Triple Crown at Observatory Village Ass'n v. Village Homes of Colorado, Inc.
2013 COA 150
Colo. Ct. App.2013Background
- Triple Crown at Observatory Village Association (Association) is a CCIOA common-interest community association organized as a nonprofit corporation; Village Homes was the declarant and drafted the 2004 Declaration.
- Article 14 of the Declaration required a multi-step claims process (notice, negotiation, AAA mediation, then AAA arbitration) for construction/design disputes and certain claims involving the declarant.
- The Association collected owner votes and recorded an amendment purporting to revoke Article 14 after a multi-stage voting process that extended beyond sixty days.
- The Association then sued the declarant for construction defects, CCPA violations, and fiduciary claims; the declarant moved to compel arbitration under Article 14.
- The trial court granted the motion to compel arbitration, finding the amendment ineffective because the Association failed to comply with the sixty-day CRNCA deadline for actions without a meeting.
- The Association appealed interlocutorily; the court of appeals affirmed and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument (Association) | Defendant's Argument (Declarant/Respondents) | Held |
|---|---|---|---|
| 1. Which statute controls the time limit for amending a declaration by action without a meeting: CCIOA or CRNCA? | CCIOA contains no time limit; the legislature intentionally omitted one so associations can vote indefinitely outside a meeting. | Because the association is a nonprofit corporation, the CRNCA procedures (including the 60‑day limit) supplement CCIOA. | CRNCA controls for nonprofit associations; the 60‑day CRNCA limit applies and the amendment was ineffective. |
| 2. Does CCIOA's grant of power to "institute, defend, or intervene in litigation" permit an association to be bound by mandatory arbitration provisions? | "Litigation" means judicial proceedings only; mandatory arbitration would infringe the statutory power to litigate. | "Litigation" can include arbitration; CCIOA’s powers should encompass alternative dispute resolution. | "Litigation" is ambiguous; construed in context to include arbitration, so Article 14 does not infringe the association's power. |
| 3. Does CCIOA § 38‑33.3‑302(2) invalidate a declaration provision (Article 14) that restricts an association's power to deal with the declarant? | Section 302(2) forbids provisions that impose unique restrictions on the association's power when dealing with the declarant, so Article 14 is invalid as to the declarant. | Section 302(2) bars restrictions unique to the declarant, but Article 14 applies to many parties, not just the declarant. | Section 302(2) forbids declarant‑specific restrictions, but Article 14 is broadly written to cover many parties; it therefore survives § 302(2). |
| 4. Can CCPA claims be compelled to arbitration? | The CCPA gives a right to a "civil action," which precludes waiver by arbitration; thus CCPA claims cannot be arbitrated. | The CCPA lacks a statutory nonwaiver provision; rights to a civil action may be waived by contract, so arbitration clauses may apply. | Because the CCPA contains no nonwaiver clause, its civil‑action language does not preclude enforcement of a valid arbitration agreement; CCPA claims may be arbitrated. |
Key Cases Cited
- Colo. Water Conservation Bd. v. Upper Gunnison River Water Conservancy Dist., 109 P.3d 585 (Colo. 2005) (statutory interpretation is reviewed de novo)
- Bd. of Cnty. Comm'rs v. Hygiene Fire Protection Dist., 221 P.3d 1063 (Colo. 2009) (statutes addressing same subject are construed together)
- Farmers Group, Inc. v. Williams, 805 P.2d 419 (Colo. 1991) (give words their plain and ordinary meaning)
- Peterman v. State Farm Mut. Auto. Ins. Co., 961 P.2d 487 (Colo. 1998) (Colorado favors arbitration)
- Guaranty Nat'l Ins. Co. v. Williams, 982 P.2d 306 (Colo. 1999) (issue preclusion can apply to arbitration when fairness factors are met)
- Judd Constr. Co. v. Evans Joint Venture, 642 P.2d 922 (Colo. 1982) (arbitration is efficient and encouraged)
- Ingold v. AIMCO/Bluffs, L.L.C., 159 P.3d 116 (Colo. 2007) (statutes with nonwaiver clauses can preclude arbitration)
- Lambdin v. Dist. Court, 903 P.2d 1126 (Colo. 1995) (same principle regarding nonwaiver provisions and arbitration)