Laurence G. Wolf Capital Management Trust v. City of Ferndale, No. 282565 (Mich. App. 2/19/2009), No. 282565.

• Decision Date: 19 February 2009
• Docket Number: No. 282565.
• Parties: LAURENCE G. WOLF CAPITAL MANAGEMENT TRUST and LAURENCE WOLF, Plaintiffs-Appellants, v. CITY OF FERNDALE, MARSHA SCHEER, ROBERT G. PORTER, and THOMAS W. BARWIN, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

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LAURENCE G. WOLF CAPITAL MANAGEMENT TRUST and LAURENCE WOLF, Plaintiffs-Appellants, v. CITY OF FERNDALE, MARSHA SCHEER, ROBERT G. PORTER, and THOMAS W. BARWIN, Defendants-Appellees.

No. 282565.

Court of Appeals of Michigan.

February 19, 2009.

Appeal from Oakland Circuit Court, LC No. 2003-051450-CK.

Before: Jansen, P.J., and Meter and Fort Hood, JJ.

UNPUBLISHED

PER CURIAM.

Plaintiffs appeal by right the circuit court's grant of summary disposition in favor of defendants. We affirm in part, reverse in part, and remand for further proceedings on Count I of plaintiffs' complaint.

I

Plaintiff Laurence G. Wolf Capital Management Trust ("the Trust") owns a building ("the building") at the southeast corner of Woodward Avenue and Nine Mile Road in Ferndale. Sometime in 1999, plaintiff Laurence Wolf ("Wolf"), as trustee of the Trust, reached an agreement with AT&T Wireless ("AT&T") concerning the placement of a cellular antenna on the roof of the building, contingent on approval by the city of Ferndale. The building was located in Ferndale's C-4 zoning district.

There was already one preexisting cellular antenna on the roof of the building, and the Ferndale zoning ordinance in effect at the time did not allow for additional wireless communication facilities in the C-4 zoning district. Therefore, plaintiffs and AT&T applied for a variance for the proposed antenna. AT&T's representatives testified before the Ferndale Zoning Board of Appeals ("ZBA") that the roof of the building was the best location in Ferndale for the proposed cellular antenna. Nonetheless, the ZBA summarily denied the variance request in January 2000.

In February 2000, upon learning of the denial of the variance request, the Trust filed suit in the Oakland Circuit Court (hereinafter "the prior state court action"). The Trust alleged (1) that the action of the ZBA had been arbitrary, capricious, and ultra vires, and (2) that Ferndale had tortiously interfered with its business relationship with AT&T. The circuit court determined that the ZBA had not articulated sufficient reasons for denying the variance request, and remanded the matter to the ZBA to further explain its reasoning. In May 2000, the ZBA clarified its decision. Although no formal written order was issued, the following reasons, among others, were provided in the minutes of a ZBA meeting: (1) "there was no evidence brought forward that the property could not be reasonably used under the current zoning of C-4," (2) the Trust had shown "no unique circumstances that would allow . . . this use in this particular area," (3) the proposed AT&T antenna "would alter the character of the neighborhood, as the proposed site was located in the downtown Business District," and (4) "the problem was self-created" because "there were numerous other areas in which [the antenna] could be placed and though this was the preferred site, the Board's decision was based on zoning practices and the welfare of the community."¹

After the ZBA had clarified its decision, the circuit court granted partial summary disposition in favor of the city of Ferndale, dismissing the Trust's claim that the denial of the variance request had been arbitrary, capricious, and ultra vires. Thereafter, in June 2001, the circuit court granted summary disposition in favor of Ferndale on the Trust's remaining claim of tortious interference with a business relationship. The circuit court ruled that Ferndale was entitled to governmental immunity with regard to the tortious interference claim. The Trust did not appeal either order.

Meanwhile, in June 2000, the Trust had filed a separate lawsuit against the city of Ferndale in federal court (hereinafter "the first federal court action"). The Trust argued that the city of Ferndale had violated § 332(c)(7)(B) of the Telecommunications Act of 1996, 47 USC 332(c)(7)(B), by failing to support its denial of the variance request with substantial evidence on the whole record, by effectively prohibiting or impeding the availability of personal wireless services, and by discriminating against providers of functionally equivalent wireless services. Following a bench trial in December 2000, the United States District Court found in favor of the city of Ferndale on all claims. Laurence Wolf Capital Mgt Trust v Ferndale, 128 F Supp 2d 441 (ED Mich, 2000), rev'd in part 61 Fed Appx 204 (CA 6, 2003). However, on appeal, the United States Court of Appeals for the Sixth Circuit reversed in part,² concluding that Ferndale's denial of the variance request had violated 47 USC 332(c)(7)(B) because it was not properly issued in writing and was not supported by substantial evidence. Laurence Wolf Capital Mgt Trust v Ferndale, 61 Fed Appx 204 (CA 6, 2003). On remand, the District Court ordered the city of Ferndale to immediately issue the variance sought by the Trust. Laurence Wolf Capital Mgt Trust v Ferndale, 318 F Supp 2d 522 (ED Mich, 2004).

