The opinion of the court was delivered by: Honorable David H. Coar
MEMORANDUM OPINION AND ORDER
Plaintiffs Hussein H. Mann and Debra Houston-Mann ("Plaintiffs" or "the Manns") bring an action against Defendant Calumet City ("Defendant" or "the City") for injunctive, declaratory, and other relief, pursuant to 42 U.S.C. § 1983 and 28 U.S.C. §§ 2201 and 2202, to redress alleged deprivations of rights guaranteed to Plaintiffs by the United States Constitution and under Illinois law. In Counts I and II of the Complaint, Plaintiffs seek declarations that certain provisions of Chapter 14 of the Municipal Code of Calumet City, Illinois (the "Code") that forbid the sale of property without an inspection to determine whether it is in compliance with the City's building and zoning codes are facially unconstitutional. In Count III, Plaintiffs seek a declaration that the City's conduct in refusing to issue "re-build" letters and/or confirm that property is legally nonconforming in connection with the sale of legal nonconfirming property constitutes an unconstitutional and unreasonable restraint on the right to freely transfer property. Finally, in Count IV, Plaintiffs seek an award of damages to compensate them for damages suffered as a result of the City's failure to comply with an order entered by Judge Milton Shadur in litigation captioned Realtor Association of West/South Suburban Chicagoland v. Calumet City II, No. 06 C 2271 (N.D. Ill.), in which Judge Shadur ordered the City to compensate Plaintiffs for the damages they suffered as a result of the City's interference with the sale of property owned by Plaintiffs.
Before this Court now are Defendant's Motion to Dismiss First Amended Complaint, pursuant to Fed. R. Civ. P. 12(b)(6), and Plaintiff's Motion for Partial Summary Judgment on Count IV of the First Amended Complaint, pursuant to Fed. R. Civ. P. 56. For the reasons stated below, Defendant's Motion to Dismiss First Amended Complaint is GRANTED, Defendant's Motion to Dismiss Intervenors as Party-Plaintiffs is GRANTED, and Plaintiff's motion for partial summary judgment is DENIED.
The Plaintiffs own property at 514 Forsythe Street in Calumet City, Illinois. Defendant Calumet City is a unit of local government incorporated under the laws of Illinois. The City is located in Cook County, Illinois.
b. The Point of Sale Inspection Ordinance
In Counts I and II of the Complaint, Plaintiffs seek a declaration that Section 14-1 of Article I of Chapter 14 of the Code, known as the Point of Sale Inspection Ordinance (the "Ordinance"), is unconstitutional because it restrains the right of property owners to sell their property without due process of law, and because it fails to provide adequate procedural due process.
In effect, the Ordinance prevents owners from selling their property until a city inspector has determined that the property is in compliance with municipal building ordinances. Section 82-322 of the Code requires property owners to pay a tax when transferring title to real property within city limits. These taxes are paid by the purchase of real estate transfer tax stamps from the city clerk. §§ 82-325, 82-327(a). The Ordinance amends Section 82-327(b) of the Code to require a "Point of Sale Inspection" ("POSI") for any transfer of any interest in property subject to Chapter 14 of the Code. § 14-1(a)(3). The POSI is an inspection of real property by the Department of Inspectional Services (the "Department") conducted in connection with a taxable transfer of real estate. The Ordinance prevents the city clerk from issuing real estate transfer tax stamps for the transfer of any property unless the grantor/seller presents the Certificate of Compliance or other evidence that the Department has determined the property to be in compliance, or if the property falls within certain exceptions to the POSI requirement. § 82-327(b). The purpose of the POSI is to determine whether such property is in compliance with the following specific requirements, which the corporate authorities of this City find are related to the public health, safety, and welfare:
(1) Compliance with property maintenance codes. All structure shall be in compliance with article X, sections 14-691 and 14-692 of this chapter 14, "property maintenance code."
(2) Inspection to determine possible illegal conversions . . . . § 14-1(c). The language of the Ordinance does not provide limitations on the duration or location of the POSIs, nor does it restrict the inspection to health and safety issues only. Sections 14-691 and 14-692, referenced above, adopt the "2006 International Property Maintenance Code" ("IPMC"), with minor modifications. Plaintiffs allege that because the IPMC contains provisions requiring the maintenance of property in "good repair," with what constitutes "good repair" left undefined, the Ordinance is unconstitutionally vague.
