United States District Court, N.D. New York
MEMORANDUM-DECISION and ORDER
LAWRENCE E. KAHN, District Judge.
Plaintiff Karen Marie Adams ("Plaintiff") commenced the instant action on April 26, 2007, asserting claims for federal civil rights violations and various state law claims, arising from an alleged conspiracy centered on Plaintiff's property in Keeseville, New York. See Dkt. Nos. 1; 57 ("Third Amended Complaint"). Presently before the Court are a pair of Motions for summary judgment, filed by Defendants Donald E. Loreman, Sr. and Carolyn Loreman (together, the "Loremans") and by Defendants the Village of Keeseville, New York (the "Village"); Mark J. Whitney ("Whitney"), the former mayor of the Village; and William O'Connor ("O'Connor") and William Seaver ("Seaver"), both former Village employees (together, the "Village Defendants") (collectively, "Defendants"). Dkt. Nos. 297 ("Loremans Motion"); 297-10 ("Loremans Memorandum"); 299 ("Village Motion"); 299-6 ("Village Memorandum"). For the following reasons, Defendants' Motions for summary judgment are granted.
The factual background of Plaintiff's action is wide ranging and has been previously recounted in detail by the Court. See Dkt. No. 219 ("September 2010 Order") at 2-16. The Court therefore only relates herein those facts necessary to the resolution of the present Motions. For a more complete statement of the facts, reference is made to the Court's September 2010 Order and Plaintiff's Third Amended Complaint. Sept. 2010 Order; Third Am. Compl.
Plaintiff's allegations against the Loremans and the Village Defendants relate to a mixeduse, historic building at 1707-1709 Front Street, Keeseville, New York (the "Front Street Property" or, the "Property"). Third Am. Compl. ¶ 23. On February 4, 2003, Plaintiff purchased the Front Street Property from the Loremans. Dkt. Nos. 298 ("Loremans Statement of Material Facts") ¶ 3; 302 ("Plaintiff Response Statement of Material Facts - Loremans") ¶ 3. The Front Street Property had sustained significant fire damage, Dkt. No. 299-5 ("Village Statement of Material Facts") ¶ 11, and Plaintiff purchased the Property with a loan from the Village, intending to renovate it and open it as a bed and breakfast, Third Am. Compl. ¶ 25. The loan was issued through the Village's Revolving Loan Program, a federally funded program intended to provide low-interest loans to promote economic growth and development in the Village. Vill. SMF ¶¶ 13-15. On May 9, 2003, Plaintiff agreed to lease 1709 Front Street to the Loremans for $400 a month. Loremans SMF ¶ 4. The Loremans operated a laundromat from that location. Id.
The total amount of the loan from the Village to Plaintiff was $145, 000. Vill. SMF ¶ 16. The purchase price for the Front Street Property was $55, 000, and the remaining $90, 000 was designated for renovating the Property and would be issued in four draws. Id. ¶ 17. The interest rate on the loan was 3% and would rise to 8.5% if the loan was in default. Id. Plaintiff received the $55, 000 and the first draw on the remainder of the loan on February 27, 2003. Id. ¶¶ 19-20. Plaintiff received the remaining draws on the loan on March 5, March 19, and March 26, 2003. Id. ¶ 21.
Plaintiff's first payment on the loan was due June 1, 2003. Id. ¶ 23. Plaintiff, however, did not make her first payment, nor did she make the following payment due July 1, 2003. Dkt. No. 299-9 ("Hathaway Affidavit") ¶¶ 15, 19-20. Plaintiff attempted to make her first payment on July 28, 2003, but the check was returned for insufficient funds. Id. ¶ 21. Plaintiff did not make the payments due on August 1 and September 1, 2003. Id. ¶¶ 21-22. On September 9, 2003, Plaintiff and her attorney appeared at a Village Board meeting and requested a deferral of the loan payments. Vill. SMF ¶ 38. On the same date, Plaintiff made her first payment on the loan. Id. ¶ 39. On September 11, 2003, the Village Board adopted a resolution deferring Plaintiff's loan payments until June 2004, but requiring her to pay taxes and water and sewer fees, and to maintain insurance on the Property. Id. ¶¶ 40-41; Dkt. No. 302 ("Plaintiff Response Statement of Material Facts - Village") ¶¶ 38, 41 (stating that the deferment had been orally agreed to ahead of the September 9 meeting).
