Vallagio at Inverness Residential Condominium Ass'n v. Metropolitan Homes, Inc., 2017 CO 69

Background

Vallagio at Inverness Condominium Association sued the developer (Metro Inverness, LLC) and related parties for construction defects; the developer had drafted the recorded declaration.
The original declaration (Section 16.6) required binding arbitration for construction-defect disputes and contained a clause (Section 16.6(h)) stating that Section 16.6 "shall not ever be amended" without the Declarant’s written consent, "without regard to whether Declarant owns any portion" of the property.
Unit owners (≥67%) voted in 2013 to amend the declaration and remove Section 16.6; they did not obtain the Declarant’s consent. The Association then filed suit in district court asserting, among other claims, CCPA claims.
The Declarant moved to compel arbitration; the district court denied the motion, holding the consent-to-amend clause conflicted with CCIOA and was void. The court of appeals reversed, holding the consent clause enforceable and that CCPA claims are arbitrable.
The Colorado Supreme Court affirmed: it held the consent-to-amend provision does not violate CCIOA and the attempted unit-owner amendment (without Declarant consent) was ineffective; the Court also held CCPA claims may be subject to pre-dispute arbitration because the CCPA contains no non-waiver provision.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a declaration provision requiring Declarant consent to amend (Section 16.6(h)) is void under CCIOA § 38-33.3-217(1)(a)(I) (the 67% amendment cap)	The 67% cap is exclusive; any extra condition (Declarant consent) that effectively raises the threshold is void	CCIOA bars only declaration provisions that specify a percentage >67%; non-percentage conditions (e.g., consent) are not prohibited and some CCIOA provisions contemplate third-party consent	Held: Consent clause is not barred by §217; CCIOA contemplates non-percentage amendment conditions, so the consent provision is enforceable
Whether the consent-to-amend clause is an impermissible "device to evade" CCIOA under § 38-33.3-104	The consent clause functions as a device to evade statutory limits by enabling Declarant perpetual veto and control	Consent here relates to dispute resolution and aligns with CCIOA’s endorsement of ADR and arbitration; it does not constitute an evasion	Held: Clause does not violate §104; it is consistent with CCIOA and Colorado public policy favoring arbitration
Whether the consent-to-amend clause violates § 38-33.3-302(2) (no greater restrictions on association's power to deal with declarant)	Clause uniquely restricts the Association’s power to act vis-à-vis Declarant and thus is invalid	Amending the declaration is a unit-owner power, not an Association power; therefore §302(2) is inapplicable	Held: Court did not reach/decide the arbitration-provision-as-invalid argument on this ground (treated as waived/not properly preserved); consent clause challenged under §302(2) rejected for lack of applicability here
Whether CCPA claims are non-arbitrable because CCPA grants a right to a "civil action"	The statutory right to a "civil action" means judicial proceedings and thus precludes pre-dispute arbitration waivers	The CCPA contains no non-waiver or anti-waiver provision; use of "civil action" alone does not render the right non-waivable	Held: CCPA claims are arbitrable; the right to bring a civil action is waivable absent an express statutory non-waiver provision

Key Cases Cited

Pulte Home Corp. v. Countryside Cmty. Ass’n, 382 P.3d 821 (Colo. 2016) (standard for statutory interpretation; read statutes harmoniously)
Denver Post Corp. v. Ritter, 255 P.3d 1083 (Colo. 2011) (apply plain meaning to statutory text)
Radil v. Nat’l Union Fire Ins. Co., 233 P.3d 688 (Colo. 2010) (Colorado public policy favors arbitration)
Lambdin v. District Court, 903 P.2d 1126 (Colo. 1995) (statutes with express non-waiver provisions can void arbitration agreements)
Ingold v. AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 116 (Colo. 2007) (arbitrability turned on statute’s non-waiver language)
Triple Crown at Observatory Vill. Ass’n v. Vill. Homes of Colo., Inc., 328 P.3d 275 (Colo. App. 2013) (prior COA decision holding CCPA claims subject to arbitration absent non-waiver language)
Smith v. Exec. Custom Homes, Inc., 230 P.3d 1186 (Colo. 2010) (legislative history cannot override plain statutory language)