Court Opinion

ID: 4088919
Source: CourtListenerOpinion
Date Created: 2016-10-12 15:06:44.936275+00
Date Added: 2024-06-11T07:45:24.917307
License: Public Domain

COLORADO COURT OF APPEALS                                         2016COA141

Court of Appeals Nos. 14CA2195 & 15CA0203
Eagle County District Court No. 12CV409
Honorable Frederick W. Gannett, Judge

DA Mountain Rentals, LLC, a Nebraska limited liability company,

Plaintiff-Appellant and Cross-Appellee,

v.

The Lodge at Lionshead Phase III Condominium Association Inc., a Colorado
not-for-profit corporation, a/k/a the Lodge at Lionshead III Condominium
Association, a Colorado not-for-profit corporation,

Defendant-Appellee and Cross-Appellant.

            JUDGMENT AFFIRMED IN PART, REVERSED IN PART,
                AND CASE REMANDED WITH DIRECTIONS

                                 Division I
                         Opinion by JUDGE MILLER
                        Taubman and Fox, JJ., concur

                         Announced October 6, 2016

Boyle/Apelman PC, Terence P. Boyle, Mark Apelman, Denver, Colorado, for
Plaintiff-Appellant and Cross-Appellee

Nemirow Perez P.C., Miles L. Buckingham, Ronald Nemirow, Lakewood,
Colorado, for Defendant-Appellee and Cross-Appellant
¶1    Plaintiff-appellant and cross-appellee, DA Mountain Rentals,

 LLC (DA), appeals the district court’s summary judgment in favor of

 defendant-appellee and cross-appellant, The Lodge at Lionshead

 Phase III Condominium Association Inc., a/k/a the Lodge at

 Lionshead III Condominium Association (Association), and the

 court’s order denying DA’s C.R.C.P. 37 motion for attorney fees.

 The Association cross-appeals the district court’s entry of three

 discovery orders.

¶2    This case concerns amendments (2012 Amendments) to the

 Condominium Declaration for the Lodge at Lionshead III

 (Declaration) establishing a condominium community (Community)

 in Vail. The Declaration was recorded many years before the

 enactment of the Colorado Common Interest Ownership Act

 (CCIOA), sections 38-33.3-101 through 38-33.3-402, C.R.S. 2016.

 A supermajority of the members of the Association voted to adopt

 the 2012 Amendments. The Association claims that CCIOA

 authorizes their adoption. DA, however, contends that the 2012

 Amendments conflict with the express terms of a proviso in the

 provision of the Declaration governing the procedure for adopting

 amendments. That proviso specifies that certain rights created by

                                   1
 the Declaration — including the allocated ownership interest of

 each unit — are permanent in nature and may not be altered

 without the unanimous consent of the owners of units and their

 first mortgagee lenders (Lenders).

¶3    We conclude that (1) CCIOA does not authorize the

 amendment that would delete that proviso and allow the alteration

 of such rights without the requisite unanimous consent of members

 and Lenders; (2) the 2012 Amendments are therefore invalid to the

 extent they conflict with the proviso; and (3) the 2012 Amendments

 regarding obsolescence and the creation of a mandatory buyout

 provision are valid.

¶4    In its cross-appeal, the Association challenges the district

 court’s order of the disclosure and production of documents from

 the file of the attorney who assisted the Association’s board of

 directors in developing and drafting the 2012 Amendments and the

 court’s denial of a related motion for protective order. The

 Association contends that the documents in the file were both

 privileged and irrelevant. We conclude that the court did not abuse

 its discretion by entering these orders.

                                      2
¶5    We accordingly affirm in part, reverse in part, and remand to

 the district court for further proceedings.

                           I.    Background

               A.    Adoption of the 2012 Amendments

¶6    The Community consists of twelve units. The Community is

 governed and operated by the Association in accordance with its

 governing documents, including, as relevant here, the Declaration.

 The owners of the units are members of the Association. Each

 member also owns a percentage of undivided interest in the general

 common elements (GCE) of the Community, which are defined in

 the Declaration as “the real property hereby submitted to

 condominium ownership . . . EXCEPT the Units.” The definition

 provides examples of the GCE, including the foundations, main

 walls, roofs, halls, lobbies, stairs, yards, gardens, parking areas,

 and installations of central services such as power, lights, gas, and

 water. The Declaration assigns each unit owner a percentage

 ownership in the GCE. The members cast votes on Association

 matters and share expenses in accordance with their respective

 ownership percentages. DA owns one of the condominium units

 and is thereby a member of the Association.

                                    3
¶7    The Declaration was recorded in 1978, and paragraph 18

 provides that the “Declaration may be amended by Owners

 representing sixty percent (60%), or more, of the [GCE] consenting

 and agreeing to such amendment by written instruments duly

 recorded.” This language is followed by an important proviso:

           provided, however, that the undivided interests
           in and to the [GCE] appurtenant to each Unit
           and the provisions of this Declaration
           governing the sharing of common expenses
           shall have a permanent character and shall
           not be altered without the consent of all of the
           Unit Owners and their first mortgagees of
           record[.]

 Thus, while this paragraph generally authorizes amendments to the

 Declaration by a sixty percent vote of member interests, the proviso

 expressly prohibits any alteration of the undivided interests in the

 GCE or the sharing of common expenses without the unanimous

 consent of the members and of their Lenders. In addition, other

 provisions of the Declaration require the unanimous approval of the

 Lenders for renovation or redevelopment and the agreement of unit

 owners representing eighty percent of the GCE interests for

 renovation and eighty-five percent for sale of the complex.

                                   4
¶8    In 2012, the members voted on the 2012 Amendments, which

 had been proposed by the Board of Directors (Board) after years of

 study. Section 13.1 of the 2012 Amendments would revise the

 procedure for amending the Declaration, stating in its entirety:

 “This declaration may be amended by the affirmative vote of the

 Unit Owners holding at least 67% of the total Association vote.”

 The unanimous member and lender consent requirements of the

 paragraph 18 proviso would therefore be eliminated. Other parts of

 the 2012 Amendments would eliminate lender consent

 requirements regarding obsolescence (sections 10.1(a) – (b)) and

 institute a “mandatory buyout” provision (section 10.1(c)) requiring

 the Association to purchase the units of owners who are not eligible

 to vote, who do not vote, or who vote against any proposal

 determining the obsolescence of the condominium complex.

¶9    Members constituting approximately seventy-four percent of

 the GCE interests voted in favor of the 2012 Amendments, thus

 exceeding the sixty percent requirement of paragraph 18 of the

 Declaration. Before the Association recorded the 2012

 Amendments with the county, however, DA sought a declaratory

 judgment in district court that the 2012 Amendments were invalid

                                   5
  because they violated the terms of the Declaration. Because of the

  lawsuit, the Association has not recorded the 2012 Amendments,

  and they consequently are not yet effective. See § 38-33.3-217(3),

  C.R.S. 2016.

