FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT January 3, 2020
_________________________________
Christopher M. Wolpert
Clerk of Court
MICHAEL W. BRUZGA; CAROLE A.
ZOLNICK,
Plaintiffs - Appellants,
v. No. 19-1133
(D.C. No. 1:18-CV-00594-CMA-MEH)
COUNTY OF BOULDER, acting by and (D. Colo.)
through the Board of County
Commissioners; DEB GARDNER, in her
official capacity as a Boulder County
Commissioner; CINDY DOMENICO, in
her official capacity as a Boulder County
Commissioner; ELISE JONES, in her
official capacity as a Boulder County
Commissioner,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before LUCERO, O’BRIEN, and CARSON, Circuit Judges.
_________________________________
Plaintiffs brought this action under 42 U.S.C. § 1983 asserting that defendants
had deprived them of their interest in housing rehabilitation funds without due
*
After examining the briefs and appellate record, this panel has
determined unanimously to honor the parties’ request for a decision on the briefs
without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is
therefore submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral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.
process of law. They also asserted defendants had violated Title II of the Americans
with Disabilities Act (ADA), 42 U.S.C. § 12132. The district court dismissed
plaintiffs’ claims with prejudice. It denied their motion to withdraw or dismiss the
ADA claim, finding that motion to be moot. Plaintiffs appeal. We affirm, but
remand to modify the dismissal of the ADA claim to be without prejudice.
I.
The district court summarized the facts underlying plaintiffs’ First Amended
Complaint (FAC) as follows:
In September 2013, Plaintiffs’ home was damaged by heavy rainfall
and flooding that caused Boulder County to be designated a local and
federal disaster area. On December 4, 2014, Plaintiffs were awarded
$32,812 in Community Development Block Grant-Disaster Recovery
(CDBG-DR) funds for the purpose of repairing the flood-related damage.
Based on conversations Plaintiffs had with personnel involved with the
CDBG-DR program, Plaintiffs believed that the remainder of the $100,000
maximum per residence had been reserved for them as well.
On February 3, 2015, Plaintiff Bruzga signed a Beneficiary
Agreement, which provided, inter alia, that “Grantee’s obligation under
this Agreement to provide funds for housing rehabilitation funding is
expressly made contingent on [Plaintiff Bruzga’s] continued eligibility for
and compliance with Grantee’s CDBG-DR program.”
However, by letter dated March 11, 2016, the Board of County
Commissioners informed Plaintiff Bruzga that the CDBG-DR award had
been canceled. The letter indicated that the reason for cancelation was
Plaintiff Bruzga’s failure to comply with various CDBG-DR program
conditions. Specifically, the letter noted that Plaintiff Bruzga had not
complied with the Beneficiary Agreement because he allegedly failed to:
(1) “[r]emedy any existing Land Use Code and Building Code violations
relating to unauthorized work at [Plaintiffs’] home”; (2) “[r]epair . . . any
damage or unauthorized work on [Plaintiffs’] home”; and (3) submit a
“signed Contractor Addendum and . . . project schedule that would assure
the County that [Plaintiffs’] project was making progress toward
completion.” At that point, the County had made payments to various
contractors totaling $6,869.58.
2
Plaintiffs dispute the factual assertions in the termination letter,
arguing that the County’s revocation of their benefits was wrongful. In the
operative First Amended Complaint, Plaintiffs claim that the remainder of
the CDBG-DR award, and other funding they discussed with the County,
constitutes an entitlement which was deprived by the County without due
process of law. Plaintiffs also seek injunctive relief under the [ADA].
R., Vol. II at 218-20 (citations and footnote omitted).
Defendants filed a motion to dismiss the FAC. They argued plaintiffs had
failed to state a procedural due process claim because CDBG-DR Home
Rehabilitation funds did not constitute a property right protected by the United States
Constitution. They further argued that Bruzga lacked standing to assert his ADA
claim and that the licensing regulations he challenged did not violate the ADA.1
In response plaintiffs argued that their claim was not based solely on a
statutory right to CDBG-DR funds but rested on a contractually based property right
created by the Beneficiary Agreement and related documents. Defendants replied
that plaintiffs had failed to state a claim for deprivation of a contractually based
property right because they did not allege that a state-law action for breach of
contract would be inadequate to compensate them for the alleged injury.
A magistrate judge assigned to the case recommended that the due-process
claim be dismissed because plaintiffs did not have “an individual, vested property
1
Bruzga’s ADA claim alleged that under Boulder’s land-use rules and
practices, homeowners may ordinarily perform work on their own homes even if they
are not licensed contractors. As a disabled homeowner Bruzga was incapable of
performing such work for himself. But if he hired and supervised laborers to
complete work that required a building permit, Boulder would require him to employ
only licensed contractors, thus imposing a limitation on his ability to perform repair
work that did not restrict non-disabled homeowners.
