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Open Door Ministries v. Lipschuetz

Supreme Court of Colorado, En Banc

June 27, 2016

Open Door Ministries, Petitioner
v.
Jesse N. Lipschuetz., Respondent

         Certiorari to the Colorado Court of Appeals Court of Appeals Case No. 13CA461

          Attorneys for Petitioner: Gibson, Dunn & Crutcher, LLP Laura M. Sturges John D. W. Partridge Katherine C. Yarger Timothy M. Zimmerman Sara E. Carlisle Monica K. Loseman Denver, Colorado

          Attorneys for Respondent: Carver, Schwarz, McNab, Kamper & Forbes, LLP Peter C. Forbes Denver, Colorado Jesse N. Lipschuetz Denver, Colorado

          Attorneys for Amicus Curiae Colorado Counties, Inc.: Hall & Evans, L.L.C. Thomas J. Lyons Malcolm S. Mead Denver, Colorado

          OPINION

          RICE CHIEF JUSTICE.

         ¶1 In this case, Jesse Lipschuetz challenged the validity of a rooming and boarding permit that the City and County of Denver ("the City")[1] issued to Open Door Ministries ("Open Door"). Lipschuetz-who owns a property adjacent to Open Door's property- filed claims against the City and Open Door seeking revocation of the permit. Open Door filed cross-claims against the City, seeking declaratory and injunctive relief to prevent the revocation of its permit. The trial court concluded that the City should not have issued the permit, but stayed its order to revoke the permit until Open Door's cross-claims were resolved. Several months later, the trial court granted summary judgment in favor of Open Door on the cross-claims.

         ¶2 On appeal, Lipschuetz argued that Open Door's cross-claims against the City were barred by the Colorado Governmental Immunity Act ("the CGIA" or "the Act") because they "could lie in tort." See § 24-10-106, C.R.S. (2015). To make a claim under the CGIA, a party must notify the governmental entity prior to filing the claims. § 24-10-109(1), C.R.S. (2015). This notice requirement is jurisdictional. Id. Because Open Door did not notify the City prior to filing its cross-claims, Lipschuetz argued that the trial court lacked subject matter jurisdiction over the cross-claims. The court of appeals agreed. Lipschuetz v. Open Door Ministries, No. 13CA461, slip op. at 7 (July 17, 2014). Because Open Door failed to comply with the notice provision, the court of appeals concluded, the trial court lacked subject matter jurisdiction over the cross-claims. Id. at 1.

         ¶3 However, the court of appeals failed to consider whether, at the time of filing, Open Door had suffered an injury that would subject its cross-claims to the CGIA. We conclude that the CGIA does not apply to Open Door's request for prospective relief to prevent future injury. Because Open Door had not suffered an injury before it filed its cross-claims, the CGIA did not bar its cross-claims seeking prospective relief from future injury, and the trial court had jurisdiction over the cross-claims.

         I. Facts and Procedural History

         ¶4 In June 2010, the Denver City Council passed Ordinance 333. Denv., Colo. Ordinance No. 333, Series of 2010. This ordinance replaced the old zoning code but included an exception that allowed any person seeking to "erect or alter structures" to apply for a permit under the old zoning code until December 30, 2010. Id. On December 30, 2010, Open Door applied for a use permit under the old code to change the use of 740 Clarkson Street to provide housing for people in need. The Denver Zoning Authority ("the DZA") issued the rooming and boarding permit. Open Door then purchased the property for $700, 000; made improvements to the property; and began providing room and board to people at risk of becoming homeless.

         ¶5 Several months later, Lipschuetz, who owns a home adjacent to 740 Clarkson, sought administrative review of the DZA's decision to issue the permit. He argued that Open Door did not meet the exception under Ordinance 333 because the permit was for a change of use, not to "erect or alter" a structure. The DZA defended its decision to issue the permit, explaining that it had consistently interpreted the exception to allow parties to seek any kind of permit under the old zoning code until December 30, 2010. The Board of Adjustment for Zoning Appeals ("the BOA") denied Lipschuetz's request to revoke the permit.

         ¶6 Lipschuetz then filed an administrative appeal under C.R.C.P. 106 against the BOA, the individual members of the BOA, and the Zoning Administrator for the City, seeking revocation of the permit. Lipschuetz moved to amend his complaint to add Open Door as a party because Open Door, "as an applicant for the permit in question, [was] a proper defendant in this action." The trial court granted this motion. The trial court also granted Lipschuetz's motion to add the City as a party.

         ¶7 Open Door answered the complaint, then filed cross-claims against the City for promissory estoppel and requested a declaratory judgment that the permit would remain valid. The City admitted all of the allegations in Open Door's cross-claim and argued that the permit was properly issued. The trial court then permitted Lipschuetz to intervene in Open Door's cross-claims against the City.

         ¶8 On July 26, 2012, the trial court found that the BOA abused its discretion when it affirmed the DZA's decision to issue the permit to Open Door. The court ordered the City to revoke the permit but stayed its order pending the resolution of Open Door's cross-claims. Open Door then filed a motion for summary judgment on its cross-claims on November 29, 2012. On January 25, 2013, the trial court found that promissory estoppel was an appropriate claim for relief for Open Door, but that the cross-claims also incorporated the elements of equitable estoppel. The trial court first concluded that Open Door had satisfied the elements of both promissory and equitable estoppel and then granted Open Door's motion for summary judgment. The trial court concluded that "the permit must be enforced to prevent manifest injustice."

         ¶9 Lipschuetz appealed, arguing for the first time that Open Door's cross-claims "could lie in tort" and were therefore subject to the CGIA. See §§ 24-10-101 to -120, C.R.S. (2015). He argued that the cross-claims amounted to an equitable estoppel claim based on Open Door's reliance on the City's "misrepresentation" that the permit was valid, and therefore, the claims could lie in tort. Lipschuetz contended that, because Open Door failed to give the City notice as required by the CGIA, the trial court lacked subject matter jurisdiction over the cross-claims. See § 24-10-109(1). The court of appeals agreed, holding that Open Door's estoppel cross-claims "could lie in tort." Lipschuetz, slip op. at 7 (citing Bd. of Cty. Comm'rs v. DeLozier, 917 P.2d 714, 715 (Colo. 1996) (distinguishing promissory estoppel from equitable estoppel based on either a negligent or intentional misrepresentation of fact and concluding that a promissory estoppel claim is not subject to the CGIA)). Thus, the court of appeals concluded that Open Door should have notified the City of its intent to file the cross-claims. Lipschuetz, slip op. at 12. The court of appeals concluded that, because Open Door failed to comply with the CGIA's notice requirement, the trial court did not have jurisdiction over Open Door's claims. Id.

         ¶10 We granted Open Door's petition for certiorari to consider whether the CGIA required Open Door to notify the City before filing its cross-claims against the City ...


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