                     B.   Disclosures and Discovery

¶ 10   The parties made C.R.C.P. 26(a)(1) disclosures in the district

  court, but the Association did not disclose documents that it

  claimed were privileged. DA filed a motion to compel the

  Association to produce a privilege log of the Association’s attorneys’

  documents, which the court granted in December 2012. The

  Association complied with the order and produced the log, and DA

  requested disclosure of communications between the Association’s

  lawyers and the Board and Board committees. The Association

  asserted that the documents were privileged and not relevant. DA

  then filed a motion to compel production of all the logged

  documents, and the Association filed a motion for a protective

  order. The district court granted DA’s motion and denied the

  Association’s motion. Finally, DA filed a motion pursuant to

  C.R.C.P. 37, requesting costs and attorney fees related to its two

                                    6
  motions to compel and the Association’s motion for a protective

  order. The district court denied this motion.

                         C.    C.R.C.P. 56 Motions

¶ 11      Shortly after the court granted DA’s second motion to compel

  and denied the Association’s motion for a protective order, the

  Association filed a motion for determination of law pursuant to

  C.R.C.P. 56(h) to determine the validity of the 2012 Amendments.

  The court granted the Association’s motion and determined that (1)

  the 2012 Amendments had been validly adopted and (2) the sixty-

  seven percent voting requirement they imposed did not violate the

  terms of the Declaration or CCIOA. The Association next filed a

  motion for summary judgment under C.R.C.P. 56(b) to resolve the

  remaining legal issues surrounding the provisions of the 2012

  Amendments eliminating the lender approval requirements and

  providing for mandatory buyouts. The court granted this motion as

  well.

                              D.   The Appeals

¶ 12      DA filed two appeals. In the first, 14CA2195, DA argues that

  the district court erred by granting the Association’s Rule 56

  motions. The second appeal, 15CA0203, challenged two post-

                                     7
  judgment district court orders relating to attorney fee and cost

  awards. The Association moved to dismiss the second appeal

  because the determination of the attorney fee issue was not

  completed by the district court and was not a final judgment

  appropriate for our review. Another division of this court partially

  granted the motion and (1) dismissed the portion of the appeal that

  sought review of the district court’s order granting the Association’s

  attorney fees as the prevailing party and setting it for a hearing

  after mandate and (2) denied the motion as to DA’s argument that

  the district court improperly denied its motion for attorney fees as a

  sanction for alleged discovery violations under Rule 37(a)(4). The

  division also consolidated the two cases.

¶ 13   On cross-appeal, the Association argues that the court erred

  by granting DA’s motions to compel and denying its motion for a

  protective order.

¶ 14   We turn first to the question of the validity of the 2012

  Amendments.

                 II.   Validity of the 2012 Amendments

¶ 15   DA argues that the district court erred when it granted the

  Association’s two Rule 56 motions because (1) the court incorrectly

                                     8
  held that section 38-33.3-217(1)(a)(I) controls over section 38-33.3-

  120(1)(a), C.R.S. 2016, and imposes a sixty-seven percent cap on

  amendment requirements; (2) the 2012 Amendments requiring only

  sixty-seven percent of member votes for amending the Declaration,

  as construed by the district court, are unconstitutional under the

  Contract Clauses of the United States and Colorado Constitutions,

  U.S. Const. art. I, § 10, cl. 1; Colo. Const. art. II, § 11; (3) the

  amendment eliminating lender approval is invalid as a matter of

  law; and (4) the mandatory buyout provision is invalid as a matter

  of law.

                          A.    Standard of Review

¶ 16   We review de novo legal questions decided under Rule 56(b)

  and (h). Goodman Assocs., LLC v. Winter Quarters, LLC, 2012 COA
96, ¶ 20 (C.R.C.P. 56(h)); McIntire v. Trammell Crow, Inc., 172 P.3d
977, 979 (Colo. App. 2007) (summary judgment). Under Rule 56(h),

  a district court may enter an order deciding a legal question “[i]f

  there is no genuine issue of any material fact necessary for the

  determination of the question of law.” Similarly, summary

  judgment under Rule 56(b) is appropriate where the trial court

  determines that there is no genuine dispute as to any material fact

                                       9
  and that the moving party is entitled to judgment as a matter of

  law. Larrieu v. Best Buy Stores, L.P., 2013 CO 38, ¶ 6. Where, as

  here, we must interpret a contract and a statute, we do so de novo.

  Oster v. Baack, 2015 COA 39, ¶ 35 (contract); McLaughlin v. Oxley,

  2012 COA 114, ¶ 9 (statute). We also review the constitutionality of

  a statute de novo. Justus v. State, 2014 CO 75, ¶ 17.

       B.   Validity of the 2012 Amendments Under the Declaration

¶ 17    This dispute concerns the question of the validity, under the

  terms of the Declaration and CCIOA, of the 2012 Amendments that

  would eliminate (1) the unanimous member and lender consent

  requirements for amendments that alter the GCE or the provisions

  of the Declaration governing the sharing of common expenses and

  (2) the unanimous lender approval requirements for determining

  obsolescence.

¶ 18    Before we reach the issue of how CCIOA interacts with the

  2012 Amendments, we first examine the terms of the Declaration

  itself to determine whether they permit the 2012 Amendments.

¶ 19    When interpreting a declaration, we follow the “dictates of

  plain English” and construe the document as a whole. Vista Ridge

  Master Homeowners Ass’n v. Arcadia Holdings at Vista Ridge, LLC,

                                    10
  2013 COA 26, ¶ 18 (quoting Buick v. Highland Meadow Estates at

  Castle Peak Ranch, Inc., 21 P.3d 860, 862 (Colo. 2001)). “If a

  declaration is clear on its face, we will enforce it as written.” Id.

¶ 20   As we stated, paragraph 18 of the Declaration permits

  amendment by agreement of unit owners representing sixty percent

  or more of the GCE,

             provided, however, that the undivided interests
             in and to the [GCE] appurtenant to each Unit
             and the provisions of this Declaration
             governing the sharing of common expenses
             shall have a permanent character and shall not
             be altered without the consent of all of the Unit
             Owners and their first mortgagees of record[.]

  (Emphasis added.) Under its plain meaning, this provision makes

  permanent the undivided interests in and to the GCE and the

  provisions governing the sharing of common expenses, requiring the

  unanimous consent of members and Lenders to change them.

¶ 21   Under the Declaration, common expenses include “all sums

  lawfully assessed” against the GCE by the Board and expenditures

  “for the operation and maintenance of the GCE.” And paragraph 19

  of the Declaration provides that the members share common

  expenses in proportion to their respective ownership shares of the

  GCE as set forth in Exhibit B to the Declaration. The same

                                     11
  percentages are used to determine their voting interests. Thus, by

  eliminating the unanimity requirement for members and Lenders,

  the 2012 Amendments would permit alteration of the undivided

  interests in the GCE and the sharing of common expenses without

  one hundred percent member and lender approval. This could

  occur if, for example, two-thirds of the members voted to amend

  Exhibit B and reallocate the percentage ownership interests of some

  or all of the owners. Therefore, by the Declaration’s own terms, the

  2012 Amendments are invalid to the extent that they eliminate the

  permanent unanimity requirement for member and lender approval

  mandated by paragraph 18.

¶ 22   The Association stresses that the 2012 Amendments would

  not on their face affect the GCE. That is technically true. But if the

  2012 Amendments were allowed to go into effect, two-thirds of the

  members of the Association would be free to adopt a second set of

  amendments that could reallocate the GCE percentage interests by

  simply amending the percentages on Exhibit B to the Declaration or

  authorizing a redevelopment adding or subtracting the number of

  units and modifying the GCE percentage interests accordingly.

