B.B. & C. v. Edelweiss Condominium

• Decision Date: 13 October 2009
• Docket Number: No. 08SC384.,08SC384.
• Parties: B.B. & C. Partnership, Petitioner, v. The EDELWEISS CONDOMINIUM ASSOCIATION, Respondent.
• Court: Colorado Supreme Court

218 P.3d 310

B.B. & C. Partnership, Petitioner, v. The EDELWEISS CONDOMINIUM ASSOCIATION, Respondent.

No. 08SC384.

Supreme Court of Colorado, En Banc.

October 13, 2009.

McElroy, Deutsch, Mulvaney & Carpenter, LLP, Victor M. Morales, C. Adam Foster, Denver, Colorado, Attorneys for Petitioner.

Lansky, Weigler & Porter, P.C., Wendy E. Weigler, Denver, Colorado, Attorney for Respondent.

Justice HOBBS delivered the Opinion of the Court.

In this quiet title adverse possession case, we review and affirm a judgment of the court of appeals.¹ B.B. & C. Partnership ("BB & C") obtained a summary judgment in the trial court quieting its title to the property identified as parking space 21 of the Edelweiss Condominiums ("Edelweiss") located in Vail, Colorado. Relying on the color of title adverse possession statute, section 38-41-108, C.R.S. (2009), the trial court ruled that BB & C owns an unrestricted fee simple estate in parking space 21 and may convey it free of condominium declaration restrictions applicable to other parking spaces on the property.

BB & C bases its quiet title adverse possession claim on the fact that one of its employees, Jack Curtin-Hill, who served as a managing agent of the condominium and is the sole remaining partner in BB & C, parked his vehicle in parking space 21 for over twenty years while BB & C paid all taxes, maintenance fees, and insurance fees on the space during that period. The dispute arose when BB & C sought to sell its claimed unrestricted fee simple ownership interest to a third party who is not a condominium owner.² The Edelweiss Condominium Association ("Association") invoked the condominium's Declaration provisions that prevent the sale of a common element parking space to a non-condominium owner.

We hold that parking space 21 is a common element of the condominium property that, under the deed of conveyance to BB & C incorporating the condominium's Declaration, cannot be sold or leased to a third party who is not a condominium owner. A plaintiff who succeeds in proving all the elements of section 38-41-108 is entitled to a judgment of legal ownership "to the extent and according to the purport of his paper title." § 38-41-108. Here, BB & C's paper title plainly incorporates a provision that contradicts BB & C's claim for title to an unrestricted fee simple estate in parking space 21 that it can freely convey to any third party.

The court of appeals ruled that the trial court erred in granting summary judgment to BB & C and remanded the case to the trial court for further proceedings. We agree, but for different reasons than the court of appeals expressed in its unpublished decision. The court of appeals reasoned that BB & C has no ownership interest at all in parking space 21 because the conveyance of the space to BB & C by a condominium unit owner violated the original and Amended Declarations. However, whether the conveyance to BB & C violated the original and Amended Declarations is immaterial when an invalid conveyance is nonetheless sufficient for color of title under the provisions of section 38-41-108. Accordingly, while on remand from the court of appeals BB & C may be able to obtain a quiet title judgment recognizing its ownership of parking space 21, it is not entitled to a judgment for an unrestricted fee simple estate.

I.

Edelweiss is a twenty-unit complex that includes thirty parking spaces. At Edelweiss's inception, one parking space was conveyed appurtenant to each condominium, and ten spaces were unassigned. A provision of the condominium's Declaration³ permitted the developer to sell the unassigned spaces to condominium owners or to third-party non-condominium owners. Under the Declaration, no person other than the developer can sell or lease a parking space to a non-condominium owner.

In 1971, Edelweiss condominium owner Edward Lana purchased parking space 21 from Investment Enterprises Corporation, the condominium developer and declarant. Edward Lana sold his condominium unit along with two parking spaces in 1972, but retained parking space 21 until 1974. At that time, he sold parking space 21 to Justin and Isabella Lana ("the Lanas"), who owned a condominium in the building.

The following year, the Lanas conveyed their unit along with two parking spaces to Margaret Hardy, but they retained parking space 21. In 1976, the Lanas sold parking space 21 for $1,200 to BB & C via warranty deed, which BB & C filed and recorded. This deed, like the others, specifically made the conveyance "subject to the terms, covenants, conditions, easements, restrictions, uses, limitations and obligations set forth in [the] Declaration" governing Edelweiss.

