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George Michaelidis, Alexander Michaelidis, and Lake Prespa, Ltd v. Donna Berry and Brian C. Davis

December 12, 2011


The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court



Plaintiffs George and Alexander Michaelidis, and Lake Prespa, Ltd. commenced this civil rights action by filing a Complaint in the District Court for the Western District of New York. (Docket No. 1.) Therein, they allege that Defendants Donna Berry and Brian C. Davis violated their civil rights to make and enforce contracts in violation of 42 U.S.C. § 1981, freely associate in violation of 42 U.S.C. § 1983, and due process in violation of state and local law. Plaintiffs also allege that Defendants conspired to interfere with their civil rights in violation of 42 U.S.C. § 1985. Plaintiffs finally allege that Defendants discriminated against them on the basis of race in violation of New York State Human Rights Law ("NYHRL"), New York Executive Law §§ 291(2), 296(2), 296(2-a) and 296(6). Presently before this Court is Defendants' Motion for Summary Judgment seeking dismissal of the Complaint in its entirety.*fn1 (Docket No. 37.) Plaintiffs oppose the motion.*fn2

For the reasons stated below, Defendants' motion is granted.


A. Facts

Plaintiff Alexander Michaelidis ("Alexander") is the sole owner of Lake Prespa, Ltd., a closely held New York corporation, and the son of co-plaintiff George Michaelidis ("George"). (Complaint ("Comp."), Docket No. 1, ¶¶ 4, 5.) Defendant Donna Berry was, at all relevant times, a district police chief with the Buffalo Police Department. (Id. ¶ 7.) Defendant Brian C. Davis was, at all relevant times, the Ellicott District Representative on the City of Buffalo's Common Council. (Id. ¶ 8.)

This matter arises out of Alexander's leasing of space at 439 Delaware Avenue in the City of Buffalo. (Statement of Undisputed Facts ("Defs.' Stmt."), Docket No. 37, ¶ 1.) On August 30, 2003 Alexander entered into a leasing agreement with 427 Delaware Holdings, LLC ("Delaware Holdings"), a limited liability company owned in part, but operated and managed exclusively, by Gregory Paul Koessler and Charles J. Schneider. (Id. ¶ 4.) Pursuant to this leasing agreement, Alexander's lease was to run from September 1, 2003 to August 30, 2008, with an option to renew. (Id. ¶ 3.) Alexander and Delaware Holdings entered the lease agreement with the understanding that a restaurant/lounge business would be opened at the leased location. (Id. ¶¶ 1, 5.) Alexander did indeed open a restaurant and lounge, known as Prespa, in April 2004, with financial support from his father, George. (Id. ¶¶ 6, 9.)

On August 16, 2005, Delaware Holdings, through its managers Koessler and Schneider, executed a Lease Amendment with Alexander. This Amendment expanded the leased space from 2,400 to 2,705.83 square feet, prohibited patrons from entering common areas in the back of the building, required removal of any accumulated debris, and made the rear exit to the building an emergency exit. (Defs.' Stmt. ¶ 8.) The Amendment also provided for default in the event Prespa's patrons caused a nuisance or otherwise acted unruly or indecently, though Plaintiffs contend that this was not one of the reasons for which the amendment became necessary. (Id.; Plaintiffs' Objections to Defendants' Statement of Undisputed Facts ("Pls.' Stmt."). Docket No. 44, ¶ 9.)