  Such a two-step process would obviously conflict with the clearly

                                    12
  expressed intent of the proviso to paragraph 18 that the undivided

  interests in GCE “have a permanent character” and “shall not be

  altered without the consent of all of the Unit Owners and their first

  mortgagees.”

¶ 23   Accordingly, the express terms of the Declaration bar any

  amendments that would authorize alteration of GCE interests or the

  provisions of the Declaration governing the sharing of common

  expenses without unanimous consent of all members and Lenders.

¶ 24   We reach a different conclusion with regard to the other 2012

  Amendments at issue. The provisions of the Declaration concerning

  the requirements for the declaration of obsolescence (paragraphs

  25(e) and (f)) do not contain similar permanency safeguards. Most

  notably, unlike paragraph 18, paragraph 25 does not stipulate that

  the unanimous lender requirements and the eighty and eighty-five

  percent member approval requirements are “permanent” and

  immune from alteration. Paragraph 18 carves out only two

  exceptions to its sixty percent member interest requirement for

  amending the Declaration, and neither applies to votes for

  obsolescence (assuming that no related change in the undivided

                                    13
  interests in GCE or in the provisions of the Declaration governing

  common expenses is made).

¶ 25   Thus, the drafter of the Declaration knew how to immunize a

  provision from future amendment and did so in the proviso to

  paragraph 18. Because the drafter did not include similar language

  in paragraphs 25(e) and 25(f), those provisions were left subject to

  the sixty percent amendment process. See Hutchinson v. Mullins,

  491 P.2d 71, 74 (Colo. App. 1971) (not published pursuant to

  C.A.R. 35(f)) (applying the rule of expressio unius exclusio alterius,

  which is routinely applied in the context of statutory interpretation,

  to contractual interpretation); cf. Hiner v. Johnson, 2012 COA 164,

  ¶ 19. For this reason, under the plain terms of the Declaration, the

  obsolescence provisions are subject to the rule requiring only sixty

  percent member approval to amend. This requirement was met,

  and we therefore conclude that the 2012 Amendments eliminating

  lender approval to declare obsolescence were valid under the

  original Declaration.

          C.   Validity of the 2012 Amendments under CCIOA

¶ 26   Next, we address the interaction between CCIOA and the

  unanimous member and lender consent requirements for

                                     14
  amendments that alter the GCE.1 We conclude that the foregoing

  construction of the Declaration does not conflict with CCIOA.

¶ 27   Under the basic principles of statutory interpretation, we look

  first to the plain language of the statute and give words and phrases

  their ordinary meaning. Fischbach v. Holzberlein, 215 P.3d 407,

  409 (Colo. App. 2009); Stevinson Imps., Inc. v. City & Cty. of Denver,

  143 P.3d 1099, 1103 (Colo. App. 2006). “The plainness or

  ambiguity of statutory language is determined by reference to the

  language itself, the specific context in which that language is used,

  and the broader context of the statute as a whole.” Holzberlein, 215
P.3d at 409 (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 341

  (1997)). We do not, however, adopt any interpretation that leads to

  an absurd conclusion or is at odds with the legislative scheme. In

  re J.N.H., 209 P.3d 1221, 1223 (Colo. App. 2009); Bryant v. Cmty.

  Choice Credit Union, 160 P.3d 266, 274 (Colo. App. 2007).

¶ 28   As a general matter, CCIOA does not apply to common interest

  communities created in Colorado before July 1, 1992. § 38-33.3-

  117(3), C.R.S. 2016. There are two important exceptions. First,

  1DA has not challenged any of the remaining 2012 Amendments
  under CCIOA other than the mandatory buyout provision, which we
  address in Part II.E.

                                    15
  such a pre-existing common interest community may elect to be

  governed by CCIOA. § 38-33.3-118, C.R.S. 2016. The Association

  has not made this election for the Community. Second, section 38-

  33.3-117 contains a list of CCIOA provisions, substantially

  lengthened over the years, which apply to pre-existing common

  interest communities. As relevant here, these provisions include

  section 38-33.3-120 and section 38-33.3-217(1). § 38-33.3-

  117(1)(f), (1.5)(d).

¶ 29    In support of its argument that, under CCIOA, the 2012

  Amendments affecting GCE required unanimous approval of the

  members and Lenders, DA argues that the matter is controlled by

  section 38-33.3-120(1)(a), which provides, in pertinent part:

              In the case of amendments to the declaration
              . . . of any common interest community
              created within this state before July 1, 1992
              . . . [i]f the substantive result accomplished by
              the amendment was permitted by law in effect
              prior to July 1, 1992,2 the amendment may be
              made either in accordance with that law, in
              which case that law applies to that
              amendment, or it may be made under this
              article[.]

  2 Neither party has argued that the substantive result accomplished
  by the relevant 2012 Amendments was not permitted by law in
  effect prior to July 1, 1992 (the effective date of CCIOA), apart from
  the terms of the Declaration itself.

                                     16
  Section 38-33.3-120(1) was made retroactive by section 38-33.3-

  117(1)(f), which provides that section 38-33.3-120(1)(a) applies to all

  common interest communities created within the state before July

  1, 1992, with respect to events and circumstances occurring on or

  after that date. On its face, then, section 38-33.3-120(1)(a) applies

  to the Community and the 2012 Amendments.

¶ 30   The Association counters that this issue is controlled by

  section 38-33.3-217(1)(a)(I), which provides:

            [T]he declaration . . . may be amended only by
            the affirmative vote or agreement of unit
            owners of units to which more than fifty
            percent of the votes in the association are
            allocated or any larger percentage, not to
            exceed sixty-seven percent, that the
            declaration specifies. Any provision in the
            declaration that purports to specify a
            percentage larger than sixty-seven percent is
            hereby declared void as contrary to public
            policy, and until amended, such provision
            shall be deemed to specify a percentage of
            sixty-seven percent.

  (Emphasis added.) This provision was made retroactive by section

  38-33.3-117(1.5)(d), to apply to common interest communities

  created within the state before July 1, 1992, with respect to events

  and circumstances occurring on or after January 1, 2006. Again,

                                    17
  on its face, this provision applies to the Community and the 2012

  Amendments.

¶ 31   The parties thus agree that the statutes conflict because

  section 38-33.3-217(1)(a)(I) apparently forbids what section 38-

  33.3-120(1)(a) and the Declaration permit: a unanimous member

  and lender consent requirement to alter the GCE. As the

  Association correctly points out, in the event of a conflict between

  CCIOA and the terms of a declaration, CCIOA generally controls.

  See § 38-33.3-104, C.R.S. 2016 (“Except as expressly provided in

  [CCIOA], provisions of [CCIOA] may not be varied by agreement, and

  rights conferred by [CCIOA] may not be waived.”); see also Ryan

  Ranch Cmty. Ass’n v. Kelley, 2014 COA 37M, ¶ 31.

¶ 32   However, we conclude that a closer look at section 38-33.3-

  217(1)(a)(I) reveals that CCIOA expressly permits the unanimity

  requirement in paragraph 18, thus eliminating any conflict.

