24CA1092 Marin Metro v Colorado Bondshares 06-12-2025
COLORADO COURT OF APPEALS
Court of Appeals No. 24CA1092 Arapahoe County District Court No. 22CV30866 Honorable Ben L. Leutwyler III, Judge
Marin Metropolitan District, a quasi-municipal corporation and political subdivision of the State of Colorado,
Plaintiff-Appellee,
v.
Colorado Bondshares – A Tax Exempt Fund and UMB Bank, N.A.,
Defendants-Appellants,
and
Century at Landmark, LLC,
Interested Party-Appellee.
JUDGMENT AFFIRMED
Division II Opinion by JUDGE SCHUTZ Fox and Harris, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced June 12, 2025
Anderson Notarianni McMahon LLC, Kimberly A. Bruetsch, Denver, Colorado, for Plaintiff-Appellee
Kutak Rock LLP, Neil L. Arney, Thomas W. Snyder, Kathleen F. Guilfoyle, Denver, Colorado, for Defendants-Appellants Fox Rothschild LLP, Marsha M. Piccone, Patrick J. Casey, Risa B. Brown, Denver, Colorado, for Interested Party-Appellee ¶1 This appeal arises from the latest lawsuit involving a special
district, owners of land within that district, the tax exempt fund
that purchased the bonds, and the bank that held the bond
proceeds in trust. See Landmark Towers Ass’n v. UMB Bank, N.A.,
2018 COA 100, ¶¶ 1-13 (Landmark).
¶2 In this case, Marin Metropolitan District (MMD), sought a
declaratory judgment holding that it could not be compelled to
impose a 2008 mill levy on approximately eleven acres of vacant
land (vacant land) owned by Century at Landmark, LLC (Century),
which is the only property that remains within MMD’s boundaries.
MMD named as defendants Colorado Bondshares — A Tax Exempt
Fund (Bondshares), which owns the bonds, and UMB Bank, N.A.
(UMB), which originally held the bond proceeds in trust.
Bondshares and UMB asserted various defenses and counterclaims
related to the enforceability of the bonds and mill levy. The suit
included Century as an interested third party.
¶3 The parties filed multiple motions for summary judgment. The
district court granted MMD’s motion in part and denied Bondshares
and UMB’s motions. The parties tried the remaining claims to the
court. After finding that the Century property derived no benefit
1 from the bond proceeds, the district court denied all of UMB and
Bondshares’ claims and entered judgment in favor of MMD.
¶4 Bondshares and UMB appeal the district court’s summary
judgment orders and its final judgment entered after the bench
trial. We affirm.
I. Background
¶5 Zachary Davidson developed property in the City of Greenwood
Village (Greenwood Village). By 2007, Davidson had constructed
two high-rise condominium towers (Landmark Towers) owned by
Landmark Towers Association, Inc. (Landmark), an entity which
Davidson controlled.
¶6 In 2007, Davidson, or one of his closely held development
entities, acquired the vacant land, which is adjacent to the
Landmark Towers. Davidson decided to form MMD to finance, own,
and manage the infrastructure necessary to develop the vacant
land. As a condition to obtaining Greenwood Village’s approval for
the formation of MMD, Davidson had to provide Greenwood Village
with a service plan that addressed the scope of the public
improvements to be built in the district, the amount of bonds that
2 would be required to fund the creation of those improvements, and
how those bonds would be repaid.
¶7 The service plan requirements created a problem for Davidson.
From the beginning, it was clear that, even once the vacant land
was fully developed and sold out, the properties on the vacant land
would not have a combined assessed value to provide sufficient
revenue to repay the bonds needed to fund the public
improvements. In short, a special district that included only the
vacant land was not financially viable.
¶8 So Davidson developed a fraudulent scheme. To gain
Greenwood Village’s approval for the formation of MMD, Davidson
included the Landmark Towers within MMD’s boundaries, thereby
providing a sufficient tax base to repay the bonds necessary to
develop the vacant land. Upon its inclusion in MMD, Landmark
Towers provided 90% of the assessed value of all of the property in
MMD, while the vacant land provided only 10%. But all of the
infrastructure proposed to be financed and operated by MMD was
located only on the vacant land. Based on the projected cash flows
created by the Landmark Towers, Greenwood Village authorized the
3 formation of MMD, including its authority to issue in excess of $30
million in bonds.
¶9 At the time MMD was formed, the individual condominiums at
Landmark Towers were in the process of being sold to the public.
As a condition to approve the service plan, Greenwood Village
required Davidson to notify these prospective purchasers of their
inclusion in MMD. Davidson failed to do so.
¶ 10 In 2008, MMD issued over $30 million in bonds to fund the
improvements. Bondshares purchased the bonds. MMD’s bond
resolution included a trust indenture stating that it would annually
impose a debt service mill levy on all taxable property within MMD
to generate the revenue necessary to satisfy the bonds and
associated interest. The proceeds from the sale of the bonds were
specially earmarked to fund the infrastructure improvements
contemplated by the MMD service plan.
¶ 11 UMB held the bond sale proceeds in trust. Davidson set up a
mechanism that allowed him to draw on the bond funds. He only
needed UMB’s approval for the reimbursements, not MMD’s. By the
end of 2008, Davidson had requested and received $8 million,
purportedly to fund construction of the infrastructure. However, no
4 improvements were ever built. Davidson misappropriated the bulk
of the $8 million for personal use.
