FJN, L.L.C. et al v. Parakh et al

Filing 41

ORDER granting in part and denying in part 31 Motion to Dismiss; granting 39 Motion to Dismiss. Signed by District Judge Arthur J. Tarnow. (MLan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FJN LLC, ET AL.,

Case No. 09-14262

v.

HONORABLE ARTHUR J. TARNOW
SENIOR UNITED STATES DISTRICT JUDGE

VIJAY PARAKH, ET AL.,

HONORABLE MARK A. RANDON
UNITED STATES MAGISTRATE JUDGE

Plaintiffs,

Defendants.
______________________________/
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND FOR JUDGMENT ON THE PLEADINGS [31] AND GRANTING
PLAINTIFFS’ MOTION TO DISMISS STATE-LAW CLAIMS [39]
This case involves the allegedly discriminatory actions of Harrison Township and its
Building Official, Vijay Parakh, in refusing to issue a certificate of occupancy to the Plaintiffs.
Plaintiffs’ main argument is that Defendants have failed to follow the applicable ordinances and
have simply refused to issue a “Certificate of Occupancy” for an expansion of Plaintiffs’ restaurant.

For the reasons stated below, Defendants’ Motion to Dismiss and for Judgment on Pleadings
is GRANTED IN PART and DENIED IN PART [31]. Plaintiffs’ Motion to Dismiss [39] their statelaw claims without prejudice is GRANTED.
I. Procedural History
Plaintiffs filed their complaint in this Court on October 30, 2009. An “Emergency Motion
of Plaintiffs for a Temporary Restraining Order and/or Preliminary Injunction” was filed by
Plaintiffs on November 11, 2009. A conference was held on November 23, 2009 at which the
parties agreed to facilitation, but on December 11, 2009, the parties informed the Court that
facilitation was not successful.
Defendants answered the Complaint on December 16, 2009. A hearing on the preliminary
injunction and TRO was held on January 14, 2010, with the injunction being neither denied nor
granted, as Plaintiffs had cured some but not all deficiencies and Defendants were to inspect the site
shortly thereafter.
On April 28, 2010, Plaintiffs filed an additional Emergency Motion for Temporary
Restraining Order and Preliminary Injunction, as a Temporary Certificate of Occupancy that had

been issued to Plaintiffs was set to expire. This was resolved without hearing by the Temporary
Certificate being extended until June 1, 2010. On April 11, 2011, the instant motion to dismiss and
for judgment on the pleadings was filed.
In a progress report submitted in June, the following information was provided: An
inspection by Harrison Township Officials of the Gino’s Surf property and constructed additions
occurred on June 9, 2011. On June 15, 2011, the Township drafted a report that contains five (5)
deficiencies in Phase II, and listed other deficiencies in landscaping and parking areas. Plaintiffs
assert that the five deficiencies are new and “not required in order for plaintiffs to receive a
Certificate of Occupancy.” Plaintiffs allege the other deficiencies concern Phase I, which already
has a Certificate of Occupancy. Plaintiffs assert that Defendants “cannot now demand plaintiffs take
corrective action to have any portion of Phase I comply with the site plan.”
In the progress report, Defendants state that Phase II has been operating without a Temporary
Certificate of Occupation since May 2010. Defendants note the five deficiencies in the building;
Defendants also contend that various “site plan deficiencies” must be cured prior to the issuing of
a Certificate of Occupancy.
In September 2011 the parties submitted an independent inspection report that noted a few
outstanding issued but concluded that after their correction the Phase II building would be “safe for
occupation.” The report concluded that the requirements of obtaining a “Certificate of Occupancy”
had been met and stated that the Township had insisted on ever-shifting correction to various
deficiencies.
II. Factual Background
This case concerns the restaurant “Gino’s Surf,” located in Harrison Township, and has at
all times operated with a Certificate of Occupancy from the township. In 2006, the Township’s
Planning Commission approved the site plan for “Phase I" additions to the restaurant, to include a
“Gazebo and Tiki Bar.”
At some later date, the restaurant submitted a proposed site plan for “Phase II" additions to
the restaurant. These additions would house an “Antique Car Museum and Restaurant” to house
Plaintiff Nazar’s antique cars. At a May 17, 2007 meeting, the Planning Commission approved the
site plan for Phase II.

