DocketNumber： Court of Appeals No. 13CA1390
Citation Numbers： 328 P.3d 275, 2013 COA 150, 2013 WL 6502659, 2013 Colo. App. LEXIS 1742
Judges： Gabriel, Terry, Webb
Filed Date： 11/7/2013
Status： Precedential
Modified Date： 10/19/2024
Opinion by
{1 Arising from alleged construction de-feets in a common interest community, this interlocutory appeal under C.A.R. 4.2
12 We decide these questions as follows:
(1) Where an association is a nonprofit corporation, the CRNCA establishes the time limit for amending its declaration based on action taken without a meeting;
(2) The statutory power to engage in "litigation" under CCIOA section 838-88.3-302(1)(d) includes arbitration;
(8) CCIOA section 38-38.3-802(2) does not invalidate the mandatory arbitration provision, because the dispute resolution procedures apply to parties other than the declarant; and
(4) CCPA claims may be subject to mandatory arbitration, because the CCPA does not include a nonwaiver provision.
T3 Therefore, we affirm the trial court's order concluding it lacked jurisdiction, and remand for further proceedings.
I. Facts and Procedural Posture
T4 Triple Crown at Observatory Village (Triple Crown) is a common interest community organized under CCIOA section 38-38.8-103(8). The developer of Triple Crown, Village Homes of Colorado, Inc., (Village Homes) was Triple Crown's declarant under section 88-83.8-108(12). As the declarant, Village Homes drafted and recorded the 2004 Declaration of Covenants, Conditions and Restrictions of Triple Crown (Declaration).
5 In the Declaration, Village Homes cere-ated Triple Crown at Observatory Village Association, Inc. (Association). The Association is a unit owners' association under CCIOA section 38-88.3-108(8). It was organized as a nonprofit corporation under the CRNCA.
T6 Article 14 of the Declaration provided dispute resolution procedures for various claims, including claims between the Association and any party regarding the design or construction of Triple Crown and claims arising from statements or representations made by Village Homes or its agents. Under Article 14, when such a dispute arose, the parties were required to (1) submit a formal claim, (2) engage in good faith negotiations, (8) submit a notice of claim, (4) engage in mediation under the auspices of the American Arbitration Association (AAA), and (5) if necessary, resolve the dispute through arbitration under AAA rules.
T7 On January 14, 2012, the Association began collecting votes from its members to revoke Article 14. After sixty days, forty-eight percent of the members had cast votes in favor of revocation. After another sixty days, the Association had obtained the required sixty-seven percent of votes to revoke Article 14.
T8 The Association then recorded an amendment to the Declaration revoking Article 14. Shortly thereafter, the Association brought this action against Village Homes and several of its principals and employees (collectively, Respondents), alleging negligent construction, CCPA violations, and breach of fiduciary duties.
9 Respondents moved to compel arbitration based on the trial court's lack of jurisdiction, citing Article 14. They argued that because the Association had not amended Article 14 within the time limits in the CRNCA, the parties were still bound to Article 14's dispute resolution procedures, including mandatory arbitration. The trial court granted Respondents' motion, concluded it lacked jurisdiction, and ordered the parties to follow Article 14.
II. Standard of Review
{10 Questions of statutory interpretation are reviewed de novo. Colo. Water Conservation Bd. v. Upper Gunnison River Water Conservancy Dist., 109 P.3d 585, 593 (Colo.2005). Because a court's primary duty is to give full effect to the General Assembly's intent, interpretation begins by examining the statute's plain language within the context of the statute as a whole. Bd. of Cnty. Comm'rs v. Hygiene Fire Protection Dist., 221 P.3d 1063, 1066 (Colo.2009). "Words and phrases should be given effect according to their plain and ordinary meaning." Farmers Group, Inc. v. Williams, 805 P.2d 419, 422 (Colo.1991). The court "must not strain to give language other than its plain meaning, unless the result is absurd." Colo. Dep't of Soc. Servs. v. Bd. of Cnty. Comm'rs, 697 P.2d 1, 18 (Colo.1985). If the plain meaning is
11 The absence of particular language is usually considered an indication of legislative intent, not a mere oversight. Specialty Restaurants Corp. v. Nelson, 231 P.3d 393, 397 (Colo.2010). Courts interpret statutes to avoid absurd or illogical results, and "strive to interpret statutes in a manner that avoids rendering any provision superfluous." Qwest Corp. v. Colo. Div. of Prop. Taxation, 2013 CO 39, ¶16, 304 P.3d 217. Interpretations that conflict with the Colorado Constitution should be avoided. Hall v. Walter, 969 P.2d 224, 229 (Colo.1998).
