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Schultz v. Averett

United States District Court, D. Utah, Central Division

July 12, 2019

CHARLES A. SCHULTZ, Plaintiff,
v.
MICHAEL AVERETT, HEATHER BATEMAN, KASEY BATEMAN, JAY BINKERD, JONATHAN BLOTTER, ERIC BUNKER, LYNN CRISLER, LAMBERT DEEGAN, MICHAEL DUGGIN, JOHN GLODOWSKI, DIANE GROASE, DANIEL HARVATH, KIM NORRIS, ED PRESSGROVE, LANCE TURNER, PAM SKINNGER, LYNNE SCHINDURLING, FRANCIS SMITH, GARY WALTON, GARY WEIGHT, and THE TOWN OF DANIEL, Defendants.

          JILL N. PARRISH DISTRICT JUDGE

          REPORT AND RECOMMENDATION RE: THE DEFENDANTS' MOTION TO DISMISS, IN PART, PLAINTIFF'S SECOND AMENDED COMPLAINT (ECF NO. 57)

          EVELYN J. FURSE UNITED STATES MAGISTRATE JUDGE

         The Defendants the Town of Daniel (“the Town”) and Eric Bunker (collectively “the Town Defendants”) move the Court[1] to dismiss the eighth cause of action for an unlawful government taking and all claims against Mr. Bunker in Plaintiff Charles Schultz's Second Amended Complaint for failure to state a claim upon which this Court can grant relief. (Defs.' Mot. to Dismiss, in Part, Pl.'s 2nd Am. Compl. (“Mot.”) 1-2, ECF No. 57.) The Town Defendants argue Mr. Schultz's takings claim and his claims against Mr. Bunker fail because Mr. Schultz failed to cure the deficiencies in his first Amended Complaint. (Id. at 4-8.) Mr. Bunker specifically argues Mr. Schultz's claims against him in his individual capacity fail because he only alleges actions taken “in a representative capacity on behalf of the Town.” (Mot. 4, ECF No. 57). Mr. Bunker further contends, to the extent Mr. Schultz alleges claims against him in his individual capacity, his claims again fail as a matter of law because he failed to state a claim against him under 42 U.S.C. § 1983. (Id. at 6.) Additionally, the Town argues this Court should dismiss Mr. Schultz's eighth cause of action because he again presents an unripe takings claim. (Id. at 7-8.) The Town seeks its attorneys' fees for bringing the present Motion because Mr. Schultz reasserts claims “previously dismissed by the Court without curing any of the defects specifically identified by the Court.” (Id. at 8.)

         On June 21, 2019, the United States Supreme Court issued its decision in Knick v. Twp. of Scott, __ U.S. __, 139 S.Ct. 2162, 2179 (2019), overturning the state-level exhaustion requirement established in Williamson Cty. Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985). The Court held that a plaintiff may bring a Fifth Amendment unlawful takings claim under 42 U.S.C. § 1983 at the time a government takes his or her property without just compensation and need not first pursue a state-level action before seeking relief in federal court. Knick, 139 S.Ct. at 2167-68. In light of the Supreme Court's ruling, the undersigned issued an Order directing the parties to file a statement as to whether, and/or how, the decision in Knick altered their positions with respect to Mr. Schultz's takings claim. (Docket Text Order, ECF No. 102.) On July 8, 2019, the Town Defendants filed their statement withdrawing their pending Motion as to Mr. Schultz's takings claim. (Defs.' Statement Re: Knick v. T'ship of Scott Ordered by Docket No. 102 (“Defs.' Statement”), ECF No. 105 at 2.) Therefore, the Town Defendants' Motion to Dismiss now addresses only the claims against Mr. Bunker.

         Having carefully considered the parties' briefing, [2] and taking all factual allegations as true, the undersigned RECOMMENDS the District Judge GRANT the Town Defendants' Motion to Dismiss all claims against Mr. Bunker because the Second Amended Complaint fails to state a claim under § 1983. Lastly, the undersigned RECOMMENDS the District Judge DENY the Town Defendants' request for attorneys' fees under 28 U.S.C. § 1927 because Mr. Schultz's actions do not constitute unreasonable and vexatious conduct.

