In re Malone

Decision Date28 August 1984
Docket NumberBankruptcy No. 82-1236(2).,Adv. No. 82-0675(2),No. 83 MISC 44B(1),83 MISC 44B(1)
Citation592 F. Supp. 1135
PartiesIn re Frank J. MALONE, Debtor. Frank J. MALONE and Joann Malone, his wife, et al., Plaintiffs, v. CITY OF FENTON, MISSOURI, A Municipal Corporation, Defendant.
CourtU.S. District Court — Eastern District of Missouri

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Glennon T. Moran and Joseph B. Dickerson, Jr., St. Louis, Mo., G. William Weier and C. Alan Schoene, Crystal City, Mo., for plaintiffs.

Thomas M. Utterback, Eugene K. Buckley, St. Louis, Mo., for defendant.

MEMORANDUM

NANGLE, Chief Judge.

Plaintiffs brought this housing discrimination action seeking declaratory, injunctive and compensatory relief. This action was originally filed as an adversary action in the Bankruptcy Court for this district and was subsequently transferred to this Court for trial. Plaintiff Malone and his wife had previously filed for relief under Chapter 11 of the Bankruptcy Reform Act, 11 U.S.C. §§ 1101 et seq., to stop foreclosure on the Malone's property in Fenton, Missouri. The property is the site of the proposed "Westview Heights Apartment Complex" (hereinafter "Westview Heights"). The Malones also sought to stop foreclosure on their home on which there was a second deed of trust as security on the loan on the Westview Heights project. Plaintiffs, who include the Malones, other investors in the Westview Heights project, and an intervenor-plaintiff named Charles Bryson, Jr., allege that the conduct of defendant city, in refusing to zone the Malone property "G-1" multiple family so that the Westview Heights Apartment Complex could be built, violated the fourteenth amendment to the Constitution, U.S. Const. amend. XIV, §§ 3604(a) and 3617 of the Fair Housing Act, 42 U.S.C. §§ 3601 et seq., and §§ 1981, 1982 and 1983 of the Civil Rights Acts of 1866, 42 U.S.C. §§ 1981, 1982, 1983.

This case was tried to this Court sitting without a jury. This Court having considered the pleadings, the testimony of the witnesses, the documents in evidence, and the stipulations of the parties, and being fully advised in the premises, hereby makes the following findings of fact and conclusions of law, as required by Rule 52 of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 52.

A. FINDINGS OF FACT

1. The real estate subject of this action (hereinafter "Malone tract") at all applicable times was located within the limits of the City of Fenton, Missouri, at the southwest corner of Horan Drive and Larkin Williams Industrial Court. The City of Fenton, defendant in this action, is a municipality located in the southwest portion of St. Louis County, Missouri.

2. The Malone tract is composed of approximately 4.32 acres and was zoned "A" Small Farm under the City of Fenton's zoning code until approximately November of 1972. The Malone tract, which was then owned by Edith Dunlap, was zoned "G-1 Multiple Family" by the passage of Ordinance No. 335. Ordinance No. 335 was passed at the November 20, 1972, meeting of the Board of Aldermen of the City of Fenton by a five (5) to four (4) vote.

3. Ordinance No. 335 provided, inter alia:

The City of Fenton is desirous, in this particular instance, to provide a proper and appropriate buffer between industrial, commercial and residential areas herein, and being of the opinion that the proposed planned multiple district will provide a proper and appropriate buffer for the purpose and intent herein expressed....

Ord. No. 335, "Whereas" cl. 6. Section 2 of Ordinance No. 335 established a deadline for the filing of a preliminary plat, a final plat, and for the completion of the first building as well as all streets, sewers, water lines and other improvements, but gave the Board of Aldermen the power to extend said deadlines for good cause shown. Section 10 of Ordinance No. 335 provided, as follows:

This ordinance shall be in full force and effect from and after the date of its passage and approval; provided however, that the owner and developer, within thirty days after the date of adoption and approval, file with the City Clerk an acceptance in writing of all of the provisions of this ordinance; and provided further that if such acceptance be not so filed within said period of thirty days, all rights, privileges, and authority herein granted shall become null and void.

Ord. No. 335, § 10. Section 11 of Ordinance 335 provided, as follows:

Sections 1 through 10, inclusive, of this ordinance are conditions precedent to the passage of this ordinance and failure to comply fully with any of such sections of this ordinance, unless expressly relieved from the terms thereof by a subsequent ordinance or by order of the Board of Aldermen, shall make this ordinance null and void, the rezoning herein contemplated shall not have taken place and the property herein described shall continue to be zoned as "A" Small Farm District.