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Certificate of Occupancy for Phase I and Phase II
On January 10, 2008, the Township issued a Certificate of Occupancy for the “Phase I”
additions to the restaurant. Sometime prior to February 6, 2009, Gino’s Surf completed the
construction of “Phase II.” Plaintiffs allege that they obtained and passed all electrical, mechanical,
and building inspections necessary to obtain a Certificate of Occupancy.
Section 16.03 of the Harrison Township Zoning Ordinances governs the issuance of a
Certificate of Occupancy. Specifically, Section 16.03(6) governs the application process:
Certificates of occupancy shall be applied for in writing to the building official
coincidentally with application for building permits, and shall be issued within five
days after notification of completion of the building, if it is found that the building
or structure, or part thereof, or the use of the land is in accordance with the
provisions of this ordinance. If such certificate is refused for cause, the applicant
shall be notified of such refusal and the cause thereof within the aforesaid five-day
period.”
It is undisputed that on February 4, 2009, Plaintiffs applied for a Certificate of Occupancy
for Phase II of the restaurant from Defendant Parakh, who as the Building Official is empowered
to issue said Certificates. Harrison Township Zoning Ordinances § 16.01. No Certificate of
Occupancy was ever issued. It is alleged by Plaintiffs that Defendants never refused to issue a
Certificate, but simply never issued the Certificate.
February 6, 2009 Incident and February 9, 2009 “Parakh Report”
On February 6, 2009, two days after applying for a Certificate of Occupancy, Plaintiffs held
an event at their restaurant. They advertised this event as a “Grand Opening Party.” Plaintiffs
unpersuasively state that the name of the party did not mean any new part of the restaurant was
opening, but rather was an attempt to attract more business. Compl. ¶ 39. It is disputed whether this
party took place only in the old portion of Gino’s Surf, or also involved the Phase I and Phase II
additions to the restaurant. At 8:30 P.M., Defendant Parakh arrived at Gino’s Surf (the original
restaurant) accompanied by two “Ordinance Officers.” Plaintiffs allege that Parakh and the Officers
remained in the Gino’s Surf portion of the restaurant and told customers they had to leave because
the business was being shut down. Plaintiffs allege this continued until 12:00 A.M. on February 7,
2009. Plaintiffs allege that Parakh’s actions were “designed to harass plaintiffs . . . defame them and
drive them out of business. . . .”

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On February 9, 2009, Defendant Parakh presented a Report to the Harrison Township Board
regarding the February 6, 2009 incident. Plaintiffs assert that Parakh’s report is untrue and
misleading. See Compl. ¶¶ 46-198. In the report, Parakh stated that he had heard a “Grand
Opening” would be taking place, and had contacted one of the owners, Frank Nazar Jr., and in a
meeting on the morning of February 5, 2009, spoke to Nazar and told him that a Certificate of
Occupancy had not been issued so that any party could not take place in the Phase II area.
Parakh states in the report that later in the day, he was told by the Deputy Treasurer of the
Township Board to speak to Plaintiffs and “direct them to restrain or cease the Grand Opening Party
in the area under construction or it would create negative publicity for the Township.” A notice and
placard were hand-delivered to Frank Nazar, Sr. (who signed a notice acknowledging receipt) stating
that if persons were in the area under construction it would create an unsafe and dangerous condition
and would violate the Township Ordinances, State Building Codes and Fire Marshall mandates.
Parakh also met with Frank Nazar Jr. at noon, who promised the new section would not be
open to the public or used at the party. Parakh also discussed a “plastic structure” (a tent) observed
by one of the officials who delivered the notice; Parakh allegedly told Nazar that any temporary tent
would have to be approved prior to use and that Nazar would have to “go to the Supervisor’s Office
for permission,” and various persons would have to inspect the tent prior to use. Plaintiff describes
this statement as “false” and notes that the Township’s Zoning Ordinance § 15.05(1) (later repealed)
exempts “tents erected on residential and commercial lots for a period not to exceed seven days”
from the need to apply for a temporary structure permit. Compl. ¶¶ 60-63. Plaintiff alleges that
Parakh was aware of this ordinance and “knowingly made material misrepresentations about
plaintiffs and the ordinances in his report.” Compl. ¶¶ 65-69. Plaintiff also disputes that Parakh told
him about any “danger” of having a party in the newly-constructed area, and states that the meeting
was purely about obtaining a Certificate of Occupancy, not in response to Parakh’s concerns.
Compl. ¶¶ 55-56.
Parakh then contacted the Fire Department and Sheriff’s Department to inform them “of the
potential gravity of the situation . . . .” On the afternoon of February 6, 2009, Township Supervisor
Forlini came to talk to Parakh and told him that Frank Nazar Sr. had called Forlini and asked his
permission to use the newer part of the building for the party. Forlini told Nazar that he did not have
his permission and that if Parakh found out about use of the new part of the building “he will issue

