24CA0807 Cuerna Verde v Adams 04-24-2025
COLORADO COURT OF APPEALS
Court of Appeals No. 24CA0807 Pueblo County District Court No. 21CV30177 Honorable Gregory J. Styduhar, Judge
The Cuerna Verde Association,
Plaintiff-Appellee,
v.
Alva Adams,
Defendant-Appellant.
JUDGMENT AFFIRMED
Division V Opinion by JUDGE FREYRE Schock and Sullivan, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced April 24, 2025
Orona Garcia & Galves, PC, Richard A. Orona, Fred Galves, Pueblo, Colorado, for Plaintiff-Appellee
Kwitek McMillan P.C., Douglas J. Kwitek, Pueblo, Colorado, for Defendant- Appellant ¶1 Defendant, Alva Adams, appeals the trial court’s judgment in
favor of plaintiff, the Cuerna Verde Association. We affirm.
I. Background
¶2 The Cuerna Verde Association (Cuerna Verde) is a Colorado
nonprofit corporation and homeowners association. Cuerna Verde
was established in 1913 by a group of Pueblo businessmen who
joined together to purchase a former dairy farm. Cuerna Verde
owns and manages 240 acres of forested land located outside of
Rye.
¶3 Membership in Cuerna Verde is established through the
ownership of a residence in the Cuerna Verde Pines subdivision
located on the land. Cuerna Verde’s bylaws (the Bylaws) provide, “A
bill of sale for a house shall specify that the transfer of ownership of
the house and the membership are being made and should be filed
with the Pueblo County Clerk and Recorder.” Members own their
residences but not the land below or around their residences. The
Bylaws further state,
All residences or other improvements belonging to the members are hereby declared to be personal property, even though the same might be attached to the land. Upon the
1 transfer of a membership, whether by inheritance, intra-family succession, or by sale, it is expressly understood that the transaction is a transfer or sale of a member’s personal property only, and does not include any land . . . .
When a residence is sold and membership is passed, Cuerna Verde
employs an attorney to draft a bill of sale, and a certificate of
membership is issued to the new member. According to Geoff
Withers, former president of the Board of Directors of Cuerna Verde
(the Board), a list of the members is maintained by the Board, and
the owners collectively agree on the accuracy of the list.
¶4 Members must pay fees semiannually. Membership entitles
all members and their families and house guests to all the privileges
and amenities of Cuerna Verde Pines. These amenities include
water, sewers, roads, tennis courts, a swimming pool, and horse
fields. If a member fails to pay their fees within thirty days of the
due date, their account is considered delinquent. A member who is
delinquent for over two months is considered to have forfeited their
membership privileges. An interest charge of eighteen percent per
year, compounded semiannually, is assessed on the unpaid balance
of a delinquent account.
2 ¶5 Currently, fifteen residences comprise Cuerna Verde Pines.
Fourteen are owned by members and one is owned by the
caretaker.
¶6 Adams owns a house, horse barn, and feeding shed. He
inherited one-half interest in the property when his father died in
December 1981. He then bought the other one-half interest and
has maintained continuous ownership of the property to the
present.
¶7 In 1977, Cuerna Verde failed to file reinstatement paperwork
with the Colorado Secretary of State, who then administratively
dissolved the association. Cuerna Verde, however, continued to
operate as it always had. In 1993, Adams purportedly “reorganized”
Cuerna Verde and named himself as the only member. Two
lawsuits ensued between Cuerna Verde and Adams. Eventually,
the Pueblo County District Court declared that Cuerna Verde was
owned by the members, not Adams alone.
¶8 This action arises from an incident that occurred in 2016
when Adams’ neighbor, Ms. Baldwin, notified Cory Pool, Cuerna
Verde’s caretaker, that her water was not working. Pool canvassed
3 Baldwin’s yard for leaks. When he did not find any, he went to
another neighbor’s house and checked their valves. Again, he
found nothing. Eventually, Pool found “sopping wet ground” on the
east side of Adams’ house. Pool was then joined by Baldwin’s
plumber, Les Coy. Pool dug below ground and found a PVC pipe
that was leaking water. Coy disassembled the actuator,1 owned by
Adams, and turned the valve to the off position. Water was then
restored.
