Meadows at Buena Vista, Inc., The et al v. Town of Buena Vista, Colorado et al

Filing 146

OPINION AND ORDER FOLLOWING RECOMMENDATION BY MAGISTRATE JUDGE: IT IS THEREFORE ORDERED (1) Upon de novo review of the Motion to Amend, the Recommendation of Magistrate Judge 127 is ADOPTED. (2) The Motion to Amend 95 is DENIED, and finding the claims against AVPC to be futile and the Plaintiffs to have had ample opportunity to state claims against AVPC, all claims against AVPC are DIMISSED with prejudice. (3) The Plaintiffs' Motion to Clarify the Finality of Prior Orders 145 is DENIED, as moot. (4) All substantive claims against all parties having been resolved by agreement or by this Order, upon resolution of the pending Motion for Attorney Fees (#143), the Clerk is directed to close the case. The Plaintiffs shall have 7 days from the date of this Order to Respond to the Motion for Attorney Fees. by Judge Marcia S. Krieger on 2/15/12.(msksec, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Honorable Marcia S. Krieger
Civil Action No. 10-cv-02871-MSK-KMT
THE MEADOWS AT BUENA VISTA, INC., a Colorado corporation; and
LONESOME PINE HOLDINGS, LLC, a Colorado limited liability company,
Plaintiffs,
v.
ARKANSAS VALLEY PUBLISHING COMPANY,
Defendant.

OPINION AND ORDER FOLLOWING RECOMMENDATION BY MAGISTRATE
JUDGE

THIS MATTER is before the Court on the Recommendation of Magistrate Judge (#127)
that Plaintiffs’ Motion to Amend Complaint (#95) be denied. The Plaintiffs filed a timely
objection to the Recommendation (#130).1 Having considered the pertinent record, the Court
sustains Plaintiffs’ Objection, in part, but ADOPTS the Recommendation, DENIES Plaintiffs’
Motion to Amend Complaint and DISMISSES all claims against AVPC with prejudice.
I. Background
This action originated in Chaffee County, Colorado, District Court, and was removed after
a Complaint (#4) and Amended Complaint (#5) had been filed. It arises from a long, acrimonious
attempt by Plaintiff The Meadows at Buena Vista to develop a 277 acre project in the Town of
Buena Vista (“Town”). After many years of controversy, the Town Board of Trustees decided to
put a proposed annexation agreement between the Plaintiffs and the Town of Buena Vista on the
November 2008 ballot for public rejection or ratification.
The immediate trigger for this lawsuit was publication of an opinion piece by the Town

1

The determination of the Motion to Amend in this ruling renders the Plaintiff’s Motion
to Clarify the Finality of Prior Orders and Other Relief (#142) moot.

Mayor opposing the ballot issue in the Chaffee County Times (the “Times”), immediately
preceding the election. Because the election occurred before publication of the subsequent issue
of the Times, the Plaintiffs were unable to publish a response. The referendum failed, and the
Plaintiffs brought various claims against the Town Mayor (Cara Russell), the Town of Buena
Vista2 and the owner and publisher of the Times, Arkansas Valley Publishing Company
(“AVPC”).
Shortly after removal of the action to this Court, AVPC moved to dismiss claims against
it pursuant to Fed. R. Civ. P. 12(b)(6) (#10). This motion was granted (#115), but the claims were
dismissed without prejudice.
Between the filing of the Motion to Dismiss and its determination, Plaintiffs twice sought
to amend their Amended Complaint to add and clarify claims against Defendants Russell and
AVPC. These motions, (#24, #38) were referred to the Magistrate Judge for recommendation.
The Magistrate Judge recommended that the motions be granted with regard to claims against
Defendant Russell but denied as to claims against Defendant AVPC. (#60). The Plaintiffs
objected (#66) to the Recommendation. The Court adopted the Recommendation (#68), then
reaffirmed its adoption on Plaintiffs’ Motions for Reconsideration (#69, #74). The Court
specifically found that the proposed claims against AVPC were futile because they were premised
upon an alleged agreement between AVPC and Russell, either to deprive the Plaintiffs of their
constitutional rights or for tortious interference with Plaintiffs’ contractual relations with the
Town of Buena Vista, for which insufficient factual allegations had been pled. (# 84).
After the denial of the Motions to Amend, Plaintiffs again sought to Amend the Amended

2

Claims against the Town of Buena Vista and Cara Russell were dismissed by stipulation

(#140).
2

Complaint (#95)3 “as a final effort to state claims against the defendants Russell and the Times
”(AVPC). The motion was referred to the Magistrate Judge, who Recommended that it be
denied. (#127). The Plaintiffs again objected (#130), AVPC responded and the Plaintiffs replied.
It is this Recommendation and Objection that are currently before the Court.
II. The Recommendation and Objection
The Recommendation assumed that AVPC had been dismissed as a Defendant (#127, p.
2) when AVPC’s Motion to Dismiss Claims in the Second Amended Complaint (#10) was
granted (#115). Thus, the Magistrate Judge found the Plaintiffs’ request to further amend to state
claims against AVPC to be moot, and recommended denial of the Motion to Amend. Plaintiffs
contend that the Magistrate Judge’s assumption was in error, and that they was not precluded
from seeking to amend the Second or Third Amended Complaint.
In this respect, the Court agrees with the Plaintiffs. AVPC’s Motion to Dismiss (#10)
was directed at the Amended Complaint that was filed in the Chaffee County District Court. Its
allegations of were insufficient to state a claim for the same reason that the Plaintiffs’ subsequent
attempts to amend were rejected.4 However, neither the order of dismissal nor the denial of
Plaintiffs’ motions to amend precluded further attempts to amend. The granting of the AVPC’s
Motion to Dismiss was without prejudice5 and the Order denying the Plaintiffs’ earlier motions to
3

