OPINION AND ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

DAVID LAWSON, District Judge

The plaintiffs have filed a lawsuit in this Court pursuant to 42 U.S.C. § 1983 alleging that the defendants' actions in seeking to enforce a local ordinance to ban the operation of their automobile salvage yard have violated the plaintiffs' rights under the Equal Protection Clause and the Due Process Clause. The defendants previously brought suit in state court against the plaintiffs here contending that the plaintiffs were operating a business on their land in violation of the ordinance that regulates the operation of junk and automobile salvage yards. The plaintiffs filed a counterclaim in the state court case, and they obtained permission to expand their counterclaim to include the theories that they press here, although they failed to avail themselves of that opportunity by timely filing an amended pleading following the state court's order granting them leave. The state court action proceeded to judgment, which the defendants here contend operates as a bar to the present lawsuit, and they have presented that argument in their motion for summary judgment now pending before the Court. The Court heard oral argument on the motion on October 28, 2003, after which the Court granted the parties additional time to supplement their authorities. The matter is now ready for decision. The Court finds that the plaintiffs' action in this Court is barred by the doctrine of res judicata, and therefore the defendants' motion will be granted.

I.

The plaintiffs have been operating an automobile salvage business on their property in Roscommon Township since 1974. Sometime in 2001, township officials alleged that the plaintiffs' business contravened a local ordinance, and they took action to cause the plaintiffs to cease and desist operations. Their efforts eventually led to a lawsuit filed by the township in the Roscommon County, Michigan Circuit Court on September 26, 2001 in which it was alleged that the Hendrixes were using four parcels of their property zoned as "C-2 Commercial" to operate a junk yard, defined by Township Ordinance Section 3.19, which is prohibited. The complaint also alleged that the Hendrixes' use of their property created a "blight condition" in violation of local ordinance.

The Hendrixes answered the sate court complaint and asserted numerous affirmative defenses. In response to Count I, they asked the state court to "dismiss [the Township's] Complaint with prejudice, enjoin [the Township] from further civil or criminal action against [them] for the current use of their property, [and] enjoin [the Township] from further harassment of [the Hendrixes]." Def.s' MSJ. Ex. B, Hendrix state court Amended Ans. and Aff. Def. at ¶ 8. They made the same request in response to Count II. Id. at ¶ 9. In their additional affirmative defenses, the Hendrixes contended that the township's actions constituted "(c) a violation of the due process clause of the Michigan Constitution and the United States Constitution;. . . [and a] (f) Violation of 42 U.S.C.A. § 1983." Id. at ¶ 43. It was the Herdrixes' theory in that court, as it is here, that the Township, its supervisor Diane Randall, her husband, and his cronies caused the suit to be instituted to destroy the Hendrixes' business, which was competing with Randall's husband's junkyard. The Hendrixes also asserted counterclaims against the township for (1) breach of contract, (2) unjust enrichment, (3) detrimental reliance, and (4) fraud. They did not name Randall, her husband, and his cronies as parties, although they made reference to Randall's role as a supervisor of the township.

On May 5, 2002, the Hendrixes successfully moved to amend their state counter-complaint to assert additional counterclaims against the Township and to raise cross claims against new defendants including Randall in her official capacity as supervisor for Roscommon Township as well as her individual capacity, her husband Steve Randall, and his fellow business associates, Phil Hendershot, Jeff McCollough, James Porath, and Porath Contractors, Inc., on theories based on violations of the Equal Protection Clause and the Due Process Clause under 42 U.S.C. § 1983. The state court's order granting that motion was entered on May 16, 2002 and provided that the Hendrixes must file their amended pleadings "within seven days." Def.s' MSJ. Ex. E.

