October 06, 2016
2016 COA 141. Nos. 14CA2195 and 15CA0203. DA Mountain Rentals, LLC v. The Lodge at Lionshead Phase III Condominium Association, Inc.
Condominium Declaration—Colorado Common Interest Ownership Act—Attorney Fees—Privilege Log—Disclosure—Discovery.
This case concerns 2012 Amendments to the Condominium Declaration for the Lodge at Lionshead III (Declaration) establishing a condominium community. The Declaration was recorded many years before the enactment of the Colorado Common Interest Ownership Act (CCIOA). DA Mountain Rentals, LLC (DA), which owns one unit, sought a declaratory judgment in district court that the 2012 Amendments were invalid because they violated the terms of the Declaration governing the procedure for adopting amendments. The district court granted the Lodge at Lionshead Phase III Condominium Association, Inc.’s (Association) CRCP 56(h) motion to determine the validity of the 2012 Amendments, determining that (1) the 2012 Amendments had been validly adopted, and (2) the 67% voting requirement they imposed did not violate the terms of the Declaration or CCIOA. The district court thereafter granted the Association’s summary judgment motion on the 2012 Amendments eliminating the lender approval requirements and providing for mandatory buyouts.
On appeal, DA argued that the district court erred when it granted the Association’s two Rule 56 motions. The Declaration’s express terms bar amendments that would eliminate the permanent unanimity requirement for member and lender approval of changes to the undivided interests in the general common elements (GCE) and provisions governing sharing of common expenses, and the CCIOA does not authorize the amendment that would allow the alteration of such rights. The 2012 Amendments are, therefore, invalid to the extent they authorize alteration of GCE interests or the provisions governing the sharing of common expenses. On the other hand, the 2012 Amendments eliminating lender approval to declare obsolescence and instituting a mandatory buyout provision are subject to the rule requiring 60% member approval to amend; because this requirement was met, these amendments were valid under the Declaration.
DA also contended that the district court erred by denying its request for fees and costs incurred in connection with its efforts to obtain disclosure and discovery of documents the Association claimed were privileged. The record supports the determination that the Association was substantially justified in objecting to logging and producing the attorney files requested by DA. Therefore, the court did not abuse its discretion in denying DA’s request for attorney fees.
On cross-appeal, the Association challenged the district court’s rulings requiring the Association to produce privilege logs of certain documents, denying its motion for a protective order for those materials, and granting DA’s motions to compel their production. However, the court did not abuse its discretion in determining that the requested documents were relevant to the fiduciary claims and that there was no privilege. Further, the court addressed proportionality issues when ordering production of the documents and privilege log. Accordingly, the court did not abuse its discretion in ordering disclosure and production of the documents or denying the request for a protective order.
The judgment was affirmed in part and reversed in part, and the case was remanded.
2016 COA 142. No. 15CA0072. Alhilo v. Kliem.
Wrongful Death—Exemplary Damages—Habitual Traffic Offender—Evidence—Flight from Scene—Circumstantial Evidence—Noneconomic Damages Cap—Comparative Negligence.
Alhilo died in a collision between his motorcycle and a car driven by defendant Kliem. Alhilo’s mother, the plaintiff, brought this wrongful death action against Kliem. The jury allocated the fault and awarded noneconomic and exemplary damages. Kliem appealed the judgment entered on the verdict.
On appeal, Kliem contended that the trial court erred by excluding evidence of the deceased’s driving record and his status as a habitual traffic offender (HTO). Kliem argued that this evidence was admissible under the exception in CRS § 42-4-1713; however, this case does not support admitting either type of evidence under this statute. Admissibility of HTO status evidence is subject to the rules of evidence, primarily CRE 401 and 403. Here, both rules weigh against admission. Therefore, the trial court did not abuse its discretion by precluding evidence of the deceased’s status as an HTO and his driving record.
Kliem also contended that the trial court erred by admitting evidence of Kliem’s two prior convictions for driving while impaired. The trial court found this evidence relevant, and acknowledging the potential for prejudice, gave an appropriate limiting instruction. Therefore, the trial court did not abuse its discretion in allowing evidence of Kliem’s prior alcohol offenses for purposes of exemplary damages.
Kliem further contended that the trial court erred by admitting evidence that he fled the accident scene. Evidence of Kliem’s flight was relevant to explain why plaintiff was unable to present direct proof of Kliem having been impaired by alcohol, such as a breath test or blood draw shortly after the accident occurred. Further, evidence of Kliem’s flight showed his consciousness of liability. For these reasons, the trial court did not abuse its considerable discretion in allowing evidence of Kliem’s post-accident flight.
