Court Opinion

ID: 4366606
Source: CourtListenerOpinion
Date Created: 2019-02-11 18:04:09.592291+00
Date Added: 2024-06-11T11:49:39.703299
License: Public Domain

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                                                          ADVANCE SHEET HEADNOTE
                                                                    February 11, 2019

                                         2019 CO 11

No. 18SA127, In Re Accetta v. Brooks Towers—Civil Procedure—Joinder—Declaratory
Judgments—Colorado Common Interest Ownership Act.

       In this original proceeding pursuant to C.A.R. 21, the supreme court reviews the

district court’s order requiring plaintiff to join as indispensable parties the approximately

500 individual unit owners in the Brooks Tower Residences (“Brooks Tower”), rather

than proceeding solely against his condominium association and its board members.

       Plaintiff seeks, among other things, a declaratory judgment invalidating a

provision of his condominium association’s declaration that provides for ownership

interests to be allocated in the sole discretion of the declarant.

       The district court concluded that all of the Brooks Tower unit owners are

indispensable parties and must be joined. The supreme court issued a rule to show cause

and now concludes that, because the condominium association can adequately represent

the interests of the absent unit owners for purposes of plaintiff’s declaratory judgment

action, plaintiff need not join those absent owners.

       Accordingly, the court makes the rule to show cause absolute.
                     The Supreme Court of the State of Colorado
                     2 East 14th Avenue • Denver, Colorado 80203

                                        2019 CO 11

                          Supreme Court Case No. 18SA127
                       Original Proceeding Pursuant to C.A.R. 21
           District Court, City and County of Denver, Case No. 17CV34787
                             Honorable J. Eric Elliff, Judge

                                           In Re
                                         Plaintiff:

                                    Anthony T. Accetta,

                                             v.

                                       Defendants:

Brooks Towers Residences Condominium Association, Inc., a Colorado nonprofit
corporation; Mark Trenka, Marla Grant, Bill Clarke, Clay Courter, Robb Green, Alton
Darby, Joan Foster, and Jeanne Root, in their capacities as members of the Board of
Directors of the Brooks Towers Residences Condominium Association, Inc.

                                Rule Made Absolute
                                      en banc

                                     February 11, 2019

Attorneys for Plaintiff:
Podoll & Podoll, P.C.
Robert C. Podoll
      Greenwood Village, Colorado

Foley & Mansfield, PLLP
Dustin J. Priebe
      Englewood, Colorado

Attorneys for Defendants:
Nemirow Perez P.C.
Miles Buckingham
Ronald H. Nemirow
      Lakewood, Colorado

JUSTICE GABRIEL delivered the Opinion of the Court.

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¶1     In this original proceeding pursuant to C.A.R. 21, we review the district court’s

order requiring plaintiff Anthony Accetta to join the approximately 500 individual unit

owners in the Brooks Tower Residences (“Brooks Tower”) as indispensable parties in the

present action, rather than proceeding solely against defendants Brooks Towers

Residences Condominium Association, Inc. and its board members (collectively, the

“Association”).

¶2     Accetta seeks, among other things, a declaratory judgment that would invalidate,

as contrary to the Colorado Common Interest Ownership Act (“CCIOA”), sections

38-33.3-101 to -402, C.R.S. (2018), the provision of the Amended and Restated Declaration

of Covenants, Conditions and Restrictions of the Association (the “Declaration”) that

provides for ownership interests to be allocated in the sole discretion of the declarant of

that Declaration (the “Declarant”). Accetta contends that this provision violates CCIOA’s

requirement that ownership interests be allocated by formula and has resulted in his

paying association dues in excess of his fair share.

¶3     On the Association’s motion to dismiss for failure to join indispensable parties, the

district court concluded that all of the Brooks Tower unit owners are indispensable

parties and must be joined. We issued a rule to show cause and now conclude that,

because the Association can adequately represent the interests of the absent unit owners

for purposes of Accetta’s declaratory judgment claim in this case, Accetta need not join

those absent owners. Accordingly, we make the rule to show cause absolute.

