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Briargate at Seventeenth Avenue Owners Ass’n v. Nelson.

2021 COA 78. No. 19CA2052.  Homeowners’ Association—Colorado Common Interest Ownership Act—Accord and Satisfaction—Setoff.

June 3, 2021

Briargate at Seventeenth Avenue Owners Association (Briargate) is the homeowners’ association (HOA) for certain condominiums. Nelson has owned a condominium with a Briargate HOA since 2002. The parties previously engaged in litigation, resulting in money judgments in favor of Nelson. Briargate brought the present action to recover from Nelson alleged unpaid assessments, interest, collection costs, and attorney fees. After determining that Nelson had unjustifiably breached his contractual obligations, the district court entered judgment for Briargate for $21,467.48 plus 8% per annum prejudgment interest. It also ordered Nelson to pay Briargate attorney fees and costs.

On appeal, Nelson contended that the trial court erred by rejecting his defense of accord and satisfaction. However, Nelson failed to act in good faith by writing “HOA Account—Payment in Full” on every check, regardless of the existence of a dispute over the outstanding balance of his HOA account, and despite accruing late charges, interest, and fees on an unpaid special assessment. Therefore, the trial court did not abuse its discretion in concluding that Nelson had not carried his burden of establishing a proper accord and satisfaction.

Nelson also argued that the trial court erred by holding that Briargate was entitled to sue and recover damages for payments it received, but refused to accept, during two months. Here, Nelson directed Briargate to apply his payments contrary to the manner in which late payments were to be allocated by Briargate under a Resolution it had adopted. Therefore, Briargate was under no duty to accept the checks. However, Nelson was not obligated to pay late fees, interest, and penalties from the time Briargate received the checks until it returned them to Nelson.

Nelson further contended that the trial court erred by not offsetting what he owed Briargate against what it owed him from prior judgments. Any common law right in the homeowner to offset damages is barred by the public policy of Colorado’s Common Interest Ownership Act. Therefore, the trial court did not err by denying Nelson’s setoff defense.

Nelson further argued that the trial court erred by admitting evidence of a check for impeachment purposes only. However, Nelson failed to make a contemporaneous objection to this evidence at trial, so reversal is not warranted.

The judgment was affirmed in part and reversed in part, the order was affirmed, and the matter was remanded to the trial court with directions.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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