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MorningStar Fellowship Church v. York County South Carolina

United States District Court, D. South Carolina, Rock Hill Division

June 17, 2019

MorningStar Fellowship Church, Plaintiff,
v.
York County South Carolina, James E. Baker, and Houston “Buddy” Motz, Defendants.

          ORDER AND OPINION

         Defendants York County South Carolina (“County”), James E. Baker (“Baker”), and Houston “Buddy” Motz (“Motz”) (collectively, “Defendants”) move this court for dismissal of Plaintiff MorningStar Fellowship Church's (“MorningStar”) Complaint (ECF No. 1). (ECF No. 15.) Subsequent to Defendant's filing of its Motion to Dismiss, MorningStar moved to amend its Complaint. (ECF No. 28.) The court GRANTS IN PART and DENIES IN PART Defendants' Motion to Dismiss and GRANTS MorningStar's Motion to Amend.

         I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

         MorningStar is “an evangelical church operating primarily in Fort Mill, York County, South Carolina.” (ECF No. 1 at 1.) It describes itself as a “large . . . international ministry that reaches virtually every nation, ” including by publishing books that have been bestsellers and translated into over fifty (50) languages and hosting an internet television network and Christian conferences on its properties in Fort Mill. (Id. at 3 ¶¶ 12-14.) Those properties were once owned and operated by the large evangelical ministry known as PTL, formerly headed by Jim and Tammy Bakker. (Id. at 3 ¶ 15.) MorningStar purchased the properties in 2004. (Id. at 4 ¶ 19.) One of these properties, and the subject of this lawsuit, is the Heritage Tower (“Tower”), a twenty-one story, partially-completed building consisting of five hundred (500) plus residential rooms. (Id. at 6 ¶ 25.) In 1989, Jim Bakker was convicted for overselling memberships to the Tower. (Id. at 6 ¶ 28.) See also United States v. Bakker, 925 F.2d 728 (4th Cir. 1991). Plaintiffs allege the Bakker case “is relevant because [MorningStar] became the subject of anti-religious and anti-Christian comments by County officials, with at least one public official, namely . . . Motz, attempting to falsely suggest that PTL and MorningStar are one in the same.” (Id. at 7 ¶ 33.)

         Since purchasing the PTL properties in 2004, MorningStar renovated one building at a time, obtaining construction permits as needed. (Id. at 21 ¶ 81.) When MorningStar was ready to begin renovation of the Tower, the County “mandated a ‘Development Agreement, '” pursuant to the South Carolina Local Government Development Agreement Act (“SCLGDAA”).[1] (Id. at 21 ¶ 82; 22 ¶ 87.) On November 5, 2007, the County passed two ordinances regarding the Development Agreement with MorningStar, and on January 13, 2008, MorningStar and the County entered into a Development Agreement (“Agreement”) with a five-year term. (Id. at 22 ¶ 86; 23 ¶ 93.) The Agreement provided for demolition of the Tower if certain conditions were not met by MorningStar:

[w]ithin 180 days of County approval of the commercial site plan for the Property, should [MorningStar] or its contractor be unable to obtain bid, performance and payment bonds from an A Best rated insurer or letters of credit from a national bank or substantial equivalent acceptable to County, then this Development Agreement shall be deemed null and void. At such time, the Tower shall be demolished, with all costs for its demolition borne by [MorningStar].

(ECF No. 1-2 at 5.)

         On March 5, 2010, the County “notified MorningStar that it was ‘in default'” of the Agreement “because MorningStar, supposedly, had not provided the [C]ounty with [the required] performance and payment bonds.” (ECF No. 1 at 40 ¶ 168.) MorningStar responded to the notice of default by letter to the County on March 9, 2010. (Id. at 40 ¶ 170.) MorningStar alleges that under the Agreement, the County was required to provide MorningStar with “formal notification in writing . . . of approval of the site development plan, which was the prerequisite that would trigger the bonding process, under a 180-day time frame from the formal notification of approval.” (Id. at 42 ¶ 176.) MorningStar alleges the County never delivered any such notification to MorningStar. (Id.) Instead, according to MorningStar, “the [C]ounty answered [MorningStar]'s inquiry about the status of the Site Plan approval [by informing MorningStar] the [C]ounty was about to issue the default notice.” (Id. at 41 ¶ 175.) MorningStar attempted to “work out any misunderstandings” with the County according to “provisions . . . in the . . . Agreement for working out such misunderstandings, ” but the County “continued to maintain [MorningStar] was in default.” (Id. at 42 ¶ 177.) MorningStar believes

[the] County did everything in its power to conceal the site plan, to conceal the approval process, to avoid clarification on the approval by refusing to respond to notices and information requests, delivered by certified mail, from MorningStar, all in an attempt to achieve their true intention of invoking an unconstitutional demolition clause to destroy sacred church property central to MorningStar's worship.

