UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

TARA WOODS LIMITED 

PARTNERSHIP, a Minnesota limited 

partnership, 

Plaintiff - Appellant, 

v. 

FANNIE MAE, a federally chartered 

corporation; EICHLER, FAYNE & 

ASSOCIATES, a Michigan general 

partnership, a/k/a EF&A Funding, LLC, 

d/b/a Alliant Capital, LLC, 

Defendants - Appellants. 

No. 12-1187 

 (D.C. No. 1:09-CV-00832-MSK-MEH) 

(D. Colo.) 

 

ORDER AND JUDGMENT*

Before BRISCOE, Chief Circuit Judge, O'BRIEN, and PHILLIPS, Circuit Judges. 

 Tara Woods, a Minnesota limited partnership, executed a ten-year, $19.6 million 

loan from Eichler, Fayne & Associates (EF&A), to refinance a 53-building apartment 

 

*

 This order and judgment is an unpublished decision, not binding precedent. 10th 

Cir. R. 32.1(A). Citation to unpublished decisions is not prohibited. Fed. R. App. 32.1. 

It is appropriate as it relates to law of the case, issue preclusion and claim preclusion. 

Unpublished decisions may also be cited for their persuasive value. 10th Cir. R. 32.1(A). 

Citation to an order and judgment must be accompanied by an appropriate parenthetical 

notation B (unpublished). Id. 

FILED 

United States Court of Appeals 

Tenth Circuit 

May 9, 2014

Elisabeth A. Shumaker 

Clerk of Court
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complex in Denver, Colorado. EF&A immediately assigned the loan to the Federal 

National Mortgage Association (FNMA, also known as Fannie Mae),1

 but continued to 

service it as Fannie Mae’s agent. About seven years later, in November 2006, Fannie 

Mae started a foreclosure action primarily based on Tara Woods’ failure to repair and 

maintain the property and to keep it lien-free. The foreclosure was withdrawn in March 

2007 and Tara Woods sold the property in May 2008 for $20 million. Tara Woods filed 

suit against EF&A and Fannie Mae in 2009. It alleged the foreclosure action was 

baseless and had stigmatized the property so that Tara Woods received less on the sale 

than it would have garnered had Fannie Mae not unreasonably interfered. Judgment was 

entered in favor of Fannie Mae and EF&A. We affirm. 

FACTUAL BACKGROUND 

 The apartment complex, Stone Creek Village Apartments (Stone Creek), was built 

around 1973. Originally, it contained 53 two and three-story apartment buildings with 

450 apartment units, two swimming pools, a clubhouse and an office. Tara Woods, 

effectively owned by Andrew Grossman, bought Stone Creek in 1991. In 1999, Tara 

Woods refinanced Stone Creek with the loan from EF&A. The relevant loan documents 

included (1) a Note (2) a Deed of Trust assigning rents, granting a lien to EF&A on the 

property, and requiring, among other things, the preservation of the property’s condition 

over the life of the loan, and (3) a Replacement Reserve and Security Agreement 

 

1

 The FNMA is referred to in the complaint, case captions, briefs and arguments as 

Fannie Mae. Apparently it does not mind. 
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(Replacement Agreement) creating an escrow fund for repairs and replacements, with an 

attachment identifying $30,400 in repairs to be made in the first year of the loan and a 

schedule for replacements of equipment over the life of the loan. The replacements and 

repair estimates were based on a March 1999 Physical Needs Assessment (PNA) of the 

property conducted by a third party for EF&A. The Replacement Agreement further 

provided: 

If at any time during the term of the Loan, Lender determines that 

replacements not listed on Exhibit A are advisable to keep the Property in 

good order and repair and in good marketable condition, or to prevent the 

deterioration of the Property . . . Lender, may send Borrower written notice 

of the need for making such Additional Replacements. 

(Appellant’s App’x Vol. I at 118.) 

 The 1999 report described Stone Creek “to be in average condition and generally, 

well maintained.” (Appellant’s App’x Vol. II at 374.) As of March 3, 1999, 90.7% of 

the units were occupied and 93.6% of the units were leased.

