application." (Compl. Ex. E, Dkt. 1-2, at 33; PgID 46.) Defendants issued the permit believing the building renovations complied with the building's C-2 zoning district under the "Clubs and Lodges" category of permissible uses within C-2 districts of the local zoning ordinance. Over the next month however theTownship came to understand the actual intended use and the scope of the activities planned for the Property. "[P]laintiffs' proposed land use constituted much more than 'a private membership club,' or a meeting or gathering place for an organization or group united by a common purpose or interest. Rather, it constituted, in effect, a 'nightclub' with various amenities." Epicurean, 2017 WL 786880, at *9.

Plaintiffs assert Defendants' subsequent actions including revoking their building permit "were taken based solely on the [D]efendants' moral opposition to the nature of [P]laintiffs' proposed business." (Compl. ¶ 14, Dkt. 1, at 3.) Plaintiffs cite that John Worden, the Township Zoning Administrator, said to the supervisor and deputy supervisor of Liberty Township, he intended to cost Plaintiffs great grief and expense, and that he intended to get them to go away. (Affidavits, Dkt. 1-2, at 40-43.) Plaintiffs also describe a March 23, 2015 email Stephen Artz, who is not a defendant, circulated to the Knights of Columbus. In the email, one of the defendants, Mike Trudell, is described as encouraging the Knights to attend a planning meeting where the swingers club would be discussed "to voice their concerns and ask questions. . . .SOME want to get it done FAST AND quietly. . . .no one knows for sure what is really going on and the people that do are no longer talking. . . .If you think that you will hold off and see what happens you will be too late." (Dkt. 1, at 5; PgID 53-56.)

By late March 2015, the Township determined, as the MCOA has subsequently affirmed, that Plaintiffs' intended use of the Property violated the Township Zoning Ordinance and did not qualify under the "Clubs and Lodges" category allowed in the C-2 zoning district. Worden submitted an affidavit to the state court stating "it later became apparent to [the Township] that plaintiffs did not intend for the property to be used solelyas a "private membership club," and that plaintiff Epicurean had not disclosed the actual intended use of the property when it submitted the additional plans to defendant in February 2015." Epicurean Developments, LLC, No. 329060, 2017 WL 786880, at *2. The Township's attorneys sent a letter to Plaintiffs clarifying that Plaintiffs' intended land uses required zoning approval since they were beyond those permitted under the zoning ordinance. Also in late March, James Dunn, the Summit Township Supervisor mailed a letter to Plaintiffs notifying them the zoning application for an administrative site plan review was being rescinded requiring that all work cease immediately. The same day the Township hand-delivered a stop work order, directing Plaintiffs to halt all work on the property, rescinding Plaintiffs' Application for Site Plan Review, and suspending all building, mechanical, electrical and/or plumbing permits for the property.

Plaintiffs filed their first of three previous lawsuits, not including the present matter, upon receiving the stop work order. Circuit Court Case No. 15-001519-CH, Plaintiffs filed against the Township in Jackson County Circuit Court ("First State Court Case"). Plaintiffs argued for (1) a Writ of Mandamus and/or Preliminary Injunction; (2) Two counts of Estoppel; (3) Substantive Due Process violations (under both Federal and State Constitutions); (4) Procedural Due Process (under both Federal and State Constitutions); and (5) Equal Protection violations under Article I, Section 2 fo the Michigan Constitution and 14th Amendment of the U.S. Constitution. (Pl. Resp., Dkt. 19, at 10; PgID 487.)

The Township moved for dismissal, asserting that Plaintiffs had not obtained a final decision and their claims were not ripe. The Circuit Court granted the motion and dismissed the constitutional allegations without prejudice for failure to exhaust administrative remedies. In September 2015, Plaintiffs appealed the dismissal to theMCOA, which later consolidated the first appeal with Plaintiffs' second state court claim (discussed below) and subsequent appeal.

In October 2015, following dismissal of the First State Court Case and while awaiting a decision on their appeal, Plaintiffs filed additional applications with the Township, requesting permit classification within the zoning ordinance under other allowed categories including cultural establishment, fraternal club, cabaret, or bathing establishment. The Township rejected all of these classifications as not consistent with Plaintiffs proposed use. The MCOA has since affirmed that determination stating "the substance of Plaintiffs' proposed use, regardless of its label, was not a permitted use in the C-2 zoning district." Epicurean, 2017 WL 786880 at *9. On October 19, 2015, the Township passed a temporary moratorium to prevent approval of any permit under the zoning ordinance with the classification of adult physical culture establishments or bathing establishments stating the zoning ordnance "contains inconsistent, erroneous, and unintended definitions and regulations."¹ (Compl. Ex. J, Dkt. 1-2, at 49; PgID 62.)

In November 2015, Plaintiffs elected to exhaust their administrative remedies without awaiting the appeal to their First State Court Case. Plaintiffs submitted a request to the Zoning Board of Appeal ("ZBA") challenging the Defendants' interpretation of the zoningordnance and the issuance of the stop-work order. The ZBA reviewed the parties' documents and held a public hearing which included extensive arguments and additional materials. The ZBA concluded in a 6-1 vote that Plaintiffs' intended use of their Property as a swinger's club with aspects of a night club did not fit the definition of "clubs and lodges" under the zoning ordinance and was not a permitted use in the Property's C-2 zoning district.

In December 2015, having exhausted their administrative remedies, Plaintiffs filed a second lawsuit, again against Summit Township, and again in Jackson County Circuit Court contesting the ZBA's final decision, Circuit Court Case No. 15-003265-AA ("Second State Court Case"). Defendants challenged the interpretation of the zoning ordnance and sought review of the Township Zoning Administrator's issuance of the stop-work order. Epicurean, 2017 WL 786880 at *6.

Plaintiffs also filed a third lawsuit in this court in February 2016. Here, Plaintiffs alleged federal and state law claims relating to the Township's stop work order, the ZBA's final decision, and the Township's actions in response to Plaintiffs' attempts to obtain approval for their proposed use of the property. On March 18, 2016, Judge O'Meara of the Eastern District of Michigan District Court sua sponte dismissed Plaintiffs' state law claims. On May 24, 2016, the court granted Defendants' motion to dismiss based on the Colorado River abstention doctrine, and...