Frisco Lot 3 LLC v. Giberson Limited Partnership, LLLP.
2024 COA 125. No. 22CA2219. Common Interest Communities—Common Interest Ownership Act—Homeowners Association—Planned Unit Development Designation—Colorado Rules of Appellate Procedure—Briefs in Cases Involving Multiple Appellants and Appellees.
December 12, 2024
Pursuant to the Homestead Act, the Giberson family received a 188-acre tract of land in Summit County in 1909. Two Giberson family members (collectively, Giberson) later executed a “Planned Unit Development Designation” (PUD), which subdivided their land into 13 residential lots and a large open space known as the Giberson Preserve. The Summit County Board of County Commissioners (BOCC) approved the PUD in 1989, and it was promptly recorded. About 10 years later, Giberson executed a “Deed of Conservation Easement” granting the Continental Divide Land Trust—which subsequently merged with Colorado Open Lands (COOL)—an easement over land known as the conservation property. Giberson Limited Partnership (GLP) subsequently took on the duties of the grantor of the conservation property. The conservation easement encumbered the open space with the intent of perpetually preserving its natural character.
In 2006, in the process of purchasing residential lot 8, Ferrari discovered the PUD and a set of unrecorded draft covenants, but he did not find an existing homeowners association (HOA). Ferrari purchased lot 8 and built a home, believing that it was not within a common interest community. Sandri later purchased lots 3, 4, and 9, which are held by Frisco Lot 3 LLC, Frisco Lot 4 LLC, and the Jeffery W. Sandri Revocable Trust (collectively, Sandri). In 2008, the Summit County planning department notified the property owners within the Giberson Preserve that the PUD required a HOA that had never been created. The lot owners did not form an association, but in 2015, lot owner Asarch filed articles of incorporation for the “Giberson Preserve Homeowners Association.” However, the association neither held formal meetings nor recorded any covenants. In 2016, Summit County sent a notice of zoning violation to GLP because no one had yet submitted the required HOA covenants, and it advised that the county would hold all building permits in abeyance until the lot owners executed and recorded the HOA covenants. Later in 2016, most of the lot owners had signed a set of covenants (2017 covenants), but Sandri and Ferrari did not join this group and opposed the 2017 covenants on multiple grounds. The BOCC approved the covenants and amended the PUD.
In 2019 Sandri initiated this lawsuit, which has since involved protracted litigation. The initial defendants included GLP and the Giberson Preserve Homeowners Association and its board members Asarch, Timberlake, and Gary Giberson (collectively, GHOA). On cross-motions for summary judgment, the trial court ultimately resolved Sandri’s and Ferrari’s separately brought claims, finding that (1) their lots were not part of a common interest community; (2) the plat and PUD did not constitute a declaration that created a common interest community; (3) the HOA did not govern their lots; and (4) the 2017 covenants did not encumber their lots. The court also determined that under the application of trust law to the conservation easement, Sandri’s guests, invitees, permittees, heirs, successors, and assigns could use the conservation property for noncommercial recreational purposes, and an amendment to the easement that would have altered their rights was ineffective. The court also denied GHOA’s separate claims that Sandri’s and Ferrari’s lots are within the HOA and governed by the HOA. COOL later joined the litigation and filed a motion to reconsider the court’s application of trust law, instead of property law, to the conservation easement’s amendment. The trial court reconsidered its summary judgment order, applied both legal frameworks, and reached the same conclusion as it had originally. The court later held a multipart bench trial over the course of about a year. During the pendency of the bench trial, the trial court granted in part and denied in part defendants’ CRCP 41(b)(1) motions, disposing of some of Sandri’s and Ferrari’s claims. The next day, it denied another homeowner’s motion to dismiss for lack of subject matter jurisdiction, which argued that the case could only be brought under CRCP 106. Sandri interpreted the trial order as having moved the location of a private access easement road, so he blocked the road. GHOA then filed an emergency motion under CRCP 60(a) asking the court to correct the trial order to state that it had not moved the road. The trial court granted the motion.
As an initial matter on appeal, the court of appeals addressed GLP’s briefing. In its opening-answer brief, instead of making its own arguments, GLP purported to use C.A.R. 28(h) to incorporate by reference four of GHOA’s arguments from its opening-answer brief. The court determined that GLP’s attempt to incorporate another party’s briefing in its own brief was improper under Rule 28(h). Accordingly, the court struck multiple sections of GLP’s opening-answer brief that incorporate by reference.
