UMB Bank, N.A. v. Landmark Towers Ass'n, Inc.

• Citation: 408 P.3d 836
• Decision Date: 11 December 2017
• Docket Number: Supreme Court Case No. 16SC455
• Parties: UMB BANK, N.A.; Colorado Bondshares—A tax exempt fund ; and Marin Metropolitan District, a Colorado Special District, Petitioners v. LANDMARK TOWERS ASSOCIATION, INC., a Colorado nonprofit corporation, by EWP-GV, LLC, as receiver for 7677 East Berry Avenue Associates, LP, its Declarant., Respondent
• Court: Supreme Court of Colorado

408 P.3d 836

UMB BANK, N.A.; Colorado Bondshares—A tax exempt fund ; and Marin Metropolitan District, a Colorado Special District, Petitioners

v.LANDMARK TOWERS ASSOCIATION, INC., a Colorado nonprofit corporation, by EWP-GV, LLC, as receiver for 7677 East Berry Avenue Associates, LP, its Declarant., Respondent

Supreme Court Case No. 16SC455

Supreme Court of Colorado.

December 11, 2017

Rehearing Denied January 22, 2018

Attorneys for Petitioners: Kutak Rock LLP, Neil Arney, Thomas W. Snyder, Mia K. Della Cava, Denver, Colorado, McNamara Law Firm, P.C., John N. McNamara, Denver, Colorado.

Attorneys for Respondent: Perkins Coie LLP, Michael L. Bender, Laura Cramer-Babycz, Denver, Colorado, Burg Simpson Eldredge Hersh & Jardine, P.C., Brian K. Matise, Nelson Boyle, Englewood, Colorado.

Attorneys for Amicus Curiae Colorado Association of Home Builders: Icenogle Seaver Pogue, P.C., Jennifer L. Ivey, Denver, Colorado.

Attorneys for Amicus Curiae Colorado Municipal Bond Dealers Association, Inc.: Sherman & Howard L.L.C., Joseph J. Bronesky, Peter J. Whitmore, Denver, Colorado.

Attorneys for Amicus Curiae Colorado Municipal League: Colorado Municipal League, Tami Yellico, Denver, Colorado.

Attorneys for Amicus Curiae Special District Association of Colorado: Butler Snow LLP, Martina Hinojosa, Monica Rosenbluth, Denver, Colorado.

En Banc

JUSTICE GABRIEL delivered the Opinion of the Court.

¶1 This case involves the establishment and funding activities of petitioner Marin Metropolitan District (the "District"), a special district that was created as a vehicle to finance the infrastructure of a proposed residential community. In late 2007, the organizers of the District held an organization election and approved the creation of the District. At the same time, pursuant to Colorado's Taxpayer Bill of Rights ("TABOR"), the organizers voted to approve the issuance of bonds and to impose property taxes to pay the bonds on landowners within the District.

¶2 A group of condominium owners subsequently learned that their properties had been included in the District under what they believed to be suspicious circumstances and that they had been assessed the above-noted taxes. Acting through their homeowners' association, respondent Landmark Towers Association, Inc., ("Landmark") the owners brought two lawsuits, one to invalidate the creation of the District and the other (this case) to invalidate the approval of the bonds and taxes and to recover taxes that they had paid to the District, among other things.

¶3 The district court ultimately ordered a partial refund of the taxes paid by the condominium owners and enjoined the District from assessing future taxes on the owners in order to pay its obligations under the bonds. Both sides appealed, and in a published decision, a unanimous division of the court of appeals concluded, in pertinent part, that Landmark's challenge to the bond and tax election was timely and that the election violated TABOR and applicable statutes. Landmark Towers Ass'n v. UMB Bank, N.A., 2016 COA 61, ¶ 4, –––P.3d ––––.

¶4 Respondents petitioned for certiorari, and we granted the petition to consider whether Landmark's challenge to the bond and tax election was timely and whether the election was otherwise validly conducted.¹

¶5 We now reverse. Section 1-11-213(4), C.R.S. (2017), requires a party seeking to contest an election like that present here to file a written statement of intent to contest the election within ten days after the official survey of returns has been filed with the designated election official. The statute further provides, "If a written statement of intent to contest the election is filed more than ten days after the completion of the official survey of returns, no court shall have jurisdiction over the contest."Id.

¶6 Here, it is undisputed that Landmark did not file the requisite written statement until more than three years after the official survey of the election returns was filed. Moreover, pursuant to our decision in Cacioppo v. Eagle County School District Re-50J, 92 P.3d 453 (Colo. 2004), Landmark's challenge was subject to section 1-11-213(4)'s time bar, and because section 1-11-213(4) is a non-claim statute, the equitable estoppel doctrine does not apply.