The proposed amended counterclaim alleged that the Township singled out the Hendrixes for enforcement of junkyard zoning ordinances while allowing others, like Diane Randall's husband, to continue operating junkyards that violated the zoning ordinance. Id. at 2-3. The proposed amended counterclaim further stated that the official action was initiated by Diane Randall, a supervisor of Roscommon Township; that she has a direct property interest in her husband's junkyard; that the real reason for the suit was to preclude competition between the Hendrixes and Randall and her husband; and that these ordinances were not enforced upon more favored citizens in the Township. For reasons that are not clear on this record, however, the Hendrixes never filed their amended counterclaim in state court in accordance with the order granting them leave to do so.

Four months later, the Hendrixes moved the state court to allow them to file their amended counterclaim. This time the state court judge denied their motion. The reason for the denial has not been presented to this Court by the parties and it does not appear in the text of the state court's written order of October 30, 2002. However, the state court thereafter bifurcated the issues in the main complaint and the counterclaim, and the Township's zoning enforcement action proceeded to trial in state court on March 25, 2003. The state court rendered its decision finding that the Hendrixes indeed enjoyed a valid non-confirming use on two of their parcels but that they impermissibly had expanded their use of that property as a junkyard. The court then enjoined the Hendrixes from storing more than twenty-five junk cars on two of the parcels, and prohibited them from storing any junk cars on the other two parcels.

Shortly before the state judgment was issued, the Hendrixes filed the present action in this Court alleging violations of their rights under the Equal Protection and Due Process Clauses via 42 U.S.C. § 1983. The Hendrixes claim that Roscommon Township, through supervisor Diane Randall, is arbitrarily and improperly enforcing its zoning ordinances against them in the hope of squelching their ability to compete in the salvage business against friends and acquaintances of defendant Randall including her husband. The Hendrixes further contend that the state court action filed by Roscommon Township in 2001 was filed in bad faith and is based solely on animus, depriving them of equal protection under the law. These claims are nearly identical to those that the Hendrixes sought to bring before the state court in their second-amended answer, counterclaims and cross claims.

Meanwhile, in September 2003, the state court granted the Township's motion for summary judgment on the detrimental reliance and fraud claims and ordered the Herdrixes' breach of contract and unjust enrichment claims to proceed to trial. The next day, on September 19, 2003, the state court entered an amended judgment enjoining and limiting the use of the four parcels in the manner described above.

The defendants in this case, the Township and Diane Randall, have filed a motion for summary judgment contending that the state court judgment acts as a bar to the present action. The Hendrixes insist that the Michigan state court rules allow them to split their claims and to proceed on their federal theories in this Court.

II.

A motion for summary judgment under Fed.R.Civ.P. 56 presumes the absence of a genuine issue of material fact for trial. The Court must view the evidence and draw all reasonable inferences in favor of the non-moving party, and determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). Here, the parties do not raise a serious contest as to the facts, although they vigorously dispute the legal consequences that flow from them. The summary judgment procedure, which "is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy and inexpensive determination of every action," Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (internal quotes omitted), therefore, is an appropriate method to address the defendants' arguments that the plaintiffs' case is barred by the doctrine of res judicata, or, in modern parlance, claim preclusion. See Dubuc v. Green Oak Twp., 312 F.3d 736, 743 (6th Cir. 2002); see also id. at 745 (noting that "claim preclusion" generally encompasses the old rules of merger and bar that are included within the doctrine of res judicata, and "issue preclusion" covers the concept of collateral estoppel).

The defendants contend that the judgments of the Roscommon County, Michigan Circuit Court in favor of Roscommon Township, including the summary judgment on a portion of the Herdrixes' state counterclaims, bar the assertion by the Hendrixes of their federal claims in this Court. "When deciding whether to afford preclusive effect to a state court judgment, the Full Faith and Credit Act, 28 U.S.C. § 1738, requires the federal court to give the prior adjudication the same preclusive effect it would have under the law of the state whose court issued the judgment." Stemler v. Florence, 350 F.3d 578, 586 (6th Cir. 2003) (citing Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984)).

