Yaklich v. Grand County , 278 F. App'x 797 ( 2008 )

FILED
United States Court of Appeals
Tenth Circuit
May 7, 2008
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
ROBERT YAKLICH,
Plaintiff - Appellant, No. 05-1563
v. D. Colo.
GRAND COUNTY, a Political (D.C. No. 1:05-CV-01081-LTB-OES)
Division of the State of Colorado, by
and through its BOARD OF COUNTY
COMMISSIONERS OF THE
COUNTY OF GRAND, COLORADO;
ROBERT ANDERSON, in his official
capacity; DUANE DAILEY, in his
official capacity; JAMES
NEWBERRY, in his official capacity;
TABERNASH MEADOWS WATER
AND SANITATION DISTRICT;
IRENE COOK, in his official capacity
as President of the Board of Directors
of Tabernash Meadows Water and
Sanitation District; LAURALEE
KOURSE, individually and as
manager, Tabernash Meadows Water
and Sanitation District; BETSY
ELIZABETH REDFIELD, in her
official capacity as Bookkeeper,
Tabernash Meadows Water and
Sanitation District; BOARD OF
DIRECTORS FOR TABERNASH
MEADOWS WATER AND
SANITATION DISTRICT; BOB
ALEXANDER, in his official
capacity; DOUGLAS OURI, in his
official capacity; GRETCHEN
BRETZ, in her official capacity; MR.
STOVALL, in his official capacity;
LURLINE UNDERBRINK, in her
official capacity as County Manager,
Grand County; WILLIAM GRAY, in
his official capacity as Acting Director
of Planning, State of Colorado, Grand
County Department of Planning and
Zoning; COLORADO BOND
SHARES, a security broker; FRED
KELLY, in his capacity as President
of Colorado Bond Shares; BANK OF
THE WEST, a California Corporation
authorized to do business in Colorado;
and TERESA TURNER, in her
capacity as President of Bank of the
West,
Defendants - Appellees.
ORDER AND JUDGMENT *
Before O’BRIEN, BALDOCK, and HOLMES, Circuit Judges.
This appeal arises out of Tabernash Meadows, LLC’s (Tabernash) failed
attempt to create a subdivision called Pole Creek Valley in Grand County,
Colorado. Robert Yaklich, the founder and sole owner of Tabernash, filed suit
against various defendants, who moved to dismiss. The district court granted the
motions. We AFFIRM in part, REVERSE in part, and REMAND as set forth in
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
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this Order and Judgment.
I. BACKGROUND
Pole Creek Valley is located approximately two miles southwest of
Tabernash, Colorado, on Highway 40. It consists of 168 acres of land subdivided
into 113 single-family, multi-family and commercial lots. Yaklich started the
platting process with Grand County in the mid-1990’s but did not receive final
plat approval until April 2000. In 1996, Yaklich formed Tabernash Meadows
Water and Sanitation District (the District) as part of the development process.
He was chairman of the District’s Board of Directors from its inception through
November of 2002, when he resigned.
On August 9, 2000, Yaklich negotiated a loan to Tabernash from Peak
National Bank (Peak) in the amount of $3,500,000 to develop Pole Creek Valley.
The loan was secured by a First Deed of Trust conveying Lots 1-15, 22-113 and
MF1-2, and Yaklich’s personal guaranty. The construction of the District’s water
and sanitation facilities was funded by general obligation bonds issued in the
amount of $5,300,000. Yaklich negotiated the issuance of the bonds, representing
both the District and Tabernash, and signed the bonds’ offering statements on
behalf of the District. The bonds were secured, in part, by the District’s covenant
to levy ad valorem property taxes on the lots and to collect “tap fees” from new
users. The bonds were also secured by Tabernash’s Developer Guaranty
Agreement (Guaranty) wherein it agreed to pay the principal and interest on the
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bonds, up to a maximum of $4,758,000, in four “Minimum Annual Guaranty”
payments to start in 2000 and continue through 2003. As security for its payment
obligations, Tabernash granted the District a lien against certain Pole Creek
Valley properties, some of the properties junior to Peak’s Deed of Trust. 1 The
Guaranty provided for the release of portions of the District’s liens upon
Tabernash’s compliance with its payment terms. In case of default, the District
was given several remedies, including initiation of foreclosure proceedings.