¶9 After the incident, Adams reported to Withers (then president
of the Board) that the actuator was inoperative. Withers offered to
repair or replace the actuator, but Adams refused to give it to him,
claiming it was “evidence.” Adams stopped paying his Cuerna
Verde membership fees in July 2017.
¶ 10 In March 2018, the Board sent Adams a letter. The letter
detailed the 2016 actuator incident and stated that while Adams
refused to give the actuator to Withers, Withers had copied the
specifications and investigated the possibility of replacing it.
1 An actuator is an electronic machine that turns the valve on and
off using an electrical impulse from a remote location. 4 Withers discovered that the model alleged to have been damaged
had not been manufactured for over a decade. But he located one
with nearly identical specifications on eBay for $400. The Board
offered to pay Adams $400 for the actuator’s replacement if a
reputable electrical shop confirmed it was damaged. The Board
acknowledged that Adams told Withers that he was withholding
payment of his membership dues until the valve was operable again
because he did not trust Cuerna Verde to reimburse him. The
Board informed Adams that he owed Cuerna Verde $4,800 in
membership dues including a $369 interest fee as required by the
Bylaws.
¶ 11 In July 2018, Withers sent Adams a letter urging him to pay
his membership dues. This letter detailed Adams’ back dues and
interest owed. Withers sent another letter in August that said the
Board did not believe that the actuator or valve had been damaged.
Accordingly, Cuerna Verde would not be paying for the alleged
damage. Withers also informed Adams that his delinquent
membership dues now amounted to around $7,000.
5 ¶ 12 In June 2019, Withers sent Adams a letter reminding him that
Cuerna Verde had elected to maintain the water system lines up to
and including a shutoff valve for every house. Because the only
service line in Cuerna Verde that did not have a separate line and
valve was the one feeding Adams’ house, the members agreed to lay
a new service line dedicated to Adams’ house with a new valve.
Withers informed Adams that if he did not respond, Cuerna Verde
would install the new service line and valve to Adams’ house, at its
expense, and would also install a new valve actuator on Adams’
existing service line to replace the one Adams alleged was damaged.
Withers also stated that Adams’ unpaid dues and interest
amounted to $9,485.29.
¶ 13 Adams responded with new allegations regarding the
installation of the new service line running to his house. He alleged
that Cuerna Verde had damaged his barn and corral, requiring the
removal of his carriage house. Adams also asserted that he had
been trying to obtain cooperation on clearing up title and
membership issues for years and that Cuerna Verde had no interest
in the land or water in Cuerna Verde Pines. Adams signed the
6 letter, “The only LEGAL member of Cuerna Verde.” Withers later
informed Adams that the water shutoff valve had been installed.
¶ 14 In March and April 2020, Adams wrote two letters to Cuerna
Verde’s attorney, Ray Hughes, who had sent Adams a collection
letter on behalf of Cuerna Verde. Adams stated that he had
“organized” Cuerna Verde and had never transferred any authority
or board of directors’ seats to the current members of Cuerna
Verde. He also claimed that the members of Cuerna Verde, over his
objection, had filed fraudulent documents with the Secretary of
State claiming ownership of the corporation and stating that they
were corporate officers. Adams wrote that because he was the
incorporator, the members of Cuerna Verde violated Colorado law
by posing as the incorporators of Cuerna Verde.
¶ 15 Adams also claimed that Cuerna Verde failed to confirm who
the owners of the residences were before admitting them as
members of Cuerna Verde. In the second letter, Adams said
Cuerna Verde members had stolen his corporate identity because
he organized Cuerna Verde, and he never held any meetings to
surrender his corporate authority or any board seats. Adams said
7 he was informed that Cuerna Verde was given to the members “by
the court,” but he claimed this was false because, as the
incorporator, he alone had the authority to select the first board.