¶ 12 In August 2009, MMD hired an independent engineer to
determine how much of the disbursed funds were eligible for public
expenses for tax purposes. The report eventually established that
some funds had been misappropriated and listed the expenses that
were potentially public expenditures.
¶ 13 Davidson’s company filed for bankruptcy in August 2009, and
Davidson personally filed for bankruptcy in early 2010. Late in
2012, Davidson was indicted for embezzlement and misuse of
public funds; he died by suicide shortly thereafter. UMB returned
the remaining bond proceeds it was holding (about $13 million) to
Bondshares. MMD imposed a mill levy on the property within the
district for six years, between 2008 and 2013. The district paid an
additional $13 million in principal and $11.5 million in interest to
Bondshares.
¶ 14 In 2011, Landmark sued MMD to prevent MMD from further
assessing the mill levy against the Landmark Towers
condominiums. After a bench trial in 2013, the trial court
permanently enjoined MMD from imposing the mill levy on the
5 condominiums. In 2018, a division of this court affirmed that
injunction in Landmark.
¶ 15 Century purchased the vacant land in 2016. At the time, the
injunction barring imposition of the mill levy was in full force and
effect. In 2021, Greenwood Village petitioned to exclude Landmark
Towers from MMD. The trial court granted the petition, and the
exclusion order took effect at the end of 2021. Thus, the vacant
land is the only property that remains part of MMD. MMD has no
funds with which to fund the public improvements contemplated by
MMD’s service plan and the bond indenture.
¶ 16 In 2020, Bondshares sent a letter to MMD’s counsel claiming
that MMD had an outstanding balance of approximately $18 million
that was “due and owing” under the trust indenture. The letter
asserted that MMD was still required to set a debt service mill levy
on the unimproved lot within the district to repay the bonds, and it
demanded MMD set a levy on the vacant land.
¶ 17 In 2022, MMD filed a complaint for the entry of a declaratory
judgment and injunctive relief to establish that Bondshares could
not compel MMD to impose a mill levy on the vacant land. Both
parties moved for summary judgment.
6 ¶ 18 The district court determined that MMD was entitled to the
entry of judgment on its claim that Bondshares was barred by the
doctrine of issue preclusion from relitigating Landmark’s holding
that the mill levy was a special assessment rather than an ad
valorem tax. The court also determined that MMD’s claims were
not barred by section 11-57-204, C.R.S. 2024, or section 31-25-
538(2), C.R.S. 2024. The court denied the parties’ competing
motions that hinged on the issue of whether the vacant land
received a benefit from expenses paid with the bond proceeds
because there were factual disputes regarding that issue.
¶ 19 The parties proceeded to trial to determine if the vacant land
benefitted from any improvements and related expenditures funded
by the bond proceeds. After the trial was completed, the court
entered detailed factual findings and legal conclusions from which it
determined that the vacant land did not benefit from any of the
bond expenditures and, therefore, imposition of the mill levy against
the vacant land would violate Century’s due process rights. Based
on this conclusion, in concert with its previous summary judgment
rulings, the court entered judgment in favor of MMD and against
Bondshares and UMB on all claims. The order declared that the
7 bond resolution and trust indenture are void and unenforceable,
the bond debt is discharged, and enjoined Bondshares and UMD
from attempting to compel MMD to impose a mill levy against the
vacant land.
II. Analysis
A. The Nature of the Mill Levy
¶ 20 Bondshares and UMB argue that the district court erred when
it concluded that the mill levy was a special assessment rather than
an ad valorem tax. The court held that Bondshares and UMB were
precluded from relitigating this issue, which was resolved by
Landmark.
¶ 21 We perceive no error in the district court’s conclusion that
issue preclusion barred Bondshares and UMB from relitigating the
determination that the mill levy was not an ad valorem tax.
Moreover, even if issue preclusion did not bar relitigation of the
issue, we conclude on the merits that the mill levy was a special
assessment, not an ad valorem tax.
8 1. Issue Preclusion
a. Standard of Review and Applicable Law
¶ 22 “The purpose of issue preclusion is to ‘bar relitigation of an
issue.’” Madalena v. Zurich Am. Ins. Co., 2023 COA 32, ¶ 21
(quoting Villas at Highland Park Homeowners Ass’n v. Villas at
Highland Park, LLC, 2017 CO 53, ¶ 29). Thus, issue preclusion
prevents parties from relitigating an issue that has already been
decided in a prior court proceeding, provided certain conditions are
met. Sunny Acres Villa, Inc. v. Cooper, 25 P.3d 44, 47 (Colo. 2001).
¶ 23 Issue preclusion applies if
(1) the issue sought to be precluded is identical to an issue actually determined in the prior proceeding; (2) the party against whom [issue preclusion] is asserted has been a party to or is in privity with a party to the prior proceeding; (3) there is a final judgment on the merits in the prior proceeding; and (4) the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior proceeding.
Id.
¶ 24 The application of “[i]ssue preclusion presents a question of
law that we review de novo.” Madalena, ¶ 25 (quoting Villas at
Highland Park Homeowners Ass’n, ¶ 26).