Counting the amendments made before the state court, this motion constitutes the
Plaintiffs’ fifth attempt to clarify and state claims against AVPC.
4

The claims against AVPC were premised upon the suspicion that there was an
agreement between AVPC and Mayor Russell to violate the Plaintiffs’ constitutional rights or
interfere the Plaintiffs’ contractual rights with the Town of Buena Vista. Putting aside Plaintiffs’
conclusory allegations and taking as true the material factual allegations, the only showing of an
agreement was that 1) Mayor Russell routinely contributed to as a columnist in the local paper,
2) the local newspaper editorially opposed the referendum to approve an annexation agreement
between the Plaintiffs and the Town of Buena Vista, and 3) that Mayor Russell and the
newspaper agreed on a headline for and date of publication of her opinion piece just before the
election on the referendum.
5

Technically, claims against parties, rather than parties, themselves, are dismissed from a
lawsuit. Whether dismissal bars a party from re-raising such claims or seeking later amendment
3

amend did not expressly bar subsequent requests to do so. Thus, the Plaintiffs’ Objection is
sustained in this regard.
Having resolved the Motion to Amend with regard to claims against AVPC on mootness
grounds, there was no need for the Magistrate Judge to assess its merits. Thus, the Court does so
de novo.
III. Standard of Review
A.

Motions to Amend and the Doctrine of Futility
Because responsive pleadings had been filed at the time of the filing of the instant Motion

to Amend and AVPC did not consent to further amendment, the Plaintiffs require the Court’s
leave to amend the operative complaint, here the Amended Complaint. Fed.R.Civ.P. 15(a)
Ordinarily, leave to amend is freely given unless there is a showing of: (1) undue delay; (2) bad
faith or dilatory motive; (3) repeated failure to cure deficiencies by amendments previously
allowed; (4) undue prejudice to the opposing party; or (5) futility of the amendment. Foman v.
Davis, 371 U.S. 178, 182 (1962). A proposed amendment is futile if the complaint, as amended,
would be subject to dismissal. Anderson v. Suiters, 499 F.3d 1228, 1238 (10th Cir. 2007)
(quotations omitted).

B.

Determination of the Sufficiency of the Pleading to Determine Futility
There is a strong presumption against dismissal for failure to state a claim under Rule

depends upon whether the dismissal is with or without prejudice. Sheldon v. Vermonty, 269 F.3d
1202, 1207 n.5 (10th Cir. 2001) (as a general matter, a party should be granted an opportunity to
amend his claims prior to a dismissal with prejudice); Hall v. Bellmon, 935 F.2d 1106, 1110
(10th Cir. 1991) (dismissal under Rule 12(b)(6) without affording the plaintiff notice or an
opportunity to amend is proper only “when it is ‘patently obvious’ that the plaintiff could not
prevail on the facts alleged, and allowing him an opportunity to amend his complaint would be
futile.”).
.
4

12(b)(6). See Cottrell, Ltd. v. Biotrol Int’l, Inc., 191 F.3d 1248, 1251 (10th Cir. 1999). The
relevant standard in determining whether claims are futile is the same standard that is applied to a
motion to dismiss under Fed. R. Civ. P. 12(b)(6).
A claim must be dismissed if a complaint does not contain enough facts to make the claim
“plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is
plausible on its face if a complaint contains sufficient facts for a court to draw an inference that
the defendant is liable for the alleged misconduct. See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949
(2009) (citing id. at 556). Although a plaintiff is not required to provide detailed factual
allegations in a complaint, it must contain “more than labels and conclusions” or “a formulaic
recitation of the elements of a cause of action” and must “raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555.
In applying the Twombly/Iqbal standard to a motion under Fed. R. Civ. P. 12(b)(6), the
Tenth Circuit has held that plausibility refers “to the scope of the allegations in a complaint: if
they are so general that they encompass a wide swath of conduct, much of it innocent, then the
plaintiffs ‘have not nudged their claims across the line from conceivable to plausible.’” Robbins
v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Twombly, 550 U.S. at 570). The
standard is “a middle ground between heightened fact pleading, which is expressly rejected, and
allowing complaints that are no more than labels and conclusions or a formulaic recitation of the
elements of a cause of action, which the Court stated will not do.” Id. (internal quotation marks
and citations omitted). The standard must be applied in a manner consistent with the notice
pleading framework set forth in Fed. R. Civ. P. 8(a)(2), which requires only that a complaint give
a defendant “fair notice” of the claim and grounds upon which it rests. Khalik v. United Air
Lines, ___ F.3d ___ , Case No. 11-1063 (10th Cir., Feb. 6, 2012) (citations omitted). The nature
and specificity of the allegations required to state a claim will depend on context. Although a
plaintiff need not plead all facts necessary to state a prima facie case in the complaint, the
5

