McDowell v. U.S.

• Decision Date: 24 February 1994
• Docket Number: No. 92CA2040,92CA2040
• Citation: 870 P.2d 656
• Parties: Gordon R. McDOWELL, Jr. and Carol A. McDowell, Plaintiffs-Appellants, v. UNITED STATES of America, Substitute Defendant and Third-Party Plaintiff-Appellee. . III
• Court: Colorado Court of Appeals

Page 656

870 P.2d 656

Gordon R. McDOWELL, Jr. and Carol A. McDowell, Plaintiffs-Appellants, v. UNITED STATES of America, Substitute Defendant and

Third-Party Plaintiff-Appellee.

No. 92CA2040.

Colorado Court of Appeals,

Div. III.

Feb. 24, 1994.

Law Office of Peter A. Ricciardelli, Peter A. Ricciardelli, Telluride, for plaintiffs-appellants.

James W. Brannigan, Jr., U.S. Atty., Mary C. Lundberg, Asst. U.S. Atty., San Diego, CA, for substitute defendant and third-party plaintiff-appellee.

Opinion by Judge DAVIDSON.

Plaintiffs, Gordon R. and Carol A. McDowell, appeal from the summary judgment dismissing their claim for enforcement of a setback requirement against defendant, United States of America, on the grounds that the action is barred by the applicable statute of limitations. We affirm.

Plaintiffs, residents of Salt Lake City, Utah, are the owners of lot 5 in the Last Dollar Planned Unit Development (Last Dollar PUD) in San Miguel County, Colorado. They acquired the lot from the developer, Last Dollar Limited Partnership, in 1976.

Defendant, United States of America, is the owner of lot 6, adjoining plaintiffs' lot, in the Last Dollar PUD. Defendant acquired lot 6 in a forfeiture action against the prior owners in April 1992.

The recorded plat of the Last Dollar PUD requires a twenty-foot setback area, as measured from lot lines, within which no improvements may be located. This requirement is not contained within the protective covenants governing the subdivision.

In the early 1980's, the prior owners of lot 6 began construction on a house which was completed in 1982. The house and several other related improvements encroach within the twenty-foot setback area, and may even extend onto lot 5.

Plaintiff Gordon McDowell stated that he visited lot 5 in 1982, but did not see any improvements upon lot 6 at that time. He discovered the encroachments during a visit to lot 5 in 1988. Concerned because the improvements appeared to intrude into the suitable building area of lot 5, he obtained a survey of the property. According to the survey, the improvements on lot 6 violated the twenty-foot setback requirement and extended onto lot 5.

Plaintiffs attempted to negotiate a resolution to the problem with the prior owners. When no agreement could be reached, plaintiffs directed their counsel to commence legal action in March 1989. Shortly afterward, plaintiffs' counsel experienced severe health problems, but although he had resumed his law practice by August 1989, suit was not filed until May 1990.

The complaint alleged violation of the twenty-foot setback requirement and trespass. In relation to the setback claim, plaintiffs sought both equitable relief, in the form of removal of the encroaching improvements, and money damages.

During the pendency of this litigation in the trial court, defendant acquired ownership of lot 6 and was substituted as defendant. Defendant filed a motion for partial summary judgment on the setback claim only, asserting that plaintiffs' action was time barred by the one-year statute of limitations set forth in § 38-41-119, C.R.S. (1982 Repl.Vol. 16A).

The trial court found in favor of defendant and granted summary judgment dismissing plaintiffs' setback claim. Pursuant to C.R.C.P. 54(b), the trial court certified the judgment as final for purposes of appeal. Further proceedings regarding plaintiffs' trespass claim have been stayed by order of the trial court pending the outcome of this appeal.

Plaintiffs' argue that the trial court erred by applying § 38-41-119 to their setback claim. We disagree.

I.

According to § 38-41-119:

No action shall be commenced or maintained to enforce the terms of any building restriction concerning real property or to compel the removal of any building or improvement on land because of the violation of any terms of any building restriction unless said action is commenced within one year from the date of the violation for which the action is sought to be brought or maintained.

Applying a "discovery rule" to the above statute of limitations, the trial court found that plaintiffs' cause of action accrued no later than October 1988, when Gordon McDowell received a copy of the survey report confirming that portions of the lot 6 house encroached into the twenty-foot setback area and possibly into lot 5.