Tabernash started selling single-family lots in mid-2000. Delays in the
completion of the water system, allegedly due to Grand County’s erroneous cost
projections, caused Tabernash to request building permits be issued even though
the water system had not been completed. In reliance on Yaklich’s representation
that the completion of the water system was imminent, Grand County allowed
building permits to be issued. When the water system was not completed as
promised, Grand County required the District to post security for completion of
the water system.
Delay of the water system was not the only problem. Sales of Pole Creek
Valley lots were far below Tabernash’s initial projections. By the time the first
“Minimum Annual Guaranty” payment came due in November 2000, only thirty-
1
Specifically, Tabernash guaranteed the following amounts based on a tap
fee price of $13,000 per tap: $1,196,000 in 2000 or fees from ninety-two taps;
same in 2001; $1,183,000 in 2002, or fees from ninety-one taps; same in 2003.
Over time, the tap fee increased to $15,000 and then to $20,000.
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one single-family lots had been sold, creating a shortfall of $793,000. Six more
lots were sold in early 2001, leaving a shortfall of $715,000. Tabernash took out
a $900,000 loan from First United Bank to make up the difference. To provide
unencumbered collateral for the loan, Yaklich, acting as president of the District,
caused the District to release its lien on four lots not encumbered by the Peak
Deed of Trust. Tabernash pledged these and other lots as collateral to First
United Bank.
Tabernash payed $715,000 of the loan proceeds to the District in March
2001, but disputes arose over which properties would be credited with the tap
fees. Sales continued to decline over the next two years. The cause for the
failure of the project became a matter of contention between Tabernash, the
District and the County. Tabernash did not make any further Guaranty payments
to the District and Yaklich eventually resigned from the District’s Board of
Directors.
After Yaklich’s resignation, the District commenced judicial foreclosure
proceedings on its junior Deed of Trust with the Grand County Public Trustee’s
Office. The Grand County district court subsequently entered orders authorizing
a foreclosure sale. On June 6, 2003, Tabernash filed a separate action in Grand
County district court, seeking a preliminary injunction to enjoin the foreclosure.
The preliminary injunction was denied. On July 24, 2003, Tabernash filed a
Chapter 11 bankruptcy petition, staying the District’s foreclosure action.
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Peak subsequently filed a complaint against Yaklich in Denver district
court alleging breach of his personal loan guarantees. In February 2004, the
Denver district court entered two judgments against Yaklich in Peak’s favor, one
for $1,461,511.93, and the other for $406,411.41. Meanwhile, after holding a
two-day hearing on the District’s Motion for Release from Stay, on April 14,
2004, the bankruptcy court granted the motion, concluding Tabernash had not
shown it was able to present an adequate reorganization plan. In July 2004, Peak
assigned its judgments against Yaklich and its interest in the first deed of trust to
Colorado BondShares.
On June 13, 2005, Yaklich filed suit in the United States District Court for
the District of Colorado against four groups of defendants: (1) the “County”
defendants, including the Grand County Board of County Commissioners, County
Manager Luraine Underbrink Curran, and Grand County Director of Planning and
Zoning William Gray; (2) “the Bank of the West” defendants, including its
President Teresa Turner; (3) the “BondShares” defendants, including its President
Fred Kelley; and (4) the “District” defendants, including its Manager Lurane
Kourse, its Bookkeeper Elizabeth Redfield, its Board of Directors, the Board’s
President Irene Cook, and individual directors Bob Alexander, Gretchen Bretz,
Doug Ouri and Mr. Stovall.
Each group of defendants filed motions to dismiss under either Rule
12(b)(1) for lack of subject matter jurisdiction or Rule 12(b)(6) for failure to state
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a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(1), (b)(6).
The district court granted the motions to dismiss.
