EMINENT DOMAIN
ARTICLE 1 PROCEEDINGS
Cross references: For right-of-way for ditches and flumes, see § 7 of art. XVI, Colo. Const.; for the taking of property, see §§ 14 and 15 of art. II, Colo. Const.; for payment of fees for land subject to the Torrens title system, see § 38-36-180.
Law reviews: For article, "Access at Last: The Use of Private Condemnation", see 29 Colo. Law. 77 (Feb. 2000); for article, "Resolving Access Disputes with Conservation Tools", see 30 Colo. Law. 71 (Dec. 2001); for article, "Eminent Domain Law in Colorado--Part II: Just Compensation", see 35 Colo. Law. 47 (Nov. 2006); for article, "Kelo Confined--Colorado Safeguards Against Condemnation for Public-Private Transportation Projects", see 37 Colo. Law. 39 (March 2008); for article, "Drafting Condemnation Clauses for Leases in Colorado--Issues and Strategies", see 43 Colo. Law. 57 (Jan. 2014).
Section
PART 1 PROCEEDINGS - REQUIREMENTS AND LIMITATIONS - DETERMINATION OF JUST COMPENSATION
38-1-101. Compensation - public use - commission - jury - court - prohibition on elimination of nonconforming uses or nonconforming property design by amortization - limitation on extraterritorial condemnation by municipalities - definitions.
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- Notwithstanding any other provision of law, in order to protect property rights, without the consent of the owner of the property, private property shall not be taken or damaged by the state or any political subdivision for a public or private use without just compensation.
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- For purposes of satisfying the requirements of this section, "public use" shall not include the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenue. Private property may otherwise be taken solely for the purpose of furthering a public use.
- By enacting subparagraph (I) of this paragraph (b), the general assembly does not intend to create a new procedural mechanism to bring about the condemnation of private property. By enacting subparagraph (I) of this paragraph (b), the general assembly intends to limit only as provided in subparagraph (I) of this paragraph (b), and not expand, the definition of "public use".
- Nothing in this section shall affect the right of a private party to condemn property as otherwise provided by law.
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- In all cases in which compensation is not made by the state in its corporate capacity, such compensation shall be ascertained by a board of commissioners of not less than three disinterested and impartial freeholders pursuant to section 38-1-105 (1) or by a jury when required by the owner of the property as prescribed in section 38-1-106. All questions and issues, except the amount of compensation, shall be determined by the court unless all parties interested in the action stipulate and agree that the compensation may be so ascertained by the court. In the event of such stipulation and agreement, the court shall proceed as provided in this article for the trial of such causes by a board of commissioners or jury.
- Notwithstanding any other provision of law, in any condemnation action, without the consent of the owner of the property, the burden of proof is on the condemning entity to demonstrate, by a preponderance of the evidence, that the taking of private property is for a public use, unless the condemnation action involves a taking for the eradication of blight, in which case the burden of proof is on the condemning entity to demonstrate, by clear and convincing evidence, that the taking of the property is necessary for the eradication of blight.
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- Notwithstanding any other provision of law to the contrary, a local government shall not enact or enforce an ordinance, resolution, or regulation that requires a nonconforming property use that was lawful at the time of its inception to be terminated or eliminated by amortization.
- (Deleted by amendment, L. 2006, p. 1749 , § 1, effective June 6, 2006.)
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The general assembly hereby finds and declares that:
- The acquisition by condemnation by a home rule or statutory municipality of property outside of its territorial boundaries involves matters of both statewide and local concern because such acquisition by condemnation may interfere with the plans and operations of other local governments and of the state.
- In order that each local government and the state enjoy the greatest flexibility with respect to the planning and development of land within its territorial boundaries, it is necessary that the powers of a home rule or statutory municipality to acquire by condemnation property outside of its territorial boundaries be limited to the narrowest extent permitted by article XX of the state constitution.
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- Effective January 1, 2004, no home rule or statutory municipality shall either acquire by condemnation property located outside of its territorial boundaries nor provide any funding, in whole or in part, for the acquisition by condemnation by any other public or private party of property located outside of its territorial boundaries; except that the requirements of this paragraph (b) shall not apply to condemnation for water works, light plants, power plants, transportation systems, heating plants, any other public utilities or public works, or for any purposes necessary for such uses.
- Effective January 1, 2004, no home rule or statutory municipality shall either acquire by condemnation property located outside of its territorial boundaries for the purpose of parks, recreation, open space, conservation, preservation of views or scenic vistas, or for similar purposes, nor provide any funding, in whole or in part, for the acquisition by condemnation by any other private or public party of property located outside of its territorial boundaries for the purpose of parks, recreation, open space, conservation, preservation of views or scenic vistas, or for similar purposes except where the municipality has obtained the consent of both the owner of the property to be acquired by condemnation and the governing body of the local government in which territorial boundaries the property is located.
- Effective January 1, 2004, the provisions of this subsection (4) shall supersede any inconsistent statutory provisions whether contained in this title or any other title of the Colorado Revised Statutes.
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The general assembly hereby finds and declares that:
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For purposes of this section, unless the context otherwise requires:
- "Local government" means a county, city and county, town, or home rule or statutory city.
- "Political subdivision" means a county; city and county; city; town; service authority; school district; local improvement district; law enforcement authority; urban renewal authority; city or county housing authority; water, sanitation, fire protection, metropolitan, irrigation, drainage, or other special district; or any other kind of municipal, quasi-municipal, or public corporation organized pursuant to law.
Source: G.L. § 1058. G.S. C. § 237. R.S. 08: § 2415. C.L. § 6311. CSA: C. 61, § 1. CRS 53: § 50-1-1. L. 61: p. 370, § 1. C.R.S. 1963: § 50-1-1. L. 84: Entire section amended, p. 972, § 1, effective February 17. L. 2003: Entire section amended, p. 2667, § 2, effective June 6. L. 2004: (4) added, p. 1747, § 6, effective June 4. L. 2006: (1), (2), and (3) amended and (5) added, p. 1749, § 1, effective June 6.
Cross references: (1) For jurisdiction of federal court, when properly invoked, see County of Allegheny v. Frank Mashuda Company, 360 U.S. 185, 79 S. Ct. 1060, 3 L. Ed. 2d 1163 (1959), and Louisiana Power and Light Company v. City of Thibodaux, 360 U.S. 25, 79 S. Ct. 1070, 3 L. Ed. 2d 1058 (1959); for taking private property for private use, see § 14 of art. II, Colo. Const.; for taking property for public use, see § 15 of art. II, Colo. Const.
(2) For the legislative declaration in the 2003 act amending this section, see section 1 of chapter 420, Session Laws of Colorado 2003.
ANNOTATION
Analysis
- I. General Consideration.
- II. Jurisdiction and Procedure in Condemnation.
- III. Defenses and Remedies.
- IV. Abandonment of Proceeding.
- V. Just Compensation.
- VI. Specific Types of Property Subject to Condemnation.
- VII. Review by Supreme Court.
I. GENERAL CONSIDERATION.
Law reviews. For article, "Appropriations of Water for a Preferred Purpose", see 22 Rocky Mt. L. Rev. 422 (1950). For article, "Eminent Domain in Colorado", see 29 Dicta 313 (1952). For article, "Proposed Eminent Domain Law for Colorado", see 29 Dicta 332 (1952). For note, "Expenses of Moving in Eminent Domain Cases", see 30 Dicta 269 (1953). For article, "Recent Development in Colorado Eminent Domain", see 27 Rocky Mt. L. Rev. 23 (1954). For comment on Russell Coal Co. v. Bd. of Comm'rs, 129 Colo. 330 , 270 P.2d 772 (1954), appearing below, see 27 Rocky Mt. L. Rev. 234 (1955). For comment discussing church condemnation, see 46 U. Colo. L. Rev. 43 (1974). For article, "Inverse Condemnation -- A Viable Alternative", see 51 Den. L.J. 529 (1974). For comment examining factors to be considered in making an election between trespass and inverse condemnation as remedies for uncompensated appropriation of land, see 52 Den. L.J. 645 (1975). For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L. J. 625 (1979). For comment, "People v. Emmert, 198 Colo. 137 , 597 P.2d 1025 (1979): A Step Backward for Recreational Water Use in Colorado", see 52 U. Colo. L. Rev. 247 (1981). For comment, "Bubb v. Christensen: The Rights of the Private Landowner Yield to the Rights of the Water Appropriator Under the Colorado Doctrine", see 58 Den. L.J. 825 (1981). For article, "Assemblage, Design and Construction for Real Estate Developments", see 11 Colo. Law. 2297 (1982). For article, "Introduction to a Condemnation Case", see 13 Colo. Law. 420 (1984). For article, "Mineral Ownership Under Highways, Streets, Alleys and Ditches", see 17 Colo. Law. 43 (1988). For comment, "Eminent Domain: A Case Comment -- Mountain States Legal Foundation v. Hodel", see 65 Den. U. L. Rev. 581 (1988). For article, "Home Rule, Extraterritorial Impact, and the Region", see 86 Den. U.L. Rev. 1271 (2009). For article, "Town of Telluride v. San Miguel Valley Corp.: Extraterritoriality and Local Autonomy", see 86 Den. U.L. Rev. 1311 (2009). For article, "Constitutional Home Rule and Judicial Scrutiny", see 86 Den. U.L. Rev. 1337 (2009). For article, "Telluride's Tale of Eminent Domain, Home Rule, and Retroactivity", see 86 Den. U.L. Rev. 1433 (2009). For comment, "Minority Interests, Majority Politics: A Comment on Richard Collins' 'Telluride's Tale of Eminent Domain, Home Rule, and Retroactivity'", see 86 Den. U.L. Rev. 1459 (2009).
Eminent domain provisions not in conflict with federal constitution. The eminent domain provisions of this state are not in conflict with the fourteenth amendment of the federal constitution. Pine Martin Mining Co. v. Empire Zinc Co., 90 Colo. 529 , 11 P.2d 221 (1932).
Each landowner holds his estate subject to the public necessity for the exercise of the right of eminent domain for public purposes, and he cannot evade this by any agreement with his neighbor, nor can his neighbor acquire a right from a private individual which imposes a new burden upon the public in the exercise of the right of eminent domain. Smith v. Clifton San. Dist., 134 Colo. 116 , 300 P.2d 548 (1956).
The authority to exercise the right of eminent domain for public uses is based upon the theory that property is granted the subject upon condition that it may be retaken to serve the necessities of the sovereign power. Tanner v. Treasury Tunnel Mining & Reduction Co., 35 Colo. 593, 83 P. 464 (1906); People ex rel. Watrous v. District Court, 207 F.2d 50 (10th Cir. 1953).
Right of condemnation has been restrained by constitutional limitations in the protection of individual property rights. Potashnik v. Pub. Serv. Co., 126 Colo. 98 , 247 P.2d 137 (1952); Beth Medrosh Hagodol v. City of Aurora, 126 Colo. 267 , 248 P.2d 732 (1952).
Both § 15 of art. II, Colo. Const., and this section protect an individual's vested rights and prohibit the taking thereof for public or private use without condemnation under proper proceedings and just compensation given therefor. Stuart v. County Comm'rs, 25 Colo. App. 568, 139 P. 577 (1914).
Condemnation right exists only under powers specifically granted by the general assembly or, in some cases, where the power to condemn specific property is provided by home-rule cities to which the general assembly has delegated its power in such matters. Colo. Cent. R.R. v. Allen, 13 Colo. 229 , 22 P. 604 (1889); Potashnik v. Pub. Serv. Co., 126 Colo. 98 , 247 P.2d 137 (1952); Beth Medrosh Hagodol v. City of Aurora, 126 Colo. 267 , 248 P.2d 732 (1952).
Power is vested in state. It is fundamental that the power of eminent domain is vested in the state of Colorado. Such power may not be exercised by a governmental subdivision or other entity unless the power has been delegated to it by the general assembly. Bd. of County Comm'rs v. Intermountain Rural Elec. Ass'n, 655 P.2d 831 ( Colo. 1982 ).
That the state constitution permits private property to be taken for certain specified uses is an implied declaration that such uses are so closely connected with the public interest as to be at least quasi public or, in a modified sense, affected with a public interest. Lamborn v. Bell, 18 Colo. 346 , 32 P. 989 (1893); Gibson v. Cann, 28 Colo. 499 , 66 P. 879 (1901); Ortiz v. Hansen, 35 Colo. 100 , 83 P. 964 (1905); Kaschke v. Camfield, 46 Colo. 60 , 102 P. 1061 (1909); Pine Martin Mining Co. v. Empire Zinc Co., 90 Colo. 529 , 11 P.2d 221 (1932).
Private property cannot be taken by government, except for public purposes. Pine Martin Mining Co. v. Empire Zinc Co., 90 Colo. 529 , 11 P.2d 221 (1932).
Taking of private property to be accompanied by compensation to owner. Pine Martin Mining Co. v. Empire Zinc Co., 90 Colo. 529 , 11 P.2d 221 (1932).
Takings questions present mixed issues of law and fact. An appellate court must defer to a trial court's factual determinations but reviews de novo the legal determination of whether something is for a public use. Carousel Farms Metro. v. Woodcrest, 2019 CO 51, 442 P.3d 402.
Effect of state agency's entry upon land without paying just compensation. When a state agency enters upon land or injures land without paying just compensation therefor, or without having commenced condemnation proceedings to ascertain the compensation due for the taking or injury, the act of the state agency is unauthorized and unlawful and is not the act of the state of Colorado. People ex rel. Watrous v. District Court, 207 F.2d 50 (10th Cir. 1953).
Remedy against state officer. The remedy for an unauthorized and unlawful taking of or injury to private land for public use without compensation by a state agency is against the state officer, individually, to prevent his unlawful act or for appropriate redress if it has been consummated. People ex rel. Watrous v. District Court, 207 F.2d 50 (10th Cir. 1953).
Municipal ordinance which imposed reasonable limitations on billboards on private property, thereby requiring modification of said billboards, did not constitute a taking for which just compensation must be paid. Nat'l Adver. v. Bd. of Adjustment of City & County of Denver, 800 P.2d 1349 (Colo. App. 1990).
"Private use" construed. The words "private use" do not mean a strictly private use, that is to say, one having no relation to the public interest. Lamborn v. Bell, 18 Colo. 346 , 32 P. 989, 20 L.R.A. 241 (1893); Gibson v. Cann, 28 Colo. 499 , 66 P. 879 (1901); Ortiz v. Hansen, 35 Colo. 100 , 83 P. 964 (1905); Kaschke v. Camfield, 46 Colo. 60 , 102 P. 1061 (1909); Pine Martin Mining Co. v. Empire Zinc Co., 90 Colo. 529 , 11 P.2d 221 (1932).
Exercise of eminent domain unrestricted by contract. Parties may not by contract between themselves restrict the exercise of the power of eminent domain. Smith v. Clifton San. Dist., 134 Colo. 116 , 300 P.2d 548 (1956).
Property owners of adjacent property cannot thwart a public improvement by the execution of restrictive covenants. Smith v. Clifton San. Dist., 134 Colo. 116 , 300 P.2d 548 (1956).
The holding and underlying reasoning of Smith v. Clifton San. Dist., 134 Colo. 116 , 300 P.2d 548 (1956), aren't limited to that case's particular facts and its holding broadly applies to any situation in which a restrictive covenant is interposed as an obstacle to a condemning authority's attempt to obtain property for public use through eminent domain. A restrictive covenant of this type isn't a compensable property interest for eminent domain purposes. Town of Monument v. State, 2018 COA 148 , 467 P.3d 1126.
Public service company is authorized to acquire by condemnation interests in real property from private owners, provided, inter alia, that the purpose for which the condemned property is sought is determined to be a public purpose. Shaklee v. District Court, 636 P.2d 715 (Colo. 1981).
Sanitation district empowered to condemn lands. A sanitation district is a body politic or corporate with power to condemn lands for proper purposes. Smith v. Clifton San. Dist., 134 Colo. 116 , 300 P.2d 548 (1956).
Landowner has right to sue trespasser with power of eminent domain. A landowner has a right to sue in trespass even though the trespasser may have the statutory power of eminent domain with respect to the land on which the trespass occurs. Ossman v. Mtn. States Tel. & Tel. Co., 184 Colo. 360 , 520 P.2d 738 (1974).
Inverse condemnation tried as if eminent domain proceeding. An inverse condemnation action is based on § 15 of art. II, Colo. Const. Since it is based on the "takings" clause of the state constitution, it is to be tried as if it were an eminent domain proceeding. Ossman v. Mtn. States Tel. & Tel. Co., 184 Colo. 360 , 520 P.2d 738 (1974); Hayden v. Bd. of County Comm'rs, 41 Colo. App. 102, 580 P.2d 830 (1978); Linnebur v. Pub. Serv. Co. of Colo., 716 P.2d 1120 ( Colo. 1986 ).
Mandamus. Mandamus cannot be used to compel the state to bring and prosecute proceedings in condemnation because mandamus would require affirmative action by the state in the exercise of its sovereign power of eminent domain. People ex rel. Watrous v. District Court, 207 F.2d 50 (10th Cir. 1953).
Doctrine of inseparability does not apply. If the legislature wanted to recognize the doctrine of inseparability, which is an exception to the general rule of recovery, it would have amended the statute to allow for the exception. Dept. of Transp. v. Marilyn Hickey Ministries, 129 P.3d 1068 (Colo. App. 2005), rev'd on other grounds, 159 P.3d 111 ( Colo. 2007 ).
General assembly enacted subsection (3)(a) to restrict the abilities of local governments to unjustly deprive property owners of their inalienable rights. JAM Rest., Inc. v. City of Longmont, 140 P.3d 192 (Colo. App. 2006).
Subsection (3)(a) is constitutional, does not violate the home rule amendment to the Colorado Constitution, and prevails over municipality's zoning ordinance as applied to landowner. Subsection (3)(a) enforces constitutionally protected property rights and prohibits the unconstitutional taking of private property without just compensation. Constitutionally protected property interests are a matter of statewide concern and must be treated uniformly throughout the state. While zoning regulations are typically a matter of local concern, subsection (3)(a) is not a zoning regulation. Rather, it prohibits the unconstitutional taking of property without just compensation. JAM Rest., Inc. v. City of Longmont, 140 P.3d 192 (Colo. App. 2006).
Because inalienable property rights are involved, both local and state concerns are implicated, and the constitution cannot be read to dictate the matter at issue as one of exclusively local concern. Although the amortization of sexually oriented businesses in a municipality may result in those businesses relocating to neighboring municipalities, there is no showing that this possibility will seriously impact residents outside the municipality. Thus, extraterritorial impact of zoning ordinance is not substantial. Although zoning regulations generally have little extraterritorial impact and are traditionally a matter of local concern, in consideration of the legislative declaration respecting subsection (3)(a) and the importance of protecting constitutionally based property rights, preventing the taking of private property without just compensation is a matter of statewide or, at least, mixed concern. JAM Rest., Inc. v. City of Longmont, 140 P.3d 192 (Colo. App. 2006).
To enforce property rights as mandated in the Colorado Constitution, statute prohibits local government from eliminating or terminating nonconforming uses that were lawful at their inception by amortization. Statute does not address whether amortization periods are reasonable. JAM Rest., Inc. v. City of Longmont, 140 P.3d 192 (Colo. App. 2006).
Subsection (3)(a) cannot be applied retroactively to negate a municipal ordinance that required a licensee to operate in an appropriately zoned area of the city. Absent legislative intent to the contrary, a statute is presumed to operate prospectively on transactions occurring after its effective date, rather than retroactively on transactions that have already occurred or on rights and obligations that existed before its effective date. Z.J. Gifts D-2, L.L.C. v. City of Aurora, 93 P.3d 633 (Colo. App. 2004).
Subsection (3)(a) applies to injunctions sought after its effective date. Because municipality did not seek to enforce zoning provisions of ordinance until after statute became effective, no retroactive application of statute occurred. JAM Rest., Inc. v. City of Longmont, 140 P.3d 192 (Colo. App. 2006).
Since the language in subsection (3)(a) does not specify an intent of the general assembly to apply the provision retroactively, the court will not attribute an intent to the general assembly to enact a statutory amendment controlling amortization of nonconforming uses that took place before the amendment was enacted. Z.J. Gifts D-2, L.L.C. v. City of Aurora, 93 P.3d 633 (Colo. App. 2004).
Giving the word "affect" its plain and ordinary meaning, § 18-4-515 does not change, alter, or lessen the requirements of articles 1 through 7 of this title in condemnation actions. San Miguel County Bd. of County Comm'rs v. Roberts, 159 P.3d 800 (Colo. App. 2006).
Giving the word "supersede" its plain and ordinary meaning, § 18-4-515 does not void, replace, supplant, or make unnecessary any provisions or requirements of articles 1 through 7 of this title in condemnation actions. San Miguel County Bd. of County Comm'rs v. Roberts, 159 P.3d 800 (Colo. App. 2006).
Section 18-4-515 may not be used in place of applicable condemnation procedures. There is no basis to conclude, however, that it does not apply or may not be used in support of or in conjunction with a contemplated condemnation proceeding. San Miguel County Bd. of County Comm'rs v. Roberts, 159 P.3d 800 (Colo. App. 2006).
The condemnation by a home rule municipality of property outside its territorial boundaries for open space and park purposes falls within the scope of the eminent domain power granted to such municipalities in this article. The eminent domain power granted to home rule municipalities in this article is not limited to the purposes specified in this section nor is the eminent domain power circumscribed when exercised extraterritorially. Rather, this article grants home rule municipalities the power to condemn property, within or outside of territorial limits, for any lawful, public, local, and municipal purpose. The extraterritorial condemnation of property need not be pursuant to a purpose that is purely local and municipal. As long as the condemnation is based on a lawful, public, local, and municipal purpose, it does not fall outside of the scope of this article merely because it potentially implicates competing state interests. Based upon statutory provisions authorizing statutory localities to condemn land for open space, parks, and recreation, as well as the traditional exercise of this power by the state's statutory and home rule municipalities, the extraterritorial condemnation of property for open space and parks is a lawful, public, local, and municipal purpose within the scope of this article. The condemnation of the landowner's property outside the territorial boundaries of the municipality was, therefore, lawful. Town of Telluride v. San Miguel Valley Corp.,185 P.3d 161 (Colo. 2008).
Subsection (4)(b) abrogates constitutional powers granted to home rule municipalities by this article. Accordingly, the statutory provision is unconstitutional with respect to home rule municipalities. Court's inquiry need not extend beyond the question of whether the statute purports to deny home rule municipalities powers specifically granted by the constitution. No analysis of competing state and local interests is necessary where a statute purports to take away home rule powers granted by the constitution. The legislature cannot prohibit the exercise of constitutional home rule powers regardless of the state interests that may be implicated by the exercise of those powers. Town of Telluride v. San Miguel Valley Corp.,185 P.3d 161 (Colo. 2008).
Subsection (4)(b) prohibits home rule municipalities from condemning property for parks and open space, thus denying them their constitutional power to condemn for any lawful, public, local, and municipal purpose. Subsection (4)(b) curtails the condemnation power in this article by limiting it to the enumerated purposes in this section and also by removing certain enumerated purposes from the list. Accordingly, subsection (4)(b) is an unconstitutional abrogation of the powers granted to home rule municipalities under this article. The general assembly has no power to enact a law that denies a right specifically granted by the constitution. Town of Telluride v. San Miguel Valley Corp.,185 P.3d 161 (Colo. 2008).
A municipality's use of great outdoors Colorado (GOCO) funds did not bar its exercise of eminent domain power to acquire easement rights over landowners' property. The municipality was not precluded from condemning the landowners' property because it used GOCO funds to pay for the costs related to planning or implementing a taking or construction on other portions of the land that were not at issue in the condemnation proceeding and evidence of funding was not relevant to the municipality's authority to condemn the landowners' land. Town of Silverthorne v. Lutz, 2016 COA 17 , 370 P.3d 368.
Applied in City of Englewood v. Weist, 184 Colo. 325 , 520 P.2d 120 (1974); City of Boulder v. Kahn's, Inc., 190 Colo. 90 , 543 P.2d 711 (1975).
II. JURISDICTION AND PROCEDURE IN CONDEMNATION.
A. In General.
Proceedings conducted strictly according to procedures in statute. Eminent domain proceedings are special statutory proceedings and are to be conducted strictly according to the procedures set out in the eminent domain statute. Bd. of Comm'rs v. Poundstone, 74 Colo. 191 , 220 P. 234 (1923); Ossman v. Mtn. States Tel. & Tel. Co., 184 Colo. 360 , 520 P.2d 738 (1974); Denver Urban Renewal Auth. v. Marshall Mfg. Co., 35 Colo. App. 227, 532 P.2d 746 (1975).
A federal district court with diversity jurisdiction can consider an inverse condemnation claim arising under the Colorado constitution and statutes providing a special judicial procedure for condemnation claims. SK Fin. SA v. La Plata County, Bd. of Comm'rs, 126 F.3d 1272 (10th Cir. 1997).
Statutory authority required. Even though the purpose for which the property is sought to be condemned is a "public use" within the meaning of Colo. Const., art. II, § 15, in the absence of express or necessarily implied statutory condemnation authority, private property may not be condemned. Bd. of County Comm'rs v. Intermountain Rural Elec. Ass'n, 655 P.2d 831 ( Colo. 1982 ).
Colorado rules of civil procedure applicable to this article. The Colorado rules of civil procedure apply to actions brought under the provisions of this article. Stalford v. Bd. of County Comm'rs, 128 Colo. 441 , 263 P.2d 436 (1953).
Constitutional objections to eminent domain proceedings should be raised in those proceedings and should be determined by the court in limine; not by way of a collateral injunction proceeding. Auraria Businessmen Against Confiscation, Inc. v. Denver Urban Renewal Auth., 183 Colo. 441 , 517 P.2d 845 (1974).
Matters which cannot be asserted in collateral suit. Matters which cannot be raised in an original condemnation proceeding cannot be asserted in a collateral suit. Ambrosio v. Baker Metro. Water & San. Dist., 139 Colo. 437 , 340 P.2d 872 (1959).
Names and addresses of appraisers to remain unknown to landowner. The owner of property sought to be condemned is not entitled to know the names and addresses of persons who made appraisals at the request of the condemning agency. Epstein v. City & County of Denver, 133 Colo. 104 , 293 P.2d 308 (1956).
Disclosure of appraisals could prejudice owners not parties to suit. Disclosure of appraisal values obtained by private owners not parties to the suit whose property has not yet been condemned could work to the prejudice of substantial rights of those private owners, since should parties who obtained independent appraisal reports reject the government's settlement offer and opt for trial, disclosure could be prejudicial to their rights. United States v. 25.02 Acres of Land, More or Less, 495 F.2d 1398 (10th Cir. 1974).
A condemning authority may exercise the power of eminent domain provided that the taking is necessary and the purpose for the condemnation is judicially determined to be a public use. Colorado law does not require a condemning authority to obtain development permits or approvals as a condition precedent to going forward with a condemnation proceeding; nor does it require the condemning authority to prove that immediate possession will not lead to irreparable damage to natural resources if permits and environmental impact statement (EIS) approval are denied and the project is not completed. Silver Dollar Metro. Dist. v. Goltra, 66 P.3d 170 (Colo. App. 2002).
In reviewing the condemning authority's finding that a proposed taking is for public use, the court's role is to determine whether the essential purpose of the condemnation is to obtain a public benefit, and the court must consider the physical conditions of the country, the needs of the community, and the character of the benefit that the projected improvement may confer upon the locality as well as the necessities for such improvement in the development of the resources of the state. Silver Dollar Metro. Dist. v. Goltra, 66 P.3d 170 (Colo. App. 2002).
The owners of the property to be condemned have the burden of proving that the taking is not for a public purpose. Silver Dollar Metro. Dist. v. Goltra, 66 P.3d 170 (Colo. App. 2002).
Where a taking would be to determine if it is possible that the condemned property could be used for a public use in the future, the taking is not for a public purpose. Silver Dollar Metro. Dist. v. Goltra, 66 P.3d 170 (Colo. App. 2002).
Trial court properly dismissed petition by county to condemn a portion of owner's property for use as a public road because county presented no valid public purpose for its condemnation of owner's property. Here, public purpose is to benefit private parties; a few, select members of the public will gain access to a private cemetery. Such a private benefit does not constitute a valid public purpose. Bd. of County Comm'rs v. Kobobel, 176 P.3d 860 (Colo. App. 2007).
Although an eminent domain valuation commission is empowered to make evidentiary rulings without consulting the supervisory judge, the judge's evidentiary rulings control and are binding on the commission. This remains true whether the judge rules on the evidentiary issue presented before or after the commission considers its admissibility. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2015 CO 57, 357 P.3d 179.
Although a trial judge who is overseeing a commission hearing need not affirmatively grant or deny a motion in limine to exclude evidence, if the judge does issue an explicit ruling, then the commission is bound by that ruling and may not deviate from it. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2015 CO 57, 357 P.3d 179.
If the judge has not ruled on the evidence, then the commission may do so without consulting her. But the judge is still the judge. Under subsection (2)(a), she is charged with deciding all questions and issues except the amount of compensation, and the commission must operate within the bounds of the judge's supervisory authority. Therefore, any implicit power in the commission to decide evidentiary rulings is necessarily subsidiary to judicial rulings and the commission has no power to alter those rulings unilaterally. This remains true even when the judicial rulings are made in limine. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2015 CO 57, 357 P.3d 179.
Evidence on project-funds sourcing is inadmissible in a condemnation proceeding. In an immediate possession hearing, a district court hears challenges to a public entity's condemnation based on an alleged lack of authority. During condemnation proceedings, district courts may not consider the source of the condemning authority's funds. Town of Silverthorne v. Lutz, 2016 COA 17 , 370 P.3d 368.
B. Question of Necessity.
Trial court's findings that corporation's 10-inch pipeline would serve a public purpose is supported by evidence in the record. Trial court's finding was based on testimony of corporation's counsel that pipeline was necessary to provide an adequate supply of oil products to meet the increased demand of the customers in the greater Denver metropolitan area. Evidence in the record indicates that the pipeline would permit continuous service to the corporation's existing Colorado customers as well as its out-of-state customers. Sinclair Transp. Co. v. Sandberg, 228 P.3d 198 (Colo. App. 2009), rev'd on other grounds sub nom. Larson v. Sinclair Transp. Co., 2012 CO 36, 284 P.3d 42.
Issue of necessity. The threshold issue of necessity, when properly raised in the pleadings, should be resolved before there is any trial as to the value of the land to be taken. Colo. State Bd. of Land Comm'rs v. District Court, 163 Colo. 338 , 430 P.2d 617 (1967).
Matter of necessity cannot be raised by merely denying allegation that the taking is necessary. Colo. State Bd. of Land Comm'rs v. District Court, 163 Colo. 338 , 430 P.2d 617 (1967).
As must plead facts evidencing fraud or bad faith. The matter of necessity cannot be raised by any conclusory pleading of fraud and bad faith, but only by pleading facts which, if true, would amount to fraud or bad faith. Colo. State Bd. of Land Comm'rs v. District Court, 163 Colo. 338 , 430 P.2d 617 (1967).
Proper matters for consideration in determining necessity of taking vary according to the circumstances of each particular case. Mortensen v. Mortensen, 135 Colo. 167 , 309 P.2d 197 (1957).
Matter of necessity of taking in condemnation is to be determined by court. Larson v. Chase Pipe Line Co., 183 Colo. 76 , 514 P.2d 1316 (1973).
Necessity involves taking property for intended purpose. The question of necessity involves the necessity of having the property taken for the purpose intended. Mortensen v. Mortensen, 135 Colo. 167 , 309 P.2d 197 (1957); Silver Dollar Metro. Dist. v. Goltra, 66 P.3d 170 (Colo. App. 2002).
Feasibility or financial success of enterprise precluded from inquiry of necessity. Whether or not an enterprise is feasible or practicable, and whether or not it will be a financial success, cannot be inquired into even by commissioners charged with the duty of determining the question of necessity; such questions are not for the determination of the court. Mortensen v. Mortensen, 135 Colo. 167 , 309 P.2d 197 (1957); Silver Dollar Metro. Dist. v. Goltra, 66 P.3d 170 (Colo. App. 2002).
Public agency's determination of necessity, absent fraud, is final. In the absence of fraud or bad faith, the determination by a public agency as to the need, necessity, and location of highways, or other public improvements, is final and conclusive and will not be disturbed by the courts. Colo. State Bd. of Land Comm'rs v. District Court, 163 Colo. 338 , 430 P.2d 617 (1967); Silver Dollar Metro. Dist. v. Goltra, 66 P.3d 170 (Colo. App. 2002).
The determination by the state of the necessity for a particular taking in the absence of a showing of bad faith is final and conclusive. Mack v. Bd. of County Comm'rs, 152 Colo. 300 , 381 P.2d 987 (1963); Arizona-Colorado Land & Cattle Co. v. District Court, 182 Colo. 44 , 511 P.2d 23 (1973).
Causing of greater than necessary loss evidence of bad faith. Where the taking of a particular easement by a private corporation would entail a great loss to the landowner which might readily be avoided, the court in limine may consider this factor in determining whether the corporation is acting in bad faith. Arizona-Colorado Land & Cattle Co. v. District Court, 182 Colo. 44 , 511 P.2d 23 (1973).
Easement serves public purpose by providing access to property in the state and therefore may be the subject of a condemnation. Bear Creek Dev. Corp. v. Dyer, 790 P.2d 897 (Colo. App. 1990).
No trial on compensation if necessity not shown. If the petitioner cannot establish necessity, there will then be no need for a trial on the issue of compensation. Colo. State Bd. of Land Comm'rs v. District Court, 163 Colo. 338 , 430 P.2d 617 (1967).
Duties of trial court, in absence of jury, include appointing the commissioners, administering the oath of office to them, fixing the time and place of their first meeting, instructing them in writing as to their duties, and, at the conclusion of the testimony, instructing them in writing as to the applicable and proper law to be followed by them in arriving at their ascertainment. Bd. of County Comm'rs v. Vail Assocs., 171 Colo. 381 , 468 P.2d 842 (1970).
Court shall upon request make rulings upon propriety of proofs and objections of the parties. Bd. of County Comm'rs v. Vail Assocs., 171 Colo. 381 , 468 P.2d 842 (1970).
Judge not to preside as in jury trial. The judge of the trial court shall not preside over the commission proceedings in the same manner as he is required to do in a jury trial. Bd. of County Comm'rs v. Vail Assocs., 171 Colo. 381 , 468 P.2d 842 (1970).
Unsupported report of commissioners not binding on court. A report of commissioners in eminent domain proceedings, unsupported by any findings and based on undisputed evidence, does not bind the court. Mortensen v. Mortensen, 135 Colo. 167 , 309 P.2d 197 (1957).
Award of expert witness fees. In eminent domain actions, the awarding of expert witness fees is a matter within the discretion of the trial court. City of Lakewood v. DeRoos, 631 P.2d 1140 (Colo. App. 1981).
Because the purpose of the taking was essentially to benefit the public, the taking satisfied the public use requirement of the state constitution and statutes, even if, at the time of the taking, there was an incidental public benefit. The state constitution requires that condemnation benefit the public but it doesn't prohibit a private party from incidentally benefitting from any particular condemnation. When a condemnation's benefits are essentially public, there is no constitutional violation. Carousel Farms Metro. v. Woodcrest, 2019 CO 51, 442 P.3d 402.
The plain language of subsection (1)(b)(I) only limits the transfer of condemned land to a private entity. Where there is no transfer and no private entity involved, this section is inapplicable. Carousel Farms Metro. v. Woodcrest, 2019 CO 51, 442 P.3d 402.
While the existence of a public purpose pursuant to subsection (2)(b) is always subject to judicial review, the necessity of an acquisition of a specific parcel of property may only be reviewed by a court upon a showing of bad faith. Thus, if bad faith is at issue, a court may look behind an entity's stated condemnation purpose and finding of necessity. City of Lafayette v. Town of Erie Urb. Ren., 2018 COA 87 , 434 P.3d 746.
Although condemnation to create an open space community buffer could be a proper public purpose, the petition to condemn land was motivated by bad faith. Specifically, the primary interest of the municipality in the subject property was to interfere with proposed commercial development undertaken by the town, which is not a lawful public purpose for the condemnation. City of Lafayette v. Town of Erie Urb. Ren., 2018 COA 87 , 434 P.3d 746.
III. DEFENSES AND REMEDIES.
Matters considered inappropriate for defense. In a condemnation proceeding, the expediency of the project or that condemnation might proceed in a way other than that proposed are not appropriate matters of defense. Ambrosio v. Baker Metro. Water & San. Dist., 139 Colo. 437 , 340 P.2d 872 (1959).
Injunction is not proper remedy to be accorded a defendant in a proceeding in eminent domain. Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958); Ambrosio v. Baker Metro. Water & San. Dist., 139 Colo. 437 , 340 P.2d 872 (1959); Dunham v. City of Golden, 31 Colo. App. 433, 504 P.2d 360 (1972).
Doctrine of laches does not provide relief where defendant failed to show that improvements would be impacted by the easement or that the defendant suffered prejudice not covered by the compensation award. Minto v. Lambert, 870 P.2d 572 (Colo. App. 1993).
IV. ABANDONMENT OF PROCEEDING.
When condemnor may abandon action. Where a property owner has not changed his position in good faith reliance on a condemnation suit, the condemnor may abandon the action at any time prior to the time the rights of the parties are reciprocally vested. Piz v. Hous. Auth., 132 Colo. 457 , 289 P.2d 905 (1955).
Right to abandon condemnation proceeding may be relinquished or lost. The right to abandon condemnation proceedings may be relinquished by agreement or lost by estoppel. Piz v. Hous. Auth., 132 Colo. 457 , 289 P.2d 905 (1955).
V. JUST COMPENSATION.
A. Right to Compensation.
Basis for compensation is fairness. The constitutional requirement of just compensation derives as much content from the basic equitable principles of fairness as it does from technical concepts of property law. Upper Eagle Valley San. Dist. v. Carnie, 634 P.2d 1008 (Colo. App. 1981).
Right to compensation belongs to owner. The right to compensation for the value of land taken and damages to the residue occasioned by the taking is a personal one which belongs to the owner. Enke v. City of Greeley, 31 Colo. App. 337, 504 P.2d 1112 (1972); Upper Eagle Valley San. Dist. v. Carnie, 634 P.2d 1008 (Colo. App. 1981); Direct Mail Servs., Inc. v. Colo., 557 F. Supp. 851 (D. Colo. 1983 ), aff'd, 729 F.2d 672 (10th Cir. 1984).
Lessee not entitled to separate award for value of leasehold. Lessee is not entitled in the initial condemnation proceedings to establish the value of its leasehold interest independently of the value of the entire property and is not entitled to a separate award by the state for the value of its leasehold. City of Sterling v. Plains Inv. Co., 32 Colo. App. 115, 511 P.2d 512 (1973), rev'd on other grounds, 185 Colo. 238 , 523 P.2d 465 (1974); Direct Mail Servs., Inc. v. Colo., 557 F. Supp. 851 (D. Colo. 1983 ), aff'd, 729 F.2d 672 (10th Cir. 1984).
Property owners are not entitled to obtain the highest and best use of their property or to gain maximum profits from its use. Van Sickle v. Boyes, 797 P.2d 1267 ( Colo. 1990 ); Nat'l Adver. v. Bd. of Adjustment of City & County of Denver, 800 P.2d 1349 (Colo. App. 1990).
B. Amount of Compensation.
Landowner is entitled to be compensated for costs reasonably incurred by him in condemnation proceedings since to require a landowner to pay such costs would reduce the just compensation guaranteed by section 15 of art. II, Colo. Const. Dept. of Hwys. v. Kelley, 151 Colo. 517 , 379 P.2d 386 (1963).
"Just compensation" includes payment of costs. In condemnation proceedings, the landowner is entitled to compensation for all reasonable costs incurred. Expenses necessarily incurred by reason of the litigation are correctly viewed as such costs. City of Colo. Springs v. Berl, 658 P.2d 280 (Colo. App. 1982).
Property damage must affect some right or interest which the landowner enjoys and which is not shared or enjoyed by the public generally, in order to be compensable; the damage must be different in kind, not merely in degree, from that suffered by the public in general. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969); City of Lakewood v. DeRoos, 631 P.2d 1140 (Colo. App. 1981).
Owner must establish right to substantial compensation. Burden rests upon owner to establish by competent evidence his right to substantial compensation. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969); United States v. 25.02 Acres of Land, More or Less, 495 F.2d 1398 (10th Cir. 1974).
No vested right in public highway maintenance. No person has a vested right in the maintenance of the public highway in any particular place. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969).
Award includes damages that are incident of improvement. An award in an eminent domain proceeding includes all damages, present and prospective, that are the natural, necessary, or reasonable incident of the improvement, but an award does not include such damages as may arise from negligent or unskillful construction or use thereof. Ruth v. Dept. of Hwys., 153 Colo. 226 , 385 P.2d 410 (1963); Linnebur v. Pub. Serv. Co. of Colo., 716 P.2d 1120 ( Colo. 1986 ).
Right to compensation unchanged by nature of business. The nature of the business, which is situated upon land subject to condemnation, does not change the right of an individual to compensation. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969).
Factors considered in determining compensable taking of access rights. Factors to consider in determining whether or not there has been a compensable taking of access rights to a highway include whether the property is a single economic unit or consists of separate units with particular access needs, the use of the property, the location of improvements, the contiguity to the highway, the land's topography, and all pertinent characteristics of the property which may be relevant to its access needs. Shaklee v. Bd. of County Comm'rs, 176 Colo. 559 , 491 P.2d 1366 (1971).
Loss of view from property not compensable. Since a property owner has no right to have the traveling public pass his property, he has no right to have the traveling public afforded a clear view of his property, and loss of view from the property caused by the construction of a viaduct is not compensable. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969).
Goodwill and profits are not regarded as elements of just compensation under either the due process or just compensation clauses of the federal and state constitutions. Auraria Businessmen Against Confiscation, Inc. v. Denver Urban Renewal Auth., 183 Colo. 441 , 517 P.2d 845 (1974).
Owner compensated only for actual taking in pipeline condemnation. The rule in condemnation cases concerning pipelines is that the owner of the land will be compensated only to the actual extent of the estate taken. W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973).
Limitation on compensation for loss of access. An abutting landowner is entitled to compensation for limitation or loss of access only if the limitation or loss substantially interferes with his means of ingress and egress to and from his property. State Dept. of Hwys. v. Davis, 626 P.2d 661 (Colo. 1981).
So long as the landowner retains a reasonable means of access to and from his property partial loss of access is not compensable. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969); Shaklee v. Bd. of County Comm'rs, 176 Colo. 559 , 491 P.2d 1366 (1971).
There is no taking of private property which would be subject to compensation when a landowner's access rights to a state highway are limited to two access points of his own choosing. Shaklee v. Bd. of County Comm'rs, 176 Colo. 559 , 491 P.2d 1366 (1971).
Inconvenience is not substantial impairment of access. Inconvenience caused by the required use of a more circuitous route to gain access to property does not constitute substantial impairment of access. State Dept. of Hwys. v. Davis, 626 P.2d 661 (Colo. 1981).
Compensation is not permitted for damage caused by circuity of route where the properties involved were used for business purposes such as motels, restaurants, and gas stations, and where the inability of the traveling public to get to the property conveniently had, in effect, diminished the value of the business property. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969).
The diversion of traffic away from the property is a factor hardly separable from circuity of route since the diversion of traffic will inevitably have as its result circuity of route. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969).
Proof required for landowner's compensation for loss of access. In order for plaintiff to be compensated for loss of access it is incumbent upon her to establish to the satisfaction of the trial court that she no longer retains a reasonable means of access to and from her property and the general system of public streets. Troiano v. Colo. Dept. of Hwys., 170 Colo. 484 , 463 P.2d 448 (1969).
Trial judge determines reasonableness of landowner's access. The trial judge must determine in the first instance whether a landowner's right of access has been subjected to unreasonable control or limitation. Shaklee v. Bd. of County Comm'rs, 176 Colo. 559 , 491 P.2d 1366 (1971).
Fair market value of property taken is sole question in determining the value of property in an eminent domain action. Dillinger v. N. Sterling Irrigation Dist., 135 Colo. 95 , 308 P.2d 606 (1957).
In the case of a temporary taking, landowner is entitled to just compensation for fair rental value of property at its highest and best use, taking into consideration any existing land use restrictions, during the period of temporary taking. In determining fair rental value, the trial court and the jury must assume a free bargaining transaction between a hypothetical lessor and lessee. Changes in land use restrictions may only be considered if they probably could have occurred during the temporary taking period. Fowler Irrevocable Trust 1992-1 v. City of Boulder, 17 P.3d 797 (Colo. 2001).
Market value means the price property would bring if sold in the open market under ordinary and usual circumstances for cash, assuming that the owner is willing to sell and the purchaser willing to buy, but neither under any obligation to do so. Epstein v. City & County of Denver, 133 Colo. 104 , 293 P.2d 308, 55 A.L.R.2d 783 (1956).
Reasonable market value means the fair, actual cash market value of the property. It is the price the property could have been sold for on the open market, for cash under the usual and ordinary circumstances where the owner was willing to sell and the purchaser was willing to buy, but neither was under an obligation to do so. Goldstein v. Denver Urban Renewal Auth., 192 Colo. 422 , 560 P.2d 80 (1977); City of Aurora v. Webb, 41 Colo. App. 11, 585 P.2d 288 (1978).
Assessment of present market value. The present market value must be assessed in light of the most advantageous use to which the property may reasonably be applied. Goldstein v. Denver Urban Renewal Auth., 192 Colo. 422 , 560 P.2d 80 (1977).
Major factors for consideration in determining market value of real estate in condemnation proceedings are: (1) A view of the premises and their surroundings; (2) a description of the physical characteristics of the property and its situation in relation to points of importance in the neighborhood; (3) the price at which the land was bought, if sufficiently recent to throw light on present value; (4) the price at which similar neighboring land has sold at about the time of the taking; (5) the opinion of competent experts; (6) a consideration of the uses for which the land is adapted and for which it is available; (7) the cost of the improvements if they are such as to increase the value of the land; and (8) the net income from the land, if the property is devoted to one of the uses to which it could be most advantageously and profitably applied. United States v. 25.02 Acres of Land, More or Less, 495 F.2d 1398 (10th Cir. 1974).
Board is entitled to consider any competent evidence, apart from certain factors arising from the very fact of condemnation, which would be considered by a prospective seller or buyer as tending to affect the present market value of the land. Goldstein v. Denver Urban Renewal Auth., 192 Colo. 422 , 560 P.2d 80 (1977); City of Aurora v. Webb, 41 Colo. App. 11, 585 P.2d 288 (1978).
If sale not too remote. If not too remote in point of time, and if neither economic nor physical conditions have changed, voluntary prior sales of the subject property may be shown in evidence in eminent domain proceedings. Epstein v. City & County of Denver, 133 Colo. 104 , 293 P.2d 308, 55 A.L.R.2d 783 (1956).
Evidence of the price paid for similar property in a voluntary sale is admissible on the question of value of the property condemned, provided the properties sold are similar in locality and character to the property in question and not so far removed in point of time to make a comparison unjust or impossible. W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973).
Root consideration is whether comparable sale is sufficiently similar, in one or more aspects, to be probative of the fair market value of the property under consideration by the commission. Goldstein v. Denver Urban Renewal Auth., 192 Colo. 422 , 560 P.2d 80 (1977).
Best evidence of market value found in comparable sales. While the best evidence of market value is found in sales of comparable property. The determination is not limited to that consideration and other substantial facts and circumstances may have probative value. United States v. 25.02 Acres of Land, More or Less, 495 F.2d 1398 (10th Cir. 1974).
Determination of market value not limited to consideration of comparable sales; other substantial facts and circumstances may have probative value. United States v. 25.02 Acres of Land, More or Less, 495 F.2d 1398 (10th Cir. 1974).
In eminent domain proceeding, in calculating value of subject property as a waste transfer station, trial court correctly admitted evidence based upon the land residual method instead of the comparable sales method. Whether a comparable sale is sufficiently similar to be of probative value in determining the value of land taken is for the trial court or commission to determine in its discretion. Here, considering both parties' expert testimony, there was sufficient evidence in the record to support landowner's position that there were not sufficient comparable sales and that, in the absence of such sales, the only way to calculate the added value of the planned unit development and waste transfer permit approvals was to use the land residual method. The record also supports a finding that criteria outlined by the American institute of real estate appraisers for use of the land residual method were met. In upholding the use of the land residual method, court of appeals rejected city's arguments that use of this method impermissibly considers a speculative or prospective value, that income and profits from a waste transfer station could not be considered in valuing the land, and that use of this method violated the undivided basis rule. City of Englewood v. Denver Waste Transfer, L.L.C., 55 P.3d 191 (Colo. App. 2002).
Unexecuted written contract for sale of adjacent land inadmissible. Just as a mere offer to buy or sell property is not a measure of the market value of a similar property, so, too, a written contract for the sale of adjacent land has been held inadmissible, if the sale did not take place. United States v. 25.02 Acres of Land, More or Less, 495 F.2d 1398 (10th Cir. 1974).
Where compensation for less than value of fee simple held proper. Where pipeline company did not take fee title to property containing its easement, and the surface land remained unaffected, useful, and of substantial value, the compensation was properly less than the value for fee simple title to the entire area within which the pipe was located. W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973).
When purchaser confined to damages for subsequent taking. Where land is already burdened by an easement when a purchaser acquires title, he takes that land in that condition when he acquires title and is confined to damages for subsequent takings. Upper Eagle Valley San. Dist. v. Carnie, 634 P.2d 1008 (Colo. App. 1981).
Demolition costs. In determining the present market value of unimproved property, as reflected by a comparable sale, the addition of demolition costs to the purchase price of a comparable property which had improvements but which was purchased for use as undeveloped land is permissible. Goldstein v. Denver Urban Renewal Auth., 192 Colo. 422 , 560 P.2d 80 (1977).
Fixtures included in determination of landowner's compensation. Fixtures are a part of the realty for which compensation must be paid to the owner by the condemning authority. Denver Urban Renewal Auth. v. Steiner Am. Corp., 31 Colo. App. 125, 500 P.2d 983 (1972).
Reservations in deeds admissible to show value of condemned property. In an eminent domain proceeding, the trial court committed prejudicial error when it refused to allow a city to introduce into evidence certain reservations in deeds through which landowners acquired their record title in order to show diminution in value of the property taken, since actually, the deeds in question should have been admitted into evidence on the question of the value of the landowners' interest. City of Englewood v. Reffel, 173 Colo. 203 , 477 P.2d 361 (1970); E-470 Pub. Hwy. Auth. v. Jagow, 30 P.3d 798 (Colo. App. 2001), aff'd on other grounds, 49 P.3d 1151 ( Colo. 2002 ).
When nonexpert witness competent to testify as to value. A nonexpert witness called to testify as to value is said to have sufficient qualification if a resident, landowner, or farmer in the neighborhood. Baker Metro. Water & San. Dist. v. Baca, 138 Colo. 239 , 331 P.2d 511 (1958).
Defendant failed to show the easement causes significant damage because of depreciation of the value of property due to the impact on the property's "pristine" character. Minto v. Lambert, 870 P.2d 572 (Colo. App. 1993).
All evidence relevant to the determination of the present market value of condemned property is admissible, including evidence of the most advantageous potential future use of the entire property, even if the condemned property would need to be dedicated as part of annexation and rezoning of the entire property in the future. Palizzi v. City of Brighton, 228 P.3d 957 (Colo. 2010).
Evidence of the value of the condemned portion as a part of the whole is admissible and should be evaluated by the fact finder when determining just compensation. Palizzi v. City of Brighton, 228 P.3d 957 (Colo. 2010).
VI. SPECIFIC TYPES OF PROPERTY SUBJECT TO CONDEMNATION.
Types of property subject to condemnation unlimited. There are no limitations on the type of property that may be acquired by the state through condemnation proceedings for highway purposes. Mack v. Bd. of County Comm'rs, 152 Colo. 300 , 381 P.2d 987 (1963).
Using or enlarging ditch without owner's consent considered taking. Using or enlarging a ditch, without the owner's consent, was a taking or damaging of private property as would be appropriating the right-of-way therefor, in the first instance, but such taking or damaging could not be tolerated except upon payment, in a constitutional manner, of just compensation. Tripp v. Overocker, 7 Colo. 72, 1 P. 695 (1883).
Cemetery lands subject to condemnation. Cemetery lands, by virtue of their sacred nature, are not placed beyond the reach of the power of eminent domain; however, in the case of public cemeteries, such power to condemn must be given expressly or by necessary and reasonable implication. Beth Medrosh Hagodol v. City of Aurora, 126 Colo. 267 , 248 P.2d 732 (1952).
Church property can be taken by eminent domain for paramount public use. Pillar of Fire v. Denver Urban Renewal Auth., 181 Colo. 411 , 509 P.2d 1250 (1973).
Condemnation of flowage easements permitted. Denver is vested with ample authority to condemn flowage easements and channel improvement rights for transportation of diverted water to storage facilities. Toll v. City & County of Denver, 139 Colo. 462 , 340 P.2d 862 (1959).
Condemnor acquires surface and support of surface. When land is acquired by condemnation for a highway, the condemnor acquires not only what is understandably known as just the surface, but, by virtue of such condemnation, it acquires whatever is necessary for the support of that surface. Russell Coal Co. v. Bd. of County Comm'rs, 129 Colo. 330 , 270 P.2d 772 (1954).
Property already subject to existing public use can be condemned. Mack v. Bd. of County Comm'rs, 152 Colo. 300 , 381 P.2d 987 (1963).
Where overwhelming necessity shown. Where land is already devoted to a public use, it would be wholly unreasonable to permit it to be taken for another public use which would nullify and defeat the one to which it is already devoted, except in cases where the overwhelming necessities of the public were such that in order to serve their needs or supply their necessities, the taking of such property became necessary. Beth Medrosh Hagodol v. City of Aurora, 126 Colo. 267 , 248 P.2d 732 (1952).
Public waters, etc., not condemnable for sewage purposes. Public waters or beds or channels of public streams cannot be condemned for sewage purposes. City & County of Denver v. District Court, 140 Colo. 1 , 342 P.2d 648 (1959).
Counties lack authority to condemn for office space. The general assembly has not impliedly delegated the power of eminent domain to counties for the purpose of acquiring office space for authorized county purposes. Bd. of County Comm'rs v. Intermountain Rural Elec. Ass'n, 655 P.2d 831 (Colo. 1982) (decided prior to enactment of § 30-11-104 (2)).
VII. REVIEW BY SUPREME COURT.
Property owners may file writ of certiorari during stay of execution. Within a period of a stay of execution granted by a trial court, the owners of property being condemned, not having the right of review of an interlocutory order upon writ of error, may file an original action, by way of certiorari, in the supreme court, alleging that otherwise they were without remedy whatsoever to protect their property from seizure under an order of a district court, which they contended was without lawful authority. Lucas v. District Court, 140 Colo. 510 , 345 P.2d 1064 (1959).
38-1-101.5. Necessity of taking land for pipelines.
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When a court is determining the necessity of taking private land or nonfederal public land for the installation of a pipeline, the court shall require the pipeline company:
- To show that the particular land lies within a route which is the most direct route practicable;
- To post a bond with the court equal to double the amount which the court determines to be the estimated cost of restoring the affected land to the same or as good a condition as it was in prior to the installation of the pipeline; except that the pipeline company may elect to deposit cash, negotiable bonds of the United States government or any political subdivision of this state, or negotiable certificates of deposit of any bank or other savings institution organized or transacting business in the United States equal to double such cost. Said bond shall not be released until the court is satisfied that the condemned land has been restored to the same or as good a condition as existed prior to the installation of the pipeline, and, if the affected land is productive agricultural land, that the soil which sustains the agricultural activity has been restored so as to provide for the continuation of such agricultural activity, and that any damages awarded by the court have been paid. If the condemned land is adjacent to or in proximity of the boundary of federal land of comparable use, such bond shall not be released until the company has restored the land to at least the same reclamation standards and meets such other standards and requirements for such federal land as required by the laws, rules, and regulations of the federal government.
- To consider existing utility rights-of-way before any new routes are taken if the land to be condemned is adjacent to existing utility rights-of-way.
- When land is condemned for a pipeline, the determination of the amount of compensation to be received by the landowner shall reflect consideration of the fact that the condemned land is to be restored as required in this section.
Source: L. 83: Entire section added, p. 1444, § 1, effective June 3. L. 84: (1)(b) amended, p. 974, § 1, effective April 12.
ANNOTATION
Trial court did not abuse its discretion in excluding evidence relating to safety issues. Landowners failed to cite any authority that supports the proposition that a court must consider safety issues in pipeline condemnation cases. Sinclair Transp. Co. v. Sandberg, 228 P.3d 198 (Colo. App. 2009), rev'd on other grounds sub nom. Larson v. Sinclair Transp. Co., 2012 CO 36, 284 P.3d 42.
38-1-101.7. Limitations on the use of right-of-way.
- No easement or right-of-way for pipelines shall be used by the owner thereof or employees of such owner for any purpose other than to construct, lay, install, replace, operate, inspect, maintain, repair, renew, substitute, monitor, change the size of, and remove certain facilities placed within the easement by such owner.
- The owner of an easement or right-of-way shall mitigate any erosion of the land within the easement or right-of-way caused by the owner of such easement.
Source: L. 84: Entire section added, p. 975, § 2, effective April 12.
38-1-102. Petition - contents - parties.
- In all cases where the right to take private property for public or private use without the owner's consent or the right to construct or maintain any railroad, spur or side track, public road, toll road, ditch, bridge, ferry, telegraph, flume, or other public or private work or improvement which may damage property not actually taken is conferred by general laws or special charter upon any corporate or municipal authority, public body, officer or agent, person, commissioner, or corporation and the compensation to be paid for, in respect of property sought to be appropriated or damaged for the purposes mentioned, cannot be agreed upon by the parties interested; or, in case the owner of the property is incapable of consenting, or his name or residence is unknown, or he is a nonresident of the state, it is lawful for the party authorized to take or damage the property so required to apply to the judge of the district court where the property or any part thereof is situate by filing with the clerk a petition, setting forth, by reference, his authority in the premises, the purpose for which said property is sought to be taken or damaged, a description of the property, the names of all persons interested as owners or otherwise, as appearing of record, if known, or, if not known, stating that fact, and praying such judge to cause the compensation to be paid to the owner to be assessed. If the proceedings seek to affect the property of persons under guardianship, the guardians or conservators of persons having conservators shall be made parties defendant. Persons interested whose names are unknown may be made parties defendant by the description of the unknown owners. In all such cases an affidavit shall be filed by or on behalf of the petitioner, setting forth that the names of such persons are unknown.
- In cases where the property is sought to be taken or damaged by the state for the purpose of establishing, operating, or maintaining any state house or charitable or other state institution or improvement, the petition shall be signed by the governor or such other person as he directs or as is provided by law.
- Under the provisions of this section, private property may be taken for private use, for private ways of necessity, and for reservoirs, drains, flumes, or ditches on or across the lands of others for agricultural, mining, milling, domestic, or sanitary purposes.
Source: G.L. § 1059. G.S. C. § 238. L. 1885: p. 200, § 1. L. 01: p. 173, § 1. R.S. 08: § 2416. C.L. § 6312. CSA: C. 61, § 2. CRS 53: § 50-1-2. L. 55: p. 368, § 1. C.R.S. 1963: § 50-1-2. L. 64: p. 265, § 154.
Cross references: For condemnation by tax exempt agency, see § 39-3-134; for taking private property for private use, see § 14 of art. II, Colo. Const.; for taking property for public use, see § 15 of art. II, Colo. Const.; for the right-of-way for ditches and flumes, see § 7 of art. XVI, Colo. Const.
ANNOTATION
Analysis
I. GENERAL CONSIDERATION.
Law reviews. For comment on City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978), appearing below, see 56 Den. L. J. 625 (1979). For article, "Access to Mineral Lands in Colorado", see 11 Colo. Law. 870 (1982).
Principal object of condemnation proceedings is to ascertain the price which a petitioner must pay for the land which he desires to acquire, and, until that determination is made by a board or jury and the same has been approved by a court, it cannot be said that the rights of the parties have become fixed or determined. Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958).
Proceedings can only be instituted under particular statutes which warrant them. Colo. Midland Ry. v. Ruedi, 2 Colo. App. 202, 29 P. 1034 (1892).
This section contemplates institution of proceedings by one corporation against another as well as by a corporation of a public character against the property of a private individual. San Luis Land, Canal & Imp. Co. v. Kenilworth Canal Co., 3 Colo. App. 244, 32 P. 860 (1893).
Power not assertable by federal oil and gas lessee. The power of condemnation prescribed by this section may not be asserted by a federal oil and gas lessee. Coquina Oil Corp. v. Harry Kourlis Ranch, 643 P.2d 519 (Colo. 1982).
Power not assertable by owner of unpatented mining claim. Precious Offer. Mineral Exch. v. McLain, 194 P.3d 455 (Colo. App. 2008).
Good faith offer prerequisite to failure to agree upon purchase price. The prerequisite of a failure to agree upon the purchase price for the property sought to be condemned generally requires only that the condemning authority make a reasonable good faith offer to reach an agreement with the owner of the property for its purchase. City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978); Bd. of County Comm'rs, v. Blecha, 697 P.2d 416 (Colo. App. 1985); City of Holyoke v. Schlachter Farms R.L.L.P., 22 P.3d 960 (Colo. App. 2001).
Where the negotiator for the plaintiff stated a price for land to the president of defendant association, who informed board of directors of offered price and all refused to accept it, this constituted failure to agree which was a condition precedent to jurisdiction of the trial court in a condemnation proceeding brought pursuant to this section. Old Timers Baseball Ass'n v. Hous. Auth., 122 Colo. 597 , 224 P.2d 219 (1950).
Requirement of good faith negotiations under this section is not a restriction on the court's subject matter jurisdiction but is merely an element of the claim for relief. Minto v. Lambert, 870 P.2d 572 (Colo. App. 1993).
Trial court did not err in finding that the good faith negotiation requirement under subsection (1) was satisfied. Here, record supports trial court's determination because: (1) Petitioner made two separate offers, both of which exceeded the appraisal, (2) respondents declined to accept either offer, although they had been afforded a reasonable time in which to do so, and (3) their only counteroffer was substantially greater than either of petitioner's offers and the only appraisal. Sheridan Redev. Agency v. Knightsbridge Land Co., 166 P.3d 259 (Colo. App. 2007).
Property owner has privilege of controverting petitioner's right to condemn. Kaschke v. Camfield, 46 Colo. 60, 102 P. 1061 (1909).
Thereafter, petitioner has burden to maintain right by proper proofs. When property owner controverts petitioner's right to condemn, the burden is upon the petitioner to maintain his right by proper proofs. Kaschke v. Camfield, 46 Colo. 60, 102 P. 1061 (1909).
Where owner fails to make contest, petitioner's right to condemn deemed admitted. Where the owner fails to make a contest, in the proper manner and at the proper time, the right in the petitioner to condemn will be deemed admitted, leaving the amount of damages to be awarded as the sole matter in dispute. Kaschke v. Camfield, 46 Colo. 60, 102 P. 1061 (1909).
Petitioner must prove failure to agree upon compensation for land taken. The burden of proof is upon the petitioner in a condemnation action to establish by competent evidence that there was a failure to agree upon the compensation to be paid for land sought to be taken or damaged. Stalford v. Bd. of County Comm'rs, 128 Colo. 441 , 263 P.2d 436 (1953); City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978).
Failure to agree on compensation prerequisite to institution of proceedings. Failure to agree upon compensation to be paid for land sought to be taken or damaged is a condition precedent to the right to institute and maintain proceedings at all and is clearly jurisdictional. Mulford v. Farmers Reservoir & Irrigation Co., 62 Colo. 167 , 161 P. 301 (1916); Stalford v. Bd. of County Comm'rs, 128 Colo. 441 , 263 P.2d 436 (1953); Welch v. City & County of Denver, 141 Colo. 587 , 349 P.2d 352 (1960).
Effect of owner's silence or failure to propose counter offer. If the property owner remains silent or rejects the offer without making an acceptable counter-offer, a condemnation action may be instituted. City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978).
Agreement precludes institution of proceedings. Where an agreement was reached between the state, which was the condemnor, and the city, which was the landowner, the state is not compelled to institute condemnation proceedings because, by enacting an ordinance authorizing the use of park lands for highway purposes, all was accomplished by condemnation proceedings. Welch v. City & County of Denver, 141 Colo. 587 , 349 P.2d 352 (1960).
Order for temporary possession not reviewable by writ of error. An order for temporary possession is interlocutory and not a final judgment or final determination of the action; thus are not reviewable by writ of error. Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958).
Doctrines of claim preclusion and issue preclusion apply, and condemnees cannot revisit the valuation of the property acquired as determined in earlier condemnation proceedings in a subsequent civil action claiming a taking without just compensation. The issue of damages for the taking of the acquired property was actually and necessarily adjudicated in the prior condemnation proceeding where the condemnees had a full and fair opportunity to litigate the issue. Wall v. City of Aurora, 172 P.3d 934 (Colo. App. 2007).
Record supports trial court's determination that corporation engaged in good faith negotiations. Requirement of good faith negotiation under subsection (1) satisfied where condemning authority makes a reasonable good faith offer to reach an agreement with property owner and allows owner sufficient time to respond. Here, condemning authority made several offers, some of which exceeded properties' appraised values, landowners did not accept offers, although they had a reasonable time to do so, and landowners' counteroffers demanded substantially more than condemning authority's offers and properties' appraised values. Sinclair Transp. Co. v. Sandberg, 228 P.3d 198 (Colo. App. 2009), rev'd on other grounds sub nom. Larson v. Sinclair Transp. Co., 2012 CO 36, 284 P.3d 42.
