March 25, 2019

Colorado Court of Appeals: Condominium Declarations Control Over Contrary Provision in CCIOA

The Colorado Court of Appeals issued its opinion in Francis v. Aspen Mountain Condominium Association, Inc. on Thursday, February 23, 2017.

Condominium Declaration—Common Expenses—Amendment—Colorado Common Interest Ownership Act—Motion for Leave to Amend—Indispensable Parties.

The Francis parties are trusts and their fiduciaries and other individuals with ownership interests in the Aspen Mountains Condominiums. The parties’ dispute arose from a contested 2010 vote that amended the original 1972 condominium declaration to reallocate the common interest shares and common expenses. The 1972 declaration had originally allocated common interest shares and common expenses based on unit size, and the amended declaration reallocated common interest shares equally among all units. Common expenses increased for the Francis parties, and they later filed suit, seeking a judgment voiding the reallocation of the common interest shares. The trial court ruled in favor of the Aspen Mountain Condominium Association, Inc. (AMCA), finding that the 2010 amendment had been properly adopted.

On appeal, the Francis parties first contended that the trial court erred by partially granting AMCA’s motion for a determination of law. Here, the declaration required a unanimous vote to alter the percentage of the undivided interests in the general common elements. The trial court erred by holding that the Colorado Common Interest Ownership Act, which went into effect in 1992, nullified the 1972 declaration’s requirement of a unanimous vote to alter ownership interests in the common elements.

The Francis parties also contended that the trial court erred in denying their motion for leave to amend the complaint to assert additional breach of fiduciary duty claims against AMCA. The motion was submitted after the discovery deadline and only a few months before trial. Further, the case had been pending for more than five years, and the Francis parties had already amended the complaint five times and could have added the newly asserted claim at any point. Therefore, the court did not abuse its discretion in denying leave to amend.

Next, the Francis parties argued that the trial court erred by denying their CRCP 59(a) motion to amend the judgment based on failure to join as indispensable parties the beneficiaries of the various trusts included among the Francis parties. The proposed additional parties were alleged to be beneficiaries of trusts that were already parties to the action and were represented by their respective trustees. As a matter of law, the beneficiaries’ interests were sufficiently protected by the trustees’ participation in the action on their behalf.

The judgment was affirmed in part and reversed in part, and the case was remanded with directions.

Summary provided courtesy of The Colorado Lawyer.

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