United States District Court, D. Colorado
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER OF
Brooke Jackson United States District Judge
case was tried to the Court from January 23, 2017 to January
FINDINGS OF FACT
Plaintiffs Michael Sedoy and Natalia Schvachko (“the
Sedoys”) are a married couple who primarily reside in
New York City. PX-99 at ¶¶1-5 (Order After Trial,
City of Aspen v. Michael Sedoy, et. al., No.
13-cv-30047 (Pitkin Cnty., Colo. Dist. Ct. May 15, 2015)). In
2011 they began to look at properties in downtown Aspen,
Colorado with plans to permanently relocate their family to
that area. Id. at ¶5.
Defendant John Provine is a real estate entrepreneur in the
Aspen area. Id. at ¶8. Along with former
defendant James Farmer and Walt Harris, Mr. Provine founded
an Aspen-based real estate redevelopment limited liability
company called “JW Ventures, LLC.” Id.
at ¶6. Mr. Provine served as co-manager of that business
with Mr. Farmer. Id.
Defendant Charles Cunniffe is an architect by trade.
Id. at ¶11. In 2008 Mr. Cunniffe joined JW
Ventures as a full member after working with the company
designing the building plans for the property that is the
subject of this dispute: 308 E. Hopkins Ave. in downtown
Aspen, Colorado. Id.
Timeline of Events.
2005 JW Ventures (comprised of Mr. Provine, Mr. Farmer, and
Mr. Harris) purchased the existing property located at 308 E.
Hopkins Ave in Aspen, Colorado. Id. at ¶12. The
company purchased this property, which is located on
Aspen's renowned “Restaurant Row, ” with
plans to demolish the existing structure and construct a new
three-story, mixed-use building. Id. at
¶¶12-13. They hired Mr. Cunniffe to design the
project. See Id. at ¶¶23-24.
will be discussed in greater detail below, Mr. Cunniffe's
original building plans called for a commercial space on the
ground floor (“Unit 101”), a commercial space on
the lower basement level (“Unit LL1”), three
affordable housing units (“AHUs”) on the second
floor, and two condominiums-one on the second floor
(“Unit 201”) and one as a third floor penthouse
(“Unit 301”). Id. at ¶13. These
condominiums have often been referred to as the “free
market units” because they were to be sold on the open
market. See id.
Cunniffe's plans also noted that the building would
feature two different entrances, each providing access to
separate entryways, halls, elevators, and stairwells.
Id. at ¶¶ 27, 33. One entrance was
considered the main or “east” entrance.
Id. at ¶ 24. It provided access to the east
entryway, hall, stairs, and elevator. See Id. The
other entrance, known as the “west” entrance,
allowed for entry to the building through the alleyway.
Id. It provided access to the west entryway, hall,
stairs, and elevator. See Id. The original building
plans provided that all occupants of the building would have
access to both entrances to enter and exit the building.
Id. at ¶33.
early 2006 JW Ventures, via Mr. Cunniffe, sought the approval
of these building plans by the Historic Preservation
Commission (“HPC”) of the City of Aspen.
Id. ¶ 24. On July 12, 2006 the HPC adopted
Resolution 18, which recommended approval of these plans.
Id. at ¶28. Next, on October 30, 2006
JW Ventures submitted its application to the City's
Planning & Zoning Commission (“P&Z”) for
its approval. Id. at ¶29. P&Z adopted
Resolution 18 on April 17, 2007. Id. at ¶34. JW
Ventures then presented its development proposal to the Aspen
City Council. Id. at ¶35.
after JW Ventures submitted its proposal to the City of
Aspen, the City approved Ordinance 27. Id. at
¶¶36-37. Ordinance 27 allowed JW Ventures to build
its mixed-use building with several important conditions.
Id. These conditions included that JW Ventures
record a subdivision agreement that met the requirements of
the City's Land Use Code, as well as all conditions of
P&Z, and that JW Ventures submit a final condominium plat
(also known as a condominium map) upon substantial completion
of the project. Id. That plat needed to be approved
and signed by the Community Development Director of the City.
Id. Furthermore, Ordinance 27 required, among other
things, that JW Ventures' building permit application
comply with the Americans with Disabilities Act
(“ADA”) and the International Building Code
(“IBC”), which the City of Aspen had adopted in
2003. Id. at ¶¶36-37, 41.
April 28, 2009 the City issued JW Ventures a building permit
based on the building plans prepared by Mr. Cunniffe.
Id. at ¶¶42-46. As mentioned before, these
building plans showed that the east entryway, stairs, and
elevator were accessible by all occupants of the building.