The first written expression of concern regarding the condition of the property 

came in a letter from EF&A to Tara Woods following the annual 2004 inspection. The 

August 19, 2004, letter listed twenty-five maintenance concerns which included, among 

other things, leaking roofs, damaged sidewalks, missing stairway handrails, “[n]umerous 

heating and cooling system issues,” and “[n]umerous waterline and plumbing issues.” 

(Appellees’ Supp. App’x Vol. I at 3.) The letter notified Tara Woods the property would 

be added to EF&A’s “Watch List.” (Id.) 

 In late 2004, two apartment buildings were totally destroyed in a fire. In the 

Spring of 2005, Grossman decided to sell Stone Creek. The property was listed at $37 
- 4 - 

million in May 2005.2

 On July 1, a second fire destroyed another building at Stone 

Creek. At that point, Tara Woods decided it would raze the two buildings destroyed in 

the first fire, rebuild the apartments destroyed by the second fire, and reduce the list price 

to $35.5 million. 

 On July 15, 2005, EF&A conducted another property inspection. This inspection 

led to another PNA, which was conducted on August 15-16, 2005. According to the 

report, Stone Creek needed “immediate repair[s]”3

 at a cost of $955,165.00. (Appellant’s 

App’x Vol. II at 426.) Relevant to Tara Woods’ claims, the report recommended 

replacement of the property’s twenty-five boilers at a total cost of $162,500.00 over five 

years. The next day, Fannie Mae sent Tara Woods a default notice based on its failure to 

maintain the condition of the property as required by the Deed of Trust. Tara Woods did 

not complete the suggested replacements and repairs. 

 In December 2005, Tara Woods and a potential buyer signed a contract for sale for 

a price of $31.3 million, subject to due diligence. By early February 2006, based on the 

poor condition of the property identified in the buyer’s inspection report, the buyer 

requested a price reduction to $28,550,000 and provided Tara Woods a copy of the 

report. It stated, “[g]enerally, the [property] was considered to be in poor condition. The 

 

2

 Fannie Mae obtained a broker’s opinion of value on the property in June 2005 in 

the amount of $26 million. 

3

 “Immediate repair needs” were defined as urgent items that: (1) “[e]ndanger the 

safety and well-being of residents, visitors and passersby,” (2) “[a]dversely affect ingress 

or egress,” (3) “[a]re material building or fire code violations,” or (4) “[e]xhibit deferred 

maintenance.” (Appellant’s App’x Vol. II at 426.) 
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[property] exhibits a number of material physical deficiencies as a result of extensive 

deferred maintenance, inherent defects related to construction, and systems and 

components that have long exceeded their expected useful lives.”4

 (Appellees’ Supp. 

App’x Vol. I at 126.) Tara Woods rejected the reduced offer.

 On February 16, 2006, Fannie Mae sent Tara Woods a second notice of default. 

The letter based the default on deterioration to the property, the failure to fully remediate 

the fire damage, and encumbrances against the property. The notice gave specific dates 

on which the deficiencies must be cured. It stated: “While Fannie Mae understands that 

there is, perhaps, a potential sale of the Mortgaged Property under consideration, in order 

to fully protect the Mortgaged Property, the borrower must comply with its obligations 

under the Loan Documents.” (Id. at 108.) 

 During 2006, Tara Woods continued to receive offers on Stone Creek, but the 

buyers either lowered their offers or terminated negotiations after conducting due 

diligence. No sale was completed. At the same time, the reputable property management 

company, which had managed Stone Creek, cancelled its contract in March 2006 due to 

Tara Woods’ failure to provide funds for necessary maintenance and repairs. Fannie Mae 

 

4

 The report stated immediate repairs of the electrical system were required at a 

cost of $217,260.00. Immediate action repairs were described as: “(1) existing or 

potentially material unsafe conditions; (2) material adverse physical deficiencies 

jeopardizing existing tenancy; (3) material building code violations; (4) poor or 

deteriorated condition of a critical element or system; and (5) a condition, that if left ‘as 

is,’ with an extensive delay in remedying the same, would result in or contribute to a 

critical element or system failure within one year or a significant increase in its remedial 

cost.” (Appellees’ Supp. App’x Vol. I at 161.) In addition, the report identified short 

term repairs (to be done within one year) that totaled $2,291,820. 
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sent additional notices of default on June 26, 2006, and September 27, 2006, continuing 

to refer to the deterioration of the property and the existence of liens. The September 

notice advised Tara Woods that Fannie Mae would be conducting yet another PNA. 

