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Seaman v. Heather Gardens Ass’n.

2023 COA 125. Nos. 22CA2103 & 23CA0372. Colorado Common Interest Ownership Act—Unit Owners’ Association Records—Duty to Maintain and Allow Owner Inspection of Records

December 28, 2023

Heather Gardens Association (HGA) is a nonprofit corporation that manages Heather Gardens, a senior living community where Seaman is a property owner and resident. In April 2020, HGA received a loan under the Paycheck Protection Program (PPP) for $1,085,800 and opened an account at KeyBank to hold and manage the PPP funds. In July 2021, HGA received forgiveness of the PPP loan. Seaman later requested copies of HGA’s records, including the KeyBank statements for the account with the PPP funds. HGA provided Seaman with copies of balance sheets showing the PPP funds as an asset with varying balances, but it did not provide the statements, contending that they were not association records that it was required to maintain or allow owners to inspect. Seaman then filed a complaint in district court seeking an injunction requiring HGA to produce the requested bank statements. HGA moved to dismiss under CRCP 12(b)(5). The district court determined, as a matter of law, that the bank statements did not fall within CRS § 38-33.3-317(1)(a), and it granted the motion.

On appeal, Seaman contended that the district court erred by dismissing his complaint on grounds that CRS § 38-33.3-317 does not require HGA to produce the bank statements. The parties agreed that HGA is subject to the Colorado Common Interest Ownership Act (CCIOA). The court of appeals determined that (1) a unit owners’ association’s bank statements may constitute “[d]etailed records of receipts and expenditures affecting the operation and administration of the association” under § 38-33.3-317(1)(a) of the CCIOA, and (2) records generated by a third party such as a bank may be records an association maintains and must make available for examination and copying by a unit owner under CRS § 38-33.3-317(2). Accordingly, the district court erred by dismissing plaintiff’s complaint on the basis that bank statements cannot, as a matter of law, be records that a unit owners’ association is required to maintain and produce for inspection to a unit owner under §§ 38-33.3-317(1)(a) and (2).

The court also reversed the district court’s order awarding HGA its attorney fees and costs, and declined to award appellate attorney fees to either party, because with no resolution on the merits, there is not yet a prevailing party.

The judgment and its order awarding attorney fees and costs to HGA were reversed, and the case was remanded for further proceedings.

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

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