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Edco Environmental Services Inc. v. City of Crown Point

United States District Court, N.D. Indiana, Hammond Division

September 19, 2014




This case originated in Lake County Superior/Circuit Court. After Plaintiff EDCO Environmental Services Inc. amended the complaint to allege federal claims, Defendant City of Crown Point ("City") removed it to federal court. Defendants City and Keith E. Anderson, in his civil servant capacity, have filed a motion to dismiss the counts of Plaintiff's complaint directed against them for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) (DE 5).

Keith Anderson, Jeanne Anderson, and Commercial Heating and Cooling ("CHC") have also moved to dismiss all claims against them (DE 13).

A. Standard for Evaluating a Motion to Dismiss

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim is to test the sufficiency of the pleadings, not to decide the merits of the case. See Gibson v. Chi., 910 F.2d 1510, 1520 (7th Cir. 1990). Rule 8(a)(2) provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." However, recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp v. Twombly, 550 U.S. 544, 555 (2007)).[1] As the Supreme Court has stated, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id . Rather, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Id. at 678 (quoting Twombly, 550 U.S. at 570). A complaint is facially plausible if a court can reasonably infer from factual content in the pleading that the defendant is liable for the alleged wrongdoing. Id . (citing Twombly, 550 U.S. at 556). The Seventh Circuit has synthesized the standard into three requirements. See Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). "First, a plaintiff must provide notice to defendants of her claims. Second, courts must accept a plaintiff's factual allegations as true, but some factual allegations will be so sketchy or implausible that they fail to provide sufficient notice to defendants of the plaintiff's claim. Third, in considering the plaintiff's factual allegations, courts should not accept as adequate abstract recitations of the elements of a cause of action or conclusory legal statements." Id.

B. Plaintiff's Complaint

The facts as set out in Plaintiff's complaint reveal that Plaintiff is a corporation that provides commercial heating, ventilation, and air conditioning services ("HVAC") in Crown Point. Defendants Keith and Jeanne Anderson live at 915 Merrillville Road in Crown Point. Defendant Commercial Heating & Cooling Inc. ("CHC") operates its business from that address. The property is zoned residential, but the Andersons have a special use approval from the City Board of Zoning Appeals allowing them to operate an office there. According to Plaintiff, CHC's HVAC operation violates the special use in that it parks and stores commercial vehicles at the property, there is a commercial sized dumpster at the property, and HVAC services and tear-down of equipment take place at the property. Plaintiff also cites several City zoning code violations at the property. Plaintiff claims that the zoning violations give CHC a competitive advantage over Plaintiff's HVAC business. Plaintiff has brought the violations to the attention of the City, but the City has not enforced its zoning code against the Andersons.

In Count I of the complaint, Plaintiff asks for judgment that the Andersons are violating the City zoning code. They ask the Court to issue an injunction requiring the Andersons and CHC to stop all business activity and to require the City to enforces its zoning code.

Count II of the complaint alleges ethical violations, conflict of interest and official misconduct against Keith Anderson. He is, according to the complaint, a "paid volunteer fireman" (Compl., DE 2, ¶ 51) with the City as well a City electrical inspector. Plaintiff had been awarded a contract for HVAC work at the City fire department. Keith Anderson, as City electrical inspector, inspected Plaintiff's work. After his inspection, Keith Anderson, through CHC, performed HVAC Services for the fire department job, which, Plaintiff maintains is a breach of the City's ethics ordinance and state law. Plaintiff asks the Court to enjoin Keith Anderson from inspecting any of its HVAC work in the City and for an award of special damages.

Count III alleges that Keith Anderson defamed Plaintiff in a letter he sent the City regarding his inspection of its work for the fire department. In Count IV, Plaintiff claims Keith Anderson tortiously interfered with its business relationship with the City's fire department. Count V is against the Andersons and CHC for unfair competiton.

Counts VI and X purport to state claims against Keith Anderson, in his official capacity, and the City, respectively, under 42 U.S.C. § 1983. In its claim against Keith Anderson, Plaintiff alleges that it was his practice to co-mingle his duties as city inspector with his responsibilities to CHC, to defame competitors, and to make intentionally misleading reports to get work from competitors whose work he inspected. This, according to Plaintiff, had the likely effect of violating its constitutionally protected right to operate a business without unfair competition. In its § 1983 claim against the City, Plaintiff alleges that the City had a policy and custom of failing and refusing to enforce its ordinance requirements associated with a special use permit and its ethics ordinance. Plaintiff claims the City inadequately trained its employees on the inspection requirements associated with a special use permit. Further, it knew or should have known that allowing CHC to operate its business at the Andersons' residence would give that business an unfair competitive advantage and had the likely effect of violating Plaintiff's constitutionally protected right to operate a business without unfair competition.

Counts VII, VIII, and IX allege § 1983 claims against Keith Anderson individually, Jeanne Anderson individually, and Jeanne Anderson "in her official capacity with CHC." In these Counts Plaintiff alleges that the Andersons willfully violated the terms of their special use permit in order to give CHC an unfair competitive edge over Plaintiff, which resulted in the violation of their constitutional rights.

In Count XI Plaintiff alleges a conspiracy under 42 U.S.C. § 1985(3) among all defendants to deprive it of its right to be free from unfair competition by intentionally disregarding the requirements of the Andersons' special use permit, thereby giving CHC greater business opportunities and eliminating business opportunities for it. In Count XII Plaintiff alleges that all defendants are liable under 42 U.S.C. § 1986 because they had knowledge of the wrongs ...

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