Opinion
No. 351306
02-18-2021
LL RESTAURANT, INC., doing business as SIGNATURE CHOP HOUSE, Plaintiff-Appellant, v. CITY OF FLUSHING, BRAD BARRETT, and KIMBERLY LYNCH, Defendants-Appellees.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Genesee Circuit Court
LC No. 18-111541-CZ Before: BOONSTRA, P.J., and BORRELLO and RICK, JJ. PER CURIAM.
Plaintiff appeals by right the trial court's order denying its motion for summary disposition, granting defendants' motion for summary disposition, and dismissing its claims. We affirm.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
Plaintiff owns and operates the Signature Chop House restaurant in Flushing. For tax years 2016 and 2017, plaintiff failed to submit personal property statements to defendant City of Flushing (the city), so the city estimated the value of plaintiff's personal property for purposes of calculating plaintiff's personal-property tax liability; according to defendants, plaintiff was sent notices of the resulting tax assessments. Defendant Brad Barrett (Barrett) was the city's manager during the relevant period, and defendant Kimberly Lynch (Lynch) was its treasurer. Plaintiff's owner, Lenora Lulgjuraj (Lulgjuraj), claimed that she did not receive notice of the 2016 and 2017 property tax assessments until it was too late for her to protest the amount of the assessments with the Tax Tribunal. Plaintiff eventually paid the 2016 personal property taxes, but was late in doing so.
In May 2018, the city's attorney sent plaintiff a letter stating that plaintiff owed past-due personal property taxes for 2017 in the amount of $12,838.86, and that the city could forcibly close plaintiff's restaurant if the amount was not paid. In subsequent proceedings, plaintiff did not deny receiving this notice, although it disputed the amount owed.
On the morning of August 27, 2018, and after consulting with Barrett and Lynch, city officials arrived at plaintiff's restaurant, placed padlocks and chains on the restaurant's main entrance and gates, and posted notices on the building stating that the city was seizing the property inside the restaurant under MCL 211.47(1). Defendants chose a Monday morning for this activity because they knew that the restaurant was closed to the public that day, to avoid any embarrassment to plaintiff in front of its customers, and to lessen any safety risks. A side door to the restaurant was not padlocked and plaintiff's employees were still allowed to enter the restaurant. Later that day, plaintiff opted to pay its past-due taxes and the chains and padlocks were removed. Plaintiff had a private banquet scheduled that day at 5:00 p.m., which was held as scheduled.
MCL 211.47(1) provides:
If a person neglects or refuses to pay a tax on property assessed to that person, the township or city treasurer, as appropriate, shall, or for the state education tax levied under the state education tax act, 1993 PA 331, MCL 211.901 to 211.906, the state treasurer may also, subject to subsection (4), collect the tax by seizing the personal property of that person, in an amount sufficient to pay the tax, the fees, and the charges, for subsequent sale of the property, and no property is exempt. The treasurer may sell the property seized, in an amount sufficient to pay the taxes and all charges, at public auction in the place where seized or in the township or city of which he or she is treasurer or for the state treasurer, anywhere in the state. The treasurer shall give public notice of the auction at least 5 days before the sale by posting written or printed notices in 3 public places in the township, village, or city where the sale is to be made. The sale may be adjourned from time to time if the treasurer considers it necessary. If the property is seized and advertised, the sale may take place at any time within 6 days after the expiration of the warrant of sale. If it is necessary to sell personal property that brings more than the amount of taxes and charges, the balance shall be returned to the person from whose possession the property was taken. However, if the state seizes and sells property and the sale brings more than the amount of the state education tax and charges due, the state shall distribute the balance on a pro rata basis to any other local taxing units to which delinquent personal property taxes on that property remain unpaid. If property seized under this section cannot be sold for want of bidders, and in that case only, the treasurer shall return a statement of that fact and the tax shall be returned as unpaid.
Plaintiff brought this action, raising multiple claims. Counts I through III were against all defendants and alleged that defendants had exceeded their authority under MCL 211.47 of the General Property Tax Act (GPTA), MCL 211.1 et seq, deprived plaintiff of federal constitutional rights in violation of 42 USC 1983 by seizing of plaintiff's business without substantive or procedural due process, and forcibly and unlawfully ejected or interfered with plaintiff's possessory interest in its land in violation of MCL 600.2918. Count IV alleged tortious interference with a business relationship, and was asserted against Barrett and Lynch. Count V alleged a claim for gross negligence against Barrett and Lynch. In answering the complaint, defendants raised governmental immunity and qualified immunity as affirmative defenses. After discovery, plaintiff and defendants filed cross-motions for summary disposition under MCR 2.116(C)(10). The trial court rejected plaintiff's arguments, agreed with defendants' arguments, and dismissed all claims. In granting defendants' motion, the trial court stated that it "sustain[ed] the position on the immunity arguments" made by defendants, and it also found that plaintiff's claims lacked substantive merit.
