Francis v. Aspen Mountain Condo. Ass'n, Inc.

• Decision Date: 23 February 2017
• Docket Number: Court of Appeals No. 15CA1776.
• Parties: Robert A. FRANCIS, as Trustee of the Judi B. Francis Irrevocable Trust, and as Trustee of the Robert A. Francis Irrevocable Family Trust; Judi B. Francis, as Trustee of the J. Lee Browning Belize Trust; Leslee K. Francis; Judi B. Francis Irrevocable Trust; Robert A. Francis Irrevocable Family Trust; and J. Lee Browning Belize Trust, Plaintiffs-Appellants, v. ASPEN MOUNTAIN CONDOMINIUM ASSOCIATION, INC., a Colorado not for profit corporation; Donald Miller, in his capacity as member of the Board of Directors of the Aspen Mountain Condominium Association; Steve Daubenmier, in his capacity as member of the Board of Directors of the Aspen Mountain Condominium Association; and Bruce Lynton, in his capacity as member of the Board of Directors of the Aspen Mountain Condominium Association, Defendants-Appellees.
• Court: Colorado Court of Appeals

401 P.3d 125

Robert A. FRANCIS, as Trustee of the Judi B. Francis Irrevocable Trust, and as Trustee of the Robert A. Francis Irrevocable Family Trust; Judi B. Francis, as Trustee of the J. Lee Browning Belize Trust; Leslee K. Francis; Judi B. Francis Irrevocable Trust; Robert A. Francis Irrevocable Family Trust; and J. Lee Browning Belize Trust, Plaintiffs-Appellants,

v.ASPEN MOUNTAIN CONDOMINIUM ASSOCIATION, INC., a Colorado not for profit corporation; Donald Miller, in his capacity as member of the Board of Directors of the Aspen Mountain Condominium Association; Steve Daubenmier, in his capacity as member of the Board of Directors of the Aspen Mountain Condominium Association; and Bruce Lynton, in his capacity as member of the Board of Directors of the Aspen Mountain Condominium Association, Defendants-Appellees.

Court of Appeals No. 15CA1776.

Colorado Court of Appeals, Div. VI.

Announced February 23, 2017

George M. Allen, Telluride, Colorado, for Plaintiffs-Appellants

John M. Lassalett, P.C., John M. Lassalett, Aspen, Colorado; Younge & Hockensmith, P.C., Benjamin M. Wegener, Grand Junction, Colorado, for Defendants-Appellees

Opinion by JUDGE TERRY

¶ 1 The Francis parties—multiple trusts and their fiduciaries, as well as other individuals with an ownership interest in Unit 1-A of the Aspen Mountain Condominiums—appeal several trial court orders and a judgment of foreclosure in favor of the Aspen Mountain Condominium Association, Inc.; and various other persons in their capacity as board members of the Association (collectively referred to as AMCA).

¶ 2 As an issue of first impression, we consider and reject AMCA's proposed limitations on the holding of DA Mountain Rentals, LLC v. Lodge at Lionshead Phase III Condominium Ass'n , 2016 COA 141, ––– P.3d ––––. We affirm in part, reverse in part, and remand the case to the trial court for further proceedings.

I. Background

¶ 3 The parties' dispute began with a contested 2010 vote that amended the original 1972 condominium declaration to reallocate the common interest shares and common expenses. The 1972 declaration had originally allocated common interest shares and common expenses based on unit size, and as owners of Unit 1-A, one of the smaller units, the Francis parties saw their common expenses increase when the amended declaration reallocated common interest shares equally among all units. The Francis parties cast the only vote against the amended declaration. Two lawsuits arose out of AMCA's approval of the amended declaration. The first, filed by the Francis parties, sought a judgment voiding the reallocation of the common interest shares. After AMCA filed the second suit to recover unpaid assessments and foreclose on the unit, the court consolidated the cases.

¶ 4 Following extensive litigation, the trial court ruled in favor of AMCA, finding that the 2010 amendment had been properly adopted. The court also entered a decree of judicial foreclosure against Unit 1-A based on the default in payments of the increased assessments due under the new declaration.

II. Impact of CCIOA on the 1972 Declaration

¶ 5 The Francis parties first contend that the trial court erred by partially granting AMCA's motion for a determination of law. The court held that the Colorado Common Interest Ownership Act (CCIOA), sections 38-33.3-101 to - 402, C.R.S. 2016, which went into effect in 1992, Ch. 283, sec. 2, 1991 Colo. Sess. Laws 1757, nullified the 1972 declaration's requirement of a unanimous vote to alter ownership interests in the common elements. We agree that this ruling was in error.

A. Preservation

¶ 6 AMCA asserts that this issue was not preserved for our review because the trial court struck as untimely the Francis parties' brief contesting AMCA's motion for a determination of law as to application of the 67% voting threshold. We disagree. Because this issue of law was raised and was ruled on by the trial court, it is ripe for appellate review.

B. Standards of Review

¶ 7 When a motion is filed under C.R.C.P. 56(h), a district court may enter an order deciding a legal question "[i]f there is no genuine issue of any material fact necessary for the determination of the question of law." We review a court's ruling on such a motion de novo. Coffman v. Williamson , 2015 CO 35, ¶ 12, 348 P.3d 929.

