Court Opinion

ID: 221716
Source: CourtListenerOpinion
Date Created: 2011-07-25 16:15:42+00
Date Added: 2024-06-11T17:28:51.499359
License: Public Domain

FILED
                                                      United States Court of Appeals
                                                              Tenth Circuit

                                                              July 25, 2011
                                      PUBLISH             Elisabeth A. Shumaker
                                                              Clerk of Court
                  UNITED STATES COURT OF APPEALS

                               TENTH CIRCUIT

 CHARLES PATER, Wyoming
 Resident, and BARRY GASDEK,
 Wyoming Resident,

             Plaintiffs-Appellants,
       v.                                           No. 09-8084
 THE CITY OF CASPER, a Wyoming
 Governmental Entity,

             Defendant-Appellee.

        APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF WYOMING
                  (D.C. NO. 1:08-CV-00274-ABJ)

Robert Todd Ingram (Larry R. Clapp with him on the briefs) Clapp, Ingram &
Olheiser, P.C., Casper, Wyoming, for Appellants.

Judith A. Studer, Schwartz, Bon, Walker & Studer, LLC, Casper, Wyoming, for
Appellee.

Before HARTZ, O’BRIEN, and TYMKOVICH, Circuit Judges.

TYMKOVICH, Circuit Judge.
      This case arises out of a contract dispute between two landowners and the

City of Casper regarding whether the landowners are obligated to reimburse the

City for certain street improvements. When the landowners did not comply with

the City’s demands for payment, the City recorded deficiency notices in the local

property records for their lots. With this burden on the landowners’ titles, the

City expected prompt payment of the assessment.

      Instead, the landowners sued the City, claiming the notices violated their

right to due process and equal protection. The district court granted summary

judgment in favor of the City on the ground that the landowners had not shown

the existence of a protected property interest, and in any case that the deficiency

notices did not constitute a deprivation of any right. We reverse, concluding the

landowners have demonstrated a disputed issue of fact as to whether the City

harmed their property interests, and we remand for consideration of whether this

deprivation violated the Due Process Clause. But we also find the district court

did not abuse its discretion in dismissing the equal protection claim.

      Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we REVERSE and

REMAND in part and AFFIRM in part.

                                  I. Background

      Plaintiffs Charles Pater and Barry Gasdek each own several residential lots

in the Cottonwood Addition subdivision in Casper, Wyoming. As successors in

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interest to the original developer, plaintiffs are parties to the Cottonwood

Addition Subdivision Agreement.

      The Subdivision Agreement is a contract with the City of Casper, which

provides that, “Upon demand of the City Council, the owners, at their sole cost

and expense, shall do or cause to be done” the construction of Trevett Lane in

accordance with the technical specifications of the City Engineer. R., Vol. I at

45–46.

      The Subdivision Agreement allows the City to undertake improvements if

the owners refuse to do so, and seek reimbursement for the cost:

      In the event the owner fails to do, or cause to be done, any of the
      requirements set forth in this contract in an expeditious manner, the
      City may at its option do any or all of the following:

      A. Refuse to issue any building permits . . . .

      B. After written notice . . . and failing cure by owner within
      reasonable period of time, the City may complete any and all of the
      public improvements required by this contract by itself or by
      contracting with a third party to do the same. In the event the City
      elects to complete said improvements or contract with a third party
      to do so, the owners agree to pay any and all costs resulting
      therefrom upon demand by the City.

      The Remedies provided in this paragraph are in addition to any other
      remedies specifically provided for in this contract, or which the City
      might otherwise have at law or in equity, and are not a limitation
      upon the same.

Id. at 51 (emphasis added).

                                         -3-
        In addition to the agreement with plaintiffs, the City entered into a similar

agreement with the developer of a neighboring subdivision. This agreement

required the developer to construct Trevett Lane and committed the City to

securing partial reimbursement from other property owners. Between 2004 and

2006, in accordance with this agreement, the developer constructed Trevett Lane.