 On November 1, 2006, based on Tara Woods’ failure to cure the previously 

noticed defaults, Fannie Mae declared the entire note due and payable, giving Tara 

Woods until November 9 to cure. On November 6, 2006, Grossman met with Frank 

Yanez, a Fannie Mae supervisor, regarding the status of Stone Creek, as well as the status 

of two other apartment complex loans Grossman had secured from Fannie Mae. 5 

According to Grossman, when he told Yanez he planned to surrender one of his two 

Oklahoma properties to Fannie Mae, Yanez responded angrily, stating he would not 

allow Grossman to “hit home runs” by selling the two properties in which Grossman had 

considerable equity while leaving Fannie Mae with the property with the least equity. 

(Appellant’s App’x Vol. II at 355.) 

 In the meantime, the latest Stone Creek PNA was completed in October 2006. It 

identified costs of $247,570.00 in necessary life-safety repairs and approximately $2.5 

million in immediate repairs and replacements.6

 Part of this assessment included 

 

5

 At the time Grossman executed the loan for Stone Creek, he, through two other 

entities, executed loans with EF&A (which were assigned to Fannie Mae) for two other 

apartment complexes located in Oklahoma. These two loans are not directly the subject 

of Tara Woods’ complaint, but claims Grossman’s suggestion that he would return one of 

these properties to Fannie Mae triggered the Stone Creek foreclosure. 

6

 The 2006 report defined immediate repair needs in the same way these needs 

were identified in 2005. See supra n.3. 
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immediate replacement of all boilers, now estimated to cost over $1 million. Fannie Mae 

commenced a foreclosure on November 30, 2006, and filed a motion for an order of sale 

of Stone Creek on December 28, 2006, pursuant to Colo. R. Civ. P. 120 ("Rule 120"). 

The foreclosure was based principally on defaults due to the property’s condition and the 

existence of liens on the property. Tara Woods received a copy of the 2006 PNA on 

January 5, 2007, and soon thereafter filed its opposition to the Rule 120 motion, claiming 

Fannie Mae’s default allegations were baseless. 

 A January 18, 2007, letter from Fannie Mae demanded Tara Woods either make 

the immediate repairs and replacements identified in the 2006 PNA by February 19, 

2007, or escrow sufficient funds ($2,643,764) by January 29, 2007, for their completion. 

Tara Woods did neither. Instead, pending the completion of the Rule 120 hearing, the 

parties agreed Fannie Mae would dismiss the foreclosure proceeding. It did so on 

March 23, 2007. 

 The dispute did not end there. In March 2007, EF&A, on behalf of Fannie Mae, 

notified Tara Woods of other defaults on the loan, including the issuance of a notice from 

the City of Denver concerning asbestos on the property. Tara Woods continued its 

efforts to sell the property, but according to Tara Woods, it was now in an unfavorable 

post-foreclosure environment with the additional stigmatization of the plainly-seen 

asbestos abatement. It again received offers either withdrawn or reduced after due 

diligence. Tara Woods rejected all final offers. On August 2007, Tara Woods 

commissioned a property condition report in preparation for an auction of the property. 

The report described the site improvements and buildings to be in “poor condition and 
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appear to have received below average maintenance.” (Appellees’ Supp. App’x Vol. I at 

35.) It also anticipated “[s]ignificant additional replacement due to deferred 

maintenance.” (Id.) The report estimated a cost of $1.849 million for the needed 

immediate repairs. No bids were received at the subsequent auction. Tara Woods 

eventually sold the property in May 2008 for $20 million and paid the loan in full. 