Applied in Colo. Midlands Ry. v. Croman, 16 Colo. 381 , 27 P. 256 (1891); Town of Lyons v. City of Longmont, 54 Colo. 112 , 129 P. 198 (1912); Otero Irrigation Dist. v. Enderud, 122 Colo. 136 , 220 P.2d 862 (1950); Rabinoff v. District Court, 145 Colo. 225 , 360 P.2d 114 (1961); Buck v. District Court, 199 Colo. 344 , 608 P.2d 350 (1980); Direct Mail Servs., Inc. v. Colo., 557 F. Supp. 851 (D. Colo. 1983 ), aff'd, 729 F.2d 672 (10th Cir. 1984); Thornton Dev. Auth. v. Upah, 640 F. Supp. 1071 (D. Colo. 1986 ).
II. PROPERTY SUBJECT TO EMINENT DOMAIN.
A. Private Property.
Property held by corporation deemed private. Property held by public corporation which is not devoted to, or needed for, a public use, is as much private property as though held by an individual. Denver Power & Irrigation Co. v. Denver & R.G.R.R., 30 Colo. 204, 69 P. 568 (1902).
B. Way of Necessity.
Common-law way of necessity is easement founded upon implied grant. Where one party conveys property, he also conveys whatever is necessary to the beneficial use of that property by which it is assumed that, when a party conveys property, he also conveys whatever is necessary to the beneficial use of that property. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915); Minto v. Lambert, 870 P.2d 572 (Colo. App. 1993).
Way of necessity arises only in favor of grantee over grantor's land, and not over the lands of a stranger. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).
Necessity does not create right, as it always originates in some grant or change of ownership. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).
Section 14 of article II of the state constitution is a general inhibition against taking private property for private use without the consent of the owner, but with certain exceptions. The exceptions are constitutional grants of rights and powers not existing before the adoption of the constitution, namely, the right to take private property for private use, without the consent of the owner, in the instances therein enumerated. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).
Private and public ways of necessity distinguished. Private ways of necessity differ from public ways of necessity only in the fact that they are private; private ways of necessity refer particularly to, and include, passageways or roadways which are indispensable to the practical use of the property for which they are claimed. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).
Private ways of necessity are not limited to ways desired for agricultural, mining, milling, domestic, or sanitary purposes, as are those for reservoirs, drains, flumes, and ditches. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915); Childers v. Quartz Creek Land Co., 946 P.2d 534 (Colo. App. 1997), cert. dismissed, 964 P.2d 509 ( Colo. 1998 ).
When private corporation may condemn land for private way of necessity. A private corporation may condemn land for a private way of necessity where the nature of its business and the situation of its property require the way, and where, under like conditions, other persons not corporate may condemn. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).
Courts may determine what constitutes private way of necessity in any particular case, unless restrained by the general assembly. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).
Private way of necessity may be condemned when the need is reasonably necessary and the common law or other legal remedy does not provide a present enforceable legal right to an alternate mode of access that is reasonable and practical. Minto v. Lambert, 870 P.2d 572 (Colo. App. 1993).
State highway department cannot condemn property for a private way of necessity. Although state highway department has express statutory authority to condemn property for local service roads and for highway construction, the department has no statutory authority to "stand in the shoes" of a private landowner and condemn a private way of necessity which the landowner has the right to assert under this section. Dept. of Hwys. v. Denver & Rio Grande W.R., 789 P.2d 1088 (Colo. 1990).
The phrase "private ways of necessity" in subsection (3) does not include natural gas pipelines. Phrase is limited to passageways, such as paths, bridges, and tunnels, and roadways that provide legal access connecting landlocked property to a public road. Petitioners do not seek to condemn an easement to provide such access but rather to construct and maintain an underground natural gas pipeline and related equipment and facilities. As such, petition did not identify a purpose for which taking property is permitted under this section and section 14 of article II of the state constitution. Akin v. Four Corners Encampment, 179 P.3d 139 (Colo. App. 2007).
If the defendant pleads the existence of an alternate route of private access across property not owned by the defendant, defendant has the burden of establishing the existence of an acceptable alternate route and of proving that plaintiffs have the present enforceable legal right to use it. West v. Hinksmon, 857 P.2d 483 (Colo. App. 1992).
Defendant should be permitted to show that an alternate route across defendant's property exists that would be less damaging than that proposed by plaintiff. West v. Hinksmon, 857 P.2d 483 (Colo. App. 1992).
When a petitioner seeks to condemn private way of necessity for access to property it wishes to develop in the future, it must demonstrate a purpose for the condemnation that enables the trial court to examine both the scope of and necessity for the proposed condemnation, so that the burden to be imposed upon the condemnee's property may be ascertained and circumscribed through the trial court's condemnation order. Glenelk Ass'n v. Lewis, 260 P.3d 1117 (Colo. 2011).
Condemnor failed to articulate a concrete development proposal for the subject property nor did he sufficiently engage the county's land use approval process prior to initiating the condemnation proceeding. Record fails to clarify condemnor's intended use of the property or size of the planned road with sufficient specificity to allow trial court to analyze necessity of requested easement. Condemnor's failure to sufficiently articulate development plan prevented trial court from determining scope of proposed condemnation sufficiently to determine scope of burden to be imposed upon the property to be condemned. Given evidentiary shortcomings in the record, trial court correctly concluded that it could not determine whether particular way of necessity requested by condemnor was indispensable and, therefore, trial court correctly denied condemnor's request for immediate possession and dismissed the condemnation petition. Glenelk Ass'n v. Lewis, 260 P.3d 1117 (Colo. 2011).
Trial court's determination in declaratory judgment action brought under constitutional counterpart of subsection (3) of this section, § 14 of article II of the state constitution, that defendants failed to rebut plaintiff's showing of an entitlement to a private way of necessity is not clearly erroneous. Trial court held plaintiff may condemn private way of necessity across defendants' property pursuant to constitutional section. Trial court's determinations that plaintiff proved that a way of necessity is reasonably necessary and that defendants did not prove, in any concrete fashion, that plaintiff has either an alternate route of access or a present enforceable legal right to use one are not clearly erroneous. Tieze v. Killam, 179 P.3d 10 (Colo. App. 2007).
C. Property Devoted to Public Use.
Condemnation of property already devoted to public use limited. Property already devoted to a public use cannot be taken for another in such manner or to such an extent that the use to which it is devoted will be wholly defeated or superseded, except where a public exigency requires that it be taken. Denver Power & Irrigation Co. v. Denver & R.G.R.R., 30 Colo. 204 , 69 P. 568 (1902); Beth Medrosh Hagodol v. City of Aurora, 126 Colo. 267 , 248 P.2d 732 (1932).
Land already appropriated as a right-of-way by a railroad company cannot be taken for a reservoir site to an extent which would totally deprive the railroad company of its use, unless a public necessity requires that it be taken. Denver Power & Irrigation Co. v. Denver & R.G.R.R., 30 Colo. 204, 69 P. 568 (1902).
Property held for a public use may be taken under the exercise of the right of eminent domain for the same or a different public use, when such taking does not materially interfere with the uses for which it is already held. Colo. E. Ry. v. Union Pac. Ry., 41 F. 293 (D. Colo. 1890), writ of error dismissed, 54 F. 22 (8th Cir. 1893), writ of error dismissed, 163 U.S. 708, 16 S. Ct. 1207, 41 L. Ed. 310 (1895); Union P. R. R. v. Colo. Postal Tel. Cable Co., 30 Colo. 133, 69 P. 564 (1902), appeal dismissed, 191 U.S. 577, 24 S. Ct. 861, 48 L. Ed. 309 (1903).
City may not condemn property already dedicated to public use. Beth Medrosh Hagodol v. City of Aurora, 126 Colo. 267 , 248 P.2d 732 (1952).
III. THE PETITION.
A. Contents.
Petition to reflect property value or amount in controversy. The petition should show the value of the property sought to be taken or the amount involved in the proceeding. Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889).
Authority to condemn need not appear in petition. Kaschke v. Camfield, 46 Colo. 60, 102 P. 1061 (1909).
Definiteness required in description of condemned property. A petition that describes the right-of-way sought to be condemned with sufficient definiteness that any one versed in the nomenclature employed for the description of lands could locate it without any trouble, contains a sufficient description. Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901).
Although this section requires that a petition for condemnation provide a description of the property to be condemned and the purpose for which the property is to be condemned, it does not require the petitioner to provide a metes and bounds legal description of the property nor to specify the particular uses for which the property is to be condemned. Bly v. Story, 241 P.3d 529 (Colo. 2010).
Averments of shortest route practicable, etc., unnecessary. The petition for a way for an irrigating ditch, over the cultivated lands of another, need not aver that the way sought is the shortest and most direct route practicable, etc. Mulford v. Farmers' Reservoir & Irrigation Co., 62 Colo. 167, 161 P. 301 (1916).
Deficient petition to be dismissed. If the petitioner is unable to bring himself within the descriptio personae of some act from which he derives his rights, or if he fails to show that he is seeking to take private property and desires to ascertain its value in that proceeding, his petition must be dismissed. Colo. Midland Ry. v. Ruedi, 2 Colo. App. 202, 29 P. 1034 (1892).
Nature of easement. Unless the exact nature of an easement sought to be taken is fixed by law, petition must describe in detail the nature of the use to be made of the land so that the burden on the landowner can be accurately evaluated. State Dept. of Hwys. v. Woolley, 696 P.2d 828 (Colo. App. 1984).
Slope easement defined in State Dept. of Highways v. Woolley, 696 P.2d 828 (Colo. App. 1984).
B. Sufficiency.
Sufficient showing of public purpose in petition. In a proceeding to condemn a right-of-way for a telegraph line, a petition which alleges that petitioner is a corporation organized for the purpose of erecting and maintaining lines of magnetic telegraph in this state is sufficient to show that the line to be established is for public use. Union P.R.R. v. Colo. Postal Tel. Cable Co., 30 Colo. 133, 69 P. 564 (1902), appeal dismissed, 191 U.S. 577, 24 S. Ct. 861, 48 L. Ed. 309 (1903).
C. Parties.
Unknown interested parties. Where the names of interested parties are unknown, this section authorizes the institution of proceedings against the owner appearing of record or, if not known stating that fact; but this section does not and could not lawfully undertake to conclude the rights and transmute the title of the real owner without notice and having his day in court. Colo. E.R.R. v. Chicago, B. & Q. Ry., 141 F. 898 (8th Cir. 1905).
Shareholders necessary parties in mutual ditch corporation action. Pursuant to Rule 19, C.R.C.P. the district court should join as parties to a condemnation action those shareholders in a mutual ditch corporation whose water rights would be affected by the condemnation action of the defendant as of the date of the initiation of the condemnation action and all parties in interest. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).
38-1-103. Summons - return - publication.
- A summons shall be issued and served and proof of service shall be made in accordance with the Colorado rules of civil procedure. The contents of such summons shall be in conformity with said rules; except that it shall notify the respondent or defendant that, upon failure to appear and defend, the court, without further notice, shall cause the compensation to be determined and title vested in the petitioner according to law. When it appears that the owners of the property sought to be condemned cannot be personally served as provided by the Colorado rules of civil procedure, an affidavit shall be filed in said cause by the petitioner or his attorney, setting forth that the person making such affidavit has made diligent inquiry and has been unable to learn the whereabouts of such owners.
- The court shall then order a notice to be published in some newspaper published in said county, addressed to such owners, in which notice shall be stated the name of the petitioner, a full and accurate description of the property sought to be taken or condemned, the purpose for which such condemnation is asked, the time and place at which such owners are required to appear, and the title of the court or name of the judge before whom said application is to be heard. The court shall also fix and determine when said notice shall be made returnable, but in no case shall it be made returnable in less than thirty days. The same shall be published at least four times in some weekly newspaper before the return day thereof. If there is no weekly newspaper published in the county in which such proceedings are had, the court shall direct that said notice be published in some newspaper, named by him, published in the nearest convenient place to such county.
Source: G.L. § 1061. L. 1879: p. 58, § 1. G.S. C. § 240. R.S. 08: § 2418. C.L. § 6314. CSA: C. 61, § 4. CRS 53: § 50-1-4. L. 55: p. 369, § 2. L. 61: p. 370, § 2. C.R.S. 1963: § 50-1-4.
Cross references: For publication of legal notices, see part 1 of article 70 of title 24; for contents of a summons, see C.R.C.P. 4(c); for personal service in state, see C.R.C.P. 4(e); for manner of proof of service, see C.R.C.P. 4(h).
ANNOTATION
Failure to answer summons waives all issues except compensation. Where the summons is returnable at a certain day and hour, no answer being interposed at the hour appointed, the court can proceed at once to the appointment of commissioners to ascertain the compensation to be made because failing to answer at the time specified is a waiver of all questions as to the necessity for the taking and the attempt to agree. Kaschke v. Camfield, 46 Colo. 60, 102 P. 1061 (1909); Williams v. Bd. of Comm'rs, 48 Colo. 541, 111 P. 71 (1910).
Applied in Sand Creek Lateral Irrigation Co. v. Davis, 17 Colo. 326, 29 P. 742 (1892); Colo. Midland Ry. v. Ruedi, 2 Colo. App. 202, 29 P. 1034 (1892); Siedler v. Seely, 8 Colo. App. 499, 46 P. 848 (1896); Thompson v. De Weese-Dye Ditch & Reservoir Co., 25 Colo. 243, 53 P. 507 (1898); Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901); Union P.R.R. v. Colo. Postal Tel. Cable Co., 30 Colo. 133, 69 P. 564 (1902); Goodman v. City of Ft. Collins, 164 F. 970 (8th Cir. 1908).
38-1-104. Trial - amendments - rules.
No cause shall be heard earlier than thirty days after service upon the defendant or upon due publication as provided in section 38-1-103. Any number of separate parcels of property situate in the same county may be included in one petition, and the compensation for each shall be assessed separately by the same or different commissions or juries, as the court may direct. Amendment to the petition or to any paper or record in the cause may be permitted whenever necessary to a fair trial and final determination of the questions involved. Should it become necessary at any stage of the proceeding to bring a new party before the court, the court has the power to make such rule or order in relation thereto as may be deemed reasonable and proper, and also has the power to make all necessary rules and orders for notice to parties of the pendency of the proceeding and to issue all process necessary to the execution of orders and judgments as they may be entered.
Source: G.L. § 1062. G.S. C. § 241. R.S. 08: § 2419. C.L. § 6315. CSA: C. 61, § 5. CRS 53: § 50-1-5. L. 55: p. 370, § 3. C.R.S. 1963: § 50-1-5. L. 85: Entire section amended, p. 1194, § 2, effective June 6.
ANNOTATION
Provisions relating to amendment of petition to be accorded liberal interpretation. Lebanon Mining Co. v. Consol. Republican Mining Co., 6 Colo. 371 (1882); Archibald v. Thompson, 2 Colo. 388 (1892); Sw. Land Co. v. Hickory Jackson Ditch Co., 18 Colo. 489, 33 P. 275 (1893); Jordan v. Greig, 33 Colo. 360, 80 P. 1045 (1905); Goodman v. City of Ft. Collins, 164 F. 970 (8th Cir. 1908).
Applicability of section. The provisions of this section allowing amendment of a petition are as applicable to the correction of errors and omissions in the statement of jurisdictional facts as to the correction of other defects. Lebanon Mining Co. v. Consol. Republican Mining Co., 6 Colo. 371 (1882); Archibald v. Thompson, 2 Colo. 388 (1892); Sw. Land Co. v. Hickery Jackson Ditch Co., 18 Colo. 489, 33 P. 275 (1893); Jordan v. Greig, 33 Colo. 360, 80 P. 1045 (1905); Goodman v. City of Ft. Collins, 164 F. 970 (8th Cir. 1908).
General statutory provisions governing amendments to pleadings are inapplicable to the eminent domain act, which prescribes a complete system of procedure for the taking or damaging of private property. Trippe v. Overacker, 7 Colo. 72, 1 P. 695 (1883); Knoth v. Barclay, 8 Colo. 300, 6 P. 924 (1885); Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889); Kindel v. Le Bert, 23 Colo. 385, 48 P. 641, 58 Am. St. R. 234 (1897).
Matter of amendments is discretionary with the court. Knoth v. Barclay, 8 Colo. 300, 6 P. 924 (1885); Goodman v. City of Ft. Collins, 164 F. 970 (8th Cir. 1908).
Amendment power unaffected by parties' failure to appear. The power of the court to allow an amendment of a petition is not affected in any wise by the failure of parties to appear because the personal service of the summons brought them under the jurisdiction of the court for all purposes of the proceedings as fully as a voluntary appearance could have done. Goodman v. City of Ft. Collins, 164 F. 970 (8th Cir. 1908).
Defective condemnation proceedings may be renewed, and the petition and other papers may be amended whenever necessary to a fair trial and final determination of the controversy. Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889).
Jurisdiction is not lost by amendment of petition because an amendment is not the institution of a new proceeding, and it creates no occasion for the issuance of a new summons or like process. Goodman v. City of Ft. Collins, 164 F. 970 (8th Cir. 1908).
Trial court's refusal to permit amendment deemed no abuse of discretion. If the condemnor is fully aware of the nature and value of the property it seeks to take, it may not wait until after evidence of value has been heard and, because of anticipated dissatisfaction with the amount of the award, modify its position where the property owners have changed their position in good faith and reliance on the condemnor's representations; since the trial court's refusal to permit an amendment was based upon consideration of fairness to the parties, the trial court did not abuse its discretion in denying to condemnor's motion to amend. Evergreen Fire Prot. Dist. v. Huckeby, 626 P.2d 744 (Colo. App. 1981).
Applied in Colo. E.R.R. v. Chicago, B. & Q. Ry., 141 F. 898 (8th Cir. 1905); Schneider v. Schneider, 36 Colo. 518 , 86 P. 347 (1906); Tegeler v. Schneider, 49 Colo. 574 , 114 P. 288 (1911); Cucharas Sanitation & Water v. Mounsey, 805 P.2d 1177 (Colo. App. 1990).
38-1-105. Adjournment - commission - compensation - defective title - withdrawal of deposit.
- The court may adjourn the proceedings from time to time and shall direct any further notice thereof to be given that may seem proper. The court shall hear proofs and allegations of all parties interested touching the regularity of the proceedings and shall rule upon all objections thereto. Unless a jury is requested by the owner of the property as provided in section 38-1-106, the court shall appoint a board of commissioners of not less than three disinterested and impartial freeholders to determine compensation in the manner provided in this article to be allowed to the owner and persons interested in the lands, real estate, claims, or other property proposed to be taken or damaged in such county for the purposes alleged in the petition. The court shall fix the time and place for the first meeting of such commissioners. Such meeting shall be held at least thirty days prior to the date scheduled for the trial to determine compensation. At the meeting, a voir dire examination shall be conducted by the court and the parties to determine whether the proposed commissioners are disinterested and impartial freeholders. If the court determines that any of the proposed commissioners is not disinterested and impartial, the court shall replace such person and appoint another commissioner, who shall also be subject to voir dire examination. At the hearing to determine compensation, the court shall administer an oath to the commissioners, shall instruct them in writing as to their duties, and, at the conclusion of the testimony, shall instruct them in writing as to the applicable and proper law to be followed by them in arriving at their ascertainment. The court shall fix reasonable compensation for the services and expenses of said commissioners and shall provide the services of a court reporter to record all proceedings had by the commissioners.
- The commissioners, before entering upon the duties of their office, shall take an oath to faithfully and impartially discharge their duties as commissioners, and any one of them may administer oaths to witnesses produced before them. The commissioners may request the court or clerk thereof to issue subpoenas to compel witnesses to attend the proceedings and testify as in other civil cases and may adjourn and hold meetings for that purpose. They may request the court to make rulings upon the propriety of the proof or objections of the parties. They shall hear the proofs and allegations of the parties according to the rules of evidence and, after viewing the premises or other property and without fear, favor, or partiality, shall ascertain and certify the proper compensation to be made to said owner or parties interested for the lands, real estate, claims, or other property to be taken or affected, as well as all damages accruing to the owner or parties interested in consequence of the condemnation of the same. The commissioners shall make, subscribe, and file with the clerk of the court in which such proceedings are had a certificate of their ascertainment and assessment, in which such lands, real estate, claims, or other property shall be described with convenient certainty and accuracy.
- The court, upon the filing of such certificate or returning of a verdict of a jury as provided in section 38-1-107 and due proof that such compensation and separate sums, if any, are certified or found to have been paid to the parties entitled to the same or have been deposited to the credit of such parties in court or with the clerk of the court for that purpose, shall make and cause to be entered in its minutes a rule describing such lands, real estate, claims, or other property, such ascertainment or compensation with the mode of making it, and each payment or deposit of the compensation, a certified copy of which shall be recorded and indexed in the office of the county clerk and recorder of the proper county in like manner and with like effect as if it were a deed of conveyance from the owner and parties interested to the proper parties. If there is more than one person interested as owner or otherwise in the property and they are unable to agree upon the nature, extent, or value of their respective interests in the total amount of compensation so ascertained and assessed on an undivided basis by either a commission or a jury, the nature, extent, or value of said interests shall thereupon be determined according to law in a separate and subsequent proceeding and distribution made among the several claimants thereto.
- Upon the entry of such rule, the petitioner shall become seized in fee unless a lesser interest has been sought, except as provided in this section, of all such lands, real estate, claims, or other property described in said rule as required to be taken, and may take possession and hold and use the same for the purposes specified in such petition, and shall thereupon be discharged from all claims for any damages by reason of any matter specified in such petition, certificate, or rule of said court. No right-of-way or easement acquired by condemnation shall ever give the petitioner any right, title, or interest to any vein, ledge, lode, deposit, oil, natural gas, or other mineral resource found or existing in the premises condemned, except insofar as the same may be required for subsurface support.
- If at any time after an attempted or actual ascertainment of compensation under this article or any purchase or by donation to said petitioner of any lands, real estate, claims, or other property for purposes specified in the petition it appears that the title acquired thereby, to all or any part of such lands for the use of such petitioner, is defective or if said assessment fails or is deemed defective, the petitioner may proceed and perfect such title by procuring an ascertainment of the proper compensation to be made to any person who has title, claim, or interest in or lien upon such lands, real estate, claims, or other property and by making payment thereof in the manner provided in section 38-1-112, as near as may be.
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- At any stage of such new proceedings or of any proceedings under this article, the court, by rule in that behalf made, may authorize the petitioner, if already in possession, to use, and, if not in possession, to take possession of and use, said premises during the pendency and until the final conclusion of such proceedings and may stay all actions and proceedings against such petitioner on account thereof, if such petitioner pays a sufficient sum into court, or to the clerk thereof, to pay the compensation in that behalf when ascertained. The court wherein any such proceedings are had shall determine the amount such petitioner is required to pay or deposit pending any such ascertainment. In every case where possession is so authorized, it is lawful for either party to conduct the proceedings to a conclusion, if the same are delayed by the other party.
- Upon proper application to the court or by stipulation between the parties, the owner may withdraw from the sum so deposited an amount not to exceed three-fourths of the highest valuation evidenced or testimony presented by the petitioner at the hearing for possession, unless the petitioner agrees to a larger withdrawal, if all parties interested in the property sought to be acquired consent and agree to such withdrawal. Any such withdrawal of said deposit shall be a partial payment of the amount of total compensation to be paid and shall be deducted by the clerk of the court from any award or verdict entered thereafter.
- The petitioner shall not take possession of the property sought to be taken or condemned earlier than thirty days after service of the summons upon the defendant, unless the owner consents to such possession prior to the expiration of the thirty-day period.
Source: G.L. § 1063. G.S. C. § 242. R.S. 08: § 2420. C.L. § 6316. CSA: C. 61, § 6. CRS 53: § 50-1-6. L. 61: p. 371, § 3. L. 63: p. 476, § 1. C.R.S. 1963: § 50-1-6. L. 66: p. 27, § 1. L. 84: (1) amended, p. 972, § 2, effective February 17. L. 85: (6)(c) added, p. 1194, § 3, effective June 6. L. 2008: (4) amended, p. 627, § 1, effective August 5.
ANNOTATION
Analysis
I. GENERAL CONSIDERATION.
Law reviews. For note, "The Real Property Interest Created In a Railroad Upon Acquisition of Its Right-of-Way", see 27 Rocky Mt. L. Rev. 73 (1954). For article, "La Plata Electric Association v. Cummins: A Radical Departure or a Consistent Interpretation of Pre-Existing Equities in Colorado Condemnation Law?", see 65 Den. U. L. Rev. 93 (1988).
Only such interest necessary to accomplish purpose passed. This article passes only such estate or interest in the lands as is reasonably necessary to accomplish the purpose had in view in the condemnation proceeding. Lithgow v. Pearson, 25 Colo. App. 70, 135 P. 759 (1913).
As a result of the 2008 legislative expansion of this section, subsection (4) prohibits a governmental entity from acquiring through condemnation a right to any mineral resource beneath real property that was itself acquired through condemnation for highway purposes except to the extent required for subsurface support. Prior to that expansion, subsection (4) did not prohibit such acquisition by the department of transportation. Dept. of Transp. v. Gypsum Ranch Co., 244 P.3d 127 (Colo. 2010).
Specific land description in order appointing commissioners not required. This section does not require that the land to be taken or damaged should be specifically described in the order appointing the commissioners. Williams v. Bd. of Comm'rs, 48 Colo. 541, 111 P. 71 (1910).
Trial judge is not required to preside at all commissioners' meetings. Bd. of County Comm'rs v. Vail Associates, 171 Colo. 381 , 468 P.2d 842 (1970).
Applied in Smith Canal or Ditch Co. v. Colo. Ice & Storage Co., 34 Colo. 485 , 82 P. 940 (1905); Boothroyd v. Bd. of Comm'rs, 43 Colo. 428 , 97 P. 255 (1908); Kern v. Minekime, 45 Colo. 378 , 101 P. 341 (1909); Hoover-Benninghoff v. Palisade, 48 Colo. 64 , 108 P. 983 (1910); United States v. O'Neill, 198 F. 677 (D. Colo. 1912 ); Keller v. Miller, 63 Colo. 304 , 165 P. 774 (1917); Rothwell v. Coffin, 122 Colo. 140 , 220 P.2d 1063 (1950); Potashnik v. Pub. Serv. Co., 126 Colo. 98 , 247 P.2d 137 (1952); Goldstein v. Denver Urban Renewal Auth., 192 Colo. 422 , 560 P.2d 80 (1977); Bd. of County Comm'rs v. Delaney, 41 Colo. App. 548, 592 P.2d 1338 (1978); Buck v. District Court, 199 Colo. 344 , 608 P.2d 350 (1980); State Dept. of Hwys. v. Pigg, 656 P.2d 46 (Colo. App. 1982).
II. THE PROCEEDINGS.
A. In General.
Parties entitled to presence at trial, cross-examination, etc. At the trial both parties are entitled to be present, to cross-examine witnesses and to object to the admission or exclusion of any and all documents offered in evidence. Routt County Dev. Co. v. Johnson, 23 Colo. App. 511, 130 P. 1081 (1913).
Petitioner may pay award or abandon proceedings. Under a judgment in condemnation the petitioner may pay the award and take title to the property, or he may abandon the proceedings and, thus, incur no liability for the sum awarded as the value of the property; and this is true even in cases where by virtue of the statute, he has obtained preliminary possession pending trial. Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1891).
Condemning party may discontinue proceedings at any time before the right of the property owner to compensation or damages has become complete, in the absence of a statutory provision showing a legislative intent to the contrary. Denver & N.O.R.R. v. Lamborn, 8 Colo. 380 , 8 P. 582 (1885); Denver & R.G.R.R. v. Mills, 59 Colo. 198 , 147 P. 681 (1915); Johnson v. Climax Molybdenum Co., 109 Colo. 308 , 124 P.2d 929 (1942).
Payment required for costs and damages recoverable upon abandonment. The privilege to so abandon the proceeding does not relieve the condemning party from the payment of such costs and damages as may be lawfully recovered. Denver & R.G.R.R. v. Mills, 59 Colo. 198, 147 P. 681, 1916E Ann. Cas. 985 (1915).
Landowner must recover damages in separate action. Damages occasioned by the occupancy and use of the land by the condemnor, where the condemnor discontinues the proceedings after gaining temporary possession of the property, must be recovered by the landowner in a separate action. Johnson v. Climax Molybdenum Co., 109 Colo. 308 , 124 P.2d 929 (1942).
Since landowner's action for damages improper for consideration in condemnation proceedings. The procedural requirement of the landowner having to seek recovery in a separate action arose from the fact that condemnor, after abandoning and discontinuing the proceedings, was relegated to the status of a trespasser ab initio, and the landowner's action for damages, of necessity, had to sound in tort and involved essentials, both in the pleading and trial thereof, not properly subjects for consideration in condemnation proceedings under this section. Johnson v. Climax Molybdenum Co., 109 Colo. 308 , 124 P.2d 929 (1942).
Condemnor has burden of maintaining his right by proper proofs, once the landowner has controverted the condemnor's right to condemn. Otero Irrigation Dist. v. Enderud, 122 Colo. 136 , 220 P.2d 862 (1950).
Property owner acquires no vested right to compensation awarded until condemnor has secured a vested right to the property condemned, and vice versa. City of Broomfield v. Walnut Creek Dev. Corp., 666 P.2d 1103 (Colo. App. 1982).
Scope of petitioner's showing in pleadings and proof. The petitioner is at liberty to show, by proper pleadings and proof that such title or claim is nothing more than the bare legal title, without any equity in the defendant, and that the damages are merely nominal, or that the defendant's estate is something less than the full legal and equitable interest, on account of the payment and acceptance of the compensation therefor, as pleaded; nothing in disparagement of defendant's title, unless fairly within the scope of the pleadings, could be properly admitted in evidence. Knoth v. Barclay, 8 Colo. 300, 6 P. 924 (1885); G.B. & L. Ry. v. Haggart, 9 Colo. 346, 12 P. 215 (1886); Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889).
Order violating constitution does not vitiate rest of proceedings. Whether an interlocutory order violates constitutional requirement of due process of law or not, it does not vitiate the rest of the proceedings for condemnation and, if in those proceedings, respondents have had notice and have had their compensation judicially ascertained, the case will not be reversed because of such order, unless it is shown that it has injuriously affected their rights upon the merits. Sternberger v. McClain v. People, 9 Colo. 190, 11 P. 85 (1886); San Luis Land, Canal & Imp. Co. v. Kenilworth Canal Co., 3 Colo. App. 244, 32 P. 860 (1893); Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901); Lavelle v. Town of Julesburg, 49 Colo. 290, 112 P. 774 (1911); Cont'l Mines Power & Reduction Co., 68 Colo. 129, 186 P. 910 (1920), appeal dismissed, 257 U.S. 617, 42 S. Ct. 95, 66 L. Ed. 399 (1921).
Issues pertaining to the government's right to take immediate possession of condemned property are properly part of eminent domain proceedings. Because the trial court had jurisdiction to decide issues pertaining to the department of transportation's right to take immediate possession of the property, it necessarily follows that the trial court also had jurisdiction to accept, interpret, and enforce a stipulation which resolved the dispute over such possession. Dept. of Transp. v. Auslaender, 94 P.3d 1239 (Colo. App. 2004).
Although an eminent domain valuation commission is empowered to make evidentiary rulings without consulting the supervisory judge, the judge's evidentiary rulings control and are binding on the commission. This remains true whether the judge rules on the evidentiary issue presented before or after the commission considers its admissibility. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2015 CO 57, 357 P.3d 179.
If the judge has not ruled on the evidence, then the commission may do so without consulting her. But the judge is still the judge. Under § 38-1-101 (2)(a), she is charged with deciding all questions and issues except the amount of compensation, and the commission must operate within the bounds of the judge's supervisory authority. Therefore, any implicit power in the commission to decide evidentiary rulings is necessarily subsidiary to judicial rulings and the commission has no power to alter those rulings unilaterally. This remains true even when the judicial rulings are made in limine. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2015 CO 57, 357 P.3d 179.
Trial judge has authority to instruct the commission to disregard evidence that the court finds to be irrelevant, despite the commission having deemed the evidence relevant and admissible during a hearing. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2015 CO 57, 357 P.3d 179.
B. Questions for Determination in Limine.
Questions for determination by court include: (1) Whether or not the petitioner belongs to the class of persons entitled to condemn; (2) whether or not the property sought to be taken belongs to the class of property that is subject to condemnation; (3) whether or not the purpose for which the property is sought to be taken is one for which condemnation is permitted; (4) whether or not the petitioner and the owner have been able to come to an agreement concerning a purchase of the land; and (5) whether or not the act authorizing the proceeding is constitutional. Pine Martin Mining Co. v. Empire Zinc Co., 90 Colo. 529 , 11 P.2d 221 (1932).
Court must determine necessity and purpose of taking land. The question of the necessity of taking land and property from the owner and the question as to whether or not the purpose for which the property is to be taken is a public one are questions which the court must answer because the correct answers are conditioned by rules of law of which the commissioners cannot have competent knowledge. Union P.R.R. v. Colo. Postal Tel. Cable Co., 30 Colo. 133, 69 P. 564 (1902), appeal dismissed, 191 U.S. 577, 24 S. Ct. 861, 48 L. Ed. 309 (1903).
Petitioner's entitlement to condemn. If a petitioner is not entitled to condemn a tract, or if a tract should not have been taken are matters for the court to settle in advance. Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
Since a right-of-way shall not give the party condemning it any right, title, or interest to any vein, ledge, lode, or deposit in the premises so taken, the question of whether the petitioners were precluded from running a tunnel is a matter which, if proper to consider in condemnation proceedings, must be settled by the court. Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901).
Inability to agree is to be determined by court, Kaschke v. Camfield, 46 Colo. 60, 102 P. 1061 (1909).
Feasibility or financial success of enterprise not determinations for court in limine. Whether or not an enterprise is feasible or will be a financial success cannot be inquired into even by commissioners charged with the duty of determining the question of necessity for the project, and clearly such questions were not for the determination of the court in limine. Rothwell v. Coffin, 122 Colo. 140 , 220 P.2d 1063 (1950).
Nothing in subsection (1) purports to preclude a court from making determination before trial on the legal question of whether the phrase "private ways of necessity" includes ways for natural gas pipelines. This legal question is distinguished from factual question of necessity, that is, whether the way sought is "reasonably necessary" under the facts and circumstances of the case, which is one for the trier of fact. Akin v. Four Corners Encampment, 179 P.3d 139 (Colo. App. 2007).
Although a trial judge who is overseeing a commission hearing need not affirmatively grant or deny a motion in limine to exclude evidence, if the judge does issue an explicit ruling, then the commission is bound by that ruling and may not deviate from it. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2015 CO 57, 357 P.3d 179.
C. Power of Commissioners.
Language of subsection (2) is permissive and not mandatory. Bd. of County Comm'rs v. McClure Venture, 41 Colo. App. 524, 594 P.2d 585 (1978).
Province of board fixed by subsection (2). The province of the board of commissioners is fixed by the terms of subsection (2). Broadmoor Land Co. v. Curr, 142 F. 421 (8th Cir. 1905); Routt County Dev. Co. v. Johnson, 23 Colo. App. 511, 130 P. 1081 (1913).
Commissioner is combination of civil juror and judge. State Dept. of Hwys. v. Copper Mt., Inc., 624 P.2d 936 (Colo. App. 1981).
Commissioners to make all evidentiary decisions. The board of commissioners may seek the aid of the trial court in resolving the propriety of the proofs or objections of the parties; however, in the absence of the board's requesting such aid, the board will make all evidentiary decisions. City of Aurora v. Webb, 41 Colo. App. 11, 585 P.2d 288 (1978).
The commission was entitled to consider any competent evidence, including after sales which were comparable in character, close in time and in location, in ascertaining the present, reasonable market value of the condemned property at the date of the taking. State Dept. of Hwys. v. Town of Silverthorne, 707 P.2d 1017 (Colo. App. 1985), cert. dismissed, 736 P.2d 411 ( Colo. 1987 ).
Commissioners may not hold interviews with those not called as witnesses. Routt County Dev. Co. v. Johnson, 23 Colo. App. 511, 130 P. 1081 (1913).
Commissioners may not examine documents not produced at the hearing. Routt County Dev. Co. v. Johnson, 23 Colo. App. 511, 130 P. 1081 (1913).
Commissioners not required to determine questions of law. It was never intended that commissioners should be required to determine questions the solution of which depends upon the application of intricate questions of law such as would be presented by the trial of issues tendered by the answer of respondent. Sand Creek Lateral Irrigation Co. v. Davis, 17 Colo. 326, 29 P. 742 (1892); Siedler v. Seely, 8 Colo. App. 499, 46 P. 848 (1896); Thompson v. DeWeese-Dye Ditch & Reservoir Co., 25 Colo. 243, 53 P. 507 (1898); Gibson v. Cann, 28 Colo. 499, 66 P. 879 (1901); Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901); Union P.R.R. v. Colo. Postal Tel. Cable Co., 30 Colo. 133, 69 P. 564 (1902), appeal dismissed, 191 U.S. 577, 24 S. Ct. 861, 48 L. Ed. 309 (1903).
Section does not confer roving commission upon commissioners; therefore, the commissioners may not go into the highways and byways in quest of plats, documents, and printed matter. Routt County Dev. Co. v. Johnson, 23 Colo. App. 511, 130 P. 1081 (1913).
Effect of one commissioner's failure to view subject property. Failure of one of commission of three freeholders to view subject property does not vitiate the commission's ascertainment of value and the judgment entered thereon. Bd. of County Comm'rs v. McClure Venture, 41 Colo. App. 524, 594 P.2d 585 (1978).
Disqualification of commissioner. There is no Colorado law on the grounds for disqualification of a commissioner. State Dept. of Hwys. v. Copper Mt., Inc., 624 P.2d 936 (Colo. App. 1981).
Trial court did not err in failing to disqualify commissioner based on the "appearance of impropriety" disqualification standard applicable to judges. Trial court properly held that the applicable standard for disqualifying commissioners under subsection (1) is not "an appearance of partiality" but whether the commissioner was "in fact interested and partial". Practical considerations support the conclusion that the general assembly intended to require actual partiality for disqualifying commissioners. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2013 COA 168 , 369 P.3d 640, aff'd in part and rev'd in part on other grounds, 2015 CO 57, 357 P.3d 179.
In applying the actual bias standard, commissioner's affiliation with two fellow employees who had testified against condemning party as expert witnesses in other unrelated condemnation cases did not make her interested or partial. Thus, the trial court did not abuse its discretion in not disqualifying commissioner despite her affiliation. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2013 COA 168 , 369 P.3d 640, aff'd in part and rev'd in part on other grounds, 2015 CO 57, 357 P.3d 179.
III. DEPOSITS.
A. In General.
Purpose of requiring deposit is to provide the landowner with security for the payment of compensation and damages ultimately awarded. City of Englewood v. Reffel, 34 Colo. App. 103, 522 P.2d 1241 (1974).
Preliminary deposit is not payment, nor part payment, until it is actually so applied. Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1891); Denver & R.G.R.R. v. Mills, 59 Colo. 198, 147 P. 681 (1915).
Deposit required must be sufficient to pay compensation due the landowner when the value of his land is determined by a board of commissioners or a jury as provided. Swift v. Smith, 119 Colo. 126 , 201 P.2d 609 (1948).
If the petitioner deposits a sum with the court sufficient to pay the compensation when it is later ascertained, the court may authorize the petitioner to take immediate possession of the property before a final evaluation of the property is made. E-470 Pub. Hwy. Auth. v. 455 Co., 997 P.2d 1273 (Colo. App. 1999).
Court acts as depositary of petitioner. In receiving the preliminary deposit, the court, or its proper officer, acts as the depositary of the petitioner until the deposit is actually applied to its ultimate purpose or is otherwise legally disposed of. Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1891); Denver & R.G.R.R. v. Mills, 59 Colo. 198, 147 P. 681 (1915).
B. Withdrawal of Deposits.
Withdrawals deemed provisional. Withdrawals from the sum deposited pursuant to subsection (6)(b) are provisional, not absolute. City of Englewood v. Reffel, 34 Colo. App. 103, 522 P.2d 1241 (1974).
If deposit withdrawn, petitioner's right of possession suspended. A preliminary deposit in a condemnation proceeding is essential to the petitioner's right of entry and possession and, if by any means, it is withdrawn before the final determination of the controversy, the petitioner's right of possession is suspended. Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1891); Denver & R.G.R.R. v. Mills, 59 Colo. 198, 147 P. 681 (1915).
Refund of excessive withdrawals. If approximation of value is shown to be grossly inflated, there is no justification for allowing the landowner to retain amounts previously withdrawn. City of Englewood v. Reffel, 34 Colo. App. 103, 522 P.2d 1241 (1974).
If courts refused to allow a refund when excessive amounts are withdrawn, the landowners would be unjustly enriched at the public's expense. City of Englewood v. Reffel, 34 Colo. App. 103, 522 P.2d 1241 (1974).
Order demanding landowner refund excess withdrawn not modification of judgment. Where a city in a second judgment succeeded in drastically reducing the amount of the landowners' award in an eminent domain proceeding, but the landowners had under the first judgment, and in accordance with subsection (6)(b), withdrawn a significant excess over the final award, an order of the court demanding a refund was not a modification of the judgment, but was an attempt to give effect to the judgment. City of Englewood v. Reffel, 34 Colo. App. 103, 522 P.2d 1241 (1974).
A deposit withdrawn with the parties' consent need not be immediately returned when the condemnation is abandoned and the award of damages arising from the abandonment is still pending. The withdrawing party may retain those funds until the condemnation damages proceeding is completed but must return any excess beyond the party's actual damages. Aurora Pub. Sch. v. Stapleton Gateway, 2020 COA 73 , 465 P.3d 142.
IV. DAMAGES.
Commissioners fix compensation payable to interested parties. The commissioners shall fix the compensation to be paid, not only to the owners, but to all parties interested in the lands taken, as well as all damages accruing to such owners or parties interested in consequence of the condemnation of the same. Hutchinson v. McLaughlin, 15 Colo. 492 , 25 P. 317 (1890); Swift v. Smith, 119 Colo. 126 , 201 P.2d 609 (1948).
Commissioners to consider highest and best use. The commissioners are not to view the property in its present status only, but rather, the present market value is to be assessed in light of the highest and best use to which the property can reasonably be applied. City of Aurora v. Webb, 41 Colo. App. 11, 585 P.2d 288 (1978).
Probability of upward rezoning. If a probability of upward rezoning exists, the commissioners may take evidence, under the comparable sales method of valuation, of sales of other property which has benefited by the more advantageous zoning status. City of Aurora v. Webb, 41 Colo. App. 11, 585 P.2d 288 (1978).
This state follows version of undivided basis rule. Where a lessor holds a fee simple subject to an encumbrance, such as a lease, this state follows the rule that the property must be valued on an undivided basis, but with some distinctions from the strict undivided fee rule. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Under undivided basis rule, parties have opportunity to agree on apportionment of award, thereby avoiding completely the difficult task of ascertaining the value of the separate interests. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Once the reasonable market value of property in an eminent domain proceeding has been established, the apportionment of that amount among claimants is of no concern to the condemnor. State Dept. of Hwys. v. Town of Silverthorne, 707 P.2d 1017 (Colo. App. 1985), cert. dismissed, 736 P.2d 411 ( Colo. 1987 ).
Undivided basis rule has effect of curbing excessive awards in that it simplifies and narrows the issues in the proceeding in which the condemnor has an interest. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Encumbrance adding or subtracting from fair market value not ignored. The undivided basis rule, as applied in Colorado and, as distinguished from the undivided fee rule adopted in some states, does not ignore the value which an encumbrance may add to or subtract from the fair market value of the property as a whole. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Contract rental adding to value relevant. The undivided basis rule contemplates that where a contract rental adds to the fair market value of the property, evidence of that rental is relevant in determining the compensation to be paid. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
If contract rental less than fair rent, latter relevant. Under the undivided basis rule, where a contract rental is less than the fair rental, the fair rental and not the contract rental is the relevant evidence on the issue of compensation. This assures a fair return for the property valued as a whole. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Condemnor need not pay for interest which was not lost by condemnees under the undivided basis rule. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Lessee's compensable rights in leasehold unaffected by lessor's settlement. Where lessee has compensable rights in leasehold, these rights are not affected by lessor's settlement with the condemnor. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Where lessee is party in interest, its compensation is affected by amount which condemnors must pay for entire property taken, and although it may have waived its right to present its own evidence of value, it did not waive its right to insist that the award be based on competent evidence and to cross-examine its source. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Stipulation not proper basis for award. Where a lessee, a party in interest, was not a party to a stipulation between the condemnors and the lessor, and objected to admissibility of the stipulation and asserted its right to cross-examine the appraisers, the stipulation is not a proper basis for the award. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
When interest on award accrues. Where the authorization to take possession of property is contingent on a deposit, the date of possession for purposes of entitlement to interest on the award is the date of deposit. Denver Urban Renewal Auth. v. Hayutin, 40 Colo. App. 559, 583 P.2d 296 (1978).
Procedure for determining the total value of the property. In a valuation hearing, the commission and the court properly refused to consider evidence of chain of title to the condemned street. State Dept. of Hwys. v. Town of Silverthorne, 707 P.2d 1017 (Colo. App. 1985), cert. dismissed, 736 P.2d 411 ( Colo. 1987 ).
38-1-106. Jury.
The owner of the property involved in any proceeding brought under the provisions of this article, before the appointment of commissioners, as provided in section 38-1-105, and before the expiration of the time for the defendant to appear and answer, may demand a jury of freeholders residing in the county in which the petition is filed to determine the compensation to be allowed in the manner provided in this article. Such demand may be made in the pleadings or by a separate writing filed with the clerk. Such jury shall consist of six persons, unless a larger number is demanded by any party to the proceeding. In no case shall the number of jurors exceed twelve. Any party so demanding a larger number than six jurors shall advance the fees for such additional jurors for one day's service according to the rate allowed jurors in the district court.
Source: G.L. § 1064. G.S. C. § 243. L. 1889: p. 156, § 1. R.S. 08: § 2421. C.L. § 6317. CSA: C. 61, § 7. CRS 53: § 50-1-7. L. 61: p. 374, § 4. C.R.S. 1963: § 50-1-7. L. 66: p. 30, § 2.
ANNOTATION
Section complies with constitution. This section complies with § 15 of art. II, Colo. Const., in providing for a board of commissioners or a jury to ascertain the compensation for taking private property against the owner's consent. Trippe v. Overacker, 7 Colo. 72, 1 P. 695 (1883).
Privilege of jury trial is unconditional; when demanded in proper time, it must be allowed. Sand Creek Lateral Irrigation Co. v. Davis, 17 Colo. 326, 29 P. 742 (1892).
Disposition of preliminary matters before jury called required. All preliminary matters are, in a regular and orderly course, to be disposed of before a jury is called to assess damages; for, unless the right to condemn be first established, there will be no damage, hence no occasion for a jury, and the jury comes for that single purpose, and for no other. Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901); Kaschke v. Camfield, 46 Colo. 60, 102 P. 1061 (1909).
Where a jury is demanded and impaneled to try the question of damages caused by taking land for a right-of-way for a ditch, the question of the necessity for taking the land cannot be tried before the jury. Thompson v. De Weese-Dye Ditch & Reservoir Co., 25 Colo. 243, 53 P. 507 (1898).
Right to demand jury of freeholders afforded in inverse condemnation. This section provides that a landowner may demand a jury of freeholders to determine the damages or compensation to be awarded in an eminent domain proceeding. The same right should likewise be afforded a landowner seeking redress, after the fact, in an inverse condemnation action. Ossman v. Mtn. States Tel. & Tel. Co., 184 Colo. 360 , 520 P.2d 738 (1974).
Inverse condemnation and common-law claim not litigated in same suit. The requirement of a jury of freeholders in an inverse condemnation action and the lack of such a requirement in an ordinary civil action leads to the conclusion that an inverse condemnation claim cannot be litigated in the same lawsuit with a common-law claim. Ossman v. Mtn. States Tel. & Tel. Co., 184 Colo. 360 , 520 P.2d 738 (1974).
Challenge for cause should be sustained to juror who is not freeholder. State Dept. of Hwys. v. Ogden, 638 P.2d 832 (Colo. App. 1981).
Retrial required where jury not made up of freeholders. Where, although the owner of property involved in a condemnation proceeding requested merely a "jury of six" and the trial court attempted to qualify the jury as freeholders, a juror did not hear the question and thus was not discovered that he was not a freeholder, there is no waiver of a jury made up of freeholders. The case must be retried before a properly constituted jury. State Dept. of Hwys. v. Ogden, 638 P.2d 832 (Colo. App. 1981).
Defendant is not entitled to have his damages assessed twice in an eminent domain proceeding, first by a commission, and then by a jury; a jury trial is allowed in lieu of an assessment of damages by a commission. Trippe v. Overacker, 7 Colo. 72, 1 P. 695 (1883); Snider v. Town of Platteville, 75 Colo. 589, 227 P. 548 (1924).
Verdict of jury is a special verdict in a special statutory proceeding under this section since the jury is concerned only with determining the amount of compensation to be paid the owners of property taken. City of Aurora v. Powell, 153 Colo. 4 , 383 P.2d 798 (1963).
Striking answer no justification for reversible error. Striking out an answer in condemnation proceedings by the trial court is not an error that would justify reversal. Whitehead v. City of Denver, 13 Colo. App. 134, 56 P. 913 (1899).
Under this section, unlike C.R.C.P. 38, no fees need be advanced at time of jury demand. It is only if more than six jurors are requested that any fees must be advanced, and then the only fees required are those for the number of jurors beyond the initial six. Town of Red Cliff v. Reider, 851 P.2d 282 (Colo. App. 1993).
Although landowners waived their right to a jury of twelve by not tendering fees at the time of their jury demand, they did not thereby waive their statutory right to a trial by a six-person jury. Town of Red Cliff v. Reider, 851 P.2d 282 (Colo. App. 1993).
Applied in Sw. Land Co. v. Hickory Jackson Ditch Co., 18 Colo. 489, 33 P. 275 (1893); Siedler v. Seely, 8 Colo. App. 499, 46 P. 848 (1896); Union P.R.R. v. Colo. Postal Tel. Cable Co., 30 Colo. 133, 69 P. 564 (1902); Broadmoor Land Co. v. Curr, 142 F. 421 (8th Cir. 1905).
38-1-107. Inspection of premises - expenses - verdict.
- When the jury has been selected and the jurors have taken an oath faithfully and impartially to discharge their duties, the court, at the request of any party to the proceeding and in the discretion of the court, may order that the jury go upon the premises sought to be taken or damaged, in charge of a sworn bailiff, and examine the premises in person. Such order shall require the party making such request to advance a sum, to be fixed by the court in such order, sufficient in the opinion of the court to defray the necessary expenses of such examination. In default of such party forthwith advancing such sum, such order shall be held for naught upon such trial before a jury. The court shall preside in the same manner and with like powers as in other cases. Evidence shall be admitted or rejected by the court according to the rules of law. At the conclusion of the evidence, the matters in controversy may be argued by counsel to the jury. At the conclusion of the arguments, the court shall instruct the jury in writing. The jury shall retire for deliberation, in charge of a sworn officer, and when they have agreed upon a verdict the same shall be returned into court.
- If the jury fails to agree, it may be discharged by the court. Thereupon another jury shall be summoned as soon as practicable, in the same manner as before, and like proceedings be had with such jury or successive juries, until a verdict is had. Any party feeling aggrieved by such verdict may move before such court for a new trial in the same manner and for the same causes as in actions at law. The refusal of such court to grant a new trial may be excepted to and assigned for appeal.
Source: G.L. § 1067. G.S. C. § 246. L. 1889: p. 157, § 3. R.S. 08: § 2424. C.L. § 6320. CSA: C. 61, § 10. CRS 53: § 50-1-10. C.R.S. 1963: § 50-1-10.
ANNOTATION
Person, other than bailiff accompanying jury's view, constitutes error. Where a view of the proposed right-of-way by the jury was directed by the court, it is error to appoint guides to aid the jury in their view because no person other than the sworn bailiff in charge of the jury is allowed to accompany the jury on their view of the premises. Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901).
Purpose of deposit. The deposit under subsection (1) is required for the sole purpose of making secure the award of compensation to be made for the taking of the land. Teller v. Sievers, 20 Colo. App. 109, 77 P. 261 (1904); Denver & R.G.R.R. v. Mills, 59 Colo. 198, 147 P. 681 (1915).
Costs are recoverable. McClain v. People, 9 Colo. 190, 11 P. 85 (1886); Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1892); Schneider v. Schneider, 36 Colo. 518, 86 P. 347 (1906).
Courts may award costs to respondents in condemnation proceedings. Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1892).
Costs are part of judgment. Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1892).
Attorney fees not allowable. McClain v. People, 9 Colo. 190, 11 P. 85 (1886); Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1892); Schneider v. Schneider, 36 Colo. 518, 86 P. 347 (1906).
Requiring jury's return of special findings within trial court's discretion. Whether or not a jury shall be required to return special findings in a condemnation proceeding rests in the discretion of the trial court and, unless that discretion has been abused to the prejudice of the party requesting such findings, the action of the trial court in refusing to require such findings will not be disturbed. Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901).
Refusal of taxation of costs. The trial courts possess discretionary power to refuse a taxation in respondent's favor of costs contumaciously or unreasonably incurred. Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138, 29 P. 378 (1892).
Court lacks authority to require deposit. The court has no authority to require the petitioner in a condemnation proceeding to deposit a sum to be applied on costs accrued or to accrue. Teller v. Sievers, 20 Colo. App. 109, 77 P. 261 (1904); Denver & R.G.R.R. v. Mills, 59 Colo. 198, 147 P. 681 (1915).
38-1-108. Order of possession.
The court, upon such verdict, shall proceed to adjudge and make such order as to right and justice shall pertain, ordering that the petitioner enter upon such property and the use of the same, upon payment of full compensation as ascertained. Such order with evidence of such payment shall constitute complete justification of the taking of such property.
Source: G.L. § 1068. G.S. C. § 247. R.S. 08: § 2425. C.L. § 6321. CSA: C. 61, § 11. CRS 53: § 50-1-11. C.R.S. 1963: § 50-1-11.
ANNOTATION
Judgment construed. A judgment is the sentence of the law pronounced by a court of competent jurisdiction as the result of proceedings instituted, and it is a judicial act; to be valid it must be pronounced by the court at a time and place appointed by law, and in the form the court requires. City of Aurora v. Powell, 153 Colo. 4 , 383 P.2d 798 (1963).
Jury's findings do not constitute judgment. The findings of a jury as to compensation in a condemnation proceeding do not constitute a judgment, the verdict not being a judicial determination but a finding of fact which the court may accept, reject, or utilize in formulating a judgment. City of Aurora v. Powell, 153 Colo. 4 , 383 P.2d 798 (1963).
Findings of court do not constitute judgment, and a statement that a judgment was rendered cannot supply the place of the judgment itself. City of Aurora v. Powell, 153 Colo. 4 , 383 P.2d 798 (1963).
Verdict itself is not judicial determination of fact, and it is without virtue until judgment has been rendered upon it. City of Aurora v. Powell, 153 Colo. 4 , 383 P.2d 798 (1963).
Property disposition in trial court's discretion. The trial court has a discretion in determining whether immediate possession of property shall be given to the condemnor in eminent domain proceedings. Vivian v. Bd. of Trustees, 152 Colo. 556 , 383 P.2d 801 (1963).
Order for temporary possession is interlocutory. Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958).
Review must be by original proceedings. Because an order for temporary possession in a condemnation proceeding is interlocutory, any review must be by an original proceeding. Larson v. Chase Pipe Line Co., 183 Colo. 76 , 514 P.2d 1316 (1973).
Relief from interlocutory order by certiorari. The proper proceeding for relief from an interlocutory order in eminent domain actions is by certiorari when directed to an endangered fundamentally substantive and substantial right. Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958).
Writ of error is improper procedure to review an interlocutory order of a district court granting immediate possession in eminent domain. Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958).
38-1-109. Intervention - cross petition.
Any person not made a party to such proceeding may become such by filing a cross petition at any time before the hearing, setting forth that he is an owner or has an interest in the property sought to be taken or damaged by the petitioner and stating the character and extent of such interest. The rights of such person shall thereupon be fully considered and determined. Except for such cross petition, there shall be no written pleadings on the part of any party to the proceeding, but, at the hearing provided for in section 38-1-105, the court shall hear and dispose of all objections that may be raised touching the legal sufficiency of the petition or cross petition or the regularity of the proceedings in any other respect. In case any person or corporation at any time or in any manner succeeds to the right of any party in the subject matter of the proceeding, such proceeding shall not abate thereby, but such person or corporation, upon motion and upon proof of the fact of such succession, shall be substituted for such party as a party to the proceeding.
Source: G.L. § 1069. G.S. C. § 248. L. 1889: p. 158, § 4. R.S. 08: § 2426. C.L. § 6322. CSA: C. 61, § 12. CRS 53: § 50-1-12. C.R.S. 1963: § 50-1-12.
ANNOTATION
Cross petition may encompass lands not included in petition. The language of this section is broad enough to permit the defendant to file a cross petition where he has other lands that will be affected by the condemnation proceedings, which are not included in the petition. Denver & R.G.R.R. v. Griffith, 17 Colo. 598, 31 P. 171 (1892).
Party allowed to defend title to preserve voluntary agreement with condemnor. Intervention has been refused in eminent domain proceedings only where the intervenor has no interest in the property. Nothing in this section precludes a party from defending its title from condemnation in order to preserve its rights under a voluntary agreement with the condemnor. Bd. of County Comm'rs v. Anderson, 34 Colo. App. 37, 525 P.2d 478 (1974), aff'd, 188 Colo. 337 , 534 P.2d 1201 (1975).
Disregarding intervention rights constitutes error. The rights of a minor in real estate may be condemned; and, when a petition in intervention is filed in a condemnation proceeding setting forth such rights, it is error to disregard the same. Hutchinson v. McLaughlin, 15 Colo. 492, 25 P. 317 (1890).
Intervenor has right to appeal final judgment adversely affecting it once intervention has been properly granted. Bd. of County Comm'rs v. Anderson, 34 Colo. App. 37, 525 P.2d 478 (1974), aff'd, 188 Colo. 337 , 534 P.2d 1201 (1975).
Statute as basis for jurisdiction. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).
Applied in Otero Canal Co. v. Fosdick, 20 Colo. 522 , 39 P. 332 (1895); Colo. E.R.R. v. Chicago, B. & Q. Ry., 141 F. 898 (8th Cir. 1905); Deepe v. United States, 103 Colo. 294 , 86 P.2d 242 (1938); Boxberger v. State Hwy. Comm'n, 126 Colo. 526 , 251 P.2d 920 (1952).
38-1-110. Appellate review.
In all cases, upon final determination thereof in the district court, the judgment is subject to appellate review as provided by law and the Colorado appellate rules.
Source: G.L. § 1070. G.S. C. § 249. R.S. 08: § 2427. C.L. § 6323. CSA: C. 61, § 13. CRS 53: § 50-1-13. C.R.S. 1963: § 50-1-13. L. 64: p. 266, § 156.
ANNOTATION
Principal object of condemnation proceedings is to ascertain the price which a petitioner must pay for the land which he desires to acquire, and, until that determination is made by a board or jury and the same has been approved by a court, it cannot be said that the rights of the parties have become fixed or determined. Burlington & C.R.R. v. Colo. E.R.R., 45 Colo. 222 , 100 P. 607 (1909); Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958).
Supreme court cannot take original jurisdiction of condemnation proceedings. Denver & N.O.R.R. v. Lamborn, 9 Colo. 119, 10 P. 797 (1886).
This section discourages review of cause piecemeal. Burlington & C.R.R. v. Colo. E.R.R., 45 Colo. 222, 100 P. 607 (1909).
Review is allowed only upon final determination of proceedings. See Burlington & C.R.R. v. Colo. E.R.R., 45 Colo. 222, 100 P. 607 (1909).
A judgment which settles the rights of respective parties is a final judgment reviewable by the appellate court. Denver Power & Irrigation Co. v. Denver & R.G.R.R., 30 Colo. 204, 69 P. 568 (1902).
When commissioners filed with the clerk their certificate of ascertainment and assessment, and the court or judge denied the motion of petitioner or respondent, as the case may be, to vacate and set aside the same, there is such a final determination as entitles him to an appeal. Benninghoff v. Town of Palisade, 48 Colo. 64, 108 P. 983 (1910).
Interlocutory order not reviewable. The order of the trial court which determines that the petitioner has the power to condemn is not final, but merely interlocutory, from which an appeal, and to which a writ of error, do not lie. Burlington & C.R.R. v. Colo. & E.R.R., 45 Colo. 222 , 100 P. 607 (1909); First Nat'l Bank v. Minnesota Mines, 109 Colo. 6 , 121 P.2d 488, cert. denied, 316 U.S. 687, 62 S. Ct. 1277, 86 L. Ed. 1759 (1942); Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958).
Intervenor has right to appeal final judgment affecting it adversely once intervention has been properly granted. Bd. of County Comm'rs v. Anderson, 34 Colo. App. 37, 525 P.2d 478 (1974), aff'd, 188 Colo. 337 , 534 P.2d 1201 (1975).
Applied in Order of Friars Minor of Province of Most Holy Name v. Denver Urban Renewal Auth., 186 Colo. 367 , 527 P.2d 804 (1974).
38-1-111. Possession pending appeal.
In cases in which compensation is ascertained, if the owner of the property taken or affected prosecutes an appeal as provided by law and the Colorado appellate rules, the petitioner may pay into court or to the clerk thereof the amount of compensation ascertained and awarded for the use of the owner and shall thereupon be entitled to take possession and use the property taken or affected the same as if no such appeal had been taken. The money so deposited shall remain on deposit until such appeal has been heard and determined. If the owner elects to receive such money before the determination of said appeal, the appeal shall thereupon be dismissed so far as such owner is concerned. If the appeal is taken by the petitioner, the amount of compensation shall nevertheless be paid into court or to the clerk thereof for the use of the owner of the property condemned or affected before such petitioner has the right to take possession of and use said property so condemned or affected. Such compensation may be paid to such owner, at any time before the determination of such appeal, upon the execution and delivery of a good and sufficient bond by such owner with good and sufficient sureties, to be approved by said court, in a sum double the amount of such compensation, conditioned that such owner will pay and refund to such petitioner all or such part of said sum as said owner may be required or adjudged to pay said petitioner, together with the cost of said appeal.
Source: G.L. § 1071. G.S. C. § 250. R.S. 08: § 2428. C.L. § 6324. CSA: C. 61, § 14. CRS 53: § 50-1-14. C.R.S. 1963: § 50-1-14.
ANNOTATION
Order of additional deposit covering award proper during pending proceedings. Where the petitioner in condemnation proceedings desired to occupy and use the premises pending appellate proceedings, it is proper to order an additional deposit sufficient to cover the amount of the compensation ascertained and awarded. Otero Canal Co. v. Fosdick, 20 Colo. 522, 39 P. 332 (1895).
Use of security deposit in subsequent condemnation proceedings. The security deposit for possession, pending condemnation proceedings, cannot be used in a subsequent condemnation proceeding by the same petitioner and for a portion of the same premises where the damages suffered by respondent through the first proceeding have not been determined and paid. Denver & N.O.R.R. v. Lamborn, 9 Colo. 119, 10 P. 797 (1886).
Dismissal of an appeal by a condemnee who requested a release of funds from the court registry that inadvertently included the $100 nominal damage award being contested and who submitted a copy of a check made payable to the court registry in the amount of $100 would simply advance form over substance and would frustrate rather than promote the function of courts, which is to adjudicate fully the issues presented by the parties. Colo. Mtn. Prop. v. Heineman, 860 P.2d 1388 (Colo. App. 1993).
Statute does not bar appeal without exception when a property owner elects to receive the benefit of a judgment before the determination of an appeal. Property owners may appeal the nature of the title obtained by a water and sanitation district that condemned the property, even though the property owners withdrew the bond that the district deposited with the clerk of court. Steamboat Lake Water & Sanit. v. Halvorson, 252 P.3d 497 (Colo. App. 2011).
Applied in Denver, etc., R. Co. v. Jackson, 6 Colo. 340 (1882); Cunningham v. Quinn, 12 Colo. 473 , 21 P. 488 (1889); Dolores No. 2 Land & Canal Co. v. Hartman, 17 Colo. 138 , 29 P. 378 (1891); Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90 , 66 P. 902 (1901); Broadmoor Land Co. v. Curr, 133 F. 37 (8th Cir. 1904); Denver & R.G.R.R. v. Mills, 59 Colo. 198 , 147 P. 681 (1915); State Dept. of Hwys. v. Casteel, 781 P.2d 108 (Colo. App. 1989); E-470 Pub. Hwy. Auth. v. 455 Co., 997 P.2d 1273 (Colo. App. 1999).
38-1-112. Payment to clerk or owner.
Payment of compensation adjudged may in all cases be made to the court or the clerk thereof, who shall on demand pay the same to the party entitled thereto, taking receipt therefor. Payment may be made to the party entitled thereto or to his conservator or guardian.
Source: G.L. § 1072. G.S. C. § 251. R.S. 08: § 2429. C.L. § 6325. CSA: C. 61, § 15. CRS 53: § 50-1-15. C.R.S. 1963: § 50-1-15.
ANNOTATION
Claimant's rights unaffected by change in form of res. When the condemnor pays the amount of the award for the condemned property into the registry of the court, the change of the form of the res from property to money does not affect the relative rights of the owner and other claimants in the res. Southworth v. Dept. of Hwys., 176 Colo. 82 , 489 P.2d 204 (1971).
