Garner Props. & Mgmt. LLC v. City of Inkster

• Decision Date: 15 August 2018
• Docket Number: Case No. 17-cv-13960
• Parties: GARNER PROPERTIES & MANAGEMENT LLC, CHRISTOPHER L. GARNER; and OLIVIA HEMARATANATORN, Plaintiffs, v. CITY OF INKSTER; GINA TRIPLETT; MCKENNA ASSOCIATES, INC.; and JIM WRIGHT, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

GARNER PROPERTIES & MANAGEMENT LLC, CHRISTOPHER L. GARNER;and OLIVIA HEMARATANATORN, Plaintiffs, v. CITY OF INKSTER; GINA TRIPLETT; MCKENNA ASSOCIATES, INC.; and JIM WRIGHT, Defendants.

Case No. 17-cv-13960

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

August 15, 2018

Paul D. Borman United States District Judge

OPINION AND ORDER (1) GRANTING IN PART AND DENYING IN PART DEFENDANT CITY OF INKSTER AND GINA TRIPLETT'S PARTIAL MOTION TO DISMISS (ECF NO. 20); (2) GRANTING DEFENDANTS MCKENNA ASSOCIATES, INC. AND JIM WRIGHT'S MOTION TO DISMISS COUNTS I AND II; and (3) GRANTING PLAINTIFFS LEAVE TO AMEND COUNT I OF THE COMPLAINT

Plaintiffs Garner Properties & Management, LLC ("GPM"), Christopher Garner and Olivia Hemaratanatorn (collectively "Plaintiffs"), have filed this putative class action against the City of Inkster, Gina Triplett, McKenna Associates, Inc. ("McKenna") and Jim Wright, for the alleged unconstitutional levy of penalties and fines, and threats of imprisonment, for alleged violations of certain City of Inkster rental property codes and ordinances. The Defendants have filed motions to dismiss portions of the Plaintiffs' Complaint. (ECF Nos. 18, 20.) Plaintiffs have responded (ECF Nos. 23, 24) and Defendants have replied (ECF Nos. 28, 29). The Court held a hearing on June 15, 2018. For the reasons that follow, the Court GRANTS IN PART and DENIES IN PART the City of Inkster and Triplett's motion to dismiss, GRANTS McKenna and Wright's motion to dismiss Counts I and II of Plaintiffs' Complaint, and GRANTS Plaintiff leave to amend Count I of the Complaint to correct a singular pleading error.

I. BACKGROUND

Plaintiffs bring this putative class action "on behalf of a class of persons who own residential real property in the City of Inkster (the "City" or "Inkster") and have been fined for failing [to] have a certificate of occupancy for a rental property." (Compl. ¶ 1.) Plaintiffs allege that under the Home Rule City Act (Mich. Comp. Laws §§ 117.1 et seq.) municipal entities like the City are empowered to adopt certain laws, codes, or rules for building maintenance control in their jurisdictions. Pursuant to this authority, the City has adopted the International Property Maintenance Code ("IPMC") through City Ordinance § 150.001, to regulate and govern "the conditions and maintenance of all property, buildings and structures[] by providing the standardsfor supplied utilities and facilities and other physical things and conditions essential to ensure that structures are safe, sanitary and fit for occupation and use . . . ." (Compl. ¶ 6) (quoting Ordinance § 150.001.) The Ordinance provides "for the issuance of permits and collection of fees" and directs that a "Building Official shall be designated as the code official and shall be the official in charge of the enforcement" of the "City Code" that adopts and embodies the provisions of the IPMC. (Id.) The Code provides that "[a]ny person who shall violate a provision of this Code . . . shall be guilty of a misdemeanor and shall be liable for a fine of not less than $100 nor more than $500." (Id.) This "Code," i.e. the IPMC as adopted by the City of Inkster, "governs the regulation of maintaining existing residential real property within the City."¹

Plaintiffs further allege that the City has enacted other ordinances that regulate the operation of rental housing within the City that require an owner of investment real estate who wants to rent property to register the property, obtain an inspection of the property, complete necessary repairs under the applicable code, and thereafterobtain a certificate of compliance. (Compl. ¶ 9.) Inspections under these ordinances are performed by a "Code Official" who has been trained in these codes and ordinances and "should know the requirements of the IPMC and other applicable codes." (Compl. ¶ 10.) The City's inspection under these ordinances is governed by the City's adoption of the IPMC, and inspection requires compliance with the IPMC such that an owner of rental property cannot obtain a certificate of compliance from the City until he or she passes an inspection pursuant to the IPMC. (Compl. ¶ 11.)

