Gordon v. City of Warren, 76-2204

• Decision Date: 26 June 1978
• Docket Number: No. 76-2204,76-2204
• Citation: 579 F.2d 386
• Parties: Harold H. GORDON and the Estate of Louis P. Begin, Plaintiffs-Appellants, v. CITY OF WARREN, City of Warren Planning and Urban Renewal Commission, Jerome R. Schmeiser, Individually and his official capacity, R. Scrivo, George A. Petrie, James E. Decker, Charles R. Tefft, A. Thomas Winterfield, Kenneth MacKenzie, John M. Frolling and Francisco Torre, Individually and jointly, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 386

579 F.2d 386

Harold H. GORDON and the Estate of Louis P. Begin, Plaintiffs-Appellants, v. CITY OF WARREN, City of Warren Planning and Urban Renewal

Commission, Jerome R. Schmeiser, Individually and his

official capacity, R. Scrivo, George A. Petrie, James E.

Decker, Charles R. Tefft, A. Thomas Winterfield, Kenneth

MacKenzie, John M. Frolling and Francisco Torre,

Individually and jointly, Defendants-Appellees.

No. 76-2204.

United States Court of Appeals, Sixth Circuit.

Argued April 11, 1978.

Decided June 26, 1978.

Dykema, Gossett, Spencer, Goodnow & Trigg, Fred J. Fechheimer, Detroit, Mich., Timothy A. Fusco, Troy, Mich., for plaintiffs-appellants.

W. Thomas Marrocco, Jr., and John J. Murray, Warren, Mich., Robert J. Lord, Fair Haven, Mich., for defendants-appellees.

Before WEICK, EDWARDS and LIVELY, Circuit Judges.

LIVELY, Circuit Judge.

The plaintiffs appeal from summary judgment for the defendants in an action for damages. The questions for decision are whether the complaint as amended stated a federal cause of action and, if so, whether the action was barred by the applicable statute of limitations. We reverse and remand for further proceedings.

The plaintiffs sought to build an apartment complex on real estate which they own in Warren, Michigan. An ordinance of the city, by reference to a "master thoroughfare plan," in effect prohibited the erection of any building within 200 feet of a proposed right-of-way. The right-of-way was part of a scheduled widening of one of the streets on which plaintiffs' property abutted. The widening was to occur at some unspecified future date. By mutual mistake of the parties the location of the line from which the setback was measured was misplaced on a revised site plan. The inaccurate plan was used as the basis of a building permit issued by the defendant planning commission to the plaintiffs. ¹

After the mistake was discovered in September 1969 the commission issued a stop order and directed that four partially completed apartment buildings within the 200-foot setback area be dismantled. When the plaintiffs refused to dismantle the buildings the city sought an injunction. On October 24, 1969 the state trial court entered judgment for the city and directed that two of the buildings be removed. Gordon and Begin appealed this decision. On January 12, 1971 the Michigan Court of Appeals reversed, holding that local units of government in Michigan may not "use the police power to require the reservation of property that a public authority might some day wish to condemn." Gordon v. Warren Planning Commission, 29 Mich.App. 309, 327, 185 N.W.2d 61, 69 (1971). The court found that the effect of the challenged ordinance was to require a dedication of private property to public use without any provision for compensation. Id. at 329, 185 N.W.2d 61.

The planning commission then appealed to the Michigan Supreme Court which affirmed the Court of Appeals in a decision filed on July 26, 1972. In its opinion the court found that the ordinance was unconstitutional on its face as a violation of due process of law, stating:

We agree with the Court of Appeals that this ordinance contains none of the safeguards which could sustain its constitutionality. The city's master thoroughfare plan was adopted without notice to plaintiffs. The ordinance contains no time limit for resolution of the question of whether the land will ever be condemned. The ordinance, in effect, requires the dedication by plaintiffs of a large portion of their property for public purposes without any provision for compensation, and, if a condemnation authority does eventually condemn the land, it could very well be considerably depreciated from its present worth. For each of these reasons, we hold the zoning ordinance unconstitutional.

Gordon v. Warren Planning Commission, 388 Mich. 82, 92, 199 N.W.2d 465, 470 (1972).