PROCEDURAL BACKGROUND 

 Tara Woods filed this lawsuit against EF&A and Fannie Mae in state court on 

March 11, 2009. It alleged numerous claims. Relevant here, it claimed: (1) tortious 

interference with prospective business advantage; (2) breach of fiduciary duty; and (3) 

breach of contract and the implied covenant of good faith and fair dealing. After removal 

to federal district court, Fannie Mae moved for partial judgment on the pleadings under 

Fed. R. Civ. P. 12(c). Tara Woods then amended its complaint.7

 This was followed by 

Fannie Mae’s motion to dismiss all claims under Fed. R. Civ. P. 12(b)(6). 

 The motions were partially successful. The judge dismissed Tara Woods’ claim 

for breach of fiduciary duty8

 and most of the tortious interference claim based on the 

relevant limitations period. What remained of this claim was dismissed on a subsequent 

 

7

 Because EF&A acted solely as Fannie Mae’s agent, for convenience we refer to 

the defendants as Fannie Mae unless otherwise noted. 

8

 Tara Woods also alleged Fannie Mae breached its fiduciary duty in managing the 

escrow funds. This claim was dismissed based on Colorado’s economic loss rule, which 

bars a tort claim for injuries resulting from an alleged breach of contract. See Tara 

Woods Ltd. P’ship v. Fannie Mae, 731 F. Supp. 2d 1103, 1118 (D. Colo. 2010). Tara 

Woods does not challenge this ruling. 
- 9 - 

motion for partial summary judgment. A bench trial was held on Tara Woods’ remaining 

claims for breach of contract and breach of the implied covenant of good faith and fair 

dealing. At the close of Tara Woods’ case, the judge considered a motion pursuant to 

Fed. R. Civ. P. 52(c) and entered judgment in favor of Fannie Mae and EF&A.

STANDARD OF REVIEW 

 Tara Woods challenges the dismissal of its breach of fiduciary duty claim, the 

application of the statute of limitations to dismiss the majority of its interference claim, 

and the adverse judgment on its breach of contract and associated implied covenant of 

good faith claim. We review de novo the dismissal of Tara Woods’ breach of fiduciary 

duty and interference claims under Fed. R. Civ. P. 12(b)(6), accepting as true the 

complaint’s well-pleaded factual allegations and viewing them in the light most favorable 

to the plaintiff. Schrock v. Wyeth Inc., 727 F.3d 1273, 1280 (10th Cir. 2013). “To 

survive a motion to dismiss under Rule 12(b)(6), a complaint must contain ‘enough facts 

to state a claim to relief that is plausible on its face.’” Id. (quoting Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 570 (2007)). 

 Because Tara Woods’ appeal concerning its contract claims is from a judgment in 

a bench trial pursuant to Fed. R. Civ. P. 52(c), we review findings of fact for clear error 

and legal conclusions de novo. See Chavez v. City of Albuquerque, 630 F.3d 1300, 1306 

(10th Cir. 2011). “If the district court’s account of the evidence is plausible in light of 

the record viewed in its entirety, the court of appeals may not reverse it even though 

convinced that had it been sitting as the trier of fact, it would have weighed the evidence 
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differently.” Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573–74 (1985). 

“The trial court’s findings of fact will be upheld unless, after review, the appellate court 

is firmly convinced a mistake has been made.” Litwin v. United States, 983 F.2d 997, 

999 (10th Cir.1993). The parties agree Colorado law applies to Tara Woods’ claims. 

A. Breach of Fiduciary Duty Arising from a Confidential Relationship 

 Tara Woods alleged Fannie Mae breached its fiduciary duty by demanding 

confidential information regarding the identity of Stone Creek’s potential buyers and the 

progress of the sales negotiations, which it then used to communicate with one or more of 

these buyers regarding the need for repairs and Fannie Mae’s intent to initiate foreclosure 

proceedings.9

 Tara Woods further alleged Fannie Mae misrepresented it would be 

cooperative during Tara Woods’ attempts to complete the sale, but then used the 

confidential information to communicate with potential buyers to discourage Stone 

Creek’s sale.

