Opinion ID: 4164932
Heading Depth: 2
Heading Rank: 3

Heading: Legal Effect of Exculpating an Agent

Text: ¶25 The POA suggests an alternative understanding and asks us to give new legal effect to the plain language. By exculpating the boards, the POA contends, the Declaration and Design Guidelines necessarily exculpated the POA because its liability as a principal could derive only from the negligence of its exculpated agents. See City of Aurora ex rel. Util. Enter. v. Colo. State Eng’r, 105 P.3d 595, 622 (Colo. 2005) 3 We state this as a general proposition of law and do not announce an alternative framework for analyzing whether a party’s actions may allow a litigant to pierce the corporate veil—a body of law not implicated here. 10 (describing respondeat superior liability). Yet that position conflicts with our conclusion in Dworak v. Olson Constr. Co., 551 P.2d 198 (Colo. 1976). There, we held that a party may sue a principal on a theory of respondeat superior even if he executes a covenant not to sue the agent and that covenant does not expressly reserve the right to sue the principal. Id. at 200. ¶26 We decline this invitation to overrule our decision in Dworak. The principle of stare decisis, which “promotes uniformity, certainty, and stability of the law,” People v. LaRosa, 2013 CO 2, ¶ 28, 293 P.3d 567, 574, requires us to follow a preexisting rule of law unless we are “clearly convinced that the rule was originally erroneous or is no longer sound because of changing conditions and that more good than harm will come from departing from precedent,” People v. Blehm, 983 P.2d 779, 788 (Colo. 1999). We are not so convinced and do not reject Dworak’s rule now. ¶27 Even if we were to overturn our rule in Dworak, moreover, it would not benefit the POA. Because our initial task is to interpret and give effect to the language in the Declaration and Design Guidelines, see Pulte, ¶ 23, 382 P.3d at 826, we must decide what meaning to afford the documents’ silence regarding the POA’s liability. To do so, we look to the legal effect of that silence at the time the Declaration and Design Guidelines were executed as indicative of its intended meaning. See Cocquyt, 189 P. at 607. Thus, even if we were to adopt a new rule now, it would not shed light on the clauses’ intended meaning at the time of execution. ¶28 Here, the documents at issue post-date Dworak, and Dworak therefore supplied the legal effect of silence regarding the POA’s liability. See Chadwick v. Colt Ross 11 Outfitters, Inc., 100 P.3d 465, 468–69 (Colo. 2004) (treating an exculpatory agreement and a release of liability as interchangeable). Under Dworak, 551 P.2d at 200, in the absence of a specific provision exculpating the POA, the POA remained open to suit, even though the clauses limited the liability of the POA’s agents. At all relevant times, then, the legal effect of silence regarding the POA’s liability was such that the POA could not benefit from protections the exculpatory clauses afforded its agents. ¶29 We cannot now construe the documents’ silence to give it a meaning it could not have enjoyed at the time the Declaration and Design Guidelines were executed. See Cocquyt, 189 P. at 607. Indeed, if the clauses’ drafters had intended a result other than the one required by our case law, we would expect them to have included language to that effect. They didn’t, and we have no authority to rewrite the clauses to produce that result today.