Judge denies Loveland’s motion for reimbursed legal fees

GREELEY — The Greeley municipal judge who refused to hear a pair of cases brought against the Loveland City Council has denied the city’s motion to have its legal fees reimbursed by the plaintiffs and their attorney.

Judge Mark Gonzales, who was acting “with authority for Loveland Municipal Court due to the conflict of all appointed Loveland judges and appointment via the intergovernmental agreement,” ruled Wednesday that, “in the same vein that Loveland Municipal Court has not adopted any Civil Rules of Procedure which resulted in the dismissal of all plaintiff’s complaints, there is no cited authority allowing a finding and ordering of attorney fees. Parties may allege such complaints in any pending or future court with sufficient jurisdiction if allowed, but it cannot do so in Loveland Municipal Court. The request is therefore denied.”

Gonzalez had determined in April that he did not have jurisdiction to hear the cases.

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“Because the judge wouldn’t hear the case, the city wanted their attorney’s fees reimbursed, and the court would have ordered either the plaintiffs or me as their attorney to pay their defense costs,” Loveland-based attorney Russell Sinnett told BizWest on Thursday. “If they want to bring it up again in District Court they can try.”

The cases involve alleged violations of the Loveland city charter, along with alleged constitutional-law violations. In one, which Sinnett originally filed in Loveland Municipal Court in January, eight plaintiffs including former Loveland City Council members Richard Ball, Dave Clark, John Fogle, Don Overcash and Chauncey Taylor sued the current council. They alleged that five current City Council members violated the charter last Nov. 21 by not calling for a public vote on its rescission of urban-renewal and financial agreements with McWhinney Real Estate Services Inc. approved in April and May 2023 over its proposed Centerra South development.

The council in February reversed its decision and reinstated the agreements after McWhinney sued.

The lawsuit said the public vote should have been called because Loveland voters in the same Nov. 7 election that propelled council members less amenable to McWhinney’s plans into office had also approved the citizen-initiated Ballot Issue 301, which gave voters the final say on urban-renewal plans.

In the other case, which Sinnett filed in Loveland Municipal Court in February, Ward 1 resident Peter Gazlay claimed unequal treatment under the law because the city failed to conduct a background investigation of the winning candidate in Ward 1, Troy Krenning, and then after he was elected, applied a background test that was different from all other candidates prior to seating him.

However, municipal judges in Loveland said conflicts of interest rendered them unable to hear the cases. An intergovernmental agreement with the city of Greeley moved the cases to municipal court there, but Gonzales determined on April 26 that he did not have jurisdiction to hear the case because of its subject matter.

On May 23, Sinnett submitted “Rule 106” pleadings to Weld County District Court in an attempt to force Greeley Municipal Court to hear the cases. Rule 106 in Colorado allows people to appeal the decision of a lower body; opponents of development projects sometimes bring Rule 106 cases in an attempt to win a court order overturning cities’ approvals.

However, on June 4, Sinnett and his clients opted not to wait for a Rule 106 hearing and ruling, instead taking their case to Larimer County District Court.

Both Sinnett and Krenning, the only attorney who holds a Loveland City Council seat and who is a defendant in both cases, have expressed concern that Loveland taxpayers have been on the hook for the city’s defense against the lawsuits, which have surpassed $100,000.

Krenning had planned to introduce a motion during the June 4 Loveland City Council meeting directing the city attorney’s office to pursue recovery of the legal fees from the plaintiffs. Upon learning that Sinnett had refiled the cases, Krenning withdrew his planned motions before the meeting. But once Sinnett refiled the cases in Larimer County District Court, the city attorney’s office decided to go ahead and pursue the reimbursement.

Kim Overholt, Loveland’s manager of communications and engagement, told BizWest in an email late Thursday that “the city attorney’s office made that decision in consultation with outside counsel.”

Krenning also is the target of a recall petition drive launched June 14 by Clark and Ward 1 residents Earl Sethre and Dr. Marvin Childers.

The original cases are Richard Ball, et al, vs. city of Loveland, case number 24cv001 in Loveland and SP24-001 in Greeley; and Peter Gazlay vs. city of Loveland, case number 24cv002 in Loveland and SP24-002 in Greeley.

The filing in Weld County District Court was 2024cv30463.

The June 4 filings in Larimer County District Court are 2024cv30466 and 2024cv30469