2013 COA 144
Colo. Ct. App.2013Background
- Declarant (Village Homes) created Triple Crown homeowners association (a Colorado nonprofit) and recorded a Declaration containing Article 14: a predispute arbitration procedure for construction-related claims that could be amended only by a 67% member vote and CCIOA compliance.
- Association sought to revoke Article 14 after construction-defect disputes arose, obtained member consents over time (48% within 60 days; 67% within 120 days), recorded an Amendment, and sued the Village Defendants on multiple theories including negligence and CCPA violations.
- Village Defendants moved to enforce Article 14, arguing the revocation was invalid because CRNCA §7-127-107(2) requires the requisite written consents to be obtained within 60 days for action without a meeting.
- Association countered that CCIOA’s amendment-by-consent provision (no 60-day limit) governs and that CCPA claims are not arbitrable; it raised other statutory challenges to Article 14’s enforceability.
- The district court compelled arbitration, holding that the association — organized as a nonprofit under CCIOA — is subject to supplemental corporate law (CRNCA) and thus the 60-day rule invalidated the revocation; it also held the CCPA claims arbitrable.
- The district court certified three questions under C.A.R. 4.2; the court of appeals granted interlocutory review, finding the questions unresolved, controlling, and that immediate review would avoid potentially wasteful arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CCIOA §38-33.3-217 (no time limit for amendment-by-consent) supersedes CRNCA §7-127-107 (60-day time limit for action without meeting) | CCIOA governs declaration amendments; no 60-day limit applies so revocation valid | CRNCA applies to a nonprofit association organized under CCIOA and supplements CCIOA; the 60-day limit controls so revocation invalid | Court accepted interlocutory review as the question is unresolved and controlling; on merits to be addressed later |
| Whether CCIOA prohibits a declaration from limiting association power to deal with declarant (so an arbitration clause applying only to declarant is void) | (Association argued constraints render parts of Article 14 unenforceable as to non-declarant parity concerns) | (Defendants maintained the arbitration clause is valid as written) | Certified as an unresolved controlling legal question for interlocutory review |
| Whether CCPA claims are subject to a predispute arbitration clause in the Declaration | CCPA claims are not arbitrable (relying on Ingold, Lambdin) | CCPA claims are arbitrable under the Declaration | District court held CCPA claims arbitrable; court of appeals accepted interlocutory review of the legal question |
| Whether an order compelling arbitration is properly reviewable by interlocutory appeal under C.A.R. 4.2 notwithstanding the UAA’s appellate provision | Association invoked C.A.R. 4.2 to obtain interlocutory review to avoid wasteful arbitration | Dissent argued UAA limits interlocutory appeals to orders denying motions to compel arbitration, so this appeal conflicts with UAA policy favoring quick arbitration | Majority held C.A.R. 4.2 and §13-4-102.1 permit interlocutory review, harmonizing statutes and rejecting the argument that the UAA precludes such review |
Key Cases Cited
- Kuehner v. Dickinson & Co., 84 F.3d 316 (9th Cir. 1996) (order compelling arbitration can be a controlling interlocutory question when it may cause needless litigation in a powerless forum)
- S.A. Mineracao Da Trindade-Samitri v. Utah Int’l Inc., 745 F.2d 190 (2d Cir. 1984) (affirming that orders compelling arbitration present controlling legal questions when they materially affect litigation conduct)
- J.P. Meyer Trucking & Constr., Inc. v. Colorado Sch. Dists. Self Ins. Pool, 18 P.3d 198 (Colo. 2001) (interpreting Uniform Arbitration Act as authorizing appeals of orders denying motions to compel arbitration)
- Radil v. Nat’l Union Fire Ins. Co., 233 P.3d 688 (Colo. 2010) (supreme court entertained review of arbitration-related orders under C.A.R. 21)
- Ferla v. Infinity Dev. Assocs., LLC, 107 P.3d 1006 (Colo. App. 2004) (discussing limits on interlocutory review under the UAA and policy favoring arbitration)
- Ingold v. AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 116 (Colo. 2007) (authority relied on by plaintiff regarding arbitrability of consumer-protection claims)