The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.
SUMMARY February 6, 2020
2020COA21
No. 18CA2136, DIA Brewing, LLC v. MCE-DIA, LLC — Civil Procedure — Amended and Supplemental Proceedings — Amendments as a Matter of Course
A division of the court of appeals analyzes when an order for
dismissal of claims without prejudice is an appealable final
judgment that cuts off a plaintiff’s right to amend as a matter of
course. Under the facts presented, the majority holds that the
plaintiff had the right to file an amended complaint as a matter of
course even though the district court had dismissed its original
claims without prejudice.
The dissent would affirm, concluding that the orders
dismissing the plaintiff’s claims were final judgments. COLORADO COURT OF APPEALS 2020COA21
Court of Appeals No. 18CA2136 City and County of Denver District Court No. 18CV30611 Honorable Brian R. Whitney, Judge
DIA Brewing Co., LLC, a Colorado limited liability company,
Plaintiff-Appellant,
v.
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; Rohit Patel; and Richard E. Schaden,
Defendants-Appellees.
JUDGMENT REVERSED AND CASE REMANDED WITH DIRECTIONS
Division VII Opinion by JUDGE LIPINSKY Webb, J., concurs Fox, J., dissents
Announced February 6, 2020
Jones & Keller, P.C., G. Stephen Long, Christopher S. Mills, Denver, Colorado; The Law Offices of George A. Barton, P.C., George A. Barton, Denver, Colorado; Connelly Law, LLC, Sean Connelly, Denver, Colorado, for Plaintiff-Appellant
Merchant & Gould P.C., Peter A. Gergely, Denver, Colorado; Woodrow & Peluso, LLC, Steven L. Woodrow, Denver, Colorado, for Defendants-Appellees 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 Haddon, Morgan and Foreman, P.C., Pamela Robillard Mackey, Saskia A. Jordan, Adam Mueller, David G. Maxted, Denver, Colorado for Defendant- Appellee Richard E. Schaden ¶1 Plaintiff, DIA Brewing Co., LLC (Brewing), had several options
after the district court dismissed its claims without prejudice, if it
wished to continue litigating against the defendants:
• move for leave to file an amended complaint that remedied the
defects in its original pleading;
• file an amended complaint with the defendants’ written
consent; or
• commence a new case, with a new complaint.
¶2 But Brewing chose a different strategy that raises novel issues
under Colorado law: it filed an amended complaint, purportedly as
a matter of course under C.R.C.P. 15(a), despite the dismissal of its
claims.
¶3 We decide three questions of law. First, we hold that, under
the facts of this case, the orders dismissing Brewing’s claims
without prejudice were not final judgments. Second, because the
dismissal orders were not final judgments, we hold that Brewing
retained the right to amend its complaint as a matter of course
under C.R.C.P. 15(a). Third, we hold that the district court erred by
deciding that Brewing’s amended complaint failed under the futility
1 of amendment doctrine. Thus, we reverse the order striking
Brewing’s amended complaint and remand for further proceedings.
I. Relevant Facts and Procedural History
¶4 Brewing unsuccessfully bid for a contract to establish
restaurants and related businesses at Denver International Airport
(DIA). The businesses included a Colorado-themed microbrewery,
two burger restaurants, and a coffee bar. DIA issued publicly
available rankings of the five qualified bidders, which ranked
Brewing fourth.
¶5 Brewing then sued several public and private defendants,
alleging a bid-rigging conspiracy between defendants MCE-DIA,
LLC, the winner of the contract; 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, who are affiliates of MCE-
DIA, LLC; Richard E. Schaden, the CEO of the hamburger chain
Smashburger; and DIA officials (who are no longer parties to the
case).
¶6 More specifically, Brewing alleged that the owners of MCE-DIA
offered partial ownership of the company to affiliates of one of the
2 DIA officials in exchange for the official’s help in awarding the
contract to MCE-DIA. Brewing asserted that DIA’s ranking of the
bidders was tainted and invalid based on defendants’ alleged
wrongful conduct.
¶7 Brewing pleaded claims for bid-rigging in violation of section
6-4-106, C.R.S. 2019; bribery and other predicate acts in violation
of the Colorado Organized Crime Control Act, § 18-17-104, C.R.S.
2019; tortious interference with prospective business opportunity;
and civil conspiracy.
¶8 The nongovernmental defendants moved to dismiss for lack of
subject matter jurisdiction under C.R.C.P. 12(b)(1), failure to plead
fraud with particularity under C.R.C.P. 9(b), and failure to state
claims on which relief could be granted under C.R.C.P. 12(b)(5).
Brewing did not amend its complaint before the district court ruled
on the dismissal motions. But, in its briefs opposing the motions to
dismiss, Brewing requested leave to amend its complaint if the
court determined that “additional averments are required,” as well
as a hearing on the dismissal motions.
¶9 After considering the materials filed by the defendants in
support of their motions to dismiss, including the list ranking the
3 bidders (which was not incorporated into the complaint), but
without conducting a hearing, the district court concluded that
Brewing lacked standing to assert any of its claims and had failed
to plead fraud with particularity. In a series of orders (the June
orders), the court dismissed the complaint in its entirety. The
dismissal orders did not indicate whether the case was dismissed
with or without prejudice.
¶ 10 Brewing did not move under C.R.C.P. 59 or 60 to vacate or set
aside the June orders. Instead, the day before the time to appeal
the June orders expired, Brewing filed an amended complaint,
contending that it had a right to amend as a matter of course under
C.R.C.P. 15(a). The defendants moved to strike and dismiss the
amended complaint, both on the grounds articulated in their
original dismissal motions and based on the June orders.
