Krystkowiak v. W.O. Brisben Companies, Inc.

CHIEF JUSTICE MULLARKEY delivered the Opinion of the Court.

JUSTICE KOURLIS concurs in judgment only, and JUSTICE COATS joins in the concurrence.

JUSTICE KOURLIS concurring in judgment only:I. Introduction

In my view, this case should have been dismissed under C.R.C.P. 12(b)(5) ("Rule 12(b)(5)") based on W.O. Brisben Development Companies, Inc.'s ("Brisben's") failure to state a claim against Eric Krystkowiak for intentional interference with contractual relations. Whether Brisben sued Krystkowiak in his individual capacity or in his representative capacity as an agent of the Northeast Colorado Springs Neighborhood Association (NECSNA),¹⁴Brisben wholly failed to allege a cause of action against Krystkowiak for interference with contractual relations. Because this case should have been dismissed on Rule 12(b)(5) grounds, I also agree that Krystkowiak was entitled to attorney fees under section13-17-201, 5 C.R.S. (2003).

If the case moved to summary judgment, as indeed occurred, judgment should also have entered in favor of Krystkowiak as a matter of law because Brisben failed to develop any facts that Krystkowiak, in allegedly causing a breach of contract between NECSNA and Brisben, acted in his personal capacity (thereby defeating any personal claim against Krystkowiak) or that Krystkowiak acted with the requisite animus (thereby defeating the claim against him asPage 873NECSNA's agent). Because this case should have been dismissed either on the pleadings or on the merits, I would not reach the applicability of our decision in ,677 P.2d 1361(Colo. 1984) (" ").

Were I to reach Krystkowiak's asserted defense, I would hold that it is not applicable. The majority concludes that because Krystkowiak was acting in his individual capacity in petitioning the City of Colorado Springs, that petitioning activity was automatically immune from suit under However, because Brisben adduced no facts to demonstrate that Krystkowiak ever acted in his individual capacity, I conclude that Krystkowiak was not entitled to the benefit of a defense. Rather, because NECSNA, Krystkowiak's principal, had contractually waived its right to petition the government in exchange for concessions from Brisben, Krystkowiak was bound by that waiver while acting in his official capacity as NECSNA's agent.

I also conclude that section7-126-103, 2 C.R.S. (2003), of the Colorado Revised Nonprofit Corporation Act (NCA) does not apply here because it would immunize Krystkowiak from suit only for those debts, liabilities, and obligations that belong to NECSNA. Because Krystkowiak was called to answer for his own intentional conduct, for which NECNSA could not have been liable, that statute has no relevance under these circumstances.

Because I would affirm the court of appeals' ruling on grounds different from the majority's, I join only in the court's judgment and write separately.II. C.R.C.P. 12(b)(5)

Krystkowiak filed a motion to dismiss under , which is, for all practical purposes, a motion to dismiss for failure to state a claim under Rule 12(b)(5). ,677 P.2d at 1368. Only if Brisben asserted a colorable claim does a court need to analyze the defendant's defenses — let alone constitutional defenses.¹⁵Here, Brisben failed to assert such a colorable claim — either against Krystkowiak in his individual capacity or in his official capacity as NECSNA's agent.

In ,697 P.2d 716(Colo. 1985), we stated that

one who

intentionally

and

improperly

interferes with the performance of a contract (except one to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.

697 P.2d at 726(quoting Restatement (Second) of Torts § 766 (1979)). Key to the tort is that the defendant was aware of the contract between the third person and another, and intended for the third person to breach the contract with the other either by inducing the third person to breach through persuasion or intimidation, or by intentionally making it impossible for the third person to perform. Restatement (Second) of Torts § 766 comment h.

Additionally, the defendant must have acted "improperly" in causing the result. To determine whether the defendant acted improperly, a court is to consider:

(a) the nature of the actor's conduct, (b) the actor's motive, (c) the interests of the other with which the actor's conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (f) the proximity or remoteness of the actor's conduct to the interference and (g) the relation between the parties.