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you a $500 ticket on Monday.” Forlini told Parakh he was certain Nazar would use the new portion
of the building. Plaintiffs assert that, while Parakh and Forlini may have spoken, the above
conversation is “false.” Compl. ¶¶ 80-84.
Parakh states in his report that he had no intention to stop any party from taking place, but
that the new portion of the building could not be used because it was not safe, insured, did not meet
Building Code, and did not have a Certificate of Occupancy. Plaintiffs assert that Parakh “knew”
that he (Parakh) “fully intended to prevent plaintiffs from having any party whatsoever” in any
portion of the building, knew that Phase II was not under construction, knew that it was safe, knew
that it was insured, knew that it met Building Code, and that he “should have issued” a Certificate
of Occupancy. Compl. ¶¶ 72-79.
At 8:00 P.M. Parakh allegedly received phone calls from Building Department employees
“in another community” and from residents of the Township indicating “that they were making
people go through a plastic flammable and combustible passageway with 3-4 large free-standing
propane heaters.” Parakh called two ordinance officers and the Sheriff and Fire Department and
went to Gino’s Surf. Parakh described the party at Gino’s as “clear pandemonium and the scene was
horrifying - it was clearly ‘out of control’ in the words of many.” A number of cars were parked in
a no parking area, and fire lanes were blocked. People were also crossing the road in a no crosswalk area. Plaintiffs state that “none of these allegations were the responsibility of Plaintiffs in any
way.” Compl. ¶ 124.
Parakh alleges that “at least 250 people were in the portion of the building under
construction” and hundreds more in the old portion of the building. Parakh alleges additional unsafe
conditions involving a “flammable and combustible plastic passageway” and “free standing propane
heaters.” Plaintiffs assert that all of the above is “completely untrue” and that Parakh never
identified any of the dangerous conditions. Compl. ¶¶ 85-94. Plaintiffs specifically deny the
existence of “a flammable and combustible” plastic passageway and propane heaters “in the alleged
‘plastic passageway.’” Compl. ¶¶ 94-101. It is unclear whether this is because there was no
passageway and heaters, or whether Plaintiffs simply dispute that the passageway was combustible
and that the propane heaters were “in” the passageway.

Parakh next alleges that he encountered

Frank Nazar Sr., who told him to “issue the ticket and get the hell out of here.” Parakh alleges that
Nazar told him he had spent $20,000 on the Grand Opening. Plaintiffs allege this conversation