¶ 11 The district court entered an order (the November order) ruling
that the amended complaint was “denied for filing.” The court said
that Brewing had not “preserved amendment as a matter of course”
when it included an amendment request in its responses to the
dismissal motions and had not sought relief from the June orders
under C.R.C.P. 59. Under the court’s reasoning, Brewing could no
4 longer amend as a matter of course after entry of the June orders
because “whether with or without prejudice, the dismissal of all
claims by the Court would be considered an ‘order to or from which
an appeal lies’” and thus were final judgments. In the alternative,
the court ruled that the amended complaint failed under the futility
of amendment doctrine because, like Brewing’s original complaint,
it neither established standing nor pleaded fraud with particularity.
¶ 12 Following entry of the November order, Brewing appealed the
June and November orders. The defendants moved to dismiss the
appeal. A motions division of this court dismissed the appeal of the
June orders as untimely but allowed the appeal to proceed with
respect to the November order. Brewing does not challenge the
motions division’s partial dismissal. Defendants do not challenge
our jurisdiction over the November order.
II. Analysis
A. Right to Amend Versus Leave to Amend
¶ 13 C.R.C.P. 15(a) allows for three types of amendment:
amendment as a matter of course, amendment by leave of court,
and amendment with the adverse party’s written consent. “A party
may amend his pleading once as a matter of course at any time
5 before a responsive pleading is filed . . . . Otherwise, a party may
amend his pleading only by leave of court or by written consent of
the adverse party; and leave shall be freely given when justice so
requires.” C.R.C.P. 15(a). A motion to dismiss is not a responsive
pleading. Davis v. Paolino, 21 P.3d 870, 873 (Colo. App. 2001).
¶ 14 Brewing contends that it had the right to amend its complaint
as a matter of course, even after dismissal of its original claims,
because the defendants never filed a responsive pleading and the
court dismissed its original claims without prejudice. Brewing
takes the position that it filed the amended complaint as a matter of
course. Thus, whether the district court abused its discretion in
denying Brewing leave to amend its complaint is not before us.
¶ 15 Defendants contend that we should review the November order
for an abuse of discretion. They argue that Brewing’s delay in
attempting to amend, as well as other factors, gave the district
court discretion to dismiss the amended complaint. But we agree
with Brewing that whether it had the right to amend as a matter of
course under C.R.C.P. 15(a) and whether the June orders cut off
that right are questions of law that we review de novo. So we review
de novo whether the district court committed legal error when it
6 concluded that Brewing had lost its absolute right to amend as a
matter of course. See DCP Midstream, LP v. Anadarko Petroleum
Corp., 2013 CO 36, ¶ 24, 303 P.3d 1187, 1193.
B. The Entry of a Final Judgment Cuts off a Plaintiff’s Right to Amend as a Matter of Course Under C.R.C.P. 15(a)
¶ 16 The entry of a final, appealable judgment cuts off the right to
amend, despite the language of C.R.C.P. 15(a). Harris v. Reg’l
Transp. Dist., 155 P.3d 583, 587 (Colo. App. 2006); Estate of Hays
v. Mid-Century Ins. Co., 902 P.2d 956, 959 (Colo. App. 1995); Wilcox
v. Reconditioned Office Sys., 881 P.2d 398, 400 (Colo. App. 1994).
The version of Fed. R. Civ. P. 15(a) in effect before the 2009
amendments was identical to the current version of C.R.C.P. 15(a).
Thus, cases interpreting the older version of the federal rule are
persuasive. Harris, 155 P.3d at 588. Federal courts construing the
earlier version of Fed. R. Civ. P. 15(a) uniformly reached the same
conclusion: the right to amend is cut off on entry of a final
judgment. Tool Box v. Ogden City Corp., 419 F.3d 1084, 1087 (10th
Cir. 2005) (listing cases applying this rule); accord 3 James Wm.
Moore et al., Moore’s Federal Practice § 15.97[2] (2d ed. 1980)
(noting that the absolute right to amend is lost after final judgment
7 is entered). (Under the current version of the federal rule, a party
may amend as a matter of course within twenty-one days after
service of either a responsive pleading or a Fed. R. Civ. P. 12(b)
motion. Fed. R. Civ. P. 15(a). The Colorado version of Rule 15(a)
does not refer to Rule 12(b).)
¶ 17 The Wilcox division reasoned that “when final judgment is
entered before a responsive pleading is filed, the liberal approach of
C.R.C.P. 15 must be balanced against the value of preserving the
integrity of final judgments.” 881 P.2d at 400. The division, and
later divisions addressing the issue, held that the right to amend is
lost after entry of a final judgment because “the concerns of finality
in litigation become even more compelling and the litigant has had
the benefit of a day in court, in some fashion, on the merits of his
claim.” Id. (quoting Union Planters Nat’l Leasing, Inc. v. Woods, 687
F.2d 117, 121 (5th Cir. 1982)).
¶ 18 But, in the absence of a final judgment, our supreme court
has said that the right to amend a complaint as a matter of course
under Rule 15(a) survives dismissal. Passe v. Mitchell, 161 Colo.