Because BB & C was a non-condominium owner and the Lanas were not the condominium developer, the conveyance of parking space 21 violated the Declaration's requirement that only the developer could sell or lease a parking space to a non-condominium owner. Nonetheless, the Association acknowledged BB & C's use and ownership of parking space 21. At the Association's annual meeting in December 1981, the condominium unit owners comprising the Association discussed parking spaces and BB & C's ownership and obligations in regard to parking space 21. The meeting's minutes note that BB & C owned a parking space in the building and "it was the consensus ... that the sale of parking spaces, if possible, be restricted only to other owners of condominium units." A consensus was then reached that BB & C should "participate in the payment of monthly assessments." The Association also decided to notify its insurance company that BB & C owned parking space 21.⁴ Subsequently, the Association assessed BB & C with a $240.00 yearly fee for the space's maintenance and insurance. Edelweiss later provided BB & C a garage door opener after modifying the parking lot to require one.

Until 1998, Curtin-Hill continued to regularly park in parking space 21. During that time he still served as managing agent of the condominium but as an employee of Arthur G. Bishop & Company. After 1998, Curtin-Hill only parked in space 21 occasionally. In 2003, BB & C, of which Curtin-Hill is the sole remaining partner, attempted to sell parking space 21 to a third-party non-condominium owner.

The dispute between BB & C and the Association arose in 2003 when BB & C sought to replace a lost automatic garage door opener needed to access parking space 21 and the Association refused to provide it. Soon after, BB & C filed a quiet title action in Eagle County District Court, claiming fee simple ownership of parking space 21 by adverse possession under color of title pursuant to section 38-41-108, among other claims. On the color of title claim, the trial court concluded that BB & C owned parking space 21 in unrestricted fee simple and could convey it to a third-party non-condominium owner.

The original Declaration that established Edelweiss in 1970, and that governs this dispute, provides in Exhibit C that:

One parking space shall be assigned (conveyed) by the Declarant to each initial purchaser(s) of a condominium unit. Additional parking spaces may be purchased or leased from the Declarant at such circumstantial value as determined by Declarant. Each condominium unit shall always have one parking space appurtenant thereto.... an owner of a condominium unit shall have the right to sell, lease or exchange a parking space, but only to or with another owner, to the Association or to the Declarant; provided, however, that all such leases shall expire on the date that such lessor's ownership interest in his condominium unit is terminated and, provided, further, that such right to sell or exchange is expressly limited to the condition that each condominium unit shall always have a minimum of one parking space appurtenant thereto. The parking spaces which are not assigned (conveyed) to the condominium unit owners shall be owned by Declarant, who shall have the right to lease or sell the same to persons other than the condominium unit owners.

(emphases added). Parking spaces are included within the definition of general common elements pursuant to section 1(d) of the Declaration. Further, the condominium map attached to the Declaration explicitly states that all of the parking spaces are limited common elements.

The Declaration forbids the partitioning of common elements and limits how and to whom common elements may be conveyed. Section 10 of the Declaration provides that general common elements "shall be owned in common by all of the owners of the units and shall remain undivided, and no owner shall bring any action for partition or division of the general common elements." Section 6 dictates that the undivided interest in the limited and general common elements, along with the condominium unit, "shall together comprise one condominium unit, shall be inseparable and may be conveyed, leased, devised or encumbered only as a condominium unit."

In 2003, the Association adopted an Amended Declaration to replace the original Declaration. The Amended Declaration, in the words of the trial court, "declared the Association members to be the owner of parking space 21 as a general common element," allowed for the reallocation of parking space 21 as a limited common element, and permitted Association members to use parking space 21 while permanently excluding BB & C from accessing it. The trial court declared the Amended Declaration to be unconscionable and voided it. The court of appeals upheld the Amended Declaration but awarded BB & C costs and attorneys fees for Edelweiss's belated disclosure of the Amended Declaration. This award of costs and attorneys fees is not an issue before us.

We conclude that the trial court on summary judgment, and subsequently the court of appeals, did not need to reach the issue of the Amended Declaration's applicability. The original Declaration incorporated into BB & C's deed precludes it from obtaining an unrestricted fee simple...