Court Opinion

ID: 4103034
Source: CourtListenerOpinion
Date Created: 2016-11-29 20:01:38.915277+00
Date Added: 2024-06-11T09:36:30.106634
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 15-2589

ADAMS HOUSING, LLC,

                Plaintiff - Appellee,

           v.

THE CITY OF SALISBURY, MARYLAND,

                Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.     J. Frederick Motz, Senior District
Judge. (1:15-cv-01011-JFM)

Argued:   October 26, 2016                 Decided:   November 29, 2016

Before THACKER and HARRIS, Circuit Judges, and Gerald Bruce LEE,
United States District Judge for the Eastern District of
Virginia, sitting by designation.

Vacated and remanded by unpublished per curiam opinion.

Victoria   M.  Shearer,   KARPINSKI,  COLARESI   &  KARP,    P.A.,
Baltimore, Maryland, for Appellant.       Luke Americus Rommel,
ROMMEL & ASSOCIATES, LLC, Salisbury, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

               Adams Housing, LLC (“Adams Housing”) filed this action

against the City of Salisbury, Maryland, (“Salisbury”) pursuant

to 42 U.S.C. § 1983 and the Declaratory Judgment Act, 28 U.S.C.

§ 2201(a), alleging a variety of state and federal violations.

Salisbury responded and moved to dismiss all claims.                                In an

unusual    posture,        the    district     court    apparently       converted      the

motion to dismiss into a motion for summary judgment and granted

judgment to Adams Housing, the nonmovant.                     Because Salisbury did

not   receive      notice      and    an    adequate    opportunity       to    argue   its

case, we vacate the district court’s judgment and remand for

further proceedings.

                                              I.

               In 1997, Salisbury enacted its Occupancy Ordinance “to

establish and maintain basic minimum standards and conditions

essential       for      the   protection      of   health,     safety     and    general

welfare    of      the    public.”         Salisbury,    Md.,   Code     of    Ordinances

§ 15.24.030(A) (“the Ordinance”). 1                 The Ordinance limits housing

in certain areas to “one of the following groups”: (1) families

related by blood, marriage, or a “custodial relationship”; (2)

“[u]p     to   a   maximum       of   two    persons    who   are   not    so    related,

      1The Ordinance has been amended on multiple occasions since
1997, and we refer to the version in effect in 2014.

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hereinafter       referred       to    as    ‘unrelated             persons’”;      or    (3)   any

group   of     four     persons        approved        as       a     “functional        family.”

§ 15.24.490.

             In July 2014, two brothers and their friend -- all

college students -- rented a house at 418 West College Avenue,

Salisbury, Maryland, from Adams Housing.                            Shortly thereafter, on

September 26, 2014, Adams Housing received an order to reduce

the   number       of   occupants         from       the    Code       Enforcement        Officer

(“Order”).        See J.A. 135-37. 2          Adams Housing challenged the Order

in a hearing before the Salisbury Housing Board of Adjustments

and Appeals (“HBAA”).                 The HBAA found Adams Housing to be in

violation of the Ordinance because the Ordinance “was written

with the idea that two unrelated people would [not] share a

house   unless      they    were      a     family     or    they      went    through      [the]

functional        family    clause.”             Id.       at       214.       Adams      Housing

challenged the HBBA decision in the Circuit Court for Wicomico

County, Maryland.          The action was stayed on May 26, 2015.

             On    April    8,     2015,      Adams        Housing         filed    a    complaint

against Salisbury in the Federal District Court for the District

of Maryland alleging: the Ordinance, on its face, violated the

Equal   Protection         and    Due       Process        Clauses      of    the       Fourteenth

        2 Citations to the “J.A.” refer to the Joint Appendix
filed by the parties in this appeal.

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Amendment; the Ordinance as applied to Adams Housing violated

its equal protection and due process rights pursuant to both the

Fourteenth Amendment and the Maryland Declaration of Rights; the

Ordinance was void for vagueness on its face and as applied to

Adams Housing; and Salisbury tortiously interfered with Adams

Housing’s    contracts.         The     complaint     requested     declaratory

relief, costs, and attorney’s fees.

            On   June   18,   2015,     Salisbury     moved    to   dismiss     the

action pursuant to Federal Rule of Civil Procedure 12(b)(6).

Adams Housing responded to the motion to dismiss and reiterated

its litany of constitutional challenges.              On September 24, 2015,

the district court conducted a status conference call with all

the parties.     No transcript was kept of the phone call.

            According to the district court, on the call, “both

parties   agreed    the   facts    of    the   case    were     undisputed      and

discovery    was   unnecessary.”         Adams   Hous.,       LLC   v.   City    of

Salisbury, Md., 147 F. Supp. 3d 390, 391 n.1 (D. Md. 2015).                      At

oral argument before this court, however, Salisbury explained

that, during the call, it had accepted the allegations in the

complaint as true for the purposes of arguing the motion to

dismiss but neither admitted their actual veracity, nor waived

any discovery rights.         See Oral Argument at 12:34, Adams Hous.,

LLC v. City of Salisbury, Md., No. 15-2589 (4th Cir. Oct. 26,

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2016),   http://www.ca4.uscourts.gov/oral-argument/listen-to-oral-

arguments.