501, 502, 423 P.2d 17, 17-18 (1967) (holding that in the absence of
a responsive pleading, “no final judgment should have been entered
8 in the absence of a showing of record that plaintiff waived the right
to file an amended complaint”); Wistrand v. Leach Realty Co., 147
Colo. 573, 576, 364 P.2d 396, 397 (1961) (After the district court
entered a dismissal order without prejudice, “[t]o now urge that the
dismissal prejudiced Leach’s right to have his claim adjudicated
does violence to [Rule 15(a)] and the court’s order.”); Renner v.
Chilton, 142 Colo. 454, 456, 351 P.2d 277, 278 (1960) (“The
language of [Rule 15(a)] is, however, clear and unequivocal. It
expressly allows one amendment as a matter of right before the
answer or reply is filed . . . .”).
¶ 19 We perceive no conflict between the Wilcox and Renner lines of
cases. Renner and its progeny allow a plaintiff to amend its
complaint as a matter of course consistent with Rule 15(a); Wilcox,
Estate of Hays, and Harris extinguish that right once the district
court enters a final judgment. (We need not address whether
Brewing unreasonably delayed in exercising its right to amend as a
matter of course. Brewing filed its amended complaint forty-eight
days after the district court dismissed its original complaint, and
the defendants do not argue that Brewing’s amended complaint was
untimely. See 6 Arthur R. Miller, Mary Kay Kane & A. Benjamin
9 Spencer, Federal Practice and Procedure § 1483, Westlaw (3d ed.
database updated Aug. 2019) (“In general . . . a party could amend
as of course within a reasonable time after an order dismissing the
complaint had been entered, inasmuch as no responsive pleading
had been served.”) (emphasis added).)
¶ 20 This reconciliation strikes an appropriate balance between the
liberal thrust of modern pleading standards, see C.R.C.P. 1(a)
(“These rules shall be liberally construed, administered, and
employed by the court and the parties to secure the just, speedy,
and inexpensive determination of every action.”), and the policy
concern, identified in Wilcox, to preserve finality once “the litigant
has had the benefit of a day in court . . . on the merits of his claim,”
Wilcox, 881 P.2d at 400.
C. Whether the District Court Dismissed Brewing’s Claims Under C.R.C.P. 12(b)(1) or 12(b)(5) Is Inconsequential to the Finality Analysis
¶ 21 The cases addressing a party’s right to amend following
dismissal of its claims did not limit their analysis to Rule 12(b)(5)
dismissals. See Passe, 161 Colo. at 502, 423 P.2d at 17-18 (unless
the plaintiff waives its right to file an amended complaint, the
district court cannot dismiss an action with prejudice); Wistrand,
10 147 Colo. at 576, 364 P.2d at 397 (holding, without qualification,
that the plaintiff could amend its complaint following a dismissal
without prejudice); Renner, 142 Colo. at 456, 351 P.2d at 278
(noting that there are no exceptions to Rule 15(a)’s right to file an
amended complaint before the filing of a responsive pleading).
¶ 22 Likewise, federal courts, which have more fully developed case
law in this area, do not distinguish between Rule 12(b)(1) and
12(b)(5) dismissals for purposes of determining whether a party may
file a post-dismissal amended pleading. See, e.g., Northlake Cmty.
Hosp. v. United States, 654 F.2d 1234, 1240 (7th Cir. 1981) (“The
Federal Rules of Civil Procedure . . . allow for the liberal amendment
of pleadings, particularly to cure jurisdictional defects.”); Lone Star
Motor Imp., Inc. v. Citroen Cars Corp., 288 F.2d 69, 75-77 (5th Cir.
1961) (holding that the district court erred in refusing to allow
plaintiff to cure subject matter jurisdiction defect by amended
complaint); Keene Lumber Co. v. Leventhal, 165 F.2d 815, 823 (1st
Cir. 1948) (stating, in dicta, that the plaintiff could amend its
complaint to establish diversity of citizenship “as a matter of right”).
¶ 23 Further, two Colorado cases say that a plaintiff whose
complaint is dismissed may elect either to stand by the dismissed
11 complaint and appeal, or to file an amended complaint. Passe, 161
Colo. at 502, 423 P.2d at 17-18; Wistrand, 147 Colo. at 576, 364
P.2d at 397.
¶ 24 Lastly, our case law reflects the tension regarding whether a
district court can consider only evidence “supportive of standing,”
Colo. Gen. Assembly v. Lamm, 700 P.2d 508, 516 (Colo. 1985), or if
it can consider “any . . . evidence submitted on the issue of
standing,” Bd. of Cty. Comm’rs v. Bowen/Edwards Assocs., 830
P.2d 1045, 1053 (Colo. 1992). This uncertainty disfavors crediting
the evidence proffered by the party that seeks to defeat standing as
a basis to deny the party that seeks to establish standing the right
to amend under Rule 15(a), particularly where, as here, Brewing
sought, but was not granted, a hearing.
¶ 25 Of course, judicial economy always deserves consideration.
Allowing a plaintiff to amend a complaint after a Rule 12(b)(1)
dismissal — as opposed to taking an immediate appeal — will result
in further proceedings before the district court. Yet the same would
be true of an amendment after a Rule 12(b)(5) dismissal. And our
supreme court has instructed district courts “not [to] impose
arbitrary restrictions on making timely amendments,” and that our
12 procedural rules should “[f]ocus . . . upon resolution of actions on
their merits . . . .” Benton v. Adams, 56 P.3d 81, 85 (Colo. 2002).
We must heed both admonitions.
¶ 26 We next consider whether the June orders constituted final
judgments and conclude that they did not.
