City of Golden v. Parker

single and there- clearly treats of voters on that kept from the

fore cannot respectfully dissent. I therefore alone.

basis that JUSTICE

I am authorized state joins in this dissent.

RICE participate. EID does not

Justice GOLDEN, municipal a Colorado

CITY OF

corporation; Associates,

Golden; Interplaza West liability

LLP, part- limited a Colorado

nership; Three Limited Liabili- Sullivan liability

ty Company, a limited Colorado Stores,

company; Department Kohl’s

Inc., corporation; De- a Delaware Home Inc., corporation;

pot U.S.A., a Delaware Realty, LLC;

Christopher Hall Ltd., corporation;

Properties, a Colorado LLC,

GEI-H, limited liabili- Colorado GEI-6, LLC,

ty company; a Colorado liability company; Coors Tech-

limited Association,

nology Center Owners nonprofit corporation; Coors

Colorado Inc., Company, a Colorado

Ceramics Company,

corporation; Coors Porcelain corporation; Bounce, Inc., a

a Colorado corporation; Graphic Packag-

Colorado Colorado, Inc.,

ing Corporation a Col- corporation; Development, Dada

orado

Inc., corporation; Ta- Colorado Parkway Investors, LLC,

ble Mountain corporation;

a Delaware Coors Co., corporation,

Brewing a Colorado

Petitioners PARKER, Respondent.

Donald G.

No. 05SC282. Colorado,

Supreme Court of

En Banc.

June Associates, A. & James Win-

Windholz Williamson, dholz, Haya- P. David S. William Boulder, ski, Colorado, Attorneys for Peti- City of Golden and the tioners City of Golden. Merrick, Senn Visciano Kirschenbaum Toro, P.C., Visciano, A. Den- Frank W. Luis Colorado, ver, In- Attorneys for Petitioners Associates, LLP, a Colorado terplaza West liability partnership; and Home De- limited U.S.A., Inc., pot corporation. a Delaware Lottner, Rubin, Saul, Fishman, Brown & P.C., Brown, Denver, Colorado, At- Richard torneys Three Limited for Petitioner Sullivan Liability Company, a limited liabili- Colorado ty company. Tarbox,

Rumler, Lyden Corporation Law Denver, Colorado, P.C., Jablonski, A. James Attorneys Department for Petitioner Kohl’s Stores, Inc., corporation. a Delaware Nolan, LLP, Golden, Stiner, Back, & Parker v. 119 P.3d 557 Jonson Nolan, Golden, Colorado, appeals’ Attor- App.2005). Thomas A. We reverse the court of Realty, neys Christopher Hall LLC. judgment. Owen, LLP, James C. Holme Roberts & Proceedings II. Facts and Prior Denver, Colorado,

Ruh, Klismet, Kary Attor- Ltd., neys Properties, for Petitioners Golden an economic established GEIH, LLC, corporation; a Colo- a Colorado program, incentives contained in the Golden GEI-6, LLC, liability company; rado limited 18.60, Municipal Chapter “for Code com- liability company; a Colorado limited Coors mercial, manufacturing develop- office and Association, Technology Center Owners ment, expansion upgrade, purposes nonprofit corporation; Colorado Coors Ce- of the economic revitalization of the commu- Inc., Company, corpora- ramics Colorado (2005). nity.” § in- G.M.C. 18.60.010 tion; Company, Porcelain Colorado Coors program City centives authorized the Bounce, Inc., corpo- corporation; a Colorado agreements provided to enter into which “de- ration; Graphic Packaging Corporation of velopment including subsidies or incentives” Colorado, Inc., corporation; a Colorado Dada up property reimbursement of taxes for Inc., corporation; Development, a Colorado years, seven reimbursement of sales and use Investors, Parkway 16200 Table Mountain up years, taxes for to five and waiver or LLC, corporation; and Coors Delaware development deferment of certain costs to Co., corporation. Brewing a Colorado expanded businesses created or within Gold- Associates, P.C., Boog F. Victor & Victor § en. G.M.C. 18.60.030. Lakewood, Colorado, Attorneys Boog, F. inAlso Colorado voters amended the Respondent. constitution, X, adding state article section 20 (“Amendment 1”). provisions One of its re- Chief Justice MULLARKEY delivered the quires approval voter in advance the “cre- Opinion of the Court. any multiple-fiscal year ation of direct or I. Introduction indirect district debt or other financial obli- granted certiorari to We consider whether Const, X, gation whatsoever.” Colo. art. (the developers “Develop- certain real estate (4)(b). § proposed cl. multi- ers”) who entered into economic incentive year agreement economic incentive with In- (the agreements “Agreements”) with the Associates, LLP, terplaza West one (“Golden”) City City of Golden and its Coun- rejected by Developers, was voters. Golden’s rights agreements cil had vested in those soliciting approval, Without voter Golden that could not an be disturbed amendment (the agree- entered into five economic incentive city to Golden’s home rule charter Amendment”) in in ments 1998 and one 1999 which are the subsequent “Charter enacted subject Agreements re- this case. The Agreements required, to the which with cer- quired or exceptions, approval tain to relocate estab- voter of all new businesses, grants property, develop lish annex development subsidies incentives $25,000.1 exchange, appeals property their real in Golden. In excess The court of agreed development that possess held did not Golden to share costs rights Agreements through property, of local reimbursement precluded application sales, of the Charter Amend- and use taxes and a waiver of certain paid development application charges. ment to subsidies and incentives to the fees and provided approval after of the amendment. All of the that the re- issues, (Amendment 1992), granted budget 1. We certiorari on two stated as to exercise its dis- annually pay monetary compensa- follows: cretion provided agreements. tion those (1) developers Whether real estate in this case (2) Whether the court of erred when it rights agreements have vested in their with the Council, developer concluded that the defendants did not require of Golden that agreements implied good have vested contract accordance with the covenant of dealing place executory faith and fair were in the initiated and consistent with the when Constitution, X, adopted. Colorado article section Charter Amendment was found that retroactive multiple did not constitute imbursements obligation financial year debt or Charter fiscal by the prohibition against to annual retro-

