Warne v. Hall

• Decision Date: 27 June 2016
• Docket Number: Supreme Court Case No. 14SC176
• Parties: Menda K. WARNE, Petitioner, v. Bill J. HALL, Respondent.
• Court: Colorado Supreme Court

373 P.3d 588

2016 CO 50

Menda K. WARNE, Petitioner

v.Bill J. HALL, Respondent.

Supreme Court Case No. 14SC176

Supreme Court of Colorado.

June 27, 2016

Attorneys for Petitioner: Vaughn & DeMuro, Gordon L. Vaughan, David R. DeMuro, Colorado Springs, Colorado

Attorneys for Respondent: Clark Williams and Matsunaka, LLC, Roger E. Clark, Loveland, Colorado

Attorneys for Amicus Curiae Colorado Civil Justice League: Davis Graham & Stubbs LLP, Jordan Lipp, Geoffrey C. Klingsporn, Denver, Colorado, Wheeler Trigg O'Donnell LLP, Terence Ridley, Evan Stephenson, Thomas Werge, Denver, Colorado

Attorneys for Amicus Curiae Colorado Defense Lawyers Association: Jaudon & Avery LLP, Jared R. Ellis, Denver, Colorado

Attorneys for Amicus Curiae Colorado Plaintiff Employment Lawyers Association: Lowrey Parady, LLC, Sarah J. Parady, Denver, Colorado

Attorneys for Amici Curiae The State of Colorado and Colorado Intergovernmental Risk Sharing Agency (CIRSA): Cynthia H. Coffman, Attorney General, Daniel D. Domenico, Solicitor General, Frederick R. Yarger, Assistant Solicitor General, Kathleen L. Spalding, Senior Assistant Attorney General, Matthew D. Grove, Assistant Solicitor General, Denver, Colorado, Colorado Intergovernmental Risk Sharing Agency (CIRSA), Tami A. Tanoue, General Counsel, Denver, Colorado

Attorneys for Amicus Curiae The Colorado Trial Lawyers Association: Leventhal & Puga, P.C., Benjamin Sachs, David Mason, Denver, Colorado, Holland, Holland Edwards & Grossman, PC, John R. Holland, Denver, Colorado

En Banc

JUSTICE COATS

delivered the Opinion of the Court.

¶1 Warne petitioned for review of the court of appeals' judgment reversing the dismissal of Hall's complaint, which asserted, as relevant here, a claim of intentional interference with contract. See Hall v. Warne , No. 12CA719 (Colo. App. Jan. 23, 2014) (not published pursuant to C.A.R. 35(f)

). Although invited to apply the standard for dismissal articulated in Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the district court dismissed for failure to state a claim upon which relief could be granted without addressing either Twombly or Iqbal in its written order. By contrast, the court of appeals expressly declined to apply the more recent United States Supreme Court jurisprudence governing Fed. R. Civ. P. 12(b)(6), finding itself instead bound by this court's existing precedent, which has heavily relied on the Supreme Court's earlier opinion in Conley v. Gibson , 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), and particularly its language to the effect that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove “no set of facts” in support of his claim. Declining, therefore, to be influenced by the United States Supreme Court's more recent admonition to the federal courts that “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face,’ ” Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955

), the court of appeals found the complaint sufficient to state a claim.

¶2 Because our case law interpreting the Colorado Rules of Civil Procedure in general, and C.R.C.P. 8

and 12(b)(5) in particular, reflects first and foremost a preference to maintain uniformity in the interpretation of the federal and state rules of civil procedure and a willingness to be guided by the Supreme Court's interpretation of corresponding federal rules whenever possible, rather than an intent to adhere to a particular federal interpretation prevalent at some fixed point in the past, the court of appeals too narrowly understood our existing precedent. Because the plaintiff's complaint, when evaluated in light of the more recent and nuanced analysis of Twombly and Iqbal , fails to state a plausible claim for relief, the judgment of the court of appeals finding the complaint to be sufficient is reversed, and the matter is remanded with instruction to permit further proceedings consistent with this opinion.

I.