 

9

 Although Tara Woods alleges the information Fannie Mae demanded was not 

required by the contract, the Deed of Trust requires: “If an Event of Default has occurred 

and is continuing, Borrower shall deliver to Lender upon written demand all books and 

records relating to the Mortgaged Property or its operation.” (Appellant’s App’x Vol. I at 

87, Section 14(e).) In turn, the definition of “Mortgaged Property” includes “all of 

Borrower’s present and future right, title and interest in . . . all contracts, options and 

other agreements for the sale of the Land, the Improvements, the Fixtures . . . or any other 

part of the Mortgaged Property entered into by Borrower now or in the future, including 

cash or securities deposited to secure performance by parties of their obligations.” (Id. at 

76, Section 1(s)(8).) From these provisions, it appears Tara Woods was required, at least, 

to provide information regarding potential purchasers who made offers on the property. 
- 11 - 

 The district judge concluded the amended complaint failed to allege sufficient 

facts to establish a fiduciary relationship. She reasoned the “bare assertion” of Fannie 

Mae’s demand for information concerning the sale, “does not permit the Court to 

infer . . . [Fannie Mae] somehow manifested a willingness to thereafter act in [Tara 

Woods’] interests in discussing the potential sale of Stone Creek.” Tara Woods Ltd. 

P’ship v. Fannie Mae, 731 F. Supp. 2d 1103, 1119 (D. Colo. 2010). And “the mere fact 

that [Fannie Mae] gave advice to [Tara Woods] or discussed strategies in how to best 

market and sell Stone Creek does not give rise to an inference that [Fannie Mae] intended 

to assume a fiduciary duty to act for [Tara Woods] in aiding in the sale of the property.” 

Id. Because the amended complaint did “not plead facts from which [Fannie Mae’s] 

intent to assume a fiduciary duty to [Tara Woods] concerning attempts to sell Stone 

Creek can be plausibly inferred,” the claim was dismissed. Id. 

 Tara Woods complains of an “overly strict interpretation of the law of fiduciary 

duty” when the judge dismissed this claim on the pleadings. (Appellant Br. at 21.) It 

acknowledges that, “in the absence of special circumstances, the relationship between a 

lending institution and its customer is merely one of creditor and debtor,” to which no 

fiduciary duty applies. Premier Farm Credit, PCA v. W-Cattle, LLC, 155 P.3d 504, 523 

(Colo. App. 2006). It nevertheless asserts Fannie Mae’s intent to assume a fiduciary 

relationship is unnecessary when the relationship itself defines a fiduciary duty, i.e., a 

“confidential relationship which . . . induces one party to relax the care and vigilance it 

 
- 12 - 

would ordinarily have exercised in dealing with a stranger.” Dolton v. Capitol Fed. Sav. 

& Loan Ass’n, 642 P.2d 21, 23 (Colo. App. 1981) (quotation marks omitted). Because a 

fiduciary duty may occur where a special advisor/advisee relationship develops between 

the lender and borrower, Wells Fargo Realty Advisors Funding Inc. v. Uioli, Inc., 872 

P.2d 1359,1365 (Colo. App. 1994), Fannie Mae’s acceptance of confidential information 

that could affect the value of the collateral created in Tara Woods’ view, a “fiduciary 

duty not to use or disclose the confidential information concerning Tara Woods’ sales 

efforts and prospective buyers in a manner detrimental to Tara Woods.” (Appellant’s Br. 

at 24.) 

 A breach of a fiduciary duty arising from a confidential relationship requires the 

plaintiff to show: (1) the “trust and confidence [placed] in the other party was justified, 

or the party in whom such confidence was reposed either invited, ostensibly accepted, or 

acquiesced in such trust; (2) the alleged trustee assumed a primary duty to represent the 

other party’s interest in the subject of the transaction; (3) the nature and scope of the duty 

. . . extended to the subject matter of the suit; and (4) that duty was violated, resulting in 

damage to the party reposing such confidence.” Jarnagin v. Busby, Inc., 867 P.2d 63, 67 

(Colo. App. 1993). Tara Woods relies on the Colorado Court of Appeals decision in 

Rubenstein v. South Denver Nat’l Bank, 762 P.2d 755 (Colo. App. 1988) where the court 

held there was a confidential relationship between the Bank’s loan customers/depositors. 

