Vestavia Plaza, LLC v. City of Vestavia Hills

• Decision Date: 09 September 2013
• Docket Number: Case No. 2:11-cv-4152-TMP
• Parties: VESTAVIA PLAZA, LLC, Plaintiff, v. CITY OF VESTAVIA HILLS, ALABAMA, et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

VESTAVIA PLAZA, LLC, Plaintiff, v. CITY OF VESTAVIA HILLS, ALABAMA, et al., Defendants.

Case No. 2:11-cv-4152-TMP

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

DONE: September 9, 2013

MEMORANDUM OPINION

This cause is before the court on the defendants' motion to dismiss (Doc. 36) the plaintiff's amended complaint filed January 23, 2103 (Doc. 35).¹ Named as defendants in the amended complaint are the City of Vestavia Hills, Alabama, ("the City"); City Council members George Pierce, Steve Ammons, and Jim Sharp, sued individually; Mayor Alberto "Butch" Zaragoza, sued individually; and City Clerk Rebecca Leavings, sued individually. The amended complaint sets forth twelve claims for relief against the various defendants arising from plaintiff's attempt to lease its building in Vestavia Hills to The Jimmie Hale Mission ("the Mission") for use as a "thrift store." According to the amended complaint, the City denied theMission a business license, causing the Mission to open its store in another location and causing plaintiff to lose the benefits of its lease with the Mission.

I. Standards of Review

A. Extrinsic Matters in Support of the Motion

The defendants' motion to dismiss immediately places before the court the procedural question whether it must be converted into a Rule 56 motion because defendants have supported the motion with (1) minutes from the January 24, 2011, meeting of the City Council of Vestavia Hills; (2) a copy of the proposed Resolution 4149 and the accompanying agreement proposed between plaintiff, the City, and the Mission; (3) a copy of the Mission's application for a business license; and (4) a copy of Vestavia Hills' Business License Code, Ordinance 2315. Ordinarily, Rule 12(d) requires that, if matters outside the pleadings are presented in support of a Rule 12(b)(6) or 12(c) motion, the motion must be converted to a motion for summary judgment under Rule 56, unless the court excludes the extrinsic matter. Even so, the Eleventh Circuit has recognized that certain types of extrinsic matters may be considered and not excluded without requiring conversion of the motion. For example, when the "plaintiff refers to a document in its complaint, the document is central to its claim, [and] its contents are not in dispute" the defendant may annex the referenced document to its motion to dismiss without causing conversion of the motion. See Financial Security Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1284 (11th Cir. 2007); Halmos v. Bomardier Aerospace Corp., 404 Fed. Appx. 376, 377 (Dec. 7, 2010) (on reviewing a Rule 12(b)(6) motion to dismiss, the court may consider documents incorporated into the complaint by reference).

Under this authority, the court has previously accepted for consideration in connection with an earlier motion to dismiss a copy of the Business License Code, Ordinance 2315, as well as the "Proposed Agreement" annexed to proposed ordinance 4149. The court excluded and rejected consideration of an affidavit by defendant Leavings. The court also previously excluded the business license application filed by the Mission (Exh. C). This document is referred to in the amended complaint and it is central to the plaintiff's claims, but plaintiff disputes the accuracy of the exhibit offered by the defendants, and particularly its apparent indication that Mayor Zaragoza "approved" the application. This conflicts with the amended complaint's factual allegation that the application was denied by the mayor and City Clerk Leavings. Again, because the contents of the business license application offered by the defendants are disputed by the plaintiff, the court must exclude and disregard it in consideration of the instant motion to dismiss.

In real dispute is whether the court may consider the minutes of the January 24, 2011, meeting of the City Council of Vestavia Hills. The court previously excluded the minutes when considering the earlier motion to dismiss, but defendants argue that it was error for the court to do so, and they have are argued that "public documents," such as the publicly-available minutes of a city council can be considered without converting a Rule 12(b)(6) motion into a summary judgment motion.

