April 24, 2019

Colorado Court of Appeals: Clear Language of Statute Precludes Appellate Review of Special District’s Creation

The Colorado Court of Appeals issued its opinion in Marin Metropolitan District v. Landmark Towers Association, Inc. on Thursday, March 27, 2014.

Special Metropolitan District—CRS § 32-1-305(7).

In 2007, a developer and five affiliated individuals (organizers) commenced proceedings under CRS §§32-1-101 to -1807 to form a special metropolitan district within the boundaries of Greenwood Village. The organizers filed a service plan with the municipality, and the city council approved it.

On September 5, 2007, a petition for organization was filed with the Arapahoe County District Court pursuant to CRS §32-1-301 and a hearing was set for October 4, 2007. Notice was published in the local newspaper and the clerk of the court issued a notice of the hearing. At the hearing, the district court entered an order directing an organizational election be held on November 6, 2007. The election was held, and on December 6, 2007, the district court entered findings and an order and decree creating the special district. The order included within the special district the Landmark Towers Association (Landmark) condominium properties, which were under construction. Approximately 130 people were under contract to purchase, but no sales had been completed.

Landmark alleged it was not until several years after the Marin Metropolitan District (District) was formed that the owners discovered facts indicating that the District had been organized through alleged misrepresentations and an asserted fraud on the court. In 2012, Landmark intervened and moved pursuant to CRCP 60(b)(2), (3), and (5) to set aside the December 2007 order for alleged fraud on the court, a lack of subject matter jurisdiction to approve the special district, and invalidity of the order due to lack of due process. The court held a three-day evidentiary hearing and issued an order on December 17, 2012 dismissing Landmark’s motion pursuant to CRS §32-1-305(7).

On appeal, the Court of Appeals reviewed the pertinent provisions of the statutory scheme for creating a special district. Landmark argued that regardless of CRS §32-1-305(7), a court has inherent power to vacate a void judgment notwithstanding a statutory time bar; has jurisdiction to set aside a previously entered order based on fraud on the court; and has a duty to provide constitutional due process, providing jurisdiction to set aside an order that is void for lack of notice and an opportunity to be heard. The Court disagreed.

CRS §32-1-305(7) is clear and unambiguous that once an order establishing a special district is entered, it “shall be deemed final, and no appeal or other remedy shall lie therefrom.” There is one exception for an action in the nature of quo warranto commenced by the attorney general within thirty days after entry of the organizational order. Finally, the subsection mandates that the organization of the district “shall not be directly or collaterally questioned in any suit, action, or proceeding except as expressly authorized in this subsection (7).” This jurisdictional issue was dispositive. Accordingly, the order was affirmed.

Summary and full case available here.

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