Payne v. Ridgewood

• Court: Colorado Court of Appeals
• Decided: September 19, 2024
• Docket: 23CA1808
• Status: Unknown

Opinion

23CA1808 Payne v Ridgewood 09-19-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1808 Mesa County District Court No. 20CV30321 Honorable Richard T. Gurley, Judge

Frank Payne, Katherine Payne, Jim Brincefield, Linda Brincefield, Claudia Flight, Debby Warner, and Teresa Garner,

Plaintiffs-Appellants,

v.

The Ridgewood Heights Homeowners Association, Dennis Hoefer, Barbara Hoefer, Kim Suplizio, Vonnie Folkers, and Jan Logan,

Defendants-Appellees.

JUDGMENT AFFIRMED AND CASE REMANDED WITH DIRECTIONS

Division III Opinion by JUDGE YUN Dunn and Moultrie, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced September 19, 2024

Wegener Lane & Evans, P.C., Benjamin M. Wegener, Dalen B. Porter, Grand Junction, Colorado, for Plaintiffs-Appellants

Lasater & Martin, P.C., Janet B. Martin, Edward L. Shepyer, Greenwood Village, Colorado, for Defendants-Appellees ¶1 This construction defect case arises from a dispute between

the plaintiffs, Frank Payne, Katherine Payne, Jim Brincefield, Linda

Brincefield, Claudia Flight, Debby Warner, and Teresa Garner

(collectively, the homeowners), and the defendants,1 the Ridgewood

Heights Homeowners Association, Dennis Hoefer, Barbara Hoefer,

Kim Suplizio, Vonnie Folkers, and Jan Logan (collectively, the HOA).

The homeowners appeal the district court’s determination of a

question of law, certified as a final judgment under C.R.C.P. 54(b),

that they cannot recover damages associated with repairing or

replacing a common element in the Ridgewood Heights subdivision.

We affirm the judgment.

I. Background

¶2 The homeowners own property in the Ridgewood Heights

subdivision, which is a residential common interest community

subject to the Colorado Common Interest Ownership Act (the Act).

See § 38-33.3-103(8), C.R.S. 2024. The subdivision is governed by

1 The additional defendants Ridgewood Heights Development, LLC,

Linda Daly, Grand Junction Lincoln Devore, Inc., Edward Morris, Dynamic Hardscapes In Landscaping, LLC, and Jose Fuentes settled with the homeowners while this appeal was pending. As such, they are no longer part of this appeal.

1 the HOA pursuant to a “Declaration of Restrictions, Covenants and

Easements” (the declaration). Under the declaration, the HOA

owns, maintains, and manages various common elements in the

subdivision, including a retaining wall (the wall) that abuts the

homeowners’ properties.

¶3 After the construction of the wall in 2018, the homeowners

noticed various defects and signs of distress in the wall and

resulting damage to their backyards. Without consulting the HOA,

the homeowners retained an engineering expert to evaluate and

produce a report on repairing the wall. The expert determined that

the wall “exhibited significant construction deficiencies” that

“compromised the intrinsic strength of the wall and cannot be

corrected by means of partial repairs.” Accordingly, the expert

recommended either comprehensive repairs or full replacement of

the wall.

¶4 The homeowners sent the expert report to the HOA (and

notices of a construction defect claim to the dismissed defendants)

and demanded that they repair the wall and the damage to the

homeowners’ properties according to their expert’s specifications.

When the HOA refused, the homeowners filed suit in district court

2 asserting, as relevant here, claims of breach of fiduciary duty and

negligent supervision against the HOA.

¶5 Roughly half a year after the litigation began, the HOA

approved its own plans to repair the wall. The minutes from that

board meeting “expressed the hope that the proposed repairs would

satisfy [the homeowners] and that the suit [would] then be

dismissed.” But the homeowners were not satisfied and sought a

temporary restraining order to halt the repairs to the wall that had

recently begun. They alleged that the plans adopted by the HOA

would not alleviate the deficiencies their expert identified in the

wall. The court denied the motion, and the wall was repaired under

the plans adopted by the HOA. The HOA also had the damage to

the homeowners’ backyards and patios repaired at no cost to them.