Based on the unpublished Eleventh Circuit case of Universal Express, Inc. v. U.S. Securites and Exchange Commission, 177 F. App'x 52 (11th Cir. 2006), the court agrees that the minutes of the City Council of Vestavia Hills are "public documents," of which the court may take judicial notice, but only for the fact that the minutes exist and that certain statements are included in the minutes, not for the truth of those statements. In Universal Express, the court ofappeals dealt with the question whether a civil complaint filed in another court can be judicially noticed in connection with a Rule 12(b)(6) motion without having to convert the motion under Rule 12(d). The court of appeals reasoned:

A district court may take judicial notice of certain facts without converting a motion to dismiss into a motion for summary judgment. See Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir. 1999). Public records are among the permissible facts that a district court may consider. See Stahl v. U.S. Dep't of Agric., 327 F.3d 697, 700 (8th Cir. 2003) ("The district court may take judicial notice of public records and may thus consider them on a motion to dismiss."); cf. Bryant, 187 F.3d at 1278 (11th Cir. 1999) (holding that "a court, when considering a motion to dismiss in a securities fraud case, may take judicial notice ... of relevant public documents required to be filed with the SEC"). Because the complaint filed in the Southern District of New York is a public document, the district court was not obliged to convert the motion to dismiss to one for summary judgment or comply with the notice requirements of Rule 56(c).

Id. at 53-54; see also Halmos v. Bomardier Aerospace Corp., 404 F. App'x 376, 377 (11th Cir. 2010)(in malicious prosecution suit, court may take notice of complaint filed in another court as a "public record").² Courts have taken judicial notice of real estate documents recorded under state recordation laws See McFarland v. BAC Home Loans Servicing, LP, 2012 WL 2205566 (N.D. Ga., June 14, 2012) (court took notice a "Security Deed" recorded under state law without converting a motion to dismiss into a motion for summary judgment). The express reliance on Bryant v. Avado Services, however, limits the use such noticed documents can have. The court in Bryant held that "a court . . . may take judicial notice (for the purpose of determining what statements the documents contain and not to prove the truth of the documents' contents). . . ." Id. at 1278 (italics added); see also Davis v. Williams Communications, Inc., 258 F. Supp. 2d 1348, 1352 (N.D. Ga. 2003); Lee v. City of Los Angeles, 250 F.3d 668, 690 (9th Cir.2001) (stating thatcourts may take judicial notice of undisputed matters of public record but may not take judicial notice of disputed facts stated in public records). While the court may take judicial notice of the minutes for what they say and do not say, it may not simply notice the truthfulness of statements that are disputed by the plaintiff. Whether a particular statement recorded in the minutes of the city council is true remains a disputed fact. With that understanding of the limited nature of the judicial notice the court may give, the minutes of the Vestavia Hills City Council will be considered in support of the motion to dismiss without converting the motion to one for summary judgment.

B. Standard of Review Applicable to a Rule 12(b)(6) Motion

Under the Supreme Court's decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1965 (2007) (rejecting the standard from Conley v. Gipson, 355 U.S. 41, 78 S. Ct. 99, 2. L. Ed. 2d 80 (1957), that any "conceivable" set of facts supporting relief is sufficient to withstand a motion to dismiss), the complaint must allege facts, not mere legal conclusions, that show a plausible basis of relief against the defendants. The threshold of plausibility is met where the plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009). The Supreme Court has explained:

Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests," Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ibid.; Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (C.A.7 1994), a plaintiff's obligation to provide the "grounds" of his "entitle[ment] to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action willnot do, see Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 92 L. Ed. 2d 209 (1986) (on a motion to dismiss, courts "are not bound to accept as true a legal conclusion couched as a factual allegation"). Factual allegations must be enough to raise a right to relief above the speculative level, see 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed.2004) (hereinafter Wright & Miller) ("[T]he pleading must contain something more ... than ... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action"), on the assumption that all the allegations in the complaint are true (even if doubtful in fact), see, e.g., Swierkiewicz v. Sorema N. A., 534 U.S. 506, 508, n. 1, 122 S. Ct. 992, 152 L. Ed. 2d 1 (2002); Neitzke v. Williams, 490 U.S. 319, 327, 109 S. Ct.

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