Sayre v. City of Cleveland
| Decision Date | 14 March 1974 |
| Docket Number | No. 73-1594.,73-1594. |
| Citation | 493 F.2d 64 |
| Parties | Maurice M. SAYRE, Trustee in Bankruptcy of the Liberty Mortgage Corporation, Plaintiff-Appellee, v. The CITY OF CLEVELAND, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
James A. Smith, Cleveland Ohio, for defendant-appellant; Herbert R. Whiting by Robert W. Jones, Asst. Director of Law, City of Cleveland, James P. Mancino, Issac Schulz, Squire, Sanders & Dempsey, Cleveland, Ohio, on the brief.
Thomas A. Luebbers, City Sol., Thomas Rehme, Asst. City Sol., Cincinnati, Ohio, on brief for amici curiae city of Cincinnati.
James W. Drake, City Atty., Dayton, Ohio, on brief for amici curiae city of Dayton.
Edwin F. Woodle, Cleveland, Ohio, for plaintiff-appellee; Woodle, Wachtel, Begam & Wolk, Cleveland, Ohio, James W. Childs, Van Wert, Ohio, on brief.
Before McCREE and MILLER, Circuit Judges, and McALLISTER, Senior Circuit Judge.
This appeal raises important questions concerning the extent to which property may be affected by an urban renewal program without being "taken" within the meaning of the fifth and fourteenth amendments to the Constitution of the United States. The facts and procedural history of the case are somewhat complex and require a not incomplete statement.
The appellee Maurice Sayre, is the trustee in bankruptcy of Liberty Mortgage Corporation. In November of 1966 appellee brought an action against the City of Cleveland for damages for loss of income, earnings and property caused by the City's negligence in conducting certain aspects of its urban renewal program.1 The City moved to dismiss, and soon thereafter the appellee amended his complaint to allege that the City had in fact taken Liberty Mortgage's property without compensation in violation of the fifth and fourteenth amendments to the United States Constitution. Specifically, the amended complaint alleged that the City had notified Liberty Mortgage and occupants of certain of its properties of the City's intention to appropriate numerous parcels of real property owned by Liberty Mortgage. These actions of the City were said to have "constituted the initial steps in the appropriation of the property of plaintiff's bankrupt, which appropriation the defendant City never carried to completion and which said defendant at no time had the facilities or ability to consummate." Moreover, in the Brief of Plaintiff in Response to Reply Brief of Defendant City of Cleveland, appellee alleged that the "initial steps" taken by the City were the passage of a resolution by the city council declaring its intent to appropriate certain parcels of Liberty Mortgage's property and the subsequent issuance of written notices in conformance with the procedures required under Ohio law for appropriation of property by a municipal corporation. Ohio Revised Code §§ 719.04 and 719.05.
Treating the motion for dismissal as including a motion to strike, the district court ordered appellee to file a second amended complaint, but to omit claims based on negligence and claims for incidental or consequential damages. Sayre v. United States, 282 F.Supp. 175 (N.D.Ohio 1967). However, appellee was permitted to maintain his claim that the City of Cleveland had abused the eminent domain proceedings and taken properties of Liberty Mortgage without just compensation. Fundamental to the decision is the reliance by the district court on appellee's allegation that the City intended to appropriate these properties and, in fact, had already begun the condemnation procedures. These allegations presented questions concerning the abuse of the power of eminent domain which this Court in Foster v. Herley, 330 F.2d 87 (6th Cir. 1964), said was a sufficient basis for the exercise of federal jurisdiction. The following language of the district court is instructive as to its thinking:
Under Foster v. Herley, supra, it is the law of this circuit that a municipality\'s claimed abuse in its exercise of the power of eminent domain, with the claimed result of taking private property without just compensation, presents a question of federal jurisdiction under the fourteenth amendment which a federal district court must hear and determine. Plaintiff\'s amended complaint in charging the defendant City with conduct which tends to state an abuse in the exercise of the power of eminent domain presents a federal jurisdictional question under the fourteenth amendment as interpreted in Foster v. Herley, supra. 282 F.Supp. at 183.