II. STANDARD OF REVIEW
We review de novo a dismissal for lack of subject matter jurisdiction
pursuant to Rule 12(b)(1), and review findings of jurisdictional facts, if any, for
clear error. Davis ex rel. Davis v. United States, 343 F.3d 1282, 1294-95 (10th
Cir. 2003). Whether a claim is ripe for review “bears on the court’s subject
matter jurisdiction under the case or controversy clause of Article III of the
United States Constitution.” New Mexicans for Bill Richardson v. Gonzales, 64
F.3d 1495, 1498-99 (10th Cir. 1995). Accordingly, a ripeness challenge, “like
[most] other challenges to a court’s subject matter jurisdiction, is treated as a
motion to dismiss under Rule 12(b)(1).” Id. at 1499.
We review de novo the legal sufficiency of a complaint under Rule
12(b)(6). Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236
(10th Cir. 1999). Such a motion “admits all well-pleaded facts in the complaint
as distinguished from conclusory allegations.” Mitchell v. King, 537 F.2d 385,
386 (10th Cir. 1976). In reviewing a motion to dismiss, the court must “look for
plausibility in the complaint.” Alvado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215
(10th Cir. 2007) (quotation and citation omitted). Under this standard, a
complaint must include “enough facts to state a claim to relief that is plausible on
its face.” See Bell Atlantic Corp. v. Twombly, --U.S.--, 127 S.Ct. 1955, 1974
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(2007).
III. DISCUSSION
A. Federal Claims 2
1. Conspiracy to Deprive Civil Rights (Claims 2 and 3)
Yaklich’s Complaint alleged the County and District defendants
discriminated against him in violation of 42 U.S.C. § 1985(3) 3 based on his
gender and failed to prevent such discrimination in violation of 42 U.S.C.
§ 1986. 4
2
Yaklich’s opening brief fails to address the dismissal of his claim
alleging conspiracy in violation of 42 U.S.C. § 1983. Therefore, the claim is
waived. See State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 984 n.7 (10th
Cir. 1994).
3
Section 1985(3) provides in relevant part:
If two or more persons . . . conspire . . . for the purpose of depriving
. . . any person . . . of the equal protection of the laws, or of equal
privileges and immunities under the laws; . . . or cause to be done,
any act in furtherance of the object of such conspiracy, . . . the party
so injured or deprived may have an action for the recovery of
damages . . . .
4
Section 1986 provides in pertinent part:
Every person who, having knowledge that any of the wrongs
conspired to be done, and mentioned in section 1985 of this title, are
about to be committed, and having power to prevent or aid in
preventing the commission of the same, neglects or refuses so to do,
if such wrongful act be committed, shall be liable to the party
injured, . . . for all damages caused by such wrongful act, which such
person by reasonable diligence could have prevented.
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“The essential elements of a § 1985(3) claim are: (1) a conspiracy; (2) to
deprive plaintiff of equal protection or equal privileges and immunities; (3) an act
in furtherance of the conspiracy; and (4) an injury or deprivation resulting
therefrom.” Tilton v. Richardson, 6 F.3d 683, 686 (10th Cir. 1993). “The
language requiring intent to deprive of equal protection, or equal privileges and
immunities, means that there must be some racial, or perhaps otherwise
class-based, invidiously discriminatory animus behind the conspirators’ action.”
Griffin v. Breckenridge, 403 U.S. 88, 102 (1971) (footnote omitted). In other
words, “[i]n order to support a section 1985(3) claim, the plaintiff must be a
member of a statutorily protected class, and the actions taken by defendant must
stem from plaintiff’s membership in the [protected] class.” Silkwood v. Kerr-
McGee Corp., 637 F.2d 743, 746 (10th Cir. 1980).
Outside the context of racial discrimination, the Supreme Court has not
defined what “otherwise class-based” discrimination may be protected under
§ 1985(3). The parties dispute whether a claim based upon gender bias is one of
the protected classes. Because Yaklich’s claim fails for a separate reason, we
need not determine the scope of the statute here. See United Bhd. of Carpenters
& Joiners of Am. v. Scott, 463 U.S. 825, 836 (1983).