¶ 33   Section 38-33.3-217(1)(a)(I) begins by spelling out the

  exceptions to its application: “[e]xcept as otherwise provided in

  subparagraphs (II) and (III) of this paragraph (a)[.]” Relevant here is

  subparagraph (III)(A), which provides that “[t]his paragraph (a) shall

  not apply . . . [t]o the extent that its application is limited by

                                      18
subsection (4) of this section.” Subsection (4)(a) carves out an

exception to the sixty-seven percent cap for amendments changing

the allocated interests of a unit, based on the language in a

declaration:

          Except to the extent expressly permitted or
          required by other provisions of this article, no
          amendment may create or increase special
          declarant rights, increase the number of units,
          or change the boundaries of any unit or the
          allocated interests of a unit in the absence of a
          vote or agreement of unit owners of units to
          which at least sixty-seven percent of the votes
          in the association, including sixty-seven
          percent of the votes allocated to units not
          owned by a declarant, are allocated or any
          larger percentage the declaration specifies.

(Emphasis added.) Subsection (4)(a) thus expressly recognizes that

a declaration may require a vote by unit owners in excess of sixty-

seven percent to change the allocated interest of a unit. Although

section 38-33.3-217(1)(a)(I) establishes a general sixty-seven

percent voting maximum for amending a declaration, it does not

apply to changes in the allocated interests of the unit — or, as

expressed in paragraph 18, “the undivided interests in and to the

[GCE] appurtenant to each unit.” More specifically, subsection

(4)(a) expressly permits a requirement that an amendment that

                                  19
  alters the GCE must pass with a percentage higher than sixty-seven

  percent, when specified by the declaration. Thus, CCIOA permits

  the unanimous member consent requirement for amendments that

  change the GCE or govern the sharing of common expenses.

¶ 34   Turning to the unanimous lender requirement to these types

  of amendments, nothing in CCIOA precludes lender approval

  requirements in this context. To the contrary, section 38-33.3-

  217(1)(b) provides a notice procedure associations may follow when

  a declaration requires first mortgagee consent to amendments to

  declarations. Cf. Vallagio at Inverness Residential Condo. Ass’n v.

  Metro. Homes, Inc., 2015 COA 65, ¶ 37 (upholding a declarant

  approval requirement) (cert. granted June 20, 2016).

¶ 35   Thus, we determine that (1) section 13.1 of the 2012

  Amendments eliminating unanimous member and lender approval

  for amendments that change the GCE or govern the sharing of

  common expenses is invalid under the terms of the Declaration and

  (2) the Declaration’s unanimity requirement is valid under CCIOA.

  We now address the 2012 Amendments’ elimination of the lender

  approval requirements for declarations of obsolescence prior to

  renovation or sale.

                                   20
                          D.      Lender Approval

¶ 36   DA contends that the 2012 Amendments violate the Contract

  Clauses of the United States and Colorado Constitutions. Because

  of our rulings in Parts II.B and II.C above, we need only address the

  elimination of lender approval for declaring obsolescence.

¶ 37   However, DA has not pointed out where this issue was

  preserved in the district court. Similarly, it has not identified, and

  we are not aware of, any location in the record where it asserted in

  the district court that the 2012 Amendments’ effect on lender

  approval was unconstitutional. See C.A.R. 28(a)(7)(A). Thus, the

  issue is not preserved. See Hassler v. Account Brokers of Larimer

  Cty., Inc., 2012 CO 24, ¶ 35.

¶ 38   Moreover, the discussion of this issue in DA’s opening brief

  addresses primarily the reduction of the one hundred percent

  owner voting requirements to sixty-seven percent. DA makes a

  single reference to the elimination of the lender approval

  requirement, but without explanation. Thus, we need not consider

  it. See Barnett v. Elite Props. of Am., Inc., 252 P.3d 14, 19 (Colo.

  App. 2010) (appellate court will not consider a proposition

                                      21
  presented without argument or development; an appellant must

  make specific assertions of error, supported by facts and authority).

¶ 39   DA also argues that elimination of lender approval would place

  it in default on its deed of trust on its condominium unit. The only

  factual support for this allegation is an unverified pleading on

  behalf of DA’s apparent Lender. However, we cannot accept

  unsworn contentions made by a party’s lawyer where there is no

  evidence in the record to support them. See Mining Equip. Inc. v.

  Leadville Corp., 856 P.2d 81, 86 (Colo. App. 1993) (rejecting a

  party’s contention because the party cited no supporting evidence

  in the record); Westrac, Inc. v. Walker Field, 812 P.2d 714, 718

  (Colo. App. 1991) (bare statements in briefs cannot supply that

  which must appear from a certified record). DA asserts that

  elimination of the lender approval requirements would violate

  section 38-33.3-217. As previously discussed, however, section 38-

  33.3-217 does not address amendments to lender approval

  requirements in declarations, other than to provide a notification

  procedure.

¶ 40   Accordingly, we reject DA’s challenge based on the alleged

  effect of the 2012 Amendments on the lender approval requirements

                                    22
  in the Declaration, except as they relate to GCE and the sharing of

  common expenses.

                   E.    Mandatory Buyout Provision

¶ 41   Finally, DA argues that the mandatory buyout provision in

  section 10.1(c) of the 2012 Amendments is invalid as a matter of

  law because it would violate (1) the Board’s fiduciary duties to deal

  impartially with the Association’s members; (2) the Board’s fiduciary

  duty of loyalty to the members;3 and (3) the implied covenant of

  good faith and fair dealing. We disagree.

¶ 42   At the outset, we note that DA has cited no authority that

  mandatory buyouts are invalid as a matter of law. To the contrary,

  Colorado has provided for forced buyouts by statute in certain

  circumstances. See, e.g., § 7-64-701, C.R.S. 2016 (forced buyout

  under Colorado Uniform Partnership Act). One division of this

  court has suggested that a forced buyout in a closely held

  corporation could be a preferable remedy to dissolution. Polk v.

  Hergert Land & Cattle Co., 5 P.3d 402, 406 (Colo. App. 2000). And

  3 The parties do not raise the issue whether the Association owes
  these fiduciary duties to its members. We therefore do not address
  that issue. We assume, without deciding, that DA may assert its
  breach of fiduciary responsibility claims against the Board, even
  though it has not named any Board members in its complaint.

                                    23
  the Declaration that DA is defending and relying on includes a

  forced buyout clause.

¶ 43   A fiduciary has a duty to deal with utmost good faith and

  solely for the benefit of the beneficiary; the fiduciary owes to its

  beneficiaries, among other duties, the duties of loyalty and to deal

  with them impartially. Woodmoor Imp. Ass’n v. Brenner, 919 P.2d
928, 933 (Colo. App. 1996). DA has not demonstrated that the

  mandatory buyout provision in this case violates the duties of

  impartiality or loyalty as a matter of law. The provision applies to

  all members and does not favor certain members at the expense of

  any others. It does not permit the Association to compete with the

  members or otherwise advance its own interests over those of the

  members. See Restatement (Third) of Agency § 8.04 (2006) (duty of

  loyalty means an agent may not compete with the principal

  concerning the subject matter of the agency); see also Smith v.