were would violate spective law in the Colorado Constitution. Council. Const, II, § art. 11. The court of Colo. 6, 2001, ap- voters Golden’s On November court, holding trial appeals reversed the to the Golden proved an amendment not confer vested did Charter, city required obtain Developers. granted the Peti- upon the grant development subsi- approval to voter now request tioners’ for certiorari review and $25,000 dies or incentives excess reverse. taxes, year. Reimbursement of refunds one development, and granted in connection with Analysis III. development fees waiver or deferment included under the definition of subsi- were Constitution, Colorado Under the the amendment. dies or incentives under Assembly prohibited is from en the General specify Amendment did not The Charter acting any “retrospective in its law that apply Const, it was intended II, § operation....” art. ll.2 Colo. Agreements at here. issue prohibition against retrospective laws at applies equally govern to local the state level 13, 2002, Subsequently, on June City County Denver v. Denver (the ment. & passed Ordinance No. 1590 “Ordi- of Buick, Inc., 121, 140, 919, 141 347 P.2d Colo. nance”), provided part in that “eco- (1959), grounds overruled on other 930 subsidy or development nomic incentive 1, 2001, City Aspen, v. 188 Colo. 532 P.2d 6, Stroud in on agreements effect November (1975). application of a 720 constitution effect, subject in however to the shall remain question of we al standard is a law which provisions conditions of each such indi- and Village 2002, review de novo. Greenwood July following agreement.” vidual In Proposed City Ordinance, v. Petitioners Centenni adoption of the Donald G. for (Colo.2000). al, 427, 440 Parker, 3 P.3d respon- a Golden resident and the here, complaint in trial court dent filed a Retrospectivity A. continuing obligation

