Westborough Mall, Inc. v. City of Cape Girardeau
| Decision Date | 10 November 1981 |
| Docket Number | No. S80-105C.,S80-105C. |
| Citation | 532 F. Supp. 284 |
| Parties | WESTBOROUGH MALL, INC., a Corporation, George Staples, Jr., and Westborough Mall Associates, a Missouri Limited Partnership, by and through George Staples, Jr., its sole general partner, Plaintiffs, v. CITY OF CAPE GIRARDEAU, MISSOURI, a Municipal Corporation, Paul W. Stehr, Robert K. Herbst, Howard C. Tooke, Samuel L. Gill, Gail L. Woodfin, W. G. Lawley, Charles L. Drury, Drury Industries, Inc., a Corporation, May Department Stores Co., a Corporation, West Park Associates, a Missouri Limited Partnership, May Centers of Cape, Inc., a Corporation, and May Centers, Inc., a Corporation, Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
James R. Robison, Sikeston, Mo., Robert E. Manley, Andrew S. Lipton, Cincinnati, Ohio, Robert H. Freilich, Martin L. Leitner, Kansas City, Mo., for plaintiffs.
Stephen E. Strom, Bradshaw Smith, Cape Girardeau, Mo., Thomas C. Walsh, St. Louis, Mo., for defendants.
This matter is before the Court upon the motions of Charles L. Drury, Drury Industries, Inc. (Drury defendants), the May Department Stores Company, the May Centers, Inc., the May Centers of Cape, Inc. (May defendants), Paul W. Stehr, Robert Herbst, Howard C. Tooke, Samuel L. Gill, Gail L. Woodfin, W. G. Lawley, the City of Cape Girardeau, Missouri, and West Park Associates, for summary judgment on each count of plaintiffs' seven count complaint which includes alleged violations of 42 U.S.C. § 1983 (Count 1), a conspiracy to violate plaintiffs' constitutional rights as made actionable under the same statute (Count 2), a violation of the Sherman Act, 15 U.S.C. § 1 (Count 3), a violation of 15 U.S.C. § 2 for a conspiracy to monopolize (Count 4), an alleged conspiracy to interfere with plaintiffs' valid business relationships (Count 5), a Sherman Act count against five members of the Cape Girardeau City Council (Count 6) and the prayer for declaratory judgment and injunctive relief, to-wit: the striking down of two ordinances of the Cape Girardeau City Council (Count 7) pursuant to Rule 56 of the Federal Rules of Civil Procedure.
The cause of events which gave rise to this suit surrounded the failure of one group of developers and the success of another group in their efforts to build a regional shopping center in Cape Girardeau, Missouri. Plaintiff, Westborough Mall, Inc., is a Missouri corporation which in 1973 leased approximately sixty seven (67) acres of land in Cape Girardeau, Missouri, at Bloomfield Road and Missouri Highway 61 (Kingshighway). George Staples, Jr., a principal of Westborough Mall Associates, a Missouri limited partnership, was the prime mover and organizer of the Westborough Mall project which involved the building and managing of a major retail shopping center on the above mentioned site. Staples made several attempts to secure "anchor" tenants for the Mall project — major department stores which would enhance the attractiveness of the project to other tenants and retail customers. In June of 1974, Westborough Mall, Inc. was granted C-4 zoning by the City of Cape Girardeau which provided for the construction of an enclosed integrated shopping mall containing three major department store tenants, as well as other small specialty shop tenants. Staples continued to solicit a supporting commitment from major department stores but was unsuccessful and shelved his development plans for approximately two years. In 1976, Staples formed a limited partnership which raised $800,000 contributed by various local limited partners in a further effort to salvage the project.
By mid-1977 Staples arranged for site preparation including grading work to be done by the Penzel Construction Company of Jackson, Missouri. Due to unforeseen and substantial rock formations on the property, the grading project proved to be considerably more difficult and expensive than had been originally contemplated. By late 1978 the Penzel Construction Company was claiming approximately $300,000 owed by Staples which had not been paid. Soon after the receipt of the first unpaid bills Staples removed his wife, son and daughter as general partners of the limited partnership. Penzel asserted mechanic's liens against the Westborough Mall property and filed suit against Westborough Mall Associates in May, 1979 seeking to collect more than $312,000. This group also was indebted to the Bank of New Madrid, Missouri in the sum of Two Hundred Eighty Six Thousand Dollars ($286,000). At this time the partnership had no liquid assets and no letters of commitment from any major tenants.