Plaintiff was issued a certificate of occupancy for her bed and breakfast in June 2003, and subsequently opened business. Vill. SMF ¶¶ 30-31. The renovations on the Front Street Property were completed by April 1, 2004. Id. ¶ 46. Sometime during this period, the insurance coverage on the Property lapsed. Id. ¶ 43; Pl. Resp. SMF - Vill. ¶ 43. State, county, and local taxes were also delinquent on the Property. Vill. SMF ¶ 44; Pl. Resp. SMF - Vill. ¶ 44. Water and sewer fees on the Property were not current. Hathaway Aff. ¶ 29.
Whitney became Mayor on April 1, 2004, and Plaintiff had discussions with him regarding a restructuring of the loan. Vill. SMF ¶¶ 45, 47-48; Pl. Resp. SMF - Vill. ¶¶ 47-48. Whitney requested certain information regarding Plaintiff's business, but Plaintiff did not provide all of the requested documentation. Vill. SMF ¶¶ 48-49; Pl. Resp. SMF - Vill. ¶¶ 48-49.
Plaintiff's first payment following the deferment period was due June 15, 2004. Vill. SMF ¶ 50. Plaintiff wrote a check dated June 15, 2004, but the check bounced due to insufficient funds. Id. ¶ 51. Plaintiff made three partial payments totaling $1, 502.00 in July and August 2004. Id. ¶ 52. The Village did not receive any further payments on Plaintiff's loan. Id. ¶ 57. On December 1, 2004, the Village initiated foreclosure proceedings in State Supreme Court, County of Essex, against Plaintiff for non-payment of her loan. Id. ¶ 58; Dkt. No. 299-30. In a decision and order dated June 15, 2005, the State court granted summary judgment in favor of the Village. Vill. SMF ¶ 62; Dkt. No. 299-31. On September 6, 2005, Plaintiff sold the Front Street Property to Kathryn Smith for $225, 000. Vill. SMF ¶ 64. On September 21, 2005, the mortgage and building loan were repaid and a discharge of mortgage was filed. Id. ¶ 66. The Village discontinued the foreclosure action. Hathaway Aff. ¶ 48.
Plaintiff alleges that the Village Defendants and the Loremans conspired to harass Plaintiff to cause her business to fail and cause her to default on her loan. Third Am. Compl. ¶¶ 28, 56, 68. Plaintiff alleges the following activities by Defendants: "failure to make timely payments and draw downs, issuing bogus citations, repeated unnecessary inspections daily, harassing show downs' with workers and Plaintiff, slander, theft of services, theft of goods, and failure to uphold agreements." Id. ¶ 28. On May 15, 2003, Plaintiff sent an invoice to the Village for "interference and damages." Vill. SMF ¶ 24.
Plaintiff alleges that O'Connor, the former Village code enforcement officer, visited the work-site daily and harassed Plaintiff and her workers while the renovations were ongoing. Third Am. Compl. ¶ 208. As code enforcement officer, O'Connor inspected properties to ensure compliance with State and local building, fire, and maintenance laws and codes. Dkt. No. 299-7 ("O'Connor Affidavit") ¶ 3. If O'Connor observed a violation, he would first give a verbal warning to the property owner. Id. If the violation was not remedied, a written citation would be issued requiring the property owner to appear at a hearing. Id. Plaintiff asserts that O'Connor issued false citations in order to harass her, including one on December 15, 2003, for not having a fire escape. Third Am. Compl. ¶¶ 219-20; see also Dkt. No. 303 ("Plaintiff Exhibits"), Ex. 12. On other occasions, O'Connor allegedly called Plaintiff and threatened to "shut (her) down." Third Am. Compl. ¶ 210. Plaintiff alleges that O'Connor had been instructed by Whitney to harass Plaintiff to cause her to quit her business. Id. ¶ 212. O'Connor states that he did inspect Plaintiff's property and would have noted observed code violations, but states that there is no record of any formal citations or fines being issued to Plaintiff. O'Connor Aff. ¶ 5.
Plaintiff also alleges that her loan payments were misappropriated. Third Am. Compl. ¶ 60. Plaintiff contends that payments she intended to make on her loan were instead directed to her water and sewer bill. Id. ¶¶ 61-62. Plaintiff states that she attempted to tender a payment on September 10, 2004, to the Village attorney, but was advised that the payment was late and that the Village intended to initiate foreclosure proceedings. Id. ¶ 64. Finally, Plaintiff claims that Whitney manipulated the interest rate on her loan following the deferment period. Id. ¶ 59.
