Bd. of Cnty. Comm'rs of Adams Cnty. v. City & Cnty. of Denver

• Decision Date: 03 March 2022
• Docket Number: Court of Appeals No. 20CA1778
• Citation: 511 P.3d 692,2022 COA 30
• Parties: BOARD OF COUNTY COMMISSIONERS OF ADAMS COUNTY, Colorado; City of Aurora, Colorado; City of Brighton, Colorado ; and City of Thornton, Colorado ; Plaintiffs-Appellees, v. CITY AND COUNTY OF DENVER, Colorado; Defendant-Appellant.
• Court: Colorado Court of Appeals

511 P.3d 692

2022 COA 30

BOARD OF COUNTY COMMISSIONERS OF ADAMS COUNTY, Colorado; City of Aurora, Colorado; City of Brighton, Colorado ; and City of Thornton, Colorado ; Plaintiffs-Appellees,

v.CITY AND COUNTY OF DENVER, Colorado; Defendant-Appellant.

Court of Appeals No. 20CA1778

Colorado Court of Appeals, Division VI.

Announced March 3, 2022

Jachimiak Peterson Kummer, LLC, Mark R. Davis, Lakewood, Colorado, for Plaintiffs-Appellees

Kaplan Kirsch & Rockwell, LLP, Samantha Caravello, Sara Mogharabi, Lakewood, Colorado; Kaplan Kirsch & Rockwell, LLP, W. Eric Pilsk, Washington, D.C., for Defendant-Appellant

Opinion by JUDGE FREYRE

¶ 1 In this contract dispute between the City and County of Denver (Denver) and the Board of County Commissioners of Adams County and three Adams County cities (Adams), Denver appeals the trial court's judgment enforcing the noise monitoring provision and related uncured noise violations under the 1988 Intergovernmental Agreement between Denver and Adams County (IGA), https://perma.cc/439M-8YGC. The IGA documents the parties’ agreements concerning the construction and operation of Denver International Airport (DIA), including, as relevant here, the noise exposure performance standards (NEPS) applicable to noise generated by aircraft flight operations. Denver contends that Adams’ enforcement claims are barred by (1) the statute of limitations; (2) waiver; (3) accord and satisfaction; (4) laches; and (5) claim preclusion. Denver also asserts that the trial court erred in its calculation of prejudgment interest for the liquidated damages arising from the lawsuit. We discern no error and affirm the court's judgment.

I. Background

¶ 2 As set forth in the trial court's judgment, during the 1980s, Denver sought to expand the operations of and increase the revenue from what was then Stapleton International Airport (Stapleton). Adams opposed the expansion because further growth would aggravate the aircraft noise from Stapleton. After a series of discussions spanning several years, Adams and Denver agreed (and voters in both counties agreed) that Denver could annex fifty-five square miles of land in Adams County to build a new airport, conditioned on Denver's agreement to comply with strict airport noise restrictions, including firm limits on noise in particular residential and wildlife areas of Adams County. The parties negotiated extensively to establish the IGA, settling on fixed noise standards and an airport location that satisfied both parties.

¶ 3 During the negotiations, Denver and Adams acknowledged that aircraft flight patterns were the primary cause of harmful airport noise. They also recognized that such flight patterns were determined solely by the Federal Aviation Administration (FAA), which declined to be a party to the IGA. Nevertheless, Denver agreed to work with the FAA and to use its influence as the airport proprietor to achieve the agreed-upon noise levels and to operate the new airport, DIA, in a manner consistent with the IGA.

¶ 4 To address and enforce Adams’ noise concerns, the IGA established the NEPS, the maximum noise levels permissible for DIA flight operations in certain areas of Adams County. NEPS violations are divided into two classes — Class I violations (exceeding the NEPS by 2 decibels (dB) or less) and Class II violations (exceeding the NEPS by more than 2 dB). IGA §§ 5.5.1, 5.5.2. Denver agreed to pay Adams $500,000 per uncured Class II NEPS violation each year as compensation for such NEPS violations. IGA § 5.6.3. The IGA provides Denver with a one-year cure period for each Class II violation before compensation is due.¹

¶ 5 The parties established two benchmarks to measure DIA noise levels for NEPS compliance: (1) the 65 Ldn noise contour and (2) the Leq(24).² To collect the data for these benchmarks, Denver agreed to "install and operate a noise monitoring system capable of recording noise levels sufficient to calculate Ldn noise contours and Leq(24) values for the purpose of monitoring and enforcing the NEPS." IGA § 5.4. At the time the parties signed the IGA, they knew that a noise monitoring system capable of fulfilling the contract's requirements did not exist and would have to be developed. They also knew that, even when the system was created, it might not be completely accurate. And, they intended the IGA to govern the parties for fifty to one hundred years.

