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Evergreen Apartments, LLC v. City of Tupelo

United States District Court, N.D. Mississippi, Aberdeen Division

August 22, 2014

EVERGREEN APARTMENTS, LLC., Plaintiffs, a Illinois limited liability company; EVERGREEN APARTMENTS, LLC, a Delaware limited liability company; and FOUNTAINBLEAU MANAGEMENT SERVICES, LLC, a Louisiana limited liability company


DEBRA M. BROWN, District Judge.

This is a diversity action brought by past and current property owners and their management company against the City of Tupelo and Tupelo POTW for an alleged failure to exercise due care in the construction, operation, and maintenance of the City's sanitary sewer system. Before the Court is the defendants' motion to dismiss, or in the alternative, for summary judgment.[1] Doc. #30.


Proper Standard

In their motion, Defendants seek dismissal of all of Plaintiffs' claims pursuant to Rule 12 of the Federal Rules of Civil Procedure, or summary judgment on all claims pursuant to Rule 56. In support of their motion, Defendants attached numerous materials outside the pleadings. See Doc. #30. Similarly, in their response opposing the motion, Plaintiffs attached various non-pleading exhibits. See Doc. #41.

Where "both parties have submitted - and the Court has not excluded - materials outside of the pleadings, Rule 12(b) directs the Court to treat the motion as one for summary judgment and to dispose of it under Rule 56." Bowers v. Nicholson, No. H-07-1910, 2007 WL 3047223, at *4 (S.D. Tex. Oct. 18, 2007) (citing Washington v. Allstate Ins. Co., 901 F.2d 1281, 1283-84 (5th Cir. 1990)). Here, because both parties have submitted evidence outside the pleadings, which the Court has not excluded, Defendants' motion will be treated as a motion for summary judgment. Id .; see also Sweet v. Lucine, No. C 01-3577, 2002 WL 31855365, at *2 n.3 (N.D. Cal. Dec. 16, 2002) ("Defendants moved to dismiss or in the alternative for summary judgment but did not distinguish between pleading problems and proof problems. Because the parties focused their efforts on the evidence... the court does not reach the motion to dismiss.").

"Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law." Norwegian Bulk Transport A/S v. Int'l Marine Terminals P'ship, 520 F.3d 409, 411 (5th Cir. 2008) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 22-23 (1986)). To award summary judgment, "[a] court must be satisfied that no reasonable trier of fact could find for the nonmoving party or, in other words, that the evidence favoring the nonmoving party is insufficient to enable a reasonable jury to return a verdict in her favor." Id. at 411-12 (internal quotation marks omitted). To this end, "[t]he moving party bears the burden of establishing that there are no genuine issues of material fact." Id. at 412.

Where "the nonmoving party bears the burden of proof at trial, the moving party may demonstrate that it is entitled to summary judgment by submitting affidavits or other similar evidence negating the nonmoving party's claim, or by pointing out to the district court the absence of evidence necessary to support the nonmoving party's case." Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). If the moving party makes the necessary demonstration, "the burden shifts to the nonmoving party to show that summary judgment is inappropriate." Id. In making this showing, "the nonmoving party must go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Cotroneo v. Shaw Env't & Infrastructure, Inc., 639 F.3d 186, 191-92 (5th Cir. 2011) (internal punctuation omitted). When considering a motion for summary judgment, the Court "resolve[s] factual controversies in favor of the nonmoving party." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).


Relevant Facts

The President's Gate Apartments, formerly known as the Evergreen Square Apartments ("Evergreen Square"), are owned by Plaintiff Evergreen Apartments, LLC, a Delaware limited liability company ("Evergreen Delaware"). Doc. #41-1 at ¶ 3; Doc. #41-6. Evergreen Delaware was formed as a part of the dissolution of Plaintiff Evergreen Apartments, L.L.C., an Illinois limited liability company ("Evergreen Illinois"). Doc. #54-1 at ¶¶ 3-4. Plaintiff Fountainbleau Management Services, LLC ("FMS"), is the former manager of Evergreen Illinois and the current manager of Evergreen Delaware. Doc. #41-1 at ¶¶ 3-4.

Beginning on April 11, 2008, the Department of Development Services for the City of Tupelo received reports regarding "major sewage problems" at Evergreen Square, "including raw sewage backing up into some of the apartments." Doc. #30-1 at ¶ 5. Between April 11, 2008, and October 5, 2008, certain unnamed "officers, employees and representatives of Evergreen Square and Fountainbleau Management Services, " contacted Lynda Ford, Inspector at the Department of Development Services. Id. at ¶¶ 3, 7. According to Ford, the anonymous representatives "asserted... that... the sewage problems were caused by... inadequate sewer lines and the inadequate design of the City of Tupelo's sewer system and were not caused by the sewer lines at Evergreen Square Apartments." Id. at ¶ 7. In contrast to Ford's recollection, Roland T.A. Von Kurnatowski, Jr., the managing member of FMS, claims that he "did not have any conversations with Linda Ford between April 11, 2008 and October 5, 2008 in which I asserted that the sewage problems being experienced at the Evergreen Square property were caused by inadequate sewer lines and/or the inadequate design of the City of Tupelo's sewer."[2]

Following an investigation in which the City of Tupelo ("City") found no obstruction in its sewer lines, Evergreen Square was "required by the City of Tupelo to repair and/or replace their sewer lines." Id. at ¶¶ 8-9.