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never occurred. Compl. ¶¶ 102-09. Parakh alleges the staff at the restaurant could not tell him how
many cars or patrons were in the parking lot and restaurant. Parakh alleges that the Fire Shift
Commander on the scene called the Fire Chief for instructions to deal with the situation, and was
told to create a passing lane for emergency vehicles, which was currently blocked. Sheriff’s
Department officers then “vacated the portion of the building that was under construction and
cleared the scene without taking any action to make the scene safe or addressing any of the illegal
parking. . . no vehicles were ticketed or towed.” Plaintiffs state that no part of the building was
cleared and that Parakh actually did not want anyone patronizing the restaurant because customers
would “jeopardize defendants’ plan to drive plaintiffs out of business.” Compl. ¶¶ 140-43.
Parakh states that he and the Ordinance Officers were at the restaurant until midnight “to
prevent further endangerment of the public and to ensure safety,” again referencing the plastic
passageway and propane heaters and the allegedly unsafe conditions on the roadway and parking
lot. Parakh stated that he would have been derelict in his duties if he allowed the “Grand Opening”
to take place in an unsafe portion of the building under construction and with Code violations, and
compares the potential catastrophe to the Rhode Island Night Club Fire. Finally, Parakh discussed
passed violations of the Building Code related to the Phase I “Tiki Bar” and stated that Plaintiffs had
“a pattern of not following the Building Codes or legal notices creating dangerous conditions for the
public.”
Plaintiffs allege that the statement in Parakh’s report are “false statements, information which
defendant Parakh knew to be untrue, and defamatory statements regarding plaintiffs.” Compl. ¶ 47.
Plaintiffs complaint that Parakh did not identify the “unsafe and dangerous conditions” in the new
portion of the building, and that Parakh does not identify how the Township Ordinances, Fire
Marshall Mandates, or Building Codes were violated. Compl. ¶¶ 50-53. Plaintiffs are correct in that
Parakh does not identify any sort of structural issue with the newly-built Phase II addition that would
create an unsafe condition. Plaintiffs also allege they had a valid Certificate of Liability Insurance
that covered the Phase II additions, contrary to Parakh’s report. Compl. ¶ 58.
Post-Incident Application for Certificate of Occupancy
Plaintiffs allege they met with Parakh on February 23, 2009, regarding their pending
application for a Certificate of Occupancy for Phase II, which they had applied for on February 4,
2009. Plaintiffs allege they asked for a list of deficiencies with regard to Phase II, but that Parakh
only identified issues with the parking lot and landscaping, which Plaintiffs state is part of the Phase
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I construction. Plaintiffs also allege that Parakh did not discuss any pending ordinance violation
tickets. Compl. ¶¶ 204-06. Parakh requested drawings of the building, which were delivered on
March 3, 2009. Compl. ¶ 214.
On February 27, 2009, a Township Ordinance Officer came to Gino’s Surf and “demanded
money” for four $500 tickets; Plaintiffs allege that they had never received any tickets. The Officer
allegedly would not answer questions about the basis for the tickets and told Plaintiffs if they did
not pay them “[Parakh] . . . will send copies of them to the Michigan Liquor Control Commission.”
The Officer also allegedly refused to provide copies of the tickets. Compl. ¶¶ 207-09. On March
2, 2009, an Ordinance Officer allegedly hand-delivered an invoice for four “civil infraction-other”
charges of $500 each, for a total of $2,000. The “service date” listed was February 6, 2009 (the date
of the “Grand Opening”), and the “invoice date” was February 23, 2009. Plaintiffs allege the Officer
refused to explain the invoice but told them that they “has [sic] better give [Parakh] the $2,000.”
Plaintiffs allege they contacted the local District Court and found there were no pending tickets
against Frank’s Holdings, LLC. Compl. ¶¶ 207-212.
On March 5, 2009 Plaintiffs sent Parakh a letter requesting a final inspection of the Phase
II building. They also requested in writing “any and all unfinished construction that would inhibit
our Certificate of Occupancy.” Sometime in July, 2009, Plaintiffs apparently met with Parakh again
to discuss the Certificate of Occupancy. Parakh provided a document entitled “Gino’s Surf” which
listed “Open Issues.” Plaintiffs dispute the list, arguing that some items were part of Phase I, and
that some items, such as a “grease trap” to be installed was a “new and unwarranted and costly
demand by defendants, without justification.” Compl. ¶¶ 219-243.
On August 8, 2009, Plaintiffs “learned that there was to be a hearing in a few hours in ...
District Court on ordinance violation tickets issued by the Township.” Plaintiffs allege they never
received any copy of the tickets. All four tickets were dated February 10, 2009, and concerned the
February 6, 2009 “Grand Opening Party.” The tickets were made out to Frank Nazar Jr. personally
and listed an address “he had not resided [at] in over a year.” Plaintiffs allege that Defendants were
aware of Nazar’s current address at the time the tickets were issued. Plaintiffs allege Defendants
knew that Nazar Jr. was not the “owner” of Gino’s Surf. Plaintiffs allege the tickets were “solely