Payment of award into court discharges further tax obligation. Where the state highway department paid into court the amount of an award in condemnation proceedings, it discharged its obligation and was relieved of further responsibility for an unpaid city tax lien assessed for the creation of a local public improvement district. Southworth v. Dept. of Hwys., 176 Colo. 82 , 489 P.2d 204 (1971).
38-1-113. Verdict recorded.
The court shall cause the verdict of the jury and the judgment of said court to be entered upon the records of said court.
Source: G.L. § 1073. G.S. C. § 252. R.S. 08: § 2430. C.L. § 6326. CSA: C. 61, § 16. CRS 53: § 50-1-16. C.R.S. 1963: § 50-1-16.
38-1-114. Formula for computing compensation - definitions.
- Except for the provisions of subsection (2) of this section that shall apply to acquisitions for highways and transportation projects undertaken by the regional transportation district created by article 9 of title 32, C.R.S., the right to compensation and the amount thereof, including damages and benefits, if any, shall be determined initially as of the date the petitioner is authorized by agreement, stipulation, or court order to take possession or the date of trial or hearing to assess compensation, whichever is earlier, but any amount of compensation determined initially shall remain subject to adjustment for one year after the date of the initial determination to provide for additional damages or benefits not reasonably foreseeable at the time of the initial determination. In estimating the value of all property actually taken, the true and actual value at such time shall be allowed and awarded. No deduction therefrom shall be allowed for any benefit to the residue of said property. In estimating damages occasioned to other portions of the claimant's property or any part thereof other than that actually taken, the value of the benefits, if any, may be deducted therefrom. In all cases the owner shall receive the full and actual value of all property actually taken. In case the benefit to the property not actually taken exceeds the damages sustained by the owner to the property not actually taken, the owner shall not be required to pay or allow credit for such excess.
-
- For acquisitions for highways and transportation projects undertaken by the regional transportation district created by article 9 of title 32, C.R.S., the right to compensation and the amount thereof, including damages and benefits, if any, shall be determined as of the date the petitioner is authorized by agreement, stipulation, or court order to take possession or the date of trial or hearing to assess compensation, whichever is earlier, but any amount of compensation determined initially shall remain subject to adjustment for one year after the date of the initial determination to provide for additional damages or benefits not reasonably foreseeable at the time of the initial determination.
- If an entire tract or parcel of property is condemned, the amount of compensation to be awarded is the reasonable market value of the said property on the date of valuation.
- If only a portion of a tract or parcel of land is taken, the damages and special benefits, if any, to the residue of said property shall be determined. When determining damages and special benefits, the appraiser shall take into account a proper discount when the damages and special benefits are forecast beyond one year from the date of appraisal.
- In determining the amount of compensation to be paid for such a partial taking, the compensation for the property taken and damages to the residue of said property shall be reduced by the amount of any special benefits which result from the improvement or project, but not to exceed fifty percent of the total amount of compensation to be paid for the property actually taken.
- For purposes of this section, "transportation" shall have the same meaning as set forth in section 43-1-102 (6), C.R.S.
Source: G.L. § 1074. G.S. C. § 253. R.S. 08: § 2431. C.L. § 6327. CSA: C. 61, § 17. CRS 53: § 50-1-17. L. 61: p. 375, § 5. L. 63: p. 477, § 2. C.R.S. 1963: § 50-1-17. L. 79: Entire section amended, p. 1381, § 1, effective July 1. L. 87: Entire section amended, p. 1308, § 1, effective July 1. L. 2005: (1) and (2)(a) amended and (3) added, p. 317, § 1, effective August 8.
Cross references: For discussion of instructions and evidence admissible on determination of agricultural land values, see City and County of Denver v. Minshall, 109 Colo. 31 , 121 P.2d 667 (1942), and City and County of Denver v. Quick, 108 Colo. 111 , 113 P.2d 999 (1941).
ANNOTATION
Analysis
- I. General Consideration.
- II. Damages for Property Actually Taken.
- III. Damages to Residue of Property.
I. GENERAL CONSIDERATION.
Law reviews. For article, "Some Problems of Severance Damage", see 29 Dicta 327 (1952). For article, "Inverse Condemnation -- A Viable Alternative", see 51 Den. L. J. 529 (1974). For article, "Status of Landowners Property Slated for Condemnation", see 14 Colo. Law. 1191 (1985).
Right of just compensation guarded. Section 15 of art. II, Colo. Const., guarantees just compensation to the owner when property is taken without his consent, and this right is jealously guarded. Lamborn v. Bell, 18 Colo. 346, 32 P. 989, 20 L.R.A. 241 (1893).
Subsection (2)(d) does not violate art. II, § 15, of the Colorado Constitution, which requires that landowners receive just compensation for property taken or damaged. When an award of compensation for property taken is reduced by the amount of special benefits pursuant to subsection (2)(d), the value of the payment received plus the value of the land still possessed by the landowner after the taking, enhanced by the special benefits, is equivalent to the value of the landowners property prior to the taking. Therefore, the landowner receives just compensation. E-470 Pub. Hwy. Auth. v. Revenig, 91 P.3d 1038 (Colo. 2004).
General compensation rules not strictly applied if result fundamentally unfair. The general rule that compensation is to be determined as of the date of the order of possession cannot be applied strictly if the result would be fundamentally unfair. Bd. of County Comm'rs v. Delaney, 41 Colo. App. 548, 592 P.2d 1338 (1978) (decided prior to 1979 amendment).
State has duty to assure just compensation. It is the duty of the state, in the conduct of an inquest by which the compensation is ascertained, to see that it is just, not merely to the individual whose property is taken, but to the public which is to pay for it. Williams v. City & County of Denver, 147 Colo. 195 , 363 P.2d 171 (1961).
Condemnation award is made in gross as a general rule. Vivian v. Bd. of Trustees, 152 Colo. 556 , 383 P.2d 801 (1963).
Claimants litigate right to assessed damages among themselves. When the damages are assessed for the taking of the property, it should be paid into court and the claimants can litigate the right thereto among themselves. Denver Power & Irrigation Co. v. Denver & R.G.R.R., 30 Colo. 204 , 69 P. 568 (1902); Vivian v. Bd. of Trustees, 152 Colo. 556 , 383 P.2d 801 (1963).
Landowner has burden to show property value and damages. In a proceeding to condemn property for public use, the burden is upon the landowner to show the value of the property or interest therein actually taken, as well as the damages, if any, to the residue of such property. Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889).
Petitioner has burden to show benefits, if any, as well as the burden of showing the necessity of the taking, where such matters are litigated. Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889).
Requirement to accept device to lessen damage prohibited. A landowner cannot be required to accept a structure or device of the petitioner, intended to lessen such damage, and which is no part of the improvement for which his land is taken. Von Richtofen v. Bijou Irrigation Dist., 52 Colo. 527, 125 P. 495 (1912).
Invalidity of award must be shown by anyone asserting it by clear and satisfactory evidence. Pub. Serv. Co. v. City of Loveland, 79 Colo. 216, 245 P. 493 (1926).
Value of land taken in condemnation proceeding should be determined as of date of city's possession and not as of the date of valuation hearing if condemnee did not seek damages to the remainder and had accepted a stipulated monetary amount upon condemnation. Therefore, condemnee was only entitled to the difference between the payment accepted and the fair market value of land at time of possession plus interest on the difference from the date of possession. City of Glendale v. Rose, 679 P.2d 1096 (Colo. App. 1983) (action commenced prior to 1979 amendment).
If the property is sought to be condemned under this procedure and if the court authorizes the condemning authority to take possession of the property prior to the valuation hearing, the ultimate award of compensation, based on the property, shall be determined as of the date the petitioner is authorized by the court to take possession. If, however, the condemning authority has not taken possession of the property prior to the valuation hearing, then the valuation date is the date of trial or hearing to assess compensation. Fowler Irrevocable Trust 1992-1 v. City of Boulder, 992 P.2d 1188 (Colo. App. 1999), aff'd in part and rev'd in part on other grounds, 17 P.3d 797 ( Colo. 2001 ).
Where the state takes possession prior to entering into a contract or receiving a court order, fair market value must be determined as of the date of possession. The Mill v. State Dept. of Health, 868 P.2d 1099 (Colo. App. 1993).
The plain language of the statute allows for the determination of true and actual value as of the date of possession. Where mining waste existed on the property as of the date the city took possession but was not discovered until after the city took possession, this section does not preclude the introduction of that information. City of Black Hawk v. Ficke, 215 P.3d 1129 (Colo. App. 2008).
Applied in Twin Lakes Hydraulic Gold Mining Syndicate v. Colo. M. Ry., 16 Colo. 1 , 27 P. 258 (1890); San Luis Land, Canal & Imp. Co. v. Kenilworth Canal Co., 3 Colo. App. 244, 32 P. 860 (1893); Lithgow v. Pearson, 25 Colo. App. 70, 135 P. 759 (1913); Pine Martin Mining Co. v. Empire Zinc Co., 90 Colo. 529 , 11 P.2d 221 (1932); Fishel v. City & County of Denver, 106 Colo. 576 , 108 P.2d 236 (1940); Rullo v. Pub. Serv. Co., 163 Colo. 99 , 428 P.2d 708 (1967); Denver Urban Renewal Auth. v. Marshall Mfg. Co., 35 Colo. App. 227, 532 P.2d 746 (1975); Hayden v. Bd. of County Comm'rs, 41 Colo. App. 102, 580 P.2d 830 (1978).
II. DAMAGES FOR PROPERTY ACTUALLY TAKEN.
A. In General.
Witnesses qualified to testify on property value. A witness may be sufficiently qualified to testify if he is a resident, landowner or farmer in the neighborhood, and is familiar with the value of the property. Bd. of Dirs. v. Calvaresi, 156 Colo. 173 , 397 P.2d 877 (1964).
Owner may testify as to his own estimate of value of his land. Bd. of Dirs. v. Calvaresi, 156 Colo. 173 , 397 P.2d 877 (1964).
Jury not required to accept owner's conclusions. Where the trial court allowed the owner to testify on his theory of value and past operations, the jury was certainly entitled to weigh the past history against the glowing future predicted, but was not required to accept the owner's conclusions. Ruth v. Dept. of Hwys., 145 Colo. 546 , 359 P.2d 1033 (1961).
Rejection of owner's estimate of value harmless error. The rejection of evidence, that defendant had stated, after the improvement was constructed, that he would not take $10,000 for his place, held, in view of testimony given by other witnesses for plaintiff, if error, to be harmless. Wiley Drainage Dist. v. Semmens, 80 Colo. 365, 250 P. 527 (1926).
Laying foundation for expert's cross-examination on property appraisals. Sufficient foundation for cross-examination of an expert as to appraisals of other property which he has made in the area is laid where it is shown: (1) That the appraisal is of a piece of property that he has determined to be comparable or involves similar property in the neighborhood of the condemned property; and (2) that the appraisal is not too remote in time. Bd. of County Comm'rs v. H.A. Nottingham & Sons, 36 Colo. App. 265, 540 P.2d 1126 (1975).
One of the few means a condemnee has to question the credibility of the condemnor's expert witness, other than by contradictory testimony by other witnesses, is to show that the expert has made other inconsistent appraisals of the comparable or of similar neighboring land at a time which is not too remote to provide a reasonable comparison. This line of cross-examination, while ostensibly used for the purpose of testing the witness's credibility, serves, in essence, to elicit additional affirmative evidence of the value of the comparable, and as such, it is relevant for purposes of determining the true value of the land used as a comparison. Bd. of County Comm'rs v. H.A. Nottingham & Sons, 36 Colo. App. 265, 540 P.2d 1126 (1975).
B. Measure of Compensation Allowed.
Compensation allowable is the difference in value of the property before and after the taking is complete. Denver & R.G.R.R. v. Griffith, 17 Colo. 598, 31 P. 171 (1892).
The compensation allowable is the price the property will sell for where there is a demand. Denver N.W. & P. Ry. v. Howe, 49 Colo. 256, 112 P. 779 (1910).
Elements of damages to condemned property such as the cost of restoration of property, estimate of replacement value, and related items are admissible only if they would have a bearing on and influence opinion as to value. Mack v. Bd. of County Comm'rs, 152 Colo. 300 , 381 P.2d 987 (1963).
Factors considered in determining proper measure of owner's recovery include: (1) Compensation for the land or property actually taken equal to the true and actual value thereof at the time of the appraisement; and (2) damages to the residue of the land or property not taken, equal to the actual diminution of its market value, if any, for any use to which the same may reasonably be put. City of Denver v. Bayer, 7 Colo. 113, 2 P. 6 (1883); Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889); Colo. M. Ry. v. Brown, 15 Colo. 193, 25 P. 87 (1890).
In arriving at the present value of the property taken and the damages, if any, to the residue, the jury has a right to consider its present condition, improvements, surroundings, and capabilities, and the present use of the land and any reasonable use in the future to which it may be adapted or to which it might be put. Bd. of County Comm'rs v. Noble, 117 Colo. 77 , 184 P.2d 142 (1947); Ruth v. Dept. of Hwys., 145 Colo. 546 , 359 P.2d 1033 (1961); Dept. of Hwys. v. Schulhoff, 167 Colo. 72 , 445 P.2d 402 (1968).
Market value of land. In determining the value of the land taken, the jury is to be governed by the land's market value at the time of the trial. Mulford v. Farmers' Reservoir & Irrigation Co., 62 Colo. 167 , 161 P. 301 (1916); Vivian v. Bd. of Trustees, 152 Colo. 556 , 383 P.2d 801 (1963).
Market value is the price which property will bring when offered for sale by one who desires but is not obliged to sell it, and is bought by one who desires it but is under no necessity to buy the property. Bd. of County Comm'rs v. Noble, 117 Colo. 77 , 184 P.2d 142 (1947); Vivian v. Bd. of Trustees, 152 Colo. 556 , 383 P.2d 801 (1963); Dept. of Hwys. v. Schulhoff, 167 Colo. 72 , 445 P.2d 402 (1968).
Just compensation excludes factors relating to public acquisition. Under the test of market value, just compensation cannot include any increment arising from the very fact of acquisition of the subject property because, if the land sold in the open market under ordinary and usual circumstances, factors relating to public acquisition would have to be excluded from consideration. Williams v. City & County of Denver, 147 Colo. 195 , 363 P.2d 171 (1961).
Just compensation is determined as of the date the petitioner is authorized by agreement, stipulation, or court order to take possession of the subject property and cannot include any increment arising from the very fact of acquisition or the intended use of the property. Wall v. City of Aurora, 172 P.3d 934 (Colo. App. 2007).
Amount of liens cannot be added to award. The award of the commission or the jury must reflect only the fair market value of the property taken and there cannot be added to the award as part of the fair market value the amount of liens which exist against the property. Dept. of Hwys. v. Kelley, 151 Colo. 517 , 379 P.2d 386 (1963).
Price paid for similar property in voluntary sale admissible evidence. Evidence of the price paid for similar property in a voluntary sale is admissible on the question of value of the property condemned, provided the properties sold are similar in locality and character to the property in question and not so far removed in point of time to make a comparison unjust or impossible. Dept. of Hwys. v. Schulhoff, 167 Colo. 72 , 445 P.2d 402 (1968); W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973); Bd. of County Comm'rs v. Evergreen, Inc., 35 Colo. App. 171, 532 P.2d 777 (1974); Loloff v. Sterling, 31 Colo. 102 , 71 P. 1113 (1903); Herring v. Platte River Power Auth., 728 P.2d 709 ( Colo. 1986 ).
Determination of property similarities rests in trial court's discretion. Whether condemned property and property voluntarily sold are sufficiently similar so that sale price would be aid to the jury in fixing the value of the property condemned rests largely in the sound discretion of the trial court which will not be interfered with unless abused. Dept. of Hwys. v. Schulhoff, 167 Colo. 72 , 445 P.2d 402 (1968); W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973); Herring v. Platte River Power Auth., 728 P.2d 709 ( Colo. 1986 ).
Evidence of value of individual lots in subdivision admissible. Where process of subdivision, platting, recording, and development had progressed to point where individual lots were available as separate units for sale, such land would have a higher market value than land which is merely currently suitable for sale as one tract to a single person who would in turn subdivide or develop the land for sale to others. Therefore, although the question for the jury is the fair market value of the tract as a whole, evidence as to the individual lot values would be both pertinent and necessary to a consideration of the highest and best use of the land. Bd. of County Comm'rs v. Evergreen, Inc., 35 Colo. App. 171, 532 P.2d 777 (1974).
When evidence of enhancement resulting from acquisition admissible. Although evidence relating to enhancement in value as a result of the acquisition of the subjected property is generally inadmissible, there are exceptional situations where the courts will admit evidence of enhancement resulting from an acquisition and they include cases where the location of the proposed project is indefinite or where there is a supplemental taking. Williams v. City & County of Denver, 147 Colo. 195 , 363 P.2d 171 (1961); City & County of Denver v. Smith, 152 Colo. 227 , 381 P.2d 269 (1963).
Speculative or prospective values are not admissible in arriving at the fair market value of the property. Ruth v. Dept. of Hwys., 145 Colo. 546 , 359 P.2d 1033 (1961); Dept. of Hwys. v. Schulhoff, 167 Colo. 72 , 445 P.2d 402 (1968).
Fair compensation does not include speculative values either lowering or raising the compensation to be paid. Williams v. City & County of Denver, 147 Colo. 195 , 363 P.2d 171 (1961).
Under some circumstances, evidence of a probable change in zoning may be admitted where such change is unrelated to the acquisition of the subject property, and where the change in zoning results from the taking of the subject property, it is not admissible. Williams v. City & County of Denver, 147 Colo. 195 , 363 P.2d 171 (1961).
Expert testimony as to value based on mere speculation is not competent. An expert opinion that relies upon an estimate of construction costs that the undisputed evidence demonstrated was not only unreliable, but was mere speculation is not legally competent evidence under C.R.E. 703. Farrar v. Total Petroleum, Inc., 799 P.2d 463 (Colo. App. 1990).
Uses available for adaptation of property considered. The use to which the property taken is subjected may be taken into consideration in determining the proper measure of damages recoverable by the owner of property. City of Denver v. Bayer, 7 Colo. 113, 2 P. 6 (1883); Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889); Colo. M. Ry. v. Brown, 15 Colo. 193, 25 P. 87 (1890).
The most profitable and advantageous use to which the property taken is adapted is the basis upon which fair compensation should be determined. Union Exploration Co. v. Moffat Tunnel Imp. Dist., 104 Colo. 109 , 89 P.2d 257 (1939).
If land is so situated that it is actually available for building purposes, its value for such purposes may be considered, even if it is used as a farm or is covered with brush and boulders. Dept. of Hwys. v. Schulhoff, 167 Colo. 72 , 445 P.2d 402 (1968).
It is improper, however, for the jury to consider an undeveloped tract of land as though a subdivision thereon is an accomplished fact, and such undeveloped property may not be valued on a per lot basis, the cost factor clearly being too speculative. Dept. of Hwys. v. Schulhoff, 167 Colo. 72 , 445 P.2d 402 (1968).
The value of lands taken is to be estimated not merely with reference to the use to which it is at the time applied, but with reference to uses to which it is plainly adapted; thus, the owner of lands having thereon an excavation for an irrigating ditch, never used for the purpose and long since abandoned by the person who made it, is entitled to the market value of the land, taking into account that this excavation is to be considered with reference to the purpose for which it is suited. Roberts v. Scurvin Ditch Co., 22 Colo. App. 120, 125 P. 552 (1912).
Special value for particular uses is to be considered in the assessment. Denver N.W. & P. Ry. v. Howe, 49 Colo. 256, 112 P. 779 (1910).
Contract rental adding to value relevant evidence. The undivided basis rule contemplates that where a contract rental adds to the fair market value of the property, evidence of that rental is relevant in determining the compensation to be paid. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Fair rental is relevant evidence if contract rental less than fair rental. Under the undivided basis rule, where a contract rental is less than the fair rental, the fair rental and not the contract rental is the relevant evidence on the issue of compensation. This assures a fair return for the property valued as a whole. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Rental value of land considered. The rental value of land is an element for the purpose of determining present market value. Vivian v. Bd. of Trustees, 152 Colo. 556 , 383 P.2d 801 (1963).
Rental of lands while in possession of petitioner is not allowable without evidence of rental value. Mulford v. Farmers' Reservoir & Irrigation Co., 62 Colo. 167, 161 P. 301 (1916).
Undivided basis rule. Where a lessor holds a fee simple subject to an encumbrance, such as a lease, the property must be valued on an undivided basis, but with some distinctions from the strict undivided fee rule. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Parties have opportunity to agree on apportionment of award under the undivided basis rule, thereby avoiding completely the difficult task of ascertaining the value of the separate interests. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Condemnor need not pay for interest not lost by condemnees under the undivided basis rule. Montgomery Ward & Co. v. City of Sterling, 185 Colo. 238 , 523 P.2d 465 (1974).
Injury to business on condemned land not element of just compensation. Injury to a business conducted upon lands taken does not constitute an element of just compensation because the business itself is not being condemned and can be relocated elsewhere. City & County of Denver v. Hinsey, 177 Colo. 178 , 493 P.2d 348 (1972).
Where income is derived from land itself, as in a farming or ranching operation, then an injury to a business conducted upon the lands may be considered in determining just compensation. City & County of Denver v. Hinsey, 177 Colo. 178 , 493 P.2d 348 (1972).
It is well settled that when land occupied for business purposes is taken by eminent domain, the owner is entitled to compensation only for the value of the land and improvements but not for the value of any business conducted thereon. Since rental trailers located on condemned land are personal property and were not themselves condemned, the commission's refusal to consider income from them was correct. Bd. of County Comm'rs v. HAD Enters., Inc., 35 Colo. App. 162, 533 P.2d 45 (1974).
Property deemed waste not valueless. Property is not to be deemed worthless because the owner allows it to go to waste, or to be regarded as valueless because he is unable to put it to any use, because others may be able to use it, and make it subserve the necessities or conveniences of life, and its capability of being made thus available gives it a market value which can be readily estimated. Colo. M. Ry. v. Brown, 15 Colo. 193, 25 P. 87 (1890); Roberts v. Scurvin Ditch Co., 22 Colo. App. 120, 125 P. 552 (1912).
No interest is allowable on unliquidated claim for damages, in the absence of contract or of statute providing therefor. Union Exploration Co. v. Moffat Tunnel Imp. Dist., 104 Colo. 109 , 89 P.2d 257 (1939).
When interest on award accrues. Where the authorization to take possession of property is contingent on a deposit, the date of possession for purposes of entitlement to interest on the award is the date of deposit. Denver Urban Renewal Auth. v. Hayutin, 40 Colo. App. 559, 583 P.2d 296 (1978).
Exemplary damages not allowed in condemnation proceeding. Absent a provision for exemplary damages, such damages are not to be allowed in a special statutory proceeding for condemnation. Ossman v. Mtn. States Tel. & Tel. Co., 184 Colo. 360 , 520 P.2d 738 (1974).
An inverse condemnation action is in the nature of a special statutory proceeding and is to be tried as if it were an eminent domain proceeding. Thus, the exemplary damages statute, which authorizes the award of exemplary damages in "all civil actions", is not applicable to an inverse condemnation action. Ossman v. Mtn. States Tel. & Tel. Co., 184 Colo. 360 , 520 P.2d 738 (1974).
Landowner entitled to costs reasonably incurred. A landowner is entitled to be compensated for costs incurred by him in condemnation proceedings, provided such costs are reasonably incurred, on the theory that to require the landowner to pay such costs would reduce the just compensation for the taking. Dept. of Hwys. v. Kelley, 151 Colo. 517 , 379 P.2d 386 (1963).
"Costs" means expenses necessarily incurred by reason of the litigation. Dept. of Hwys. v. Kelley, 151 Colo. 517 , 379 P.2d 386 (1963).
Attorney fees are not included within meaning of "costs" and are not recoverable in eminent domain proceedings. Dept. of Hwys. v. Intermountain Term. Co., 164 Colo. 354 , 435 P.2d 391 (1967).
Special improvement assessments against land taken are not "costs". Special improvement assessments against land taken by condemnation and paid by the landowner are not expenses necessarily incurred by reason thereof, and cannot be taxed as costs. Dept. of Hwys. v. Kelley, 151 Colo. 517 , 379 P.2d 386 (1963).
All evidence relevant to the determination of the present market value of condemned property is admissible, including evidence of the most advantageous potential future use of the entire property, even if the condemned property would need to be dedicated as part of annexation and rezoning of the entire property in the future. Palizzi v. City of Brighton, 228 P.3d 957 (Colo. 2010).
Evidence of the value of the condemned portion as a part of the whole is admissible and should be evaluated by the fact finder when determining just compensation. Palizzi v. City of Brighton, 228 P.3d 957 (Colo. 2010).
III. DAMAGES TO RESIDUE OF PROPERTY.
Measure of damages to residue is diminuation of market value. The measure of damages to the residue of property after an eminent domain taking is the diminution of the market value by reason of the taking. W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973).
Damages are awarded equal to the actual diminution of its market value, if any, for any use to which the same may reasonably be put. City of Denver v. Bayer, 7 Colo. 113, 2 P. 6 (1883); Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889); Denver & R.G.R.R. v. Griffith, 17 Colo. 598, 31 P. 171 (1892); Roberts v. Scurvin Ditch Co., 22 Colo. App. 120, 125 P. 552 (1912).
Damage to the residue after land taken is to be measured by the present difference between market value before and after taking, and includes all damages from the natural, necessary, and reasonable result of the taking. Mack v. Bd. of County Comm'rs, 152 Colo. 300 , 381 P.2d 987 (1963).
All damages, present and prospective, that are the natural, necessary, or reasonable result of the taking should be assessed, except such as may arise from negligent or unskillful construction. Denver City Irrigation & Water Co. v. Middaugh, 12 Colo. 434, 21 P. 565 (1889); Loloff v. Sterling, 31 Colo. 102, 71 P. 113 (1903); Farmers' Reservoir & Irrigation Co. v. Cooper, 54 Colo. 402, 130 P. 1004 (1913); Moffat v. City & County of Denver, 57 Colo. 473, 143 P. 577 (1914); Mulford v. Farmers' Reservoir & Irrigation Co., 62 Colo. 167, 161 P. 301 (1916).
Damage to residue includes all damages from the natural, necessary, and reasonable result of the taking. Mack v. Bd. of County Comm'rs, 152 Colo. 300 , 381 P.2d 987 (1963).
When a portion of a parcel of land is taken from a property owner in a condemnation proceeding, the landowner is entitled to recover all damages that are the natural, necessary, and reasonable result of the taking, as measured by the reduction in the market value of the remainder of the property. The property owner is entitled to present any relevant evidence concerning diminution of market value caused by the taking. If the evidence supports a finding that a diminution of market value has occurred, compensation must be awarded. La Plata Elec. Ass'n, Inc. v. Cummins, 728 P.2d 696 ( Colo. 1986 ); Bement v. Empire Elec. Ass'n, Inc. 28 P.2d 706 ( Colo. 1986 ); Herring v. Platte River Power Auth., 728 P.2d 709 (Colo. 1986).
Loss and inconvenience thereby occasioned may be considered in determining the proper measure of damages recoverable by an owner whose property has been taken. City of Denver v. Bayer, 7 Colo. 113, 2 P. 6 (1883); Colo. Cent. R.R. v. Allen, 13 Colo. 229, 22 P. 605 (1889); Colo. M. Ry. v. Brown, 15 Colo. 193, 25 P. 87 (1890).
Loss of means of access to premises considered. Where the premises sought are used by the landowner as the means of access to the premises not taken, the injury occasioned by the taking will, in this respect, be special to him, and he is entitled to compensation therefor. Lavelle v. Town of Julesburg, 49 Colo. 290, 112 P. 774 (1910).
Although it would seem difficult to establish the true or market value of access rights since they are not a commodity dealt in on a buying and selling market, the right of ingress and egress to and from a person's property adds or detracts from the property value and it would seem that the true value of such rights could only be found in the difference between the value of the land and its use for any and all kinds of purposes before the disturbance or destruction of such rights, and the value of the land minus any access or disturbed or inconvenient access to the highway. Boxberger v. State Hwy. Comm'n, 126 Colo. 526 , 251 P.2d 920 (1952).
Damage for loss beyond market value prohibited. The condemnor is not permitted to add an additional element of damage for loss of use beyond the market value. Vivian v. Bd. of Trustees, 152 Colo. 556 , 383 P.2d 801 (1963).
Costs of restoration are not allowed as a test for determining damages to residue occasioned by a taking in condemnation cases. W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973).
Evidence of aesthetic damage and damage for loss of view, which would result from construction of power line, is admissible in assessing damages to remainder since unsightliness or loss of view did not affect any other owner or public in a general way but did specifically affect remainder. La Plata Elec. Ass'n, Inc. v. Cummins, 703 P.2d 592 (Colo. App. 1985), aff'd, 728 P.2d 696 ( Colo. 1986 ).
Jury cannot consider general benefits. General benefits, which accrue to the residue of property after a condemnation by reason of the improvement, may not be considered by the jury in arriving at the market value of the residue after the taking. Mack v. Bd. of County Comm'rs, 152 Colo. 300 , 381 P.2d 987 (1963).
"Benefit". "Benefit", as used in eminent domain law, is not equivalent or interchangeable with "benefit" that arises out of special improvement. City of Englewood v. Weist, 184 Colo. 325 , 520 P.2d 120 (1974).
"Benefit" that justifies a special assessment tax is not the same "benefit" that must be calculated and deducted from a landowner's recovery in an eminent domain proceeding. City of Englewood v. Weist, 184 Colo. 325 , 520 P.2d 120 (1974).
General benefit cannot be set off against damages. General benefits that result to the owner in common with the public and other nearby owners cannot be set off against damages. W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973).
Special benefits that may be set off against damages are those benefits that accrue directly to the residue as a result of the construction of the improvement and that directly and particularly benefit that residue as opposed to benefitting the public generally. W. Slope Gas Co. v. Lake Eldora Corp., 32 Colo. App. 293, 512 P.2d 641 (1973); E-470 Pub. Highway Auth. v. 455 Co., 983 P.2d 149 (Colo. App. 1999), rev'd on other grounds, 3 P.3d 18 ( Colo. 2000 ).
Special benefits may generally be set off against a condemnation award but cannot be set off where the remaining property is subject to an assessment for those same benefits. E-470 Pub. Highway Auth. v. 455 Co., 983 P.2d 149 (Colo. App. 1999), rev'd on other grounds, 3 P.3d 18 ( Colo. 2000 ).
Trial court abused its discretion by granting landowners' motion in limine to exclude all evidence of special benefits accruing to the landowners' property as a result of the E-470 highway construction. The commissioners should have had the opportunity at trial to consider all parties' evidence of the special benefits accruing to the remaining property. Both the highway authority's and the landowners' appraisers agreed that construction of the E-470 conferred special benefits on the landowners' remaining property. By excluding this evidence of special benefits, the trial court effectively ensured that the landowners would recover in an amount greater than they suffered. E-470 Pub. Hwy. Auth. v. 455 Co., 3 P.3d 18 (Colo. 2000).
Whether the highway expansion fee is labeled as a "special fee" or a "special assessment", the mere existence of such fee is not, in and of itself, an adequate basis for excluding all evidence of special benefits for two reasons: (1) The fee is speculative; and (2) the fee does not charge for the same benefit as those the highway authority sought to introduce into evidence. E-470 Pub. Hwy. Auth. v. 455 Co., 3 P.3d 18 (Colo. 2000).
City's collection of special assessment tax not foreclosed. A city's failure to prove any benefit to the landowner's property in the section 38-1-101 proceeding does not foreclose the city from collecting a special assessment tax. The city is entitled to specially assess for the benefit accruing to the landowner's property by the construction of the special improvement. City of Englewood v. Weist, 184 Colo. 325 , 520 P.2d 120 (1974).
Record that included contradictory and conflicting evidence supported the trial court's determination that diminution, if any, of the value of condemnee's remaining property was de minimis even though condemnee testified that he was forced to sell his remaining lots low because the condemnation action could possibly result in a loss of privacy, an increased traffic flow, and an inability to construct a security gate at the entrance to the subdivision. Colo. Mtn. Prop. v. Heineman, 860 P.2d 1388 (Colo. App. 1993).
Trial court's refusal to award damages based on the purportedly lower sales prices of condemnee's lots is consistent with rule that compensation in a condemnation action is measured either at the time the petitioner is authorized to take possession or at the date of the trial or hearing in which compensation is assessed, particularly where the trial court, within its discretion, found that condemnee failed to meet the burden of establishing that claimed loss. Colo. Mtn. Prop. v. Heineman, 860 P.2d 1388 (Colo. App. 1993).
Trial court did not err in awarding nominal damages since the record supports its finding that there was not evidence presented of any additional cost of the roadway other than evidence of initial costs that were not associated with the subsequent grant of the access easement. Colo. Mtn. Prop. v. Heineman, 860 P.2d 1388 (Colo. App. 1993).
No unjust enrichment where the record shows that the development costs in building roadway would have been incurred by condemnee regardless of whether condemnor pursued his rights in condemnation. Colo. Mtn. Prop. v. Heineman, 860 P.2d 1388 (Colo. App. 1993).
38-1-115. Contents of report or verdict.
-
Except as provided in this section, the report of the commissioners or the verdict of the jury shall contain:
- An accurate description of the land taken;
- The value of the land or property actually taken;
- The damages, if any, to the residue of such land or property; and
- The amount and value of the benefit.
- No findings as to damages and benefits as provided in paragraphs (c) and (d) of subsection (1) of this section shall be required in cases involving the total taking of property, nor shall either or both of such findings be required in cases involving the partial taking of property unless evidence thereof has been received by the commissioners or jury.
- The report of the commissioners or the verdict of the jury may also contain such other findings or answers to interrogatories as the court in its discretion may require to establish the value of the property condemned on an undivided basis.
Source: G.L. § 1075. G.S. C. § 254. R.S. 08: § 2432. C.L. § 6328. CSA: C. 61, § 18. CRS 53: § 50-1-18. L. 63: p. 477, § 3. C.R.S. 1963: § 50-1-18. L. 66: p. 30, § 3.
ANNOTATION
Analysis
- I. General Consideration.
- II. Requirement as to Description of the Land Taken.
- III. Requirement as to Value of Land Taken.
- IV. Requirement as to Amount and Value of Benefits to Residue.
I. GENERAL CONSIDERATION.
This section is mandatory. Denver & R.G.R.R. v. Stark, 16 Colo. 291, 26 P. 779 (1891); Otero Canal Co. v. Fosdick, 20 Colo. 522, 39 P. 332 (1895); Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901); Denver N.W. & P. Ry. v. Howe, 49 Colo. 256, 112 P. 779 (1910).
Section must be strictly construed. Pueblo v. Rudd, 5 Colo. 270 (1880); Rio Grande S. Ry. v. Knight, 1 Colo. App. 219, 28 P. 19 (1891).
Failure of verdict to include required contents deemed fatal. A failure to include in the verdict those things required by the section is fatal. Norris v. City of Pueblo, 12 Colo. App. 290, 55 P. 747 (1898).
Province of jury is to determine damages to be awarded the owner of the property taken. Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901); Tegeler v. Schneider, 49 Colo. 574, 114 P. 288 (1911).
The question of the necessity for taking for municipal purposes is not for the jury. Warner v. Town of Gunnison, 2 Colo. App. 430, 31 P. 238 (1892).
Submission of questions not required properly refused. Any attempt to submit to the jury any questions, save those which it is required to report upon, is properly refused. Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90, 66 P. 902 (1901).
When directions requiring additional evidence not prejudicial. Where the report of the commissioners, based upon the evidence presented, was in compliance with this section, the directions of the trial court requiring more evidence, to the extent, were surplusage not affecting the substantial rights of the parties, therefore, not prejudicial. Dept. of Hwys. v. Intermountain Term. Co., 164 Colo. 354 , 435 P.2d 391 (1967).
Respondent to show cash value of property. The burden rests upon the respondent to show by a preponderance of the evidence the present actual cash value of the property taken, as well as the damages, if any, resulting to the residue, but the burden of showing benefits, if any, accruing to the residue rests upon the petitioner. Bd. of County Comm'rs v. Noble, 117 Colo. 77 , 184 P.2d 142 (1947).
Petitioner to show benefits accruing to residue. The burden of showing benefits, if any, accruing to the residue rests upon the petitioner. Bd. of County Comm'rs v. Noble, 117 Colo. 77 , 184 P.2d 142 (1947).
When objection to report or verdict required. Any objection to the commissioners' report must be made when it is returned, before the commissioners are discharged. Evergreen Fire Prot. Dist. v. Huckeby, 626 P.2d 744 (Colo. App. 1981).
Objection to the form or substance of a verdict must be made at the time of its return, and before the discharge of the jury. Fort Lyon Canal Co. v. Farnan, 48 Colo. 414, 109 P. 861 (1910).
Applied in Searl v. Sch. Dist. No. 2, 133 U.S. 553, 10 S. Ct. 374, 33 L. Ed. 740 (1890); Pub. Serv. Co. v. City of Loveland, 79 Colo. 216, 245 P. 493 (1926); Wiley Drainage Dist. v. Semmens, 80 Colo. 365, 250 P. 527 (1926).
II. REQUIREMENT AS TO DESCRIPTION OF THE LAND TAKEN.
Description as land "tinted pink" on map insufficient. It is not a sufficient description to merely refer to the land as the land described in the petition, nor as the land "tinted pink" on the map. Norris v. City of Pueblo, 12 Colo. App. 290, 55 P. 747 (1898).
III. REQUIREMENT AS TO VALUE OF LAND TAKEN.
Verdict must state value of property taken for conformity. The verdict does not conform to the requirements of subsection (1)(b), where it does not state the value of the property actually taken. Sand Creek Lateral Irrigation Co. v. Davis, 17 Colo. 326, 29 P. 742 (1892).
Stating gross amount in verdict as value deemed noncompliance. Stating a gross amount as the value of the property taken to cover right-of-way and enlargement for a certain distance, certainly is not a compliance with subsection (1)(b), and neither can the other amounts assessed as damages to cover certain work and improvements be regarded as an ascertainment of the value of the property taken. Sand Creek Lateral Irrigation Co. v. Davis, 17 Colo. 326, 29 P. 742 (1892).
IV. REQUIREMENT AS TO AMOUNT AND VALUE OF BENEFITS TO RESIDUE.
Verdict must show consideration and determination of benefits question. The verdict must affirmatively show that the question of benefits was considered and determined; otherwise it was insufficient and must be vacated. Fort Lyon Canal Co. v. Farnan, 48 Colo. 414, 109 P. 861 (1910).
Where the verdict as to this matter was as follows: "That the amount and value of the benefits received by the defendants due to the construction of this ditch, is dollars", the question of the benefits was considered and passed upon, and benefits were nothing. Fort Lyon Canal Co. v. Farnan, 48 Colo. 414, 109 P. 861 (1910).
Verdict not fixing definite value to be rejected. A verdict not fixing any definite amount or value of the supposed benefit, in dollars, is to be rejected. Denver N.W. & P. Ry. v. Howe, 49 Colo. 256, 112 P. 779 (1910).
38-1-116. Interest on award.
The court shall forthwith cause the report of the commissioners or the verdict of the jury to be entered upon the records of the court, and, where possession of the property has been previously taken by the petitioner pursuant to section 38-1-105 (6), it shall add to the amount of any such award interest at the rate established pursuant to section 5-12-106 (2), C.R.S., on and after the date of such possession until the date such award of the commissioners or verdict of the jury is filed with the clerk of the court. No interest shall be allowed on that portion of the award which the owner and others interested received or could have received as a partial payment by withdrawal from the deposit as provided in section 38-1-105 (6), nor shall interest be allowed for the period wherein the trial of the case is delayed or continued by or at the request of the respondent.
Source: L. 61: p. 375, § 7. CRS 53: § 50-1-20. L. 63: p. 477, § 4. C.R.S. 1963: § 50-1-19. L. 66: p. 31, § 4. L. 85: Entire section amended, p. 1194, § 4, effective June 6.
ANNOTATION
Law reviews. For article, "Collecting Pre- and Post- Judgment Interest in Colorado: A Primer", see 15 Colo. Law. 753 (1986). For article, "An Update of Appendices from Collecting Pre- and Post-Judgment Interest in Colorado", see 15 Colo. Law. 990 (1986).
When interest on award accrues. Where the authorization to take possession of property is contingent on a deposit, the date of possession for purposes of entitlement to interest on the award is the date of deposit. Denver Urban Renewal Auth. v. Hayutin, 40 Colo. App. 559, 583 P.2d 296 (1978).
When the landowner, with the consent of the other interested parties, could have withdrawn funds deposited by the petitioner pursuant to § 38-1-105 (6), the exception to the interest accrual requirement under this section applies and no interest is allowed on the funds. E-470 Pub. Hwy. Auth. v. 455 Co., 997 P.2d 1273 (Colo. App. 1999).
No conflict with general interest statute. There is no conflict between this section, which provides for six percent interest from the date of possession until the date the commission's award is filed with the court, and the general interest statute, § 5-12-102 , pertaining to interest thereafter, since once the amount of the valuation award has been ascertained, the result is like any other judgment. And, since the condemnation statutes are silent on the matter of interest for the period after judgment, the general statute on interest applies. Denver Urban Renewal Auth. v. Hayutin, 40 Colo. App. 559, 583 P.2d 296 (1978); E-470 Pub. Hwy. Auth. v. 455 Co., 997 P.2d 1273 (Colo. App. 1999).
No interest accrues on the amount of an immediate possession deposit made under § 38-1-105. By depositing funds into the court registry, a petitioner relinquishes control of the funds and transfers to the property owner the right to withdraw and use the funds, and the petitioner is no longer responsible for the productive use of the funds. E-470 Pub. Hwy. Auth. v. 455 Co., 997 P.2d 1273 (Colo. App. 1999).
Interest under this section to be compounded annually. Although this section does not specifically state that interest is to be compounded annually, since the rate of interest under this section is determined by reference to the rate established in § 5-12-106 (2), which provides for annual compounding of interest, this section implicitly provides that interest be compounded annually. State Dept. of Hwys. v. Interstates-Denver West, 781 P.2d 176 (Colo. App. 1989).
Trial court appropriately denied award of pre-judgement interest in inverse condemnation case. There was no order authorizing the municipality to take possession of the property prior to trial. Moreover, the evaluation date used by each of the parties, without objection from either, was the date of the hearing, and the jury was specifically instructed to determine the value of the property taken as of that date. Accordingly, because the property was valued as of the date of the trial and not as of some earlier date, no award of pre-judgment interest was authorized. Fowler Irrevocable Trust 1992-1 v. City of Boulder, 992 P.2d 1188 (Colo. App. 1999), aff'd in part and rev'd in part on other grounds, 17 P.3d 797 ( Colo. 2001 ).
Denial of interest on attorney fees and costs was proper because this section has nothing to do with attorney fees and costs but instead allows prejudgment interest to a landowner who has been awarded just compensation for a taking for the sole purpose of compensating the owner for any possible difference between the value of the property as of the date that the condemning authority took possession of it and any payment made to the owner at that time. Sinclair Transp. Co. v. Sandberg, 2014 COA 75 M, 350 P.3d 915.
Applied in State Dept. of Hwys. v. Copper Mt., Inc., 624 P.2d 936 (Colo. App. 1981).
38-1-117. Condemnation of personal property.
Whenever a petitioner is specifically authorized by law to acquire personal property or interests therein by condemnation, the proceedings to acquire the same shall be governed by this article, and the petitioner shall acquire such interest therein as may be sought and specifically described in the petition in condemnation.
Source: L. 66: p. 31, § 5. C.R.S. 1963: § 50-1-22.
38-1-118. Evidence concerning value of property.
Any witness in a proceeding under articles 1 to 7 of this title, in any court of record of this state wherein the value of real property is involved, may state the consideration involved in any recorded transfer of property, otherwise material and relevant, which was examined and utilized by him in arriving at his opinion, if he has personally examined the record and communicated directly and verified the amount of such consideration with either the buyer or seller. Any such testimony shall be admissible as evidence of such consideration and shall remain subject to rebuttal as to the time and actual consideration involved and subject to objections as to its relevancy and materiality.
Source: L. 61: p. 376, § 7. CRS 53: § 50-1-22. L. 63: p. 478, § 5. C.R.S. 1963: § 50-1-21.
ANNOTATION
Law reviews. For article, "Inverse Condemnation -- A Viable Alternative", see 51 Den. L.J. 529 (1974).
Competence of witness not presumed. It will not be presumed that a witness is competent to give an opinion as to the value of property; rather, it must be shown that he has some peculiar means of forming an intelligent, correct judgment as to the value of the property in question or the effect upon it by a particular improvement beyond what is possessed by men generally. City & County of Denver v. Hinsey, 177 Colo. 178 , 493 P.2d 348 (1972).
Knowledge of witness may be derived from buying and selling, valuing, and managing real estate in the town or county where the particular property is situated or by reason of being acquainted with the property in the neighborhood where it is situated, especially if accompanied by a knowledge of sales of similar property. City & County of Denver v. Hinsey, 177 Colo. 178 , 493 P.2d 348 (1972).
Expert testimony need not be stricken where expert relied only in part on sales data he did not personally confirm but did not offer the data as direct evidence to support his opinion. Any impermissible impact that the unverifiable sales may have had on the expert's testimony was ameliorated by striking evidence of the comparable property that was supported by the unverified sales. Westminster v. Jefferson Center Ass'n, 958 P.2d 495 (Colo. App. 1997).
Owner's opinion of property value. A property owner may testify as to his opinion of the value of his own property. Denver Urban Renewal Auth. v. Berglund-Cherne Co., 193 Colo. 562 , 568 P.2d 478 (1977); Denver Urban Renewal Auth. v. Hayutin, 40 Colo. App. 559, 583 P.2d 296 (1978).
Testimony by the owner regarding the price paid for replacement property in a transaction that was not a comparable sale is incompetent. Denver Urban Renewal Auth. v. Hayutin, 40 Colo. App. 559, 583 P.2d 296 (1978).
Evidence of restoration costs admissible. Evidence of costs of restoration and replacement of property where there is no testimony to relate these costs to market value is admissible only insofar as it aids the jury in arriving at the market value of the property before and after the taking in order that there be no confusion between the measure of damages and evidence admissible to show damages. City & County of Denver v. Hinsey, 177 Colo. 178 , 493 P.2d 348 (1972).
Evidence of economic rent is admissible only for limited purpose of establishing the basis for the expert's final opinion of value. Denver Urban Renewal Auth. v. Berglund-Cherne Co., 193 Colo. 562 , 568 P.2d 478 (1977).
Evidence of the character and amount of business conducted on the land taken is only admissible for the limited purpose of showing a use to which the land could be put. City & County of Denver v. Hinsey, 177 Colo. 178 , 493 P.2d 348 (1972).
When opinion evidence inadmissible. Opinion testimony based almost entirely on the offering prices as distinguished from the sale prices of replacement properties and on the price paid for a noncomparable property is inadmissible. Denver Urban Renewal Auth. v. Hayutin, 40 Colo. App. 559, 583 P.2d 296 (1978).
38-1-119. Preference on docket.
To assure that property owners receive compensation for the taking of their property at the earliest practical time and to reduce the interest obligation of petitioners, all courts wherein such actions are pending shall give such actions preference over other civil actions therein in the manner of setting the same for trial.
Source: L. 61: p. 375, § 7. CRS 53: § 50-1-21. C.R.S. 1963: § 50-1-20.
38-1-120. Acquisition of state lands - department of natural resources.
All proceedings brought by the department of natural resources pursuant to the provisions of section 24-33-107 (3)(a), C.R.S., for the acquisition of interests in state lands under the jurisdiction of the state board of land commissioners shall be as prescribed by this article.
Source: L. 73: p. 178, § 2. C.R.S. 1963: § 50-1-23.
Cross references: For state board of land commissioners acquiring land by eminent domain, see § 24-33-107 (3)(a).
38-1-121. Appraisals - negotiations.
- As soon as a condemning authority determines that it intends to acquire an interest in property, it shall give notice of such intent, together with a description of the property interest to be acquired, to anyone having an interest of record in the property involved. If the property has an estimated value of five thousand dollars or more, such notice shall advise that the condemning authority shall pay the reasonable costs of an appraisal pursuant to subsection (2) of this section. Such notice, however, need not be given to any of such persons who cannot be found by the condemning authority upon the exercise of due diligence. Upon receipt of such notice, such persons may employ an appraiser of their choosing to appraise the property interest to be acquired. Such appraisal shall be made using sound, fair, and recognized appraisal practices which are consistent with law. The value of the land or property actually taken shall be the fair market value thereof. Within ninety days of the date of such notice, such persons may submit to the condemning authority a copy of such appraisal. The condemning authority immediately upon receipt thereof shall submit to such persons copies of its appraisals. If the property interest is being acquired in relation to a federal aid project, then the appraisals submitted by the condemning authority shall be those which have been approved by it pursuant to applicable statutes and regulations, if such approval is required. All of these appraisals may be used by the parties to negotiate in good faith for the acquisition of the property interest, but neither the condemning authority nor such persons shall be bound by such appraisals.
- If an appraisal is submitted to the condemning authority in accordance with the provisions of subsection (1) of this section, the condemning authority shall pay the reasonable costs of such appraisal. If more than one person is interested in the property sought to be acquired and such persons cannot agree on an appraisal to be submitted under subsection (1) of this section, the condemning authority shall be relieved of any obligation herein imposed upon it to pay for such appraisals as may be submitted to it pursuant to this section.
- Nothing in this section shall be construed as in any way limiting the obligation of the condemning authority to negotiate in good faith for the acquisition of any property interest sought prior to instituting eminent domain proceedings or as in any way limiting the discovery rights of parties to eminent domain proceedings.
- Nothing in this section shall prevent the condemning authority from complying with federal and state requirements to qualify the authority for federal aid grants.
- Nothing in this section shall be construed to limit the right of the condemning agency to institute eminent domain proceedings or to obtain immediate possession of property as permitted by law; except that an eminent domain proceeding may not proceed to trial on the issue of valuation until the ninety-day period provided in subsection (1) of this section has expired or the owner's appraisal has been submitted to the condemning authority, whichever is sooner.
- If the parties involved in the negotiations fail to reach agreement on the fair market value of the property being acquired, the condemning authority, prior to proceeding to trial on the issue of valuation, shall furnish all owners of record a written final offer.
Source: L. 75: Entire section added, p. 1405, § 1, effective July 18. L. 78: (1) and (5) amended, p. 274, § 100, effective May 23. L. 85: (1) amended and (6) added, p. 1194, § 5, effective June 6.
ANNOTATION
Statute designed to facilitate negotiations and settlement. This statute, which is not mandatory, contemplates and is designed to facilitate negotiations and settlement between parties involved in condemnation proceedings. City of Colo. Springs v. Berl, 658 P.2d 280 (Colo. App. 1982).
This section does not apply to the award of costs pursuant to C.R.C.P. 54(d). City of Colo. Springs v. Berl, 658 P.2d 280 (Colo. App. 1982).
When costs of appraisals are litigation expenses. If the owner chooses not to submit appraisals prior to trial, but does so as evidence during trial, the costs of the appraisals of real property are correctly viewed as expenses necessarily incurred by reason of the litigation. City of Colo. Springs v. Berl, 658 P.2d 280 (Colo. App. 1982).
Amount offered by county not dispositive of lack of good faith attempt to negotiate where efforts by county were thwarted by lack of response from the landowners. Bd. of County Comm'rs v. Blosser, 844 P.2d 1237 (Colo. App. 1992).
Property interests contemplated by subsection (3) are limited to recorded interests. City & County of Denver v. Eat Out, Inc., 75 P.3d 1141 (Colo. App. 2003).
38-1-122. Attorney fees.
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If the court finds that a petitioner is not authorized by law to acquire real property or interests therein sought in a condemnation proceeding, it shall award reasonable attorney fees, in addition to any other costs assessed, to the property owner who participated in the proceedings.
(1.5) In connection with proceedings for the acquisition or condemnation of property in which the award determined by the court exceeds ten thousand dollars, in addition to any compensation awarded to the owner in an eminent domain proceeding, the condemning authority shall reimburse the owner whose property is being acquired or condemned for all of the owner's reasonable attorney fees incurred by the owner where the award by the court in the proceedings equals or exceeds one hundred thirty percent of the last written offer given to the property owner prior to the filing of the condemnation action. The provisions of this subsection (1.5) shall not apply to any condemnation proceeding seeking to acquire rights-of-way under article 4, 5, or 5.5 of this title, article 45 of title 37, C.R.S., or section 7 of article XVI of the Colorado constitution.
- Nothing in subsection (1) of this section shall be construed as limiting the ability of a property owner to recover just compensation, including attorney fees, as may otherwise be authorized by law.
Source: L. 85: Entire section added, p. 1195, § 6, effective June 6. L. 2003: (1.5) added, p. 2669, § 2, effective July 1.
Cross references: For the legislative declaration in the 2003 act adding subsection (1.5), see section 1 of chapter 421, Session Laws of Colorado 2003.
ANNOTATION
Purpose of section is to compensate a property owner who is required to incur costs when the condemning authority does not proceed properly. Fowler Irrevocable Trust 1992-1 v. City of Boulder, 992 P.2d 1188 (Colo. App. 1999), aff'd in part and rev'd in part on other grounds, 17 P.3d 797 ( Colo. 2001 ).
This section does not apply to a case that is not a condemnation action. Sinclair Transp. Co. v. Sandberg, 2014 COA 76 M, 305 P.3d 924.
Denial of attorney fees on appeal was proper where the orders appealed did not address the petitioner's authority to condemn. This section simply authorizes a fee award if the petitioner lacked legal authority to acquire the real property interests sought. Sinclair Transp. Co. v. Sandberg, 2014 COA 75 M, 350 P.3d 915.
The legislature intended that challenges to a condemning agency's authority to condemn be addressed by subsection (1), but that challenges to a condemning agency's valuations be addressed by subsection (1.5). Town of Telluride v. San Miguel Valley Corp., 197 P.3d 261 (Colo. App. 2008).
In valuation cases, the legislature intended to limit awards of attorney fees to relatively egregious cases where the condemning agency has not offered fair value to the property owner and also intended that reimbursement for attorney fees be limited to the fees incurred in obtaining a fair valuation. Town of Telluride v. San Miguel Valley Corp., 197 P.3d 261 (Colo. App. 2008).
Landowner is not authorized by law to condemn a right-of-way where he already has a common law way of necessity and, accordingly, the property owner against whom the condemnation proceedings were brought may recover attorney fees. Billington v. Yust, 789 P.2d 196 (Colo. App. 1989).
District court properly awarded city its attorney fees and costs under subsection (1). Private condemnor sought to condemn entire public trail and not the easement across the public trail the court acknowledged it could obtain. Because the prior public use doctrine precluded what the private condemnor sought, its condemnation petition was not "authorized by law" and the district court properly awarded fees and costs to the city. CAW Equities v. City of Greenwood Village, 2018 COA 42 M, 425 P.3d 1197.
Subsection (2) permits recovery of attorney fees only if another statute expressly authorizes such recovery. Dept. of Health v. Hecla Mining Co., 781 P.2d 122 (Colo. App. 1989); City of Holyoke v. Schlachter Farms R.L.L.P., 22 P.3d 960 (Colo. App. 2001).
Attorney fees should be allowed where the condemnee proves that an alternate acceptable route is legally available to the condemnor at the time the condemnation action is commenced. West v. Hinksmon, 857 P.2d 483 (Colo. App. 1992).
But where dismissal is reversed on appeal, the award of attorney fees is not appropriate. Freeman v. Rost Family Trust, 973 P.2d 1281 (Colo. App. 1999).
No attorney fees should be allowed where the condemnee establishes the existence of an acceptable alternate route across the condemnee's own property. West v. Hinksmon, 857 P.2d 483 (Colo. App. 1992).
For purposes of awarding attorney fees, the petition for condemnation was amended in such a substantial manner that it was tantamount to the filing of a new condemnation action for a second parcel of land. Thus, the last written offer prior to filing the original condemnation proceeding on the first parcel and the subsequent amended petition as to the second parcel both constitute last written final offers as to the respective parcels. Sch. Dist. No. 12 v. Sec. Life of Denver Ins. Co., 179 P.3d 1 (Colo. App. 2007), rev'd on other grounds, 185 P.3d 781 ( Colo. 2008 ).
When a condemnation petition is amended to reflect both the property described in the original petition and a newly added property, the last written offer for purposes of subsection (1.5) is the offer made to the property owner for both properties prior to the filing of the amended petition. Town of Silverthorne v. Lutz, 2016 COA 17 , 370 P.3d 368.
When there are two distinct and separable condemnations that were tried in a single proceeding, this section contemplates the trial court's application of each written offer to the corresponding condemnation scenario. Because the condemnation award in either scenario exceeds 130% of the condemning authority's corresponding final written offer, the owner of the property is entitled to attorney fees. Sch. Dist. No. 12 v. Sec. Life of Denver Ins. Co., 185 P.3d 781 (Colo. 2008).
Absent evidence of a contrary legislative intent, section does not authorize fee awards in situations other than successful defenses in unauthorized condemnation proceedings. As such, fee award in inverse condemnation action would be improper. Fowler Irrevocable Trust 1992-1 v. City of Boulder, 992 P.2d 1188 (Colo. App. 1999), aff'd in part and rev'd in part on other grounds, 17 P.3d 797 ( Colo. 2001 ).
Prejudgment interest is separate from the "award by the court". "[A]ward by the court" plainly contemplates only the principal award and not the prejudgment interest on that award. City of Colo. Springs v. Andersen Mahon Enters., 251 P.3d 536 (Colo. App. 2010).
Court rejects contention that section requires an "all or nothing" award of attorney fees and that trial court was therefore precluded from making a partial award of fees and costs. To refuse to award a respondent any fees at all when the trial court has found that the petitioner was not authorized to acquire some of the property interests being sought would thwart the purpose of the statute. Similarly, it would be equally inappropriate to award a respondent all fees incurred in defending the entire action when at least some of petitioner's condemnation claims were in fact authorized by law. Thus, an "all or nothing" approach would lead to unreasonable and absurd results. Wilkinson v. Gaffney, 981 P.2d 1121 (Colo. App. 1999).
Here, record supports trial court's determination that respondents were entitled to an award of only fees incurred in defending against petitioner's unauthorized claim for a utility easement by condemnation. Further, the court's ruling is supported by the record and is consistent with the statutory intent of discouraging the filing of unauthorized condemnation claims. Accordingly, trial court committed no abuse of discretion. Wilkinson v. Gaffney, 981 P.2d 1121 (Colo. App. 1999).
The city's bad faith in one aspect of the litigation does not violate the condemnation statutes and therefore does not mean the city is not authorized by law to acquire the property for purposes of subsection (1). City of Black Hawk v. Ficke, 215 P.3d 1129 (Colo. App. 2008).
Under subsection (1.5), a landowner may recover appellate attorney fees incurred in successfully defending the commission's just compensation award. Reg'l Transp. Dist. v. 750 W. 48th Ave., LLC, 2013 COA 168 , 369 P.3d 640, aff'd in part and rev'd in part on other grounds, 2015 CO 57, 357 P.3d 179.
Applied in Platte River Power Auth. v. Nelson, 775 P.2d 82 (Colo. App. 1989); Akin v. Four Corners Encampment, 179 P.3d 139 (Colo. App. 2007).
PART 2 GOVERNMENTAL ENTITIES, INDIVIDUALS, AND CORPORATIONS AUTHORIZED TO EXERCISE THE POWER OF EMINENT DOMAIN
38-1-201. Legislative declaration.
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The general assembly hereby finds and declares that:
- The power of eminent domain allows the federal government, the state, counties, cities and counties, municipalities, and various other types of governmental entities to condemn property when necessary for public use and allows individual property owners and corporations to condemn property in certain circumstances when condemnation is necessary to create a private way of necessity or to allow beneficial use of private property.
- Although both the state constitution and state statutes require the payment of just compensation to any person whose property is condemned, the exercise of the power of eminent domain nonetheless substantially impacts fundamental property rights.
- Because of this substantial impact, it is necessary and appropriate to ensure that Coloradans can easily determine which governmental entities, corporations, and other persons may exercise the power of eminent domain and to further ensure that Coloradans can easily identify the procedural requirements that entities, corporations, and other persons must follow when exercising the power of eminent domain.
-
The general assembly further finds and declares that:
- In addition to counties, cities and counties, and municipalities that serve as general units of government in the state, the governmental structure of the state includes a wide variety of special districts, authorities, and other governmental entities that serve limited governmental purposes, some of which may exercise the power of eminent domain.
- Although many of the provisions of state law that authorize governmental entities, individuals, and corporations to exercise the power of eminent domain and prescribe procedures that govern the exercise of that power are concentrated in this article and in articles 2 to 7 of this title, the proliferation throughout the history of the state of special districts, authorities, and other governmental entities that serve limited governmental purposes, together with other historical factors that have necessitated grants of eminent domain powers to certain types of corporations and persons, have resulted in the codification in other parts of the Colorado Revised Statutes of many other provisions that authorize the exercise of the power of eminent domain.
-
The codification of provisions of state law that authorize eminent domain in parts of the Colorado Revised Statutes other than this article and articles 2 to 7 of this title makes it difficult in many cases for Coloradans to easily determine, with respect to any given governmental entity, corporation, or person:
- Whether the governmental entity, corporation, or person may exercise the power of eminent domain; and
- The procedural requirements that the governmental entity, corporation, or person must comply with in order to exercise the power of eminent domain.
- In order to help Coloradans to more easily determine whether any given governmental entity, corporation, or person may exercise the power of eminent domain and identify the procedural requirements that the entity, corporation, or person must follow in exercising the power of eminent domain, it is necessary, appropriate, and in the best interests of the state to list in this part 2 all of the governmental entities, corporations, and persons that may exercise the power of eminent domain pursuant to provisions of state law and to clarify that the procedural requirements specified in this article and articles 2 to 7 of this title apply to all eminent domain proceedings.
-
In enacting this part 2, it is not the intent of the general assembly to:
- Repeal, limit, or otherwise modify the authority of any governmental entity, corporation, or person to exercise the power of eminent domain;
- Grant new eminent domain authority to any governmental entity, individual, or corporation; or
- Infringe upon the home rule power of any home rule municipality or county.
Source: L. 2006: Entire part added, p. 351, § 1, effective August 7.
38-1-202. Governmental entities, corporations, and persons authorized to use eminent domain.
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The following governmental entities, types of governmental entities, and public corporations, in accordance with all procedural and other requirements specified in this article 1 and articles 2 to 7 of this title 38 and to the extent and within any time frame specified in the applicable authorizing statute, may exercise the power of eminent domain:
- The United States as authorized in section 3-1-102, C.R.S.;
-
The state:
- As authorized in paragraph (b) of article IX of the upper Colorado river basin compact, codified at section 37-62-101, C.R.S.;
- As authorized in paragraph 3. of article V of the South Platte river compact, codified at section 37-65-101, C.R.S.;
- As authorized in article VII of the Republican river compact, codified at section 37-67-101, C.R.S.;
-
By action of the general assembly or by action of any of the following officers and agencies of the state:
- The department of human services as authorized in section 19-2.5-1503;
- The department of natural resources as authorized in section 24-33-107 (3), C.R.S.;
- The department of personnel with the approval of the governor as authorized in section 24-82-102, C.R.S.;
- The attorney general at the direction of the governor as authorized in section 24-82-302 (1), C.R.S.;
- Repealed.