In Michigan, a judgment has preclusive effect under the doctrine of claim preclusion and bars a second action "when (1) the first action was decided on the merits, (2) the matter contested in the second action was or could have been resolved in the first, and (3) both actions involve the same parties or their privies." Sewell v. Clean Cut Management, Inc., 463 Mich. 569, 575, 621 N.W.2d 222 (2001). The Michigan Supreme Court has stated that claim preclusion applies "`to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.'" Pierson Sand Gravel, Inc. v. Keeler Brass Co., 460 Mich. 372, 380, 596 N.W.2d 153, 157 (1999) (quoting Hackley v. Hackley, 426 Mich. 582, 585, 395 N.W.2d 906 (1986)). Michigan's version of the claim preclusion doctrine "bars relitigation of claims that are based on the same transaction or events as a prior suit." Ditmore v. Michalik, 244 Mich. App. 569, 577, 625 N.W.2d 462 (2001); see also Jones v. State Farm Mut. Automobile Ins. Co., 202 Mich. App. 393, 401, 509 N.W.2d 829 (1993). If the same facts or evidence would sustain both, the two actions are the same for the purpose of claim preclusion. Huggett v. Dep't. of Natural Resources., 232 Mich. App. 188, 197-198, 590 N.W.2d 747 (1998); In re Koernke Estate, 169 Mich. App. 397, 399, 425 N.W.2d 795 (1988). The claim-preclusion doctrine is broadly applied in Michigan. Gose v, Monroe Auto Equip, Co., 409 Mich. 147, 160, 294 N.W.2d 165 (1980). When a claim is barred by claim preclusion, the claimant loses all rights to remedies against the opposite party "with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose." Jones, 202 Mich. App. at 397; 509 N.W.2d at 832 (quoting 1 Restatement Judgments, 2d, § 24, p 196).

The argument by the plaintiffs in this case focuses on the second element of the doctrine, and they believe that a provision of the Michigan Court Rules saves them from its preclusive effect. Since the claims they seek to raise in this Court arguably were the subject of a state counterclaim, the Hendrixes point to Mich. Ct. R. 2.203(E), which states:

(E) Time for Filing Counterclaim or Cross-Claim. A counterclaim or cross-claim must be filed with the answer or filed as an amendment in the manner provided by MCR 2.118. If a motion to amend to state a counterclaim or cross-claim is denied, the litigation of that claim in another action is not precluded unless the court specifies otherwise.

(emphasis added). The plaintiffs here insist that the emphasized language insulates them from the otherwise obvious application of the doctrine of claim preclusion in this case.

The defendants contend that Mich. Ct. R. 2.203(E) provides no solace to the plaintiffs because they had already stated a counterclaim in the state court action, in which they were obliged to include every claim against the opposite parties that they had at the time. They cite Mich. Ct. R. 2.203(A), Michigan's compulsory joinder rule, which states:

In a pleading that states a claim against an opposing party, the pleader must join every claim that the pleader has against that opposing party at the time of serving the pleading, if it arises out of the transaction or occurrence that is the subject matter of the action and does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction.

Mich. Ct. R. 2.203(A). Moreover, the defendants observe that the Hendrixes' motion to amend their counterclaim to state their federal constitutional claims against the Township and Randall was not denied; rather the Hendrixes failed to comply with the state procedure and timely file their amended pleading within the time allowed by the state trial judge.

The Court believes that the defendants have the better argument. First, the plain language of Mich. Ct. R. 2.203(E) provides relief to a state court defendant who is denied the opportunity to amend an answer to state a counterclaim. However, the Hendrixes already had stated a counterclaim in their responsive pleadings in state court, and their motion to amend further in order to expand their theories and add counter-defendants was granted. It was the Hendrixes' own procedural default, not any action by the state trial judge, that interfered with the claims coming before the state court.