Prior to construction, the City did not contact plaintiffs about Trevett Lane, either

to request that they do the work themselves or to notify them that a third party

had been contracted to do the work.

        After the project was completed, the Casper City Council sought

contribution from plaintiffs for the cost of the street improvements, pursuant to

the Subdivision Agreement. First, the City Council enacted a resolution—again,

after the fact—that “ordered, demanded, approved, and authorized” the street

improvements that had already been made. R., Vol. III at 616 (Resolution No.

06-306). With the resolution in hand, the City’s attorneys then sent plaintiffs a

letter requiring payment for their pro rata share of the construction of Trevett

Lane.

        The letter informed plaintiffs of the amount of their obligation and their

duty to pay the assessed amounts in one lump sum or over a ten year period at

eight percent interest. For example, the letter to Gasdek stated:

        Pursuant to the Subdivision Agreement for your subdivision, your
        real property is assessable for the pro rata share of the public
        improvement costs based upon the lineal footage of your property

                                           -4-
      which abuts Trevett Lane. In this regard, the assessment for all of
      your property for the street improvements is the total sum of
      $143,709.12.

R., Vol. I at 125. The letter to Pater was identical, except that the sum demanded

was $118,549.16. Id. at 122.

      A few weeks later, before plaintiffs responded to the letters and without

further notice, the City Council passed another resolution finding the City’s

assessment of costs was “fair and equitable” and “the proper method for the

apportionment” of construction costs. Id. at 131–32 (Resolution No. 07-136).

The City then recorded a “Notice of Apportionment and Assessment” (Notice of

Assessment) with the County Clerk against each of plaintiffs’ properties.

      The Notices of Assessment provided:

      [T]he pro-rata share of the Trevett Lane public improvements
      apportioned and assessable to this real property is the total sum of
      [the parcel-specific assessment], said sum being due and owing to the
      City of Casper until paid in full. . . .

      UPON THE PAYMENT OF THE TOTAL SUM DUE THE CITY OF
      CASPER UNDER THIS NOTICE, THE CITY SHALL FILE IN THE
      REAL ESTATE RECORDS OF NATRONA COUNTY, WYOMING A
      RELEASE AND SATISFACTION SHOWING THAT ALL SUMS
      DUE AND OWING HEREUNDER HAVE BEEN PAID IN FULL.

Id. at 134.

      Plaintiffs believed they did not owe the claimed sum under the terms of the

Subdivision Agreement because the City had never made a written demand for the

construction of Trevett Lane, as the Agreement required, until after the street had

                                         -5-
already been built. They also claimed the Notices placed a cloud on their

property title. Accordingly, they filed a complaint in state court asserting claims

for declaratory judgment, a breach of the duty of good faith and fair dealing, and

a violation of plaintiffs’ due process rights under 42 U.S.C. § 1983. The City

removed the case to federal court, and made counterclaims alleging breach of

contract, breach of the implied covenant of good faith and fair dealing, quantum

meruit, and unjust enrichment.

         In response to cross motions for summary judgment, the district court

dismissed plaintiffs’ § 1983 claims and remanded the remaining claims to state

court.

                                     II. Discussion

         Plaintiffs contend the district court erred in dismissing their § 1983 claims,

asserting violations of their right to procedural due process and equal protection.

For the reasons discussed below, we agree the district court erred in dismissing

the due process claim. But we find no abuse of discretion in the court’s treatment

of the equal protection claim.

         A. Due Process

         Plaintiffs’ first argument is that the City’s Notices of Assessment deprived

them of a property interest without due process. Specifically, they claim they

were not obligated to reimburse the City for the street improvements under the

terms of the Subdivision Agreement. If the City disagreed, they contend, its

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proper recourse was an action in breach of contract. Plaintiffs assert the City’s in

terrorem attempt to enforce its understanding of the contract by recording the

Notices of Assessment against their property, without giving plaintiffs notice or

an opportunity to object, violated their right to procedural due process.