(Id. at 42 ¶ 178.)

         For the next eighteen (18) months after the County issued the default notice, the parties attempted to mediate. (Id. at 42 ¶ 179.) MorningStar maintained it had not received notice of site approval, as required by the Agreement, while the County maintained “it had given notice when it supposedly communicated with private engineers in Charlotte, North Carolina[, ] who [had] been working on the project on behalf of MorningStar.” (Id. at 43 ¶¶ 180-83.) MorningStar alleges this was in “direct violation of how official notices were to be given personally to MorningStar President and Pastor Rick Joyner Joyner by Certified Mail.”[2] (Id. at 12 ¶ 58; 17 ¶ 68; 43 ¶ 184.) MorningStar asserts that by issuing the default, “the [C]ounty effectively prohibited MorningStar from being able to secure any bonding or financing of the Tower project.” (Id. at 44 ¶ 186.) This in turn left MorningStar unable to remedy the default because “no prudent financial institution would issue a bond on a project already in ‘default' by a municipality.” (Id. at 44 ¶ 187.) The default caused MorningStar “to suffer serious financial losses from the County's arbitrary ‘default' declaration, including losses of engineering funds and other reconstruction expenses, as well as make all of its other financial needs nearly impossible.” (Id. at 44 ¶ 188.) Still, MorningStar and two County Commissioners (representing the County) were able to reach an agreement during mediation. (Id. at 45 ¶ 189.) However, the York County Council (“Council”) unanimously rejected the settlement, including the two Commissioners who had negotiated the settlement. (Id. at 45 ¶ 190.)

         On January 24, 2013, MorningStar sued the County in the York County Court of Common Pleas, seeking declaratory judgment regarding “the County's apparently arbitrary actions under the . . . Agreement, by its use of a so-called ‘default' mechanism to actively prevent MorningStar from getting bonding that was needed to complete [its] obligations under the [A]greement.” (Id. at 47 ¶¶ 198-99.) The County counterclaimed, seeking destruction of the Tower pursuant to the Agreement's demolition clause. (Id. at 48 ¶¶ 200-01.) The County filed its counterclaim on March 25, 2013, “more than five years after execution of the . . . Agreement[] and after any authority that the County may have had under the . . . Agreement[] to bring about destruction of the Tower, had already expired.” (Id. at 50 ¶ 210.) During discovery, “MorningStar found shocking evidence, which showed the County's true intentions with regard to the church, revealing the County's unconstitutional discriminatory attitude against [MorningStar] in its exercise of religious activities.” (Id. at 51 ¶ 213.) Specifically, MorningStar discovered two emails it describes as “slanderous” and “defamatory.” (Id. at 51 ¶¶ 214-15.) The first, sent by Defendant Motz, Chairman of the Council, on January 22, 2010, states,

Thanks Jim. I see them as being in the same mode as the old PTL, and just as scheming. They are only out to fleece the investors of the units and bilk them for every dime they can get. The [C]ounty has delayed this for too long and I see no reason for us to allow them to continue further. It would not be accepted for other businesses and it should not be allowed for them.

(Id. at 51 ¶ 215.) (See also ECF No. 1-3 at 1.) Motz sent the email to ten other County officials including County Commissioners, Assistant County Managers, the Clerk to the Council, the County Attorney, a Council member, Executive Assistants to the County Manager, and the Director of the York County Planning and Development Services Department. (Id. at 55 ¶¶ 229, 231-39.) MorningStar asserts that Defendant Motz's “email sets out a clear example of anti-Christian discrimination, and unleashes a shocking tirade of petty vindictiveness and an all-out assault on religious freedom that the First Amendment sets out to protect Americans against, especially from government officials.” (Id. at 54 ¶ 225.)

         The second email, sent about twenty (20) minutes before the email from Motz, was sent by Defendant Baker. (Id. at 57 ¶ 241.) (See also ECF No. 1-3 at 1-2.) Baker wrote that he “believe[d] the [C]ouncil should take a strong stance and give notice of default to MorningStar if they cannot provide the financial assurances that were promised in the . . . Agreement that they signed on April 28, 2008.” (Id. at 57 ¶ 243.) Baker's email was sent to three Council members, including the Vice Chairman, and several of the same recipients of Motz's email. (Id. at 63 ¶¶ 270-75; 64 ¶ 276.) MorningStar alleges that

[t]he vindictive emails, and the policy that followed those emails, and the tone that was set by the wording of those emails, were designed to orchestrate, and carry out a [C]ounty policy against [MorningStar] and to prevent and obstruct the church and its members from carrying out their freedom of worship as they see fit, a freedom that is protected by the First Amendment of the United States Constitution.