Id. at ¶¶16-22. The plans also noted that
the east elevator would provide handicap access to the
commercial space in the lower basement level. Id.
The west elevator would be used primarily by the commercial
units for moving goods. See id.
After JW Ventures received their building permit, it prepared
the condominium plat required by Ordinance 27. See
Id. at ¶57. Curiously, that map conflicted with JW
Ventures' original building plans in many respects. For
instance, the condominium map labeled the east entryway,
hall, stairs, elevator as “limited common
elements” (“LCE”) for Units 201 and 301.
Id. ¶57; DX-306 (condominium plat). This meant
that these portions of the building were apparently reserved
for the exclusive use of the owners of those free market
units and were not for use by tenants of the AHUs.
See PX-99 at ¶60; C.R.S. § 38-33-103(5).
The condominium map also made it clear that tenants of the
AHUs could not use the west elevator, which was designated as
an LCE and a service elevator for the two commercial units in
the building. See DX-306. The west entryway,
hallway, and stairs, however, were designated as
“general common elements” or “GCEs”
(at least on the ground level), meaning that any tenant,
including those living the AHUs, had unrestricted access.
Id.; PX-99 at ¶¶58-59; C.R.S. §
first time JW Ventures submitted its condominium map to the
City for approval, the City returned the map to the company
after finding a minor error unrelated to the parts of the map
described above. PX-99 at ¶¶71-75. This was in
Roughly around that same time, plaintiffs began to consider
buying a property in Aspen to permanently relocate their
family from New York City. They began to get serious about
this plan in 2011, enlisting the help of Aspen real estate
broker Tim Estin and local attorney Chris LaCroix to aid them
in their home-buying process. Id. ¶¶93-95.
Plaintiffs told Mr. Estin that they wished to relocate to
downtown Aspen so that they could mimic the urban lifestyle
they had come to love in New York. At the same time, however,
they informed Mr. Estin that privacy was a major concern for
them with whatever property they ended up choosing.
Also in 2011, roughly two years after JW Ventures first
submitted its condominium map to the City, JW Ventures
resubmitted its condominium plat for 308 E. Hopkins Ave. to
the City. PX-99 at ¶¶76-79. Aside from making the
change the City had earlier requested, in all other respects,
particularly with respect to the designated usage of the east
and west entrances, the new map JW Ventures resubmitted was
the same as the 2009 map. See id.
Shortly after JW Ventures resubmitted its revised condominium
plat in early 2011, the Community Development Director of the
City of Aspen approved it. Id. As would become clear
many years later after the state court case involving this
property described infra, by approving the map the
City was merely confirming that the map met the standards as
set forth in the City's Land Use Code. See Id.
at ¶79. It was not evaluating whether the designations
of certain portions of the building as LCEs, namely the east
entryway and elevator, was legal. See Id. As the
City's approval on the map explained in small print, the
building's design was still subject to Ordinance 27 and
therefore numerous other City regulations regarding
accessibility, ingress, and egress. Id. at ¶80;
DX-306. JW Ventures recorded the signed condominium map with
the Pitkin County Clerk and Recorder on February 28, 2011.
PX-99 at ¶83; DX-306.
the spring of 2011 JW Ventures began to experience financial
difficulties. PX-99 at ¶90. Specifically, the company
got behind on its mortgage payments after Ute and Syzygy, the
two restaurants occupying the commercial units run by JW
Ventures member Walt Harris, could not consistently pay their
full rental obligations each month. See Id. By this
point, JW Ventures had also not yet sold the two free market
units in the building. Id.
Also in spring of 2011 the Sedoys contacted JW Ventures and
expressed an interest in purchasing both of the free market
units at 308 E. Hopkins Ave. Id. at ¶93.
Negotiations over the properties soon began in earnest.
Id. Attorney Leonard Oates represented JW Ventures
during these negotiations. Id. at ¶96.
these negotiations were ongoing, Mr. Provine apparently
accompanied Ms. Schvachko and Mr. Estin on tours of the
property. I use the word “apparently” because Mr.
Provine vigorously denies that these tours ever occurred.
Nevertheless, Ms. Schvachko testified that not only did these
tours occur, but that Mr. Provine represented to her during
them, as well as on numerous phone calls, that the owners of
the free market units would have exclusive use of east
entryway, hall, stairs, and elevator (as the condominium map
indicated), except for occasional elevator use by handicapped
patrons of the basement commercial unit. Mr. Estin
corroborated Ms. Schvachko's account, testifying that Mr.
Provine “absolutely” made such representations to
Ms. Schvachko. As will be described in greater detail below,
I find that it is unnecessary to ...