¶ 16 By July 1, 2020, Adams owed $17,424.74, including interest,
on the membership dues. At the membership meeting on July 11,
2020, the members unanimously agreed to suspend Adams’ Cuerna
Verde privileges for the unpaid dues. Consequently, Cuerna Verde
capped and locked the shutoff valve on the service line running to
Adams’ house, thereby preventing Adams from accessing running
water.
¶ 17 In 2021, Cuerna Verde filed suit against Adams for breach of
contract and unjust enrichment based on the unpaid membership
dues and interest. Adams alleged several affirmative defenses and
asserted counterclaims of negligence, trespass, and breach of
contract (to protect property and to provide water).
¶ 18 A bench trial was held on November 14 and 15, 2023. The
trial court issued a written judgment in favor of Cuerna Verde as to
Cuerna Verde’s breach of contract claim in the amount of
$48,163.93. The trial court also found that the Colorado Common
8 Interest Ownership Act (CCIOA) did not apply to Cuerna Verde
because (1) Cuerna Verde was established before 1992; (2) Cuerna
Verde elected not to be governed by CCIOA; and (3) Cuerna Verde
never recorded a declaration as required by the statute. The trial
court also ruled in favor of Cuerna Verde as to Adams’
counterclaims.
¶ 19 On appeal, Adams challenges the trial court’s findings that
(1) Cuerna Verde did not cease to exist as a corporation following its
1977 administrative dissolution; (2) Cuerna Verde complied with
Colorado law with respect to finalizing its legal authority; (3) Cuerna
Verde was not subject to CCIOA; (4) Cuerna Verde’s Bylaws
established an enforceable contract between Cuerna Verde and
Adams; and (5) a contractual basis to award attorney fees to Cuerna
Verde existed. We address and reject each contention.
II. Corporate Existence and Authority
¶ 20 Adams contends that when Cuerna Verde was administratively
dissolved in 1977, Cuerna Verde “could not carry on business
afterwards and simply ceased to exist” and, therefore, lacked any
corporate authority. We disagree.
9 A. Standard of Review and Controlling Law
¶ 21 We review a trial court’s judgment entered following a bench
trial as a mixed question of fact and law. State Farm Mut. Auto. Ins.
Co. v. Johnson, 2017 CO 68, ¶ 12. We review legal conclusions de
novo, id., and will disturb factual findings only if they are clearly
erroneous and not supported by the record. Jehly v. Brown, 2014
COA 39, ¶ 8.
¶ 22 An association may be administratively dissolved by the
attorney general if it obtained its articles of incorporation through
fraud or it has continued to exceed or abuse the authority conferred
upon it by law. § 7-134-301(1), C.R.S. 2024. Additionally,
administrative dissolution can occur for failure to comply with
statutory requirements such as filing periodic reports or paying
applicable taxes. Ski Time Square Condo. Ass’n v. Ski Time Square
Enters., 119 P.3d 588, 589 (Colo. App. 2005).
B. Analysis
1. Corporate Existence
¶ 23 In his response to the amended complaint, Adams argued that
Cuerna Verde lacked standing to bring the action against Adams
because (1) it was not the real party in interest, and (2) its present 10 board of directors did not have authority under the articles of
incorporation (Articles), Bylaws, and organizational documents to
direct the action.
Following trial, the trial court found:
• Cuerna Verde was administratively dissolved by the
Colorado Secretary of State in 1977 for failing to file its
annual reports.
• No evidence was presented that Cuerna Verde ceased to
operate, wind up, or liquidate its business affairs.
• Cuerna Verde has “continuously existed since 1913.”
• Two lawsuits, based on Adams’ claim that he organized
the association in 1993, ensued and were resolved in
1997 when the court “declared that [Cuerna Verde] was
owned by its members.”
• Despite the administrative dissolution in 1977, the
members of Cuerna Verde did not intend to terminate the
mutual obligations set forth in Cuerna Verde’s Bylaws.
