Opinion
No. 99-CV-76319
May 8, 2001
OPINION AND ORDER
This lawsuit arises out of the City of Detroit's demolition of a vacant building built in approximately 1918, formerly a Gardner-White Furniture retail location. The building, owned in part by plaintiff Ruth Kahn, was taken down without providing plaintiff notice or an opportunity to be heard. On August 23, 2000, this court issued an order and opinion granting partial summary judgment for plaintiff as to defendant City of Detroit's liability on plaintiff's 42 U.S.C. § 1983 procedural due process claim arising under U.S. Const. Amend. XIV and state law trespass claim. What remained for the court to determine was the amount of damages, if any, to which plaintiff was entitled. To resolve that matter, the court conducted a bench trial March 5-7, 2001. At the conclusion of the trial, the court invited the parties to file supplemental briefs addressing the assessment of attorney fees as damages claimed by plaintiff under 42 U.S.C. § 1988, and heard subsequent argument by the parties on that issue on April 3, 2001. In making its determination on the issue of damages, the court has considered the testimony and items of evidence in the record, the parties' supplemental briefs, and the arguments presented. The court's findings of fact, conclusions of law, and assessment of damages follow.
I. Ownership Interest in Building
The parties are in agreement that the building at issue here was located at 5607-25 West Fort Street, Detroit, Michigan. Testimony and the parties' exhibits have demonstrated that the real property located at 5607-25 West Fort Street is made up of two parcels, with two separate legal descriptions (see plaintiff's Exhibit 4, Offer to Purchase; plaintiff's Exhibit 9, Memorandum of Land Contract). Despite a temporary conveyance of one parcel to the State of Michigan for nonpayment of taxes and a land contract sale and subsequent forfeiture, exhibits in the record demonstrate a longstanding interest of plaintiff in the building in the amount of 25%. Plaintiff, however, asserts that her ownership in the building was 75% as of the date of its demolition. Plaintiff's 75% position is apparently based on unrecorded quitclaim deeds admitted by the court as plaintiff's trial exhibits 1 and 2, which plaintiff asserts demonstrate conveyance of the 50% interest formerly held by plaintiff's mother-in-law to plaintiff's husband, Irwin Kahn, and then to plaintiff. However, the court notes that one quitclaim deed conveys property described in pertinent part as "Property 1 . . . Lots 9 10, part of Lot 8 . . ." (Plaintiff's Exhibit 1) from Eva Kahn to Irwin Kahn, while the other quitclaim deed conveys property described in pertinent part as "Property 2 . . . part of Lot 8 and part of Lot 7" (Plaintiff's Exhibit 2) from Irwin Kahn to Ruth Kahn. There is no evidence demonstrating a conveyance of the property described as "Property 1" from Irwin Kahn to Ruth Kahn, or "Property 2" from Eva Kahn to Irwin Kahn. The record lacks any evidence demonstrating the conveyance of additional ownership interest in one or both properties to Ruth Kahn. Therefore, while the court accepts the plaintiff's assertion of a long-standing 25% undivided compensable ownership interest by Ruth Kahn in the property (both parcels), there is no evidence supporting a greater ownership interest held by plaintiff. Because plaintiff has failed to establish a greater share, damages will be calculated based upon a 25% share in the building.
The court notes that some documents have used one broader description for the property rather than two separate legal descriptions.
These documents include a warranty deed dated 3/18/60, which it appears was faxed to the court but not filed; a title search attached to plaintiff's summary judgment reply brief; and the land contract agreement (defendant's trial exhibit #3).
II. Damages for Demolition of Building
A. 1990 Sale for $105,000
Turning to an assessment of damages, plaintiff has offered various forms of proof concerning its value. Plaintiff's Exhibit 9 is a Memorandum of Land Contract, between sellers "Eva Kahn, as to an undivided 1/2 interest, Ruth Kahn, as to an undivided 1/4 interest, and Arthur Leebove, a single man, as to an undivided 1/4 interest," and buyer Donald A. Reed. Defendant's Exhibit 3, the land contract itself, shows that the agreement was made by the parties listed above on October 16, 1990 with a sales price of $105,000. Irwin Kahn, husband of plaintiff Ruth Kahn and president of Gardner-White Furniture Company, gave testimony at trial. He indicated that Mr. Reed occupied the premises for a period of time before he defaulted and the property owners filed an action of forfeiture. Mr. Reed made only sporadic payments during his ownership of the property and it is unclear whether he made any significant use of the building, even for storage as he planned.
