Town of Silverthorne v. Lutz

• Decision Date: 11 February 2016
• Docket Number: Court of Appeals No. 14CA1505
• Citation: 370 P.3d 368
• Parties: TOWN OF SILVERTHORNE, a Colorado home rule municipality, Summit County, Colorado, Plaintiff–Appellee, v. Matthew F. LUTZ and Edward R. Lutz, Defendants–Appellants.
• Court: Colorado Court of Appeals

370 P.3d 368

TOWN OF SILVERTHORNE, a Colorado home rule municipality, Summit County, Colorado, Plaintiff–Appellee,

v.Matthew F. LUTZ and Edward R. Lutz, Defendants–Appellants.

Court of Appeals No. 14CA1505

Colorado Court of Appeals, Div. VI.

Announced February 11, 2016

Hoffmann Parker Wilson & Carberry, P.C., M. Patrick Wilson, Denver, Colorado, for Plaintiff–Appellee.

Fowler Shimberg & Flanagan, P.C., Timothy J. Flanagan, Steven W. Fox, Denver, Colorado, for Defendants–Appellants.

Holland & Hart, LLP, Marcy G. Glenn, Michael J. Carrigan, Denver, Colorado, for Amicus Curiae State Board of the Great Outdoors Colorado Trust Fund.

Opinion by JUDGE MILLER

¶ 1 In this eminent domain action, respondents, Matthew F. Lutz and Edward R. Lutz (landowners), appeal the judgment in favor of petitioner Town of Silverthorne, a home rule municipality. The landowners contend that the trial court erred by excluding evidence of the Town's Great Outdoors Colorado Program (GOCO) funds from the immediate possession hearing. They argue that this evidence was relevant to the Town's authority to condemn the land because the GOCO amendment, article XXVII, section 9 of the Colorado Constitution

, bars a GOCO fund recipient from using its funds to acquire property by condemnation. The landowners also argue that the trial court erroneously denied their motion for attorney fees. We conclude that the trial court did not err in deciding these issues and, therefore, we affirm.

I. Background

¶ 2 Some years prior to the commencement of this action, the Town undertook to construct the Blue River Trail (Trail), a network of trails for nonmotorized transportation along the Blue River corridor within the Town's borders. The Town sought to acquire land and easement rights for the Trail along the Blue River, including land located on private property. In addition, the Town applied for and received funds from GOCO.

¶ 3 The GOCO amendment provides that "the net proceeds of every state-supervised lottery game ... shall be guaranteed and permanently dedicated to the preservation, protection, enhancement, and management of the state's wildlife, park, river, trail and open space heritage." Colo. Const. art. XXVII, § 1

(1). The State Board of the Great Outdoor Colorado Trust Fund (GOCO Board), a political subdivision of the state of Colorado, dispenses GOCO funds from a trust fund. See id. at §§ 2, 6. However, section 9 of the GOCO amendment provides that "[n]o moneys received by any state agency pursuant to this article shall be used to acquire real property by condemnation through the power of eminent domain." Id . at § 9.

¶ 4 The Town commenced the project by building portions of the Trail to the north and south of an area that includes the landowners' property. The Town determined that it wanted to connect the Trail through this area by building a path over a previously existing easement that provided a pedestrian walkway along the river. It called this part of the Trail "Segment 5." The landowners and some of their neighbors who would be affected by this plan sued the Town in a quiet title action seeking declaratory and injunctive relief. They sought to enjoin the Town from constructing the Trail over the existing walkway. The Town counterclaimed for declaratory relief and quiet title, seeking a decree that it had the legal right to construct Segment 5 of the Trail over the walkway. The Town unsuccessfully attempted to settle the quiet title action. The district court granted the injunction in part, first preliminarily and then permanently enjoining the Town from undertaking any demolition, preconstruction, or construction activities on Segment 5.

¶ 5 Before the district court issued the permanent injunction, the Town made a written offer of $6,000 to the landowners to acquire easement rights on a strip of land adjacent to the walkway (adjacent strip) to construct the Trail. The landowners did not accept or make a counteroffer, and the Town then filed a petition in condemnation to acquire the easement rights over the adjacent strip under its eminent domain authority.

¶ 6 Thereafter, the Town sought to acquire an additional Public Trail Overlay Easement located within the existing walkway. The Town made a written offer to the landowners of $75,000 for both easements ($69,000 for the overlay easement rights plus the original $6,000 for the adjacent strip easement rights). When the landowners did not accept the offer or make a counteroffer, the Town amended its condemnation petition to include both easements, which the court granted.