         FACTUAL AND PROCEDURAL HISTORY

         On October 12, 2017, Mr. Schultz filed his first Amended Complaint alleging seventeen causes of action. (Am. Compl., ECF No. 32.) Defendants Michael Averett, Heather Bateman, Kasey Bateman, Jay Binkerd, Jonathan Blotter, Eric Bunker, Lynn Crisler, Lambert Deegan, Michael Duggin, John Glodowski, Diane Groase, Daniel Harvath, Kim Norris, Ed Pressgrove, Lynne Schindurling, Pam Skinnger, Francis Smith, Lance Turner, Gary Walton, Gary Weight, and the Town of Daniel (collectively the “Daniel Defendants”) filed a Motion to Dismiss for failure to state a claim. (Defs.' Mot. to Dismiss & Supp'g Mem., ECF No. 33.)

         On August 22, 2018, the undersigned issued a Report and Recommendation to grant in part and deny in part the Daniel Defendants' Motion. With specific relevance to the instant Motion to Dismiss, the undersigned recommended dismissing all claims against the individual defendants without prejudice because the Amended Complaint failed to plead any facts explaining “what actions the individuals took or failed to take, and in what capacity they acted.” (R&R to Grant the Defs.' Mot. to Dismiss (“R&R”) 9, ECF No. 49.) The undersigned recommended giving Mr. Schultz an opportunity “to amend his Complaint to include more detailed factual pleadings against the individuals.” (Id.) The undersigned further noted if Mr. Schultz intended to make a claim for financial damages against the individual defendants for any federal constitutional violations, then he must state a claim pursuant to 42 U.S.C. § 1983. (Id. at 9-11 .)

         On September 12, 2018, the District Judge adopted the Report and Recommendation in its entirety and granted Mr. Schultz “twenty-one days to file an amended complaint that remedies the deficiencies identified in the Report and Recommendation, if he can.” (Order Adopting R&R (“Order”) 4-5, ECF No. 51.)

         On November 2, 2018, Mr. Schultz filed his Second Amended Complaint. (2d. Am. Compl., ECF No. 54.) Taking the factual allegations in the Second Amended Complaint as true, Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)), the following facts provide the background for this decision.

         On June 1, 1999, Mr. Schultz purchased a home on 3.71 acres in Wasatch County, Utah. (2d. Am. Compl. ¶¶ 8, 12, 13, ECF No. 54.) At the time Mr. Schultz purchased the property, Wasatch County had zoned the property along with all of the property on that street, 3000 South, residential/agriculture (“RA”). (Id. at ¶ 15.) On May 1, 2002, a fire destroyed Mr. Schultz's property. (Id. at ¶ 12.) Mr. Schultz's property, along with all of the property on 3000 South, retained its RA designation “until sometime in 2006, after the Town of Daniel became a town, and rezoned the property along 3000 South to RA-5 (residential/agriculture, five acre minimum).” (Id. at ¶ 17) (footnote omitted).

         In February 2006, the Town of Daniel filed articles of incorporation with the Wasatch County Recorder. (See id. at ¶¶ 8, 16.) Mr. Schultz's property sits in the Town of Daniel. (Id. at ¶ 17.) No one notified Mr. Schultz of the Town of Daniel's incorporation, and he did not know the area became a town until April or May of 2014. (Id. at ¶¶ 16, 20-21.) In fact, Mr. Schultz continued to pay taxes on his property as a residential lot and therefore overpaid his property taxes to the Town of Daniel. (Id. at ¶¶ 42-45.)

         In 2006 or 2007, the Town of Daniel passed a code that changed Mr. Schultz's property's zoning from RA to RA-5. (Id. at ¶¶ 18-19.) Mr. Schultz first learned the Town of Daniel had changed the zoning of his property in April or May of 2014 while attempting to sell his property. (Id. at ¶¶ 23-25.) After experiencing difficulty selling his property, Mr. Schultz contacted the Town of Daniel who

told [him] a home could not be built on his property, because the Town of Daniel had passed Daniel Town Code, Section 8.22.03, that states that [he] could not build a new home on his property, because he did not rebuild a new home on his property, within one year after the home on his property was destroyed by fire, on May 1, 2002, unless [he] could provide the Town of Daniel with a document called a “Lot of Record, ” even though the Town of Daniel did not exist, until ...

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