2012 COA 137
Colo. Ct. App.2012Background
- RLND developed a private residential complex at Aspen Mountain with 8 hotel units, 8 affordable units, 3 commercial units, and 26 condominiums; 208 fractional interests were sold.
- PFW acquired an eighth interest in a four-bedroom condominium unit via Miller, who assigned to PFW in May 2008.
- Construction/closing were set for December 2008, but the market declined; PFW gave notice of rescission and demanded earnest money release.
- PFW asserted ILSFDA violations, breach of contract, and fraudulent inducement; the parties pursued arbitration on nine non-ILSFDA claims.
- Arbitrator ruled in RLND’s favor on the nine non-ILSFDA claims; PFW moved to vacate the arbitration award, which the court denied.
- The trial court later granted judgment in RLND’s favor on the ILSFDA claims in July 2011; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the interests are 'lots' under ILSFDA | PFW: interests are 'lots' under HUD guidance. | RLND: interests are not 'lots' because no exclusive possession. | PFW's ILSFDA claims fail; interests not 'lots' and exempt from registration. |
| Whether the arbitration award can be vacated for fraud | PFW: award procured by RLND’s concealment of improper registration. | RLND: issue belongs to arbitrator; proper basis to deny vacatur. | Trial court’s denial of vacatur affirmed; fraud issue not properly before court. |
Key Cases Cited
- Giralt v. Vail Village Inn Associates, 759 P.2d 801 (Colo. App. 1988) (interpretation of documents and de novo statutory interpretation)
- Winter v. Hollingsworth Properties, Inc., 777 F.2d 1444 (11th Cir. 1985) (HUD treatment of condos as lots with exclusivity concerns)
- Premier Farm Credit, PCA v. W-Cattle, LLC, 155 P.3d 504 (Colo. App. 2006) (read documents together; multiple documents in a single transaction)
- Bodansky v. Fifth on Park Condo, LLC, 635 F.3d 75 (2d Cir. 2011) (sale occurs when buyer signs purchase agreement; reliance on HUD guidance)
- Ingold v. AIMCO/Bluffs, LLC. Apartments, 159 P.3d 116 (Colo. App. 2007) (fraud generally; arbitrability and contract validity vs. arbitration clause)