Even if gender is a protected class, Yaklich’s complaint contains no factual
allegation of racial or class-based motivation. See Hughes v. Ranger Fuel Corp.,
467 F.2d 6 (4th Cir. 1972); Action v. Gannon, 450 F.2d 1227 (8th Cir. 1971); and
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Kletschka v. Driver, 411 F.2d 436 (2nd Cir. 1969). He merely alleges the same
gender-neutral actions taken against him to ensure his bankruptcy were based on
his gender. This conclusory statement is insufficient to state a claim. See Tal v.
Hogan, 453 F.3d 1244, 1261 (10th Cir. 2006) (“Conclusory allegations . . .
without any supporting facts are insufficient . . . .”), cert. denied, 127 S.Ct. 1334(2007). Section 1985(3) was not intended “to reach conspiracies motivated by
bias towards others on account of their economic views, status, or activities.”
United Bhd. of Carpenters & Joiners of Am., 463 U.S. at 837 (emphasis omitted).
Because the § 1985(3) claim is insufficient, Yaklich’s § 1986 claim also
fails. Taylor v. Nichols, 558 F.2d 561, 568 (10th Cir. 1977) (“A claim under
Section 1986 exists for refusal to take positive action where the circumstances
demand to prevent acts which give rise to a cause of action under Section 1985.
In view then of this relationship, there cannot be a valid claim under Section 1986
unless there is also a claim under Section 1985.”). The district court properly
dismissed these claims.
2. Regulatory Taking and Procedural Due Process (Claims 6 and 7)
Yaklich alleged the County and the District violated his Fifth and
Fourteenth Amendment rights by regulating the Pole Creek Valley property to the
point it became worthless – an inverse condemnation – without providing him just
compensation. He further alleged these defendants violated his Fourteenth
Amendment procedural due process rights premised on the alleged taking. The
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district court dismissed these claims with prejudice because Yaklich failed to
exhaust the eminent domain remedies provided for in Colo. Rev. Stat. Ann. §§ 38-
1-101 to 122.
The Just Compensation Clause of the Fifth Amendment states: “[P]rivate
property [shall not] be taken for public use, without just compensation.” U.S.
Const. amend. V. This prohibition applies against the states through the
Fourteenth Amendment. See Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226,
241 (1897). “The Fifth Amendment does not proscribe the taking of property; it
proscribes taking without just compensation.” Williamson County Reg’l Planning
Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194 (1985). “Nor does
the Fifth Amendment require that just compensation be paid in advance of, or
contemporaneous with the taking; all that is required is that a reasonable, certain
and adequate provision for obtaining compensation exist at the time of the
taking.” Id. (quotation omitted). “[I]f a State provides an adequate procedure for
seeking just compensation, the property owner cannot claim a violation of the Just
Compensation Clause until it has used the procedure and been denied just
compensation.” Id. at 194-95. “[T]he ripeness requirement of Williamson applies
to due process and equal protection claims that rest upon the same facts as a
concomitant takings claim.” Bateman v. City of West Bountiful, 89 F.3d 704, 709
(10th Cir. 1996).
Yaklich does not address the Williamson exhaustion of state remedies
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requirement. Rather, he asserts his claims are final under Abbot Laboratories v.
Gardner, because the defendants’ decisions were definite, had the status of law,
and compliance with the law had a direct and immediate effect on his day-to-day
business. 387 U.S. 136, 151-52 (1967), overruled on other grounds by Califano
v. Sanders, 430 U.S. 99, 105 (1977). Even if the decisions of the County and
District were final, Yaklich cannot bring a takings claim until he utilizes the
Colorado compensation procedure.
At all times relevant to this lawsuit, Colorado has statutorily provided a
method for seeking just compensation under eminent domain proceedings. See
Colo. Rev. Stat. Ann. §§ 38-1-101 to 122; see also Linnebur v. Pub. Serv. Co. of
Colo., 716 P.2d 1120, 1123 (Colo. 1986) (“An inverse condemnation action . . . is
to be tried as if it were an eminent domain proceeding.”). Section (2)(a) of § 38-
1-101 provides:
In all cases in which compensation is not made by the state in its
corporate capacity, such compensation shall be ascertained by a
board of commissioners of not less than three disinterested and
impartial freeholders pursuant to section 38-1-105(1) or by a jury
when required by the owner of the property as prescribed in section
38-1-106. All questions and issues, except the amount of
compensation, shall be determined by the court unless all parties
interested in the action stipulate and agree that the compensation may
be so ascertained by the court. In the event of such stipulation and
agreement, the court shall proceed as provided in this article for the
trial of such causes by a board of commissioners or jury.