Despite the federal court's order, Ferndale never issued the variance sought by the Trust. This is because during the pendency of the Trust's appeal to the United States Court of Appeals for the Sixth Circuit, in November 2001, the city of Ferndale had amended its zoning ordinance with regard to the placement of wireless communication antennas. The amendments removed the prohibition on second antennas, but added a provision requiring property owners to obtain a special use permit.

After the city of Ferndale amended its zoning ordinance, Wolf again contacted AT&T on behalf of the Trust. According to an AT&T representative, AT&T "went back and . . . took another look at the site" and decided that it was still interested in locating its antenna on the roof of the building. AT&T determined that the building was still "absolutely" a suitable location for the antenna; therefore, Wolf and AT&T entered into renewed negotiations and "pretty much had [an agreement] worked out again . . . ." According to its representative, AT&T was "cautiously optimistic that we could make this a go again."

However, before finalizing any agreement, AT&T met with the city of Ferndale to make sure that it could obtain approval for the antenna under the amended zoning ordinance. According to an AT&T representative, "someone at the City . . . told [AT&T that] this is not going to get approved" and that AT&T "should not go there." Thus, AT&T decided not to finalize its agreement with plaintiffs and began looking instead into the possibility of locating its antenna on a second, nearby building, which was also privately owned. AT&T had begun the process of applying to locate its antenna on this second building when representatives of the city of Ferndale again insinuated that the application would be denied. By this time, AT&T had become weary, and decided to abandon the application process altogether.

It was at that point that defendant Marsha Scheer, Ferndale's director of community development, approached AT&T and "mentioned that the city property option was still available and why don't we look at some of those properties." In the summer of 2002, prior to the ruling of the United States Court of Appeals for the Sixth Circuit in Laurence Wolf Capital Mgt Trust, AT&T reached an agreement with the city of Ferndale to locate its antenna on city-owned property. According to an AT&T representative, the city of Ferndale did not require AT&T to go through the zoning or planning process before constructing its antenna on the city-owned property, and the city council summarily approved the contract with AT&T without much debate or discussion.

Notwithstanding plaintiffs' loss of AT&T as a potential customer, Wolf was interested in constructing a "spec antenna"³ on the building. He applied for a special use permit under the amended zoning ordinance for this purpose. However, after the city of Ferndale allegedly delayed and impeded the progress of the application process, Wolf abandoned his application and sued.

In May 2003, plaintiffs filed a second suit in federal court (hereinafter "the second federal court action"). Plaintiffs alleged (1) that by delaying and impeding their application for a special use permit, defendants had infringed upon their due process rights in violation of 28 USC 1983, (2) that defendants had tortiously interfered with plaintiffs' renewed business relationship with AT&T, and (3) that defendants had tortiously interfered with plaintiffs' prospective business relationships or expectancies by preventing them from constructing a "spec antenna." Count I, alleging the violation of 28 USC 1983, was voluntarily dismissed with prejudice by stipulation of the parties in an order dated September 8, 2003. That order further provided that "this Order closes the case." However, neither this final order nor any other order entered in the case addressed Counts II and III, which contained plaintiffs' state-law tortious interference claims. Nor have the parties provided us any indication that the District Court otherwise disposed of plaintiffs' state law claims. Accordingly, we presume that the District Court simply declined to retain supplemental jurisdiction over the state law claims upon dismissal of the § 1983 claim in Count I. See United Mine Workers of America v Gibbs, 383 US 715, 726-727; 86 S Ct 1130; 16 L Ed 2d 218 (1966) (noting that when federal claims are dismissed before trial, any pendant state law claims should generally be dismissed without prejudice).

II

In July 2003, plaintiffs filed the present case in the Oakland Circuit Court. In Count I of their complaint, plaintiffs alleged that when they renewed negotiations with AT&T following the amendment of Ferndale's zoning ordinance, Ferndale again tortiously interfered with their business relationship with AT&T. In Count II of their complaint, plaintiffs alleged that Ferndale had also tortiously interfered with their plans to construct a "spec antenna" and to attract other wireless providers. In Count I, plaintiffs...