112 Where two statutes address the same subject, both statutes are construed together; the court seeks to avoid inconsistencies and reconcile conflicts,. Hygiene Fire Protection Dist., 221 P.3d at 1066. But if a conflict arises, specific provisions usually control over general provisions. City & Cnty. of Denver ex. rel. Bd. of Water Comm'rs v. Bd. of Cnty. Comm'rs, 782 P.2d 753, 766 (Colo.1989). Further, where a statute is specifically incorporated by reference, amendments to that statute made after the original enactment are deemed incorporated if the General Assembly expressly or by strong implication shows that it intended to incorporate the later amendments. Curtis Ambulance of Fla., Inc. v. Bd. of Cnty. Comm'rs, 811 F.2d 1371, 1378-79 (10th Cir.1987); see also 2B Norman J. Singer & J.D. Shambie Singer, Sutherland Statutes and Statutory Construction § 51:8 (7th ed. 2007).
T18 Courts presume that the General Assembly knew and considered relevant judicial precedent when it enacted legislation. People v. O'Donnell, 926 P.2d 114, 115 (Colo. App.1996). This is true "[even in the absence of demonstrative legislative history." Rauschenberger v. Radetsky, 745 P.2d 640, 648 (Colo.1987).
III. Where an Association Is a Nonprofit Corporation, the CRNCA's Sixty-Day Time Limit Controls the Time Allotted to Amend Declarations Without Meetings Under CCIOA
114 The trial court held that when a nonprofit unit owners' association amends its declaration without a meeting under CCIOA section 38-38.3-217(1)(a)(I), the association must comply with the sixty-day time limit provided in CRNCA section 7-127-107. Because the Association did not comply with the CRNCA's sixty-day requirement, the court held that the amendment repealing Article 14 was ineffective. We agree.
15 CCIOA provides that each unit owners' association must be organized "as a nonprofit, not-for-profit, or for-profit corporation or as a limited liability company." § 38-83.3-301. Thus, the type of organization the de-clarant selects determines which corporate law will supplement CCIOA. See § 38-38.3-108 (referencing "the law of corporations"). However, provisions of the Colorado corporate statutes that conflict with CCIOA will not override it. § 88-83.8-8319.
116 Imposing the CRNCA time limit on actions taken without meetings does not impair the substantive rights of unit owners' associations. See § 38-33.3-801 ("Neither the choice of entity nor the organizational structure of the association shall be deemed to affect its substantive rights and obligations under this article."). Instead, reading the statutes together to avoid conflicts, the CRNCA's time limit for actions without meetings merely provides a procedure to implement such associations' substantive right to amend their declarations.
{17 Nevertheless, here, the Association argues that the General Assembly intended associations to have an indefinite time in which to vote without a meeting on declaration amendments, because the absence of a time limit in CCIOA should be recognized as intentional. The Association has not cited, nor have we found in Colorado, a case applying this principle where one statute incorporates the terms of another by reference. Instead of dictating the specific procedures that must be followed in amending declarations, CCIOA incorporates Colorado corporate law by reference. §§ 38-33.3-108, 38-33.3-218, 88-33.3-819. On this basis, the Association's citations are distinguishable.