challenging Golden’s sought under the Parker a general prohibition against ret declaratory injunctive judgment and relief to rospective legislation prevent is to intended prevent further to might result from the unfairness that $25,000 approval. in excess of absent voter rights already application of law to in new DeWitt, Golden, Council, Develop- In re Estate 54 P.3d and the existence. “Petitioners”) (Colo.2002). 849, Legislation pre (collectively, the filed a 854 is ers prospectively Summary Judgment operate which was sumed to unless there Motion for contrary. legislative is intent to the Id. Ret granted the trial court. The deter- law, application although of a disfa Developers had vested roactive mined that the vored, necessarily not is unconstitutional and to have the Council exercise reasonable permitted if the annually determining law at issue effects in discretion change procedural that is remedial. to reimburse appropriate or not to funds (Colo. State, trial Kuhn 924 P.2d 1056-57 Agreements. The under the properly pointed previously, we Contracts Clause was not federal issue. As out 2. The federal and, therefore, proceedings below the federal Constitution contains no textual coun- raised trial, opinion. terpart prohibition it in this At address to the Colorado we do not Constitution's support against retrospective legislation. Dep't of their motion brief Ficarra v. defendants’ correctly summaiy judgment, Regulatory Agencies, addition to cit- 849 P.2d 12 n. 11 Constitution, (Colo.1993). Furthermore, mistakenly given disposition cit- ing to the Colorado our proposi- retrospectivity on constitution, States Constitution the issue of under the state ed the United legislation. The barring retrospective portion trial we do not reach the of the tion granting appeals' opinion addressing impairment in its order court of repeated this mistake court summary though judgment, the substance of contract under the even state and federal constitu- Golden, Colo- tions. See Parker v. opinion confined itself court’s of the (Colo.App.2005). did not touch rado Constitution 1996). distinguish legislation ap A determination that retroactive to order retroactive, merely plication impairs right use the term a vested is that is we law “retrospective” only regard legislation dispositive retrospectivity inquiry to rights acquired “may “impairs finding that because such a be balanced laws, obligation, concerns, a new existing safety or creates against public health and duty, or attaches a new dis imposes powers regulate prac a new to certain police state’s ability, respect tices, or consider public policy to transactions as well as other consider already past.” Dep’t Ficarra v. application ations of a ations.” Id. Retroactive law Regulatory Agencies, implicates right only permis is 1993)(citations omitted). sible, however, if the law bears a rational relationship legitimate government to a in two-step inquiry to deter use a We cases, past “applied] terest. Id. In we have retrospective not a law is mine whether or balancing weighs public test First, DeWitt, operation. 54 P.3d at 854. statutory objectives against reasonable legislative intent to determine we look expectations substantial reliance.” operate whether the law is intended to retro Kuhn, Ficarra, (quoting 924 P.2d at 1059-60 require legislative actively. Id. a clear 17). P.2d at retroactively apply law intent prospectivity. presumption overcome the implicated, If a vested is not Ficarra, However, express 849 P.2d at analysis. prong consider the second we language of retroactive is not nec prong, “retrospectivity may this result Under essary apply find that a law is intended to obligation, imposi from the creation of a new retroactively. duty, tion of a or attachment of a new new disability respect past to” transactions ap If we find intent of retroactive DeWitt, or considerations. 54 P.3d at 855. plication, step inquiry the second Application retrospec of a law is not deemed retroactively applied determine whether tive, however, “merely because the facts operates retrospectively. A law is retro law “(1) upon operates which it occurred before” impairs spective if it either a vested adoption. City Village, (2) Greenwood 3 P.3d right, obligation, imposes or creates new at 445. duty, disability a new or attaches a new ” DeWitt, 54 consider .... P.3d at 855. We legislation pre- Because we review with the prongs retrospectivity each of these the see, constitutional, sumption e.g., it In analysis regard In turn. to the first Interrogatories re Submission on House right found that a prong, we have is vested 99-1325, (Colo.1999), P.2d 554 Bill only “independent it has an when existence.” our cases have not often found a law retro- D.K.B., People v. However, spective. prohibited we have ret- 1993). may from a right A vested be derived rospective application aof statute when the law, statute or the common but “once it vests expectations reasonable and substantial reli- dependent for its longer it is no assertion party prior ance of a to the enactment under law or statute the common (stat- Kuhn, of the statute. 924 P.2d at 1060 Ficarra, acquired.” may have been retrospectively applied ute not to could P.2d at 15. attorneys’ right defeat to court-ordered rea- fund). paid sonable out of common employ a fixed formula or fee do not determining whether a bright-line test for Rather, at 17. we look right is vested. Application B. “(1) public whether the to three factors: (2) retarded; advanced interest is Retroactivity 1. bona or defeats the gives effect to the statute A law is expectations oper retroactive “when it or reasonable fide intentions (3) ates on individuals; already whether the transactions that have oc the affected rights obligations or on individuals who have relied curred that ex surprises statute DeWitt, contrary at 855. isted City law.” before its effective date.” on a (citation Rights at 444 Vested Village, 3 P.3d Greenwood omitted). Develop- The Petitioners contend that the evidence on the The factual record lacks right ers have vested Council’s level, retroactivity. question of At the trial considering exercise of its discretion in Parker, Amend- the drafter of the Charter whether to make annual un- ment, two letters he wrote to the submitted They Agreements. der the concede that the filing legal as prior to his claim Developers right do not have a under the was intended that the amendment evidence payment any Agreements particular to Agreements. letters apply to to the These above, year. As noted were dispositive The Peti- are not of the issue. specifically written to avoid creation of a any legis- evidence of tioners did not submit multiple year obligation that financial would lative intent. X, have violated article section 20 of the state Rather, argue constitution. the Petitioners Petitioners contend that the Charter nonfinancial apply obligations duty from the derived any of law and that such ments as a matter good dealing. According faith and fair to retroactive and uncon- would be Petitioners, application of the Charter stitutionally retrospective. The economic in- Amendment to will interfere issue, argue, the Petitioners were centives duty Council’s exercise its “granted” all when the were ex- discretion, good depriving Develop- faith Additionally, ecuted in 1998 and 1999. expectation ers of their reasonable of reli- assert Council’s Petitioners ance on that exercise discretion. adoption of No. 1590 clarifies that Ordinance ap- Amendment should not be the Charter Further, the Petitioners assert that each of plied existing Agreements. Agreements provided right expenses with the to “earn back” the argues Respondent Parker that the Devel- development subject a maximum amount opers have no vested which could be during of reimbursement the life each by application impaired of the Charter by non-ap- contract which not reduced was and incentives Amendment to the subsidies propriation year. one Moreover, granted Agreements. under the significant public funds into im- invested argues Parker because provements in reliance on the terms of the discretionary Agreements are instance, every appropriations, appropri- annual each annual expenses Agree- “earn back” these the “grant” ation is a new of incentives under the beyond ments extended that the Charter Amendment. He contends apply to Charter Amendment was intended Developers argues Parker did any payments to of subsidies or incentives Agreements in the for have 2001, $25,000 6, over made after November He contends that because several reasons. prospective, not application and that such is Agreements any payments made under the Therefore, Parker, according to retroactive. subject discretionary pay- annual are to unconstitutionally void be- the Ordinance is ments, Developers the have no reasonable plain language of cause it circumvents the any particular in expectation payment of the Charter Amendment. by year application of that could be disturbed According to Par- appeals the Charter Amendment. The trial court and the court ker, Agreements that analy- language the purposes both assumed for the of their 1 comply Amendment was intend- allows them to ses that the Charter Amendment Parker, year financial retroactively. multiple debt or apply 119 P.3d and avoids ed to of all obligation also results the surrender question at 561. Because the we face is may had by rights were created remedies the whether or not vested non-appropriation of against Agreements, we also assume the retroac- Golden year. Finally, ar- any one Parker apply funds tive intent of the amendment pre- gues language already contracts in existence. 292 performance terms of property er to set or control the of “vested