This appeal followed.
II. STANDARD OF REVIEW
We review de novo a trial court's decision on a motion for summary disposition. Spiek v Dep't of Transp, 456 Mich 331, 337; 572 NW2d 201 (1998). Plaintiff and defendants both moved for summary disposition under MCR 2.116(C)(10). A motion under MCR 2.116(C)(10) tests the factual support for a claim. A court must consider the pleadings, affidavits, depositions, admissions, and any other documentary evidence submitted by the parties, and view that evidence in the light most favorable to the nonmoving party to determine if a genuine issue of material fact exists. MCR 2.116(G)(5); Maiden v Rozwood, 461 Mich 109, 118-120; 597 NW2d 817 (1999). Summary disposition should be granted if, except as to the amount of damages, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Babula v Robertson, 212 Mich App 45, 48; 536 NW2d 834 (1995).
Although defendants did not expressly bring their motion under MCR 2.116(C)(7) (claim barred by governmental immunity), they did raise the defense of governmental immunity in both their own motion for summary disposition and their response to plaintiff's motion, and the trial court granted summary disposition in part on that basis.
We review de novo the applicability of governmental immunity as a question of law. Margaris v Genessee County, 324 Mich App 111, 115; 919 NW2d 659 (2018). Under MCR 2.116(C)(7), summary disposition is appropriate where the affidavits, depositions, admissions, and other documentary evidence, viewed in the light most favorable to the plaintiff, show that the governmental agency or employee is entitled to immunity as a matter of law. Id.
III. STATE LAW CLAIMS
Plaintiff argues that the trial court erred by dismissing its claims against all defendants for the violation of MCL 211.47 and for forcible ejectment, and additionally by dismissing its claims against Barret and Lynch for tortious interference with a business relationship and gross negligence. We disagree.
A. GOVERNMENTAL IMMUNITY
1. THE CITY
We conclude that the city was entitled to governmental immunity on plaintiff's claims for the violation of MCL 211.47 and forcible ejectment. Both of these claims are based on the city's actions, through its employees, in seizing plaintiff's property to satisfy delinquent personal property taxes as permitted by MCL 211.47.
Apart from certain enumerated exceptions, governmental agencies are immune from tort liability when engaged in the exercise or discharge of a governmental function. MCL 691.1407(1); Adam v Sylvan Glynn Golf Course, 197 Mich App 95, 96-97; 494 NW2d 791 (1992). Activity that is mandated or authorized by law is a governmental function. Adam, 197 Mich App at 97. Plaintiff's claims against the city are based on the allegedly wrongful seizure of plaintiff's property to collect delinquent taxes, an act authorized by MCL 211.47. Although plaintiff alleges that this particular seizure was unlawful because the amount seized was excessive, when analyzing whether a governmental entity is performing a governmental function, we focus on the general nature of the activity rather than specific conduct. Marlin v Detroit, 177 Mich App 108, 112-113; 441 NW2d 45 (1989); see also Petersen Financial LLC v City of Kentwood, 326 Mich App 433, 453; 928 NW2d 245 (2018) (holding that the city defendant was entitled to governmental immunity for claims arising from its allegedly improper collection of special assessments). The trial court therefore did not err by granting summary disposition in favor of the city on these claims.
2. BARRETT AND LYNCH
We also conclude that Barrett and Lynch were entitled to qualified immunity on plaintiff's state law claims. In Odom v Wayne Co, 482 Mich 459, 479-480; 760 NW2d 217 (2008), our Supreme Court summarized the tests courts are to apply to determine whether governmental employees are entitled to qualified immunity:
(1) Determine whether the individual is a judge, a legislator, or the highest-ranking appointed executive official at any level of government who is entitled to absolute immunity under MCL 691.1407(5).
(2) If the individual is a lower-ranking governmental employee or official, determine whether the plaintiff pleaded an intentional or a negligent tort.
(3) If the plaintiff pleaded a negligent tort, proceed under MCL 691.1407(2) and determine if the individual caused an injury or damage while acting in the course of employment or service or on behalf of his governmental employer and whether:
(a) the individual was acting or reasonably believed that he was acting within the scope of his authority,
(b) the governmental agency was engaged in the exercise or discharge of a governmental function, and
(c) the individual's conduct amounted to gross negligence that was the proximate cause of the injury or damage.
