2014 CO 80
Colo.2014Background
- Town of Parker formed Cherry Creek South Metropolitan District #1 to fund infrastructure at Stroh Ranch and levied development fees payable at building permit issuance.
- District and developer SRD entered a reimbursement agreement; over years the agreement was amended and in a Seventh Amendment (2000) the District assigned to SRD the right to receive future development-fee revenue, without expressly addressing whether assignee could increase fees or charge interest.
- SRD (later SDI) collected fees and increased them at the statutory 8% interest rate from the assignment date; SDI later sold property to Pivotal but retained the assigned fee rights for lots sold.
- SDI sued Pivotal (and E & T Li) for unpaid development fees; trial court awarded SDI the fees with 8% interest and attorneys’ fees; the trial court used “pledge” and “assign” interchangeably and did not question the District’s authority to assign.
- The Colorado Court of Appeals reversed, holding the Special District Act authorized pledges of revenue but—because pledge differs from assignment—did not authorize assignments, rendering the assignment void; it also questioned SDI’s ability to increase fees.
- Colorado Supreme Court granted certiorari, reversed the court of appeals, and held the Act expressly authorized assignment as a disposition of property; it remanded unresolved issues (including whether SDI could increase/charge interest and attorneys’ fees) to the court of appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Special District Act authorizes a district to assign future revenue rights | SDI: Act allows districts to "dispose of" property, which includes assigning rights to future revenue | Pivotal: Act only expressly authorizes pledges of revenue; assignment is different and thus not authorized | Assignment authorized: assignment is a disposition of intangible personal property under §32-1-1001(1)(f) |
| Whether express authorization to pledge limits other powers | SDI: Express pledge power does not implicitly preclude other powers; Act states listed powers are not limiting | Pivotal: Because statute expressly mentions pledge, assignment is precluded | Rejected: statute explicitly provides enumerated powers are not limiting (§32-1-1001(1)(n)) |
| Whether the right to receive future development fees is "property" within Act | SDI: Right to future revenue is intangible personal property and thus subject to disposition | Pivotal: "Real and personal property" limited to tangible items, so future revenue rights not covered | Held: Right to receive future fees is intangible personal property and falls within the power to dispose of property |
| Whether SDI could increase or charge interest on assigned fees (nondelegation) | SDI: Trial court found entitlement to statutory 8% interest when no agreement on rate existed | Pivotal: Allowing private party to set/increase fees delegatesthe district's legislative power to set fees | Not decided: Supreme Court reversed on statutory-authority ground and remanded; left fee-increase/interest and attorneys' fees issues to court of appeals for determination |
Key Cases Cited
- Colo. Dep't of Revenue v. Hibbs, 122 P.3d 999 (Colo. 2005) (standard of de novo review for statutory construction)
- South Fork Water & Sanitation Dist. v. Town of South Fork, 252 P.3d 465 (Colo. 2011) (special districts possess only statutory and necessary implied powers)
- Las Animas Cnty. High Sch. Dist. v. Raye, 356 P.2d 237 (Colo. 1960) (definition of property includes intangible rights)
- Farmers Acceptance Corp. v. DeLozier, 496 P.2d 1016 (Colo. 1972) (right to receive money due or to become due may be assigned)
- In re Marriage of Grubb, 745 P.2d 661 (Colo. 1987) (vested but unmatured rights to future payment constitute property)