Vicentic v. City of Hot Springs

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IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HOT SPRINGS DIVISION
DRAGAN VICENTIC 	PLAINTIFF
v. 	Civil No. 6:24-cv-06042
CITY OF HOT SPRINGS 	DEFENDANT
REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE
On August 1, 2024, the Honorable Susan O. Hickey referred this case to the undersigned
for the purpose of making a Report and Recommendation. ECF No. 19. Before the Court is a
Motion for Judgment on the Pleadings filed by the City of Hot Springs (“Defendant”). ECF No. 9.
Dragan Vicentic (“Plaintiff”) filed a Response to the motion (ECF No. 12) and Defendant has filed
a Reply. ECF No. 17.
On October 17, 2024, a hearing was held, and the parties presented their arguments to the
Court. For the reasons set forth below, the Court recommends Defendant’s motion be denied.
I. 	BACKGROUND
On October 18, 2022, the Hot Springs Board of Directors passed a Resolution declaring
Plaintiff’s property, located at 1104 Park Avenue, Hot Springs, Arkansas, a public nuisance and
condemning the same. ECF No. 2, p. 2. On February 27, 2023, Defendant, through the
Neighborhood Services Manager, sent Plaintiff a letter indicating demolition and removal of the
improvements to his property would begin on March 6, 2023. ECF No. 2-1. According to the
Complaint, prior to receiving this letter, Plaintiff had been in communication with agents of the
City who allegedly told Plaintiff to obtain a permit to do the necessary repairs to the home to avoid
the demolition of his property. Plaintiff executed a Building Permit Application on November 15,
2022, and later received a Vacant Structure Permit issued on November 23, 2022. ECF Nos. 2, p.
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2, 2-2, 2-3.
Plaintiff had owned the house at 1104 Park Avenue for many years, and it was an income
producing rental property. Plaintiff alleges he advised Defendant if his property was demolished,
he would be irreparably harmed because he would not be able to rebuild the structure without
expending an exorbitant amount of money. He goes on to state he testified before the Hot Springs
Board of Directors that repairs were being made to the premises, and the premises was habitable
and should not be condemned. ECF No. 2, p. 3.
Plaintiff claims he had one year from the time of obtaining the building permit to cure any
deficiencies to the building code alleged by Defendant. ECF No. 2, p. 3. He also states “Plaintiff
filed a Complaint for Preliminary injunction, but the City ignored same and ignored the rights of
the Plaintiff and demolished and removed the structure on March 6, 2021. The building had a value
that exceeded $150,000.00.” Id. On April 2, 2024, Plaintiff filed the instant lawsuit, asserting a
Fifth Amendment violation pursuant to 42 U.S.C. § 1983 for an alleged taking without
compensation. ECF No. 2.
On May 2, 2024, Defendant filed a timely Answer. ECF No. 8. On May 8, 2024, Defendant
filed the instant Motion. ECF No. 9. Defendant argues Plaintiff’s Complaint should be dismissed
with prejudice pursuant to Fed. R. Civ. P. 12(c) because Plaintiff failed to file and perfect an appeal
within thirty days of the Hot Springs Board of Director’s administrative decision to condemn the
structure located on Plaintiff’s property at 1104 Park Avenue, Hot Springs, Arkansas. Defendant
states, “Exhaustion of said administrative remedy is required through strict compliance with
Arkansas District Court Rule 9. See Ingram v. City of Pine Bluff, 355 Ark. 129, 133 S.W.3d 382
(2003).” Id. Defendant argues this Court does not have subject-matter jurisdiction over Plaintiff’s
Fifth Amendment claim because Plaintiff failed to exhaust this administrative remedy.
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In his Response to the instant motion, Plaintiff argues he is not required to exhaust his
administrative remedies under Ark. Dist. Ct. R. 9 because of the United States Supreme Court’s
decision in Knick v. Township of Scott, Penn., 588 U.S. 180 (2019). He goes on to state:
The City of Hot Springs did not attempt to pay the Plaintiff any amount of money
for his building and, in fact, charged him $10,143.34 for the demolition of the
improvements at 1104 Park Avenue in Hot Springs, Garland County, Arkansas.
Prior to or during the demolition of the premises, the City of Hot Springs stole an
outdoor shortage building that Plaintiff had placed on the property that was valued
at $3,500.00. The City adjusted their invoice to the Plaintiff to reflect the $3,500.00
credit and the Plaintiff paid $6,643.34 to prevent the City from placing a lien on his
property and potentially having it sold.
ECF No. 13, pp. 2-3. During the October 17, 2024, hearing, Plaintiff conceded that he did not file
an appeal to the Hot Springs Board of Director’s administrative decision to condemn his property.
II. 	APPLICABLE LAW
Rule 8(a) contains the general pleading rules and requires a complaint to present “a short
and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
8(a)(2). To meet that standard and survive a motion to dismiss for failure to state a claim pursuant
to Fed. R. Civ. P. 12(b)(6), “the complaint must include sufficient factual allegations to provide
the grounds on which the claim rests.” Drobnak v. Andersen Corp., 561 F.3d 778, 783 (8th Cir.
2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). The stated claim for relief must
be “plausible on its face.” Id. at 570. “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Rule 12(b)(6) authorizes a court to dismiss a claim based on a dispositive issue of law.
Neitzke v. Williams, 490 U.S. 319, 326 (1989). If, as a matter of law, “it is clear that no relief could
be granted under any set of facts that could be proved consistent with the allegations,” a claim
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must be dismissed, without regard to whether it is based on an outlandish legal theory or on a
close but ultimately unavailing one. Id. at 327 (quoting Hishon v. King & Spalding, 467 U.S. 69,
73 (1984).
