Schaden v. DIA Brewing Co.

• Decision Date: 11 January 2021
• Docket Number: Supreme Court Case No. 20SC225
• Citation: 478 P.3d 1264
• Parties: Richard SCHADEN; MCE-DIA, LLC, a Michigan limited liability company; Midfield Concessions Enterprises, Inc. a Michigan limited liability company; Andrea Hachem; Noureddine "Dean" Hachem; Samir Mashni; Simrae Solutions LLC, a Colorado limited liability company; Sudan I. Muhammad; Pangea Concessions Group LLC, a Florida limited liability company; Niven Patel ; and Rohit Patel, Petitioners, v. DIA BREWING CO., LLC, a Colorado limited liability company, Respondent.
• Court: Colorado Supreme Court

478 P.3d 1264

Richard SCHADEN; MCE-DIA, LLC, a Michigan limited liability company; Midfield Concessions Enterprises, Inc. a Michigan limited liability company; Andrea Hachem; Noureddine "Dean" Hachem; Samir Mashni; Simrae Solutions LLC, a Colorado limited liability company; Sudan I. Muhammad; Pangea Concessions Group LLC, a Florida limited liability company; Niven Patel ; and Rohit Patel, Petitioners,

v.DIA BREWING CO., LLC, a Colorado limited liability company, Respondent.

Supreme Court Case No. 20SC225

Supreme Court of Colorado.

January 11, 2021

As Modified on Denial of Rehearing February 1, 2021

Attorneys for Petitioner Richard Schaden : Haddon, Morgan and Foreman, P.C., Saskia A. Jordan, Adam Mueller, Denver, Colorado

Attorneys for Petitioners MCE-DIA, LLC; Midfield Concessions Enterprises, Inc.; Andrea Hachem; Noureddine "Dean" Hachem; Samir Mashni; Simrae Solutions LLC; Sudan I. Muhammad; Pangea Concessions Group LLC; Niven Patel; and Rohit Patel: Merchant & Gould P.C., Peter A. Gergely, Denver, Colorado, Woodrow & Peluso, LLC, Steven L. Woodrow, Denver, Colorado

Attorneys for Respondent: Law Office of G. Stephen Long, G. Stephen Long, Denver, Colorado, Jones & Keller, P.C., Christopher S. Mills, Denver, Colorado, Connelly Law, LLC, Sean Connelly, Denver, Colorado

En Banc

JUSTICE GABRIEL delivered the Opinion of the Court.

¶1 This case requires us to interpret Rule 15(a) of the Colorado Rules of Civil Procedure. Plaintiff below, DIA Brewing Co., LLC, contends that after the district court entered an order dismissing this action pursuant to C.R.C.P. 12(b)(1), C.R.C.P. 15(a) gave DIA Brewing the right to amend its complaint as a matter of course and without leave of the court or the consent of defendants because no responsive pleading had been filed. Defendants below, MCE-DIA, LLC, Midfield Concessions Enterprises, Inc., Andrea Hachem, Noureddine "Dean" Hachem, Samir Mashni, Simrae Solutions LLC, Sudan I. Muhammad, Pangea Concessions Group LLC, Niven Patel, Rohit Patel, and Richard Schaden (collectively, "MCE-DIA"), in contrast, contend that the C.R.C.P. 12(b)(1) dismissal resulted in a final judgment that cut off DIA Brewing's right to amend as a matter of course under C.R.C.P. 15(a). Thus, MCE-DIA contends that if DIA Brewing wanted to amend, it was required to seek leave of the court or to obtain MCE-DIA's written consent. We granted certiorari to resolve this dispute.¹

¶2 Reading C.R.C.P. 15(a) harmoniously with C.R.C.P. 59 and C.R.C.P. 60, as we must, we now conclude that a final judgment cuts off a plaintiff's right to file an amended complaint as a matter of course under C.R.C.P. 15(a). We further conclude that the dismissal order here constituted a final judgment and that therefore DIA Brewing did not have the right to amend its complaint as a matter of course but rather was obligated, if it wished to amend, to seek relief from the judgment and to file a motion requesting leave to amend or indicating that MCE-DIA had consented in writing to the filing of an amended complaint.

¶3 Having reached that conclusion, we must consider the proper remedy. Although MCE-DIA would have us conclude that DIA Brewing failed to proceed properly in attempting to amend its complaint and therefore this case should be closed, we cannot ignore the facts that (1) our opinion today clarifies the scope of C.R.C.P. 15(a) ; (2) in its response to MCE-DIA's motion to dismiss, DIA Brewing noted its desire to seek to amend its complaint if the court found the complaint deficient; (3) although DIA Brewing did not formally seek relief from the judgment or leave to amend its complaint, it filed an amended complaint in the district court; and (4) we are in the same position as the district court in terms of our ability to assess the viability of that amended complaint.

¶4 In these circumstances, we deem it appropriate to consider the viability of the amended complaint, and we now conclude, contrary to the district court, that that amended pleading is not futile but rather states viable claims for relief.

