Warne v. Hall, 373 P.3d 588

Background

Hall sued the Town of Gilcrest and Mayor Menda Warne, alleging Warne used mayoral authority to impose excessive conditions on Ensign United States Drilling’s site plan, causing Ensign to terminate a purchase agreement to buy Hall’s property.
The removed federal claims were voluntarily dismissed; the intentional interference with contract claim was remanded to state court and the federal 12(b)(6) motion converted to C.R.C.P. 12(b)(5).
District court dismissed Hall’s complaint and amended complaint for failure to state a claim, finding insufficient factual allegations that Warne’s conduct caused Ensign’s breach; attorney fees were awarded to defendants.
The court of appeals reversed under Colorado precedent applying Conley’s “no set of facts” language, holding Hall’s allegations adequate.
The Colorado Supreme Court granted review to decide whether Colorado should adopt the federal Twombly/Iqbal “plausible on its face” pleading standard and whether Hall stated a plausible claim for tortious interference.
The Court held Colorado will interpret C.R.C.P. 8 harmoniously with Twombly/Iqbal, reversed the court of appeals, found Hall’s pleading not plausibly alleging improper conduct by Warne, but allowed leave to amend before reconsideration of dismissal or fees.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Colorado should continue to follow Conley’s “no set of facts” wording or adopt Twombly/Iqbal plausibility standard for pleadings	Hall: Colorado has long followed Conley; C.R.C.P. 8 differences and notice-pleading policy counsel against adopting a heightened plausibility test	Warne: Colorado rules should be read in harmony with federal Rule 8 as interpreted in Twombly/Iqbal; dismissal appropriate under plausibility review	Colorado adopts Twombly/Iqbal plausibility standard and will construe C.R.C.P. 8 in harmony with federal interpretation when appropriate
Whether Hall’s complaint (and amended complaint) sufficiently pleaded intentional interference with contract under the plausibility standard	Hall: Allegations of Warne’s unilateral imposition of unlawful/disproportionate conditions, statements she would block Ensign, and prior animosity plausibly show improper motive and causation	Warne: Allegations are conclusory or equally consistent with legitimate municipal action; no specific factual showing that Warne caused the breach or acted beyond authority	Under plausibility review, the Court found Hall’s allegations conclusory or equally consistent with lawful conduct and insufficient to plausibly allege impropriety or causation; dismissal affirmed (but plaintiff granted leave to amend)
Whether allegations of motive and state of mind may be pleaded on information and belief under Colorado rules post-adoption of plausibility standard	Hall: C.R.C.P. 8(e)(1) allows pleading on information and belief and C.R.C.P. 9 permits general averment of intent; discovery is necessary to obtain facts	Warne: Even with information-and-belief pleading, plausibility requires factual enhancement; conclusory assertions are not enough	Court: Pleading on information and belief remains permissible, but such allegations must still provide factual content that makes the inference of culpability plausible under Twombly/Iqbal
Whether attorney fees awarded after dismissal should stand given dismissal under new standard	Hall: Plaintiff requested leave to amend and argued fees were premature given uncertainty about pleading standard	Warne: Fees appropriate following dismissal	Court: Because change in pleading standard affects sufficiency and plaintiff lacked prior notice, plaintiff must be allowed to amend; fees should not be upheld before amendment succeeds

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (articulates the "plausibility" pleading standard under Rule 8)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (extends Twombly’s plausibility standard beyond antitrust cases; clarifies courts need not accept legal conclusions)
Conley v. Gibson, 355 U.S. 41 (1957) (historical notice-pleading formulation stating a complaint should not be dismissed unless no set of facts could support it)
Krystkowiak v. W.O. Brisben Cos., 90 P.3d 859 (Colo. 2004) (elements of intentional interference with contract and inquiry into whether defendant’s conduct was "improper")
Trimble v. City & County of Denver, 697 P.2d 716 (Colo. 1985) (discusses factors relevant to determining impropriety in interference claims)