Court of Appeals Nos. 13CA0211 & 13CA0751 Arapahoe County District Court No. 07CV1793 Honorable Charles M. Pratt, Judge
McNamara Law Firm, P.C., John McNamara Jr., Denver, Colorado, for Appellee and Intervenor-Appellee
Kutak Rock LLP, Neil L. Arney, Denver, Colorado, for Intervenor-Appellee
Burg Simpson Eldridge Hersh & Jardine, P.C., Diane Vaksdal Smith, Brian K. Matise, Nelson P. Boyle, Englewood, Colorado, for Intervenor-Appellant
¶ 1 In this action involving a special metropolitan district, intervenor-appellant Landmark Towers Association, Inc. (Landmark), appeals the district court's denial of its motion to set aside the order which created the Marin Metropolitan District (District), appellee, and its related order awarding costs to the District and to a bond issuer for the district, Colorado Bondshares (Bondshares). We affirm.
¶ 2 In 2007, a developer and five affiliated individuals (organizers) commenced proceedings under section 32-1-101 to -1807, C.R.S. 2013, to form a special metropolitan district within the boundaries of Greenwood Village. The organizers filed a service plan with the municipality and the city council approved it pursuant to section 32-1-204.5, C.R.S. 2013, on August 27, 2007.
¶ 3 On September 5, 2007, a petition for organization was filed with the Arapahoe County District Court pursuant to section 32-1-301, C.R.S. 2013. The court set the petition for hearing on October 4, 2007. Notice of the hearing was published in the local newspaper, and the Clerk of the Court issued a notice of the hearing on September 13, 2007.
¶ 4 On October 4, 2007, the district court entered an order directing an organizational election be held on November 6, 2007. The election was held, and on December 6, 2007, the district court entered findings, and an order and decree creating the special district. The order included within the special district the Landmark Towers condominium properties which were then under construction. Approximately 130 persons had contracted to purchase condominiums therein, but no sales had been completed as of December 2007.
¶ 5 According to Landmark, a homeowners' association comprised of Landmark Towers condominium owners, it was not until several years after the District was formed that the owners discovered facts indicating that the District had been organized through alleged misrepresentations to the municipality and an asserted fraud on the court. In 2012, Landmark intervened and moved pursuant to C.R.C.P. 60 (b)(2), (3), and (5) to set aside the December 2007 order for alleged fraud on the court, a lack of subject matter jurisdiction to approve the special district, and invalidity of the order due to lack of due process.
¶ 6 The court held a three-day evidentiary hearing and by written order entered on December 17, 2012, dismissed Landmark's motion. The court concluded that it was barred from setting aside the order by section 32-1-305(7), C.R.S. 2013. That subsection provides:
If an order is entered declaring the special district organized, such order shall be deemed final, and no appeal or other remedy shall lie therefrom. The entry of such order shall finally and conclusively establish the regular organization of the special district against all persons except the state of Colorado in an action in the nature of quo warranto commenced by the attorney general within thirty-five days after entry of such order declaring such special district organized and not otherwise. The organization of said special district shall not be directly or collaterally questioned in any suit, action, or proceeding except as expressly authorized in this subsection (7).
¶ 7 The court interpreted the statute, giving weight to its plain meaning, as follows:
The language chosen by the Legislature in adopting C.R.S. §32-1-305(7) is clear and unambiguous – once the final order is signed only the attorney general may challenge the order, and no appeal or other remedy is available.
¶ 8 The court also determined that the relief Landmark sought — to set aside the order based on fraud on the court, or because the order was void, and because there was a lack of due process — all fell within the phrase "other remedy" as used in the statute, and the relief requested was not available. As the court explained, "[f]or the Legislature to choose to deprive parties of the right to appeal an order after it becomes final is extraordinary and demonstrates the breadth of the prohibition the Legislature intended."
¶ 9 Thus, the court acknowledged that it was required to deny Landmark's motion on the statutory basis alone.
¶ 10 Nevertheless, the court went on to address Landmark's other arguments. With respect to Landmark's argument that it had been denied due process, the court mentioned that "there is little doubt, based upon the evidence presented to this court to date, that efforts were made [to] prevent the individuals who had entered into purchase contracts from finding out about the developer's intentions and efforts to create the District and the related tax liability which would burden the property they were purchasing." However, the court clarified that regardless of any efforts to prevent individuals from learning about the formation of the District, the Legislature clearly chose to deprive parties of the right to appeal or attack an order after it became final.
¶ 11 With respect to the order being void and therefore subject to being set aside under C.R.C.P. 60(b)(3), the court stated:
It appears to the Court that Landmark has established that the creation of the District was never approved by taxpaying electors [, ] which is a prerequisite to the court's December 17, 2007 Order. Because such would render the order void there would be no Rule 60(b)(3) time bar.
The court again clarified that, nonetheless, "the court lacks jurisdictional authority to enter an order finding the December 17, 2007 Order void."
¶ 12 With respect to the issue of Landmark's timely filing of its motion under C.R.C.P. 60(b)(5), the court remarked that although the evidence presented to date strongly suggested that fraud had occurred, the time bar of C.R.C.P. 60(b)(2) would apply to preclude relief. And again the court clarified that it was jurisdictionally unable to reach the issue.
¶ 13 In a separate order, the court awarded $5, 905.36 in costs to the District and to the other intervenor, Bondshares, as costs necessarily incurred because of the litigation and for the ...