Yaklich claims he is not required to comply with the statute because his efforts
would be futile. The district court disagreed, stating the statute does not require
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approval of the various defendants to determine the taking or just compensation.
We agree.
Yaklich’s regulatory takings and due process claims fail because he did not
exhaust available Colorado remedies. As a consequence, Yaklich’s claims are not
ripe and the district court could not address their merits. Dismissal with
prejudice, however, was inappropriate. See Brereton v. Bountiful City Corp., 434
F.3d 1213, 1216 (10th Cir. 2006) (“[W]here the district court dismisses an action
for lack of jurisdiction . . . the dismissal must be without prejudice.”); cf.
Hollander v. Sandoz Pharm. Corp., 289 F.3d 1193, 1216-17 (10th Cir. 2002)
(dismissal for lack of personal jurisdiction should be without prejudice when it
does not address merits of claim). We reverse the district court’s dismissal of
claims 6 and 7 with prejudice and remand for dismissal without prejudice.
B. State Law Claims
1. Colorado Government Immunities Act (Claims 1, 4, 5, 8, and 9)
Yaklich alleged state law claims of civil conspiracy, intentional and
tortious interference with contractual relations, intentional infliction of emotional
distress (outrageous conduct) and civil conversion against the County and District
defendants. The district court dismissed these claims for lack of jurisdiction
because Yaklich failed to provide these defendants notice within 180 days of
discovering his injury, as required by the Colorado Government Immunities Act
(CGIA).
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Under the CGIA, anyone claiming to have suffered an injury by a public
entity or its employee must file written notice within 180 days after the discovery
of the injury, regardless of whether the person knew all of the elements of the
claim or of a cause of action for such injury. See Colo. Rev. Stat. Ann. § 24-10-
109(1). Compliance with the 180-day notice requirement is a jurisdictional
prerequisite and failure to comply with it is an absolute bar to suit. Id.; see also
Gallagher v. Bd. of Tr. for Univ. of N. Colo., 54 P.3d 386, 393 (Colo. 2002) (en
banc). “[N]on-claim statutes and the issue of subject matter jurisdiction are not
subject to equitable defenses such as waiver, tolling, or estoppel.” Gallagher, 54
P.3d at 393. Furthermore, “the judicially-constructed continuing violation
doctrine cannot be used to remedy an untimely filing under the CGIA.” Id.
“For purposes of the CGIA, . . . the notice period is triggered when a
claimant has only discovered that he or she has been wrongfully injured.” Id. at
391.
[T]he plaintiff need not yet know the cause of the injury nor must all
elements of the claim have ripened before the plaintiff must file [his]
notice of claim. The plaintiff’s 180-day time limit may expire if [he]
wait[s] to discover the cause of [his] injury before filing pursuant to
the CGIA. . . . [T]he trial court is the pre-trial fact-finder to
determine whether notice was timely filed-that is, when the injury
was discovered by the claimant. When there is a factual dispute
concerning when the plaintiff discovered [his] injury, an evidentiary
hearing is necessary to resolve the dispute. The trial court may also
permit limited discovery to decide the notice issue. The plaintiff has
the burden of proving jurisdiction and the trial court will not
construe inferences in favor of the plaintiff.
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Id. (citation omitted). Relying on the order granting the District relief from stay
in Yaklich’s bankruptcy proceedings, the district court determined Yaklich was
aware of his injuries well before September 3, 2004, 180 days before he gave
notice on March 2, 2005.
Yaklich argues the conspiracy is the “real harm,” and the conspiracy of all
the defendants did not “occur” until the fall of 2004; it “could not have occurred
in Plaintiff’s mind sooner.” (Appellant’s Br. at 28.) Yaklich further maintains
the question of whether he had “knowledge” or “discovered” his injuries prior to
September 3, 2004, is a factual question which could not be resolved without an
evidentiary hearing.
