Loveland City Council recall protest goes to trial as minority on board sues – BizWest

LOVELAND — Signs of growing discord on the Loveland City Council continued Tuesday, as the body's four-member minority filed a civil rights lawsuit against the city in federal court and the council voted to appoint a hearing officer to rule on a member's appeal of a recall petition seeking his removal.

City Council members Dana Foley, Patrick McFall, Steve Olson and Andrea Samson have sued the city in U.S. District Court in Denver, claiming that the City Council's five-member majority violated their right to petition by opening a state investigation into them for alleged open meeting law violations after they wrote a letter last year urging Gov. Jared Polis to block a law that would have banned the inclusion of agricultural land in urban renewal areas. Had that law passed, it could have derailed McWhinney Real Estate Services Inc.'s Centerra South mixed-use development on Loveland's east side, which the plaintiffs support.

And on Tuesday night, in Troy Krenning's absence, the City Council, by an 8-0 vote, appointed Denver-based attorney Mark Grueskin to hear Krenning's protest of a recall petition against him circulated by former City Councilman Dave Clark and two other Loveland residents. That petition was approved on Aug. 13 for the Nov. 5 ballot.

Grueskin, a partner in the law firm Recht Kornfeld PC, frequently represents government agencies and officials in litigation and regularly practices before the Colorado Supreme Court and the Colorado Court of Appeals.

Krenning, the only attorney on the current council, has come under fire from development and other business interests in Loveland since taking office. Two weeks after his election, Krenning led the campaign to repeal the Centerra South agreements, a decision that was later reversed after McWhinney sued the council for breach of contract. Krenning also led the campaign to investigate the council's four-member minority for alleged public meeting violations before the agreements were originally approved by the previous council.

In a letter sent last Thursday to Loveland's acting city clerk, Angie Sprang, Krenning requested a hearing on his protest led by an official with the authority to issue subpoenas and compel witnesses to testify.

In his letter, Krenning claimed that the petition was worded so that signers had to be “eligible voters” rather than the “registered voters” required by state law. He wrote that a hearing officer's decision and subsequent judicial review would likely not be completed before Sept. 10, the last day the city of Loveland must certify any issues it wants to put on the Nov. 5 ballot. If the recall had to take place in a separate election, Krenning wrote, it could cost the city between $65,000 and $100,000, undermining the petitioners' claim that the recall would be free for Loveland taxpayers.

In his letter, Krenning also disputed plaintiffs' claims that his “destructive and abusive conduct” had “cost Loveland millions of dollars, damaged its reputation, and resulted in the loss of outstanding and respected leadership” – apparently referring to officials such as Loveland City Manager Steve Adams and City Attorney Moses Garcia, with whom Krenning had led negotiations on the exit agreements.

If Krenning's protest against the recall petition is upheld, the recall initiatives would have to “start their efforts all over again,” said Loveland City Attorney Vincent Junglas.

In their lawsuit in federal court, the City Council minority demanded a jury trial on the grounds that Krenning's investigation into their alleged violations of the right of public session had deprived them of their “right to free speech and petition” guaranteed to them under the First and Fourteenth Amendments to the U.S. Constitution. Their lawyer, John Zakhem of the Denver law firm Campbell Killin Brittan & Ray LLC, had threatened at a council meeting in March that any further action by the council majority against them would be “responded to with a federal lawsuit for violation of civil rights.”

In their lawsuit, the four want the federal court to declare the city's “official policy of sanctioning and punishing plaintiffs” unconstitutional. They claim that the council majority sought to “criminalize the exercise of their right to free and protected speech and petition on issues of government policy.” They claim that they have “suffered injuries and damages in an amount to be determined at trial” and that “the degradation [sic] of the plaintiff’s constitutional rights, injuries and damages have occurred for which the defendant must compensate the plaintiffs.”

Section 15-7 of the Loveland City Constitution states that “any willful violation of any provision of this Constitution shall be a misdemeanor and may be prosecuted in the Municipal Court. Any person convicted of such violation shall be punishable by imprisonment for a term not exceeding the maximum term imposed by the Municipal Court… by a fine not exceeding the maximum term imposed by the Municipal Court… or by both a fine and imprisonment.” The four plaintiffs claim that the Council's application of this constitutional provision “is unconstitutional because it was used to punish and sanction the plaintiffs for exercising their right to petition the government and to speak freely on matters of public interest.”

In April, a special prosecutor appointed by the five-member majority of the Loveland City Council said she had decided not to pursue misdemeanor charges against the four current and three former members. In an email to Junglas, Kathy Haddock wrote that while a report by special counsel Christopher Gregory concluded there was reasonable suspicion that the seven intentionally violated Loveland's charter and municipal code, as well as Colorado's open meetings law, “I do not believe the report contains evidence or that there is probable cause to believe that a violation of Loveland's open meetings law or charter or municipal code occurred. … Therefore, I do not believe there is reasonable suspicion to file charges.”

The new complaint is one of several circulating in the council.

In one of them, eight plaintiffs, including recall organizer Clark and former Loveland City Council members Richard Ball, John Fogle, Don Overcash and Chauncey Taylor, sued the current City Council, seeking the removal of Mayor Jacki Marsh, Mayor pro tempore Jon Mallo and Council members Krenning, Erin Black and Laura Light-Kovacs on the grounds that they violated the city constitution on November 21 of last year by failing to call a public vote on repealing the agreements for the proposed Centerra South development that the previous council approved in April and May 2023. That lawsuit said a public vote should have been called because, in the same Nov. 7 election that put council members less receptive to McWhinney's plans in office, Loveland voters also approved citizen-initiated Ballot Proposition 301, which gave voters the final say on urban renewal plans.

In the other case, Ward 1 resident Peter Gazlay claimed he was being treated unequally under the law because the city failed to conduct a background check on Krenning, the winning candidate in Ward 1, and then, after his election, applied a background test before his appointment that was different from that of all other candidates.

Meanwhile, Bill Jensen, owner of a Loveland hair salon, filed two lawsuits against the city. He filed suit in Larimer District Court in July, claiming the council withheld transparency from him and violated the Open Meetings Law when a quorum emerged from a board meeting at 2:15 a.m. on Feb. 21 and reversed its Nov. 21 decision to rescind the McWhinney agreements. Jensen claims the action was taken “without full and timely notice to the public” and without an opportunity for citizens to comment on the action taken.

He has also appealed a district judge's March decision to dismiss his first lawsuit, which alleges that the previous city council's votes approving the agreements with McWhinney were invalid due to violations of open meeting rules and failure to give proper notice.

The new federal case is Dana Foley, Andrea Samson, Steve Olson and Patrick McFall v. the City of Loveland, a municipality of Colorado, in the United States District Court for the State of Colorado, case number 24-cv-02370-MEH.