Starting in summer 2007, Alexander, as a result of falling profits, hired Sean M. Spurlock, an African American, as an independent contractor to promote Prespa and improve its business. (See Defs.' Stmt. ¶ 12.) Owing to Mr. Spurlock's efforts, revenues did increase. (Comp. ¶ 31.) At the same time, Prespa's clientele changed from predominantly Caucasian, to mostly African-American. (¶ 32.) Also during this time, Defendant Davis' office began receiving anonymous complaints regarding Prespa. (Defs.' Stmt. ¶ 14.) In addition, local members of the community allegedly heard rumors of drug use on Prespa's premises, leading Schneider's wife, Mary Kathryn Schneider, who operated a photography studio owned by Delaware Holdings, to contact the Buffalo Police Department. (Affidavit of Mary Kathryn Schneider ("Schneider Aff."), Docket No. 37, ¶¶ 5, 6.) Ms. Schneider was put in contact with district police chief, and defendant, Donna Berry. (Id. ¶ 7.) Ms. Schneider would go on to contact Defendant Berry at least six more times regarding Prespa. (Id.) In addition, Ms. Schneider also contacted Defendant Davis to further express her fears about the effect Prespa was having on the neighborhood, including the discovery of liquor store receipts near Prespa, and the parking of cars so as to block Prespa's rear exit. (Id. ¶¶ 8, 9.)

In August 2007 George met with Defendant Davis at the latter's request. Also in attendance was Defendant Berry. (Affidavit of George Michaelidis ("George Aff."), Docket No. 44, ¶¶ 18, 19.) During that meeting, Defendants asserted that Spurlock, Prespa's promoter, was a criminal engaging in the illegal sale of drugs. (Id. ¶ 19.) Defendants told George that Spurlock should be removed from any activities relating to Prespa. (Id.) In response to these allegations, George asked Defendants to provide him with Spurlock's arrest record or other evidence of his illegal activities. (Id. ¶ 20.) Defendants failed to do so, despite George's repeated attempts to get that information. (Id. ¶ 21.) The only documentation received by Plaintiffs relating to Spurlock was a letter sent by Defendant Davis on October 16, 2007, which stated that his office had received "numerous, anonymous complaints regarding alleged nuisance activity" at Prespa. (Defs.' Stmt. ¶ 19.)

On September 27, 2007 the police closed Prespa's for one evening for operating without a live music license. (Id. ¶ 18.) Plaintiffs did not have the requisite license, but were able to acquire it within 24 hours. (Pls.' Stmt. ¶ 18.) However, after this incident, Plaintiffs never again had a live band on their premises. (Id.)

On April 11, 2008, Delaware Holdings received notice from the State of New York Division of Alcoholic Beverage Control that charged Plaintiffs with selling alcohol not purchased from a registered dealer and for permitting Spurlock to act as an owner or operator of Prespa. (Id. ¶ 24; Pls.' Stmt. ¶ 24.) Plaintiffs' license was ultimately not suspended. (Pls.' Stmt. ¶ 20.) During the same time period, Alexander met with Schneider and was informed that Spurlock had to be terminated and removed from the premises. (Affidavit of Alexander Michaelidis ("Michaelidis Aff."), Docket No. 44, ¶ 35.) Schneider explained that he did not want to be hassled by the police and Defendant Davis. (Id.)

On May 15, 2008, Delaware Holdings informed Alexander that his lease would not be renewed. The landlords' stated reason for non-renewal was the receipt of notices of insurance cancellations, late rent payments, dissatisfaction with the bar business, and doubts regarding future plans for the site. (Deposition of Gregory Paul Koessler ("Koessler Dep."), Docket No. 38, 67:16 - 68:5.) Schneider specifically disliked what Prespa had evolved into over the course of its tenancy, referring to the late payment of bills and the incident involving the New York Liquor Authority. (Id. at 68:19 - 69:4; 69:13-23.) Plaintiffs, by contrast, allege that Defendants' actions led Schneider and Koessler not to renew the lease.

Following the decision not to renew the lease, Plaintiffs explored alternative business possibilities excluding Spurlock, but Plaintiffs' former landlords refused to reconsider. (See Comp. ΒΆΒΆ 68, 69.) Although Schneider originally said that no new bar or restaurant would be put in Prespa's place, following Plaintiffs' departure in July 2008, their former landlords did exactly that. ...

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