BLACKBURN, J.
The matters before me are (1)
I have jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 (federal question) and 1367 (supplemental jurisdiction).
Summary judgment is proper when there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A dispute is "genuine" if the issue could be resolved in favor of either party. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Farthing v. City of Shawnee, 39 F.3d 1131, 1135 (10th Cir.1994). A fact is "material" if it might reasonably affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Farthing, 39 F.3d at 1134.
A party who does not have the burden of proof at trial must show the absence of a genuine fact issue. Concrete Works of Colorado, Inc. v. City & County of Denver, 36 F.3d 1513, 1517 (10th Cir.1994), cert. denied, 514 U.S. 1004, 115 S.Ct. 1315, 131 L.Ed.2d 196 (1995). By contrast, a movant who bears the burden of proof must submit evidence to establish every essential element of its claim or affirmative defense. See In re Ribozyme Pharmaceuticals, Inc. Securities Litigation, 209 F.Supp.2d 1106, 1111 (D.Colo.2002). In either case, once the motion has been properly supported, the burden shifts to the nonmovant to show, by tendering depositions, affidavits, and other competent evidence, that summary judgment is not proper. Concrete Works, 36 F.3d at 1518. All the evidence must be viewed in the light most favorable to the party opposing the motion. Simms v. Oklahoma ex rel Department of Mental Health and Substance Abuse Services, 165 F.3d 1321, 1326 (10th Cir.), cert. denied, 528 U.S. 815, 120 S.Ct. 53, 145 L.Ed.2d 46 (1999).
The Town of Carbondale, Colorado (the Town), a home rule municipality, has enacted an affordable housing ordinance "to mitigate the impact of market rate housing construction on the limited supply of available land suitable for housing" within the town. (
In December 2005, plaintiffs submitted an application to the Town for a development known as Cleveland Place II. Plaintiffs were granted a number of variances in connection with development of the project (see id., Exh. A-3 ¶ 15.20.100 at 10) and construction was allowed to begin on the infrastructure before the plan was fully approved. Subsequently, in July 2007, plaintiffs and the Town entered into a Subdivision Improvement Agreement ("SIA") (id., Exh. A-8) and a Planned Unit Development Agreement ("PUD") (id., Exh. A-9), which were approved by local ordinance (id., Exh. A-10).
Pursuant to the SIA, plaintiffs agreed to a number of "conditions of approval and installation of public improvements," including, most importantly for present purposes, two units of community housing,
Development of Cleveland Place II proceeded, but in May 2008, the Town learned that Lots 1A and 1B had either been sold or were under contract at free market prices. The parties negotiated various amendments to the SIA and PUD, which increased the total number of units for the project from 18 to 20 and designated three units for community housing. (See id., Exh. A-11 ¶ C(7) at 3.) Although defendants contend that plaintiffs failed to begin construction on the community housing units,
Plaintiffs maintain that although they actively marketed the community housing units through the Town's administrative agent, Mountain Regional Housing Authority ("MRHA"), they found only one buyer. Moreover, plaintiffs insist that the community housing contracts approved by MRHA included unreasonable conditions under which their lender refused to finance construction of pre-sale units.
On August 6, 2009, the Town, via its attorneys, sent plaintiffs a letter under the heading "
Defendant Nancy Barnett, the acting town manager, notified plaintiffs on June 9, 2011, of the Town's intent to draw on the extant letter of credit unless the alleged deficiencies were cured within ten days. Ms. Barnett presented a first sight draft on June 16, 2011, and a second on June 20, 2011. Although plaintiffs filed a motion for a temporary restraining order to prevent the Town from calling in the letter of credit, the bank released the funds on June 20, 2011.
As a result of these events, the development is now in foreclosure, and plaintiffs represent that they are liable to their lenders for nearly three million dollars. The suit they initially brought in Colorado state district court was eventually removed to this court after plaintiffs filed an amended complaint asserting claims under 42 U.S.C. § 1983.
Plaintiffs assert four such claims here, alleging violation of their constitutional rights of equal protection and substantive and procedural due process, as well as a claim alleging a regulatory taking under the Fifth Amendment. In addition, plaintiffs have alleged state law claims for breach of contract and for declaratory and injunctive relief. For their part, defendants have counterclaimed for breach of contract.