Second, even if the Hendrixes had not sought to amend their counterclaim, the state compulsory joinder rules would force the application of the doctrine of claim preclusion here. Under Michigan Court Rule 2.203(A), the Hendrixes were obligated to bring all their theories in their counterclaim against the Township. Since their constitutional claims arose from the subject matter described in the counterclaim, the Hendrixes should have brought them all in the state court.

Lastly, Section 2.203(E) is a procedural rule that yields to the doctrines of claim and issue preclusion. See Salem Industries, Inc. v. Mooney Process Equip. Co., 175 Mich. App. 213, 216, 437 N.W.2d 641, 642 (1989) (holding that a defendant who is denied leave to state a counterclaim may bring an independent action "to the extent allowed by the rules of collateral estoppel and res judicata"). Thus, Section 2.203(E) cannot preempt those doctrines, nor cannot it revive an action that otherwise would be barred by them.

Claim preclusion operates here. The state court action resulted in a decision on the merits and the issuance of a judgment: the Hendrixes' constitutional defenses necessarily were rejected in the adjudication of the zoning violation matter after trial; and the counterclaim was decided adversely to them on summary judgment. Next, the equal protection and due process claims arose from the same transaction as the subject matter of the state complaint and the counterclaim and could have been raised in the state-court action. In fact, as mentioned above, the Hendrixes successfully moved the state court to amend their first answer to incorporate the equal protection claim but then failed to do so in a timely manner. In addition, the Hendrixes raised affirmative defenses to the zoning enforcement action that include an alleged violation of the Due Process Clause and other constitutional claims not delineated. See Ternes Steel Co. v. Ladney, 364 Mich. 614, 619, 111 N.W.2d 859 (1961) ("Once plaintiff raised these issues [the claims he asserts in a second suit] as defenses in the first suit, they were required to be fully and finally determined in that suit"); Sprague v. Buhagiar, 213 Mich. App. 310, 313-14, 539 N.W.2d 587, 588-89 (1995) (court precluded a second claim that could have been raised as a counter-claim or affirmative defense in first action under broad application of res judicata doctrine).

The Hendrixes' claims alleging unequal or selective enforcement of the zoning ordinance and issues surrounding due process clearly arose out of the same transaction or occurrence that was the subject matter of the state-court action. The effort by the Hendrixes to amend their counter-complaint twice in the state action also demonstrates that the same facts for their claims were present in both suits. Dubuc, 312 F.3d at 750. Had the Hendrixes exercised reasonable diligence, they could have raised all their counterclaims in the first action.

Finally, the parties in the state action and federal action are the same. The defendant in the state action and the plaintiffs here are the Hendrixes. Thus, the party against whom claim preclusion is being asserted was present in both suits. The counter-defendant in the state-court action was Roscommon Township, and the defendants in the present action are the Township and its supervisor, Diane Randall. Although Randall was not a party to both suits, the Hendrixes claim that Randall authorized the Township's state action to enforce the zoning ordinance in her official capacity. See Compl. at ¶¶ 14-23. Since Roscommon Township may be held liable for its officials unconstitutional actions, there is sufficient privity between the two. Cf. Dubuc, 312 F.3d at 751 (stating that "[t]he Court should not allow Appellant to continue this repetitive litigation simply by finding some municipal official that has not yet been sued, and trying to blame what he claims was systematic group mistreatment of him on that one person individually").

All of the elements of claim preclusion are present in this case.

III.

The Court finds that the claims set forth by the plaintiffs in their complaint filed in this Court are barred by the doctrine of claim preclusion and the operation of the Roscommon County, Michigan Circuit Court Judgments referenced earlier. The provisions of the Michigan Court Rules relied upon by the plaintiffs so not provide an exception that saves the plaintiffs' claims.

Accordingly, it is ORDERED that the defendants' motion for summary judgment [dkt #18] is GRANTED.

It is further ORDERED that the plaintiffs' complaint is DISMISSED WITH PREJUDICE.