D. The June Orders Were Not Final Judgments
1. The District Court Dismissed Brewing’s Initial Claims Without Prejudice
¶ 27 Because the June orders did not specify whether the district
court was dismissing Brewing’s initial claims with or without
prejudice, we must determine whether the dismissals were with or
without prejudice. The registry of actions said that the dismissals
were without prejudice. But the content of an order, not its title,
determines whether it is a final judgment. Cyr v. Dist. Court, 685
P.2d 769, 770 (Colo. 1984). A “[j]udgment” is “a decree and order to
or from which an appeal lies.” C.R.C.P. 54(a).
¶ 28 C.R.C.P. 41(b)(3) presumes that dismissal orders that do not
specify with or without prejudice must be construed as effecting a
dismissal without prejudice. See Graham v. Maketa, 227 P.3d 516,
517 (Colo. App. 2010) (“The dismissal order did not specify whether
13 the action was being dismissed ‘with’ or ‘without’ prejudice, and so
it is presumed to be without prejudice.”).
¶ 29 Still, this conclusion does not end our analysis of whether the
June orders were final judgments because, as we explain in the
next section, dismissals without prejudice may be final judgments.
2. The June Orders Were Not Final Judgments Because Brewing Could Have Cured the Defects in Its Claims Through Amendment
¶ 30 The district court’s June orders dismissed Brewing’s claims
because Brewing lacked standing and because Brewing failed to
plead fraud with particularity. This first basis was a dismissal for
lack of jurisdiction under C.R.C.P. 12(b)(1) because standing is a
jurisdictional prerequisite. C.W.B., Jr. v. A.S., 2018 CO 8, ¶ 16, 410
P.3d 438, 442; City of Greenwood Vill. v. Petitioners for Proposed
City of Centennial, 3 P.3d 427, 436 (Colo. 2000). So, the question is
whether the C.R.C.P. 12(b)(1) dismissals were final judgments.
¶ 31 A long line of Colorado cases holds that a dismissal without
prejudice constitutes a final judgment only if the action “cannot be
saved” by an amended complaint. See, e.g., Schoenewald v. Schoen,
132 Colo. 142, 143-44, 286 P.2d 341, 341 (1955) (dismissal without
prejudice was not a final judgment); Avicanna Inc. v. Mewhinney,
14 2019 COA 129, ¶ 1 n.1, ___ P.3d ___, ___ n.1 (noting that, “[w]here
. . . the circumstances of the case indicate that the action cannot be
saved . . . , dismissal without prejudice qualifies as a final
judgment”); Harris, 155 P.3d at 585 (same); Burden v. Greeven, 953
P.2d 205, 207 (Colo. App. 1998) (same); Carter v. Small Bus. Admin.,
40 Colo. App. 271, 272-73, 573 P.2d 564, 566 (1977) (same).
¶ 32 The most common situation where a complaint “cannot be
saved” occurs when further proceedings would be barred by a
statute of limitations. E.g., Harris, 155 P.3d at 585; B.C. Inv. Co. v.
Throm, 650 P.2d 1333, 1335 (Colo. App. 1982). Other cases involve
clear preemption, e.g., Richardson v. United States, 336 F.2d 265,
266 n.1 (9th Cir. 1964); claims that are “so patently frivolous that
they cannot be saved,” Rubins v. Plummer, 813 P.2d 778, 779 (Colo.
App. 1990); and other “special circumstance[s],” In re Custody of
Nugent, 955 P.2d 584, 587 (Colo. App. 1997).
¶ 33 This approach to determining the finality of dismissal orders
comports with the federal courts’ treatment of the issue. While
federal courts articulate the test in different ways, the gist of the
rule remains constant: a dismissal without prejudice is not a final
judgment if the plaintiff can cure deficiencies through an amended
15 complaint. See, e.g., Goode v. Cent. Va. Legal Aid Soc’y, 807 F.3d
619, 623 (4th Cir. 2015) (“An order dismissing a complaint without
prejudice is not an appealable final order . . . if ‘the plaintiff could
save his action by merely amending his complaint.’” (quoting
Domino Sugar Corp. v. Sugar Workers Local Union 392, 10 F.3d
1064, 1066-67 (4th Cir. 1993))); Moya v. Schollenbarger, 465 F.3d
444, 448-49 (10th Cir. 2006) (“[I]n this circuit, ‘whether an order of
dismissal is appealable’ generally depends on ‘whether the district
court dismissed the complaint or the action. A dismissal of the
complaint is ordinarily a non-final, nonappealable order (since
amendment would generally be available), while a dismissal of the
entire action is ordinarily final.’” (quoting Mobley v. McCormick, 40
F.3d 337, 339 (10th Cir. 1994))); Ordower v. Feldman, 826 F.2d
1569, 1572 (7th Cir. 1987) (“If a district court’s dismissal leaves a
plaintiff free to file an amended complaint, the dismissal is not
considered a final appealable order.”); Borelli v. City of Reading, 532
F.2d 950, 951 (3d Cir. 1976) (holding that “an implicit invitation to
amplify the complaint is found in the phrase ‘without prejudice’”).