119 Further, the differences in the corporate structures available to associations support the interpretation that the General Assembly intended the laws of the chosen corporate structure to supplement CCIOA's terms. Compare CRNCA, § 7-127-107, C.R.S.2013 (procedures for actions without meetings for nonprofit corporations requiring members' votes), with Colorado Business Corporation Act, § 7-108-202, C.R.S. 2018 (procedures for actions without meetings taken by directors of for-profit corporations). To nevertheless conclude that the General Assembly intended declaration amendment voting time frames to be of indefinite duration would ignore the differences between associations that have directors and those that do not. CJL § 38-38.3-102(1)(c) ("[Ilt is the policy of this state to give developers flexible development rights.").
120 Therefore, we conclude that nonprofit unit owners' associations are bound by the CRNCA's sixty-day time limit when they seek to amend declarations without a meeting. Accordingly, because the Association did not comply with this limit, the attempt to remove Article 14 from the Declaration was ineffective.
IV. The Statutory Power to Engage in "Litigation" under CCIOA Section 38-33.3-302(1)(d) Includes Arbitration
121 CCIOA establishes the power of unit owners' associations to "(institute, defend, or intervene in litigation or administrative proceedings ... on matters affecting the common interest community." § 38-88.3-302(1)(d) (emphasis added). The trial court interpreted "litigation" to include both judicial proceedings and arbitrations. Thus, it held that the mandatory arbitration provision did not infringe on the Association's statutory power to "(institute ... litigation." Although the question is close, we agree with the trial court.
122 CCIOA does not define "litigation." See § 838-88.8-108. Nor does the Uniform Common Interest Ownership Act (Uniform Act), on which CCIOA is based. See Uniform Act, § 1-108 (2008); Giguere v. SJS Family Enters., Ltd., 155 P.3d 462, 467 (Colo.App.2006) (explaining CCIOA was based on the Uniform Act). Thus, "where the legislature has not expressly defined a statutory term or otherwise limited its meaning, that term must be given its ordinary meaning." Marquez v. People, 2013 CO 58, ¶ 8, 311 P.3d 265, 2013 WL 5309235.
123 No Colorado case has addressed the ordinary meaning of "litigation." See Estate
24 "Litigation" has been defined as "[the process of carrying on a lawsuit" or as "[a] lawsuit itself." Black's Law Dictionary 1017 (9th ed. 2009); see Mercantile Adjustment Bureau, L.L.C. v. Flood, 2012 CO 38, ¶ 23, 278 P.3d 348 (referencing the Black's Law Dictionary definition of litigation but not expanding on it). A "lawsuit" is a proceeding by a party against another in a court of law. See Black's Low Dictionary 1572. By contrast, an "alternative dispute resolution" proceeding is "a procedure for settling a dispute by means other than litigation, such as arbitration or mediation." Id. at 91 (emphasis added); see also Melssen v. Auto-Owners Ins. Co., 2012 COA 102, ¶ 28, 285 P.3d 328 (quoting definition with approval).
125 "Litigation" has also been defined as "the act or process of litigating," or "the practice of taking legal action." Webster's Third New International Dictionary 1822 (2002). In turn, to "litigate" is "to make the subject of a lawsuit," which is defined as "a case before a court" or "any of various technical legal proceedings (as an action, prosecution)." Id. at 1280, 1822.
126 Under these definitions, "litigation" does not include arbitration. At least one court has adopted this narrow definition, holding that " 'litigation' is unambiguous ... [and its] 'ordinary and popular sense' does not include arbitration." SDR Capital Mgmt., Inc. v. Am. Int'l Specialty Lines Ins. Co., 320 F.Supp.2d 1043, 1047 (S.D.Cal.2004) (citations omitted) (holding insurance contract's prior litigation exclusion does not include prior arbitration).
T 27 In contrast, for purposes of the work-product doctrine, "litigation" includes "civil and criminal trial proceedings, as well as adversarial proceedings before an administrative agency, an arbitration panel or a claims commission, and alternative-dispute-resolution proceedings such as mediation or mini-trial." Restatement (Third) of Law Governing Lawyers, § 87, emt. h (2000) (emphasis added). Several courts have taken this approach to attorney work-product. Seq, e.g., Amobi v. D.C. Dep't of Corr., 262 F.R.D. 45, 52 (D.D.C.2009); In re Grand Jury Subpoena, 220 FRD. 130, 147 (D.Mass.2004); Samuels v. Mitchell, 155 FRD. 195, 200 (N.D.Cal.1994).