The court notes defendant's Exhibit 6 indicates a default judgment entered against Mr. Reed by the 36th Judicial District of Michigan on September 7, 1995) finding Reed had forfeited the land contract.
B. 1998 Unconsummated Offer to Purchase for $135,000
Plaintiff's Exhibit 4 is an Offer to Purchase Real Estate, dated May 15, 1998, made by Fort Jefferson Commerce Park, L.L.C. (FJCP), concerning the parcels of property commonly known as 5607 and 5621 W. Fort Street, for $135,000. That offer included a number of contingencies which FJCP had a certain period of time to remove (Plaintiff's Exhibit 4, p. 3). If all contingencies were not removed or waived by the purchaser within the designated period, FJCP was not obligated to consummate the sale. Id. Those contingencies included one stating "That property contiguous and/or in the general vicinity of the subject property can be consolidated and acquired by Purchaser in order to accommodate Purchaser's intended use."Id. Irwin Kahn testified at trial that FJCP was attempting to purchase enough land in the area to build a plant for automotive suppliers, but that FJCP couldn't follow through with its plans, because it was unable to acquire adjacent land. Mr. Kahn could not recall if he refunded the earnest money deposit he received on the offer.
C. Oral Discussions of Possible Lease of Building
Thomas Granata, a long-term business acquaintance of Irwin Kahn, also offered testimony at trial. He testified that he had been involved in furniture sales throughout his career and that he had known the building at 5607 W. Fort Street for 47 years. He stated that in 1998 he expressed interest to Irwin Kahn in renting the Fort Street building for warehouse space, and that they discussed a five year lease at a rental rate of $75,000 per year. Mr. Granata further testified that Irwin Kahn would have prepared the building for occupancy for his purposes, and that Mr. Kahn would have paid taxes and utilities on the property. He also stated that if Mr. Kahn had made the building available to him for sale at a price of $135,000, he would have made an offer to purchase it. However, on cross-examination, Mr. Granata admitted that he had not seen the property in 1998 and guessed that the last time he had been in the building was probably the early 1980s.
The court notes that plaintiff's counsel has, at various times (including arguments to the court at trial), represented this figure to be $46,000 per year.
D. Expert Opinion Evidence Concerning Cost of Replacement and Repair of Building
Frederick J. Auch, Jr., the former president and CEO of the George W. Auch Company, a general contracting business, gave opinion testimony at trial on the cost of repairs and new construction. He testified that a photograph of the building dated approximately 1997 (Plaintiff's Exhibit 13) demonstrated the building's "structural integrity," and further gave his opinion on various costs of repair. He stated that repairs to the front of the building, requiring "immediate attention," would have cost $20,000-$25,000. He further testified that the roof would have required an investment of approximately $25,000, and that building clean up, debris removal, and repairs to the heat, electrical, and plumbing and elevator might have cost $90,000. Further, Mr. Auch offered an estimated cost of replacing the building in 1998 of $2,000,000. Although Mr. Auch attempted to opine on the value of the building after depreciation, the court refused to consider such evidence as it exceeded his expertise. On cross-examination, Mr. Auch attested that occupied buildings have longer lives than vacant buildings; that lack of heat can affect buildings; and that the roof should have received regular maintenance. Mr. Auch's testimony was admittedly based on an examination of photographs and reports of those who did see the building, as he was retained only after the building's demolition.
E. Eyewitness Evidence Concerning Condition of Building
Although the defendant offered no testimony relating to the building's value, some eyewitness evidence was received describing the condition of the building before its destruction in 1998. of interest to the court was testimony by Danny Shufford of the Detroit Public Works, who stated that in October 1997, standing water in the basement reached half way up the stairs, that the back door of the building was open, and a man sleeping in the building's elevator apparently lived in the building. Defendant also called Rolland Wilkins, Jr., a City of Detroit building inspector who, along with City of Detroit Officer George Lott, witnessed a large piece of metal fall from the front of the building in September 1997. Officer Lott also testified at trial that after the building was no longer used as retail furniture space (he stated that use ended in the late 1980s or early 1990s), he had watched the building deteriorate into a dangerous condition, that the metal and brick on the building's facade were "unstable," and that the building was open to trespass. Officer Lott further testified that he saw water dripping in the building and that he witnessed two inch deep standing water on the first floor of the building.