¶3 Bill Hall filed a complaint in state district court against the Town of Gilcrest and its mayor, Menda Warne, as an individual. Hall's complaint alleged that Warne used her authority as mayor to interfere with his purchase agreement to sell a parcel of land in Gilcrest to Ensign United States Drilling, Inc., which intended, according to an attachment to the complaint, to build its headquarters on the property. Although the precise terms of the agreement were not included in the pleadings, the complaint, along with its attached exhibits, indicated that Ensign tried for more than a year to obtain approval to purchase the property and construct its headquarters in Gilcrest, but its efforts were thwarted by the town government. More specifically, the complaint alleged that Warne caused Ensign to terminate the agreement by imposing unauthorized and unreasonable conditions on its proposed site development plan, by mayoral order, after the plan had been conditionally approved by the town board at a public hearing. The complaint further alleged that Warne's actions were motivated by malice towards Hall and that the conditions imposed on Ensign's plans were “disproportionate to any impact Ensign would have on the town” and “were not based on the reasonable requirements of applicable ordinances or law.” On the basis of these and similar allegations, the complaint asserted several claims for relief under state and federal law, including intentional interference with contractual obligations, taking without just compensation, and violation of substantive due process under 42 U.S.C. § 1983 (2012).

¶4 Because the original complaint included both state and federal claims, the case was removed to federal district court pursuant to 28 U.S.C. § 1441 (2012)

. Upon removal, Warne and the town filed a motion to dismiss for failure to state a claim for relief under Fed. R. Civ. P. 12(b)(6). Before briefing was complete, the federal district court accepted a stipulation by the parties whereby the federal law claims would be voluntarily dismissed by Hall and the case would be remanded to state district court for resolution of the state law claim for intentional interference with contractual obligations against Warne.¹

¶5 On remand to the state district court, the motion to dismiss under Fed. R. Civ. P. 12(b)(6)

was converted into a motion to dismiss under the corresponding, though differently-numbered state rule, C.R.C.P. 12(b)(5). In subsequent briefing, Warne and the town urged the district court to review the motion to dismiss according to the “plausible on its face” standard recently articulated by the United States Supreme Court in Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), rather than the so-called “no set of facts” standard from Conley v. Gibson , 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), cited favorably by this court in the past. Without expressly distinguishing the Conley from the Twombly /Iqbal standard of review, the district court granted the defendants' motion to dismiss, finding that the complaint contained insufficient allegations that Warne in fact caused the conditions to be imposed on Ensign's proposed development plan that ultimately led Ensign to terminate its contract with Hall.

¶6 The plaintiff was granted leave to file an amended complaint, which he did, to include additional allegations that he had been informed that Warne exercised control over land development matters and would have used any means at her disposal to ensure that Ensign would never meet the requirements necessary to build, regardless of what had been approved by the town board. The defendants renewed their motion to dismiss for failure to state a claim, which the district court again granted, finding that while the amended complaint provided additional allegations supporting a conclusion that Warne possessed the authority and intent to block Ensign's development plan, it lacked allegations of Warne's specific conduct causing Ensign's breach. Subsequently, the district court also awarded attorney fees in favor of the defendants.

¶7 On Hall's appeal of the dismissal of his claim for contractual interference, the court of appeals reversed, finding itself bound by this court's precedent relying on Conley 's “no set of facts” standard and, therefore, rejecting Warne's proposal to examine the complaint under the Twombly

/Iqbal “plausible on its face” standard. Under the Conley standard, the court of appeals concluded that the complaint sufficed to state a claim for relief and, more specifically, that Hall's allegations to the effect that Warne possessed the authority and intent to block Ensign's development plan and that she had exercised that authority to impose conditions despite the town board's prior approval of Ensign's plan sufficiently pled that Warne caused Ensign to terminate its contract with Hall. The court of appeals therefore also reversed the district court's award of attorney fees.

¶8 Warne petitioned this court for further review by writ of certiorari.

II.¶9 In Bell Atlantic Corp. v. Twombly

, in addressing the proper standard for pleading an antitrust conspiracy through allegations of parallel conduct, the United States Supreme Court explicated the pleading standard of Federal Rule of Civil Procedure 8 in greater detail than it had done in at least a half-century, giving particular emphasis to the “plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief.’ ” 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Fed. R. Civ. P. 8(a)(2) ). In that context, the Court stated that the factual allegations of the complaint must be enough to raise a right to relief “above the speculative...