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                        I. Facts and Procedural Background

¶4     Accetta and his wife own a condominium in Brooks Tower. Brooks Tower is

comprised of 566 residential units, 13 commercial units, and 297 associated garage units.

¶5     All Brooks Tower unit owners are governed by the Declaration, which allocates

condominium fees among the unit owners based on the “value” of each unit. As

pertinent here, this value (1) “may or may not be the list price of the Unit as quoted to

prospective third-party purchasers” as of the date of the declaration; (2) is determined

“in Declarant’s sole and arbitrary discretion”; (3) is to be used for the purpose of

computing the unit owners’ percentage interests in Brooks Tower’s common elements;

and (4) “shall be final and conclusive.”

¶6     Accetta asserts that his unit has been allocated association dues that are over fifty

percent higher than the dues allocated to comparable units and that this misallocation

has resulted in hundreds of dollars in monthly overcharges. Accordingly, he filed the

present action against the Association seeking, among other things, a declaratory

judgment invalidating the portion of the Declaration allowing the Declarant to allocate

values in its “sole and arbitrary discretion,” rather than by way of a formula that allocates

percentage ownership consistently among comparable units.              Accetta specifically

contends that the provision at issue violates CCIOA and is therefore “invalid or otherwise

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void and must be reformed to comply with the requirements of [CCIOA] and the

obligation of good faith.”1

¶7        The Association moved to dismiss Accetta’s complaint, arguing, in pertinent part,

that he failed to join indispensable parties, namely, the individual unit owners in Brooks

Tower. Specifically, the Association contended that, because the declaratory judgment

that Accetta sought could affect the other unit owners’ interests, he was required to join

those owners pursuant to C.R.C.P. 19(a), C.R.C.P. 57(j), and section 13-51-115, C.R.S.

(2018).

¶8        The district court ultimately denied the Association’s motion to dismiss, but it

agreed with the Association that Accetta was required to join all of the other unit owners

before the case could proceed. The court reasoned that, because the other unit owners

would be affected by any declaratory judgment concerning the legality of the pertinent

provisions of the Declaration, Accetta was required to join them under C.R.C.P. 57(j).

¶9        Accetta petitioned this court for relief under C.A.R. 21, requesting that we issue a

rule to show cause why the district court’s ruling should not be vacated. We issued the

requested rule, and we have had the benefit of full briefing and oral argument in this

matter.

1 In his complaint, Accetta also asserts a number of claims seeking recovery of the
excessive fees that he alleges to have paid the Association as a result of the Declaration
provision at issue. None of these damages claims, however, implicates the interests of
the other unit owners so as to warrant possible joinder in this case, and therefore these
claims are not pertinent to the issue now before us.

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                                       II. Analysis

¶10    We begin by discussing our jurisdiction to hear this matter and the applicable

standard of review. We then consider the law applicable to the joinder questions

presented, and we conclude that, because the Association can adequately represent the

absent unit owners’ interests for purposes of Accetta’s declaratory judgment claim in this

case, Accetta need not join those absent owners pursuant to C.R.C.P. 19(a), C.R.C.P. 57(j),

and section 13-51-115.

                 A. Original Jurisdiction and Standard of Review

¶11    Exercise of our original jurisdiction under C.A.R. 21 is within our sole discretion.

Fognani v. Young, 115 P.3d 1268, 1271 (Colo. 2005).        An original proceeding under

C.A.R. 21 is an extraordinary remedy that is limited in both its purpose and availability.

Wesp v. Everson, 33 P.3d 191, 194 (Colo. 2001). We generally elect to hear C.A.R. 21

matters that raise issues of first impression and that are of significant public importance,

and we have exercised our original jurisdiction to review novel questions of statutory

interpretation. See Smith v. Jeppsen, 2012 CO 32, ¶ 6, 277 P.3d 224, 226.