elements of each alleged cause of action help to determine whether the plaintiff has set forth a
plausible claim. Id.
In reviewing a complaint under Rule 12(b)(6), a court should accept, as true, all wellpleaded facts and construe all reasonable allegations in the light most favorable to a plaintiff.
Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009). With regard to inferences drawn
from factual allegations, they “must be more than speculation and conjecture.” Sunward Corp. v.
Dun & Bradstreet, Inc., 811 F.2d 511, 521 (10th Cir.1987) (citing Galloway v. United States, 319
U.S. 372, 63 S.Ct. 1077, 87 L.Ed. 1458 (1943)). Inferences must be based on the facts alleged; in
other words, an inference “is reasonable where ‘a probability’ exists that a ‘conclusion flows from
the ... facts.’” United States v. Bowen, 527 F.3d 1065, 1076 (10th Cir. 2008) (citation omitted).
An inference is not a hypothetical “fact” fabricated post hoc in order to arrive at a desired
conclusion.
C.

The Proposed Third Amended Complaint
With these considerations in mind, the Court understands the proposed Third Amended

Complaint (“PTAC”) to allege the following facts.
In 2005, Plaintiff The Meadows at Buena Vista, Inc sought to develop 277 acre parcel
located near the Town of Buena Vista. Plaintiff Lonesome Pine Holdings, LLC owned 274 of the
acres and associated water rights. When the Plaintiffs requested that the Town annex the
property, the Town conditioned annexation upon assignment of the associated water rights to it.
The Plaintiffs did not agree.
Negotiations between the Plaintiffs and the Town continued with limited success.
Plaintiffs attribute the pace and adverse outcome to personal and business relationships between
various Town Trustees and a competing developer, Dean Hiatt. Of concern to this action was the
perceived relationship between Cara Russell (initially a Trustee, then Town Mayor) and Mr.
Hiatt. Mr. Hiatt was in business with Ms. Russell’s husband and leased residential property to the
6

Russells.
In February, 2006, the Town and Plaintiffs entered into a Memorandum of Understanding
(“MOU”) in which the Town agreed to use good faith efforts to negotiate a water service
agreement and annexation agreement with Plaintiffs. Certain details, including a cash-in-lieu of
water dedication value fee, were successfully negotiated. However, the apparent progress abated
at a Town meeting on March 28, 2006. At that meeting, the Board of Trustees went into an
executive session; at the conclusion of such session the Town reimposed to the condition that the
water rights be transferred to the Town.
At the Town meeting on April 11, 2006 the dispute between the Plaintiffs and Town
Trustees became particularly contentious. Plaintiff The Meadows argued that the Town’s
position contravened the terms of the MOU, and it accused Ms. Russell of having a conflict of
interest created by her relationship with Mr. Hiatt. The Meadows also accused others of conflicts
of interest, particularly the Mayor pro tem, Bill Woodhouse who was employed by Mr. Hiatt. A
reporter from the Chaffee County Times was present, but no article reported on the allegations of
conflict of interest.6
While negotiations between the Town and Plaintiffs were ongoing, Mr. Hiatt’s business
submitted an application for rezoning of land for development. Although the application
anticipated a greater water supply than supported by the attendant water rights, it was approved

6

At Paragraph 27 of the proposed Third Amended Complaint contains a hypothetical
conversation between an unidentified “Editor” and “Reporter” at the Times suggesting a decision
and rationale for not publishing information about the conflict of interest allegations. The label
of this colloquy is “Inference,” but it is not offered “upon information and belief” or with any
investigational certification required by Fed. R.Civ.P. 11. Indeed, Plaintiffs’ counsel admits (in
an email submitted by AVPC) that this script (and others referenced below) that this is what he
imagined could have been said. Because there are no factual allegations from which this
hypothetical conversation can be inferred, the Court disregards it as speculative. Similarly, the
Court disregards all factual conclusions based upon such speculation.
7

by the Town Board of Trustees on June 27, 2006.7 Mr. Hiatt posted a letter of credit to secure
performance under a subdivision improvement agreement, but it was not timely called. Mr.
Hiatt’s business filed for bankruptcy protection in 2009 with an outstanding liability to the Town
of $240,000. The Times did not report on the Town’s failure to timely call the letter of credit, but
there is no factual allegation that anyone at the Times knew of this event.8
In January 2007, the Town and the Plaintiffs entered into a Pre-Annexation Agreement
whereby the water issues were resolved with a tap fee, a cash-in-lieu fee of $6000 per tap and
other arrangements. In June that year, the Plaintiffs submitted applications for annexation, PUD
and Sketch Plan. The Town and Plaintiffs agreed to a Water Service Agreement and an
Annexation and Development Agreement that were approved on March 25, 2008. Mayor Russell
did not vote on the issue, but according to the Plaintiffs, the Town Mayor is not entitled to vote.
This decision was followed by a number of citizen petitions opposing the Town’s
approval. As a result, the Town’s approvals were withdrawn, then re-instated. Finally, the Town
Trustees decided to put the agreements on the ballot in the November 2008 election for popular
ratification or rejection. Numerous debates were held. The Town, through its Board of Trustees,
endorsed approval of the agreements.
Mayor Russell, however, opposed ratification. She frequently wrote a column in the
Times entitled “Mayor’s Focus”, and in the edition of the Times published just prior to the
7