, 679 P.2d at 726 (quoting Restatement (Second) of Torts § 767).

Because corporate officers as well as agents are generally not liable for the intentional interference with contractual relations involving the corporation or the principal, plaintiffs suing an agent or corporate officer must additionally allege that the defendantPage 874acted with malice in inducing or causing the breach. ; ,948 F. Supp. 1469,1477-78(D. Colo. 1996). Without this additional pleading burden, "every time a corporation was sued for breach of contract, each of its officers who participated in the decision to breach would also be liable for intentional interference with contractual relations." ,948 F. Supp. at 1478. As the court of appeals aptly noted in this case, a general recognition of such claims against agents would also create double recovery for a plaintiff where an action already lies in contract against the principal. ,165 Colo. 576,580,440 P.2d 772,774(Colo. 1968) ("The fundamental rule to be observed in breach of contract actions is that the wronged party shall recover compensatory damages sufficient to place him in the position he would have occupied had the breach not occurred.").

In considering a motion to dismiss for failure to state a claim upon which relief may be granted, we may consider only the matters listed in the complaint, and must accept as true all allegations of material fact, viewing them in the light most favorable to the plaintiff.

Coors Brewing

Co. v. Floyd

,978 P.2d 663,665(Colo. 1999). Because Brisben's complaint did not clarify whether Krystkowiak was acting in his individual or official capacity in inducing the breach in this case, I would analyze the complaint as if it charged both.

As it pertained to Krystkowiak, Brisben's complaint alleged only that "NECSNA's breach of its agreement to support Brisben's development plan at the public hearings . . . was primarily the result of the actions of Defendant Krystkowiak" and that "Krystkowiak presented the NECSNA's objections to Brisben's plan and encouraged the Planning Commission, and the City Council, to deny Brisben's development plan." Brisben failed to allege any facts tending to demonstrate that Krystkowiak induced or caused NECSNA to breach its contract with Brisben. There was no indication that Krystkowiak either persuaded or intimidated NECSNA into repudiating the settlement and there was no suggestion that Krystkowiak made it impossible for NECSNA to honor the settlement. Further, all of Krystkowiak's petitioning activity took place after NECSNA's president attempted to rescind the agreement and the complaint itself characterizes virtually all of the petitioning activity as NECSNA's own conduct — not Krystkowiak's. Thus, Brisben failed to allege that Krystkowiak induced or caused the breach.

Moreover, the complaint alleges no facts that would support a conclusion that Krystkowiak's conduct in relation to the breach was improper — only that the breach was the result of his conduct. Without an allegation that Kyrstkowiak induced the breach through persuasion or intimidation, or that he intentionally made it impossible for NECSNA to perform its contract and without an allegation that any such conduct was improper as contemplated by , Brisben failed to state a claim for intentional interference with contractual relations against Krystkowiak in his individual capacity.

If the claim pertained to Krystkowiak as an agent of NECSNA and as a corporate officer, then in addition to alleging that Krystkowiak improperly induced or caused NECSNA's breach, our case law would demand that Brisben also allege that Krystkowiak acted with malice in inducing or causing the breach. Because the complaint failed to so allege, Brisben similarly failed to allege a claim against Krystkowiak for intentional interference with contractual relations in his capacity as NECSNA's agent.

For these reasons, it is clear that Brisben failed to state a claim upon which relief could be granted. Accordingly, the court of appeals was correct to affirm the trial court's dismissal of Brisben's claim against Krystkowiak on that basis.III. Summary judgment

This case was ultimately decided on a summary judgment motion, and the court took into account additional factual information in granting summary judgment. In my view, that information demonstrates, as a matter of law, that Krystkowiak was acting in his official capacity as NECSNA's agent at all relevant times, and that he did not evidence the animus that would be required to hold himPage 875liable for interfering with his principal's contract.A. Standard of Review

This court must review the trial court's entry of summary judgment de novo. ,86 P.3d 402,406(Colo. 2004). Summary judgment should only be entered "when there is no disputed issue of material fact and the moving party is entitled to judgment as a matter of law." In reviewing a summary judgment, "the nonmoving party is entitled to the benefit of all favorable inferences that may be drawn from the undisputed facts, and all doubts as to the existence of a triable issue of fact must be resolved against the moving party."