venting the formation after precludes the formation formation. rights” contracts. rights under the determining represent that The Petitioners court found that The trial budgetary appropriations whether to make Council, City due to to have the had to the discretion of Golden’s Council. left implied duty good and fair deal- faith Chapter XI of the Home Rule Char- good faith when ing, exercise its discretion duty to ter Council with the invests yearly appropriation of “earn considering the budget budgetary ap- adopt an annual and employed the expenses. The court back” propriations 6.1 of the therein. Section that: factors stated in to find three DeWitt power grants Golden’s voters the Charter (1) by public interest of the was advanced Council, propose any ordinance Agreements; incentives in the the economic concerning] budget, capital “except [those (2) application of the Charter retroactive levy program, appropriation of taxes or or defeated the city employees.” salaries of officers or (3) parties; and bona fide intentions given duty in Public officials unfairly sur- retroactive would volving discretion abuse discretion had prise Golden and the who See, they e.g., Lamm v. if fail to exercise it. enforceability Agree- relied on the Barber, 511, 517, 538, 542 192 Colo. 565 P.2d appeals ments. The court of reversed McNichols, (1977); 141, People v. 91 Colo. ruling, finding trial court 143, 266, (1932); Moody 13 P.2d v. Lar on ments did not create vested based sen, 1169, (Colo.App.1990), 1171-72 802 P.2d language precluding financial obli- their by grounds, superseded statute on other Ch. gations beyond year one under Amendment 12, 16-5-209, § sec. 2000 Colo. Sess. prop- prohibiting the formation of vested 451, 454, recognized Schupper Laws as v. erty rights. character- Smith, (Colo.App.2005). 128 P.3d 323 When Developers’ as a “mere ex- ized the public duty-bound fails to exercise officer pectation hope” payment, completely discretion, ... will direct an officer “[c]ourts Parker, dependent on an uncertain event. proceed exercise the discretion vested 119 P.3d at 562. Colo, McNichols, in him law.” Duty Implied law, a. of Good Faith 13 P.2d at 267. Under Colorado Dealing Fair expected could be to exercise its discretion, budgetary regardless of whether law, every contract Under Colorado manner of that was favorable to exercise implied duty good an faith and contains Developers. 4-1-203, (2005); § dealing. Amo fair C.R.S. Ervin, co 908 P.2d Oil Co. provides Each of the 1995). duty good A faith violation development costs that reimbursement dealing gives and fair rise to a claim for are to annual Cary v. breach of contract. United Oma City. respective Developers chose to lo (Colo.2003). Ins., ha Life expand existing or to on cate new businesses performance in on contractual good The faith doctrine ones Golden based assur City ances that the Council would exercise its attaches to contracts “to effectuate the inten annually appropriation city in of reason discretion parties tions of the or to honor their Co., develop P.2d funds for reimbursement of their expectations.” able Amoco Oil expenses duty good expenses. faith fair ment Included these at 498. The of and improvements and infrastructure dealing may public “when the man were be relied necessary development, to such as construc performance specific ner of under a contract language part sewage tion of lines. Based on the term allows for discretion on the of City Rule party.” performance Agreements, of the Golden’s Home either Id. Discretion formation, contracting, time of and Gold parties, at defer Charter at the occurs “when duty good faith and fair deal regarding performance implied en’s a decision terms ing, expec- a reasonable leaving party pow- with the had the contract” one exercise tation that the Council would Charter Amendment to the im- plicates right a determining Developers. vested of the budgetary discretion its annually. appropriate to funds First, public we consider whether the in terest is advanced retarded retroactive implied The court of found that the application of the Charter Amendment. De duty good dealing fair faith and Witt, 54 P.3d economic Golden’s of a contract could not a performance confer program incentives was enacted to advance right a vested on the because public “development, interest in business right independent has an existence expansion, upgrade, purposes and statutory duty good faith fair and the community.” economic revitalization of the dealing product a common law. (2005). § program G.M.C. 18.60.010 The an Parker, interpretation 119 P.3d at 563. This ticipated offering economic incentives of vested contractual was in error. consequent development would in proposition The court cited Ficarra for the city through crease annual revenues en right independent that a vested must have an receipt hancement of the tax base and the Parker, existence. 119 P.3d at 563. Howev- generated by development direct revenues er, in Ficarra we also that a stated 18.60.030(2). charges. § related See G.M.C. right may originate from a statute or the terms, By their Agreements contemplate only common law and it is “once it vests that Golden, generation por of revenue to longer dependent it is no its assertion tion of which permitted are upon the common law or statute under which years. “earn back” in program future The may acquired.” have been at 15. encouraged development also city, within the analysis way in Ficarra in Our no indicates discouraging sprawl. urban right originate that a vested cannot from the countervailing A consideration is the vot- common law. limiting public ers’ interest expenditures, likely passage motivated the Rather, right is vested if it Charter Amendment. The Amendment en- repeal survives “the of a statute or the abro majority sures that the of Golden’s electorate gation of the common law from which [it] supports city expenditure of more than may originated.” Id. at A 15-16. vest $25,000 promote development. business right, proper ed “must be contract However, application of the Amendment to ty right, right arising or a from a transaction prior contracts made to its enactment re- in the nature of a contract which has become public by preventing tards the interest perfected degree depen that it is not city honoring from its commitments.3 While dent on the continued existence of the stat prospective application of the Charter Singer, ute” or common law. 1A Norman J. promotes public interest of Statutory § Sutherland Construction 23.35 limiting public expenditures, future retroac- (6th ed.2002). Developers’ reasonable tive to the serves expectations here have derived from the only duty to relieve the Council of the duty good common law faith fair deal exercising its discretion in fulfillment ing, but their Council’s obligations. contractual Agree exercise of discretion arose from the Agreements contemplate reimburse- ments, independent and were therefore development ment for costs the common law. Council, discretion of the not the voters. Because Golden entered into the Analysis b. DeWitt public for the advancement of the public now turn DeWitt factors and because the interest is best served by application honoring city’s to determine whether of the the contractual commit- obligations stringent 3. The fact that the contractual ... would of the more regulating examination than laws government, private party, relationships pri a at between rather than are contractual significant. Supreme parties.” Span vate nous, issue is The Court has not- Allied Structural Steel Co. 2716, ed 244 that under the federal Contracts Clause "im- 438 U.S. n. 98 S.Ct. (1978). pairments of a State’s own contracts would face L.Ed.2d 727 the reasonable merits, Agreement would would frustrate public the we find that application of the by expectations be retarded retroactive and substantial reliance Kuhn, Amendment Charter Developers in this case. See 924 P.2d at 1060. Second, the Charter we look to whether to or defeats the gives effect