Plaintiffs take particular offense to this in light of the demand for assignment of their
water rights. They also contend that the consideration of the application was in violation of a
long-standing policy requiring that applications be considered based on the date of submission.
8

With regard to this fact and others, the proposed Third Amended Complaint contains
paragraphs entitled “Inference” that recite imagined conversations. Paragraphs 34, 52, 59, 63
contain an imagined conversations between an unidentified Reporter and Editor. Paragraphs 61
and 64 contain an imagined conversation between the Mayor and unidentified Editor. Paragraph
70 contains an imagined conversation between an unidentified Editor and Owner of the
newspaper. Paragraph 72 contains snippets of imagined conversations between the Mayor and
Bill Woodhouse, the Mayor and Police Chief, and the Mayor and an unidentified Reporter. For
the reasons stated in Footnote 5, these allegations and all factual conclusions based thereon are
disregarded as speculative.
8

election, stated her reasons for opposing the ballot issue under the caption “How Big a Payoff Do
you Want?” Because no subsequent edition of the Times was published prior to the election, the
Plaintiffs did not have an opportunity to respond. The ballot measure was defeated by a narrow
margin. Thereafter, the Plaintiffs submitted new applications which were approved at a special
election on April 6, 2010.
In the proposed Third Amended Complaint, the Plaintiffs assert the following claims
against AVPC:
Claim 12 (Conspiracy to Violate Plaintiffs’ Civil Rights, relating to the statements of the
Mayor in the Publication under 42 U.S.C. § 1983);
Claim 13 (Conspiracy to Violate Plaintiffs’ Civil Rights with Actual Malice, also relating
to the statements of the Mayor in the Publication)9;
Claim 14 (Aiding and Abetting the Mayor’s Violation of Plaintiffs’ Civil Rights);
Claim 15 (Aiding and Abetting the Mayor’s Violation of Plaintiffs’ Civil Rights with
Actual Malice); and
Claim 16 (Declaratory Judgment).

9

This claim and Claim 15 appear to present a fundamental misunderstanding of the
relationship between New York Times v. Sullivan, 376 U.S. 254 (1964) and constitutional
violations. Excluding labels and conclusory language, Plaintiffs appear to assert that the
Mayor’s column contained false statements of fact, which caused them harm, and that the Times
conspired with (or aided and abetted) the Mayor to bring about this harm to Plaintiffs. As pled,
however, the Plaintiffs contend that the Plaintiff’s constitutional rights were violated.
Sullivan provides “a framework for applying the First Amendment to states’ abilities to
punish defamatory falsehood,” requiring a heightened culpable mental state of “actual malice,”
rather than simple negligence or strict liability. United States v. Strandlof, --- F.3d ----, 2012
WL 247995 at *7 (10th Cir., Jan. 27, 2012). It does not, however, convert an alleged defamatory
false statement by a public official, without more, into a constitutional injury. As a legal matter,
the Court is unaware of any free-standing constitutional right to be free from a government
official’s publication of false statements. Renaud v. Wyoming Dep’t of Family Servs., 203 F.3d
723, 726-27 (10th Cir. 2000) (“defamation, standing alone, [is] not sufficient to establish a claim
for deprivation of a liberty interest.”). Because Plaintiffs have persistently avoided asserting
their claims against either the Mayor or AVPC as defamation, the Court will examine only
whether they have sufficiently alleged a constitutional harm.
9

II. Analysis
As noted, the proposed claims against AVPC are substantially similar to those the
proposed Second Amended Complaint, which the Court found deficient. (#84) The Plaintiffs
contend that the identified deficiencies in the proposed Second Amended Complaint have been
cured, in part, by inclusion of imaginary conversations that have been labeled inferences. They
argue that such inferences are reasonable, and when coupled with stated facts are sufficient to
state plausible claims. The Plaintiffs contend that the proposed amendments demonstrate (1) an
agreement between the Mayor and the Times to form a conspiracy and (2) that the Times was
aware that the Mayor was engaged in wrongful or illegal conduct. As to the second issue, the
Plaintiffs specifically contend that the Times was aware that the Mayor had failed to disclose a
conflict of interest, which amounts to a violation of C.R.S. § 18-8-308, and failed to report this to
their readers.
Because review of Plaintiff’s Motion to Amend and proposed Third Amended Complaint
is de novo, the referent is not this Court’s prior ruling addressing prior proposed amendments to a
prior complaint. Rather, the issue is whether the proposed Third Amended Complaint contains
sufficient factual allegations that, taken as true, state plausible claims against AVPC.
A.

The Elements of the Claims Asserted
1.

