Opinion ID: 2330535
Heading Depth: 2
Heading Rank: 2

Heading: Did Appellant Adequately Plead a Pretext Defense?

Text: Because such a defense is sometimes viable, we must evaluate whether Mr. Franco adequately pled a defense of pretext. All facts underlying the defense must be taken to be those set up in the . . . answer. Kelly v. Kosuga, 358 U.S. 516, 516, 79 S.Ct. 429, 3 L.Ed.2d 475 (1959). In considering a motion to strike defenses, a court draws all reasonable inferences in favor of the party asserting the defenses and resolves all doubts in favor of denying the motion to strike. Nwachukwu, 216 F.R.D. at 178. A motion to strike will be denied if [the defenses] fairly present[] a question of law or fact which the court ought to hear. Securities & Exchange Commission v. Gulf & Western Industries, Inc., 502 F. Supp. at 345. Applying these standards, we hold that Mr. Franco sufficiently pled his pretext defense. His answer alleges that the legislation authorizing NCRC to take his property would authorize the taking of said property for a private use and not for a public use or purpose by, among other things, having as its purpose conferring a private benefit on a particular private party, stating pretextually a public purpose but having as its actual purpose bestowing a private benefit. . . . These allegations may be too conclusory by themselves to survive a motion to strike (a question we do not decide). See Super. Ct. Civ. R. 8(b) (A party shall state in short and plain terms the party's defenses to each claim asserted. . . .); id., R. 8(e)(1) (Each averment of a pleading shall be simple, concise, and direct.). Cf. Twombly, 127 S.Ct. at 1965 (Factual allegations [in a complaint] must be enough to raise a right to relief above the speculative level. . . .). However, Franco made many specific factual allegations to support this claim, albeit presenting them under the subheading First Counterclaim (Taking In Violation of the Takings Clause Public Use Provisions of the Fifth Amendment of the U.S. Constitution). The trial court did not address these facts because it struck Mr. Franco's six counterclaims, holding that Superior Court Civil Rule 71A (e) prohibited it from considering them. See Kansas Pipeline Co. v. A 200 Foot by 250 Foot Piece of Land, Located in Section 6, Southwest Quarter, Township 32 South, Range 10 West, County of Barber, State of Kansas, 210 F. Supp. 2d 1253, 1258 (D. Kan. 2002) (according to Rule 71A (e), counterclaims are not permitted in the answer); 12 CHARLES ALAN WRIGHT, ARTHUR R. MILLER AND RICHARD L. MARCUS, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 3048, at 216 (1997) (same). Mr. Franco does not contest the decision to strike his counterclaims, as such, or the court's refusal to re-designate the counterclaims as additional defenses. See Rule 71A (e) (providing that after the answer has been filed, [n]o other pleading or motion asserting any additional defense or objection shall be allowed). However, he urged the trial court to recognize that the allegations in the counterclaims provide addition[al] detail to the respective defenses in the answer, and we decline to ignore factual detail which elaborates on his defense that the proposed taking would violate the Fifth Amendment. See Super. Ct. Civ. R. 8(c) (When a party has mistakenly designated a defense as a counterclaim or a counterclaim as a defense, the Court on terms, if justice so requires, shall treat the pleading as if there had been a proper designation.); Horsford v. Romeo, 407 F.2d 1302, 1303 (3d Cir. 1969) ([T]he court will treat a defendant's pleading denominated a counterclaim as an answer raising affirmative defenses, regardless of its title, if the allegations of the pleading so require.). [9] Therefore, we consider facts alleged in his counterclaims which support Mr. Franco's defense of pretext (although we do not repeat all of those allegations in this opinion). In accordance with the standards discussed above, we assume these facts (as distinguished from his legal conclusions) are true and give Mr. Franco the benefit of reasonable inferences drawn from them. He alleges that NCRC entered into the JDA with a private developer in September 2002, two years before the first bill concerning the Skyland Site was introduced to the Council. The JDA provided that NCRC would share in the profits of the redevelopment. Mr. Franco alleged that NCRC then set about to obtain the funds and legal authority to acquire the Skyland Site. NCRC's sole objective in this intended acquisition [was] to perform its undertakings under the JDA and then sell the property to the developer, who would design and build a new shopping center on the site for his own account. He asserted that NCRC had refused to discuss redevelopment of the site with any of the present owners, despite said owners' repeated requests. He also alleged that NCRC planned to sell the site to the private developer for $25 million less than its value. Mr. Franco asserted that the stores in the Skyland Shopping Center had been fully leased for at least the last five years, he named several of the tenants, and he denied that the center was either blighted or located in a blighted area. He also detailed the actions of the Council in proposing and voting on the four Skyland bills. Mr. Franco alleged that none of the bills specified any use for the properties or stated why the Council considered the properties necessary and desirable for the public use. Finally, he alleged that the legislative findings inserted at the last minute were and remain pretextual, wrong, inaccurate, baseless and substantially irrelevant. For example, the permanent legislation recites that NCRC had advised the Council that the Skyland Shopping Center is blighted, but, according to Mr. Franco, NCRC admitted that it had made no such finding. He claimed that the Council revised the final Skyland bill to include this finding and fifteen others without giving public notice, conducting a public hearing, or giving owners, tenants, or interested members of the public an opportunity to contest the truth of these revisions. Recognizing the limited role of the courts in eminent domain jurisprudence, we are especially careful not to indulge baseless, conclusory allegations that the legislature acted improperly. Compare United States v. 416.81 Acres, 514 F.2d at 631-32 (appellant's assertion that the purported public use was a pretense or a sham did not state a valid defense to the proposed taking; even accepting as true the factual underpinnings of his objections, the taking still would qualify as a public use) to United States v. 58.16 Acres of Land, More or Less, in Clinton County, State of Illinois, 478 F.2d 1055, 1057, 1059 (7th Cir. 1973) (court could not summarily deny without a hearing a property owner's detailed objections; questions of bad faith, arbitrariness, and capriciousness, all bearing upon the determination of public use, having been raised . . ., the district court was required to resolve those questions). Furthermore, courts accord deference to a legislature's judgment that a taking will serve a public purpose. E.g., Kelo, 545 U.S. at 480, 125 S.Ct. 2655 (Without exception, our cases . . . reflect[] our longstanding policy of deference to legislative judgments as to what is a public purpose); Berman v. Parker, 348 U.S. 26, 32, 75 S.Ct. 98, 99 L.Ed. 27 (1954) (when the legislature has spoken, the public interest has been declared in terms well-nigh conclusive.); cf. Robert Siegel, Inc. v. District of Columbia, 892 A.2d 387, 395 (D.C. 2006) (declining to second-guess Council's legislative judgment that estimate of costs to acquire land and build infrastructure for major league baseball stadium was satisfactory). Nevertheless, Kelo makes clear that there is room for a landowner to claim that the legislature's declaration of a public purpose is a pretext designed to mask a taking for private purposes, and we hold that Mr. Franco adequately pled such a defense. With the detailed allegations included in his counterclaims, the defense fairly present[ed] a question of law or fact which the [trial] court ought to hear. Securities & Exchange Commission v. Gulf & Western Industries, Inc., 502 F. Supp. at 345. Cf. Twombly, 127 S. Ct. at 1965 ([A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of the facts alleged is improbable, and that a recovery is very remote and unlikely. (internal quotation marks and citation omitted)). Therefore, we remand so that Mr. Franco's pretext defense can be evaluated on its merits. [10]