Perfect Place, a Colorado limited liability company, Plaintiff-Appellant and Cross-Appellee,
R. Parker Semler, Defendant-Appellee and Cross-Appellant.
of Appeals No. 15CA0918 City and County of Denver District
Court No. 13CV32699 Honorable Catherine A. Lemon, Judge
AFFIRMED IN PART, REVERSED IN PART, AND CASE REMANDED WITH
& Podoll, P.C., Richard B. Podoll, Robert C. Podoll,
Robert A. Kitsmiller, Greenwood Village, Colorado, for
& Associates, P.C., R. Parker Semler, Andrew Oh-Willeke,
Jeremy Goldblatt, Denver, Colorado, for Defendant and
1 In this case, we are asked to decide a matter of first
impression - whether § 38-33.3-213, C.R.S. 2016, of the
Colorado Common Interest Ownership Act (CCIOA), pertaining to
the subdivision of units, requires strict or substantial
compliance. We conclude, consistent with the statutory
language and the purposes of CCIOA, that substantial
compliance is required.
2 In this quiet title action, plaintiff, Perfect Place, LLC,
(a member of the Blake Street homeowner's association)
appeals the trial court's judgment finding that
defendant, R. Parker Semler, owns parking spaces C and D in
the 1940 Blake Street Condominium (Blake Street)
property. Semler cross-appeals the court's
equitable enlargement of the historical dimensions of parking
space E and its corresponding decrease in the size of parking
space D. He also seeks an award of attorney fees under CCIOA.
We affirm the trial courts finding that the parking spaces
were properly subdivided and that Semler owns spaces C and D.
However, because we conclude that the trial court erred when
it adjusted the size of space E, and because we conclude the
court erred when it denied Semler's motion for attorney
fees, we reverse in part, and remand the case for further
3 This case arises from a quiet title action in which Perfect
Place asserted ownership of three parking spaces in the Blake
Street property. In 2000, Blake Street bought a mixed use
residential and commercial building and recorded a written
declaration subjecting the property to the provisions of
CCIOA. Thereafter, Blake Street sold a majority interest in
the building to Quail Street Company, LLC (Quail Street).
Quail Street's principal and sole shareholder was John
Watson. Watson owned the majority of the building for several
years and made multiple changes to it, including subdividing
the garage into three individual parking spaces (C, D, and E)
by painting yellow dividing lines on the garage wall. Spaces
C and D were full-sized parking spaces and accommodated
normal-sized vehicles. Space E was smaller and was only able
to accommodate a motorcycle or a very small car.
4 Over time, Watson sold the individual parking spaces (as
part of condominium units) to different buyers, who
subsequently sold or mortgaged the spaces. Through the years,
the City and County of Denver taxed each space individually,
the Blake Street homeowners association separately assessed
dues for each space, and title insurance companies separately
insured the spaces during subsequent title transfers.
5 The subsequent title transfers are set forth in detail in
Appendices 1 and 2. As relevant here, Semler claimed title to
space C from a 2007 foreclosure proceeding in which he paid
$641, 000during the redemption period and obtained a
deed in lieu of foreclosure. Semler claimed title to space D
through a different foreclosure proceeding in which he
obtained a deed in lieu of foreclosure from the record owner.
6 In 2010, the association's attorney notified Semler and
Perfect Place of clouded title concerning spaces D and E.
Thereafter, Semler paid more than $35, 000 for a quitclaim
deed from the former record owner of space D and recorded
that deed in 2012. He claimed title to space E from a
different deed in lieu of foreclosure that stemmed from an
unlawful conveyance and that became part of the same 2007
foreclosure proceeding. See infra Part IV.
7 Perfect Place claimed title to all three spaces from a 2011
quitclaim deed it received from Watson. After receiving
notice of title problems with spaces D and E, Perfect Place
paid Watson ten dollars for the 2011 quitclaim deed and
promptly recorded it.
8 Perfect Place also claimed title to spaces D and E from a
series of conveyances originating from a wild deed, see
infra Part IV. It paid ten dollars to Newtown Ten for a
quitclaim deed purporting to convey spaces "D and/or
9 Perfect Place brought this quiet title action asserting
superior title to all three spaces based on the 2011
quitclaim deed. It further alleged that all previous
conveyances of the spaces were invalid because Watson had
never properly subdivided the garage in accordance with the
provisions of CCIOA.
10 Semler contended that Watson properly subdivided the
garage, that Perfect Place obtained the 2011 quitclaim deed
from Watson through fraudulent misrepresentations, and that
Perfect Place was not a bona fide purchaser for value because
it only paid ten dollars for the 2011 quitclaim deed.