Conspiracy to Violate Civil Rights (Claims 12 and 13)

42 U.S.C. § 198310 provides that “[e]very person who, under color of any statute,

10

As noted in the Recommendation (#60) first denying Plaintiffs’ motion to amend as
futile, a conspiracy to violate civil rights may arise under either 42 U.S.C. § 1983 or § 1985. An
essential element of a section 1985 conspiracy claim, however, is the existence of some racial or
other class-based, invidiously discriminatory animus behind the conspirator’s actions. See Bray
v. Alexandria Women’s Health Clinic, 506 U.S. 263, 267–68 (1993). The Recommendation
determined that the Plaintiffs’ allegations did not contain any facts that could plausibly state a
claim under section 1985 and the Plaintiffs did not object to this portion of the Recommendation.
Reviewing the allegations in the proposed Third Amended Complaint de novo, the Court also
concludes that there are no allegations that would give rise to an inference that the alleged
conspirators were motivated by any racial or other class-based invidious discrimination.
10

ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia,
subjects, or causes to be subjected, any citizen of the United States or other person within the
jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the
Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or
other proper proceeding for redress . . .” The statute creates no substantive civil rights, only a
procedural mechanism for enforcing existing constitutional and other federal rights. Wilson v.
Meeks, 52 F.3d 1547, 1552 (10th Cir. 1995). Therefore, to assert a claim under section 1983, a
plaintiff must identify (1) the violation of a right secured by the Constitution and laws of the
United States and show facts demonstrating (2) that the deprivation was committed by a person
acting under color of state law. Hall v. Witteman, 584 F.3d 859, 864 (10th Cir. 2009).
A § 1983 conspiracy claim can arise when a private actor conspires with state actor to
deprive a person of a constitutional right under color of state law. See Dennis v. Sparks, 449 U.S.
24, 29, 101 S.Ct. 183, 187, 66 L.Ed.2d 185 (1980); see also Gallagher v. Neil Young Freedom
Concert, 49 F.3d 1442, 1453-54 (10th Cir. 1995) (identifying various theories under which state
action may be imputed to the acts of a private party for the purposes of section 1983, including
“joint action,” where state officials and private parties have acted in concert in effecting a
particular deprivation of constitutional rights”). “Provided that there is an underlying
constitutional deprivation, the conspiracy claim allows for imputed liability; a plaintiff may be
able to impose liability on one defendant for the actions of another performed in the course of the
conspiracy.” Dixon v. City of Lawton, Okla., 898 F.2d 1443, 1449 n. 6 (10th Cir. 1990).
Therefore, assuming there is a plausible claim that the Mayor violated the Plaintiffs’
constitutional rights, if the allegations are sufficient to demonstrate a conspiracy between AVPC
and the Mayor to violate the Plaintiffs’ constitutional rights, there is a plausible claim against

Therefore, the Court only examines whether the Plaintiffs can state a claim under section 1983.
11

AVPC . However, to be sufficient, both the conspiracy claim and the claim for deprivation of the
constitutional right must be adequately pled. Snell v. Tunnell, 920 F.2d 673, 701 (10th Cir. 1990).
Under Tenth Circuit law, a conspiracy claim brought under 42 U.S.C. § 1983 requires a
showing of “at least a combination of two or more persons acting in concert and an allegation of a
meeting of the minds, an agreement among the defendants, or a general conspiratorial objective.”
Brooks v. Gaenzle, 614 F.3d 1213, 1227-28 (10th Cir. 2010). Conclusory allegations of
conspiracy are insufficient to state a claim. Id. at 1228. Moreover, to state a claim under a
conspiracy theory, the plaintiff is required to allege that “both public and private actors share a
common, unconstitutional goal.” Gallagher, 49 F.3d at 1454 (quoting Cunningham v. Southlake
Ctr. for Mental Health, Inc., 924 F.2d 106, 107 (9th Cir.1991)).
Taking these causes of action together, therefore, the elements of a conspiracy to violate a
plaintiff’s civil rights require a showing of (1) violation of a right secured by the Constitution and
laws of the United States; (2) by a person acting under color of state law and in concert with at
least one other person; (3) based on a meeting of the minds, agreement or general conspiratorial
objective to deprive the plaintiff of the constitutional right. Although the Third Amended
Complaint need not include a specific factual allegation for each element, the absence of well
pled facts affects the “plausibility” of the claim asserted.
(a) Deprivation of Constitutional Right
Because the alleged conspiracy is between AVPC and the Mayor, we begin the analysis,
by focusing upon the allegations that the Mayor violated found in Claim 10 of the proposed Third
Amended Complaint. These are that the “hearings held in connection with the plaintiffs’
application for development rights were quasi-judicial in nature.” PTAC ¶ 123. The Mayor
violated the Plaintiffs’ right to due process by participating in the hearings on plaintiffs’
applications when she had a conflict of interest and by encouraging and supporting the 2008
referendum process (alleged upon information and belief). PTAC at ¶ 96. By publishing the
12