9 ¶ 25 Bondshares and UMB do not dispute that elements two, three,
or four were satisfied. Thus, we focus our analysis on the first
element.
b. The Parties’ Contentions
¶ 26 Bondshares and UMB argue that the issue they raised in the
district court regarding the mill levy is substantively different than
the issue they raised in the trial court in Landmark. Specifically,
they argue that in Landmark, the court determined that the levy
was a special assessment because the Landmark Towers were
included, without the residents’ knowledge, in the special district.
¶ 27 Now that the Landmark Towers property has been excluded
from the special district by court order, they argue, the levy is an ad
valorem tax as it relates to the vacant land. Bondshares and UMB
argue that Century purchased the vacant land knowing that it was
the sole remaining property in the special district and the
contemplated infrastructure was intended to benefit the vacant
land. They reason that the applicability of the mill levy to the
vacant land presents a different issue than Landmark decided.
10 c. Analysis
¶ 28 In applying the first element of issue preclusion to the facts of
this case, we conclude that the controlling question is whether the
decision in Landmark — that the mill levy is a special assessment,
rather than an ad valorem tax — resolves the same issue here. We
conclude it does.
¶ 29 The correct framing of the issue presented obviously dictates
the conclusion. Recognizing that reality, Bondshares and UMB
attempt to frame the issues in the two cases differently, arguing
that the issue decided by Landmark was whether the mill levy was a
special assessment as applied to the Landmark Towers property
while the question presented here was whether the mill levy was a
special assessment as applied to the vacant land.
¶ 30 But Bondshares and UMB’s attempt to reshape the issues
presented in both cases runs into multiple obstacles. First, the
division in Landmark concluded that “[t]he levy at issue in this case
funds purely local improvements directly and specifically benefiting
only the [vacant land]. It does not fund ‘the general expenses of
government.’ It is therefore a special assessment, not a tax.”
Landmark, ¶ 33 (footnote omitted) (quoting Bloom v. City of Fort
11 Collins, 784 P.2d 304, 307 (Colo. 1989)). No portion of Landmark
states that its conclusion that the mill levy is a special assessment
is limited only to the Landmark Towers property.
¶ 31 Second, Bondshares and UMB concede that the nature of the
mill levy must be assessed as of the time the mill levy was approved
by MMD. See Barber v. Ritter, 196 P.3d 238, 248 (Colo. 2008) (“To
determine whether a government mandated financial imposition is a
‘fee’ or a ‘tax,’ the dispositive criteria is the primary or dominant
purpose of such imposition at the time the enactment calling for its
collection is passed.” (citing Zelinger v. City & Cnty. of Denver, 724
P.2d 1356, 1358 (Colo. 1986))). And at that time, as the division in
Landmark concluded, the mill levy was not intended to generate any
revenue for constructing or operating improvements on the
Landmark Towers property.
¶ 32 Relatedly, Bondshares and UMB fail to cite any authority
holding that a mill levy, at the time of passage, may be a special
assessment as it relates to some portion of the property it is
intended to encumber but, at the same time, is an ad valorem tax
against other property in the district. MMD’s answer brief noted
the absence of any supporting authority on this central point. In
12 their reply brief, Bondshares and UMB acknowledge this void and,
even then, fail to cite any authority supporting their contention.
¶ 33 In the face of this void, Bondshares and UMB argue that
Landmark supports their position. Particularly, they note that
Landmark held that the “the formation of [MMD] . . . , and the
resulting levying of the Landmark [Towers] owners’ properties,
violated the Landmark [Towers] owners’ rights to due process.”
Landmark, ¶ 28. But the finding that the mill levy was a special
assessment that violated the Landmark Towers owners’ due process
rights does not support a conclusion that the levy was a special
assessment against Landmark Towers but an ad valorem tax on the
¶ 34 Bondshares and UMB next turn to the language in Landmark
stating that “the injunction doesn’t require [MMD] to impose taxes
on anyone or on any property. If [MMD] decides to impose a true
tax, it can exclude [Landmark Towers] from the District.” Id. at
¶ 48. Bondshares and UMB argue that this language supports
their contention that even though the levy is a special assessment
against the Landmark Towers property, it is an ad valorem tax
against the vacant land. But that’s not what the quoted language
13 says. Indeed, to the contrary, the use of the word “decides” and the
reference to excluding the Landmark Towers property suggests
something that could happen in the future. But MMD took no
further action to pass an ad valorem tax that would apply only to
the vacant land. Instead, Bondshares and UMB are trying to
unilaterally convert the mill levy from a special assessment into an
ad valorem tax without any subsequent enabling action being taken
by MMD. Neither Landmark nor any other authority cited by
Bondshares and UMB supports this position.
¶ 35 In sum, we conclude that Landmark’s holding that the mill
levy is a special assessment resolves the same issue presented here
— whether the mill levy is a special assessment or an ad valorem
tax. Thus, the first element of issue preclusion is satisfied, and
because the parties do not dispute the remaining elements, the
district court did not err by applying issue preclusion to preclude
Bondshares and UMB from now treating the mill levy as an ad
valorem tax.
¶ 36 Ad Valorem Taxes and Special Assessments
14 ¶ 37 In addition, treatment of the levy as a special assessment
rather than an ad valorem tax is consistent with the general
principles applicable to such taxes.
