2015 COA 90
Colo. Ct. App.2015Background
- In 1998 the McMullins platted a 30-acre subdivision (Two Rivers Estates) creating seven lots and 17 acres of Common Open Space (COS); the final plat placed maintenance responsibilities on a "homeowners association."
- The McMullins later sold the seven lots (to the Hauers, Conrados, and Lincoln Trust) but never formally created or incorporated a homeowners association and did not separately convey or encumber the 17-acre COS.
- The Hauers (individually and on behalf of an unincorporated Two Rivers HOA) sued to quiet title to the COS, arguing the recorded plat, subdivision agreement, deeds, and related documents together constituted a declaration under CCIOA creating an implied common interest community and vesting COS ownership in the HOA.
- The McMullins counterclaimed that no common interest community was formed, no HOA was created, and they retain title to the COS.
- The trial court found an implied common interest community and an unincorporated HOA with appurtenant interests (each lot owner responsible for one-seventh of common expenses), quieted title to the COS in the HOA, and awarded plaintiffs attorney fees for discovery violations. The appellate majority affirmed; Judge Gabriel dissented on the implied-community ruling but concurred as to fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a common interest community was created under CCIOA by the recorded documents | Plat, subdivision agreement, deeds and land-sale contract together are "declarations" under CCIOA and imply assessment authority, creating a common interest community | No signed, complete declaration was recorded; the statutory requirements for a declaration were not satisfied, so no community exists | Affirmed: recorded plat, subdivision agreement, deeds and related documents collectively satisfied CCIOA as an implied declaration and created a common interest community |
| Whether an unincorporated homeowners association exists and holds title to COS | Declarations showed intent to create an HOA responsible for common property; equity permits an unincorporated HOA and appurtenant interests were conveyed with lots | No formal association was formed or organized; title to COS was never conveyed to any HOA | Affirmed: court may recognize an unincorporated HOA by implication and infer appurtenant interests in COS (each lot has one‑seventh) |
| Whether individual warranty deeds conveyed the COS to lot owners | Lot conveyances referencing the recorded plat conveyed an appurtenant undivided interest in COS to each lot owner | Warranty deeds did not expressly convey COS and thus did not transfer title | Trial court inferred conveyance appurtenant to each lot via the plat and related documents; appellate court affirmed that appurtenant interests were conveyed |
| Whether attorney fees for discovery sanctions were properly awarded under C.R.C.P. 37 | Plaintiffs sought fees for defendants' failures to timely and fully disclose discovery; fees authorized by Rule 37(a)(4) | Defendants argued award required specific finding of prejudice | Affirmed: awarding fees under Rule 37(a)(4) does not require an explicit prejudice finding; trial court did not abuse discretion |
Key Cases Cited
- Evergreen Highlands Ass'n v. West, 73 P.3d 1 (Colo. 2003) (declared that assessment authority and common-interest community status may be implied from recorded declaration materials when an association is created but lacks a funding mechanism)
- Hiwan Homeowners Ass'n v. Knotts, 215 P.3d 1271 (Colo. App. 2009) (found mandatory assessment provisions in recorded declarations sufficient to create a common interest community even without common property)
- Abril Meadows Homeowner's Ass'n v. Castro, 211 P.3d 64 (Colo. App. 2009) (addressed signature/recording formalities for declarations and invalidity of unsigned declaration)
- DeJean v. Grosz, 412 P.3d 733 (Colo. App. 2015) (explained courts may create implied homeowners associations where developer intent appears in declarations)
- Sun Valley Land & Minerals, Inc. v. Hawkes, 66 P.3d 798 (Idaho 2003) (rejected property rights in COS where no HOA was ever formed and no conveyance occurred)