Appeals court rejects dismissal of lawsuit against Loveland

DENVER — The Colorado Court of Appeals on Thursday reversed a Larimer District Court judge’s dismissal of barbershop owner Bill Jensen’s lawsuit against the City of Loveland over the previous City Council’s vote in May 2023 to approve an urban-renewal agreement for the proposed Centerra South mixed-use development.

A unanimous three-judge appeals court panel remanded Jensen’s case back to the Larimer court, ordering that it be heard on its merits. Judge Pax Moultrie wrote the opinion, with judges Craig Welling and Jaclyn Casey Brown concurring.

Jensen’s lawsuit, originally filed in December 2023, claimed that the council’s urban-renewal agreement with Centerra South developer McWhinney Real Estate Services Inc. was invalid based on violations of city and state open-meetings rules and improper notice. Larimer District Court Judge C. Michelle Brinegar in March threw out Jensen’s complaint — but not based on its merits. She instead dismissed it based on laws that prohibit relitigation of claims that already had been decided. Jensen had filed a complaint echoing Loveland mayor Jacki Marsh’s contention that the council did not provide sufficient notice for the May 2, 2023, hearing and vote on Centerra South, and asked the court to determine whether Colorado’s urban-renewal laws had been violated. Dean dismissed that complaint in September 2023, but also not on its merits; she ruled that Jensen filed it after a statutory deadline.

City officials argued that Jensen’s December 2023 complaint had already been ruled on and couldn’t be litigated because of the doctrine of “claim preclusion,” but Jensen argued that his actual complaint had never been heard. He appealed in May 2024 to the Colorado Court of Appeals in Denver, alleging that Brinegar’s ruling was in error and that his complaint should be remanded back to the Eighth Judicial District Court in Larimer County. Oral arguments in that case were held in November before the appeals court.

Writing for the appeals court, Moultrie cited case law to conclude that “it is well-settled in Colorado that a dismissal for lack of subject-matter jurisdiction is not a judgment on the merits, and therefore does not preclude a subsequent action on the same claim in a proper forum.”

Thus, Moultrie wrote, “the prior judgment lacked finality for purposes of precluding Jensen’s December complaint, and the district court reversibly erred when it dismissed it on that basis.”

The appeals court did, however, reject Jensen’s claim for remuneration of attorney fees and court costs — but only because the merits of his Colorado Open Meetings Law claims haven’t yet been decided by the district court.

“I have many reasons to be confident,” Jensen told BizWest on Thursday. “That May 2 hearing was improper, and it needs to be invalidated. If the city wants to adopt a URA, they must abide by the statutory procedures. I always fall back to the statute that says formation of public policy is public business. Frequently the City Council sidesteps the public, and they proceed without the public in mind.”

Jensen’s allegations stem from letters that Loveland City Council members Dana Foley, Patrick McFall, Steve Olson and Andrea Samson, and former members Richard Ball, John Fogle and Don Overcash signed on official letterhead and sent to Gov. Jared Polis and state lawmakers. The letter to Polis was sent April 19, 2023, and signed by all but Samson. All seven signed the letter to members of the General Assembly that was sent April 27, 2023. The letters urged the governor and lawmakers to reject legislation that would have made the Centerra South URA illegal.

Jensen, a 20-year Loveland resident, also sued the city last October over further alleged violations of open-meetings laws last February and March when the council reinstated the Centerra South urban-renewal and financing agreements it had rescinded in November 2023.

“I’m trying to have the reinstatement of the Centerra South agreements blocked,” Jensen said Thursday, adding that Larimer District Judge Stephen J. Jouard “is going to have something to say about that very soon.”

The lawsuits are: Bill Jensen v. Loveland City Council in Larimer District Court, case number 2023-CV-246; Bill Jensen v. Loveland City Council in Larimer District Court, case number 2024-CV-170; Bill Jensen v. Loveland City Council in Larimer District Court, case number 2024-CV-209; and Jensen v. Loveland in Colorado Court of Appeals, case number 2024-CA-789.

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