¶ 38 “An ad valorem tax is a tax upon various classes of real and
personal property located within the territorial limits of the taxing
authority.” Bloom, 784 P.2d at 307. An ad valorem tax must be
uniformly imposed on real property within the boundaries of the
taxing authority. Landmark, ¶ 42. Similarly, under the Colorado
Constitution, “[e]ach property tax levy shall be uniform upon all real
and personal property not exempt from taxation under this article
located within the territorial limits of the authority levying the tax.”
Colo. Const. art. X, § 3(1)(a).
¶ 39 In contrast, “[t]he essential characteristic of a special
assessment is that it must confer some special benefit to the
property assessed.” Bloom, 784 P.2d at 308. As the supreme court
explained,
The burden of the assessment falls on the property owners because “the benefits they receive from the particular improvements are different from the benefits they enjoy in common with other property owners.” Id. A special assessment for a local improvement, therefore, must specifically benefit or enhance
15 the value of the premises assessed “in an amount at least equal to the burden imposed.” [Reams v. City of Grand Junction, 676 P.2d 1189, 1194 (Colo. 1984)]; see also Satter v. City of Littleton, 185 Colo. 90, 97, 522 P.2d 95, 98 (1974); Pomroy v. Board of Public Waterworks, 55 Colo. 476, 479, 136 P. 78, 80 (1913). The funds generated by a special assessment cannot be diverted to other purposes, since the imposition of the assessment “upon a particular class of taxpayers can be justified only to the extent that such taxes are equivalent to special benefits conferred upon those taxpayers.” Reams, 676 P.2d at 119.
Bloom, 784 P.2d at 308.
¶ 40 Bondshares and UMB’s urged interpretation of the mill levy
would run contrary to the fundamental requirement that an ad
valorem tax must be uniformly imposed against the same class of
properties within the taxing authority. Instead, enforcement of the
mill levy as they urge would have required the mill levy to be treated
as an unenforceable special assessment against the Landmark
Towers, but as an ad valorem tax against the vacant land. This did
not and could not happen based on the requirements of an ad
valorem tax. See Colo. Const. art. X, § 3(1)(a).
¶ 41 The subsequent order excluding the Landmark Towers from
MMD also confirms that the mill levy was not and could not be
16 treated as an ad valorem tax. Under section 32-1-503(1), C.R.S.
2024,
For the purpose of retiring the special district’s outstanding indebtedness and the interest thereon existing at the effective date of the exclusion order, the special district shall remain intact, and the excluded territory shall be obligated to the same extent as all other property within the special district but only for that proportion of such outstanding indebtedness and the interest thereon existing immediately prior to the effective date of the exclusion order.
¶ 42 Despite the requirements of section 32-1-503(1), the exclusion
order did not and could not provide that Landmark Towers
remained liable for repayment of any portion of the subject bonds.
Thus, the requirement that an ad valorem tax must be uniformly
imposed against all property within the district at the time the debt
was incurred could not be effectuated when the bonds and mill levy
were authorized and cannot be effectuated now.
¶ 43 For these reasons, the conclusion that the mill levy is a special
assessment, in addition to being dictated by issue preclusion, is
mandated by the controlling legal distinctions between an ad
valorem tax and a special assessment. The district court therefore
did not err by concluding that the mill levy was — at the time it was
17 imposed — a special assessment, and it remains a special
assessment now notwithstanding the subsequent exclusion of
Landmark Towers from MMD.
¶ 44 Recognizing the likelihood of this conclusion, Bondshares and
UMB alternatively claimed in the district court that the mill levy
should be treated as an enforceable special assessment against the
vacant land because the proceeds from the bonds provided the
vacant land with material benefits. We turn now to that argument.
B. Value to Century Property
¶ 45 Recall that the district court denied the parties’ motions for
summary judgment with respect to whether the special assessment
provided value to the vacant land because the resolution of this
issue required the court to resolve disputed issues of fact. Thus,
the central purpose of the trial was to resolve this dispute. After
hearing the evidence, the district court made detailed factual
findings and concluded that the mill levy provided no value to the
vacant land and was therefore an unenforceable special
assessment. Bondshares and UMB appeal that finding.
18 1. Standard of Review
¶ 46 We apply a mixed standard of review to orders entered after a
trial before a judge. Jehly v. Brown, 2014 COA 39, ¶ 8. We review
the district court’s factual findings for clear error. Id. A factual
finding is clearly erroneous only when it lacks any support in the
record. Cronk v. Bowers, 2023 COA 68M, ¶ 12. We review the
court’s legal conclusions de novo. See Frisco Lot 3, LLC v. Giberson
Ltd. P’ship, LLLP, 2024 COA 125, ¶ 66.
¶ 47 We agree with Bondshares and UMB that the ultimate
conclusion of whether a special assessment provides a sufficient
benefit to a parcel of property to be enforceable presents a question
of law. See State Farm Mut. Auto. Ins. Co. v. Johnson, 2017 CO 68,
¶ 12. But we also agree with MMD that the answer to that question
turns on the court’s assessment of the evidence related to fact-
intensive issues, which we review for clear error. Id.
2. The Parties’ Contentions
¶ 48 Bondshares and UMB argue that the district court improperly
concluded that private expenditures and soft costs cannot be
considered a benefit, and that benefits must continue indefinitely to
be compensable. Bondshares and UMB also argue that the court
19 erred by not giving appropriate weight to evidence that MMD, after
learning of Davidson’s fraudulent conduct, procured a study for tax
purposes to assess whether any of the $8 million paid to Davidson
or his affiliated entities could be treated as eligible public expenses
as opposed to private expenditures.