Rule 12(c) governs motions for judgment on the pleadings and states, “After the pleadings
are closed – but early enough not to delay trial – a party may move for judgment on the
pleadings”. Fed. R. Civ. P. 12(c). The federal rules also provide, “if, on a motion under Rule
12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court,
the motion must be treated as one for summary judgment under Rule 56. All parties must be given
a reasonable opportunity to present all the materials that is pertinent to the motion.” Fed. R. Civ.
P. 12(d).
III. 	DISCUSSION
As previously stated, Defendant argues this Court does not have subject matter
jurisdiction over Plaintiff’s Fifth Amendment takings claim because “Plaintiff did not appeal
the Board’s decision to condemn and demolish the structure on Plaintiff’s property, and Plaintiff
did not perfect an appeal within thirty days of the Board’s October 18, 2022, decision.” ECF
No. 10, p. 6. During the hearing on October 17, 2024, counsel for Defendant agreed if Plaintiff
had appealed the Board’s decision and the appeal had been denied, he would have then had to
file suit in state court.1
1 Except for an order denying a motion to remand a case from federal to state court so a plaintiff could exhaust his
administrative remedies for a taking, see Edward L. Boyd and Verna Boyd v. City of Helena-West Helena, Eastern
District of Arkansas, Case No. 4:19-cv-00266-JM, ECF No. 21, Defendant cites to cases decided prior to the United
States Supreme Court’s decision in Knick v. Township of Scott, Pennsylvania, 588 U.S. 180 (2019). Moreover, the
Boyd order dealt only with the issue of whether the plaintiff’s motion to remand to state court could be granted.
The Eastern District denied the motion to remand because it was untimely and stated that remand would be futile
because the state circuit court would not have jurisdiction. The order did not address the issue which is currently
before this Court - whether a plaintiff whose property has been “taken” may file a Fifth Amendment takings claim
in federal court.
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The Takings Clause of the Fifth Amendment states “private property [shall not] be taken
for public use, without just compensation.” In Williamson County Regional Planning Comm’n
v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), the Supreme Court held a property
owner whose property has been taken by a local government has not suffered a violation of his
Fifth Amendment rights – and thus cannot bring a federal takings claim in federal court- until a
state court has denied his claim for just compensation under state law. In Williamson, the Court
rationalized that if the property owner failed to secure just compensation under state law in state
court, he would be able to bring “ripe” federal takings claim in federal court. Id. at p. 194.
However, in San Remo Hotel, L. P. v. City and County of San Francisco, Cal., 545 U.S.
323 (2005), the Supreme Court ruled a state court’s resolution of a claim for just compensation
under state law generally has preclusive effect in any subsequent federal suit. “The takings
plaintiff thus finds himself in a Catch-22: He cannot go to federal court without going to state
court first; but if he goes to state court and loses, his claim will be barred in federal court. The
federal claim dies aborning.” See Knick v. Township of Scott, Pennsylvania, 588 U.S. 180
(2019).
The Supreme Court’s decision in Knick, overruled its decision in Williamson. The Court
specifically states:
…the state-litigation requirement rests on a mistaken view of the Fifth Amendment.
The Civil Rights Act of 1871, after all, guarantees “a federal forum for claims of
unconstitutional treatment at the hands of state officials,” and the settled rule is that
“exhaustion of state remedies ‘is not a prerequisite to an action under [42 U.S.C.]
§ 1983.’” … But the guarantee of a federal forum rings hollow for takings plaintiffs,
who are forced to litigate their claims in state court.
We now conclude that the state-litigation requirement imposes an unjustifiable
burden on takings plaintiffs, conflicts with the rest of our takings jurisprudence,
and must be overruled. A property owner has an actionable Fifth Amendment
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takings claim when the government takes his property without just compensation,
and therefore may bring his claim in federal court under § 1983 at that time.
Id. at p. 185 (internal citations omitted)(emphasis added). While Knick specifically overruled the
state-litigation requirement it also declined to require any administrative exhaustion.
Here, Plaintiff’s property was razed and cleared by Defendant on March 6, 2022, without
being compensated for the taking of his property. Instead, Plaintiff alleges Defendant sent him an
invoice for over $6000.00 which Plaintiff paid to prevent Defendant from placing a lien on the
property. Accordingly, based on the express holding in Knick, the Court finds Plaintiff is not
required to exhaust any state remedy prior to filing his “takings” lawsuit in federal court and the
Court has subject matter jurisdiction over Plaintiff’s Fifth Amended claim under § 1983.2
IV. 	CONCLUSION
Based on the foregoing, the Court recommends Defendants’ Motion for Judgment on the
Pleadings (ECF No. 9) be DENIED.
The Parties have fourteen (14) days from receipt of this Report and Recommendation
in which to file written objections pursuant to 28 U.S.C. § 636(b)(1). 	The failure to file
timely objections may result in waiver of the right to appeal questions of fact. 	The Parties
are reminded that objections must be both timely and specific to trigger de novo review by
the district court. 	See Thompson v. Nix, 897 F.2d 356, 357 (8th Cir. 1990).
DATED this 25 th day of October 2024.
/s/ Barry A. Bryant
HON. BARRY A. BRYANT
UNITED STATES MAGISTRATE JUDGE
2 The Knick case appeared to be limited to 5th Amendment “takings” claims and not directly applicable to other
federal claims for which administrative exhaustion has been required.
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