(4) If the plaintiff pleaded an intentional tort, determine whether the defendant established that he is entitled to individual governmental immunity under the Ross test by showing the following:
(a) The acts were undertaken during the course of employment and the employee was acting, or reasonably believed that he was acting, within the scope of his authority,
(b) the acts were undertaken in good faith, or were not undertaken with malice, and
(c) the acts were discretionary, as opposed to ministerial.
Barrett and Lynch are not the highest-ranking executives at any level of government within the city; they are instead appointed by, and serve at the pleasure of, the city council. Consequently, they are not entitled to absolute immunity. Plaintiff has primarily pleaded that Barrett and Lynch committed intentional torts, but they also allege gross negligence; we will therefore consider Odom's tests both for intentional torts and for negligence.
The factor common to both tests is whether an employee was acting, or reasonably believed he was acting, within the scope of his authority. Odom, 482 Mich 479-480. Barrett testified at his deposition that he was the city's chief administrative officer and supervised Lynch; he also testified that the city charter gave the treasurer the authority to collect past-due taxes. Barrett stated that after consulting with the city attorney and receiving legal counsel, he instructed Lynch to secure plaintiff's property, as permitted by the city's charter. Lynch testified that she was directed by Barrett to secure the property and consulted with the police chief and fire chief regarding safety concerns and the timing for placing the padlocks. Lynch testified that her goal in having the padlocks placed on plaintiff's property was to secure removable assets of the business until they could be seized and sold to pay plaintiff's delinquent taxes.
Even when viewed in the light most favorable to plaintiff, Maiden, 461 Mich at 118-120, the evidence presented to the trial court showed that Barrett and Lynch were acting within the scope of their authority as employees of the city, or reasonably believed that they were. Lynch was given the explicit authority by the city charter to collect delinquent taxes, and Barrett was both her supervisor and responsible for day-to-day operations of the city, including addressing budgetary concerns caused by tax shortfalls.
Regarding plaintiff's intentional-tort claims, there is sparse caselaw on the issue of governmental employees' entitlement to immunity for claims alleging a violation of MCL 211.47 in particular; one federal court has opined that Michigan courts would not hold governmental employees immune from challenges brought under MCL 211.47, see American Excavators, Inc v Parshall, 595 F Supp 1092, 1096 (WD MI, 1984), citing Raynsford v Phelps, 43 Mich 342; 5 NW 403 (1880), basing its reasoning on its determination that the distraint of property for tax collection purposes was a "ministerial" rather than "discretionary" act. See also Ross v Consumers Power Co (On Rehearing), 420 Mich 567, 595-596; 363 NW2d 641 (1984) (defining ministerial and discretionary acts). A discretionary act is one that involves significant decision-making entailing personal deliberation, decision and judgment, while a ministerial act involves the execution or implementation of a decision and entails only minor decision making. Ross, 420 Mich at 592; Oliver v Smith, 290 Mich App 678, 688-689; 810 NW2d 57 (2010). However, the acts of Barrett and Lynch that plaintiff alleges form the basis of its claims against them involved discretionary acts; in fact, plaintiff accuses them of failing to exercise "sound discretion" so as to seize only enough property to satisfy the tax obligation. See Fidlin v Collison, 9 Mich App 157, 167; 156 NW2d 53 (1967). We conclude that the acts that plaintiff alleges to have caused it injury were discretionary, rather than ministerial, in nature. Odom, 482 Mich 479-480.
Decisions of a federal district court interpreting Michigan law are not binding on Michigan courts, but may be persuasive. Linsell v Applied Handling, Inc, 266 Mich App 1, 16; 697 NW2d 913 (2005). However, in American Excavators, 595 F Supp at 1096, the district court analyzed an earlier version of the Michigan governmental immunity statute and opined generally that Michigan law held the seizure of property taxes to be a ministerial duty. Yet, the case it cited for that proposition, Raynsford, did not establish such a clear rule; in fact, although it referred to tax collection as a "ministerial" duty, Raynsford actually stated that a tax collector may be held liable for the seizure of private property if he violates the statute under which he seizes that property: "the officer is commissioned by the law to act only with due respect to the rights of individuals, and . . . if he acts otherwise and causes special injury, he disobeys his commission, and is not within the protection the commission might otherwise give." Raynsford, 43 Mich at 346. We are not persuaded by American Excavators to establish a bright-line rule that the seizure of property for the collection of taxes is always a ministerial duty.