Kliem next contended that there was insufficient evidence to prove plaintiff was entitled to exemplary damages. However, the alcohol containers found in Kliem’s vehicle, and the facts that he failed to immediately seek medical attention for his severe injuries, fled the accident scene, and failed to immediately turn himself in to police constitute sufficient circumstantial evidence to support the exemplary damages award.
Kliem also argued that exemplary damages were improper because his left-hand turn was legal. There is no authority requiring that a traffic law violation be shown before exemplary damages can be awarded.
Finally, Kliem contended that the noneconomic damages cap in CRS § 13-21-203 must be applied to an award of noneconomic damages before comparative negligence is apportioned. Once the amount of a plaintiff’s recovery is determined, the noneconomic damages cap in CRS § 13-21-203 comes into play, which merely limits a plaintiff’s recovery to a specified maximum amount. Therefore, the trial court properly determined the amount of plaintiff’s recovery by first apportioning the percentage of comparative negligence attributable to Kliem and then applying the noneconomic damages cap in CRS § 13-21-203 to that amount.
The judgment was affirmed.
2016 COA 143. No. 15CA0206. Semler v. Hellerstein.
Notice of Appeal—Timeliness—Amended Complaint—Jurisdiction—Motion to Dismiss—Fraud—Concealment—Misrepresentation—Civil Conspiracy—Breach of Fiduciary Duty—Breach of Contract—Third Party Beneficiary—Attorney Fees.
Plaintiff Semler and defendant Perfect Place, LLC are both members of the 1940 Blake Street Condominium Association (Association). Defendant Hellerstein owns and controls both Perfect Place, LLC and Bruce S. Hellerstein, CPA P.C. (collectively, Perfect Place defendants). Hellerstein also served as treasurer of the Association. Defendant Bewley is an attorney employed by defendant law firm Berenbaum Weinshienk, P.C. At all relevant times, Bewley represented Hellerstein and his two corporate entities.
The current litigation stems from a related quiet title action in which Perfect Place asked the court to determine that it was the rightful owner of parking spaces C, D, and E. The court presiding over the quiet title action determined that Semler owned parking spaces C and D, while Perfect Place owned parking space E. Semler then brought the current suit, claiming that Bewley and Hellerstein devised a scheme to gain title to Semler’s parking spaces C and D. Semler’s first amended complaint alleged claims only for breach of fiduciary duty against Hellerstein, aiding and abetting that breach against Bewley, and civil conspiracy against all defendants. The court granted defendants’ motions to dismiss. Semler than moved to amend his complaint a second time, proposing to add claims for fraud, nondisclosure and concealment, negligent misrepresentation, negligent supervision, vicarious liability, and breach of contract. He also more clearly explained that he was seeking damages for lost income opportunities he suffered as a result of having to defend against the quiet title action. The court denied Semler’s second motion to amend based on lack of standing to pursue alleged fraud or misrepresentation against the prior owner of the parking spaces and awarded attorney fees in favor of defendants.
On appeal, defendants asserted that Semler’s notice of appeal was untimely and, therefore, the Court of Appeals lacked jurisdiction to consider the appeal. The Court determined that Semler timely filed his notice of appeal 49 days after the court denied his CRCP 59 motion for reconsideration.
Semler contended that the trial court erred by denying his motion for leave to amend his complaint a second time. The court’s dismissal of the action was specifically premised on Semler’s fraud claims, which were new to the second amended complaint. It was therefore apparent to the Court that although the trial court denied the motion to amend, it considered the claims in the second amended complaint when ruling on the motion to dismiss.
Semler argued that the trial court erred in granting defendants’ motions to dismiss. Semler’s fraud, concealment, and misrepresentation claims were all premised on conversations and transactions between the prior owner of the parking spaces and defendants in which Semler was not involved. Semler lacked standing to bring those claims. Semler’s claims for lost opportunity damages are too remote and unforeseeable to be recoverable under these claims. Therefore, these claims failed to state a claim upon which relief could be granted and should have been dismissed under CRCP 12(b)(5).
Semler also contended that defendants conspired with each other to obtain his parking spaces. He is not entitled to relief on a civil conspiracy claim against Bewley because a director cannot conspire with the corporation that he serves, which is the premise of Semler’s argument. Additionally, because Hellerstein was not acting in his role as treasurer when he engaged in the allegedly fraudulent conduct, Semler’s breach of fiduciary duty claim against Hellerstein fails. Because these claims fail, Semler’s aiding and abetting breach of fiduciary duty claim against Bewley and negligent supervision and vicarious liability claims against Bewley’s law firm, Berenbaum Weinshienk, fail as well.
As to his breach of contract claim, although Semler was not a party to the contract between Berenbaum Weinshienk and the Association in which Berenbaum Weinshienk agreed that it would not represent one Association member against another, Semler sufficiently pleaded a third-party beneficiary breach of contract claim pursuant to this agreement. Therefore, the case was remanded to the trial court for further proceedings on this claim.
