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Parkview Homes, LLC v. City of Lexington

United States District Court, D. Minnesota

February 27, 2017

Parkview Homes, LLC, Plaintiff,
City of Lexington, Defendant.

          Thomas F. DeVincke, Malkerson Gunn Martin LLP, for Plaintiff.

          George C. Hoff and Justin L. Templin, Hoff Barry & Kozar, P.A., for Defendant.


          SUSAN RICHARD NELSON, United States District Judge

         This matter is before the Court on Defendant's Motion for Summary Judgment [Doc. No. 27]. For the reasons set forth below, that Motion is granted in part and denied in part.

         I. BACKGROUND

         The material facts of this matter are undisputed. Instead, the parties dispute the significance of some facts and which facts are relevant. The Court notes these disputes where necessary to its analysis.

         A. Facts

         Plaintiff Parkview Homes, LLC (“Parkview”) is a Minnesota limited liability company that is wholly owned by National Loan Acquisitions Company (“NLAC”). (Def's Mem. of Law in Supp. of its Mot. (“Mem. in Supp.”) at 2 [Doc. No. 29].) Parkview owns and operates a manufactured home community located in the City of Lexington, Minnesota (the “City”). (Compl. at ¶ 3 [Doc. No. 1-1].)

         Parkview hopes to adding new manufactured homes to the Community. Before it may do so, however, the City must first approve permits for the siting of those homes. (See Compl. at ¶ 13; Mem. in Supp. at 2.) Parkview proposed its plan for these new manufactured homes to the City in 2014 and the parties have disputed that plan ever since. In general, Parkview asserts that the City is obstructing the approval of its permit applications in an attempt “to shut down a manufactured home community in favor of more desirable economic redevelopment.” (Pl's Mem. in Opp. to Def's Mot. (“Mem. in Opp.”) at 2 [Doc. No. 48]). In contrast, the City views the Community as a “historically problematic property” for which Parkview has not presented a sufficiently detailed renovation and redevelopment plan. (See Compl., Ex. C (“Ltr. dated 1/9/2015”) at 12.[1])

         Parkview first proposed adding twenty-eight new manufactured homes to the Community in the summer of 2014. (Mem. in Opp. at 3.) Soon after this initial proposal, the City informed Parkview that the proposed homes did not meet the building code's (the “Code”) minimum square footage and width requirements and thus the City would not approve the requested permits. (Id. at 4.) In September of 2014, Parkview sent a letter to the City disputing this assessment. (Id. at 5.) Specifically, Parkview claimed that manufactured homes within the Community were exempt from the dimensional requirements of the Code by its own terms. (Id.)

         In October of 2014, the City required that Parkview provide specifications about the proposed homes to the building inspector for review. (Id. at 6.) Parkview complied and provided the requested materials. (Id.) On January 9, 2015, the City expressed concerns about a number of infrastructure issues in the Community, in particular the water system. (Id.; see Ltr. dated 1/9/2015.) The City doubted that Parkview could make the investments required to correct the Community's alleged infrastructure deficiencies. (Ltr. dated 1/9/2015 at 11-12.) In light of this doubt, the City threatened condemnation if Parkview did not provide it with certain “planning and performance assurances.” (Id.)

         Despite the letter from the City, Parkview again submitted permitting applications for twenty new manufactured homes in July of 2015. (Mem. in Opp. at 7; Mem. in Supp. at 2.) Those applications were denied by the City on August 14, 2015. (Mem. in Supp. at 3; see Compl., Ex. D (“Ltr. dated 8/14/2015”) at 13-16.) The City notified Parkview that it would not approve Parkview's applications until it satisfied six requirements. (See Ltr. dated 8/14/2015; Mem. in Supp. at 3-4.) Those six requirements were that Parkview: 1) provide a “comprehensive plan” of its “proposed rehabilitation of the park, ” including information on lot setbacks and boundaries, construction and utility plans, storm water compliance, disability accessibility, and sewer discharge data; 2) remove structures or units located within the municipal right of way; 3) provide the City with test results on the Community's water delivery and sewer systems, as well as data on the improvements that Parkview made to the water delivery system in 2015; 4) identify abandoned structures, units, and lots; 5) disclose any existing units that were used for business purposes and identify any of the proposed units that would be used in similar ways; and 6) discontinue the use and occupation of a particular home in the Community that was previously cited for Code violations and remove that unit from its present lot. (See Ltr. dated 8/14/2015; Mem. in Supp. at 3-4.)

         B. Procedural History

         Parkview filed suit in state court shortly after receiving the City's August 14, 2015 letter. (See Compl.) Parkview's suit presents two counts. (Id.) First, Parkview seeks a declaratory judgment that the City's refusal to issue the requested permits-based on its interpretation of the Code-is improper because it conflicts with federal law regarding the requirements for manufactured homes (i.e., that federal law preempts the Code). (Compl. at ¶¶ 7, 16-18.) Second, Parkview asserts a claim under 42 U.S.C. § 1983 alleging that the City “impermissibly attempted to interfere and actually interfered” with Parkview's property interests in the Community by refusing to issue the requested permits under false pretenses. (See id. at ¶¶ 19-25.) Although not specifically stated as a claim, Parkview also alleges that the City's attempts to enforce the Code against the Community would violate Minn. Stat. § 462.357 by altering the Community's existing density. (Id. at ¶ 9.) The City removed this case to federal court based on the federal questions raised in Parkview's preemption and § 1983 claims. (See Not. of Removal [Doc. No. 1-2]; Civ. Cover Sheet [Doc. No. 1-3].)

         At the November 21, 2016 hearing on the City's Motion for Summary Judgment, Parkview admitted that its § 1983 claim was based on state-not federal-tort and due process law. In light of this admission and based on the record and briefing, the Court notified the parties that it would grant the Motion with respect to the preemption and § 1983 claims. However, the Court expressed concern about whether it should exercise pendent jurisdiction and decide any remaining state law claim(s). The Court agreed to retain jurisdiction over those claims for a limited time to allow the parties to engage in settlement discussions. However, shortly thereafter, the parties informed the Court that settlement would not be possible. (See Doc. Nos. 49, 50.) Thus, as discussed at the hearing on the Motion, the Court issues this Order disposing of this case..


         A. Legal Standard

         Summary judgment is proper if, drawing all reasonable inferences in favor of the non-moving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986); Morriss v. BNSF Ry. Co., 817 F.3d 1104, 1107 (8th Cir. 2016), cert. denied, (U.S. Oct. 3, 2016). ‚ÄúSummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, ...

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