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El Diablo Restaurant – Tenth Circuit Court of Appeals

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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  elevated seating areas built that are not accessible.  At the time the lawsuit was filed and for some time after, there were two tables on the non-raised seating areas that are low, but the bar, and all other seating inside is at high tables. Defendants even put high “cocktail” tables in the only part of the restaurant that might be accessible to a customer who uses a wheelchair.  During this lawsuit Defendants have tried to convince the court that all of the tables in the restaurant are accessible and that accessible tables are “regularly” available in the one small accessible area, they are not.  Just look in the front window of El Diablo any time, any day; you will see the high tables with bar stools.  It seems they can only find lower tables when they are taking pictures for the court.  See latest Morreale Dec. and photos.  Plaintiffs produced evidence showing El Diablo does not provide such tables, but you can go look for yourself.

Despite efforts to notify the owner, Jesse Morreale, in advance of the lawsuit, Mr. Morreale refused to meet.  Since the time the lawsuit was filed, Mr. Morreale gave a sworn statement to the Court saying he would rather give special treatment to customers who use wheelchairs even though the restaurant was completely renovated and the inaccessible raised seating areas were built in during the alterations, he takes the legal position that separate, segregated seating for people in wheelchairs is okay, because “El Diablo does not restrict any portion of the restaurant to use by people who use wheelchairs.” Mr. Morreale ignores the fact that, at the time the lawsuit was filed, only two tables were regularly made available unless someone was  lifted up the raised seating areas, which Mr. Morreale says are “slightly elevated,” “approximately one foot off the ground,” accessible by “one step.”

El Diablo boasts about its “El Diablo Restaurant Policy Regarding Seating of Mobility-Impaired Patrons.”  Instead of providing “full and equal” access as the ADA requires, El Diablo gives “priority seating” to customers who use wheelchairs by moving tables around if you ask.  Also, “Mobility-impaired patrons of El Diablo are welcome to seek “third-party assistance” to access tables located in the restaurant’s raised seating areas [i.e., carry them up the step]. However, no El Diablo manager nor other employee shall physically assist a mobility-impaired patron to secure seating at any such table,” and …

“Any El Diablo manager or other employee asked to physically assist a mobility impaired patron to access a table in one of the restaurant’s raised seating areas shall politely decline such request and expressly disclaim any liability (both personal and on behalf of El Diablo) for any accident or injury that might result from such efforts; provided, however, that El Diablo staff may (and should) discuss with any mobility-impaired patron all available restaurant seating options.”

Mr. Morreale’s declaration and the priority seating policy are attached in the documents.

Mr. Morreale’s later declaration stating that accessible tables are “regularly” provided is also provided along with Plaintiffs’ surreply showing the opposite.

Status

Plaintiffs also filed a Motion for Summary Judgment requesting the court rule that as a matter of law restaurants and other public accommodations cannot, under the ADA, build or alter public accommodations that are not completely accessible.  El Diablo is a restaurant that was altered a year or so ago.  The owners and builders designed and constructed raised seating areas that are not accessible to people who use wheelchairs.  These raised seating areas did not exist before.  El Diablo created them.

Many depositions have been taken.  The many motions and briefs in this case are provided.

 

On November 9, 2011 Judge Matsch granted our Motion for Partial Summary Judgment and ruled “the alterations made to the El Diablo Restaurant space created a new barrier to wheelchairs.”

We filed our reply to the motion for injunction in the El Diablo case. The Court ruled El Diablo’s inaccessible dining areas in its newly altered restaurant violate the ADA. Rather than fixing the access barriers, Defendants said, “Plaintiffs are doing nothing more than advancing the political agenda of a discrete and empowered minority of three that has demonstrated no real interest in eating a meal at El Diablo.” 

 

In granting Plaintiffs’ request for a permanent injunction, the Court has ordered that Defendants provide a plan for remediating the barrier to accessibility on or before April 23, 2012.  The Court has granted an extension until May 23, 2012 to submit the remediation plan.

