El Diablo Restaurant - Tenth Circuit Court of Appeals

Citation

Fox, et al. v. Morreale Hotels LLC, and Sketch Restaurant, LLC d/b/a El Diablo Restaurant, 10-cv-03135-RPM-MJW

Issues

El Diablo is a Denver restaurant, located at First Avenue and Broadway.  The restaurant space was renovated and opened in August of 2010.  The owners and operators of El Diablo built raised seating areas that are inaccessible to customers who use wheelchairs.  Nearly all of the seating areas inside El Diablo are completely inaccessible to individuals who use wheelchairs.  The ADA requires that when a restaurant makes alterations to its dining areas, the altered areas must be wheelchair accessible.  El Diablo had two

Status



On December 19, 2012, Defendants filed their Notice of Bankruptcy and Automatic Stay.  Plaintiff's filed a response to that notice. On January 4. 2013, the Court ordered the proceedings abated until "Morreale's bankruptcy proceedings have concluded or the bankruptcy court enters any order allowing these proceedings to continue against Morreale." At that time, the owner must file an order with the Court explaining whether this appeal should continue. 

Despite the fact that the Trial Court ruled that the restaurant is not compliant with the ADA, the restaurant remains open to the public, and the inaccessible dining area still exists. 

According to its own Facebook page and as reported in several newspapers, on May 2, 2013, the El Diablo restaurant closed its doors for good. The restaurant closed for a few brief periods for violations of City building codes unrelated to this lawsuit; otherwise, the restaurant was open from August of 2010 until May of 2013, reportedly doing very well financially, without ever providing full and equal access to customers who use wheelchairs. Our Legal Program devoted over 2,000 hours of time to this case and won a great summary judgment victory saying when a business alters a building, those alterations must be made accessible. Now, it is moot. No fees will be recovered. Fortunately, that legal decision remains. It is a great victory in what was a hard fought case. Apparently, these Defendants had no intention of complying with the Court's orders. Instead, they folded and left everyone hanging. CCDC's Legal Program does not charge clients, because our clients cannot afford attorneys. We only recover fees and costs from Defendants when we are successful in litigation or when we reach a settlement. The ADA allows this. All totaled, because of the Defendants' resistance, our Legal Program had over $300,000 in billable hours. Please see "El Diablo Closed. Donate to CCDC. QED" for ways you can help CCDC's Legal Program. 

The owners and operators of EL Diablo restaurant have remained in bankruptcy, and the Court has continued abatement of the proceedings until the bankruptcy issues are resolved. The property is up for auction on December 3, 2015; an article is posted below with the auction details. 

On December 3, 2015, the building that housed the restaurant was sold at auction for $6.7 million. See Denver Post stories below.

Despite Jesse Morreale testified during his deposition in the ADA accessibility lawsuit that the owner/operator oF the El Diablo restaurant found by the District Court to violate the ADA, "Primarily it's real estate acquisition generally of troubled properties. Restoration of those properties in assistance with neighborhood organizations, city entities, other government authorities, and neighbors and individuals to take buildings that may have been blighted and problematic for the city or for a neighborhood and bettering them and changing them into an amenity and a place of value for the -- the community."Morreale added his company, "[r]estored the space and decorated it. Acquired furniture, fixtures, and equipment to operate it. Advertised it. All with the intention of taking what was an extremely blighted property, problematic for the neighborhood and the city and the state, frankly, and restore it to create an amenity for the neighborhood, the residents, and the business."

As can be seen in the pictures in the newspaper articles below, the only extremely blighted property on the corner of First Avenue and Broadway in Denver was the El Diablo restaurant and Sketch Wine Bar that have been boarded up for years because the City and County of Denver shut down the businesses and Morreale's companies for failing to restore the building as the companies agreed to do after receiving large amounts of money from Denver. The corner of First Avenue  and Broadway is the home of Punch Bowl Social, the Hornet, the Landmark Mayan Theater and the office building that houses the Civil Rights Education and Enforcement Center, co-directed by one of the plaintiffs in the lawsuit.