column, the Mayor “delegated to herself the opportunity to make an ex parte closing argument to
the citizens of the Town after the vote in violation of the plaintiffs’ due process right to a
quasi-judicial hearing [on the various applications] and thereby denied to the plaintiffs due
process of law.” PTAC at ¶ 125.
Put most generally, the Court understands the claim to be that the Mayor deprived the
Plaintiffs of process due to them in connection with the Town’s consideration of their various
development related applications.11 The starting point for any due process claim is the existence
of a protected liberty or property interest. Here, the proposed Third Amended Complaint suggests
that the protected interest was the approval of their various development applications.
For due process purposes, a property interest results from a “legitimate claim of
entitlement” to some benefit, not the abstract need for, or unilateral expectation of, that benefit.
Hyde Park, 226 F.3d at 1210. Generally, in land use regulation cases, the entitlement analysis
presents a question of law and focuses on “whether there is discretion in the defendants to deny a
zoning or other application filed by the plaintiffs.” Id. (quoting Norton v. Village of Corrales,
103 F.3d 928, 931-32 (10th Cir.1996)). The focus is on the degree of discretion given the
decisionmaker rather than the probability of a favorable decision. Id. (citation omitted).
Therefore, for there to be a plausible claim of denial of due process, the proposed Third Amended
Complaint must allege conditions existing under state and local law, “the fulfillment of which

11

The Court notes that the allegations as to who was the decisionmaker is somewhat
unclear. It may depend on whether the ballot measure was binding or non-binding. If the
measure was binding, then the Trustees and Mayor had no role in the decisionmaking process
and the decision, and thus the alleged deprivation was made by the electorate.
AVPC contends that, according to the PTAC, the ballot measure was not binding but was
rather intended as a political tactic, to head off further citizen referendum action. This raises
another issue - sufficiency of pleading with regard to causation. If the only purpose for the
election was to assist the Board in making a decision and the ultimate decision made by the
Trustees was to approve other applications by the Plaintiffs, the relationship between the
Mayor’s published opinion and the ultimate decision is not clearly alleged in the proposed Third
Amended Complaint..
13

would give rise to a legitimate expectation” that their applications would be approved. Id.
Although there are passing comments about deviation from expected procedures in the
application process, there are no factual allegations in The Third Amended Complaint that
identify the basis upon which the Plaintiffs expected that their applications would be approved.12
Thus, the factual allegations are inadequate to show a protected interest.
Assuming, however, that there was a protected interest, the next showing that is required
is what process was required to protect it. Again, there is no specific allegation, nor is there a
statement of what process was denied or whether the denial was procedural or substantive.13
For a procedural due process claim there must be allegations identifying the procedure to
which Plaintiffs were entitled, but of which they were deprived. Reedy v. Werholtz, 660 F.3d 1270
(10th Cir. 2011) (“To establish a procedural-due-process claim, a plaintiff needs to demonstrate
not only the possession of a protected property interest but also a denial of an appropriate level of
process.”). The allegations of the proposed Third Amended Complaint identify no procedural
requirements set forth by law or regulation that were violated by the Mayor’s action. In addition,
as noted by AVPC, a contested election is not a quasi-judicial process with rules regarding the
taking of evidence or other procedural protections.
For a substantive due process claim, a plaintiff must demonstrate an arbitrary deprivation
of a property right and that the arbitrariness is extreme. Klen v. City of Loveland, Colo., 661 F.3d
12

Ordinarily, the identification of the property/liberty interest is correlated with a
description of the injury or deprivation of that interest, which gives rise to the party’s standing to
bring an action. Here, the existence of an injury is somewhat doubtful. Although the process of
consideration of the Plaintiffs’ applications was long and arduous, the Plaintiffs ultimately had
applications approved by the Town. This occurred after the election. Without allegations as the
differences in terms between the applications that were rejected and those approved, it is difficult
to determine what injury the Plaintiffs have suffered.
13

“Procedural due process ensures the state will not deprive a party of property without
engaging fair procedures to reach a decision, while substantive due process ensures the state will
not deprive a party of property for an arbitrary reason regardless of the procedures used to reach
that decision.” Hyde Park Co. v. Santa Fe City Council, 226 F.3d 1207, 1210 (10th Cir. 2000).
14