F. Analysis of Evidence Concerning Value
The court finds that of the above, the best evidence concerning the building's market value is the actual land contract sale of the building in 1990 for $105,000. Deficiencies in the other evidence offered by plaintiff concerning value present too much uncertainty to be a reliable measure. For example, the offer to purchase real estate made by FJCP was contingent on the developer's acquisition of a substantial amount of surrounding property, so the court cannot find that the offer represented any indication of the value of plaintiff's building. The discussions Mr. Granata had with Mr. Kahn about leasing the building apparently contemplated rehabilitation of the building to a certain degree prior to occupation, details of which are unknown by the court (and presumably were not known to Mr. Granata, inasmuch as he had not been to the building for approximately 15 years). Finally, Mr. Auch, while not a certified appraiser, was able to opine concerning the replacement cost of the building and offered general estimations of repair costs, but based this testimony only on photographs and other individuals' reports. This evidence is of very little probative use because there was no evidence offered to give a clear understanding of the condition of the building's infrastructure.
The court, therefore, will use $105,000 as a starting point for making a valuation of the building. The court notes that plaintiff has not offered any evidence, such as comparable sales or State Equalized Value (SEV) data, to demonstrate that the building or the area realized any appreciation during the years between the building's 1990 sale and 1998 demolition. In fact the building's market value was diminished during those years, as it stood vacant subject to trespass and was not maintained for all or most of those years. Thus the court finds that, despite serious shortcomings in the record evidence, it must approximate the cost of necessary repairs to make the building minimally habitable for a commercial tenant (e.g. use as storage space).
Mr. Auch's testimony was of some assistance to the court in that the court accepts his opinion that the building retained some structural integrity. However, as outlined above, the testimony of Mr. Shufford, Mr. Wilkins, and Officer Lott demonstrated that the building was in disrepair. At a minimum, the court finds that the facade of the building was in serious need of repair; water filled the basement and had become a problem on the first floor of the building, suggesting damage to the roof, ceilings and/or walls; there was debris in and around the building in need of removal; and the building was subject to trespass creating an interior in need of clean up and repair. Mr. Auch's testimony was also of assistance to the court in assigning costs to these repair requirements. The court accepts a mid-point of $22,500 in his estimate of repair costs to the building's facade and his estimated cost of $25,000 to repair/replace the roof. Further, although it seems highly likely that the infrastructure of the building (including heat, air conditioning, plumbing and electricity), needed extremely costly repairs, the court notes that there was a serious lack of evidence on these aspects of the building. Therefore, the court conservatively estimates minimal repairs and clean up for the building's interior would have been $10,000. This repair/clean up total, to be subtracted from the land contract sale price of $105,000, is $57,500.
The court considered Mr. Kahn's testimony about the roofs "perfect" condition, but found that testimony was outweighed by a) Mr. Auch's testimony about a roofs need for regular maintenance; b) Mr. Kahn's testimony that he had probably not been inside (or, the court extrapolates, on the roof of) the building since 1990; and c) the testimony concerning water in the basement and on the first floor.
G. Deduction from Recovery for Residual Value of Land
Finally, the court must address the value of the land owned by plaintiff, as this amount is not recoverable by plaintiff for the improper building demolition. Although not placed in evidence at the time of trial, testimony at trial indicated a 1998 SEV of $6,400 and land value of $12,800. The parties apparently do not dispute an estimated 1998 land value of $12,800.
The court notes that exhibits to plaintiff's motion for summary judgment included two 1998 City of Detroit assessments, one for each of the two parcels of land comprising plaintiff's property. One is for a 45' x 140' parcel indicating Lots 7 8, with an SEV of $3,850. It is the other which lists an SEV of $6,400, for a parcel 75' x 140', indicating Lots 8, 9 10.
H. Damages Calculation
As discussed above, the court adopts a starting valuation point for the building demolished by defendant City of Detroit of $105,000, subject to reduction in the amount of $57,500, representing the court's conservative estimate for minimal repairs necessary to restore the building to marketable condition in 1998, and $12,800, representing a residual land value, resulting in a valuation for the building itself of $34,700. Finally, as the court has found that plaintiff's compensable interest in the property was 25%, the figure must be further reduced by 75%. Plaintiff's damages award for defendant's illegal demolition of the Fort Street building, therefore, is $8,675.
II. Attorney Fees under 42 U.S.C. § 1988
The court will next address the assessment of attorney fees under 42 U.S.C. § 1988. Plaintiff asserts that under that statute, she is entitled to an award of the attorney fees she incurred in prosecuting her due process claim under 42 U.S.C. § 1983. 42 U.S.C. § 1988 provides, in pertinent part:
* * * * * * * * *
(b) Attorney's fees
In any action or proceeding to enforce a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title. . . ., the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity such officer shall not be held liable for any costs, including attorney's fees, unless such action was clearly in excess of such officer's jurisdiction.