With the sale at auction of the property, Plaintiffs will likely File a motion to dismiss the case with prejudice. If these companies ever operate El Diablo again in this space, Plaintiffs will refile their lawsuit.

Although the companies that owned and operated El Diablo filed for bankruptcy and eventually lost the restaurant space in auction, the District Court ruling that restaurants cannot build in accessible dining areas when they engage in complete alterations of buildings stands as a principle that the ADA will be enforced in Colorado. Other developers and restauranDespite Jesse Morreale testifying during his deposition in the ADA accessibility lawsuit that the owner/operator oF the El Diablo restaurant found by the District Court to violate the ADA, "Primarily it's real estate acquisition generally of troubled properties. Restoration of those properties in assistance with neighborhood organizations, city entities, other government authorities, and neighbors and individuals to take buildings that may have been blighted and problematic for the city or for a neighborhood and bettering them and changing them into an amenity and a place of value for the -- the community."Morreale added his company, "Restored the space and decorated it. Acquired furniture, fixtures, and equipment to operate it. Advertised it. All with the intention of taking what was an extremely blighted property, problematic for the neighborhood and the city and the state, frankly, and restore it to create an amenity for the neighborhood, the residents, and the business."

As can be seen in the pictures in the newspaper articles below, the only extremely blighted property on the corner of First Avenue and Broadway in Denver was the El Diablo restaurant and Sketch Wine Bar that have been boarded up for years because the City and County of Denver shut down the businesses and Morreale's companies for failing to restore the building as the companies agreed to do after receiving large amounts of money from Denver.

With the sale at auction of the property, Plaintiffs will likely File a motion to dismiss the case with prejudice. If these companies ever operate El Diablo again in this space, Plaintiffs will refile their lawsuit.

Although the companies that owned and operated El Diablo filed for bankruptcy and eventually lost the restaurant space in auction, the District Court ruling that restaurants cannot build in accessible dining areas when they engage in complete alterations of buildings stands as a principle that the ADA will be enforced in Colorado. Other developers and restauranteurs should take note that building elevated dining areas that are inaccessible to customers who use wheelchairs is a violation of the ADA and may be subject to a lawsuit anyway.

Appellants filed a Motion to Dismiss the appellate case. On December 30, 2015, the 10th Circuit Court of Appeals granted Appellants' Motion to Dismiss the case. On January 11, 2016, the District Court also granted Plaintiffs' Motion to Dismiss. Both Orders are posted below.