Busse

v. City of Golden

,73 P.3d 660,665n. 10 (Colo. 2003).B. Factual Background

The following facts derive from evidence developed by the parties in support of or in opposition to the summary judgment motion.

In June of 1998, Krystkowiak, the defendant in this action and petitioner for purposes of this appeal, received a letter informing him that Brisben planned to develop a large apartment complex in his neighborhood. The planned development was to be built directly across the street from Krystkowiak's house. On June 11, 1998, Brisben filed its application for the project with the City of Colorado Springs Planning Department (CPD). As originally filed, the application proposed a development consisting of 161 apartment units.

Concerned about the project's compatibility with the neighborhood, Krystkowiak notified the CPD of his initial opposition to the plan and began investigating other projects Brisben had completed. He also began research on city design requirements. Between June of 1998 and August of 1998, Krystkowiak was in frequent contact with the CPD.

During the summer of 1998, Krystkowiak and other neighbors who were concerned about the project collaborated to form the Northeast Colorado Springs Neighborhood Association (NECSNA or the "association"). They formed the association for the express purpose of opposing Brisben's development. The association's original officers were Ralph Bowden and Bob Hamm.

In July of 1998, Krystkowiak was selected by the association to be the Chair of the association's Design Committee since he was the member most knowledgeable about city design requirements. Krystkowiak began communicating regularly with the CPD and Brisben using letterhead identifying him with NECSNA.

In August of 1998, the CPD denied Brisben's initial application and set the matter for a hearing before the City Planning Commission (CPC). The CPC considers second-level appeals of the CPD's decisions regarding development applications; the CPD is a recommending body and the CPC is the quasi-judicial decision making body, whose decisions are subject to review by the Colorado Springs City Council (the "city council").

Several meetings took place between NECSNA and Brisben in anticipation of the hearing. Some of the meetings were facilitated by Quinn Peitz, head of the CPD. The association made it known to the CPD and Brisben that they opposed the project as planned due to its scale. To reconcile the goals of Brisben and the association, Peitz hoped to persuade Brisben to scale down its project. After a breakdown in communications between the association and Brisben, the CPD became heavily involved in discussions and eventually proposed mediation.

A pre-mediation meeting took place on November 19, 1998. Those in attendance at the meeting included the proposed mediator, the city attorney, representatives of the CPD, as well as Brisben's attorney and representatives for NECSNA. At that meeting, the parties agreed upon the ground rules for the mediation. In her deposition, Wynetta Massey, the city attorney, testified that the purpose of the scheduled mediation was to arrive at a settlement between the association and Brisben. She explained that if a settlement was forthcoming, NECSNA would not protest the planned development. If a settlement was not forthcoming, however, Brisben was not required to concede any of its plans and NECSNA was free to continue itsPage 876opposition — formal or otherwise — to the development.

At the pre-mediation meeting, Ralph Braden, Brisben's attorney, emphatically stated that Brisben would not agree to mediate unless Krystkowiak personally agreed to sign any resulting agreement. Brisben also insisted that all of NECSNA's decision-makers attend the mediation. Mediation was then set for December 7, 1998. Between November 19, 1998, and December 7, 1998, Krystkowiak "was always involved and . . . was the leader of [NECSNA] for design purposes."¹⁶

At the December 7, 1998, mediation, all of NECSNA's decision-makers were present except Ralph Bowden, its president, and Braden. After ten hours of negotiation, Brisben walked out when it reached an impasse with NECSNA; Brisben refused to reduce the scale of the project below 144 units and NECSNA demanded the project consist of no more than 140 units. NECSNA's representatives stayed at the mediation and the mediator collected their demands and desires and explained to them that he would reduce them to writing and attempt to get Brisben to agree to them.

