Lambert v. Ritter Inaugural Committee, Inc., No. 08CA1784.

• Decision Date: 03 September 2009
• Docket Number: No. 08CA1784.
• Parties: Kent LAMBERT, Complainant-Appellant, v. RITTER INAUGURAL COMMITTEE, INC. and Bill Ritter for Governor, Respondents-Appellees.
• Court: Colorado Court of Appeals

218 P.3d 1115

Kent LAMBERT, Complainant-Appellant, v. RITTER INAUGURAL COMMITTEE, INC. and Bill Ritter for Governor, Respondents-Appellees.

No. 08CA1784.

Colorado Court of Appeals, Div. V.

September 3, 2009.

Hackstaff Gessler LLC, Scott E. Gessler, Mario D. Nicolais II, Denver, CO, for Complainant-Appellant.

Hill & Robbins, P.C., John F. Walsh, Jennifer H. Hunt, Ingrid C. Barrier, Denver, CO, for Respondent-Appellee Ritter Inaugural Committee, Inc.

Isaacson Rosenbaum P.C., Mark G. Grueskin, Blain D. Myhre, Denver, CO, for Respondent-Appellee Bill Ritter for Governor.

Opinion by Judge RICHMAN.

Kent Lambert appeals the order of the administrative law judge (ALJ) dismissing, under C.R.C.P. 12(b)(5), his claims alleging campaign finance violations against Bill Ritter for Governor (the Candidate Committee) and Ritter Inaugural Committee, Inc. (the Inaugural Committee) and the separate order awarding attorney fees against him. We reverse the order dismissing the claims, vacate the order awarding attorney fees, and remand this matter to the ALJ for further proceedings.

I. Background

Governor Bill Ritter was elected on November 7, 2006. As the authorized candidate committee for Ritter's campaign, the Candidate Committee was subject to campaign finance laws, including applicable contribution limits and disclosure requirements. See Colo. Const. art. XXVIII, §§ 2(3), 3 & 7; §§ 1-45-101 to -118, C.R.S.2008. The Inaugural Committee, a nonprofit corporation established on the day after the election to finance inaugural ceremonies, was allegedly subject to other campaign finance rules. See, e.g., Colo. Const. art. XXVIII, §§ 2(12)(a) (definition of "political committee") & 3(4) (requirements pertaining to corporations and labor organizations).

Kent Lambert initiated this action on April 21, 2008, pursuant to article XXVIII, section 9(2)(a) of the Colorado Constitution, which provides that "[a]ny person who believes that a violation of [specified campaign finance laws] has occurred may file a written complaint with the secretary of state no later than one hundred eighty days after the date of the alleged violation." Lambert alleged that (1) both committees violated campaign contribution limits, (2) the Inaugural Committee illegally contributed to the Candidate Committee, (3) the Candidate Committee failed to report all of its contributions, and (4) the Inaugural Committee failed to comply with registration and reporting obligations.

In support of his allegations, Lambert attached to his complaint a report on the Inaugural Committee's expenses, prepared at the request of the Inaugural Committee, by the consulting firm Patten, MacPhee & Associates, Inc. (the Patten Report). Lambert alleged that the Patten Report showed that both committees had violated campaign finance laws, and he requested that fines be assessed against them. See Colo. Const. art. XXVIII, § 10(1) ("Any person who violates any provision of this article relating to contribution or voluntary spending limits shall be subject to a civil penalty of at least double and up to five times the amount contributed, received, or spent in violation of the applicable provision of this article."); see also § 1-45-103.7(7)(b), C.R.S.2008 (same effect).

According to the Patten Report, the Inaugural Committee hired the Patten firm to inspect its financial records to determine the extent to which Inaugural Committee funds may have been used to pay the expenses of the Candidate Committee. The Patten Report states that the Inaugural Committee raised more than $1.1 million from private donations and ticket sales to inaugural events. Exhibit G to the report lists over $217,000 in expenditures by the Inaugural Committee which "appear to be related to payment of the Campaign's expenses." Lambert alleged that such expenditures were unlawful excess contributions in violation of article XXVIII, section 3(1)(a)(I) (first claim for relief) and unlawful corporate contributions in violation of section 3(4) (second claim for relief) and that the failures to report constituted violations of the reporting requirements of section 1-45-108, C.R.S.2008 (third and fourth claims for relief).

However, according to the Patten Report, all of the expenditures identified on Exhibit G were made more than 180 days before Lambert filed his complaint on April 21, 2008. Accordingly, the ALJ concluded, and it is not disputed on appeal, that any claims pertaining to these expenditures on Exhibit G were time barred by the constitutional provision requiring that complaints regarding campaign finance violations be filed no later than 180 days after the date of an alleged violation. See Colo. Const. art. XXVIII, § 9(2)(a).

