T&T Management, Inc. v. City of Detroit

CourtDistrict Court, E.D. Michigan
DecidedMarch 1, 2022
Docket2:21-cv-10900
StatusUnknown

This text of T&T Management, Inc. v. City of Detroit (T&T Management, Inc. v. City of Detroit) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
T&T Management, Inc. v. City of Detroit, (E.D. Mich. 2022).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

T&T MANAGEMENT, INC.,

Plaintiff, Case No. 21-10900

v. HON. MARK A. GOLDSMITH

CITY OF DETROIT,

Defendant. __________________________________/ OPINION & ORDER GRANTING DEFENDANT’S MOTION TO DISMISS (Dkt. 5)

This matter is before the Court on Defendant City of Detroit’s motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) (Dkt. 5). For the reasons stated below, the Court grants the motion.1 I. BACKGROUND Plaintiff T&T Management (T&T) brings this action against Defendant the City of Detroit in connection with real property adjacent to Detroit City Airport. Compl. (Dkt. 1). In 1997, Merkur Steel Supply, Inc. (T&T’s predecessor entity) became the tenant of the property under a written lease with HRT Enterprises. Id. ¶ 8. The lease contained an initial term of five years and two five-year option periods, for a total term that lasted until 2012. Id. In 1999, Merkur sued the City in Michigan’s Wayne County Circuit Court, alleging that the City had inversely condemned Merkur’s property rights as the tenant of the property. Id. ¶ 6. In 2002, a jury found that the City had partially inversely condemned Merkur’s property rights by preventing Merkur from using the

1 Because oral argument will not aid the Court’s decisional process, the motion will be decided based on the parties’ briefing. See E.D. Mich. LR 7.1(f)(2); Fed. R. Civ. P. 78(b). In addition to the motion, the briefing includes T&T’s response to the motion to dismiss (Dkt. 6), the City’s reply (Dkt. 8), the City’s supplemental brief (Dkt. 10), and T&T’s response to the City’s supplemental brief (Dkt. 11). vacant land to expand its business. Id. ¶ 6. The Michigan state court entered a final judgment that obligated the City to pay Merkur $3,800 per month as just compensation for its future damages. Id. Under the judgment, the City must continue the payments until one of three events occurs: (i) Merkur ceases to lease the property; (ii) the City acquires ownership of the property; or (iii) the City lifts certain building restrictions that prevent construction of a building on the vacant five- acre parcel. Id.; Final J. at PageID.29–31 (Dkt. 1).2 On June 23, 2017, the City notified Merkur that, as of that day, it had terminated the $3,800

monthly payments due under the final judgment because it concluded that Merkur had ceased to lease the property. 6/23/17 Letter at PageID.61 (Dkt. 1). Merkur filed a motion in the state court to enforce the judgment and to require the City to make monthly payments from July 2017 to the present. Compl. ¶ 44; Mot. to Enforce J. at PageID.63–66 (Dkt. 1). After oral argument, the state court denied the motion based on its determination that Merkur had ceased to lease the property and that, therefore, under the judgment, the City was no longer required to make monthly payments. Compl. ¶ 45. Merkur then filed a motion for reconsideration in which it argued that the court made the factual finding that there was no lease without any testimony from the parties and without application of the law based on any findings. Mot. for Reconsideration ¶ 12 at PageID.96–99

(Dkt. 1). It also contended that the court’s ruling was clearly erroneous because the lease between Merkur and HRT Enterprises contained a provision that if Merkur became a holdover tenant, the lease would continue on a month-to-month basis. Id. ¶ 13. And it stated that T&T continued to

2 The final judgment, letter regarding monthly payments, motion to enforce the judgment, motion for reconsideration, and orders from the Michigan Court of Appeals and the Michigan Supreme Court (all cited below) are referenced in and attached to the complaint. Accordingly, the Court may consider them on the motion to dismiss. Com. Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327, 335 (6th Cir. 2007) (“[D]ocuments attached to the pleadings become part of the pleadings and may be considered on a motion to dismiss.”). lease the property based on the possibility that the City would eventually remove the restrictions on the property. Id. ¶ 14. The state court denied the motion for reconsideration. Compl. ¶ 47. Merkur filed an application for leave to appeal in the Michigan Court of Appeals, which denied the application for lack of merit in the grounds presented. Id. ¶ 48; Mich. Ct. App. 7/22/20 Order at PageID.122 (Dkt. 1). Merkur appealed the order of the Michigan Court of Appeals to the Michigan Supreme Court, which denied review because it was “not persuaded that the question presented should be reviewed by this Court.” Compl. ¶ 48; Mich. Supreme Ct. 12/22/20 Order at

PageID.124 (Dkt. 1). Having succeeded by way of a corporate merger to Merkur’s rights under the final judgment, Compl. ¶¶ 9–10, T&T brought this action, asserting a procedural due process claim and a Fifth Amendment claim. The procedural due process claim is based on two grounds. First, T&T alleges that it was denied procedural due process when the City terminated monthly payments without notice and an opportunity to be heard and without a court’s permission. Id. ¶¶ 52–53. Second, T&T alleges that it was again denied procedural due process when (i) the Wayne County Circuit Court found that Merkur’s lease had been terminated without holding an evidentiary hearing or trial and without making any application of the law based on factual findings, and (ii) the Michigan Court of Appeals and Michigan Supreme Court denied review. Id. ¶¶ 46, 55. T&T also brings a

Fifth Amendment claim, alleging that the City’s termination of payments and the “judicial endorsement thereof” constituted a taking of T&T’s property without just compensation. Id. ¶ 63. T&T seeks (i) a judgment determining that the City has deprived T&T of its due process rights; (ii) an injunction to prohibit the City from terminating monthly payments under the final judgment unless one of the three conditions is met; (iii) an order to enforce the final judgment and require the City to make payments under the final judgment from July 2017 to the present; (iv) other appropriate relief; and (v) costs and attorney fees. Id. ¶¶ 58, 65. The City filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) (Dkt. 5). T&T filed a response (Dkt. 6), and the City filed a reply (Dkt. 8). Without seeking leave of the Court, the City also filed supplemental authority in support of the motion (Dkt. 10), to which T&T responded (Dkt. 11). II. ANALYSIS3 The City argues that T&T’s claims should be dismissed for several reasons. First, it contends that neither the 2002 judgment nor any law entitled T&T to notice and an opportunity to be heard

on whether Merkur’s lease had ended or required the City to seek judicial permission to stop making payments once it determined the lease had ended. Mot. at 6; Reply at 6. Second, it asserts that the Rooker-Feldman doctrine bars T&T’s claim alleging that the state court denied T&T due process and committed an unconstitutional taking when the state court determined that the lease had ended and, therefore, denied the motion to enforce the final judgment. Mot. at 10–11; Supp. Authority at 2–3. Third, it states that T&T’s takings claim based on the City’s termination of payments is barred by Michigan’s doctrine of collateral estoppel. Mot. at 7–10; Reply at 1–3. The Court addresses each argument in turn.4 A.

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T&T Management, Inc. v. City of Detroit, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tt-management-inc-v-city-of-detroit-mied-2022.