Amendment expecta- or reasonable bona fide intentions Compliance Amendment l’s Re- c. DeWitt, 54 P.3d at 855. parties. tions Multi-year on Financial striction above, Developers have a the As discussed Obligations expectation that the reasonable in de- budgetary discretion disagree will exercise its parties as to whether the appropriate termining or not contractual limitations Petitioners Agree- under the funds for reimbursement pre- adopted comply with Amendment undisputed It is also bona ments. the establishment of vested con- cluded of Golden and the fide intentions tractual over the life of the of the de- were to condition reimbursement essentially argument ments. Parker’s appropria- velopment expenses on the annual Agreements prevent- of either the terms process. Application Charter tions the creation of vested contractual ed Agreements would defeat Amendment to the by that could be disturbed the Charter par- expectations and intentions both rights, they Amendment or that such if exist- ties. ed, unconstitutionally Amend- would violate Third, we examine whether Charter Dougherty ment 1. The Petitioners claim that surprises the Petitioners due to Amendment 99-1325, Interrogatories on HB both of contrary law. As dis- on their reliance prohibition examined Amendment l’s below, specifi- were cussed year obligations, permit multiple on financial cally comply with Amendment tailored to multiple year formation of nonfinancial obli- County with Board Com- accordance gations, provided in the as here. County Boulder v. missioners (Colo.App.1994), Dougherty, appeals Dougherty, P.2d 199 exam- grounds by In re lease-purchase agreement overruled on other Submis- ined whether a Interrogatories on House Bill 99- sion county grader between the of Boulder road (Colo.1999). parties 979 P.2d 549 banking firm and an investment constituted addressing prior relied on law “multiple-fiscal year direct or indirect district enforceability the contracts. Fur- for the obligation” other financial under debt or above, thermore, parties as discussed at 201. The Amendment 1. 890 P.2d lease- responsibility relied Council’s agreement provided initial purchase for an budget making annual and sole discretion eight month term with four additional one- provided as the Golden year appeals renewal terms. The court of Therefore, appli- Charter. retroactive agreement found that the did not create Amendment would ef- cation the Charter multiple year obligation financial fiscal be- DeWitt, parties. surprise fect a on the See require approp- it that funds cause did not any single year. riated in Id. at 207. We find all three of the DeWitt factors banking Dougherty firm in The investment are met implication of argued that the lack of a future financial application of Amendment to the the Charter obligation lease-purchase agreement Additionally, we find no here. than substance was a matter of form rather overriding public policy concerns that would county the intent to make because the had justify retroactive of the Charter every year until the conclusion of agreements Amendment to entered into agreement. Id. The court already of Golden were present, the held that even were such intent at the time the Amendment was existence possibili- nonpayment fact that was a distinct contrary, To the we find that the enacted. distinguished from ty agreement application of the Amendment to the Charter contrast, By looking at all of year obligation.4 Id. the multiple financial economic realities and circumstances created analysis appeals’ of examined the court here, Agreements the there is no obli Interrogatories in on HB 99- Dougherty in payments gation that Golden make at 556-57. We found 1325. See 979 P.2d any year. single in Much like not “lease-purchase agreement was that the positions parties Dougherty, the of the in obligation requiring approv- voter a financial may well contracted with the have borrowing of it did not entail the al because appropriations intent to make the of the Id. pledge funds or the credit State.” year Agreements every and the distinguished that contract from at 557. We expect well to receive reimbursement (“RANs”) anticipation notes that the revenue every year, payments ultimately but the lan interrogatories the be- were guage Agreements leaves the matter in “it that the [was] cause the RANs evident to the discretion of the Council. Noth money receiving in the form of a [was] State ing Agreements prevents the scope that came within the of “other loan” exercising Council from its discretion to de obligation financial whatsoever” in Amend- Moreover, appropriate cline to funds. Further, ment 1. Id. at 557-58. we held that contemplate Agreements reimbursement merely obligation payment because a is dis- only portion for an incremental of the tax cretionary beyond year its first does developed generated prop revenues from the scope that it is outside the of Amend- dictate erty. provision, Agreements Due to this 1. determine whether a ment Id. 558. To funds, contingent borrowing are not on the “multiple-year obligation” implicated, fiscal credit, any pay the extension Golden’s obligation “the entire must be looked at as for are unavailable. ments which funds whole.” Id. holding Interrogato- Consistent