- The governor as authorized in section 27-90-102 (3), C.R.S.;
- The department of transportation as authorized in sections 33-11-104 (4), 43-1-210 (1), (2), and (3), 43-1-217 (1), 43-1-406 (4), 43-1-414 (1), (2), (3), and (4), 43-1-509, 43-1-1410 (1)(i), 43-2-135 (1)(k), 43-3-106, and 43-3-107, C.R.S.;
- The state board of land commissioners as authorized in section 36-4-108, C.R.S.;
- The transportation commission created in section 43-1-106, as authorized in section 43-1-208 (2);
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The statewide bridge enterprise as authorized in section 43-4-805 (5)(e), C.R.S.;
(J.5) The high-performance transportation enterprise as authorized in section 43-4-806 (6)(e), C.R.S.; and
- The Colorado aeronautical board as authorized in section 43-10-106, C.R.S.;
- State educational boards of control, including the state board for community colleges and occupational education and local district college boards of trustees, and institutions of higher education, as authorized in sections 23-31.5-108, 23-53-105, 23-60-208, 23-71-122 (1)(p), and 38-2-105, C.R.S.;
- Counties, cities and counties, and boards of county commissioners as authorized in sections 24-72-104 (2), 25-3-306, 29-6-101, 30-11-104 (2), 30-11-107 (1)(w), 30-11-205, 30-11-307 (1)(c), 30-20-108 (3), 30-20-402 (1)(a), 30-35-201 (37), (41), (42), and (43), 31-25-216 (2), 41-4-102, 41-4-104, 41-4-108, 41-5-101 (1)(a), 43-1-217 (1), 43-2-112 (2), 43-2-204, 43-2-206, and 43-3-107, C.R.S.;
- Cities, cities and counties, and towns as authorized in sections 29-4-104 (1)(d), 29-4-105, 29-4-106, 29-6-101, 29-7-104, 30-20-108 (3), 31-15-706 (2), 31-15-707 (1)(a) and (1)(e), 31-15-708 (1)(b), 31-15-716 (1)(c), 31-25-201 (1), 31-25-216 (2), 31-25-402 (1)(c), 31-35-304, 31-35-402 (1)(a), 31-35-512 (1)(g), 38-5-105, 38-6-101, 38-6-122, 41-4-108, and 41-4-202, C.R.S.;
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The following types of single purpose districts, special districts, authorities, boards, commissions, and other governmental entities that serve limited governmental purposes or that may exercise eminent domain for limited purposes:
- A school district as authorized in section 22-32-111, C.R.S.;
- A power authority established pursuant to section 29-1-204 (1), C.R.S., as authorized in section 29-1-204 (3)(f), C.R.S.;
- A water or drainage authority established pursuant to section 29-1-204.2 (1), C.R.S., as authorized in section 29-1-204.2 (3)(f), C.R.S.;
- A multijurisdictional housing authority established pursuant to section 29-1-204.5 (1), C.R.S., as authorized in section 29-1-204.5 (3)(f), C.R.S.;
- A housing authority organized pursuant to part 2 of article 4 of title 29, C.R.S., as authorized in sections 29-4-209 (1)(k), 29-4-211, and 29-4-212, C.R.S.;
- An authority created by a municipality for the purpose of carrying out a development plan pursuant to section 29-4-306, C.R.S., as authorized in sections 29-4-306 (2) and 29-4-307 (1)(a), C.R.S.;
- A metropolitan recreation district or park and recreation district organized under article 1 of title 32, C.R.S., or a municipal board given charge of a recreation system as authorized in sections 29-7-104 and 32-1-1005 (1)(c), C.R.S.;
- An improvement district created by a county pursuant to part 5 of article 20 of title 30, C.R.S., as authorized in section 30-20-512 (1)(i), C.R.S.;
- An urban renewal authority created pursuant to section 31-25-104, C.R.S., as authorized in sections 31-25-105 (1)(e) and 31-25-105.5, C.R.S., and in accordance with the vesting requirements specified in article 7 of this title;
- An improvement district created by a municipality pursuant to part 6 of article 25 of title 31, C.R.S., as authorized in section 31-25-611 (1)(i), C.R.S.;
- A board of water and sewer commissioners created by the governing body of a municipality pursuant to section 31-35-501, C.R.S., as authorized in sections 31-35-511 and 31-35-512 (1)(g), C.R.S.;
- A fire protection district as authorized in section 32-1-1002 (1)(b), C.R.S.;
- A metropolitan district as authorized in section 32-1-1004 (4), C.R.S.;
- A sanitation, water and sanitation, or water district as authorized in section 32-1-1006 (1)(f), C.R.S.;
- A tunnel district as authorized in section 32-1-1008 (1)(c), C.R.S.;
- A water and sanitation district organized under part 4 of article 4 of title 32, C.R.S., as authorized in section 32-4-406 (1)(j), C.R.S.;
- A metropolitan sewage district organized under the provisions of part 5 of article 4 of title 32, C.R.S., as authorized in section 32-4-502 (5) and 32-4-510 (1)(j), C.R.S.;
- A regional service authority formed in accordance with the provisions of section 17 of article XIV of the state constitution and article 7 of title 32, C.R.S., as authorized in section 32-7-113 (1)(k), C.R.S.;
- The regional transportation district created in section 32-9-105, C.R.S., as authorized in sections 32-9-103 (2), 32-9-119 (1)(k), and 32-9-161, C.R.S.;
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The urban drainage and flood control district created in section 32-11-201, C.R.S., as authorized in sections 32-11-104 (10), 32-11-216 (1)(g), 32-11-220 (1)(b), 32-11-615 (2), and 32-11-663, C.R.S.;
(XX.5) The Fountain creek watershed, flood control, and greenway district created in section 32-11.5-201, C.R.S., as authorized in section 32-11.5-205 (1)(n)(I), C.R.S.;
- A mine drainage district organized under the provisions of article 51 of title 34, C.R.S., as authorized in section 34-51-123, C.R.S.;
- A conservation district created pursuant to article 70 of title 35, C.R.S., as authorized in section 35-70-108 (1)(e), C.R.S.;
- A conservancy district created under articles 1 to 8 of title 37, C.R.S., as authorized in sections 37-2-105 (7), 37-3-103 (1)(h), 37-3-116, 37-3-117, and 37-4-109 (3), C.R.S.;
- A drainage district organized pursuant to article 20 of title 37, C.R.S., as authorized in sections 37-21-114 (1), 37-23-103, and 37-24-104, C.R.S.;
- The Grand Junction drainage district created in section 37-31-102 (1), C.R.S., as authorized in sections 37-31-119 and 37-31-152, C.R.S.;
- An irrigation district organized under the provisions of article 41 of title 37, C.R.S., as authorized in sections 37-41-113 (3) and (5), 37-41-114, 37-41-128, and 37-43-207, C.R.S.;
- An irrigation district organized under the provisions of article 42 of title 37, C.R.S., as authorized in sections 37-42-113 (1) and (2) and 37-43-207, C.R.S.;
- An internal improvement district established under the provisions of article 44 of title 37, C.R.S., as authorized in sections 37-44-103 (1)(b), 37-44-108 (1) and (2), 37-44-109, and 37-44-141, C.R.S.;
- A water conservancy district organized under the provisions of article 45 of title 37, C.R.S., as authorized in sections 37-45-118 (1)(c) and 37-45-119, C.R.S.;
- A water activity enterprise, as defined in section 37-45.1-102 (4), C.R.S., exercising the legal authority to exercise the power of eminent domain of the district that owns it in relation to a water activity, as defined in section 37-45.1-102 (3), C.R.S., as authorized in section 37-45.1-103 (4), C.R.S.;
- The Colorado river water conservation district created in section 37-46-103, C.R.S., as authorized in section 37-46-107 (1)(i), C.R.S.;
- The southwestern water conservation district created in section 37-47-103, C.R.S., as authorized in section 37-47-107 (1)(i), C.R.S.;
- The Rio Grande water conservation district created in section 37-48-102, C.R.S., as authorized in section 37-48-105 (1)(i), C.R.S.;
- The Republican river water conservation district created in section 37-50-103 (1), C.R.S., as authorized in section 37-50-107 (1)(j), C.R.S.;
- The Colorado water conservation board created in section 37-60-102, C.R.S., as authorized in section 37-60-106 (1)(j), C.R.S.;
- The Colorado water resources and power development authority created in section 37-95-104 (1), C.R.S., as authorized in section 37-95-106 (1)(n) and (1)(v), C.R.S.;
- A public airport authority created under the provisions of article 3 of title 41, C.R.S., as authorized in section 41-3-106 (1)(j), C.R.S.;
- A public highway authority created pursuant to section 43-4-504, C.R.S., as authorized in sections 43-4-505 (1)(a)(IV) and 43-4-506 (1)(h), C.R.S.;
- A regional transportation authority created pursuant to section 43-4-603, as authorized in section 43-4-604 (1)(a)(IV);
- The Colorado aeronautical board created in section 43-10-104, as authorized in section 43-10-106;
- The front range passenger rail district created in section 32-22-103 (1), as authorized in section 32-22-106 (1)(k); and
- The Colorado electric transmission authority created in section 40-42-103 (1) as authorized in section 40-42-104 (1)(p).
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The following types of corporations and persons, in accordance with all procedural and other requirements specified in this article and articles 2 to 7 of this title 38 and to the extent and within any time frame specified in the applicable authorizing provision of the state constitution or statute may exercise the power of eminent domain:
- A person or corporation that needs to exercise the power of eminent domain in order to acquire any right-of-way across public, private, or corporate lands for the construction of ditches, canals, and flumes for the purposes of conveying water for domestic purposes, for the irrigation of agricultural lands, for mining and manufacturing purposes, or for drainage, as authorized in section 7 of article XVI of the state constitution;
- A pipeline company as authorized in article 5 of this title and sections 7-43-102, 34-48-105, 34-48-111, 38-1-101.5, 38-1-101.7, 38-2-101, 38-4-102, and 38-4-107, C.R.S.;
- A cemetery company organized pursuant to section 7-47-101, C.R.S., as authorized in section 7-47-102, C.R.S.;
- A cemetery authority, as defined in section 6-24-101 (3), as authorized in section 6-24-104;
- A public utility as authorized in section 32-12-125, C.R.S.;
- An owner or agent of an owner of coal lands lying on two or more sides of the property of another as authorized in section 34-31-101, C.R.S.;
- A person who requires a right-of-way or property in order to bring water or air into a mine or convey tailings and wastes from a mining operation, construct or maintain a flume, ditch, pipeline, tram, tramway, or pack trail over or through mining claims, or follow a mineral-bearing vein or lode into the property of another person pursuant to an established right to do so as authorized in sections 34-48-101, 34-48-105, 34-48-107, 34-48-110, and 34-48-111, C.R.S.;
- A natural gas public utility, as defined in section 34-64-102 (3), C.R.S., as authorized in section 34-64-103, C.R.S.;
- A person who owns a water right or conditional water right as authorized in article 86 of title 37, C.R.S.;
- A person who needs to create or operate a water storage facility in order to realize the person's right to appropriate water as authorized in section 37-87-101, C.R.S.;
- A person who, under general laws or special charter, requires and is entitled to private property of another for private use, private ways of necessity, or for reservoirs, drains, flumes, or ditches on or across the lands of others for agricultural, mining, milling, domestic, or sanitary purposes as authorized in section 38-1-102;
- A corporation formed for the purpose of constructing a road, ditch, reservoir, pipeline, bridge, ferry, tunnel, telegraph line, railroad line, electric line, electric plant, telephone line, or telephone plant as authorized in section 38-2-101;
- Landowners who wish to construct a drain to carry off surplus water as authorized in section 38-2-103;
- A mineral landowner who needs to construct a connecting railroad spur over another landowner's property as authorized in section 38-2-104;
- A tunnel company as authorized in sections 38-2-101, 38-4-101, 38-4-107, and 38-4-110;
- An electric power company as authorized in sections 38-2-101, 38-4-101, and 38-4-107;
- A tramway company as authorized in sections 38-4-104 and 38-4-107;
- A telegraph, telephone, electric light power, gas, or pipeline company as authorized in sections 38-2-101 and 38-5-105 and limited by section 38-5-108; and
- A person, company, corporation, or association that has been granted an electric railroad franchise as authorized in section 40-24-102, C.R.S.
Source: L. 2006: Entire part added, p. 353, § 1, effective August 7. L. 2007: (1)(c) amended, p. 550, § 6, effective August 3. L. 2008: (1)(d) and (1)(e) amended, p. 2055, § 13, effective July 1. L. 2009: (1)(b)(IV)(J) amended and (1)(b)(IV)(J.5) added, (SB 09-108), ch. 5, p. 54, § 16, effective March 2; (1)(f)(XX.5) added, (SB09-141), ch. 194, p. 875, § 2, effective April 30. L. 2010: (1)(b)(IV)(F) amended, (SB 10-175), ch. 188, p. 807, § 83, effective April 29. L. 2011: (1)(b)(IV)(F) amended, (HB 11-1303), ch. 264, p. 1173, § 87, effective August 10. L. 2015: (1)(b)(IV)(E) repealed, (HB 15-1145), ch. 79, p. 228, § 10, effective August 5. L. 2017: IP(2) and (2)(d) amended, (HB 17-1244), ch. 239, p. 983, § 3, effective August 9. L. 2019: IP(1) and (1)(b)(IV)(I) amended, (SB 19-017), ch. 67, p. 244, § 3, effective August 2. L. 2021: IP(1)(f), (1)(f)(XXXIX), and (1)(f)(XL) amended and (1)(f)(XLII) added, (SB 21-072), ch. 329, p. 2127, § 8, effective June 24; (1)(f)(XXXIX) and (1)(f)(XL) amended and (1)(f)(XLI) added, (SB 21-238), ch. 401, p. 2673, § 3, effective June 30; (1)(b)(IV)(A) amended, (SB 21-059), ch. 136, p. 751, § 138, effective October 1.
Editor's note: Section 11 of chapter 329 (SB 21-072), Session Laws of Colorado 2021, provides that the act changing this section applies to conduct occurring on or after June 24, 2021.
Cross references: For the legislative declaration in SB 19-017, see section 1 of chapter 67, Session Laws of Colorado 2019.
ARTICLE 2 SPECIFIC GRANTS OF POWER
Section
38-2-101. Who may condemn real estate, rights-of-way, or other rights - additional requirements for private toll roads and toll highways.
- If any corporation formed for the purpose of constructing a road, ditch, reservoir, pipeline, bridge, ferry, tunnel, telegraph line, railroad line, electric line, electric plant, telephone line, or telephone plant is unable to agree with the owner for the purchase of any real estate or right-of-way or easement or other right necessary or required for the purpose of any such corporation for transacting its business or for any lawful purpose connected with the operations of the company, the corporation may acquire title to such real estate or right-of-way or easement or other right in the manner provided by law for the condemnation of real estate or right-of-way. Any ditch, reservoir, or pipeline company, in the same manner, may condemn and acquire the right to take and use any water not previously appropriated.
- Notwithstanding the provisions of subsection (1) of this section, a toll road or toll highway company may not condemn real estate or right-of-way, but the department of transportation may exercise, subject to the conditions and limitations set forth in sections 7-45-104 and 43-1-1202 (1)(f), C.R.S., the power of eminent domain for purposes of acquiring property and rights-of-way necessary for the completion of a toll road or toll highway open to the public that is incorporated into the comprehensive statewide transportation plan prepared pursuant to section 43-1-1103 (5), C.R.S., and is being undertaken as a public-private initiative between the department and the company. Such a toll road or toll highway company shall provide written notice of its intent to construct a toll road or toll highway as required by section 7-45-108 (2), C.R.S.
- Nothing in this section shall be construed to authorize any toll road or toll highway company to construct a toll road or toll highway through, in, upon, under, or over any street or alley of any city, incorporated town, county, or city and county without first obtaining the consent of the municipal or county authorities having power to give the consent of the city, incorporated town, county, or city and county.
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- A political subdivision may levy a tax, fee, or charge on a toll road or toll highway company for any right or privilege of constructing or operating a toll road or toll highway such as a street or public highway construction permit fee or an impact fee or other similar development charge designed to fund expenditures by the political subdivision on capital facilities needed to serve the toll road or toll highway, but shall only levy a construction permit fee to the extent that the permit fee applies to all persons seeking a construction permit.
- All permit fees, impact fees, or other similar development charges levied by a political subdivision on a toll road or toll highway company constructing or operating a toll road or toll highway shall be no greater than necessary to defray the costs directly incurred by the political subdivision in providing services, and, in the case of impact fees or other development charges, shall be no greater than necessary to defray impacts directly related to the toll road or toll highway. The fees and charges shall also be reasonably related in time to the incurrence of the impacts or costs. In any controversy concerning the appropriateness of a fee or charge, the political subdivision shall have the burden of proving that the fee or charge is no greater than necessary to defray the direct impacts or costs incurred by the political subdivision. All costs of construction shall be borne by the toll road or toll highway company constructing or operating the toll road or toll highway.
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As used in this section, unless the context otherwise requires:
- (Deleted by amendment, L. 2008, p. 1712 , § 9, effective June 2, 2008.)
- "Toll road or toll highway" shall have the meaning set forth in section 7-45-102 (8) , C.R.S.
- "Toll road or toll highway company" shall have the meaning set forth in section 7-45-102 (9) , C.R.S.
Source: G.L. § 304. G.S. § 338. L. 1891: p. 98, § 3. R.S. 08: § 2461. C.L. § 6362. CSA: C. 61, § 52. L. 52: p. 109, § 1. CRS 53: § 50-2-1. C.R.S. 1963: § 50-2-1. L. 79: Entire section amended, p. 1381, § 2, effective July 1. L. 2006: (2), (3), and (4) amended and (5) added, p. 1769, § 2, effective June 6; entire section amended, p. 546, § 1, effective August 7. L. 2008: (2) and (5)(a) amended, p. 1712, § 9, effective June 2.
Cross references: For the taking of private property for private use, see § 14 of art. II, Colo. Const.; for taking property for public use, see § 15 of art. II, Colo. Const.; for the right-of-way of pipeline companies, see § 7-43-102.
ANNOTATION
Law reviews. For article, "Eminent Domain in Colorado", see 29 Dicta 313 (1952). For article, "Recent Developments in Colorado Eminent Domain", see 27 Rocky Mt. L. Rev. 23 (1954). For article, "Condemnation and Redevelopment", see 28 Rocky Mt. L. Rev. 535 (1956). For article, "Assemblage, Design and Construction for Real Estate Developments", see 11 Colo. Law. 2297 (1982).
Section not offensive to constitutions. This section does not offend either § 25 of art. V, Colo. Const. or the fourteenth amendment of the federal constitution. Miller v. Pub. Serv. Co., 129 Colo. 513 , 272 P.2d 283 (1954), appeal dismissed, 348 U.S. 923, 75 S. Ct. 338, 99 L. Ed. 724 (1955).
De facto corporation may exercise power of eminent domain. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).
Irrigation districts fall within scope of section. Riverside Irrigation Dist. v. Lamont, 194 Colo. 320 , 572 P.2d 151 (1977).
Applied in F.C. Ayres Mercantile Co. v. Union P.R.R., 16 F.2d 395 (8th Cir. 1926); Pine Martin Mining Co. v. Empire Zinc Co., 90 Colo. 529 , 11 P.2d 221 (1932); Otero Irrigation Dist. v. Enderud, 122 Colo. 136 , 220 P.2d 862 (1950); Potashnik v. Pub. Serv. Co., 126 Colo. 98 , 247 P.2d 137 (1952); Town of Glendale v. City & County of Denver, 137 Colo. 188 , 322 P.2d 1053 (1958); Buck v. District Court, 199 Colo. 344 , 608 P.2d 350 (1980).
38-2-102. Entering lands to survey - liability.
Any corporation formed for the purpose of constructing a road, ditch, tunnel, or railroad may cause such examination and survey as may be necessary to the selection of the most advantageous route and, for such purpose, by its officers, agents, or servants may enter upon the lands of any person or corporation, but subject to liability for all actual damages which are occasioned thereby.
Source: G.L. § 305. G.S. § 339. R.S. 08: § 2462. C.L. § 6363. CSA: C. 61, § 53. CRS 53: § 50-2-2. C.R.S. 1963: § 50-2-2.
38-2-103. Proceedings to drain.
Whenever the owners of any parcels of land desire to construct a drain for the purpose of carrying off surplus water and they cannot agree among themselves or with the parties who own land below, through which it is expedient to carry the drain in order to reach a natural waterway, then proceedings may be had in the same manner as in cases of eminent domain affecting irrigation works of diversion. The rights-of-way for such drains shall be regarded as equal to those for irrigation canals.
Source: L. 1893: p. 258, § 1. R.S. 08: § 2463. C.L. § 6364. CSA: C. 61, § 54. CRS 53: § 50-2-3. C.R.S. 1963: § 50-2-3.
38-2-104. Mineral landowner may construct connecting railway spur.
It is lawful for the owner of any coal or other mineral lands, not contiguous to any railroad in this state, desiring to connect such lands with any railroad by means of a connecting railway spur, not to exceed fifteen miles in length, to construct and operate such connecting railway spur across any other lands lying intermediate between such coal or other mineral lands and any railroad with which such connection may be desired. In case the owner of such coal or other mineral lands is unable to agree with the owner of such intermediate lands for the purchase of any necessary rights-of-way across such intermediate lands for the purpose of constructing and operating such connecting railway spur as to the purchase price on such rights-of-way, then the owner of such coal or other mineral lands may exercise the right of eminent domain and condemn any rights-of-way across such intermediate lands necessary to make such connection and to construct and operate such connecting railway spur, and it may acquire title to such rights-of-way in the manner provided by law for the condemnation of lands for rights-of-way by railroad companies. All the laws of this state relating to the manner of exercising the right of eminent domain by railroad companies are hereby made applicable to such proceedings.
Source: L. 01: p. 237, § 1. R.S. 08: § 2464. C.L. § 6365. CSA: C. 61, § 55. CRS 53: § 50-2-4. C.R.S. 1963: § 50-2-4.
38-2-105. Higher education governing boards have right of eminent domain.
The regents of the university of Colorado, the board of governors of the Colorado state university system for Colorado state university and Colorado state university - Pueblo, the board of trustees for Fort Lewis college, the board of trustees of the Colorado school of mines, the board of trustees for the university of northern Colorado, the board of trustees for Adams state university, the board of trustees for Colorado Mesa university, the board of trustees for Western Colorado university, and the board of trustees for Metropolitan state university of Denver have the power to acquire real property, which they may deem necessary, by the exercise of eminent domain through condemnation proceedings in accordance with law.
Source: L. 37: p. 402, § 1. CSA: C. 61, § 56. CRS 53: § 50-2-5. L. 61: pp. 708, 709, §§ 2, 3. C.R.S. 1963: § 50-2-5. L. 2002: Entire section amended, p. 1249, § 27, effective August 7. L. 2003: Entire section amended, p. 2002, § 65, effective May 22; entire section amended, p. 792, § 15, effective July 1. L. 2004: Entire section amended, p. 1205, § 81, effective August 4. L. 2010: Entire section amended, (HB 10-1375), ch. 327, p. 1515, § 1, effective May 27. L. 2011: Entire section amended, (SB 11-265), ch. 292, p. 1368, § 26, effective August 10. L. 2012: Entire section amended, (HB 12-1080), ch. 189, p. 761, § 25, effective May 19; entire section amended, (SB 12-148), ch. 125, p. 429, § 20, effective July 1; entire section amended, (HB 12-1331), ch. 254, p. 1272, § 20, effective August 1. L. 2019: Entire section amended, (HB 19-1178), ch. 400, p. 3547, § 20, effective July 1.
Editor's note:
- Amendments to this section by House Bill 03-1093 and House Bill 03-1344 were harmonized.
- Amendments to this section by House Bill 12-1080, House Bill 12-1331, and Senate Bill 12-148 were harmonized.
Cross references: (1) For the legislative declaration in the 2011 act amending this section, see section 1 of chapter 292, Session Laws of Colorado 2011.
(2) For the legislative declaration in the 2012 act amending this section, see section 1 of chapter 125, Session Laws of Colorado 2012.
ARTICLE 3 CONDEMNATION OF PUBLIC LANDS
Section
38-3-101. Condemning public land - petition.
Whenever any corporation authorized to appropriate for a public use by the exercise of the right of eminent domain lands, rights-of-way, or other rights or easements in lands requires, needs, or desires to appropriate lands, rights-of-way, or other rights or easements in lands which belong to the United States, the state of Colorado, or any other state or sovereignty, such corporation, for the purpose of having such lands, rights-of-way, or other rights or easements appropriated to such use and for determining the compensation to be paid to such owner therefor, may present a petition to the district court in each of the counties in which such lands, or any part thereof, are located, describing the desired property, giving the name of the owner thereof, and stating by whom and for what purpose it is proposed to be appropriated and that it is needed and required by the petitioner for the public use to which it is proposed to devote the same, and praying that such court appropriate such property to its use and determine the compensation to be paid to the owner therefor.
Source: L. 15: p. 229, § 1. C.L. § 6331. CSA: C. 61, § 21. CRS 53: § 50-3-1. C.R.S. 1963: § 50-3-1. L. 64: p. 266, § 167.
ANNOTATION
Law reviews. For article, "Eminent Domain in Colorado", see 29 Dicta 313 (1952).
This section does not grant any authority to corporations that have power of eminent domain to condemn state lands but merely establishes the procedures by which to do so. Town and water and sanitation district were not authorized to condemn state-owned property to determine feasibility of recreation and water storage project. Town of Parker v. Colo. Div. of Parks, 860 P.2d 584 (Colo. App. 1993).
Applied in Denver & R.G.R.R. v. Wilson, 28 Colo. 6 , 62 P. 843 (1900) (decided prior to section's earliest source, L. 15, p. 229 , § 1).
38-3-102. Notice - service - publication.
The court shall fix a time for the first hearing upon said petition. Notice directed to such owner of the filing of the petition and its object and containing a description of the property and of the time and place of the first hearing shall be published by such corporation in one or more newspapers of general circulation in the state of Colorado once a week for six weeks prior to the time set for the first hearing. At least two weeks before the time set for the first hearing, a copy of said notice shall be served on any party who is in actual possession of the land, and, in case the state is the owner, on the attorney general, and, in case the United States is the owner, on the United States attorney for the district in which the land or any part thereof is situated. The copy of such notice shall be deemed to have been sufficiently served if delivered during the usual hours of business at the residence of the party in possession or at the office of the attorney general or the United States attorney, as the case may be.
Source: L. 15: p. 230, § 2. C.L. § 6332. CSA: C. 61, § 22. CRS 53: § 50-3-2. C.R.S. 1963: § 50-3-2. L. 76: Entire section amended, p. 607, § 33, effective July 1.
Cross references: For publication of legal notices, see part 1 of article 70 of title 24.
38-3-103. Hearing - findings filed - published.
Upon proof being filed of the publication of such notice and of such personal service where required, the court, at the time and place therein fixed or to which the hearing may be adjourned, shall proceed to hear the allegations and proofs of all persons interested which touch the matters committed to it, and it shall regulate the order of proof as it may deem best. The testimony taken by it shall be under oath. The court shall determine the truth of the matters alleged and set forth in the petition and also the compensation to be paid to such owner for the lands, rights-of-way, or other rights or easements in lands to be appropriated. In the event that the petitioner has theretofore taken possession of such lands, rights-of-way, or other rights or easements in lands, the value thereof shall be determined without considering the value of any improvements that may have been constructed by such corporation and as of the date when such corporation took possession. The court shall file among its records its findings in writing and shall give notice to the petitioner that its findings have been filed. The petitioner shall cause a notice to be published in one or more newspapers of general circulation in the state of Colorado once a week for two weeks, setting forth that the findings of the court have been filed and stating the amount of the compensation fixed by the court. If the owner has appeared in said proceeding by attorney, a copy of said notice shall be served prior to the last publication of said notice upon the attorney so appearing.
Source: L. 15: p. 230, § 3. C.L. § 6333. CSA: C. 61, § 23. CRS 53: § 50-3-3. C.R.S. 1963: § 50-3-3.
38-3-104. Order - copy recorded.
In case no appeal is taken within thirty days after the last publication of notice that the findings of the court have been filed, the court, upon the payment by the petitioner to the clerk of such court of the compensation fixed by the court and upon motion of the petitioner, shall enter an order appropriating the lands, rights-of-way, or other rights or easements in lands, as the case may be, to the petitioner. Thereafter, the same shall be the property of the petitioner, and a certified copy of the order may be filed for record with the county clerk and recorder of the county in which such lands, rights-of-way, or other rights or easements in lands are located. Such record shall be notice, and a certified copy of such record shall be evidence of the title and rights of the petitioner as therein set forth. The clerk of said court shall notify the owner of the property of the payment of the compensation fixed by the court and shall pay the same to such owner on demand.
Source: L. 15: p. 231, § 4. C.L. § 6334. CSA: C. 61, § 24. CRS 53: § 50-3-4. C.R.S. 1963: § 50-3-4.
38-3-105. Judgment - appellate review.
Upon the payment into court of the compensation assessed, the court shall give judgment appropriating the lands, rights-of-way, or other rights or easements in lands, as the case may be, to the petitioner, and thereafter the same shall be the property of the petitioner. Either party to the action may appeal from the judgment in like manner and with like effect as in ordinary condemnation cases. Such appeal shall not stay the proceedings so as to prevent the petitioner from taking such lands into its possession and using them for the purposes of the petitioner or from proceeding to exercise the rights-of-way or other rights or easements appropriated.
Source: L. 15: p. 231, § 5. C.L. § 6335. CSA: C. 61, § 25. CRS 53: § 50-3-5. C.R.S. 1963: § 50-3-5.
ARTICLE 4 RIGHTS-OF-WAY: DESIGNATED COMMON CARRIERS
Section
38-4-101. Tunnel companies.
Any foreign or domestic corporation organized or chartered for the purpose, among other things, of carrying, transmitting, or delivering ores, minerals, or other property for hire by means of a tunnel shall have the right-of-way for the construction, operation, and maintenance of any such tunnel of sufficient size and dimensions for such purpose through or over any patented or unpatented mines, mining claims, or other lands without the consent of the owner thereof, if such right-of-way is necessary to reach the place to or from which it is proposed to carry such ores, minerals, or other property.
Source: L. 07: p. 282, § 1. R.S. 08: § 2435. C.L. § 6336. CSA: C. 61, § 26. CRS 53: § 50-4-1. C.R.S. 1963: § 50-4-1.
ANNOTATION
Law reviews. For article, "Eminent Domain in Colorado", see 29 Dicta 313 (1952).
Applied in Tanner v. Treasury Tunnel, Mining & Reduction Co., 35 Colo. 593, 83 P. 464, 4 L.R.A. (n.s.) 106 (1906); Sternberger v. Continental Mines Power & Reduction Co., 68 Colo. 129, 186 P. 910 (1920).
38-4-102. Pipeline companies.
Any foreign or domestic corporation organized or chartered for the purpose, among other things, of conducting or maintaining a pipeline for the transmission of power, water, air, or gas for hire to any mine or mining claim or for any manufacturing, milling, mining, or public purpose shall have the right-of-way for the construction, operation, and maintenance of such pipeline for such purpose through any lands without the consent of the owner thereof, if such right-of-way is necessary for the purpose for which said pipeline is used.
Source: L. 07: p. 283, § 2. R.S. 08: § 2436. C.L. § 6337. CSA: C. 61, § 27. CRS 53: § 50-4-2. C.R.S. 1963: § 50-4-2.
Cross references: For the right-of-way of pipeline companies, see § 7-43-102.
38-4-103. Electric power companies.
- Any foreign or domestic corporation organized or chartered for the purpose, among other things, of conducting and maintaining electric power lines for providing power or light by means of electricity for hire has a right-of-way for the construction, operation, and maintenance of electric power lines through any patented or unpatented mine or mining claim or other land without the consent of the owner of the patented or unpatented mine or mining claim or other land, if the right-of-way is necessary for the purposes proposed.
-
An electric utility, as defined in section 40-15-601 (6), exercising its rights under subsection (1) of this section may, in accordance with part 6 of article 15 of title 40:
- Install or allow the installation of any attached facility, as that term is defined in section 40-15-601 (1); and
- Exercise any rights available to the electric utility under part 6 of article 15 of title 40 in connection with the installation.
Source: L. 07: p. 283, § 3. R.S. 08: § 2437. C.L. § 6338. CSA: C. 61, § 28. CRS 53: § 50-4-3. C.R.S. 1963: § 50-4-3. L. 2019: Entire section amended, (SB 19-107), ch. 424, p. 3713, § 2, effective August 2.
38-4-104. Tramway companies.
Any foreign or domestic corporation organized or chartered for the purposes, among other things, of conducting and maintaining for hire an aerial tramway for transporting ores, minerals, waste materials, or other property from any mine or mining claim by means of an aerial tramway shall have the right-of-way for the construction, operation, and maintenance for such tramway and for all necessary towers and supports thereof over and across any intervening mining claims, lands, or premises without the consent of the owner thereof, if such right-of-way is necessary for the purposes proposed.
Source: L. 07: p. 283, § 4. R.S. 08: § 2438. C.L. § 6339. CSA: C. 61, § 29. CRS 53: § 50-4-4. C.R.S. 1963: § 50-4-4.
38-4-105. Common carriers - fees.
Any such corporations organized or chartered for any or all of the purposes mentioned in sections 38-4-101 to 38-4-104 shall be deemed common carriers and shall fix and charge only a reasonable and uniform rate to all persons who desire the use of any such tunnel, pipeline, electric power transmission lines, or aerial tramway.
Source: L. 07: p. 283, § 5. R.S. 08: § 2439. C.L. § 6340. CSA: C. 61, § 30. CRS 53: § 50-4-5. C.R.S. 1963: § 50-4-5.
38-4-106. Distance governs rate.
In fixing the rate to be charged its patrons, as provided in section 38-4-105, any such transportation tunnel company or aerial tramway company shall take into consideration the distance over which the materials to be transported are carried.
Source: L. 07: p. 284, § 6. R.S. 08: § 2440. C.L. § 6341. CSA: C. 61, § 31. CRS 53: § 50-4-6. C.R.S. 1963: § 50-4-6.
38-4-107. Compensation.
Any such corporation shall make due and just compensation for such right-of-way to the owners of the property through which it is proposed to construct, operate, and maintain such tunnel, pipeline, electric transmission lines, or aerial tramway. When the parties cannot agree upon such right-of-way and the amount of compensation to be paid the owner of such property, the same shall be determined in the manner provided by law for the exercise of the right of eminent domain.
Source: L. 07: p. 284, § 7. R.S. 08: § 2441. C.L. § 6342. CSA: C. 61, § 32. CRS 53: § 50-4-7. C.R.S. 1963: § 50-4-7.
38-4-108. Owner entitled to minerals.
The owner of any vein, lode, mining claim, or other property over which it is proposed to construct a tunnel, as provided in this article, shall have the right to all ores and minerals taken from such vein or lode at the intersection thereof with such tunnel.
Source: L. 07: p. 284, § 8. R.S. 08: § 2442. C.L. § 6343. CSA: C. 61, § 33. CRS 53: § 50-4-8. C.R.S. 1963: § 50-4-8.
38-4-109. Owner to have access to tunnel.
The owner of such vein or lode so intersected shall have the right, at any reasonable time and from time to time, upon application to the superintendent or other managing officer of such tunnel corporation, to enter such tunnel with his surveyors and inspectors for the purpose of inspecting and making a survey of any such vein or lode. The owner of such vein or lode and his employees shall have the right of ingress and egress into and out of said tunnel at all reasonable times.
Source: L. 07: p. 284, § 9. R.S. 08: § 2443. C.L. § 6344. CSA: C. 61, § 34. CRS 53: § 50-4-9. C.R.S. 1963: § 50-4-9.
38-4-110. No right to vein matter acquired.
Nothing in this article shall be so construed as to give such tunnel corporation the right to follow any vein or lode without the consent of the owner. When any vein or lode is encountered in driving any such tunnel, such tunnel corporation shall only have the right-of-way to cross such vein or lode at such angle as may be suitable for the convenient operation of the tunnel.
Source: L. 07: p. 284, § 10. R.S. 08: § 2444. C.L. § 6345. CSA: C. 61, § 35. CRS 53: § 50-4-10. C.R.S. 1963: § 50-4-10.
38-4-111. Tunnel company to file map.
Any such tunnel corporation desiring to avail itself of the benefit of this article shall file with the county clerk and recorder of the county in which it is proposed to operate a map or survey of the proposed tunnel for which it desires a right-of-way, together with a statement showing the route of the proposed tunnel and the patented or unpatented mining claims or other property through which it is proposed to construct the same, and may file supplementary maps and surveys upon any lawful change of its proposed line of tunnel.
Source: L. 07: p. 284, § 11. R.S. 08: § 2445. C.L. § 6346. CSA: C. 61, § 36. CRS 53: § 50-4-11. C.R.S. 1963: § 50-4-11.
38-4-112. Pipeline company to file map.
Any such pipeline corporation desiring to avail itself of the benefit of this article shall file with the county clerk and recorder of the county in which it is proposed to operate a map or survey of the proposed line for which it desires a right-of-way, together with a statement showing the route of the proposed pipeline and the patented or unpatented mining claims or other property through which it is proposed to construct the same, and may file supplementary maps and surveys upon any lawful change of its proposed line.
Source: L. 07: p. 285, § 12. R.S. 08: § 2446. C.L. § 6347. CSA: C. 61, § 37. CRS 53: § 50-4-12. C.R.S. 1963: § 50-4-12.
38-4-113. Power company to file map.
Any such electric power transmission corporation desiring to avail itself of the benefit of this article shall file with the county clerk and recorder of the county in which it proposes to operate a map or survey of the proposed lines for which it desires a right-of-way, together with a statement showing the route of the proposed lines and the patented or unpatented mining claims or other property through which it is proposed to construct the same, and may file supplementary maps and surveys upon any lawful change of its proposed lines.
Source: L. 07: p. 285, § 13. R.S. 08: § 2447. C.L. § 6348. CSA: C. 61, § 38. CRS 53: § 50-4-13. C.R.S. 1963: § 50-4-13.
38-4-114. Tramway company to file map.
Any such aerial tramway corporation desiring to avail itself of the benefit of this article shall file with the county clerk and recorder of the county in which it is proposed to operate a map or survey of the proposed route for which it desires a right-of-way, together with a statement showing the route of the proposed tramway and the patented or unpatented mining claims or other property over or across which it is proposed to construct the same, and may file supplementary maps and surveys upon any lawful change of its proposed route.
Source: L. 07: p. 285, § 14. R.S. 08: § 2448. C.L. § 6349. CSA: C. 61, § 39. CRS 53: § 50-4-14. C.R.S. 1963: § 50-4-14.
38-4-115. Companies to transport ore - toll.
Any such tunnel or aerial tramway corporation, subject to its reasonable regulations, shall accept from the owners of mining properties all ores, waste materials, and other materials loaded in cars and delivered to it along its line of tunnel or aerial tramways for transportation and afford facilities for the handling of the same at such place upon payment to it at the rates established and fixed by such tunnel or aerial tramway corporation.
Source: L. 07: p. 285, § 15. R.S. 08: § 2449. C.L. § 6350. CSA: C. 61, § 40. CRS 53: § 50-4-15. C.R.S. 1963: § 50-4-15.
38-4-116. Companies to furnish power - fees.
Any such pipeline corporation or electric power transmission corporation, subject to its reasonable regulations, shall furnish to the owners of mining properties power from said pipelines or electric power transmission lines upon payment to it at the rates established and fixed by such corporation.
Source: L. 07: p. 286, § 16. R.S. 08: § 2450. C.L. § 6351. CSA: C. 61, § 41. CRS 53: § 50-4-16. C.R.S. 1963: § 50-4-16.
ARTICLE 5 RIGHTS-OF-WAY: TRANSMISSION COMPANIES
Section
38-5-101. Use of public highways.
Any domestic or foreign electric light power, gas, or pipeline company authorized to do business under the laws of this state or any city or town owning electric power producing or distribution facilities shall have the right to construct, maintain, and operate lines of electric light, wire or power or pipeline along, across, upon, and under any public highway in this state, subject to the provisions of this article. Such lines of electric light, wire or power, or pipeline shall be so constructed and maintained as not to obstruct or hinder the usual travel on such highway.
Source: L. 07: p. 385, § 1. R.S. 08: § 2451. C.L. § 6352. CSA: C. 61, § 42. L. 39: p. 365, § 1. CRS 53: § 50-5-1. L. 63: p. 479, § 1. C.R.S. 1963: § 50-5-1. L. 96: Entire section amended, p. 303, § 2, effective April 12.
ANNOTATION
Law reviews. For article, "Eminent Domain in Colorado", see 29 Dicta 313 (1952). For comment on Englewood v. Mountain States Tel. & Tel. Co., 163 Colo. 400 , 431 P.2d 40 (1967), appearing below, see 40 U. Colo. L. Rev. 167 (1967).
Section within constitutional boundaries. The provisions of this section are well within the boundaries of art. XXV, Colo. Const. City of Englewood v. Mtn. States Tel. & Tel. Co., 163 Colo. 400 , 431 P.2d 40 (1967).
Right granted subject to reasonable changes by municipal authorities. The right granted in this section is qualified and subject to the power of the municipal authorities to make such reasonable changes in the grade or an improvement therein as in their judgment the public interests demanded and required. Mtn. States Tel. & Tel. Co. v. Horn Tower Constr. Co., 147 Colo. 166 , 363 P.2d 175 (1961).
The provisions of this section are not applicable to grant a state franchise to continue using public highways when consent of a city was never obtained by a rural electric association for the use of the city's streets to expand its facilities. City of Greeley v. Poudre Valley R. Elec., 744 P.2d 739 (Colo. 1987), appeal dismissed for want of a properly presented federal question, 485 U.S. 949, 108 S. Ct. 1207, 99 L. Ed. 2d 409 (1988).
An intoxicated, speeding driver is not engaged in "usual travel" and, therefore, is not within the class of persons intended to be protected by this section. Jacque v. Pub. Serv. Co. of Colo., 890 P.2d 138 (Colo. App. 1994).
Applied in Sternberger v. Cont'l Mines Power & Reduction Co., 68 Colo. 129 , 186 P. 910 (1920);City of Northglenn v. City of Thornton, 193 Colo. 536 , 569 P.2d 319 (1977).
38-5-102. Right-of-way across state land.
Any domestic or foreign electric light power, gas, or pipeline company authorized to do business under the laws of this state, or any city or town owning electric power producing or distribution facilities shall have the right to construct, maintain, and operate lines of electric light wire or power or pipeline and obtain permanent right-of-way therefor over, upon, under, and across all public lands owned by or under the control of the state, upon the payment of such compensation and upon compliance with such reasonable conditions as may be required by the state board of land commissioners.
Source: L. 07: p. 385, § 2. R.S. 08: § 2452. C.L. § 6353. CSA: C. 61, § 43. L. 39: p. 365, § 2. CRS 53: § 50-5-2. L. 63: p. 479, § 2. C.R.S. 1963: § 50-5-2. L. 96: Entire section amended, p. 303, § 3, effective April 12.
38-5-103. Power of companies to contract.
- Such electric light power, gas, or pipeline company, or such city, town, or other local government shall have power to contract with any person or corporation, the owner of any lands or any franchise, easement, or interest therein over or under which the line of electric light wire power or pipeline is proposed to be laid or created for the right-of-way for the construction, maintenance, and operation of its electric light wires, pipes, poles, regulator stations, substations, or other property and for the erection, maintenance, occupation, and operation of offices at suitable distances for the public accommodation.
- An electric utility, as defined in section 40-15-601 (6), exercising its rights under subsection (1) of this section may, in accordance with part 6 of article 15 of title 40, install or allow the installation of any attached facility for commercial broadband service, as those terms are defined in section 40-15-601 (1) and (3), respectively.
Source: L. 07: p. 386, § 3. R.S. 08: § 2453. C.L. § 6354. CSA: C. 61, § 44. CRS 53: § 50-5-3. L. 63: p. 480, § 3. C.R.S. 1963: § 50-5-3. L. 96: Entire section amended, p. 303, § 4, effective April 12. L. 2019: Entire section amended, (SB 19-107), ch. 424, p. 3714, § 3, effective August 2.
38-5-104. Right-of-way across private lands.
- A telegraph, telephone, electric light, power, gas, or pipeline company, an electric transmission authority, or a city or town is entitled to the right-of-way over or under the land, property, privileges, rights-of-way, and easements of other persons and corporations and to the right to erect its poles, wires, pipes, regulator stations, substations, systems, and offices upon making just compensation therefor in the manner provided by law. When a right-of-way is taken under this section for an interstate electric transmission line, the court shall evaluate public purpose in light of the transmission system as a whole, including public use and benefits occurring either within Colorado or at a regional level. The rights granted by this section and section 38-5-105 to such electric light, power, gas, or pipeline companies or to such cities and towns shall not extend to the taking of any portion of the right-of-way of a railroad company, except to the extent of acquiring any necessary easement to cross the same or to serve such railroad company with electric light, power, or gas service. The rights granted by this section and section 38-5-105 to telegraph or telephone companies shall not extend to the taking of any portion of the right-of-way of a railroad company, except to the extent of acquiring any easement which does not materially interfere with the existing use by the railroad company, or except to the extent of acquiring any necessary easement to cross the same or to serve such railroad company with telegraph or telephone service.
- If any right-of-way is taken by such telegraph, telephone, electric light power, gas, or pipeline company, city or town over any portion of the right-of-way of a railroad company the taking party shall pay the entire cost of constructing its facilities along such right-of-way, including any expenses incurred by the railroad for inspection and flagging as reasonably necessary to avoid interference with safe operation of the railroad. The taking party shall also bear the entire cost, including the cost of such inspection and flagging, of removing, relocating, altering, or protecting any facility installed on right-of-way so taken if, at any time, such removal, relocation, alteration, or protection becomes reasonably necessary to avoid interference with the railroad company's ability to use its original right-of-way to operate its railroad efficiently and safely and to efficiently and safely serve existing, new, or potential railroad customers. The taking party shall indemnify the railroad company from all losses and expenses resulting from the negligence of the taking party, its successors or contractors, in connection with or related to such right-of-way. The taking party shall have no claim against the railroad for any loss resulting from damage to the taking party's telegraph or telephone facilities resulting from any unforeseen emergencies or acts of God such as derailment, explosions, collisions, or activities reasonably performed in repairing damages caused by such occurrences.
Source: L. 07: p. 386, § 4. R.S. 08: § 2454. C.L. § 6355. CSA: C. 61, § 45. CRS 53: § 50-5-4. L. 63: p. 480, § 4. C.R.S. 1963: § 50-5-4. L. 79: Entire section amended, p. 1382, § 3, effective July 1. L. 2021: (1) amended, (SB 21-072), ch. 329, p. 2128, § 9, effective June 24.
Editor's note: Section 11 of chapter 329 (SB 21-072), Session Laws of Colorado 2021, provides that the act changing this section applies to conduct occurring on or after June 24, 2021.
38-5-105. Companies, cities, and towns have eminent domain right.
Such telegraph, telephone, electric light power, gas, or pipeline company or such city or town is vested with the power of eminent domain, and authorized to proceed to obtain rights-of-way for poles, wires, pipes, regulator stations, substations, and systems for such purposes by means thereof. Whenever such company or such city or town is unable to secure by deed, contract, or agreement such rights-of-way for such purposes over, under, across, and upon the lands, property, privileges, rights-of-way, or easements of persons or corporations, it shall be lawful for such telegraph, telephone, electric light power, gas, or pipeline company or any city or town owning electric power producing or distribution facilities to acquire such title in the manner now provided by law for the exercise of the right of eminent domain and in the manner as set forth in this article.
Source: L. 07: p. 386, § 5. R.S. 08: § 2455. C.L. § 6356. CSA: C. 61, § 46. CRS 53: § 50-5-5. L. 63: p. 480, § 5. C.R.S. 1963: § 50-5-5.
ANNOTATION
Because corporation is a foreign corporation, in good standing and authorized to do business in Colorado, operates and maintains a pipeline on landowner's properties, conveys petroleum products through its pipelines, and would be responsible for the construction, cost, operation, and maintenance of the pipeline, corporation is a pipeline company for purposes of this section. Sinclair Transp. Co. v. Sandberg, 228 P.3d 198 (Colo. App. 2009), rev'd on other grounds sub nom. Larson v. Sinclair Transp. Co., 2012 CO 36, 284 P.3d 42.
By enacting this section, the general assembly did not grant, either expressly or by clear implication, the power of eminent domain to companies for the construction of pipelines carrying petroleum. Rather, the general assembly intended to authorize condemnation for the construction of electric power infrastructure. Larson v. Sinclair Transp. Co., 2012 CO 36, 284 P.3d 42.
Applied in Larson v. Chase Pipe Line Co., 183 Colo. 76 , 514 P.2d 1316 (1973).
38-5-106. Possession pending action.
At any time after jurisdiction has been obtained pursuant to section 38-1-103, the petitioner, upon notice to the respondent pursuant to the Colorado rules of civil procedure, may move for an order for immediate possession. Upon such motion and after hearing, the court, by rule in that behalf made, may authorize the petitioner, upon payment into court or to the clerk thereof of the amount determined by the court as probably sufficient to pay the sum that may ultimately be awarded as compensation and damages for the taking, if not in possession to take possession of such right-of-way, and if already in possession to maintain and keep such possession, and in all cases to use and enjoy such right-of-way during the pendency and until the final conclusion of such proceedings, and the court may stay all actions and proceedings against such petitioner on account thereof. Withdrawal from the sum so deposited may be had as provided in section 38-1-105 (6)(b). At such hearing for immediate possession, the court shall hear and dispose of all objections that are raised at that time concerning the motion for immediate possession, the legal sufficiency of the petition, or the regularity of the proceedings in any other respect.
Source: L. 07: p. 386, § 6. R.S. 08: § 2456. C.L. § 6357. CSA: C. 61, § 47. CRS 53: § 50-5-6. C.R.S. 1963: § 50-5-6. L. 75: Entire section amended, p. 1406, § 2, effective July 18.
ANNOTATION
Section inapplicable to acquisition of land for highway purposes. This section has no application whatever to eminent domain proceedings in which rights-of-way for highways are sought, and it is error to assume that this section confers any right or authority to maintain an action hereunder to acquire lands for highway purposes. Swift v. Smith, 119 Colo. 126 , 201 P.2d 609 (1948).
Possession may be acquired only if property acquirable by eminent domain. A public service company may not lawfully acquire immediate possession of any property pursuant to this section unless that property could be lawfully acquired by the exercise of eminent domain. Shaklee v. District Court, 636 P.2d 715 (Colo. 1981).
Possession may not be awarded pending determination of public use. Because land cannot lawfully be condemned pending a judicial determination of the issue of public use, neither may immediate possession pendente lite be awarded. Shaklee v. District Court, 636 P.2d 715 (Colo. 1981).
Applied in Colo. Fuel & Iron Co. v. Four Mile Ry., 29 Colo. 90 , 66 P. 902 (1901); Lavelle v. Town of Julesburg, 49 Colo. 290 , 112 P. 774 (1910); Denver & R.G.R.R. v. Mills, 59 Colo. 198 , 147 P. 681 (1915); Mulford v. Farmers' Reservoir & Irrigation Co., 62 Colo. 167 , 161 P. 301 (1916); Beth Medrosh Hagodol v. City of Aurora, 126 Colo. 267 , 248 P.2d 732 (1952).
38-5-107. Companies, cities, and towns carrying high voltage - crossings - arbitration.
- Any person, corporation, or city or town seeking to secure a right-of-way for lines of electric light or for the transmission of electric power for any purpose over, under, or across any right-of-way of any other person, corporation, or city or town for such purposes or seeking to erect or construct its lines of wire under or over the lines of wire already constructed by such other person, corporation, or city or town for any such purposes upon, under, along, or across any public highway or upon, under, along, or across any public lands owned or controlled by the state of Colorado before constructing such lines or wires over, under, or across such rights-of-way or wires of other persons, corporations, or cities or towns, where either of said lines or wires carry a current at an electrical pressure of five thousand volts or more, shall agree with such other persons, corporations, or cities or towns as to the conditions under or upon which such overhead or underneath construction or crossing shall be made, looking to the due protection and safeguard of the wires of the person, corporation, or city or town already having a right-of-way for such wires and looking to the safety of life, health, and property. In case of an inability to agree upon the conditions under or upon which such overhead or underneath crossings shall be made, the person, corporation, or city or town owning and operating or controlling the lines of wires already built or constructed and the person, corporation, or city or town seeking to construct new lines or wires or to make said crossings shall each select a person as an arbitrator, which two persons shall determine said conditions under or upon which such overhead or underneath construction or crossing shall be made. In case of a disagreement in regard thereto by the arbitrators, they shall select a third person to act with them, and the decision made by any two of said arbitrators shall be final and binding upon the person, corporation, or city or town so seeking to make or construct the crossings, who shall construct the crossings in a manner determined by such arbitrators.
- The parties interested, before they make their submission to the arbitrators, shall make and subscribe a written article of agreement in and by which they shall agree to submit the matter as to how said crossings shall be made to the arbitrators named, and will abide by their award. Said award shall be in writing, and a copy thereof delivered to each of the parties interested. Such conditions for protection at said crossings shall be established at the sole expense of the person, corporation, or city or town seeking the right-of-way for such overhead or underneath construction or crossings. Nothing in this article shall affect the right of any person, corporation, or city or town to make such crossings where the lines or wires of neither of the parties concerned carry a current at an electrical pressure of less than five thousand volts.
Source: L. 07: p. 387, § 7. R.S. 08: § 2457. C.L. § 6358. CSA: C. 61, § 48. CRS 53: § 50-5-7. L. 63: p. 481, § 6. C.R.S. 1963: § 50-5-7. L. 96: (1) amended, p. 303, § 5, effective April 12.
38-5-108. Consent necessary to use of streets.
Nothing in this article shall be construed to authorize any person, partnership, association, corporation, or city or town to erect any poles, construct any electric light power line, or pipeline, or extend any wires or lines along, through, in, upon, under, or over any streets or alleys of any city or incorporated town without first obtaining the consent of the municipal authorities having power to give the consent of such city or incorporated town.
Source: L. 07: p. 388, § 8. R.S. 08: § 2458. C.L. § 6359. CSA: C. 61, § 49. CRS 53: § 50-5-8. L. 63: p. 482, § 7. C.R.S. 1963: § 50-5-8. L. 96: Entire section amended, p. 303, § 6, effective April 12.
ANNOTATION
Law reviews. For comment on Englewood v. Mountain States Tel. & Tel. Co., 163 Colo. 400 , 431 P.2d 40 (1967), appearing below, see 40 U. Colo. L. Rev. 167 (1967).
The right to maintain right-of-way continues until the state, which granted the privilege, desires to modify, alter, or withdraw it. City of Englewood v. Mtn. States Tel. & Tel. Co., 163 Colo. 400 , 431 P.2d 40 (1967).
Applied in Town of Lyons v. City of Longmont, 54 Colo. 112, 129 P. 198 (1912); Pub. Serv. Co. v. City of Loveland, 79 Colo. 216, 245 P. 493 (1926).
ARTICLE 5.5 RIGHTS-OF-WAY: TELECOMMUNICATIONS PROVIDERS
Law reviews: For article, "S.B. 10: Access to Public Rights-of-Way for Telecommunications Providers", see 25 Colo. Law. 89 (Sept. 1996); for article, "Rights-of-Way Regulating Authority After Denver v. Qwest", see 30 Colo. Law. 103 (July 2001).
Section
38-5.5-101. Legislative declaration.
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The general assembly hereby finds, determines, and declares that:
- The passage of House Bill 95-1335, enacted at the first regular session of the sixtieth general assembly, established a policy within the state to encourage competition among the various telecommunications providers, to reduce the barriers to entry for those providers, to authorize and encourage competition within the local exchange telecommunications market, and to ensure that all consumers benefit from such competition and expansion.
- The stated goals of House Bill 95-1335 were that all citizens have access to a wider range of telecommunications services at rates that are reasonably comparable within the state, that basic service be available and affordable to all citizens, and that universal access to advanced telecommunications services would be available to all consumers. Such goals are essential to the economic and social well-being of the citizens of Colorado and can be accomplished only if telecommunications providers are allowed to develop ubiquitous, seamless, statewide telecommunications networks. To require telecommunications companies to seek authority from every political subdivision within the state to conduct business is unreasonable, impractical, and unduly burdensome. In addition, the general assembly further finds and declares that since the public rights-of-way are dedicated to and held on a nonproprietary basis in trust for the use of the public, their use by telecommunications companies is consistent with such policy and appropriate for the public good.
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The general assembly further finds, determines, and declares that nothing in this article shall be construed to alter or diminish the authority of political subdivisions of the state to lawfully exercise their police powers with respect to activities of telecommunications providers within their boundaries, and, subject to such reservation of authority, that:
- The construction, maintenance, operation, oversight, and regulation of telecommunications providers and their facilities is a matter of statewide concern and interest;
- Telecommunications providers operating under the authority of the federal communications commission or the Colorado public utilities commission pursuant to article 15 of title 40, C.R.S., require no additional authorization or franchise by any municipality or other political subdivision of the state to conduct business within a given geographic area and that no such political subdivision has jurisdiction to regulate telecommunications providers based upon the content, nature, or type of telecommunications service or signal they provide except to the extent granted by federal or state legislation;
- Telecommunications providers have a right to occupy and utilize the public rights-of-way for the efficient conduct of their business;
- Access to rights-of-way and oversight of that access must be competitively neutral, and no telecommunications provider should enjoy any competitive advantage or suffer a competitive disadvantage by virtue of a selective or discriminatory exercise of the police power by a local government.
Source: L. 96: Entire article added, p. 298, § 1, effective April 12.
ANNOTATION
A municipal ordinance that conflicts with the specific provisions of state statute concerning telecommunications providers, which imposes express limitations on local regulation of telecommunications providers, is preempted and invalid. City & County of Denver v. Qwest Corp., 18 P.3d 748 (Colo. 2001).
38-5.5-102. Definitions.
As used in this article 5.5, unless the context otherwise requires:
- "Broadband" or "broadband service" has the same meaning as set forth in 7 U.S.C. sec. 950bb (b)(1) as of August 6, 2014, and includes "cable service", as defined in 47 U.S.C. sec. 522 (6) as of August 6, 2014.
- "Broadband facility" means any infrastructure used to deliver broadband service or for the provision of broadband service.
- "Broadband provider" means a person that provides broadband service, and includes a "cable operator", as defined in 47 U.S.C. sec. 522 (5) as of August 6, 2014.
- "Collocation" has the same meaning as set forth in section 29-27-402 (3).
- "Political subdivision" or "local government entity" means a county; city and county; city; town; service authority; school district; local improvement district; law enforcement authority; water, sanitation, fire protection, metropolitan, irrigation, drainage, or other special district; or any other kind of municipal, quasi-municipal, or public corporation organized pursuant to law.
- "Public highway" or "highway" for purposes of this article 5.5 includes all roads, streets, and alleys and all other dedicated rights-of-way and utility easements of the state or any of its political subdivisions, whether located within the boundaries of a political subdivision or otherwise.
- "Small cell facility" has the same meaning as set forth in section 29-27-402 (4).
- "Small cell network" has the same meaning as set forth in section 29-27-402 (5).
- "Telecommunications provider" means a person that provides telecommunications service, as defined in section 40-15-102 (29), with the exception of cable services as defined by section 602 (5) of the federal "Cable Communications Policy Act of 1984", 47 U.S.C. sec. 522 (6), pursuant to authority granted by the public utilities commission of this state or by the federal communications commission. "Telecommunications provider" does not mean a person or business using antennas, support towers, equipment, and buildings used to transmit high power over-the-air broadcast of AM and FM radio, VHF and UHF television, and advanced television services, including high definition television. The term "telecommunications provider" is synonymous with "telecommunication provider".
Source: L. 96: Entire article added, p. 299, § 1, effective April 12. L. 2014: (1) amended and (1.2), (1.3), and (1.7) added, (HB 14-1327), ch. 149, p. 507, § 3, effective August 6. L. 2017: Entire section amended, (HB 17-1193), ch. 143, p. 476, § 5, effective July 1.
Editor's note: Section 602(5) of the federal "Cable Communications Policy Act of 1984" referenced in subsection (3) was repealed October 25, 1994.
Cross references: For the short title ("Broadband Deployment Act") in HB 14-1327, see section 1 of chapter 149, Session Laws of Colorado 2014.
38-5.5-103. Use of public highways - discrimination prohibited - content regulation prohibited.
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- Any domestic or foreign telecommunications provider or broadband provider authorized to do business under the laws of this state has the right to construct, maintain, and operate conduit, cable, switches, and related appurtenances and facilities, and communications and broadband facilities, including small cell facilities and small cell networks, along, across, upon, above, and under any public highway in this state, subject to this article 5.5 and article 1.5 of title 9.
- The construction, maintenance, operation, and regulation of the facilities described in subsection (1)(a) of this section, including the right to occupy and utilize the public rights-of-way, by telecommunications providers and broadband providers are matters of statewide concern. The facilities shall be constructed and maintained so as not to obstruct or hinder the usual travel on a highway.
- A political subdivision shall not discriminate among or grant a preference to competing telecommunications providers or broadband providers in the issuance of permits or the passage of any ordinance for the use of its rights-of-way, nor create or erect any unreasonable requirements for entry to the rights-of-way for the providers.
- A political subdivision shall not regulate a telecommunications provider or a broadband provider based upon the content or type of signals that are carried or capable of being carried over the provider's facilities; except that nothing in this subsection (3) prevents regulation by a political subdivision when the authority to regulate has been granted to the political subdivision under federal law.
Source: L. 96: Entire article added, p. 300, § 1, effective April 12. L. 2014: (1) amended, (HB 14-1327), ch. 149, p. 507, § 4, effective August 6. L. 2017: Entire section amended, (HB 17-1193), ch. 143, p. 477, § 6, effective July 1.
Cross references: For the short title ("Broadband Deployment Act") in HB 14-1327, see section 1 of chapter 149, Session Laws of Colorado 2014.
38-5.5-104. Right-of-way across state land.
Any domestic or foreign telecommunications provider or broadband provider authorized to do business under the laws of this state has the right to construct, maintain, and operate lines of communication, switches, and related facilities, and communications and broadband facilities, including small cell facilities and small cell networks, and obtain a permanent right-of-way for the facilities over, upon, under, and across all public lands owned by or under the control of the state, upon the payment of just compensation and upon compliance with reasonable conditions as the state board of land commissioners may require.
Source: L. 96: Entire article added, p. 300, § 1, effective April 12. L. 2017: Entire section amended, (HB 17-1193), ch. 143, p. 478, § 7, effective July 1.
38-5.5-104.5. Use of local government entity structures.
- Except as provided in subsection (2) of this section and subject to the requirements and limitations of this article 5.5, sections 29-27-403 and 29-27-404, and a local government entity's police powers, a telecommunications provider or a broadband provider has the right to locate or collocate small cell facilities or small cell networks on the light poles, light standards, traffic signals, or utility poles in the rights-of-way owned by the local government entity; except that, a small cell facility or a small cell network shall not be located or mounted on any apparatus, pole, or signal with tolling collection or enforcement equipment attached.
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If, at any time, the construction, installation, operation, or maintenance of a small cell facility on a local government entity's light pole, light standard, traffic signal, or utility pole fails to comply with applicable law, the local government entity, by providing the telecommunications provider or the broadband provider notice and a reasonable opportunity to cure the noncompliance, may:
- Cause the attachment on the affected structure to be removed; and
- Prohibit future, noncompliant use of the light pole, light standard, traffic signal, or utility pole.
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- Except as provided in subsections (3)(b) and (3)(c) of this section, a local government entity shall not impose any fee or require any application or permit for the installation, placement, operation, maintenance, or replacement of micro wireless facilities that are suspended on cable operator-owned cables or lines that are strung between existing utility poles in compliance with national safety codes.
- A local government entity with a municipal or county code that requires an application or permit for the installation of micro wireless facilities may, but is not required to, continue the application or permit requirement subsequent to July 1, 2017.
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A local government entity may require a single-use right-of-way permit if the installation, placement, operation, maintenance, or replacement of micro wireless facilities:
- Involves working within a highway travel lane or requires the closure of a highway travel lane;
- Disturbs the pavement or a shoulder, roadway, or ditch line;
- Includes placement on limited access rights-of-way; or
- Requires any specific precautions to ensure the safety of the traveling public; the protection of public infrastructure; or the operation of public infrastructure; and such activities either were not authorized in, or will be conducted in a time, place, or manner that is inconsistent with, the approval terms of the existing permit for the facility or structure upon which the micro wireless facility is attached.
Source: L. 2017: Entire section added, (HB 17-1193), ch. 143, p. 478, § 8, effective July 1.
38-5.5-105. Power of companies to contract.
Any domestic or foreign telecommunications provider or broadband provider has the power to contract with any individual; corporation; or the owner of any lands, franchise, easement, or interest therein over or under which the provider's conduits; cable; switches; communications or broadband facilities, including small cell facilities and small cell networks; or related appurtenances and facilities are proposed to be laid or created for the right-of-way for the construction, maintenance, and operation of the facilities or for the erection, maintenance, occupation, and operation of offices at suitable distances for the public accommodation.
Source: L. 96: Entire article added, p. 301, § 1, effective April 12. L. 2017: Entire section amended, (HB 17-1193), ch. 143, p. 479, § 9, effective July 1.
38-5.5-106. Consent necessary for use of streets.
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- This article 5.5 does not authorize any telecommunications provider or broadband provider to erect, within a political subdivision, any poles or construct any communications or broadband facilities, including small cell facilities and small cell networks; conduit; cable; switch; or related appurtenances and facilities along, through, in, upon, under, or over any public highway without first obtaining the consent of the authorities having power to give the consent of the political subdivision.
- A telecommunications provider or broadband provider that, on or before July 1, 2017, either has obtained consent of the political subdivision having power to give consent or is lawfully occupying a public highway in a political subdivision need not apply for additional or continued consent of the political subdivision under this section.
- Notwithstanding any other provision of law, a political subdivision's consent given to a telecommunications provider or a broadband provider to erect or construct any poles, or to locate or collocate communications and broadband facilities on vertical structures in a right-of-way, does not extend to the location of new facilities or to the erection or construction of new poles in a right-of-way not specifically referenced in the grant of consent.
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- The consent of a political subdivision for the use of a public highway within its jurisdiction shall be based upon a lawful exercise of its police power and shall not be unreasonably withheld.
- A political subdivision shall not create any preference or disadvantage through the granting or withholding of its consent. A political subdivision's decision that a vertical structure in the right-of-way, including a vertical structure owned by a municipality, lacks space or load capacity for communications or broadband facilities, or that the number of additional vertical structures in the rights-of-way should be reasonably limited, consistent with protection of public health, safety, and welfare, does not create a preference for or disadvantage any telecommunications provider or broadband provider, provided that such decision does not have the effect of prohibiting a provider's ability to provide service within the service area of the proposed facility.
Source: L. 96: Entire article added, p. 301, § 1, effective April 12. L. 2017: Entire section amended, (HB 17-1193), ch. 143, p. 480, § 10, effective July 1.
38-5.5-107. Permissible taxes, fees, and charges.
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No political subdivision shall levy a tax, fee, or charge for any right or privilege of engaging in a business or for use of a public highway other than:
- A license fee or tax authorized under section 31-15-501 (1)(c), C.R.S., or article XX of the state constitution; and
- A street or public highway construction permit fee, to the extent that such permit fee applies to all persons seeking a construction permit.
