Simstad v. Scheub

• Decision Date: 17 March 2016
• Docket Number: No. 15–1056.,15–1056.
• Citation: 816 F.3d 893
• Parties: Thomas SIMSTAD, et al., Plaintiffs–Appellants, v. Gerald SCHEUB, et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

816 F.3d 893

Thomas SIMSTAD, et al., Plaintiffs–Appellants,

v.Gerald SCHEUB, et al., Defendants–Appellees.

No. 15–1056.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 25, 2015.

Decided March 17, 2016.

Michael K. Sutherlin, Sutherlin & Associates, Indianapolis, IN, Plaintiff–Appellants.

Darren A. Craig, Anthony W. Overholt, Abigail Rom, Jessica Williams Schnelker, Frost Brown Todd LLC, Indianapolis, IN, for Defendant–Appellees.

Before WOOD, Chief Judge, and BAUER and EASTERBROOK, Circuit Judges.

WOOD

, Chief Judge.

Tom and Marla Simstad are longtime developers in Lake County, Indiana. In late 2004, the Simstads began the process of seeking approval from the Lake County Plan Commission for a proposed subdivision project called Deer Ridge South. In late 2006, the Commission approved the plans for the project. But this did not happen quickly enough to satisfy the Simstads. They believed that approval was delayed, at great cost to themselves, because of their support in 1996 for commission member Gerald Scheub's opponent in the County Commissioner primary race. They accordingly sued several members of the Commission and Lake County, alleging violations of the First and Fourteenth Amendments, the Racketeer Influenced and Corrupt Organizations Act (RICO), and various Indiana laws.

The case went to trial before a jury, but the district court eliminated some of the Simstads' claims during the trial. The remainder of their theories went to the jury, which found for the defendants. The Simstads have raised a number of points on appeal, but we conclude that the district court properly disposed of each aspect of the case and thus affirm its judgment.

I

The Lake County Plan Commission has nine members. Ind.Code § 36–7–4–208

. A simple majority of five votes is necessary to approve a development plan. Ind.Code § 36–7–4–302. A number of steps precede final approval. First, a developer must obtain any permits required by state and federal agencies. Two months before a public Commission hearing, the developer files a "sketch plan" with the Commission and reviews that plan with the relevant state and federal agencies. Then the developer files a primary plat for Commission approval. The Commission staff (which does not include any Commission members) prepares comments on the plan for the Commission. At the public meeting, the developer presents the project, the staff comments on the plan, and the public may speak. The staff makes recommendations to Commission members on the project's compliance with the relevant ordinances, but its views are nonbinding. Then the Commission takes an initial vote.

The Commission next evaluates the primary plat to determine whether it complies with the relevant subdivision control ordinance. The plat must identify standards for the size of individual lots, coordination between internal and external public ways, and coordination with municipal services. Ind.Code § 36–7–4–702

. The Commission may waive requirements of the subdivision control ordinance, but it has no discretion to override the zoning ordinance. Ind.Code § 36–7–4–707.

Ken Bachorski was the lead developer for Deer Ridge South, to which we refer as the Project. He filed the first sketch plan on October 28, 2004. The Commission organized a meeting among Bachorski, a planner from the Commission's staff, and a highway department engineer to discuss that plan on November 17, 2004. The engineer indicated that the highway department wanted the Project to add acceleration and deceleration lanes on Clark Street, the main road bordering the subdivision. The planner told Bachorski to apply for a waiver of the requirement that all subdivision lots be rectangular. (The waiver was necessary because some of the proposed lots would border the subdivision's curved road.) Bachorski filed the first primary plat on November 30, 2004. In it, he requested two waivers: one to permit the irregular lot shapes, and one that would exempt him from widening Clark Street, which had recently been upgraded and did not seem to need further work.

Because of the highway engineer's concerns about a proposed internal road (129th Street) that would cross a wetland, Bachorski met again with the engineer, several planners, and the Commission's Executive Director, Ned Kovachevich, on February 17, 2005. At that meeting, the group discussed both the wetland and sewer services. Kovachevich and the highway engineer suggested eliminating one of the two entrances to the subdivision because of the wetland concerns. That approach triggered the need for two more waivers: one from the ordinance's requirement of two entrances, and the other from a part of the ordinance setting cul-de-sac length.