  Mehaffy, 30 P.3d 727, 733 (Colo. App. 2000) (“A breach of the duty

  of undivided loyalty occurs when [the agent] obtains a personal

  advantage in dealing with a [beneficiary] or . . . creates

  circumstances that adversely affect the [beneficiary’s] interests.”).

                                     24
¶ 44   The implied duty of good faith and fair dealing “may be relied

  upon ‘when the manner of performance under a specific contract

  term allows for discretion on the part of either party.’” New Design

  Constr. Co. v. Hamon Contractors, Inc., 215 P.3d 1172, 1181 (Colo.

  App. 2008) (quoting City of Golden v. Parker, 138 P.3d 285, 292

  (Colo. 2006)). “Discretion in performance occurs ‘when the parties,

  at formation, defer a decision regarding performance terms of the

  contract’ leaving one party with the power to set or control the

  terms of performance after formation.” Id. (quoting Parker, 138

  P.3d at 292). “Whether a party acted in good faith is a question of

  fact which must be determined on a case by case basis.” Amoco Oil

  Co. v. Ervin, 908 P.2d 493, 499 (Colo. 1995).

¶ 45   We conclude for two reasons that DA has not demonstrated a

  breach of the implied covenant of good faith and fair dealing. First,

  there is no discretionary term to which it would apply; the

  mandatory buyout provision requires the Association to purchase a

  dissenting or abstaining voter’s unit at the fair market value of the

  unit, as determined by an appraisal. The mandatory buyout

  provision does not give the Association any discretion to determine

  the terms or conditions of the buyout. Second, because, under the

                                    25
  facts of this case, the Association has not acted on this provision by

  initiating a mandatory buyout, we cannot speculate whether, in a

  hypothetical future buyout, the Board might then fail to act in good

  faith.

¶ 46       Accordingly, DA has not established the invalidity of the

  mandatory buyout provision.

                                F.    Summary

¶ 47       In summary, we conclude that section 13.1 of the 2012

  Amendments, which provides that the Declaration may be amended

  by affirmative vote of the owners holding at least sixty-seven

  percent of the total Association vote, is invalid to the extent it

  conflicts with the prohibition in paragraph 18 of the Declaration on

  any alteration in the undivided interests in the GCE appurtenant to

  each unit and the provisions of the Declaration governing the

  sharing of common expenses. Those provisions may not be

  amended without the consent of all the owners and their Lenders in

  the manner prescribed by paragraph 18.4 In all other respects, the

  4Because we make these determinations as a matter of law and DA
  prevails on this issue, we need not address DA’s argument that a
  genuine issue of material fact exists as to whether the 2012
  Amendments alter the GCE.

                                       26
  2012 Amendments challenged by DA are valid. On remand, the

  district court should issue a decree so stating.

             III.   DA’s Request for Attorney Fees and Costs

¶ 48   DA contends that the district court erred by denying its

  request for fees and costs incurred in connection with its efforts to

  obtain disclosure and discovery of documents the Association

  claimed are privileged.

¶ 49   We review for an abuse of discretion a district court’s decision

  to grant or deny sanctions, including an award of fees and costs,

  under C.R.C.P. 37 based on disclosure and discovery deficiencies.

  Winkler v. Shaffer, 2015 COA 63, ¶ 7. Courts are given wide

  flexibility in determining whether to impose sanctions. Kallas v.

  Spinozzi, 2014 COA 164, ¶ 19. A court abuses its discretion if its

  decision is manifestly arbitrary, unreasonable, or unfair or based on

  an erroneous application of the law. Vanderpool v. Loftness, 2012
COA 115, ¶ 19.

¶ 50   C.R.C.P. 37(a)(4)(A) provides that when a motion to compel

  disclosure or discovery is granted,

            the court may, after reasonable notice and an
            opportunity to be heard, if requested, require
            the party or deponent whose conduct

                                    27
             necessitated the motion or the party or
             attorney advising such conduct or both of
             them to pay to the moving party the
             reasonable expenses incurred in making the
             motion, including attorney fees, unless the
             court finds that the motion was filed without
             the movant’s first making a good faith effort to
             obtain the disclosure or discovery without
             court action, or that the opposing party’s
             nondisclosure, response, or objection was
             substantially justified or that other
             circumstances make an award of expenses
             manifestly unjust.

  (Emphasis added.) As is apparent from the plain language of Rule

  37, awarding fees and costs is not mandatory. See Kallas, ¶ 20; 4

  Sheila K. Hyatt & Stephen A. Hess, Colorado Practice Series, Civil

  Rules Annotated § 37 authors’ cmt. 37.3 (4th ed. 2005) (“Rule

  37(a)(4) provides for an order requiring payment of expenses of the

  motion to compel after the court determines whether the discovery

  is improperly sought or withheld. This award is discretionary, and

  the court has the flexibility to fashion such orders as are just.”).

¶ 51   DA argues that the district court erred because (1) it denied

  DA’s motion for attorney fees in a single-sentence order that is

  devoid of any findings and (2) the Association’s failure to produce

  was not substantially justified. We are not persuaded.

                                     28
¶ 52   Notwithstanding DA’s statement that “[t]here is no way to

  know the trial court’s reasoning or analysis,” the district court

  adopted the Association’s arguments in its response to DA’s

  C.R.C.P. 37 motion as its reasoning for denying DA’s motion for

  sanctions. The Association’s response sets forth multiple reasons

  supporting a denial of attorney fees, including that the Association

  was justified in asserting a privilege on the attorney files that DA

  sought that were not relevant to the case.

¶ 53   We conclude that the record supports the determination that

  the Association was substantially justified in objecting to logging

  and producing the attorney files requested by DA for several

  reasons:

       • The Association argued that the documents sought

          exceeded the scope of permissible discovery. The district

          court recognized the legitimacy of this concern when it

          granted the motion to compel production of a privilege log:

          “Whether the Complaint is sufficiently particular to require

          a disclosure pursuant to C.R.C.P. 26 is a close question.”

       • None of the orders by the district court and special master

          granting the motions to compel suggested that the

                                    29
  Association’s objections to the motions to compel were filed

  in other than good faith or otherwise not substantially

  justified.

• In its order denying the C.R.C.P. 37(a)(4) motion, the court

  adopted the reasons set forth in the Association’s response

  to the motion. The response provided the bases for the

  positions it took in opposing the motions to compel. We

  conclude that the district court did not abuse its discretion

  in finding that those reasons provided substantial

  justification for the Association’s objections.

• DA argues that the filing of a motion for a protective order

  was unnecessary and “arguably unauthorized.” The

  Association responds that it filed the protective order to

  preserve it objections, citing Scott v. Matlack, Inc., 39 P.3d
1160, 1173 (Colo. 2002) (“Once sanctions are sought, the

  party that failed to file for a protective order has waived its

  objection to the admissibility of evidence it failed to produce

  through discovery.”). We conclude that the district court

  did not abuse its discretion in denying attorney fees with

  respect to the motion on this basis.

                             30
¶ 54   Accordingly, the district court did not abuse its discretion by

  denying DA’s C.R.C.P. 37(a)(4) motion for fees and costs.