to harass” Nazar Jr. Plaintiffs allege that the tickets are not for amounts in accordance with the
schedule set out by Section 1-7 of Harrison Township’s Code of Ordinances, which provide that first
violations are $50.00, second violations are $125.00, third violations are $250.000, and fourth or
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subsequent violations are $500.00. The tickets issued constitute first, second, third, and fourth
violations as noted on the tickets. Ex. 19-22; Compl. ¶¶ 246-267. It appears that a correct total
would have been $925.00, although Plaintiffs dispute that the tickets are properly more than first
violations, as each ticket alleges a violation of a different section of the Zoning Ordinances.
On August 31, 2009, Plaintiffs received a letter from Parakh which set out a list of forty-two
(42) deficiencies in the “Gino’s Surf Site Plan” that needed to be corrected prior to issuing a
Certificate of Occupancy. The letter also noted the procedure for obtaining a Temporary Certificate
of Occupancy. Plaintiffs allege that these site deficiencies had nothing to do with the Phase II
addition and were motivated purely by animus. Plaintiffs allege they tried to “explain” why the
deficiencies were not accurate, but were rebuffed.
III. Analysis
Standard of Review
Plaintiffs correctly note that a Motion to Dismiss for failure to state a claim under Rule
12(b)(6) may not be filed after the Defendants have answered, as has occurred in this case.
However, a Motion for Judgment on the Pleadings is permitted at any time after the pleadings are
closed but early enough not to delay trial. The standard for a motion for judgment on the pleadings
is the same as a motion to dismiss under 12(b)(6). EEOC v. J.H. Routh Packing Co., 246 F.3d 850,
851 (6th Cir. 2001). All well-pled allegations in the complaint must be taken as true and construed
in the light most favorable to the plaintiff. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). To
survive a motion to dismiss or for judgment on the pleadings, a complaint must “state a claim to
relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “While
legal conclusions can provide the framework of a complaint, they must be supported by factual
allegations. When they are well-pleaded factual allegations, a court should assume their veracity
and then determine whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal,
129 S. Ct. 1937, 1950 (2009).
Requirement to Issue Permits
Section 16.01 of the Harrison Township Zoning Ordinances contains the following
provision: “The building official shall not refuse to issue a permit when the conditions imposed by
this ordinance are complied with by the applicant despite violations of contracts, such as covenants
or private agreements which may result upon the granting of said permit.” The language “shall not
refuse” indicates that the Building Official may not refuse to issue a permit when all the
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requirements of the ordinance are complied with. As noted above, Section 16.03 of the Harrison
Township Zoning Ordinances governs the issuance of a Certificate of Occupancy. Specifically,
Section 16.03(6) governs the application process:
Certificates of occupancy shall be applied for in writing to the building official
coincidentally with application for building permits, and shall be issued within five
days after notification of completion of the building, if it is found that the building
or structure, or part thereof, or the use of the land is in accordance with the
provisions of this ordinance. If such certificate is refused for cause, the applicant
shall be notified of such refusal and the cause thereof within the aforesaid five-day
period.”
Exhaustion of Administrative Remedies and Ripeness
Defendants argue that Plaintiffs have failed to exhaust their administrative remedies and thus
may not seek judicial review. The administrative remedy Defendants suggest is the Harrison
Township Zoning Board of Appeals which has the power and duty to “hear and decide appeals
where it is alleged there is error of law in any order, requirement, decision or determination made
by the building official or planning commission in the administration or enforcement of this
ordinance.” Mich. Comp. L. § 125.3603(1); Harrison Twp. Zoning Ordinance § 15.01. Defendants
also note that Mich. Comp. L. § 125.1514(1) and Harrison Township Zoning Ordinance § 18-9(c)
allow appeal to a “Construction Board of Appeals” by any person if “an enforcing agency refuses
to grant an application for a building permit, or if the enforcing agency makes any other decision
pursuant or related to this act, or the code . . . .”
Plaintiffs make two arguments in response. First, Plaintiffs contend that no decision has
been made with regard to the Certificate of Occupancy, and thus they cannot make an appeal.
Essentially, Plaintiffs argue that Defendants have neither refused nor agreed to grant a Certificate
of Occupancy. However, Plaintiffs have at times argued that Defendants have “refused to grant a
Certificate of Occupancy.” Moreover, the statute and ordinance allowing appeal of the Zoning
Board of Appeals allow appeal from any “requirement, decision, or determination.” Thus, Plaintiffs
would seem to be allowed to appeal the additional requirements that they have been asked to meet
by Harrison Township. Similarly, as Plaintiffs are alleged by Defendants to have violated sections
of the Building Code, they would seem to have the right to appeal this decision to the Construction
Board of Appeals.