Of the total expenditures by the Inaugural Committee, the Patten Report separately identifies and lists on Exhibit H $107,894.25 in payments made to Greg Kolomitz (Ritter's campaign manager, who also managed the Inaugural Committee's day-to-day operations), Solutions West (Kolomitz's consulting firm), and Sheila MacDonald (a principal of Solutions West). The Patten Report states that "the frequency and magnitude of [the payments on Exhibit H] go beyond our understanding of the amounts that were to be paid by the Inaugural Committee for their services." Exhibit H classifies these payments to Kolomitz, his firm, and his employee into three categories: "inaugural expense," "campaign expense," and "Kolomitz/ Solutions West." Five of the payments listed on Exhibit H, totaling $21,292.45, are classified as "campaign expense" and are listed on Exhibit G. None of these five payments occurred within 180 days of Lambert's complaint.

The only payment made by the Inaugural Committee within 180 days preceding the filing of Lambert's complaint is a payment of $350 made to Kolomitz on October 24, 2007, exactly 180 days before Lambert filed his complaint. The Patten Report does not list this $350 payment as a campaign expense on Exhibit G, and it does not classify the payment as either a "campaign expense" or "inaugural expense" on Exhibit H, placing it under the category of "Kolomitz/ Solution West."

Lambert's amended complaint was referred to the Office of Administrative Courts and assigned to an ALJ. See Colo. Const. art. XXVIII, § 9(2)(a). Both committees filed motions to dismiss. The ALJ construed the Patten Report as part of the complaint and determined that it did not support, but rather contradicted, Lambert's allegations. Relying on the Patten Report, the ALJ concluded that the contents of the report do not support the allegation that the $350 payment was "related to the Governor's campaign" and found that the payment "was not for campaign related activities." The ALJ also concluded that even if it was related to a campaign expense, the payment "in and of itself, does not violate any contribution limit." She thus dismissed the first claim for relief on these alternative grounds.

Having found that the October 24, 2007 payment was not a campaign-related expense, the ALJ dismissed the second and third claims for relief because none of the contributions which give rise to the claims occurred within 180 days before the filing of the complaint. The ALJ also concluded that any report due from the Inaugural Committee, as alleged in the fourth claim for relief, would have to have been filed by October 15, 2007, and Lambert's complaint was also untimely as to any registration or reporting violations that preceded that date. Accordingly, the ALJ granted the committees' motions to dismiss and awarded attorney fees under section 1-45-111.5(2), C.R.S.2008, finding that the complaint lacked substantial justification. In a subsequent order, the ALJ awarded $8,598 to the Inaugural Committee and $10,137.50 to the Candidate Committee as attorney fees and costs. This appeal followed.

II. Standard of Review

"On appellate review, we accept an ALJ's factual findings unless they are clearly erroneous or unsupported by evidence in the record." Colo. Educ. Ass'n v. Rutt, 184 P.3d 65, 77 (Colo.2008). A ruling on a motion to dismiss is a question of law we review de novo. Akin v. Four Corners Encampment, 179 P.3d 139, 143 (Colo.App.2007). We apply the same standards as the trial court or, in this case, the ALJ. W. Innovations, Inc. v. Sonitrol Corp., 187 P.3d 1155, 1158 (Colo. App.2008). Thus, in evaluating a C.R.C.P. 12(b)(5) motion, we may consider only those matters stated in the complaint and must accept all allegations of material fact as true, viewing the allegations in the light most favorable to the plaintiff. Coors Brewing Co. v. Floyd, 978 P.2d 663, 665 (Colo.1999). "Such motions `are viewed with disfavor, and a complaint is not to be dismissed unless it appears beyond doubt that the plaintiff cannot prove facts in support of the claim that would entitle the plaintiff to relief.'" Id. (quoting Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 911 (Colo.1996)).

Generally, on a C.R.C.P. 12(b)(5) motion, whether a complaint states a claim must be determined solely from the complaint itself. Stauffer v. Stegemann, 165 P.3d 713, 716 (Colo.App.2006). "However, when ... the plaintiff attaches documents to the complaint, the court may consider those documents in ruling on a motion to dismiss." Id. "Further, a trial court is not required to accept legal conclusions or factual claims at variance with the express terms of documents attached to the complaint." Id.

III. Analysis

A. Excess Contributions

Lambert argues that dismissal of his amended complaint is error because when viewed in the light most favorable to him, the facts alleged state a claim that the Inaugural Committee's $350 payment to Kolomitz on October 24, 2007 was an illegal contribution to the Candidate Committee. We agree that dismissal of the complaint was error.

The contribution limit for any one person or political committee to a gubernatorial candidate committee at the time of the 2006 Ritter campaign was $1,050. See Colo. Const. art. XXVIII,...