N. Face Constr. v. City of Birmingham
| Decision Date | 12 July 2022 |
| Docket Number | 2:20-cv-00165-MHH |
| Parties | NORTH FACE CONSTRUCTION, LLC, Plaintiff, v. CITY OF BIRMINGHAM, ALABAMA, Defendant. |
| Court | U.S. District Court — Northern District of Alabama |
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In January 2019, after a period of heavy rain, a section of the City of Birmingham's retaining wall at the bottom of North Face Construction, LLC's property “failed” and slid down the slope toward the street below. The movement of the wall and the earth behind it made the adjacent street buckle and damaged the City's right of way. At the time, North Face had nearly completed construction of an apartment building on its property, and the slope failure jeopardized the stability of the new building. North Face and the City blame one another for the wall's failure, but North Face repaired the damage under a reservation of rights letter because the City threatened to withhold North Face's occupancy permit if North Face did not complete the repairs. North Face needed the wall repaired quickly to help secure its new apartment building.
To recover its expenses for the wall's repair, North Face asserts against the City a takings claim, substantive and procedural due process claims, an unjust enrichment claim and a claim for breach of the duty of lateral support.[1] The Court held a bench trial to resolve North Face's suit against the City. Consistent with Rule 52 of the Federal Rules of Civil Procedure, the Court makes the following findings of fact and conclusions of law. Fed.R.Civ.P. 52(a)(1).
1. Ben Miree is the sole member of North Face Construction, LLC. North Face owns property at 2205 16th Avenue South in Birmingham, Alabama. (Doc. 26, p. 2, ¶ 5; Doc. 90, p 2). The property “slopes downward relatively steeply from south to north,” and there is a retaining wall at the bottom of the slope that “runs along the north property line along 16th Avenue South.” (P's Ex. 70). North Face constructed a 4-unit apartment building on the property at the top of the slope. (P's Exs. 54, 55, 57).
2. The City owns the retaining wall along 16th Avenue South, and the wall is located in the City's right of way. (Doc. 89, p. 1, ¶ 2).
3. Fred Hawkins, the City Engineer during the North Face construction project, testified that the City does not know who constructed the retaining wall or when it was constructed. Mr. Hawkins believes the retaining wall is at least 50 to 60 years old. Before January 2019, the City had not inspected the wall or performed maintenance on it.[2] 4. As early as January 12, 2016, North Face was aware of an approximately 2-inch crack in the City's retaining wall. (P's Ex. 70). Mr. Miree believed that the crack was caused by the growth of a tree next to the wall and pressure on the wall from the tree's root system. North Face cut down the tree and attached a metal plate to the wall to cover the crack. (D's Exs. 23, 43). North Face did not notify the City of the crack or the installation of the metal plate on the retaining wall.
5. In an August 15, 2016 pre-construction affidavit that North Face submitted to the City, Mr. Miree certified that he had been “retained to periodically observe and inspect the actual construction of the new footings, foundations, and retaining walls, but not the two pre-existing retaining walls and their foundations . . . .” (P's Ex. 3).
6. North Face began constructing the apartment building on its property after the City issued a building permit on January 3, 2017. (P's Ex. 6).
7. The City had notice of North Face's intent to clear vegetation from the slope above the retaining wall and approved the clearing. (P's Exs. 28, 29). North Face received a “soil erosion permit (clearing and grading)” on December 22, 2016. (P's Exs. 4, 5).
8. Between January and April 2017, North Face cleared and graded the slope above the retaining wall. During this time, the vegetation on the slope was removed and the ground left exposed. Mr. Miree testified that North Face removed 8-10 large trees from the slope but left the roots in the ground. After North Face finished the clearing and grading, North Face immediately reseeded the area with sod. In Plaintiff's Exhibit 54, photographs taken in April 2017 show the slope above the retaining wall covered with grass and the tree stumps in the ground. (P's Ex. 54). The slope was reseeded more than 1.5 years before January 2019.
9. City inspectors occasionally visited the building site; they did not express concern about or criticize North Face for the slope clearing.
