Villa Sierra Condominium Ass'n v. Field Corp.
| Citation | 787 P.2d 661 |
| Decision Date | 18 January 1990 |
| Docket Number | No. 88CA1484,88CA1484 |
| Parties | VILLA SIERRA CONDOMINIUM ASSOCIATION, a Colorado non-profit corporation, Mr. and Mrs. Robert G. Bond, Miss Evelyn M. Hollowell, William and Pauline Barber, Mr. and Mrs. Harry G. Hendler, Mr. and Mrs. Horace M. Woehler, Mr. and Mrs. Joe Orell, Naomi M. McCracken, Jamie Boswell, and James B. and Eileen Blaine, individually and as representatives of a class, Plaintiffs-Appellants, v. FIELD CORPORATION, a Colorado corporation; Villa Sierra Development, a joint venture; Hubchik & Davis, Inc., a Colorado corporation; Schuetz Construction Co., Inc., a Colorado corporation; and Hans Schuetz, an individual, Defendants-Appellees. . IV |
| Court | Colorado Court of Appeals |
David C. Mize, Colorado Springs, for plaintiffs-appellants.
Fowler & Schimberg, P.C., Jeffrey Cowman and Penne A. Goplerud, Denver, for defendants-appellees Field Corp. and Villa Sierra Development.
Retherford, Mullen, Rector & Johnson, Neil C. Bruce, Colorado Springs, for defendants-appellees Schuetz Const. Co. and Hans Schuetz.
Opinion by Judge CRISWELL.
Plaintiffs' appeal requires us to determine whether their suit meets the necessary prerequisites for a class action under C.R.C.P. 23(b)(3) and whether a condominium association has standing to assert claims on behalf of condominium unit owners against the builder-vendor for alleged construction defects. The trial court answered both questions in the negative. We reverse.
The individual plaintiffs are owners of "units" in a condominium project known as Villa Sierra. Villa Sierra Condominium Association (the association) is a Colorado not-for-profit corporation created to administer the applicable condominium declaration and to manage the property. The respective ownership interests and the rights and responsibilities of the association are set forth in the condominium declaration and in the articles and by-laws of the association.
The underlying property interest upon which the condominium's buildings were constructed consists of a long-term lease. A "unit" under the declaration is an "individual air space" that is enclosed within the interior roof, walls, and floors of each unit. Specifically excluded from this definition are the "structural components for the building" within which the unit is located. Thus, a "condominium unit" in Villa Sierra consists of the individual ownership of a "unit" (air space), an undivided common interest in the buildings and other common elements, and an undivided common interest in the underlying leasehold.
There are more than 200 units in Sierra Villa. Each owner is required to maintain and repair the non-supporting interior walls, floors, and ceilings of the building that enclose the unit. Except to this extent, however, the declaration imposes upon the association, as the owners' attorney-in-fact, the responsibility for the maintenance and repair of the buildings and other common elements.
All unit owners are members of the association. Its articles and by-laws recite that its general purpose is to provide "an entity for the furtherance of the interest of the owners of the condominium units." It is given the power to repair and improve the buildings and other common elements, "to protect and defend the entire premises from loss and damage by suit or otherwise," to engage in other activities designed to foster, promote, and advance the common ownership interests of the unit owners, and "to do all things, necessary and reasonable, in order to carry out the governing and the operation of [the] condominium property."
The defendant Villa Sierra Development is the joint venture that developed the condominium project. Field Corporation is one of the members of this joint venture, and the other defendants are the contractors who had responsibility for the physical construction of the project.
Plaintiffs, the association and several unit owners, sought to represent a class consisting of all of the present unit owners. Their complaint asserted that, prior to construction of the project, the defendants had been supplied with engineering reports upon the property's soil conditions, which reports made certain specific recommendations for construction to assure that the property would be properly drained. It was plaintiffs' allegation, however, that defendants failed to follow these recommendations, and as a result, surface and sub-surface water had accumulated at and under the buildings' foundations, improper soil conditions now exist under those foundations, the sub-surface has moved, a foul odor has been created, and there has been severe erosion of certain of the landscaped areas.
