Martinez v. CSG Redevelopment Partners LLLP

          City and County of Denver District Court No. 16CV31344 Honorable Jay S. Grant, Judge

          Announced June 20, 2019 DiGiacomo, Jaggers & Perko, LLP, Douglas J. Perko, Arvada, Colorado, for Plaintiff-Appellant

          Harris, Karstaedt, Jamison & Powers, P.C., Susan M. Stamm, Englewood, Colorado, for Defendant-Appellee

          OPINION

          J. JONES, JUDGE.

          ¶ 1 Guadalupe P. Martinez, a resident of the low-income housing facility Casa Loma Apartments, slipped and fell on a walkway leading to the apartment building. Seeking to recover for his injuries, Mr. Martinez sued CSG Redevelopment Partners, LLLP (CSGR), Casa Loma's management company and the building's owner, under the Premises Liability Act, § 13-21-115, C.R.S. 2018, and (alternatively) for negligence, alleging that CSGR had allowed snow and ice to accumulate on the walkway.

         ¶ 2 CSGR moved to dismiss the complaint, arguing that, as an "instrumentality" of a public entity - the Denver Housing Authority (DHA) - it is immune from tort liability under the Colorado Governmental Immunity Act (CGIA), § 24-10-106, C.R.S. 2018. It also argued that the exception to governmental immunity in section 24-10-106(1)(d)(III) for a dangerous condition on a walkway "leading to a public building open for public business" doesn't apply because Casa Loma isn't such a building. Mr. Martinez opposed the motion. After a Trinity Broadcasting of Denver, Inc. v. City of Westminster, 848 P.2d 916 (Colo. 1993), hearing, the district court granted CSGR's motion, ruling that CSGR is an instrumentality of the DHA and that the public building exception doesn't apply.

          ¶ 3 We conclude that, because of both DHA's extensive control over CSGR and CSGR's public purpose, CSGR is an instrumentality of a public entity within the meaning of the CGIA, and therefore a public entity itself entitled to governmental immunity. We also conclude that the record supports the district court's finding that Casa Loma isn't a public building open for public business, and that Mr. Martinez's alternative contention that immunity doesn't apply because the walkway is part of a "public facility located in [a] recreation area maintained by a public entity," see § 24-10-106(1)(e), is, on this record, unavailing. The upshot is we affirm the district court's judgment.

         I. Background

         ¶ 4 The following facts were found by the district court with record support or are otherwise undisputed.

         ¶ 5 In 1987, DHA created the Denver Housing Corporation (DHC), a nonprofit entity that DHA completely owns and controls. For nearly thirty years, DHC (and, by extension, DHA), has owned and operated the Casa Loma Apartments. In 2013, to finance the renovation of Casa Loma and two other low-income housing properties, DHA created CSGR and CSG Housing, Inc. CSG Housing served as CSGR's general partner, and another of DHA's instrumentalities, DHA Limited Partner, served as CSGR's limited partner. At that point, CSGR was made up of, and controlled entirely by, DHA instrumentalities.^[1]

         ¶ 6 But in 2014, as part of CSGR's effort to secure more funding for the renovations, Wincopin Circle LLLP joined CSGR as a limited partner.^[2] It functions mainly as an investor, having contributed approximately $12.5 million in equity financing. CSG Housing and DHA Limited Partner each contributed $90 and $10, respectively. As a result, CSG Housing, as the general partner, retained a 0.01% ownership interest in CSGR; DHA Limited Partner, a special limited partner, retained a 0.001% ownership interest in CSGR; and the investor, the limited partner, received a 99.989% ownership interest in CSGR and qualified for tax credits through the Low-Income Housing Tax Credit (LIHTC) program - a federal program that offers federal tax credits to private investors as an incentive to invest in low-income housing projects. See 26 U.S.C. § 42 (2018). The partnership is governed by a restated partnership agreement (more about which we'll discuss below).

         ¶ 7 Around the same time the investor joined CSGR, DHC leased the land under Casa Loma to CSGR for sixty-five years; DHC transferred its ownership of the structural improvements on the property to CSGR (this was also so the investor could qualify for LIHTC); and DHA lent CSGR approximately $45.3 million, $21 million of which was a construction loan that DHA funded by issuing private activity bonds (about $15 million was cash directly from DHA). CSG Housing, acting in its capacity as the general partner, hired DHA as the manager of the property under a written management agreement (another agreement about which we'll talk more below).

         ¶ 8 Several years later, Mr. Martinez slipped and fell on an allegedly icy walkway leading to the building. He sued CSGR, claiming over $400, 000 in medical expenses. As noted, the district court dismissed his complaint based on governmental immunity.

         II. Discussion

         ¶ 9 Mr. Martinez contends that the district court erred by (1) concluding that CSGR is an instrumentality of DHA; (2) ruling that the "public building" exception doesn't apply; and (3) failing to address his argument that the "recreation area" waiver in section 24-10-106(1)(e) applies.

         A. Standard of Review

         ¶ 10 To the extent historical facts relevant to the issues Mr. Martinez raises on appeal were disputed, we review the district court's findings of fact for clear error, Medina v. State, 35 P.3d 443, 452 (Colo. 2001); such a finding is clearly erroneous only if there's no support for it in the record, M.D.C./Wood, Inc. v. Mortimer, 866 P.2d 1380, 1384 (Colo. 1994). But to the extent all such facts relevant to a particular issue weren't disputed, we review the issue de novo. Young v. Brighton Sch. Dist. 27J, 2014 CO 32, ¶ 10. And to the extent that CSGR's claim to immunity implicates questions of law, including statutory interpretation or application of a proper legal standard, we review the district court's conclusions de novo. See Corsentino v. Cordova, 4 P.3d 1082, 1087 (Colo. 2000).

         B. Analysis

         1. CSGR is an Instrumentality of a Public Entity

         ¶ 11 First, Mr. Martinez contends that his claim isn't barred by the CGIA because CSGR's status as a private partnership precludes its treatment as a "public entity." He points to the investor's significant capital contributions, the investor's approval power over some of CSGR's operations, and that much of DHA's investment came from the sale of private activity ...