      The Fourteenth Amendment prohibits the government from depriving an

individual of property “without due process of law.” U.S. C ONST . amend. XIV,

§ 1. Under the Due Process Clause’s requirements, “procedural due process

ensures the state will not deprive a party of property without engaging fair

procedures to reach a decision, while substantive due process ensures the state

will not deprive a party of property for an arbitrary reason.” Hyde Park Co. v.

Santa Fe City Council, 226 F.3d 1207, 1210 (10th Cir. 2000).

      In evaluating a procedural due process claim, we undertake a two-step

inquiry. First, we ask whether the City’s actions deprived plaintiffs of a

constitutionally protected property interest. Id. If plaintiffs can satisfy this

requirement, we then consider whether they were afforded the appropriate level of

process. Farthing v. City of Shawnee, 39 F.3d 1131, 1135 (10th Cir. 1994).

      1. Step One: Deprivation of a Property Interest

      The first inquiry turns on whether plaintiffs’ claim implicates a protected

property interest, and the scope of that interest. Property interests “are created

and their dimensions are defined by existing rules or understandings that stem

from an independent source such as state law.” Hulen v. Yates, 322 F.3d 1229,

                                         -7-
1240 (10th Cir. 2003) (quotation omitted). “[C]onstitutionally protected property

interests are created and defined by statute, ordinance, contract, implied contract

and rules and understandings developed by state officials.” Id. Thus, for

example, courts have identified property interests arising from state zoning

regulations, see Jordan-Arapahoe, LLP v. Bd. of County Comm’rs, 633 F.3d 1022,

1026 (10th Cir. 2011), state employment contracts, see Yates, 322 F.3d at 1241,

and restrictive covenants between government agencies and private parties, see

Juarez v. F.A.A., Nos. 97-70112, 97-70722, 1998 WL 482929, *1–2 (9th Cir. Aug.

11, 1998). And, of course, ownership of land or real estate is a quintessential

source of property interests. See Connecticut v. Doehr, 501 U.S. 1, 10–12 (1991);

see also Peralta v. Heights Med. Ctr, Inc., 485 U.S. 80, 85–86 (1988).

      The parties part company on the basic property interest at stake here. The

City interprets plaintiffs’ argument as suggesting the Subdivision Agreement

created a property interest in the opportunity to object to the City’s demand for

the construction of Trevett Lane. The City points out the Subdivision Agreement

makes no mention of such an entitlement and gives the City full discretion to

determine when and how to make the demand. It therefore argues the contract

does not create a protected property right on which plaintiffs can rest their claim.

      This argument misconstrues plaintiffs’ complaint. Plaintiffs contend the

Notices of Assessment encumbered their interest in the Cottonwood Subdivision

lots—their real property—against which the Notices are recorded. In other

                                         -8-
words, that the Notices infringed on their interest in their land. Thus understood,

plaintiffs’ claims arise from their title to real estate and not from some abstract

benefit conferred by the Subdivision Agreement.

       Having identified the property interest at issue here, we must next consider

whether the Notices of Assessment constitute a deprivation of plaintiffs’ interest

in their real estate. The district court found no deprivation after concluding the

Notices did not empower the City to foreclose on the burdened property. While

true enough, the point is not whether the City could foreclose or otherwise take

plaintiffs’ property to satisfy a financial obligation, but whether the Notices

sufficiently encumber the property interest to be a legally cognizable deprivation

of right.

       The Supreme Court has made it clear that something less than a complete,

physical, or permanent deprivation of real property may be sufficient to trigger

due process concerns. In Doehr, addressing a prejudgment attachment, the Court

recognized “even the temporary or partial impairments to property rights that

attachments, liens, and similar encumbrances entail are sufficient to merit due

process protection.” 501 U.S. at 12. It went on to find a prejudgment attachment

has a significant effect on property interests, because it “ordinarily clouds title;

impairs the ability to sell or otherwise alienate the property; taints any credit

rating; reduces the chance of obtaining a home equity loan or additional

mortgage; and can even place an existing mortgage in technical default where

                                          -9-
there is an insecurity clause.” Id. at 11. The Court rejected the state’s argument

that only “extreme deprivations” such as “complete, physical, or permanent

deprivation of real property” are required before due process protections come

into play. Id.