with our in appeals’ ries on HB 99-1325 and the court of obligations proposed payment holding Dougherty, we find that likely multiple RANs were to extend into Agreements “multiple-fiscal do not create a years were within and therefore RANs year direct or indirect district debt or other Amendment 1 because the State had to obligation” financial as defined Amend- market- pledge its credit the notes to be ment 1. For reasons stated elsewhere this notes, able. Id. In order to sell the the State reject argument opinion, we Parker’s that security had to create a that would the terms of the which allowed beyond year. likely one Id. We noted extend prevent- comply them to with Amendment presented that when Amendment 1 was vesting ed the of nonfinancial contractual “they told that it would the voters were rights. require approval voter for the creation of beyond obligations most financial that extend the Formation d. Restrictions on year government the current fiscal unless Property Rights Vested enough money to fund the obli- sets aside gation years in all are due.” language The court of found that (citation omitted). Consequently, when Municipal Code and certain of the Golden year transportation budget for the precludes entire the creation million, approximately rights negates the voters a claim to property was of vested $585 reasonably expect from the could issuance vested contractual derived Parker, 119 P.3d at 562. The transportation billion RANs sub- $1.0 equated “property rights” with “con- Id. at mitted them. 558-59. agreement year. Dougherty, lease-purchase at issue here do not one agreement provided termination clauses the event that the would be terminat contain contrary, any non-appropriation. non-appropriation On the the lan- ed in the event of one County guage Agreements contemplates year. County Bd. Comm'rs Dougherty, to "earn back” reim- could continue Boulder v. contract, However, during App.1994). bursements the life of that case does not stand appropriation proposition agreements subject is made in one whether or not beyond year. annual are unenforceable program economic incentives and the vested rights,” finding no distinction between tract appear in property rights section the Golden the two in this context. chapter Municipal Code concerned provides that Municipal Code The Golden city planning zoning. Parker has and right property- such vested or other “[n]o compelling to inter- presented reason granted impli- rights or shall be or interests by property rights” than pret “vested other any entity” by edly person or conferred statutory definition and the context of program. incentives G.M.C. the economic Furthermore, statutory the state scheme. addition, Agree- § 18.60.080.In three statutory meaning prop- of “vested use language precludes that ments contain erty language rights” is consistent with the rights property. Par- creation of vested Agreements. argues language that the in the Code and ker contrary Agreements is some of the Therefore, ap- we hold that the court of Agreements claim that the creat- Petitioners’ equating contract peals erred rights. contract ed vested rights property rights pro- with the vested argue proper- The Petitioners that “vested by program the economic incentives hibited ty Agreements and in rights” as used prohibi- certain of the and is a term of art and refers to the Code property on the creation of vested tions statutory by which a landowner state scheme preclude did not creation of vested property right in land obtain a vested rights. contractual - §§ governments. from local 24-68-101 to (2005). statutory Under C.R.S. Conclusion IV. scheme, property right” defined a “vested reasons, foregoing For the we find that the right complete as “the undertake appeals erred in its determination development property and use of under the that did not have a vested specific of a devel- terms and conditions site by adoption that was disturbed 24-68-102(5). plan.” § opment Amendment. reverse the Charter Municipal provides procedures Code holding of the court of and remand property rights granted are which vested the case with directions to return it to the specific development plan, in under a site district court. statutory accordance with the state scheme. §§ G.M.C. 18.66.010to -080. dissents, EID Justice and Justice COATS point agreement Petitioners also joins in the dissent. Ltd., Properties, grants with Golden lim- developer property dissenting: EID Justice city’s ability modify zoning of the its the case, In the at issue this property, as evidence promised that the Golden Council contemplation into in ments were entered Developers’ request consider the would statutory the state scheme. The Golden payment nothing more. Because this — Properties agreement states “this right,” promise falls far short of a “vested develop- Agreement be deemed to be shall subjecting the Golden Charter Amendment agreement meaning of [sec- ment within the people is not such to vote provides for the dura- 24-68-104” which tion] unconstitutionally retrospective. respect- I property of vested tion and termination fully dissent. § rights granted by governments. local 24- 68-104. majority acknowledges Significantly, the right” no argument persua- have “vested