On November 3, 2008, individual tenants at Evergreen Square filed a civil action in this Court against Plaintiff FMS and certain individual defendants. Doc. #30-2; see also Adkins v. Fountainbleau Mgmt. Servs., LLC, No. 1:08-cv-00257 (N.D. Miss. 2008). In their complaint, the tenants alleged, among other things, that FMS, the manager of Evergreen Square, was "informed... that the repeated sewer backups were due to aging, blocked lines and could not be stopped without replacing the main sewer service lines connecting Evergreen Square's buildings to the city sewer system." Doc. #30-2 at ¶ 11.

During the pendency of the Adkins action, two City employees, including Ford, were deposed. During her June 4, 2009, deposition, Ford testified that, in June 2008, she recommended to Von Kurnatowski that Evergreen Square: (1) replace its sewer lines; and (2) remove the garbage disposals in its units. Doc. #41-3. Also on June 4, 2009, City of Tupelo Code Enforcement Inspector Debra Byrd testified regarding a meeting between Von Kurnatowski and City officials. Doc. #41-4. Specifically, Byrd recounted that she asked Von Kurnatowski to bring Evergreen Square up to code within thirty days and that "his point of contention was he did not want to have do that in 30 days." Id. at 2-5. Subsequent testimony revealed that Evergreen made efforts to comply with the City's suggestions by replacing some of its pipes. Id. at 7-10. On March 17, 2010, the Adkins action was dismissed for lack of subject matter jurisdiction. Doc. #30-3.

On March 26, 2010, the State of Mississippi issued to "Tupelo POTW" a "Permit to Discharge Wastewater in Accordance with National Pollutant Discharge Elimination System" ("NPDES Permit"). Doc #41-8 at 3. The NPDES Permit contained numerous conditions and provided that "[t]he permittee must comply with all conditions of this permit. Any permit noncompliance constitutes a violation of the Clean Water Act and is grounds for enforcement action; for permit termination, revocation and reissuance, or modification; or denial of a permit renewal application." Doc. #41-8 at 16.

On September 2, 2010, Marcus Calvert, an Evergreen Square tenant, filed suit against FMS in the County Court of Lee County, Mississippi, seeking recovery for damages caused by "sewage backups." Doc. #30-4 at ¶ 13. Calvert's case was dismissed by reason of settlement on August 21, 2012.[3] Doc. #30-6.

On February 20, 2013, the law firm of Evans Petree PC sent a letter to Kim Hanna, City Clerk of the City of Tupelo. Doc. #41-6. The letter purported to be on behalf of: (1) "Evergreen Square LLC, a Illinois limited liability company;" (2) "Evergreen Square, LLC, a Delaware limited liability company;" and (3) "Fountainbleau Management Services, LLC, a Louisiana limited liability company." Id. The document stated that "[t]he purpose of this letter is to provide the City of Tupelo... with notice of Claimants' claims pursuant to Miss. Code Ann. § 11-46-11." Id. More specifically, the letter explained that the claimants were seeking redress for damages caused by the City of Tupelo's alleged failure to maintain its sewer system in compliance with standards set forth in its National Pollutant Discharge Elimination System ("NPDES") permit and Mississippi Department of Environmental Quality's Guidance for the Design of Public Owned Wastewater Facilities. Id.

On August 23, 2013, Plaintiffs[4] filed this action against Defendants City of Tupelo and Tupelo POTW.[5] Doc. #1. The complaint asserted two claims: (1) a breach of contract claim premised on alleged violations of the NPDES permit; and (2) a negligence claim arising from Defendants' alleged "negligent[] planning, developing, constructing, and/or maintaining the outfall sewer." Id. at ¶¶ 34-47.


Negligence Claim

In their motion, Defendants argue that the negligence claim is barred because: (1) the Plaintiffs' notice of suit was inadequate; (2) the statute of limitations on the claim has run; and (3) the design, construction, operation, and maintenance of the sewer line is a discretionary function. Doc. #31.

The Mississippi Tort Claims Act ("MTCA"), Miss. Code Ann. § 11-46-1, et seq., "provides for a limited waiver of sovereign immunity and permits the maintenance of only certain types of claims against... a governmental agency." Liggans v. Coahoma Cnty. Sheriff's Dep't, 823 So.2d 1152, 1154 (Miss. 2002). The MTCA "is the exclusive remedy for filing a lawsuit against [Mississippi] governmental entities and [their] employees." City of Jackson v. Brister, 838 So.2d 274, 278 (Miss. 2003). Claims brought under the MTCA are subject to a one-year statute of limitations and to certain notice requirements enumerated in the statute. See Miss. Code Ann. § 11-46-11(3). In addition to its procedural requirements, the MTCA explicitly exempts from its waiver of sovereign immunity actions based on certain acts or omissions. See id. § 11-46-9. Of relevance here, the statute provides that "[a] governmental entity... shall not be liable for any claim [b]ased upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a governmental entity...." Id. § 11-46-9(1)(d).

As a tort, a claim for negligence brought against a governmental entity must meet the MTCA's notice and timeliness requirements. See Caves v. Yarbrough, 991 So.2d 142, 147-50 (Miss. 2008) (considering MTCA's statute of limitations in negligence claim); Estate of Spiegel v. W. Sur. Co., 908 So.2d 859, 863 (Miss. Ct. App. 2005) ("The record demonstrates that Spiegel did not comply with the notice of claim requirements of [the MTCA] and for that reason alone, his [negligence] action against the circuit clerk and former circuit clerk could have been dismissed."). Negligence claims against governmental entities also are subject to the discretionary function exemption. Lang v. Bay St. Louis/Waveland Sch. Dist., 764 So.2d 1234, 1239-40 (Miss. 1999). Both Defendants are indisputably ...

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