¶ 7 The matter proceeded to an immediate possession hearing and a subsequent valuation trial. The district court granted the Town's motion for immediate possession, and the landowners were compensated according to the jury's valuation.

II. Waiver of Defenses

¶ 8 The Town initially argues that the landowners waived any challenge to the condemnation proceedings, other than challenges to the amount of compensation, by failing to file an answer within the twenty-one days provided in C.R.C.P. 12

.

¶ 9 The Town filed its petition in condemnation on January 13, 2012, and served it on the landowners on January 23. Counsel for the landowners filed an entry of appearance and jury demand on January 31, 2012. The landowners then filed a motion to dismiss the petition on March 1, 2012. The Town filed a response to the motion to dismiss, in which it argued, among other things, that the landowners had waived their defenses to condemnation by failing to file a timely answer. The landowners filed a reply, in which they briefed the issue. In its order dated April 6, 2012, the district court converted the landowners' motion to dismiss into a motion for summary judgment and ordered the Town to file a surresponse within fourteen days and the landowners to submit a surreply seven days thereafter. The court also ordered the landowners to file an answer to the petition within fourteen days.

¶ 10 We assume without deciding that the landowners' motion to dismiss and answer were filed out of time. But see M. Patrick Wilson, Eminent Domain Law in Colorado, 35 Colo. Law. 65, 72 (2006)

("Technically, there is no need to file an answer in a condemnation case, but it is good practice to do so.") (footnote omitted). C.R.C.P. 6(b)(2) gives the court discretion to accept a motion filed past the time period set forth in other rules of civil procedure "where the failure to act was the result of excusable neglect."

¶ 11 We perceive the court's April 6, 2012 order as an exercise of its discretion under

C.R.C.P. 6(b)(2)

. By ordering the landowners to file their answer within fourteen days of the issuance of the conversion order, the court exercised its discretion and indicated that it had considered and denied the Town's waiver argument.

¶ 12 We conclude that the court did not abuse its discretion when it ordered the filing of an answer. The Town neither asserts that the court abused its discretion in ordering the landowners to file an answer nor explains how the relatively short delay caused it any prejudice. The landowners' jury demand, filed within the twenty-one day period, as well as the parties' long history of conflict concerning the Trail, placed the Town on notice that the landowners intended to contest the condemnation. Their motion to dismiss advised the Town of their defenses, and the trial court did not rule on the defenses until more than a year after the motion and answer were served, following extensive briefing.

¶ 13 Accordingly, the landowners did not waive their right to contest the proceedings in the district court.¹

III. Source of Funds

A. Posture of the Issue

¶ 14 In their motion to dismiss, the landowners argued that the Town's use of GOCO funds on the Trail barred the Town's exercise of eminent domain power to acquire the easement rights over the landowners' property. After the district court converted the motion to dismiss into a motion for summary judgment, the parties submitted briefs on the issue of GOCO fund evidence. On April 29, 2013, the Town filed a motion in limine to exclude evidence of project funding sources from the immediate possession hearing. The court granted the motion in limine and excluded that evidence from the immediate possession hearing, taking as true the landowners' allegations concerning the source of the funds and determining that "[c]ondemnation is a special statutory proceeding in which the funding sources for the condemnation are not to be considered." The court never expressly ruled on the motion for summary judgment. Rather, by accepting as true the landowners' factual allegations concerning the GOCO funds, it decided the issue in the context of the in limine motion as a matter of law, effectively denying or mooting the summary judgment motion.

¶ 15 The landowners nonetheless argue that the trial court erred in granting the Town's motion in limine to exclude evidence of the source of the funds with which the Town would pay for the property it sought to condemn. If this evidence had been admitted, they argue, it would have shown that the Town was precluded from condemning the landowners' land. We are not persuaded.

B. Standard of Review

¶ 16 We review a district court's grant of a motion in limine excluding evidence for an abuse of discretion. Palizzi v. City of Brighton, 228 P.3d 957, 962 (Colo.2010)

(condemnation proceeding). A trial court abuses its discretion when its ruling is manifestly arbitrary, unreasonable, or unfair. Id. A trial court also abuses its discretion when it erroneously applies the law. Vanderpool v. Loftness, 2012 COA 115, ¶ 19, 300 P.3d 953. The landowners make two separate arguments related to the evidence concerning GOCO funds. We address and reject each in turn.

C. GOCO Funds as Evidence of the Town's Authority to Condemn

¶ 17 The landowners first contend that they wanted the trial court to review the constitutional and statutory issue of the source of funds to determine if the Town's use of funds would...