Allan L. Bergano, D.D.S., P.C. v. City of Va. Beach

ALLAN L. BERGANO, D.D.S., P.C. et al., Plaintiffs, v. CITY of VIRGINIA BEACH, et al., Defendants.

Civil Action No. 2:15cv520

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA NORFOLK DIVISION

August 15, 2016

OPINION & ORDER

This matter is before the Court on two motions: the City of Virginia Beach, Philip A. Davenport, and Gail E. Salmons's ("Defendants") Motion to Dismiss ("Motion to Dismiss"), Doc. 12, and Dr. Allan L. Bergano's¹ ("Plaintiff") Motion for Leave to Amend ("Motion to Amend"), Doc. 22. For the following reasons, the Court GRANTS Defendants' Motion to Dismiss as to Counts 1, 3, 4, and 5 and DENIES it as to Counts 2 and 6. Doc. 12. The Court DENIES Plaintiff's Motion to Amend, Doc. 22, but GRANTS Plaintiff leave to amend Count 4.

I. BACKGROUND

A. Factual Allegations²

Plaintiff is a dentist whose practice has been located at 256 N. Witchduck Road, Suite D, Virginia Beach for over thirty (30) years. Am. Compl. ¶ 15. In the spring or summer of 2014, a real estate representative for the City of Virginia Beach ("the City") informed Plaintiff that the City intended to acquire the Witchduck Office Court ("the Witchduck building"), Plaintiff'soffice location, from the owner, Jerry Collier ("Mr. Collier"). Id. ¶ 27, Ex. F. The representative told Plaintiff that the acquisition was for a public project and Plaintiff would need to relocate. Id. On September 9, 2014, the City acquired the Witchduck building as part of the City's "Witchduck Road Phase II Project."³ Id. ¶¶ 10, 18, 21, Ex. B ¶ A. On September 9, 2014, Plaintiff signed a Possession Agreement with the City to remain in the Witchduck building until September 15, 2015. Id., Ex. B. On September 15, 2014, the City notified Plaintiff that it would be using the entire building and Plaintiff would have to relocate. Id., Ex. A at 1. The City also stated that Plaintiff was eligible to receive relocation assistance from the City. Id., Ex. A. Later, the City moved its Human Services Department into the Witchduck building, and all private professional offices except Plaintiff's were relocated. Id. ¶ 21.

In 2015, Plaintiff hired a real estate broker to find a new location for Plaintiff's dental practice. Id. ¶ 35. Plaintiff and the broker determined 4460 Corporation Lane, Suite 190, Virginia Beach was suitable for the dental practice, and Plaintiff hired experts and contractors to provide estimates of the "significant" work to be done in the space to accommodate his practice. Id. ¶¶ 35-36. On July 28, 2015, Plaintiff signed a lease for the Corporation Lane building and submitted the lease and construction estimates to the City for reimbursement. Id. ¶¶ 38-39. On August 5, 2015, the City notified Plaintiff that it would not provide the requested funds to modify the Corporation Lane property because "it was apparent that the location would accommodate the dental practice with minor modifications and exceeds what the dental [practice] currently occupies." Id., Ex. C at 1. On August 12, 2015, Plaintiff informed the City that he would appeal its decision to deny him relocation assistance for the Corporation Lane property. Id. ¶ 36. On August 19, 2015, Plaintiff requested a hearing date for his appeal. Id.,Ex. E, at 1.

On August 20, 2015, the City notified Plaintiff that it no longer needed the entire Witchduck property and Plaintiff did not have to relocate his practice after all. Id., Ex. F. The City told Plaintiff that it would reimburse him for "any expenses incurred to satisfy any contractual relocation obligations entered into after the effective date of the notice of relocation eligibility, pursuant to 49 CFR § 24.2(a)(9)(ii)(G)." Id. The City also offered to discuss a new lease with Plaintiff. Id. On September 18, 2015, Plaintiff sent a letter to the City complaining of the loss of direct access to Witchduck Road, the loss of parking for Plaintiff's staff and patients, the relocation of other professional offices from the Witchduck building, and the presence of police and shackled inmates at the building. Id. ¶¶ 20-26.

On September 23, 2015, the City responded with its factual findings and a determination that Plaintiff and his business are not "displaced persons." Id. ¶ 47, Ex. H at 2. The City recounted that it had paid the broker's fees and "may compensate Dr. Bergano and his wife, for their time and expenses pursuing an alternate location in accordance with Virginia Administrative Code Section 24 VAC 30-41-300." Id., Ex. H at 2. On October 12, 2015, the City met with Plaintiff, his counsel, and the real estate broker. Doc. 13 at 5 n.3.⁴ Plaintiff still occupies and practices in the same office space he has used since he became a tenant of the Witchduck building many years ago.⁵ Hearing Tr. at 19:15-19:16, Apr. 7, 2016.