¶ 24 We reject Adams’ claim that Cuerna Verde lacked a corporate
existence and agree with the trial court that the fact of Cuerna
11 Verde’s administrative dissolution in 1977 did not automatically
terminate the parties’ respective obligations under the Bylaws, for
two reasons. First, the record confirms that Cuerna Verde’s and its
members’ actions, including Adams’, did not reflect an intent that
the obligations provided by the Bylaws would cease to exist while
the benefits provided by Cuerna Verde remained. See Ski Time
Square Condo. Ass’n, 119 P.3d at 591 (Following the association’s
administrative dissolution, “[t]he parties did not intend that . . . the
protection of the covenants would disappear while the
condominium development and its association continued to exist.”).
Indeed, Adams testified that he paid membership dues and received
the association’s benefits from 1981 (after the administrative
dissolution occurred) until he unilaterally ceased paying dues in
2017. Further, Adams presented no evidence that Cuerna Verde
took steps to wind up or liquidate its business and affairs. Instead,
the Board continued to hold membership meetings, collect dues
semiannually, and provide membership services to the Cuerna
Verde members. See id.
12 ¶ 25 Second, when a nonprofit entity administratively dissolves and
continues to operate, as was the case here, the nonprofit is deemed
an unincorporated organization that qualifies as a nonprofit
association. § 7-137-102(5), C.R.S. 2024 (“Any nonprofit corporate
entity formed prior to January 1, 1968, . . . that was suspended,
declared defunct, administratively dissolved, or dissolved by
operation of law, and continues to operate for nonprofit purposes
and does not wind up its business and affairs, shall be deemed an
unincorporated organization that qualifies as a nonprofit
association as provided in section 7-30-101.1 . . . .”).
¶ 26 Accordingly, we discern no error in the trial court’s
determination that Cuerna Verde’s Bylaws remained in force
notwithstanding its administrative dissolution. See id.
¶ 27 Cuerna Verde asks us to apply the doctrines of claim and
issue preclusion to resolve this issue and to hold, under the law of
the case, that Cuerna Verde has continuously existed as a matter of
law since the 1977 administrative dissolution, based on the 1997
litigation and judgment. We decline to do so because neither party
produced any evidence of the specific nature of the prior litigation,
13 aside from general testimony, and the court’s judgment is not part
of the appellate record. See Colo. Ass’n of Pub. Emps. v. Colo. Dep’t
of Pers., 991 P.2d 827, 831 (Colo. App. 1999) (our review is limited
to the record presented).
2. Corporate Authority
¶ 28 In Adams’ answer to Cuerna Verde’s amended complaint,
Adams asserted that Cuerna Verde “lack[ed] standing to bring the
action against [Adams] as its present board of directors [did] not
have the authority under the Articles, Bylaws, and organization
documents to direct the action.” Here, Adams argues that
(1) corporate existence begins upon incorporation; (2) Cuerna Verde
was formed in 1993 by Adams’ actions as the organizer; (3) Adams
was the only initial director named in the Articles; (4) after he
organized Cuerna Verde, Adams did not hold a meeting as required
by section 7-122-105(1)(b), C.R.S. 2024; and (5) without holding the
required meeting to transfer authority, all corporate actions are
void. Adams contends that the trial court should have found that
Cuerna Verde failed to finalize its organizational requirements since
1993. At trial, Adams testified:
14 It’s a horror story by itself. Turnaround, when we went to — when I filed papers for the Secretary of State to reorganize the corporation, we went to court and the court said that the other guys could jiggle, you know, could, we’re going to take care of it. And that means they were supposed to, you know, get — find out who the members are and get all that stuff taken care of. And my portion was to turn around and as the organizer, I was supposed to hold the first meeting and then turn around and facilitate to a new board the authority acquired from being the organizer.
So I didn’t have any on-hands in regards to titles or anything else, but I do feel that in order to be able to hold a meeting of the members, you have to know who the members are. You need to have provable interest in the houses. You have to have something that is concrete, that spells it out.
