to the Colorado Court of Appeals Court of Appeals Case No.
Attorneys for Petitioners: Neiley Law Firm, LLC Richard Y.
Neiley, Jr. Richard Y. Neiley, III
Attorneys for Respondent: Hall & Evans, L.L.C. Alan
Epstein Lance G. Eberhart Timothy M. Murphy
Petitioners Mac McShane and Cynthia Calvin had once hoped to
build a multistory home overlooking the Roaring Fork Valley
near Carbondale. After belatedly discovering their design for
that home exceeded Garfield County height regulations,
however, they ended up with something less: a one-story home
and an attached "pod." Making the required changes
Today, we decide whether McShane and Calvin can seek to
assign any of those costs to the Stirling Ranch Property
Owners Association ("POA"), which they allege
improperly approved the faulty architectural plans and then
later improperly denied approval of revised plans as well.
Because the plain language of the declaration and design
guidelines governing Stirling Ranch properties does not limit
the POA's liability, and the POA cannot benefit from
exculpatory clauses protecting its boards and agents, we
conclude McShane and Calvin may bring their claims.
Facts and Procedural History
Mac McShane and his wife Cynthia Calvin (collectively,
"the Owners") purchased a lot in Stirling Ranch, a
planned unit development in Garfield County, seeking to build
a home atop a bluff surveying the Roaring Fork Valley.
Their conflict with the POA concerns the rules and
regulations governing properties in that community, including
the Second Amended and Restated Declaration of Covenants,
Conditions, Restrictions and Easements for Stirling Ranch,
P.U.D. ("Declaration"). The Owners' lot is
subject to the Declaration. The Declaration created the POA.
Each lot owner within Stirling Ranch is a member of the POA.
The POA is in turn governed by the Executive Board, which
appoints the Design Review Board ("DRB").
The DRB promulgated and enforced the Stirling Ranch Design
Guidelines ("Design Guidelines") intended to
preserve "the Ranch's unique character, . . .
natural beauty and . . . the quality of open space."
Under those guidelines, all improvements require DRB approval
to proceed. And to win DRB approval, the improvements must
comply with both the Design Guidelines and Garfield County
After first submitting plans to the DRB in 2010, the Owners
sought approval of them in earnest in 2011. Their architect
drafted a cover sheet to accompany those plans, and in it he
averred that the house would comply with Garfield County
height restrictions. "This, " the trial court
noted, "later proved to be incorrect."
Relying in part on the representation in the cover sheet, the
DRB granted final design approval for the multistory home,
and the Owners began building. Construction proceeded without
issue until December 2011, at which point the neighboring lot
owners returned from a vacation to find the Owners'
partly finished garage spoiling their view. As members of
both the Executive Board and the DRB were working to resolve
that issue, Garfield County learned the house would exceed
its height restrictions and issued a stop-work order. Work
In the months that followed, the Owners secured a new
architect who revised the design but retained a second story.
Garfield County approved those plans, but the DRB and
Executive Board did not. After another round of redesigns, in
which the multistory proposal became a single-story design
with an attached "pod, " the DRB approved the
plans, and the Owners built the home as designed.
Because the Owners blamed the POA for the costs associated
with the single- story conversion, they filed suit. The
Owners pursued declaratory judgment/equitable estoppel and
negligence claims against the POA, alleging more than $260,
000 in damages. Pointing to two exculpatory clauses, one in
the Declaration and another in the Design Guidelines, the POA
argued those claims were barred.
The clause in the Declaration provided as follows:
The Design Review Board will use reasonable judgment in
accepting or disapproving all plans and specifications
submitted to it. Neither the Design Review Board nor any
individual Design Review Board member will be liable to any
person for any official act of the Design Review Board in
connection with submitted plans and specifications, except to
the extent the Design Review Board or any individual Design
Review Board member acted with malice or intentional wrongful
acts. Approval by the Design Review Board does not
necessarily assure approval by the appropriate governmental
body or Garfield County. Notwithstanding that the Design
Review Board has approved plans and specifications, neither
the Design Review Board nor any of its members will be
responsible or liable to any Owner, developer or contractor
with respect to any loss, liability, claim or expense which
may arise by reason of such approval of the construction of
the improvements. Neither the Executive Board, the Design
Review Board, nor any agent thereof, nor Declarant, nor any
of its partners, employees, agents or consultants will be
responsible in any way for any defects in any plans or
specifications submitted, revised or approved in accordance
with the provisions of the Association Documents, nor for any
structural or other defects in any work done according to
such plans and specifications. In all events the Design
Review Board will be defended and indemnified by the
Association in any such suit or proceeding, which may arise
by reason of the Design Review Board's decisions.
Section II.D of the Design Guidelines contained the following
Neither the DRB nor any member of the DRB will be liable to
the POA, any owner or any other person for any damage, loss
or prejudice ...