Megna v. Little Switzerland of America Candy Factory, Inc.

          ORDER

          RAYMOND P. MOORE, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendants' motion for summary judgment on Plaintiffs' claims against them (ECF No. 91) and Plaintiffs' motion for summary judgment on Defendants' counterclaims (ECF No. 92). The motions have been fully briefed and are ripe for review. (ECF Nos. 101, 105, 109, 111.) For the reasons below, Defendants' motion is denied for the most part, and Plaintiffs' motion is denied in its entirety.

         I. LEGAL STANDARDS

         Summary judgment is appropriate only if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Gutteridge v. Oklahoma, 878 F.3d 1233, 1238 (10th Cir. 2018). Whether there is a genuine dispute as to a material fact depends on whether the evidence presents a sufficient disagreement to require submission to a jury or is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000). “The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Scott v. Harris, 550 U.S. 372, 380 (2007) (quotation omitted). A fact is “material” if it pertains to an element of a claim or defense, and a factual dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a reasonable jury could return a verdict for either party. Anderson, 477 U.S. at 248.

         II. BACKGROUND

         The B&B Condominium Complex consists of two buildings, one owned by Defendant Little Switzerland of America Candy Factory, Inc. (“Little Switzerland”) and one owned by Plaintiff Backstreet Bistro, LLC, and some common areas. The complex is subject to restrictive covenants that can be revoked only with the consent of all the owners. Defendants Kristine and Hayes Ullemeyer and the previous owners of Plaintiffs' building informally agreed to divide portions of the common areas into “designated areas” for each building. A fence was installed to enclose the Ullemeyer's designated area, and the previous owners of Plaintiffs' building built a deck in their designated area; however, no changes were made to the restrictive covenants. When Plaintiffs Eryn and Robert Megna purchased their building, the Ullemeyers' building was being leased to tenants.

         This dispute arose after the Megnas had a heat exhaust blower installed on the outside of their building in a common area that is part of the Ullemeyers' designated area. The parties did not discuss the installation beforehand. State and local regulations require a blower to operate a restaurant, and a building inspector told the Megnas that the blower could be installed only in its current location. The Ullemeyres allege that the exhaust from the blower “has a strong and unpleasant odor, ” that the blower “creates a continuous noise whenever in operation, ” and that the blower “presents an unsightly, offensive and obnoxious appearance which is clearly visible from” their building. (ECF No. 43 at ¶ 23.)

         Interactions between the Megnas and Ullemeyers did not begin well. Mr. Megna, who is black, saw Ms. Ullemeyer, who is white, walking around the complex and introduced himself.^[1]Plaintiffs allege that Ms. Ullemeyer “immediately responded by telling Mr. Megna, in a markedly hostile and aggressive tone, to get his ‘fucking chairs' off of her ‘fucking building.'” (ECF No. 25 at ¶ 48.) After Mr. Megna moved the offending chairs, Ms. Megna introduced herself to Ms. Ullemeyer. Ms. Ullemeyer responded to her by saying that she needed to move her blower because it was ugly. Mr. Megna and Mr. Ullemeyer also discussed the blower at some point.^[2] Plaintiffs allege that during that discussion Mr. Ullemeyer used the word “boy” to address Mr. Megna and threatened legal action if the blower was not moved. Defendants contend that Mr. Ullemeyer never used the word “boy, ” and alternatively that even if he did, he did not use it to imply racial animus against Mr. Megna. On another occasion, Ms. Ullemeyer waited outside the Megnas' restaurant while her friend went in to complain about the blower. Mr. Megna told the friend she would have to speak with their lawyer.

         In the months that followed, the parties' lawyers attempted without success to resolve the dispute. The Ullemeyers then filed a lawsuit in state court. The Ullemeyers alleged that the blower was installed in violation of the restrictive covenants and that it was causing a nuisance. After the state court denied the Megnas leave to add counterclaims under 42 U.S.C. §§ 1981, 1982, and 1983, Plaintiffs filed this lawsuit in federal court, and all proceedings in the state lawsuit were stayed.

         Plaintiffs assert ten claims against Defendants, including violations of their rights under § 1982, violations of their rights under 42 U.S.C. § 1985(3), violation of the Common Interest Ownership Act (“CIOA”), conversion, private nuisance, and breach of covenants. (ECF No. 25.) Defendants assert four counterclaims for nuisance, violation of restrictive covenants, injunctive relief, and declaratory relief. (ECF No. 43.) Both sides seek summary judgment on the claims against them.

         III. ANALYSIS

         A. Defendants' Motion for Summary Judgment

         Defendants argue they are entitled to summary judgment on the claims against them because (1) there is insufficient evidence of racial discrimination to support a § 1982 claim and Plaintiffs cannot show that Defendants interfered with their use of property; (2) Plaintiffs cannot establish a conspiracy; (3) the CIOA does not apply to the restrictive covenants; (4) there is no genuine dispute supporting a ...