GLP and GHOA argued that the trial court erred in concluding that the PUD didn’t create a common interest community in 1989, which was years before the Colorado Common Interest Ownership Act (CCIOA) became effective. All parties agreed that CCIOA does not control the creation of a common interest community here. Based on Evergreen Highlands Ass’n v. West, 73 P.3d 1, 8 (Colo. 2003), and the Restatement (Third) of Property: Servitudes (Am. L. Inst. 2000), the court held that a pre-CCIOA common interest community exists when “(1) individual properties are (2) properly burdened with a servitude that imposes an obligation to either (a) pay for the use of or contribute to the maintenance of commonly held or enjoyed property or (b) pay dues or assessments to an association that provides a service or enforces a servitude on commonly held or enjoyed property.” Here, though the PUD satisfies the first factor, it does not burden the lots with a servitude imposing an obligation to pay for or maintain commonly held or enjoyed property, or to pay HOA assessments. Therefore, the original owners failed to create a common interest community, and the later lot owners are not subject to the subsequently created HOA. Thus, the trial court correctly concluded that the PUD did not create a common interest community and that the 2017 covenants are not binding on Sandri and Ferrari.
GHOA also contended that the trial court lacked subject matter jurisdiction. It maintained that the BOCC’s hearing and approval of a minor PUD amendment was a quasi-judicial decision that required the lot owners to challenge encumbrances on their lots through a CRCP 106(a)(4) action brought within 28 days of the BOCC’s decision. However, the question the BOCC addressed was a separate matter from the parties’ dispute here to determine the enforceability of the covenants, and the minor amendment was different from a court proceeding to determine the parties’ rights. The amendment was thus not quasi-judicial, so the trial court did not err in denying the motion to dismiss for lack of subject matter jurisdiction.
Sandri asserted that the trial court erred by granting GHOA’s Rule 60 motion, which concerned the location of the private access easement serving lots 7, 8, 9, and 10 (the PAE). However, the record supports the trial court’s use of this rule to correct the court’s improperly labeled diagram in its trial order.
Sandri also argued that, aside from the trial court’s diagram, other substantive parts of the judgment demonstrate that the PAE was moved. Here, some language in the corrected trial order is inconsistent with some of the trial court’s findings regarding one of Sandri’s claims. There is thus an obvious conflict between the trial court’s Rule 60 order, which reiterates where the PAE lies, and the underlying order delineating property rights.
Sandri further contended that the trial court erred in allowing his counsel to withdraw early. This issue was not preserved because Sandri failed to timely object to the motion to withdraw, so the court did not address it.
Sandri additionally maintained that the trial court abused its discretion through the combined effect of its April 2021 orders. However, there was no abuse of discretion in the rulings, and any resulting error is harmless as a matter of law because the trial court ultimately found that Sandri failed to prove any of the essential elements of the claim underlying his damages. And none of Sandri’s complaints about his former counsel show an abuse of discretion either.
GLP contended that the trial court erred in its interpretation of the conservation easement; and along with COOL, it argued that property law rather than trust law applies to this issue. GLP maintained that the trial court incorrectly concluded that the amended conservation easement couldn’t modify Sandri’s and Ferrari’s rights to use the conservation property; instead, they have only a license or privilege to use the land. Here, under the amended conservation easement, GLP could prohibit Sandri or Ferrari from accessing the conservation easement property, but the easement prohibited changing this aspect of their right to use the property. The amendment thus conflicted with the easement’s conservation purposes and, as to Sandri and Ferrari, affected its perpetual duration. Therefore, the court did not err in concluding that the amended conservation easement was improper and that the lot owners retain the rights that the grantor reserved in the original conservation easement.
The parties each requested attorney fees. The court denied Sandri’s requests under Rule 105, Rule 57, and CRS § 38-35-109(3) as meritless; and it denied his request based on CCIOA’s fee-shifting provision because the statute is inapplicable. However, the 2017 covenants contain a fee-shifting provision, and the conservation easement also addresses the award of reasonable costs and fees. Both fee-shifting provisions apply only to a prevailing party in a proceeding, which in this case, involves multiple parties and a myriad of claims, some of which were not part of this appeal. Here, at the time of appeal, the trial court had not determined the prevailing parties. The trial court was authorized to award Sandri and Ferrari their reasonable attorney fees incurred on appeal from GLP and GHOA if it determines that they are prevailing parties in the litigation.
The Rule 60 order was affirmed. The portion of the trial order concerning Sandri’s claim against GLP that the 2017 covenants impermissibly expanded the scope of the private access easement to provide access not only to lots 7 through 10 but also to the open space was reversed. The remainder of the judgment was affirmed. The matter was remanded (1) for further findings of fact and conclusions of law on Sandri’s claim that GLP improperly expanded access to the PAE; (2) to award appellate fees due to Sandri and Ferrari, if the trial court determines they are prevailing parties, from GHOA and GLP; and (3) for any further proceedings that the trial court determines are necessary.