                   IV.   The Association’s Cross-Appeal

¶ 55   On cross-appeal, the Association challenges the district court’s

  rulings requiring the Association to produce privilege logs of certain

  documents, denying its motion for a protective order for those

  materials, and granting DA’s motions to compel their production.

  As part of the relief sought by the Association on the cross-appeal,

  it requests the return of its documents claimed to be privileged. We

  review the discovery rulings for an abuse of discretion. Cardenas v.

  Jerath, 180 P.3d 415, 421 (Colo. 2008) (privilege log); Stone v. State

  Farm Mut. Auto. Ins. Co., 185 P.3d 150, 155 (Colo. 2008) (motion to

  compel); Liscio v. Pinson, 83 P.3d 1149, 1156 (Colo. App. 2003)

  (protective order).

                              A. The Privilege Log

¶ 56   We first address the court’s December 2012 order requiring

  the Association to provide a privilege log. After the parties made

  their initial disclosures, DA filed a motion to compel the Association

  to turn over the files of the attorney who advised it on matters

  related to the drafting of the 2012 Amendments. The court ordered

                                    31
  the Association to disclose documents in the attorney’s file that are

  not privileged and to create a privilege log for those withheld. The

  Association did so and now argues that the court abused its

  discretion in so ordering because the attorney files were not

  relevant to DA’s claims.

¶ 57   The Colorado Rules of Civil Procedure govern the scope of

  discovery in civil cases. The test for determining whether

  information is discoverable is found in C.R.C.P. 26(b)(1). The

  version of the rule in effect at all relevant times provided, in

  pertinent part:

             parties may obtain discovery regarding any
             matter, not privileged, that is relevant to the
             claim or defense of any party. . . . Relevant
             information need not be admissible at the trial
             if the discovery appears reasonably calculated
             to lead to the discovery of admissible evidence.

  C.R.C.P. 26(b)(1) (2013).5 Relevance for purposes of discovery is

  different from relevance for admissibility of evidence at trial. Parties

  may obtain discovery that relates to a claim or defense of any party

  and is “reasonably calculated to lead to the discovery of admissible

  5C.R.C.P. 26(b)(1) was amended in July 2015, effective on July 1,
  2015, for cases filed on or after that date, to narrow the scope of
  discovery and to import the principle of proportionality from former
  C.R.C.P. 26(b)(2)(F)(iii).

                                     32
  evidence,” even if not admissible itself. Silva v. Basin W., Inc., 47
P.3d 1184, 1188 (Colo. 2002) (citation omitted); see also C.R.C.P.

  26(b)(1).

¶ 58   Under the former version of C.R.C.P. 26(b)(5) (now C.R.C.P.

  (26)(b)(5)(A)), when a party believes that information subject to

  disclosure or sought in discovery is privileged, the party may

  withhold the information, but must “make the claim [of privilege]

  expressly and shall describe the nature of the documents,

  communications, or things not produced or disclosed in a manner

  that, without revealing information itself privileged or protected, will

  enable other parties to assess the applicability of the privilege or

  protection.” See Alcon v. Spicer, 113 P.3d 735, 742 (Colo. 2005)

  (“[W]hen a party wishes to assert privilege in response to a discovery

  request he or she must notify the party seeking disclosure by

  providing a privilege log identifying the documents withheld and

  explaining the privilege claim.”).

¶ 59   The Association argues that the district court applied the

  wrong legal standard to DA’s request for the attorney’s file and the

  contents of the file were not relevant because “[t]he key question in

  this case — whether § [38-33.3-]217(1) automatically reduces the

                                       33
  various supermajority requirements in the 1977 Declarations — is

  strictly a question of statutory interpretation.”

                               1. Proportionality

¶ 60   We first address the Association’s argument on the proper

  legal standard. It argues that the court did not make a finding on

  proportionality required by DCP Midstream, LP v. Anadarko

  Petroleum Corp., 2013 CO 36. DA counters that the court was not

  required to do so because it ruled on the scope of discovery before

  Anadarko was decided and the rule in effect at the time did not

  require a proportionality analysis.

¶ 61   A brief timeline of the pertinent motions and rulings here is

  helpful in assessing this argument. The district court ruled on DA’s

  motion for disclosure and a privilege log in December 2012, and it

  appointed the special master to resolve discovery issues in early

  2013. As relevant here, the court ordered the Association to

  produce the attorney’s files and make a privilege log for withheld

  privileged documents because the attorney was an “integral part” of

  the facts giving rise to the litigation and the court would be faced

  with similar motions later if it did not address the request.

  Anadarko was decided in June 2013, and the Association filed a

                                     34
  supplemental brief the following month arguing that the court

  should apply Anadarko to the discovery motions before it, thus

  preserving the argument for appeal. The special master issued an

  order thereafter in September 2013 finding that the documents

  were not protected by the attorney-client privilege and compelling

  production of all the documents listed in the privilege log. The

  district court adopted the special master’s order in October 2013.

  See C.R.C.P. 53(e)(2). Thus, Anadarko was decided and brought to

  the attention of the special master and the court before the orders

  compelling production of the documents listed in the privilege log

  were issued.

¶ 62    In Anadarko, ¶ 8, the supreme court determined that C.R.C.P.

  26(b) “requires trial courts to take an active role managing discovery

  when a scope objection is raised.” When a party raises an objection

  to the scope of requested information, such as one that the

  documents requested are not relevant, “the trial court must

  determine the appropriate scope of discovery in light of the

  reasonable needs of the case and tailor discovery to those needs.”

  Id.

                                   35
¶ 63   The Association argues that Anadarko requires the court to

  make an express finding on proportionality when determining the

  proper scope of discovery. The Anadarko court determined that the

  cost-benefit and proportionality factors in C.R.C.P. 26(b)(2)(F) are

  “helpful” in determining the scope of discovery and district courts

  should consider them. Id. But the court went on to explain that

  “[w]hen tailoring discovery, the factors relevant to a trial court’s

  decision will vary depending on the circumstances of the case, and

  trial courts always possess discretion to consider any or all of the

  factors listed — or any other pertinent factors — as the needs of the

  case require.” Id. at ¶ 9 (emphasis added). The purpose of C.R.C.P.

  26(b), the court said, is to require active judicial management of

  discovery requests when a scope objection is made in order to

  control excessive requests. Id. at ¶¶ 8, 28.

¶ 64   Cost-benefit and proportionality were factors that courts

  overseeing discovery considered before the Anadarko decision. See

  Averyt v. Wal-Mart Stores, Inc., 265 P.3d 456, 461 (Colo. 2011)

  (explaining that discovery and disclosure are not required for public

  documents because “[t]he burden imposed upon the parties by such

  continuing disclosure outweighs any benefit of expediency gained

                                     36
  by automatically sharing the information where, as here, the public

  information is readily available and equally accessible to both

  parties”); In re Attorney D., 57 P.3d 395, 399 (Colo. 2002) (“Even

  though [the Colorado Rules of Civil Procedure] permit broad

  discovery, it is not unlimited. The discovery process can be abused

  by disproportionate and inappropriate requests that increase the

  cost of litigation, harass an opponent, or tend to delay a fair and

  just determination of the legal issues.”) (citation omitted); Silva, 47
P.3d at 1188 (same). The Anadarko decision does not, then, reflect

  a significant departure from the previous method of determining the

  scope of discovery, but rather, highlights cost-benefit and

  proportionality as important factors that a court should consider

  when taking an active role to manage discovery and to avoid

  excessive requests.