         Following Doehr, we must thus consider whether the Notices created an

impairment equivalent to “attachments, liens, and similar encumbrances.” We

believe at this stage in the proceedings plaintiffs have met their burden on this

score.

         The precise legal effect of the Notices of Assessment under Wyoming law

is not entirely clear. The City contends the Notices do no more than inform third

parties that assessments have been imposed on plaintiffs. That they surely do.

But plaintiffs, on the other hand, insist the Notices create a cloud on their title to

the Cottonwood Subdivision lots and impair their ability to sell the property.

         Plaintiffs do not challenge the district court’s finding that the Notices do

not enable the City to foreclose on the properties without further proceedings.

The Notices therefore do not constitute formal “judgment liens” as defined by

Wyoming law. See W YO . S TAT . A NN . § 1-17-302 (1957) (“The lands and

tenements within the county in which judgment [lien] is entered are bound for the

satisfaction thereof from the day the judgment [lien] is filed with the county

clerk.”).

                                           -10-
      But there is reason to think the Notices had the effect of lowering the

market value of the burdened properties or limiting their alienability. Plaintiffs

argue the Notices run with the land—that is, the Notices will cause future owners

of the property to be liable for the assessments if plaintiffs do not make the

demanded payments. If this is true, the Notices have the effect of impairing the

value of the land by the amount of the assessments or restricting its attractiveness

to potential buyers.

      Plaintiffs’ contention is supported by evidence in the record suggesting this

was the City’s intent. In a letter sent to plaintiffs after the Notices were filed, the

Casper City Attorney explained their intended effect:

      In order to protect the taxpayers’ interest in this matter, the City had
      the right and the obligation to record the notices of the assessment of
      the pro-rata costs of the construction of Trevett Lane and its
      associated public improvements against your client’s subdivided lots.
      Had the City not done so, future owners of the property could have
      claimed that they were bona fide purchasers for value and would not
      be required to pay the assessments . . . .

R., Vol. I at 247 (emphasis added). This letter confirms the City believed that

once the Notices were recorded, future buyers could only take the burdened

properties subject to the assessments.

      In addition, the City Manager testified the Notices themselves are “an

attempt to recoup the cost the taxpayers have paid for the cost of improvements

on Trevett Lane.” Id. at 190. When asked whether the Notices are a charge

against the land, he stated, “I would hope so, that is correct.” Id.

                                          -11-
      This evidence is buttressed by common sense. If the assessments could

only be obtained from plaintiffs, the City would have no purpose in giving notice

to third parties interested in the property. It is obvious the City’s intention in

recording the Notices of Assessment was, as the City Attorney stated, to impose a

burden on the property that could not be evaded by sale to a third party.

      More importantly, even if the City was incorrect that the Notices created an

enforceable servitude against future buyers, the Notices would still have raised a

red flag to any potential purchaser. A title search would reveal the Notices, and

the suggestion that the assessment might be held against future buyers would

effectively lower the market value of the property or reduce its alienability.

      In addition, plaintiffs have offered evidence suggesting the Notices

effectively prevent the sale of the burdened property until the assessments are

paid. Before the district court, plaintiffs designated a local title insurance agent

as an expert witness. In the designation, plaintiffs asserted the witness would

testify that the Notices were “an obligation that must be satisfied and cleared off

title, at closing or sooner, prior to the issuance of a title insurance policy.”

Plaintiffs’ Designation of Expert Witnesses, Pater v. City of Casper, Wyoming,

No. 08-00274 (D. Wyo. June 10, 2009). In other words, plaintiffs contend that

until the assessments are paid, a future buyer cannot obtain title insurance.

Plaintiffs convincingly argue that, without title insurance, no reasonable buyer

would purchase the property. Given this status, until plaintiffs resolve their

                                          -12-
contract dispute with the City regarding the Subdivision Agreement, their lots

will be difficult to market.