On December 10, 1998, the mediator completed a written statement of the mediation which specified 140 units. The settlement required the signatures of the CPD, the city attorney, Brisben, and NECSNA. The mediator forwarded the settlement to Bowden and Krystkowiak on December 10, 1998. Bowden signed the agreement. Krystkowiak did not. All other parties eventually signed. Though Massey stated that the agreement accurately reflected NECSNA's demands, Krystkowiak explained to Peitz of the CPD that he would not agree to the negotiated settlement because he felt it did not reflect the desires of NECSNA, as communicated to the mediator. Between the time Brisben left the mediation and the time Krystkowiak informed Peitz he would not sign the agreement, Krystkowiak did not speak to any representative of Brisben.

Brisben, on the other hand, changed the design of the development in order to comply with the terms of the settlement. Accordingly, the CPD approved the application as modified to 140 units. On January 3, 1999, however, Bowden sent a letter to Peitz attempting to rescind NECSNA's support for the settlement. Simultaneously, Krystkowiak appealed the decision of the CPD. A second hearing before the CPC was then scheduled for January 7, 1999.

At the January 7 hearing, Krystkowiak spoke out against the plan. The minutes of that meeting designate him as NECSNA's "Design Committee Chairman." He told the CPC that NECSNA was opposing the plan because it did not comply with city code. The CPC approved the application nonetheless and Krystkowiak petitioned the city council for an appeal. Shortly after the January 7 hearing and before the city council hearing on the appeal, Krystkowiak was appointed to NECSNA's governing board.

The city council held a hearing in late January, 1999. Krystkowiak also testified at that hearing, again explaining that the plan did not comply with city code. The city council voted unanimously to reject Brisben's application, but it also listed certain criteria that, if met, would likely result in the city council's approval. The city council remanded the matter back to the CPC. Brisben, however, notified the mayor of Colorado Springs that it would not conform its design to the city council's order.

On March 4, 1999, the CPC held another hearing on Brisben's plan. This time, the CPD recommended a denial of the application as the plan failed to conform to the city council's order. Krystkowiak testified again at this hearing, arguing that the plan failed either to comply with city code or with the city council order. Despite Krystkowiak's lengthy presentation, which included demonstrative slides of the "bulk and scale" of the project, the CPC voted again to accept Brisben's application. Krystkowiak filed a final appeal to the city council.

At the second city council hearing, Krystkowiak made another thorough presentation. His testimony primarily concerned the "bulk and scale" of the project and its lack of compatibility with the neighborhood. ThePage 877city council voted to reject the plan. Brisben has since abandoned all plans to go forward with the project.

Although Krystkowiak later explained that he petitioned the city council in his individual capacity, he stated in his deposition:

I never gave it much thought as to which hat or directly who I was representing. I was always speaking on behalf of the overall neighborhood, of which the association is part of and I, as an individual am part of, and that I never thought there was a difference or that it would ever matter as to how. As design committee chairman and representing the association, I felt I was wearing multiple hats in representing the community, the association, and my own personal rights and interests.

He also swore in an affidavit filed with the trial court that "[t]he statements which I made to the Planning Commission and the City Council as attached are incorporated in this Affidavit representing my activities and presentations on behalf of the Northeast Colorado Springs Neighborhood Association."

Based on these facts, it is clear that at all relevant times, Krystkowiak was acting on behalf of NECSNA. Accordingly, to survive a motion for summary judgment on its claim against Krystkowiak, Brisben was required by our case law to allege that Krystkowiak acted with a malicious intent in inducing or causing NECSNA to breach its contract. ,697 P.2d at 726; ,948 F. Supp. at 1477-78.