¶ 65   The district court here took an active managerial role when the

  Association objected to the scope of DA’s disclosure and discovery

  requests. When the dispute over the attorney’s file developed, the

  court addressed the issue and the arguments that the Association

  raised — that the complaint was not sufficiently particular to

  require disclosure of the file (which is essentially an argument on

                                     37
  relevance), that the Association should not have had to produce a

  privilege log because DA did not have to produce one, and that the

  documents were privileged and therefore not relevant — and the

  court concluded that the files were directly relevant to the case. It

  narrowly defined the scope of relevant documents as those in the

  files kept by the attorney and his colleagues pertaining to the single

  topic of amending the Declaration. Other than stating that the

  production of a privilege log would require significant time and

  expense that was disproportionate “when compared to the

  nonexistent value to the Plaintiff or the case,” the Association did

  not argue with specificity that producing the documents would be

  unduly burdensome. And the court addressed the aspect of

  proportionality when it determined that the files were “integral” to

  the case — thus determining their value was not “nonexistent” to

  DA.

¶ 66    Further, there is no evidence in the record that the request

  was disproportionate. DA requested documents in a file on a single

  topic which were in existence at the time the request was made and

  which could be identified and reproduced without undue burden.

  The Association has not provided specifics on either the volume of

                                    38
  production or the costs of gathering, logging, and producing the

  documents. To the extent that the Association incurred extensive

  fees and costs in litigating over the privilege issue, such expenses

  were voluntarily incurred.

                                  2. Relevance

¶ 67   Contrary to the Association’s second argument about why the

  court should not have required it to produce a privilege log, the

  record supports the court’s determination that the files were

  relevant. As discussed above, the applicable test is whether the

  materials are relevant to the parties’ claims and defenses. In its

  amended complaint, DA made the following allegations, among

  others:

             “For a number of years now, certain Members of the

              Association have wanted to redevelop [the community].

              Numerous proposals have been discussed and circulated.

              These proposals . . . all would significantly increase the

              ownership density of [the community], significantly

              diminish or eliminate the green space surrounding [the

              community], and fundamentally alter its character.”

                                     39
 A recent development project proposes to demolish the

  community and rebuild a thirty or forty unit development

  with no green space.

 This and other proposals did not garner the requisite

  eighty-five percent member approval to declare

  obsolescence, so “the Association, under the guise of

  ‘document modernization,’ hired lawyers to re-write the

  Declaration.”

 “The Amendments are an integral and essential part of

  the over-arching scheme to redevelop [the Community]

  without following the requirements of the Declaration.”

 “Another improper aspect of the [2012 Amendments] is

  . . . [the] mandatory buyout provision which is essentially

  a poison pill penalty directed at the Owners who object to

  redevelopment. . . . This coercive provision goes against

  the original intent of the Declaration, takes away existing

  rights and expectations, and is another way of indirectly

  changing the ownership of GCE without following the

  Declaration’s requirement” of unanimous member and

  lender approval.

                         40
  Because of DA’s allegations, the records of the attorneys who

  drafted the contested 2012 Amendments could reasonably have

  contained information helpful in answering questions about how

  the 2012 Amendments would affect existing provisions of the

  Declaration and the Association’s governance of the Community.

  The drafter’s intent might have been particularly probative of DA’s

  arguments related to the Association’s fiduciary duties.

¶ 68   Thus, the documents were relevant to the claims and defenses

  of the parties and could reasonably have led to the discovery of

  other evidence. The district court, therefore, did not abuse its

  discretion in determining that the requested documents were

  relevant and requiring the Association to create a privilege log of the

  documents it argued were protected by attorney-client privilege.

                      B. Production of the Attorney’s File

¶ 69   The Association next argues that (1) because the documents at

  issue were subject to the attorney-client privilege, the court abused

  its discretion in compelling their production in the first instance;

  and (2) we should reverse the court’s order adopting the special

  master’s order denying a protective order and require DA to return

  the documents.

                                    41
¶ 70   The attorney-client privilege is codified by statute and operates

  to protect communications regarding legal advice between attorney

  and client. Anadarko, ¶ 40; see also Oldham v. Pedrie, 2015 COA
95, ¶ 46. Colorado has codified the attorney-client privilege as

  follows: “[a]n attorney shall not be examined without the consent of

  his client as to any communication made by the client to him or his

  advice given thereon in the course of professional employment[.]”

  § 13-90-107(1)(b), C.R.S. 2016. However, “[n]o blanket privilege for

  all attorney-client communications exists.” Wesp v. Everson, 33
P.3d 191, 197 (Colo. 2001). This privilege applies only to

  “confidential matters communicated by or to the client in the course

  of obtaining counsel, advice, or direction with respect to the client’s

  rights or obligations.” People v. Madera, 112 P.3d 688, 690 (Colo.

  2005) (citation omitted).

¶ 71   The special master found that the attorney-client privilege did

  not apply to DA’s request for the attorney’s file for a number of

  reasons, including that “the privilege does not apply under Garner

  and Neusteter because Plaintiff DA alleges that the Association is

  acting inimically to the interests of its own members.” Because we

  determine that this conclusion is correct, we need not address the

                                    42
  special master’s remaining conclusions. See Rush Creek Sols., Inc.

  v. Ute Mountain Ute Tribe, 107 P.3d 402, 406 (Colo. App. 2004) (we

  may affirm a district court’s ruling based on any grounds that are

  supported by the record). The application of the attorney-client

  privilege is a question of law we review de novo. See People v.

  Trammell, 2014 COA 34, ¶ 9.

¶ 72   The Garner and Neusteter cases to which the special master

  referred are Garner v. Wolfinbarger, 430 F.2d 1093, 1104 (5th Cir.

  1970), and Neusteter v. District Court, 675 P.2d 1, 3-4 (Colo. 1984),

  which address the applicability of privileges to discovery requests in

  actions brought by shareholders against their corporations. To

  determine the applicability of these cases to the present case, we

  first examine their predecessor, Pattie Lea, Inc. v. District Court, 161
Colo. 493, 423 P.2d 27 (1967).

¶ 73   In Pattie Lea, when a minority shareholder brought an action

  against the corporation and sought to depose the corporation’s

  accountant, the corporation asserted the accountant-client

  privilege. Id. at 495, 423 P.2d at 28. The supreme court held that

  the accountant-client privilege “does not protect a corporation from

  being required to disclose to its own stockholders in a derivative

                                     43
  suit brought in good faith against the corporation, communications

  made by the corporation to its certified public accountant.” Id. at

  498, 423 P.2d at 30. The court explained that a certified public

  accountant is hired for the benefit of all of the stockholders and the

  stockholders are therefore entitled to the information the

  accountant gives the corporation. Id.