- All fees and charges levied by a political subdivision shall be reasonably related to the costs directly incurred by the political subdivision in providing services relating to the granting or administration of permits. Such fees and charges also shall be reasonably related in time to the occurrence of such costs. In any controversy concerning the appropriateness of a fee or charge, the political subdivision shall have the burden of proving that the fee or charge is reasonably related to the direct costs incurred by the political subdivision. All costs of construction shall be borne by the telecommunications provider or broadband provider.
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No political subdivision shall levy a tax, fee, or charge for any right or privilege of engaging in a business or for use of a public highway other than:
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- Any tax, fee, or charge imposed by a political subdivision shall be competitively neutral among telecommunications providers and broadband providers.
- Nothing in this article or in article 32 of title 31, C.R.S., shall invalidate a tax or fee imposed if such tax or fee cannot legally be imposed upon another telecommunications provider, broadband provider, or service because of the requirements of state or federal law or because such other provider is exempt from taxation or lacks a taxable nexus with the political subdivision imposing the tax or fee.
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If a political subdivision imposes a tax on a telecommunications provider or broadband provider and such tax does not apply to other providers of comparable telecommunications services or broadband services due to the language of the ordinance or resolution that imposes the tax, then the governing body of the political subdivision shall take one of the following two courses of action:
- If it can do so without violating the election requirements of section 20 of article X of the state constitution, the governing body shall amend the ordinance or resolution that imposes the tax so as to extend the tax to providers of comparable telecommunications services or broadband services; or
- If an election is required under section 20 of article X of the state constitution, the governing body shall cause an election to be held in accordance with said section 20 to authorize the extension of the tax to providers of comparable telecommunications services or broadband services. If the extension of the tax is not approved by the voters at such election, then the existing tax shall no longer apply to the providers that had been subject to the tax immediately before the election.
- Taxes, fees, and charges imposed shall not be collected through the provision of in-kind services by telecommunications providers or broadband providers, nor shall any political subdivision require the provision of in-kind services as a condition of consent to use a highway.
- The terms of all agreements between political subdivisions and telecommunications providers or broadband providers regarding use of highways shall be matters of public record and shall be made available upon request pursuant to article 72 of title 24, C.R.S.
- Nothing in this section affects the manner in which the property tax administrator values a public utility under article 4 of title 39, C.R.S.
- Nothing in this article affects the ability of a political subdivision to require and grant a cable franchise to a cable operator seeking to provide cable television service within the political subdivision and to obtain any consideration or impose any conditions in a cable franchise, unless otherwise prohibited by federal law.
- As used in this section, "public highway" or "highway" as otherwise defined in section 38-5.5-102 (6) does not include excess and remainder rights-of-way under the department of transportation's jurisdiction.
Source: L. 96: Entire article added, p. 301, § 1, effective April 12. L. 2014: (1)(b), (2), (3), and (4) amended and (5), (6), and (7) added, (HB 14-1327), ch. 149, p. 507, § 5, effective August 6. L. 2017: (7) amended, (HB 17-1193), ch. 143, p. 480, § 11, effective July 1.
Cross references: For the short title ("Broadband Deployment Act") in HB 14-1327, see section 1 of chapter 149, Session Laws of Colorado 2014.
ANNOTATION
Section prohibiting municipality from exacting a fee from telecommunications providers for the use of public rights-of-way, beyond costs directly incurred by the municipality, does not authorize a taking of property for which the municipality would be entitled to compensation by inverse condemnation under article II, § 15 of the state constitution. A municipality controls public rights-of-way in its governmental capacity, and such property is not "private" for purposes of a takings analysis. City & County of Denver v. Qwest Corp., 18 P.3d 748 (Colo. 2001).
Applied in Plains Coop. v. Washington Bd. of County Comm'rs, 226 P.3d 1189 (Colo. App. 2009).
38-5.5-108. Pole attachment agreements - limitations on required payments.
- Neither a local government entity nor a municipally owned utility shall request or receive from a telecommunications provider, broadband provider, or cable television provider, as defined in section 602 (5) of the federal "Cable Communications Policy Act of 1984", in exchange for permission to attach small cell facilities, broadband devices, or telecommunications devices to poles or structures in a right-of-way, any payment in excess of the amount that would be authorized if the local government entity or municipally owned utility were regulated pursuant to 47 U.S.C. sec. 224, as amended.
- A municipality shall not request or receive from a telecommunications provider or a broadband provider, in exchange for or as a condition upon a grant of permission to attach telecommunications or broadband devices to poles, any in-kind payment.
Source: L. 96: Entire article added, p. 302, § 1, effective April 12. L. 2017: Entire section amended, (HB 17-1193), ch. 143, p. 481, § 12, effective July 1.
Editor's note: Section 602(5) of the federal "Cable Communications Policy Act of 1984" referenced in subsection (1) was repealed October 25, 1994.
38-5.5-109. Notice of trenching - permitted access.
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- The state or a political subdivision shall provide notice on a competitively neutral basis to broadband providers of any utility trenching project that it conducts, but notice is not required for emergency repair projects. The state or political subdivision shall provide the notice a minimum of ten business days prior to the start of the project involving trenching.
- The department of transportation shall maintain a public list of all broadband providers that would like to receive notice of a utility trenching project and the providers' addresses on the website it maintains. To be eligible to receive notice under paragraph (a) of this subsection (1), a broadband provider must request the department of transportation to be included in the department list. A political subdivision may rely on the department list when making its notifications, and such notifications may be made by electronic mail.
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- For any trenching project conducted by the state or a political subdivision, the state or political subdivision shall allow joint trenching by broadband providers on a nonexclusive and nondiscriminatory basis for the placement of broadband facilities, except as set forth in paragraph (b) of this subsection (2). This subsection (2) does not limit the ability of the state, political subdivision, or any private entity to share the costs of construction related to the trenching project with the broadband provider.
- The state or a political subdivision may deny joint trenching by broadband providers if the joint trenching will hinder or obstruct highway safety or the construction, maintenance, operations, or related regulation of highway facilities or if it is not feasible because it will delay the repair or construction of a political subdivision's water, wastewater, electricity, or gas line or because collocation with a political subdivision's water, wastewater, electricity, or gas line will hinder or obstruct the maintenance or operations of a political subdivision's water, wastewater, electricity, or gas facilities.
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- Nothing in this section is intended to preempt or otherwise replace requirements for joint trenching that may be imposed by a political subdivision.
- Nothing in this section requires a private entity undertaking a trenching project to allow a broadband provider to participate in the trenching project.
- Any provision in this section that conflicts with federal law is unenforceable.
- Nothing in this section shall be construed to prevent or delay commencement or progress of a construction, maintenance, or trenching project.
- As used in this section, "trenching" means a construction project in which a highway right-of-way surface is opened or removed for the purpose of laying or installing conduit, fiber, or similar infrastructure in excess of one mile in length. "Trenching" does not mean any other activity or project for the construction or maintenance, including drainage or culvert work, of a highway facility.
Source: L. 2014: Entire section added, (HB 14-1327), ch. 149, p. 509, § 6, effective August 6.
Cross references: For the short title ("Broadband Deployment Act") in HB 14-1327, see section 1 of chapter 149, Session Laws of Colorado 2014.
ARTICLE 6 PROCEEDINGS BY CITIES AND TOWNS
Section
PART 1 CONDEMNATION OF PROPERTY
38-6-101. Power of towns and cities.
Whenever, in a town, city, or city and county, the council thereof or other municipal board having authority by charter or statute passes a resolution or ordinance to establish, construct, extend, open, widen, or alter any street, lane, avenue, boulevard, park, playground, parkway, pleasure way, public square, market, viaduct, bridge, sewer, tunnel, or subway or to build, acquire, construct, or establish any public building or any other public work or public improvement, said town, city, or city and county shall have the right to take, damage, condemn, or appropriate by right of eminent domain such private property as may be required in the manner provided for in this part 1; but, except as specifically authorized by law, no incorporated town shall exercise the power of eminent domain over property outside the town boundaries. In any case where such special benefits are not to be assessed by commissioners as provided in section 38-6-107 against the real estate specially benefited, the said town, city, or city and county may follow the procedure set forth in this part 1 or the procedure set forth in article 1 of this title.
Source: L. 11: p. 373, § 1. C.L. § 9076. CSA: C. 163, § 119. CRS 53: § 50-6-1. L. 57: p. 365, § 1. L. 59: p. 423, § 1. C.R.S. 1963: § 50-6-1. L. 69: p. 356, § 1. L. 76: Entire section amended, p. 312, § 60, effective May 20.
Cross references: For the proceedings and procedure for taking private property for public use, see part 1 of article 1 of this title.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L. J. 625 (1979). For article, "Condemnation of Property for Economic Development by Home Rule Municipalities", see 25 Colo. Law. 53 (Jan. 1996).
Acquisition of right-of-way makes condemnation unnecessary. When an owner of land permitted the city to construct and operate a pipe line through his land, the city acquired a vested right-of-way and condemnation was unnecessary. Enke v. City of Greeley, 31 Colo. App. 337, 504 P.2d 1112 (1972).
Where condemnation action to be commenced. Art. XX, Colo. Const., and this article provide that a condemnation action must be commenced in the district court in which the city and county is situated. Toll v. City & County of Denver, 139 Colo. 462 , 340 P.2d 862 (1959).
City has option of proceeding under either section 38-1-101 or this section in condemning private property for a public use. City of Englewood v. Weist, 184 Colo. 325 , 520 P.2d 120 (1974).
Once election made city cannot be bound by other procedure. Once a city elects to proceed under article 1 of this title, it cannot be forced to follow, comply with, or be bound by the provisions contained in this part. City of Englewood v. Weist, 184 Colo. 325 , 520 P.2d 120 (1974).
Determination of special assessments presumed valid. The invalidity of a municipal ordinance generally must be established beyond a reasonable doubt; however, a different rule as to special assessments has been established. A presumption of validity inheres in a city council's determination that the benefits specially accruing to properties equal or exceed the assessments thereon. Cline v. City of Boulder, 35 Colo. App. 349, 532 P.2d 770 (1975).
Property owners must show invalidity of ordinance as to special assessments. The burden is on the property owners to affirmatively show to the council, by substantial competent evidence, that a municipal ordinance is invalid as to special assessments. Cline v. City of Boulder, 35 Colo. App. 349, 532 P.2d 770 (1975).
Applied in Alexander v. City & County of Denver, 51 Colo. 140, 116 P. 342 (1911); Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919); Snider v. Town of Platteville, 75 Colo. 589, 227 P. 548 (1924); People ex rel. Bear Creek Dev. Corp. v. District Court, 78 Colo. 526, 242 P. 997 (1925).
38-6-102. Petition.
The attorney for said city or city and county, in the name of such city or city and county, shall apply to the district court of the district in which said city or city and county is situated, by petition, which petition shall state the general nature of the improvement proposed to be established or made, a correct description of the property required, and the name of the owner of said property as shown on the records of the county clerk and recorder of the county or city and county in which said property is situated. Said petition shall pray for the appointment of three disinterested commissioners, freeholders of real estate in and residents of said city or city and county, to appraise and award the damages which said owner may sustain by reason of the appropriation and condemnation of such property by the city or city and county and to perform such other duties as are in this part 1 enumerated.
Source: L. 11: p. 374, § 2. C.L. § 9077. CSA: C. 163, § 120. CRS 53: § 50-6-2. C.R.S. 1963: § 50-6-2. L. 76: Entire section amended, p. 312, § 61, effective May 20.
ANNOTATION
Law reviews. For article, "Inverse Condemnation -- A Viable Alternative", see 51 Den. L.J. 529 (1974). For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L. J. 625 (1979).
Applied in Wassenich v. City & County of Denver, 67 Colo. 456 , 186 P. 533 (1919); Toll v. City & County of Denver, 139 Colo. 462 , 340 P.2d 862 (1959).
38-6-103. Defendants - guardian ad litem.
The owners of all property sought to be condemned for the proposed improvement shall be made parties defendant. It shall not be necessary to make any person a defendant unless such person has some title thereto of record in the office of the county clerk and recorder of the county or city and county in which said property is situated. If the proceeding seeks to affect land owned by an infant or a mentally incompetent person, the legal guardian or conservator of such person shall be made a party defendant. If such person has no legal guardian, the district court shall have the power to appoint a guardian ad litem to represent such person.
Source: L. 11: p. 374, § 3. C.L. § 9078. CSA: C. 163, § 121. CRS 53: § 50-6-3. C.R.S. 1963: § 50-6-3. L. 75: Entire section amended, p. 932, § 53, effective July 1.
38-6-104. Judge to set hearing - summons - service - publication.
Upon the filing of the petition, said court shall fix a date for hearing said petition, and the attorney for the petitioner shall prepare and issue a summons, directed to the defendants, notifying them of the date fixed by the court for the hearing. Jurisdiction of said defendants shall be obtained by causing the summons to be served on the defendants in like manner as is provided by the laws of this state for the service of summons in civil actions, except as otherwise provided in this section. The date for the hearing of the petition shall not be less than ten days after the date of the service of the summons. In case any defendant does not reside in said city or city and county or is a foreign corporation or in case the attorney for the petitioner files an affidavit that he has endeavored to find such person in such city or city and county, for the purpose of causing the person to be served, and that after reasonable effort he has been unable to find said person in said city or city and county, the petitioner may cause the summons to be published for three consecutive times in any daily or weekly newspaper published in said city or city and county. The date for the hearing of said petition shall not be less than ten days after the date of the last publication of said summons.
Source: L. 11: p. 374, § 4. C.L. § 9079. CSA: C. 163, § 122. CRS 53: § 50-6-4. C.R.S. 1963: § 50-6-4.
38-6-105. Answer - hearing - commissioners.
Any defendant has the right to appear in the proceeding and file an answer, in writing, with the clerk of the court, at any time prior to the date fixed for the hearing of the petition but not thereafter, in which answer said defendant shall set forth such legal objections as he may have to the condemnation or appropriation of any property owned by him or to the prosecution of said proceeding. At the time set for the hearing of said petition or such time to which the hearing may have been continued by the court, the court shall proceed to hear any objections raised by the answer, if any there be. The court has no power to inquire into the necessity of exercising the power of eminent domain for the purpose proposed, nor into the necessity of making the proposed improvement, nor into the necessity of taking the particular property described in the petition. If the court finds that the petitioner has the right to prosecute said proceeding and such objections as may have been filed are overruled, the court shall appoint three disinterested commissioners in condemnation, freeholders of real estate in said city or city and county and residents thereof, who shall have the powers and duties provided in this part 1. No person shall be disqualified to act as a commissioner by reason of the fact that he may own either the fee or other interest in or to property that might be assessed a special benefit on account of the proposed improvement.
Source: L. 11: p. 375, § 5. C.L. § 9080. CSA: C. 163, § 123. CRS 53: § 50-6-5. C.R.S. 1963: § 50-6-5. L. 76: Entire section amended, p. 312, § 62, effective May 20.
ANNOTATION
Law reviews. For comment discussing church condemnation, see 46 U. Colo. L. Rev. 43 (1974). For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L. J. 625 (1979).
Questions for court to determine in limine. Whether or not the petitioner belongs to the class of persons entitled to condemn; whether or not the property sought to be taken belongs to the class of property that is subject to condemnation; whether or not the purpose for which the property is sought to be taken is one for which condemnation is permitted; whether or not the petitioner and the owner have been able to come to an agreement concerning a purchase of the land; and whether or not the act authorizing the proceeding is constitutional -- these and similar questions, when raised, are for the court to determine in limine. Wassenich v. City & County of Denver, 67 Colo. 456 , 186 P. 533 (1919); Dunham v. City of Golden, 31 Colo. App. 433, 504 P.2d 360 (1972).
Applied in People ex rel. Bear Creek Dev. Corp. v. District Court, 78 Colo. 526, 242 P. 997 (1925).
38-6-106. Commissioners - oaths - hearing.
The commissioners, before entering upon the duties of their office, shall take an oath to faithfully, promptly, and impartially discharge their duties as such commissioners. Any commissioner may administer oaths to witnesses produced before him. The commissioners may issue subpoenas and compel witnesses to attend and testify, may adjourn and hold meetings, and shall hear such proofs as may be presented to them.
Source: L. 11: p. 375, § 6. C.L. § 9081. CSA: C. 163, § 124. CRS 53: § 50-6-6. C.R.S. 1963: § 50-6-6.
38-6-107. Assessment of damages - lien - fund.
It is the duty of the commissioners to estimate, fix, and determine the fair and actual cash market value of all property proposed to be taken for the improvement, without reference to the projected improvement, and the fair, direct, and actual damage caused on account of said improvement to other property not taken for the improvement. The commissioners shall provide for the payment of the total amount of their awards for land taken and damaged, in all cases where the resolution or ordinance authorizing the improvement so provides, by assessing against the owners of all real estate which, in their opinion, will be specially benefited by the proposed improvement the amounts of said benefit as special assessments, and such commissioners shall assess the balance required to make said total amount as a general assessment against the petitioning city or city and county. Such special benefits shall be assessed against the owners of each lot or parcel of property that is, in the opinion of said commissioners, specially benefited by said improvement, which said special benefits shall be a lien on the property so charged, and shall be collected as provided by the charter or ordinance of said city or city and county, and when so collected shall be paid into the treasury of said city or city and county as a separate fund, to be used for the payment of the awards and damages.
Source: L. 11: p. 376, § 7. C.L. § 9082. CSA: C. 163, § 125. CRS 53: § 50-6-7. C.R.S. 1963: § 50-6-7.
ANNOTATION
Law reviews. For article, "Eminent Domain in Colorado", see 29 Dicta 313 (1952).
Assessment of damages by jury is in lieu of assessment by commission. Snider v. Town of Platteville, 75 Colo. 589, 227 P. 548 (1924).
Property owner is not entitled to have damages assessed twice, first by a commission and then by a jury. Snider v. Town of Platteville, 75 Colo. 589, 227 P. 548 (1924).
Speculative damages not awarded. All damages, present or prospective, which are the reasonable and necessary result of an improvement, are taken into account, and compensation awarded therefor, but not speculative damages which may by possibility result from future municipal action, for a different purpose. Moffat v. City & County of Denver, 57 Colo. 473, 143 P. 577 (1914).
Injury to business conducted upon lands taken not element of just compensation. Injury to a business conducted upon lands taken under the right of eminent domain, in the absence of a statute expressly allowing it, does not constitute an element of just compensation. City & County of Denver v. Tondall, 86 Colo. 372, 282 P. 191 (1929).
Railway property, benefited by special improvements, may be assessed the same as other lands. Post Printing & Publ'g Co. v. City & County of Denver, 68 Colo. 50, 189 P. 39 (1920).
"Benefit" construed. "Benefit", which justifies special assessment tax, is not the same "benefit" which must be calculated and deducted from a landowner's recovery in an eminent domain proceeding. City of Englewood v. Weist, 184 Colo. 325 , 520 P.2d 120 (1974).
City not foreclosed from collecting special assessment tax. A city's failure to prove any benefit to the landowner's property in the section 38-1-101 proceeding does not foreclose the city from collecting a special assessment tax. The city was entitled to specially assess for the benefit accruing to the landowner's property by the construction of the special improvement. City of Englewood v. Weist, 184 Colo. 325 , 520 P.2d 120 (1974).
Opinion of expert witnesses permitted as to amount of damages. Witnesses who have properly qualified as experts may give their opinion as to the amount of damages. City & County of Denver v. Tondall, 86 Colo. 372, 282 P. 191 (1929).
Applied in Lavelle v. Town of Julesburg, 49 Colo. 290, 112 P. 774 (1910); Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919); City & County of Denver v. Tondall, 86 Colo. 372, 282 P. 191 (1929).
38-6-108. Commissioners' report.
The commissioners shall make, subscribe, and file with the clerk of the court in which such proceedings are had a report of their awards and assessments, in which all property assessed shall be described with convenient certainty and accuracy. In said report, the awards and damages allowed to each owner and the benefits assessed against each parcel of land shall be separately stated.
Source: L. 11: p. 376, § 8. C.L. § 9083. CSA: C. 163, § 126. CRS 53: § 50-6-8. C.R.S. 1963: § 50-6-8.
38-6-109. Cost assessed against block.
In all cases where the proposed improvement is the opening, widening, establishing, or extension of a public alley, the cost thereof shall be assessed against the property in the particular block in which said alley is situated, according to the benefits to be received therefrom, and against none other.
Source: L. 11: p. 376, § 9. C.L. § 9084. CSA: C. 163, § 127. CRS 53: § 50-6-9. C.R.S. 1963: § 50-6-9.
ANNOTATION
Applied in Phipps v. City & County of Denver, 57 Colo. 205, 140 P. 797 (1914).
38-6-110. Property need not be in city limits.
In all proceedings under this part 1, the petitioner has the right to take or condemn separate parcels of land. Such parcels of land need not be adjoining or contiguous to each other. In all cases where a proceeding is brought to condemn, appropriate, or acquire land for boulevard, parkway, or park purposes, such land or any part thereof may be situated beyond or without the corporate limits of said city or city and county, subject to the limitation imposed by section 31-25-201 (1), C.R.S.
Source: L. 11: p. 377, § 10. C.L. § 9085. CSA: C. 163, § 128. CRS 53: § 50-6-10. C.R.S. 1963: § 50-6-10. L. 76: Entire section amended, p. 313, § 63, effective May 20. L. 83: Entire section amended, p. 1266, § 4, effective July 1.
Cross references: For the legislative declaration in the 1983 act amending this section, see section 1 of chapter 367, Session Laws of Colorado 1983.
38-6-111. Hearing - notice - publication.
After the report of said commissioners is filed with the clerk of the court, the court shall fix a time for the consideration of said report, and the petitioner shall give written notice to the defendants and all other persons who are the owners of record of property mentioned in said report, whether damaged, appropriated, condemned, or assessed special benefits, of the matters contained in said report and of the time so fixed by the court for the consideration thereof. The notice shall be served in like manner as is provided by the laws of this state for the service of summons in civil actions, except as otherwise provided in this section. Said persons shall be served at least ten days before the time fixed for the consideration of the report by the court. In case any defendant or owner of record of any property damaged, appropriated, condemned, or assessed special benefits does not reside in said city or city and county or is a foreign corporation or in case the attorney for said petitioner files an affidavit that he has endeavored to find such person in said city or city and county, for the purpose of causing said person to be notified, and that after reasonable effort he has been unable to find said person in said city or city and county, the petitioner may cause to be published a notice, of the matters affecting such person contained in said report and of the time fixed for the consideration thereof, for three successive times in some daily or weekly newspaper published in said city or city and county. Said publication shall be in lieu of personal service of said notice on all such persons.
Source: L. 11: p. 377, § 11. C.L. § 9086. CSA: C. 163, § 129. CRS 53: § 50-6-11. C.R.S. 1963: § 50-6-11.
Cross references: For publication of legal notices, see part 1 of article 70 of title 24.
ANNOTATION
Applied in Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
38-6-112. Objections - default - burden of proof - findings - reappraisement.
Any person who is the owner of, or who has any interest in, any of the property mentioned in said report, whether appropriated or damaged or against which special benefits have been assessed, may appear, at or before the time fixed by the court for the consideration of said report but not after said time, and file his written objection to said report. Default shall be entered against the owners of all property mentioned in said report who have not filed objections thereto within said time, and the report shall be confirmed by the court as to such persons. At the time fixed by the court for the consideration of said report, the court shall proceed to hear any objections that have been filed, except where a jury trial has been demanded, as provided for in section 38-6-113. Any party interested in said proceeding may introduce such evidence as may tend to establish the right of the matter. The burden of proof to change any finding, award, or assessment of said commissioners shall be upon the person objecting thereto. If it appears to the court that the property of the objector has been appraised by the commissioners at more or less than the fair, actual cash market value thereof, or that the fair, direct, and actual damage to property not taken is greater or less than the amount awarded by the commissioners, or that the property of the objector is assessed a special benefit in an amount greater than it will be actually benefited by the proposed improvement, the court shall so find and shall also find what the proper award or assessment shall be, and judgment shall be rendered accordingly. The court, for good cause shown, may modify, alter, change, annul, or confirm the report of the commissioners, or any part thereof, or may order a new appraisement and assessment as to any of the property affected in the proceeding by the same commissioners or by other commissioners appointed by the court.
Source: L. 11: p. 378, § 12. C.L. § 9087. CSA: C. 163, § 130. CRS 53: § 50-6-12. C.R.S. 1963: § 50-6-12.
ANNOTATION
Applied in Phipps v. City & County of Denver, 57 Colo. 205, 140 P. 797 (1914); City & County of Denver v. Lathan, 57 Colo. 371, 141 P. 462 (1914).
38-6-113. Jury trial - motion for new trial - appellate proceedings.
- At the time fixed for the hearing of the commissioners' report or at any time prior thereto but not after said time, any defendant who owns or is interested in any property actually taken, appropriated, or damaged on account of the proposed improvement and who is dissatisfied with the amount awarded to him by said commissioners may file his demand, in writing, for a trial by a jury of either six or twelve freeholders to appraise and assess the damages which said defendant or person may sustain by reason of the appropriation and condemnation of, or damage to, his property. Any person so demanding a jury, at the time of said demand, shall deposit with the clerk the jury fees for one day's services according to the rate allowed jurors in the district court. The court shall fix an early date for said trial, and on such date the defendants who have made written demands for jury trial within the time provided shall proceed to submit their claims to the jury. Such jury shall be drawn as in civil actions; except that the jurors shall have the qualifications provided in this section.
- The court shall proceed in the same manner and with like powers as in other cases, except as otherwise provided in this part 1. At the request of any party to the proceedings, the court shall order that the jury go upon the premises sought to be taken or damaged, in charge of a sworn bailiff and in the company of any other person that the court may order, and examine the premises in person. At the conclusion of the evidence, the matters in controversy may be argued by counsel to the jury, and at the conclusion of the arguments the court shall instruct the jury in writing. The jury shall return a special verdict fixing and determining the damages or compensation to be allowed to each defendant, severally, who has demanded a jury trial, which verdict shall include both the fair, actual cash market value of the land actually taken for the improvement and the direct, fair, and actual damage, if any, caused on account of said improvement to property not taken for the improvement. Any party to the proceeding may move for a new trial in the same manner as in actions at law. The refusal of said court to grant the same may be excepted to and assigned for appeal, but no appeal shall be permitted to stay the improvement sought by the proceeding.
Source: L. 11: p. 378, § 13. C.L. § 9088. CSA: C. 163, § 131. CRS 53: § 50-6-13. C.R.S. 1963: § 50-6-13. L. 76: (2) amended, p. 313, § 64, effective May 20.
ANNOTATION
Limiting number of witnesses is within court's discretion. Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
Jury is not authorized to view premises other than the land condemned. Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
Market value to be determined. The issue to be determined is the fair, actual cash market value of the land taken at the time of the award and the direct, fair and actual damages to the remainder of the tract, not taken, caused by the improvement, equal to the diminution in the market value of the residue at the time of the trial, for any use to which it may be put, reasonably. Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
Any reasonable future use to which the land may be adapted or applied by men of ordinary prudence and judgment may be considered only insofar as it may assist the jury in arriving at the present market value. Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
Evidence of sales of like properties admissible. In computing damages under a jury trial evidence of sales of other like properties, in the same vicinity, and used for the same purpose, is admissible. Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
Opinions by qualified witnesses as to value permitted. To aid and assist the jury in arriving at an opinion, witnesses who are qualified may give their opinions as to the value and any special circumstances upon which those opinions are based. Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
38-6-114. Costs - compensation.
The cost of the proceedings shall be paid by the city or city and county. The commissioners shall be allowed a reasonable compensation for their services and expenses, the amount of which shall be fixed by the court.
Source: L. 11: p. 379, § 14. C.L. § 9089. CSA: C. 163, § 132. CRS 53: § 50-6-14. C.R.S. 1963: § 50-6-14.
ANNOTATION
Applied in Moffat v. City & County of Denver, 57 Colo. 473, 143 P. 577 (1914); Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
38-6-115. Amendments - new parties - notice.
Amendment to the petition or to any paper or record in the proceedings shall be permitted by the court whenever necessary to a fair hearing and final determination of the questions involved. Should it become necessary at any stage of the proceedings to bring in a new party, the court has the power to make such rule or order in relation thereto as may be deemed reasonable and proper. The court also has the power to make all necessary rules and orders for notice to persons of the pendency of the proceedings.
Source: L. 11: p. 380, § 15. C.L. § 9090. CSA: C. 163, § 133. CRS 53: § 50-6-15. C.R.S. 1963: § 50-6-15.
38-6-116. Decree - copy to city clerk - payments - collection of assessments.
After the trial hearings and determination of all objections to said report, the court shall make its judgment and decree, granting the petitioner such title to the property condemned as may be petitioned for and the right to enter upon the same, upon payment of the compensation ascertained. The decree shall describe each parcel of property so condemned and state the owner thereof and shall describe the property against which special assessments have been made and the amounts thereof. When said judgment and decree have been made by the court, the clerk of said court shall make a certified copy thereof and after thirty days deliver the same to the clerk of the city or city and county. Unless other provision is made in the charter of said city or city and county for the payment of said awards, the council, within ninety days after the date of said decree, shall make, by ordinance, the necessary appropriation for the payment of the compensation for the property condemned. The proper officers of said city or city and county shall thereupon issue the warrants of said city or city and county to the respective parties entitled thereto. The council, by ordinance, shall also provide for the collection of such special assessments as have been confirmed by the final decree of the court.
Source: L. 11: p. 380, § 16. C.L. § 9091. CSA: C. 163, § 134. CRS 53: § 50-6-16. C.R.S. 1963: § 50-6-16.
ANNOTATION
This section is mandatory. Heimbecher v. City & County of Denver, 97 Colo. 465 , 50 P.2d 785 (1935).
Applied in Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
38-6-117. City may dismiss proceedings.
The attorney for the city or city and county commencing the proceedings has the right to withdraw said proceedings or to dismiss the same as to one or more of said defendants or as to one or more parcels of land, without prejudice, at any stage of the proceedings, and the petitioner shall pay the costs thereof.
Source: L. 11: p. 380, § 17. C.L. § 9092. CSA: C. 163, § 135. CRS 53: § 50-6-17. C.R.S. 1963: § 50-6-17.
ANNOTATION
Meaning of this section and § 38-6-116 . This section and § 38-6-116 when read in conjunction with each other mean that the proceedings mentioned in this section come to an end at the expiration of 90 days, as specified in § 38-6-116. Heimbecher v. City & County of Denver, 97 Colo. 465 , 50 P.2d 785 (1935).
Applied in Fifteenth Street Inv. Co. v. City & County of Denver, 59 Colo. 189, 147 P. 677 (1915); Post Printing & Publ'g Co. v. City & County of Denver, 68 Colo. 50, 189 P. 39 (1920).
38-6-118. Ownership in controversy - award.
If the ownership of any property condemned or damaged is in controversy, the amount awarded in payment of said property or the damage thereto shall be paid into the registry of said court for the use of the successful claimants of said property as their respective interests appear to the court. All disputes as to ownership of property taken or damaged shall be tried to the court.
Source: L. 11: p. 381, § 18. C.L. § 9093. CSA: C. 163, § 136. CRS 53: § 50-6-18. C.R.S. 1963: § 50-6-18.
ANNOTATION
Applied in Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
38-6-119. Possession - award paid.
As soon as the amounts awarded for property taken or in payment of damages have been tendered to the parties entitled thereto, respectively, or deposited in the registry of said court for the use of the respective persons entitled to said amounts, the city or city and county may have possession of said premises and may proceed with the proposed improvement. When any controversy concerning ownership has been determined, the clerk of said court shall pay the amounts awarded to said parties.
Source: L. 11: p. 381, § 19. C.L. § 9094. CSA: C. 163, § 137. CRS 53: § 50-6-19. C.R.S. 1963: § 50-6-19.
ANNOTATION
Property owner deemed entitled to money and he cannot be required to accept city warrants, no matter what may be their value. Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
38-6-120. Review - deposit - possession.
Upon the final determination of any proceeding under this part 1, appeal shall lie in every case to bring into review the proceedings therein. If the owner of any property taken or affected appeals, the petitioner may pay into the registry of said court the amount of compensation awarded therefor, for the use of said owner, and shall thereupon be entitled to take possession of and use the property taken or affected the same as if no appeal had been taken. The money so deposited shall remain on deposit until the appeal has been heard and determined. If any owner elects to receive such amount before the determination of such appeal, said appeal shall thereupon be dismissed so far as such owner is concerned.
Source: L. 11: p. 381, § 20. C.L. § 9095. CSA: C. 163, § 138. CRS 53: § 50-6-20. C.R.S. 1963: § 50-6-20. L. 76: Entire section amended, p. 313, § 65, effective May 20.
ANNOTATION
No review of award absent objection. Where no objection is made below to the damages awarded in respect to land taken, the supreme court will not, on appeal, review such award. Phipps v. City & County of Denver, 57 Colo. 205, 140 P. 797 (1914).
Applied in Wassenich v. City & County of Denver, 67 Colo. 456, 186 P. 533 (1919).
38-6-121. Lis pendens.
In any proceeding brought under this part 1, the petitioner, at the time of filing the petition or at any time thereafter during the pendency of such proceeding, may file with the county clerk and recorder of the county in which the property sought to be condemned is situated a notice of the pendency of the proceeding, containing a general description of the property affected. The filing of such notice shall be constructive notice of the proceeding to any purchaser or encumbrancer of said property. The petitioner shall take all property condemned under this part 1 free of all conveyances, taxes, or assessments that have attached thereto subsequent to the filing of the lis pendens.
Source: L. 11: p. 382, § 21. C.L. § 9096. CSA: C. 163, § 139. CRS 53: § 50-6-21. C.R.S. 1963: § 50-6-21. L. 76: Entire section amended, p. 314, § 66, effective May 20.
38-6-122. Eminent domain beyond city limits.
Cities and towns are granted the power of eminent domain both within and beyond their corporate limits, for the purpose of constructing or installing storm or sanitary sewers, septic tanks, disposal works, or electric lines, regulator stations, substations, and related facilities, such power to be exercised in the manner prescribed by law. Nothing in this section shall authorize the pollution or contamination of any public river, stream, or water.
Source: L. 21: p. 773, § 1. C.L. § 9097. CSA: C. 163, § 140. CRS 53: § 50-6-22. L. 63: p. 482, § 8. C.R.S. 1963: § 50-6-22.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L. J. 625 (1979).
Town must comply with § 30-28-110 in exercising powers under this section. A town must comply with county zoning procedures enunciated in § 30-28-110 , when the town exercises its power of eminent domain for construction of sewage facilities beyond its corporate limits pursuant to this section. Blue River Defense Comm. v. Town of Silverthorne, 33 Colo. App. 10, 516 P.2d 452 (1973).
County residents entitled to present objections and views. Even though a town may affirmatively overrule a county's decision regarding the town's proposed construction of a sewage plant, the residents of the county are entitled to an opportunity to present their objections and views and to have these considered as part of the planning commission's approval or disapproval and to require that if construction is to proceed, the town must determine to proceed in the face of the county's objection. Blue River Defense Comm. v. Town of Silverthorne, 33 Colo. App. 10, 516 P.2d 452 (1973).
Public stream not condemnable for sewer system purposes. This section grants to municipal corporations the authority to condemn land for the right-of-way for sewers, but no statute provides for the condemnation of a public stream for the purpose of making it a part of a sewer system. Healy v. City of Delta, 59 Colo. 124, 147 P. 662 (1915).
PART 2 CONDEMNATION OF WATER RIGHTS
38-6-201. Condemnation of water rights by municipalities.
This part 2 shall apply to any water right which is to be condemned by a town, city, city and county, or municipal corporation having the powers of condemnation, referred to in this part 2 as a "municipality".
Source: L. 75: Entire part added, p. 1408, § 1, effective July 1.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L. J. 625 (1979).
38-6-202. Petition.
- The attorney for any municipality, in the name of said municipality, shall apply to the district court of the district in which the municipality is situated, by petition, which petition shall set forth the general nature of the improvement proposed to be established or made, a correct description of the water right required, the name of the owner of the water right, and those persons who may be damaged by the acquisition of the water right. Said petition shall pray for the appointment of three disinterested commissioners appointed by the court of jurisdiction, freeholders of real estate in Colorado, one to be a resident from the area affected by the proposed action, one to be a resident of the municipality bringing the action, and one to be a party who has no interest in the controversy, to determine the issue of the necessity of exercising eminent domain as proposed in the petition and, if the condemnation is to be allowed, to appraise and award the damages that each person damaged may sustain by reason of the appropriation and condemnation of the water right by the municipality and to perform such other duties as are in this part 2 enumerated.
- No municipality shall be allowed to condemn water rights, as provided in section 38-6-207, for any anticipated or future needs in excess of fifteen years, nor shall any municipality be allowed to condemn water rights that are appropriated to a prior public use.
Source: L. 75: Entire part added, p. 1408, § 1, effective July 1.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", appearing below, see 56 Den. L. J. 625 (1979).
Provisions held unconstitutional. The provisions of this part, subsection (1) of this section, and §§ 38-6-203 , 38-6-207 (1) , (3), and (4), and 38-6-210 , relating to the appointment, action, and effect of a commission to determine the issue of necessity of exercising eminent domain, are in conflict with the express grant of eminent domain powers to home rule cities by § 1 of art. XX, Colo. Const. City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978).
The 15-year provision of subsection (2), as applied to home-rule municipalities, is unconstitutional. City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978).
38-6-203. Condemnation - municipal - water supplies - standards and procedures for evaluations.
-
Prior to any hearing for condemnation of water supplies and structures under this part 2, the municipality shall:
- Prepare or update a community growth development plan reflecting present population and resources uses and capabilities and projected population growth and resources requirements, the latter to include all resources requirements to provide for phased development of municipal services and facilities;
-
Prepare a detailed statement describing:
- The water rights to be acquired under condemnation and their present uses;
- The effects upon the county and suitable area within the river drainage basin or basins from the change or conversion of acquired irrigation and other water supplies to domestic uses, to include economic and environmental effects;
- The unavoidable adverse and irreversible effects from such taking of properties and rights; and
- Alternative sources of water supply that may be acquired by appropriation, purchase, lease, conservation, or condemnation and relative acquisitions costs.
- The information contained in the growth development plan and statement of effects from the condemnation shall be prepared in sufficient detail to provide a meaningful basis for assessment of the aspects of the condemnation to the public if the condemnation is approved. These statements shall be presented to the commissioners appointed by the court and the defendants and shall be made available to interested parties.
Source: L. 75: Entire part added, p. 1409, § 1, effective July 1.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L.J. 625 (1979).
38-6-204. Defendants - guardian ad litem.
The owners of all property sought to be condemned for the proposed improvement or who would be damaged by said improvement shall be made parties defendant. If the proceeding seeks to affect land owned by a minor or mental incompetent under legal disabilities, the legal guardian or conservator of such person shall be made party defendant. If such person has no legal guardian, the district court shall have the power to appoint a guardian ad litem to represent such person.
Source: L. 75: Entire part added, p. 1409, § 1, effective July 1.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L.J. 625 (1979).
38-6-205. Judge to set hearing - summons - service - publication.
Upon the filing of the petition, said court shall fix a date for hearing said petition, and the attorney for the petitioner shall prepare and issue a summons, directed to the defendants, notifying them of the date fixed by the court for the hearing. Jurisdiction of said defendants shall be obtained by causing the summons to be served on the defendants in like manner as is provided by the laws of this state for the service of summons in civil actions, except as otherwise provided in this section. The date for the hearing of the petition shall not be less than ten days after the date of the service of the summons. In case any defendant does not reside in the state or is a foreign corporation or in case the attorney for the petitioner files an affidavit that he has endeavored to find such person for the purpose of causing the person to be served and that after reasonable effort he has been unable to find said person, the petitioner may cause the summons to be published for three consecutive times in any daily or weekly newspaper published in the judicial district. The date for the hearing of said petition shall not be less than ten days after the date of the last publication of said summons.
Source: L. 75: Entire part added, p. 1409, § 1, effective July 1.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L.J. 625 (1979).
38-6-206. Answer - hearing - jury.
- Any defendant has the right to appear in the proceeding and file an answer, in writing, with the clerk of the court, at any time prior to the date fixed for the hearing of the petition but not thereafter, in which answer said defendant shall set forth such objections as he may have to the condemnation or appropriation of any water right owned by him or to the prosecution of said proceeding.
- Any defendant may file a demand for a jury trial as provided for in section 38-6-211 (1), prior to the date fixed for the hearing of the petition.
- At the time set for the hearing of said petition or at the time to which the hearing may have been continued by the court, the court shall proceed to hear any objections raised by the answer provided for in subsection (1) of this section. The court shall also appoint three commissioners to carry out the provisions of this part 2.
Source: L. 75: Entire part added, p. 1410, § 1, effective July 1.
38-6-207. Duty of commissioners, determination of necessity.
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In any case initiated for the acquisition of water rights pursuant to this part 2, it is the duty of the commissioners to:
- Examine and assess the growth development plan and statement provided by the municipality, from the proposed condemnation, required in section 38-6-203, and obtain necessary information pursuant to powers granted in section 38-6-208, and make a determination as to the necessity of exercising the power of eminent domain for the proposed purposes;
-
Provide one of the following recommendations to the court, based upon their findings:
- There exists no need and necessity for condemnation as proposed.
- There exists a need and necessity for condemnation as proposed.
- There exists a need and necessity for condemnation, but it is premature.
- In making a recommendation, as provided in subsection (1)(b)(II) of this section, the commissioners may recommend an alternate source of water supply.
- The commissioners shall hear the proofs and allegations of the parties and, after viewing the premises, certify the proper compensation to be made to said owner or parties interested for the water or other property to be taken or affected, as well as all damages accruing to the owner or parties interested in consequences of the condemnation of the same.
- If the commissioners find there exists no need and necessity for the condemnation proposed, they shall make no finding as to the value of the condemned property.
Source: L. 75: Entire part added, p. 1410, § 1, effective July 1.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L. J. 625 (1979).
Provisions held unconstitutional. The provisions of this part, §§ 38-6-202(1) , 38-6-203 , and 38-6-210 , and subsections (1), (3), and (4) of this section, relating to the appointment, action, and effect of a commission to determine the issue of necessity of exercising eminent domain are in conflict with the express grant of eminent domain powers to home rule cities by § 1 of art. XX, Colo. Const. City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978).
Review of determination of necessity. The determination of necessity is an essential part of the power of eminent domain and is not reviewable by the judiciary absent a showing of fraud or bad faith. City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978).
38-6-208. Commissioners - oaths - hearing.
The commissioners, before entering upon the duties of their office, shall take an oath to faithfully, promptly, and impartially discharge their duties as such commissioners. Any commissioner may administer oaths to witnesses produced before him. The commissioners may issue subpoenas and compel witnesses to attend and testify, may adjourn and hold meetings, and shall hear such proofs as may be presented to them.
Source: L. 75: Entire part added, p. 1411, § 1, effective July 1.
38-6-209. Hearing - notice - publication.
After the report of the commissioners is filed with the clerk of the court, the court shall fix a time for the consideration of said report, and the petitioner shall give written notice to the defendants and all other persons who are the owners of property mentioned in said report, whether damaged, appropriated, condemned, or assessed special benefits, of the matters contained in said report and of the time so fixed by the court for the consideration thereof. The notice shall be served in like manner as is provided by the laws of this state for the service of summons in civil actions, except as otherwise provided in this section. Said persons shall be served at least ten days before the time fixed for the consideration of the report by the court. In case any defendant or owner of any property damaged, appropriated, condemned, or assessed special benefits does not reside in the state or is a foreign corporation or in case the attorney for said petitioner files an affidavit that he has endeavored to find such person for the purpose of causing said person to be notified and that after reasonable effort he has been unable to find said person in the state, the petitioner may cause to be published a notice, of the matters affecting such person contained in said report and of the time fixed for the consideration thereof, for three successive times in some daily or weekly newspaper published in said judicial district. Said publication shall be in lieu of personal service of said notice on all such persons.
Source: L. 75: Entire part added, p. 1411, § 1, effective July 1.
38-6-210. Objections - default - burden of proof - findings - reappraisement.
Any person who is the owner of, or who has any interest in, any of the property mentioned in said report, whether appropriated or damaged or against which special benefits have been assessed, may appear, at or before the time fixed by the court for the consideration of said report, but not after said time, and file his written objection to said report. Default shall be entered against the owners of all property mentioned in said report who have not filed objections thereto within said time, and the report shall be confirmed by the court as to such persons. At the time fixed by the court for the consideration of said report, the court shall proceed to hear any objections that have been filed, except where a jury trial has been demanded, as provided for in section 38-6-211. Any party interested in said proceeding may introduce such evidence as may tend to establish the right of the matter. The burden of proof to change any finding, award, or assessment of said commissioners shall be upon the person objecting thereto. If it appears to the court that the property of the objector has been appraised by the commissioners at more or less than the fair, actual cash market value thereof, or that the fair, direct, and actual damage to property not taken is greater or less than the amount awarded by the commissioners, or that the property of the objector is assessed a special benefit in an amount greater than it will be actually benefited by the proposed improvement, the court shall so find and shall also find what the proper award or assessment shall be, and judgment shall be rendered accordingly. The court, for good cause shown, may modify, alter, change, annul, or confirm the report of the commissioners, or any part thereof, or may order a new appraisement and assessment as to any of the property affected in the proceeding by the same commissioners or by other commissioners appointed by the court.
Source: L. 75: Entire part added, p. 1411, § 1, effective July 1.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L.J. 625 (1979).
38-6-211. Jury trial - motion for new trial - appellate proceedings.
- At any time prior to the date fixed for the hearing of the petition provided for in section 38-6-205, any defendant who owns or is interested in any property to be taken, appropriated, or damaged on account of the proposed improvement may file his demand, in writing, for a trial by a jury of either six or twelve freeholders to appraise and assess the damages which said defendant or person may sustain by reason of the appropriation and condemnation of, or damage to, his property. Any person so demanding a jury, at the time of said demand, shall deposit with the clerk the jury fees for one day's services according to the rate allowed jurors in the district court. The court shall fix an early date for said trial, and on such date the defendants who have made written demands for jury trial within the time provided shall proceed to submit their claims to the jury. Such jury shall be drawn as in civil actions; except that the jurors shall have the qualifications provided in this section.
- The court shall proceed in the same manner and with like powers as in other cases, except as otherwise provided in this part 2. At the request of any party to the proceedings, the court shall order that the jury go upon the premises sought to be taken or damaged, in charge of a sworn bailiff and in the company of any other person that the court may order, and examine the premises in person. At the conclusion of the evidence, the matters in controversy may be argued by counsel to the jury, and at the conclusion of the arguments the court shall instruct the jury in writing. The jury shall return a special verdict fixing and determining the damages or compensation to be allowed to each defendant, severally, who has demanded a jury trial, which verdict shall include the fair, actual cash market value of the land actually taken for the improvement. Any party to the proceeding may move for a new trial in the same manner as in actions at law. The refusal of said court to grant the same may be excepted to and assigned for appeal, but no appeal shall be permitted to stay the improvement sought by the proceeding.
Source: L. 75: Entire part added, p. 1412, § 1, effective July 1.
38-6-212. Costs - compensation.
The cost of the proceedings shall be paid by the municipality. The commissioners shall be allowed a reasonable compensation for their services and expenses, the amount of which shall be fixed by the court. The court may also order that the municipality pay reasonable attorney fees.
Source: L. 75: Entire part added, p. 1412, § 1, effective July 1.
38-6-213. Amendments - new parties - notice.
Amendment to the petition or to any paper or record in the proceedings shall be permitted by the court whenever necessary to a fair hearing and final determination of the questions involved. Should it become necessary at any stage of the proceedings to bring in a new party, the court has the power to make such rule or order in relation thereto as may be deemed reasonable and proper. The court also has the power to make all necessary rules and orders for notice to persons of the pendency of the proceedings.
Source: L. 75: Entire part added, p. 1412, § 1, effective July 1.
38-6-214. Decree - copy to municipality - payments - collection of assessments.
After the trial hearings and determination of all objections to said report, the court shall make its judgment and decree. The decree shall describe the property so condemned and state the owner thereof and shall describe the property against which special assessments have been made and the amounts thereof. When said judgment and decree have been made by the court, the clerk of said court shall make a certified copy thereof and after thirty days deliver the same to the municipality. Unless other provision is made in the charter of the municipality for the payment of said awards, the legislative body, within ninety days after the date of said decree, shall make the necessary appropriation for the payment of the compensation for the property condemned. The proper officers of the municipality shall compensate the respective parties entitled thereto. The municipality shall also provide for the collection of such special assessments as have been confirmed by the final decree of the court.
Source: L. 75: Entire part added, p. 1413, § 1, effective July 1.
ANNOTATION
Law reviews. For comment, "Water: Statewide or Local Concern? City of Thornton v. Farmers Reservoir & Irrigation Co., 194 Colo. 526 , 575 P.2d 382 (1978)", see 56 Den. L.J. 625 (1979).
38-6-215. Municipality may dismiss proceedings.
The attorney for the municipality commencing the proceedings has the right to withdraw said proceedings or to dismiss the same as to one or more of said defendants or as to one or more parcels of property, without prejudice, at any stage of the proceedings, and the petitioner shall pay the costs thereof.
Source: L. 75: Entire part added, p. 1413, § 1, effective July 1.
38-6-216. Ownership in controversy - award.
If the ownership of any property condemned or damaged is in controversy, the amount awarded in payment of said property or the damage thereto shall be paid into the registry of said court for the use of the successful claimants of said property as their respective interests appear to the court. All disputes as to ownership of property taken or damaged shall be tried to the court.
Source: L. 75: Entire part added, p. 1413, § 1, effective July 1.
ARTICLE 7 EMINENT DOMAIN BY URBAN RENEWAL AUTHORITIES - VESTING
Section
38-7-101. Motion for vesting - contents.
- In any proceeding initiated by an urban renewal authority, as defined in section 31-25-103, C.R.S., under the provisions of article 1 of this title, the petitioner or any respondent, at any time after the petition has been filed and before judgment is entered in the proceeding, may file a written verified motion requesting that, immediately or at some specified later date, the petitioner be vested with fee simple title, or some lesser estate, interest, or easement, as may be required, to the real property, or a specified portion thereof, which is the subject of the proceeding, and be authorized to take possession of and use such property. Any motion filed by any respondent shall affect, and be limited in application to, the property in which the said respondent has an interest. All the owners of property must join in any motion filed by any respondent under this section, unless one or more of the owners of record cannot by due diligence be found, in which instance this fact shall be stated in the motion.
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The motion described in subsection (1) of this section, referred to in this article as the "motion for vesting", shall set forth:
- An accurate description of the property to which the motion relates and the estate or interest sought to be acquired or divested; but, in any motion for vesting filed by any respondent, the interest sought to be divested shall be the interest described in the petition in eminent domain; and
- The names of the owners of record of the property described in the motion for vesting; and
- The date upon which it is requested that the estate or interest sought to be acquired or divested shall vest in the petitioner and the date upon which it is requested that the petitioner shall be entitled to possession and use of the subject property.
Source: L. 69: p. 357, § 1. C.R.S. 1963: § 50-7-1.
Cross references: For the definition of an urban renewal authority, see § 31-25-103 (8.5); for proceedings and procedure for taking private property, see part 1 of article 1 of this title.
38-7-102. Motion for vesting - procedure with respect thereto.
- The court shall set a date, not less than twenty-one days after the filing of such motion, for the hearing thereon, and the court shall require at least fourteen days' notice to be given to each party to the proceeding whose interests would be affected by the taking requested. The averments in the motion and the necessity for the vesting of title, or some lesser estate, prior to the final determination of just compensation are deemed admitted unless such averments are controverted in a responsive pleading filed at or before the hearing on the motion for vesting.
-
At the hearing on the motion for vesting, if such averments have been controverted in responsive pleadings filed at or before the said hearing and if the court has not previously, in the same proceeding, determined the same, the court shall first hear and determine the following matters:
- The authority of the petitioner to exercise the right of eminent domain;
- Whether the property described in the motion for vesting is subject to the exercise of the right of eminent domain;
- Whether the right of eminent domain is being properly exercised in the particular proceeding.
- Failure to raise the issues enumerated in subsection (2) of this section, at or before the hearing on the motion for vesting, constitutes a waiver insofar as the said issues relate to the property described in the motion for vesting. The court's order thereon is a final order, and an appeal may be obtained for the review thereof by either party within twenty-one days after the entry of such order, but not thereafter unless the appellate court, on good cause shown, shall, within the twenty-one-day period, extend the time for obtaining an appeal. Appellate review shall not stay the other proceedings under this article, unless the appeal was obtained by the petitioner or unless an order staying such further proceedings is entered by the appellate court upon a showing of irreparable injury.
- If the issues enumerated under subsection (2) of this section are determined in favor of the petitioner and further proceedings are not stayed or if further proceedings are stayed and the appeal results in a determination in favor of the petitioner, the court shall hear and determine all matters raised in and relating to the motion for vesting. If the foregoing matters are determined in favor of the petitioner, the court shall appoint three disinterested commissioners, who shall be freeholders, to assess the compensation to which the respondents named in the motion for vesting may be entitled by reason of the appropriation of the petitioner.
- The commissioners, before entering upon the duties of their office, shall take an oath to faithfully and impartially discharge their duties as commissioners. Any one of them may administer oaths to witnesses produced before them. The commissioners shall forthwith view the property, hear such testimony, and consider such evidence as is reasonably necessary to enable them to make a preliminary finding of an amount constituting just compensation for the taking of the property of the respondents named in the motion for vesting. The commissioners shall forthwith make, subscribe, and file with the clerk of the court in which such proceedings are had a certified report meeting the requirements of section 38-1-115. Upon the motion of the petitioner filed within fourteen days of receipt of the notice provided for in section 38-7-103 (1), the court shall review the said report of the commissioners, and, upon good cause shown by the petitioner, the court may order a new report by the same or different commissioners, and the said order shall void the report objected to. The new commissioners appointed, if any, and the new report shall be in accordance with the provisions of this article.
- Such preliminary finding of just compensation and any deposit made or security provided pursuant thereto shall not be evidence in the further proceedings to ascertain finally the just compensation to be paid and shall not be disclosed in any manner to a jury impaneled in such proceedings.
Source: L. 69: p. 358, § 1. C.R.S. 1963: § 50-7-2. L. 2014: (1), (3), and (5) amended, (HB 14-1347), ch. 208, p. 769, § 4, effective July 1.
Cross references: For contents of the report or verdict in eminent domain proceedings, see § 38-1-115.
38-7-103. Vesting of title - procedure.
- When the certified report of the commissioners is filed with the clerk of the court, the said clerk shall forthwith notify all parties named in the motion for vesting of the filing of the said report and of the amount preliminarily found to constitute just compensation.
- Within seven days of receipt of the notice described in subsection (1) of this section, the petitioner shall deposit with the court or the clerk of the court, for the use of the respondent named in the motion for vesting, the sum of money preliminarily found to constitute just compensation by the commissioners. If the petitioner has filed a motion for a new report under section 38-7-102 (5), the deposit shall not be due until seven days following the court's ruling on the said motion, if the motion is denied. If the motion is granted by the court, a new notice shall be sent by the clerk upon receipt of the new report.
- Upon payment into the court or the clerk of the court of the sum described in subsection (2) of this section by the petitioner, the court shall enter an order vesting in the petitioner the fee simple title, or such lesser estate, interest, or easement, as may be required, to the property as requested in the motion for vesting at such date as the court considers proper, and fixing a date on which the petitioner is authorized to take possession of and to use the property. A certified copy of said order shall be recorded and indexed in the recorder's office of the county in which the property is located in like manner and with like effect as if it were a deed of conveyance from the owners and parties interested to the proper parties. If there is more than one person interested as owner or otherwise in the property and they are unable to agree upon the nature, extent, or value of their respective interests in the total amount of compensation so ascertained and assessed on an undivided basis, the nature, extent, or value of said interests shall be determined according to law in a separate and subsequent proceeding and distribution made among the several claimants.
- At the request of any affected party and upon his showing of undue hardship or other good cause, the petitioner's authority to take possession of the property shall be postponed for more than fourteen days after the date of such vesting of title or more than twenty-one days after the entry of such order when the order does not vest title in the petitioner. If postponement occurs, such party shall pay to the petitioner a reasonable rental for such property, the amount thereof to be determined by the court.
Source: L. 69: p. 359, § 1. C.R.S. 1963: § 50-7-3. L. 2014: (2) and (4) amended, (HB 14-1347), ch. 208, p. 769, § 5, effective July 1.
38-7-104. Withdrawals from deposit.
Upon proper application to the court or by stipulation between the parties, the respondent may withdraw from the sum deposited pursuant to section 38-7-103 (2) an amount not to exceed three-fourths of the highest valuation evidenced by testimony presented by the petitioner to the commissioners, unless the petitioner agrees to a larger withdrawal. All parties interested in the property sought to be acquired shall be required to consent and agree to any such withdrawal. Any such withdrawal of said deposit shall be a partial payment of the amount of total compensation to be paid and shall be deducted by the clerk of the court from any award or verdict entered thereafter. Any party making such withdrawal shall refund to the clerk of the court, upon the entry of a proper court order, any portion of the amount so withdrawn which exceeds the amount finally ascertained in the proceeding to be just compensation or damages, costs, or expenses owing to such party.
Source: L. 69: p. 360, § 1. C.R.S. 1963: § 50-7-4.
38-7-105. Construction of article.
The right to take possession and title prior to the final judgment as prescribed in this article is in addition to any other right, power, or authority otherwise conferred by law and shall not be construed as abrogating, limiting, or modifying any such other right, power, or authority, including the rights, powers, and authorities granted in articles 1 to 6 of this title. Should the provisions of this article be invoked by any party, the final determination of the amount constituting just compensation shall be determined pursuant to the provisions of article 1 of this title.
Source: L. 69: p. 360, § 1. C.R.S. 1963: § 50-7-5.
Cross references: For computing damages and compensation, see § 38-1-114.
38-7-106. Commissioners - other articles.
Nothing in this article shall be construed to prevent a commissioner appointed under this article from being appointed pursuant to the provisions of articles 1 to 6 of this title in the same eminent domain proceeding. Nothing in this article shall prevent the appointment of a commissioner, for purposes of this article, who has previously been appointed in the same proceeding under the provisions of article 1 of this title.
Source: L. 69: p. 360, § 1. C.R.S. 1963: § 50-7-6.
Cross references: For the appointment of a board of commissioners to determine just compensation, see § 38-1-105 (1).
38-7-107. Interest.
The petitioner shall pay interest as provided in section 38-1-116; except that no interest shall be allowed on that portion of the award which the respondent received or could have received as a partial payment by withdrawal from the sum deposited by the petitioner pursuant to section 38-7-103 (2).
Source: L. 69: p. 360, § 1. C.R.S. 1963: § 50-7-7.
Cross references: For the interest on an award, see § 38-1-116.
FRAUDS - STATUTE OF FRAUDS
ARTICLE 8 FRAUDULENT TRANSFERS
Law reviews: For article, "Representing the Debtor: Counsel Beware", see 23 Colo. Law. 539 (1994); for article, "Overcoming Difficulties in Collecting Child Support and Maintenance", see 24 Colo. Law. 2725 (1995); for article, "Litigating Claims under the Colorado Uniform Fraudulent Transfer Act", see 45 Colo. Law. 35 (April 2016).
Section
UNIFORM FRAUDULENT TRANSFER ACT PREFATORY NOTE
The Uniform Fraudulent Conveyance Act was promulgated by the Conference of Commissioners on Uniform State Laws in 1918. The Act has been adopted in 25 jurisdictions, including the Virgin Islands. It has also been adopted in the sections of the Bankruptcy Act of 1938 and the Bankruptcy Reform Act of 1978 that deal with fraudulent transfers and obligations.
The Uniform Act was a codification of the "better" decisions applying the Statute of 13 Elizabeth. See Analysis of H.R. 12339, 74th Cong., 2d Sess. 213 (1936). The English statute was enacted in some form in many states, but, whether or not so enacted, the voidability of fraudulent transfer was part of the law of every American jurisdiction. Since the intent to hinder, delay, or defraud creditors is seldom susceptible of direct proof, courts have relied on badges of fraud. The weight given these badges varied greatly from jurisdiction, and the Conference sought to minimize or eliminate the diversity by providing that proof of certain fact combinations would conclusively establish fraud. In the absence of evidence of the existence of such facts, proof of a fraudulent transfer was to depend on evidence of actual intent. An important reform effected by the Uniform Act was the elimination of any requirement that a creditor have obtained a judgment or execution returned unsatisfied before bringing an action to avoid a transfer as fraudulent. See American Surety Co. v. Conner, 251 N.Y. 1, 166 N.E. 783, 67 A.L.R. 244 (1929) (per C.J. Cardozo).
The Conference was persuaded in 1979 to appoint a committee to undertake a study of the Uniform Act with a view to preparing the draft of a revision. The Conference was influenced by the following considerations:
- The Bankruptcy Reform Act of 1978 has made numerous changes in the section of that Act dealing with fraudulent transfers and obligations, thereby substantially reducing the correspondence of the provisions of the federal bankruptcy law on fraudulent transfers with the Uniform Act.
- The Committee on Corporate Laws of the Section of Corporations, Banking & Business Law of the American Bar Association, engaged in revising the Model Corporation Act, suggested that the Conference review provisions of the Uniform Act with a view to determining whether the Acts are consistent in respect to the treatment of dividend distributions.
- The Uniform Commercial Code (located in title 4 of C.R.S.), enacted at least in part by all 50 states, had substantially modified related rules of law regulating transfers of personal property, notably by facilitating the making and perfection of security transfers against attack by unsecured creditors.
- Debtors and trustees in a number of cases have avoided foreclosure of security interests by invoking the fraudulent transfer section of the Bankruptcy Reform Act.
- The Model Rules of Professional Conduct adopted by the House of Delegates of the American Bar Association on August 2, 1983, forbid a lawyer to counsel or to assist a client in conduct that the lawyer knows is fraudulent.
The Drafting Committee appointed by the Conference held its first meeting in January of 1983. A first reading of a draft of the revision of the Uniform Fraudulent Conveyance Act was had at the Conference's meeting in Boca Raton, Florida, on July 27, 1983. The Committee held four meetings in addition to a meeting held in connection with the Conference meeting in Boca Raton. Meetings were also attended by the following representatives of interested organizations:
Robert Rosenberg, Esq., of the American Bar Association;
Richard Cherin, Esq., of the Commercial Financial Services Committee of the Corporation, Banking and Business Law Section of the American Bar Association;
Robert Zinman, Esq., of the American College of Real Estate Lawyers;
Bruce Bernstein, Esq., of the National Commercial Finance Association;
Ernest E. Specks, Esq., of the Real Property, Probate and Trust Law Section of the American Bar Association.
The Committee determined to rename the Act the Uniform Fraudulent Transfer Act in recognition of its applicability to transfers of personal property as well as real property, "conveyance" having a connotation restricting it to a transfer of personal property. As noted in Comment (2) accompanying § 1(2) (numbered as section 38-8-102 (2) in C.R.S.) and Comment (8) accompanying § 4 (numbered as section 38-8-105 in C.R.S.), however, this Act, like the original Uniform Act, does not purport to cover the whole law of voidable transfers and obligations. The limited scope of the original Act did not impair its effectiveness in achieving uniformity in the areas covered. See McLaughlin, Application of the Uniform Fraudulent Conveyance Act, 46 Harv. L. Rev. 404, 405 (1933).
The basic structure and approach of the Uniform Fraudulent Conveyance Act are preserved in the Uniform Fraudulent Transfer Act. There are two sections in the new Act delineating what transfers and obligations are fraudulent. Section 4(a) (numbered as section 38-8-105 (1) in C.R.S.) is an adaptation of three sections of the U.F.C.A.; § 5(a) (numbered as section 38-8-106 (1) in C.R.S.) is an adaptation of another section of the U.F.C.A.; and § 5(b) (numbered as section 38-8-106 (2) in C.R.S.) is new. One section of the U.F.C.A. (§ 8) is not carried forward into the new Act because deemed to be redundant in part and in part susceptible of inequitable application. Both Acts declare a transfer made or an obligation incurred with actual intent to hinder, delay, or defraud creditors to be fraudulent. Both Acts render a transfer made or obligation incurred without adequate consideration to be constructively fraudulent - i.e., without regard to the actual intent of the parties - under one of the following conditions:
(1) the debtor was left by the transfer or obligation with unreasonably small assets for a transaction or the business in which he was engaged;
(2) the debtor intended to incur, or believed that he would incur, more debts than he would be able to pay; or
(3) the debtor was insolvent at the time or as a result of the transfer or obligation.
As under the original Uniform Fraudulent Conveyance Act a transfer or obligation that is constructively fraudulent because insolvency concurs with or follows failure to receive adequate consideration is voidable only by a creditor in existence at the time the transfer occurs or the obligation is incurred. Either an existing or subsequent creditor may avoid a transfer or obligation for inadequate consideration when accompanied by the financial condition specified in § 4(a)(2)(i) (section 38-8-105 (1)(b)(I) in C.R.S.) or the mental state specified in § 4(a)(2)(ii) (section 38-8-104 (1)(b)(II) in C.R.S.).
Reasonably equivalent value is required in order to constitute adequate consideration under the revised Act. The revision follows the Bankruptcy Code in eliminating good faith on the part of the transferee or obligee as an issue in the determination of whether adequate consideration is given by a transferee or obligee. The new Act, like the Bankruptcy Act, allows the transferee or obligee to show good faith in defense after a creditor establishes that a fraudulent transfer has been made or a fraudulent obligation has been incurred. Thus a showing by a defendant that a reasonable equivalent has been given in good faith for a transfer or obligation is a complete defense although the debtor is shown to have intended to hinder, delay, or defraud creditors.
