United States District Court, D. Colorado
LAKEVIEW RENOVATIONS, INC. dba NORTH AMERICAN PROPERTY SERVICES, INC., Plaintiff,
CITY AND COUNTY OF DENVER, a municipal corporation, and SHEILA DIDUCH, Defendants.
RECOMMENDATION OF UNITED STATES MAGISTRATE
KATHLEEN M. TAFOYA, Magistrate Judge.
case comes before the court on Defendants' "Motion
to Dismiss Amended Complaint Pursuant to Fed.R.Civ.P.
12(b)(1) and (6) and to Compel Compliance with Contractual
Dispute Resolution Procedure." (Doc. No. 24
["Mot."], filed July 21, 2015.) Plaintiff has filed
a response (Doc. No. 36 ["Resp."], filed August 28,
2015), to which Defendants have replied. (Doc. No. 41
["Reply"], filed September 11, 2015.)
OF THE CASE
is a commercial janitorial and cleaning services company,
commonly referred to as NAPS. (Doc. No. 23 ["Am.
Comp."] at 2.) Plaintiff is operated by a Korean
individual and a high percentage of its employees are also
Korean. ( Id. ) As Defendants in this action,
Plaintiff has named the City and County of Denver (the
"City") and Sheila Diduch, who served as a
Prevailing Wage Investigator for the Office of the Auditor.
Though not formally named as a defendant, Clay Vigoda was, at
all times relevant to this lawsuit, employed by the City as
the Director of Government, Community Affairs and Prevailing
Wage and was also Defendant Diduch's supervisor.
held a contract for its services with the City beginning in
2010 until 2015 when its contract was not renewed. (Am. Comp.
at 3, 10.) The contract incorporated a prevailing wage
requirement adopted by the City that specifies a base hourly
rate and a rate for multiple "fringe benefits"
applicable to various positions, including a custodian.
Defendant Diduch began her employment as a Prevailing Wage
Investigator in early 2010 and was assigned to Plaintiff.
(Am. Comp. at 4.)
contends that from the beginning of her assignment, Defendant
Diduch subjected it to discriminatory treatment by refusing
to timely pay multiple invoices for Plaintiff. (Am. Comp. at
4-5.) As an example, Plaintiff alleges that in 2012,
Defendant Diduch withheld payment for 161 invoices, totaling
hundreds of thousands of dollars. ( Id. ) Plaintiff
further alleges that Defendant Diduch required Plaintiff to
improperly reimburse its employees, misclassify employees and
improperly compensate employees during breaks, all of which
resulted in overpayments totaling over $800, 000.00. (Am.
Comp. at 3-6).
contends that Defendant Diduch's conduct and actions
toward Plaintiff were based on discriminatory racial animus.
Plaintiff alleges that in May 2012, Defendant Diduch stated
to one of Plaintiff's employees that it was a "bad
company" and that "she was working on taking this
company of out of the city." (Am. Comp. at 5.) Plaintiff
also asserts that in June 2012, Defendant Diduch went to one
of the City locations where Plaintiff's janitors were
working and stated, "I hate Koreans." (Am. Comp. at
several occasions, Plaintiff requested that Mr. Vigoda review
Defendant Diduch's decisions regarding payment of their
invoices and Mr. Vigoda refused, responding that he supported
Defendant Diduch's payment determinations and that she
made the final determination. (Am. Comp. at 6.) In January
2013, Plaintiff informed Mr. Vigoda of Defendant Diduch's
discriminatory statements and requested Mr. Vigoda assign a
different investigator to Plaintiff. ( Id. ) Mr.
Vigoda ignored Plaintiff's request. ( Id. )
Thereafter, Defendant Diduch began communicating and meeting
with Rafael Gongon, a representative for the Service
Employees International Union ("SEIU"), the union
representing Plaintiff's employees. (Am. Comp. at 6.)
2013, Plaintiff submitted a detailed memorandum to the
Auditor from Plaintiff's counsel showing that Defendant
Diduch's requirement that it pay a higher fringe benefit
rate to its employees was inaccurate and unsupported by law.
(Am. Comp. at 6.) The Auditor acknowledged the error. (
Id. ) At that point, Plaintiff was able to begin
paying the correct fringe benefit rate. ( Id. )
September 10, 2013, Mr. Vigoda and Defendant Diduch drafted a
letter including false information about Plaintiff for the
City's Auditor and presented it to Adrienne Benavidez,
the City's Manager of General Services, copying each
member of the Denver City Council and the Mayor. (Am. Comp.
at 7.) Plaintiff contends that in the letter, Mr. Vigoda and
Defendant Diduch misrepresented several of Plaintiff's
actions, as well as accusing Plaintiff of bad faith and being
morally corrupt. ( Id. )
Plaintiff could respond to the letter submitted to Ms.
Benavidez, or an investigation could occur, the Auditor sent
a copy of the letter to the Denver Post. ( Id. ) On
September 18, 2013, based on encouragement from Defendant
Diduch, the SEIU picketed in front of the Wellington Webb
building. (Am. Comp. at 7.) On September 19, 2013, the Denver
Post published an article based on the Auditor's letter.