So that, as far as I can see, the houses are not really marketable, you know, without a good title. And so to protect your own property, it helps to get the thing done. Well, nobody wanted to do that.
And so, at that point, Mr. Hadley went and claimed he was the president and he went and filed papers with the Secretary of State, all on his own, to basically take control of the corporation. And at that point, I’ve never transferred any authority or anything else from that. I’ve just sat. Because to me, it’s gotten to a point of being a legal question. You know, are they legitimate or aren’t they? That’s the question. 15 ¶ 29 The trial court found:
Defendant argues that [Cuerna Verde] lacks standing to bring the action against the defendant as [Cuerna Verde] is not the real party in interest and that its present board of directors does not have authority under the Articles, Bylaws, and organization documents to direct the action. Again, this defense in light of the evidence has no merit.
¶ 30 As the trial court found, Cuerna Verde was incorporated in
1913 and continued to operate, fulfilling its obligations under the
Bylaws and providing benefits to members, until the time of this
litigation. And because the association never ceased to exist, there
was no need to hold a meeting, as required by section 7-122-105(1),
to transfer corporate authority. In other words, because Cuerna
Verde was incorporated in 1913 and continued to operate even after
its administrative dissolution, section 7-122-105 is inapplicable to
Cuerna Verde and its corporate authority. Accordingly, Cuerna
Verde’s corporate actions were authorized.
¶ 31 Adams next argues that the trial court should have found that
Cuerna Verde failed to establish its property owners and, therefore,
failed to establish its own membership necessary to carry on
business. We disagree and conclude that because Cuerna Verde
16 was incorporated in 1913 and never ceased to operate, Cuerna
Verde did not need to establish its membership to hold an initial
meeting in 1993.
¶ 32 Accordingly, we conclude that Cuerna Verde retained
corporate authority subsequent to its administrative dissolution in
1977.
III. Enforceability of Bylaws
¶ 33 Adams next contends that the trial court erred in concluding
that Cuerna Verde’s Bylaws established an enforceable contract
between it and Adams. We do not address this argument because it
is unpreserved.
A. Controlling Law
¶ 34 “Preservation is a threshold question” because “[w]e do not
review issues that have been insufficiently preserved.” Rinker v.
Colina-Lee, 2019 COA 45, ¶ 22. We do not require “talismanic
language” to preserve an issue for appeal. Madalena v. Zurich Am.
Ins. Co., 2023 COA 32, ¶ 50 (quoting In re Estate of Owens, 2017
COA 53, ¶ 21). For an issue to be preserved, it “must be brought to
the trial court’s attention and the court must be given the
17 opportunity to rule on it.” Franklin D. Azar & Assocs. P.C. v. Ngo,
2024 COA 99, ¶ 51.
¶ 35 In his opening brief, Adams contends that the trial court erred
in concluding that Cuerna Verde’s Bylaws established an
enforceable contract between him and Curena Verde. But in his
answer to Cuerna Verde’s amended complaint, he used those same
Bylaws to assert multiple counterclaims, including two claims of
breach of contract. He argued that Cuerna Verde “had a
contractual duty to protect Adams’ property from damage due to
causes originating on the real property owned by it” and “a
contractual obligation to make sure that Adams had unfettered
access to fresh water.” Moreover, he argued that Cuerna Verde
breached those contractual obligations.
¶ 36 The trial court found that the relationship between Cuerna
Verde and its members was contractual, “with the members
agreeing, by virtue of their membership, to submit to rules and
obligations set forth in [Cuerna Verde]’s Bylaws.” The court further
18 found that Adams never disputed his obligation to pay assessments
under the Bylaws or that a contract existed.