Plaintiffs' first claim asserts a violation of their rights of equal protection under the Fourteenth Amendment. "Equal protection is essentially a direction that all persons similarly situated should be treated alike." Fogle v. Pierson, 435 F.3d 1252, 1260 (10th Cir.), cert. denied, 549 U.S. 1059, 127 S.Ct. 675, 166 L.Ed.2d 526 (2006) (citation and internal quotation marks omitted). The Equal Protection Clause "does not forbid classifications. It simply keeps governmental decisionmakers from treating differently persons who are in all relevant respects alike." Nordlinger v. Hahn, 505 U.S. 1, 10, 112 S.Ct. 2326, 2331, 120 L.Ed.2d 1 (1992). In general, and particularly in relation to economic and social welfare issues, the state "retains broad discretion to classify as long as its classification has a reasonable basis." Graham v. Richardson, 403 U.S. 365, 371, 91 S.Ct. 1848, 1852, 29 L.Ed.2d 534 (1971). However, if the government's classification involves a suspect class or burdens a fundamental constitutional right, the classification is subject to strict scrutiny and must be narrowly tailored to serve a compelling government interest. Save Palisade FruitLands v. Todd, 279 F.3d 1204,
Plaintiffs do not argue (nor could they) that they are members of a suspect class.
Oklahoma Education Association, 889 F.2d at 933 (citation and internal quotation marks omitted) (concluding that right to pursue an occupation is not a fundamental right for purposes of the Equal Protection Clause).
More particularly, federal courts have concluded uniformly that the right to dispose of one's property is not fundamental for equal protection purposes in circumstances similar to those presented in this case.
Alternatively, plaintiffs suggest they still may proceed to trial as a "class of one."
Assuming arguendo that plaintiffs can satisfy the first element — a proposition not at all clear from the record before me — they present nothing to substantiate the second. Plaintiffs must show "that they were singled out for persecution due to some animosity, meaning that the actions of [the Town] were a spiteful effort to `get' [plaintiffs] for reasons wholly unrelated to any legitimate state activity." Mimics, Inc. v. Village of Angel Fire, 394 F.3d 836, 849 (10th Cir.2005) (citation and internal quotation marks omitted). Although plaintiffs argue that the Town issued COs to other developers who had not built community housing units, the evidence reveals rational distinctions for these differences in treatment — most notably, that all these alleged comparators actually built community housing, whereas plaintiffs never did. Nor is there any other record evidence sufficient to allow a reasonable jury to conclude that defendants harbored the
For these reasons, I find and conclude that summary judgment is appropriate as to plaintiffs' equal protection claim, and the motion as to that claim therefore will be granted.
The Fourteenth Amendment provides, inter alia, that the state may not deprive "any person of life, liberty, or property, without due process of law."
Plaintiffs argue that they have a protected property interest by virtue of Colorado's Vested Property Rights Act, which provides:
§ 24-68-103(1)(b), C.R.S. The fact that state law creates a right, however, does not end the constitutional inquiry. It further must be determined whether, as a matter of "federal constitutional law ... that interest rises to the level of a legitimate claim of entitlement protected by the Due Process Clause such that the right is a protected property right protected by due process." Cross Continent Development, LLC v. Town of Akron, Colorado, 742 F.Supp.2d 1179, 1188 (D.Colo.2010) (quoting Memphis Light, Gas and Water Division v. Craft, 436 U.S. 1, 9, 98 S.Ct. 1554, 56 L.Ed.2d 30 (1978)) (internal quotation marks omitted). Such a legitimate claim of entitlement exists only when "the asserted right to property or liberty is mandated by state law [in that] specified substantive predicates exist." Elliott, 675 F.3d at 1244.
Plaintiffs' vested property right under state law consists of "the right to undertake and complete the development and use of said property under the terms and conditions of the site specific development plan including any amendments thereto." § 24-68-103(1)(c), C.R.S. In other words, plaintiffs have the right to complete the development in accordance with the terms of the SIA and the PUD. Yet their compliance with those terms vel non is the crux of this lawsuit. Without first determining that plaintiffs are not in material breach of the contract, it is impossible to say that state law mandates a decision in their favor.
This determination reveals a related and even more fundamental problem with plaintiffs' procedural due process claim, namely, that the circumstances in which a breach of contract may give rise to a procedural due process claim are limited in any event. "[I]t is neither workable nor within the intent of section 1983 to convert every breach of contract claim against a
It is clear beyond question that Colorado provides a remedy for breach of contract, which state law remedy plaintiffs have sought to avail themselves in this selfsame action. Although the availability of such a claim for relief may be inadequate, and pre-deprivation procedures consequently required, if the plaintiff "was denied a right by virtue of which he was presently entitled ... to exercise ownership dominion over real ... property," Baird v. Board of Education for Warren Community Unit, 389 F.3d 685, 691 (7th Cir.2004), cert. denied, 546 U.S. 811, 126 S.Ct. 332, 163 L.Ed.2d 45 (2005) (citation and internal quotation marks omitted), plaintiffs here were not denied any such right, see Lujan v. G & G Fire Sprinklers, Inc., 532 U.S. 189, 196, 121 S.Ct. 1446, 1451, 149 L.Ed.2d 391 (2001). Instead, they simply allege that they were denied the benefit of their bargain. The pre-deprivation procedures mandated by due process are not implicated in these circumstances. See id. (post-deprivation claim for breach of contract adequate where plaintiff's claim amounted to no more than deprivation "of payment that it contends it is owed under a contract, based on the State's determination that [plaintiff] failed to comply with the contract's terms. [Plaintiff] has only a claim that it did comply with those terms and therefore that it is entitled to be paid in full.").