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Plaintiffs also argue that they have the right to directly seek remedy in federal court because
they seek to vindicate their due process rights. However, Plaintiffs do not allege whether they seek
to vindicate their procedural or substantive due process rights. Plaintiffs cite to Nasieowski v.
Sterling Heights, 949 F.2d 890, 894 (6th Cir. 1991) for the holding that “a procedural due process
claim is instantly cognizable in federal court without requiring a final decision on a proposed
development from the responsible municipal agency . . . .” However, procedural due process means
simply that a person has a right to notice and a hearing prior to a decision being made that affects
substantive rights; in this case, Plaintiffs do have a right to a hearing, and do not allege that their
rights have been affected without a hearing to which Plaintiffs were entitled. Moreover, in
Nasieowski the complained-of conduct was the changing of the zoning of plaintiff’s land without
a hearing and notice to the plaintiff. Here, Plaintiffs have not been deprived of a right but rather have
sought the licensing of their facility by a municipal body. Plaintiffs do not dispute that there are
procedures in place to secure the license in question (the Certificate of Occupancy); rather, their
complaints are that they have not been treated “fairly” in the process. This is more of a substantive
due process claim. The Court thus finds that Plaintiffs have failed to state a procedural due process
claim.
“[T]o establish a violation of substantive due process, a plaintiff must first establish the
existence of a constitutionally-protected property or liberty interest.” Silver v. Franklin Township
Board of Zoning Appeals, 966 F.2d 1031, 1036 (6th Cir. 1992). In Silver, the court of appeals held
that where a zoning board or other municipal body had the discretion to deny a permit to the plaintiff
“even if he complied with certain minimum, mandatory requirements,” a plaintiff did not have a
protected liberty interest. Id. at 1036. Where, as here, the ordinance regarding a Certificate of
Occupancy states that the Building Official “shall” issue a Certificate if the ordinance is complied
with, the Building Official lacks discretion. The additional language in Section 16.01 of the Zoning
Ordinances that the Building Official “shall not refuse to issue” permits when the ordinances are
complied with also speaks to the presence of a property right.
Thus, Plaintiffs have a property right based on their expectation that they would receive a
Certificate of Occupancy if they comply with the Township Ordinances. Plaintiffs basic complaint
is that they have not been treated fairly in this determination. The Court finds that Plaintiffs have
made out a prima facie substantive due process claim.
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Plaintiffs’ claim is also ripe for review. The basic rationale of ripeness and exhaustion is that
courts avoid “entangling themselves in abstract disagreements.” Michigan Wolfdog Ass’n v. St.
Clair County, 122 F.Supp.2d 794, 800 (E.D. Mich. 2000). The court must make a determination of
whether “the factual record is sufficiently developed to produce a fair adjudication of the merits of
the parties’ respective claims.” Nat’l Rifle Ass’n v. Magaw, 132 F.3d 272, 284 (6th Cir. 1997). The
factual record in this case is sufficiently developed to allow this Court to make a ruling. Plaintiffs
need not exhaust their administrative remedies prior to bringing a substantive due process action.
Plaintiffs have sufficiently pled a substantive due process claim sufficient to withstand a motion for
judgment on the pleadings. Thus, Defendants’ Motion for Judgment on the Pleadings is DENIED
with respect to the substantive due process claim, but GRANTED with respect to Plaintiffs’
procedural due process claim.
Equal Protection
Plaintiffs equal protection claim mirrors their substantive due process claim - that they have
been treated “unfairly.” Plaintiff fails to allege that similarly situated individuals have been treated
differently. Plaintiffs also fail to include factual allegations from which the Court can infer that
Defendants lack a rational basis for their actions. The Court therefore GRANTS Defendants’
Motion for Judgment on the Pleadings with respect to Plaintiffs’ Equal Protection claim.
Temporary Certificate of Occupancy
Defendants argue at length that this Court lacks the authority to review a decision regarding
whether or not to issue a Temporary Certificate of Authority, based on discretionary language in
granting such a Certificate. Plaintiffs correctly note that they have not asked this Court to rule on
this issue. Defendants argument on this issue is therefore moot.
Entitlement to a Certificate of Occupancy
Defendants argue that factual issues demonstrate that the Plaintiffs had not complied with
all aspects of the building code and Township Ordinances, and thus should not have been issued a
Certificate of Occupancy. Plaintiffs assert in response that they have complied with all aspects of
the Township Ordinances and building code with respect to Phase II, and that the township has used
ever-shifting deficiencies and metrics, many related to Phase I, as the basis to refuse the granting
of said Certificate. As at this stage the Court is required to accept Plaintiffs’ well-pled allegations
as true, and Plaintiffs assert that Phase II is fully in compliance with the code and Township
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Ordinances, Plaintiffs have sufficiently met their burden to withstand a motion for judgment on the
pleadings with respect to possible entitlement to a Certificate of Occupancy.
Municipal Liability Under § 1983
A municipality cannot be held liable for constitutional damages by an employee on a
respondeat superior theory, i.e., solely because it employs a tortfeasor. Monell v. Dep’t of Social
Servs. of City of New York, 436 U.S. 658, 691 (1978). Instead, the action of the employee must be
fairly attributable to the municipality, in that the action is a “policy statement, ordinance, regulation
or decision officially adopted and promulgated by the body’s officers,” is an action or policy
decision that has “received formal approval from the body’s official decisionmaking channels” or
the action or policy “made by its lawmakers or by those edicts or acts may fairly be said to represent
official policy.” Id. at 690-94.
From this Defendants advance the theory that Plaintiffs are required to demonstrate that “the
Harrison Township Board itself is the wrongdoer.” The Court declines to follow this reasoning.
Rather, liability attaches to “acts of the municipality,” that is, “acts which the municipality has
officially sanctioned or ordered.” Pembaur v. City of Cincinnati, 475 U.S. 469, 480 (1986).
Liability may thus be imposed for “single decisions by municipal policymakers under appropriate
decisions.” Id. That being said, “municipal liability attaches only where the decisionmaker
possesses final authority to establish municipal policy with respect to the action ordered.” Id. at 481.
Plaintiffs argue that “the actions of defendant Parakh and other representatives of the
Township . . . were the execution of the Township’s policy or custom as to plaintiffs, thereby
making this the official policy of the Township.” What Plaintiffs argue is that Parakh, as the
Building Official, had final decisionmaking authority with respect to the carrying out of certain
municipal functions, in this case the issuing of Certificates of Occupancy. Thus, his actions
constitute “final authority to establish municipal policy with respect to the action ordered.” The
Court adopts this reasoning. The municipality cannot have an “official policy” with respect to
Certificates of Occupancy because evaluation prior to issuing said Certificates takes place on a caseby-case basis. Nevertheless, a municipal official is given authority to make final decisions with
respect to the applicable Zoning Ordinance. In this case, that official is Parakh. His actions in
carrying out the statute have “final authority.”