1 28 This split in authority shows that "litigation" could reasonably have two different meanings, one including arbitration and one excluding arbitration. Thus, we conclude that "litigation," as used in CCIOA, is ambiguous. See, eg., State v. Nieto, 993 P.2d 493, 500-01 (Colo.2000).
129 In light of this ambiguity, we begin with the statute as a whole. See Bd. of Cnty. Comm'rs v. Costalla Cnty. Conservancy Dist., 88 P.3d 1188, 1192 (Colo.2004). To the extent applicable, "we may [also] consider the objective the legislature sought to attain, the legislative history, legislative declarations or purposes, and the consequences of a particular construction."
1830 The purpose of enumerating broad powers in section 38-38.3-302 is to ensure that associations will be able to address all issues which may arise in governing a common interest ownership community.
1 31 This broader meaning also finds some support in the General Assembly's 2007 addition to CCIOA of section 838-88.3-124(1)(a){II) to "endorse[ ] and encourage[ | associations ... [and] declarants ... to make use of ... alternative dispute resolution." In making this change, the General Assembly did not revise section 88-88.8-802(1)(d) to add engaging in alternative dispute resolution to associations' enumerated powers. Thus, if unit owners' associations' powers under section 38-838.3-8302(1)(d) were limited to judicial proceedings, an association could not adopt mandatory alternative dispute resolution procedures. As a result, despite the encouragement to engage in alternative dispute resolution, such procedures could occur only when agreed to by an association and its adversary. Hence, the canon that statutory provisions which seemingly conflict should be construed to give effect to both, Bd. of Cnty. Comm'rs v. Bainbridge, Inc., 929 P.2d 691, 698 (Colo.1996), also favors interpreting "litigation" in section 33-33.3-302(1)(d) to include arbitration.
1832 Further, CCIOA section 88-88.3-114(2) provides, "[aloy right or obligation declared by the article is enforceable by judicial proceeding." The use of "judicial proceeding" suggests that the choice of "litigation" in section 88-83.3-8302(1)(d) had a broader meaning than "judicial proceeding." "[TJhe use of different terms signals an intent on the part of the General Assembly to afford those terms different meanings." Carlson v. Ferris, 85 P.3d 504, 509 (Colo.2003).
133 Comparing section 38-838.3-104 and section 38-83.3-802(1) disfavors using the former to void a mandatory arbitration provision in a declaration. Section 88-88.3-104 provides "rights conferred by this article may not be waived," but section 88-88.8-302(1) lists "powers," not "rights," which an association "may" exercise, "subject to the provisions of the declaration." This phrase suggests that a declaration may limit an association's enumerated powers. See Uniform Act, § 3-102, emt. 1 ("This section permits the declaration, subject to the limitations of subsection (b), to include limitations on the exercise of any of the enumerated powers.").
134 Including arbitration within "litigation" also aligns with the state's public policy, because "[in Colorado, arbitration is a favored method of dispute resolution.... Our constitution, our statutes and our case law all support agreements to arbitrate disputes." Peterman v. State Farm Mut. Auto. Ins. Co., 961 P.2d 487, 493 (Colo.1998). When CCIOA was passed in 1991, "it hald] long been the policy of this state to foster and encourage the use of arbitration as a method of dispute resolution." Judd Constr. Co. v. Evans Joint Venture, 642 P.2d 922, 924 (Colo.1982). Interpreting "litigation" to preclude mandatory arbitration could create tension with article XVIII, section 3 of the Colorado Constitution, which should be avoided. See Colo. Const. Art. XVIII, § 3 ("It shall be the duty of the general assembly to pass such laws as may be necessary and proper to decide differences by arbitrators
1 35 In addition, interpreting the power to engage in "litigation" as precluding mandatory arbitration provisions in declarations could
(36 Finally, recognizing arbitration as a form of litigation is also consistent with the supreme court's application of issue preclusion to arbitration proceedings where the four-factor collateral estoppel test has been satisfied. See Guaranty Nat'l Ins. Co. v. Williams, 982 P.2d 306, 308 (Colo.1999); Dale v. Guaranty Nat'l Ins. Co., 948 P.2d 545, 549-50 (Colo.1997). One factor is whether "the party against whom the doe-trine is asserted has had a full and fair opportunity to litigate the issue in the prior proceeding." Dale, 948 P.2d at 550 (emphasis added). When concluding that arbitration met this requirement, the court recognized "arbitration gives parties a right to a hearing where they can present all evidence and raise all available defenses, as well as access to the judicial system after arbitration." Id.