3
interest in federal disaster funds that are appropriated like CDBG-DR award and
loans,” id. at 82, and because they failed to cite any case law that supported the
asserted contractually based property right. He also determined that plaintiff Bruzga
lacked standing to assert his ADA claim and had failed to state a claim for an ADA
violation.
In their objections to the magistrate judge’s recommendation, plaintiffs
clarified that their claim was based on either an express or implied contract with
Boulder County. They contended the existence of a state-law contractual remedy did
not preclude them from pursuing a separate, contractually based due-process claim
based on Boulder County’s arbitrary breach of the contract.
Plaintiffs later filed a motion to withdraw or dismiss the ADA claim. They
stated that a Boulder County building official had assured them they could undertake
certain repair efforts at their house without employing licensed contractors. In view
of this representation, they asked the district court to dismiss the ADA claim without
prejudice.
The district court adopted the magistrate judge’s report and recommendation.
But it declined to address whether plaintiffs had a contractually based protected
property interest. It reasoned instead that assuming plaintiffs had such an interest,
they failed to show that a post-deprivation, state-law action for breach of contract
would not provide them with adequate process. Such a state-court action, the district
court reasoned, would fully protect the plaintiffs’ alleged interest.
4
The district court also adopted the magistrate judge’s recommendations
concerning the ADA claim, noting plaintiffs’ lack of objection to it. It then
dismissed all of plaintiffs’ claims with prejudice, noting that an amended complaint
would also be subject to dismissal for the reasons it had stated.
II.
We review de novo the district court’s order dismissing a complaint for failure
to state a claim. See Sylvia v. Wisler, 875 F.3d 1307, 1313 (10th Cir. 2017). “To
survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).
III.
To state a procedural due process claim under § 1983, a plaintiff must allege
both that he had “a protected interest such that the due process protections were
applicable” and that he was not “afforded an appropriate level of process.”
Merrifield v. Bd. of Cty. Comm’rs, 654 F.3d 1073, 1078 (10th Cir. 2011) (internal
quotation marks omitted). In their opening appeal brief plaintiffs address only the
first element: whether they had a protected property interest.2 They do not challenge
the district court’s finding that they failed to satisfy the second element of their
claim: that they were not deprived of an appropriate level of process because they
2
Although plaintiffs make passing references to Boulder County’s failure
to provide them with a hearing, see Aplt. Opening Br. at 8, 14, 15, 17, they do not
challenge the district court’s conclusion that a state-court breach of contract action
would provide them with adequate process.
5
could pursue a state-law breach-of-contract action. Failure to challenge this finding
justifies affirmance of the district court’s dismissal. See Starkey ex rel. A.B. v.
Boulder Cty. Soc. Servs., 569 F.3d 1244, 1252 (10th Cir. 2009) (“When an appellant
does not challenge a district court’s alternate ground for its ruling, we may affirm the
ruling.”); see also Nixon v. City & Cty. of Denver, 784 F.3d 1364, 1366 (10th Cir.
2015) (“The first task of an appellant is to explain to us why the district court’s
decision was wrong.”).
In their reply brief, plaintiffs present an argument that potentially implicates
the second due-process factor. They argue that under Knick v. Township of Scott,
139 S. Ct. 2162 (2019), they may pursue their procedural due process claim even if
state-court remedies are available. Ordinarily, arguments not raised until a reply
brief are waived. See Starkey, 569 F.3d at 1259. But Knick was decided after
plaintiffs filed their opening brief. Assuming this timing provides grounds to
consider the argument notwithstanding their silence concerning the state-law
breach-of-contract issue in their opening brief, plaintiffs fail to show that Knick
requires reversal.
In Knick the Supreme Court addressed whether a plaintiff who brings a claim
under the Takings Clause of the Fifth Amendment must first seek just compensation
under state law—potentially depriving him of his federal claim through the
application of claim preclusion—before bringing his federal takings claim in federal
court. See Knick, 139 S. Ct. at 2167. Overruling prior authority, the Supreme Court
held “the property owner has suffered a violation of his Fifth Amendment rights
6
when the government takes his property without just compensation, and therefore
may bring his claim in federal court under § 1983 at that time.” Id. at 2168. The
Court reasoned that “[t]he Fifth Amendment right to full compensation arises at the
time of the taking, regardless of [state] post-taking remedies that may be available to
the property owner.” Id. at 2170.
Plaintiffs fail to show the reasoning in Knick affects their procedural due
process claim. The right discussed in Knick is “the irrevocable right to just
compensation immediately upon a taking . . . by which the landowner has already
suffered a constitutional violation” irrespective of the availability of a subsequent
compensation remedy, id. at 2172 (internal quotation marks omitted), whereas a
procedural due process violation does not occur until or unless the plaintiff has been
deprived of adequate process—that is, of “such procedural protections as the
particular situation demands,” M.A.K. Inv. Grp., LLC v. City of Glendale, 897 F.3d
1303, 1309 (10th Cir. 2018). Plaintiffs fail to show that Knick has undermined the
rule that a state breach-of-contract action may provide all the process that is due to
redress a contractually based deprivation.