Plaintiffs assert that all defendants had been negligent and that the joint venture and its members had breached the warranties of fitness and habitability inhering in its sales contracts with the original unit owners and had made misrepresentations to them. As damages, plaintiffs sought to recover only the cost to repair the buildings and the landscaped areas and the cost of implementing the engineer's prior recommendations. No plaintiff sought any individual damages.
Based upon the foregoing factual background, plaintiffs sought a preliminary certification of the class under C.R.C.P. 23(b)(1) or (3). Defendants resisted such certification, and they argued, as well, that the association had no standing to assert any claims on behalf of its members.
The trial court, without giving any reasons for its actions, summarily denied plaintiffs' request for class certification, struck the complaint's allegations pertaining thereto, and dismissed the association as a party plaintiff.
Plaintiffs first assert that the trial court was guilty of clear error in refusing to certify, at least on a preliminary and conditional basis, that all of the unit owners in Villa Sierra constitute a proper class under C.R.C.P. 23. Under the circumstances disclosed by this record, we agree.
In order to maintain any type of class action, the requirements of C.R.C.P. 23(a) must be met. These requirements are that (1) the members of the class are so numerous as to make their joinder impracticable, (2) there are questions of law or fact common to the members, (3) the claims or defenses asserted by the parties are typical of the claims or defenses of the other class members, and (4) the parties seeking to represent the class will fairly and adequately protect the members' interests.
Plaintiffs' evidence demonstrated that all of the conditions of C.R.C.P. 23(a) exist, and defendants do not seriously dispute that proposition. Not only do the members of the class exceed 200, but the nature of plaintiffs' claims, and the nature of the evidence to be submitted in support of those claims, mandate the conclusion that there are numerous questions both of law and of fact that are common to the class. In addition, the claims asserted are typical of those possessed by other class members. Indeed, the absent unit owners may have a legal interest in the present plaintiffs' claims by virtue of their common ownership of the buildings and other common elements. See Weng v. Schleiger, 130 Colo. 90, 273 P.2d 356 (1954) ().
However, to obtain class-action status, C.R.C.P 23(b) sets forth further requirements to be met, depending upon the nature of the claim being asserted. In order to maintain a class action under C.R.C.P. 23(b)(1), it must be demonstrated either that individual adjudications would create incompatible standards of conduct for the party opposing the class or would dispose of the interests of absent individuals or impair or impede their ability to protect that interest. Under C.R.C.P. 23(b)(3), it must appear that common questions of law or fact predominate over any questions affecting only individual members and that a class action is superior to any other available method of adjudicating the controversy.
Defendants direct their argument to these requirements, asserting that this is not an action to which C.R.C.P. 23(b)(1) applies and that the conditions prescribed by C.R.C.P. 23(b)(3) cannot be met because the issues that are common to the class members do not predominate over issues relating only to individual members. Because we conclude that this record requires class certification under C.R.C.P. 23(b)(3), we do not address defendants' assertion that C.R.C.P. 23(b)(1) is inapplicable to this action.
The burden of demonstrating that a class should be certified rests upon the class action advocate. Kniffin v. Colorado Western Development Co., 622 P.2d 586 (Colo.App.1980) (); Levine v. Empire Savings & Loan Ass'n, 197 Colo. 293, 592 P.2d 410 (1979) (). And, a trial court's decision whether a class is to be certified will be upheld unless that decision is "clearly erroneous." Friends of Chamber Music v. Denver, 696 P.2d 309 (Colo.1985).
However, the determination of an action's class status may require more than a review of the pleadings; its resolution may well demand consideration of the nature of the evidence that will be presented. Thus, it is generally better practice for a trial court to hold an evidentiary hearing upon the question of class certification. See Levine v. Empire Savings & Loan Ass'n, supra.
Here, defendants assert that the nature both of plaintiffs' claims and of their defenses make clear that the issues affecting only individual class members predominate over any questions that are common to the class. We disagree.
A "predominant" issue need not be one that is determinative of a defendant's liability. Rather, ...
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