      We further note the potential injury arising from an improperly recorded

notice against property has been recognized in another context, in the tort of

slander of title. This common law cause of action is based on the notion that

disparagement of title can impair the ability of a landowner to sell or lease

property. R ESTATEMENT (S ECOND ) OF T ORTS § 624 (1977) (defining slander of

title as “the publication of a false statement disparaging another’s property rights

in land, chattels or intangible things, that the publisher should recognize as likely

to result in pecuniary harm . . . to the other’s interests in the property”). While

not directly analogous, the principle illustrates the point that the Notices have the

potential to cause legally cognizable harm to plaintiffs’ property interests.

      Accordingly, in light of this evidence, we conclude plaintiffs have

established a disputed issue of fact as to whether the Notices effectively

decreased the value of the property by the amount of the assessments or prevented

the sale of the property entirely.

      But even if these allegations are true, the question remains whether the

Notices created a sufficient cloud on title to constitute a deprivation for due

process purposes. Two circuit courts have considered the question in related

circumstances and have reached differing conclusions. The Second Circuit, in

Diaz v. Paterson, 547 F.3d 88 (2d Cir. 2008), addressed the affect of a lis pendens

                                         -13-
on private property. A lis pendens is a notice filed against property informing

third parties of pending litigation in which the ownership of that property is

disputed. Id. at 90. Once the lis pendens is recorded, prospective buyers have

constructive notice of the competing interests in the property, and take the

property subject to the judgement in the concurrent lawsuit. Id. In other words,

filing a lis pendens has the effect of preventing sale or lowering the market value

of the property, pending the conclusion of related litigation. 1 Diaz did not resolve

the question of whether the restriction on alienation of property constitutes a

deprivation for due process purposes, since it found the challenged statute

provided sufficient process. But it did note a lis pendens “is arguably [] a similar

encumbrance” to a prejudgment attachment, meriting due process protection

under Doehr. Id. at 95–96.

      In contrast, the Eleventh Circuit held a lis pendens “does not affect

property interests to an extent significant enough to implicate the Due Process

      1
          As is the case with the Notices at issue here, a lis pendens does not
expressly bar alienation of the burdened property. But the property records
“show[] that the property is subject to the [filing party’s] claim and hence buyers
would seldom pay a full price . . . . So the lis pendens is a kind of unilateral
attachment, without benefit of judicial supervision, and at the very least must be
subject to expungement when it is inappropriately used.” D AN B. D OBBS , L AW OF
R EMEDIES § 6.1 at 32 (2d ed. 1993). Of course, a lis pendens traditionally has
attendant procedural protections that do not apply here. In Wyoming, a notice of
lis pendens may only be filed for suits “affecting the title or right of possession of
real property.” W YO . S TAT . A NN . § 1-6-108 (1957). And then only after filing a
complaint in a court of competent jurisdiction. W YO . S TAT . A NN . § 1-6-107
(1957). If the plaintiff does not prevail in his suit, the notice is removed.

                                         -14-
Clause of the Fifth Amendment.” United States v. Register, 182 F.3d 820,

836–37 (11th Cir. 1999). The court acknowledged that “notices of lis pendens

have the practical effect of impeding an owner’s ability to sell property,

particularly at its (unrestricted) market value.” Id. at 836 (quotation omitted).

But, it reasoned, “the right to alienate the property exists,” and “even accounting

for this practical consequence, notices of lis pendens affect only one incident of

ownership—alienability—whereas other methods of securing potentially

forfeitable property are significantly more restrictive.” Id. (quotation and

alteration omitted). In support, the Eleventh Circuit cited a Supreme Court

decision, Kirby Forest Indus. v. United States, 467 U.S. 1 (1984), which it

characterized as holding that the filing of a lis pendens does not implicate a

property owner’s Fifth Amendment rights. Register, 182 F.3d at 836.