An examination of our opinion in Foster v. Herley, 330 F.2d 87 (6th Cir.1964), and the district court's opinion on remand, Foster v. City of Detroit, 254 F.Supp. 655 (E.D.Mich.1966), aff'd 405 F.2d 138 (6th Cir.1968), is crucial to an understanding of the holding of the district court. Foster owned three tracts of land in the City of Detroit. In 1950 the City notified him that it intended to condemn his property and that in the meantime he should do nothing either to maintain or improve the property. A few months later the City instituted formal condemnation proceedings and placed a lis pendens against all property in the area. Additionally, the Detroit Common Council passed a resolution freezing the use and management of the property and prohibiting any new buildings or improvements without special permission of council. Despite these initial steps, the condemnation process was never completed; in June of 1960 the City dismissed the proceedings and removed the lis pendens. But during this ten year period Foster's property deteriorated because of the apparently imminent condemnation: it became extremely difficult to find tenants for his rental property; vandals looted the empty buildings and fire insurance was cancelled. The entire neighborhood suffered similar problems. Then in 1958 the City informed Foster that because of the delapidated condition of the buildings, they would have to be demolished at his expense. This was done, and Foster was left in debt with three empty parcels of land. Finally, in 1961 Foster learned that the City was again considering condemnation—this time under the Federal Urban Renewal Program. The new appraisals on the property were at its depreciated, 1961, value.
Foster filed suit in the United States District Court, alleging that the City had abused its power of eminent domain and had so deprived the plaintiff of his use and enjoyment of the property that there was a taking of the property without compensation. The district court dismissed the action because it found that there could be no taking unless the condemnation process was completed and title passed to the City. Once plaintiff's claim under the fourteenth amendment was lost, he was left with a tort action against the City—a cause of action which the federal court did not have jurisdiction to hear since there was no diversity of citizenship. On appeal this Court reversed, holding that pursuant to 28 U.S.C. § 1331, the district court had jurisdiction to hear the merits of the case and then determine whether plaintiff had a valid cause of action under the fourteenth amendment.
The district court on remand heard the case on the merits, finding in favor of the plaintiff. The actions of the City—initiating the condemnation proceedings, refusing to allow improvements and permitting years of delay in the proceedings—were, at the very best, major contributing causes of the decline in value of the area in general and of the plaintiff's property in particular. Although the condemnation process was never formally completed, the City had effectively "taken" plaintiff's property within the meaning of the fifth and fourteenth amendments and was therefore liable for just compensation. This Court affirmed the district court's decision although our opinion was directed mainly to procedural issues raised by the City on appeal.
In the present case the City of Cleveland, after the denial of its motion for dismissal, prepared written interrogatories for appellee to answer. Specifically, the City requested appellee to list those properties which it believed had been taken by the City. Appellee responded by naming 194 properties. In August of 1972, the City moved for summary judgment. Accompanying this motion was the affidavit of Frederick Pizzedaz, Executive Commissioner of the Cleveland Department of Community Development. Pizzedaz stated that none of Liberty Mortgage's properties involved in the current appeal had been the subject of any council resolution of intent to appropriate for the general neighborhood planning area or the urban renewal project area.2 Neither had any of said properties ever been designated for appropriation for the urban renewal project nor had any of said properties been the subject of an eminent domain proceeding.
The district court granted summary judgment for the City on 107 of the 194 properties: 29 of the properties were found to have been previously acquired by the City, and 78 were found to be entirely outside the General Neighborhood Renewal Plan Area and not where the urban renewal activity, of which appellee complained, had occurred. But for the remaining 87 properties—those within the General Neighborhood Renewal Plan Area—summary judgment was denied. The district court did not elaborate on its reasons for denying the motion other than to hold that the complaint stated a claim upon which relief could be granted. Also the court stated that appellee had "stated a claim for relief as to which there exists a genuine issue of material fact. . . ." Unfortunately, the memorandum opinion does not state which facts, crucial to the decision, are in dispute. It is from the denial of summary judgment on these 87 properties that the City of Cleveland brings this appeal.3
Post-war concern over decaying central cities and blighted neighborhoods led to the passage of the Housing Act of 1949, 42 U.S.C. Sec. 1441 et seq., and the Housing Act Ame...
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