¶ 49 MMD responds that the district court’s determination that the
$8 million in expenditures provided no benefit to the vacant land is
predicated on a series of factual findings that are supported by the
record. In addition, MMD argues that the district court did not
conclude that soft costs and private expenditures can never result
in benefits that are reimbursable. Rather, MMD argues, the court
simply concluded that the soft costs and private expenditures in
this case provided no benefit to the vacant land. As to the report
concerning potential benefits for tax purposes, MMD argues that
the district court correctly concluded that whether an expenditure
qualifies as a public expenditure for MMD’s tax purposes sheds no
meaningful light on whether the same expenditures provided a
benefit to the vacant land.
¶ 50 We agree with MMD on both the factual and legal contentions.
20 3. Analysis
¶ 51 In support of its conclusion that the expenditures provided no
benefit to the vacant land, the district court made extensive factual
findings, including the following:
• “The evidence and testimony presented at trial demonstrates
that the [vacant land] has received no benefit from the 2008
Bonds.”
• [MMD’s] accountant, who served in that capacity from early
2009 to 2022, testified that “no actual public infrastructure
was built, despite the expenditure of funds, and no benefit was
conveyed to the [vacant land] by those expenditures.”
• A Bondshares representative who visited the vacant land
several times stated he was not aware of any improvements
that were built on the vacant land, saying, “I’ll be honest with
you, I still don’t know what was actually built.”
• “Design, engineering, architecture, and other ‘soft’ costs
incurred by Davidson did not enhance the value of the [vacant
land]. . . . [N]obody has located these design plans, and in any
event, they have no value today.”
21 ¶ 52 Based on these findings, and many others, the district court
concluded that “no evidence has been presented that any actual
benefit has been conveyed to the [vacant land] from the expenditure
of bond funds by Davidson and/or [MMD].” There is a plethora of
record evidence to support this conclusion, and we therefore will
not disturb it.
¶ 53 We also reject Bondshares and MMD’s argument that the
audit for tax purposes has any bearing on the question of whether
expenditures made by Davidson or MMD provided any benefit to the
vacant land. We fail to see how a report assessing whether the
expenditures may be claimed as a “public expenditure” for tax
purposes informs the analysis of whether any of the expenditures
actually benefitted the vacant land. And Bondshares and UMB
provide no meaningful analysis to support their implicit contention
that the two assessments should be treated as interchangeable.
¶ 54 Finally, as illustrated by the court’s detailed factual findings, it
did not operate from an erroneous legal assumption that soft costs
and private expenditures can never qualify as a benefit to a special
district or the property located therein. Rather, the court found
22 only that the soft costs and private expenditures in this case have
not provided, and will not provide, any benefit to the vacant land.
¶ 55 We perceive no error in the district court’s conclusion that the
expenditures therefore did not provide a benefit to the vacant land
that would justify imposition of the mill levy. Recall that a special
assessment must not only provide a theoretical benefit to the taxed
property, but it must also provide a benefit that “specifically
benefit[s] or enhance[s] the value of the premises assessed ‘in an
amount at least equal to the burden imposed.’” Bloom, 784 P.2d at
308 (quoting Reams, 676 P.2d at 1194). Using this measure, we
perceive no error in the district court’s conclusion that the bonds
provided no benefit to the vacant land.
¶ 56 We also reject Bondshares and UMB’s argument that no due
process violation occurred even if the bonds provided no benefit to
the Century property because Century purchased the vacant land
with knowledge that the bond and mill levy resolution existed. In
making this argument, Bondshares and UMB draw on case law
developed in the context of a due process claim under the Takings
Clause of the Fifth Amendment. U.S. Const. amend. V (“[N]or shall
private property be taken for public use, without just
23 compensation.”). In that context, the supreme court has stated that
the “‘reasonable investment-backed expectations’ of the regulated
party is the dispositive factor in takings analysis when the regulated
party is ‘on notice’ of the extent of the government’s regulatory
authority over its property.” State Dep’t Health v. Mill, 887 P.2d
993, 1000 (Colo. 1994) (quoting Golden Pac. Bancorp v. United
States, 15 F.3d 1066, 1072 (Fed. Cir. 1994)). From there,
Bondshares and UMB assert that when Century purchased the
vacant land, the bonds and associated mill levy were public
knowledge, as was the fact that the vacant land was included in
MMD. Therefore, the argument continues, Century acquired the
vacant land with full notice that it was subject to the bonds and
mill levy and no due process violation occurred.
¶ 57 We reject these contentions for multiple reasons. First, MMD’s
claim that due process prohibited it from assessing the mill levy on
the vacant land was not based on the Takings Clause, or the case
law developed thereunder. Rather, the claim was based on
Colorado’s due process jurisprudence holding that a special
assessment cannot be imposed on property that does not receive a
commensurate benefit from the funds generated by the special
24 assessment. Bloom, 784 P.2d at 308. This analysis does not
depend upon whether the property owner had notice of the special
assessment prior to purchasing the subject property. Thus, UMB
and Bondshares’ argument is premised on a legal principle that
does not apply to this case.
¶ 58 Second, we disagree with the factual premise of the argument.