T37 Accordingly, we conclude that the Association's power to initiate "litigation" under CCIOA section 38-83.3-802(1)(d) is not infringed by Article 14's mandatory arbitration provision.
V. CCIOA Section 88-83.8-802(2) Does Not Invalidate Article 14, Because the Dispute Resolution Procedures Apply to Parties Other Than the Declarant
1388 CCIOA section 838-88.3-302(2) provides that "[the declaration may not impose limitations on the power of the association to deal with the declarant that are more restrictive than the limitations imposed on the power of the association to deal with other persons." The Association argues that this section invalidates Article 14, because its restrictions apply to Village Homes, the de-clarant. The trial court rejected this argument, holding that section 38-88.3-302(2) only prohibits a declarant from limiting or imposing favorable business "dealings" on an association. We agree with the trial court's ultimate determination that Article 14 survives section 38-88.3-302(2), but interpret this section differently.
1 39 Section 38-88.83-302(2) corresponds to section 8-102 of the Uniform Act. Comment fourteen states that this section "prevents the declarant from imposing unique limits on the association's power to deal with the de-clarant," including "the extent to which a declarant may insert provisions into a declaration designed to impede the association's future flexibility and discretion in managing its affairs." Uniform Act, § 3-102, emt. 14. Thus, the limitation imposed by CCIOA seetion 88-83.3-802(2) is not restricted to business dealings, as the trial court concluded. "Managing" an association's "affairs" would include initiating either litigation or alternative dispute resolution to resolve construction defects.
140 However, CCIOA section 38-38.3-302(2) forbids only restrictions unique to the declarant. Here, Article 14 is not limited to the Association's dealings with Village Homes. Instead, it controls disputes between parties, and "Party" is defined as:
Declarant, its officers, directors, partners, members, employees and agents; the Master Declarant, its officers, directors, partners, members, employees and agents; the Association, its officers, directors and committee members; the master Association, its officers, directors and committee members; all Persons subject to this Declaration; any builder, its officers, directors, partners, members, employees and agents; and any Person not otherwise subject to this Declaration who agrees to submit to this Article.
Declaration, § 14.4.2 (emphasis added). Thus, Article 14's dispute resolution procedures do not violate CCIOA section 38-83.3-302(2).
[ 41 Accordingly, we conclude that CCIOA section 88-33.3-302(2) does not preclude enforcement of Article 14.
VI. The Association's CCPA Claims Are Subject to Mandatory Arbitration, Because the CCPA Does Not Include a Nonwaiver Provision
142 The CCPA states that its "provisions ... shall be available in a civil action for any claim against any person who has engaged in or caused another to engage in any deceptive trade practice listed." § 6-1-113(1) (emphasis added). Based on this right to bring a "civil action," the Association argues that its CCPA claims are not subject to mandatory arbitration. The trial court rejected this argument, holding that while the CCPA contemplates actions in Colorado courts, because the statute lacks a nonwaiver provision, such a right can be waived. Then, it held that Article 14 applied to the Association's CCPA claims. We agree.