Available Documents

2011.05.13 Declaration of Jesse Morreale
2011.05.13 Dfs' Motion for Protective Order
2011.05.13 El Diablo Restaurant's Seating Policy
2011.05.28 Pl's Response to Motion for Protective Order
2011.06.06 Plaintiff's Motion to Compel Discovery Responses
2011.06.21 Motion for Leave to File Second Amended Complaint
2011.06.21 Motion for Partial Summary Judgment
2011.06.23 Defendants' Motion to File Under Seal and Request for Attorneys' Fees
2011.06.27 Defendants' Response to Plaintiff's Motion to Compel Discovery Responses
2011.06.29 Plaintiff's Response to Defendants' Motion to Seal and for Fees
2011.06.30 Defendants' Reply to Plaintiff's Response to Motion to Seal and for Fees
2011.07.12 Motion to Stay
2011.07.15 Response Motion to Stay
2011.07.18 Reply to Response to Motion to Stay
2011.07.20 Order
2011.07.20 Order re Motion to Compel
2011.07.20 Order re Protective Order
2011.07.29 Motion to Seal
2011.08.01 Order re Motion to Seal
2011.08.03 Order re Protective Order and Motion to Compel
2011.08.10 Motion to Dismiss Second Claim for Relief
2011.08.11 Notice of Dismissal of Second Claim for Relief
2011.08.15 Defendants' Cross Motion for Partial Summary Judgment
2011.08.15 Defendants' Opposition to Plaintiffs' Motion for Partial Summary Judgment
2011.08.16 Plaintiffs' Motion to Compel
2011.08.19 Plaintiffs' Reply to Opposition to Motion for Partial Summary Judgment
2011.08.23 Order re Motion to Stay
2011.08.29 Defendants' Opposition to Plaintiffs' Motion to Compel
2011.08.31 Motion for Leave to Amend Complaint
2011.09.02 Order re Motion to Compel
2011.09.09 Defendants' Opposition to Plaintiffs' Motion to Amend Complaint
2011.09.09 Plaintiffs' Response to Defendants' Cross Motion for Partial Summary Judgment
2011.09.26 Declaration of Jack D. Patten, III in support of Dfs Cross Motion for Summary Judgment
2011.09.26 Declaration of Jesse Morreale in support of Dfs' Cross Motion for Summary Judgment
2011.09.26 Defendants' Reply to Response to Motion for Partial Summary Judgment
2011.09.26 Plaintiffs' Reply to Defendants' Opposition to Motion to Amend Complaint
2011.09.28 Order accepting Supplemental and Third Amended Complaint
2011.09.29 Supplemental and Third Amended Complaint
2011.10.03 Plaintiffs' Surreply in Opposition to Dfs' Cross-Motion for Summary Judgment
2011.10.05 Order accepting Plaintiffs' Surreply
2011.10.13 Defendant Morreale Hotels LLC Answer to Supplemental and Third Amended Complaint
2011.10.13 Defendant Sketch Restaurant LLC d/b/a El Diablo's Answer to Supplemental and Third Amended Complaint
2011.11.09 Order Granting Plaintiffs' Motion for Partial Summary Judgment and Denying Defendants' Cross-Motion for Summary Judgment
2011.11.18 #134 Stipulated Dismissal of Claims
2011.11.18 Plaintiffs' Motion for Entry of Permanent Injunction
2011.11.28 #138 Defendants' Response to Plaintiffs' Motion for Permanent Injunction
2011.12.14 Reply to Motion for Permanent Injunction
2012.03.05 Order granting Plaintiffs' Request for Injunction
2012.03.06 Press Release - Court orders El Diablo restaurant owner to provide access to customers who use wheelchairs
2012.05.23 Defendants' Plan to Make El Diablo Restaurant Accessible
2012.05.24 Press Release re El Diablo's Remediation Plan
2012.06.19 #148 Objections to Dfs' Remedial Plan
2012.06.26 Dfs Reply to Remediation Plan
2012.07.03 Dfs' Supplement to Reply to Remediation Plan
2012.07.13 Notice of Closing of El Diablo Restaurant
2012.07.16 Response to Notice of Closing of El Diablo Restaurant
2012.07.31 Supplemental Response to Notice of Closure
2012.08.03 Order Deferring Injunctive Relief
2012.08.03 Reply to Response and Supplemental Response to Notice of Closure
2012.10.05 Dfs Mtn Extension of time re Remedial Plan
2012.10.09 Motion for Final Permanent Injunction and Final Judgment
2012.10.09 Response to Motion for Extension of Time re Remedial Plan
2012.10.12 Order Granting Extension and Denying Injunction
2012.11.13 Notice of Appeal
2012.11.27 Dfs Motion to Dismiss Appeal
2012.12.12 Pls' Response to Motion to Dismiss
2012.12.19 Dfs' Reply re Motion to Dismiss
2012.12.19 Notice of Bankruptcy and Automatic Stay
2013.01.02 Response to Notice of Bankruptcy and Automatic Stay
2013.01.04 Order of Abatement
2015.12.30 10th Circuit Order Dismissing Case
2016.01.11 #178 Order Granting Pls' Mtn to Dismiss
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