There was also no evidence that Barrett or Lynch carried out these discretionary acts with malice or with a lack of good faith. Malice or the absence of good faith may be shown through evidence of conduct willfully intended to harm the plaintiff, or that demonstrates an indifference to whether harm will result. Id. at 475. Here, as we have discussed, the padlocking did not prevent plaintiff's employees from entering the restaurant through a side door. Further, the business was not open to the public on the day it was padlocked, and the padlocks were in place for a total of 118 minutes before they were removed after plaintiff paid the outstanding amount owed. Lynch testified that she consulted with police and fire officials about safety concerns, and that Barrett and Lynch chose a time when plaintiff's business was closed in order to provide the least amount of disruption to plaintiff's business. Nothing in the evidence presented to the trial court supports an inference that Barret or Lynch either intentionally sought to harm plaintiff or acted with wanton disregard of the harm their actions would cause. Id.
Regarding the remaining Odom factors for allegations of negligence, as discussed, the city was engaged in the exercise or discharge of a governmental function at the time of the allegedly injurious acts. Id. And plaintiff did not provide any evidence to support its claim that Barrett and Lynch were grossly negligent.
In Bellinger v Kram, 319 Mich App 653, 659-660; 904 NW2d 870 (2017), this Court explained:
"Gross negligence" is statutorily defined as "conduct so reckless as to demonstrate a substantial lack of concern for whether an injury results." MCL 691.1407(8)(a). Grossly negligent conduct must be conduct that is "substantially more than negligent." Maiden, 461 Mich at 122. Generally, allegations or evidence of inaction or claims that a defendant could have taken additional precautions are insufficient. See Tarlea v Crabtree, 263 Mich App 80, 84-86, 90-92; 687 NW2d 333 (2004) (requiring students to exercise in high temperatures and high humidity was not gross negligence when the defendants required student athletes to obtain a physical examination before participation, provided student athletes with adequate water and food, and allowed breaks). However, evidence that a defendant engaged in affirmative actions contrary to professionally accepted standards and then sought to cover up those actions does establish gross negligence. See Maiden, 461 Mich at 128-130 (performing an autopsy without the requisite anatomical knowledge and then attempting to conceal the results of that autopsy from the police and prosecutor constituted gross negligence). We have previously characterized gross negligence "as a willful disregard of safety measures and a singular disregard for substantial risks." Oliver v Smith, 290 Mich App 678, 685; 810 NW2d 57 (2010). [Bellinger v Kram, 319 Mich App 653, 659-660; 904 NW2d 870 (2017), lv den 501 Mich 911 (2017).]
We agree with the trial court that plaintiff did not produce evidence to support its claim for gross negligence. Plaintiff alleged that Barrett and Lynch were liable for gross negligence because they (1) artificially inflated the estimated true cash value of plaintiff's personal property in order to assess higher taxes against plaintiff, (2) without legal authority, threatened to forcibly shut down and close plaintiff's business if it did not pay the excessive taxes, and (3) caused plaintiff's business to be forcibly shut down without legal authority. But, as explained earlier, MCL 211.47 authorized defendants to seize plaintiff's personal property to satisfy an unpaid tax debt. In pursuit of that authorized activity, Barrett and Lynch purposely selected a day when plaintiff was not open to the public for business, briefly padlocked some of the entrances to the restaurant, and promptly removed the locks when plaintiff elected to pay its tax debt. Although plaintiff argues that defendants should have simply seized property equal to the value of the unpaid taxes from the restaurant without securing the entire restaurant, we fail to see how Barrett and Lynch's approach could reasonably be deemed to have been grossly negligent. To the contrary, it would seem that there was a higher potential for harm and disruption to plaintiff if defendants had immediately started disassembling and removing items from the restaurant before plaintiff had been given further opportunity to pay its tax debt.
The trial court did not err by granting summary disposition in favor of Barrett and Lynch, on grounds of qualified immunity, with regard to plaintiff's state-law claims.
B. MERITS OF PLAINTIFF'S CLAIMS
Even if defendants were not entitled to immunity from plaintiff's claims, we would affirm the trial court, because we agree with its determination that plaintiff did not demonstrate a genuine issue of material fact regarding the elements of those claims. We have already discussed much of our reasoning in reaching this conclusion. Plaintiff argues that defendants violated MCL 211.47(1) by seizing its entire business, not just personal property, and by seizing property well in excess of the amount owed. We disagree. MCL 211.47(1) permits a city treasurer to "collect the tax by seizing the personal property of that person, in an amount sufficient to pay the tax, the fees, and the charges, for subsequent sale of the property, and no property is exempt." Plaintiff does not dispute that it owed unpaid taxes for 2017, and does not dispute the validity or amount of the taxes assessed. Rather, plaintiff relies on Fidlin, 9 Mich App at 167, in asserting that defendants violated MCL 211.47(1) by failing to exercise "sound discretion" in determining what property to seize, and in seizing property in excess of the debt owed. See Id., citing 84 CJS, Taxation, § 694, p 1371. The general limits on what assets may be seized to pay a tax debt are based on constitutional principles; taxing entities are not permitted to seize and sell property valued far in excess of the debt owed, regardless of whether the surplus is promptly tendered to the taxpayer. See Rafaeli, LLC v Oakland Co, 505 Mich 429, 437; ___ NW2d ___ (2020). In this case, however, there was no sale, and plaintiff has not established any such unlawful seizure. Again, the submitted evidence showed that defendants placed padlocks on plaintiff's business to secure the premises where the assets were located to prevent their removal while defendants inventoried the assets, determined their values, and decided which assets could be removed and sold to pay plaintiff's tax debt. No property was ever removed or sold because plaintiff decided to pay the taxes owed, at which point the padlocks were removed and plaintiff was free to continue operating its business. Plaintiff was never prevented from operating its business during posted business hours, and a private event scheduled for later that day was held as planned. Accordingly, plaintiff has not shown that defendants violated MCL 211.47(1).