148 The CCPA does not define "civil action." See § 6-1-102. The Colorado Supreme Court has defined the phrase as "a proceeding on the part of one person, as actor, against another, for the infringement of some right of the first, before a court of justice, in the manner prescribed by the court or law." Hernandez v. Downing, 154 P.3d 1068, 1070 (Colo.2007) (citation and internal quotation marks omitted). Thus, we conclude that the General Assembly's use of the phrase "civil action" in CCPA section 6-1-113(1) provides a right to commence a judicial proceeding.
¶44 In arguing that this right precludes mandatory arbitration, the Association's reliance on Ingold v. AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 116 (Colo.2007), and Lambdin v. District Court, 903 P.2d 1126 (Colo.1995), is unpersuasive. In both cases, the supreme court's analysis turned on the respective statutes' nonwaiver provisions. See Ingold, 159 P.8d at 123 (holding the nonwaiver provision of the Wrongful Withholding of Security Deposits Act, currently section 88-12-108(7), C.R.S.2018, prevents enforcing arbitration agreement); Lambdin, 903 P.2d at 1130 (holding the nonwaiver provision of the Colorado Wage Claim Act, currently section 8-4-121, C.R.S.2018, prevents enforcing arbitration term in employment agreement). In contrast, the CCPA does not include a nonwaiver provision. .
145 Therefore, we decline to extend the reasoning of Ingold and Laombdin to the CCPA. Accordingly, we conclude that the right to a civil action provided by the CCPA does not invalidate enforcement of Article 14.
46 The trial court's order is affirmed, and the case is remanded for further proceedings.
. See The Triple Crown at Observatory Village Ass'n, Inc., v. Vill. Homes of Colo., Inc., 2013 COA 144, - P.3d -, 2013 WL 5761028 (accepting petition for interlocutory review).
. In Romer v. Board of County Commissioners, 956 P.2d 566, 576 (Colo.1998), the supreme court found the absence of language providing counties with a right to judicial review in district court under the Colorado Human Services Code, § 26-1-126, C.R.S.1997, was intentional, because of its contrast to the explicit creation of such a right elsewhere in the code. In Specialty Restaurants Corp. v. Nelson, 231 P.3d 393, 402 (Colo.2010), citing Romer, the court held that because the General Assembly did not include an effective date in certain amendments to the Colorado Workers' Compensation Act, § 8-43-406, C.R.S.2007, as it had in all previous amendments, the amendment applied regardless of the date of the employee's injury. Unlike the Colorado Worker's Compensation Act and the Colorado Human Services Code, CCIOA directly references the CRNCA as supplementing the provisions governing unit owners' associations that choose to be organized as nonprofit corporations. Compare Colorado Human Services Code, § 26-1-101 to -501, C.R.$.2013, and Colorado Workers' Compensation Act, § 8-43-101 to -607, C.R.S.2013, with CCIOA, § 38-33.3-108.
. Neither party has cited any legislative history.
. Not only are the listed powers expansive, but they include "any other powers conferred by the declaration or bylaws" and "all other powers
. Because section 38-33.3-124(1)(a)(II) encourages unit owners' associations and declarants to utilize alternative dispute resolution, and the Uniform Act does not include an analogous statement, the General Assembly's failure to adopt the 2008 revisions to the Uniform Act empowering associations to initiate alternative dispute resolution mechanisms is of little consequence. See Uniform Act, § 3-102(a)(4).
. The Association's reliance on Ass'n of Apartment Owners of Waikoloa Beach Villas ex rel. Board of Directors v. Sunstone Waikoloa, LLC (Waikoloa), 307 P.3d 132 (Haw.2013), is misplaced. While the Hawaii Supreme Court voided the dispute resolution procedures that were unique to the association's claims against the declarant, it upheld the procedures that were not so limited. Id. at 160-61.
. Other jurisdictions have held that consumer protection act claims can be subject to arbitration. See, eg., Dan Wiebold Ford, Inc. v. Universal Computer Consulting Holding, Inc., 142 Idaho 235, 127 P.3d 138, 142-44 (2005); Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d 335, 340-41 (Ky.Ct.App.2001); Pyburn v. Bill Heard Chevrolet, 63 S.W.3d 351, 365-67 (Tenn.Ct.App.2001).