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George S. Michael, Susan Michael, Dorothy Michael v. Christine Letchinger

August 5, 2011

GEORGE S. MICHAEL, SUSAN MICHAEL, DOROTHY MICHAEL, AND ROBERT C. MICHAEL, PLAINTIFFS,
v.
CHRISTINE LETCHINGER, R. DREW IRVIN, GERALD NELLESSEN, PETER FRIEDMAN, KATHLEEN O'HARA, BRIAN HAMER, SUSAN GARRETT, AND THE VILLAGE OF LAKE BLUFF, A MUNICIPALITY, DEFENDANTS.



The opinion of the court was delivered by: Judge Feinerman

MEMORANDUM OPINION AND ORDER

Plaintiffs George, Susan, Dorothy, and Robert Michael filed this action under 42 U.S.C. § 1983, alleging that Defendants-the Village of Lake Bluff, several village officials, a state senator, and the Director of the Illinois Department of Revenue-committed state law torts and violated their rights under the United States Constitution. Defendants have filed four motions to dismiss, which are granted in part and denied in part.

Background

The facts alleged in the complaint, which spans 76 pages and 253 paragraphs, are assumed true on a Rule 12(b)(6) motion. See Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). Also pertinent at the Rule 12(b)(6) stage are documents "referred to in [the] complaint" that are attached to the motions to dismiss and central to Plaintiffs' claims. Wright v. Associated Ins. Cos., Inc., 29 F.3d 1244, 1248 (7th Cir. 1994). Any variance between the complaint's allegations and an exhibit is resolved in the exhibit's favor. See Forrest v. Universal Sav. Bank, F.A., 507 F.3d 540, 542 (7th Cir. 2007). Orders entered and filings made in other courts are properly subject to judicial notice. See United States v. Stevens, 500 F.3d 625, 628 n.4 (7th Cir. 2007).

Plaintiffs are George Michael and Susan Michael, a married couple; their daughter, Dorothy Michael; and Robert Michael, George's brother. The Michaels will be referred to by their first names. Defendants are the Village of Lake Bluff; Christine Letchinger, the Village President; R. Drew Irvin, the Village Building Commissioner; Peter Friedman, the Village Attorney; Gerald Nellessen, the Village Building Code Supervisor; Kathleen O'Hara, a Village Trustee and also a coordinator at Lake Forest High School, which Dorothy attended; Brian Hamer, the Director of the Illinois Department of Revenue; and Susan Garrett, the state senator whose district encompasses the Village.

A. The Home, the Church, and the Property Tax Exemption

George and Susan purchased a lakeside home with a private beach in Lake Bluff, Illinois, in October 2003. Susan suffers from multiple sclerosis and autonomic dysfunction-a condition that causes her blood pressure to drop when subjected to stress-and had been encouraged by her physician to live near the water. Lake Bluff had the additional benefit of offering Dorothy, who is mentally disabled and shows signs of early-stage multiple sclerosis, access to schools with specialized facilities and curricula. George, Susan and Dorothy, as well as Robert, who at all relevant times resided in Chicago, are of Armenian descent and adhere to the Armenian Orthodox faith.

In October 2003, when the Michaels acquired the home, the property taxes were $27,000 per year. Before moving in, the Michaels built a pool, a rehabilitation room, a racquetball court, and two additional bedrooms. The property was reassessed in 2004, resulting in an increase in the Michaels' property taxes to $87,000 per year, among the highest in Lake Bluff. Soon thereafter, the Michaels decided to convert their racquetball court into an Armenian Orthodox church. According to the complaint, the travel required to attend the Armenian Orthodox church on the far west side of Chicago was compromising Susan's health.

To give Susan's "foreshortened days as much grace" as possible, the complaint alleges, the family hired an architect, Harry Burroughs, and a contractor, Philip Orzech, to begin work on the project. Doc. 1 at ¶¶ 30-31. In September 2004, Burroughs submitted drawings of a proposed chapel, cathedral room, and pastor's study to the Village in an effort to determine if a zoning variance was necessary. Pursuant to a Village policy, Burroughs was not given a receipt for delivery of the drawings. Four sets of revised plans were delivered to the Village at various points in 2005 but, as with the first submission, no receipts were provided. Burroughs was told by a Village official that if a zoning variance was required, the Michaels would receive notice. When the family did not hear from the Village by January 2007, they began work on the chapel. George enrolled in an online program with the Church of Spiritual Humanism, see http://www.spiritualhumanism.org, paid a modest fee, and obtained a clergy license.