¶ 37 The record shows that Adams never argued, as he does now,
that Cuerna Verde’s Bylaws did not establish an enforceable
contract between Cuerna Verde and himself. To the contrary, at
trial, Adams recognized the existence of a contract between Cuerna
Verde and himself and argued that Cuerna Verde had breached the
contract by failing to provide him with the required membership
services. Adams argued for the first time, in his motion for
reconsideration, that the Bylaws did not establish an enforceable
contract. But arguments raised for the first time in a post-trial
motion or motions for reconsideration are not preserved for
appellate review. Briargate at Seventeenth Ave. Owners Ass’n v.
Nelson, 2021 COA 78M, ¶ 66; see also People v. Schaufele, 2014 CO
43, ¶ 49 (Boatright, J., concurring) (“Motions for reconsideration are
designed to correct erroneous court rulings; they are not designed
to allow parties to present new legal arguments for the first time
and then appeal their denial . . . .”).
19 ¶ 38 Accordingly, we conclude this contention is unpreserved and
do not address it further.
IV. Applicability of CCIOA
¶ 39 Adams next contends that the trial court erred by finding that
Cuerna Verde is not governed by CCIOA. Specifically, he argues
that (1) Cuerna Verde was incorporated in 1993, and (2) the trial
court erred in failing to conclude that Cuerna Verde was subject to
CCIOA. We disagree.
A. Standard of Review and Applicable Law
¶ 40 We review a trial court’s judgment entered following a bench
trial as a mixed question of fact and law as set forth above in Part
II.A.
¶ 41 By its terms, CCIOA applies only to “all common interest
communities created within this state on or after July 1, 1992.”
§ 38-33.3-115, C.R.S. 2024.
¶ 42 A common interest community “may be created . . . only by
recording a declaration.” § 38-33.3-201(1)(a), C.R.S. 2024. “No
common interest community is created until the plat or map for the
common interest community is recorded.” § 38-33.3-201(1)(b).
B. Analysis 20 ¶ 43 As discussed in Part II.B.1, Cuerna Verde was established in
1913 and continuously operated until the time of this litigation.
See Jehly, ¶ 8 (we will disturb factual findings only if they are
clearly erroneous and not supported by the record). Therefore,
CCIOA is not applicable to this case. See Accetta v. Brooks Towers
Residences Condo. Ass’n, 2021 COA 87, ¶ 30 (CCIOA generally does
not apply to communities created before its effective date); see also
State Farm Mut. Auto. Ins. Co., ¶ 12 (we review the trial court’s legal
conclusions de novo).
¶ 44 Additionally, a common interest community is “created” for
purposes of CCIOA by recording a declaration and a plat or map
and conveying the real estate subject to the declaration to the
association. § 38-33.3-201(1)(a), (1)(b). The record shows that
Cuerna Verde never created or recorded a declaration as required
by the statute. See id.
¶ 45 Accordingly, we discern no error in the trial court’s legal
determination that Cuerna Verde is not subject to CCIOA.
21 V. Attorney Fees
¶ 46 Adams lastly contends that the trial court erroneously
determined there was a contractual basis for an award of attorney
fees to Cuerna Verde. Specifically, he reasons that the trial court
erroneously determined that the attorney fees provision contained
in Cuerna Verde’s amended Bylaws could be applied retroactively.
We are not persuaded.
A. Additional Facts
¶ 47 In July 2020, Withers sent Cuerna Verde’s members an email
regarding the upcoming membership meeting. Withers emphasized
that Cuerna Verde needed to adopt a new set of Bylaws so that they
could “responsibly pursue the recovery of money that Alva Adams
owes [Cuerna Verde].” Withers listed the following agenda items:
“[d]iscussion and decision of suspending Alva Adams’ membership
privileges for failure to pay his dues for this fourth year, the accrual
of which now has reached nearly $18,000 and [d]iscussion of the
need for a special assessment to cover the cost of attorney’s fees to
pursue legal action for collection of Alva’s dues.”
¶ 48 At the July 11, 2020, membership meeting, Cuerna Verde
amended its Bylaws to include the following: 22 The annual and special assessments, together with interest, costs, and reasonable attorney fees incurred by [Cuerna Verde] in collecting such assessments, constitute a continuing lien on the membership and improvements (including the home) of the delinquent Members.