¶7 Accordingly, we conclude that Landmark's challenge to the bond and tax election at issue was time barred, and thus, we reverse the judgment of the division below and remand for further proceedings. In light of this disposition, we need not reach the other issues on which we granted certiorari.

I. Facts and Procedural Background

¶8 In 2005, 7677 East Berry Avenue Associates, L.P. ("7677"), which was managed by Zachary M. Davidson, created a development plan for a project that came to be known as the "Landmark Towers." The Landmark Towers would be a combined residential and retail development in Greenwood Village, Colorado.

¶9 Pursuant to an agreement between 7677 and Greenwood Village, 7677 was to be provided with a portion of certain sales tax revenues generated by the businesses occupying the property. Such revenues were offered as an inducement to 7677 to complete public improvements on the project.

¶10 As pertinent here, Davidson also managed Everest Marin, L.P. ("Everest"). Everest sought to construct a project called "European Village," which was to be built directly to the south of the Landmark Towers. Everest did not, however, intend for European Village to provide for its own infrastructure. Instead, Everest intended to form a special district that would issue general obligation or revenue bonds to finance the infrastructure. Because Davidson recognized that the European Village project would not have been viable without the assessed value and the taxes on the Landmark Towers, he decided to incorporate the Landmark Towers into the then-proposed District.

¶11 Prior to the creation of the District, approximately 130 people had signed contracts to purchase condominiums in the Landmark Towers, although none had proceeded to closing. In connection with these contracts, the purchasers had paid substantial, non-refundable deposits.

¶12 At the time the condominium owners signed their contracts, Everest had planned to form the District, but Davidson, who, as noted above, was also developing the Landmark Towers, did not tell any of the purchasers about Everest's planned District. Indeed, when some of the condominium owners expressly inquired about the existence of any special districts, Davidson and his colleagues responded that no special districts were applicable to the owners' property.

¶13 In order to form the District, Everest sought approval of a service plan from the Greenwood Village City Council. After Greenwood Village representatives inquired as to why the Landmark Towers should be incorporated into the District, an Everest representative falsely responded that Davidson and his associates had gone back to the Landmark condominium buyers and confirmed their approval of and support for the District's creation. Similarly, Davidson falsely told the city council that "the buyers" were aware at the time of purchase of the then-proposed District's mill levy. Having heard this and other testimony, Greenwood Village approved the District's service plan.

¶14 TABOR then required an election in order to approve the debt and related taxes. Colo. Const. art. X, § 20 (4). To create eligible voters for this election, Everest contracted for purchase options on portions of a so-called "director's parcel" with six individuals connected to Everest, including Davidson. The District then held an election in which the six people under contract for portions of the ten-foot by ten-foot director's parcel approved, among other things, authorizing up to $35,500,000 in bonds to finance the European Village infrastructure. The voters also approved taxes on all owners within the District in order to secure the repayment of those bonds. The District then issued $30,485,000 in bonds under a trust indenture between the District and petitioner UMB Bank, N.A., acting as trustee.

¶15 Shortly after the approval of the District and the issuance of bonds, Davidson began to misuse certain of the bond funds. Everest ultimately never constructed any of the infrastructure that was to serve European Village. Moreover, both 7677 and Davidson eventually filed for bankruptcy, Davidson was indicted for misuse of public funds and embezzlement, and he subsequently committed suicide.

¶16 The condominium owners closed on their homes in 2008. At that time, they had only minimal, if any, information about the possibility of a future special district, notwithstanding the fact that the District had already been formed and the bonds had been issued. 7677 did not inform the condominium buyers about either the existence of the District or the related tax assessments.

¶17 Subsequently, in 2009, the condominium owners received their tax bills, and some found that their property taxes were unexpectedly high. Several owners inquired about why their tax bills were unexpectedly high, and they learned, for the first time, of the existence of the District. They also learned that approximately half of their tax bills were attributable to the taxes levied by the District.

¶18 Two years later, Landmark, acting on behalf of its member owners, filed the current action, seeking relief from the bond and tax election, as well as other claims not now before us. In connection with these claims, Landmark later argued that because it received no benefit from the creation of the District, the tax assessment made by the District was illegal and violated the owners' due process rights.

¶19 The matter proceeded to a bench trial, after which the district court issued a lengthy and detailed order reciting extensive findings of fact and conclusions of law. As pertinent here, the court concluded that it had no jurisdiction to decide Landmark's claims regarding the bond and tax election because those claims were barred by the...