            Indeed, after the phone call, Salisbury sent a letter

to the district court requesting “the Court permit the case to

move forward to discovery” if the court denied the motion to

dismiss.     J.A. 240.      The district court acknowledged receiving

the letter but otherwise ignored its content.                 See Adams Hous.,

LLC, 147 F. Supp. 3d at 391 n.1 (“I conducted a call with Adams

Housing and Salisbury’s counsel on September 24, 2015, where

both parties agreed the facts of the case were undisputed and

discovery was unnecessary.         On the call, both parties consented

to the issuance of a final opinion; however, on October 8, 2015,

defendant’s counsel wrote a letter requesting the court move

forward with discovery if I denied defendant’s motion for [sic]

dismiss.”).

            On November 30, 2015, the district court entered its

Memorandum    Opinion      and   Final       Order.     The     district     court

dismissed    Adams   Housing’s    facial       challenges     under    the   Equal

Protection    and    Due    Process      Clauses,     the     facial   vagueness

challenge, and the tortious interference with contract claim. 3

However, instead of simply denying the motion to dismiss as it

     3 The court did not reach the as-applied due process and
equal protection challenges. See Adams Hous., LLC, 147 F. Supp.
3d at 399.

                                         5
related    to    the    as-applied      vagueness        challenge,       the    district

court     awarded       judgment       to        Adams    Housing,         “declar[ing]

Salisbury’s      interpretation        and       enforcement        of   the    Occupancy

Ordinance unconstitutionally vague as-applied to Adams Housing.”

Adams Hous., LLC, 147 F. Supp. 3d at 399.

             The district court was cryptic.                        Its opinion never

uses the words “summary judgment” nor does it cite any rule of

procedure or precedent to support this unusual disposition.                           As

best we can decipher, the district court sua sponte converted

the motion to dismiss into cross-motions for summary judgment

and granted summary judgment to Adams Housing.                       See Adams Hous.,

LLC, 147 F. Supp. 3d at 391.                 The district court simply stated

the    action    was   “ripe    for    declaratory        judgment”       and    declared

Salisbury’s occupancy ordinance vague as-applied.                          Id. at 391,

399.        During      argument      before       this     court,       both     parties

interpreted      the   district       court’s     opinion      as    granting     summary

judgment.       See Oral Argument, Adams Hous., LLC, No. 15-2589, at

12:34, 33:44.          We too classify the declaration as a grant of

summary judgment.

             Salisbury     timely       filed      this    appeal.         Because     we

conclude     the     district      court     failed       to   follow      the    proper

procedure for granting summary judgment, we vacate its judgment.

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                                       II.

            District courts have inherent power to grant summary

judgment.       See Allstate Ins. Co. v. Fritz, 452 F.3d 316, 323

(4th Cir. 2006).          However, before granting summary judgment, a

court must afford the losing party notice and an opportunity to

be heard.       See id.     The court must give notice to ensure that

the party is aware that it must “come forward with all of [its]

evidence.”      Celotex Corp. v. Catrett, 477 U.S. 317, 326 (1986).

Once such party has sufficient notice, the party also needs an

“adequate opportunity” to present its case and “demonstrate a

genuine issue of material fact.”             U.S. Dev. Corp. v. Peoples

Fed. Sav. & Loan Ass’n, 873 F.2d 731, 735 (4th Cir. 1989).

These requirements serve to provide the party with a “full and

fair   opportunity     to    present   its   case.”    aaiPharma    Inc.   v.

Thompson, 296 F.3d 227, 235 (4th Cir. 2002).

            Here, the district court failed to provide notice and

an opportunity to respond.         The only possible attempt to do so

was    during    the   status   conference    call,   but   that   call    was

inadequate for both tasks.

            At that juncture, when the only pending matter was a

motion to dismiss, Salisbury could not have known it needed to

come forward with all of its evidence.           See U.S. Dev. Corp., 873

F.2d at 735 (explaining that the notice must be viewed in the

context of “the procedural, legal, and factual complexities of

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the case”).           Similarly, the call did not provide an adequate

opportunity for Salisbury to present its case.                              See id.      On the

call,     it        would   have    been        impossible            for     Salisbury         to

spontaneously marshal all of its evidence and demonstrate its

relevance to the legal allegations.

               In    sum,   when    no    motion          for    summary      judgment         was

pending,       no    opportunity    for    discovery            was    provided,         and    no

hearing    was       conducted,     the    district         court       could      not    grant

summary    judgment.         This   was    not        a   fair    chance      to    litigate.

Therefore, the district court’s grant of summary judgment was

improper.

                                           III.

               For the foregoing reasons, we vacate and remand for

further     proceedings       to    allow        an       adequate      opportunity            for

discovery and for each side to argue its case.

                                                                   VACATED AND REMANDED

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