¶ 74   After this decision in Pattie Lea, the Fifth Circuit Court of

  Appeals addressed nearly the same question about the rights of

  plaintiff stockholders to discovery in an action alleging the

  corporation acted against the stockholder’s interests. Garner, 430
F.2d at 1095-96. But there, the documents the shareholders

  sought were in possession of the corporation’s attorney, and the

  corporation argued that the documents were protected by the

  attorney-client privilege. Id. at 1096. The Fifth Circuit determined

  that “where the corporation is in suit against its stockholders on

  charges of acting inimically to stockholder interests, protection of

  those interests as well as those of the corporation and of the public

  require that the availability of the privilege be subject to the right of

  the stockholders to show cause why it should not be invoked in the

  particular instance.” Id. at 1103-04 (emphasis added). In making

                                     44
  this determination, the court acknowledged the Colorado Supreme

  Court’s “strikingly similar” decision in Pattie Lea. Id. at 1103. And

  it set forth factors that could establish good cause for setting aside

  the privilege in favor of the stockholders, such as:

               the number of shareholders and the
               percentage of stock they represent; the bona
               fides of the shareholders; the nature of the
               shareholders’ claim and whether it is obviously
               colorable; the apparent necessity or
               desirability of the shareholders having the
               information and the availability of it from other
               sources; whether, if the shareholders’ claim is
               of wrongful action by the corporation, it is of
               action criminal, or illegal but not criminal, or
               of doubtful legality; whether the
               communication related to past or to
               prospective actions; whether the
               communication is of advice concerning the
               litigation itself; the extent to which the
               communication is identified versus the extent
               to which the shareholders are blindly fishing;
               the risk of revelation of trade secrets or other
               information in whose confidentiality the
               corporation has an interest for independent
               reasons.

  Id. at 1104. This has come to be referred to as the “good cause”

  test.

¶ 75      Fourteen years later, the Colorado Supreme Court in Neusteter

  returned to the question whether a privilege applied against

  shareholders suing the corporation. 675 P.2d at 4. There, the

                                      45
  corporation asserted the accountant-client privilege when the

  shareholders sought information provided to the corporation by its

  accountant. Id. The supreme court applied its precedent in Pattie

  Lea and adopted the “good cause” test from Garner, deeming the

  test “an appropriate elaboration and development” of the holding in

  Pattie Lea. Id. at 6. On the fact that Garner concerned the

  attorney-client privilege, the court said that this privilege is

  analogous to the accountant-client privilege. Id. at 5. The court

  then concluded that when the question “whether the corporation

  was governed properly or inimically to shareholder interests is a

  central issue of the case, shareholders must be permitted to show

  that there is good cause not to permit disclosure to be thwarted by

  invocation of the [accountant-client] privilege.” Id. at 6. It also

  adopted verbatim the good cause factors set forth in Garner. Id. at

  6 n.6.

¶ 76   Neusteter is similar to the present case in all relevant ways

  except that it involved the accountant-client privilege rather than

  the attorney-client privilege. However, Neusteter adopted the

  Garner rule that applied to the attorney-client privilege and, in

  applying it to claims of accountant-client privilege, made clear that,

                                     46
  at least for the purpose of disclosing information to shareholders in

  a derivative suit against the corporation, the two privileges are

  analogous. Id. at 5. Thus, the Garner good cause test applies here,

  and when shareholders allege that the corporation acted inimically

  to their interests and seek information from the corporation’s

  attorney, the shareholders may show good cause as to why the

  attorney-client privilege does not apply. Such a showing of good

  cause overcomes the privilege.

¶ 77   We note that the United States District Court for the District of

  Colorado has twice concluded that the supreme court would apply

  the Garner good cause test to determine if shareholders in a suit

  against the corporation could overcome the attorney-client privilege.

  See Galena St. Fund, L.P. v. Wells Fargo Bank, N.A., No. 12-cv-

  00587-BNB-KMT, 2014 WL 943115, at *2 (D. Colo. Mar. 10, 2014)

  (unpublished opinion); Ryskamp ex rel. Boulder Growth & Income

  Fund v. Looney, No. 10-cv-00842-WJM-KLM, 2011 WL 3861437, at

  *10 (D. Colo. Sept. 1, 2011) (unpublished opinion).

¶ 78   In the present case, the special master found, and the court

  adopted his findings and conclusions, that the factors from Garner

  weighed in favor of DA because: (1) it was a longstanding member of

                                    47
  the Association; (2) the communications related to past

  communications and not trial matters; (3) the communications

  sought were not advice concerning the litigation itself; (4) there was

  no risk of revealing trade secrets or confidential information; (5)

  although DA’s percentage of the GCE was 7.78 percent, members

  representing 25.61 percent of the GCE voted against the 2012

  Amendments; (6) DA’s claims were colorable because they survived

  a motion to dismiss and alleged the improper elimination of secured

  lenders; (7) the information sought was necessary and not available

  from other sources; (8) the full and fair litigation of the issues

  required the production of the documents; and (9) the information

  sought was identified and did not require a fishing expedition.

¶ 79   We conclude that the record supports the special master’s and

  court’s findings of good cause to waive the privilege and grant DA

  access to the attorney’s file. Although DA’s percentage of GCE is

  relatively small and it is not joined in the lawsuit by any other

  members, DA’s lawsuit aligns with the interests of the members

  representing 25.6 percent of the ownership of the GCE who voted

  against the 2012 Amendments. In addition, as our discussion in

  Part II illustrates, DA’s claims were colorable and not frivolous.

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  Further, the requested files were, as the district court found,

  directly relevant as communications of advice concerning the

  amendments at issue but did not constitute advice about the

  litigation itself. As we stated, the communications were specifically

  identified and could be readily located and produced. Finally, the

  Association has not identified any information in the attorney file

  that is confidential for independent reasons. Thus, on balance, the

  record supports the special master’s findings and conclusions,

  adopted by the court, that DA was entitled to disclosure of the

  attorney’s file.

¶ 80   Accordingly, the district court did not abuse its discretion in

  ordering the disclosure and production of the documents or denying

  the request for a protective order.

                V.   Attorney Fees and Costs under CCIOA

¶ 81   Both parties seek appellate attorney fees and costs pursuant

  to section 38-33.3-123, C.R.S. 2016, which governs awards of

  attorney fees under CCIOA. The statute permits an award of

  attorney fees and costs to the prevailing party. See § 38-33.3-

  123(1)(c).

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¶ 82   The Association moved for its attorney fees and costs in the

  district court as the prevailing party, pursuant to section 38-33.3-

  123(1)(c). The district court issued an order finding the Association

  to be the prevailing party. It concluded, however, that it would be

  cost effective to defer the hearing on the amount of an award until

  after this court ruled on the merits of the appeal. The Association

  appealed that order in case 15CA0203, and another division of this

  court dismissed the appeal of that issue as premature. We

  therefore do not address the district court’s award of fees other than

  to note that we are reversing the judgment in part.

¶ 83   Both parties seek their fees incurred on appeal under section

  38-33.3-123(1)(c). Because that issue is intertwined with the award

  of fees incurred in the district court under the same section, we

  exercise our discretion under C.A.R. 39.1 and remand to the district

  court to determine the entitlement to and the amount of any

  attorney fees incurred on appeal.

                            VI.   Conclusion

¶ 84   The judgment is affirmed in part and reversed in part and

  remanded to the district court with directions for proceedings

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consistent with the conclusions set forth in Parts II and V of this

opinion.

     JUDGE TAUBMAN and JUDGE FOX concur.

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