The duty was breached when the Bank told one of the plaintiffs’ employees that the 

 
- 13 - 

plaintiffs’ line of credit would be cancelled and told one of the plaintiffs’ customers that 

plaintiffs were in financial difficulty. Id. at 756. The court held: “In light of the 

considerable authority for the general rule that a bank is under a duty not to disclose the 

financial condition of its customers and depositors, we conclude that the trial court erred 

in entering summary judgment dismissing plaintiffs’ claim for unauthorized disclosure of 

confidential information.” Id. at 757. Tara Woods contends the situation here is similar. 

We do not agree. 

 First, every conceivable banking loan involves the transmission of some sort of 

confidential information. A lender’s duty to protect such information cannot 

automatically create a fiduciary relationship as Tara Woods suggests; “there is no per se

fiduciary duty between a borrower and a lender.” Wells Fargo Realty Advisors Funding, 

Inc., 872 P.2d at 1365. Moreover, Rubenstein can be easily distinguished. Unlike the 

situation here, where the confidential information is the identity of potential purchasers of 

the loan’s security, Rubenstein addressed the unauthorized disclosure of financial

information to a third party. And even if Rubenstein extended to the disclosure of 

information other than the borrower’s financial information, “the lender’s duty to refrain 

from involvement in transactions antagonistic to the borrower arises [only] if a fiduciary 

relationship exists.” Id. Thus, Tara Woods must allege facts pre-dating the allegedly 

detrimental use of confidential information in order to effectively plead a fiduciary 
- 14 - 

relationship due to the confidence placed in another.10 It did not do so.11 The breach of 

fiduciary duty claim was properly dismissed.12

B. Statute of Limitation/ Interference with Prospective Business Advantage 

 Tara Woods’ amended complaint alleged three instances of interference with 

prospective business advantage; (1) filing a baseless foreclosure action; (2) secretly 

 

10 We do not say the disclosure of confidential information may not breach a 

contractual duty of good faith and fair dealing. Our discussion is limited to the creation 

of a fiduciary relationship. 

11 Tara Woods alleged below that it was in a fiduciary relationship because Fannie 

Mae gave it advice on the management and sale of Stone Creek. However, Tara Woods 

did not allege it took Fannie Mae’s advice and the record indicates any such advice was 

ignored. 

12 Tara Woods faces a second difficulty with its claim. As argued by Fannie Mae 

on appeal, even if we allowed Tara Woods to proceed, its breach of fiduciary duty claim 

would undoubtedly fail if subjected to a motion for summary judgment. In its amended 

complaint, Tara Woods failed to mention no less than three notices of default Fannie Mae 

had sent before the alleged breach of fiduciary duty. A fiduciary relationship does not 

arise when the parties are in an adverse position. See Wells Fargo Realty Advisors 

Funding, Inc., 872 P.2d at 1365 (“No fiduciary duty arises between a bank and its 

borrower where the bank did not offer financial advice, its advice was not always heeded, 

or where the borrower was advised by others, such as legal counsel.”). 

Tara Woods tells us the parties were not in an adversarial posture until the 

foreclosure proceeding in November 2006 because, until then, “the parties maintained a 

cooperative relationship: Fannie Mae and EF&A agreed to forbear from pursuing 

foreclosure in favor of working with Tara Woods to sell the property.” (Appellant’s 

Reply Br. at 6.) However, the February 16, 2006, (second) notice of default explicitly 

stated: “While Fannie Mae understands that there is, perhaps, a potential sale of the 

Mortgaged Property . . . the borrower must comply with its obligations under the Loan 

Documents.” (Appellees’ App’x Vol. I at 108.) Tara Woods has offered no evidence 

showing Fannie Mae’s requirement of continued compliance with the loan obligations to 

have been rescinded. An agreement to cooperate by parties represented by counsel does 

not make the relationship any less adverse for purposes of determining whether a 

fiduciary duty exists. 
- 15 - 

communicating with prospective purchasers to discourage the sale; and (3) sending notice 

of additional defaults after abandoning the foreclosure action. Fannie Mae moved to 

dismiss the claims based on Colorado’s two-year statute of limitations. See Colo. Rev. 