IV.
Plaintiffs also argue the district court should have granted them leave to amend
their complaint to present a claim that defendants retaliated against them for the
exercise of their First Amendment rights. To establish that they requested this relief
in district court, they cite their objection to the magistrate judge’s recommendation.
See R., Vol. II at 113 (stating that if the court were inclined to grant the motion to
7
dismiss, plaintiffs requested the right to amend the FAC, “in order to advance other
grounds for this civil rights matter. Those grounds would include violation of
Plaintiffs’ First Amendment rights.”).3 But they fail to show they followed up with a
motion seeking leave to amend the FAC.4 The mere suggestion that plaintiffs would
request leave to amend their complaint was insufficient to invoke the district court’s
authority to permit an amendment. See, e.g., Garman v. Campbell Cty. Sch. Dist.
No. 1, 630 F.3d 977, 986 (10th Cir. 2010).
3
Plaintiffs also argue generally that the district court “did not address
alternative claims for relief that are plausible under the Amended Complaint.” Aplt.
Opening Br. at 22. They cite Barrett v. Tallon, 30 F.3d 1296 (10th Cir. 1994),
presumably relying on our statement in that case that “[a] complaint should not be
dismissed under Rule 12(b)(6) merely because plaintiff’s allegations do not support
the legal theory he intends to proceed on, and certainly not when other theories are
apparent on the face of the complaint.” Id. at 1299 (citation and internal quotation
marks omitted). Assuming Barrett remains good law under the current standard for
evaluating a complaint, see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562-63 (2007)
(overruling Conley v. Gibson, 355 U.S. 41, 45-46 (1957)), plaintiffs do not specify a
potential claim that should have been apparent from the allegations of their
complaint, other than their proposed First Amendment retaliation claim. But that
prospective claim did not prevent dismissal under Barrett, for several reasons. First,
unlike the potential “garden variety” fraud and conversion claims that could have
supplanted the deficiently pleaded RICO claim in Barrett, 30 F.3d at 1299, plaintiffs’
proposed First Amendment retaliation claim would have changed the essential nature
of their complaint. Second, our de novo review persuades us that no such claim is
facially evident in the FAC. Finally, plaintiffs’ statement they would seek leave to
amend to state such a claim is further evidence that the operative FAC did not
already contain such a claim.
4
A district court should not dismiss for failure to state a claim in pro se
cases unless it is obvious the plaintiff cannot prevail on the alleged facts and
amendment would be futile. See Kay v. Bemis, 500 F.3d 1214, 1217 (10th Cir. 2007).
The district court determined that an amended complaint, at least one containing the
same claims, would be subject to dismissal for the reasons it had stated. We also
note that although plaintiffs are proceeding pro se, Bruzga is a licensed attorney.
8
V.
Finally, plaintiffs complain that the district court ruled on their ADA claim
without jurisdiction, because the claim had become moot by the time the district
court made what they characterize as an “advisory” ruling. Aplt. Opening Br. at 23.
Plaintiffs do not object to dismissal of their ADA claim—in fact, they requested it.
Their only controversy appears to be with the fact that the district court dismissed the
claim by adopting the magistrate judge’s recommendation rather than by declining to
rule on mootness grounds. But the district court could choose between jurisdictional
defects (standing vs. mootness) as a basis for dismissal, without thereby issuing an
impermissible, advisory decision. See Citizen Ctr. v. Gessler, 770 F.3d 900, 906
(10th Cir. 2014) (addressing mootness before standing, explaining that “[b]ecause
there is no mandatory sequencing of nonmerits issues, we have leeway to choose
among threshold grounds for denying audience to a case on the merits” (brackets and
internal quotation marks omitted)). We discern no error in the dismissal based on
lack of standing.
That said, because the dismissal was for lack of standing it should have been
without prejudice. We therefore must remand the matter to the district court to
modify its judgment accordingly. See Coll v. First Am. Title Ins. Co., 642 F.3d 876,
892 (10th Cir. 2011).
VI.
We affirm the district court’s judgment dismissing plaintiffs’ complaint but
remand with instructions to modify its dismissal of the ADA claim from a dismissal
9
with prejudice to a dismissal without prejudice. We grant plaintiffs’ motion to
amend (supplement) the record on appeal with district court CM/ECF documents
14-1 and 34-1. The clerk of court is directed to prepare a supplemental record
containing these documents.5
Entered for the Court
Joel M. Carson III
Circuit Judge
5
Although Bruzga is an attorney, in view of plaintiffs’ pro se status this
court previously determined it would take responsibility for assembling the record on
appeal rather than relying on an appendix.
10