A good faith transferee or obligee who has given less than a reasonable equivalent is nevertheless allowed a reduction in liability to the extent of the value given. The new Act, like the Bankruptcy Code, eliminates the provision of the Uniform Fraudulent Conveyance Act that enables a creditor to attack a security transfer on the ground that the value of the property transferred is disproportionate to the debt secured. The premise of the new Act is that the value of the interest transferred for security is measured by and thus corresponds exactly to the debt secured. Foreclosure of a debtor's interest by a regularly conducted, noncollusive sale on default under a mortgage or other security agreement may not be avoided under the Act as a transfer for less than a reasonably equivalent value.
The definition of insolvency under the Act is adapted from the definition of the term in the Bankruptcy Code. Insolvency is presumed from proof of a failure generally to pay debts as they become due.
The new Act adds a new category of fraudulent transfer, namely, a preferential transfer by an insolvent insider to a creditor who had reasonable cause to believe the debtor to be insolvent. An insider is defined in much the same way as in the Bankruptcy Code and includes a relative, also defined as in the Bankruptcy Code, a director or officer of a corporate debtor, a partner, or a person in control of a debtor. This provision is available only to an existing creditor. Its premise is that an insolvent debtor is obliged to pay debts to creditors not related to him before paying those who are insiders.
The new Act omits any provision directed particularly at transfers or obligations of insolvent partnership debtors. Under § 8 of the Uniform Fraudulent Conveyance Act any transfer made or obligation incurred by an insolvent partnership to a partner is fraudulent without regard to intent or adequacy of consideration. So categorical a condemnation of a partnership transaction with a partner may unfairly prejudice the interests of a partner's separate creditors. The new Act also omits as redundant a provision in the original Act that makes fraudulent a transfer made or obligation incurred by an insolvent partnership for less than a fair consideration to the partnership.
Section 7 (numbered as section 38-8-108 in C.R.S.) lists the remedies available to creditors under the new Act. It eliminates as unnecessary and confusing a differentiation made in the original Act between the remedies available to holders of matured claims and those holding unmatured claims. Since promulgation of the Uniform Fraudulent Conveyance Act the Supreme Court has imposed restrictions on the availability and use of prejudgment remedies. As a result many states have amended their statutes and rules applicable to such remedies, and it is frequently unclear whether a state's procedures include a prejudgment remedy against a fraudulent transfer or obligation. A bracketed paragraph is included in Section 7 for adoption by those states that elect to make such a remedy available.
Section 8 (numbered as section 38-8-109 in C.R.S.) prescribes the measure of liability of a transferee or obligee under the Act and enumerates defenses. Defenses against avoidance of a preferential transfer to an insider under § 5(b) (numbered as section 38-8-106 (2) in C.R.S.) include an adaptation of defenses available under § 547(c)(2) and (4) of the Bankruptcy Code when such a transfer is sought to be avoided as a preference by the trustee in bankruptcy. In addition a preferential transfer may be justified when shown to be made pursuant to a good faith effort to stave off forced liquidation and rehabilitate the debtor. Section 8 also precludes avoidance, as a constructively fraudulent transfer, of the termination of a lease on default or the enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code.
The new Act includes a new section specifying when a transfer is made or an obligation is incurred. The section specifying the time when a transfer occurs is adapted from Section 548(d) of the Bankruptcy Code. Its premise is that if the law prescribes a mode for making the transfer a matter of public record or notice, it is not deemed to be made for any purpose under the Act until it has become such a matter of record or notice.
The new Act also includes a statute of limitations that bars the right rather than the remedy on expiration of the statutory periods prescribed. The law governing limitations on actions to avoid fraudulent transfers among the states is unclear and full of diversity. The Act recognizes that laches and estoppel may operate to preclude a particular creditor from pursuing a remedy against a fraudulent transfer or obligation even though the statutory period of limitations has not run.
38-8-101. Short title.
This article shall be known and may be cited as the "Colorado Uniform Fraudulent Transfer Act".
Source: L. 91: Entire article added, p. 1681, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 12 in the uniform act. Colorado placed it here and renumbered the succeeding sections accordingly. Colorado also used its own numbering system for subsections and paragraphs within sections. Where necessary, these changes will be noted in the comments.
38-8-102. Definitions.
As used in this article, unless the context otherwise requires:
-
"Affiliate" means:
-
A person who directly or indirectly owns, controls, or holds with power to vote twenty percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities:
- As a fiduciary or agent without sole discretionary power to vote the securities; or
- Solely to secure a debt, if the person has not exercised the power to vote;
-
A corporation, twenty percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor or a person who directly or indirectly owns, controls, or holds with power to vote, twenty percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities:
- As a fiduciary or agent without sole power to vote the securities; or
- Solely to secure a debt, if the person has not in fact exercised the power to vote;
- A person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or
- A person who operates the debtor's business under a lease or other agreement or controls substantially all of the debtor's assets.
-
A person who directly or indirectly owns, controls, or holds with power to vote twenty percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities:
-
"Asset" means property of a debtor. "Asset" shall not include:
- Property to the extent it is encumbered by a valid lien;
- Property to the extent it is generally exempt immediately prior to the time of transfer under nonbankruptcy law; or
- An interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant.
- "Claim" means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
- "Control" of a debtor or debtor's property by another person does not include conduct undertaken by the other person to enforce rights existing under a valid agreement, entered into in good faith and not primarily for the purpose of obtaining control of the debtor or the debtor's property, including without limitation a lease of such property.
- "Creditor" means a person who has a claim.
- "Debt" means liability on a claim.
- "Debtor" means a person who is liable on a claim.
-
"Insider" means:
-
If the debtor is an individual:
- A relative of the debtor or of a general partner of the debtor;
- A partnership in which the debtor is a general partner;
- A general partner in a partnership described in subparagraph (II) of this paragraph (a); or
- A corporation of which the debtor is a director, officer, or person in control;
-
If the debtor is a corporation:
- A director of the debtor;
- An officer of the debtor;
- A person in control of the debtor;
- A partnership in which the debtor is a general partner;
- A general partner in a partnership described in subparagraph (IV) of this paragraph (b); or
- A relative of a general partner, director, officer, or person in control of the debtor;
-
If the debtor is a partnership:
- A general partner in the debtor;
- A relative of a general partner in, or a general partner of, or a person in control of the debtor;
- Another partnership in which the debtor is a general partner;
- A general partner in a partnership described in subparagraph (III) of this paragraph (c); or
- A person in control of the debtor;
- An affiliate, or an insider of an affiliate as if the affiliate were the debtor; or
- A managing agent of the debtor.
-
If the debtor is an individual:
- "Lien" means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien.
- "Person" means an individual, partnership, corporation, association, organization, government or governmental subdivision or agency, business trust, estate, trust, or any other legal or commercial entity.
- "Property" means anything that may be the subject of ownership.
- "Relative" means an individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree.
- "Transfer" means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance.
- "Valid lien" means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.
Source: L. 91: Entire article added, p. 1681, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 1 in the uniform act. In the introductory portion to this section, after the word "article", Colorado added a comma and the words "unless the context otherwise requires". In the introductory portion to subsection (2), Colorado replaced a comma with a period and changed the words "but the term does not include" to "'Asset ' shall not include". In subsection (2)(b), after "exempt", Colorado added "immediately prior to the time of transfer". The definition of "control" in subsection (4) has been added and subsequent definitions renumbered accordingly. In subsection (8), the word "means" has been substituted for "includes".
OFFICIAL COMMENT
- The definition of "affiliate" is derived from § 101(2) of the Bankruptcy Code.
- The definition of "asset" is substantially to the same effect as the definition of "assets" in § 1 of the Uniform Fraudulent Conveyance Act. The definition in this Act, unlike that in the earlier Act, does not, however require a determination that the property is liable for the debts of the debtor. Thus, an unliquidated claim for damages resulting from personal injury or a contingent claim of a surety for reimbursement, contribution, or subrogation may be counted as an asset for the purpose of determining whether the holder of the claim is solvent as a debtor under § 2 of this Act (numbered as section 38-8-103 in C.R.S.), although applicable law may not allow such an asset to be levied on and sold by a creditor. Cf. Manufacturers & Traders Trust Co. v. Goldman (In re Ollag Construction Equipment Corp.), 578 F.2d 904, 907-09 (2d Cir. 1978).
- The definition of "claim" is derived from § 101(4) of the Bankruptcy Code. Since the purpose of this Act is primarily to protect unsecured creditors against transfers and obligations injurious to their rights, the words "claim" and "debt" as used in the Act generally have reference to an unsecured claim and debt. As the context may indicate, however, usage of the terms is not so restricted. See, e.g. §§ 1(1)(i)(B) (numbered as section 38-8-102 (1)(b)(II) in C.R.S.) and 1(8) (numbered as section 38-8-102 (9) in C.R.S.).
- The definition of "creditor" in combination with the definition of "claim" has substantially the same effect as the definition of "creditor" under § 1 of the Uniform Fraudulent Conveyance Act. As under that Act, the holder of an unliquidated tort claim or a contingent claim may be a creditor protected by this Act.
- The definition of "debt" is derived from § 101(11) of the Bankruptcy Code.
- The definition of "debtor" is new.
- The definition of "insider" is derived from § 101(28) of the Bankruptcy Code. The definition has been restricted in clauses (i)(C), (ii)(E), and (iii)(D) (clauses (a)(III), (b)(V), and (c)(IV) in C.R.S.), to make clear that a partner is not an insider of an individual, corporation, or partnership if any of these latter three persons is only a limited partner. The definition of "insider" in the Bankruptcy Code does not purport to make a limited partner an insider of the partners or of the partnership with which the limited partner is associated, but it is susceptible of a contrary interpretation and one which would extend unduly the scope of the defined relationship when the limited partner is not a person in control of the partnership. The definition of "insider" in this Act also differs from the definition in the Bankruptcy Code in omitting the reference in 11 U.S.C. § 101(28)(D) to an elected official or relative of such an official as an insider of a municipality. As in the Bankruptcy Code (see 11 U.S.C. § 102(3)), the word "includes" is not limiting, however. Thus, a court may find a person living with an individual for an extended time in the same household or as a permanent companion to have the kind of close relationship intended to be covered by the term "insider." Likewise, a trust may be found to be an insider of a beneficiary.
- The definition of "lien" is derived from paragraphs (30), (31), (43), and (45) of § 101 of the Bankruptcy Code, which define "judicial lien," "lien," "security interest," and "statutory lien" respectively.
- The definition of "person" is adapted from paragraphs (28) and (30) of § 1-201 of the Uniform Commercial Code, defining "organization" and "person" respectively.
- The definition of "property" is derived from § 1-201(33) of the Uniform Probate Code (see section 15-10-201 (36) in C.R.S.). Property includes both real and personal property, whether tangible or intangible, and any interest in property, whether legal or equitable.
- The definition of "relative" is derived from § 101(37) of the Bankruptcy Code but is explicit in its references to the spouse of a debtor in view of uncertainty as to whether the common law determines degrees of relationship by affinity.
- The definition of "transfer" is derived principally from § 101(48) of the Bankruptcy Code. The definition of "conveyance" in § 1 of the Uniform Fraudulent Conveyance Act was similarly comprehensive, and the references in this Act to "payment of money, release, lease, and the creation of a lien or incumbrance" are derived from the Uniform Fraudulent Conveyance Act. While the definition in the Uniform Fraudulent Conveyance Act did not explicitly refer to an involuntary transfer, the decisions under that Act were generally consistent with an interpretation that covered such a transfer. See, e.g., Hearn 45 St. Corp. v. Jano, 283 N.Y. 139, 27 N.E.2d 814, 128 A.L.R. 1285 (1940) (execution and foreclosure sales); Lefkowitz v. Finkelstein Trading Corp., 14 F.Supp. 898, 899 (S.D.N.Y. 1936) (execution sale); Langan v. First Trust & Deposit Co., 277 App.Div. 1090, 101 N.Y.S.2d 36 (4th Dept. 1950), aff'd, 302 N.Y. 932, 100 N.E.2d 189 (1951) (mortgage foreclosure); Catabene v. Wallner, 16 N.J.Super. 597, 602, 85 A.2d 300, 302 (1951) (mortgage foreclosure).
- The definition of "valid lien" is new. A valid lien includes an equitable lien that may not be defeated by a judicial lien creditor. See, e.g., Pearlman v. Reliance Insurance Co., 371 U.S. 132, 136 (1962) (upholding a surety's equitable lien in respect to a fund owing a bankrupt contractor).
Subparagraphs (i), (ii), and (iii) (paragraph (a), (b), and (c) in C.R.S.) provide clarification by excluding from the term not only generally exempt property but also an interest in a tenancy by the entirety in many states and an interest that is generally beyond reach by unsecured creditors because subject to a valid lien. This Act, like its predecessor and the Statute of 13 Elizabeth, declares rights and provides remedies for unsecured creditors against transfers that impede them in the collection of their claims. The laws protecting valid liens against impairment by levying creditors, exemption statutes, and the rules restricting levyability of interest in entireties property are limitations on the rights and remedies of unsecured creditors, and it is therefore appropriate to exclude property interests that are beyond the reach of unsecured creditors from the definition of "asset" for the purposes of this Act.
A creditor of a joint tenant or tenant in common may ordinarily collect a judgment by process against the tenant's interest, and in some states a creditor of a tenant by the entirety may likewise collect a judgment by process against the tenant's interest. See 2 American Law of Property 10, 22, 28-32 (1952); Craig, An Analysis of Estates by the Entirety in Bankruptcy, 48 Am.Bankr.L.J. 255, 258-59 (1974). The levyable interest of such a tenant is included as an asset under this Act.
The definition of "assets" in the Uniform Fraudulent Conveyance Act excluded property that is exempt from liability for debts. The definition did not, however, exclude all property that cannot be reached by a creditor through judicial proceedings to collect a debt. Thus, it included the interest of a tenant by the entirety although in nearly half the states such an interest cannot be subjected to liability for a debt unless it is an obligation owed jointly by the debtor with his or her cotenant by the entirety. See 2 American Law of Property 29 (1952); Craig, An Analysis of Estates by the Entirety in Bankruptcy, 48 Am.Bankr.L.J. 255, 258 (1974). The definition in this Act requires exclusion of interests in property held by tenants by the entirety that are not subject to collection process by a creditor without a right to proceed against both tenants by the entirety as joint debtors.
The reference to "generally exempt" property in § 1(2)(ii) (numbered as section 38-8-102 (2)(b) in C.R.S.) recognizes that all exemptions are subject to exceptions. Creditors having special rights against generally exempt property typically include claimants for alimony, taxes, wages, the purchase price of the property, and labor or materials that improve the property. See Uniform Exemptions Act § 10 and the accompanying Comment. The fact that a particular creditor may reach generally exempt property by resorting to judicial process does not warrant its inclusion as an asset in determining whether the debtor is insolvent.
Since this Act is not an exclusive law on the subject of voidable transfers and obligations (see Comment (8) to § 4 infra) (numbered as section 38-8-105 in C.R.S.), it does not preclude the holder of a claim that may be collected by process against property generally exempt as to other creditors from obtaining relief from a transfer of such property that hinders, delays, or defrauds the holder of such a claim. Likewise the holder of an unsecured claim enforceable against tenants by the entirety is not precluded by the Act from pursuing a remedy against a transfer of property held by the entirety that hinders, delays, or defrauds the holder of such a claim.
Nonbankruptcy law is the law of a state or federal law that is not part of the Bankruptcy Code, Title 11 of the United States Code. The definition of an "asset" thus does not include property that would be subject to administration for the benefit of creditors under the Bankruptcy Code unless it is subject under other applicable law, state or federal, to process for the collection of a creditor's claim against a single debtor.
ANNOTATION
"Creditor" includes persons with unlitigated claims against a defendant. Sands v. New Age Family P'ship, Ltd., 897 P.2d 917 (Colo. App. 1995).
The general assembly restricted the definition of "insider" under this act by substituting the word "means" in place of the word "includes" in the uniform act. Although the general assembly chose to change only one word--switching the word "includes" to "means"--the change in verbs has substantive implications. The terms "means" and "includes" are not necessarily synonymous. The natural distinction would be that where "means" is employed, the term and its definition are to be interchangeable equivalents, and that the verb "includes" imports a general class, some of whose particular instances are those specified in the definition. In re Blair, 594 B.R. 712 (Bankr. D. Colo. 2018).
Under the plain meaning of subsection (8), the term "insider" is restricted exclusively to those narrow categories of persons that are listed. The first category includes a "relative of the debtor". In re Blair, 594 B.R. 712 (Bankr. D. Colo. 2018).
A fiance does not qualify as a "relative of the debtor". In re Blair, 594 B.R. 712 (Bankr. D. Colo. 2018).
"Insider" includes spouses; therefore, the burden of proof lies with the creditor to prove each and every element of a fraudulent transfer under the statute before the debtor and spouse must come forward to prove their entitlement to the defense of good faith and reasonably equivalent value. In re Thomason, 202 B.R. 768 (Bankr. D. Colo. 1996).
"Obligation," not specifically defined in this section, is generally synonymous with "transfer" and includes the assumption by the debtor of a duty to transfer an asset as a fraudulent transfer, even though no actual transfer has as yet taken place. Sands v. New Age Family P'ship, Ltd., 897 P.2d 917 (Colo. App. 1995).
Neither "transfer" nor "obligation" refers to the creditor's claim against the debtor, but refers instead to the transaction by which the debtor sought to place assets beyond the reach of creditors. Sands v. New Age Family P'ship, Ltd., 897 P.2d 917 (Colo. App. 1995).
A transaction between a husband and wife is presumptively fraudulent. Nevertheless, the movant must still establish an intent to hinder, delay, or defraud. Krol v. Unglaub, 332 B.R. 303 (Bankr. N.D. Ill. 2005).
Debtor's transfers to his fiance and her company were not fraudulent transfers to an insider. Because the fianc had not married debtor, she did not qualify as a relative. Nor was the company she owned a relative of the debtor. In re Blair, 594 B.R. 712 (Bankr. D. Colo. 2018).
As to the other exclusive categories of "insiders" listed in subsection (8), neither the fiance nor her company qualified as "insiders" because neither was: (1) a partnership in which the debtor was a general partner; (2) a general partner in such a partnership; or (3) a corporation of which the debtor was a director, officer, or person in control. In re Blair, 594 B.R. 712 (Bankr. D. Colo. 2018).
Applied in Wilson v. Pauling, 457 F. Supp. 3d 965 (D. Colo. 2020).
38-8-103. Insolvency.
- A debtor is insolvent if the sum of the debtor's debts is greater than all of the debtor's assets at a fair valuation.
- A debtor who is generally not paying his debts as they become due is presumed to be insolvent.
- A partnership is insolvent under subsection (1) of this section if the sum of the partnership's debts is greater than the aggregate of all of the partnership's assets, at a fair valuation, and the sum of the excess of the value of each general partner's nonpartnership assets over the partner's nonpartnership debts.
- Assets under this section do not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this article.
- Debts under this section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.
Source: L. 91: Entire article added, p. 1684, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 2 in the uniform act. In subsection (3), the phrase "at a fair valuation" has been moved from immediately after "aggregate" to immediately after the first "assets".
OFFICIAL COMMENT
- Subsection (a) (numbered as subsection (1) in C.R.S.) is derived from the definition of "insolvent" in § 101(29)(A) of the Bankruptcy Code. The definition in subsection (a) and the correlated definition of partnership insolvency in subsection (c) (numbered as subsection (3) in C.R.S.) contemplate a fair valuation of the debts as well as the assets of the debtor. As under the definition of the same term in § 2 of the Uniform Fraudulent Conveyance Act exempt property is excluded from the computation of the value of the assets. See § 1(2) supra. (numbered as section 38-8-102 (2) in C.R.S.) For similar reasons interests in valid spendthrift trusts and interests in tenancies by the entireties that cannot be severed by a creditor of only one tenant are not included. See the Comment to § 1(2) supra. (numbered as section 38-8-102 (2) in C.R.S.) Since a valid lien also precludes an unsecured creditor from collecting the creditor's claim from the encumbered interest in a debtor's property, both the encumbered interest and the debt secured thereby are excluded from the computation of insolvency under this Act. See § 1(2) supra (numbered as section 38-8-102 (2) in C.R.S.) and subsection (e) of this section (numbered as subsection (5) in C.R.S.).
- Section 2(b) (numbered as section 38-8-103 (2) in C.R.S.) establishes a rebuttable presumption of insolvency from the fact of general nonpayment of debts as they become due. Such general nonpayment is a ground for the filing of an involuntary petition under § 303(h)(1) of the Bankruptcy Code. See also U.C.C. § 1-201(23), which declares a person to be "insolvent" who "has ceased to pay his debts in the ordinary course of business." The presumption imposes on the party against whom the presumption is directed the burden of proving that the nonexistence of insolvency as defined in § 2(a) is more probable than its existence. See Uniform Rules of Evidence (1974 Act), Rule 301(a). The 1974 Uniform Rule 301(a) conforms to the Final Draft of Federal Rule 301 as submitted to the United States Supreme Court by the Advisory Committee on Federal Rules of Evidence. "The so-called 'bursting bubble' theory, under which a presumption vanishes upon the introduction of evidence which would support a finding of the nonexistence of the presumed fact, even though not believed, is rejected as according presumptions too 'slight and evanescent' an effect." Advisory Committee's Note to Rule 301. See also 1 J.Weinstein & M.Berger, Evidence 301 [01] (1982).
- Subsection (c) (numbered as subsection (3) in C.R.S.) is derived from the definition of partnership insolvency in § 101(29)(B) of the Bankruptcy Code. The definition conforms generally to the definition of the same term in § 2(2) of the Uniform Fraudulent Conveyance Act.
- Subsection (d) (numbered as subsection (4) in C.R.S.) follows the approach of the definition of "insolvency" in § 101(29) of the Bankruptcy Code by excluding from the computation of the value of the debtor's assets any value that can be realized only by avoiding a transfer of an interest formerly held by the debtor or by discovery or pursuit of property that has been fraudulently concealed or removed.
- Subsection (e) (numbered as subsection (5) in C.R.S.) is new. It makes clear the purpose not to render a person insolvent under this section by counting as a debt an obligation secured by property of the debtor that is not counted as an asset. See also Comments to §§ 1(2) (numbered as section 38-8-102 (2) in C.R.S.) and 2(a) supra (numbered as section 38-8-103 (1) in C.R.S.).
The requirement of § 550(b)(1) of the Bankruptcy Code that a transferee be "without knowledge of the voidability of the transfer" in order to be protected has been omitted as inappropriate. Knowledge of the facts rendering the transfer voidable would be inconsistent with the good faith that is required of a protected transferee. Knowledge of the voidability of a transfer would seem to involve a legal conclusion. Determination of the voidability of the transfer ought not to require the court to inquire into the legal sophistication of the transferee.
The presumption is established in recognition of the difficulties typically imposed on a creditor in proving insolvency in the bankruptcy sense, as provided in subsection (a) (numbered as subsection (1) in C.R.S.). See generally Levit, The Archaic Concept of Balance-Sheet Insolvency, 47 Am.Bankr.L.J. 215 (1973). Not only is the relevant information in the possession of a noncooperative debtor but the debtor's records are more often than not incomplete and inaccurate. As a practical matter, insolvency is most cogently evidenced by a general cessation of payment of debts, as has long been recognized by the laws of other countries and is now reflected in the Bankruptcy Code. See Honsberger, Failure to Pay One's Debts Generally as They Become Due: The Experience of France and Canada, 54 Am.Bankr.L.J. 153 (1980); J. MacLachlan, Bankruptcy 13, 63-64, 436 (1956). In determining whether a debtor is paying its debts generally as they become due, the court should look at more than the amount and due dates of the indebtedness. The court should also take into account such factors as the number of the debtor's debts, the proportion of those debts not being paid, the duration of the nonpayment, and the existence of bona fide disputes or other special circumstances alleged to constitute an explanation for the stoppage of payments. The court's determination may be affected by a consideration of the debtor's payment practices prior to the period of alleged nonpayment and the payment practices of the trade or industry in which the debtor is engaged. The case law that has developed under § 303(h)(1) of the Bankruptcy Code has not required a showing that a debtor has failed or refused to pay a majority in number and amount of his or her debts in order to prove general nonpayment of debts as they become due. See, e.g., Hill v. Cargill, Inc. (In re Hill), 8 B.R. 779, 3 C.B.C.2d 920 (Bk.D.Minn. 1981) (nonpayment of three largest debts held to constitute general nonpayment, although small debts were being paid); In re All Media Properties, Inc., 5 B.R. 126, 6 B.C.D. 586, 2 C.B.C.2d 449 (Bk.S.D.Tex. 1980) (missing significant number of payments or regularly missing payments significant in amount said to constitute general nonpayment; missing payments on more than 50% of aggregate of claims said not to be required to show general nonpayment; nonpayment for more than 30 days after billing held to establish nonpayment of a debt when it is due); In re Kreidler Import Corp., 4 B.R. 256, 6 B.C.D. 608, 2 C.B.C.2d 159 (Bk.D.Md. 1980) (nonpayment of one debt constituting 97% of debtor's total indebtedness held to constitute general nonpayment). A presumption of insolvency does not arise from nonpayment of a debt as to which there is a genuine bona fide dispute, even though the debt is a substantial part of the debtor's indebtedness. Cf. 11 U.S.C. § 303(h)(1), as amended by § 426(b) of Public Law No. 98-882, the Bankruptcy Amendments and Federal Judgeship Act of 1984.
ANNOTATION
The fair value balance sheet method for determining insolvency is essentially mandated for individuals. The Colorado Uniform Fraudulent Transfer Act method of determining insolvency mirrors the balance sheet test for insolvency under the federal bankruptcy code. The balance sheet test for insolvency requires that the court determine the fair value of the debtor's assets and the extent of its liabilities at the time of each contested transfer. In re Blair, 588 B.R. 605 (Bankr. D. Colo. 2018).
Subsection (2)'s presumption appears to be based only on a simple factual inquiry: At the time of the alleged fraudulent transfers, was the debtor paying its debts as they became due, or not? It is a factual question and not really the province for an expert analysis. No expert knowledge, skill, experience, training, or education seems needed to ascertain whether someone is paying their debts. In re Blair, 588 B.R. 605 (Bankr. D. Colo. 2018).
38-8-104. Value.
- Value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the promisor's business to furnish support to the debtor or another person.
- For the purposes of sections 38-8-105 and 38-8-106, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive sale, foreclosing on assets subject to a lien, or pursuant to the execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust, or security agreement.
- A transfer is made for present value if the exchange between the debtor and the transferee is intended by them to be contemporaneous and is in fact substantially contemporaneous.
Source: L. 91: Entire article added, p. 1684, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 3 in the uniform act. In subsection (2), after "conducted,", the phrase "noncollusive foreclosure sale or execution" has been changed to "noncollusive sale, foreclosing on assets subject to a lien, or pursuant to the execution".
OFFICIAL COMMENT
- This section defines "value" as used in various contexts in this Act, frequently with a qualifying adjective. The word appears in the following sections:
- Section 3(a) (numbered as section 38-8-104 (1) in C.R.S.) is adapted from § 548(d)(2)(A) of the Bankruptcy Code. See also § 3(a) of the Uniform Fraudulent Conveyance Act. The definition in Section 3 is not exclusive. "Value" is to be determined in light of the purpose of the Act to protect a debtor's estate from being depleted to the prejudice of the debtor's unsecured creditors. Consideration having no utility from a creditor's viewpoint does not satisfy the statutory definition. The definition does not specify all the kinds of consideration that do not constitute value for the purposes of this Act--e.g., love and affection. See, e.g., United States v. West, 299 F.Supp. 661, 666 (D.Del. 1969).
- Section 3(a) does not indicate what is "reasonably equivalent value" for a transfer or obligation. Under this Act, as under § 548(a)(2) of the Bankruptcy Code, a transfer for security is ordinarily for a reasonably equivalent value notwithstanding a discrepancy between the value of the asset transferred and the debt secured, since the amount of the debt is the measure of the value of the interest in the asset that is transferred. See, e.g., Peoples-Pittsburgh Trust Co. v. Holy Family Polish Nat'l Catholic Church, Carnegie, Pa., 341 Pa. 390, 19 A.2d 360 (1941). If, however, a transfer purports to secure more than the debt actually incurred or to be incurred, it may be found to be for less than a reasonably equivalent value. See e.g., In re Peoria Braumeister Co., 138 F.2d 520, 523 (7th Cir. 1943) (chattel mortgage securing a $3,000 note held to be fraudulent when the debt secured was only $2,500); Hartford Acc. & Indemnity Co. v. Jirasek, 254 Mich. 131, 140, 235 N.W. 836, 839 (1931) (quitclaim deed given as mortgage held to be fraudulent to the extent the value of the property transferred exceeded the indebtedness secured). If the debt is a fraudulent obligation under this Act, a transfer to secure it as well as the obligation would be vulnerable to attack as fraudulent. A transfer to satisfy or secure an antecedent debt owed an insider is also subject to avoidance under the conditions specified in Section 5(b) (numbered as section 38-8-106 (2) in C.R.S.).
- Section 3(a) of the Uniform Fraudulent Conveyance Act has been thought not to recognize that an unperformed promise could constitute fair consideration. See McLaughlin, Application of the Uniform Fraudulent Conveyance Act, 46 Harv.L.Rev. 404, 414 (1933). Courts construing these provisions of the prior law nevertheless have held unperformed promises to constitute value in a variety of circumstances. See, e.g., Harper v. Lloyd's Factors, Inc., 214 F.2d 662 (2d Cir. 1954) (transfer of money for promise of factor to discount transferor's purchase-money notes given to fur dealer); Schlecht v. Schlecht, 168 Minn. 168, 176-77, 209 N.W. 883, 886-87 (1926) (transfer for promise to make repairs and improvements on transferor's homestead); Farmer's Exchange Bank v. Oneida Motor Truck Co., 202 Wis. 266, 232 N.W. 536 (1930) (transfer in consideration of assumption of certain of transferor's liabilities); see also Hummel v. Cernocky, 161 F.2d 685 (7th Cir. 1947) (transfer in consideration of cash, assumption of a mortgage, payment of certain debts, and agreement to pay other debts). Likewise a transfer in consideration of a negotiable note discountable at a commercial bank, or the purchase from an established, solvent institution of an insurance policy, annuity, or contract to provide care and accommodations clearly appears to be for value. On the other hand, a transfer for an unperformed promise by an individual to support a parent or other transferor has generally been held voidable as a fraud on creditors of the transferor. See, e.g., Springfield Ins. Co. v. Fry, 267 F.Supp. 693 (N.D.Okla. 1967); Sandler v. Parlapiano, 236 App.Div. 70, 258 N.Y.Supp. 88 (1st Dep't 1932); Warwick Municipal Employees Credit Union v. Higham, 106 R.E. 363, 259 A.2d 852 (1969); Hulsether v. Sanders, 54 S.D. 412, 223 N.W. 335 (1929); Cooper v. Cooper, 22 Tenn.App. 473, 477, 124 S.W.2d 264, 267 (1939); Note, Rights of Creditors in Property Conveyed in Consideration of Future Support, 45 Iowa L.Rev. 546, 550-62 (1960). This Act adopts the view taken in the cases cited in determining whether an unperformed promise is value.
- Subsection (b) (numbered as subsection (2) in C.R.S.) rejects the rule of such cases as Durrett v. Washington Nat. Ins. Co., 621 F.2d 201 (5th Cir. 1980) (nonjudicial foreclosure of a mortgage avoided as a fraudulent transfer when the property of an insolvent mortgagor was sold for less than 70% of its fair value); and Abramson v. Lakewood Bank & Trust Co., 647 F.2d 547 (5th Cir. 1981), cert. denied, 454 U.S. 1164 (1982) (nonjudicial foreclosure held to be fraudulent transfer if made without fair consideration). Subsection (b) adopts the view taken in Lawyers Title Ins. Corp. v. Madrid (In re Madrid), 21 B.R. 424 (B.A.P. 9th Cir. 1982), aff'd on another ground, 725 F.2d 1197 (9th Cir. 1984), that the price bid at a public foreclosure sale determines the fair value of the property sold. Subsection (b) prescribes the effect of a sale meeting its requirements, whether the asset sold is personal or real property. The rule of this subsection applies to a foreclosure by sale of the interest of a vendee under an installment land contract in accordance with applicable law that requires or permits the foreclosure to be effected by a sale in the same manner as the foreclosure of a mortgage. See G.Osborne, G.Nelson, & D.Whitman, Real Estate Finance Law 83-84, 95-97 (1979). The premise of the subsection is that "a sale of the collateral by the secured party as the normal consequence of default . . . [is] the safest way of establishing the fair value of the collateral . . .." 2 G.Gilmore, Security Interests in Personal Property, 1227 (1965).
- Subsection (c) (numbered as subsection (3) in C.R.S.) is an adaptation of § 547(c)(1) of the Bankruptcy Code. A transfer to an insider for an antecedent debt may be voidable under § 5(b) infra (numbered as section 38-8-106 (2) in C.R.S.).
4(a)(2) (numbered as section 38-8-105 (1)(b) in C.R.S.) ("reasonably equivalent value");
4(b)(8) (numbered as section 38-8-105 (2)(h) in C.R.S.) ("value ... reasonably equivalent);
5(a) (numbered as section 38-8-106 (1) in C.R.S.) ("reasonably equivalent value");
5(b) (numbered as section 38-8-106 (2) in C.R.S.) ("present, reasonably equivalent value");
8(a) (numbered as section 38-8-109 (1) in C.R.S.) ("reasonably equivalent value");
8(b), (c), (d), and (e) (numbered as section 38-8-109 (2), (3), (4), and (5) in C.R.S.) ("value");
8(f)(1) (numbered as section 38-8-109 (6)(a) in C.R.S.) ("new value"); and
8(f)(3) (numbered as section 38-8-109 (6)(c) in C.R.S.) ("present value").
If a lien given an insider for a present consideration is not perfected as against a subsequent bona fide purchaser or is so perfected after a delay following an extension of credit secured by the lien, foreclosure of the lien may result in a transfer for an antecedent debt that is voidable under Section 5(b) infra (numbered as section 38-8-106 (2) in C.R.S.). Subsection (b) does not apply to an action under Section 4(a)(1) (numbered as section 38-8-105 (1)(a) in C.R.S.) to avoid a transfer or obligation because made or incurred with actual intent to hinder, delay, or defraud any creditor.
38-8-105. Transfers fraudulent as to present and future creditors.
-
A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
- With actual intent to hinder, delay, or defraud any creditor of the debtor; or
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Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
- Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
- Intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due.
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In determining actual intent under paragraph (a) of subsection (1) of this section, consideration may be given, among other factors, to whether:
- The transfer or obligation was to an insider;
- The debtor retained possession or control of the property transferred after the transfer;
- The transfer or obligation was disclosed or concealed;
- Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
- The transfer was of substantially all the debtor's assets;
- The debtor absconded;
- The debtor removed or concealed assets;
- The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
- The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
- The transfer occurred shortly before or shortly after a substantial debt was incurred; and
- The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.
Source: L. 91: Entire article added, p. 1685, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 4 in the uniform act.
OFFICIAL COMMENT
- Section 4(a)(1) (numbered as section 38-8-105 (1)(a) in C.R.S.) is derived from § 7 of the Uniform Fraudulent Conveyance Act. Factors appropriate for consideration in determining actual intent under paragraph (1) (paragraph (a) in C.R.S.) are specified in subsection (b) (subsection (2) in C.R.S.).
- Section 4(a)(2) (numbered as section 38-8-105 (1)(b) in C.R.S.) is derived from §§ 5 and 6 of the Uniform Fraudulent Conveyance Act but substitutes "reasonably equivalent value" for "fair consideration." The transferee's good faith was an element of "fair consideration" as defined in § 3 of the Uniform Fraudulent Conveyance Act, and lack of fair consideration was one of the elements of a fraudulent transfer as defined in four sections of the Uniform Act. The transferee's good faith is irrelevant to a determination of the adequacy of the consideration under this Act, but lack of good faith may be a basis for withholding protection of a transferee or obligee under § 8 infra (numbered as section 38-8-109 in C.R.S.).
- Unlike the Uniform Fraudulent Conveyance Act as originally promulgated, this Act does not prescribe different tests when a transfer is made for the purpose of security and when it is intended to be absolute. The premise of this Act is that when a transfer is for security only, the equity or value of the asset that exceeds the amount of the debt secured remains available to unsecured creditors and thus cannot be regarded as the subject of a fraudulent transfer merely because of the encumbrance resulting from an otherwise valid security transfer. Disproportion between the value of the asset securing the debt and the size of the debt secured does not, in the absence of circumstances indicating a purpose to hinder, delay, or defraud creditors, constitute an impermissible hindrance to the enforcement of other creditors' rights against the debtor-transferor. Cf. U.C.C. § 9-311.
- Subparagraph (i) of § 4(a)(2) (subparagraph (I) of section 38-8-105 (1)(b) in C.R.S.) is an adaptation of § 5 of the Uniform Fraudulent Conveyance Act but substitutes "unreasonably small [assets] in relation to the business or transaction" for "unreasonably small capital." The reference to "capital" in the Uniform Act is ambiguous in that it may refer to net worth or to the par value of stock or to the consideration received for stock issued. The special meanings of "capital" in corporation law have no relevance in the law of fraudulent transfers. The subparagraph focuses attention on whether the amount of all the assets retained by the debtor was inadequate, i.e., unreasonably small, in light of the needs of the business or transaction in which the debtor was engaged or about to engage.
- Subsection (b) (subsection (2) in C.R.S.) is a nonexclusive catalogue of factors appropriate for consideration by the court in determining whether the debtor had an actual intent to hinder, delay, or defraud one or more creditors. Proof of the existence of any one or more of the factors enumerated in subsection (b) may be relevant evidence as to the debtor's actual intent but does not create a presumption that the debtor has made a fraudulent transfer or incurred a fraudulent obligation. The list of factors includes most of the badges of fraud that have been recognized by the courts in construing and applying the Statute of 13 Elizabeth and § 7 of the Uniform Fraudulent Conveyance Act. Proof of the presence of certain badges in combination establishes fraud conclusively--i.e., without regard to the actual intent of the parties--when they concur as provided in § 4(a)(2) or in § 5 (section 38-8-105 (1)(b) or in section 38-8-106 in C.R.S.). The fact that a transfer has been made to a relative or to an affiliated corporation has not been regarded as a badge of fraud sufficient to warrant avoidance when unaccompanied by any other evidence of fraud. The courts have uniformly recognized, however, that a transfer to a closely related person warrants close scrutiny of the other circumstances, including the nature and extent of the consideration exchanged. See 1 G. Glenn, Fraudulent Conveyances and Preferences § 307 (Rev. ed. 1940). The second, third, fourth, and fifth factors listed are all adapted from the classic catalogue of badges of fraud provided by Lord Coke in Twyne's Case, 3 Coke 80b, 76 Eng.Rep. 809 (Star Chamber 1601). Lord Coke also included the use of a trust and the recitation in the instrument of transfer that it "was made honestly, truly, and bona fide," but the use of the trust is fraudulent only when accompanied by elements or badges specified in this Act, and recitals of "good faith" can no longer be regarded as significant evidence of a fraudulent intent.
-
In considering the factors listed in § 4(b) (section 38-8-105 (2) in C.R.S.) a court should evaluate all the relevant circumstances involving a challenged transfer or obligation. Thus the court may appropriately take into account all indicia negativing as well as those suggesting fraud, as illustrated in the following reported cases:
- Whether the transfer or obligation was to an insider: Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574, 1582-83 (2d Cir. 1983) (insolvent debtor's purchase of two residences in the name of his spouse and the creation of a dummy corporation for the purpose of concealing assets held to evidence fraudulent intent); Banner Construction Corp. v. Arnold, 128 So.2d 893 (Fla.Dist.App. 1961) (assignment by one corporation to another having identical directors and stockholders constituted a badge of fraud); Travelers Indemnity Co. v. Cormaney, 258 Iowa 237, 138 N.W.2d 50 (1965) (transfer between spouses said to be a circumstance that shed suspicion on the transfer and that with other circumstances warranted avoidance); Hatheway v. Hanson, 230 Iowa 386, 297 N.W. 824 (1941) (transfer from parent to child said to require a critical examination of surrounding circumstances, which, together with other indicia of fraud, warranted avoidance); Lumpkins v. McPhee, 59 N.M. 442, 286 P.2d 299 (1955) (transfer from daughter to mother said to be indicative of fraud but transfer held not to be fraudulent due to adequacy of consideration and delivery of possession by transferor).
- Whether the transferor retained possession or control of the property after the transfer: Harris v. Shaw, 224 Ark. 150, 272 S.W.2d 53 (1954) (retention of property by transferor said to be a badge of fraud and, together with other badges, to warrant avoidance of transfer); Stephens v. Reginstein, 89 Ala. 561, 8 So. 68 (1890) (transferor's retention of control and management of property and business after transfer held material in determining transfer to be fraudulent); Allen v. Massey, 84 U.S. (17 Wall.) 351 (1872) (joint possession of furniture by transferor and transferee considered in holding transfer to be fraudulent); Warner v. Norton, 61 U.S. (20 How.) 448 (1857) (surrender of possession by transferor deemed to negate allegations of fraud).
- Whether the transfer or obligation was concealed or disclosed: Walton v. First National Bank, 13 Colo. 265, 22 P. 440 (1889) (agreement between parties to conceal the transfer from the public said to be one of the strongest badges of fraud); Warner v. Norton, 61 U.S. (20 How.) 448 (1857) (although secrecy said to be a circumstance from which, when coupled with other badges, fraud may be inferred, transfer was held not to be fraudulent when made in good faith and transferor surrendered possession); W.T. Raleigh Co. v. Barnett, 253 Ala. 433, 44 So.2d 585 (1950) (failure to record a deed in itself said not to evidence fraud, and transfer held not to be fraudulent).
- Whether, before the transfer was made or obligation was incurred, a creditor sued or threatened to sue the debtor: Harris v. Shaw, 224 Ark. 150, 272 S.W. 2d 53 (1954) (transfer held to be fraudulent when causally connected to pendency of litigation and accompanied by other badges of fraud); Pergrem v. Smith, 255 S.W.2d 42 (Ky.App. 1953) (transfer in anticipation of suit deemed to be a badge of fraud; transfer held fraudulent when accompanied by insolvency of transferor who was related to transferee); Bank of Sun Prairie v. Hovig, 218 F.Supp. 769 (W.D.Ark. 1963) (although threat or pendency of litigation said to be an indicator of fraud, transfer was held not to be fraudulent when adequate consideration and good faith were shown).
- Whether the transfer was of substantially all the debtor's assets: Walbrun v. Babbitt, 83 U.S. (16 Wall.) 577 (1872) (sale by insolvent retail shop owner of all of his inventory in a single transaction held to be fraudulent); Cole v. Mercantile Trust Co., 133 N.Y. 164, 30 N.E. 847 (1892) (transfer of all property before plaintiff could obtain a judgment held to be fraudulent); Lumpkins v. McPhee, 59 N.M. 442, 286 P.2d 299 (1955) (although transfer of all assets said to indicate fraud, transfer held not to be fraudulent because full consideration was paid and transferor surrendered possession).
- Whether the debtor had absconded: In re Thomas, 199 F. 214 (N.D.N.Y. 1912) (when debtor collected all of his money and property with the intent to abscond, fraudulent intent was held to be shown).
- Whether the debtor had removed or concealed assets: Bentley v. Young, 210 F. 202 (S.D.N.Y. 1914), aff'd, 223 F. 536 (2d Cir. 1915) (debtor's removal of goods from store to conceal their whereabouts and to sell them held to render sale fraudulent); Cioli v. Kenourgios, 59 Cal.App. 690, 211 P. 838 (1922) (debtor's sale of all assets and shipment of proceeds out of the country held to be fraudulent notwithstanding adequacy of consideration).
- Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred: Toomay v. Graham, 151 S.W.2d 119 (Mo.App. 1941) (although mere inadequacy of consideration said not to be a badge of fraud, transfer held to be fraudulent when accompanied by badges of fraud); Texas Sand Co. v. Shield, 381 S.W.2d 48 (Tex. 1964) (inadequate consideration said to be an indicator of fraud, and transfer held to be fraudulent because of inadequate consideration, pendency of suit, family relationship of transferee, and fact that all nonexempt property was transferred); Weigel v. Wood, 355 Mo. 11, 194 S.W.2d 40 (1946) (although inadequate consideration said to be a badge of fraud, transfer held not to be fraudulent when inadequacy not gross and not accompanied by any other badge; fact that transfer was from father to son held not sufficient to establish fraud).
- Whether the debtor was insolvent or became insolvent shortly after the transfer was made or obligation was incurred: Harris v. Shaw, 224 Ark. 150, 272 S.W. 2d 53 (1954) (insolvency of transferor said to be a badge of fraud and transfer held fraudulent when accompanied by other badges of fraud); Bank of Sun Prairie v. Hovig, 218 F.Supp. 769 (W.D. Ark. 1963) (although the insolvency of the debtor said to be a badge of fraud, transfer held not fraudulent when debtor was shown to be solvent, adequate consideration was paid, and good faith was shown, despite the pendency of suit); Wareheim v. Bayliss, 149 Md. 103, 131 A. 27 (1925) (although insolvency of debtor acknowledged to be an indicator of fraud, transfer held not to be fraudulent when adequate consideration was paid and whether debtor was insolvent in fact was doubtful).
- Whether the transfer occurred shortly before or shortly after a substantial debt was incurred: Commerce Bank of Lebanon v. Halladale A Corp., 618 S.W. 2d 288, 292 (Mo.App. 1981) (when transferors incurred substantial debts near in time to the transfer, transfer was held to be fraudulent due to inadequate consideration, close family relationship, the debtor's retention of possession, and the fact that almost all the debtor's property was transferred).
- The effect of the two transfers described in § 4(b)(11) (section 38-8-105 (2)(k) in C.R.S.), if not avoided, may be to permit a debtor and a lienor to deprive the debtor's unsecured creditors of access to the debtor's assets for the purpose of collecting their claims while the debtor, the debtor's affiliate or insider, and the lienor arrange for the beneficial use or disposition of the assets in accordance with their interests. The kind of disposition sought to be reached here is exemplified by that found in Northern Pacific Co. v. Boyd, 228 U.S. 482 (1913), the leading case in establishing the absolute priority doctrine in reorganization law. There the Court held that a reorganization whereby the secured creditors and the management-owners retained their economic interests in a railroad through a foreclosure that cut off claims of unsecured creditors against its assets was in effect a fraudulent disposition (id. at 502-05). See Frank, Some Realistic Reflections on Some Aspects of Corporate Reorganization, 19 Va. L.Rev. 541, 693 (1933). For cases in which an analogous injury to unsecured creditors was inflicted by a lienor and a debtor, see Jackson v. Star Sprinkler Corp. of Florida, 575 F.2d 1223, 1231-34 (8th Cir. 1978); Heath v. Helmick, 173 F.2d 157, 161-62 (9th Cir. 1949); Toner v. Nuss, 234 F.S. 457, 461-62 (E.D.Pa. 1964); and see In re Spotless Tavern Co., Inc., 4 F.Supp. 752, 753, 755 (D.Md. 1933).
- Nothing in § 4(b) (section 38-8-105 (2) in C.R.S.) is intended to affect the application of § 2-402(2), 9-205, 9-301, or 6-105 of the Uniform Commercial Code. Section 2-402(2) recognizes the generally prevailing rule that retention of possession of goods by a seller may be fraudulent but limits the application of the rule by negating any imputation of fraud from "retention of possession in good faith and current course of trade by a merchant-seller for a commercially reasonable time after a sale or identification." Section 9-205 explicitly negates any imputation of fraud from the grant of liberty by a secured creditor to a debtor to use, commingle, or dispose of personal property collateral or to account for its proceeds. The section recognizes that it does not relax prevailing requirements for delivery of possession by a pledgor. Moreover, the section does not mitigate the general requirement of § 9-301(1)(b) that a nonpossessory security interest in personal property must be accompanied by notice-filing to be effective against a levying creditor. Finally, like the Uniform Fraudulent Conveyance Act this Act does not pre-empt the statutes governing bulk transfers, such as Article 6 of the Uniform Commercial Code. Compliance with the cited sections of the Uniform Commercial Code does not, however, insulate a transfer or obligation from avoidance. Thus a sale by an insolvent debtor for less than a reasonably equivalent value would be voidable under this Act notwithstanding compliance with the Uniform Commercial Code.
ANNOTATION
The Colorado Uniform Fraudulent Transfer Act (CUFTA) changes the common law rule that a claim of conspiracy to fraudulently convey property fails unless the claimant establishes a lien against the property transferred. Double Oak Constr., L.L.C. v. Cornerstone Dev. Int'l, L.L.C., 97 P.3d 140 (Colo. App. 2003).
The principle behind the "lien requirement" rule is that, until a creditor obtains a lien giving him or her vested or specific rights in the debtor's property, the debtor is legally free to do what he or she will with his or her property. However, modern fraudulent transfer law, like CUFTA, has dispensed with the lien requirement, focusing instead on the debtor's intent to frustrate the creditor once its claim is made known. Double Oak Constr., L.L.C. v. Cornerstone Dev. Int'l, L.L.C., 97 P.3d 140 (Colo. App. 2003).
A transfer in violation of CUFTA is a legal wrong that will support a conspiracy claim. A creditor who does not have a lien on the subject property is nevertheless entitled to assert a civil conspiracy cause of action against persons who participate in a fraudulent conveyance. Double Oak Constr., L.L.C. v. Cornerstone Dev. Int'l, L.L.C., 97 P.3d 140 (Colo. App. 2003).
For purposes of CUFTA, the intent of a transferee can be imputed to the debtor when the transferee is in a position to dominate or control the disposition of the debtor's property. Schempp v. Lucre Mgmt. Group, 18 P.3d 762 (Colo. App. 2000).
The transferee's intent is not interchangeable or synonymous with the debtor's intent. Schempp v. Lucre Mgmt. Group, 75 P.3d 1157 (Colo. App. 2003).
Nothing in this section indicates that the plaintiff's burden of proving fraudulent intent may be reduced by attaching a presumption of fraud to a transaction between a principal and an agent. Schempp v. Lucre Mgmt. Group, 75 P.3d 1157 (Colo. App. 2003).
Whether a debtor intended to hinder, delay, or defraud creditors is a question of fact. The movant has the burden of proving all elements of a fraudulent transfer before the debtor must come forward to prove his or her defenses. Krol v. Unglaub, 332 B.R. 303 (Bankr. N.D. Ill. 2005).
Evidence that transactions were in the ordinary course of business may negate the actual intent element of fraudulent transfer. Sender v. Mann, 423 F. Supp. 2d 1155 (D. Colo. 2006).
In determining whether a transfer is made with actual intent to defraud, CUFTA sets forth several factors, known as the "badges of fraud", from which an inference of fraudulent intent may be drawn. Krol v. Unglaub, 332 B.R. 303 (Bankr. N.D. Ill. 2005).
When these "badges of fraud" are present in sufficient number, they may give rise to an inference or presumption of an intent to defraud. Krol v. Unglaub, 332 B.R. 303 (Bankr. N.D. Ill. 2005).
Separate findings are not required on each of the "badges of fraud" in subsection (2) where the findings and the record make it clear that the court was aware of and considered many, if not all, of such factors. Silverberg v. Colantuno, 991 P.2d 280 (Colo. App. 1998).
"Reasonably equivalent value" is not the same as market value, although market value is an important factor to be used in the assessment. Silverberg v. Colantuno, 991 P.2d 280 (Colo. App. 1998).
Whether "reasonably equivalent value" has been received is a question of fact. What constitutes "reasonably equivalent value" for the transfer requires an analysis of all of the facts and circumstances surrounding the transaction. The standard of reasonably equivalent value implies a rule of reasonableness in light of the particular circumstances. Reasonable equivalence is not synonymous with market value, even though market value is an important factor to be utilized in the assessment. For purposes of the Colorado Uniform Fraudulent Transfer Act, equity looks to the substance of the transaction rather than its form. Krol v. Unglaub, 332 B.R. 303 (Bankr. N.D. Ill. 2005).
A transfer for which the transferor received no direct or indirect benefit cannot be considered reasonably equivalent value, even with the undisputed history of the transfers of the property back and forth between a husband and wife for zero dollars. Leverage Leasing Co. v. Smith, 143 P.3d 1164 (Colo. App. 2006).
Reserve asset was not unreasonably small and was therefore not constructively fraudulent under subsection (1)(b)(I). In dispute over real estate commission between real estate broker and judgment debtor, broker failed to show that debtor should have reasonably foreseen that its distribution of proceeds from real estate sale would create an unreasonable risk of insolvency. CB Richard Ellis, Inc. v. CLGP, LLC, 251 P.3d 523 (Colo. App. 2010).
In considering whether distribution of proceeds from real estate sale was constructively fraudulent under subsection (1)(b)(II), trial court applied the proper two-pronged test, consisting of both a subjective and an objective prong. In dispute over real estate commission between real estate broker and judgment debtor, trial court's finding that debtor did not have an intent or belief that it would be unable to pay entire commission addressed the subjective prong. With regard to the objective prong, trial court found that debtor's reserve asset was reasonable to pay its debts as they came due. CB Richard Ellis, Inc. v. CLGP, LLC, 251 P.3d 523 (Colo. App. 2010).
The failure to pay the taxes due results in a forfeiture of the original owner's interest in the property, by operation of law, to the state, which then grants title to the property to the holder of the lien free and clear of any other claims. Because the state transferred the tax deeds free of all prior interests, there was no transfer by a debtor, as is required to violate CUFTA. In re Grandote Country Club Co., 252 F.3d 1146 (10th Cir. 2001).
Where property was acquired through a regularly conducted tax sale subject to a competitive bidding procedure, the tax sale constitutes transfer for "reasonably equivalent value" under CUFTA. In re Grandote Country Club Co., 252 F.3d 1146 (10th Cir. 2001).
The recording of a mortgage is a transfer under CUFTA. Krol v. Unglaub, 332 B.R. 303 (Bankr. N.D. Ill. 2005).
Debtor's assets of between $785,000 and $800,000 were unreasonably small in relation to an allegedly fraudulent transfer under subsection (1)(b)(I) where the debtor was exposed to $2 million in liability. Tiger v. Anderson, 976 P.2d 308 (Colo. App. 1998).
A subsidiary's loan payments on behalf of its corporate parent are made in exchange for reasonably equivalent value if the subsidiary receives a benefit of the loan made to its parent. Ciccarelli v. Guaranty Bank, 99 P.3d 85 (Colo. App. 2004).
Applied in Vickery v. Evelyn V. Trumble Living Trust, 277 P.3d 864 (Colo. App. 2011); In re Blair, 594 B.R. 712 (Bankr. D. Colo. 2018); Wilson v. Pauling, 457 F. Supp. 3d 965 (D. Colo. 2020).
38-8-106. Transfers fraudulent as to present creditors.
- A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.
- A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent.
Source: L. 91: Entire article added, p. 1686, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 5 in the uniform act.
OFFICIAL COMMENT
- Subsection (a) (numbered as subsection (1) in C.R.S.) is derived from § 4 of the Uniform Fraudulent Conveyance Act. It adheres to the limitation of the protection of that section to a creditor who extended credit before the transfer or obligation described. As pointed out in Comment (2) accompanying § 4 (section 38-8-105 in C.R.S.), this Act substitutes "reasonably equivalent value" for "fair consideration."
- Subsection (b) (subsection (2) in C.R.S.) renders a preferential transfer--i.e., a transfer by an insolvent debtor for or on account of an antecedent debt--to an insider vulnerable as a fraudulent transfer when the insider had reasonable cause to believe that the debtor was insolvent. This subsection adopts for general application the rule of such cases as Jackson Sound Studios, Inc. v. Travis, 473 F.2d 503 (5th Cir. 1973) (security transfer of corporation's equipment to corporate principal's mother perfected on eve of bankruptcy of corporation held to be fraudulent); In re Lamie Chemical Co., 296 F. 24 (4th Cir. 1924) (corporate preference to corporate officers and directors held voidable by receiver when corporation was insolvent or nearly so and directors had already voted for liquidation); Stuart v. Larson, 298 F. 223 (8th Cir. 1924), noted 38 Harv.L.Rev. 521 (1925) (corporate preference to director held voidable). See generally 2 G. Glenn, Fraudulent Conveyances and Preferences 386 (rev. ed. 1940). Subsection (b) overrules such cases as Epstein v. Goldstein, 107 F.2d 755, 757 (2d Cir. 1939) (transfer by insolvent husband to wife to secure his debt to her sustained against attack by husband's trustee); Hartford Accident & Indemnity Co. v. Jirasek, 254 Mich. 131, 139, 235 N.W. 836, 389 (1931) (mortgage given by debtor to his brother to secure an antecedent debt owed the brother sustained as not fraudulent).
- Subsection (b) (subsection (2) in C.R.S.) does not extend as far as § 8(a) of the Uniform Fraudulent Conveyance Act and § 548(b) of the Bankruptcy Code in rendering voidable a transfer or obligation incurred by an insolvent partnership to a partner, who is an insider of the partnership. The transfer to the partner is not vulnerable to avoidance under § 4(b) (section 38-8-105 (2) in C.R.S.) unless the transfer was for an antecedent debt and the partner had reasonable cause to believe that the partnership was insolvent. The cited provisions of the Uniform Fraudulent Conveyance Act and the Bankruptcy Act make any transfer by an insolvent partnership to a partner voidable. Avoidance of the partnership transfer without reference to the partner's state of mind and the nature of the consideration exchanged would be unduly harsh treatment of the creditors of the partner and unduly favorable to the creditors of the partnership.
ANNOTATION
The failure to pay the taxes due results in a forfeiture of the original owner's interest in the property, by operation of law, to the state, which then grants title to the property to the holder of the lien free and clear of any other claims. Because the state transferred the tax deeds free of all prior interests, there was no transfer by a debtor, as is required to violate the Colorado Uniform Fraudulent Transfer Act. In re Grandote Country Club Co., Ltd., 252 F.3d 1146 (10th Cir. 2001).
A collusive foreclosure under power of sale is a fraudulent conveyance. The fundamental element of a fraudulent conveyance is whether the debtor's estate is unjustly diminished. Megabank Fin. v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).
A chattel mortgage is collusive if it is a transaction intended to delay creditors and to prevent the property of the debtor coming to their use. Megabank Fin. v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).
A fraudulent conveyance results whether of real or personal property if, as a result of the debtor's operations on the title to his property, the creditor loses by reason of finding less to seize and apply to his claim; however, no injury can result from a sale of an asset at its fair value since the estate does not abate as a result of what was done. Megabank Fin. v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).
Trial court did not err in setting aside preferential transfers from a corporation to the corporation's sole officer, shareholder, and director, because the corporation was insolvent at the time of the transfers and transfer was made to a corporate insider. Morris v. Askeland Enter., Inc., 17 P.3d 830 (Colo. App. 2000).
Where property was acquired through a regularly conducted tax sale subject to a competitive bidding procedure, the tax sale constitutes transfer for "reasonably equivalent value" under the Colorado Uniform Fraudulent Transfer Act. In re Grandote Country Club Co., Ltd., 252 F.3d 1146 (10th Cir. 2001).
Debtors did not receive reasonably equivalent value in exchange for their tithes and contributions to their church, therefore, the transfers were avoided. In re Bloch, 207 B.R. 944 (D. Colo. 1997).
To succeed on a fraudulent transfer claim, a creditor must show that the debtor did not receive a reasonably equivalent value in exchange for the property. Schempp v. Lucre Mgmt. Group, LLC, 18 P.3d 762 (Colo. App. 2000).
"Reasonable equivalence" is not wholly synonymous with market value, even though market value is an important factor to be used in the assessment, and the determination of reasonably equivalent value requires analysis of all the facts and circumstances surrounding the transaction. Silverberg v. Colantuno, 991 P.2d 280 (Colo. App. 1998); Schempp v. Lucre Mgmt. Group, LLC, 18 P.3d 762 (Colo. App. 2000).
The standard of "reasonably equivalent value" implies a rule of reasonableness in light of the particular circumstances. Schempp v. Lucre Mgmt. Group, LLC, 18 P.3d 762 (Colo. App. 2000).
In considering whether judgment debtor's distribution of proceeds from real estate sale was constructively fraudulent, trial court applied proper test with regard to insolvency under subsection (1). In dispute over real estate commission between real estate broker and judgment debtor, trial court correctly concluded that debtor's reserve asset was sufficient and reasonable to keep it solvent despite the distribution. CB Richard Ellis, Inc. v. CLGP, LLC, 251 P.3d 523 (Colo. App. 2010).
38-8-107. When transfer is made or obligation is incurred.
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For the purposes of this article:
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A transfer is made:
- With respect to an asset that is real property other than a fixture, but including the interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so far perfected that a good-faith purchaser of the asset from the debtor against whom applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and
- With respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this article that is superior to the interest of the transferee.
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A transfer is made:
- If applicable law permits the transfer to be perfected as provided in subsection (1) of this section and the transfer is not so perfected before the commencement of an action for relief under this article, the transfer is deemed made immediately before the commencement of the action.
- If applicable law does not permit the transfer to be perfected as provided in subsection (1) of this section, the transfer is made when it becomes effective between the debtor and the transferee.
- A transfer is not made until the debtor has acquired rights in the asset transferred.
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An obligation is incurred:
- If oral, when it becomes effective between the parties; or
- If evidenced by a writing, when the writing executed by the obligor is delivered to or for the benefit of the obligee.
Source: L. 91: Entire article added, p. 1686, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 6 in the uniform act.
OFFICIAL COMMENT
- One of the uncertainties in the law governing the avoidance of fraudulent transfers and obligations is the difficulty of determining when the cause of action arises. Subsection (b) (subsection (2) in C.R.S.) clarifies this point in time. For transfers of real estate Section 6(1) (section 38-8-107 (1) in C.R.S.) fixes the time as the date of perfection against a good faith purchaser from the transferor and for transfers of fixtures and assets constituting personalty, the time is fixed as the date of perfection against a judicial lien creditor not asserting rights under this Act. Perfection typically is effected by notice-filing, recordation, or delivery of unequivocal possession. See U.C.C. §§ 9-302, 9-304, and 9-305 (security interest in personal property perfected by notice-filing or delivery of possession to transferee); 4 American Law of Property § 17.10-17.12 (1952) (recordation of transfer or delivery of possession to grantee required for perfection against bona fide purchaser from grantor). The provision for postponing the time a transfer is made until its perfection is an adaptation of § 548(d)(1) of the Bankruptcy Code. When no steps are taken to perfect a transfer that applicable law permits to be perfected, the transfer is deemed by paragraph (2) to be perfected immediately before the filing of an action to avoid it; without such a provision to cover that eventuality, an unperfected transfer would arguably be immune to attack. Some transfers--e.g., an assignment of a bank account, creation of a security interest in money, or execution of a marital or premarital agreement for the disposition of property owned by the parties to the agreement--may not be amenable to perfection as against a bona fide purchaser or judicial lien creditor. When a transfer is not perfectible as provided in paragraph (11), the transfer occurs for the purpose of this Act when the transferor effectively parts with an interest in the asset as provided in § 1(12) supra (section 38-8-102 (12) in C.R.S.).
- Paragraph (4) requires the transferor to have rights in the asset transferred before the transfer is made for the purpose of this section. This provision makes clear that its purpose may not be circumvented by notice-filing or recordation of a document evidencing an interest in an asset to be acquired in the future. Cf. Bankruptcy Code § 547(e); U.C.C. § 9-203(1)(c).
- Paragraph (5) is new. It is intended to resolve uncertainty arising from Rubin v. Manufacturers Hanover Trust Co., 661 F.2d 979, 989-91, 997 (2d Cir. 1981), insofar as that case holds that an obligation of guaranty may be deemed to be incurred when advances covered by the guaranty are made rather than when the guaranty first became effective between the parties. Compare Rosenberg, Intercorporate Guaranties and the Law of Fraudulent Conveyances: Lender Beware, 125 U.Pa.L.Rev. 235, 256-57 (1976).
An obligation may be avoided as fraudulent under this Act if it is incurred under the circumstances specified in § 4(a) (section 38-8-105 (1) in C.R.S.) or § 5(a) (section 38-8-106 (1) in C.R.S.). The debtor may receive reasonably equivalent value in exchange for an obligation incurred even though the benefit to the debtor is indirect. See Rubin v. Manufacturers Hanover Trust Co., 661 F.2d at 991-92; Williams v. Twin City Co., 251 F.2d 678, 681 (9th Cir. 1958); Rosenberg, supra at 243-46.
ANNOTATION
Rather than relying on date when deeds were recorded to determine when a transfer was made under subsection (1)(a)(I), court ordered remand proceedings regarding when transferee's interest in real property based upon possession or contract prevented would-be good faith purchaser from acquiring superior interest. Tiger v. Anderson, 976 P.2d 308 (Colo. App. 1998).
38-8-108. Remedies of creditors.
