Klen v. City of Loveland

• Decision Date: 15 November 2011
• Docket Number: Nos. 10–1311,10–1327.,s. 10–1311
• Citation: 661 F.3d 498
• Parties: Edward J. KLEN, Diverse Construction, Inc., a Colorado corporation; Stephen J. Klen; Holstein Self–Service Storage, LLC, organized under Colorado law, Plaintiffs–Appellants, v. CITY OF LOVELAND, COLORADO, a Colorado municipal corporation; Thomas Hawkinson, City of Loveland Building Official, in his individual and official capacities; Greg George, City of Loveland, Community Services Director, in his individual and official capacities; John R. Duval, City of Loveland Attorney, in his individual official capacities; Kristine Burns, City of Loveland Building Permit Coordinator, in her individual and official capacities; David Sprague, City of Loveland Plans Reviewer, in his individual and official capacities; Cindy Worayeth, City of Loveland Employee, in her individual and official capacities, Defendants–Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

661 F.3d 498

Edward J. KLEN, Diverse Construction, Inc., a Colorado corporation; Stephen J. Klen; Holstein Self–Service Storage, LLC, organized under Colorado law, Plaintiffs–Appellants,

v.CITY OF LOVELAND, COLORADO, a Colorado municipal corporation; Thomas Hawkinson, City of Loveland Building Official, in his individual and official capacities; Greg George, City of Loveland, Community Services Director, in his individual and official capacities; John R. Duval, City of Loveland Attorney, in his individual official capacities; Kristine Burns, City of Loveland Building Permit Coordinator, in her individual and official capacities; David Sprague, City of Loveland Plans Reviewer, in his individual and official capacities; Cindy Worayeth, City of Loveland Employee, in her individual and official capacities, Defendants–Appellees.

Nos. 10–1311

10–1327.

United States Court of Appeals, Tenth Circuit.

Nov. 15, 2011.

Submitted on the briefs: ^*

Michael P. Zwiebel, Springer and Steinberg, P.C., Denver, CO, for Plaintiffs–Appellants.

Thomas J. Lyons, Esq., Malcolm S. Mead, Esq., Lance E. Shurtleff, Esq., Hall & Evans, L.L.C., Denver, CO, for Defendants–Appellees.

Before O'BRIEN, ANDERSON, and HOLMES, Circuit Judges.

ANDERSON, Circuit Judge.

Plaintiffs brought this civil rights action against the city of Loveland, Colorado (City) and various City employees, alleging a plethora of constitutional violations involving the defendants' alleged imposition of deliberate delays and unreasonable requirements for plaintiffs' building permit; solicitation of illegal and extortionate fees for the permit; selective prosecution for building without a permit; use of perjury in criminal ordinance violation proceedings; retaliation for plaintiffs' exercise of their First Amendment rights; forgery of plaintiffs' permit application to facilitate a wrongful prosecution; and trespassing by a building inspector. The district court granted summary judgment in favor of the defendants on plaintiffs' federal claims and declined to exercise supplemental jurisdiction over their state-law claims.¹ Plaintiffs appeal from the district court's award of summary judgment to defendants. We affirm in part, reverse in part, and remand.²

BACKGROUND

Plaintiffs' claims arose out of their attempts to obtain a building permit from the City. After the permit was delayed, plaintiffs expressed increasing frustration with the delay by making vituperative and abusive comments to and concerning City employees and, according to the City, by conducting illegal and unauthorized construction without the permit. Plaintiffs contend the City retaliated by further delaying the permit, by issuing nearly sixty unjustified municipal citations to plaintiff Edward J. Klen (Ed Klen), by using perjury and forgery to prosecute Ed Klen, by trespassing on plaintiffs' work site, and by preventing City employees from patronizing plaintiffs' business.

1. The Anasazi Phase 2 Permit Applications

Plaintiffs Ed Klen and Stephen J. Klen are partners in plaintiff Holstein Self–Service, LLC (Holstein). They are also shareholders in plaintiff Diverse Construction, Inc. (Diverse). Holstein owns land in Loveland known as Anasazi Park, which it contracted with Diverse to develop.

In 2003, plaintiffs completed construction of a commercial project in Anasazi Park known as “Phase 1.” Early in 2004, they began the process of obtaining City approval for a new commercial project in Anasazi Park, known as “Phase 2.” Plaintiffs had two potential anchor tenants lined up for Phase 2: a martial arts studio (the “Oriental School of Mudu”), and a shooting range.