....
If the Board of Directors determines by majority vote that a lawsuit is unwarranted or unnecessary to resolve a dispute, and the Court rules in favor of [Cuerna Verde] in any proceeding, the member who initiated the litigation will reimburse the costs of [Cuerna Verde].
¶ 49 In Adams’ proposed trial management order, Adams alleged
the following affirmative defenses:
The Plaintiff’s Bylaws and policies lack a legal basis for the Plaintiff to pursue some of the damages sought in its Complaint.
The Plaintiff failed to request attorney’s fees against the defendant in its Complaint, and the Bylaws of the Plaintiff did not provide for an award of attorney’s fees to the Plaintiff when the dispute between the parties began, but were amended subsequently thereto, and should not be allowed.
¶ 50 The trial court found:
As a result of inheritance, use, and occupancy of the Residence, Defendant became a member of [Cuerna Verde]. Accordingly, he is subject 23 to [Cuerna Verde’s] Bylaws. The relationship between [Cuerna Verde] and its members is contractual, with the members agreeing, by virtue of their membership, to submit to rules and obligations set forth in [Cuerna Verde]’s Bylaws.
¶ 51 In its conclusions of law, the trial court found that (1) the
Bylaws included the attorney fees provision when the action was
commenced; (2) Cuerna Verde requested an award of costs in its
amended complaint; and (3) attorney fees should be treated as
costs.
B. Standard of Review and Applicable Law
¶ 52 We review a trial court’s judgment entered following a bench
trial as a mixed question of fact and law as set forth above in Part
¶ 53 Whether a contract authorizes an attorney fees award is a
question of law that we review de novo. Butler v. Lembeck, 182 P.3d
1185, 1188 (Colo. App. 2007). The party requesting attorney fees
has the burden of proving that it is entitled to them. Anderson v.
Pursell, 244 P.3d 1188, 1194 (Colo. 2010).
¶ 54 Colorado follows the American rule, which requires each party
in a lawsuit to bear its own attorney fees. Allstate Ins. Co. v. Huizar,
24 52 P.3d 816, 818 (Colo. 2002). Absent an express statute, court
rule, or contract to the contrary, attorney fees are generally not
recoverable by the prevailing party in a contact action. Id.
¶ 55 However, parties to a contract may agree to a fee-shifting
provision. W. Stone & Metal Corp. v. DIG HP1, LLC, 2020 COA 58,
¶ 7. In general, contractual fee-shifting provisions are valid under
Colorado law. Morris v. Belfor USA Grp., Inc., 201 P.3d 1253, 1260
(Colo. App. 2008). Because we interpret a contract according to the
plain and ordinary meaning of its terms, we similarly interpret
fee-shifting provisions in a “common sense manner.” Id. at 1259
(quoting Butler, 182 P.3d at 1189). No “formulaic language” is
required to constitute a valid fee-shifting provision, so long as the
provision “clearly informs the parties that a breach . . . may result
in an award of attorney fees.” Id. at 1260 (quoting Butler, 182 P.3d
at 1189.) The fee-shifting provision must “specifically refer” to
attorney fees to be valid. Id. (quoting Butler, 182 P.3d at 1189-90).
¶ 56 When a contract contains a valid fee-shifting provision, the
prevailing party will be entitled to recover its attorney fees. Wheeler
v. T.L. Roofing, Inc., 74 P.3d 499, 503 (Colo. App. 2003).
