City of Aurora, Colorado; Aurora Urban Renewal Authority; and RIDA Development Corp, Plaintiffs-Appellants and Cross-Appellees,
1405 Hotel, LLC; 550 15th Owner, LLC; Broadmoor Hotel Inc.; Brown Palace Hotel Associates Limited Partnership; Cheyenne Mountain Conference Resort; CHSP Denver LLC; DiamondRock Cherry Creek Tenant LLC; DiamondRock Denver Downtown Tenant LLC; HEP Denver Ltd., d/b/a Magnolia Hotel; Oxford Hotel 2005 Holdings LLC; and Westminster Boulevard Finance, LLC, Defendants-Appellees and Cross-Appellants
Arapahoe County District Court No. 13CV31506. Honorable
Charles M. Pratt, Judge.
Rock LLP, Thomas W. Snyder, Daniel C. Lynch, Michael M.
Frandina, Denver, Colorado; Michael J. Hyman, City Attorney,
Aurora, Colorado, for Plaintiffs-Appellants and
Cross-Appellees City of Aurora, Colorado and Aurora Urban
& Woods, P.C., John M. Tanner, Denver, Colorado, for
Plaintiff-Appellant and Cross-Appellee RIDA Development Corp.
Roca Rothgerber Christie LLP, James M. Lyons, Hilary D.
Wells, Jessica L. Fuller, Hermine Kallman, Denver, Colorado,
for Defendants-Appellees and Cross-Appellants.
[¶1] In July 2013, eleven
hotels along Colorado's Front Range
(collectively, the Hotels) submitted a petition to the
Colorado Economic Development Commission (CEDC) requesting
that CEDC require the City of Aurora (Aurora) to submit a new
application for an $81 million tax subsidy (the Gaylord
Project) after the initial company that had been awarded the
subsidy, the Gaylord Entertainment Company, assigned its
interest to RIDA Development Corporation (RIDA). The Attorney
General (AG) denied the petition on behalf of the
CEDC. The Hotels filed an action in the
Denver District Court (Denver lawsuit). Both the Denver
District Court and a division of our court affirmed the
AG's denial of the Hotels' petition. 1405 Hotel,
LLC v. Colo. Econ. Dev. Comm'n, 2015 COA 127, P.3d (
1405 Hotel I ). However, in response to the
Hotels' alleged " conspir[acy] . . . to interfere
with the financing and development of the [p]roject,"
plaintiffs, the City of Aurora, the Aurora Urban Renewal
Authority, and RIDA (collectively, the Aurora parties), sued
the Hotels in October 2013.
[¶2] The Aurora parties now appeal the
judgment of the Arapahoe District Court (district court),
which dismissed their complaint after the court found the
Hotels' complaint in the Denver lawsuit was immunized
under the First Amendment based on Protect Our Mountain
Environment, Inc. v. Dist. Court, 677 P.2d 1361 (Colo.
1984) ( POME ). We affirm.
[¶3] The underlying facts of this case are
set forth in 1405 Hotel I. In the Denver lawsuit,
the Hotels sued the CEDC and Aurora alleging four claims for
relief: (1) a claim in the nature of mandamus brought under
C.R.C.P. 106(a)(2) to compel the CEDC to require Aurora to
submit a new application for the Gaylord Project, as required
by the Colorado Regional Tourism Act (RTA); (2) a claim
brought pursuant to the State Administrative Procedure Act
(APA), section 24-4-106(4), C.R.S. 2015, seeking review of
the CEDC's denial of their petition for reconsideration
and approving the Gaylord Project; (3) a claim for
declaratory relief pursuant to C.R.C.P. 57 and section
13-51-105, C.R.S. 2015, challenging the constitutionality of
section 309 of the RTA, section 24-46-309, C.R.S. 2015; and
(4) a claim seeking a declaration that procedural
irregularities in the CEDC's approval of the initial
Gaylord Project invalidated the RTA award.
[¶4] In December 2013, Aurora moved for a
C.R.C.P. 12(c) judgment on the pleadings, asserting that the
Hotels lacked standing to bring claims one, two, and four.
Aurora conceded that the Hotels had standing to bring their
third claim, but maintained that the third claim should be
resolved in Aurora's favor on the merits. Following a
hearing in March 2014, the Denver court granted Aurora's
C.R.C.P. 12(c) motion in an oral ruling. In July 2014, the
Denver District Court entered a written order denying the
Hotels' C.R.C.P. 59 motion. A division of our court
affirmed in 1405 Hotel I, ¶ 1, __ P.3d at __.
[¶5] However, after the Hotels filed their
appeal in the Denver lawsuit but before the 1405 Hotel
I decision, the Aurora parties filed this lawsuit before
the Arapahoe District Court, asserting claims against the
Hotels for intentional interference with contract,
intentional interference with business expectancy, abuse of
process, and civil conspiracy. First, the Hotels filed an
answer and asserted several counterclaims. Later the same
day, the Hotels moved to dismiss pursuant to C.R.C.P.
12(b)(5), arguing their initial complaint was protected by
the First Amendment privilege to petition the government for
redress of grievances as described in POME. Also on
the same day, the Hotels filed a separate C.R.C.P. 12(b)(5)
motion to dismiss against RIDA's claims individually.