      The reasoning in Register is unpersuasive for two reasons. First, the

Eleventh Circuit did not address the conflict between its holding that a restraint

on alienability is insufficient to create a deprivation and the language of Doehr.

In fact, the court did not cite Doehr at all. And second, in any event, we disagree

with the court’s reading of Kirby Forest . In that case, the Supreme Court did not

consider whether a lis pendens can be a deprivation under the Due Process

Clause; it held only that a lis pendens is not a government taking under the

Takings Clause. Kirby Forest Indus. , 467 U.S. at 15 . But the standards for a

procedural due process claim and a takings claim are not the same. Compare

                                         -15-
Palazzolo v. Rhode Island, 533 U.S. 606 (2001) (stating that a regulatory taking

occurs only where the regulation denies the landowner all beneficial use of the

land, or where the economic impact, the interference with reasonable investment-

backed expectations, and the character of the government action indicate a taking)

with Doehr, 501 U.S. at 12 (finding the partial impairment to property rights

caused by prejudgment attachment is sufficient to merit due process protection).

      Applying Doehr, we conclude an encumbrance with the characteristics of

the Notices of Assessment can be a deprivation of a property interest. At this

stage in the proceedings, plaintiffs have successfully alleged the Notices either

impair their ability to alienate their property or reduce its market value. We find

these attributes, if proven, place the Notices squarely in the category of

“attachments, liens, and similar encumbrances.” Doehr, 501 U.S. at 12. As was

the case with the prejudgment attachment at issue in Doehr, the Notices allegedly

act as a restraint on alienability that could potentially lead to other adverse

consequences, such as a tainted credit rating, a reduced chance of obtaining a

home equity loan or future mortgage, and even a threat to an existing mortgage

burdened with an insecurity clause. See id. at 11.

      Thus, plaintiffs have shown a genuine dispute of fact as to whether the

City’s actions deprived them of a protected property interest.

                                          -16-
      2. Level of Process

      We now turn to the second prong of the due process inquiry—that is,

whether plaintiffs were afforded sufficient process to satisfy the Fourteenth

Amendment. Because the district court found plaintiffs could not establish the

deprivation of a protected property interest, it did not reach this question, and

appellate briefing is sparse. We therefore remand to the district court for further

proceedings on this issue.

      In so doing, we note the procedural due process analysis is “not a technical

conception with a fixed content unrelated to time, place and circumstances, but

rather is flexible and calls for such procedural protections as the particular

situation demands.” Ward v. Anderson, 494 F.3d 929, 935 (10th Cir. 2007)

(quotations omitted). To determine what process is due where the government

effects a deprivation, a court must balance the three factors laid out by the

Supreme Court in Matthews v. Eldridge, 424 U.S. 319, 335 (1976): (1) “the

private interest that will be affected by the official action”; (2) “the risk of an

erroneous deprivation of such interest through the procedures used, and the

probable value, if any, of additional or substitute procedural safeguards”; and (3)

“the Government’s interest, including the function involved and the fiscal and

administrative burdens that the additional or substitute procedural requirement

would entail.” See also Doehr, 501 U.S. at 11. “Although the exact procedures

required by the Constitution depend on the circumstances of a given case, the

                                          -17-
fundamental requirement of due process is the opportunity to be heard at a

meaningful time and in a meaningful manner.” PJ v. Wagner, 603 F.3d 1182,

1200 (10th Cir. 2010) (quotation and alterations omitted).

      Where the government has a preexisting right to the property at issue, it has

a “heightened interest [that] in certain circumstances can provide a ground for

upholding procedures that are otherwise suspect.” Doehr, 501 U.S. at 12 n.4

(finding the creditor’s interests served by prejudgment attachment statute did not

justify ex parte procedure where he “had no existing interest in [the property

owner’s] real estate when he sought the attachment[,]” but only sought “to ensure

the availability of assets to satisfy his judgment if he prevailed”).

