June 26, 2019

Colorado Court of Appeals: Plaintiff Need Not Post Bond in Every Land Use Appeal Under C.R.C.P. 106

The Colorado Court of Appeals issued its opinion in Stor-N-Lock Partners Inc. v. City of Thornton on Thursday, May 3, 2018.

Administrative Law—C.R.C.P. 106—Specific Use Permit—Zoning Regulations—Evidence—Bond—Preliminary Injunction.

Plaintiff, Stor-N-Lock Partners #15, LLC (Stor-N-Lock), owns a self-storage facility located in the City of Thornton (the City). The Stor-N-Lock facility is located next to vacant property. Defendant Resolute Investments, Inc. (Resolute) contracted to buy the vacant property and then sought a specific use permit from the City to operate a self-storage facility there. The City granted the permit. Stor-N-Lock appealed the City’s decision to the district court under C.R.C.P. 106. While the case was pending in district court, Resolute filed a motion to require Stor-N-Lock to post a bond, theorizing that by filing the Rule 106 action, Stor-N-Lock had effectively obtained an injunction. The district court summarily denied the motion and affirmed.

On appeal, Stor-N-Lock argued that the City granted the permit in violation of its own zoning regulations, because the City failed to find that Resolute’s use of the property as a self-storage facility enhanced Stor-N-Lock’s property. However, the record evidence supports the City Council’s determination that the proposed use of the property would contribute to, enhance, or promote the welfare of adjacent properties, including Stor-N-Lock’s property. This evidence was sufficient to clear Rule 106(a)(4)’s low no-competent-evidence bar. Thus, the City Council did not abuse its discretion in granting the permit.

On cross-appeal, Resolute argued that although Stor-N-Lock did not seek a preliminary injunction, and the district court did not enjoin Resolute’s use of the property in any way, Stor-N-Lock should nonetheless have been ordered to post a bond when it initiated its Rule 106 action in the district court. Resolute argued that the mere filing of the action increased the financial risk associated with the project and thus created an “effective stay” of its development plan. However, a plaintiff is required to post a bond only when a restraining order or preliminary injunction has been entered . Here, Stor-N-Lock did not seek injunctive relief or a temporary restraining order and therefore was not required to post a bond. The district court did not err in denying Resolute’s motion to require security.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

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