Ord. No. 335, § 11.

In addition, § 9 provided that the development of the Malone tract was "expressly subject to the applicable terms and provisions of," inter alia, Ordinance No. 171. Ord. No. 335, § 9. Ordinance No. 171 established the requirements for "G-1" planned multi-family districts and contained a "reverter" clause. Said reverter clause in Ordinance No. 171 provided that if substantial work or construction did not commence within one (1) year from the date of the "G-1" zoning, the subject property reverted to its former zoning classification and the change to "G-1" was to be treated as null and void. Ordinance No. 171 further stated that if apartments were not constructed within three (3) years after the "G-1" zoning was granted, the property or portions thereof uncompleted was considered to have the same zoning classification existing prior to the "G-1" zoning.1

There was no evidence that the owner and developer of the Malone tract filed a written acceptance of the terms of Ordinance No. 335 within thirty (30) days after passage of said ordinance. No development of any type, substantial or otherwise, has occurred on the subject property from the passage of Ordinance No. 335 to the present.

4. Nevertheless, on July 15, 1974, pursuant to a letter from then Malone tract owner Jerome Howe, the Board of Aldermen granted an eighteen (18) month extension on the "G-1 Multiple Family" zoning status of the Malone tract. This was allowed to expire, but on May 19, 1976, and again pursuant to a letter from owner and developer Jerome Howe, the Board of Aldermen granted another eighteen (18) month extension of the multiple family zoning on the Malone tract. This second extension was also allowed to expire and no further significant action took place with respect to the Malone tract until September 6, 1978, when a petition for change of zoning was presented to the Planning and Zoning Commission (hereinafter "Commission") of the City of Fenton.2 Neither of the two (2) extensions referred to in this paragraph purported to expressly relieve the owner of the Malone tract of the terms and conditions of Ordinance No. 335.

5. On March 19, 1979, the Board of Aldermen granted a nine (9) month extension of the "G-1" multiple family zoning status of the Malone tract, and on July 16, 1979, it similarly granted a six (6) month extension. Neither of these two (2) extensions purported to expressly relieve the owner of the Malone tract of the terms and conditions of Ordinance No. 335. The last extension expired on January 16, 1980, but on February 18, 1980, the Board of Aldermen approved the final plat for the Westview Heights project on the Malone tract. Then, on April 21, 1980, the Board of Aldermen granted a one (1) year extension of the "G-1" zoning status of the Malone tract. On May 19, 1980, the Board of Aldermen again approved the final plat for Westview Heights, which included new storm water drainage and sewer stipulations.

6. Mr. Frank J. Malone and his wife Joann initiated their purchase of the Malone tract in May of 1980 and they received a General Warranty Deed to said property from then owner L. Aboussie on July 8, 1980. The Malones intended to develop the tract as Westview Heights in accordance with the plans of Aboussie, subject to minor modifications. When they bought the property the Malones believed that it was legally zoned "G-1" multiple family.

7. During the Summer of 1980 Mr. Malone submitted his construction documents and plans to the City of Fenton. On August 7, 1980, Mr. Melvin West, Building Commissioner of the City of Fenton, stamped the construction plans for Westview Heights as "approved for zoning" and executed those plans on behalf of the City of Fenton. The plans for the project were then forwarded to the St. Louis County Department of Public Works for further review.

Mr. Malone, however, did not have financing for his project during the Summer of 1980. Simultaneous to his negotiations for the purchase of the Malone tract, Mr. Malone applied to the Department of Housing and Urban Development (hereinafter "HUD") of the United States for construction financing. Mr. Malone received a Firm Commitment of financing from HUD and the Government National Mortgage Association in January, 1981, which commitment was renewed in December, 1981.

8. Mr. Malone wrote a letter to the Board of Aldermen, dated May 7, 1981, advising the Board that he had applied for HUD financing. However, the existence of HUD financing and the likelihood of so-called "Section 8 housing" being a part of Westview Heights was known to both Mayor Joseph Morgan and the City of Fenton prior to May 7, 1981. Mayor Morgan testified that both he and the city were aware, as early as 1979, that Westview Heights would be financed by HUD and would contain a certain number of subsidized § 8 units, because Aboussie so informed them when he appeared before the Board of Aldermen in 1979. Moreover, on August 5, 1980, Mr. John Bullock, a representative of HUD, wrote a letter to the Mayor relating to HUD financing of the...

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