On March 22, 2007, after the chapel's construction was complete, the Michaels conveyed their home by quit-claim deem, without charge, to the Armenian Church of Lake Bluff ("Church"), an incorporated entity created by George and Susan. The Michaels continued to live in the home, and opened the Church to "public" services presided over by George. On April 10, 2007, the Michaels sought a property tax exemption from the Lake County Assessor's Office; the application averred that the home was utilized primarily as a place of worship and, because the Michael children read their bibles and study books every day, a place of religious instruction.

On June 26, 2007, the Church's Treasurer, Marc Geissler, notified the Village that the Church had obtained ownership of the property and was applying for a Non-Homestead Property Tax Exemption. Irvin (the Village Administrator) wrote a letter to the Lake County Review Board on the Village's behalf opposing the exemption. Irvin and Nellessen (the Building Code Supervisor) then engaged in ex parte communications with the Board to oppose the exemption, at least in part because of the Michaels' Armenian Orthodox faith. On February 29, 2008, the Lake County Review Board denied the exemption. On March 13, 2008, the Church filed a petition with the Illinois Department of Revenue seeking further review. On June 12, 2008, Hamer (the Department's Director) issued the Church a tax exemption. Doc. 58 at 3.

The individual village defendants then began a campaign to drive the Church out of existence and to reverse the exemption. On June 20, 2008, Irvin contacted Senator Garrett, whose district encompasses Lake Bluff, asking for help in reversing the exemption. Irvin also instructed the Village police to conduct surveillance of the Michaels' home to determine if religious services actually were being conducted. On Sundays, police cars and fire trucks (with sirens on) would drive up the Michaels' driveway.

In addition, the Village issued a Notice of Zoning Violation to the Michaels for operating a church in an area zoned for residential use. Nellessen and a Village police officer delivered the Notice to the Michael home. "It is believed," the complaint says, that Nellessen went to the back of the home, pounded on a sliding glass door, scowled at Susan, declared that she and her husband were in trouble, and mentioned that Susan's body language was indicative of culpability. Doc. 1 at ¶ 109. The Notice declared that a fine as high as $250 per day could be imposed for the non-zoned use, for a total of $115,000. When George saw the Notice, he sent the Village a letter declaring that all "public" services at the Church would cease.

In July 2008, the Village filed suit against the Church, George, and Susan in the Circuit Court of Lake County, seeking fines for the Church-related zoning violations. See Village of Lake Bluff v. Armenian Church of Lake Bluff, 08 CH 2706 (Doc. 30-5 at 31-54). On July 20, 2008, Nellessen delivered a copy of the complaint by, "it is believed," arriving at the home when he knew Susan would be alone, walking to the back of the house, banging on a glass door, yelling at her for taking too long to open the door, and threatening to take the family's furniture if they did not pay $115,000. Doc.1 at ¶ 127. Susan experienced an autonomic crisis shortly thereafter and was forced to take medication. George then authorized his attorney to accept any Village notifications or citations.

In the meantime, on June 25, 2008, the Village and the Lake Bluff Elementary School District 65, motivated in part by the Michaels' Armenian Orthodox faith, filed with the Department an administrative appeal of the tax exemption Hamer had issued two weeks earlier. An administrative law judge ("ALJ") was assigned, and Senator Garrett commenced her efforts to get the exemption reversed, providing Hamer with ex parte "misinformation" about the Church and the Michaels. Doc.1 at ¶ 105. Director Hamer relied on Senator Garrett's statements and colluded with the ALJ to ensure that the exemption was reversed. On March 20, 2009, Director Hamer decided to reverse the tax exemption and told Friedman (the Village Attorney), through an ex parte communication, to file a motion for summary judgment before the ALJ. Summary judgment motions were filed in March 2009.

On April 21, 2009, Director Hamer issued a "Denial of Non-Homestead Property Tax Exemption," which stated that he had reconsidered the exemption because the property was not actually in exempt ownership or exempt use. Doc. 58 at 5. On July 6, 2009, the ALJ granted summary judgment to the Village on its administrative appeal of the original exemption. Doc. 30-2 at 2-30. Two days later, on July 8, 2009, Director Hamer issued a formal Notice of Decision adopting the ALJ's decision. Doc. 30-2 at 36-37. According to the complaint, Director Hamer instructed the ALJ how to rule, and the ALJ's decision, though dated July 6, was written after Director Hamer's July 8 Notice of Decision and then backdated. In the meantime, the church filed an administrative appeal of Hamer's April 21, 2009, reversal of the original exemption; the ALJ and then Director Hamer denied the appeal on res judicata grounds in light of the July 2009 decision on the Village's appeal. Doc. 20-3 at 42-48.

