Ingold v. AIMCO/Bluffs, L.L.C. Apartments

159 P.3d 116, 2007 Colo. LEXIS 445, 2007 WL 1532155
CourtSupreme Court of Colorado
DecidedMay 29, 2007
Docket06SA240
StatusPublished
Cited by45 cases

This text of 159 P.3d 116 (Ingold v. AIMCO/Bluffs, L.L.C. Apartments) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ingold v. AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 116, 2007 Colo. LEXIS 445, 2007 WL 1532155 (Colo. 2007).

Opinion

Justice EID

delivered the Opinion of the Court.

This case concerns an arbitration clause in an apartment lease entered into between Plaintiffs Chris and Cindy Ingold and one of the Defendants, Boulder Creek Apartments. We issued a rule to show cause to review the trial court's order compelling the Ingolds to arbitrate their claims against Boulder Creek Apartments as well as its parent company, Defendant AIMCO/Bluffs LLC, and its employee, Defendant James R. Macias (collectively, the "Defendants"). We make the rule absolute in part, discharge it in part, and remand with directions.

I.

For purposes of this proceeding the factual allegations set forth in the Ingolds' complaint are accepted as true. See Rosenthal v. Dean Witter Reynolds, Inc., 908 P.2d 1095, 1099 (Colo.1995).

The Ingolds entered into a one-year apartment lease with Boulder Creek Apartments in July 2001 (the "Lease"). Section 30 of the Lease provides: "All disputes between the parties concerning the provisions of this Lease shall be submitted to arbitration...." Only the Ingolds and Boulder Creek Apartments are identified as parties to the Lease.

After taking possession of their apartment in August, the Ingolds smelled a foul odor in the unit. The Ingolds were advised that the odor resulted from a ruptured sewer pipe underneath the apartment building, and that the pipe would be repaired. When they returned to the unit in September, the foul odor was gone.

Problems with the apartment unit persisted, either because the sewer pipe was inadequately repaired or because sewage from the initial rupture was not removed from underneath the apartment building. The Ingolds again were told that the Defendants were addressing the problem. The Ingolds claim that they relied on these representations when agreeing to renew their Lease in August 2002 for another one-year term.

Shortly after renewing the Lease, the In-golds began to suffer health problems associated with mold and bacteria, problems that they attribute to the sewage left under their apartment. A microbiologist hired by the Ingolds analyzed samples from the apartment and concluded that the unit contained a serious mold and bacteria problem. Based on these findings, the Ingolds' physician advised them to leave the apartment.

When the Ingolds reported the microbiologist's findings to Boulder Creek Apartments, the apartment manager, James Macias, inspected the crawl space and attic of the apartment building. Macias advised that he detected no problem with mold or bacteria. An industrial hygienist hired by the Ingolds to inspect the apartment reached a different conclusion; he determined that both the crawl space and attic contained toxic levels of mold and bacteria.

The Ingolds abandoned the apartment unit in November 2002, leaving behind their possessions-and refusing to pay their November rent. Later that month, a representative of the Defendants contacted the Ingolds and denied any environmental problem with the apartment unit and informed them that they continued to be responsible for complying with the terms of the Lease, including their monthly rental payments. The Ingolds still refused to pay their rent.

In December 2002, Boulder Creek Apartments notified the Ingolds that their failure to pay rent resulted in a breach of the Lease, and demanded the payment of $6,095.55 as a termination fee. Boulder Creek Apartments also withheld the Ingolds' security deposit.

In October 2004, the Ingolds filed suit against the Defendants, advancing ten claims for relief: eight tort claims, a claim for viola *119 tion of the Colorado Consumer Protection Act, sections 6-1-101 to -115, C.R.S. (2006), and a claim for violation of the Wrongful Withholding of Security Deposits Act, see-tions 38-12-101 to -104, C.R.S. (2006). 1

The Defendants moved to dismiss the In-golds' Complaint for lack of subject matter jurisdiction on grounds that the Lease required the Ingolds to arbitrate their claims. The Ingolds opposed arbitration, claiming that they had been fraudulently induced into entering the Lease based on the Defendants' representations that the apartment was habitable.

The trial court granted the Defendants' motion and held that all of the Ingolds' claims fell within the scope of the Lease's clause requiring the arbitration of "[alll disputes between the parties concerning the provisions of this Lease ...." The trial court further found that the "parties" to the Lease included AIMCO/Bluffs and James Macias, and ordered the Ingolds to arbitrate their claims against these Defendants as well as the signatory to the Lease, Boulder Creek Apartments.

We issued a rule to show cause to consider whether the trial court erred by compelling the parties to arbitrate. At oral argument, the Defendants acknowledged that the trial court should not have ordered the Ingolds to arbitrate their claims against AIMCO/Bluffs and James Macias, because these Defendants are not parties to the Lease. 2 We therefore only consider the trial court's arbitration order as it applies to Boulder Creek Apartments.

The Ingolds present three principal issues for our consideration:

First, the Ingolds allege that they were fraudulently induced into entering the Lease, and therefore that they cannot be bound by the Lease's arbitration clause. We disagree. As explained in section II of this opinion, the Ingolds must arbitrate their claim of fraudulent inducement because it is directed to the enforceability of the Lease as a whole, not specifically to the Lease's arbitration provision.

Second, the Ingolds contend that their claims for relief fall outside the seope of the arbitration clause. In section III below, we find that all of the Ingolds' claims against Boulder Creek Apartments are arbitrable with the exception of their statutory claim for the wrongful withholding of their security deposit. This statutory claim cannot be arbitrated and must be resolved by the trial court.

Third, the Ingolds argue that the existence of multiple claims against multiple parties, less than all of which are arbitrable, precludes the arbitration of any of their claims against Boulder Creek Apartments, including those that fall within the seope of the parties' arbitration agreement. To support this argument, the Ingolds rely on the "intertwining doctrine" recognized in Sandefer v. District Court, 635 P.2d 547 (Colo.1981), overruled in part on other grounds by Sager v. District Court, 698 P.2d 250 (Colo.1985). Sandefer held that courts should not compel arbitration if the legal and factual issues raised by the arbitrable claims are "inextricably intertwined" with issues raised by non-arbitrable claims.

For the reasons explained in section IV below, we no longer believe that Colorado law supports the "intertwining doctrine," and we reject it by overruling Sandefer to the extent that it recognizes the doctrine.

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Cite This Page — Counsel Stack

Bluebook (online)
159 P.3d 116, 2007 Colo. LEXIS 445, 2007 WL 1532155, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ingold-v-aimcobluffs-llc-apartments-colo-2007.