We find the Petitioners’ payment “to phrases under the sive. We construe words Maj. year.” op. at 291. That is acquired particular particular a technical or mean- because, out, majority points as the ing, legislative definition oth- 2-4-101, (2005); erwise, accordingly. specifically § were written C.R.S. Heiserman, require- Corp. the Colorado Constitution’s e.g., Resolution Trust avoid (Colo.1995). “creation of approval Both the ment of voter for the promise indirect dis- Nor could the even voter- any multiple-fiscal year direct or obligation what- discretion, or other financial trict debt free for the Council’s discretion to Const, (4)(b) X, § el. art. soever.” Colo. subject appropriate always funds to was (“Amendment 1”); maj. If op. at 291. the Moreover, change through voter initiative.1 multi-year create fiscal Agreements do not majority acknowledges, Agree- as the the 1, they do not obligations under Amendment ments were made after the Golden voters obligations purposes of the such create rejected proposed multi-year a had economic analysis retrospeetivity either. package Develop- incentives with one of the majority analy this seems to concede maj. op. ers in this case. See at 288. Under sis, Developers that the have a but concludes circumstances, Developers’ these the claim of Agreements— right vested non-fiscal expectations appropri- thwarted in voter-free namely, expectation the “reasonable ations is at best dubious. budgetary City would exercise its Council determining appro to discretion whether majority proceeds to find vested annually.” Maj. priate op. funds at 292-93. right to voter-free Council discretion in the question right to the might One whether this good dealing, fair covenant of faith and see of the discretion is exercise Council’s 292-93, maj. op. “applies at when one actually right Developers seek to the the party discretionary authority has to deter noted, protect; the court of the as contract, mine certain terms of the such as Developers to goal ultimate of the is receive quantity, price, or time.” Amoco Oil Co. v. clearly not a “vested payment, which is (Colo.1995). Ervin, We Parker right” Agreements. under the See duty requires parties that held Amoco the Golden, (Colo.App. exercising good to act in faith when their 2005). majority’s description But even if the id. But the contractual discretion. See accurate, “right” question is it sim the good-faith exercise of contractual discretion qualify as under our ply does not “vested” entirely separate question an from wheth is jurisprudence. er such discretion can be limited the claiming right in Petitioners are a vested government their voters when contracts ability to exercise its discretion the Council’s private party. question this On —which Developers approve payment to with- question prece the central in this case—our people. “right” But this to out a vote of the applying implied inap are dents the covenant voter-free discretion is nowhere Council plicable. language Agreements. found in the contrary, language of several of On the duty good implied Even if the faith were language of a tracks the ease, majority applicable to this fails to providing ordinance that “[n]o Golden major- explain it violated. The how has been property property right or other such inter- ity Developers “had a rea- believes granted impliedly ests or shall or expectation Council sonable any person entity” conferred budgetary discretion in would exercise its through program. the economic incentives determining appropriate to funds majority downplays § 18.60.080.The G.M.C. Maj. annually.” op. at 292-93. But there is language by stating that it the effect of this exercised no claim that the Council somehow zoning. pertains only planning to See faith, its discretion in bad as would be maj. op. at 296. But a more common-sense if were due under the case reading language is that ments’ formula and the Council refused at the time the duty good faith and fair pay them. The protect from the were made wanted to itself dealing requires that discretion be exercised very right” claims that sort “vested faith; good guarantee that a does raise this case. They simply challenge acknowledge the constitu- that the Council’s Brief at 13. 1. The Petitioners "authority grant appropriate funds to econom- tionality Amendment’s of the Charter ic subsidies or incentives is restric- to their Reply Pet.'s tions of the Charter Amendment." $25,000 in the future government discretion will made particular form of change.2 keep public expenditures.3 down See from voter will be insulated maj. op. (characterizing Respon- bottom, claim to have At argument). dent’s gov- right particular method of recognition legitimate Despite its decision-making. define such ernment supporting government interest the Charter proce- in “remedies or modes interests Amendment, majority goes on to find “procedural,” repeated- and we have dure” as outweighed signifi the interest is ly that there can be no vested stated cant benefits of Golden’s economic incentives change effects a that is “where the statute applauds It program. See id. 293. procedural” in nature. In re Estate De- city’s develop “encourag[ing] initiative in Witt, 3, (Colo.2002); 854 n. “discouraging sprawl.” ment” and urban D.K.B., People see also v. 843 P.2d majority places premium at 293. The also a (Colo.1993) (finding that a statute 1331-32 on the need for Golden to its com “honor[ ] repealing procedure sealing a certain for ar- mitments,” 293-94, though begs this id. at impair a rest and criminal records did not question of whether those commitments right”). plain. The reason for this is “vested right” place. first constitute “vested amount of Government must have certain majority’s application of rational The basis flexibility regard procedures with to the it little to “the review bears resemblance most majority’s logic, once a follows. Under the judicial deferential standard of review.” entity government enters into a contract with Lamm, Parrish v. 758 P.2d process private party, budgeting its is fro- 1988). place changed zen in and cannot be regard party. Although to that this case promise Because the Council’s to con- initiative, arises in the context of a voter payment sider does not logic apply any change gov- would them, right” upon confer “vested budgeting process ernmental —voter-initiated subjecting pay- Charter Amendment such Nothing or not. in the Colorado Constitution approval ments to voter unconstitution- requires such a result. ally retrospective. respectfully I dissent. majority acknowledges