25 C. Analysis
¶ 57 We discern no error in the court’s finding that a contractual
basis for an award of attorney fees existed because the record
supports it. See Jehly, ¶ 8 (we will disturb factual findings only if
they are clearly erroneous and not supported by the record). The
Bylaws set forth the responsibilities of Cuerna Verde and its
members. The members agree to submit to the rules and
obligations set forth in the Bylaws and to pay membership dues in
exchange for the amenities that Cuerna Verde provides. The
Bylaws specifically state that members “will be subject to the terms
and provisions of the Articles of Incorporation and Bylaws of
[Cuerna Verde], the actions of the board of Directors, and all rules
and regulations which are or may be formulated to regulate [Cuerna
Verde], its Members, and its employees.” Further, the Bylaws lay
out the rights of members to enjoy the privileges of Cuerna Verde so
long as they pay membership dues. Adams conceded at trial that
when he acquired his house in Cuerna Verde, he understood that
there were Bylaws and restrictions associated with the ownership of
26 his house. Moreover, he never disputed that the Bylaws required
him to pay membership dues.
¶ 58 We are unpersuaded by Adams’ argument that the Bylaws
could not be amended by Cuerna Verde without his express
consent. Contrary to this assertion, the Bylaws provide that
Cuerna Verde may “alter, amend, or repeal these Bylaws, and may
adopt new Bylaws by a two-third vote.” At the July 22, 2020,
membership meeting, the members unanimously approved the
changes to Cuerna Verde’s Bylaws that allowed Cuerna Verde to
request reimbursement for attorney fees and costs of litigation when
successful in court proceedings. See Reishus v. Bullmasters, LLC,
2016 COA 82, ¶¶ 33-34 (enforcing co-ownership agreement
provision that provided that the agreement could be amended with
the approval of “at least 7/12ths of the Ownership Interests”).
¶ 59 Additionally, we agree with Cuerna Verde that it was entitled,
under the Bylaws, to its reasonable attorney fees incurred in
collecting unpaid assessments. Like Butler, Cuerna Verde’s Bylaws
do not contain typical language that provides for attorney fees to
“the prevailing party.” 182 P.3d at 1189. However, the fee-shifting
27 agreement provided in the Bylaws refers specifically to attorney fees
and, therefore, put both parties on notice that Cuerna Verde was
entitled to reasonable attorney fees when attempting to collect
unpaid assessments. See id. at 1189-90. Accordingly, we conclude
that an award of attorney fees was authorized by the Bylaws.
¶ 60 Adams further argues that the amendment to the Bylaws is an
ex-post facto law that is unenforceable. We are not persuaded for
two reasons. First, Cuerna Verde filed its amended complaint on
February 12, 2021, almost a year after amending its Bylaws to
include the attorney fees amendments. The amendments,
therefore, were not applied retroactively because they were enacted
before the commencement of this litigation.
¶ 61 Second, article II, section 11, of the Colorado Constitution
provides, “No ex post facto law, nor law impairing the obligation of
contracts, or retrospective in its operation . . . shall be passed by
the general assembly.” Here, Cuerna Verde is not the General
Assembly, and the amendments do not constitute a law. Therefore,
Adams’ ex-post facto argument lacks merit.
28 ¶ 62 Finally, Cuerna Verde requests an award of appellate attorney
fees by relying on Accetta, ¶¶ 65-66. In Accetta, another division of
this court concluded that section 38-33.3-123(1)(c), C.R.S. 2020,
required an award of appellate attorney fees to the prevailing party
even though the prevailing party was not governed by CCIOA.
Accetta, ¶¶ 65-66. The court reasoned that appellate attorney fees
were required because the non-prevailing party brought the action
to enforce CCIOA’s provisions. Id. Cuerna Verde’s reliance on
Accetta is misplaced. Adams did not allege in his answer that
CCOIA applied nor did he assert any action to enforce CCIOA’s
provisions. Therefore, we reject Cuerna Verde’s request for
appellate attorney fees.2
VI. Disposition
¶ 63 The judgment is affirmed.
JUDGE SCHOCK and JUDGE SULLIVAN concur.
2 Adams asserts that Cuerna Verde did not ask for attorney fees in
its amended complaint. However, the trial court found that Cuerna Verde did request attorney fees. Because the amended complaint is not part of the record, we must presume the trial court’s findings are correct. See Hock v. N.Y. Life Ins. Co., 876 P.2d 1242, 1252 (Colo. 1994). 29