Stat. § 13-80-102(1)(a). In response, Tara Woods claimed it could not have known it was 

damaged until it sold the property for a reduced amount and therefore, its cause of action 

did not accrue until the sale in May 2008.13 The district judge rejected this argument. 

Calculating two years back from the date Tara Woods filed its complaint in state court 

(March 11, 2009), it dismissed the interference claim based on conduct occurring before 

March 11, 2007. The interference claim based on actions taken after the withdrawal of 

the foreclosure action was later dismissed on summary judgment and is not challenged 

here. 

 On appeal, Tara Woods takes a different approach. It now contends its cause of 

action could not have accrued until the date Fannie Mae withdrew the foreclosure, 

arguing: 

At the time the foreclosure action was commenced, Tara Woods could not 

have known whether its opposition to the foreclosure action would succeed, 

nor could Tara Woods have predicted that the foreclosure action would be 

unilaterally withdrawn. If Fannie Mae had succeeded in foreclosing on the 

property, Tara Woods could not have suffered injury as a result of tortious 

 

13 According to Tara Woods, because the amended complaint does not state the 

date when it first knew or should have known of the injury and its cause, the limitations 

bar did not appear on the face of the complaint and the question is normally one of fact. 

See Sterenbuch v. Gross, 266 P.3d 428, 432 (Colo. App. 2011). The facts alleged in the 

complaint, however, were sufficiently detailed to determine Tara Woods knew of its 

injury by November 2006 at the latest. 
- 16 - 

interference with a future sale of Stone Creek for the simple reason that 

Tara Woods would have had no property to sell. 

(Appellant’s Br. at 16.) 

 “It is generally held that questions raised for the first time on appeal are not to be 

considered by an appellate court.” Stahmann Farms, Inc. v. United States, 624 F.2d 958, 

961 (10th Cir. 1980). Nonetheless, Tara Woods asks that we relax this rule because “the 

question is one of law and failure to hear it results in miscarriage of justice.” Id. We 

decline this invitation as there is no miscarriage of justice here. 

 A claim accrues when “both the injury and its cause are known or should have 

been known by the exercise of reasonable diligence.” Colo. Rev. Stat. § 13-80-108(1). 

“[O]nce some injury has occurred, the statute begins to run, notwithstanding that further 

injury continues to occur.” Duell v. United Bank of Pueblo, N.A., 892 P.2d 336, 340 

(Colo. App. 1994). Where the fact of injury is known, uncertainty as to the extent of 

damages does not prevent the statute of limitations from running. Dove v. Delgado, 808 

P.2d 1270, 1274 (Colo. 1991). Here, Tara Woods alleged interference due to Fannie 

Mae’s communicated intent to foreclose on the property, and the initiation of a baseless 

foreclosure caused Tara Woods damage. Thus, as these injuries occurred prior to the 

time Fannie Mae withdrew the foreclosure action, “they did not remain uncertain or 

speculative pending the resolution of the [foreclosure] action.” Sterenbuch v. Gross, 266 

P.3d 428, 435 (Colo. App. 2011). The district court properly dismissed the interference 

claim as time-barred. 
- 17 - 

C. Breach of Implied Covenant of Good Faith and Fair Dealing 

 Tara Woods argues Fannie Mae’s demand for an additional $2.7 million in 

January 2007, based on the 2006 PNA, violated Fannie Mae’s obligation to reasonably 

use its discretion in determining additional costs to keep the property in good order and to 

prevent deterioration of the property.14 Grossman testified to his expectations that he 

need only repair and maintain the property so that it remained in the same condition as it 

was in 1999. The judge determined neither Grossman, nor Tara Woods’ property 

manager from 2006 through 2008 had sufficient experience to testify as to the 

commercial reasonableness of Fannie Mae’s demands. She then compared the property 

condition reports from 2004 through the date of the sale of the property, and noted the 

reports consistently stated the property was not well-maintained and would need repair in 

amounts ranging “between $1 and $2.7 million.” (Appellant’s App’x Vol. I at 267.) 