¶ 34 Viewing the June orders through this lens, Brewing could have
saved its allegations related to standing in the original complaint,
16 which the district court deemed insufficient, through an amended
complaint. The court held that Brewing had not “sufficiently
established actual injury to create standing” because it offered no
evidence to support its allegation — i.e., it pleaded “[u]pon
information and belief” — that it “was actually the highest scoring
entity bidding” on the request for proposals. The court relied
entirely on a summary ranking provided by MCE-DIA in support of
its motion to dismiss, which showed that Brewing finished fourth of
five bidders. So, in the court’s view, Brewing had not sufficiently
shown injury in fact.
¶ 35 Brewing could have cured this defect by pleading additional
facts to discredit the entire summary ranking, as it does in its
amended complaint. Specifically, the amended complaint alleges in
detail how Bhavesh Patel, the alleged insider at DIA, manipulated
the voting process to ensure that MCE-DIA won the contract. (The
amended complaint alleges how Bhavesh Patel designed the judges’
scorecards and manipulated DIA’s scoring tabulation matrix to
ensure that MCE-DIA would prevail, and how he sought to
improperly influence the judging through another alleged co-
conspirator. These allegations are supported by an affidavit from
17 an investigator who interviewed an official at DIA involved with the
request-for-proposals process.)
¶ 36 Lastly, the motions division’s conclusion that the June orders
constituted appealable final judgments, and that Brewing had
missed the deadline to appeal those orders, do not preclude us from
holding that the June orders were not final judgments for purposes
of amendment as a matter of course. The motions division neither
considered nor determined whether Brewing had the right to amend
as a matter of course following the entry. And “[a] decision of a
motions division is not always binding.” Cordova v. Indus. Claim
Appeals Office, 55 P.3d 186, 189 (Colo. App. 2002); see Allison v.
Engel, 2017 COA 43, ¶ 22, 395 P.3d 1217, 1222 (deciding that the
court is not bound by a motions division’s determination of
jurisdiction).
¶ 37 In sum, based on consistent precedent from divisions of this
court and the federal courts, we conclude that the June orders were
not final judgments barring amendment as a matter of course
under Rule 15(a) because Brewing could have amended its
complaint to cure the deficiencies noted in the June orders.
18 III. The District Court Erred by Rejecting Brewing’s Amended Complaint Under the Futility of Amendment Doctrine
¶ 38 As explained above, in the November order, the district court
held that Brewing could not amend its complaint as a matter of
course and, moreover, if Brewing had moved for leave to amend
under C.R.C.P. 15(a), its motion would fail under the futility of
amendment doctrine.
¶ 39 Futility of amendment is a basis to deny a motion for leave to
amend a pleading. Benton, 56 P.3d at 85-86. A district court may
deny a motion for leave to amend on grounds of futility if the
proposed pleading could not survive a motion to dismiss. See id. at
85. “A proposed amendment would clearly be futile if, among other
things, it failed to state a legal theory or was incapable of
withstanding a motion to dismiss.” Vinton v. Virzi, 2012 CO 10,
¶ 13, 269 P.3d 1242, 1246.
¶ 40 Futility of amendment does not apply to amended pleadings
filed as a matter of course, however. By definition, a party
amending as a matter of course does not need the court’s leave to
submit its amended pleading. “When the plaintiff has the right to
file an amended complaint as a matter of course, . . . the plain
19 language of Rule 15(a) shows that the court lacks the discretion to
reject the amended complaint based on its alleged futility.”
Williams v. Bd. of Regents, 477 F.3d 1282, 1292 (11th Cir. 2007)
(interpreting the federal analogue to C.R.C.P. 15(a)). Of course, an
opposing party could move for dismissal of the amended pleading
under C.R.C.P. 12(b), which identifies the grounds for dismissal of a
pleading.
¶ 41 Here, the district court improperly analyzed Brewing’s
amended complaint under the futility of amendment doctrine
because Brewing filed the amended complaint as a matter of course
and was not seeking leave of court to do so. For this reason, we
reverse the district court’s decision to disallow Brewing’s amended
complaint under the futility of amendment doctrine. Because
Brewing had the right to file its amended complaint as a matter of
course, the next procedural step following remand will be
defendants’ submission of an “answer or other response” pursuant
to C.R.C.P. 12(a)(1).
IV. Conclusion
¶ 42 The judgment is reversed. The case is remanded for further
proceedings consistent with this opinion.
20 JUDGE WEBB concurs.
JUDGE FOX dissents.
21 JUDGE FOX, dissenting.
¶ 43 I agree that two questions of law are dispositive of this appeal.
The first is whether a district court’s order dismissing all claims
under C.R.C.P. 12(b)(1) on the basis that the plaintiff lacks standing
is a final judgment. The second is whether a plaintiff retains an
absolute right to amend its complaint under C.R.C.P. 15(a) after
final judgment is entered. I disagree with the majority that the
June orders were nonfinal judgments and also disagree that, once
final judgments were entered, Brewing retained an absolute right to
amend. I would, therefore, affirm the district court’s order
dismissing plaintiff’s amended complaint.
¶ 44 Because the majority fairly sets out the procedural history and
the operative facts, I will not repeat them here.
I. Analysis
¶ 45 “A party may amend his pleading once as a matter of course at
any time before a responsive pleading is filed.” C.R.C.P. 15(a).
“Otherwise, a party may amend his pleading only by leave of court,”
which “shall be freely given when justice so requires.” Id.
22 ¶ 46 Brewing contends that it had an absolute right to amend its
complaint even after it was dismissed for lack of standing because
the defendants never filed a responsive pleading. 1 Brewing does not
ask this court to construe its filing of the amended complaint as
asking for leave.