The that the Char- only by supported

ter Amendment need be I am authorized to state that Justice legitimate government “a interest” to survive joins in COATS this dissent. retrospectivity challenge. Maj. op. at 290.

Moreover, identify goes on to that interest “limiting expenditures.” public this case— Indeed, majority points

Id. at 293. as the

out, “prospective application of the Charter promotes public

limiting public expenditures.” future Id. at Ironically, precisely

293. this is what Re-

spondent arguing support Parker is constitutionality: applica-

Amendment’s require-

tion of the Charter Amendment’s approval payments

ment of voter over McNichols, majority People majority relies 3. that the Charter Amend- on The assumes 141, 143, (1932), Colo. applies retroactively ment "[cjourts proposition that ... will direct an offi- ground question, on the that the trial court and proceed cer to in added). and exercise the discretion vested assumption. made such an See court of Maj. op. (emphasis law.” at 292 him maj. op. my analysis, at 291. it does not Under that, point passage here is after the applies matter whether the Charter Amendment Amendment, was of the Charter retroactively prospectively because longer no "vested” with the "discretion ... right” impaired ments contain no "vested approval law” free from voter over by the Amendment. $25,000.

Case Details

Case Name: City of Golden v. Parker

Court Name: Supreme Court of Colorado

Date Published: Jun 26, 2006

Citation: 138 P.3d 285

Docket Number: 05SC282

Court Abbreviation: Colo.