Century did not make its purchase knowing that the vacant land
alone would bear the burden of repaying the bonds, even though
the bonds provided no benefit to its property. Indeed, at the time of
the purchase, an injunction was in place prohibiting MMD from
imposing the mill levy. Moreover, the Landmark Towers property
remained in the district and the mill levy was passed based on the
assumption that the bonds would be repaid by imposing the mill
levy against both the vacant land and the Landmark Towers
property. Thus, the factual premise of Bondshares and UMB’s
takings argument is also unsupported.
¶ 59 We therefore reject Bondshares and UMB’s argument that the
district court’s due process ruling was wrong because Century
purchased the property with notice of the bonds and mill levy.
25 C. Statutes of Limitation
¶ 60 Bondshares and UMB argue that the district court erred by
rejecting their affirmative defense asserting that MMD’s claim for
declaratory relief was time barred under two different statutes. We
address each statute in turn.
1. Section 11-57-212, C.R.S. 2024
¶ 61 We review a district court’s statutory interpretation de novo.
Educhildren LLC v. Cnty. of Douglas Bd. of Equalization, 2023 CO
29, ¶ 27. In doing so, “[o]ur principal goal is to effectuate the
legislature’s intent. To do this, we ‘read a statutory scheme as a
whole, “giving consistent, harmonious, and sensible effect to all of
its parts,”’ and we ascribe plain and ordinary meaning to its terms.”
Id. (citations omitted). We must apply the statute as written and
may not add or subtract words. Nieto v. Clark’s Mkt., Inc., 2021 CO
48, ¶ 12.
¶ 62 Section 11-57-212 provides: “No legal or equitable action
brought with respect to any legislative acts or proceedings in
connection with the authorization or issuance of securities by a
public entity shall be commenced more than thirty days after the
authorization of such securities.”
26 ¶ 63 The 2008 bond resolution that authorized the issuance of the
bonds incorporated the statute. Because section 11-57-212
requires that a challenge to the “authorization or issuance of
securities by a public entity” be brought within thirty days,
Bondshares and UMB argue that MMD’s claim for declaratory and
injunctive relief concerning the bond indenture and mill levy was
time barred. MMD counters that the declaratory judgment action
does not challenge the resolution authorizing the issuance of the
bonds, but rather challenges imposition of a mill levy on the vacant
land because the bonds and associated mill levy provided no value
to that property.
¶ 64 The district court concluded that the statute did not apply to
MMD’s claims. The court agreed that MMD did not challenge the
legislative acts or proceedings associated with the authorization or
issuance of the bonds. Rather, MMD sought declaratory relief to
determine whether it could be compelled to impose an
unconstitutional special assessment against the vacant land. While
acknowledging that MMD’s claim was “tangentially” related to the
issuance of the bonds, the court concluded that the claim fell
27 outside the reach of section 11-57-212. We agree with the district
court.
¶ 65 Landmark addressed the applicability of section 11-57-212 to
Bondshares and UMB’s assertion that Landmark’s claim in that
case was time barred. In rejecting the assertion, the division
reasoned as follows:
[T]he argument fails on the merits. The statute applies, by its terms, to “the authorization or issuance of securities.” § 11- 57-212. Landmark, however, challenges, on constitutional grounds, the creation of [MMD] to include the Landmark [Towers] and the associated levies. We won’t expand the reach of the statute beyond the plain meaning of its language. See Denver Post Corp. v. Ritter, 255 P.3d 1083, 1089 (Colo. 2011) (if statutory language is clear, we apply the statute as written); Spahmer v. Gullette, 113 P.3d 158, 162 (Colo. 2005) (“We will not create an addition to a statute that the plain language does not suggest or demand.”).
Landmark, ¶ 22. We find this analysis persuasive.
¶ 66 Bondshares and UMB try to distinguish Landmark, reasoning
that the Landmark Towers owners were only challenging their
inclusion in the district. But, as the division in that case made
clear, it found section 11-57-212 not applicable because the
Landmark Towers owners were challenging “the creation of [MMD]
28 to include the Landmark [Towers] and the associated levies.” Id.
(emphasis added). And the Landmark division found the levy was
unenforceable against the Landmark Towers owners because the
levy was an unconstitutional special assessment. Id. at ¶ 33.
¶ 67 Here, MMD’s claim for declaratory relief was premised on the
contention that the levy was a special assessment that could not be
imposed on the vacant land because to do so would violate
Century’s due process rights. In evaluating whether MMD’s claim
fell within the reach of section 11-57-212, we see no material
distinction between the essence of MMD’s claim and the claim made
in Landmark.
¶ 68 The district court did not err by rejecting the argument that
section 11-57-212 barred MMD’s claims.
2. Section 31-25-538(2), C.R.S. 2024
¶ 69 Bondshares and UMB next argue that the district court erred
by concluding that section 31-25-538(2) did not bar MMD’s claims.
¶ 70 Section 31-25-538(2) provides that “[a]ny action brought with
respect to . . . levying of any assessments . . . taken under this part
5 shall be commenced within thirty days” of “issuing [the] bonds.”
§ 31-25-538(2). The district court held that the statute did not
29 apply because MMD’s claim was not brought under part 5 of title
31, article 25, which applies to “special improvement districts,” and
MMD is not a special improvement district. Moreover, the court
noted that MMD could not have been acting under part 5 because
the bond documents were completed before part 5 was amended to
allow special districts to establish a special improvement district.