¶12    The question that Accetta asks us to resolve here, which involves the construction

and interplay of CCIOA and the rules and statutes concerning declaratory relief and the

indispensable parties thereto, is one of first impression for this court. Moreover, the issue

is one of significant public importance because (1) it potentially affects condominium

litigation throughout the state of Colorado and (2) it implicates substantial issues of

access to justice. Finally, appellate relief would likely be inadequate in this case because

the significant expense of joining and serving some 500 other parties could render

                                             6
Accetta’s pursuit of his claims cost prohibitive. See People v. Dist. Court, 953 P.2d 184, 187

(Colo. 1998) (“[O]riginal jurisdiction under C.A.R. 21 is appropriate ‘when appeal would

not provide a plain, speedy, and adequate remedy.’”) (quoting People v. Young, 814 P.2d
834, 838 (Colo. 1991)).

¶13     We therefore conclude that the exercise of our original jurisdiction is appropriate

here.

¶14     Because the issue before us concerns the intersection of the appropriate legal

standard for joinder and the legal effect of CCIOA, we review the district court’s decision

on this issue de novo. See State v. Medved, 2019 CO 1, ¶ 13, __ P.3d __ (noting that we

review questions of law de novo).

                               B. Applicable Legal Principles

¶15     C.R.C.P. 19(a) requires a person properly subject to service of process in an action

to be joined as a party in that action if:

           (1) In his absence complete relief cannot be accorded among those
           already parties, or (2) he claims an interest relating to the subject of the
           action and is so situated that the disposition of the action in his absence
           may: (A) As a practical matter impair or impede his ability to protect
           that interest or (B) leave any of the persons already parties subject to a
           substantial risk of incurring double, multiple, or otherwise inconsistent
           obligations by reason of his claimed interest.

¶16     C.R.C.P. 57(j) and section 13-51-115 apply similar joinder principles in the context

of declaratory judgment actions. Those provisions require joinder of all persons “who

have or claim any interest which would be affected by the declaration,” and they state

that “no declaration shall prejudice the rights of persons not parties to the proceeding.”

§ 13-51-115; C.R.C.P. 57(j).

                                              7
¶17    As the foregoing provisions make clear, merely having an interest in the outcome

of an action is insufficient to require joinder. Gibbs Wire & Steel Co. v. Johnson, 255 F.R.D.
326, 329 (D. Conn. 2009). Rather, joinder is required when absent parties’ ability to

protect their interests would be impaired or impeded due to their absence, as, for

example, when a requested declaratory judgment could prejudice their rights.

§ 13-51-115; C.R.C.P. 19(a); C.R.C.P. 57(j).

¶18    Although this court has yet to weigh in on the range of factors that courts should

consider in determining whether joinder is required, a division of our court of appeals

has observed that, in making such a determination, courts consider, among other things,

whether the absent party’s interests will be adequately represented based on the current

posture of the case. Kowalchik v. Brohl, 2012 COA 49, ¶ 12 n.4, 411 P.3d 681, 686 n.4.

Numerous federal courts have expressed the same view. See, e.g., Ohio Valley Envtl.

Coal. v. Bulen, 429 F.3d 493, 504–05 (4th Cir. 2005) (perceiving no abuse of discretion in

the district court’s determination that joinder was not required when the parties in the

litigation were “capable of representing the interests of the [absent parties]”); Hooper v.

Wolfe, 396 F.3d 744, 749 (6th Cir. 2005) (“When assessing prejudice, the court must

consider whether the interests of an absent party are adequately represented by those

already a party to the litigation.”); Ramah Navajo Sch. Bd., Inc. v. Babbitt, 87 F.3d 1338, 1351

(D.C. Cir. 1996) (“If the nonparties’ interests are adequately represented by a party, the

suit will not impede or impair the nonparties’ interests, and therefore the nonparties will

not be considered ‘necessary.’”); Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th Cir.

1990) (“Impairment [of an absent party’s interests] may be minimized if the absent party

                                               8
is adequately represented in the suit.”); Wichita & Affiliated Tribes of Okla. v. Hodel,

788 F.2d 765, 774 (D.C. Cir. 1986) (“In some cases the prejudice created by the relevant

party’s absence is mitigated, or even eliminated, by the presence of a party who will

represent the absent party’s interest.”); Gibbs Wire & Steel Co., 255 F.R.D. at 329 (noting

that, if nonparties’ interests are adequately represented by a party, then the suit will not

impede or impair the nonparties’ interests and thus the nonparties need not be joined).