Contractors who construct buildings within the City must obtain approval for their structures. The City approves various phases of industrial construction in incremental stages by granting permits, inspecting work performed pursuant to these permits, and granting final approval based on successful inspection results. The City makes available several different types of building permits with differing requirements and different time frames for issuance. “Footing and foundation” permits allow a builder to pour the concrete foundation and footings for a building. “Core and shell” permits allow the builder to construct the core and shell of the structure. “Tenant finish” permits allow completion of the building so that it may be occupied by tenants. Finally, “special use” permits are used where the builder intends to use a building for a purpose not permitted by existing zoning.

Anasazi 2 was not zoned for a martial arts studio or a firing range. Accordingly, when plaintiffs submitted their building permit application on July 6, 2004, they filed for both a tenant finish permit (allowing them to complete the structure from start to finish) and a special use permit. According to plaintiffs, defendant Thomas Hawkinson, the City's permit coordinator, suggested to them that things might move faster if they withdrew their application for a tenant finish and special use permit, and simply filed instead for a core and shell permit to get started on the building. This was because, under the City's municipal ordinances, plaintiffs could obtain a core and shell permit by right, whereas the City had discretion concerning whether to issue a special use permit and would impose strict requirements before issuing such a permit. Hawkinson's seemingly reasonable suggestion would lead to no end of trouble as things progressed.

Even now, there is considerable factual disagreement between the parties about the nature of the permit plaintiffs actually sought and the delays they endured in obtaining it. The City contends that rather than withdrawing their request for a special use permit, the Klens wanted both permit applications (core and shell and special use) to proceed simultaneously. In this way, they could obtain their special use approval quickly after they completed the core and shell of Anasazi 2. Following this logic, the City characterizes plaintiffs' complaints as only involving delays in obtaining the special use permit. It then argues that plaintiffs have little cause for complaint about delays in receiving something to which they were not even entitled by law. Plaintiffs respond that the delays they are complaining about involved the core and shell permit, to which they were entitled by law. See Aplt. Reply Br. at 6. Because there is evidence that supports plaintiffs' version of events sufficient to create a genuine factual dispute on this point, see Aplt.App., Vol. 1B at 325–26; Vol. 1D at 1141, 1264, 1292, we will assume for purposes of summary judgment analysis that it was the core and shell permit that was delayed.

2. Permit Delays

Plaintiffs complain of unreasonable delays in obtaining their permit. It is not entirely clear whether they attribute the initial delays to simple incompetence or to a pre-existing malicious or discriminatory attitude toward them by the City or its employees. See, e.g., Affidavit of James Cook, id. at 374 (“The speed and ease with which a builder's project and plans progressed through the permitting process at the City of Loveland often depended on whether the builder was part of an insider group.... Builders who were members of this group tended to be given preference, better treatment, and have their problems and concerns resolved more quickly”); Affidavit of Marlaine Maslen, id. at 378 (“The filing practices of the City of Loveland offices were bad. Approximately 25 percent of building files were temporarily lost and ten percent of the plans were permanently lost”); Second Amended Complaint, id. at 329 (alleging Cindy Worayeth with City's planning department “possessed a malignant animosity toward [Ed Klen] and was resolved to harm him if possible”). As time went on, however, plaintiffs allege that the City's actions were motivated by animosity and a desire to retaliate against them.

Plaintiffs allege that at the outset of the permitting process, Hawkinson and other City officials told them that their core and shell permit would issue within six to eight weeks. Hawkinson also stated that the footing and foundation permit, which would allow them to get started on the building, would be easy to obtain. Acting on this information, plaintiffs applied for and obtained a construction loan with an envisioned construction start date of September 2004. On August 12, 2004, they resubmitted to the City their plans for a core and shell permit. Plaintiffs began clearing the site and began preliminary work in late 2004.

Things did not go as swiftly as anticipated. On September 14, 2004, David Sprague, a plan reviewer for the City, indicated he would not approve plaintiffs' permit application unless they submitted mechanical, plumbing, and electrical drawings. Plaintiffs contend this was an unreasonable requirement for approval of their core and shell permit application because the drawings Sprague requested could not be done until the tenant requirements were known, and thus these requirements were part of tenant finish, not core and shell. Plaintiffs also claim the City's records show that when Sprague eventually approved the plans eight months later, he did so without the drawings.

On November 19, 2004, plaintiffs met with Hawkinson to determine when they could expect issuance of the permit. He told them he did not see any problems, and that they could continue doing the “dirt work” at the site for a few days until the permit issued. Three days later, on November 22, 2004, plaintiffs closed on the construction loan.

Plaintiffs assert that Hawkinson told them on December 1, 2004, that they could proceed with work on the building foundation even though no permit had yet been issued. According to two former City building inspectors who filed affidavits on behalf of plaintiffs and plaintiff's expert witness, the City routinely permitted builders to begin building before they were issued permits.

3. The Stop Work Order

On December...