May 21, 2019

Colorado Court of Appeals: Preliminary Injunction Appropriate Where HOA Board Amending Bylaws Without Proper Notice

The Colorado Court of Appeals issued its opinion in Anderson v. Applewood Water Association, Inc. on Thursday, November 3, 2016.

Homeowners Association—Open Meetings—Notice—Colorado Common Interest Ownership Act—Colorado Revised Nonprofit Corporations Act.

Plaintiffs filed for a preliminary injunction to enjoin defendant Applewood Water Association, Inc. (Association) from (1) conducting special meetings of the board of directors (board) in violation of its bylaws and (2) submitting an amended declaration of covenants for a full membership vote, based on their belief that the amended declaration illegally conveyed certain property rights. The owners presented evidence to support their contention that the board conducted special meetings without giving required notice set forth in the Colorado Common Interest Ownership Act (CCIOA) and the Colorado Revised Nonprofit Corporations Act (CRNCA). They also presented evidence that those meetings concerned amendments to existing covenants. The trial court denied both requests.

On appeal, the owners contended that the trial court erred as a matter of law when it found that it had no legal authority to enjoin future violations of civil statutes. The CCIOA and CRNCA create a legally protected interest in open meetings. The plain language of both statutes gives a court the authority to enjoin the violation of their provisions where a movant can show noncompliance and harm. Therefore, the trial court has the authority to enjoin the Association from holding special board meetings without providing the notice required under CCIOA and CRNCA. The trial court’s order as to that preliminary injunction request was reversed and the case was remanded for further factual findings.

The Court of Appeals concluded that the second injunction request is moot because a vote on the amended declaration has already occurred. That portion of the appeal was thus dismissed.

Summary provided courtesy of The Colorado Lawyer.

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