Regarding plaintiff's forcible ejectment claim, plaintiff alleged that it had a legal right to operate the business at its premises, and that defendants unlawfully ejected or put plaintiff out from the premises in a forcible or unlawful manner in violation of MCL 600.2918. But the evidence demonstrated that defendants did not completely cut off access to the restaurant or any land owned by plaintiff. Plaintiff was simply not ejected from the premises. And there was no evidence that defendants' actions involved the use of force or that they acted in an unlawful manner. Padlocking and chaining the doors is not the type of force that MCL 600.2918(1) was intended to prevent. See Shaw v Hoffman, 25 Mich 162, 169 (1872) ("[T]he force contemplated by the statute is not merely the force used against, or upon the property, but force used or threatened against persons as a means, or for the purpose of expelling or keeping out the prior possessor."). The trial court did not err by granting summary disposition in favor of defendants on this claim.
With regard to plaintiff's tortious interference with a business relationship claim, plaintiff could not demonstrate a genuine issue of material fact that Barrett and Lynch acted with malicious intent to harm plaintiff's business reputation. Dalley v Dykema Gossett PLLC, 287 Mich App 296, 323; 788 NW2d 679 (2010). Further, to the extent there was any harm to plaintiff's business reputation, there is no basis for attributing that harm to any conduct by Barrett or Lynch. Defendants acted on a day when the restaurant was closed to the public, and there was no evidence that Barrett or Lynch made any statements in public beyond posting the notices on plaintiff's restaurant, which were removed before the restaurant opened for business. In addition, media reports and posts on social media came from others, not defendants. Moreover, any damage to plaintiff's reputation ultimately arose from its own failure to pay its taxes. Plaintiff did not establish that Barrett and Lynch were the proximate cause of plaintiff's alleged damages. Ray v Swager, 501 Mich 52, 65-66; MCL 691.1407(2)(c).
The trial court correctly granted summary disposition in favor of defendants on plaintiff's state-law claims. Babula, 212 Mich App at 48.
IV. FEDERAL CONSTITUTIONAL CLAIMS
Plaintiff argues that the trial court erred by granting summary disposition in favor of defendants on its claims for the violation of its federal constitutional rights. We disagree. Plaintiff claimed that the city deprived it of its federal constitutional right to be free from unlawful searches and seizures under the Fourth Amendment to the United States Constitution, US Const Am IV. Plaintiff also claimed the city deprived it of its right to due process of law under the Fourteenth Amendment to the United States Constitution, US Const Am XIV. These claims form the basis of plaintiff's claim law under 42 USC 1983 for the deprivation of its constitutional rights under color of state law.
42 USC 1983 provides in pertinent part:
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. . . .To pursue a claim under 42 USC 1983, a plaintiff must prove a violation of a federal constitutional right. Mettler Walloon, LLC v Melrose Twp, 281 Mich App 184, 196; 761 NW2d 293 (2008). Here, as stated, plaintiff's § 1983 claims are premised on alleged violations of its Fourth and Fourteenth Amendment rights. Plaintiff alleged these claims against the city (a municipality) as well as against Barrett and Lynch (governmental employees).