Trial Court's Order
11 After a three-day hearing, the trial court found that
Watson subdivided the garage unit into three separate parking
spaces. It also found that Perfect Place procured the 2011
quitclaim deed by fraud, concealment, and unclean hands. The
court therefore concluded that Semler was the rightful owner
of spaces C and D.
12 Title to space E was resolved in favor of Perfect Place by
agreement of the parties after Perfect Place reached a
pretrial settlement with defendants Kari and Nathan Peters.
Finding that the equities weighed in favor of Semler, the
court ordered him to draft a proposed amendment to the Blake
Street declaration, including a new map depicting the
boundaries of the three spaces. It intended for Semler to
record the amended map and to submit it to the homeowners
association for inclusion in the Blake Street declaration.
13 Pursuant to the trial court's order, Semler submitted
a proposed map allotting space C 132 square feet, space D 132
square feet, and space E 90 square feet. In computing these
dimensions, Semler relied on the historical boundaries of
spaces C and D and the dimensions of space E set forth in a
recorded Parking Space Licensing Agreement negotiated between
Perfect Place and Nathan and Kari Peters as a part of their
14 Perfect Place objected to Semler's proposal and argued
that "everyone understood that there were to be 3
parking spaces in the Parking Space Unit, " and that
"[t]he map proposed by Semler would effectively prevent
[it] from using parking space E as a parking space."
Perfect Place submitted its own proposed map that would
"accommodate three cars" and that "properly
indicated a large brick pillar between spaces C and D."
It also requested an evidentiary hearing.
15 The trial court began the hearing by noting that the
weight of the trial evidence suggested that space E was a
usable parking space for a small car, and that it intended,
as an equitable matter, to create three usable parking spaces
in order to avoid future litigation. After the hearing, the
court found that space E had always been smaller than spaces
C and D, and it again acknowledged that the balance of the
equities weighed in favor of Semler. In its final order,
however, the court adopted a map that allotted space C 129
square feet, space D 114 square feet, and space E 122 square
Propriety of Subdivision Under CCIOA
16 Perfect Place contends that the absence of a formal
application to the association's board describing a
reapportionment of the common elements, as well as the
absence of an amended declaration or condominium map that
strictly complies with CCIOA, violates § 38-33.3-213.
Perfect Place asserts that because CCIOA was violated, spaces
C, D, and E were never properly subdivided and, instead,
constitute a single unit as a matter of law. Semler contends
that the trial court's subdivision findings are factual
findings that are supported by the record. We agree with
Semler and conclude that Watson substantially complied with
CCIOA when he subdivided the garage into three parking
17 After trial, the court found that one of two events
occurred to subdivide the garage: (1) either the original
declarant subdivided the garage when it filed the original
declaration or (2) the first purchaser and majority unit
holder, Watson, subdivided the garage into three spaces
─ C, D, and E ─ when he placed physical
demarcation lines on the garage wall separately identifying
each space. It concluded that if Watson subdivided the units,
his failure to comply with the technical requirements of
§ 38-33.3-213 did not "materially violate CCIOA,
" because he substantially complied with the spirit and
purpose of the law. The trial court reasoned that any other
reading of the statute would elevate "form over
18 We conclude the record supports the trial court's
finding that Watson subdivided the garage into three separate
parking spaces and that Watson substantially complied with
the provisions of CCIOA when doing so. Because minor
deficiencies should not render otherwise marketable title
unmarketable, we further conclude that substantial compliance
with the requirements of § 38-33.3-213 is sufficient to
satisfy the application procedures for subdividing a unit.
Finally, because we may affirm a trial court's ruling on
any grounds that are supported by the record, we need not
address the trial court's alternative finding that the
original declarant subdivided the garage. See Rush Creek
Sols., Inc. v. Ute Mountain Ute Tribe, 107 P.3d 402, 406
19 We review issues of statutory construction de novo.
See Gagne v. Gagne, 2014 COA 127, ¶ 25. We
review a court's factual findings for clear error and
defer to those findings unless they are not supported by the
record. E-470 Pub. Highway Auth. v. 455 Co., 3 P.3d
18, 22 (Colo. 2000).
20 In interpreting a statute, our primary objective is to
ascertain and effectuate the intent of the General Assembly.
Specialty Rests. Corp. v. Nelson, 231 P.3d 393, 397
(Colo. 2010). "If the statutory language is clear, we
interpret the statute according to its plain and ordinary
meaning." Id. We read words and phrases in
context and construe them according to their common usages.
