United States District Court, D. Oregon
LKS ENTERPRISES, LLC, an Oregon limited liability company, Plaintiff,
CITY OF SILVERTON, a municipal corporation and DARYL JONES, Defendants.
Michael McShane United States District Judge
LKS Enterprises, LLC, a construction company, brings suit
against the City of Silverton and its building inspector for
violating plaintiff's right to substantive due process,
interfering with its business relationships, and defamation.
All of these claims are based on the plaintiff's belief
that it was being treated unfairly by the building inspector
when permits were not issued and code violations were found
in connection with four residential construction projects.
Plaintiff, for the most part, does not contest the validity
of the inspector's decisions based on the building codes.
Rather, plaintiff contends that they were arbitrarily being
applied to it in a retaliatory manner. Because plaintiff was
not entitled to have his work permitted due to code
violations, he cannot establish he had a federally protected
property interest under a substantive due process analysis.
Because plaintiff's evidence of retaliation, defamation,
and interference with economic relationships is based on
rumor and mere speculation, its state claims fail as well.
Defendants' motion for summary judgment, ECF No. 16, is
Stanley is LKS's project manager. In early 2015, he applied
for and received building permits to construct four
residential homes in Silverton. Just before the framing was
completed on the first home (810 Pioneer) Stanley fired Todd
Franks, the framing subcontractor, because Franks allowed his
worker's compensation insurance to lapse. Franks had
subcontracted the framing work to Jose Garcia Construction.
Stanley Depo.; Piscadlo Decl. Ex. 1, 8; ECF No. 17. Garcia
attempted to finish the job using his own insurance, but
Stanley refused Garcia further access to the site and refused
to pay Garcia's workers for the work that was
substantially completed. Stanley hired another company to
finish the framing.
then requested a framing inspection from the City of
Silverton. On April 16, 2016, Jones arrived to perform the
“rough in - combo” inspection. Jones stopped the
inspection because the house was not ready. Piscadlo Decl.
Ex. 9, 6. Jones listed eight violations before stopping the
inspection. Among the alleged violations were: fire blocking
of garage ceiling to rear wall; post to beam attachment was
inadequate; improper anchorage of 2x4 ledger to glue lam
supporting floor joists; and additional engineering required
due to variation of headers from approved plans. Id.
Thus began the contentious relationship between Jones and
alleges “Jones began to single LKS Enterprises out for
minor or, in some cases, nonexistent code violations.”
Stanley Decl. ¶ 5; ECF No. 30. Curiously, despite
pointing to the framing inspection in support of his claims,
Stanley admits the house was not ready for inspection that
day. In fact, Stanley “knew there was going to be some
corrections on it because of the framing problems issues on
it. And this was also going to be part of my leverage with
the framer that you have some problems that you need to take
care of.” Stanley Depo. Piscadlo Decl. Ex. 1, 13. Even
after reviewing the codes, Stanley admits there were several
code violations at the time of the framing inspection.
Id. at 15.
went to Jones's office and challenged some of the alleged
violations. The two disagreed on whether Stanley could
substitute 4 x 12 lumbar for 3 ½ x 9 ½ glulams
shown on the plans. Stanley told Jones “he could not
allege corrections without citing code” and that he
would report Jones to the State of Oregon Building Code
Division. Stanley Decl. ¶ 6; ECF No. 30. Jones
subsequently began citing the code in all future inspections.
April 22, 2015, Jones issued a stop work notice on 810
Pioneer. Piscado Decl. Ex. 13. In Stanley's opinion, a
stop work (or “red tag) notice is “extremely
rare. None of the listed reasons for the red tag were health
or safety-related, or have been the basis for any red tag in
any project that I have dealt with in the past.”
Stanley Decl. ¶ 7. On the stop work order, Jones noted:
above mentioned structure is not in compliance with the
approved plans and engineering submitted for the issuance of
a building permit.
• Engineered Structural beams have been changed without
proper documentation from the engineer of record.
• Structural details outlined in the engineering for
hardware have not been installed or have been substituted
without approval by the building Official or the Engineer of
• Ledger attachments are not in compliance with chapter
5 OSRC. Joist hangers shall be installed or ledger and
attachment to be designed by engineer of record.
• Fire Blocking is lacking in garage walls to floor
• Stair system has been reconfigured from the approved
plan and has questionable bearing and support.
• The approved plans show the furnace location on the
slab in the back of the garage; the furnace has been
installed in the attic imposing additional loads to the
bottom of the trusses without proper documentation submitted
to the building department.
• The platform supporting the furnace is lacking proper
framing and access.
• Trusses installed do not match approved plans.
Due to the major structural changes and the extremely tall
crawl space (12 feet plus) the Engineer of record shall make
a site visit and perform a structural load path from the
roofing to the foundation system, including but not limited
to static and live loads, lateral loads, and connections. All
results shall be shown on revised plans, all engineering
shall display an original engineer seal and be submitted to
the Building Official for review and approval.
Piscadlo Decl. Ex. 13, 1.
days later, Jones lifted the stop work order. The parties
continued to have a contentious relationship throughout the
construction of the four homes. On tens of occasions, Jones
did not approve requested permits. There are hundreds of
approved and denied requests for permits in the record. LKS
never points specifically to any single permit it alleges it
was entitled to but did not receive.
purpose of resolving this motion, it is enough to say that
generally LKS alleges Jones treated it unfairly and made it
jump through hoops it allowed other builders to bypass. For
example, Stanley alleges:
10. After construction was nearly complete on 812 Pioneer,
Daryl Jones also required me to submit engineering for the
deck, despite having previously approved the plans containing
drawings of the deck. Mr. Jones claimed that a deck was not
permitted even though the deck plans were contained in the
original building plans that were approved.
11. Mr. Jones also required engineering for the retaining
wall on 812 Pioneer even though grading had not yet been
completed, and the wall was slightly under 4 feet in
12. In my review of the building permits and inspection
notes, I did not find any other new construction projects in
which the City required engineering to be submitted for a
deck or retaining wall. The only such engineering was on
permits by homeowners for additions, such as a new deck or
Stanley Decl., 3-4.
the deck, Jones pointed out that decks over 30 inches above
grade required plans and a permit. Piscadlo Decl, Ex. 19, 14.
The deck was over 30 inches above grade. Additionally, the
plans approved merely contained a conceptual drawing of what
a deck would look like, even stating “NOT NECESSARILY
HOW THE STRUCTURE WILL FINALLY APPEAR.” Piscadlo Decl.
Ex. 18, 1. In his deposition, Stanley admitted there were no
details regarding the deck on the approved plans. Piscadlo
Decl. Ex. 1, 33. Some of the approved plans did not even
contain the conceptual drawing of the deck, and none showed
concrete footings or piers, or even whether the deck was on
grade or raised. Id. at 33-34.
the retaining wall that Stanley alleges was
“slightly” under four feet tall, there is no
evidence Jones (or any other inspector) required engineering
for the retaining wall. Instead, the inspector merely
informed Stanley that the retaining wall might need a permit.
Piscadlo Decl. Ex. 23, 3. Walls over four feet or
supporting a surcharge require a permit. ORSC R105.2.
response in opposition, supported by several declarations,
fails to identify a specific property interest, the denial of
which is federally protected under a due process analysis.
the city issued a final occupancy permit for three of the
houses. LKS never requested a ...