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In an action for relief against a transfer or obligation under this article, a creditor, subject to the limitations in section 38-8-109, may obtain:
- Avoidance of the transfer or obligation to the extent necessary to satisfy the creditor's claim;
- An attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with the procedure prescribed by the Colorado rules of civil procedure;
- With respect to a transfer made or obligation incurred that is fraudulent under section 38-8-105 (1)(a), a judgment for one and one-half the value of the asset transferred or for one and one-half the amount necessary to satisfy the creditor's claim, whichever is less, together with the creditor's actual costs; except that any judgment entered against a person under this paragraph (c) is in lieu of, not in addition to, a judgment against the same person under section 38-8-109 (2). No judgment may be entered pursuant to this paragraph (c) against a person other than the debtor unless that person also acts with wrongful intent as defined in section 38-8-105 (1)(a); otherwise, judgment for money damages against a person other than the debtor may be entered only as provided in section 38-8-109. No judgment may be entered under this paragraph (c) unless a court of competent jurisdiction enters or has entered a judgment or order establishing the validity of the creditor's claim against the debtor.
-
Subject to applicable principles of equity and in accordance with applicable rules of civil procedure:
- An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;
- Appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or
- Any other relief the circumstances may require.
- If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.
Source: L. 91: Entire article added, p. 1687, § 1, effective July 1. L. 2014: (1) amended, (HB 14-1302), ch. 143, p. 489, § 1, effective May 2.
OFFICIAL COMMENT
- This section is derived from §§ 9 and 10 of the Uniform Fraudulent Conveyance Act. Section 9 of that Act specified the remedies of creditors whose claims have matured, and § 10 enumerated the remedies available to creditors whose claims have not matured. A creditor holding an unmatured claim may be denied the right to receive payment for the proceeds of a sale on execution until his claim has matured, but the proceeds may be deposited in court or in an interest-bearing account pending the maturity of the creditor's claim. The remedies specified in this section are not exclusive.
- The availability of an attachment or other provisional remedy has been restricted by amendments of statutes and rules of procedure to reflect views of the Supreme Court expressed in Sniadach v. Family Finance Corp. of Bay View, 395 U.S. 337 (1969), and its progeny. This judicial development and the procedural changes that followed in its wake do not preclude resort to attachment by a creditor in seeking avoidance of a fraudulent transfer or obligation. See, e.g., Britton v. Howard Sav. Bank, 727 F.2d 315, 317-20 (3d Cir. 1984); Computer Sciences Corp. v. Sci-Tek Inc., 367 A.2d 658, 661 (Del. Super. 1976); Great Lakes Carbon Corp. v. Fontana, 54 A.D.2d 548, 387 N.Y.S. 2d 115 (1st Dep't 1976). Section 7(a)(2) (section 38-8-108 (1)(b) in C.R.S.) continues the authorization for the use of attachment contained in § 9(b) of the Uniform Fraudulent Conveyance Act, or of a similar provisional remedy, when the state's procedure provides therefor, subject to the constraints imposed by the due process clauses of the United States and state constitutions.
- Subsections (a) and (b) of § 10 of the Uniform Fraudulent Conveyance Act authorized the court, in an action on a fraudulent transfer or obligation, to restrain the defendant from disposing of his property, to appoint a receiver to take charge of his property, or to make any order the circumstances may require. Section 10, however, applied only to a creditor whose claim was unmatured. There is no reason to restrict the availability of these remedies to such a creditor, and the courts have not so restricted them. See, e.g., Lipskey v. Voloshen, 155 Md. 139, 143-45, 141 Atl. 402, 404-05 (1928) (judgment creditor granted injunction against disposition of property by transferee, but appointment of receiver denied for lack of sufficient showing of need for such relief); Matthews v. Schusheim, 36 Misc. 2d 918, 922-23, 235 N.Y.S.2d 973, 976-77, 991-92 (Sup.Ct. 1962) (injunction and appointment of receiver granted to holder of claims for fraud, breach of contract, and alimony arrearages; whether creditor's claim was mature said to be immaterial); Oliphant v. Moore, 155 Tenn. 359, 362-63, 293 S.W. 541, 542 (1927) (tort creditor granted injunction restraining alleged tortfeasor's disposition of property).
- As under the Uniform Fraudulent Conveyance Act, a creditor is not required to obtain a judgment against the debtor-transferor or to have a matured claim in order to proceed under subsection (a) (subsection (1) in C.R.S.). See § 1(3) and (4) supra (section 38-8-102 (3) and (4) in C.R.S.); American Surety Co. v. Conner, 251 N.Y. 1, 166 N.E. 783, 65 A.L.R. 244 (1929); 1 G. Glenn, Fraudulent Conveyances and Preferences 129 (Rev.ed. 1940).
- The provision in subsection (b) (subsection (2) in C.R.S.) for a creditor to levy execution on a fraudulently transferred asset continues the availability of a remedy provided in § 9(b) of the Uniform Fraudulent Conveyance Act. See, e.g., Doland v. Burns Lbr. Co., 156 Minn. 238, 194 N.W. 636 (1923); Montana Ass'n of Credit Management v. Hergert, 181 Mont. 442, 449, 453, 593 P.2d 1059, 1063, 1065 (1979); Corbett v. Hunter, 292 Pa.Super. 123, 128, 436 A.2d 1036, 1038 (1981); see also American Surety Co. v. Conner, 251 N.Y. 1, 6, 166 N.E. 783, 784, 65 A.L.R. 244, 247 (1929) ("In such circumstances he [the creditor] might find it necessary to indemnify the sheriff and, when the seizure was erroneous, assumed the risk of error"); McLaughlin, Application of the Uniform Fraudulent Conveyance Act, 46 Harv.L.Rev. 404, 441-42 (1933).
- The remedies specified in § 7, like those enumerated in §§ 9 and 10 of the Uniform Fraudulent Conveyance Act, are cumulative. Lind v. O. N. Johnson Co., 204 Minn. 30, 40, 282 N.W. 661, 667, 119 A.L.R. 940 (1939) (Uniform Fraudulent Conveyance Act held not to impair or limit availability of the "old practice" of obtaining judgment and execution returned unsatisfied before proceeding in equity to set aside a transfer); Conemaugh Iron Works Co. v. Delano Coal Co., Inc., 298 Pa. 182, 186, 148 A. 94, 95 (1929) (Uniform Fraudulent Conveyance Act held to give an "additional optional remedy" and not to "deprive a creditor of the right, as formerly, to work out his remedy at law"); 1 G. Glenn, Fraudulent Conveyances and Preferences 120, 130, 150 (Rev.ed. 1940).
ANNOTATION
Section 38-8-109 (2) does not provide an additional remedy to creditors but instead limits the remedy provided under subsection (1)(a) of this section by limiting the creditor's recovery in an action to avoid a fraudulent transfer to the lesser of the adjusted value of the transferred asset or the amount of the creditor's claim. Because a bankruptcy trustee thus has the power to recover the same amount sought by the plaintiff creditor for the benefit of all creditors and because allowing individual creditors to file actions for recovery would interfere with the bankruptcy estate and the equitable distribution scheme dependent upon it, the plaintiff creditor lacked standing. Summers v. Perkins, 81 P.3d 1141 (Colo. App. 2003).
38-8-109. Defenses, liability, and protection of transferee.
- A transfer or obligation is not voidable under section 38-8-105 (1)(a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee.
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Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under section 38-8-108 (1)(a), the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (3) of this section, or the amount necessary to satisfy the creditor's claim, whichever is less. The judgment may be entered against:
- The first transferee of the asset or the person for whose benefit the transfer was made; or
- Any subsequent transferee other than a good-faith transferee or obligee who took for value or from any subsequent transferee or obligee.
- If the judgment under subsection (2) of this section is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.
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Notwithstanding voidability of a transfer or an obligation under this article, a good-faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to:
- A lien on or a right to retain any interest in the asset transferred;
- Enforcement of any obligation incurred; or
- A reduction in the amount of the liability on the judgment.
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A transfer is not voidable under section 38-8-105 (1)(b) or 38-8-106 if the transfer results from:
- Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or
- Enforcement of a security interest in compliance with the provisions of the "Uniform Commercial Code - Secured Transactions", article 9 of title 4, C.R.S.
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A transfer is not voidable under section 38-8-106 (2):
- To the extent the insider gave new value to or for the benefit of the debtor after the transfer was made unless the new value was secured by a valid lien;
- If made in the ordinary course of business or financial affairs of the debtor and the insider; or
- If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.
Source: L. 91: Entire article added, p. 1687, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 8 in the uniform act. In subsection (2) (b), the phrase "or obligee" has been added after "transferee" in both places where "transferee" appears.
OFFICIAL COMMENT
- Subsection (a) (subsection (1) in C.R.S.) states the rule that applies when the transferee establishes a complete defense to the action for avoidance based on Section 4(a)(1) (section 38-8-105 (1)(a) in C.R.S.). The subsection is an adaptation of the exception stated in § 9 of the Uniform Fraudulent Conveyance Act. The person who invokes this defense carries the burden of establishing good faith and the reasonable equivalence of the consideration exchanged. Chorost v. Grand Rapids Factory Showrooms, Inc., 77 F. Supp. 276, 280 (D.N.J. 1948), aff'd, 172 F.2d 327, 329 (3d Cir. 1949).
- Subsection (b) (subsection (2) in C.R.S.) is derived from § 550(a) of the Bankruptcy Code. The value of the asset transferred is limited to the value of the levyable interest on the transferor, exclusive of any interest encumbered by a valid lien. See § 1(2) supra (section 38-8-102 (2) in C.R.S.).
- Subsection (c) (subsection (3) in C.R.S.) is new. The measure of the recovery of a defrauded creditor against a fraudulent transferee is usually limited to the value of the asset transferred at the time of the transfer. See, e.g., United States v. Fernon, 640 F.2d 609, 611 (5th Cir. 1981); Hamilton Nat'l Bank of Boston v. Halstead, 134 N.Y. 520, 31 N.E. 900 (1892); cf. Buffum v. Peter Barceloux Co., 289 U.S. 227 (1932) (transferee's objection to trial court's award of highest value of asset between the date of the transfer and the date of the decree of avoidance rejected because an award measured by value as of time of the transfer plus interest from that date would have been larger). The premise of § 8(c) is that changes in value of the asset transferred that occur after the transfer should ordinarily not affect the amount of the creditor's recovery. Circumstances may require a departure from that measure of the recovery, however, as the cases decided under the Uniform Fraudulent Conveyance Act and other laws derived from the Statute of 13 Elizabeth illustrate. Thus, if the value of the asset at the time of levy and sale to enforce the judgment of the creditor has been enhanced by improvements of the asset transferred or discharge of liens on the property, a good faith transferee should be reimbursed for the outlay for such a purpose to the extent the sale proceeds were increased thereby. See Bankruptcy Code § 550(d); Janson v. Schier, 375 A.2d 1159, 1160 (N.H. 1977); Anno., 8 A.L.R. 527 (1920). If the value of the asset has been diminished by severance and disposition of timber or minerals or fixtures, the transferee should be liable for the amount of the resulting reduction. See Damazo v. Wahby, 269 Md. 252, 257, 305 A.2d 138, 142 (1973). If the transferee has collected rents, harvested crops, or derived other income from the use or occupancy of the asset after the transfer, the liability of the transferee should be limited in any event to the net income after deduction of the expense incurred in earning the income. Anno., 60 A.L.R.2d 593 (1958). On the other hand, adjustment for the equities does not warrant an award to the creditor of consequential damages alleged to accrue from mismanagement of the asset after the transfer.
- Subsection (d) (subsection (4) in C.R.S.) is an adaptation of § 548(c) of the Bankruptcy Code. An insider who receives property or an obligation from an insolvent debtor as security for or in satisfaction of an antecedent debt of the transferor or obligor is not a good faith transferee or obligee if the insider has reasonable cause to believe that the debtor was insolvent at the time the transfer was made or the obligation was incurred.
- Subsection (e)(1) (subsection (5)(a) in C.R.S.) rejects the rule adopted in Darby v. Atkinson (In re Farris), 415 F.Supp. 33, 39-41 (W.D.Okla. 1976), that termination of a lease on default in accordance with its terms and applicable law may constitute a fraudulent transfer. Subsection (e)(2) (subsection (5)(b) in C.R.S.) protects a transferee who acquires a debtor's interest in an asset as a result of the enforcement of a secured creditor's rights pursuant to and in compliance with the provisions of Part 5 of Article 9 of the Uniform Commercial Code. Cf. Calaiaro v. Pittsburgh Nat'l Bank (In re Ewing), 33 B.R. 288, 9 C.B.C.2d 526, CCH B.L.R. paragraph 69,460 (Bk.W.D.Pa. 1983) (sale of pledged stock held subject to avoidance as fraudulent transfer in § 548 of the Bankruptcy Code), rev'd, 36 B.R. 476 (W.D.Pa. 1984) (transfer held not voidable because deemed to have occurred more than one year before bankruptcy petition filed). Although a secured creditor may enforce rights in collateral without a sale under § 9-502 or § 9-505 of the Code, the creditor must proceed in good faith (U.C.C. § 9-103) and in a "commercially reasonable" manner. The "commercially reasonable" constraint is explicit in U.C.C. § 9-502(2) and is implicit in § 9-505. See 2 G. Gilmore, Security Interests in Personal Property 1224-27 (1965).
- Subsection (f) (subsection (6) in C.R.S.) provides additional defenses against the avoidance of a preferential transfer to an insider under § 5(b) (section 38-8-106 (2) in C.R.S.).
Paragraph (1) (paragraph (a) in C.R.S.) is adapted from § 547(c)(4) of the Bankruptcy Code, which permits a preferred creditor to set off the amount of new value subsequently advanced against the recovery of a voidable preference by a trustee in bankruptcy to the debtor without security. The new value may consist not only of money, goods, or services delivered on unsecured credit but also of the release of a valid lien. See, e.g., In re Ira Haupt & Co., 424 F.2d 722, 724 (2d Cir. 1970); Baranow v. Gibraltor Factors Corp. (In re Hygrade Envelope Co.), 393 F.2d 60, 65-67 (2d Cir.), cert. denied, 393 U.S. 837 (1968); In re John Morrow & Co., 134 F.686, 688 (S.D.Ohio 1901). It does not include an obligation substituted for a prior obligation. If the insider receiving the preference thereafter extends new credit to the debtor but also takes security from the debtor, the injury to the other creditors resulting from the preference remains undiminished by the new credit. On the other hand, if a lien taken to secure the new credit is itself voidable by a judicial lien creditor of the debtor, the new value received by the debtor may appropriately be treated as unsecured and applied to reduce the liability of the insider for the preferential transfer.
Paragraph (2) (paragraph (b) in C.R.S.) is derived from § 546(c)(2) of the Bankruptcy Code, which excepts certain payments made in the ordinary course of business or financial affairs from avoidance by the trustee in bankruptcy as preferential transfers. Whether a transfer was in the "ordinary course" requires a consideration of the pattern of payments or secured transactions engaged in by the debtor and the insider prior to the transfer challenged under § 5(b) (section 38-8-106 (2) in C.R.S.). See Tait & Williams, Bankruptcy Preference Laws: The Scope of Section 547(c)(2), 99 Banking L.J. 55, 63-66 (1982). The defense provided by paragraph (2) is available, irrespective of whether the debtor or the insider or both are engaged in business, but the prior conduct or practice of both the debtor and the insider-transferee is relevant.
Paragraph (3) (paragraph (c) in C.R.S.) is new and reflects a policy judgment that an insider who has previously extended credit to a debtor should not be deterred from extending further credit to the debtor in a good faith effort to save the debtor from a forced liquidation in bankruptcy or otherwise. A similar rationale has sustained the taking of security from an insolvent debtor for an advance to enable the debtor to stave off bankruptcy and extricate itself from financial stringency. Blackman v. Bechtel, 80 F.2d 505, 508-09 (8th Cir. 1935); Olive v. Tyler (In re Chelan Land Co.), 257 F.497, 5 A.L.R. 561 (9th Cir. 1919); In re Robin Bros. Bakeries, Inc., 22 F.S. 662, 663-64 (N.D.Ill. 1937); see Dean v. Davis, 242 U.S. 438, 444 (1917). The amount of the present value given, the size of the antecedent debt secured, and the likelihood of success for the rehabilitative effort are relevant considerations in determining whether the transfer was in good faith.
ANNOTATION
Whether "reasonably equivalent value" has been received is a question of fact. What constitutes "reasonably equivalent value" for the transfer requires an analysis of all of the facts and circumstances surrounding the transaction. The standard of reasonably equivalent value implies a rule of reasonableness in light of the particular circumstances. Reasonable equivalence is not synonymous with market value, even though market value is an important factor to be utilized in the assessment. For purposes of the Colorado Uniform Fraudulent Transfer Act, equity looks to the substance of the transaction rather than its form. Krol v. Unglaub, 332 B.R. 303 (Bankr. N.D. Ill. 2005).
The time value of money does not constitute reasonably equivalent value in an equity-type Ponzi scheme, so a transfer of profits or interest is voidable. When an innocent investor has no guarantee of profit or the payment of interest, the debtor's fraudulent transfer of profits to the investor from the scheme does not satisfy an antecedent debt and is not a transfer of reasonably equivalent value. Lewis v. Taylor, 2018 CO 76, 427 P.3d 796.
Subsection (2) of this section does not provide an additional remedy to creditors but instead limits the remedy provided under § 38-8-108 (1)(a) by limiting the creditor's recovery in an action to avoid a fraudulent transfer to the lesser of the adjusted value of the transferred asset or the amount of the creditor's claim. Because a bankruptcy trustee thus has the power to recover the same amount sought by the plaintiff creditor for the benefit of all creditors and because allowing individual creditors to file actions for recovery would interfere with the bankruptcy estate and the equitable distribution scheme dependent upon it, the plaintiff creditor lacked standing. Summers v. Perkins, 81 P.3d 1141 (Colo. App. 2003).
The ordinary course of business defense is available only to insiders. Sender v. Mann, 423 F. Supp. 2d 1155 (D. Colo. 2006).
Because ranch was encumbered by valid liens that exceeded its value, it was not an asset under this article. Because ranch did not constitute an asset under this article, jury's verdict in favor of plaintiff on his fraudulent conveyance claim must be reversed. Bd. of Cty. Comm'rs v. Sportsmen's Ranch, 271 P.3d 562 (Colo. App. 2011).
38-8-110. Extinguishment of cause of action.
-
A cause of action with respect to a fraudulent transfer or obligation under this article is extinguished unless action is brought:
- Under section 38-8-105 (1)(a), within four years after the transfer was made or the obligation was incurred or, if later, within one year after the transfer or obligation was or could reasonably have been discovered by the claimant;
- Under section 38-8-105 (1)(b) or 38-8-106 (1), within four years after the transfer was made or the obligation was incurred; or
- Under section 38-8-106 (2), within one year after the transfer was made or the obligation was incurred.
Source: L. 91: Entire article added, p. 1689, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 9 in the uniform act.
OFFICIAL COMMENT
- This section is new. Its purpose is to make clear that lapse of the statutory periods prescribed by the section bars the right and not merely the remedy. See Restatement of Conflict of Laws 2d § 143 Comments (b) and (c) (1971). The section rejects the rule applied in United States v. Gleneagles Inv. Co., 565 F.S. 556, 583 (M.D.Pa. 1983) (state statute of limitations held not to apply to action by United States based on Uniform Fraudulent Conveyance Act).
- Statutes of limitations applicable to the avoidance of fraudulent transfers and obligations vary widely from state to state and are frequently subject to uncertainties in their application. See Hesson, The Statute of Limitations in Actions to Set Aside Fraudulent Conveyances and in Actions Against Directors by Creditors of Corporations, 32 Cornell L.Q. 222 (1946); Annos., 76 A.L.R. 864 (1932), 128 A.L.R. 1289 (1940), 133 A.L.R. 1311 (1941), 14 A.L.R.2d 598 (1950), and 100 A.L.R.2d 1094 (1965). Together with § 6 (section 38-8-107 in C.R.S.), this section should mitigate the uncertainty and diversity that have characterized the decisions applying statutes of limitations to actions to fraudulent transfers and obligations. The periods prescribed apply, whether the action under this Act is brought by the creditor defrauded or by a purchaser at a sale on execution levied pursuant to § 7(b) (section 38-8-108 (2) in C.R.S.) and whether the action is brought against the original transferee or subsequent transferee. The prescription of statutory periods of limitation does not preclude the barring of an avoidance action for laches. See § 10 (section 38-8-111 in C.R.S.) and the accompanying Comment infra.
ANNOTATION
This section's time limitation may be extended by an express agreement entered into voluntarily by both parties. Lewis v. Taylor, 2016 CO 48, 375 P.3d 1205.
To determine when the four-year statute of limitations under subsection (1)(a) began to run, court ordered remand proceedings to determine when the transfer was made under § 38-8-107 (1)(a)(I). Tiger v. Anderson, 976 P.2d 308 (Colo. App. 1998).
38-8-111. Supplementary provisions.
Unless displaced by the provisions of this article, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement the provisions of this article.
Source: L. 91: Entire article added, p. 1689, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 10 in the uniform act.
OFFICIAL COMMENT
This section is derived from § 11 of the Uniform Fraudulent Conveyance Act and § 1-103 of the Uniform Commercial Code. The section adds a reference to "laches" in recognition of the particular appropriateness of the application of this equitable doctrine to an untimely action to avoid a fraudulent transfer. See Louis Dreyfus Corp. v. Butler, 496 F.2d 806, 808 (6th Cir. 1974) (action to avoid transfers to debtor's wife when debtor was engaged in speculative business held to be barred by laches or applicable statutes of limitations); Cooch v. Grier, 30 Del.Ch. 255, 265-66, 59 A.2d 282, 287-88 (1948) (action under the Uniform Fraudulent Conveyance Act held barred by laches when the creditor was chargeable with inexcusable delay and the defendant was prejudiced by the delay).
ANNOTATION
The language of this section expressly permits parties to pursue other remedies, evincing the general assembly's intention not to abrogate preexisting common law claims and remedies by the enactment of the Colorado Uniform Fraudulent Transfer Act (CUFTA). Double Oak Constr., L.L.C. v. Cornerstone Dev. Int'l, L.L.C., 97 P.3d 140 (Colo. App. 2003).
Since civil conspiracy provides damage remedies independent of those provided under CUFTA, the trial court did not err in imposing joint tort liability for conspiracy to convey property fraudulently. Double Oak Constr., L.L.C. v. Cornerstone Dev. Int'l, L.L.C., 97 P.3d 140 (Colo. App. 2003).
38-8-112. Uniformity of application and construction.
This article shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this article.
Source: L. 91: Entire article added, p. 1689, § 1, effective July 1.
Editor's note - Colorado legislative change: This section was numbered as section 11 in the uniform act. Colorado deleted the phrase "among states enacting it" from the end of this section.
ARTICLE 10 FRAUDS - STATUTE OF FRAUDS
Cross references: For formal requirements for defense of statute of frauds, see § 4-2-201; for modification, rescission, and waiver of contract, see § 4-2-209; for nature of a sale on approval and sale or return, see § 4-2-326; for pleading fraud as a defense, see C.R.C.P. 8.
Section
38-10-101. Conveyances to defraud.
Every conveyance of any estate or interest in the lands, or the rents and profits of lands, and every charge upon lands, or upon the rents and profits thereof, made or created with the intent to defraud prior or subsequent purchasers for a valuable consideration of the same lands, rents, or profits, as against such purchasers, shall be void.
Source: R.S. p. 337, § 1. G.L. § 1251. G.S. § 1510. R.S. 08: § 2655. C.L. § 5100. CSA: C. 71, § 1. CRS 53: § 59-1-1. C.R.S. 1963: § 59-1-1.
Cross references: For the statute of frauds as an affirmative defense, see C.R.C.P. 8(c).
ANNOTATION
Law reviews. For article, "The Statute of Frauds in Colorado", Part I, see 4 Rocky Mt. L. Rev. 29 (1931); Part II, see 4 Rocky Mt. L. Rev. 99 (1932). For note, "A Survey of the Colorado Torrens Act", see 5 Rocky Mt. L. Rev. 149 (1933). For article, "Unwritten Agreements for the Use of Land", see 14 Rocky Mt. L. Rev. 153, 294 (1942). For article, "A Decade of Colorado Law: Conflict of Laws, Security, Contracts and Equity", see 23 Rocky Mt. L. Rev. 247 (1951). For article, "Colorado's New Fraudulent Transfer Statutes", see 20 Colo. Law. 1815 (1991).
This section has no application to cases involving equitable trusts. In re Heinzman, 40 Colo. App. 262, 579 P.2d 638 (1977), aff'd, 198 Colo. 36 , 596 P.2d 61 (1979).
Statute of frauds must be raised in pleadings. For the statute of frauds to be available as a defense, it must be raised in the pleadings; it cannot be urged for the first time in the supreme court on writ of error. Saccomano v. Palermo, 159 Colo. 307 , 411 P.2d 22 (1966).
A collusive foreclosure under power of sale is a fraudulent conveyance. The fundamental element of a fraudulent conveyance is whether the debtor's estate is unjustly diminished. Megabank Financial v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).
A chattel mortgage is collusive if it is a transaction intended to delay creditors and to prevent the property of the debtor coming to their use. Megabank Financial v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).
A fraudulent conveyance results whether of real or personal property if, as a result of the debtor's operations on the title to his property, the creditor loses by reason of finding less to seize and apply to his claim; however, no injury can result from a sale of an asset at its fair value since the estate does not abate as a result of what was done. Megabank Financial v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).
Applied in First Mtg. Sec. Co. v. Fader, 100 Colo. 22 , 64 P.2d 1278 (1937).
38-10-102. Purchaser with notice - prior grantee privy.
No such conveyance or charge shall be deemed fraudulent in favor of a subsequent purchaser, who has actual or legal notice thereof at the time of his purchase, unless it appears that the grantee in such conveyance or person to be benefited by such charge was privy to the fraud intended.
Source: R.S. p. 338, § 2. G.L. § 1252. G.S. § 1511. R.S. 08: § 2656. C.L. § 5101. CSA: C. 71, § 2. CRS 53: § 59-1-2. C.R.S. 1963: § 59-1-2.
38-10-103. Conveyance determinable at will of grantor void.
Every conveyance or charge of or upon any estate or interest in lands containing any provision for the revocation, determination, or alteration of such estate or interest, or any part thereof, at the will of the grantor shall be void as against subsequent purchasers from such grantor, for a valuable consideration, of any estate or interest so liable to be revoked, determined, or altered by such grantor, by virtue of the power reserved or expressed in such prior conveyance or charge.
Source: R.S. p. 338, § 3. G.L. § 1253. G.S. § 1512. R.S. 08: § 2657. C.L. § 5102. CSA: C. 71, § 3. CRS 53: § 59-1-3. C.R.S. 1963: § 59-1-3.
38-10-104. Power to revoke and reconvey.
When the power to revoke a conveyance of any lands or the rents and profits thereof and to reconvey the same is given to any person other than the grantor in such conveyance and such person thereafter conveys the same lands, rents, or profits to a purchaser for a valuable consideration, such subsequent conveyance shall be valid in the same manner and to the same extent as if the power of revocation were recited therein and the intent to revoke the former conveyance expressly declared.
Source: R.S. p. 338, § 4. G.L. § 1254. G.S. § 1513. R.S. 08: § 2658. C.L. § 5103. CSA: C. 71, § 4. CRS 53: § 59-1-4. C.R.S. 1963: § 59-1-4.
38-10-105. Conveyance before power vests.
If a conveyance to a purchaser under section 38-10-103 or 38-10-104 is made before the person making the same is entitled to execute his power of revocation, it shall nevertheless be valid from the time the power of revocation actually vests in such person, in the same manner and to the same extent as if then made.
Source: R.S. p. 338, § 5. G.L. § 1255. G.S. § 1514. R.S. 08: § 2659. C.L. § 5104. CSA: C. 71, § 5. CRS 53: § 59-1-5. C.R.S. 1963: § 59-1-5.
Cross references: For a conveyance determinable at the will of the grantor being void, see § 38-10-103; for the validity of the power to revoke a conveyance and reconvey, see § 38-10-104.
38-10-106. Conveyance - trust - power must be in writing.
No estate or interest in lands, other than leases for a term not exceeding one year, nor any trust or power over or concerning lands or in any manner relating thereto shall be created, granted, assigned, surrendered, or declared, unless by act or operation of law, or by deed or conveyance in writing subscribed by the party creating, granting, assigning, surrendering, or declaring the same, or by his lawful agent thereunto authorized by writing.
Source: R.S. p. 338, § 6. G.L. § 1256. G.S. § 1515. R.S. 08: § 2660. C.L. § 5105. CSA: C. 71, § 6. CRS 53: § 59-1-6. C.R.S. 1963: § 59-1-6.
ANNOTATION
Analysis
- I. General Consideration.
- II. Express Trusts.
- III. Resulting and Constructive Trusts.
- IV. Authority of Agent.
I. GENERAL CONSIDERATION.
Law reviews. For article, "Express Trusts in Colorado", see 10 Rocky Mt. L. Rev. 9 (1937). For article, "An Aspect of Estate Planning in Colorado: The Revocable Inter Vivos Trust", see 43 Den. L.J. 296 (1966). For note, "A Survey of Colorado Water Law", see 47 Den. L.J. 226 (1970). For article, "Signatures on Documents Affecting Title to Colorado Real Property -- Part III", see 12 Colo. Law. 447 (1983).
Statute of frauds only concerns making of contracts. Niernberg v. Feld, 131 Colo. 508 , 283 P.2d 640 (1955).
Statute of frauds is inapplicable to revocation of contracts. Niernberg v. Feld, 131 Colo. 508 , 283 P.2d 640 (1955).
Statute of frauds inapplicable to executed contracts. Sherman v. Randle, 79 Colo. 243, 245 P. 717 (1926).
Rescission of executing contract by parol agreement permitted. An executory contract involving title to, or an interest in, land may be rescinded by an agreement resting in parol. Niernberg v. Feld, 131 Colo. 508 , 283 P.2d 640 (1955).
Statute of frauds is inapplicable to equitable trusts. Page v. Clark, 40 Colo. App. 24, 572 P.2d 1214 (1977), rev'd on other grounds, 197 Colo. 306 , 592 P.2d 792 (1979).
Agreement restricting use of land is not within statute of frauds because it does not relate to an interest in land but merely to its use. Thornton v. Schobe, 79 Colo. 25, 243 P. 617 (1925).
Interest in deed of trust is not an interest in the underlying land. Since Colorado is a lien theory jurisdiction, statute of frauds does not bar suit on oral agreement to execute and deliver a mortgage upon real estate. Bigelow v. Nottingham, 833 P.2d 764 (Colo. App. 1991), rev'd on other grounds sub nom. Haberl v. Bigelow, 855 P.2d 1368 ( Colo. 1993 ).
Promissory note secured by a deed of trust for real property does not create an interest in land. Crown Life Ins. Co. v. Haag Ltd. P'ship, 929 P.2d 42 (Colo. App. 1996).
Settlement of accounts following partnership termination independent of status of realty. When the business of a partnership, organized to lease and operate a mine during a limited period for the sole purpose of making a profit through the extracting and marketing of ores therefrom, had been terminated in a suit brought by one of the partners to settle the partnership accounts and distribute the partnership profits and other assets, no interest in realty was involved, and, in such cases, the right to a settlement and distribution in no way depends upon the legal status of realty under the statute of frauds, therefore, this section is inapplicable to the right to a settlement and distribution. Meagher v. Reed, 14 Colo. 335, 24 P. 681 (1890).
A written conveyance from a partner who contributes real estate to a partnership is not required to convert the property into partnership property because the partnership statutes and the trust relationship between partners sufficiently protect partners from fraud. In re Estate of Grosboll, 2013 COA 141 , 315 P.3d 1284.
Partial performance removes contract from scope of statute. Where there is an accounting between parties when one party paid over half the profits from jointly owned land, there is such partial performance of a contract conveying a one-half interest in land as would remove the contract from the scope of the statute. Bushner v. Bushner, 134 Colo. 509 , 307 P.2d 204 (1957).
Method of use of land not subject to section. Method of use of land is not estate or interest in land, subject to this section. Thornton v. Schobe, 79 Colo. 25, 243 P. 617 (1925).
Profits on purchase and sale of land not an "estate or interest" in the land, subject to this section. Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Thornton v. Schobe, 79 Colo. 25, 243 P. 617 (1925).
Defense involves questions of fact and law. The defense of the statute of frauds involves questions of fact as well as law. Bushner v. Bushner, 134 Colo. 509 , 307 P.2d 204 (1957).
Proof of parol agreement prohibited absent fraud, accident, or mistake. In the absence of the elements of fraud, accident, or mistake, the grantor in an absolute conveyance is prohibited by the statute of frauds from setting up and proving a parol agreement, in which the grantee was to hold the land in trust for his benefit. Hall v. Linn, 8 Colo. 264, 5 P. 641 (1885); Bohm v. Bohm, 9 Colo. 100, 10 P. 790 (1885); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890).
To exclude the operation of the statute on the ground of fraud where an oral agreement is alleged as a foundation of the trust, it must appear that the promise is used as a means of imposition or deceit; the promise may be received in evidence as one of the steps by which the fraud was accomplished. Bohm v. Bohm, 9 Colo. 100, 10 P. 790 (1885).
Unless the transaction was tainted with either actual or constructive fraud, trust could not be created by parol. Hodgson v. Fowler, 7 Colo. App. 378, 43 P. 462 (1896).
While Colorado recognizes that the intent to create a trust can be inferred from the nature of property transactions, the circumstances surrounding the holding of and transfer of property, the particular documents or language employed, and the conduct of the parties, the inference of an intent to create a trust must come from clear, explicit, definite, unequivocal, and unambiguous language or conduct. No finding of a trust is warranted as a matter of law where neither the language of the relevant documents nor the conduct of the parties satisfies this standard. Bishop & Diocese of Colo. v. Mote, 716 P.2d 85 (Colo.) (en banc), cert. denied, 479 U.S. 826, 107 S. Ct. 102, 93 L. Ed. 2d 52 (1986); In re Fairfield Pagosa, Inc., 97 F.3d 247 (8th Cir. 1996).
Applied in Farrand v. Beshoar, 9 Colo. 291 , 12 P. 196 (1886); Beulah Marble Co. v. Mattice, 22 Colo. 547 , 45 P. 432 (1896); Heron v. Weston, 44 Colo. 379 , 100 P. 1130 (1908); Griffith v. Sands, 84 Colo. 456 , 271 P. 191 (1928); Quelland v. Roy, 148 Colo. 316 , 365 P.2d 899 (1961).
II. EXPRESS TRUSTS.
Parol evidence cannot establish existence of express trust. Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Johnson v. Calnan, 19 Colo. 168, 34 P. 905, 41 Am. St. R. 224 (1893).
Parol evidence admissible to show truth of transaction. Where there is some written evidence showing the existence of a trust, the door is thereby opened to the admission of parol evidence to show the truth of the transaction. Johnson v. Calnan, 19 Colo. 168, 34 P. 905, 41 Am. St. R. 224 (1893).
Written evidence of trust required. It is not required by this section that a trust should be created by a writing, but that there should be evidence in writing, proving that there was such a trust; the proof may be made by letters and informal documents. Johnson v. Calnan, 19 Colo. 168, 34 P. 905 (1893); Waterbury v. Fisher, 5 Colo. App. 362, 38 P. 846 (1894), aff'd, 23 Colo. 256, 47 P. 277 (1896).
To constitute a valid express trust in relation to realty, the conditions thereof must, by virtue of the statute of frauds, be in writing. Armor v. Spalding, 14 Colo. 302, 23 P. 789 (1890).
III. RESULTING AND CONSTRUCTIVE TRUSTS.
Resulting and constructive trusts arise by operation of law upon the transaction of the parties. Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); McPherrin v. Fair, 57 Colo. 333, 141 P. 472 (1914).
A constructive trust is a creature of equity and springs from a desire to prevent the statute of frauds from being used as a shield which would allow a party to be unjustly enriched. Page v. Clark, 197 Colo. 306 , 592 P.2d 792 (1979); Ralston Oil & Gas Co. v. July Corp., 719 P.2d 334 (Colo. App. 1985).
Situations giving rise to resulting trusts. There are three situations in which the trust which arises is properly called a resulting trust: (1) Where an express trust fails in whole or in part; (2) where an express trust is fully performed without exhausting the trust estate; and (3) where property is purchased and the purchase price is paid by one person and at his direction the vendor conveys the property to another person. Page v. Clark, 197 Colo. 306 , 592 P.2d 792 (1979).
A trust in operation of law may occur where a trust is declared only as to part of the conveyance and nothing is said as to rest. Walker v. Bruce, 44 Colo. 109, 97 P. 250 (1908).
Statute of frauds does not prevent declaration of constructive trust nor does it prevent recovery of property delivered conditionally by one to himself and another as joint tenants in contemplation of marriage. In re Heinzman, 198 Colo. 36 , 596 P.2d 61 (1979).
If the conditions for imposing a constructive trust are present, such remedy will not be precluded by application of the statute of frauds. Ralston Oil & Gas Co. v. July Corp., 719 P.2d 334 (Colo. App. 1985).
Resulting trust in lands may be established by oral testimony. Knox v. McFarran, 4 Colo. 586 (1879); Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); Bohm v. Bohm, 9 Colo. 100, 10 P. 790 (1885); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); First Nat'l Bank v. Campbell, 2 Colo. App. 271, 30 P. 357 (1892), rev'd on other grounds, 22 Colo. 177, 43 P. 1007 (1896); Warren v. Adams, 19 Colo. 515, 36 P. 604 (1894); Berry v. French, 24 Colo. App. 519, 135 P. 985 (1898); Walker v. Bruce, 44 Colo. 109, 97 P. 250 (1908); O'Byrne v. McNeill, 90 Colo. 226, 7 P. 956 (1932).
Statute of frauds has no application to resulting trust, for such a trust is created by operation of law. Kayser v. Maugham, 8 Colo. 232 , 6 P. 803 (1885); Walker v. Bruce, 44 Colo. 109 , 97 P. 250 (1908); McPherrin v. Fair, 57 Colo. 333 , 141 P. 472 (1914); In re Doerfer's Estate, 100 Colo. 304 , 67 P.2d 492 (1937); Vandewiele v. Vandewiele, 110 Colo. 556 , 136 P.2d 523 (1943).
When constructive trust operates. It has been held that a constructive trust is the formula through which the conscience of equity finds expression; when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee. Page v. Clark, 197 Colo. 306 , 592 P.2d 792 (1979).
Where legal title to land has been fraudulently acquired, and is still held in fraud of the rights of another having a valuable interest in the premises, a trust by operation of law may be declared upon equitable terms. Learned v. Tritch, 6 Colo. 432 (1882); Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); Stewart v. Stevens, 10 Colo. 440, 15 P. 786 (1887); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Walker v. Bruce, 44 Colo. 109, 97 P. 250 (1908).
Essence of constructive trusts seems to be fraud, deceit, or bad faith; no effort is made to include them in the intention of the contracting parties. Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885).
Fraudulent conveyance prevents trust from resulting to grantor. No trust can result to grantor when conveyance is made for a colorable, illegal, or fraudulent purpose. First Nat'l Bank v. Campbell, 2 Colo. App. 271, 30 P. 357 (1892), rev'd on other grounds, 22 Colo. 177, 43 P. 1007 (1896).
Confidential relations sufficient to create constructive trust. Confidential relations between the parties are sufficient to create a constructive trust. Bohm v. Bohm, 9 Colo. 100 , 10 P. 790 (1885); Young v. Hinds, 68 Colo. 164 , 188 P. 739 (1920); Vosburg v. Knight, 71 Colo. 473 , 207 P. 1112 (1922); Herrick v. Woodrow-Shindler Co., 75 Colo. 363 , 226 P. 137 (1924); O'Byrne v. McNeill, 90 Colo. 226 , 7 P.2d 956 (1932).
Setting aside transaction for abuse of confidential relationship. If the existence of a confidential relationship has been established, a transaction may be set aside if that relationship has been abused. It is not necessary that the abuse of the confidential relationship be the procuring cause of the original conveyance, but rather the refusal to perform the promise to reconvey is itself a sufficient abuse of confidence to allow the conveyance to be set aside. Page v. Clark, 197 Colo. 306 , 592 P.2d 792 (1979).
IV. AUTHORITY OF AGENT.
Agency for sale of lands can be created only by writing. Springer v. City Bank & Trust Co., 59 Colo. 376, 149 P. 253, 1917A Ann. Cas. 520 (1911).
In the absence of written authority from a wife, the owner of real property, to her husband, authorizing it, a lease and option given by him on a part of the land was void under the statute of frauds. Simpson v. Nelson, 71 Colo. 490, 208 P. 455 (1922).
Written authority required to create power of attorney in fact. A contract and deed, executed by father, professing to act as attorney in fact for his daughter, were void under the statute of frauds, so far as the daughter was concerned, because he was not authorized in writing to execute the contract and deed. Clement v. Major, 1 Colo. App. 297, 29 P. 19 (1892); Hagerman v. Bates, 5 Colo. App. 391, 38 P. 1100 (1895), rev'd on other grounds, 24 Colo. 71, 49 P. 139 (1897); Newman v. Tibbitts, 27 Colo. App. 325, 149 P. 266 (1915), aff'd, 63 Colo. 74, 163 P. 720 (1917).
Ratification of signing of contract requires writing. In an action to enforce specific performance of a contract required by the statute of frauds to be in writing, where the statute of frauds was pleaded, ratification of the signing of the contract by one party for another could be shown only in writing. People's Mining & Milling Co. v. Cent. Consol. Mines Corp., 20 Colo. App. 561, 80 P. 479 (1905).
38-10-107. Not to affect will or trusts by operation of law.
Section 38-10-106 shall not be construed to affect in any manner the power of the testator in the disposition of his real estate by a last will and testament nor to prevent any trust from arising or being extinguished by implication or operation of law.
Source: R.S. p. 338, § 7. G.L. § 1257. G.S. § 1516. R.S. 08: § 2661. C.L. § 5106. CSA: C. 71, § 7. CRS 53: § 59-1-7. C.R.S. 1963: § 59-1-7.
ANNOTATION
Law reviews. For article, "Express Trusts in Colorado", see 10 Rocky Mt. L. Rev. 9 (1937).
Statute of frauds is inapplicable to equitable trusts. Page v. Clark, 40 Colo. App. 24, 572 P.2d 1214 (1977), rev'd on other grounds, 197 Colo. 306 , 592 P.2d 572 (1979).
38-10-108. Contracts for interests in land - must be written.
Every contract for the leasing for a longer period than one year or for the sale of any lands or any interest in lands is void unless the contract or some note or memorandum thereof expressing the consideration is in writing and subscribed by the party by whom the lease or sale is to be made.
Source: R.S. p. 339, § 8. G.L. § 1258. G.S. § 1517. R.S. 08: § 2662. C.L. § 5107. CSA: C. 71, § 8. CRS 53: § 59-1-8. C.R.S. 1963: § 59-1-8.
ANNOTATION
Analysis
- I. General Consideration.
- II. Leases.
- III. Contracts for Sale of Interest in Land.
- IV. Note or Memorandum.
- V. Complete Performance and Part Performance.
I. GENERAL CONSIDERATION.
Law reviews. For article, "Collateral Effects of the Statute of Frauds", see 13 Rocky Mt. L. Rev. 233 (1941). For note, "The Effect of 'Invalid' Leases", see 22 Rocky Mt. L. Rev. 305 (1950). For article, "The Interest of Landowner and Lessee in Oil and Gas in Colorado", see 25 Rocky Mt. L. Rev. 117 (1953). For article, "Trusts and Estates", see 30 Dicta 435 (1953). For article, "One Year Review of Agency, Partnerships and Corporations", see 40 Den. L. Ctr. J. 123 (1963). For article, "Signatures on Documents Affecting Title to Colorado Real Property -- Part III", see 12 Colo. Law. 447 (1983). For article, "Residential Tenancies, Lease to Eviction An Overview of Colorado Law", see 43 Colo. Law. 55 (May 2014).
Statute of frauds should operate as shield against fraud. Burnford v. Blanning, 189 Colo. 292 , 540 P.2d 337 (1975).
Section is for protection of vendor and not vendee, and the vendee cannot take advantage of it. Colo. Lumber, Land, & Imp. Co. v. Dustin, 38 Colo. 398 , 87 P. 1142 (1906); Gabarino v. Union Sav. & Loan Ass'n, 107 Colo. 140 , 109 P.2d 638 (1941); Boyer v. Karakehian, 915 P.2d 1295 ( Colo. 1996 ).
This section requires a contract for the sale of land or interest therein to be expressed in a writing signed by the selling or granting party, and such a contract must identify the parties to the transaction, the terms and conditions of the transaction, a description of the property, and the consideration. Luttgen v. Fischer, 107 P.3d 1152 (Colo. App. 2005).
When oral contract for land not considered void. An oral contract for the sale of land cannot be considered void so long as the vendor is willing to treat the contract as good; this rule applies where the vendee resists payment on a check given for the purchase price. Colo. Lumber, Land, & Imp. Co. v. Dustin, 38 Colo. 398 , 87 P. 1142 (1906); Gabarino v. Union Sav. & Loan Ass'n, 107 Colo. 140 , 109 P.2d 638 (1941); Houtchens v. United Bank of Co. Spgs., 797 P.2d 814 (Colo. App. 1990).
Where the oral contract is not void but voidable, a promise within the statute of frauds will serve as consideration for an enforceable promise by another. Colo. Lumber, Land, & Imp. Co. v. Dustin, 38 Colo. 398 , 87 P. 1142 (1906); Gabarino v. Union Sav. & Loan Ass'n, 107 Colo. 140 , 109 P.2d 638 (1941).
Statute of frauds furnishes rule of evidence, but not of pleading. Tucker v. Edwards, 7 Colo. 209, 3 P. 233 (1883); Garbanati v. Fassbinder, 15 Colo. 535, 25 P. 991 (1890); Ruth v. Smith, 29 Colo. 154, 68 P. 278 (1901).
Defense involves questions of fact and law. The defense of the statute of frauds involves questions of fact as well as law. Bushner v. Bushner, 134 Colo. 509 , 307 P.2d 204 (1957).
Unenforceable contract of the statute cannot be made indirectly enforceable by promising to execute a sufficient memorandum or otherwise to satisfy the requirements of the statute. Rupp v. Hill, 149 Colo. 48 , 367 P.2d 746 (1961).
Statute of frauds concerns making of contracts only; it does not apply to the matter of their revocation. Niernberg v. Feld, 131 Colo. 508 , 283 P.2d 640 (1955).
Executory contracts may be rescinded by mutual consent of parties thereto. Niernberg v. Feld, 131 Colo. 508 , 283 P.2d 640 (1955).
When parol gift of interest in realty deemed good in equity. A parol gift of an interest in real property is good in equity, as a rule, only when valuable improvements have been made in reliance on the gift, so that to refuse to enforce it is inequitable. Kendall v. Metroz, 65 Colo. 387, 176 P. 473 (1918).
Contract not evidenced by memorandum conveying title to omitted property. A written memorandum by the grantor agreeing to convey the legal title to his grantee who has purchased, paid for, and reduced to peaceable possession, property which by mistake was omitted from the original deed, does not evidence a contract for the sale of land within the meaning of this section. Ross v. Purse, 17 Colo. 24, 28 P. 473 (1891).
Grubstake agreements not within statute of frauds. Grubstake agreements may be either oral or written and are not within the statute of frauds. Smaller v. Leach, 136 Colo. 297 , 316 P.2d 1030 (1957), cert. denied, 356 U.S. 936, 78 S. Ct. 777 (1958).
Statute does not prevent declaration of constructive trust nor does it prevent recovery of property delivered conditionally by one to himself and another as joint tenants in contemplation of marriage. In re Heinzman, 198 Colo. 36 , 596 P.2d 61 (1979).
Estoppel as bar to statute of frauds defense. In order to estop vendors from asserting the statute of frauds as a defense, the vendee must have performed acts constituting substantial action or forbearance. Tripp v. Shelter Research Inc., 729 P.2d 1024 (Colo. App. 1986).
Estoppel not found. Tripp v. Shelter Research Inc., 729 P.2d 1024 (Colo. App. 1986).
A party making an oral promise respecting the title to real estate may not rely on the statute if the other party fails to assure that the oral agreement is reduced to writing because of the confidence engendered by the first party. The promisor will be treated in such case as a constructive trustee for the other party. Jarnagin v. Busby, Inc., 867 P.2d 63 (Colo. App. 1993).
In order to escape the bar of the statute of frauds, it was necessary for the plaintiffs to prove, among other things, that they reasonably reposed confidence and trust in the promisor at the time of the negotiations leading to the oral agreement at issue and that, but for such confidential relationship, such oral agreement would have been reduced to writing. Jarnagin v. Busby, Inc., 867 P.2d 63 (Colo. App. 1993).
Applied in Wolf v. Burke, 18 Colo. 264 , 32 P. 427, 19 L.R.A. 792 (1893); Thomas Realty Co. v. Guthrie, 71 Colo. 98 , 204 P. 330 (1922); Swaim v. Swanson, 118 Colo. 509 , 197 P.2d 624 (1948); Payne v. Cumming, 136 Colo. 244 , 315 P.2d 818 (1957); Hunt v. Pick, 240 F.2d 782 (10th Cir. 1957); Coulter v. Anderson, 144 Colo. 402 , 357 P.2d 76 (1960); Dolton v. Capitol Fed. Sav. & Loan Ass'n, 642 P.2d 21 (Colo. App. 1981); Great Falls Props., Inc. v. Prof'l Group, Ltd., 649 P.2d 1082 ( Colo. 1982 ); Nicol v. Nelson, 776 P.2d 1144 (Colo. App. 1989), cert. denied, 785 P.2d 917 ( Colo. 1989 ); Karakehian v. Boyer, 900 P.2d 1273 (Colo. App. 1994).
II. LEASES.
Verbal lease for year to begin in future valid. A verbal lease for the term of a year, to begin in the future, is valid. Sears v. Smith, 3 Colo. 287 (1877).
Lease of land for crop year not void. An oral lease of land for the crop year, made in June, 1943, where the crops to be planted would not mature until July or August, 1944, did not amount to a lease for a period longer than one year, and it is not void under this section. Northrup v. Nicklas, 115 Colo. 207 , 171 P.2d 417 (1946).
Time between making lease and taking possession cannot be counted. The time between the making of the lease and the time when the lessee is entitled to possession thereunder cannot be counted in computing the year as that is no part of the term. Northrup v. Nicklas, 115 Colo. 207 , 171 P.2d 417 (1946).
III. CONTRACTS FOR SALE OF INTEREST IN LAND.
Actual possession must be referable to contract. Actual possession in furtherance of an oral contract may be made the foundation for a decree of specific performance, but such possession must be referable to the contract. Rupp v. Hill, 149 Colo. 48 , 367 P.2d 746 (1961).
Trier of facts determines whether possession referable. Whether possession is referable to an oral contract rests upon circumstances, and should be resolved by the trier of the facts. Rupp v. Hill, 149 Colo. 48 , 367 P.2d 746 (1961).
Verbal agreements for profits and contracts for land may be independent. A verbal agreement to share the profits arising from the purchase and sale of real estate may be made independent of any contract for an interest in the land itself. Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890).
Oral agreement for perpetual right-of-way constitutes easement. An oral agreement for a perpetual right-of-way over the premises of another constitutes an easement or interest in land and is within the statute of frauds. Whitsett v. Kershow, 4 Colo. 419 (1878); Ward v. Farwell, 6 Colo. 66 (1881); Stewart v. Stevens, 10 Colo. 440, 15 P. 786 (1887); Fetta v. Vandevier, 3 Colo. App. 419, 34 P. 168 (1893), aff'd, Vandevier v. Fetta, 20 Colo. 368, 38 P. 466 (1894); Laesch v. Morton, 38 Colo. 171, 87 P. 1081 (1906); Workman v. Stephenson, 26 Colo. App. 339, 144 P. 1126 (1914).
Agreement for joint benefit of several persons not within section. Agreement between two or more persons to explore the public domain and discover and locate lodes for the joint benefit of all is not within this section, and it is not necessary that it should be written. Murley v. Ennis, 2 Colo. 300 (1874); Meylette v. Brennan, 20 Colo. 242, 38 P. 75 (1894).
Statute inapplicable to extension of performance time of executing contract. The statute of frauds does not apply to an oral agreement to extend the time for performance of an executory contract. Poznik v. Urton & Co., 30 Colo. App. 475, 496 P.2d 1073 (1972), aff'd, 181 Colo. 15 , 506 P.2d 741 (1973).
Retention right in mine requires writing. Where one enters upon a mine previously discovered, and to which the discoverer has lost his right by failing to make the development required by the law; from the moment of commencing the labor of development with the bona fide purpose to complete it, and so appropriate the mine, the party has a possession in fact, and for the time being a right to retain that possession, and this right is, perhaps, such an interest in land as cannot be contracted for or disposed of without writing. Murley v. Ennis, 2 Colo. 300 (1874).
Subsequent oral modification unenforceable. A contract for the sale of land required to be in writing cannot be validly changed or modified as to a material condition, by a subsequent oral agreement, without more, so as to make the original written agreement, as orally modified, an enforceable obligation. Burnford v. Blanning, 189 Colo. 292 , 540 P.2d 337 (1975).
Exceptions to unenforceability of subsequent oral modification. Exceptions to general rule that contracts for sale of land cannot be modified by subsequent parol agreement include: (1) When subsequent oral agreement amounts to revocation of written contract; and (2) when party consents to, or requests postponement of, performance by other party which is for his benefit and other party has acted on such request or consent. Urton & Co. v. Poznik, 181 Colo. 15 , 506 P.2d 741 (1973).
Contracts for the sale of land can be modified by subsequent oral agreement if a party consents to or requests a postponement of performance by the other party which is for the requesting party's benefit and the other party has acted thereon. Colo. Inv. Servs., Inc. v. Hager, 685 P.2d 1371 (Colo. App. 1984).
When oral agreement not violative of statute. Where an oral modification agreed to by the parties has been performed, a contract which affects interests in real property may be modified as to a material condition by a subsequent oral agreement without violating the statute of frauds. Discovery Land & Dev. Co. v. Colorado-Aspen Dev. Corp., 40 Colo. App. 292, 577 P.2d 1101 (1977).
IV. NOTE OR MEMORANDUM.
Required contents of "note or memorandum". The "note or memorandum" required upon sale of real estate must show on its face or by reference to other writings: (1) The names of the parties, vendor, and vendee; (2) the terms and conditions of the contract; (3) the interest or property affected; and (4) the consideration to be paid therefor. Eppich v. Clifford, 6 Colo. 493 (1883); Micheli v. Taylor, 114 Colo. 258 , 159 P.2d 912 (1945).
Nexus required between writings. Where more than one writing is used to satisfy the requirements of the statute of frauds, some nexus between the writings must be shown. While the phrase "internal reference" is often used to describe the requisite nexus, it need not be in the form of express cross-references between the writings. Instead, the requirement may be satisfied by parol evidence where it is apparent that the memoranda referred to the same subject matter or transaction. Bennett v. Moring, 33 Colo. App. 390, 522 P.2d 741 (1974).
Business record qualifies as memorandum. "Church Roll and Record", a regular business record, although kept in a rather informal manner, qualifies as a memorandum capable of satisfying the statute of frauds. Bennett v. Moring, 33 Colo. App. 390, 522 P.2d 741 (1974).
V. COMPLETE PERFORMANCE AND PART PERFORMANCE.
Section is inapplicable when performance of contract is shown. Babcock v. Bouton, 85 Colo. 327 , 275 P. 908 (1929); Rupp v. Hill, 149 Colo. 48 , 367 P.2d 746 (1961); Ridgeway v. Pope, 163 Colo. 160 , 430 P.2d 77 (1967).
An oral contract for a one-fourth interest in the water of a spring, based on a valuable consideration, and which is performed by both parties, except as to the expenses that may arise in the future, is such a complete performance on both sides as will remove the bar of the statute. Vandewark v. Widman, 79 Colo. 82, 243 P. 622 (1926).
Full performance of a parol contract respecting the construction of an irrigating ditch and the right-of-way therefor takes the case out of the operation of the statute of frauds. Tynon v. Despain, 22 Colo. 240, 43 P. 1039 (1896).
Part payment and partial performance complies with section. A written receipt given as part payment reciting balance due, together with partial performance, is sufficient to overcome claim that contract violated this section. Tolley v. Fritsinger, 150 Colo. 440 , 374 P.2d 364 (1962).
Contracts enforceable where there is substantial part performance. Where there is substantial part performance, which would result in injustice, courts of equity will enforce contracts which otherwise might be unenforceable under the statute of frauds. Siler v. Inv. Sec. Co., 125 Colo. 438 , 244 P.2d 877 (1952).
Payment of profits from jointly owned land partial performance. Where there is an accounting between parties when one party paid over half the profits from jointly owned land there is such partial performance of a contract conveying a one-half interest in land as would take the contract from under the statute. Bushner v. Bushner, 134 Colo. 509 , 307 P.2d 204 (1957).
Money expended for labor and building materials sufficient part performance. Where persons expended from $1,200 to $1,500 in labor and materials in building their home on another's land in reliance on owner's consent, it is clearly apparent that there was sufficient part performance to overcome the defense of the statute of frauds. Zamboni v. Graham, 104 Colo. 23 , 88 P.2d 98 (1939).
Part performance may take the place of a writing under the statute of frauds and will permit enforcement of an otherwise unenforceable oral contract. Walk v. Miller, 650 P.2d 1286 (Colo. App. 1981); Ralston Oil and Gas Co. v. July Corp., 719 P.2d 334 (Colo. App. 1985); L.V. Cattle Co. v. Wilson, 714 P.2d 1344 (Colo. App. 1986); A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).
Standards used in determining part performance. Part performance consists of performing something required by the contract, such as the payment of rent, plus the taking of possession by the tenant and the installation of trade fixtures or other similar equipment of a type that is indicative of a long-term tenancy. A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).
A party relying on part performance to defeat a defense based on the statute of frauds must show that the partial performance is more consistent with the terms of the contract than with some other arrangement, such as a month-to-month tenancy or a tenancy at will. A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).
Mere possession of property is not substantial part performance if possession may be attributed to some arrangement other than the one under the alleged oral agreement. A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).
In many cases where part performance has been allowed to defeat a statute of frauds defense, either a tenant or a putative owner has taken possession of the premises and made extensive improvements or expenditures in preparing to occupy the property in reliance on an oral agreement. A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).
Evidence insufficient to prove part performance. Walk v. Miller, 650 P.2d 1286 (Colo. App. 1981); Tripp v. Shelter Research Inc., 729 P.2d 1024 (Colo. App. 1986).
38-10-109. Authorized agent may subscribe instrument.
Every instrument required to be subscribed by any party under section 38-10-108 may be subscribed by the agent of such party lawfully authorized by writing.
Source: R.S. p. 339, § 9. G.L. § 1259. G.S. § 1518. L. 1887: p. 274, § 1. R.S. 08: § 2663. C.L. § 5108. CSA: C. 71, § 9. CRS 53: § 59-1-9. C.R.S. 1963: § 59-1-9.
ANNOTATION
Law reviews. For article, "One Year Review of Agency, Partnerships and Corporations", see 40 Den. L. Ctr. J. 123 (1963). For article, "Signatures on Documents Affecting Title to Colorado Real Property -- Part III", see 12 Colo. Law. 447 (1983).
Agent's written authority required for binding contract. By this section as amended in 1887, a binding contract for the sale of real estate cannot be executed by an agent, unless the agent be authorized by writing. Castner v. Richardson, 18 Colo. 496, 33 P. 163 (1893); Springer v. City Bank & Trust Co., 59 Colo. 376, 149 P. 253, 1917A Ann. Cas. 520 (1915).
A down payment on the purchase price of realty made by a prospective purchaser to one claiming to be the representative of the seller is not binding on the seller in the absence of written authority in the agent to convey. Nunnally v. Hilderman, 150 Colo. 363 , 373 P.2d 940 (1962).
Agent must be given specific authority to do either the general business of his principal or the particular thing which he assumed to do. Johnson v. Lennox, 55 Colo. 125 , 133 P. 744 (1913); Nunnally v. Hilderman, 150 Colo. 363 , 373 P.2d 940 (1962).
Act of partner in selling real estate is binding upon the partnership and the other parties without obtaining their written consent when in the apparent scope of the partnership's business. Ball v. Carlson, 641 P.2d 303 (Colo. App. 1981).
Burden is put on plaintiff, who sues upon a contract thus executed, to show that the person who signed the contract as agent was authorized, not only to negotiate the sale, but also to conclude in writing a binding contract within the terms, conditions, and limitations expressed in the contract upon which the action is founded. Nunnally v. Hilderman, 150 Colo. 363 , 373 P.2d 940 (1962).
Applied in Malone v. McCullough, 15 Colo. 460, 24 P. 1040 (1890); Rice v. Bush, 16 Colo. 484, 27 P. 720 (1891).
38-10-110. Courts may enforce specific performance.
Nothing in this article shall be construed to abridge the powers of courts of equity to compel the specific performance of agreements in cases of part performance of such agreement.
Source: R.S. p. 339, § 10. G.L. § 1260. G.S. § 1519. R.S. 08: § 2664. C.L. § 5109. CSA: C. 71, § 10. CRS 53: § 59-1-10. C.R.S. 1963: § 59-1-10.
ANNOTATION
Analysis
I. GENERAL CONSIDERATION.
Law reviews. For article, "Part Performance and the Statute of Frauds in Colorado", see 2 Rocky Mt. L. Rev. 209 (1930). For article, "The Remedy of Specific Performance in Colorado Contracts", Part I, see 8 Rocky Mt. L. Rev. 15 (1935); Part II, see 8 Rocky Mt. L. Rev. 106 (1936).
Applied in Foster v. Caffey, 71 Colo. 171 , 204 P. 900 (1922); Sackett v. Rodeck, 75 Colo. 425 , 226 P. 295 (1924); Thornton v. Schobe, 79 Colo. 25 , 243 P. 617 (1925); Moschetti v. Santarelli, 82 Colo. 346 , 259 P. 515 (1927); Jutten v. Deeble, 88 Colo. 301 , 295 P. 496 (1931); French v. Mitchell, 92 Colo. 532 , 22 P.2d 644 (1933); Boyd v. McElroy, 105 Colo. 527 , 100 P.2d 624 (1940); Poznik v. Urton & Co., 30 Colo. App. 475, 496 P.2d 1073 (1972).
II. SPECIFIC PERFORMANCE.
Specific performance enforceable for part performance. Specific performance of an oral contract will be enforced in favor of one who has partly performed it. Van Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Knoff v. Grace, 68 Colo. 527, 190 P. 526 (1920).
Essential contract terms must be established to justify specific performance of parole contract. In order to justify the specific performance of a parol contract for the sale of land on the ground of part performance, it is necessary that all the essential terms of the contract must first be established by competent evidence and shown to be definite, certain, clear, and unambiguous. Mestas v. Martini, 113 Colo. 108 , 155 P.2d 161 (1944).
Where the purchaser of lands has partly performed under a verbal contract, he can recover for what he has done in pursuance of the oral agreement where the vendor insists upon the statute of frauds and refuses to perform. Colo. Lumber, Land, & Imp. Co. v. Dustin, 38 Colo. 398, 87 P. 1142 (1906); Drier v. Sherwood, 77 Colo. 539, 238 P. 38 (1925).
Sufficient consideration required for enforceability of agreement. An agreement, whether within or without the statute of frauds, must be founded upon a sufficient consideration before a court of equity will enforce it. Beulah Marble Co. v. Mattice, 22 Colo. 547, 45 P. 432 (1896).
Cause of performance other than contract alleged insufficient. What is fairly referable to some cause other than the contract as alleged will not be regarded as sufficient part performance to justify a decree of specific performance. Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Knoff v. Grace, 68 Colo. 527, 190 P. 526 (1920).
Requisites for rescission of oral contract for land purchase. Where a party has rendered services, or paid money, in consideration of an oral contract for the purchase of land, he cannot rescind such contract and recover for such services, or the money paid, unless the other party insists upon the statute of frauds, and refuses to perform it on his part. Colo. Lumber, Land, & Imp. Co. v. Dustin, 38 Colo. 398, 87 P. 1142 (1906).
Evidence of parol contract inadmissible where written contract alleged. In an action for specific performance of a contract to convey land, where the complaint alleges a written contract, evidence of a parol contract taken out of the statute of frauds by part performance is inadmissible to support the action. People's Mining & Milling Co. v. Central Consol. Mines Corp., 20 Colo. App. 561, 80 P. 479 (1905).
A trial court has discretion to grant the equitable relief of specific performance while the jury concurrently deliberates on the award of damages in cases where the damages are in no way contingent upon the trial court's equity decision. Soneff v. Harlan, 712 P.2d 1084 (Colo. App. 1985).
III. PART PERFORMANCE.
Part performance removes contract from bar of statute of frauds. Part performance of a contract removes it from the bar of the statute of frauds. Ridgeway v. Pope, 163 Colo. 160 , 430 P.2d 77 (1967).
Acts of part performance must be pursuant to verbal contract. Acts of part performance, such as will furnish a foundation for enforcing a verbal contract respecting land otherwise void under the statute of frauds, must be such as are done in pursuance, or according to the terms, of the contract, and which in some manner affect or change the relation of the parties in respect to the property whereby one of the parties would be defrauded if the contract were not enforced. Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890).
Absent agreement, no acts of part performance would exist. The part performance, which will bring a contract within the provisions of this section, must consist of an act or of acts which it clearly appears the performing party would not have done in the absence of the agreement or without a direct view to its performance. Horton v. Stegmyer, 175 F. 756, 20 Ann. Cas. 1134 (8th Cir. 1913); Brown v. Johanson, 69 Colo. 400, 194 P. 943 (1920).
