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Chaney v. City of Ocean Springs, Mississippi

United States District Court, S.D. Mississippi, Southern Division

March 12, 2019

COREY J. CHANEY and MIRANDA L. CHANEY PLAINTIFFS
v.
CITY OF OCEAN SPRINGS, MISSISSIPPI DEFENDANT

          MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT CITY OF OCEAN SPRINGS, MISSISSIPPI'S [13] MOTION TO DISMISS ALL CLAIMS BROUGHT UNDER § 1983

          HALIL SULEYMAN OZERDEN, UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT is the Motion [13] to Dismiss All Claims Brought Under § 1983 filed by Defendant City of Ocean Springs, Mississippi. After due consideration of the Motion, the related pleadings, the record, and relevant legal authority, the Court finds that the City's Motion [13] to Dismiss should be granted in part and denied in part and that Plaintiffs' equal protection claim should be dismissed with prejudice.

         I. BACKGROUND

         A. Factual background

         This action arises out of Plaintiffs Corey J. Chaney and Miranda L. Chaney's (“Plaintiffs”) purchase and attempted development of certain real property located within the city limits of Defendant City of Ocean Springs, Mississippi (the “City”). See 1st Am. Compl. [8] at 2. On August 15, 2016, Plaintiffs purchased a single parcel of property comprised of what had been known as Lot 16 and the south half of Lot 17[1] in the City's Cherokee Cove Subdivision. Id. at 2. Plaintiffs apparently intended to renovate an existing structure on Lot 17, subdivide the parcel, and then sell the two resulting parcels, Lot 16 and the south half of Lot 17, separately. Id. at 2-3. According to Plaintiffs, before their lender, First Federal, would give final approval to the construction financing, it requested and received confirmation from the City that the south half of Lot 17 qualified as a “legal lot.” Id. at 3. The City allegedly confirmed that both reconfigured lots would be buildable lots that could be sold and developed separately, as long as Lot 17 received an additional 7.3 feet from Lot 16. Based on this confirmation, First Federal approved construction financing for Plaintiffs' project on Lot 17. Id.

         The City issued a building permit on March 13, 2017, and construction to renovate the existing structure on Lot 17 began on May 13, 2017. Id. at 5. According to Plaintiff, beginning on June 1, 2017, neighboring landowners engaged in a pattern of harassment directed at Plaintiffs, including vandalizing their property. Id. On June 27, 2017, “unidentified neighbors, ” whom Plaintiffs believe “were motivated by racism and their desire to keep a mixed race couple from moving into the neighborhood, ” had an attorney draft a letter and send it to the City. Id. The letter referenced the City's approval of what these residents referred to as an “illegal lot split/reconfiguration” and an “illegal/void building permit concerning the subject property.” Id. at 5-6. The residents asked the City to “pull/revoke the illegal building permit, and overturn or withdraw the purported lot split . . . .” Id.

         Plaintiffs allege that the day the City received the letter, a building official called Plaintiffs' architect asking to speak with them. Id. at 6. That same day, the City's Planning and Grants Administrator, Carolyn Martin (“Martin”), left a voicemail for Plaintiffs stating that “she had made an error in her interpretation of the code” and that “she had failed to consider and/or was unaware of the statutes which applied to [Plaintiffs'] property.” Id. Plaintiffs assert that, without providing notice or an opportunity to be heard, the City then issued a Stop Work Order on July 5, 2017, and delivered to the Jackson County, Mississppi, Chancery Clerk a document entitled “Rescind: Parcel Boundary Reconfiguration.” Id. at 7. On July 11, 2017, this document was recorded in the office of the Chancery Clerk of Jackson County, ostensibly restoring the parcels to their original configuration. Id. at 8.

         When Plaintiffs contacted First Federal on July 7, 2017, to inform it of these developments, First Federal had already learned of them and had frozen Plaintiffs' account. Id. Plaintiffs infer that this indicates someone contacted their lender for the purpose of intentionally interfering with their building project. Id.

         On July 27, 2017, the City sent Plaintiffs a letter setting forth its position that construction could continue on what had been known as Lot 17, but only subject to relevant codes and ordinances. Id. This included certain set-back provisions, but the City recognized that the home being built might already be violating this provision. Id. The City's letter also stated that any plans to sell a portion of the parcel that had previously been known as Lot 16 would violate the relevant zoning ordinance, and that such a sale would not be possible. Id.

         Plaintiffs claim that a City building official then contacted their architect and informed him that the official would discuss the matter at a “board meeting” that evening; however, Plaintiffs were never informed this communication occurred. Id. at 9. Plaintiffs posit that the City and its Planning and Grants Administrator Martin contacted the architect in an attempt to reconfigure the project, and intentionally conducted meetings outside Plaintiffs' presence in an effort to do so. Id.