Plaintiff alleges that the Loremans conspired with the Village Defendants to harass her and defraud her of the Front Street property. See id. ¶ 28. After the sale of the Front Street property closed, the Loremans continued to occupy 1709 Front Street, from which they operated a laundromat. Id. ¶ 27; Loremans SMF ¶ 4. However, the Loremans refused to sign Plaintiff's lease or make payments. Third Am. Compl. ¶ 27. On May 9, 2003, Plaintiff signed a version of the lease revised by the Loremans' attorney. Id. ¶ 29.
Relations between the parties deteriorated, with each side accusing the other of numerous breaches of the lease. See id. ¶ 32; Pl. Exs., Exs. 2, 3; Loremans SMF ¶ 6. Plaintiff alleges that the Loremans damaged the Property and refused to pay rent. See Pl. Exs., Ex. 2. Plaintiff contends that the Loremans intended to cause Plaintiff's business to fail in order to regain ownership of the Property. Third Am. Compl. ¶ 31. The Loremans, on the other hand, assert that they withheld rent because Plaintiff failed to meet her obligations under the lease. See Loremans SMF ¶¶ 11-15.
In March and April 2004, Plaintiff brought actions to evict the Loremans in the Keeseville Village court before Justice George Head. Third Am. Compl. ¶¶ 32-33. Both actions were rejected for procedural deficiencies. Id. Before filing the second action, Plaintiff changed the locks on the laundromat. Dkt. No. 297-2 ("Plaintiff Deposition") at 86:2 to 86:6. The Loremans were out of town, but their son went to the building and attempted to break in. Id. at 86:10 to 86:15. The next day, Plaintiff was summoned before Justice Head and ordered to give the Loremans' son a key to the changed lock. Id. at 87:16 to 88:4. Plaintiff brought a third eviction action, this time represented by counsel, in August 2004. Third Am. Compl. ¶ 34. Following a three-day trial in December 2004, Justice Head issued a partial order in Plaintiff's favor, which recommended that the parties go to arbitration to determine the amount of rent due. Id. ¶ 38. Plaintiff's counsel instead requested a final order from Justice Head on the amount of rent due. Id. Justice Head, however, never issued such an order before his death in June 2007. Id. ¶¶ 39, 41. After Justice Head's death, the Village closed the Keeseville court. Id. ¶ 41. Plaintiff has continued to seek a final order, but the Village has refused to provide a statement that the Keeseville court is closed and her case is still pending. Id.
Plaintiff observed numerous interactions between the Loremans and Village Defendants which she believes establish a conspiracy to defraud her of the Front Street Property. Id. ¶ 31. During the eviction action, Plaintiff observed Whitney in the courtroom passing notes to the Loremans. Id. ¶ 36. Plaintiff also observed Whitney meeting with the Loremans at the back of their laundromat. Id. ¶ 216. Plaintiff states that the Loremans supported Whitney in his campaign for Mayor. Pl. Dep. at 80:11 to 80:16. Plaintiff similarly observed O'Connor talking to the Loremans in the laundromat. Id. at 77:4 to 77:23. Seaver, who rented an apartment from Plaintiff at the Front Street Property, allowed the Loremans onto the Property without Plaintiff's permission. Third Am. Compl. ¶¶ 218, 223. Whitney and Seaver were both present when Plaintiff was summoned to Justice Head's chambers to return a key to the changed lock. Pl. Dep. at 87:23 to 88:1.
Plaintiff refers to comments by the Loremans and Village Defendants that they would "take the [Front Street Property] off' her hands." Third Am. Compl. ¶ 218. The Loremans repeatedly suggested to Plaintiff that she had "gotten in over (her) head" and offered to "to work something out with the Village to take the building back.'" Id. ¶ 28. Plaintiff notes that as she was trying to evict the Loremans, the Village informed Plaintiff's counsel that it intended to foreclose on her and appoint the Loremans as receivers of the building. Id. ¶ 69. A letter written by the Village's attorney indicated that the Village intended to seek an order appointing a receiver and to ask the receiver to continue renting the laundromat to the Loremans, because the laundromat was the only viable business that could pay rent to heat the building in the event of foreclosure. Dkt. No. 299-30 at 70.
III. LEGAL STANDARD
Federal Rule of Civil Procedure 56(a) instructs a court to grant summary judgment if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). Although "[f]actual disputes that are irrelevant or unnecessary" will not preclude summary judgment, "summary judgment will not lie if... the evidence is such that a reasonable jury could return a verdict for the nonmoving party." ...