¶ 6 Denver hired Harris Miller Miller & Hanson, Inc. (HMMH), an environmental and transportation consulting firm, to develop its noise monitoring system. Denver rejected HMMH's initial proposal, and in 1991, it told Adams that it would not install a noise monitoring system. Instead, Denver decided to model aircraft noise using a computer program called ARTSMAP, a system based in part on the FAA's Integrated Noise Model.

¶ 7 HMMH developed ARTSMAP as a proprietary noise model for Denver to forecast the noise level of every flight into and out of DIA using the actual flight paths and altitudes of the aircraft. ARTSMAP uses real-time FAA radar and flight tracking data for its calculations, which are driven by a lateral attenuation algorithm that references a database for aircraft design and engine placement, and then considers atmospheric absorption, temperature, humidity, and ground effects to estimate the noise generated by an aircraft at a particular location on the ground. The algorithm was developed in 1981, and the aircraft database was created in 1993.

¶ 8 Adams objected to Denver's use of ARTSMAP and filed a lawsuit in 1992 (before DIA opened) seeking a court order to compel Denver to install a noise monitoring system. Soon after the suit was filed, HMMH informed Denver that a different company, Technology Integration, Inc., could develop a noise monitoring system accurate enough to distinguish between aircraft and non-aircraft noise. Denver then filed a motion for summary judgment asking the court to dismiss Adams’ lawsuit because it could now install and operate a state-of-the-art noise monitoring system, due to technological developments, and argued that the lawsuit was moot. Based on Denver's representations, the court dismissed the lawsuit without prejudice in 1993. Thereafter, in 1995, Denver installed the state-of-the-art Airport Noise and Operations Monitoring System (ANOMS).

¶ 9 Denver contracted with Technology Integration, Inc., to install ANOMS and to field-test it for accuracy. Testing revealed that ANOMS could differentiate aircraft noise from community noise, DIA aircraft from other aircraft, and local non-DIA aircraft noise from community noise; thus, it satisfied Denver's specifications. ANOMS uses data from Remote Monitoring Terminals (RMTs) and a detection and correlation algorithm to collect and report noise events. When an RMT detects an abnormal sound, a sophisticated detection algorithm determines whether the sound constitutes a "noise event."³ A correlation algorithm then determines whether a DIA aircraft was in the area and can be matched to the noise event. When the noise event shows a significant correlation across all categories, it is reclassified as an aircraft noise event. ANOMS identifies the highest level of noise and the duration of each aircraft noise event and applies a standardized formula to calculate the sound exposure limit (SEL) of that event. The total energy of all aircraft SELs during a defined time period is measured against the Leq(24) benchmark to determine NEPS compliance.

¶ 10 Since Denver installed ANOMS, Denver has updated its software several times and has replaced and upgraded the RMTs it uses. At the time of trial, ANOMS was used at over 200 airports worldwide and comprised 70% of the airport noise monitoring market.

¶ 11 In its first three annual reports, Denver reported NEPS values from both ARTSMAP and ANOMS, which revealed violations. Adams then sued Denver in 1998 for the damages resulting from the uncured NEPS violations. In the 1999 trial, Denver argued that Adams could not use ARTSMAP data to enforce the NEPS because ARTSMAP provided "modeled" rather than "actual" noise levels. But, at that time, the noise levels reported by ANOMS and ARTSMAP varied by only 1 to 3 dB, and that variance appeared to be declining over time. Because the parties knew that any system developed would not be completely accurate and because they never asked the court to determine the proper reporting system, the court did not decide that issue. Instead, the trial court found that Denver bore sole responsibility for reporting NEPS values annually, that the IGA did not require Adams to perform NEPS calculations, and that the liquidated damages provision of the IGA required Denver to pay for the uncured violations reported by ARTSMAP.

¶ 12 After its first three annual reports, Denver only reported NEPS values from ARTSMAP, and the parties settled subsequent violations based on the trial and appellate courts’ rulings in the 1999 case.⁴

¶ 13 In 2014, Denver provided a package of materials to Adams that included an annual "Noise Climate Report." This report documented noise levels from ANOMS. When Adams compared the ANOMS noise levels to the ARTSMAP noise levels reported in the annual report, it discovered a large discrepancy. Rather than the 1 dB to 3 dB difference that existed in 1998, ANOMS now reported noise levels 20 dB higher than ARTSMAP at some of the noise monitoring locations. Adams then requested additional ANOMS data and hired a noise expert to calculate the NEPS values. Adams discovered that ANOMS and ARTSMAP no longer produced similar noise data, and that the discrepancy between the two had substantially increased over time.

¶ 14 Denver reported no NEPS violations between 2014 and 2016 using ARTSMAP. Adams contested these findings based on the new ANOMS data. In 2017, after attempts to negotiate a settlement failed, Adams filed this action and the case proceeded to a bench trial in 2019. The trial court found that ARTSMAP did not comply with the IGA because...