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Northern Golf, Inc. v. City of Colorado Springs

United States District Court, D. Colorado

May 4, 2017

NORTHERN GOLF, INC., and MICHAEL NORTHERN, Plaintiffs,
v.
CITY OF COLORADO SPRINGS, Defendant.

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          MICHAEL E. HEGARTY UNITED STATES MAGISTRATE JUDGE.

         Before the Court is Defendant's Motion for Judgment on the Pleadings [filed March 23, 2017; ECF No. 18]. The Honorable Christine M. Arguello referred the motion to this Court for recommendation. ECF No. 19. The motion is fully briefed, and the Court finds that oral argument will not assist in its adjudication. Defendant's motion asks the Court to determine whether Plaintiffs' Complaint states a constitutional violation against the City of Colorado Springs. Because Plaintiffs' claims fail to allege an entity liability claim under 42 U.S.C. § 1983, the Court respectfully recommends that Defendant's motion for judgment on the pleadings be granted.[1]

         BACKGROUND

         I. Facts

         The following are factual allegations (as opposed to legal conclusions, bare assertions, or merely conclusory allegations) made by Plaintiffs in the Complaint, which are taken as true for analysis under Fed.R.Civ.P. 12(c). See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000) (“A motion for judgment on the pleadings under Rule 12(c) is treated as a motion to dismiss under Rule 12(b)(6).”).

         Defendant owns two public golf courses within its city limits-Patty Jewett Municipal Golf Course and Valley Hi Golf Course. Compl. ¶ 7, ECF No. 1. Defendant contracts with private businesses to operate the golf courses' concessions. Id. at ¶ 9. From 1994 to 2014, Northern Golf, Inc.-a company wholly owned by Michael Northern-successfully operated and managed the concessions at Valley Hi. Id. at ¶ 10. During the latter part of this period, a company named Gimmie Golf operated the concessions at Patty Jewett. Id. at ¶ 11.

         From 2012 through 2014, Defendant employed a golf manager, named Dal Lockwood, to oversee its courses. Id. at ¶ 8. Plaintiffs presented evidence to Lockwood that Gimmie Golf mismanaged Patty Jewett, costing Defendant hundreds of thousands of dollars in lost revenue. Id. at ¶ 13. Despite this evidence, Lockwood took no action to penalize Gimmie Golf. Id. at ¶ 14. To the contrary, Lockwood routinely approved improvements at Patty Jewett, while rejecting Plaintiffs' proposed improvements at Valley Hi. Id. at ¶ 16. Additionally, in 2012, Lockwood instituted a baseless investigation into Northern Golf's operations of Valley Hi and issued a “Cure Notice” to Plaintiffs for a deficiency in cash flows. Id. at ¶ 17.

         Northern Golf's and Gimmie Golf's contracts with Defendant had set expiration dates and required Defendant to engage in a competitive bidding process before renewal. See Id. at ¶¶ 19, 21. Pursuant to this process, after Defendant accepted bids for the concessions at each golf course, a panel of “evaluators” decided which bid to accept. See Id. at ¶ 24. In 2013, Lockwood renewed Gimmie Golf's expired contract without seeking bids. Id. at ¶ 18. However, when Northern Golf's then-existing contract was set to expire on December 31, 2014, Lockwood opened the contract to the competitive bidding process. Id. at ¶¶ 21-22. Gimmie Golf and Northern Golf submitted bids, and Defendant awarded the contract to Gimmie Golf. Id. at ¶ 23. The evaluators of the bids based their decision, at least in part, on Lockwood's 2012 investigation of Northern Golf and the lack of any similar investigation into Gimmie Golf's conduct. Id. at ¶ 24. After Defendant terminated Northern Golf's contract, Mr. Northern raised his concerns regarding Gimmie Golf's management with the chief of staff for Defendant's mayor and through a formal ethics complaint. Id. at ¶¶ 25-26. Defendant dismissed both of these complaints. Id.

         Shortly thereafter, Defendant forced Lockwood to resign due to Lockwood's “poor management skills and blatant favoritism . . . .” Id. at ¶ 28. In September 2015, Defendant posted the golf manager position on the Internet. Id. at ¶ 29. Shortly after Mr. Northern applied, Defendant removed the position, allegedly due to “budgetary issues.” Id. at ¶¶ 30-31. Nonetheless, Defendant eventually filled the position with someone less qualified than Mr. Northern. Id. at ¶¶ 32-33.

         II. Procedural History

         Based on these factual allegations, Plaintiffs filed their Complaint on May 10, 2016. ECF No. 1. Plaintiffs bring three claims for relief under 42 U.S.C. § 1983. Id. at ¶¶ 35-51. Plaintiffs' first claim alleges that Defendant treated Northern Golf, a class of one, differently than other similarly situated entities, and thus violated Northern Golf's equal protection rights. Id. at ¶ 37. Plaintiffs' second claim asserts a cause of action for deprivation of Northern Golf's property interest in the maintenance of its concessions contract with Defendant and its right to bid on the Patty Jewett contract. Id. at ¶¶ 40-45. Plaintiffs' final claim for relief contends Defendant refused to hire Mr. Northern for the golf manager position in retaliation for Mr. Northern's complaints about Gimmie Golf. Id. at ¶¶ 46-51.

         Defendant filed an Answer to the Complaint on June 3, 2016. ECF No. 10. Then, on March 23, 2017, Defendant filed the present Motion for Judgment on the Pleadings. ECF No. 18. Defendant argues the case should be dismissed, because Plaintiffs' Complaint does not allege an official policy or custom. Id. at 3-4. Additionally, Defendant asserts that all of Plaintiffs' causes of action fail to state a constitutional violation. Id. at 5-14. Plaintiffs filed a Response to Defendant's Motion on April 13, 2017. ECF No. 20. Plaintiffs contend Defendant is liable, because Lockwood's actions amount to an informal policy or custom, Lockwood is a final policymaker, and alternatively, Defendant ratified Lockwood's decisions. Id. at 4-6. Plaintiffs also argue that each of their causes of action sufficiently alleges a constitutional violation. Id. at 6-15. On April 27, 2017, Defendant filed a Reply in Support of its Motion. ECF No. 21.

         LEGAL STANDARDS

         “A motion for judgment on the pleadings under Rule 12(c) is treated as a motion to dismiss under Rule 12(b)(6).” Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000); Aberkalns v. Blake, 633 F.Supp.2d 1231, 1233 (D. Colo. 2009) (“Courts review a motion for judgment on the pleadings using the same standard as a motion under Rule 12(b)(6).”). “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.'” Iqbal, 556 U.S. at 678 (quoting Bell Atl. 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. Twombly requires a two-prong analysis. First, a court must identify “the allegations in the complaint that are not entitled to the assumption of truth, ” that is, those allegations which are legal conclusions, bare assertions, or merely conclusory. Id. at 678-80. Second, the Court must consider 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 680.

         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.'” Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012) (quoting Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008)). “The nature and specificity of the allegations required to state a plausible claim will vary based on context.” Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1215 (10th Cir. 2011). Thus, while the Rule 12(b)(6) standard does not require that a plaintiff establish a prima facie case in a complaint, the elements of each alleged cause of action may help to determine whether the plaintiff has set forth a plausible claim. Khalik, 671 F.3d at 1191.

         However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. The complaint must provide “more than labels and conclusions” or merely “a formulaic recitation of the elements of a cause of action, ” so that “courts ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. “[W]here the well-pleaded facts do not permit the court to ...


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