Thomas Seaman v. Heather Gardens Association

CourtColorado Court of Appeals
DecidedDecember 28, 2023
Docket22CA2103 & 23CA0372
StatusPublished

This text of Thomas Seaman v. Heather Gardens Association (Thomas Seaman v. Heather Gardens Association) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thomas Seaman v. Heather Gardens Association, (Colo. Ct. App. 2023).

Opinion

The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.

SUMMARY December 28, 2023

2023COA125

No. 22CA2103 & 23CA0372, Seaman v. Heather Gardens — Real Property — Colorado Common Interest Ownership Act — Association Records

In this civil action involving the Colorado Common Interest

Ownership Act (CCIOA), §§ 38-33.3-101 to -402, C.R.S. 2023, a

division of the court of appeals determines, as a matter of first

impression, that a unit owners’ association’s bank statements may

constitute “[d]etailed records of receipts and expenditures affecting

the operation and administration of the association” under section

38-33.3-317(1)(a), C.R.S. 2023. The division further concludes that

records generated by a third party, such as a bank, may be records

an association “maintain[s]” and must make available for

examination and copying by a unit owner under section 38-33.3-

317(2). Thus, the division concludes that the district court erred by dismissing plaintiff’s amended complaint on the basis that bank

statements cannot, as a matter of law, be records that a unit

owners’ association is required to maintain and produce for

inspection to a unit owner under section 38-33.3-317(1)(a) and (2).

Consequently, the division reverses the judgment dismissing

plaintiff’s complaint and remands for further proceedings. COLORADO COURT OF APPEALS 2023COA125

Court of Appeals Nos. 22CA2103 & 23CA0372 Arapahoe County District Court No. 22CV31637 Honorable Elizabeth Beebe Volz, Judge

Thomas Seaman,

Plaintiff-Appellant,

v.

Heather Gardens Association, a Colorado nonprofit corporation,

Defendant-Appellee.

JUDGMENT AND ORDER REVERSED AND CASE REMANDED WITH DIRECTIONS

Division VII Opinion by JUDGE BROWN Tow and Schock, JJ., concur

Announced December 28, 2023

Robinson Waters & O’Dorisio, P.C., Kimberly A. Bruetsch, Mike Lazar, Denver, Colorado, for Plaintiff-Appellant

The Hustead Law Firm, Patrick Q. Hustead, Aaron M. Bell, Jason J. Patel, Denver, Colorado, for Defendant-Appellee ¶1 The legislature enacted the Colorado Common Interest

Ownership Act (CCIOA), §§ 38-33.3-101 to -402, C.R.S. 2023, in

part to “establish a clear, comprehensive, and uniform framework

for the creation and operation of common interest communities.”

§ 38-33.3-102(1)(a), C.R.S. 2023. Common interest communities

are managed by unit owners’ associations organized under section

38-33.3-301, C.R.S. 2023.

¶2 Section 38-33.3-317, C.R.S. 2023, provides that unit owners

are entitled to reasonable access to information about the

operation, administration, and finances of their unit owners’

association. To that end, section 38-33.3-317(1) obligates an

association to “maintain” eighteen categories of records — in

addition to any records specifically defined in the association’s

declaration or bylaws, or expressly required by section

38-33.3-209.4(2), C.R.S. 2023 — “for purposes of document

retention and production to owners.” § 38-33.3-317(1)(a)-(p).

¶3 Plaintiff, Thomas Seaman, appeals the district court’s order

dismissing his complaint against defendant, Heather Gardens

1 Association (HGA).1 Seaman sought an injunction compelling HGA

to make certain bank statements available to him for examination

under CCIOA.2 He contends that the court erred by dismissing his

complaint on the basis that section 38-33.3-317 does not require

HGA to produce the bank statements.

¶4 Resolving Seaman’s contention requires us to determine, as a

matter of first impression, whether bank statements may be

“[d]etailed records of receipts and expenditures affecting the

operation and administration of the association” under section

38-33.3-317(1)(a). Based on the plain language of the statute, we

conclude that bank statements may constitute such records. We

further conclude that records generated by a third party, such as a

bank, may be records an association “maintain[s]” and must make

available for examination and copying by a unit owner under

section 38-33.3-317(2)(a). Consequently, we conclude that the

1 Our references to Seaman’s complaint are to his first amended

complaint, which is the operative complaint. 2 Seaman’s complaint also requested a penalty under section 38-

33.3-317(4.5), C.R.S. 2023, which states that an association must allow inspection or copying of the applicable records within thirty days or be subject to penalties. That claim is not before us on appeal and should be addressed on remand.

2 district court erred by dismissing Seaman’s complaint under

C.R.C.P. 12(b)(5). We reverse the judgment and remand for further

proceedings.3

I. Background and Procedural History

¶5 HGA is a nonprofit corporation that manages Heather

Gardens, an age-restricted senior living community. The parties

agree that HGA is subject to CCIOA and that Seaman is a property

owner and resident of Heather Gardens. See § 38-33.3-103(3), (31),

C.R.S. 2023.

¶6 According to Seaman’s complaint, in April 2020, HGA applied

for a loan under the Paycheck Protection Program (PPP) and

received funds in the amount of $1,085,800. It opened a new

account at KeyBank to hold and manage the PPP funds. And in

July 2021, it applied for and received forgiveness of the PPP loan.

¶7 In June 2022, Seaman requested copies of HGA’s records

including, as relevant here, bank statements for the KeyBank

account in which it held the PPP funds. HGA provided Seaman

3 Because we reverse on this basis, we decline to address Seaman’s

alternative argument that section 38-33.3-317(2) requires an association to produce “all records” it maintains, regardless of whether such records fall within a category listed in subsection (1).

3 with copies of balance sheets showing the PPP funds as an asset

titled “Cash – Key Bank PPP Proceeds” with varying balances, but it

declined to provide the bank statements, explaining that “[b]ank

statements are not records of the association that must be kept or

made available for inspection/copying by owners.”

¶8 In August, Seaman filed a complaint in the district court

seeking an injunction requiring HGA to produce the requested bank

statements. HGA moved to dismiss under C.R.C.P. 12(b)(5),

arguing that section 38-33.3-317 does not require it to maintain or

produce bank statements for inspection and copying. It further

argued that the statute does not require it to maintain and make

available records created by a third party, such as a bank.

¶9 The district court granted the motion to dismiss, concluding

that bank statements “[c]learly” are not “[d]etailed records of

receipts and expenditures affecting the operation and

administration of the association” under section 38-33.3-317(1)(a)

and are not otherwise listed among the categories of records an

4 association is required to maintain under subsection (1).4 The

court acknowledged that the purpose of section 38-33.3-317 is “to

provide owners with access to information about the operation of

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Thomas Seaman v. Heather Gardens Association, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-seaman-v-heather-gardens-association-coloctapp-2023.