A GOVERNMENTAL IMMUNITY
1. THE CITY
A municipality is a "person" to which 42 USC 1983 applies; in other words, unlike the state, a municipality may, under certain circumstances, be sued in state or federal court for violations of 42 USC 1983. Johnson v Vanderkooi, 502 Mich 751, 762; 918 NW2d 785 (2018). However, "[e]stablishing municipal liability under 42 USC 1983 requires proof that "(1) a plaintiff's federal constitutional or statutory rights were violated and (2) the violation was caused by a policy or custom of the municipality." Id. at 762. Plaintiff did not argue before the trial court, and does not argue on appeal, that the alleged violation of its constitutional rights was based on either an official policy or widespread governmental custom of the city so as to invoke municipal liability. Id., see also Monell v Dep't of Soc Servs of New York City, 436 US 658, 690-691; 98 S Ct 2018, 56 L Ed 2d 611 (1978); Bd of the Co Comm'rs of Bryan Co, Oklahoma v Brown, 520 US 397, 404; 117 S Ct 1382; 137 L Ed 2d 626 (1997). Therefore, summary disposition in favor of the city was appropriate on that basis alone, regardless of whether the underlying constitutional violation could be established. See Vanderkooi, 502 Mich at 762, citing Collins v Harker Hts, Texas, 503 US 115-121-122; 112 S Ct 1061; 117 L Ed 2d 261 (1992) (noting that "whether a legal violation occurred and whether a municipality might be liable for that violation are separate legal inquiries.").
2. BARRETT AND LYNCH
Barrett and Lynch, as governmental employees, are entitled to qualified immunity from suits under 42 USC 1983 related to actions undertaken in the course of their employment under certain circumstances. As this Court stated in Holeton v City of Livonia, 328 Mich App 88, 102; 935 NW2d 601 (2019):
An official has qualified immunity from suits under 42 USC 1983 when the official's conduct "does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Kisela v Hughes, 584 US ___, ___, 138 S Ct 1148, 1152; 200 L Ed 2d 449 (2018) (quotation marks and citation omitted). "The doctrine of qualified immunity protects government officials from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Pearson v Callahan, 555 US 223, 231; 129 S Ct 808; 172 L Ed 2d 565 (2009) (quotation marks and citation omitted).Before allowing a §1983 claim to proceed notwithstanding the general applicability of qualified immunity, a trial court must determine that the plaintiff has established two elements:
First, a court must decide whether the facts that a plaintiff has alleged or shown make out a violation of a constitutional right. Second, if the plaintiff has satisfied this first step, the court must decide whether the right at issue was "clearly established" at the time of defendant's alleged misconduct. [Id. at 232, 129 S Ct 808 (quotation marks and citations omitted).]We agree with the trial court that plaintiff did not establish that a violation of either its Fourth or Fourteenth Amendment rights occurred.
(i) FOURTH AMENDMENT
Plaintiff argues that defendants' actions in temporarily padlocking and chaining some of the restaurant doors in order to secure the property inside constituted an unlawful seizure that violated plaintiff's Fourth Amendment rights. We disagree.
To establish a Fourth Amendment violation, a plaintiff must prove both that defendants' actions constituted a seizure and that defendants' actions were unreasonable in light of the surrounding circumstances. As explained in Fox v Van Oosterum, 176 F3d 342, 349-350 (CA 6, 1999):
The Fourth Amendment prohibits unreasonable searches and seizures. Specifically, the Fourth Amendment provides that "[t]he right of the people to be secure in their person, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable
cause, supported by Oath or affirmation, and particularly describing the place to be searched and the persons or things to be seized." U.S. CONST. amend. IV. The Supreme Court has established that one of the purposes of the prohibition on unreasonable seizures of property is the protection of the individual's property rights in the seized item. See Soldal v. Cook County, Ill., 506 U.S. 56, 62-63, 113 S.Ct. 538, 121 L.Ed.2d 450 (1992) (holding that the Fourth Amendment "protects property as well as privacy"). However, the courts have yet to define the breadth of the Fourth Amendment's protection of property. Cf. United States v. Jacobsen, 466 U.S. 109, 113 n. 5, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984) (noting that "the concept of a 'seizure' of property is not much discussed in [Supreme Court] cases"). Whatever the breadth of Fourth Amendment protection of property interests, that protection is limited to the breadth of the meaning of the word "seizure" in the Fourth Amendment.
The Supreme Court has defined "seizure." For Fourth Amendment purposes a " 'seizure' of property . . . occurs when 'there is some meaningful interference with an individual's possessory interests in that property.' " Soldal v. Cook County, Ill., 506 U.S. 56, 61, 113 S.Ct. 538, 121 L.Ed.2d 450 (1992) (quoting United States v. Jacobsen, 466 U.S. 109, 113, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984) (Stevens, J.)); cf. Texas v. Brown, 460 U.S. 730, 747, 103 S.Ct. 1535, 75 L.Ed.2d 502 (1983) (Stevens, J., concurring in judgment) ("The [Fourth] Amendment protects two different interests of the citizen—the interest in retaining possession of property and the interest in maintaining personal privacy." (Emphasis added)).