For these reasons, I find and conclude that defendants' motion for summary judgment as to plaintiffs' procedural due process claim must be granted.
Due process also includes a substantive component, "the touchstone [of which] ... is protection of the individual against arbitrary action of government ... in the exercise of power without any reasonable justification in the service of a legitimate governmental objective." Graves v. Thomas, 450 F.3d 1215, 1220 (10th Cir.2006) (quoting County of Sacramento v. Lewis, 523 U.S. 833, 845-46, 118 S.Ct. 1708, 1716, 140 L.Ed.2d 1043 (1998)) (internal quotation marks omitted). Plaintiffs may make out such a claim either by showing the infringement of a fundamental right or by presenting evidence suggesting that defendants' actions are so egregious as to "shock the conscience" of the court. Neither of these benchmarks is met here.
The rights protected by substantive due process are carefully delimited to "those fundamental rights and liberties which are, objectively, deeply rooted in this Nation's history and tradition," and thus are "implicit in the concept of ordered liberty, such that neither liberty nor justice would exist if they were sacrificed."
In the absence of such a right, rational-basis review prevails, see Lee, 330, F.3d at 467,
Tonkovich v. Kansas Board of Regents, 159 F.3d 504, 528 (10th Cir.1998) (citation and internal quotation marks omitted). As implied in the statement of the standard itself, the question whether conduct is conscience shocking is one of law for the court. See Perez v. Unified Government of Wyandotte County/Kansas City, Kansas, 432 F.3d 1163, 1168 n. 4 (10th Cir. 2005), cert. denied, 548 U.S. 905, 126 S.Ct. 2971, 165 L.Ed.2d 953 (2006).
Assuming arguendo that it is proper to consider plaintiffs' claims under the rubric of substantive due process at all, as opposed to a more particularized constitutional guarantee, see Albright v. Oliver, 510 U.S. 266, 273, 114 S.Ct. 807, 813, 127 L.Ed.2d 114 (1994), I cannot conclude that defendants' alleged actions in this lawsuit, even construed in the light most favorable to plaintiffs, are so arbitrary and outrageous as to shock the conscience. The actions plaintiffs describe outline a disagreement — albeit undoubtedly a vigorous one — about the proper interpretation of the terms of a contract.
Plaintiffs allege an unconstitutional taking in the October 2010 and August 2011 denials of COs for the two units that ostensibly are otherwise ready for occupancy, as well as in the calling in of the letter of credit.
In analyzing such a claim, it is important to remember that "[t]he Fifth Amendment does not proscribe the taking of property; it proscribes taking without just compensation." Williamson County Regional Planning Com'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194, 105 S.Ct. 3108, 3120, 87 L.Ed.2d 126 (1985). As a necessary corollary of that principle, a takings claim is not ripe until the plaintiff has sought and been denied just compensation. Id., 105 S.Ct. at 3120
Id. at 3120-21 (internal brackets, citations, and quotation marks omitted). For this reason, "if a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation." Id. at 3121.
Colorado does provide such a procedure by virtue of its eminent domain statute, see §§ 38-1-101-38-1-122, C.R.S., which affords property owners the right to institute inverse condemnation proceedings against the state, see Casey v. Colorado Higher Education Insurance Benefits Alliance Trust, ___ P.3d ___, ___, 2012 WL 3517612 at *8 (Colo.App. Aug. 16, 2012). Plaintiffs' suggestion that this statute does not apply to regulatory takings is baseless.
Accordingly, plaintiffs' takings claim is not ripe, and the motion for summary judgment is granted as to that claim.
Thus, the only remaining claims for consideration are the parties' respective state law claims for breach of contract.
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4. That judgment
5. That as prevailing parties, defendants are
6. That the trial set to commence February 25, 2013, is
7. That this case is
The Mill, 809 P.2d at 440 (footnote omitted).