 

Defendants filed their remedial plan on May 23, 2012.  That plan does not resolve the issue of the inaccessibility of the raised seating areas.  Instead Defendants propose expanding the restaurant into the space in the building next door and they promise that space will be accessible.  Plaintiffs responded to Defendants’ remedial plan.  Defendants submitted a reply and supplemental reply.  

 

On July 10, 2012, Denver’s Building Official, Mike Roach, who oversees all aspects of the building code agency posted notices to vacate at First Avenue Hotel property, which includes the El Diablo restaurant.  The Agency cited unsafe conditions and the owners making alterations to the building without seeking permits as the reasons in the notices.  

 

As a result, Defendants filed their Notice of Closure of the Restaurant by The City.  We responded on July 31, 2012.  El Diablo’s owner filed an appeal to the Community Planning and Development Board of Appeals.  After a hearing, the Board allowed the restaurant to re-open conditioned upon the the owner fixing a list of outstanding building code violations and doing so before September 30, 2012.  Judge Matsch gave the owner an extension of time to submit a remedial plan up to and including October 8, 2012.  Just before that deadline, Defendants counsel requested yet another extension, which we opposed.  Judge Matsch issued an order agreeing with Defendants that they would not have to submit a remedial plan until 30 days after the City determines that the building code issues are resolved.  

 

Defendants had until October 31, 2012 to bring the building into compliance.  CCDC has submitted ongoing CORA requests to the City to obtain all documents exchanged between the owners and the City regarding compliance with the plan.  A letter dated September 28, 2012 from Deputy City Attorney D. Scott Martinez details specific actions the owner must take to resolve the outstanding code issues.  This letter states specifically: “If the above referenced items are not completed by the October 31, 2012 extension, the City shall enforce the Board of Appeals ruling.”  The Board of Appeals denied the owner’s appeal pending the owner obtaining all necessary permits and complying with the outstanding work plan.  The Board of Appeals said that if the owner failed to do so, the notices of unsafe structure would go back into place.  In other words, the restaurant would once again be shut down.  

 

The City of and Board of Appeals continue to grant El Diablo extensions of time to come into compliance with the requirements of the building code.  After a brief closure of the restaurant, it has remained open to the public every day since.  The court ordered Defendants to submit a new remedial plan.  Once again, Defendants refused to submit a plan that would remedy the inaccessible raised seating areas and instead requested that the court postpone Defendants having to submit a plan until “after all issues with the City have been resolved.”  Plaintiffs opposed that motion and, at the same time, filed their Motion Requesting Entry of Final Permanent Injunction and Final Judgment.  Plaintiffs requested the court issue an order requiring the defendants undertake remedial steps, including the following:   Submitting applications for removing the barriers, cooperating with the City on prosecuting those applications, and, in the interim before barrier removal occurs, installing a fully-accessible table on the street level for use by customers who use wheelchairs.  

 

The court granted Defendants’ request for an indeterminate extension.  “Although the plaintiffs’ protected interests in access are affected by the re-opening of the restaurant, without modification, the viability of the business is uncertain at this time . . . . The issues with the City are of such significant importance to any court approved plan to remediate the barriers to wheelchair access that no further orders can be entered until the issues have been resolved.”  The court denied Plaintiffs’ motion seeking a final injunction.  

 

Plaintiffs appealed the court’s ruling saying, in part, the ADA requires an injunction be issued when a determination of liability has been made.  Plaintiffs allege their proposed injunction accomplishes the purposes of the ADA and takes into consideration the ongoing disputes between Defendants and the City.  

 

On December 14, 2012, Defendant Morreale Hotels, LLC filed for Chapter 11 bankruptcy.  The owners are also subject to foreclosure action taken against the property itself. The city once again posted notices of unsafe structure and notices to vacate and shut the restaurant down. The owner filed a Motion for Temporary Restraining Order and requested that the city’s actions be stopped. The Court granted the Temporary Restraining Order. Therefore, El Diablo opened once again and has remained open since. El Diablo’s owner and the city continue to negotiate as to whether the building is safe enough to be open to the public. 

 

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.

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 inaccessible dining areas when they engage in complete alterations of buildings stands as a principle that the ADA will be enforced in Colorado. Despite 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. 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.

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 Document


Media Coverage


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