The Complaint alleges that the IPMC contains its own set of procedural guidelines that the City must comply with, such as the provision that a prosecution for violations for a failure to comport with an inspection performed under the IPMC cannot be initiated until a person has failed to comply with a notice of violation served in accordance with Section 107 of the IPMC. (Compl. ¶ 12.) Section 106 provides in pertinent part as follows:

106.1 Unlawful Acts. It shall be unlawful for a person, firm or corporation to be in conflict with or in violation of any of the provisions of this code.

106.2 Notice of Violation. The code official shall serve a notice of violation or order in accordance with Section 107.

106.3 Prosecution of violation. Any person failing to comply with a notice of violation or order served in accordance with Section 107 shall be guilty of a misdemeanor, and the violation shall be deemed a strict liability offense. If the notice of violation is not complied with, the codeofficial shall institute the appropriate proceeding at law or in equity to restrain, correct, or abate such violation . . . .

106.4 Violation penalties. Any person who shall violate a provision of this code, or fail to comply therewith, or with any of the requirements thereof, shall be prosecuted within the limits provided by state or local laws. Each day that a violation continues after due notice has been served shall be deemed a separate offense.

(IPMC Section 106 Violations.)

Section 107 of the IPMC, in turn, provides the following with respect to the content and form for a notice of violation:

107.1 Notice to owner or to person or persons responsible. Whenever the code official determines that there has been a violation of this code or has grounds to believe that a violation has occurred, notice shall be given to the owner or the person or persons responsible therefore in the manner prescribed in Section 107.2 and 107.3.

107.2 Form. Such notice prescribed in Section 107.1 shall be in accordance with all of the following:

1. Be in writing.

2. Include a description of the real estate sufficient for identification.

3. Include a statement of the violation or violations and why the notice is being issued.

4. Include a correction order allowing a reasonable time to make repairs and improvements required to bring the dwelling unit or structure into compliance with the provisions of this code.

5. Inform the property owner of the right to appeal.

6. Include a statement of the right to file a lien in accordance with section 106.3.107.3 Method of service. Such notice shall be deemed to be properly served if a copy thereof is:

1. Delivered personally;

2. Sent by certified or first-class mail addressed to the last known address; or

3. If the notice is returned showing that the letter was not delivered, a copy thereof shall be posted in a conspicuous place in or about the structure affected by such notice.

(Compl. ¶¶ 10-14, ECF No. 24, Pls.' City Resp. Ex. A.)

The IPMC provides for a process of appeal in Section 111, which provides in pertinent part:

111.1 Application for appeal. Any person directly affected by a decision of the code official or a notice or order issued under this code shall have the right to appeal to the board of appeals, provided that a written application for appeal is filed within 20 days after the day of the decision. An application for appeal shall be based on a claim that the true intent of this code or the rules legally adopted thereunder have been incorrectly interpreted, the provisions of the code do not fully apply, or the requirements of this code are adequately satisfied by other means, or that the strict application of any requirement of this code would cause an undue hardship.

111.2 Membership of board. The board of appeals shall consist of a minimum of three members who are qualified by experience and training to pass on matters pertaining to property maintenance and who are not employees of the jurisdiction. The code official shall be an ex-officio member but shall have no vote on any matter before the board. . . .

* * *

111.7 Court review. Any person, whether or not a previous party of the appeal, shall have the right to apply to the appropriate court for a writ ofcertiorari to correct errors of law. Application for review shall be made in the manner and time required by law following the filing of the decision in the office of the chief administrative officer.

111.8 Stays of enforcement. Appeals of notice and orders (other than Imminent Danger notices) shall stay the enforcement of the notice and order until the appeal is heard by the appeals board.

(Compl. ¶¶ 18-19; Pls.' City Resp. Ex. A.)

Plaintiffs allege that despite these procedural guidelines required by the IPMC, the City refuses to comply with them and instead issues civil infraction fines and misdemeanor violations to the owners for failure to bring properties in compliance with the IPMC by issuing tickets for failing to obtain a certificate of occupancy under the City's local ordinances, without regard to the Notice requirements of the IPMC. (Compl. ¶¶ 19-20.) The City begins this process by issuing a property inspection report ("PIR") that requests that the owner correct any listed failure to comply with the IPMC and associated codes. If the items contained in the PIR are not complied with the City issues a "Violation" that references the City ordinances related to certificates of compliance. At no point in either the PIR or the Violation does the City provide a correction order allowing a reasonable time to make repairs and improvements to bring a dwelling into compliance with the IPMC. (Compl. ¶¶ 21-24.)

According to the allegations of the Complaint, at no point in either the PIR or the Violation process does the City notify the property owner...