¶ 47 Thus, I agree with the majority that we are not reviewing
whether the district court abused its discretion by denying Brewing
leave to amend its complaint. Rather, we are to review de novo
whether the district court committed legal error when it concluded
that Brewing had lost its absolute right to amend. 2 See DCP
Midstream, LP v. Anadarko Petroleum Corp., 2013 CO 36, ¶ 24.
1 The majority correctly recognizes that a motion to dismiss is not a responsive pleading. Davis v. Paolino, 21 P.3d 870, 873 (Colo. App. 2001). 2 Defendants contend that we should review the trial court’s order
dismissing the amended complaint for an abuse of discretion, and argue that Brewing’s delay in attempting to amend, as well as other factors, gave the trial court discretion to dismiss the amended complaint (or more accurately, to deny leave to amend). I agree with Brewing that the questions of whether it had an absolute right to amend under C.R.C.P. 15(a), and whether the June orders cut off that right, are questions of law that warrant de novo review.
23 B. The Entry of a Final, Appealable Judgment Cuts Off a Plaintiff’s Right to Amend Under C.R.C.P. 15(a)
¶ 48 For twenty-five years, divisions of this court have uniformly
held that the entry of a final, appealable judgment cuts off the right
to amend, notwithstanding the language of C.R.C.P. 15(a). Gandy
v. Williams, 2019 COA 118, ¶ 10; Harris v. Reg’l Transp. Dist., 155
P.3d 583, 587 (Colo. App. 2006); Estate of Hays v. Mid-Century Ins.
Co., 902 P.2d 956, 959 (Colo. App. 1995); Wilcox v. Reconditioned
Office Sys., 881 P.2d 398, 400 (Colo. App. 1994).
¶ 49 Before Fed. R. Civ. P. 15(a) was amended in 2009, it was
identical to the Colorado rule, and federal courts construing that
version of the rule uniformly reached the same conclusion: the right
to amend is cut off when a final judgment is entered. 3 Tool Box v.
Ogden City Corp., 419 F.3d 1084, 1087 (10th Cir. 2005) (listing
cases applying this rule); Cooper v. Shumway, 780 F.2d 27, 29
(10th Cir. 1985); accord 3 James Wm. Moore et al., Moore’s Federal
Practice § 15.97[2] (2d ed. 1980) (noting that the absolute right to
amend is lost after final judgment is entered).
3Under the current federal rule, the absolute right to amend is cut off twenty-one days after service of a C.R.C.P. 12(b) motion.
24 ¶ 50 These opinions are sound. The Wilcox division reasoned that
“when final judgment is entered before a responsive pleading is
filed, the liberal approach of C.R.C.P. 15 must be balanced against
the value of preserving the integrity of final judgments.” 881 P.2d
at 400. The division, and later divisions addressing the issue,
struck that balance by holding that the right to amend is lost after
a final judgment is entered because “the concerns of finality in
litigation become even more compelling and the litigant has had the
benefit of a day in court, in some fashion, on the merits of his
claim.” Id. (quoting Union Planters Nat’l Leasing v. Woods, 687 F.2d
117, 121 (5th Cir. 1982)). Instead, before amending, a plaintiff
must move to set aside the dismissal judgment under C.R.C.P. 59
or 60(b). See id.
¶ 51 So, it should have been no surprise to Brewing that under
these precedents, it had the following choices when the district
court dismissed its complaint for lack of standing under C.R.C.P.
12(b)(1):
• timely move to amend the judgment of dismissal under
C.R.C.P. 59 or to vacate the judgment under C.R.C.P.
60;
25 • timely appeal the June 2018 dismissal to this court; or
• file a new action, taking the risk that the June 2018
dismissal would be preclusive of the new action.
¶ 52 Brewing did none of these things. Instead, without properly
seeking leave of court, Brewing filed an amended complaint
forty-eight days after the June 2018 dismissal order, contending
that it had an absolute right to do so, and it allowed the
forty-nine-day appeal period for the June orders to expire without
filing a notice of appeal. See C.A.R. 4(b).
¶ 53 Given these court of appeals cases and Brewing’s course of
action, it can succeed in this appeal only if the June orders did not
constitute final judgments, or if all of the court of appeals’ decisions
were contrary to Colorado Supreme Court precedent.
C. The District Court’s June Orders Were Final Judgments
¶ 54 The court’s June orders dismissed Brewing’s complaint
because Brewing lacked standing and because Brewing failed to
plead fraud with particularity. This first basis was a dismissal for
lack of jurisdiction under C.R.C.P. 12(b)(1) because standing is a
jurisdictional prerequisite. C.W.B., Jr. v. A.S., 2018 CO 8, ¶ 16; City
of Greenwood Village v. Petitioners for Proposed City of Centennial, 3
26 P.3d 427, 436 (Colo. 2000). So, the question is whether the
C.R.C.P. 12(b)(1) dismissals were final judgments.
¶ 55 I recognize that the district court initially characterized its
dismissals as “without prejudice.” Later, in response to an order to
show cause from this court, the district court stated that the
“without prejudice” designation was a “clerical error.” This
confusion does not affect my analysis. Usually, “a trial court’s
dismissal of a claim without prejudice does not constitute a final
judgment,” but this designation is not dispositive. Brody v. Bock,
897 P.2d 769, 777 (Colo. 1995).
¶ 56 The characterization of a dismissal order as either with or
without prejudice may, as this case illustrates, lend uncertainty to
the process. The principal effect of a dismissal without prejudice is
that the dismissal does not preclude filing a new action. Grynberg
v. Phillips, 148 P.3d 446, 450 (Colo. App. 2006). That
characterization may also affect whether the order is a final,
appealable judgment. See id. Generally, though not always, a
dismissal without prejudice is not a final, appealable order, and this
court usually will dismiss an appeal of an order dismissing a case
27 without prejudice. Avicanna Inc. v. Mewhinney, 2019 COA 129, ¶ 1
n.1.