In this case, the evidence before the trial court showed that defendants placed padlocks on the main entrance and front gates, but that other doors to the premises were not locked. Further, plaintiff's employees were not prevented from entering the premises. The locking took place on a day that the restaurant was closed to the public. Thee padlocks were promptly removed after plaintiff paid the outstanding taxes, allowing plaintiff to hold a scheduled event that evening. Under these circumstances, defendants' actions did not present a particularly "meaningful interference" with plaintiff's property. Id. Nonetheless, even if defendants' actions constituted a seizure, it was not unreasonable under the circumstances.
As will be discussed further later in this opinion, MCL 211.47(1) authorized defendants to seize and sell plaintiff's personal property to satisfy the outstanding tax debt. Defendants' actions to secure the premises before seizing and selling specific property items were not unreasonable because defendants were not familiar with the contents of the building or the value of plaintiff's property. Defendants were aware that they were only permitted to sell items sufficient to satisfy plaintiff's tax debt, but they still needed to determine what items to seize and sell. Defendants explained to the trial court that it might have been necessary to bring in professionals to properly disconnect and remove certain pieces of restaurant equipment. We conclude that defendants acted reasonably in securing the premises as a preliminary step to seizing personal property to cover the tax debt. See Heck v Walters, 523 F2d 23, 24-25 (CA 9, 1975) (federal government was allowed to use reasonable means to secure equipment subject to federal tax lien by padlocking the building where the equipment was located before formally seizing the property).
Further, defendants intentionally acted on a day they knew that plaintiff's business was closed to the public in order to cause as little disruption as possible. Defendants only padlocked the main entrance and front gates, and allowed plaintiff's employees to enter the premises through a side door. The padlocks were removed approximately two hours later, after plaintiff paid its delinquent taxes. Plaintiff was never prevented from operating its business during posted business hours, and a private event scheduled for later that day was held as planned.
In sum, because defendants' conduct was authorized by MCL 211.47(1), its conduct was carried out at a time intended to be least disruptive to plaintiff's business, defendants never actually removed any property from the premises and the padlocks were promptly removed after plaintiff paid its outstanding tax debt, and plaintiff was never prevented from operating its business during normal business hours or from holding any scheduled events, the trial court did not err by holding that plaintiff failed to establish a genuine issue of material fact regarding whether any seizure was unreasonable. Babula, 212 Mich App at 48. Accordingly, the trial court did not err by dismissing plaintiff's claim under 42 USC 1983 premised on the Fourth Amendment.
(ii) FOURTEENTH AMENDMENT
Plaintiff argues that it was entitled to notice and a hearing before defendants proceeded with their efforts to begin to seize plaintiff's property pursuant to MCL 211.47(1). Plaintiff also argues that defendants' failure to comply with MCL 211.47(1) by limiting their seizure to property sufficient to satisfy the outstanding tax bill supports its due-process claim. We disagree in both respects.
The United States Constitution precludes the government from depriving a person of property without due process of law. US Const, AM XIV; Reed v Reed, 265 Mich App 131, 157; 693 NW2d 825 (2005). Under the Fourteenth Amendment, states must give individuals whose property interests are at stake notice and an opportunity to be heard before finally depriving them of that interest. Dusenberry v United States, 534 US 161, 167; 122 S Ct 694; 151 L Ed 2d 597 (2002).
However, due process does not always require a full hearing prior to the initial deprivation of property. See Gilbert v Homar, 520 US 924, 930; 117 S Ct 1807; 138 L Ed 2d 120 (1997). The GPTA contains procedures by which a taxpayer may challenge the amount of taxes assessed before any seizure. See, e.g., MCL 211.30(4) (discussing the board of reviews ability to request assessed value upon request). Plaintiff admitted that it did not avail itself of the procedures for challenging the personal property assessment for 2017. Plaintiff was sent notice of the personal property assessments for tax years 2016 and 2017, which Lulgjuraj admitted receiving. Lulgjuraj also admitted receiving a letter from the city's attorney indicating that the restaurant property could be forcibly closed if delinquent taxes were not paid. Moreover, after a seizure occurs, a taxpayer may avail itself of judicial review to seek the return of property if it believes the seizure was made in error. See Petersen Financial LLC, 326 Mich App at 443, 444, quoting Joy Mgt Co v Detroit, 176 Mich App 722, 728; 440 NW2d 654 (1989), overruled in part on other grounds by Detroit v Walker, 445 Mich 682, 697 n. 20; 520 NW2d 135 (1994) (noting that circuit courts have jurisdiction over challenges to the legality of methods used to enforce the collection of property taxes and to the construction of MCL 211.47); see also In re Petition of Wayne Co Treasurer for Foreclosure, 286 Mich App 108, 113; 777 NW2d 507 (2009). Under these circumstances, we conclude that plaintiff's due process rights were not violated by the lack of a pre-padlocking hearing, especially when plaintiff was given a further opportunity to pay the tax owed in order to secure the immediate unlocking of the property. Because the time to challenge the amount of the assessment had passed, a pre-padlocking hearing would have only had the effect of repeating the warning given in the city attorney's letter, a warning that plaintiff had already ignored. The trial court did not err by finding that the failure to hold a pre-padlocking hearing did not deprive plaintiff of its right to the due process of law.