The question is when Yaklich “knew or, through the exercise of reasonable
diligence, should have known” of his injury. Trinity Broadcasting of Denver, Inc.
v. City of Westminster, 848 P.2d 916, 923 (Colo. 1993) (en banc). A review of
the bankruptcy court order leaves no question that Yaklich should have been
aware of his injuries well before September 3, 2004. 5 The bankruptcy court
5
The bankruptcy court’s order was not included in Yaklich’s complaint,
but he made reference to the Bankruptcy action and its effect upon him.
“Generally, a district court must convert a motion to dismiss into a motion for
summary judgment when matters outside the pleadings are relied upon.” Utah
Gospel Mission v. Salt Lake City Corp., 425 F.3d 1249, 1253 (10th Cir. 2005)
(emphasis omitted). “We have recognized however, that a document central to
the plaintiff’s claim and referred to in the complaint may be considered in
resolving a motion to dismiss, at least where the document’s authenticity is not in
dispute.” Id. at 1253-54 (citing County of Santa Fe v. Pub. Serv. Co. of N.M., 311
F.3d 1031, 1045 (10th Cir. 2002)). Yaklich did not contest the bankruptcy court’s
order as an invalid document and it was reasonable for the district court to review
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determined Tabernash had not shown it was capable of effectuating a successful
reorganization, that the value of the land at Pole Creek was insufficient to service
the debt, and Yaklich was unable to demonstrate that financing was “imminent or
even possible.” (Bankruptcy Order at 16.) These findings were allegedly based,
in part, on deliberate testimonial misrepresentations at the bankruptcy hearing
given by several County and District defendants. In the bankruptcy order, the
court noted the District had formally opposed Yaklich’s proposed plan to save
Tabernash as well as Yaklich’s other unpaid personal debts which would impede a
successful extrication from financial disaster. Taking Yaklich’s current
allegations as true, he clearly should have known that County and District actions
had caused him injury when he received the bankruptcy court’s ruling.
Yaklich attempts to avoid the statutory time limitations by alleging the
defendants entered “into a series of conspiracies designed to deny Robert Yaklich
of his property rights.” This is not sufficient. Knowledge of injury is all that is
necessary. Knowledge of the cause of action or the identity of the tortfeasor is
not required. See East Lakewood Sanitation Dist. v. District Court, 842 P.2d 233,
235-36 (Colo.1992) (knowledge of the identity of the tortfeasor not required for
running of notice period). Further, a “series of conspiracies” is akin to a
continuing violation, on which he cannot rely. Gallagher, 54 P.3d at 393.
the order to determine when Yaklich became aware of his injuries for CGIA
purposes.
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Because the bankruptcy court’s order was not contested as invalid, the
district court was not required to hold an evidentiary hearing or provide for
limited discovery regarding the date Yaklich knew of his injury. See Padilla ex
rel. Padilla v. Sch. Dist. No. 1 in the City and County of Denver, 25 P.3d 1176,
1180 (Colo. 2001) (en banc) (“Where there is no evidentiary dispute,
governmental immunity or waiver of immunity is a matter of law, and the trial
court may rule on the jurisdictional issue without a hearing.”). The district court
properly dismissed Claims 1, 4, 5, 8 and 9 against the County and District
defendants under the CGIA.
2. Breach of Contract (Claim 10)
The CGIA applies only to tort claims and therefore does not bar Yaklich’s
breach of contract claim against the District and its Board of Directors. The
district court declined to exercise supplemental jurisdiction over the claim and
dismissed it without prejudice. Yaklich’s only argument in his opening brief on
this issue is as follows: “Appellant has demonstrated that it was also error to
dismiss the Tenth Claim without prejudice.” (Appellant’s Br. at 37.) This
conclusory statement will not preserve this issue. See Am. Airlines v.
Christensen, 967 F.2d 410, 415 n.8 (10th Cir.1992) (“It is insufficient merely to
state in one’s brief that one is appealing an adverse ruling below without
advancing reasoned argument as to the grounds for the appeal.” (citing Fed. R.