Semler also contended that if the dismissal order is reversed, the attorney fees award in favor of defendants must also be reversed. Only Semler’s breach of contract claim survives CRCP 12(b) dismissal. Thus, because that claim was not pleaded against the Perfect Place defendants, the attorney fees award to them remains undisturbed. The order awarding fees award under this statute to Bewley and Berenbaum Weinshienk was reversed.
The orders were affirmed in part and reversed in part, and the case was remanded with directions.
2016 COA 144. No. 15CA0765. Bill Barrett Corp. v. Sand Hills Metropolitan District.
Summary Judgment—Special District Act—Altering District Boundaries and Service Plan—Material Modification Requiring Approval of County Commissioners.
In 2004, the town of Lochbuie approved a proposed service plan (2004 plan) and the district court issued an order and decree organizing the Altamira Metropolitan District No. 6 (the Altamira District). The Altamira District’s boundaries were entirely within Lochbuie. The Altamira development was to include single family homes and commercial space within Lochbuie’s boundaries, but it never occurred.
70 Ranch, LLC owns acreage approximately 30 miles northeast of Lochbuie in unincorporated Weld County. In 2009, the district purported to include the 70 Ranch property within its boundaries, and the district court granted the inclusion. In 2010, the district changed its name from Altamira District to the Sand Hills Metropolitan District. In 2011, the court entered an order granting the district’s exclusion from its boundaries of all the land in Lochbuie that originally comprised the Altamira District. Through this sequence of events, the district relocated itself from Lochbuie to encompass only the 70 Ranch property. No notice was given or approval obtained from the Board of County Commissioners of Weld County.
Bill Barrett Corporation and Bonanza Creek Energy (taxpayers) and Noble Energy, an involuntary plaintiff-appellee (Noble), are oil and natural gas exploration companies that lease mineral interests at 70 Ranch. In 2008, the district’s board of directors approved certification of a mill levy for the district’s general operating expenses. Taxpayers have paid millions of dollars since 2009 (when 70 Ranch was included) in ad valorem taxes to the district.
Despite its 2009 and 2011 actions, the district did not prepare a revised service plan to reflect its new location and adjusted purpose until 2013. Taxpayers sued Sand Hills (the district, United Water and Sanitation District, and Lochbuie (collectively Sand Hills)) in 2013, claiming it exceeded its authority and violated parts of the Special District Act, CRS §§ 32-1-101 to -1807, and the Colorado Constitution. Cross-motions for summary judgment were filed and each was granted in part. The trial court found that (1) the district lost its legal authority to collect taxes after April 28, 2011 when it unilaterally removed itself entirely from Lochbuie, so taxpayers are entitled to a tax refund for taxes paid for tax years 2011, 2012, and 2013; and (2) the district had the authority to tax taxpayers from April 29, 2009 until April 28, 2011, when the District’s boundaries included the 70 Ranch property and the original Altamira District property.
On appeal, Sand Hills argued that it was error to find that the district lost its authority to tax when it relocated itself in 2011. On cross-appeal, taxpayers argued that it was error to find that the district had authority to impose taxes on their mineral interests from 2009 to 2011.
The Court of Appeal’s analysis of the case focused on applying the plain meaning of CRS § 32-1-207(2)(a), which provides a nonexhaustive list of factors specifying when a district’s modification of its service plan is considered material and requires a petition to and approval from the board of county commissioners. The district court concluded, and the Court of Appeals agreed, that the district’s failure to comport with the purposes of the 2004 plan along with its complete geographic overhaul in 2011 constituted a material departure from the original service plan. The district was required to obtain approval from the board of county commissioners for such a change. Therefore, the Court affirmed the trial court’s grant of taxpayers’ motions for summary judgment as to the time period after April 28, 2011.
The Court also concluded that the district’s geographic shift in 2009 to include the 70 Ranch property was a material modification of the district’s 2004 plan that required, but did not receive, the approval of the board of county commissioners. Therefore, the district also did not have taxing authority after 2009. The Court reversed the trial court’s judgment as it relates to Sand Hills’ motion for summary judgment for the time period from 2009 until 2011.
The Court further concluded that the relief granted to taxpayers applies also to Noble.
The judgment was affirmed in part and reversed in part, and the case was remanded.
2016 COA 145. No. 15CA1135. Golden Run Estates, LLC v. Town of Erie.
Annexation—Subject Matter Jurisdiction—Contract Claims—Annexation Act.