¶19    To determine whether a present party adequately represents the interests of an

absent party, courts have considered whether (1) the present party’s interests “‘are such

that it will undoubtedly make all’ of the absent party’s arguments”; (2) the present party

is “‘capable of and willing to make such arguments’”; and (3) “the absent party would

‘offer any necessary element to the proceedings’ that the present [party] would neglect.”

Shermoen v. United States, 982 F.2d 1312, 1318 (9th Cir. 1992) (quoting Cty. of Fresno v.

Andrus, 622 F.2d 436, 439 (9th Cir. 1980)); accord Martinez v. Clark Cty., 846 F. Supp. 2d
1131, 1148 (D. Nev. 2012).

¶20    Applying factors such as these, courts have concluded that joinder was not

required when the interests of the absent parties were aligned with those of any of the

present parties.    See, e.g., Bulen, 429 F.3d at 504–05 (affirming the district court’s

determination that coal associations could adequately represent absent parties because

the associations were arguing on behalf of their members, including members whose

interests coincided with those of the absent parties); United States v. Supreme Court of N.M.,

980 F. Supp. 2d 1334, 1345 (D.N.M. 2013) (concluding that joinder was not required when

the absent parties’ interests were adequately represented by the defendants and noting

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particularly that joinder is not required “where the absent party’s interests are aligned

with an existing party”), aff’d, 839 F.3d 888 (10th Cir. 2016); Gibbs Wire & Steel Co.,
255 F.R.D. at 330 (noting that joinder was unnecessary, even though, if joined, some

absent parties would align with the plaintiff and others with the defendants, because, in

either case, the rights that the absent parties were seeking to vindicate would be

adequately protected by one of the existing parties).

¶21    Similarly, one court has concluded that joinder was not required in a case

involving a challenge by federal prosecutors to the application of a state disciplinary rule

to them. Supreme Court of N.M., 980 F. Supp. 2d at 1345. In that case, federal prosecutors

challenged the application to them of a state rule of professional conduct limiting when

they could subpoena lawyers in grand jury or other proceedings to present evidence

about past or present clients. Id. at 1336. As pertinent here, the court was asked to decide

whether attorneys who might potentially be affected under the rule were necessary and

indispensable parties and whether the prosecutors’ failure to join them mandated

dismissal of the action. Id. The court concluded that the absent parties were not necessary

and indispensable because the state regulators who were seeking to “champion” the

disciplinary rule had the same interest in defending the rule as the absent attorneys who

could be affected by an adverse ruling in the case. Id. at 1345.

¶22    And in a case against a county and certain county and state officials challenging a

state statute permitting a person to obtain a certificate to solemnize a marriage only if the

person was affiliated with a religious organization, the court held that people already

holding certificates did not need to be joined. Martinez, 846 F. Supp. 2d at 1136, 1149. In

                                             10
so ruling, the court reasoned that joinder was unnecessary because the defendants in the

case already had the responsibility and ability to defend the laws at issue against

constitutional challenges, which is what the absent parties also would have sought to do.

See id. at 1149.

¶23    We are persuaded by the analyses set forth in the above-described case law, and

we follow the principles discussed in those cases. Applying those principles here, we

conclude for several reasons that the absent unit owners need not be joined.

¶24    First, in oral argument, the Association conceded that “the legality of a declaration

provision is an issue on which the Association can adequately represent the interests of

absent owners.” Accordingly, by the Association’s admission, joinder of the absent unit

owners is unnecessary, at least to the extent that Accetta is seeking a declaratory

judgment as to the legality of the Declaration provision at issue.