* * * * * * * * *
42 U.S.C. § 1988(b). Plaintiff submits her legal bills in connection with this matter and asserts that the appropriate "lodestar" calculation, resulting in a fee of $59,361.25, represents the number of hours worked on this case by at least one paralegal with a billing rate of $75/hour and several attorneys with billing rates ranging from $150.00-$300.00 per hour.
In response, in a brief filed a week after the court's deadline, defendant initially argues that the defendant's demolition was not a due process violation. The court disregards this argument in that it made its due process violation determination at the time plaintiff moved for and was awarded summary judgment on defendant's liability under 42 U.S.C. § 1983. Defendant next argues the billings submitted by plaintiff are excessive for certain tasks they describe, and that there might be hours in these billings which overlap with work on an unrelated personal injury case against which the Kahn family is defending in Wayne County Circuit Court. Further, the defendant argues that plaintiff has enjoyed limited success in this case, which directs a proportional award of attorney fees. Finally, defendant argues that expert fees and other costs are not recoverable by plaintiff under 42 U.S.C. § 1988. The court declines to address this argument because plaintiff has only requested recovery of attorney/paralegal fees in this proceeding.
Concerning defendant's assertion of excessive hours, defendant's only articulated complaint of excessive hours is that plaintiff billed for nine hours to draft the complaint, five hours to prepare a motion to compel discovery, and seven and one half hours to prepare for two depositions. Although defendant does not cite the court to particular dates, the court has examined plaintiff's bills to pinpoint the hours defendant states are excessive. In plaintiff's invoice dated February 28, 1999, a total of 16.5 hours were billed by a paralegal at a rate of $75/hour in connection with researching, discussing, and drafting the complaint. In the invoice dated March 31, 2000, the court notes several entries concerning the preparation and taking of depositions, including 4.75 hours for "deposition preparation." In the invoice dated January 31, 2000, the court notes 3 hours of paralegal time at $75/hour for drafting a motion to compel, and 2 hours spent by plaintiff's counsel Julie Kosovec on reviewing and revising that motion. The court does not find that these hours are unreasonable.
Regarding the potential for work necessitated by this case and a personal injury case the Kahn family is apparently defending through the same law firm, defendant has pointed to no particular entry to support this contention. The court will not speculate in this regard. However, at oral argument conducted April 3, 2001, the court questioned plaintiff on an invoice dated December 31, 2000, which plaintiff's counsel agreed was submitted in error. The court also notes that the invoice questioned by defendant's counsel at oral argument, to which plaintiff did not respond, included charges for matters related to "action against Montgomery Ward for the unauthorized sale of life insurance." As shown below, that invoice dated 5/31/98 does not appear to apply to this matter and will not be allowed.
Finally, the court will address defendant's argument under Hensley v. Eckerhart, 461 U.S. 424, 76 L.Ed.2d 40 (1983) and Farrar v. Hobby, 506 U.S. 103; 113 S.Ct. 566 (1992), that the degree of plaintiff's success in this case is partial or limited, necessitating a proportionally small award of attorney's fees under 42 U.S.C. § 1988. Although the court acknowledges that the demolition damages award is far less than that sought by plaintiff in her complaint and significantly less than that sought at the time of trial, the award is not nominal, but representative of plaintiff's compensable 25% interest in an aged and abandoned building. Due to its finding that plaintiff was entitled to summary judgment on her procedural due process claim under 42 U.S.C. § 1983, the court finds that plaintiff is a prevailing party for purposes of 42 U.S.C. § 1988 .
Although summary judgment was entered for plaintiff on both her trespass claim and her procedural due process claim, the trespass finding of an unauthorized invasion/demolition was based on the violation of due process in defendant's failure to provide notice in compliance with its own ordinance.
The court has examined the invoices submitted by plaintiff and has determined the following formula for calculating reasonable attorney's fees in this matter. The court is persuaded by the brief, exhibit, and oral argument presented by plaintiff that the fees of plaintiff's counsel, Julie Kosovec, in the amount of $125-150/hour prior to 2001 and $175 in 2001, are reasonable. However, the court finds that plaintiff did not specifically justify the various higher attorney fees in the record. Therefore, the court will accept Ms. Kosovec's attorney fees at those rates, and the fees of partners, other attorneys, and paralegals in the invoices, subject to a cap of $175/hour. This amount certainly represents a reasonable hourly rate for a lawsuit involving issues of average complexity. Further, the court will not allow recovery of any invoices which by their billing number or description do not appear to relate to the instant matter. This calculation is set forth below.