(Id. at 65 ¶ 282.) MorningStar further alleges that the County's constitutional violations “are ongoing and continuous” because the County “continues to take away and to prevent MorningStar from engaging in its constitutionally-protected worship under the First Amendment . . .[, ] the act of completing the Tower, which MorningStar considers an act of worship to God.” (Id. at 71 ¶¶ 303-04.)

         Additionally, MorningStar alleges the County has entered into only three development agreements since the passage of the SCLGDAA. (Id. at 72 ¶ 306.) Since MorningStar is the only religious organization with which the County has a development agreement, MorningStar believes the County singled out MorningStar by requiring that it enter into a development agreement. (Id. at 72 ¶ 308.) According to MorningStar, its Agreement with the County “is the only development agreement that [the County] has ever entered into in which it required any private citizen or entity to destroy property, in the event of non-performance.” (Id. at 73 ¶ 312.) Thus, MorningStar alleges that “as an act of individually-targeted discrimination, the County has placed more stringent requirements against MorningStar, by forcing it into a[n] . . . Agreement which would lead to the destruction of its property, than it has placed on any other person or organization in the County, including private real estate developers.” (Id. at 72 ¶ 309.)

         In sum, MorningStar alleges that

[t]he county's disparate use of its three development agreements, in favoring the two developers but, in the words of the former County Manager, taking a “strong stance” against [MorningStar], by seeking destruction of a sacred Tower, not only violates [MorningStar]'s constitutional right to Equal Protection under the Fourteenth Amendment, but also violates [MorningStar], and its members['] [] rights to free exercise of religion under the First Amendment of the United States Constitution.

(Id. at 76 ¶ 326.) MorningStar also claims that it has “suffered damages in the amount of at least $11, 889, 000, which is the most recent estimate of the value of the Tower that it has been unable to use as a result of the [C]ounty's actions[;] MorningStar has [also] suffered damages above that amount for its loss in the use of the Tower.” (Id. at 77 ¶ 329.)

         Based on these allegations, MorningStar asserts the following causes of action: (1) “violation of the free exercise clause of the First Amendment of the United States Constitution as to all Defendants” (id. at 78-79 ¶¶ 331-35); (2) an “equal protection clause violation . . . of the United States Constitution as to all Defendants” (id. at 79-81 ¶¶ 336-41); (3) a “due process clause [] violation of the [Fifth] and [Fourteenth] Amendments [of the] United States Constitution as to all Defendants” (id. at 81-83 ¶¶ 342-47); (4) “violation of the South Carolina Religious Freedom Act” (id. at 83 ¶¶ 348-49); (5) violations42 U.S.C. of § 1983 as to Motz and Baker (id. at 84 ¶¶ 350-51); (6) violations of 42 U.S.C. § 1985 as to Motz and Baker (id. at 84-85 ¶¶ 352-53); (7) injunctive relief as to the County (id. at 85-86 ¶¶ 354-55); (8) violation of Article 1, Section 2 of the South Carolina Constitution (id. at 86 ¶¶ 356-57); (9) violation of Article 8, Section 17 of the South Carolina Constitution (id. at 86-87 ¶¶ 358-59); and (10) declaratory judgment under 28 U.S.C. § 2201 as to all Defendants (id. at 87-93 ¶¶ 360-61).

         For relief, MorningStar requests “a judgment on the merits of all the causes of action set forth above”; “a restraining order against [the] County to prevent it from continuing to apply a ‘default' designation against MorningStar under the . . . Agreement . . . that expired on or about January 12[, ] 2013”; “a permanent injunction . . . against [the] County preventing it from taking any action to destroy the . . . Tower”; “a trial by jury on any and all issues to w[hich] there may be a genuine question of fact”; “monetary damages . . . in an amount to be determined by a jury, for MorningStar's loss of use of [the] Tower as a result of the County's unconstitutional actions”; and attorney's fees and costs. (Id. at 93-94.)

         On January 11, 2019, Defendants filed a Motion to Dismiss. (ECF No. 15.) In their Memorandum in Support, Defendants argue MorningStar's claims are barred by the statute of limitations, and the doctrine of res judicata applies because this action is duplicative of the prior litigation filed by MorningStar in South Carolina's state courts. (ECF No. 15-1 at 1.) Baker and Motz argue they are also entitled to dismissal because MorningStar has failed to allege facts giving rise to any cognizable claim against either Baker or Motz. (Id. at 2.) On February 8, 2019, MorningStar responded in opposition to Defendants' Motion. (ECF No. 24.) In response to Defendants' res judicata argument, MorningStar argues the case before this court is factually and legally distinct from the state court case, namely because it sets forth multiple constitutional claims and is based in equity. (Id. at 2.) As to Defendants' statute of limitations defense, MorningStar contends their case is mainly based in equity, and therefore, is not bound by any statute of limitations. (Id.) According to MorningStar, under South Carolina law, the statute of limitations is ten (10) years if the action has no defined statute of limitations. (Id.) Thus, MorningStar argues a ten-year statute of limitations applies to this case. (Id.)