Defendant Town of Erie entered into a pre-annexation agreement with Harber for his property located in unincorporated Boulder County. Harber intended his company, Golden Run Estates, to develop a mixed-use community over approximately 50 years. An annexation agreement and a detailed development plan were supposed to follow the pre-annexation agreement. Golden Run Estates and Harber sued Erie after an annexation agreement was not reached following annexation of the property. They brought two contract claims, a claim for declaratory relief, and a claim for a judicial disconnection decree. The trial court found it had subject matter jurisdiction over the contract claims and entered a judgment for damages. It also ordered judicial disconnection, but concluded it did not have subject matter jurisdiction over the declaratory relief claim.
The sole issue on appeal was the jury award on the two contract claims. Erie argued that the trial court erred in concluding that it had subject matter jurisdiction over the contract claims and in upholding the breach of contract verdict because plaintiffs did not bring their claims within the 60-day limitation period under CRS § 31-12-116(2)(a)(I). The Court of Appeals determined that the CRS § 31-12-116(2)(a)(I) limitation period is jurisdictional and its time limits cannot be tolled or waived.
Erie also raised arguments relating to the sufficiency of the evidence concerning lost opportunity costs and the property manager’s testimony. Because the Court determined that the trial court did not have subject matter jurisdiction over plaintiffs’ contract claims, it did not address these contentions.
Plaintiffs argued that their contract claims did not challenge the annexation of the property but were to enforce the terms of the pre-annexation agreement, so CRS 31-12-116 was inapplicable. The Court found plaintiffs’ claims were actually impermissible collateral attacks on the annexation and there was no separate breach of contract claim that wasn’t an argument regarding the annexation itself. The Court held that the trial court did not have subject matter jurisdiction over the contract claims and vacated that part of the judgment and the damages award. The case was remanded with directions to grant Erie’s motion for directed verdict and for a determination of the amount of attorney fees incurred by Erie in the appeal.
2016 COA 146. No. 15CA1589. Berges v. County Court of Douglas County.
The Children’s Code—Authority of District Attorneys to Prosecute Mandatory Reporters.
Plaintiffs are medical doctors, clinical social workers, and healthcare professionals charged with violating CRS § 19-3-304, under which they are “mandatory reporters” required to report suspected child abuse or neglect. Plaintiffs moved to dismiss the charges, arguing that the district attorney lacked authority to prosecute under CRS § 19-3-206. The county court denied the motions. Plaintiffs filed a complaint under CRCP 106(a)(4) seeking review of the county court’s orders. The district court denied all relief and upheld the county court’s determination.
On appeal, plaintiffs contended that CRS § 19-3-206 of the Children’s Code vests county attorneys with exclusive authority to prosecute mandatory reporters for criminal violations of CRS § 19-3-304 because such prosecutions are “proceedings” brought under article 3 of the Children’s Code. The Court of Appeals concluded that CRS § 19-3-206 does not preclude district attorneys from prosecuting mandatory reporters because CRS § 19-3-304 does not set forth a proceeding under article 3, but simply defines an offense. Criminal prosecutions of that offense do not constitute article 3 proceedings.
The judgment was affirmed.
2016 COA 147. No. 15CA1664. Andrade v. Johnson.
Personal Injury—Summary Judgment—Premises Liability Statute—Negligence.
Andrade slipped and fell on the damaged public sidewalk adjacent to Johnson’s house and fractured her leg. Andrade filed a complaint against Johnson asserting premises liability and common law negligence claims. The district court granted Johnson’s motion for summary judgment on both claims.
On appeal, based on concessions in her opening brief, the Court of Appeals determined that Andrade did not contest entry of the summary judgment on the premises liability claim. Based on the undisputed fact that Andrade fell on a public sidewalk, the Court concluded as a matter of law that Johnson was not a “landowner” for purposes of the premises liability statute, CRS § 13-21-115 (the Act). Because Andrade’s injury did not occur on Johnson’s property, she had no claim under the Act, and the district court did not err in entering summary judgment on this claim.
Andrade also argued that the district court erred in entering summary judgment on the negligence claim, alleging Johnson had a duty to notify the city engineer about the damaged sidewalk and became liable for Andrade’s injury as a result of her failure to notify. The Court considered whether the “no duty” rule was applicable and concluded that it was not because Colorado Springs City Code § 3.4.103(D) expressly provides for civil liability under the circumstances of this case. The Court held that (1) the plain language of § 3.4.103(B) unambiguously imposes a duty on owners and occupants of real property to notify the city engineer about any damage to the public sidewalk abutting or adjacent to their property, and (2) this section expressly imposes liability on such owners or occupants when their failure to notify is the proximate cause of a third party’s injury. Because disputed issues of fact remain as to whether the public sidewalk was damaged and whether Johnson’s failure to report it was a proximate cause of Andrade’s injuries, the district court erred by entering summary judgment on this claim.
The summary judgment on the premises liability claim was affirmed. The summary judgment on the negligence claim was reversed and the case was remanded to the district court for further proceedings.