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Further, Parakh stated in his February 9, 2009 report about the “Grand Opening Party” that
the Deputy Treasurer of the Township Board had told him he had to speak to Plaintiffs and “direct
them to restrain or cease the Grand Opening Party in the area under construction or it would create
negative publicity for the Township.” While this by itself does not constitute endorsement by the
Township Board, it suggests approval of Parakh’s actions.
The Court therefore finds that, as a matter of law, Plaintiff has set out a claim of municipal
liability under 42 U.S.C. § 1983. Thus, Defendants’ motion for judgment on the pleadings on this
issue is DENIED.
Plaintiffs’ State-Law Claims
On March 21, 2012, Plaintiffs filed a Motion to Dismiss their state-law claims without
prejudice. These claims include (1) Business Libel and Slander, (2) Libel and Slander of Plaintiff
Frank Nazar Sr., (3) Libel and Slander of Plaintiff Frank Nazar Jr., (4) Breach of Contract, and (5)
Breach of Implied Contract.
The Court finds that Defendants will not be unduly prejudiced by dismissal of Plaintiffs’
state-law claims without prejudice. Thus, Plaintiffs’ Motion to Dismiss [39] is GRANTED.
IV. Conclusion
Accordingly, Defendants’ Motion to Dismiss and for Judgment on the Pleadings [31] is
GRANTED with respect to Plaintiffs’ Procedural Due Process and Equal Protection Claims and is
DENIED with respect to Plaintiffs’ Substantive Due Process Claim; Plaintiff’s allegations regarding
an apparent ever-shifting target to obtain a Certificate of Occupancy support a claim for violation
of Substantive Due Process. Plaintiffs’ Motion to Dismiss State-Law Claims [39] is GRANTED.
The Court is hopeful that the intermittent spurts of cooperation between the parties in this case will
lead to an amicable resolution of this dispute.
SO ORDERED.
s/Arthur J. Tarnow
ARTHUR J. TARNOW
SENIOR UNITED STATES DISTRICT JUDGE
Dated: March 28, 2012

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