Invoice Recoverable Notes date hours/rates
This notation indicates that the invoice in question reflects the mixed/general billing number of 01064 (as opposed to the specific matter number of 04629 for this case), description of work performed is not obviously related to this matter, and there were no hours highlighted as in similar (mixed matter) bills submitted by plaintiff.
6/30/98 n/a No hours claimed
7/31/98 n/a No hours claimed
8/31/98 .5 hrs @ $175/hr. ($87.50) Atty fees capped at $175/hr.
This notation reflects the court's recalculation of invoices that originally included charges in excess of $175 per hour.
This notation reflects the court's recalculation of invoices that originally included charges in excess of $175 per hour.
9/30/98 n/a No hours claimed
10/31/98 1.25 hrs. @ $175/hr. ($218.75) Atty fees capped at $175/hr.
11/30/98 n/a No hours claimed
1/31/99 2.25 hrs. @ $175/hr. ($393.75) Atty fees capped at $175/hr.
2/28/99 16.5 hrs. @ $75/hr. ($1237.50) 1 hr. @ $175/hr. ($175.00)
3/31/99 3 hrs. @ $175/hr. ($525.00) Atty fees capped at $175/hr.
4/30/99 5.5 hrs. @ $175/hr. ($962.50) Atty fees capped at $175/hr.
4/30/99 n/a Only messenger fee indicated
5/31/99 5.75 hrs. @ $175/hr. ($1006.25) Atty fees capped at $175/hr.
6/30/99 6.25 hrs. @ $175/hr. ($1093.75) Atty fees capped at $175/hr.
7/31/99 4.75 hrs. @ $175/hr. ($831.25) Atty fees capped at $175/hr.
8/31/99 11.75 hrs. @ $175/hr. ($2056.25) Atty fees capped at $175/hr.
9/30/99 15.75 hrs. @ $175/hr. ($2756.25)
10/31/99 2 hrs. @ $175/hr. ($350.00)
11/30/99 11.25 hrs. @ $125/hr. ($1406.25) 8 hrs. @ $175/hr. ($1400.00)
1/1/00 5 hrs. @ $125/hr. ($625.00)
1/31/00 6 hrs. @ $75/hr. ($450.00) Atty fees capped 3 hrs. @ $150/hr. ($450.00) at $175/hr. 1 hr. @ $175/hr. ($175.00)
2/29/00 11.25 hrs. @ $150/hr. ($1687.50) Atty fees capped 1.75 hrs. @ $175/hr. ($306.25) at $175/hr.
3/31/00 4.5 hrs. @ $150/hr. ($675.00) Atty fees capped 17.75 hrs. @ $175/hr. ($3106.25) at $175/hr.
4/30/00 32.5 hrs. @ $150/hr. ($4875.00) Atty fees capped 3.5 hrs. @ $175/hr. ($612.50) at $175/hr.
5/31/00 12.5 hrs. @ $150/hr. ($1875.00) Atty fees capped 3 hrs. @ $175/hr. ($525.00) at $175/hr.
6/30/00 19 hrs. @ $75/hr. ($1425.00) 2.75 hrs. @ $150/hr. ($412.50)
7/31/00 11.75 hrs. @ $150/hr. ($1762.50) Atty fees capped 7.5 hrs. @ $175/hr. ($1312.50) at $175/hr.
8/31/00 2 hrs. @ $150/hr. ($300.00) Atty fees capped 8 hrs. @ $175/hr. ($1400.00) at $175/hr.
9/30/00 1.25 hrs. @ $150/hr. ($187.50) Atty fees capped 3.75 hrs. @ $175/hr. ($656.25) at $175/hr.
10/31/00 .75 hrs. @ $150/hr. ($112.50) Atty fees capped 1 hr. @ $175/hr. ($175.00) at $175/hr.
11/30/00 1 hr. @ $150/hr. ($150.00)
12/31/00 n/a Matter no. 05123
12/31/00 12.25 hrs. @ $125/hr. ($1531.25) 26.5 hrs. @ $150/hr. ($3975.00)
1/31/01 8.5 hrs. @ $151/hr. ($1283.50)
2/28/01 3.75 hrs. @ $175/hr. ($656.25)
3/14/01 63.25 hrs. @ $175/hr. ($11,068.75)
Based on the hours and rates allowed by the court, as detailed above, the court finds that the recoverable attorney fees in this matter total $56,271.
CONCLUSION
The court has determined that plaintiff's damages in this matter are $8,675 for a 25% compensable interest in the demolished building, and $56,271 for attorney fees recoverable under 42 U.S.C. § 1988. The court, therefore, ORDERS that plaintiff be awarded damages totaling $64,946.