10. Approximately 1.5 years before January 2019, North Face added fill dirt above the retaining wall.
11. Between December 27, 2018 and January 4, 2019, the National Oceanic & Atmospheric Administration (NOAA) recorded 7.73 inches of rain at the Birmingham airport. (Doc. 89, p. 1, ¶ 4). By comparison, the three-decade average of precipitation at the Birmingham Airport is 4.45 inches for the month of December and 4.84 inches for the month of January. (P's Ex. 25, pp. 1-2).[3]
12. On January 2, 2019, the retaining wall beneath North Face's apartment building and the dirt behind the wall began sliding down the hill towards 16th Avenue South. The wall moved at a rate of 4 to 6 inches per day and moved a total of approximately 6 feet. The wall pushed against the adjacent sidewalk and street and caused 16th Avenue South to buckle and crack. As a result, the retaining wall, the sidewalk, the street, the curb, and the gutter next to the property were damaged. (D's Exs. 16, 19, 23, 30, 51, 52, 71).
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13. All sections of the City's retaining wall other than the section below North Face's construction site remained stable in the rain event.
14. North Face blocked off 16th Avenue South and notified the City of the wall movement.[4]
15. The City informed North Face that it was responsible for repairing the wall failure. Mr. Miree asked the City to put the information in writing.
16. Before sending a demand letter, the City did not retain an independent engineer to perform an analysis of the wall failure, and the City did not perform an internal engineering analysis. The City did not inspect the retaining wall following the rain event. At the time of the demand letter, the City did not know the retaining wall's dimensions.[5]
17. On January 18, 2019, the City sent North Face an “official demand” to “repair the city infrastructure.” (P's Ex. 9; D's Ex. 1). In the letter, the City stated that North Face's construction activities were responsible for the damage. The City listed “contributing factors causing damage” which “may include” the “[c]learing of all vegetation including large trees and ground cover above the retaining wall” and “[p]lacing additional fill [dirt] above the retaining wall.”
18. In the demand letter, the City cited the General Code of the City of Birmingham, Alabama Sec. 4-5-40, which states: “Damage to city streets during construction; restoration required.” This code section allows the City to refuse to issue a permit if a developer fails to make repairs and fails to reimburse the City for those repairs. In the letter, the City did not offer North Face a way to challenge the City's determination that the company was at fault.
19. By January 2019, North Face had completed nearly 95% of its construction project and had spent over $2,000,000 on the project. North Face had a lease with a tenant for occupancy beginning February of 2019. According to Mr. Miree, Mr. Hawkins informed him that North Face would not receive an occupancy permit unless the company completed the repairs. According to Mr. Miree, Mr. Hawkins explained, “That's [the] only leverage I got.”
20. Relatedly, in October 2018, because it believed that North Face's heavy construction equipment tore up parts of 16th Avenue South, the City asked North Face to repave the road. Mr. Hawkins sent an email stating: “We will be holding all final C.O.'s until the final paving is completed.” (P's Ex. 8, p. 1). “C.O.” is an abbreviation for certificate of occupancy.
21. On January 26, 2019, North Face responded to the City's demand letter. (P's Ex. 10). North Face indicated that the “repair resulting from the failure of the wall [was] the responsibility of the City,” and that “the design and construction of the subject wall was defective . . . .” North Face stated:
The wall failure has also jeopardizes [sic] the stability of our building which is almost complete. In light of the City's position, we have no choice under this circumstance, but to take immediate emergency steps to stabilize our building. . . . While we will be forced to bear the cost of this work initially, we will look to the City for reimbursement if our position is ultimately found to be correct.
22. North Face stabilized its building, built a new section of retaining wall to replace the section that failed, and repaired damage to city infrastructure near the new section of retaining wall. (P's Ex. 57; D's Exs. 8, 9). On June 30, 2019, North Face sent a letter to Mr. Hawkins to inform the City that the repairs were complete. North Face wrote: “Although we objected, we had no choice but to proceed in light of your vow to withhold an occupancy permit on our project adjacent [to] the city's right of way as the only leverage you had to force compliance.” (P's Ex. 21).
23. North Face spent $588,124 to build the new section of retaining wall and concrete buttresses and to repair 16th Avenue South, the gutter, the sidewalk, the curb, and damage to water utility lines. (Doc. 89, p. 1, ¶ 3).
24. North Face received an occupancy permit for the property on August 15, 2019. (P's Ex. 23).
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