¶ 71 On appeal, Bondshares and UMB assert that MMD cannot
have it both ways — that is, it cannot argue, on the one hand, that
the levy was a special assessment and also argue, on the other
hand that section 31-25-538(2) does not apply to its claim.
¶ 72 At first blush, Bondshares and UMB’s consistency argument
seems persuasive. But it fails on closer examination.
¶ 73 Bondshares and UMB do not argue that MMD is, or ever was,
a special improvement district. Indeed, they concede that it has
always been a special district. And Bondshares and UMB also
concede that in 2008, when the mill levy was authorized, special
districts like MMD were not authorized to act with the powers of a
30 special improvement district.1 Not surprisingly then, none of the
paperwork related to the bonds make any reference to section 31-
25-538(2). That is because MMD had no authority to act as a
special improvement district and did not purport to do so.
¶ 74 Nevertheless, Bondshares and MMD argue that the district
court was bound to apply section 31-25-538(2) as if MMD had been
created as a special improvement district before the resolution
authorizing the mill levy was passed. As we understand its
argument, it reasons that because Landmark concluded in 2018
that the mill levy was and is a special assessment, we must now
assume that MMD properly imposed a special assessment under
section 31-25-538(2) when it issued the bonds. Alternatively, they
contend that indenture and mill levy resolutions should be deemed
subject to section 31-25-538(2) as of 2018, when the Landmark
decision became final. But Bondshares and UMB cite no authority
supporting these arguments, and we are aware of none.
1 In 2009, special districts were granted authority to form special
improvement districts within their boundaries by following certain procedures. See § 32-1-1101.7, C.R.S. 2024; Ch. 81, sec. 2, § 32-1- 1101.7, 2009 Colo. Sess. Laws 298-99. The record contains no evidence that MMD ever formed a special improvement district within its boundaries.
31 ¶ 75 Ironically, during the course of the Landmark litigation, the
defendants in that case — including UMB — argued that the court
should refuse to recognize the mill levy as a special assessment
because MMD had no authority to impose special assessments. In
rejecting this argument, the division reasoned:
Defendants also argue the levy couldn’t have been a special assessment because, when [MMD] was created, special districts didn’t have statutory authority to impose special assessments. But the fact [MMD] wasn’t authorized to impose special assessments doesn’t mean it didn’t do so. As discussed, the nature of the levy is determined by its purpose and characteristics. If the purpose and characteristics of a levy show that it’s a special assessment, then that’s what it is. In the end, even if defendants are right about the state of the law at the time of the election, that means only that there’s another reason for declaring the special assessment invalid.
¶ 76 Landmark, ¶ 33 n.7. Switching horses, Bondshares and UMB
now ask us to apply section 31-25-538(2) as though MMD was
acting within its authority to impose a special assessment.
¶ 77 Bondshares and UMB’s current position is the product of
misinterpreting or misapplying the reasoning of Landmark. That
decision did not conclude that the mill levy was a properly
authorized special assessment in 2008, or that it became a properly
32 authorized special assessment once Landmark was announced.
Rather, the division concluded that MMD had no authority to
impose the special assessment that it sought to impose, whether in
2008 or 2018.
¶ 78 In sum, MMD took no action in this case as a special
improvement district, and nothing about the decision in Landmark
transforms the invalid special assessment into a validly authorized
and adopted special assessment within the purview of section 31-
25-538(2). Thus, the district court properly concluded that the
statute did not bar MMD’s declaratory judgment claim.
D. Bondshares and UMB’s Counterclaims
1. Colorado Constitution Article XI, Section 6(1)
¶ 79 Bondshares and UMB argue that article XI, section 6(1) of the
Colorado Constitution precluded MMD’s claim that the mill levy
could not be assessed against the vacant land. They argue that the
bonds were a general obligation debt that could not be repealed
until the indebtedness was “fully paid or discharged.”
¶ 80 We review de novo the district court’s interpretation of the
Colorado Constitution. Qwest Corp. v. Colo. Div. of Prop. Tax’n,
33 2013 CO 39, ¶ 11. The relevant portion of the Colorado
Constitution provides, “No political subdivision of the state shall
contract any general obligation debt by loan . . . except by adoption
of a legislative measure which shall be irrepealable until the
indebtedness therein provided for shall have been fully paid or
discharged.” Colo. Const. art XI, § 6(1).
b. Analysis
¶ 81 As we have previously concluded, the mill levy was and is a
special assessment. A general obligation debt exists only when
specific circumstances are satisfied, including that “the obligation
requires use of revenue from a tax otherwise available for general
purposes.” Fischer v. City of Colorado Springs, 260 P.3d 331, 335
(Colo. App. 2010). Consistent with its status as a special
assessment, the mill levy was not available for general purposes.
¶ 82 In an effort to avoid this conclusion, Bondshares and UMB
return to their argument that, when adopted, even though it was
not a general obligation debt with respect to the Landmark Towers
property, it was a general obligation debt as applied to the vacant
land. But we reject this contention for the reasons previously
stated: a tax cannot qualify as a general obligation against some of
34 the taxing authority’s property at the time that it is adopted while
simultaneously qualifying as a special assessment against other
property within the jurisdiction. The mill levy, since adoption, was
and remains a special assessment.
¶ 83 Thus, the district court did not err by rejecting the argument
that MMD’s declaratory judgment claim was barred by article XI,
section 6(1).2
2. Unjust Enrichment
¶ 84 Finally, Bondshares and UMB argue that the district court
erred by rejecting their unjust enrichment claim.