498, 512-513 (10th Cir. 2011) (“The plaintiff must demonstrate a degree of outrageousness and a
magnitude of potential or actual harm that is truly conscience shocking.”) (citations omitted).
Outrageousness conduct is required to avoid use of §1983 as a replacement for state tort law, and
in order to give deference to local policymaking bodies’ decisions. Id. at 513. It is doubtful that
losing a contested election (without demonstrated irregularity in the election itself) is sufficient to
shock the conscience.
Finally, it is difficult to understand the application of traditional procedural due process or
substantive due process analyses in this context because there are no allegations that the Mayor
made the ultimate decision regarding the Plaintiffs’ annexation and development applications. As
noted, earlier, it is not clear whether the election was the decision with regard to the applications,
or whether it simply was advisory to the Board of Trustees. If it was the Board of Trustees that
was the decisionmaker, both the decision prior to and after the election favored the Plaintiffs. In
either case, it does not appear that the Mayor was the decisionmaker. Indeed, the Plaintiffs
specifically allege that the Mayor “was not entitled to vote” on the Plaintiffs’ applications at the
September 2008 hearing. PTAC ¶ 124.
If the claim against the Mayor is based not on her decisionmaking, but instead on the
effect of her actions on the decisionmakers (the electorate or Town Trustees), which is consonant
with the allegations that her opinion piece in the Times influenced the election, there could be a
claim under section 1983. Such a claim, however, would require a causal nexus between her
actions and the decision that resulted in the injury to the property/liberty interest. As noted
earlier, whether there is a protected interest is unclear and whether there was a injury to such
interest is also unclear. But assuming, without deciding, that both have been adequately alleged,
there only allegation of causation is that publication of the Mayor’s column caused the
referendum to be defeated. Unfortunately, this statement is purely conclusory, and as a
consequence insufficient to allege causation.
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(b) Under Color of State Law
As noted earlier, for a claim of constitutional deprivation under Section 1983, the actions
must have occurred under the “color of law”.14 With respect to a private party such as AWPC,
this requirement can be shown by demonstration of a conspiracy between the private party and a
state actor who is acting under color of state law. That would require the Mayor to have been
acting, or be perceived as acting, in her official capacity. The allegations in the proposed Third
Amended Complaint not only do not allege this, logically they are inconsistent with this. Because
the Town Trustees endorsed the ballot measure, the Mayor’s contrary position could not be
“fairly attributed” to the Town.
(c) Agreement or Shared Conspiratorial Objective
Finally, for a plausible § 1983 claim against AVPC, the proposed Third Amended
Complaint must allege facts showing that AVPC (or its authorized agent) entered into an
agreement with the Mayor to deprive the Plaintiffs of the right to due process. Although an
agreement to conspire may be inferred through circumstantial evidence, see Snell, 920 F.2d at
702, conclusory allegations are insufficient. Inferences must be drawn from properly pled facts
and they must be based on speculation. “To demonstrate the existence of a conspiratorial
agreement it simply must be shown that there was ‘a single plan, the essential nature and general
scope of which [was] know to each person who is to be held responsible for its consequences.’”

14

The “under color of state law” requirement is “a jurisdictional requisite for any § 1983
action.” Polk County v. Dodson, 454 U.S. 312, 315 (1981). “The traditional definition of acting
under color of state law requires that the defendant in a § 1983 action have exercised power
‘possessed by virtue of state law and made possible only because the wrongdoer is clothed with
the authority of state law.’” West v. Atkins, 487 U.S. 42, 49 (1988) (citation omitted). Purely
private conduct by state employees that is not “fairly attributable” to the state does not satisfy the
“color of law” requirement. Jojola v. Chavez, 55 F.3d 488, 492 (10th Cir. 1995) (citation
omitted). Therefore, “there must be ‘a real nexus’ between the employee’s use or misuse of their
authority as a public employee, and the violation allegedly committed by the defendant.” Id. at
493. The public employee’s authority may be apparent as well as actual. Id.
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Id. (citation omitted). In addition, the purpose of the conspiracy must be to deprive the plaintiff a
constitutional right. Gallagher, 49 F.3d at 1455) (under joint action or conspiracy approach to
section 1983 liability, “state and private entities must share a specific goal to violate the
plaintiff’s constitutional rights by engaging in a particular course of action,” it is not enough to
show that they shared a common general goal).
Assuming, without deciding, that there is a cognizable claim against the Mayor, to extend
this to AVPC, the allegations in the proposed Third Amended Complaint must identify the
agreement between the Mayor and a specific person acting for AVPC, when and how that
agreement was reached, and the purpose of the agreement ( and show that its purpose was to
deprive the Plaintiff’s of a protected interest, which the Court assumes to be the expectation that
Plaintiffs’ applications would be approved). The Plaintiffs argue that the allegations show an
agreement between AVPC and the Mayor by virtue of the following facts: 1) the Mayor routinely
contributed to as a columnist in the local paper, 2) the Times editorially opposed the referendum
to approve an annexation agreement between the Plaintiffs and the Town of Buena Vista, 3) one
of Times reporters signed a petition opposing the project, 3) the Mayor and the newspaper agreed
on a headline for and date of publication of her opinion piece, and 4) the Times failed to publish
the allegations made about her conflict of interest in 2006 and otherwise failed to publish articles
showing the Plaintiffs’ “side” of the controversy.
The Court appreciates that these actions create suspicion, but taking them as true, they are
insufficient to plausibly show a conspiracy between AVPC and the Mayor. There is no
identification of a specific person or people who entered into an agreement with the Mayor, how
such person or persons is related to or acted for AVPC, when such agreement was entered into, or
what its objective was.15 At most, the facts show that the Mayor, one reporter and the editorial

15

These deficiencies are highlighted by the need to use imaginary conversations in the
proposed Third Amended Complaint in order to supply critical facts. Even the imaginary
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staff of the Times opposed ballot issue and someone at the Times agreed to publish the Mayor’s
opinion. Assuming the sufficiency of the allegations in stating a §1983 claim against the Mayor,
of which the Court is doubtful, these allegations do not begin to satisfy the Plaintiffs’ burden
under Twombly/Iqbal to allege facts that give rise to a reasonable inference that AVPC could be
liable under a conspiracy theory.
Having reviewed the proposed Third Amended Complaint in its entirety, and having given
deference to the truth of the well-pled allegations, the Court finds that the infirmities in pleading
are so numerous and pervasive, that Claims 12 and 13 alleging that AVPC conspired to deprive
Plaintiffs of their civil rights are not plausible. This being the Plaintiffs’ fifth attempt to amend
their Complaint since the inception of the action in the state court, and they acknowledge is there
final attempt to do so, the Motion to Amend is DENIED on the grounds that the assertion of such
claims is futile. Furthermore, because Plaintiffs have no additional facts to assert and have had
multiple opportunities to amend, all claims based on these theories are DISMISSED with
prejudice.
2.