Here, there were no facts developed even suggesting that Krystkowiak maliciously interfered with NECSNA's contract with Brisben. To the contrary, all of the petitioning activity that forms the basis of this action occurred after NECSNA itself repudiated its contract with Brisben. Krystkowiak was merely reciting NECSNA's position to the city when he petitioned against Brisben's planned development. Even affording Brisben all favorable inferences to be gleaned from these facts, nothing indicates that Krystkowiak acted with any animus toward the parties to the mediated settlement. Thus, Brisben's claim against Krystkowiak for intentional interference with contractual relations would have failed even on its merits.IV.

POME

Defense

Because Brisben wholly failed to put forth a viable claim against Krystkowiak, I would not reach Krystkowiak's asserted defense. Beyond that, I take issue with the majority's conclusion that Krystkowiak could ever avail himself of the protections of under these facts. While Krystkowiak was acting on behalf of NECSNA, his petitioning activity was subject to NECSNA's own contractual limitations; in that capacity, he was bound by NECSNA's contractual waiver and therefore had no defense.

In , we held that the right to petition the government guaranteed by theFirstAmendment operates to immunize a person or entity from a suit brought because of that person's or entity's petitioning activity.677 P.2d at 1365-66. In that case, a developer sued an environmental protection group for the tort of abuse of process and civil conspiracy. at 1362. The group had filed another lawsuit seeking to overturn a board of county commissioners' decision to approve the developer's rezoning application. at 1363 n. 1. In its answer to the abuse of process lawsuit, the environmental protection group asserted aFirstAmendment right to seek redress of grievances from the government and requested a dismissal of the developer's claims. The trial court rejected that defense and the group appealed.

Ultimately, in that case, this court created a defense for civil defendants being sued for petitioning activities. The defense protects them from suit based on theFirstAmendment unless their petitioning activity is nothing more than a sham. at 1367-68. Procedurally, we held that even though the motion to dismiss based on theFirstAmendment should, for practical purposes, be considered a motion to dismiss based on the failure to state a claim, trial courts should allow some discovery related to the defense and dispose of the motion as one for summary judgment. at 1368-70. If the petitioning activity that forms the basis of the complained-of activity is not a "sham,"Page 878the court should dismiss the suit under C.R.C.P. 12(b).¹⁷Thus, we protected the environmental group's petitioning activity under theFirstAmendment because it was not a "sham" and the petitioning activity itself was subject to no other limitation.

While this court has thus protected parties from civil interference with theirFirstAmendment freedoms, we have also recognized that parties may voluntarily waive those sameFirstAmendment rights. In ,981 P.2d 600(Colo. 2000), we held that theFirstAmendment did not immunize members of a school board from suit for disclosing details related to a confidentiality agreement that prohibited such disclosures. There, we stated that any effect the agreement had on the defendants'FirstAmendment right to speak on matters of public importance was incidental and was a consequence to which they had agreed. at 603. We took care to distinguish the defendants in the case — members of a school board who were limited in speaking freely about an employee's resignation because of the entire board's agreement to maintain confidentiality — from hypothetical defendants who were not members of the school board and who did not sign an agreement but were nevertheless facing suit for "speaking freely about what he or she knew." at 602. While theFirstAmendment would immunize the latter group from suit, it would not excuse the former group from its contractual obligations merely because they would have the right to speak freely in the abstract. at 602, 604.

In this case, NECSNA agreed not to oppose Brisben's plan. It contracted away itsFirstAmendment freedoms in exchange for concessions from Brisben. That waiver is enforceable against NECSNA and against its agents. ,758 P.2d 186,189(Colo.App. 1988); Restatement (Second) of Agency § 387 (1958) ("Unless otherwise agreed, an agent is subject to a duty to his principal to act solely for the benefit of the principal in all matters connected with his agency."). From the time of his first appearance before the CPC, Krystkowiak was NECSNA's designated spokesman and agent.

