Open Inns, Ltd. v. Chester County Sheriff's Dept., CIVIL ACTION NO. 97-4822 (E.D. Pa. 10/20/1998), CIVIL ACTION NO. 97-4822.

CourtUnited States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
Writing for the CourtDalzell
Docket NumberCIVIL ACTION NO. 97-4822.
Decision Date20 October 1998

Page 1

OPEN INNS, LTD., et al.
United States District Court, E.D. Pennsylvania.
October 20, 1998.

Anthony Valenti, Cureton, Caplan & Clark, P.C., Mt. Laurel, NJ, for Plaintiff.

Robert C. Houpt, Houpt, Wolfe & Huganir, Paoli, PA, for Defendant.


DALZELL, District Judge.

Plaintiffs, Open Inns, Ltd. and Associated Motor Inns Co., have sued the Chester County Sheriff's Department, its sheriff, and several of its officers to challenge the constitutionality of an admitted Sheriff's Department custom or practice. This practice authorizes Department officers, at any hour of the day or night, to be hired by private parties to accompany and assist them in serving process in civil actions and then to remain on the premises at the behest (and expense) of those parties while their agents seize property, all without any inquiry into the legality of such actions, such as whether the seizures are taken pursuant to an antecedent court order or writ. This custom may fairly be summarized as the "don't ask, don't think policy", and we shall throughout this Memorandum use that shorthand for it.

In particular, plaintiffs contend that defendants' pre-arranged participation in the unlawful repossession of the Lionville Holiday Inn in Exton, Pennsylvania from 3:20 a.m. to 5:30 a.m. on August 26, 1995 gave the unlawful repossession a cachet of legality and converted it into state action in violation of 42 U.S.C. § 1983. As the material facts of this case are not in dispute, we will deny defendants' motion for summary judgment and grant plaintiffs' motion for summary judgment as to liability.


Plaintiff Open Inns, Ltd. ("Open Inns") is a limited partnership that was formed and organized to operate the Lionville Holiday Inn. At all relevant times, Open Inns was the tenant of the Lionville Holiday Inn and occupied the hotel pursuant to a written lease with the owner of the property, Cignature Hospitality, Inc. ("Cignature"). Raymond Carr ("Carr") was the sole or primary shareholder of Cignature.2 The initial term under the lease was to continue through June 1, 1988, with Open Inns having an option to extend the term of the lease for four extension periods of five years each, or, in other words, until June 1, 2008. Accordingly, as of August 26, 1995, there were as many as thirteen years left on the lease.

Plaintiff Associated Motor Inns Co. ("AMI") is a closely-held Ohio corporation that occupied and managed the Lionville Holiday Inn pursuant to a written management agreement entered into between Open Inns and AMI. The terms of the management agreement ran concurrently with the term of the lease between Open Inns and Cignature, and provided that AMI would receive three percent of all room revenues and five percent of all restaurant and lounge receipts.

In the summer of 1995, Open Inns fell behind in its lease payments to Cignature. On August 24, 1995, Cignature filed a civil complaint in the Chester County Court of Common Pleas against Open Inns. See Cignature Hospitality Ltd. v. Open Inns, Ltd., Civ. No. 95-7865 (C.P. Chester County). The complaint Cignature filed sought only money damages for back rent and no other form of relief.

On the same day, Cignature's attorney, Anthony Morris, filed a request with the Chester County Sheriff's Department to serve the complaint. In making the request, Morris spoke with defendant Lieutenant Malcolm D. LaRose, the supervisor of the Civil Unit in the Chester County Sheriffs Department.3 In that conversation, Morris requested that the complaint be served on Open Inns "late at night" and that the Sheriff's officers be authorized for up to twelve hours of overtime (six hours each) so that they could accompany Carr and his attorneys. LaRose authorized the service of the complaint at the time Cignature's counsel requested (LaRose testified that he so authorized "with the approval of higher-up") and authorized overtime for two sheriff's officers. LaRose Dep. at 27. LaRose did not question why counsel wanted the complaint served late at night, or why the officers were needed for up to six hours each.4

LaRose assigned defendants Sergeant Edward R. Clemens and Deputy Sheriff John R. Freas to effectuate service of process. LaRose sent Clemens as the senior person, who in turn was responsible for the supervision of Freas.5 LaRose did not give either Clemens or Freas any special instructions or explanation other than that they may be required to remain on the premises after serving process. See Clemens Dep. at 24. Instead, LaRose instructed Freas and Clemens to meet Carr and his attorneys at Carr's office at 1:00 a.m. on August 26th. LaRose advised the officers that they would receive their instructions from Carr's counsel. See Freas Dep. at 19; LaRose Dep. at 65.