Bachorski filed a second primary plat on April 1, 2005, accompanied by all four waiver requests. Despite the fact that outside agencies recommended approval, the staff did not support most of the necessary changes: it endorsed the irregular lot waiver, but it opposed the single-entry and cul-de-sac waivers and took no position on the widening of Clark Street. At the public meeting on May 18, 2005, numerous members of the public spoke against the Project. The Commission denied all four waivers and voted to defer the plat for 30 days.

The Project team responded by restoring the 129th Street entrance to the plat. But this was not enough. At an August 17, 2005 meeting, Kovachevich asked to review the declarations of the Property Owners' Association regarding the maintenance of the subdivision's private park. He also said that an easement from the cul-de-sac to the adjoining property was necessary before he could propose approval. Bachorski filed the third plat on August 31, 2005, with two entrances and no waiver requests. Kovachevich removed the plat from the October meeting agenda because it did not contain requests for waivers from the requirements to widen and improve Clark Street.

At Bachorski's insistence, Kovachevich put the plat on the agenda for the November 16, 2005 public meeting. Once again, the Commission withheld its approval. Kovachevich sent the Project team a letter citing six reasons for denial, including failure to request a waiver for Clark Street. The Plan Commission ultimately approved the plat on October 24, 2006, almost exactly two years after the first sketch was filed. But by the time the Simstads were ready to build, the housing market had collapsed. Eventually they had to sell the Deer Ridge South property at a steep loss to avoid default.

That, in a nutshell, is what led to this litigation. If the Project had been approved promptly, the Simstads believe, they could have made money from it. They sued everyone who was responsible for the approval process, but at this point they are asserting claims only against Scheub, who was on the Plan Commission's Board, Executive Director Kovachevich, and Lake County. They argue principally that Scheub violated their First Amendment rights by retaliating against them for their support of his opponent (Wilbur Cox) in the 1996 County Commissioner primary race; the complaint also included claims under the Fourteenth Amendment and RICO, 18 U.S.C. §§ 1962

, 1964. They also raised supplemental claims under the Indiana Tort Claims Act, Ind.Code § 34–13–3–8.

Eight years may sound like a long time to hold a grudge, but the Simstads believe that this is exactly what Scheub did. Their lawsuit also followed a slow track. They initially filed it in the district court on November 15, 2007; the defendants filed a timely answer. On April 9, 2008, the Simstads filed an amended complaint, along with a number of discovery requests. The defendants filed a motion to dismiss the amended complaint and requested that the court stay discovery. It did so pending resolution of the motion to dismiss.

There the case sat until September 30, 2010, when the district court addressed the defendants' motion to dismiss. It issued an order dismissing the RICO claims, but denying defendants' motion with respect to the First Amendment, Fourteenth Amendment, and state-law claims. At that point, defendants' answer to the amended complaint was due on October 14, 2010, according to Federal Rule of Civil Procedure 12(a)(4)(A)

. That date came and went with no new answer.

The district court returned to the subject of discovery on December 3, 2010, noting that no one was doing anything: the defendants had failed to answer the Simstads' discovery requests, and the Simstads had not followed up with a motion to compel. The district court set new discovery deadlines. Following the close of discovery on October 26, 2011, the parties agreed to a trial date a year out, on October 1, 2012. That date slipped away too. The Simstads moved to reopen discovery on November 9, 2012, but the district court denied the request, which it viewed as an attempt to "restart [the] litigation." On September 11, 2013, nearly a year later, the Simstads filed a Notice of Intent to Rely on Deemed Admissions based on the defendants' failure to respond to discovery requests and their failure to file an answer to the amended complaint. Defendants filed a motion for leave to file a belated answer and set aside the admissions. The district court granted the defendants' motion after full briefing.

At long last, in December 2014 the case went to trial. After the Simstads presented their case, the district court disposed of most of the case with judgments as a matter of law. It dismissed the First Amendment claim, finding that there was insufficient evidence of a connection between the 1996 election and the approval process for the Project; it dismissed the state-law claim for failure to provide timely notice under the Indiana Tort Claims Act; and it tossed the individual-capacity claim against Kovachevich for lack of evidence. The Equal Protection claim went to the jury, which found for the defendants.

On appeal, the Simstads complain that the district court should not have allowed the defendants to file such a late answer to...