¶6 However, this did not end the litigation. The homeowners

continued to have their retained expert inspect the newly repaired

wall and point out alleged deficiencies. Later, all defendants filed a

joint motion under C.R.C.P. 56(h), asking the court to determine as

a matter of law that the homeowners could not recover damages

associated with repairing or replacing the wall. Two of the

dismissed defendants also filed a motion for summary judgment on

3 damages, alleging that the homeowners had not produced any

evidence of damage to their properties after the wall was repaired.

¶7 The district court granted both motions and awarded the

defendants attorney fees for the motion for determination of law.

The homeowners filed a motion to reconsider or, in the alternative,

to certify the determination of law and summary judgment orders

as final under C.R.C.P. 54(b). The district court declined to

reconsider its orders but certified them — apart from attorney fees

and costs — as final, appealable judgments.2

¶8 The homeowners appealed both certified orders, but they later

settled with the defendants who prevailed on summary judgment.

2 The parties do not disagree that certification was appropriate

under C.R.C.P. 54(b). However, “we are obligated to raise and resolve the question of the legal sufficiency of the Rule 54(b) certification on our own motion.” Harding Glass Co. v. Jones, 640 P.2d 1123, 1126 (Colo. 1982). After conducting our own review, we are satisfied that (1) the certified orders dispose of entire claims for relief; (2) the orders resulted in the final disposition of the claims against the defendants who recently settled and the negligent supervision claim against the HOA; and (3) the district court did not abuse its discretion by finding “there is no just reason for delay in the entry of final judgment on these claims, given the length of time this litigation has been pending and the age of the Plaintiffs.” See Wolf v. Brenneman, 2024 CO 31, ¶ 16.

4 Accordingly, only the order granting the motion for determination of

law remains at issue for this appeal.

II. Analysis

¶9 The homeowners contend that the district court erred by

determining as a matter of law that they could not recover damages

associated with repairing or replacing common elements, including

the wall. We disagree.

A. Standard of Review

¶ 10 We review orders resolving a C.R.C.P. 56(h) motion de novo.

Henisse v. First Transit, Inc., 247 P.3d 577, 579 (Colo. 2011); see

also Gibbons v. Ludlow, 2013 CO 49, ¶ 11. We also review

declarations and statutes de novo. DA Mountain Rentals, LLC v.

Lodge at Lionshead Phase III Condo. Ass’n, 2016 COA 141, ¶ 16.

¶ 11 When reviewing a district court’s order addressing a C.R.C.P.

56(h) motion, we apply the same standards used by the district

court. Stapleton v. Pub. Emps. Ret. Ass’n, 2013 COA 116, ¶ 20; City

of Fort Collins v. Colo. Oil & Gas Ass’n, 2016 CO 28, ¶ 9. A district

court may enter an order deciding a question of law under Rule

56(h) “[i]f there is no genuine issue of any material fact necessary

for the determination of the question of law.”

5 B. Governing Law and the Declaration

¶ 12 We interpret declarations according to their plain language,

considering them as a whole and bearing in mind their intended

purpose. DA Mountain Rentals, ¶ 19. “If a declaration is clear on

its face, we will enforce it as written.” Id. (quoting Vista Ridge

Master Homeowners Ass’n v. Arcadia Holdings at Vista Ridge, LLC,

2013 COA 26, ¶ 18).

¶ 13 The declaration includes the following relevant provisions:

3.4. Common Elements. The Association holds title to the Common Elements, subject to the rights of the Owners . . . . [N]o Owner may alter or remove anything from . . . the Common Elements without the Board’s approval. . . .

....

9.2.1. Common Elements and Association Property. The Association is responsible for maintaining, repairing, and replacing the Common Elements . . . with the scope, scheduling, and specifications of maintenance being decided by the Board, including:

maintenance and repair of the Common Elements . . . ;

maintenance and repair of retaining walls, wherever located in the Development; . . .