Plaintiff also claims that defendants acted arbitrarily and capriciously to deprive it of its constitutionally protected property interest. The government may not deprive a person of liberty or property through the arbitrary exercise of power. Landon Holdings, Inc v Grattan Twp, 257 Mich App 154, 173; 667 NW2d 93 (2003). Governmental action is arbitrary and capricious when it "lacks an adequate determining principle, when it reflects an absence of consideration or adjustment with reference to principles, circumstances or significance, or when it is freakish or whimsical." Wescott v Civil Service Comm, 298 Mich App 158, 162; 825 NW2d 674 (2012).
Plaintiff argues that defendants seized property in excess of the amount it owed in taxes, and treated it differently than other businesses owing delinquent taxes. However, as noted, defendants did not actually seize the entire restaurant because plaintiff's employees were still allowed to enter the building during the brief period when the restaurant was padlocked. Furthermore, to the extent that defendants' actions could be considered a seizure, they were authorized by MCL 211.47(1) and were not unreasonable under the circumstances. Moreover, plaintiff has not shown that defendants acted arbitrarily simply because other businesses were not subject to shutdowns. While there was evidence that some other businesses with delinquent taxes had not been padlocked, there was also evidence that plaintiff owed the largest amount of outstanding taxes. Plaintiff has not shown that defendant's actions to collect its largest outstanding tax debt before similarly pursuing other debtors were arbitrary and capricious.
Plaintiff states in its brief on appeal that defendants had chained and padlocked another business for nonpayment of personal property taxes shortly before plaintiff's; according to plaintiff, this business was "significantly more delinquent than Plaintiff on its personal property taxes." If accurate, this statement would suggest that, rather than acting arbitrarily or capriciously, defendants were quite systematic in their approach to the collection of delinquent taxes, simply starting with the taxpayer owing the largest sum and proceeding down the list accordingly.
Plaintiff failed to a show a genuine issue of material fact that defendants' actions denied it due process of law under the Fourteenth Amendment. Babula, 212 Mich App at 48. Accordingly, the trial court did not err by dismissing plaintiff's due-process claims under 42 USC 1983.
Because plaintiff could not show that a constitutional violation occurred, Barrett and Lynch were entitled to qualified immunity on plaintiff's §1983 claims. Holeton, 328 Mich App at 102.
B. MERITS OF PLAINTIFF'S CLAIMS
Even if defendants were not entitled to immunity on plaintiff's federal constitutional claims, as discussed, we conclude, for the reasons discussed, that no unreasonable seizure or due process violation occurred. The trial court therefore correctly granted summary disposition in favor of defendants on these claims. Babula, 212 Mich App at 48.
V. CONCLUSION
We affirm the trial court's order granting summary disposition in favor of defendants. Defendants were entitled to either absolute governmental immunity or qualified immunity on plaintiff's state-law claims. Additionally, plaintiff did not raise a genuine issue of material fact with respect to those claims and defendants were entitled to judgment as a matter of law. Regarding its 42 USC 1983 claims, plaintiff failed to allege or show a custom or policy so as to impose municipal liability on the city; additionally, plaintiff failed to show that a violation of a clearly established constitutional right occurred, and Barrett and Lynch were entitled to qualified immunity on those claims. Also, because plaintiff could not establish a genuine issue of material fact regarding a violation of its federal constitutional rights, the trial court appropriately granted summary disposition in favor of defendants with respect to those claims.
Plaintiff argues that governmental immunity does not bar a plaintiff from seeking declaratory or injunctive relief. Plaintiff is correct that governmental immunity does not always bar suits for declaratory relief, even where the doctrine prevents suits for money damages. See, e.g., Lash v Traverse City, 479 Mich 180, 196; 735 NW2d 628 (2007). However, inasmuch as we have also determined that all of plaintiff's claims lack merit, we find no error in the trial court's failure to explicitly state whether plaintiff's requests for declaratory relief regarding its claims for violation of MCL 211.47 and 42 US 1983 were subject to governmental immunity. --------
Affirmed.
/s/ Mark T. Boonstra
/s/ Stephen L. Borrello
/s/ Michelle M. Rick