Gagne, ¶ 25. We also interpret a statute in a
way that best effectuates the purpose of the legislative
scheme. Id. at ¶ 26. When construing a statute,
we read and consider the statute as a whole and interpret it
in a manner that gives consistent, harmonious, and sensible
effect to all of its parts. Id.
21 "Not all directives and requirements declared in
statute law should be understood to have equal force[;]"
therefore, "[w]hether less than full compliance with
particular provisions is permitted is an issue of statutory
construction." Wainscott v. Centura Health
Corp., 2014 COA 105, ¶ 24 (quoting 3 Norman J.
Singer & J.D. Shambie Singer, Sutherland Statutory
Construction § 57:1, at 6 (7th ed. 2012)) (alteration
omitted). Where the purposes of a statutory requirement are
satisfied, substantial, rather than strict or absolute,
compliance may be sufficient. See Finnie v. Jefferson
Cty. Sch. Dist. R-1, 79 P.3d 1253, 1257-58 (Colo. 2003);
Meyer v. Lamm, 846 P.2d 862, 876 (Colo. 1993);
Woodsmall v. Reg'l Transp. Dist., 800 P.2d 63,
67-68 (Colo. 1990); Denver Classroom Teachers Ass'n
v. City & Cty. of Denver Sch. Dist. No. 1, 2015 COA
71, ¶ 46.
22 In determining whether a particular statutory requirement
has been satisfied, courts have imposed a degree of
compliance consistent with the objective sought to be
achieved by the legislation under consideration.
Woodsmall, 800 P.2d at 67; see, e.g.,
People v. Stanley, 169 P.3d 258, 261 (Colo.App.
2007) (holding that substantial compliance is "actual
compliance [with] respect to the substance essential to every
reasonable objective of the statute, as distinguished from
mere technical imperfections of form" (quoting
People v. Jacobs, 729 P.2d 757, 763-64 (Cal.
1987))). If the statute requires only substantial compliance,
a court must then consider whether "the allegedly
complying acts fulfilled the statute's purpose."
Grandote Golf & Country Club, LLC v. Town of La
Veta, 252 P.3d 1196, 1203 (Colo.App. 2011); see also
Bd. of Cty. Comm'rs v. City & Cty. of Denver,
193 Colo. 325, 327-30, 566 P.2d 335, 337-38 (1977) (finding a
statutory requirement that a map and a school board
resolution accompany an annexation petition was substantially
complied with where the map and resolution were available to
the city council when it considered the petition).
Substantial or Strict Compliance
23 In enacting CCIOA, the General Assembly intended a
"clear, comprehensive, and uniform framework for the
creation and operation of common interest communities."
§ 38-33.3-102(1)(a), C.R.S. 2016. One of the principal
purposes of CCIOA is to "promote effective and efficient
property management through defined operational requirements
that preserve flexibility for such homeowner
associations." § 38-33.3-102(1)(d) (emphasis
added). The General Assembly intended most common interest
communities to be bound by CCIOA and that developers have
"¶exible development rights with specific
obligations within a uniform structure of development of a
common interest community." § 38-33.3-102(1)(c)
24 While one goal of CCIOA is uniformity, the General
Assembly has balanced that goal against the goal of
flexibility, indicating that a rigid or strict interpretation
is not favored. For example, § 38-33.3-203(4), C.R.S.
2016, states: "Title to a unit and common elements is
not rendered unmarketable or otherwise affected by reason of
an insubstantial failure of the declaration to
comply with this article. Whether a substantial failure
impairs marketability is not affected by this article."
(Emphasis added.) Keeping these purposes in mind, we examine
the plain language of § 38-33.3-213, which concerns
25 Section 38-33.3-213(1) provides that "[i]f the
declaration expressly so permits, a unit may be subdivided
into two or more units." The remainder of §
38-33.3-213 sets forth the procedures a unit owner must
follow to subdivide property:
(2) In order to subdivide a unit, the unit owner of such
unit, as the applicant, must submit an application
to the executive board, which application shall be
executed by such owner and shall include:
(a) Evidence that the applicant of the proposed subdivision
shall have complied with all building codes, fire codes,
zoning codes, planned unit development requirements, master
plans, and other applicable ordinances or resolutions adopted
and enforced by the local governing body and that the
proposed subdivision does not violate the terms of any
document evidencing a security interest encumbering the unit;
(b)The proposed reallocation of interests, if any;
(c)The proposed form for amendments to the declaration,
including the plats or maps, as may be necessary to
show the units which are created by the subdivision and their
dimensions, and identifying numbers;
(d)A deposit against attorney fees and costs which the
association will incur in reviewing and effectuating the
application, in an amount reasonably ...