BNC Metropolitan District No. 1 v. BNC Metropolitan District No. 3.
2025 COA 52. No. 24CA1093. Breach of Fiduciary Duty—Colorado Governmental Immunity Act—Actions Against Public Employees—Acts or Omissions Outside the Scope of Employment—Notice of Claim.
May 22, 2025
BNC Metropolitan District No. 1 (BNC1) was established in 2000, and BNC Metropolitan District No. 2 (BNC2) and BNC Metropolitan District No. 3 (BNC3) (collectively, the plaintiff districts), were established in 2004. BNC1, BNC2, and BNC3 are special districts. Catellus, Inc. acquired the real property within the boundaries of BNC1, BNC2, and BNC3 through foreclosure and became the primary developer. In 2017, BNC1, BNC2, and BNC3 entered into a cost-sharing intergovernmental agreement that designated BNC2 and BNC3 as the “Constructing Districts” responsible for constructing the improvements needed for development. In 2019, BNC1, BNC2, and BNC3 amended the agreement (the first amendment) to specify that BNC3 would be the only “Constructing District” for any remaining improvements and that BNC1 and BNC2 must transfer necessary funds to BNC3 for completing those improvements. BNC1 transferred $3,363,277 to BNC3 under the original agreement and the first amendment. At the time of that transfer, BNC1’s board of directors consisted of two designees from Catellus, Theodore Antenucci and Emanuel, and three designees from the original developer. BNC2 later transferred $733,636 to Catellus based on a cost requisition request and then transferred $694,556 to BNC3 under the original agreement and the first amendment. When these BNC2 transfers were made, BNC3’s board of directors consisted of Catellus designees Theodore Antenucci, Emanuel, and Robert Bol; and BNC2’s board of directors consisted of Theodore Antenucci, Emanuel, and additional Catellus designees Robert Bol, Julianna Antenucci, and Pauline Bol. Meanwhile, Robert Bol and five independent homeowners had submitted self-nomination forms to serve on BNC2’s board of directors. The five homeowners were elected to serve on that board, and on the same day, three other independent homeowners began serving on BNC1’s board of directors as well. The Catellus designees then resigned from BNC1’s board. The plaintiff districts sued BNC3 and Theodore Antenucci, Emanuel, Robert Bol, Julianna Antenucci, and Pauline Bol (collectively, individual defendants) under the Colorado Governmental Immunity Act (CGIA) asserting, as relevant here, a claim for breach of fiduciary duty. The individual defendants moved to dismiss, arguing that the CGIA barred the claim because they were public employees, and the plaintiff districts had failed to provide the required statutory notice. The district court granted the motion.
On appeal, the plaintiff districts contended that the district court erred by concluding that the CGIA notice requirement applied, because they sufficiently alleged that the individual defendants’ conduct was outside the scope of their public employment. It is undisputed that the plaintiff districts’ breach of fiduciary duty claim is a tort claim that arises from conduct in which the individual defendants engaged when they were board members of BNC1, BNC2, and BNC3, such that the individual defendants are considered public employees for CGIA purposes. Therefore, unless the plaintiff districts sufficiently alleged that the individual defendants were acting outside the scope of their public employment, the CGIA’s notice requirement applies. Here, the plaintiff districts alleged that the individual defendants entered into contracts, transferred money between districts and to the developer, and held elections, all of which are routine actions for members of a special district’s board of directors. But plaintiff districts did not explain why these actions were financially reckless, whether BNC3 did anything improper with the funds or failed to construct the remaining improvements, or how the individual defendants specifically benefited from the transfers. The plaintiff districts thus failed to sufficiently allege that the individual defendants were acting outside the scope of their employment. Accordingly, the district court properly determined that the CGIA notice requirement applies.
The plaintiff districts also argued that the district court erred by not holding a hearing under Trinity Broad. of Denver, Inc. v. City of Westminster, 848 P.2d 916 (Colo. 1993), because they should have been allowed to conduct discovery and present evidence to establish the nature of defendants’ personal benefit and the amount benefited. The CGIA protects public employees from unlimited liability, and the plaintiff has the burden of establishing that a public employee is not immune under the CGIA and that the trial court has jurisdiction over the tort claim. To resolve factual disputes concerning questions of immunity, a trial court has discretion to hold an evidentiary hearing (Trinity hearing). But if the relevant evidence and underlying facts are undisputed, the trial court may decide the jurisdictional issue as a matter of law. Here, because the complaint did not create a dispute by alleging facts that would support a finding that the individual defendants acted outside the scope of their employment, the district court did not abuse its discretion by declining to conduct a Trinity hearing.
The plaintiff districts further asserted that the district court erred by concluding that they were required to provide notice of their claim under the CGIA. As discussed above, the district court properly determined that the CGIA notice requirement applied; and it is undisputed that the plaintiff districts did not provide the required notice. Because the notice requirement is jurisdictional, the plaintiff districts’ failure to provide notice barred their tort claim against the individual defendants.
The judgment was affirmed and the case was remanded for the district court to determine the amount of reasonable appellate attorney fees to be awarded to the individual defendants.