Based on this evidence, she concluded Tara Woods failed to establish Fannie Mae’s 

demand was commercially unreasonable. Basically, Tara Woods argues this conclusion 

is clearly erroneous when the costs of repairs and replacements required in the 1999 and 

2005 PNAs are compared to those required in the 2006 PNA (especially the cost for 

replacement of the boilers). 

 “Good faith performance of a contract emphasizes faithfulness to an agreed 

common purpose and consistency with the justified expectations of the other party.” 

 

14 Tara Woods does not appeal from the judgment on the remainder of its contract 

claims. 
- 18 - 

Wells Fargo Realty Advisors, Inc., 872 P.2d at 1363. “The duty of good faith and fair 

dealing applies when one party has discretionary authority to determine certain terms of 

the contract, such as quantity, price, or time.” Amoco Oil Co. v. Ervin, 908 P.2d 493, 498 

(Colo. 1995). “When one party uses discretion conferred by the contract to act 

dishonestly or to act outside of accepted commercial practices to deprive the other party 

of the benefit of the contract, the contract is breached.” Wells Fargo Realty Advisors 

Funding, Inc., 872 P.2d at 1363. However, “good faith and fair dealing” does not impose 

an obligation contrary to terms or conditions for which a party has bargained. Id.

 The parties agree Fannie Mae had the discretion to require additional payments if 

needed “to keep the Property in good order and repair . . . or to prevent the deterioration 

of the Property.” (Appellant’s App’x Vol. I at 118.) According to Tara Woods, the judge 

erroneously relied on Grossman’s expectations and did not consider commercial 

reasonableness under an objective standard. The argument mischaracterizes the record. 

 The judge did not rely solely on Grossman’s stated belief that he would only need 

to complete repairs according to the 1999 PNA. Indeed, she concluded Grossman and 

Tara Woods’ property manager could not testify as to what was commercially reasonable 

due to their lack of experience in owning or managing large rental properties. Instead, 

she looked to other available evidence—not only the PNAs, but to other reports of 

inspections by third parties, such as those given to the potential buyers during due 

diligence and the report commissioned by Tara Woods prior to auction. As the judge 

noted, “[i]n 1999, the condition of Stone Creek was described as average and wellmaintained” with an occupancy rate of 90 to 93%. (Appellant’s App’x Vol. I at 266.) By 
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late 2006, the occupancy rate had dropped to the 40% range. The prior property 

management company left due to Tara Woods’ failure to pay for standard maintenance 

costs. All of the property evaluations from 2004 through 2007 stated the property 

required significant repairs due to poor maintenance. 

 In every instance during 2005 and 2007, if a potential purchaser did not withdraw 

its offer completely, the due diligence resulted in a purchase price reduction of $2.75 

million to $4.5 million. While the increase in the cost of boiler replacements between the 

2005 PNA ($162,500.00) and the 2006 PNA (over $1 million) is surprising, we cannot 

say this difference leaves us with a definite and firm conviction that a mistake has been 

committed. See Anderson, 470 U.S. at 574 (“Where there are two permissible views of 

the evidence, the factfinder’s choice between them cannot be clearly erroneous.”). Under 

the terms of the agreement, the parties expected Tara Woods to keep the property 

maintained and gave Fannie Mae the discretion to determine the necessary costs of 

maintenance over the term of the loan. Tara Woods presented no evidence that Fannie 

Mae was commercially unreasonable in its demands. 

 AFFIRMED. 

Entered by the Court: 

Terrence L. O’Brien 

United States Circuit Judge