¶ 57 The content of an order, not its title, determines whether it is a
final judgment. Cyr v. Dist. Court, 685 P.2d 769, 770 (Colo. 1984).
A “[j]udgment” is “a decree and order to or from which an appeal
lies.” C.R.C.P. 54(a). The controlling question is whether the order
“constitutes a final determination of the rights of the parties in the
action.” Cyr, 685 P.2d at 770. “[A]n order of dismissal is to be
treated as a judgment for the purposes of taking an appeal when it
finally disposes of the particular action and prevents any further
proceedings as effectually as would any formal judgment.” Levine v.
Empire Sav. & Loan Ass’n, 192 Colo. 188, 190, 557 P.2d 386, 387
(1976) (quoting Herrscher v. Herrscher, 259 P.2d 901, 903 (Cal.
1953)).
¶ 58 Here, the district court’s June orders disposed of all claims
against all parties. The court adjudicated the critical question of
whether Brewing had standing and concluded that it did not. There
were no remaining issues, legal or factual, for the court to resolve
after it granted the motions to dismiss. Under the Colorado Rules
of Civil Procedure and supreme court precedent, the orders
28 constituted final judgments. There was simply nothing left for the
district court to do at that point, except to address issues of fees
and costs. And a request for fees or costs does not generally affect
the judgment’s finality. See C.R.C.P. 58(a) (providing that entry of
the judgment shall not be delayed for the taxing of costs); Moya v.
Schollenbarger, 465 F.3d 444, 450 (10th Cir. 2006) (reasoning that
dismissal of the entire action is ordinarily a final judgment); Driscoll
v. Dist. Court, 870 P.2d 1250, 1252 (Colo. 1994) (fees and costs
request does not affect finality of a judgment); see also Baldwin v.
Bright Mortg. Co., 757 P.2d 1072, 1074 (Colo. 1988). In asking the
court to determine what fees and costs were due, the parties
recognized as much.
¶ 59 The motions division of this court agreed. In the defendants’
motion to dismiss the appeal, they argued that the June orders
constituted appealable final judgments, but that the time for appeal
had expired. The motions division agreed and dismissed the
portion of the appeal relating to the June orders because they
“dispos[ed] of this case on the merits.”
¶ 60 While the district court never adjudicated the underlying
merits of the plaintiff’s various claims, it did adjudicate the question
29 of whether the plaintiffs have standing to bring those claims.
“Although dismissal for lack of subject matter jurisdiction does not
adjudicate the merits of the claims asserted, it does adjudicate the
court’s jurisdiction.” W. Colo. Motors, LLC v. Gen. Motors, LLC, 2019
COA 77, ¶ 19 (quoting Sandy Lake Band of Mississippi Chippewa v.
United States, 714 F.3d 1098, 1103 (8th Cir. 2013)). As to that
limited question — standing and, thus, jurisdiction — the dismissal
order was an adjudication constituting a final judgment.
¶ 61 Because the June orders constituted final judgments, Brewing
lost the absolute right to amend under C.R.C.P 15(a). 4
D. Colorado Supreme Court Precedent Does Not Dictate a Different Result
¶ 62 In addressing the final question, I cannot disregard twenty-five
years of court of appeals authority holding that entry of final
judgment cuts off a plaintiff’s right to amend under C.R.C.P. 15(a).
4 I do not exclude the possibility that a dismissal based on lack of standing predicated solely on the four corners of a complaint may not be a final, appealable judgment. But in this case, the trial court considered information outside of the complaint to inform its standing ruling. Under these circumstances, a Rule 12(b)(1) dismissal is a final order or judgment.
30 ¶ 63 Brewing essentially argues that the prior court of appeals
cases are contrary to earlier holdings of the Colorado Supreme
Court, which have never been overruled by the supreme court in its
adjudicatory or rulemaking capacities. As an intermediate
appellate court, we are bound by supreme court authority. See
Silver v. Colo. Cas. Ins. Co., 219 P.3d 324, 330 (Colo. App. 2009). It
matters not that the supreme court authority is old or that we
purportedly discern a better rule of law. It is the prerogative of the
supreme court alone to overrule its cases. See id.
¶ 64 Brewing relies on three supreme court cases: Renner v.
Chilton, 142 Colo. 454, 351 P.2d 277 (1960); Passe v. Mitchell, 161
Colo. 501, 423 P.2d 17 (1967); and Wistrand v. Leach Realty Co.,
147 Colo. 573, 364 P.2d 396 (1961). According to Brewing, each of
these cases holds that a plaintiff’s right to amend is not cut off
when a court grants a motion to dismiss so long as no responsive
pleading has been filed.5
5These cases address a version of C.R.C.P. 15(a) that is substantively identical to the current version of the rule.
31 ¶ 65 Passe and Renner involved a plaintiff’s attempt to amend his
complaint after the court had granted the defendant’s C.R.C.P.