Plaintiffs also take issue with the provisions of the Ordinance that permit the City to order a deconversion of "illegally converted" property. The POSI includes a determination of whether structures on property have been illegally converted. § 14-1(c). "Illegal converted" is defined to mean that "the property was converted to another or additional use beyond that for which the property was originally permitted, and which [i] is in violation of the property's zoning limitations and [ii] is not a legal nonconforming use under section V of the City Zoning Ordinance." § 14-1(c). In the event the inspection reveals a structure which has been illegally converted, the Department issues a notice of deconversion, specifying the measures which must be taken in order to bring the illegally converted structure into compliance with applicable zoning regulations. § 14-1(g). Plaintiffs contend that the Ordinance "contains no due process protection against [the] City improperly ordering the deconversion of legal nonconforming property as a precondition of the right to sell the property." First Am. Compl. ("Compl.") ¶ 15 (emphasis in original). A "legal nonconforming" use of property is "any lawfully established use of a building or land, on the effective date of the ordinance or of amendments thereto, that does not conform to the use of regulations for the district in which it is located." Municipal Code of Calumet City, Appendix B ("Zoning Code") § 5.1. Generally, the code permits legal nonconforming use of property to be continued despite new zoning restrictions, id., but Plaintiffs contend that the City may use the Ordinance's deconversion provision to force owners of legal nonconforming property to conform their property to current zoning laws.
The procedures for the POSI are as follows. If the owner consents to the POSI, or if the Department successfully obtains an administrative search warrant to allow the inspection of the property of a non-consenting owner within ten days of the non-consent,*fn1 the Department conducts a Compliance Inspection within 28 days. § 14-1(e). Within three days of the inspection, the Department must issue a written notice of violations and the repairs necessary to bring the property into compliance. § 14-1(g). The Department must conduct a reinspection within three business days of the completed repairs. § 14-1(h). If the property is in compliance with these requirements, the Department will issue a "Certification of Compliance" permitting the property owner to purchase transfer tax stamps. Id.
Additionally, the Ordinance requires that grantor/seller pay the water bill and other fees owed by the seller to the City prior to the issuance of transfer tax stamps. § 14-1(i). If the seller disputes any such obligation, the clerk will "provide the owner with a predeprivation due process hearing consistent with the principles enunciated in Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1 (1978)." Id. "If the owner disputes the City's determination as to liability, the owner may pay said bill under protest, and may pursue any remedies available to said seller to recover the claimed overcharge." Id.
c. The Zoning Code and Legally Nonconforming Property
Plaintiffs also raise a related claim regarding the City's Zoning Code. The Zoning Code provides that if any legal nonconforming property is damaged by less than 50%, it may be rebuilt or repaired to its legal nonconforming use, even if current zoning restrictions would not permit the prior/intended use. Zoning Code § 5.5. However, if legal nonconforming property is damaged or destroyed by more than 50% of its replacement value at that time, the property can be rebuilt only for a conforming use and in compliance with the provisions of the district in which it is located. Id.
Plaintiffs argue that when an owner of legal nonconforming property finds a buyer for his property, the buyer's lender almost uniformly asks the City to issue a letter that states that, should the legal nonconforming property be damaged, it can be rebuilt as legal nonconforming property. Compl. ¶ 18. Additionally, buyers and/or lenders seeking assurance that the property complies with zoning restrictions often ask the City to confirm that a given property is legal nonconforming. Compl. ¶ 19. However, Plaintiffs allege, the City has refused to provide either form of assurance. Plaintiffs allege that the City's refusal to issue rebuild or confirmation letters in effect prohibits the sale of legal nonconforming property, because lenders will not loan money to buyers in the absence of such assurance. Plaintiffs then ask for relief worded in the negative but actually seeking affirmative action by the city: a declaration that the city's refusal to issue rebuild or confirmation letters is unconstitutional, and an injunction "prohibiting [the] City from refusing to issue rebuild letters and/or confirmation regarding whether property is legal nonconforming." Compl. ¶ 46.
d. Plaintiff's Request for Damages or Enforcement of Judge Shadur's March 14, 2007 Order
In a prior related litigation, Realtor Association of West/South Suburban Chicagoland v. Calumet City II, No. 06 C 2271 (N.D. Ill. dismissed Nov. 27, 2007), a local realtor association filed suit seeking an injunction against the City's enforcement of the Ordinance. On August 8, 2006, Judge Milton Shadur entered a preliminary injunction which enjoined the City from enforcing the Ordinance and from ordering the deconversion of legal nonconforming property. Compl., Ex. F. In the fall of 2006, Plaintiffs listed their property for sale and entered into a contract for the sale of their property. Compl. ¶ 50. Plaintiffs scheduled the closing of the sale for October 30, 2006. Id. Prior to the closing, Plaintiff Houston-Mann and the buyer went to the City's Department of Inspectional Services to purchase the necessary transfer stamps. Id. In violation of the August 8 injunction, the City refused to issue transfer stamps until the water bill was paid and the property deconverted. Id. After this incident, the buyer decided not to purchase the property. Id.