Aiding and Abetting Violation of Civil Rights or Illegal Conduct
(Claims 14 and 15)

The proposed Third Amended Complaint also contains two claims alleging that AVPC
aided and abetted the Mayor’s deprivation of the Plaintiffs’ civil rights and other illegal activities
by publishing the Mayor’s column and by failing to report on her alleged illegal conflicts of
interest. Under Colorado law, a person is liable for aiding and abetting tortious conduct if the
following elements are established: (1) the party whom the defendant aids performs a wrongful
act that causes an injury; (2) the defendant is generally aware of his role as part of an overall
illegal or tortious activity at the time that he provides the assistance; (3) and the defendant
knowingly and substantially assists the principal violation. Holmes v. Young, 885 P.2d 305, 308

conversations are vague, referring only to a generic “Reporter” and “Editor,”.
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(Colo.App. 1994). Assuming without deciding that this theory could be applied to a
constitutional injury, the Court turns to the facts that could support each element of the claim.
(a) Wrongful Act
As noted above, there are significant questions as to whether the Plaintiffs have alleged
facts that, if true, would establish that the Mayor deprived them of a constitutional right by
publishing her column. Incorporating the prior reasoning with regard to the §1983 claims, here,
the allegations are not sufficient to show a wrongful act, that has caused an injury or that AVPC
was aware of any involvement in an illegal or tortious activity associated with the publishing of
the column.
To the extent that the proposed Third Amended Complaint refers to a separate wrongful
act in violation of Colorado state law by failing to disclose the Mayor’s conflicts of interest with
respect to the project, the Court turns to the applicable provision of Colorado law. As with the
prior conspiracy claims, there must be a sufficient allegation that the Mayor engaged in a
wrongful act for there to be a sufficient claim that AVPC aided and abetted in that act.
Under Colorado law, it is a criminal offense for a public official to fail to disclose a
conflict of interest:
(1) A public servant commits failing to disclose a conflict of
interest if he exercises any substantial discretionary function in
connection with a government contract, purchase, payment, or other
pecuniary transaction without having given seventy-two hours’
actual advance written notice to the secretary of state and to the
governing body of the government which employs the public
servant of the existence of a known potential conflicting interest of
the public servant in the transaction with reference to which he is
about to act in his official capacity.
(2) A “potential conflicting interest” exists when the public servant
is a director, president, general manager, or similar executive
officer or owns or controls directly or indirectly a substantial
interest in any nongovernmental entity participating in the
transaction.
(3) Failing to disclose a conflict of interest is a class 2
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misdemeanor.
C.R.S. § 18-8-308.
The proposed Third Amended Complaint alleges that at the April 2006 meeting, the
Plaintiffs’ representative made statements accusing the Mayor of having a conflict of interest.
There is no allegation that the Mayor failed to disclose a conflict of interest that falls within the
Colorado statute - that she failed to disclose that she was “a director, president, general manager,
or similar executive officer or owns or controls directly or indirectly a substantial interest in any
nongovernmental entity” participating in “a government contract, purchase, payment, or other
pecuniary transaction.”
(b) Knowledge of Role as Part of an Overall Illegal or Tortious Activity and Knowing
and Substantial Assistance
In addition, assuming a wrongful act by the Mayor, there is no specific allegation that
anyone acting on behalf of AVPC knew of the Mayor’s conflict of interest, failure to disclose it or
perpetuated or aided in hiding such information. The Plaintiffs argue generally that AVPC
“knew” that the Mayor was a “criminal” because individuals at AVPC were aware that the Mayor
had violated state law in failing to disclose her conflict of interest. Motion to Amend, #95, at 7.
Such argument is not reflected in specific allegations in the proposed Third Amended Complaint;
even if they were included, they are too general and conclusory to demonstrate knowledge
sufficient to state a plausible claim of aiding and abetting.
The final claim against AVPC is for declaratory judgment, which is repetitive of the
substantive claims, which are all futile.
IT IS THEREFORE ORDERED
(1)

Upon de novo review of the Motion to Amend, the Recommendation of Magistrate
Judge (#127) is ADOPTED.

(2)

The Motion to Amend (#95) is DENIED, and finding the claims against AVPC to
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be futile and the Plaintiffs to have had ample opportunity to state claims against
AVPC, all claims against AVPC are DISMISSED with prejudice.
(3)

The Plaintiffs’ Motion to Clarify the Finality of Prior Orders (#145) is DENIED,
as moot.

(4)

All substantive claims against all parties having been resolved by agreement or by
this Order, upon resolution of the pending Motion for Attorney fees (#143), the
Clerk is directed to close the case. The Plaintiffs shall have 7 days from the date
of this Order to respond to the Motion for Attorney fees.

DATED this 15th day of February, 2012.

BY THE COURT:

Marcia S. Krieger
United States District Judge

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