12(b)(5) motion to dismiss for failure to state a claim, and, in both
cases, the supreme court held that the plaintiffs had a right to
amend. Passe, 161 Colo. at 502, 423 P.2d at 17-18; Renner, 142
Colo. at 455-56, 351 P.2d at 277-78. In Passe, the court reasoned
that “no final judgment should have been entered in the absence of
a showing of record that plaintiff waived the right to file an
amended complaint, and elected to stand upon the allegations of
the complaint to which the motion to dismiss was addressed.”
Passe, 161 Colo. at 502, 423 P.2d at 17-18.
¶ 66 In Wistrand, the case most heavily relied on by Brewing, the
plaintiff’s contract claim was dismissed without prejudice under
C.R.C.P. 12(b)(5) because the defendant was not a party to the
contract. Wistrand, 147 Colo. at 574-75, 364 P.2d at 397. The
plaintiff then filed a new suit against the same defendant on the
theory of unjust enrichment. Id. at 575, 364 P.2d at 397. On
appeal, the supreme court held that the legal theory of res judicata
(now, claim preclusion) was inapplicable because the dismissal was
without prejudice. Id. at 575-76, 364 P.2d at 397.
32 ¶ 67 In a discussion that does not appear to be necessary to the
court’s holding on res judicata, the court noted that “[o]n dismissal
of the original action [plaintiff] could have (1) amended its
complaint, (2) stood on its complaint and appealed, (3) accepted a
dismissal without prejudice or (4) had its rights finally adjudicated
by a dismissal with prejudice and failure to appeal.” Id. at 575, 364
P.2d at 397. Brewing relies on this language, and the language in
Passe and Renner, to contend that it had an absolute right to
amend its complaint even after dismissal.
¶ 68 I reject this argument because in all three cases the dismissals
were under C.R.C.P. 12(b)(5) — not, as was the case here, under
C.R.C.P. 12(b)(1).
¶ 69 A dismissal under Rule 12(b)(5) for failure to state a claim is
fundamentally different from a dismissal under Rule 12(b)(1) for
lack of jurisdiction. 6 On a Rule 12(b)(5) motion, a court must take
the facts pleaded as true and may only consider the four corners of
the complaint (together with documents appended to or referred to
6 Because the district court in this case dismissed the complaint for lack of standing, the court noted that it was not reaching the defendants’ C.R.C.P. 12(b)(5) grounds for dismissal.
33 in the complaint). Norton v. Rocky Mountain Planned Parenthood,
Inc., 2018 CO 3, ¶ 7. In contrast, under Rule 12(b)(1), a court must
make findings and conclusions necessary to adjudicate the
jurisdictional question. A court may, and often must, look beyond
the pleadings and consider relevant evidence to assure itself that it
has the power to hear the case. See Barry v. Bally Gaming, 2013
COA 176, ¶ 8. And a court may (and in certain contexts, must)
hold an evidentiary hearing and make factual findings related to its
jurisdiction. See, e.g., Trinity Broad. of Denver v. City of
Westminster, 848 P.2d 916, 926 (Colo. 1993).
¶ 70 In this case, defendants’ challenge to the court’s subject
matter jurisdiction required the court to address whether Brewing
had standing and thus whether the court had jurisdiction to
adjudicate the pleaded claims. On a Rule 12(b)(1) motion, in
contrast to a Rule 12(b)(5) motion, a court may look outside of the
complaint to resolve a jurisdictional issue. See Barry, ¶ 8. Here,
34 the court relied on the published list of bidders to conclude that
Brewing did not have standing. 7
¶ 71 Because the merits of the standing determination of the June
orders are not before us, I do not address to what extent the
allegations of a complaint regarding standing must be accepted as
true by a district court. See, e.g., Ainscough v. Owens, 90 P.3d 851,
857 (Colo. 2004). I also need not decide whether the court may or
must, as in certain other cases implicating the court’s subject
matter jurisdiction, conduct evidentiary proceedings to enable the
court to make findings of fact and conclusions of law on the
jurisdictional questions. See, e.g., Trinity Broad., 848 P.2d at 926.
¶ 72 Because none of the supreme court decisions Brewing relied
on addressed a dismissal under Rule 12(b)(1) for lack of
jurisdiction, those holdings do not control here. And because a
Rule 12(b)(1) dismissal order is at issue, this case does not require
deciding whether Harris, a 2006 court of appeals case regarding a
7Because, in my view, the June orders are not before us, I do not determine whether the trial court correctly relied on the published bidding list to conclude that Brewing lacked standing.
35 Rule 12(b)(5) dismissal, was inconsistent with Renner, Passe, or
Wistrand. 8
¶ 73 In conclusion, the district court did not err by dismissing the
amended complaint because its June orders constituted final
judgments that cut off Brewing’s right to amend. Because I would
affirm on that ground, I would not address whether the court erred
when it concluded, in the alternative, that the amended complaint
was futile. To the extent that Brewing’s briefs invite us to give an
advisory opinion on whether a new action would be barred by claim
preclusion, I would decline the invitation because that question is
not properly before us. During oral argument, however, the parties
conceded that Brewing is free to initiate a new action regardless of
the outcome of the amendment question at issue.
8 The Harris opinion took note of only Renner, distinguishing it on the ground that the motion to amend in Renner was “made before judgment was entered on the docket,” whereas in Harris, judgment was entered on the docket before amendment. Harris v. Reg’l Transp. Dist., 155 P.3d 583, 587 (Colo. App. 2006). The Harris division found this distinction sufficient to conclude that it was not bound by Renner.