         First Federal discontinued funding the Lot 17 renovation project, which caused all construction to halt. Id. “As a result of the intentional actions of Ocean Springs and its policy maker Martin and to the detriment of [Plaintiffs], the collateral of Charter, Lot 16, was rendered worthless.” Id. Plaintiffs claim that they have now been sued by their contractor for over $70, 000.00. Id.

         B. Procedural history

         Plaintiffs filed a Complaint [1] against the City in this Court on January 30, 2018, followed by a First Amended Complaint [8] on March 16, 2018. The First Amended Complaint advances federal constitutional claims pursuant to 42 U.S.C. § 1983 for alleged violations of Plaintiffs' equal protection, procedural due process, and substantive due process rights, and a claim for a wrongful taking of property without just compensation. The First Amended Complaint also raises claims under state law for tortious interference with contractual relations, negligent misrepresentation, and negligence. 1st Am. Compl. [8] at 9-13. Plaintiffs seek an award of compensatory damages, attorneys' fees, expenses, and prejudgment interest. Id. at 14.

         The City has moved pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss all claims Plaintiffs are asserting against it under 42 U.S.C. § 1983. City's Mot. [13] at 1. The City posits that Plaintiffs' § 1983 claims should be dismissed because they “have made no allegations of a policy or custom of the City's that was a motivating factor behind any alleged constitutional violations, ” and because their “takings claim is not ripe, as Plaintiffs have failed to pursue the matter under available state remedies.” City's Mem. [14] at 1-2. The City argues that Plaintiffs' procedural due process claim fails because they “made no effort to avail themselves of local and state procedures readily available.” Id. For this reason, “the substantive due process claims should be dismissed as premature in that the procedural due process claim based on alleged deprivation of the same right is not properly before the Court.” Id. Upon dismissal of the § 1983 claims, the City maintains that this case should be dismissed in its entirety for lack of federal subject-matter jurisdiction. Id. at 2.

         Plaintiffs respond that they “have pled enough facts to state a claim that is plausible on its face, ” Pls.' Resp. [17] at 1, including the existence of an official policy with a direct causal connection to a constitutional deprivation, id. at 3. “The facts as pled by Plaintiffs, and which must be taken as true, establish that a decision adverse to Plaintiffs' constitutional rights was made and officially adopted and promulgated by an official of Defendant (Carolyn Martin) to whom Defendant delegated policy-making authority . . . .” Id. at 5. Plaintiffs, who are represented by counsel, have not sought leave to amend their pleadings in the event the Court finds that the First Amended Complaint fails to state a § 1983 claim.

         II. DISCUSSION

         A. Rule 12(b)(6) standard

         To survive a Rule 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).

         A “plaintiff's factual allegations must support a claim to relief that is plausible on its face and rises above mere speculation.” United States ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262, 266 (5th Cir. 2010). “[A] complaint may proceed even if ‘recovery is very remote and unlikely,' so long as the alleged facts ‘raise a right to relief above the speculative level.'” Littell v. Houston Indep. Sch. Dist., 894 F.3d 616, 622 (5th Cir. 2018) (quoting Twombly, 550 U.S. at 555-56).

         In determining whether a complaint states a valid claim for relief, a court must accept all well-pleaded facts as true and construe the complaint in the light most favorable to the plaintiff. In re Great Lakes Dredge & Dock Co. LLC, 624 F.3d 201, 210 (5th Cir. 2010). While a court must “take factual allegations as true at the Federal Rule of Civil Procedure 12(b)(6) stage, ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.'” Rountree v. Dyson, 892 F.3d 681, 685 (5th Cir. 2018) (quoting Iqbal, 556 U.S. at 678).

         B. Municipal liability under § 1983

         42 U.S.C. § 1983 requires a showing that a defendant deprived the plaintiff of his or her constitutional rights and did so while acting under color of state law. Moody v. Farrell, 868 F.3d 348, 351 (5th Cir. 2017). “[A] municipality cannot be held liable under § 1983 on a respondeat superior theory.” Monell v. Dep't of Soc. Servs. of City of New York, 436 U.S. 658, 691 (1978). Plaintiffs seeking to impose liability on local governments under § 1983 must show that “‘action pursuant to official municipal policy' caused their injury.” Connick v. Thompson, 563 U.S. 51, 60 (2011) (quoting Monell, 436 U.S. at 691). To state a claim for municipal liability under § 1983, a plaintiff “must allege sufficient factual content to permit the reasonable inference (1) that a constitutional violation occurred and (2) that an ...


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