On November 17, 2006, the plaintiff in the Realtor Association litigation filed a Motion for Order to Show Cause Why Calumet City Should Not Be Held in Contempt for Violating the Court's Order. On March 14, 2007, Judge Shadur granted the motion in part, and stated, with respect to Plaintiffs:
The owners of property at 514 Forsythe in Calumet City, along with the involved real estate brokers, are entitled to be compensated by Calumet City for the damages they incurred or will incur in the future in connection with their failed closing of the sale and transfer of the property on or about October 31, 2006 . . . [and] reasonable attorneys' fees and related costs incurred in enforcing their rights . . . .
See Compl., Ex. G. On June 22, 2007, Judge Shadur ordered the City to make specific payments of $6,287.11 to two real estate brokers pursuant to the March 14, 2007 contempt order. The City refused, however, to compensate Plaintiffs. Compl. ¶ 18. On October 17, 2007, the Seventh Circuit held that the plaintiffs in Realtor Association did not have standing to sue the City, vacated the preliminary injunction, and dismissed the suit. Mainstreet Organization of Realtors v. Calumet City, Illinois, 505 F.3d 742 (7th Cir. 2007) .*fn2
Plaintiffs seek partial summary judgment that the March 14, 2007 contempt order is enforceable by this Court, and that they are owed compensation for damages suffered as a result of the City's violation of Judge Shadur's August 8 preliminary injunction. Compl. ¶ 54. In the alternative, Plaintiff seeks an award of damages from this Court, independent of the contempt order, to compensate them for the alleged violation of their constitutional rights resulting from the City's refusal to issue transfer stamps in connection with the scheduled sale of Plaintiff's property in October 2006. Id.
a. Standard for Motion to Dismiss
On a motion to dismiss for failure to state a claim upon which relief can be granted, the district court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. Fed. R. Civ. P. 12(b)(6); Gastineau v. Fleet Mortg. Corp., 137 F.3d 490, 493 (7th Cir. 1998) (citation omitted). The purpose of a 12(b)(6) motion is to decide the adequacy of the complaint, not to determine the merits of the case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990) (citation omitted). A complaint should not be dismissed pursuant to Rule 12(b)(6) unless it fails it provide fair notice of what the claim is and the grounds upon which it rests or it is apparent from the face of the complaint that under no plausible facts may relief be granted. St. John's United Church of Christ v. City of Chicago, 502 F.3d 616, 625. Although "[a]ll the complaint need do to withstand a motion to dismiss for failure to state a claim is outline or adumbrate a violation of the statute or constitutional provision upon which the plaintiff relies and connect the violation to the named defendants," Christensen v. County of Boone, Illinois, 483 F.3d 454, 459 (7th Cir. 2007) (quoting Brownlee v. Conine, 957 F.2d 353, 354 (7th Cir.1992) (internal citations and quotation marks omitted)), surviving a Rule 12(b)(6) motion "requires more than labels and conclusions . . . . Factual allegations must be enough to raise a right to relief above the speculative level[.]" Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007); see also Pugh v. Tribune Co., 521 F.3d 686, 699 (7th Cir. 2008) (citing Twombly). Here, the factual allegations are the provisions of the Ordinance (attached as exhibits to the Complaint), and are not in dispute.
A facial challenge to a legislatively-enacted ordinance is the most difficult challenge to mount because the challenger must prove that no set of circumstances exists under which the Ordinance would be valid. United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095 (1987); Doe v. Heck, 327 F.3d 492, 528 (7th Cir. 2003). Therefore, if there is even one set of circumstances under which the Ordinance is valid, then there is no facial constitutional violation and Plaintiffs have failed to state a claim under which relief can be granted. Fed. R. Civ. P. 12(b)(6).
b. Standard for Summary Judgment
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). A genuine issue of material fact exists only if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant bears the burden of establishing that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant meets this burden, the non-movant must set forth specific facts (a "scintilla of evidence" is insufficient) demonstrating that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Anderson, 477 U.S. at 252; see also Celotex, 477 U.S. at 324. When reviewing a ...