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Fraccola v. City of Troy

July 21, 2009

PHYLLIS FRACCOLA, ALAN FRACCOLA, ASVG ASSOCIATES, LLC, HYDRANIA, INC., AND RICK'S SALON AMERIQUE, LTD., PLAINTIFFS,
v.
CITY OF TROY, NEW YORK, HARRY J. TUTUNJIAN, MAYOR OF TROY, AND KEVIN MOONEY, ASSISTANT CODE INSPECTOR, DEFENDANTS.



MEMORANDUM-DECISION AND ORDER

Plaintiffs commenced this action on September 22, 2008, asserting constitutional claims as well as a claim of promissory estoppel, after Defendants closed Plaintiffs' businesses for a year pursuant to the City of Troy, New York's Nuisance Ordinance ("Nuisance Ordinance").*fn1 See generally Complaint (Dkt. No. 1). Presently before this Court is Plaintiffs' Motion for a preliminary injunction, as Plaintiffs seek to enjoin Defendants from enforcing the provisions of the Nuisance Ordinance against Plaintiffs. Motion (Dkt. No. 6). For the reasons set forth below, Plaintiffs' Motion is denied.

I. BACKGROUND

Plaintiff Phyllis Fraccola owns the real property located at 12, 14, 16, and 18 King Street in Troy, New York ("Troy" or the "City"). Affidavit of Plaintiff Alan Fraccola ("Alan Fraccola Aff.") ¶ 3 (Dkt. No. 6, Attach. 2). Two businesses operate from the premises in question: "Fantasies,"*fn2 an adult entertainment establishment, and "Troy Video and News," an adult retail store. Id. ¶¶ 7, 9.*fn3

Fantasies operates within 16 and 18 King Street, while Troy Video and News operates at 12 King Street. Id. ¶¶ 12-13. The building located at 14 King Street is a part of both Troy Video and News and Fantasies. Id. ¶ 14. The first floor of 14 King Street includes video arcade booths for Troy Video and News, while the second floor includes private rooms and bathrooms associated with Fantasies. Id. ¶¶ 15-16.

On February 1, 2008, Troy's Bureau of Code Enforcement inspected the property located at 14 King Street and placed padlocks upon the properties located at 12, 14, 16 and 18 King Street. Compl. ¶¶ 22-23. The City placed upon the front of 14 King Street a notice which stated that the building was in violation of Troy's Code of Ordinances and that the building must be vacated immediately. Alan Fraccola Aff. ¶ 19 and Ex. A. Plaintiffs allege that the City failed to notify or serve the owner or the tenants of 12, 14, 16 and 18 King Street as to any charges or actions that were pending. Compl. ¶ 26. On February 5, 2008, Plaintiffs' attorney, David Brickman ("Plaintiffs' counsel") sent correspondence to David B. Mitchell, Corporation Counsel for the City of Troy ("Defense counsel"), asking for notice of such charges. Affirmation of David Brickman ("Brickman Affirm.") ¶ 2 (Dkt. No. 6, Attach. 5) and Ex. 1. On February 12, 2008, Defense counsel responded by letter, stating that he was enclosing "a copy of the charges against the property located at #12, #14, #16 & #18 King Street." Brickman Affirm. ¶ 3 and Ex. 2. The accompanying Notice of Violations, issued by the City's Bureau of Code Enforcement, listed the property location as "14 King St." and included over 140 violations allegedly stemming from an inspection conducted on February 1, 2008 by Defendant Kevin Mooney, Assistant Code Inspector for the City. Brickman Affirm., Ex. 2. These violations included various alleged deficiencies in the safety and sanitation of the building. Id.

On February 11, 2008, Plaintiffs commenced a proceeding in the Rensselaer County Supreme Court by Order to Show Cause, pursuant to Article 78 of the Civil Practice Laws and Rules, challenging the padlocking of the buildings. Brickman Affirm. ¶ 6 and Ex. 3. On February 12, 2008, another attorney with the City's Corporation Counsel's Office sent Plaintiffs a letter entitled "Notice of Charges and Opportunity for Hearing" ("Notice of Charges"), notifying them of charges against 14 King Street under the Nuisance Ordinance. Brickman Affirm. ¶ 7 and Ex. 4. The Notice of Charges listed five alleged nuisance incidents at 14 King Street over the previous six months, including one incident of prostitution and two incidents of public lewdness, and set a hearing date for March 28, 2009. Brickman Affirm., Ex. 4. The Notice of Charges stated that the Plaintiffs' "failure to appear will result in a default judgment and the imposition of a penalty pursuant to Section 205-2 of the Troy City Code," including the closing of the building and/or the suspension or revocation of the certificate of use and occupational license or permit for the businesses. Brickman Affirm., Ex. 4. ¶ 6. Plaintiffs' counsel states that after his negotiations with Defense counsel and the removal of the padlocks on the building, the Plaintiffs withdrew the Article 78 proceeding on or around February 22, 2008. Brickman Affirm. ¶ 9 and Ex. 5.