The "discovery rule" is a principle applied to actions in tort which provides that the statute of limitations will not begin to run until the injured party discovers, or through the exercise of reasonable diligence, should have discovered the wrongful act. Trinity Broadcasting of Denver, Inc. v. City of Westminster, 848 P.2d 916 (Colo.1993). This rule seeks to alleviate the manifest unfairness of foreclosure of a cause of action before there has been a reasonable opportunity to discover its existence. Austin v. Litvak, 682 P.2d 41 (Colo.1984).

Colorado courts have applied the discovery rule to various causes of action, even if the applicable statute makes no explicit reference to the "discovery" of the wrongful conduct. See Miller v. Armstrong World Industries, Inc., 817 P.2d 111 (Colo.1991) (products liability); Rauschenberger v. Radetsky, 745 P.2d 640 (Colo.1987) (wrongful death); Financial Associates, Ltd. v. G.E. Johnson Construction Co., 723 P.2d 135 (Colo.1986) (negligence or defects in improvements to real property); Austin v. Litvak, supra (medical malpractice); Stjernholm v. Life Insurance Co., 782 P.2d 810 (Colo.App.1989) (conversion based upon payment of instrument on forged endorsement).

As the trial court noted, here, it could be argued that the date of the violation, which at the latest would be the date of completion of the construction on lot 6, should govern rather than the date of discovery. We need not determine which date is operative, however, as we agree with the trial court that, even if the cause of action accrued in October 1988, commencement of the lawsuit in May of 1991 was tardy, and plaintiffs' claims are barred by the one-year statute of limitations.

II.

Plaintiffs first argue that the trial court erred in applying § 38-41-119 because the setback requirements of the Last Dollar PUD plat are in the nature of zoning ordinances and therefore are not building restrictions concerning real property. We disagree.

Although raised by plaintiffs in their opposition to defendant's motion for summary judgment, the trial court did not address this threshold question. If the setback requirements are not building restrictions concerning real property, then plaintiffs would be correct in asserting that § 38-41-119 does not bar their claim.

We agree with plaintiffs insofar as they contend that a planned unit development, duly adopted and approved by a local government entity, represents a form of rezoning for the area within the PUD because the adoption of the PUD provides a method for allowing a diversity of uses which may not have been included within the original zoning designations. See South Creek Associates v. Bixby & Associates, Inc., 781 P.2d 1027 (Colo.1989); Tri-State Generation & Transmission Co. v. City of Thornton, 647 P.2d 670, 677 (Colo.1982) ("While traditional zoning establishes fixed uses and requirements applicable to specified areas of the city, the PUD concept allows the municipality to control the development of individual tracts of land by specifying the permissible form of development in accordance with the city's PUD ordinance.")

Ample authority exists for the tenet that adoption of a planned unit development by a local government entity is a rezoning of the included area. See Ford Leasing Development Co. v. Board of County Commissioners, 186 Colo. 418, 528 P.2d 237 (1974); Moore v. City of Boulder, 29 Colo.App. 248, 484 P.2d 134 (1971). Only one case in Colorado, however, discusses the nature of setback requirements contained in a PUD plat in the context of applying a statute of limitations for actions to enforce such requirements. That authority determined that such requirements are building restrictions concerning real property and are subject to § 38-41-119. See Styers v. Mara, 631 P.2d 1138 (Colo.App.1981).

Plaintiffs' argue that Styers v. Mara, supra, is not controlling because the setback requirements in that case were contained in the restrictive covenants of the development as well as the provisions of the PUD plan, but here, the setback requirements are not contained within the restrictive covenants of the development. We are not persuaded that the Styers holding rests on any such distinction.

In that case, the plaintiffs were homeowners within a development which contained a designated "green belt" area. Pursuant to the PUD plan and the restrictive covenants, no improvements were to be placed within a twenty-foot setback from the green belt area. The plaintiffs sued to require several of their neighbors to remove improvements which encroached into the twenty-foot setback. A panel of this court concluded that the setback requirement was a building restriction concerning real property and did not specify that this determination was based solely upon the setback requirement as contained in the restrictive covenants as opposed to the PUD plan. See Styers v. Mara, supra.

We are similarly unpersuaded by plaintiffs' other argument for distinguishing the Styers holding, which is that because the "green belt" area represented a setback itself, the further twenty-foot setback requirement was a "setback from a setback." We do not observe any perceptible difference between this and the setback requirement here. Both are restrictions as to how close to a particular property line a lot owner may place improvements.

Neither are we convinced that Styers v. Mara, supra, was wrongly decided. We note that although setback requirements are frequently enacted in the form of a zoning ordinance, see Landmark Universal, Inc. v. Pitkin County Board of Adjustment, 40 Colo.App. 444, 579 P.2d 1184 (1978), setback...