United States District Court, W.D. Wisconsin
MICHAEL SULLIVAN, STACY SULLIVAN, and BIRCHWOOD ACRES, LLC, Plaintiffs,
TOWN OF STOCKHOLM and JANE WHITESIDE, Defendants.
OPINION AND ORDER
D. PETERSON DISTRICT JUDGE
Michael and Stacy Sullivan wished to make their single-family
home in Stockholm, Wisconsin available to tourists for
short-term rentals. But in 2016 and 2017, Stockholm's
Plan Commission and Town Board denied the Sullivans'
application for a conditional use permit that would have
allowed them to do so. Although state law now allows them to
rent out their property, the Sullivans (along with their
limited liability corporation, Birchwood Acres, LLC) are
suing the town of Stockholm and former Stockholm Plan
Commission chair Jane Whiteside for damages incurred in 2016
and 2017. (The court will refer to the Sullivans and
Birchwood Acres, LLC collectively as “the
Sullivans.”) The Sullivans assert claims under both the
Due Process Clause and state tort law.
the defendants, Jane Whiteside, has moved to dismiss the
Sullivans' claims against her for failure to state a
claim under Federal Rule of Civil Procedure 12(b)(6). Dkt.
11. Whiteside contends that (1) the Sullivans'
allegations are too speculative to state a claim; (2) the due
process claim is barred as a matter of law because the
Sullivans failed to avail themselves of available state-law
remedies; and (3) Whiteside is immune from state-law tort
liability because, as chair of the Plan Commission, she was
acting in a quasi-legislative or quasi-judicial capacity. The
court will deny Whiteside's motion. There may be reasons
to question whether the Sullivans are likely to prevail on
any of their claims, but Whiteside isn't entitled to a
dismissal for any of the reasons she asserts in her motion.
court draws the following facts from the Sullivans'
complaint, Dkt. 1, and accepts them as true for the purpose
of deciding Whiteside's motion. Zahn v. N. Am. Power
& Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016).
and Stacy Sullivan live in Minnesota. They designed and built
“Birchwood Acres, ” a second home that they
intended to use on weekends, in the Pepin Pava development in
Stockholm, Wisconsin. After construction was completed in
summer 2016, Michael and Stacy transferred title to the home
to their limited liability corporation, Birchwood Acres, LLC.
Sullivans began advertising Birchwood Acres for rent on a
vacation rentals website in September 2016. In December 2016,
the Stockholm Town Board Chair informed the Sullivans that
they needed to apply for a conditional use permit and should
cease renting the home until they received that permit. So
the Sullivans ceased advertising the house and, on January 6,
2017, they submitted a conditional use permit application to
the Stockholm Plan Commission, the body tasked with
recommending to the Town Board whether to grant conditional
was chair of the Plan Commission at the time. She was a
fellow resident of the Pepin Pava development, and she
opposed the Sullivans' conditional use permit
application. She lobbied members of the Plan Commission to
recommend denying the permit application by circulating a
memorandum written by her husband, attorney William Mavity,
which argued among other things that permitting short-term
rentals of Birchwood Acres would adversely affect the value
and quality of homes in Pepin Pava. Whiteside and Mavity also
lobbied town residents and members and officers of the Pepin
Pava Homeowners' Association to oppose the permit
March 16, 2017, the Plan Commission held a hearing to
consider the Sullivans' application. Whiteside both
presided over the hearing and actively urged the
Commission's members to recommend denial. The Commission
did so by a unanimous vote. A written report prepared by
Whiteside indicated that the reasons for the Commission's
recommendation included: (a) the perceived adverse impact on
neighbors in the Pepin Pava development; (b) the fact that
the Sullivans' property had “bec[o]me a business,
” despite their building permit which authorized only a
single-family home; and (c) concerns that approving the
permit would set a “significant precedent” in
favor of allowing commercial business. Dkt. 1, ¶ 33.
Four days later, Whiteside presented the Commission's
report and recommendation to the Town Board.
April 22, 2017, the town held a public hearing on the
Sullivans' conditional use permit application. The
Sullivans were told prior to the hearing that they would have
ten minutes to make their case for the conditional use
permit, but at the hearing itself, they were told they would
only have three minutes to speak. So instead of speaking at
the hearing, the Sullivans submitted comments to the Town
Board in writing.
15, 2017, the Town Board voted unanimously to deny the
Sullivans' conditional use permit application, based in
part on Whiteside's report for the Plan Commission. On
June 2, the Sullivans sent the Board a notice of appeal and
demand for review of determination, as provided under
Wisconsin Statute § 68.11. The Board denied review
without a hearing four days later. So the Sullivans filed a
petition for certiorari review in Pepin County Circuit Court.
The Circuit Court granted the Sullivans' petition. In a
decision issued December 4, 2017, Judge Joseph Boles
1. Due to Plan Commission Chair Jane Whiteside's
participation in March 16, 2017 Plan Commission meeting
[sic], the Town of Stockholm did not afford the
plaintiffs due process in its decision to deny their
conditional use permit application.
2. The decision of the town of Stockholm is reversed and
remanded for new proceedings without Jane Whiteside's