The complaint in the present action was filed in the district court on October 2, 1974. Jurisdiction was asserted pursuant to 28 U.S.C. § 1331 and § 1343, and it was stated that more than $10,000 is in issue. Recovery of damages was sought on four different theories, set forth in separate counts. The fourth count was dropped, however, when an amended complaint was filed on September 5, 1975. Count I as amended sought damages from the city and the commission under the 14th Amendment for the "continuous and uninterrupted taking of property without due process of law and without just compensation during the period from July 14, 1968 through August 16, 1972, a period in excess of four years." The damages were claimed to consist of increased cost of completion of the buildings, vandalism and weather damages while construction was halted and lost rentals less additional expenses that would have been incurred. The prayer was for $260,500 plus interest, costs and reasonable attorney fees.

In Counts II and III the same damages were sought for "deliberate and malicious" violations of 42 U.S.C. § 1983 and § 1985 respectively by the individual defendants. It was charged that these defendants, acting under color of state law, deprived the plaintiffs of rights secured to them by the Constitution by taking their property for more than four years without due process of law and without just compensation.

In their answer to the original complaint the defendants pled that Count I failed to state a cause of action because the district court had no jurisdiction to award compensation damages in an action based directly on an alleged violation of the 14th Amendment. They answered Counts II and III with contentions that neither stated a claim upon which relief could be granted and that both were barred by the applicable Michigan statute of limitations, M.C.L.A. 600.5805(7), which prescribes a three-year limitation for "all other actions to recover damages for injuries to persons and property." The answer admitted that a stop work order was issued to the plaintiffs in September 1969 and that the civil action for an injunction was thereafter commenced by the planning commission.

In a separate motion to dismiss Counts II and III the defendants contended that the right of action asserted in those counts accrued when the stop work order was issued in September 1969 and that the limitations period ran before the complaint was filed. The plaintiffs made a three-fold response to this motion: (1) that the taking of their property was continuous and the statute of limitations did not begin to run until the restraint on use of their property was removed, (2) that all statutes of limitations are tolled during litigation and (3) that in any event a Michigan six-year statute of limitations, M.C.L.A. 600.5813, was applicable to their cause of action.

In their answer to the amended complaint the defendants denied taking the plaintiffs' property for public use and denied ever applying the disputed ordinance to plaintiffs or their property. This pleading also relied on qualified immunity of the individual defendants, stating that they acted in their official capacities, in good faith and without ill-will or malice. In a motion to dismiss the amended complaint the defendants argued that if plaintiffs had a cause of action it accrued on January 12, 1971, the date of the decision of the Michigan Court of Appeals. Asserting that the planning commission did not seek to obtain a stay of that decision while appealing to the Michigan Supreme Court the defendants contended that after January 12, 1971 the plaintiffs were "totally unprohibited" by any action of the defendants from resuming and completing construction of the apartment project.

The last contention evoked an affidavit by the plaintiff Gordon that the stop order was not lifted after the court of appeals decision was rendered and that plaintiffs could not resume construction until the Michigan Supreme Court finally determined that the ordinance was unconstitutional. Counter affidavits were filed which sought to establish that the stop order was not related to the 200-foot setback requirement. The affidavits asserted that the order was based on the fact that work on the project was not in accordance with the revised plan which the commission had approved, in particular, the requirement that a six-foot-high brick wall be erected along the plaintiffs' north property line.

The district court held that the three-year statute of limitations applied to all three counts and granted summary judgment for the defendants. Gordon v. City of Warren, 415 F.Supp. 556 (E.D.Mich.1976). The court held that a Michigan "tolling" statute was not applicable and that accrual of plaintiffs' cause of action was not deferred by the city's appeal to the Michigan Supreme Court, stating:

It is the opinion of this Court, however, that the possibility of reversal by the state supreme court is not a restraint by the defendants sufficient to be a "continuing wrong." When the Court of Appeals reversed the trial court, all restraint (sic) to the construction project based on the invalid ordinance were lifted, including the requirements specified by that ordinance and the Circuit Court injunction. It was not necessary for the city to remove the offending ordinance from its books for its effect to be negated. 415 F.Supp. at 563 (footnotes omitted).

The court further held that failure of the city to lift the stop order after the decision of the court of appeals did not constitute a "continuing wrong." This holding was predicated on a finding that the stop order was issued because the plaintiffs had failed to comply with valid conditions upon which their site plan had been approved and not solely for violation of the 200-foot setback requirement. 415 F.Supp. at 564.

The district court then found that the complaint as amended failed to state a claim for relief in any of its counts. As to the city and the planning commission the court held that there was no cause of action under the 14th Amendment due...