HomeMy WebLinkAbout2018CV149 - SUTHERLAND V. CITY OF FORT COLLINS, STEVE MILLER & IRENE JOSEY - 028 - ORDER GRANTING TDA AND COMPASS BANK'S MOTION TO DISMISS1
DISTRICT COURT, LARIMER COUNTY, STATE OF COLORADO
201 LA PORTE AVENUE, SUITE 100
FORT COLLINS, CO 80521-2761
(970) 494-3500
________________________________________________
Plaintiff(s): Eric Sutherland
v.
Defendant(s): The City of Fort Collins; Steve Miller, in
his capacity as the Larimer County Assessor; Irene
Josey, in her capacity as the Larimer County Treasurer;
The Timnath Development Authority and Compass
Mortgage Corporation.
FOR COURT USE
Case No.: 18CV149
Courtroom: 5B
ORDER GRANTING DEFENDANTS TIMNATH DEVELOPMENT AUTHORITY
AND COMPASS MORTGAGE CORPORATION’S JOINT MOTION TO DISMISS
On June 27, 2018, the Court held a hearing on Defendant Timnath Development
Authority (“TDA”) and Defendant Compass Mortgage Corporation’s (“CMC”) joint
motion to dismiss. The Court has considered the filings, testimony, and evidence and
orders the following:
On April 26, 2018, Eric Sutherland filed a Complaint for Declaratory Judgment
and Equitable Relief. Plaintiff seeks a declaratory judgment from the Court finding that
any repayment of debt would be an unlawful violation of the Urban Renewal Authority
Act. C.R.S. §13-25-101, et seq. Plaintiff asks the Court to enjoin the Larimer County
Assessor and the Larimer County Treasurer from “calculating or disbursing property
tax increment for the purposes of repaying any part” of the debt.
The parties agree that the TDA was adopted by the Town of Timnath in 2004 and
was amended in 2007 and 2015. On March 27, 2018 the TDA approved the issuance of a
loan not to exceed $20,000,000 to fund capital improvements within the urban renewal
area.
DATE FILED: July 11, 2018
CASE NUMBER: 2018CV149
2
TDA and CMC move to dismiss the Complaint on multiple grounds: 1) Plaintiff
lacks standing to enforce the Urban Renewal Authority Statute; 2) the claims are not
applicable to actions taken by the TDA; 3) the claims are insufficiently pled; 4) the
claims are time barred.
Applicable Law
A motion to dismiss for failure to state a claim tests the sufficiency of a plaintiff’s
complaint and is looked on with disfavor. Allen v. Steele, 252 P.3d 476, 481 (Colo. 2011).
A complaint must contain sufficient factual allegations to raise a right to relief above the
level of speculation to the level of plausibility. Warne v. Hall, 373 P.3d 588, 595 ¶ 24
(Colo. 2016).
On a motion to dismiss, a court must accept as true all averments of material fact
in a complaint. Id. at 591 ¶ 9. However, legal conclusions and conclusory allegations
are not entitled to be assumed true. Id.; id. at 596 ¶ 27. A court must only consider the
complaint’s contents, but it may examine documents referred to in the complaint
without converting the motion into one for summary judgment. Yadon v. Lowry, 126
P.3d 332, 335-36 (Colo.App. 2005). Ultimately, a claim that is not plausible on its face
will be dismissed for failure to state a claim. Warne, 373 P.3d at 595.
A plaintiff has standing if he or she “(1) incurred an injury-in-fact (2) to a legally
protected interest, as contemplated by statutory or constitutional provisions.” Brotman
v. East Lake Creek Ranch, L.L.P., 31 P.3d 886, 890 (Colo. 2001). To determine standing, a
court considers “whether the plaintiff has asserted a legal basis upon which a claim for
relief may be predicated.” Olson v. City of Golden, 53 P.3d 747, 750 (Colo. App. 2002).
Olson held that, because the judicial branch of the government is precluded from
assuming the powers of another branch, courts could not overlook limitations on
standing to “redress otherwise nonjusticiable wrongs.” Id., citing Dodge v. Department of
Social Services, 600 P.2d 70, 73 (Colo. 1979). A plaintiff must demonstrate a legal interest
that entitles him or her to judicial redress. Id.
The Colorado Supreme Court has held that there are three factors to consider in
making the determination of whether a plaintiff has demonstrated such a legal interest:
(1) whether the statute specifically creates such a right in the plaintiff; (2) whether there
is any indication of legislative intent to create or deny such a right; and (3) whether it is
3
consistent with the statutory scheme to imply such a right. Id., citing Cloverleaf Kennel
Club, Inc. v. Colorado Racing Commission, 620 P.2d 1051 (Colo. 1980).
Application of Law
Standing
The Olson Court found that the URA does not confer the right on taxpayers to
enforce its provisions. Olson, 53 P.3d at 752. Though Plaintiff contends that his action is
not intended to enforce the Urban Renewal Statutes, it is evident that the suit is, in fact,
a thinly veiled attack on Defendant TDA’s compliance with the URA for which Plaintiff
lacks standing to proceed.
“…[I]f the General Assembly had intended that taxpayers to have a right of
enforcement, it would have provided directions, such as staying the project during
litigation or requiring bonds to protect the taxpayers’ interest if the project continued
during litigation.” Olson, 53 P.3d at 752. Plaintiff asserts standing as a taxpayer, though
he clearly lacks standing and any right to enforce the URA.
Injury-in-Fact
“To satisfy the injury-in-fact prong of the Wimberly standing test (as set forth in
Brotman), the injury must be direct and palpable.” Olson, 53 P.3d at 750, citing Cloverleaf
Kennel Club, Inc. v. Colorado Racing Commission, 620 P.2d 1051 (Colo. 1980). As in Olson,
the injury complained of here is speculative at best. That case was brought by a
plaintiff who claimed that her status as a taxpayer granted her the authority to bring
suit to enforce the URA. The Court of Appeals found that the plaintiff had not
demonstrated a palpable injury-in-fact. Similarly, here, Plaintiff’s claimed injury
centers on his belief that Poudre School District will raise taxes in the future due to lost
revenue. An injury that “cannot be determined until a remote time in the future is not
sufficiently direct and palpable to support a finding of injury-in-fact.” Id.
Claims one and three are dismissed because the Plaintiff: 1) does not have
standing; and, 2) has failed to allege injury-in-fact.
4
Sufficiency of Pleadings
Rule 8(a) of the Colorado Rules of Civil Procedure requires a “short and plain
statement of the claim showing that the pleader is entitled to relief.” The allegations
contained in a complaint must be more than merely speculative and must provide
plausible grounds for relief. Warne v. Hall, 373 P.3d 588, 595 (Colo. 2016).
Plaintiff lists his claims in headings titled from “First Claim for Relief” through
“Nineteenth Claim for Relief.”1
Claim two and Claims four through nineteen are: 1) inapplicable to TDA and
CMC; 2) are insufficiently pled or 3) both.
For example, the fourth claim states in full, “Poudre Valley Fire Protection
District agreement.” The “claim” is not recognizable as a claim, does not set forth to
whom it applies and is not even a complete sentence.
The Court grants the motion to dismiss as to TDA and CMC on claims two and
four through nineteen.
Statute of Limitations
It appears that some claims, if sufficiently pled and if the Plaintiff has standing,
would have been barred by the statute of limitations; however, due to the insufficiency
of the pleadings that determination is moot.
Dated: July 11, 2018. BY THE COURT:
__________________________
Gregory M. Lammons
District Court Judge
1 The Plaintiff does not clearly set forth which claims apply to which of the five Defendants that he has
sued.