In June, 1978, Staples had agreed with Penzel Construction Company that the Company was to construct a shell building on the site. This contract contained a forfeiture clause which provided that if financing for the mall had not been arranged by May 1, 1979 Westborough Mall Associates was to forfeit $5,000 to Penzel. As of that date no commitment had been obtained for financing and the grading bill had not been paid. Penzel, a limited partner in Staples' Westborough Mall Associates, had to institute a suit against the partnership and Staples in state court in an attempt to collect the $5,000 penalty and the unpaid grading bill. Such bill has not been paid to date. In fact, no substantial, successful preparations had been made at that time, and no building plans have ever been prepared for any structure at the Westborough Mall site. In sum, by mid-1979, Westborough Mall had no liquid assets, no major department store tenants, no building plans, no commitments for financing, and had past numerous projected target dates promised by Staples throughout the years. In 1979, Westborough Mall was no closer to viability than it was in 1973.
The City Manager of Cape Girardeau, Missouri, defendant W. G. Lawley, was referred to in an article in the April 18, 1979 issue of the Southeast Missourian — a local daily newspaper — as questioning the validity of Westborough's C-4 zoning due to a requirement in the Cape Girardeau zoning code which provided that construction had to commence within three years of the grant of C-4 zoning or the zoning would lapse. Lawley later ordered the zoning maps of the City changed so as to reflect that C-4 zoning for Westborough Mall had lapsed and instructed the City Engineer of Cape Girardeau not to issue building permits for the Westborough site. There exists no evidence at this time before this Court which would indicate that any of the moving defendants knew anything of Lawley's opinion or his acts prior to the time they were reported in the newspaper, or in any way prompted him to act as he did. In fact, Lawley was unaware that the C-4 zoning given to the Westborough Mall site contained an exemption to this three year requirement, and consequently the Westborough group actually enjoyed C-4 zoning throughout this time frame.
Staples argues that this action by Lawley had a substantial chilling effect on the prospect of the Westborough Mall project attaining major tenants and financing. Nevertheless, Staples continued to reassure his partners and armed with his own belief that Westborough Mall's C-4 zoning remained in effect and his attorney's opinion to that effect, he professed an intention to proceed with the project as if Lawley had never made his statements. Staples never petitioned or in any way approached the City for a clarification or reaffirmation of his C-4 zoning. On May 14, 1979 Westborough Mall, Inc. agreed to sell the leasehold interest it held in the site, yet no sale has ever been effected.
The Mall eventually built in the City of Cape Girardeau, the West Park Mall, is located at Route K and Mount Auburn Road. The site was owned by Drury Industries which in late 1978 entered into a partnership agreement with the May Centers of Cape, Inc. At the time of the execution of this agreement there existed no arrangement whereby May Department Store or Famous Barr, major retail department stores, would be located in the shopping center. Famous Barr although had expressed some interest in entering the Cape Girardeau market but as early as 1976 had decided not to open a store there.
The City Attorney of Cape Girardeau had assured Drury that a shopping center could actually be constructed on C-2 zoning and Drury requested the City to rezone to C-2 those portions of the site which were not already so zoned. When the application for C-2 zoning was submitted, the finalized layout of the shopping center had not been sufficiently completed in order to file an application for C-4 zoning. The developers told the City that C-4 zoning would be requested as soon the plans had become sufficiently finalized.
Pursuant to governing ordinances, a public hearing was held before the Planning and Zoning Commission of Cape Girardeau concerning this C-2 application. This request was vehemently opposed by Staples and his business associates, but the Planning and Zoning Commission recommended the approval of the application. Further, public hearings were held before the City Council in accordance with the applicable regulations, and the Council on April 4, 1979 approved the C-2 zoning. A few months later the developers prepared and filed an application for C-4 zoning, and again after extensive public hearings before both the Planning and Zoning Commission and the City Council, the Council voted to grant C-4 zoning to the West Park Mall site. The West Park Mall is now largely a reality with two major anchor tenants and the vast majority of its rentable space being occupied.
Counts 1 and 2 of the amended complaint state a claim for damages and attorney's fees under 42 U.S.C. § 1983. Count 1 refers only to the City officials and Count 2 to all of the defendants. Count 2 is an allegation that all of the defendants acted pursuant to an agreement and conspiracy under "color...
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...under 42 U.S.C. § 1983. Accord, Gorman Towers, Inc. v. Bogoslavsky, 626 F.2d 607, 614-15 (8th Cir.1980); Westborough Mall v. City of Cape Girardeau, 532 F.Supp. 284 (E.D.Mo.1981), reversed in part on other grounds, 693 F.2d 733 (8th Cir.1982). Accordingly, the Association Defendants are als......
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