2 Having reached this conclusion, we need not and do not address
MMD’s alternative argument that the bonds have been discharged by virtue of the Landmark decision combined with the judgment entered in this case. At oral argument, counsel for MMD acknowledged that the entry of the district court’s declaratory order stating that the bond resolution and trust indenture are void and the debt was discharged was not necessary to resolve the question of whether the mill levy could be imposed against the vacant land. Bondshares and UMB did not directly appeal this declaration; instead they contested the declaration only as it relates to the enforcement of the mill levy against the vacant land. Having rejected those contentions regarding the enforceability of the mill levy on other grounds, we need not and do not reach the question of whether the district court erred by declaring the bond resolution and trust indenture void and the bond debt discharged.
35 ¶ 85 Bondshares and UMB argue that, even if the mill levy is an
unenforceable special assessment, the bond proceeds unjustly
enriched MMD. Therefore, they contend, they should be allowed to
recover against MMD under a theory of unjust enrichment because
“it would be inequitable for the benefit to be retained without
payment of the value.”
a. Standard of Review
¶ 86 “Unjust enrichment claims require that courts make extensive
factual findings to determine whether a party has been unjustly
enriched. Because careful consideration of particular
circumstances is required in unjust enrichment claims, we [review]
trial court determinations for abuse of discretion.” Lewis v. Lewis,
189 P.3d 1134, 1140 (Colo. 2008) (citation omitted).
¶ 87 We perceive no abuse of discretion in the district court’s
determination that MMD was not unjustly enriched.
¶ 88 As a starting point, all parties acknowledge the general
principle that equitable claims — such as unjust enrichment —
cannot be invoked to enforce a void contract with a governmental
entity. See Falcon Broadband, Inc. v. Banning Lewis Ranch Metro.
36 Dist. No. 1, 2018 COA 92, ¶¶ 47-48 (citing Normandy Ests. Metro.
Recreation Dist. v. Normandy Ests., Ltd., 553 P.2d 386, 388-89
(Colo. 1976)); Rocky Mountain Nat. Gas, LLC v. Colo. Mountain
Junior Coll. Dist., 2014 COA 118, ¶ 31 (“[W]here a contract is void
because it is not within a municipality’s power to make, the
municipality cannot be estopped to deny the validity of the
contract.”). But Bondshares and UMB rely on Normandy Estates to
argue that an unjust enrichment claim should be recognized under
the circumstances of this case. We conclude that their reliance on
Normandy Estates is misplaced.
¶ 89 In Normandy Estates, a special district approved and
disbursed bond proceeds to acquire an existing swimming pool and
the associated acreage, but the district did not pay the full
purchase price to the seller. 553 P.2d at 387-88. The special
district claimed the contract to purchase was not enforceable
because it had neglected to hold an election on the issue. Id.
¶ 90 The supreme court held that, although the contract was
invalid because the required election was not held, the seller was
nevertheless able to recover the land in question or the balance of
the purchase price because allowing the special district to keep the
37 land without paying the full, agreed-upon price would be unjust.
Id. at 389-90.
¶ 91 But the supreme court cautioned that the exception it was
recognizing was extremely narrow:
We note, however, that the recovery authorized by this decision is a limited one. The party dealing with the municipal entity must have acted in good faith, and the contract must be one not positively condemned by law, as distinguished from one which is merely invalid because of want of power to contract or because statutory procedure was not followed in its making. We hold, further, that there can be no recovery where the property is no longer in existence or identifiable, or where it cannot be restored to the plaintiff without serious damage to other property of the municipality.
Id. at 390 (citations omitted).
¶ 92 These conditions preclude the recognition of an unjust
enrichment claim in this case. The money is gone. MMD does not
retain any funds generated by the sale of the bonds. No
improvements were ever built on the vacant land. And we have
affirmed the district court’s findings that the portion of the bonds
that was paid out to Davidson or various vendors provided no
benefit to MMD or the vacant land. The remainder of the bond
proceeds were returned to MMD or used to reduce the interest and
38 principal of the bonds. Thus, the proceeds of the bonds are “no
longer in existence or identifiable.” Id.
¶ 93 Moreover, the district court concluded that the equities in this
case favor MMD:
[MMD] itself is a victim of Davidson’s self- dealing and fraud. Bondshares is a sophisticated institutional investor that knowingly took on higher risk investment opportunities; it knew that the Service Plan wasn’t feasible; knew that Davidson was exerting pressure to gain free use of the bond proceeds, but simply left it up to UMB to deal with that pressure; and, should have seen that there were virtually no controls in place regarding requests for payment by the District, which were in fact requests for payment by Davidson.
¶ 94 Given the district court’s detailed factual findings, which are
supported by the record, we cannot say that it abused its discretion
by rejecting Bondshares and UMB’s unjust enrichment claim.3
III. Disposition
¶ 95 The judgment is affirmed.
3 Given our disposition, we do not need to address Bondshares and
UMB’s argument that section 24-10-113(3), C.R.S. 2024, provides a mechanism to collect the sums it asserts remain due on the bonds. That statute provides a mechanism for a special district to impose a mill levy to satisfy a judgment. It is not relevant here because no judgment has been entered against MMD.
39 JUDGE FOX and JUDGE HARRIS concur.