B. Procedural History

On December 1, 2015, Plaintiff filed a three-count Complaint in this Court alleging that (1) Plaintiff and his practice are displaced persons entitled to relocation benefits; (2) Defendants violated Plaintiff's civil rights under 42 U.S.C. §§ 1983, 1988; and (3) Defendants violatedPlaintiff's civil rights under the Equal Protection Clauses of the Fifth and Fourteenth Amendments. Compl. ¶¶ 39-75. On December 31, 2015, Defendants filed a Motion to Dismiss for Failure to State a Claim. Doc. 5. On January 11, 2016, Plaintiff filed an Amended Complaint. Am. Compl. On January 25, 2016, Defendants filed the instant Motion to Dismiss. Doc. 12. Plaintiff responded in opposition on February 8, 2016, Doc. 15, and Defendants replied on February 16, 2016, Doc. 16. On April 7, 2016, the Court held a hearing on the Motion to Dismiss. Doc. 20. On April 13, 2016, Plaintiff filed the instant Motion to Amend. Doc. 22. On April 27, 2016, Defendants responded in opposition, Doc. 25, and on May 4, 2016, Plaintiff replied, Doc. 26. On May 9, 2016, the Parties conducted a settlement conference before a magistrate judge of this Court. Doc. 27. The Parties did not settle. Id.

Plaintiff's six-count Amended Complaint alleges that Defendants violated Plaintiff's (1) rights guaranteed under 42 U.S.C. §§ 1983, 4601, 4622, Am. Compl. ¶¶ 54-114; (2) procedural due process rights under the Fifth and Fourteenth Amendments, id. ¶¶ 115-22; (3) substantive due process rights under the Fifth and Fourteenth Amendments, id. ¶¶ 123-25; and (4) right to equal protection guaranteed by the Fifth and Fourteenth Amendments, id. ¶¶ 126-38. Plaintiff also (5) requests declaratory relief under 28 U.S.C. § 2201 and Virginia Code § 8.01-184, id. ¶¶ 139-43, and (6) protection of his rights guaranteed under Virginia Code §§ 25.1-400, 25.1-406, id. ¶¶144-58.

II. DEFENDANTS' MOTION TO DISMISS

A. Legal Standards

i. Rule 12(b)(6)

A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint; "it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses."Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Although a court must accept as true all well-pleaded factual allegations and construe them in the plaintiff's favor, Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999), the same is not true for legal conclusions, Iqbal, 556 U.S. at 678. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. In deciding the sufficiency of a civil rights complaint, a court "'must be especially solicitous of the wrongs alleged' and 'must not dismiss the complaint unless it appears to a certainty that the plaintiff would not be entitled to relief under any legal theory which might plausibly be suggested by the facts alleged.'" Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999)) (emphasis in original).

In deciding a motion to dismiss, a court may consider the facts alleged on the face of the complaint as well as "matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint." Moore v. Flagstar Bank, 6 F. Supp. 2d 496, 500 (E.D. Va. 1997) (quoting 5A Charles A. Wright & Arthur R. Miller, Fed. Prac. & Proc. § 1357 (1990)); see Pueschel v. United States, 369 F.3d 345, 353 n.3 (4th Cir. 2004) (citations omitted). However, "[c]onsideration of a document attached to a motion to dismiss ordinarily is permitted only when the document is integral to and explicitly relied on in the complaint." Zak v. Chelsea Therapeutics Int'l, Ltd., 780 F.3d 597, 606-07 (4th Cir. 2015) (quoting Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004)) (alteration in original).

ii. Exhibit-Prevails Rule and Corollary

Generally, when an attachment to a complaint and the complaint itself conflict, a court should rely on the exhibit-prevails rule. Goines v. Valley Cmty. Servs. Bd., No. 15-1589, 2016 WL 2621262, at *4 (4th Cir. May 9, 2016). Under this rule, the exhibit is taken as true over "'the bare allegations of the complaint.'" Id. (quoting Fayetteville Inv'rs v. Commercial Builders, Inc., 936 F.2d 1462, 1465 (4th Cir. 1991)). Thus, if a plaintiff "'attaches documents and relies upon the documents to form the basis for a claim or part of a claim, dismissal is appropriate if the document negates the claim.'" Id. (quoting Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 754 (7th Cir. 2002)).

In applying the exhibit-prevails rule, however, "it is not always appropriate to conclude that the plaintiff has adopted the contents of an attached document." Id. at *5 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 455 (7th Cir. 1998) (explaining the extent of Rule 10(c))) (illustrating that...