As instructed, Clemens and Freas met Carr and his counsel at Carr's office at the arranged hour. After their arrival, Carr's counsel told Freas and Clemens that Carr intended to take possession of the Lionville Holiday Inn and wanted the officers to remain on the premises after serving the civil complaint. Both officers agreed to remain on the premises until Carr's counsel relieved them. See Clemens Dep. at 35-36, 41-42; Clemens Dep. of 9/12/96 at 26; Freas Dep. at 26-27.

In his deposition, Freas admitted that before going to Carr's office, he had read the papers that were being served on Open Inns and was aware that what they were serving was a civil complaint for money damages only. See Freas Dep. at 21, 25. Freas also testified that he was aware that there was no writ of possession or court order requiring Open Inns to turn over the hotel. See id. at 46. Before serving process, and upon learning that Carr and his lawyers were going to take possession of the hotel, Freas stated to Carr that his role was to serve the complaint and then to remain while the repossession took place in order to "keep the peace" until he was told that Carr's counsel relieved him. See Freas Dep. at 26-29.6

In his deposition, Clemens stated that he did not read the complaint before serving it, but he knew that it was some type of a civil action involving breach of contract. See Clemens Dep. at 27, 63. Clemens further testified that prior to serving process he knew there was no writ of possession, see id. at 61, but that he believed that Carr had legal authority to take possession of the hotel under a clause in a contract and by virtue of the fact that Carr had legal counsel with him.7 See Clemens Dep. at 63, 69. Neither Clemens nor Freas apparently asked Carr whether he had any legal authority to repossess the hotel, nor did Carr's counsel tell them so.

After remaining at Carr's office for about two hours, Clemens and Freas departed for the Lionville Holiday Inn in a marked police car shortly after 3:00 a.m.8 En route to the hotel, Clemens contacted county radio and requested that they have an Uwchlan Township police officer meet them so they could advise the officer of what was taking place. Sergeant Laurence W. Lester of the Uwchlan Township Police Department met Clemens and Freas at a Gulf Station down the street from the Lionville Holiday Inn. At that time, Clemens advised Lester as a "professional courtesy" that "they would be executing a civil proceeding" at the Holiday Inn. See Lester Dep. at 21-22.

Thereafter, at about 3:20 a.m., Clemens and Freas, along with Carr, his two attorneys, and perhaps five or six others entered the Lionville Holiday Inn and approached the front desk. Freas and Clemens were fully armed and in full police uniform. As Freas and Clemens approached the front desk, Carr and his team were behind them. According to Freas, he served the night manager, Clifford Hoffman, and read the Notice to Defend. Freas then claims that Hoffman asked him if there was anything to sign. Freas said there was nothing to sign. Freas then informed Hoffman that "I believe these gentlemen [Carr and his colleagues] would like to talk to you." Freas Dep. at 32. Freas and Clemens then stepped away from the counter, while Carr proceeded to tell the night manager that he was taking possession of the hotel.

At that moment, Hoffman, with the civil complaint in his hand, turned to Deputy Sheriff Freas and stated, "How the fuck can they be doing this?" Id. at 33. Freas alleges that he responded, "My job was to serve the complaint upon you. I cannot give you any legal information about what is going on. I would suggest that you call someone, an attorney. If you can't get a hold of someone, I would suggest that you talk to these people here." Id. at 33-349 In his deposition, Hoffman stated that because of the presence of Carr and the "uniforms" (referring to the presence of two uniformed officers), he felt he "had no choice but to do what was requested to do or told to do." Hoffman Dep. at 18.

Service of the civil complaint was accomplished within five to ten minutes after Freas and Clemens arrived at the Holiday Inn. After this service, Hoffman turned over the keys to the hotel, and Carr and his team went around the hotel securing offices and maintenance areas, taking inventories of supplies, and taking possession of plaintiffs' assets. While all of this was happening, additional representatives of Carr and his new management team, Mardeck, Inc., emerged from the elevators.10

During the two hours after the complaint was served, between 3:30 a.m. and 5:30 a.m., Freas claims to have remained in the lobby near the front of the hotel watching what was happening. See Freas Dep. at 43-44. Clemens admits that during that two-hour period he searched for and found the hotel bartender to tell him what was happening "so that he would not be alarmed," Clemens Dep. at 45-46, walked "from time to time" between the lobby, the bar, and the kitchen "[j]ust to make sure that everything was all right," id. at 49, and at one point helped one of Carr's employees take an...

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