¶25    Second, several provisions of CCIOA reflect a legislative determination that a unit

owners’ association can represent the interests of its members, at least in certain

circumstances. For example, section 38-33.3-301 provides that every common interest

community must have a unit owners’ association and that “[t]he membership of the

association at all times shall consist exclusively of all unit owners.”               Section

38-33.3-302(1)(d), in turn, expressly authorizes the association to represent individual

unit owners in defense of litigation:

       Except as provided in subsections (2) and (3) of this section, and subject to
       the provisions of the declaration, the association, without specific
       authorization in the declaration, may . . . [i]nstitute, defend, or intervene in
       litigation or administrative proceedings in its own name on behalf of itself

                                             11
      or two or more unit owners on matters affecting the common interest
      community . . . .

¶26   Third, the Association is already defending the legality of the Declaration

provision at issue, and, in this regard, its interests would be fully aligned with those of

any absent unit owners who would want to preserve the status quo and defeat Accetta’s

declaratory judgment claim. See Supreme Court of N.M., 980 F. Supp. 2d at 1345 (finding

that joinder was not required when the existing parties were already championing the

challenged disciplinary rule and, in that regard, had the same interest as the absent

parties who likewise wished to uphold the rule); Martinez, 846 F. Supp. 2d at 1149 (noting

that joinder was unnecessary when the existing defendants had the responsibility and

ability to defend a state statute against constitutional challenges and the absent parties

would likewise have sought to uphold that statute).

¶27   For these reasons, we conclude that the Association can adequately represent the

interests of the absent unit owners with respect to Accetta’s claim for a declaratory

judgment that the Declaration provision at issue is unlawful. Accordingly, we further

conclude that joinder of the absent owners is not required here.

¶28   The division’s opinion in Clubhouse at Fairway Pines, L.L.C. v. Fairway Pines Estates

Owners Ass’n, 214 P.3d 451 (Colo. App. 2008), on which the Association relies, is not to

the contrary. The analysis in that case tracks the analysis that we employ here, but the

division concluded, on the facts presented, that the association in that case could not

adequately represent the absent owners. Id. at 453–57. For the reasons discussed above,

the record mandates a different conclusion here.

                                            12
¶29    In addition, we are unpersuaded by the Association’s assertion that joinder is

necessary because Accetta seeks not only a declaratory judgment but also judicial

reformation of the Declaration. In our view, the Association misunderstands the nature

of the relief that Accetta requests.

¶30    As we understand it, Accetta seeks a declaratory judgment that the Declaration

provision at issue is “invalid or otherwise void and must be reformed to comply with the

requirements of [CCIOA] and the obligation of good faith.” Accetta’s complaint does not

ask the district court to craft new language for the Declaration, nor do any of the parties

before us suggest that the district court here would engage in a process to renegotiate the

terms of the Declaration.

¶31    Moreover, in oral argument, Accetta clarified that he was only seeking a

declaration that the allocation provision of the Declaration is invalid under CCIOA:

       The overriding relief that’s requested by Mr. Accetta in this complaint is the
       fact that he cannot be overcharged HOA dues in violation of CCIOA . . . and
       that shouldn’t require him to individually name hundreds of other unit
       owners. At this point in time, that’s the declaration that we believe we’re
       entitled to, and that’s what we’re seeking in this case.

¶32    Thus, were Accetta to prevail on his declaratory judgment claim, the result would

be a declaration that the allocation provision at issue is void as contrary to CCIOA and

that the Association must reform it.

¶33    In light of the foregoing, we perceive the claim at issue to involve solely a request

for declaratory relief concerning the validity of a Declaration provision. Because the

                                            13
Association can adequately represent the absent owners with respect to such a claim, we

conclude that Accetta need not join the absent unit owners in this case.2

                                   III. Conclusion

¶34    For the foregoing reasons, we conclude that the Association can adequately

represent the interests of the absent unit owners for purposes of Accetta’s declaratory

judgment claim in this case. Accordingly, Accetta need not join those unit owners as

parties pursuant to C.R.C.P. 19(a), C.R.C.P. 57(j), and section 13-51-115.

¶35    We therefore make the rule to show cause absolute.

2 In light of this disposition, we need not address and express no opinion on Accetta’s
contention that section 38-33.3-311(1) controls and makes clear that joinder is not required
in this case.

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