6 9.7. Liability of the Association-Related Parties. . . . No Owner has a claim against the Association-Related Parties for reimbursement or otherwise for maintenance, repairs or replacements performed by that Owner, if the maintenance, repairs or replacements are the responsibility of the Association . . . .

¶ 14 The declaration defines “Association-Related Parties” as “the

Association, the Directors, the Officers and the Association’s

employees, agents and contractors, and the owners, managers,

directors, officers, employees, agents and contractors of each of

them.”

C. Discussion

¶ 15 The homeowners argue that the district court was wrong to

rule that they could not recover damages for repairing or replacing

the retaining wall because their claim against the HOA is for breach

of fiduciary duty, not for breach of the declaration. We are

unpersuaded.

¶ 16 Section 9.2.1. of the declaration states that the HOA “is

responsible for maintaining, repairing, and replacing the Common

Elements” and specifically includes retaining walls in that

responsibility. And section 9.7. precludes the homeowners from

bringing a claim against “Association-Related Parties,” including the

7 HOA, for “reimbursement or otherwise for maintenance, repairs or

replacements” of common elements the HOA is obligated to repair,

such as the wall. As these provisions are plain and unambiguous,

we are obligated to enforce them as written if they apply to the

homeowners’ claims against the HOA. See DA Mountain Rentals,

¶ 19.

¶ 17 The homeowners’ argument that their claim is for breach of

fiduciary duty and not for breach of the declaration is not a

meaningful distinction. As the homeowners themselves state in

their complaint, the “[w]all is within the subdivision that is operated

by the Ridgewood HOA” and their ownership interests in the wall

stem from their membership in the HOA. And they initiated this

action “[d]ue to the inaction of the Ridgewood HOA in remedying the

[w]all’s defects and deficiencies,” an obligation imposed by section

9.2.1. of the declaration. Thus, the homeowners initiated this

action to defend their perceived interests and rights under the

declaration and the Act. Cf. Cody Park Prop. Owners’ Ass’n v.

Harder, 251 P.3d 1, 8 (Colo. App. 2009) (awarding attorney fees

under the Act where a homeowners association declaration was the

basis of the complaint and the plaintiff brought the claims to

8 “enforce its perceived rights under the [declaration,]” irrespective of

how the claims were labeled).

¶ 18 Similarly, the HOA’s fiduciary duty to the homeowners — to

the extent it exists — arises from the declaration and the Act. See

§ 38-33.3-113, C.R.S. 2024 (imposing an obligation of good faith);

§ 38-33.3-303(2)(a), (b), C.R.S. 2024 (board members appointed by

the declarant must act as fiduciaries of owners, but board members

not appointed by the declarant are liable only for wanton and willful

acts or omissions). Further, section 9.7. is not as narrow as the

homeowners suggest. It states that “[n]o Owner has a claim against

the Association-Related Parties,” which explicitly include the HOA,

and nowhere does it narrow the definition of “claim” only to claims

for breach of the declaration.

¶ 19 Applying section 9.7. to this case, the homeowners cannot

recover damages for repairing and/or replacing the wall under

either their breach of fiduciary duty or negligent supervision claim

against the HOA. First, at oral argument, the homeowners’ counsel

conceded that the only damages they seek through their negligent

supervision claim are those associated with repairing the wall. As

such, section 9.7. bars the homeowners’ negligent supervision claim

9 against the HOA. Second, to the extent that the homeowners seek

to recover damages for repairing and/or replacing the wall under

their breach of fiduciary duty claim against the HOA, those

damages are again barred by section 9.7.

¶ 20 Accordingly, the district court did not err by concluding that,

under the declaration, the homeowners “do not have the right

and/or ability to collect damages associated with repairing and/or

replacing . . . the retaining wall at issue in this case as a matter of

law.”

III. Disposition

¶ 21 The judgment granting the motion for determination of

question of law is affirmed. The case is remanded with directions

for the district court to dismiss the negligent supervision claim

against the HOA and to proceed with the homeowners’ remaining

fiduciary duty claims for damages not associated with repairing

and/or replacing the wall.

JUDGE DUNN and JUDGE MOULTRIE concur.