         On February 21, 2019, the court held a hearing on Defendants' Motion. (ECF No. 27.) On April 18, 2019, MorningStar moved to amend its Complaint “to add a cause of action for violation of the federal Religious Use and Institutionalized Persons Act of 2000 (“RLUIPA”), 42 U.S.C. §§ 2000cc-2000-cc-5.” (ECF No. 28 at 1.) In its Proposed First Amended Complaint, MorningStar asserts Defendants violated RLUIPA by “refus[ing] to [g]rant MorningStar a basic, routine, limited building permit on August 24, 2017.” (ECF No. 28-1 at 94 ¶ 363.) MorningStar alleges that it requested this building permit on June 30, 2017, and that “[t]he very maintenance and upkeep of its sacred Tower is considered by MorningStar to be an act of worship, which is protected by the First Amendment of the United States Constitution.” (Id. at 98 ¶ 378-79.) The County denied MorningStar's request by letter dated August 24, 2017, stating, “[n]o restoration activities are authorized for this building, and in light of the ongoing litigation, the violation of the Planned Development Plan adopted by the . . . Council [o]n January 10, 2005, and the . . . Agreement, the permit application is denied.” (Id. at 99 ¶ 385; 100-01 ¶ 390.) MorningStar alleges that this denial “has imposed a substantial burden on [MorningStar's] religious exercise in violation of RLUIPA” because the County has not demonstrated that denying the permit furthers a compelling governmental interest using the least restrictive means, and the denial “constitutes discrimination against MorningStar on the basis of religion or religious denomination.” (Id. at 108-09 ¶¶ 416- 18.)

         On May 2, 2019, Defendants filed a Response in Opposition to MorningStar's Motion to Amend. (ECF No. 31.) Defendants argue that “[a]s for the new RLUIPA claim, [MorningStar] has failed to state a viable cause of action and this claim (like all of the others) is subject to dismissal pursuant to Rule 12(b)(6) [of the Federal Rules of Civil Procedure].” (Id. at 2.) More specifically, Defendants argue “[t]he mere denial of a permit . . . is not a violation of RLUIPA”; “Plaintiff's Amended Complaint fails to identify any ordinance or legal authority that would have entitled Morning[S]tar to receive such a permit in 2017”; MorningStar “has not alleged and cannot show any substantial burden has been imposed on its religious activities”; and “Morning[S]tar has not alleged and cannot prove that any secular property owner under a similar situation (unfinished structure left vacant for 30 years) was treated more favorably.” (Id. at 8-10.) Thus, Defendants “request that the court deny the amendment on the basis of futility and that the action be dismissed in its entirety.” (Id. at 2.)

         II. LEGAL STANDARD

         “A motion filed under Rule 12(b)(6) [of the Federal Rules of Civil Procedure] challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). “In considering a 12(b)(6) challenge to the sufficiency of a complaint, this Rule must be applied in conjunction with the liberal pleading standard set forth in Federal Rule of Civil Procedure 8(a).” Jenkins v. Fed. Bureau of Prisons, C/A No. 3:10-1968-CMC-JRM, 2011 WL 4482074, at *2 (D.S.C. Sept. 26, 2011). Rule 8(a) provides that to be legally sufficient, a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). When considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999). A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support their claim and would entitle them to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). “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)). “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.” Id. However, a federal district court may dismiss a claim as time-barred under Rule 12(b)(6) “if the time bar is apparent on the face of the complaint.” Dean v. Pilgrim's Pride Corp., 395 F.3d 471, 474 (4th Cir. 2005).

         Under Rule 15(a)(2) of the Federal Rules of Civil Procedure, “a party may amend its pleading only with the opposing party's written consent or the court's leave.” Leave to amend should be freely given “when justice so requires, ” id., unless “the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would [be] futile.” Steinburg v. Chesterfield Cty. Planning Comm'n, 527 F.3d 377, 390 (4th Cir. 2008) (quoting Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006)). See also Cook v. Howard, 484 Fed.Appx. 805, 814 (4th Cir. 2012) (“Rule 15(a)(2) articulates a relatively liberal amendment policy, in which leave to amend should be ‘freely give[n] when justice so requires.'”). An amendment is considered futile “if the proposed amended complaint fails to satisfy the requirements of the federal rules.” United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008) (quoting United States ex rel. Fowler v. Caremark RX, LLC, 496 F.3d 730, 740 (7th Cir. 2007)). In other words, a motion to amend should be denied as “futile when the proposed amended complaint fails to state a claim.” Van Leer v. Deutsche Bank Sec., Inc., 479 Fed.Appx. 475, 479 (4th Cir. 2012). The “grant or denial of an opportunity to amend is ...


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