The majority today concludes that the defense created in applies because "[o]nce NECSNA's and Krystkowiak's viewpoints diverged, [Krystkowiak] was free to dissociate from the organization and continue to petition against the development in his individual capacity." Maj. Op. at 22-23. I do not agree that the facts support the conclusion that Krystkowiak ever dissociated himself from the organization. Rather, in my view, he petitioned against the development at all times in his official capacity as NECSNA's representative. Further, his position did not diverge from NECSNA's. Indeed, at the very point at which NECSNA was attempting to repudiate the mediated settlement, Krystkowiak was continuing to appear in opposition to the development.

Accordingly, I do not agree that Krystkowiak has recourse to the protections of — just as NECSNA would not have that protection. Krystkowiak never petitioned the government in his individual capacity; he appeared at all times on behalf of NECSNA, and NECSNA entered into an agreement that waived itsFirstAmendment rights to oppose the project in exchange for significant changes in the development plan.V. NCA Defense

Because Brisben's claim against Kyrstkowiak should have been dismissed either on the pleadings or the merits, I would also not reach Krystkowiak's defense based on section7-126-103, 2 C.R.S. (2003), of the Colorado Revised Nonprofit Corporation Act (NCA). That statute, which provides persons associated with a non-profit corporationPage 879immunity from suit in most cases, states that "[t]he directors, officers, employees, and members of a nonprofit corporation are not, as such, personally liable for the acts, debts, liabilities, or obligations of a nonprofit corporation." §7-126-103. Such immunity is subject to exception where the defendant purports to act on behalf of the corporation without a good faith belief that he has the corporation's permission to do so. §7-122-104, 2 C.R.S. (2003).

It is not clear to me that the statute would apply in this case. Section7-126-103specifically provides immunity from suit to corporate personnel for the obligations, debts, and liabilities of the corporation. As applicable here, it would immunize Krystkowiak from a suit based on NECSNA's breach of contract. It does not appear to immunize corporate defendants from suit for their own intentional torts. Here, NECSNA was not and could not have been called to answer for the intentional interference with its own contract; instead, Brisben sued Krystkowiak as a representative of the corporation, but for his own intentional conduct, which could not have been attributed to the corporation.

Additionally, the statute speaks to a corporate member's financial liability for the corporation's debts or liabilities where the corporate member is being sued only by virtue of his position or membership within the corporation. It does not abrogate the otherwise applicable laws of agency and does not immunize a corporate agent from a suit based on the agent's own conduct.

Accordingly, I would find the plain language of section7-126-103to be inapplicable here.VI. Attorney Fees

Because this case should have been dismissed on the Rule 12(b)(5) motion, I would agree that Krystkowiak was entitled to an award of attorney fees under section13-17-201. However, I would so conclude on this basis alone and therefore do not join in the majority's analysis of the interrelation between the Rule 12(b)(5) motion and the defense.VII. Conclusion

Brisben's lawsuit against Krystkowiak should have been dismissed upon motion under Rule 12(b)(5) because Brisben failed to state a claim against him for tortious interference with contract. Even assuming there was a valid contract between NECSNA and Brisben and that NECSNA breached it, Brisben did not plead facts that would support a claim against Krystkowiak either individually or as NECSNA's agent for interference with that contract. Additionally, when Brisben was given an opportunity to conduct discovery, it was unable to present facts sufficient to overcome summary judgment as a matter of law.

I do not believe that a defense was applicable here for two reasons: (1) Brisben's claims were susceptible to dismissal on common law grounds without recourse to the constitutional defense; and (2) Krystkowiak was acting on behalf of an association that had itself waived the right to petition the government in opposition to the development and he was bound by that waiver because of his identity with the association.

I also do not believe that the NCA need be or can be invoked here, because it protects individuals only when they are called to answer for the debts, obligations, and liabilities of the corporation, and not where, as here, they are being sued in tort for their own intentional conduct.

For all of those reasons, I respectfully concur only in the judgment of the court and do not join in the majority opinion.

I am authorized to state that JUSTICE COATS joins in the concurrence.Page 880