      One of our cases is illustrative. In Cobb v. Saturn Land Co., we

acknowledged that recording a notice of a lien prejudiced the rights of the

property holder. 966 F.2d 1334, 1337–38 (10th Cir. 1992). Nonetheless, we

upheld the contested lien statute because state law automatically granted an oil

and gasoline lien in favor of unpaid workers and companies that had fulfilled

contracts relating to the extraction of these resources. Id. The fact that the

creditors had an interest in the property before recording the notices justified the

limited process granted by the state. Id.; see also Doehr, 501 U.S. at 12 n.4

(observing that a mechanic’s lien statute could be upheld where state law gave the

mechanic an interest in the property at issue predating the actual recording of

notice); id. at 29 (Rehnquist, C.J., concurring) (stating that a postsequestration

                                         -18-
hearing provides sufficient process for filing a notice of lis pendens, as the filing

party already claims an interest in the property that he seeks to enforce through a

concurrent lawsuit).

      Thus, resolution of this point will require the district court to determine

whether the City had a preexisting interest in the burdened property under the

Subdivision Agreement or Wyoming law. The court should also consider whether

plaintiffs have received any postdeprivation process and the extent to which state

law mandates additional procedures.

      B. Equal Protection

      In their second claim, plaintiffs contend the City violated their right to

equal protection by selectively targetting them for the assessments. Plaintiffs

allege that other, similarly situated landowners in the Cottonwood Subdivision

were not assessed for the costs of the construction of Trevett Lane, and that there

is no rational basis for this disparity in treatment. In response, the City asserts it

followed its historical practice of only assessing landowners whose property abuts

the newly constructed road.

      But the City also notes plaintiffs did not make an equal protection claim in

their complaint; they raised this argument for the first time in their motion for

summary judgment. Presumably for this reason, the district court did not address

plaintiffs’ argument. Plaintiffs urge that the court’s failure to resolve the claim

was reversible error.

                                          -19-
      An issue raised for the first time in a motion for summary judgment may

properly be considered a request to amend the complaint, pursuant to

Federal Rule of Civil Procedure 15. Viernow v. Euripides Dev. Corp., 157 F.3d

785, 790 n.9 (10th Cir. 1998). We therefore construe the district court’s refusal

to address the new issue as a denial of plaintiffs’ request. See id. at 795 n.21.

      The decision to grant leave to amend the pleadings “is within the discretion

of the trial court, and we will not reverse the court’s decision absent an abuse of

discretion.” Minter v. Prime Equip. Co., 451 F.3d 1196, 1204–05 (10th Cir.

2006) (internal quotations and alterations omitted).

      Rule 15 mandates that the court grant leave to amend “when justice so

requires.” F ED . R. C IV . P. 15(a). As a general rule, a plaintiff should not be

prevented from pursuing a claim merely because the claim did not appear in the

initial complaint. Evans v. McDonald’s Corp., 936 F.2d 1087, 1090–91 (10th Cir.

1991). However, a court properly denies leave where “a late shift in the thrust of

the case will [] prejudice the other party in maintaining his defense upon the

merits.” Id. (quotation omitted). The liberalized pleading rules do not allow

plaintiffs “to wait until the last minute to ascertain and refine the theories on

which they intend to build their case.” Id. at 1091. In addition, “untimeliness

alone is a sufficient reason to deny leave to amend . . . . when the party filing the

motion has no adequate explanation for the delay.” Frank v. U.S. West, Inc., 3

F.3d 1357, 1365–66 (10th Cir. 1993)

                                          -20-
      Here, we cannot find the district court’s refusal to treat the complaint as

amended was an abuse of discretion. The new equal protection claim raised

substantially different factual issues after the close of discovery. To allow the

City to develop its defense, the court would have been forced to grant significant

additional time for discovery. Nor did plaintiffs give a reason for their delay in

setting forth the claim.

      We find no error in the district court’s failure to consider the equal

protection claim.

                                  III. Conclusion

      For the foregoing reasons, we REVERSE the district court’s dismissal of

plaintiffs’ procedural due process claim and REMAND for further proceedings

consistent with this opinion.

                                         -21-