[¶6] The court granted the Hotels'
POME motion and dismissed all four of the Aurora
parties' claims. Although the court held that one of the
claims brought by the Hotels in the Denver lawsuit lacked a
cognizable basis in law and was therefore a "
sham," it nevertheless granted the Hotels' motion
because it concluded that POME requires an entire
lawsuit to be frivolous in order to remove the First
[¶7] On appeal, the Aurora parties seek
reversal of the district court's order and contend: (1)
the court abused its discretion in refusing to allow
discovery and a hearing; (2) the court erred in determining
that three of the Hotels' claims in the Denver lawsuit
had reasonable factual support or a cognizable basis in law;
and (3) the court erred in dismissing their complaint despite
concluding that one of the Hotels' claims from the Denver
lawsuit was a " sham." We disagree.
[¶8] In their cross-appeal, the Hotels
contend (1) the court erred in concluding that the Hotels
lacked probable cause to bring an as-applied constitutional
challenge to section 309 of the RTA under Colorado
Constitution article II, section 11 and therefore their third
claim was not a sham; and (2) we should affirm the C.R.C.P.
12(b)(5) dismissal of RIDA's claims. We agree with the
Hotels' first contention and do not address their second
Nature of the Hotels' Motion
[¶9] At the outset, in considering what
standard of review to apply to the POME motion to
dismiss, we need to consider whether the Hotels'
POME motion was properly decided as a motion to
dismiss or whether it should have been converted into a
motion for summary judgment. The Aurora parties contend that
POME requires a motion to dismiss be converted into
a motion for summary judgment. Because the outcome would be
the same regardless of whether the motion was treated as a
C.R.C.P. 12(b)(5) motion or as a motion for summary judgment,
we perceive no reversible error.
Standard of Review
[¶10] We review de novo a court's order
granting a motion to dismiss under C.R.C.P. 12(b)(5).
Denver Post Corp. v. Ritter, 255 P.3d 1083, 1088
(Colo. 2011). We also review de novo questions of
constitutional fact and law. In re Foster, 253 P.3d
1244, 1250 (Colo. 2011) (addressing de novo whether the lower
court properly applied POME ).
[¶11] We review a district court's entry
of summary judgment de novo. McIntyre v. Bd. of Cty.
Comm'rs, 86 P.3d 402, 406 (Colo. 2004). Summary
judgment should only be entered " when there is no
disputed issue of material fact and the moving party is
entitled to judgment as a matter of law." Id.
In reviewing a summary judgment, " the nonmoving party
is entitled to the benefit of all favorable inferences that
may be drawn from the undisputed facts, and all doubts as to
the existence of a triable issue of fact must be resolved
against the moving party." Busse v. City of
Golden, 73 P.3d 660, 665 n.10 (Colo. 2003).
[¶12] A C.R.C.P. 12(b)(5) motion to dismiss
tests the formal sufficiency of a plaintiff's complaint.
Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 911
(Colo. 1996). A motion to dismiss is properly granted only
when it appears beyond doubt that no set of facts can prove
that the plaintiff is entitled to relief. Id. Thus,
we may affirm a district court's decision to grant a
defendant's motion to dismiss when the factual
allegations do not, as a matter of law, support the
plaintiff's claim for relief. Id.
[¶13] In reviewing a motion to dismiss, the
court must accept all factual allegations as true and view
them in the light most favorable to the plaintiff. Denver
Post, 255 P.3d at 1088. The court is not permitted to
consider any information or facts outside the confines of
that pleading. Allen v. Steele, 252 P.3d 476, 481
(Colo. 2011). Nevertheless, a court may consider documents
referenced in a complaint and matters of which it may take
judicial notice without converting a motion to dismiss into a
motion for summary judgment. Walker v. Van
Laningham, 148 P.3d 391, 397 (Colo.App. 2006).
[¶14] The First Amendment immunity defense
raises the question of whether a plaintiff's complaint
states a claim upon which relief can be granted; therefore,
courts should give the parties a reasonable opportunity to
present all material pertinent to the motion and, when
appropriate, should treat the motion as one for summary
judgment. POME, 677 P.2d at 1368-69. Under summary
judgment, the parties may present materials outside the
pleadings, including affidavits and other records.
Krystkowiak v. W.O. Brisben Cos., Inc., 90 P.3d 859,
870 (Colo. 2004).
[¶15] The district court treated the
POME motion to dismiss as a C.R.C.P. 12(b)(5)
motion. The Aurora parties contend that POME
requires a motion to dismiss be converted into a motion for
summary judgment. The Hotels, in their appellate briefs,
contended that their motion did not need to be converted to a
motion for summary judgment and that the trial court properly
dismissed the complaint under C.R.C.P. 12(b)(5); however, at
oral argument, the Hotels argued that the district court
should have converted the motion to one for summary judgment
but that there was no reversible error.
[¶16] However, we need not decide whether
the trial court properly dismissed the motion under C.R.C.P.
12(b)(5) or should have converted the motion to one for
summary judgment because we conclude, under the circumstances
of this case, that the outcome would have been the same under
[¶17] We note that in describing the
POME procedures, the Krystkowiak court
indicated that " summary judgment is often the
appropriate procedure for determining the merits of a First
Amendment defense because it allows courts to consider
matters outside the pleadings, while at the same time,
eliminate sham claims and defenses in an expedited
manner." Krystkowiak, 90 P.3d at 870 (emphasis
added). This quoted language supports the conclusion that the
supreme court's language in POME indicating that
a motion to dismiss based on First Amendment allegations
should be converted into a summary judgment motion does not
apply to every case.
[¶18] Therefore, either the trial court did
not err and properly dismissed the Hotels' C.R.C.P.
12(b)(5) motion, or, even if the Hotels' motion should
have been converted into one for summary judgment, because
the Aurora parties failed to prove the first objective prong
of the POME test, which is a question of law, as
discussed below, any error did not affect the ...