( Id. ) On that same day, Plaintiff's
representatives met with Mr. Vigoda and Denis Berckefeld,
Director of Communications of the Office of the Auditor, to
inform them of Defendant Diduch's discriminatory conduct,
to dispute the false accusations in the Auditor's letter
and provide them with sworn statements from two employees who
heard Defendant Diduch make the statement, "I hate
Koreans." ( Id. ) Within two hours of this
meeting, Defendant Diduch contacted Mr. Gongon via
email and in reference to SEIU's picketing, stated,
"Good job yesterday! Now I need your help. [Plaintiff]
is playing dirty, so I am going to need to produce tons of
documentation, including some statements from your
workers." ( Id. )
October 4, 2013, Ms. Benavidez reported that she had
thoroughly investigated the allegations within the
Auditor's letter and concluded Plaintiff had not breached
its contract. ( Id. ) Plaintiff contends that Mr.
Vigoda never investigated its allegations regarding Defendant
Diduch's discriminatory conduct, nor did he inform the
City Attorney of the same until several months later. (Am.
Comp. at 9.) Plaintiff further alleges that in retaliation
for Plaintiff's report of Defendant Diduch's
discriminatory conduct, Mr. Vigoda continuously attempted to
present negative information to the Auditor and Denver City
Council pertaining to Plaintiff in order to prevent a future
contract between the City and Plaintiff. ( Id. ) On
October 21, 2014, Mr. Vigoda stated in an email regarding the
Denver City Council, "It seems pretty clear they will
never agree to NAPS being chosen as the preferred bidder. So
I think they are out no matter what!" ( Id. )
has submitted numerous requests and a formal invoice to the
City seeking reimbursement for the overpayments that occurred
at Defendant Diduch's direction. (Am. Comp. at 10.)
However, the City has refused to reimburse Plaintiff for the
same. ( Id. ) Additionally, Plaintiff participated
in the bid process for a new contract with the City in 2015
but its contract was not renewed. ( Id. )
action, Plaintiff asserts claims under 42 U.S.C. Â§Â§ 1981,
1983 against Defendant Diduch and the City based on racial
discrimination and retaliation. (Am. Comp. at 10-15.)
Additionally, Plaintiff asserts a breach of contract claim
against the City based on Defendant Diduch's requirement
that Plaintiff pay the incorrect fringe benefit amount and
failing to timely pay Plaintiff, as well as the City's
failure to pay and/or reimburse Plaintiff for the correct
fringe benefit amount. (Am. Comp. at 15.)
Failure to State a Claim Upon Which Relief Can Be Granted
Rule of Civil Procedure 12(b)(6) provides that a defendant
may move to dismiss a claim for "failure to state a
claim upon which relief can be granted." Fed.R.Civ.P.
12(b)(6). "The court's function on a Rule 12(b)(6)
motion is not to weigh potential evidence that the parties
might present at trial, but to assess whether the
plaintiff's complaint alone is legally sufficient to
state a claim for which relief may be granted."
Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th
Cir. 2003) (citations and quotation marks omitted).
court reviewing the sufficiency of a complaint presumes all
of plaintiff's factual allegations are true and construes
them in the light most favorable to the plaintiff."
Hall v. Bellmon, 935 F.2d 1106, 1198 (10th Cir.
1991). "To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face.'"
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). Plausibility, in the context of a motion to dismiss,
means that the plaintiff pleaded facts which allow "the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." Id. The
Iqbal evaluation requires two prongs of analysis.
First, the court identifies "the allegations in the
complaint that are not entitled to the assumption of truth,
" that is, those allegations which are legal conclusion,
bare assertions, or merely conclusory. Id. at
679-81. Second, the Court considers the factual allegations
"to determine if they plausibly suggest an entitlement
to relief." Id. at 681. If the allegations
state a plausible claim for relief, such claim survives the
motion to dismiss. Id. at 679.
the court need not accept conclusory allegations without
supporting factual averments. Southern Disposal, Inc., v.
Texas Waste, 161 F.3d 1259, 1262 (10th Cir. 1998).
"[T]he tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal
conclusions. Threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not
suffice." Iqbal, 556 U.S. at 678. Moreover,
"[a] pleading that offers labels and conclusions' or
a formulaic recitation of the elements of a cause of action
will not do.' Nor does the complaint suffice if it
tenders naked assertion[s]' devoid of further factual
enhancement.'" Id. (citation omitted).
"Where a complaint pleads facts that are merely
consistent with' a defendant's liability, it stops
short of the line between possibility and plausibility of
entitlement to relief.'" Id. (citation
evaluating a Rule 12(b)(6) motion to dismiss, courts may
consider not only the complaint itself, but also attached
exhibits and documents incorporated into the complaint by
reference. Smith v. United States,561 F.3d 1090,
1098 (10th Cir. 2009) (citations omitted). "[T]he
district court may consider documents referred to in the
complaint if the documents are central to the plaintiff's