The Church (though not the Michaels personally) then filed administrative review actions in the Circuit Court of Cook County to challenge the Department's decision. See Armenian Church of Lake Bluff v. Dep't of Revenue, Nos. 09 CH 26405, 10 L 50003. The circuit court rejected the Church's challenges. The Church appealed, and the Appellate Court of Illinois affirmed. See Armenian Church of Lake Bluff, 2011 IL App. (1st) 102249, __ N.E.2d __, 2011 WL 3186391 (July 22, 2011). The appellate court's opinion sets forth an extensive summary of the relevant facts. 2011 WL 3186391, at *2-8. The court ruled that the Department's denial of an exemption was not against the manifest weight of the evidence. Id. at *8-9. In particular, the court concluded that "the record indicates the property was primarily used as a private residence for George Michael, his wife Susan Michael, and their three daughters, which is a secular use," and that "even if George Michael did conduct religious services within the single-family dwelling, these services were essentially for his wife and perhaps their children and a few close family members and friends." Id. at *9. The court sharply noted that key averments in the Church's exemption application-that "the former or current leader of St. Gregory [the Armenian Orthodox church on Chicago's far west side] performed a religious ritual establishing the subject property as an Armenian Orthodox church within the Easter Diocese of the Armenian Church of North America, were conducting weekly or holiday Armenian Orthodox services on the subject property, and were residing there in an Armenian Orthodox 'parsonage'"-were "false or misleading and improperly bolstered the claimed entitlement to a religious-use exemption." Ibid. The appellate court also held that the Department's decisions were not based on an analysis of religious doctrine, and that due process was not violated when Director Hamer issued the "Denial of Non-Homestead Property Tax Exemption" in the midst of summary judgment briefing on the Department's administrative appeal of Director Hamer's initial April 2009 decision granting the exemption. Id. at *9-10.

B. Building Code Issues and Further Litigation

The Church was not the only source of friction between the Michaels and the Village. After moving into their home in late 2004, the Michaels built a stairway from their home to the beach, a large deck on the beach, and an electric tram capable of transporting Susan down the bluff. In February 2006, George applied for a permit for an extension to the detached garage-which had been on the property for 75 years, and which already had a shower and kitchenette-but later withdrew the application because of the Village's onerous permitting requirements. When a tree fell on the garage later that year, the family proceeded with the extension without first obtaining a permit. The extension, completed in July 2006 and leaving untouched the shower and kitchenette, violated the Village Code's setback requirements. George ultimately paid two fines, totaling several thousand dollars, to resolve the violations.

In September 2008, the Michaels added a ramp to their beach deck, which allowed Susan to reach the deck in her wheelchair. On September 25, 2008, the day the project was completed, Nellessen delivered a stop work order to the Michael home. "It is believed," says the complaint, that Nellessen banged on the back door and threatened Susan with jail time, causing her to suffer autonomic symptoms. Doc. 1 at ¶ 163. When George contacted the Village about the ramp, he was told it could not be used until he applied for a permit, submitted four sets of drawings, and satisfied fifteen additional requirements. George did not comply, but did not hear about the ramp again until the issue reemerged in state court litigation over a year later.

The additional state court litigation arose as follows. After the Department issued its final ruling denying the property tax exemption, Nellessen, Irwin, Letchinger (the Village President), and Friedman agreed to attempt to recover the Village's litigation costs by pursuing pending fines and instituting new actions against the Michaels. As part of the scheme, the village officials agreed to deny the fact that the Michaels had submitted several architectural drawings to the Village. On October 20, 2009, Irvin prepared a Notice of Zoning Violation, which concerned the shower and living quarters in the garage. The Notice indicated that the Michaels could face fines up to $500 per day, for a total penalty of $577,500, if the structure was not brought into compliance with zoning regulations.

In late 2009, the Village filed another suit against the Church, George, and Susan in the Circuit Court of Lake County, seeking payment of fines due to the shower in the Michaels' detached garage and other Building Code violations. See Village of Lake Bluff v. Armenian Church of Lake Bluff, 09 CH 6241 (Docs. 30-3 & 30-4). This lawsuit has since been consolidated with the 2008 lawsuit regarding the Church-related zoning violations and an earlier 2009 lawsuit, Village of Lake Bluff v. Armenian Church of Lake Bluff, 08 CH 9302 (described at Doc. 30 at 7). On January 12, 2010, Nellessen and two police officers served the complaint on Susan. "It is believed" that Nellessen rang the doorbell and, when Dorothy answered the door, demanded to know where Susan was. Doc.1 at ΒΆ 196. Dorothy lied about Susan's whereabouts and, when Susan came to the door, Nellessen shook his fist at Dorothy and loudly asked, "You always lie like that to strangers?" He then asked Susan, "Do you teach your children to lie?" "It is believed" that when Susan tried to come between Nellessen and her daughter, she had an ...


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