In March 2008, Plaintiffs' counsel corresponded with Defense counsel by letter on multiple occasions regarding the Notice of Charges and the possibility that Plaintiffs could meet with members of the Troy Police Department to discuss the incidents that led to the nuisance charges. See Brickman Affirm. ¶¶ 10-12 and Ex. 6-8. Plaintiffs' counsel states that he discussed this meeting with Defense counsel, and that this meeting between Plaintiffs and the police was meant to avoid further prosecution of the nuisance charges, thereby mooting the necessity of the scheduled hearing. Brickman Affirm. ¶¶ 12-13 and Ex. 8.

The hearing on the nuisance charges was held on March 28, 2008 without the appearance of Plaintiffs or their counsel. Brickman Affirm. ¶ 14 and Ex. 9. Plaintiffs' counsel states that he contacted Defense counsel immediately upon being informed that the hearing had been held, and that Defense counsel assured him that the hearing was unimportant and that the prior resolution between the parties remained in effect. Brickman Affirm. ¶¶ 17-18. On April 2, 2008, the hearing officer issued a decision recommending "revocation of the certificate of use for the subject premises for a period of one year." Hearing Officer Decision at 5 (Brickman Affirm., Ex. 9). The hearing officer "further recommended that the City prohibit the owner or operator or other person or entity affiliated with 14 King Street, from obtaining a new certificate of use for 14 King Street, Troy, New York, or any other location with the City of Troy during the period of such revocation." Id.

On September 12, 2008, Defendant Harry J. Tutunjian, the City's Mayor (the "Mayor"), signed an Order of Closure "directing that the property located [at] 14 King Street, Troy New York, along with all business, trade activities and uses be CLOSED for a period of ONE-YEAR EFFECTIVE IMMEDIATELY and that the premises identified in this Order may re-open effective September 12, 2009, provided all required permits, licenses and approvals are in place." Brickman Affirm. ¶ 19 and Ex. 9. On September 12, 2008, padlocks were again placed on the buildings located at 12, 14, 16, and 18 King Street. Compl. ¶ 49.

Plaintiffs filed their Complaint on September 22, 2008, alleging that the Defendants "engaged in a scheme to close Plaintiffs' businesses and prevent them from operating without notice or an opportunity to be heard[,]" thereby violating Plaintiffs' procedural due process rights. Compl. ¶¶ 50-59. Plaintiffs also allege that Defendants' actions and the City's statutory scheme upon which those actions were based violated Plaintiffs' First Amendment rights by unlawfully interfering with Plaintiffs' ability to engage in constitutionally protected speech and by creating a prior restraint and chilling effect on that speech. Id. ¶¶ 60-65. Plaintiffs further assert a claim for promissory estoppel, alleging that attorneys with the City's Corporation Counsel's Office made representations to Plaintiffs' counsel that the charges against Plaintiffs would be deferred or ceased based upon negotiations and settlement agreements. Id. ¶ 67. Plaintiffs claim that they reasonably relied upon such promises, but that the City failed to fulfill its promises. Id. ¶¶ 68-70. On September 22, 2008--the same day Plaintiffs filed their Complaint--Plaintiffs also filed the pending Motion for a preliminary injunction. Dkt. No. 6.

II. STANDARD OF REVIEW

It is well settled that in order for a court to grant a motion for a preliminary injunction, the party seeking such relief must show: "(1) a likelihood of irreparable harm in the absence of the injunction; and (2) either a likelihood of success on the merits or sufficiently serious questions going to the merits to make them a fair ground for litigation, with a balance of hardships tipping decidedly in the movant's favor." Doninger v. Niehoff, 527 F.3d 41, 47 (2d Cir. 2008) (citation omitted). "Irreparable harm 'means injury for which a monetary award cannot be adequate compensation.'" Jayaraj v. Scappini, 66 F.3d 36, 39 (2d Cir. 1995) (quoting Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979)). Moreover, to establish irreparable harm, plaintiffs "must demonstrate that absent a preliminary injunction they will suffer 'an injury that is neither remote nor speculative, but actual and imminent,' and one that cannot be remedied 'if a court waits until the end of trial to resolve the harm.'" Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112, 114 (2d Cir. 2005) (quoting Rodriguez v. DeBuono, 175 F.3d 227, 234-35 (2d Cir. 1999)).

When the party seeking preliminary injunctive relief challenges a "'government action taken in the public interest pursuant to a statutory or regulatory scheme,'" the moving party cannot resort to the "fair ground for litigation" standard, but is required to demonstrate irreparable harm and a likelihood of success on the merits. Able v. United States, 44 F.3d 128, 131 (2d Cir. 1995) (per curiam) (quoting Plaza Health Labs., Inc. v. Perales, 878 F.2d 577, 580 (2d Cir. 1989)). Moreover, "[w]hen the movant seeks a 'mandatory' injunction--that is . . . an injunction that will alter rather than maintain the status quo--she must meet the more rigorous standard of demonstrating a 'clear' or 'substantial' likelihood of success on the merits." Doninger, 527 F.3d at 47 (citation omitted). "[A]bsent a clear showing that the movant has met its burden of proof," a motion for a preliminary injunction will be denied. Fisher v. Goord, 981 F. Supp. 140, 167 (W.D.N.Y. 1997) (internal quotations omitted).

Here, Plaintiffs are challenging a governmental action taken pursuant to a regulatory scheme intended to abate public nuisances, and are seeking a mandatory injunction. Accordingly, Plaintiffs' burden is especially rigorous-- in addition to establishing irreparable harm, they must demonstrate a clear or substantial likelihood ...


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