¶ 8 In interpreting a statute, our primary goals are to discern and give effect to the General Assembly's intent. Krol v. CF & I Steel , 2013 COA 32, ¶ 15, 307 P.3d 1116. We look first to the statutory language, giving the words and phrases used therein their plain and ordinary meanings. Id. We read the language in the dual contexts of the statute as a whole and the comprehensive statutory scheme, giving consistent, harmonious, and sensible effect to all of the statute's language. Id. After doing this, if we determine that the statute is not ambiguous, we enforce it as written and do not resort to other rules of statutory construction. Id.

¶ 9 We also interpret the terms of a condominium declaration de novo, giving terms their plain and ordinary meanings; if the terms are clear and unambiguous, we will enforce them as written. Vista Ridge Master Homeowners Ass'n v. Arcadia Holdings at Vista Ridge, LLC , 2013 COA 26, ¶ 18, 300 P.3d 1004.

C. The Original Condominium Declaration

¶ 10 Paragraph 28 of the 1972 declaration states, "the percentage of the undivided interest in the general common elements appurtenant to each apartment unit ... shall have a permanent character and shall not be altered without the consent of all of the condominium unit owners as expressed in a duly recorded amendment to this Declaration." Thus, the declaration required a unanimous vote in order to alter the percentage of the undivided interests in the general common elements.

D. CCIOA's Impact on the Unanimity Requirement

¶ 11 AMCA asserts that a provision of CCIOA, section 38-33.3-217(1)(a)(I), C.R.S. 2016, retroactively lowered the voting threshold for amending declarations to 67% and thus superseded the original declaration's unanimity requirement. However, this reading of the statute ignores another statutory provision that controls here.

¶ 12 Because the Aspen Mountain Condominiums are a common interest community created before 1992, only certain enumerated provisions of CCIOA apply to the condominium association. §§ 38-33.3-117(1), (1.5), C.R.S. 2016. Section 38-33.3-117(1.5) applies section 38-33.3-217(1), "Amendment of declaration," to existing communities for events occurring on and after January 1, 2006. As a result, the amendment provision applied to AMCA at the time of the 2010 vote amending the declaration.

¶ 13 In general, section 38-33.3-217(1)(a)(I) lowers the voting threshold for amending a declaration by providing as follows:

[T]he declaration ... may be amended only by the affirmative vote or agreement of unit owners of units to which more than fifty percent of the votes in the association are allocated or any larger percentage, not to exceed sixty-seven percent, that the declaration specifies. Any provision in the declaration that purports to specify a percentage larger than sixty-seven percent is hereby declared void as contrary to public policy, and until amended, such provision shall be deemed to specify a percentage of sixty-seven percent.

(Emphasis added.)

¶ 14 Yet, a further reading of section 38-33.3-217(1)(a)(I) reveals an exception to the new 67% threshold. See DA Mountain Rentals , ¶ 33. The first sentence of 38-33.3-217(1)(a)(I) provides that its provisions apply "[e]xcept as otherwise provided in subparagraphs (II) and (III) of this paragraph (a)." Subparagraph (III) states that paragraph (a) shall not apply "[t]o the extent that its application is limited by subsection (4) of this section." § 38-33.3-217(1)(a)(III)(A).

¶ 15 Subsection (4)(a) carves out an exception, validating an original declaration's requirement of a unanimous vote to alter common interests. That subsection provides:

Except to the extent expressly permitted or required by other provisions of this article, no amendment may ... change the boundaries of any unit or the allocated interests of a unit in the absence of a vote or agreement of unit owners of units to which at least sixty-seven percent of the votes in the association ... are allocated or any larger percentage the declaration specifies.

(Emphasis added.) The phrase, "or any larger percentage the declaration specifies," recognizes the continued validity of any pre-CCIOA declaration requirement for a voting threshold in excess of 67% in order to change the allocated interest of a unit. DA Mountain Rentals , ¶ 33. We agree with the reasoning of the division in DA Mountain Rentals , and we apply it here.

¶ 16 In doing so, we reject the argument that because the condominium association was created before CCIOA was enacted, it has never been subject to the provisions of section 38-33.3-217(4). AMCA contends that section 38-33.3-117(1.5)(d) applies subsection (1) of section 38-33.3-217 to pre-existing communities, and that subsection (4) is not among the subsections that apply to such communities. Because this argument disregards applicable statutory provisions, we reject it.

¶ 17 As noted, the legislature made section 38-33.3-217(1) applicable to pre-existing communities. And subsection (1)(a)(III)(A)—a part of the section that imposes the 67% limitation—limits the application of paragraph (a) "[t]o the extent that its application is limited by subsection (4)." Because subsection (4) is specifically referenced in subsection (1), subsection (4) provisions are also applicable to communities that predate CCIOA for purposes of determining whether an "amendment may create or increase special declarant rights, increase the number of units, or change the boundaries of any unit or the allocated interests of a unit." § 38-33.3-217(4)(a).

¶ 18 AMCA further contends that maintaining a unanimous voting requirement to reallocate common elements defies CCIOA's pronouncement that declaration...