App. P. 28(a)(4)). Because the district court had dismissed the federal claims
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with prejudice, the court did not abuse its discretion in dismissing Claim 10. See
28 U.S.C. § 1367(c)(3) (“The district court may decline to exercise supplemental
jurisdiction over a claim . . . if . . . [it] has dismissed all claims over which it has
original jurisdiction.”).
3. Civil Conspiracy and Outrageous Conduct (Claims 1 and 8)
Yaklich complains the district court erroneously dismissed his civil
conspiracy and outrageous conduct claims against the private entities, Bank of the
West and BondShares. While Yaklich abandoned his claims against Bank of the
West at oral argument, he continues to claim the district court erred in dismissing
these claims against the BondShares defendants under the Rooker-Feldman
doctrine. See D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v.
Fidelity Trust Co., 263 U.S. 413 (1923).
a. Rooker-Feldman Doctrine
The Rooker-Feldman doctrine is a narrow one confined to “cases brought
by state-court losers complaining of injuries caused by state-court judgments
rendered before the district court proceedings commenced and inviting district
court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi
Basic Indus. Corp., 544 U.S. 280, 284 (2005). The doctrine does not apply to
parallel state and federal litigation and “does not otherwise override or supplant
preclusion doctrine or augment the circumscribed doctrines that allow federal
courts to stay or dismiss proceedings in deference to state-court actions.” Id. at
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284, 292. More specifically, it does not deprive lower federal courts of
jurisdiction if the federal court suit was filed before the end of the state court’s
appeal process. See Guttman v. Khalsa, 446 F.3d 1027, 1031-32 (10th Cir. 2006).
It must be remembered that BondShares did not even come into the picture
until after Yaklich defaulted, Peak secured the judgments against Yaklich, and the
bankruptcy court ordered the stay of foreclosure on the Pole Creek properties
removed. Yaklich alleges, after BondShares received payment in full on its loans
in March 2005, it took title to Lot 48 and proceeded to unlawfully foreclose on
the same property in May 2005. In addition, some time in late 2004 and early
2005, BondShares failed to credit the District’s foreclosure sales to Yaklich’s
debt. It was only when Yaklich filed suit in the Colorado district court that
BondShares properly credited his account. 6 Based on these allegations, Yaklich
alleged in Claim 1 that BondShares conspired with the other defendants to
bankrupt him. In Claim 8, Yaklich alleged BondShares engaged in extreme and
outrageous conduct with the intent of causing him severe emotional distress.
At the time Yaklich filed his complaint in this case, the state court had not
reached a final judgment determining whether BondShares properly credited
6
The record reveals Yaklich did not file a separate suit against
BondShares, but rather filed a motion to apply the foreclosure proceeds to the
judgments against him in the ongoing case originally brought by Peak against
Yaklich. The Denver district court granted Yaklich’s motion in part by requiring
BondShares to provide a verified accounting of all sales of the collateral securing
the debts underlying the judgments.
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Yaklich with the foreclosure sale’s proceeds. BondShares’ motion to dismiss
admitted this fact. Therefore, the district court improperly dismissed this claim
under Rooker-Feldman. Id., 446 F.3d at 1032 (holding that federal district court
had subject matter jurisdiction to hear case, notwithstanding Rooker-Feldman
doctrine, where plaintiff filed federal suit while certiorari petition to New Mexico
Supreme Court was pending in similar state court action).
Alternatively, BondShares argues Yaklich failed to plead sufficient facts to
establish the claims against it. However, BondShares did not raise this alternative
argument below. Ordinarily, “a federal appellate court does not consider an issue
not passed on below.” Singleton v. Wulff, 428 U.S. 106, 120 (1976). While this
general rule is not absolute, we decline to exercise our discretion, in this instance,
because we do not know the exact nature of the state court claims or whether the
state court has reached an ultimate resolution. We remand these state law claims
to the district court for dismissal without prejudice. 28 U.S.C. § 1367(c)(3).
AFFIRMED in part, REVERSED in part, and REMANDED for action
consistent with this Order and Judgment.
ENTERED FOR THE COURT
Terrence L. O’Brien
Circuit Judge
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