¶5 Accordingly, we affirm the judgment of the division below, albeit on different grounds, and we remand this case with directions that the case be returned to the district court with instructions that the court accept DIA Brewing's amended complaint for filing, after which MCE-DIA may respond in the ordinary course.

I. Facts and Procedural History

¶6 Because this case arises from an order dismissing DIA Brewing's claims, for present purposes, we take the facts principally from the allegations of DIA Brewing's complaint and, where appropriate, from its proffered amended complaint.

¶7 This case involves a dispute over the award of a concessions contract at Denver International Airport ("DIA"). The contract resulted from a Request for Proposals ("RFP") issued by the City and County of Denver Department of Aviation. The RFP specified that the winning bidder would receive a contract to develop, operate, and manage three restaurants and one branded gourmet coffee bar at DIA. The city received five proposals, including one from DIA Brewing and one from MCE-DIA. Following the recommendation of certain DIA officials, the Denver City Council awarded the contract to MCE-DIA. According to a publicly available document, DIA Brewing's bid was ranked fourth out of the five bids.

¶8 DIA Brewing subsequently filed suit, alleging claims of bid-rigging, tortious interference with a prospective business opportunity, civil conspiracy, and violations of the Colorado Organized Crime Control Act. As pertinent here, DIA Brewing alleged that MCE-DIA had conspired with two DIA officials involved in the RFP process, Bhavesh Patel and Mukesh "Mookie" Patel, to ensure that MCE-DIA would be awarded the concessions contract notwithstanding MCE-DIA's failure to meet the minimum requirements for all bidders. (The district court dismissed the claims against both Bhavesh Patel and Mookie Patel on governmental immunity grounds, and those claims are not before us.) DIA Brewing asserted that, as part of this conspiracy, a number of individuals associated with MCE-DIA's bid had bribed Bhavesh Patel to ensure that MCE-DIA would be awarded the contract and that Bhavesh Patel and Mookie Patel had then steered the contract award to MCE-DIA by, among other things, rigging the bids, changing the RFP screening process, and changing or shredding the bid scoresheets. DIA Brewing contended, on information and belief, that it was, in fact, the highest scoring bidder and, thus, it should have been awarded the contract.

¶9 MCE-DIA moved to dismiss the complaint on several different grounds. Pertinent here, MCE-DIA argued that DIA Brewing lacked standing to sue because it had "finished in fourth place" and thus had not suffered any cognizable injury. MCE-DIA further argued that DIA Brewing's claims sounded in fraud but that DIA Brewing had failed to plead fraud with the particularity required by C.R.C.P. 9(b).

¶10 DIA Brewing responded that it had adequately pled all of its claims but that, should the district court dismiss any part of its complaint, it should be granted leave to amend pursuant to C.R.C.P. 15(a).

¶11 The district court agreed with MCE-DIA's arguments and granted the motions to dismiss without reference to the request from DIA Brewing for leave to amend. Notably, although the district court's minute orders indicated that the court had dismissed the action without prejudice, they also indicated that the court had closed the case.

¶12 Approximately one-and-a-half months later, and after MCE-DIA had filed a bill of costs and a motion for attorney fees, DIA Brewing filed a First Amended Complaint and Demand for Jury Trial. In doing so, DIA Brewing did not seek relief from the court's dismissal order. Nor did it move for leave to file an amended complaint or file a pleading indicating that MCE-DIA had consented in writing to the filing of an amended complaint.

¶13 DIA Brewing's proffered first amended complaint comprised 28 pages and 176 paragraphs of detailed allegations regarding the purported bid-rigging scheme. Among other things, the amended complaint made the following allegations, which we detail at some length given the questions presented here as to the viability of such allegations:

¶14 Bhavesh Patel had informed the people who would ultimately form MCE-DIA that he was designing and would have DIA issue what ultimately became the RFP at issue. Based on this inside information, MCE-DIA was formed.

¶15 To ensure that MCE-DIA would be awarded the contract, people associated with MCE-DIA bribed Patel to steer the contract to MCE-DIA in return for their agreement to include Patel's designees as part owners of MCE-DIA. Patel accepted this bribe.

¶16 Thereafter, Patel met with Schaden and other representatives of a restaurant that would ultimately become part of MCE-DIA's bid. At this meeting, Patel discussed the scheme by which MCE-DIA would obtain the contract, and after the meeting, Schaden joined in the alleged conspiracy.

¶17 In furtherance of this conspiracy, MCE-DIA did, in fact, include Patel's designees as owners of MCE-DIA, in exchange for his assurance that MCE-DIA would get the contract. Patel then completed his work in designing the RFP.

¶18 Notwithstanding Patel's efforts to help build MCE-DIA into a viable bidder, MCE-DIA submitted the weakest of the bids received because, in multiple respects described in detail in the amended complaint, its bid did not comply with the terms of the RFP.

¶19 After the bids had been submitted, Patel asked to see them, which DIA's lead administrator for the RFP found unusual. With access to the bids, Patel was able to assess the strengths and weaknesses of the bidders before designing the scorecards and scoring matrix that the judges would use, and he designed the scorecards and scoring matrix with this information in mind. Specifically, although the RFP detailed the weight to be assigned to each of a number of identified criteria on which...