Money expended for labor and building materials constitute part performance. Where persons expended from $1,200 to $1,500 in labor and materials in building their home on another's land in reliance on owner's consent, it is clearly apparent that there was sufficient part performance to overcome the defense of the statute of frauds. Zamboni v. Graham, 104 Colo. 23 , 88 P.2d 98 (1939); Hill v. Chambers, 136 Colo. 129 , 314 P.2d 707 (1957).
Actual possession and making improvements constitute sufficient part performance. The most important acts which constitute a sufficient part performance to authorize courts of equity to decree specific performance are actual possession, and the making of permanent and valuable improvements. Hunt v. Hayt, 10 Colo. 278, 15 P. 410 (1887).
Where the plaintiff solicited defendant to quit his ranch, move to town, take possession of, furnish, and conduct a hotel on certain premises, promising that if he would do so, he, plaintiff, would execute to him a lease of the hotel at a specified rent for a specified term of years, and the defendant complied with this request, removed from his ranch, assumed possession of, and furnished, the hotel, and paid rentals monthly for several months, such acts constitute a sufficient part performance to entitle defendant to specific performance of the contract lease. Adcock v. Lieber, 51 Colo. 373, 117 P. 993 (1911).
Mere possession will not be deemed part performance sufficient to justify such relief when it may fairly be referable to some other cause than the execution of the contract. Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890).
Plaintiff has burden of proof. In an action to compel defendant to execute a written lease to premises for a term of two years, the burden of proof was upon plaintiff to establish by a preponderance of the evidence that he and the defendant made an oral contract for a written lease of the premises for a period of two years and, that in reliance upon this contract, he had entered into possession and partly performed it. Kiter v. Owen, 115 Colo. 7 , 168 P.2d 254 (1946).
38-10-111. Trusts for use of grantor void against creditors.
All deeds of gift, all conveyances, and all transfers or assignments, verbal or written, of goods, chattels, or things in action, or real property, made in trust for the use of the person making the same shall be void as against the creditors existing of such person.
Source: R.S. p. 339, § 11. G.L. § 1261. G.S. § 1520. R.S. 08: § 2665. L. 21: p. 339, § 1. C.L. § 5110. CSA: C. 71, § 11. CRS 53: § 59-1-11. C.R.S. 1963: § 59-1-11.
ANNOTATION
Law reviews. For article, "An Aspect of Estate Planning in Colorado: The Revocable Inter Vivos Trust", see 43 Den. L.J. 296 (1966). For article, "Perils of Pre-Bankruptcy Planning: Transfers, Exemptions and Taxes", see 17 Colo. Law. 1513 (1988). For article, "Chapter 13 Bankruptcy as an Alternative to Chapter 7", see 18 Colo. Law. 2089 (1989). For article, "Can Some Colorado Trusts Provide Protection from Claims of Creditors?", see 28 Colo. Law. 61 (Aug. 1999).
Object of section is to invalidate transfers of property which have the effect of placing it beyond the reach of creditors of the person making the transfer, but which leave a beneficial use, control, or ownership in him. Wilson v. Am. Nat'l Bank, 7 Colo. App. 194, 42 P. 1037 (1895).
Applicability of section. This section refers to cases where the use of trust for the grantor is the principal purpose accomplished by the conveyance, and not merely an incident thereto. Campbell v. Colo. Coal & Iron Co., 9 Colo. 60, 10 P. 248 (1885).
A public welfare official is not precluded from using the state debtor and creditor law set forth in this section to set aside an allegedly fraudulent transfer so as to recover under social services law. Alberico v. Health Mgmt. Sys., Inc., 5 P.3d 967 (Colo. App. 2000).
"Things in action" include assignment of wages to be earned under a contract existing at the date of the assignment. City & County of Denver v. Jones, 85 Colo. 212, 274 P. 924 (1929).
There is no necessity of proving intent to defraud, but, if the assignment is shown to be in trust for the grantor, it is, as to existing creditors, the same as if no transfer had been made. Fulton Inv. Co. v. Smith, 27 Colo. App. 279, 149 P. 444 (1915), aff'd, 64 Colo. 33, 170 P. 1183 (1918).
Question of intention determined from facts of each case. The question of intention is one to be determined from the facts and circumstances of each case. Hunter v. Ferguson, 3 Colo. App. 287, 33 P. 82 (1893); Innis v. Carpenter, 4 Colo. App. 30, 34 P. 1011 (1893).
Express language of section invalidates conveyance to a trust as against the Colorado department of health care policy and financing ("DHF") because DHF was a creditor at the time of the transfer. Section does not provide additional or conflicting requirements for eligibility or recovery under the medicaid act. Instead, section simply invalidates conveyance to trust made when creditors have outstanding claims at the time of the conveyance. Thus, defendants' liens are valid and enforceable against the mother's residence. Alberico v. Health Mgmt. Sys., Inc., 5 P.3d 967 (Colo. App. 2000).
Where a judgment debtor had neither a legal nor an equitable interest in a property, recording a judgment does not create a lien on the property, because there is no interest on which the lien could attach. Junior creditor who successfully exposes a fraudulent transfer by filing suit takes priority over senior creditors holding judgments recorded prior to the junior creditor uncovering the fraud. Shepler v. Whalen, 119 P.3d 1084 (Colo. 2005); In re Bryan, 469 B.R. 348 (Bankr. D. Colo.), aff'd, 483 B.R. 738 (D. Colo. 2012).
Applied in Sickman v. Abernathy, 14 Colo. 174, 23 P. 447 (1890); Eppich v. Blanchard, 58 Colo. 139, 143 P. 1035 (1914); Zimmerman v. Mozer, 10 B.R. 1002 (D. Colo. 1981); In Re Baum, 22 F.3d 1014 (10th Cir. 1994).
38-10-111.5. Trusts to establish or maintain eligibility for certain public assistance void - exceptions.
Any trust established by or for a person that consists of the person's individual assets, income, or property of any kind shall be void for the purpose of establishing or maintaining eligibility for any public assistance as provided by article 2 of title 26, C.R.S., or medical assistance as provided by articles 4, 5, and 6 of title 25.5, C.R.S., unless the trust is established in accordance with the provisions of sections 15-14-412.6 to 15-14-412.9, C.R.S.
Source: L. 94: Entire section added, p. 1604, § 12, effective July 1. L. 2000: Entire section amended, p. 1836, § 16, effective January 1, 2001. L. 2006: Entire section amended, p. 2022, § 117, effective July 1.
38-10-112. Void agreements.
-
Except for contracts for the sale of goods which are governed by section 4-2-201, C.R.S., and lease contracts which are governed by section 4-2.5-201, C.R.S., in the following cases every agreement shall be void, unless such agreement or some note or memorandum thereof is in writing and subscribed by the party charged therewith:
- Every agreement that by the terms is not to be performed within one year after the making thereof;
- Every special promise to answer for the debt, default, or miscarriage of another person;
- Every agreement, promise, or undertaking made upon consideration of marriage, except mutual promises to marry.
- Repealed.
Source: R.S. p. 339, § 12. G.L. § 1262. G.S. § 1521. R.S. 08: § 2666. C.L. § 5111. CSA: C. 71, § 12. CRS 53: § 59-1-12. C.R.S. 1963: § 59-1-12. L. 69: p. 392, § 1. L. 77: (2) repealed, p. 340, § 47, effective January 1, 1978. L. 91: (1) amended, p. 321, § 5, effective July 1, 1992.
ANNOTATION
Analysis
- I. General Consideration.
- II. The Memorandum.
- III. Agreements not to be Performed Within One Year.
- IV. Promise to Answer for the Debt of Another.
- V. Agreement Made Upon Consideration of Marriage.
I. GENERAL CONSIDERATION.
Law reviews. For article, "The Remedy of Specific Performance in Colorado Contracts", Part I, see 8 Rocky Mt. L. Rev. 15 (1935); Part II, see 8 Rocky Mt. L. Rev. 106 (1936). For article, "One Year Review of Cases on Contracts", see 33 Dicta 57 (1956). For article, "Domestic Case Update", which discusses cases concerning antenuptial agreements, see 14 Colo. Law. 209 (1985).
Purpose of statute of frauds. The statute is to be invoked for the purpose of preventing the commission of a fraud. Walker v. Bruce, 44 Colo. 109, 97 P. 250 (1908).
Statute of frauds furnishes rule of evidence, but not of pleading. Tucker v. Edwards, 7 Colo. 209, 3 P. 233 (1883); Garbanati v. Fassbinder, 15 Colo. 535, 25 P. 991 (1890); Ruth v. Smith, 29 Colo. 154, 68 P. 278 (1901).
Plea of statute of frauds is personal privilege; if not pleaded, it will be regarded as waived. Benjamin v. Mattler, 3 Colo. App. 227, 32 P. 837 (1893).
Statute of frauds must be specially pleaded, if relied upon in defense. Benjamin v. Mattler, 3 Colo. App. 227, 32 P. 837 (1893); Schildt v. Topliss, 98 Colo. 464 , 56 P.2d 1328 (1936).
In an action upon an oral contract, the defense that it was an agreement to answer for the debt of another and void under this section because it is not in writing is not available to defendant unless the statute be pleaded. Hamill v. Hall, 4 Colo. App. 290, 35 P. 927 (1894); Cerrusite Mining Co. v. Steele, 18 Colo. App. 216, 70 P. 1091 (1902).
Unless contractual violation shown in complaint. Tucker v. Edwards, 7 Colo. 209, 3 P. 233 (1883); Hunt v. Hayt, 10 Colo. 278, 15 P. 410 (1887); Garbanati v. Fassbinder, 15 Colo. 535, 25 P. 991 (1890); Hamill v. Hall, 4 Colo. App. 290, 35 P. 927 (1894); Tynon v. Despain, 22 Colo. 240, 43 P. 1039 (1896).
Because the statute of frauds is a defense of which the defendant may or may not avail himself, and if he desires to take advantage thereof, unless the infirmity appears in the complaint, he must affirmatively plead it by answer and he must rely upon it at the trial. Hunt v. Hayt, 10 Colo. 278 , 15 P. 410 (1887); Pettit v. Mayhew, 43 Colo. 274 , 95 P. 939 (1908); Kingdom of Gilpin Mines, Inc. v. McNeill, 88 Colo. 44 , 291 P. 1036 (1930); Gage v. Young, 95 Colo. 130 , 33 P.2d 389 (1934).
Where the action alleges a contract price which does not appear in the writing relied upon, the writing is not sufficient to take the contract out of the statute of frauds. Howse v. Crumb, 143 Colo. 90 , 352 P.2d 285 (1960).
Where the contract sued upon is denied by the answer, the statute of frauds is available without being specially pleaded. Salomon v. McRae, 9 Colo. App. 23, 47 P. 409 (1896); Sch. Dist. No. 46 v. Johnson, 26 Colo. App. 433, 143 P. 264 (1914).
Part-performance exception applied in the case of an oral joint venture partnership agreement where performance by both parties was substantial and consistent with evidence of the terms of the joint venture. McCrea & Co. Auctioneers, Inc. v. Dwyer Auto Body, 799 P.2d 394 (Colo. App. 1989) (disagreeing with Sch. Dist. No. 46 v. Johnson).
Parol agreement to reduce contract to writing unenforceable. A parol agreement to reduce to writing a contract which is within the statute of frauds is unenforceable because a contract that is unenforceable by reason of the statute cannot be made indirectly enforceable by promising to execute a sufficient memorandum or otherwise to satisfy the requirements of the statute. Rupp v. Hill, 149 Colo. 48 , 367 P.2d 746 (1961).
Full performance by party makes void contract binding. Although a contract may have been void under the statute of frauds, nevertheless, if it has been fully performed by one of the parties, it is binding on the other party. Schust v. Perington, 169 Colo. 39 , 453 P.2d 599 (1969).
When statute not defense to action on loan agreement. The statute of frauds is not available as a defense to an action on a loan agreement where the agreement has been fully performed by plaintiff. Nissen v. Dews, 43 Colo. App. 228, 603 P.2d 966 (1979).
Valid contract not altered by void subsequent oral agreement. Subsequent void oral agreement cannot alter, revoke, or modify previous valid contract. Harvey v. Morey, 22 Colo. 412, 45 P. 383 (1896).
Action may be maintained in Colorado on a contract valid where made, notwithstanding it would be void under the Colorado statute of frauds, if made in Colorado. Wolf v. Burke, 18 Colo. 264, 32 P. 427 (1893).
Applied in Schilling v. Rominger, 4 Colo. 1 00 (1878); Little v. Dougherty, 11 Colo. 1 03 , 17 P. 292 (1887); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Hill v. Groesbeck, 29 Colo. 161 , 67 P. 167 (1901); Hall v. Allen, 46 Colo. 355 , 104 P. 489 (1909); Yost v. Irwin, 53 Colo. 269 , 125 P. 526 (1912); Jones v. Ceres Inv. Co., 60 Colo. 562 , 154 P. 745 (1916); Jasper v. Bicknell, 68 Colo. 308 , 191 P. 115 (1920); Johnson v. Sanchez, 72 Colo. 514 , 212 P. 522 (1923); Enyart v. Orr, 78 Colo. 6 , 238 P. 29 (1925); Heuschkel v. Wagner, 78 Colo. 6 1, 239 P. 873 (1925); Clayton Coal Co. v. King, 108 Colo. 63 , 113 P.2d 672 (1941); Hoff v. Armbruster, 125 Colo. 198 , 242 P.2d 604 (1952); Lindsey v. Oregon-Washington Plywood Co., 287 F.2d 710 (10th Cir. 1961); Kodekey Elecs., Inc. v. Merchanex Corp., 486 F.2d 449 (10th Cir. 1973); World of Sleep, Inc. v. Seidenfeld, 674 P.2d 1005 (Colo. App. 1983); In re Frontier Airlines, Inc., 121 B.R. 386 (Bankr. D. Colo. 1990 ).
II. THE MEMORANDUM.
A. Form and Sufficiency.
Agreement must express all essential conditions of bargain to satisfy section. To satisfy this section, the agreement or memorandum must, either by its own terms or by reference to some other writing, express with reasonable certainty all the conditions and essential elements of the bargain. Salomon v. McRae, 9 Colo. App. 23, 47 P. 409 (1896).
Several writings read in connection show memorandum of agreement. Several writings of different dates may be read in connection to show a memorandum of an agreement. Beckwith v. Talbot, 2 Colo. 639 (1875), aff'd, 95 U.S. 289, 24 L. Ed. 496 (1877).
The contract, which the parties have made, may be gathered from letters which have passed in correspondence between them; it is not necessary that every paper should contain all the necessary elements of the contract which may be authenticated and established through the medium of letters and separate writings and documents, provided that they refer to each other and to the same persons and things, and that they manifestly relate to the same contract and transaction. Beckwith v. Talbot, 2 Colo. 639 (1875), aff'd, 95 U.S. 289, 24 L. Ed. 496 (1877); Crystal Palace Flouring Mills Co. v. Butterfield, 15 Colo. App. 246, 61 P. 479 (1900); McClurg v. Crawford, 209 F. 340 (8th Cir. 1913); S.C. Ins. Co. v. Fisher, 698 P.2d 1369 (Colo. App. 1984).
Notices of premium due sufficient memorandum. Where each year the company sent notices of the premium due, identifying the contract, the dates between which the premium operated making the contract effective and subscribed to by an agent whose authority was not questioned, this is a sufficient memorandum as required by this section to take the obligation out of the statute of frauds. Mass. Bonding & Ins. Co. v. Bd. of County Comm'rs, 100 Colo. 398 , 68 P.2d 555 (1937).
Agreement between finance company's officers and creditor sufficient memorandum. An agreement between officers of finance company and creditor, providing for a manager to operate the creditor's business subject to the supervision and control of the officers of the finance company, is a sufficient memorandum to prevent this section being a bar in action against finance company to recover for goods sold to the creditor. Colo. Fin. Co. v. B.F. Bennet Oil Co., 110 Colo. 1 , 129 P.2d 299 (1942).
Letter insufficient to bind wife to payment of husband's debt. Where Mrs. B., who on account of the illness of her husband was attending to his business, wrote to his creditor the following letter: "Mr. H. You will find enclosed $50, all I can raise at present. I hope to be able to give you more very soon. Please give me credit, and oblige. Mr. B. is home sick. Mary B.". The letter was insufficient, under this section, to bind her to the payment of her husband's debt. Bohm v. Hoffer, 2 Colo. App. 146, 29 P. 905 (1892).
Extrinsic oral evidence inadmissible to vary written contract terms. Extrinsic oral evidence is inadmissible to contradict, add to, subtract from, or vary the terms of a written contract, and the rule applies with greater force to contracts required by the statute of frauds to be in writing. Randolph v. Helps, 9 Colo. 29, 10 P. 245 (1885); Nesmith v. Martin, 32 Colo. 77, 75 P. 590 (1904).
B. The Signature.
Term "subscribed" is substitute for term "signed". Coon v. Rigden, 4 Colo. 275 (1878).
Letters referring to contract evidence of assent and subscription. Where a contract was signed by one party and retained by the other, letters subsequently written by the latter, to which the contract was clearly referred, are sufficient to show his assent, and to show that he subscribed the contract within the meaning of this section. Beckwith v. Talbot, 2 Colo. 639 (1875), aff'd, 95 U.S. 289, 24 L. Ed. 496 (1877).
Bills initialed by salesman did not constitute memorandum in writing. Where a salesman sold bills of goods on credit and indorsed the bills thus: "O.K. McR.", the latter letters being his initials, the indorsement did not constitute an agreement or memorandum in writing within the meaning of this section, and that parol evidence was inadmissible to show that, by a prevailing custom of the trade, it was intended by the indorsement that the salesman should be answerable to his employer for the default of the purchaser in making payment. Salomon v. McRae, 9 Colo. App. 23, 47 P. 409 (1896).
III. AGREEMENTS NOT TO BE PERFORMED WITHIN ONE YEAR.
Agreement not performed within one year invalid generally. An agreement that by its terms is not to be performed within one year from the making thereof shall be invalid or void unless the agreement or some note or memorandum thereof is in writing and signed by the party to be charged. Lucas v. Whittaker Corp., 335 F. Supp. 889 (D. Colo. 1971), aff'd, 470 F.2d 326 (10th Cir. 1972).
Subsection (1)(a) inapplicable where possibility of performance within year. Subsection (1)(a) does not apply to oral contracts which may not be performed within one year. It refers to contracts which by their affirmative terms exclude performance within that time. Woodall v. Davis-Creswell Mfg. Co., 9 Colo. App. 198, 48 P. 670 (1897); Clark v. Perdue, 70 Colo. 589, 203 P. 655 (1922); Lloyd v. Grynberg, 464 F.2d 622 (10th Cir. 1972).
Oral agreement not to engage in business for three years void. An agreement, not to engage in a certain business at, or near, a certain place for a period of three years, is an agreement not to be performed within one year, and under this section is void unless in writing. DeBord v. Holcomb, 13 Colo. App. 161, 57 P. 548 (1899).
Subsection (1)(a) is inapplicable to leases. Sears v. Smith, 3 Colo. 287 (1877).
Subsection (1)(a) has no application to parol leases or contracts relating to any interests in lands. Northrup v. Nicklas, 115 Colo. 207 , 171 P.2d 417 (1946).
Oral agreement for yearly payments not within section. An oral agreement as to yearly payments of interest on a promissory note was not within this section for the original contract; a note payable on, or before, 10 years from date, could have been performed within one year. Kuhlmann v. McCormack, 116 Colo. 300 , 180 P.2d 863 (1947).
Oral promise to pay debts upon inheritance not within section. A debtor's oral promise to pay his debts if he should inherit an interest in his father's estate, notwithstanding his discharge in bankruptcy, is not an agreement not to be performed within one year. Winbourn v. Crump, 77 Colo. 574, 238 P. 58 (1925).
Agreement whose performance is contingent upon happening not within section. An oral agreement, the performance of which is dependent upon the happening of a certain contingency, is not within the statute if the contingency is such that it may occur within one year; and this is true, although the contingency may not in fact happen until after the expiration of the year, and although the parties may not have expected that it would occur within that period. Winbourn v. Crump, 77 Colo. 574, 238 P. 58 (1925).
Modification of lease by parol for period less than one year. A modification of a written lease by parol for a period less than one year is not within the statute of frauds. Doherty v. Doe, 18 Colo. 456, 33 P. 165 (1893).
Computation of time. The year mentioned in subsection (1)(a) runs from the day when the agreement is made, and not from the day when the performance is to begin. Sch. Dist. No. 46 v. Johnson, 26 Colo. App. 433, 143 P. 264 (1914).
Oral agreement for at-will employment. Where defense of statute of frauds raised, neither partial performance nor payment of compensation deemed sufficient to avoid bar of statute as to enforcement of entire contract. Chidester v. E. Gas & Fuel Assoc., 859 P.2d 222 (Colo. App. 1992).
While part performance can take an oral agreement out of this section, such part performance must be fairly referable to no other theory besides that allegedly contained within the oral agreement. Nelson v. Elway, 908 P.2d 102 (Colo. 1995).
Where an oral agreement to sponsor sporting events for two seasons allowed a party to terminate the agreement after one season, the option to terminate may fairly be interpreted as an alternative way to perform the agreement; therefore, the agreement may be performed within one year, and the statute of frauds does not void the agreement. Prof'l Bull Riders, Inc. v. Autozone, Inc., 113 P.3d 757 (Colo. 2005).
IV. PROMISE TO ANSWER FOR THE DEBT OF ANOTHER.
Promise is considered original when given for promisor's benefit, rather than to secure credit for a third party debtor. Cramblit v. Chateau Motel, Inc., 28 Colo. App. 213, 472, P.2d 183 (1970).
A promise by one, for himself, to pay for services rendered to another, is an original promise, and binding without writing. Tuttle v. Welty, 46 Colo. 25, 102 P. 1069 (1909); Spelts v. Anderson, 67 Colo. 63, 185 P. 468 (1919).
Where one, to promote his own interest, promises to pay the debt of another, the transaction constitutes an original contract and is not within the statute of frauds. Spelts v. Anderson, 67 Colo. 63 , 185 P. 468 (1919); Moon v. Greenlee, 69 Colo. 482 , 195 P. 1100 (1921); Takamine v. Hirschfeld, 81 Colo. 501 , 256 P. 312 (1927); Ady v. Weicker Transf. & Storage Co., 97 Colo. 230 , 48 P.2d 807 (1935); Mayer Oil Co. v. Schnepf, 100 Colo. 578 , 69 P.2d 775 (1937).
An agreement by a debtor to pay his creditor's obligation to a third party has never been regarded as a collateral promise, but wherever it is entered into upon a sufficient consideration and is accepted by the party to whom the money is to be paid, it has always been deemed an original promise, and enforceable by the party who is entitled to its advantages. Thatcher v. Rockwell, 4 Colo. 375 (1878), aff'd, 105 U.S. 467, 26 L. Ed. 949 (1881); Mulvany v. Gross, 1 Colo. App. 112, 27 P. 878 (1891).
The promise of one person, though in form to answer for the debt of another, if founded upon a new and sufficient consideration, moving from the creditor and promised to the promisor, and beneficial to the latter, is not within the statute of frauds, and need not be in writing. Green v. Morrison, 5 Colo. 18 (1879); De Walt v. Hartzell, 7 Colo. 601, 4 P. 1201 (1884); Maxwell v. Dell, 11 Colo. 415, 18 P. 561 (1888); Mulvany v. Gross, 1 Colo. App. 112, 27 P. 878 (1891); Green v. Latcham, 2 Colo. App. 416, 31 P. 233 (1892); Fisk v. Reser, 19 Colo. 88, 34 P. 572 (1893).
Promise of the secretary of a corporation to pay a balance for printing stock certificates if printer "would go ahead" and print them, which he did is an original promise and not within the statute of frauds. Takamine v. Hirschfeld, 81 Colo. 501, 256 P. 312 (1927).
An oral promise is collateral and thus barred by the statute of frauds, if the leading object of the promise is to become a surety or guarantor on the debt of another; the promise is original when the performance of the agreement directly benefits the promisor. Idealco, Inc. v. Gunnin, 746 P.2d 69 (Colo. App. 1987).
An original oral promise will only be enforced if the accrual of the benefit to the promisor is contingent upon performance by the promisee. Idealco, Inc. v. Gunnin, 746 P.2d 69 (Colo. App. 1987).
Applicability of subsection (1)(b). A bank, which ignorantly pays money to the holder of an instrument upon the faith of a third person's statement that he knows the holder to be the payee and which is afterwards compelled to pay the amount to the true payee, may recover the sum from the third person in an action for damages occasioned by the deceit, and subsection (1)(b) cannot be invoked in behalf of the defendant in such case, because his liability does not grow out of any special promise to answer for the debt, default, or miscarriage of another, nor upon any agreement required to be in writing. Lahay v. City Nat'l Bank, 15 Colo. 339, 25 P. 704 (1890).
Part performance which will withdraw a promise covered by subsection (1)(b) from the statute must consist of acts from which it clearly appears that the performing party would not have done in the absence of the agreement. Masinton v. Dean, 659 P.2d 50 (Colo. App. 1982).
What is done as part performance must be consistent with no theory other than the oral agreement, otherwise it does not tend to prove the latter. Masinton v. Dean, 659 P.2d 50 (Colo. App. 1982).
To be binding collateral agreement must be in writing. An agreement, if it is not collateral, but in the nature of an original agreement to pay the debt of another, founded on a sufficient consideration received by the promisor himself, is not within the provisions of subsection (1)(b), and therefore, need not be in writing; but, if the agreement to answer for the debt of another be wholly collateral, it must be in writing. Thatcher v. Rockwell, 4 Colo. 375 (1878), aff'd, 105 U.S. 467, 26 L. Ed. 949 (1881); Fisk v. Reser, 19 Colo. 88, 34 P. 572 (1893).
Words importing collateral undertaking. The words, "we will see the articles paid for", or equivalent words, standing alone and uncontrolled by circumstances showing a contrary intent, import a collateral undertaking, and are within the statute of frauds. Wagner v. Hallack, 3 Colo. 176 (1877); Clayton Coal Co. v. King, 108 Colo. 63 , 113 P.2d 672 (1941).
Where the president of an insolvent bank presented to one of the directors, who was also a depositor, a release of his claim in the latter capacity, and to induce the execution thereof, said to the director: "You shall have your money out of the assets of the bank if this settlement goes through." "I will take the assets of the bank, and make the money out of them, and you shall have every nickel." "You shall have all your money back, with interest." These words were a promise to pay the debt of the bank and the oral agreement is void under subsection (1)(b). Freeman v. Hampton, 67 Colo. 90, 185 P. 251 (1919).
Where defendant said concerning lumber purchased by another: "If he doesn't pay for it, I will", this is not an original undertaking, but a collateral promise and within the statute of frauds. Seal v. Colo. Coal & Lumber Co., 79 Colo. 141, 244 P. 469 (1926).
Agreement within statute where object is to become guarantor to promisee. When the leading object of the promise or agreement is to become guarantor or surety to the promisee for a debt for which a third party is and continues to be primarily liable, the agreement, whether made before or after, or at the time with the promise of the principal, is within the statute of frauds and not binding unless evidenced by writing. Cramblit v. Chateau Motel, Inc., 28 Colo. App. 213, 472 P.2d 183 (1970).
Where plaintiff sold to a tenant goods and charged them upon his books to such tenant, a promise by the landlord to pay such account, made without consideration, was a promise to pay the debt of another within subsection (1)(b), and was not binding unless made in writing. Burson v. Bogart, 18 Colo. App. 449, 72 P. 605 (1903).
Full performance of promise by plaintiff removes matter from statute. Assuming that the alleged promises of the defendants amounted to a special promise to answer for the debt of another person, the full performance on the part of plaintiff of the acts required of him under the oral agreement would remove the case from the statute of frauds. Schust v. Perington, 169 Colo. 39 , 453 P.2d 599 (1969).
Promise to pay another's debt for consideration not within statute. Where one promises to pay the debt of another in consideration of money or property received from the debtor for the expressed purpose of paying the debt, the promise is not within the statute of frauds. Hughes v. Fisher, 10 Colo. 383 , 15 P. 702 (1887); Durkee v. Conklin, 13 Colo. App. 313, 57 P. 486 (1899); Cerrusite Mining Co. v. Steele, 18 Colo. App. 216, 70 P. 1091 (1902); McIntire v. Schiffer, 31 Colo. 246 , 72 P. 1056 (1903); Burson v. Bogart, 49 Colo. 410 , 113 P. 516 (1911); Argys v. McGlothlen, 130 Colo. 490 , 276 P.2d 983 (1954).
Where, after the plaintiff refused to sell supplies to a corporation lacking credit, the defendant then said: "Charge these things to me, and let the boys at the mine have what they need", the promise was original rather than collateral or of guaranty; hence, not within the statute. Redington v. Jenkins-McKay Hdwe. Co., 111 Colo. 363 , 141 P.2d 891 (1943).
Return to work on promise of payment of wages not within statute. Where oil drillers ceased work because of default of payment of their wages by the original contractor, and returned to work on the promise of officers of the owner company that the latter would see that their wages were paid, the promise is not within the statute of frauds. Mayer Oil Co. v. Schnepf, 100 Colo. 578 , 69 P.2d 775 (1937).
Promise to assume notes for purchase of property not within statute. Where defendants purchased property of plaintiffs incumbered by trust deed, and orally agreed to assume the notes secured thereby, such promise is not an agreement to answer for the debt of another person within the meaning of subsection (1)(b). Enos v. Anderson, 40 Colo. 395, 93 P. 475 (1907).
Payment of note in exchange for conveyance of property not within statute. A promise to a debtor to pay his debt in consideration of the conveyance of property to the promisor is not within the statute of frauds. Enos v. Anderson, 40 Colo. 395, 93 P. 475 (1907); Burson v. Bogart, 49 Colo. 410, 113 P. 516 (1911); United States Mining Corp. v. Fred Goble, Inc., 82 Colo. 59, 256 P. 1091 (1927).
Where, in exchange for property conveyed to her by her husband, the wife promised to pay off the husband's note, the agreement was nothing more than a promise to perform an obligation in consideration of which the lands were conveyed to her; this agreement constituted an original contract by the wife, not within the statute of frauds. Green v. Richardson, 4 Colo. 584 (1879); McIntire v. Schiffer, 31 Colo. 246, 72 P. 1056 (1903).
Where agreement not promise to pay another's debt. An agreement to place a person's name upon a settlement check is not a promise to pay the debt of another, although performance of the promise may result in the discharge of the debt of another. Davis v. Ciancio, 172 Colo. 54 , 470 P.2d 30 (1970).
Partnership, agreeing that a loan to one of partners would be a partnership debt, is a direct and not collateral agreement and does not come within the statute. Kelsey v. Munson, 198 F. 841 (8th Cir. 1912).
A contract, by which certain expert witnesses were to testify in behalf of the managing officers of a mining corporation in an action against them for sending fraudulent statements through the mail in regard to the values of its properties, is a direct promise to pay the stipulated fees and expenses of the corporation and is not a contract to answer for the debt, default, or miscarriage of another within this section. Lincoln Mt. Gold Mining Co. v. Williams, 37 Colo. 193, 85 P. 844 (1906).
Test for liability for debt of another. The test for whether one by an oral promise becomes liable for the debts of another is whether or not a promise has been made as a surety of the debtor or as an original undertaking by the promisor. Seal v. Colo. Coal & Lumber Co., 79 Colo. 141, 244 P. 469 (1926).
Debtor and creditor may sue for breach of promise. Upon the breach of a promise to pay the debt of another in consideration of money or property received from the debtor, not only the debtor himself, but the creditor, may sue, even though the promise is made to the debtor alone. Argys v. McGlothlen, 130 Colo. 490 , 276 P.2d 983 (1954).
Plaintiff has burden of establishing that oral promise asserted was original and unconditional and thus amounted to an assumption by defendant of the direct liability for goods thereafter furnished to third parties. Clayton Coal Co. v. King, 108 Colo. 63 , 113 P.2d 672 (1941).
Novation of a guaranty is an original agreement rather than a collateral agreement and thus not within the purview of the statute of frauds. Moffat County State Bank v. Told, 780 P.2d 11 (Colo. App. 1989), aff'd, 800 P.2d 1320 ( Colo. 1990 ).
V. AGREEMENT MADE UPON CONSIDERATION OF MARRIAGE.
Writing required for antenuptial agreement. Antenuptial agreements conveying lands are included in that class of contracts required by this section to be in writing and signed by the party to be charged therewith, as equity will not permit subsection (1)(c) to be made an instrument for the perpetration of a fraud. Moore v. Allen, 26 Colo. 197, 57 P. 698, 77 Am. St. R. 255 (1899).
Widow's violation of antenuptial contract manifested bad faith. Where an oral contract was entered into between a husband and wife before their marriage wherein it was agreed that their property rights should not be affected by the marriage, and subsequent to their marriage they executed a written agreement in which each waived and released all right to the property of the other, and where the husband left a will in which no provision was made for the widow who attempted to repudiate both contracts as void, her violation of the solemn contracts was a manifestation of bad faith and ought not to be tolerated. Remington v. Remington, 69 Colo. 206, 193 P. 550 (1920).
Where the trial court concluded, and it was undisputed, that the obligations at issue were not made upon consideration of the parties marriage, the oral agreement was removed from the statute of frauds provision under this section. In re Lemoine-Hofmann, 827 P.2d 587 (Colo. App. 1992).
38-10-113. Goods sold at auction - memorandum.
Whenever goods are sold at auction, and the auctioneer at the time of sale enters in a sale book a memorandum specifying the nature and price of the property sold, the terms of sale, the name of the purchaser, and the name of the person for whose account the sale is made, such memorandum shall be deemed a note of the contract of such sale within the meaning of section 38-10-112.
Source: R.S. p. 339, § 13. G.L. § 1263. G.S. § 1522. R.S. 08: § 2667. C.L. § 5112. CSA: C. 71, § 13. CRS 53: § 59-1-13. C.R.S. 1963: § 59-1-13.
38-10-114. No delivery or change of possession - effect.
Except as otherwise provided in section 4-2-402 or 4-2.5-308, C.R.S., or except where evidence of the transaction is included in the central registry maintained with respect to transactions relating to title to such goods and chattels, or is duly noted on the certificate of title to such goods and chattels by the authority issuing such certificate, or is included in the records of the proper filing office for a security interest in such goods and chattels under section 4-9-501, C.R.S., or is a transaction described in section 4-9-309 or 4-9-310, C.R.S., every sale made by a vendor of goods and chattels in his or her possession or under his or her control and every assignment of goods and chattels, unless each shall be accompanied by an immediate delivery and followed by an actual and continued change of possession of things sold or assigned, shall be presumed to be fraudulent and void as against the creditors of the vendor, or the creditors of the person making such assignment, or subsequent purchasers in good faith, unless the party opposed to the effect of the presumption shall establish that it is more probable than not that such sale or assignment was made by the seller or assignor in good faith and without any actual intent to hinder, delay, or defraud creditors or subsequent purchasers.
Source: R.S. p. 339, § 14. G.L. § 1264. G.S. § 1523. R.S. 08: § 2668. C.L. § 5113. CSA: C. 71, § 14. CRS 53: § 59-1-14. C.R.S. 1963: § 59-1-14. L. 65: p. 1481, § 3. L. 83: Entire section amended, p. 1446, § 1, effective July 1. L. 91: Entire section amended, p. 1689, § 2, effective July 1; entire section amended, p. 321, § 6, effective July 1, 1992. L. 2001: Entire section amended, p. 1446, § 42, effective July 1.
Editor's note: Amendments to this section by House Bill 91-1080 and Senate Bill 91-129 were harmonized.
Cross references: For rights of seller's creditors against sold goods, see § 4-2-402.
ANNOTATION
Analysis
- I. General Consideration.
- II. Sufficient Delivery and Change of Possession.
- III. Rights of Creditors.
I. GENERAL CONSIDERATION.
Law reviews. For comment on Daniel v. Surratt (cited below), see 9 Rocky Mt. L. Rev. 98 (1936). For article, "A Decade of Colorado Law: Conflict of Laws, Security, Contracts and Equity", see 23 Rocky Mt. L. Rev. 247 (1951).
Applicability of section limited. This section applies only to sales of chattels in possession of the vendor or under his control. Weiland v. Potter, 8 Colo. App. 79, 44 P. 769 (1896).
Section inapplicable where bailee possesses goods. This section is inapplicable where, prior to the sale, the vendor has placed the goods in possession of a bailee, and such bailee, being informed of the sale, agrees to hold them for the purchaser. Weiland v. Potter, 8 Colo. App. 79, 44 P. 769 (1896); Hendrie & Bolthoff Mfg. Co. v. Collins, 13 Colo. App. 8, 56 P. 815 (1899); Hendrie & Bolthoff Mfg. Co. v. Collins, 29 Colo. 102, 67 P. 164 (1901); Jones v. Mackenzie Bros. Wall Paper & Paint Co., 19 Colo. App. 121, 73 P. 847 (1903); Morrison v. McCluer, 27 Colo. App. 264, 148 P. 380 (1915).
Effect of proof of bona fide sale. A case is not taken out of the statute by proving that the sale was, in fact, bona fide. Bartell v. Griffin, 47 Colo. 569, 108 P. 171 (1910); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Party entitled to attack validity of property transfer. In an action of replevin for property claimed by the plaintiff under a sale to him by a third person, the defendant, who was neither a creditor of, nor a subsequent purchaser from, such third person, could not attack the validity of the transfer of the property between such third person and the plaintiff on the ground of no actual change of possession. Klug v. Munce, 40 Colo. 276, 90 P. 603 (1907).
One who is neither the purchaser of an animal, nor the creditor of the one who sold it, cannot object that a purchase asserted by another was not accompanied by a change of possession. Graves v. Davenport, 45 Colo. 270, 100 P. 429 (1909).
Review by supreme court. This section cannot be invoked for the first time in the supreme court on review. Hunt v. Hayt, 10 Colo. 278, 15 P. 410 (1887); Benjamin v. Matler, 3 Colo. App. 227, 32 P. 837 (1893); Hamill v. Hall, 4 Colo. App. 290, 35 P. 927 (1894); Tynon v. Despain, 22 Colo. 240, 43 P. 1039 (1896); Painesville Nat'l Bank v. Hannan, 64 Colo. 301, 171 P. 364 (1918).
Applied in Goodrich v. Michael, 3 Colo. 77 (1876); Finding v. Hartman, 14 Colo. 596 , 23 P. 1004 (1890); McCraw v. Welch, 2 Colo. 284 (1892); Goard v. Gunn, 2 Colo. App. 66, 29 P. 918 (1892); Anders v. Barton, 3 Colo. App. 324, 33 P. 142 (1893); Goff v. Landon, 5 Colo. App. 452, 39 P. 69 (1895); Singer Mfg. Co. v. Converse, 23 Colo. 247 , 47 P. 264 (1896); Stanley v. Citizens' Coal & Coke Col., 24 Colo. 103 , 49 P. 35 (1897); Singer Mfg. Co. v. Bohen, 31 Colo. 444 , 72 P. 1097 (1903); Austin v. Terry, 38 Colo. 407 , 88 P. 189 (1906); Israel v. Day, 41 Colo. 52 , 92 P. 698 (1907); Morsch v. Lessig, 45 Colo. 168 , 100 P. 431 (1909); Visbet v. Federal Title & Trust Co., 229 F. 644 (8th Cir. 1915); Goad v. Corrington, 61 Colo. 43 7, 158 P. 284 (1916); Best & Co. v. Wolf Co., 67 Colo. 42 , 185 P. 371 (1919); Case Threshing Mach. Co. v. Reminger, 77 Colo. 595 , 238 P. 63 (1925); Daniel v. Surratt, 97 Colo. 43 , 46 P.2d 903 (1935); Foster v. Howell, 122 Colo. 64 , 220 P.2d 717 (1950).
II. SUFFICIENT DELIVERY AND CHANGE OF POSSESSION.
Acts necessary to constitute sufficient delivery and change of possession depend in a great measure upon the nature and situation of the property. Crymble v. Mulvaney, 21 Colo. 203, 40 P. 499 (1895).
Determination of sufficient delivery. If there is a full surrender upon the part of the vendor and a full assumption on the part of the vendee of the control and dominion of the subject of the sale, the delivery is sufficient. Cook v. Mann, 6 Colo. 21 (1881); Wilcox v. Jackson, 7 Colo. 521, 4 P. 966 (1884); Bassinger v. Spangler, 9 Colo. 175, 10 P. 809 (1886); Sweeney v. Coe, 12 Colo. 485, 21 P. 705 (1889); Herr v. Denver Milling & Mercantile Co., 13 Colo. 406, 22 P. 770 (1889); Atchison v. Graham, 14 Colo. 217, 23 P. 876 (1890); Felt v. Cleghorn, 2 Colo. App. 4, 29 P. 813 (1892); Springer v. Kreeger, 3 Colo. App. 487, 34 P. 269 (1893); Crymble v. Mulvaney, 21 Colo. 203, 40 P. 499 (1895); Hugus & Co. v. Hardenburg, 19 Colo. App. 464, 76 P. 543 (1904).
Where, at the time of the sale, chattels were not in the physical possession of the vendor but were under his control, and where the sale was not accompanied by an immediate delivery to the bank, or any delivery, nor was it followed by an actual and continued change of possession of the things sold, the sale is void. Reed v. Ardway State Bank, 102 Colo. 266 , 78 P.2d 624 (1938).
This section requires the removal of the property sold from the custody and control of the vendor whenever removal is possible, notwithstanding any expense or hardship the removal may entail. Burchinell v. Weinberger, 4 Colo. App. 6, 34 P. 911 (1893); Crymble v. Mulvaney, 21 Colo. 203, 40 P. 499 (1895).
Requirements of change of possession. The vendee of chattels must take actual possession of the articles sold, and the possession must be open, notorious, unequivocal, and such as to apprise the community that the goods have changed hands or that the sale is void as to creditors of the vendor. Bassinger v. Spangler, 9 Colo. 175, 10 P. 809 (1886); Sweeney v. Coe, 12 Colo. 485, 21 P. 705 (1889); Lloyd v. Williams, 6 Colo. App. 157, 40 P. 243 (1895); Willis v. Roberts, 18 Colo. App. 149, 70 P. 445 (1902).
The necessity of clear, unequivocal, and unmistakable change of possession, and retention of such possession by the vendee, has been properly, fully, and clearly asserted by the supreme court. Cook v. Mann, 6 Colo. 21 (1881); Wilcox v. Jackson, 7 Colo. 521, 4 P. 966 (1884); Herr v. Denver Milling & Mercantile Co., 13 Colo. 406, 22 P. 770 (1889); Baur v. Beall, 14 Colo. 383, 23 P. 345 (1890).
The possession taken by a purchaser of personalty must be actual, continued, visible, open, notorious, unequivocal, and exclusive. Cook v. Mann, 6 Colo. 21 (1881); Davis v. Patterson, 69 Colo. 226, 193 P. 662 (1920); Acott v. Sterling Hdwe. & Implement Co., 74 Colo. 195, 219 P. 1073 (1923); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Sale void absent visible indicia of change of ownership. The sale of a stock of goods in a store is void as no indicia of a change of ownership were visible, where the sign of the former proprietor, who made the sale, was permitted to remain on the building, the vendor frequented the store after the sale and occasionally made sales of goods himself; therefore, the retention of the old sign amounted to a declaration to the public that the former proprietor was still proprietor of the store and it gave to the transaction an equivocal character. Bassinger v. Spangler, 9 Colo. 175, 10 P. 809 (1886).
Gift of automobile by parent to minor child void as to creditors. Gift of an automobile by a parent to a minor child residing with him, unaccompanied by delivery and continued change of possession, is void as to creditors. Wilcoxen v. Morgan, 2 Colo. 473 (1875); Bassinger v. Spangler, 9 Colo. 175, 10 P. 809 (1886); Bartell v. Griffin, 47 Colo. 569, 108 P. 171 (1910); Goad v. Corrington, 61 Colo. 427, 158 P. 284 (1916); Davis v. Patterson, 69 Colo. 226, 193 P. 662 (1920); Chavez v. Haynie, 75 Colo. 414, 225 P. 852 (1924).
Purchaser's placing goods in locked room constituted possession. Where a purchaser of goods obtained possession thereof, put them in a room over which the vendor had no control, locked them up, took the key away, leaving a notice on the door that the goods were his, his possession satisfied the requirements of this section. Conly v. Friedman, 6 Colo. App. 160, 40 P. 348 (1895).
Conditional sale not avoided by vendor's continued possession. Where a bill of sale is made under an oral agreement that it shall be delivered only upon the happening of a certain event, the sale, being conditional, is not avoided by the fact that the vendor continued in possession until performance of the condition. Roberts v. Hawn, 20 Colo. 77, 36 P. 886 (1894).
If conditional sale is rescinded, seller is bound to immediately take and keep actual and continued possession of the personalty in order to make the transaction available against the buyer's creditors. Coors v. Reagan, 44 Colo. 126, 96 P. 966 (1908).
Rights of subsequent purchaser taking with knowledge of prior transaction. Where a sale of chattels is completed as between the parties thereto, but the possession temporarily remains with the vendor, a subsequent purchaser who has knowledge of the prior transaction takes subject to the rights of the prior vendee. McKee v. Bassick Mining Co., 8 Colo. 392, 8 P. 561 (1885).
Evidence admissible to determine actual change of possession of goods. Where the issue is as to whether an actual change of possession of the goods took place, the books of the warehouse in which they were stored, at and after the time of the sale, are admissible to show whether or not there has been such a change. Springer v. Kreeger, 3 Colo. App. 487, 34 P. 269 (1893).
Concurrent or joint possession inadmissible. A concurrent or joint possession between buyer and seller is not admissible. Cook v. Mann, 6 Colo. 21 (1881); Wilcox v. Jackson, 7 Colo. 521, 4 P. 966 (1884); Bassinger v. Spangler, 9 Colo. 175, 10 P. 809 (1886); Atchison v. Graham, 14 Colo. 217, 23 P. 876 (1890); Donovan v. Gathe, 3 Colo. App. 151, 32 P. 436 (1893); Bartell v. Griffin, 47 Colo. 569, 108 P. 171 (1910); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Purchaser's exclusive possession is question of fact for jury. A question as to whether exclusive possession of the chattels sold was given to the purchaser is one of fact for the jury. Eversman v. Clements, 6 Colo. App. 224, 40 P. 575 (1895).
III. RIGHTS OF CREDITORS.
Recording of bill of sale not notice to creditors. The recording of a bill of sale, the law not requiring or authorizing the recording of such instruments, is no notice to creditors of the vendor. Bassinger v. Spangler, 9 Colo. 175, 10 P. 809 (1886); Sweeney v. Coe, 12 Colo. 485, 21 P. 705 (1889); Allen v. Steiger, 17 Colo. 552, 31 P. 226 (1892); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Rights of parties unaffected by transfer subsequent to sale. The rights of the parties are not at all affected by any transfer which may be made subsequent to the time of the sale, even though the transfer may occur before any actual levy on the goods by creditors who have sued out attachments or have issued executions. Cook v. Mann, 6 Colo. 21 (1881); Ray v. Raymond, 8 Colo. 467, 9 P. 15 (1885); Bassinger v. Spangler, 9 Colo. 175, 10 P. 809 (1886); Sweeney v. Coe, 12 Colo. 485, 21 P. 705 (1889); Atchison v. Graham, 14 Colo. 217, 23 P. 876 (1890); Allen v. Steiger, 17 Colo. 552, 31 P. 226 (1892); Felt v. Cleghorn, 2 Colo. App. 4, 29 P. 813 (1892); Burchinell v. Weinberger, 4 Colo. App. 6, 34 P. 911 (1893); Autrey v. Bowen, 7 Colo. App. 408, 43 P. 908 (1896); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Creditor may secure debt by mortgage on property sold. A bona fide creditor may, notwithstanding notice or knowledge of a sale fraudulent and void under this section, secure his debt by mortgage on the property thus sold. Allen v. Steiger, 17 Colo. 552, 31 P. 226 (1892).
Creditor's knowledge of fraudulent sale inmaterial. Knowledge of creditors of a sale which is fraudulent and void under this section is immaterial. Cook v. Mann, 6 Colo. 21 (1881); Bassinger v. Spangler, 9 Colo. 175, 10 P. 809 (1886); Allen v. Steiger, 17 Colo. 552, 31 P. 226 (1892); Lloyd v. Williams, 6 Colo. App. 157, 40 P. 243 (1895); Willis v. Roberts, 18 Colo. App. 149, 70 P. 445 (1902); Helgert v. Stewart, 20 Colo. App. 202, 77 P. 1091 (1904); Bartell v. Griffin, 47 Colo. 569, 108 P. 171 (1910); Davis v. Patterson, 69 Colo. 226, 193 P. 662 (1920); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
A sale, not accompanied by delivery and followed by actual and continued change of possession, is fraudulent and void as to creditors of the vendor, notwithstanding such creditors had actual notice of the sale. Helgert v. Stewart, 20 Colo. App. 202, 77 P. 1091 (1904); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Voluntary property transfer to creditor not void as to other creditors. A voluntary transfer by a debtor to one of his creditors of certain horses and mules and wagons used by the debtor at his sawmill, in trust to sell the same and to apply the proceeds in payment of certain preferred creditors, the balance being accepted by the assignee in settlement of his own claim, is not void as to other creditors under this section, where a bill of sale of the property was executed by the debtor, and delivered to the assignee, and formal possession of the property surrendered to the assignee one day, and the property removed by the assignee from the mill the next. Bailey v. Johnson, 9 Colo. 365, 12 P. 209 (1886).
38-10-115. Creditors defined.
"Creditors", as used in section 38-10-114, includes all persons who are creditors of the vendor or assignor at any time while such goods and chattels remain in his possession or control.
Source: R.S. p. 340, § 15. G.L. § 1265. G.S. § 1524. R.S. 08: § 2669. C.L. § 5114. CSA: C. 71, § 15. CRS 53: § 59-1-15. C.R.S. 1963: § 59-1-15.
ANNOTATION
When attaching creditor not "creditor" within section. Where possession and control of the property had passed out of the vendor more than six months prior to the commencement of a suit by the attaching creditor, he is not a "creditor" within the definition of this section. Weiland v. Potter, 8 Colo. App. 79, 44 P. 769 (1896); Hendrie & Bolthoff Mfg. Co. v. Collins, 13 Colo. App. 8, 56 P. 815 (1899); Jones v. Mackenzie Bros. Wall Paper & Paint Co., 19 Colo. App. 121, 73 P. 847 (1903).
Wife with alimony claim is creditor. A wife who had a claim for alimony and a suit pending to secure a divorce and compel its payment is a creditor within the purview of this section. Gregory v. Filbeck, 12 Colo. 379, 21 P. 489 (1888); Hall v. Harrington, 7 Colo. App. 474, 44 P. 365 (1896).
Applied in Rizer v. McCarth, 3 Colo. App. 348, 33 P. 191 (1893); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
38-10-116. Lawful agent may subscribe.
Every instrument required by any of the provisions of this article to be subscribed by any party may be subscribed by the lawful agent of such party.
Source: R.S. p. 340, § 16. G.L. § 1266. G.S. § 1525. R.S. 08: § 2670. C.L. § 5115. CSA: C. 71, § 16. CRS 53: § 59-1-16. C.R.S. 1963: § 59-1-16.
Cross references: For legality of subscription of a document by a lawful agent, see § 38-10-109.
38-10-117. Conveyances to defraud creditors void.
- Every conveyance or assignment in writing or otherwise of any estate or interest in lands, goods, or things in action or of any rents and profits issuing thereupon, and every charge upon lands, goods, or things in action or upon the rents and profits thereof made with the intent to hinder, delay, or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts, or demands, and every bond or other evidence of debt given, suits commenced, or decree or judgment suffered with the like intent as against the person so hindered, delayed, or defrauded shall be void.
- This section shall not apply to any transfer made or obligation incurred on or after July 1, 1991, and, for the applicability of this subsection (2), the time at which any such transfer or obligation is made or incurred shall be determined in accordance with the provisions of article 8 of this title.
Source: R.S. p. 340, § 17. G.L. § 1267. G.S. § 1526. R.S. 08: § 2671. C.L. § 5116. CSA: C. 71, § 17. CRS 53: § 59-1-17. C.R.S. 1963: § 59-1-17. L. 91: Entire section amended, p. 1690, § 3, effective July 1.
ANNOTATION
Analysis
I. GENERAL CONSIDERATION.
Law reviews. For article, "Reaching Fraudulent Conveyances and Equitable Interests of Debtors", see 27 Dicta 137 (1950). For article, "Property Law", see 32 Dicta 420 (1955). For article, "An Aspect of Estate Planning in Colorado: The Revocable Inter Vivos Trust", see 43 Den. L.J. 296 (1966). For article, "Deeds in Lieu of Foreclosure", see 15 Colo. Law. 394 (1986). For article, "Perils of Pre-Bankruptcy Planning: Transfers, Exemptions and Taxes", see 17 Colo. Law. 1513 (1988). For article, "Colorado's New Fraudulent Transfer Statutes", see 20 Colo. Law. 1815 (1991).
Object of this section is to protect all persons against conveyances made to hinder or defraud them of their lawful suits, damages, forfeitures, debts, or demands. Gregory v. Filbeck, 12 Colo. 379, 21 P. 489 (1888).
Injured party deemed creditor. One who has sustained a personal injury by the negligence or misconduct of another is a creditor of the offending party within the meaning of this section even though his claim has not been reduced to judgment. Thuringer v. Trafton, 58 Colo. 250, 144 P. 866 (1914); Chalupa v. Preston, 65 Colo. 400, 177 P. 965 (1918).
"Creditor" includes persons with unlitigated claims against a defendant. Sands v. New Age Family P'ship, Ltd., 897 P.2d 917 (Colo. App. 1995).
"Obligation" includes the assumption by the debtor of a duty to transfer an asset as a fraudulent transfer, even though no actual transfer has as yet taken place. Sands v. New Age Family P'ship, Ltd., 897 P.2d 917 (Colo. App. 1995).
Neither "transfer" nor "obligation" refers to the creditor's claim against the debtor, but refers instead to the transaction by which the debtor sought to place assets beyond the reach of creditors. Sands v. New Age Family P'ship, Ltd., 897 P.2d 917 (Colo. App. 1995).
Hindering and delaying construed. The hindering and delaying meant by this section as vitiating an assignment is that hindrance and delay intended to be produced by the assignor through covin and malice, or for his own benefit and advantage. Burr v. Clement, 9 Colo. 1, 9 P. 633 (1885).
By listing the elements of hindrance, delay, or fraud in the disjunctive, the statute implies that each is to have substantive consequences and a creditor need only show that the debtor acted with one of the three elements in mind to support a remedy. Yetter Well Serv., Inc. v. Cimarron Oil Co., Inc., 841 P.2d 1068 (Colo. App. 1992).
A wrongful withholding within the meaning of § 5-12-102 (1)(a) need not involve actual fraud or be tortious in nature. Section 38-10-117 provides that any conveyance made with the intent to hinder, delay, or defraud creditors is fraudulent. Stansbury v. Comm'r of Internal Rev., 102 F.3d 1088 (10th Cir. 1996); Scott v. Comm'r of Internal Rev., 236 F.3d 1239 (10th Cir. 2001).
Corporate executive of insolvent company liable as a transferee of assets for unpaid income taxes and the interest that accrued since the taxes became due. Transferee liable under subsection (1) because conveyance was made with the intent to hinder, delay, or defraud creditors, in this case, the internal revenue service. While structuring the sale of the assets of the insolvent company, corporate executive (transferee) obtained multiple opinions on the foreseeable tax consequences. Informed by those opinions and his corporate acumen, executive knowingly chose to take a calculated risk. Scott v. Comm'r of Internal Rev., 236 F.3d 1239 (10th Cir. 2001).
Conveyance to hinder and delay creditors is void only as to the creditor intended to be hindered or delayed. Lathrop v. Pollard, 6 Colo. 424 (1882); Italian-American Bank v. Lepore, 79 Colo. 466, 246 P. 792 (1926).
Transaction held to constitute conveyance with intent to hinder creditors. Love v. Olson, 645 P.2d 861 (Colo. App. 1982).
There was no evidence of intent to defraud, hinder, or delay creditors where the evidence showed that the transferee knew of a pending lawsuit against the transferor, but expected the transferor to win the lawsuit and continue as a going concern. Walk-In Med. Ctrs., Inc. v. Breuer Capital Corp., 778 F. Supp. 1116 (D. Colo. 1991).
Evidence that the transferee knew of a judgment against the transferor does not by itself show intent to defraud, hinder, or delay. Walk-In Med. Ctrs., Inc. v. Breuer Capital Corp., 778 F. Supp. 1116 (D. Colo. 1991).
A good-faith conveyance between family members based upon a pre-existing debt may permissibly operate as a preference of a relative's loan even though it results in delay or hindrance to other creditors. Erjavec v. Herrick, 827 P.2d 615 (Colo. App. 1992).
Fraudulent conveyance not void, but voidable. Fraudulent conveyances are not void ab initio in Colorado; they are voidable. The fraudulent transferee can convey good title to a bona fide purchaser for value. Appel v. Steamboat Ski Corp. (In re Smythe), 32 B.R. 736 (Bankr. D. Colo. 1983).
No conveyance may be adjudged "fraudulent" against creditors without proof that: (1) The transferor was insolvent at the time of the transfer, or was rendered insolvent thereby; (2) the purpose of the conveyance was to defeat, hinder, or delay creditors; (3) the transferor acted with fraudulent intent or with an intent to benefit or to secure an advantage to himself; and (4) the transferee knew of, or participated in, the transferor's intent. Yetter Well Serv., Inc. v. Cimarron Oil Co., Inc., 841 P.2d 1068 (Colo. App. 1992).
In order to state a claim under this section to set aside a fraudulent conveyance, a plaintiff need not first have a judgment against the debtor. Emarine v. Haley, 892 P.2d 343 (Colo. App. 1994).
Lis pendens appropriate. A proceeding to set aside a conveyance pursuant to this section falls within the type of action upon which a lis pendens pursuant to C.R.C.P. 105(f) may be recorded. Crown Life Ins. Co. v. April Corp., 855 P.2d 12 (Colo. App. 1993).
The three-year statute of limitations set forth in § 13-80-101 applies to suits brought under this section. In re Walden, 207 B.R. 1 (D. Colo. 1997).
Applied in Gutheil v. Polichio, 103 Colo. 426 , 86 P.2d 972 (1939); Mohler v. Buena Vista Bank & Trust Co., 42 Colo. App. 4, 588 P.2d 894 (1978); In re Carter, 4 B.R. 692 (D. Colo. 1980 ); Zimmerman v. Mozer, 10 B.R. 1002 (D. Colo. 1981 ); Appel v. Steamboat Ski Corp. (In re Smythe), 28 B.R. 882 (Bankr. D. Colo. 1983 ); Smith Office Serv., Inc. v. Kelley, 762 P.2d 791 (Colo. App. 1988).
II. VOID CONVEYANCES.
Fraud may be inferred from the facts and circumstances of each case. Grimes v. Hill, 15 Colo. 359, 25 P. 698 (1890); Innis v. Carpenter, 4 Colo. App. 30, 34 P. 1011 (1893); Helm v. Brewster, 42 Colo. 25, 93 P. 1101 (1908); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Intent of conveyance necessary determination. The necessary and material thing to bring a case within the protection of this section is not that the party invoking its aid should have an existing cause of action or demand at the time the conveyance is made, but that the grantor intended by such conveyance to hinder, delay, or defraud creditors or other persons in the manner set forth in this section. Gregory v. Filbeck, 12 Colo. 379, 21 P. 489 (1888).
While it is true that a fraudulent intent must be participated in by both parties, grantor and grantee, or mortgagor and mortgagee, when such is the case, the conveyance or mortgage is null and void. Livingston v. Swofford Bros. Dry Goods Co., 12 Colo. App. 331, 56 P. 355 (1898); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
A sale of property, though for a full consideration, may be void, if made by the owner with intent to hinder, delay, or defraud his creditors, and if the vendee participated in such intent. Helm v. Brewster, 42 Colo. 25, 93 P. 1101 (1908); Reithmann v. Godsman, 23 Colo. 202, 46 P. 684 (1896); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Intent need only be to hinder or delay payment. That the transferor did not intend to defraud his creditors will not defeat a suit to void a transfer as fraudulent. If the transferor's intent was merely to hinder or to delay the payment of his creditors, the transfer will be voided. United States v. Morgan, 554 F. Supp. 582 (D. Colo. 1982).
Burden of proof to show that a conveyance is honest and made in good faith for valuable consideration and without intent to hinder, delay, or defraud creditors is on the transferee and transferor. In re Genova v. Champion, 33 B.R. 930 (Bankr. D. Colo. 1983).
Once a bankruptcy trustee shows a family transfer, burden of proof shifts to the transferee and transferor to show that the transfer was honest and that there was no intent to defraud. Also, the burden of proof of solvency is upon the debtor and the transferee and not upon the trustee. In re Genova v. Champion, 33 B.R. 930 (Bankr. D. Colo. 1983).
Void transfer invalid even between parties. Where an attempted transfer by deed of a party's interest in property is set aside as an attempt to defraud creditors, it is invalid as between the parties to the deed. Park State Bank v. McLean, 660 P.2d 13 (Colo. App. 1982).
Conveyance intended to defraud future creditors void. A conveyance intended to defraud creditors, is voidable not only as to existing, but as to future, creditors. Gregory v. Filbeck, 12 Colo. 379, 21 P. 489 (1888); Fish v. East, 114 F.2d 177 (10th Cir. 1940); House v. Johnson, 19 Colo. App. 524, 76 P. 743 (1904).
Party need not have been existing creditor at the time the conveyance was executed in order to invoke the protection of this section. House v. Johnson, 19 Colo. App. 524, 76 P. 743 (1904); Fish v. East, 114 F.2d 177 (10th Cir. 1940).
Action by judgment creditor to set aside conveyance maintainable. A judgment creditor may maintain an equitable action to set aside a fraudulent conveyance of real property by the debtor, and enforce its judgment lien thereon. Hugo Nat'l Bank v. Ashworth, 84 Colo. 362, 270 P. 553 (1928).
Bar to money judgments implicit in remedy. Implicit in this remedy is a bar to any money judgments against the fraudulent transferor since awarding the judgment creditor a money judgment would amount to an increase in the judgment debt owed to the judgment creditor by the fraudulent transferor. Miller v. Kaiser, 164 Colo. 206 , 433 P.2d 772 (1967).
Equity court has inherent power to award actual damages. A court of equity has the inherent power to award actual damages under certain circumstances in order to accomplish the fulfillment of the equitable remedy. Miller v. Kaiser, 164 Colo. 206 , 433 P.2d 772 (1967); Morris v. Askeland Enter., Inc., 17 P.3d 830 ( Colo. 2000 ).
When fraudulent transferee held personally liable. Under special circumstances which generally involve some activity of the fraudulent transferee in causing the property involved to be depreciated in value while in his hands or causing the property, either wholly or in part, to be placed beyond the reach of the court, it is in equity's power to hold a fraudulent transferee personally liable. Miller v. Kaiser, 164 Colo. 206 , 433 P.2d 772 (1967).
Property statements and debtor's oral admission admissible as evidence. In an action to set aside alleged fraudulent conveyances, property statements and oral admissions of the debtor are properly admitted. Gallegos v. Lajara Livestock Loan Co., 73 Colo. 325, 215 P. 131 (1923). See Whitescarver v. Interstate Trust Co., 71 Colo. 416, 207 P. 81 (1922).
Transfer not fraudulent because value of the property transferred was worth a great deal less than the amount owed. In re Genova v. Triangle Truck Serv., Inc., 40 B.R. 513 (Bankr. D. Colo. 1984).
III. TRANSACTIONS BETWEEN HUSBAND AND WIFE.
The decisions interpreting this section hold that married parties may stand in the relationship of debtor and creditor. Erjavec v. Herrick, 827 P.2d 615 (Colo. App. 1992).
Bona fide loan transaction required. Although husband and wife may stand in the relationship of debtor and creditor, a bona fide loan transaction must be established. Love v. Olson, 645 P.2d 861 (Colo. App. 1982); Erjavec v. Herrick, 827 P.2d 615 (Colo. App. 1992).
Lien enforceable on payment for land. Where a debtor transferred real property to his wife without consideration, in fraud of a judgment creditor, and the wife sold and conveyed the property to another, the creditor can establish and enforce his lien on the money to be paid by the purchaser of the land. Hugo Nat'l Bank v. Ashworth, 84 Colo. 362, 270 P. 553 (1928).
Wife may be "creditor" within the protection of this section based upon a judgment obtained subsequent to the conveyance. Linker v. Linker, 28 Colo. App. 136, 470 P.2d 882 (1970).
Wife's action against husband to set aside conveyance maintainable. A wife can maintain an action to set aside a conveyance by her husband, made with fraudulent intent, so as to enable her to collect alimony awarded in a divorce suit against him, though the cause for such divorce did not arise until after the conveyance was made. Gregory v. Filbeck, 12 Colo. 379, 21 P. 489 (1888); Hanscom v. Hanscom, 6 Colo. App. 97, 39 P. 885 (1895); Hall v. Harrington, 7 Colo. App. 474, 44 P. 365 (1896); Ruffenach v. Ruffenach, 13 Colo. App. 102, 56 P. 812 (1899); Fahey v. Fahey, 43 Colo. 354, 96 P. 251 (1908).
Conveyance by husband to his wife is deemed fraudulent, without regard to intent, if the conveyance is made without fair consideration and if the husband is insolvent at the time of making such conveyance, or if, by reason of such conveyance, he is rendered unable to pay his existing debts. Harvey v. Harvey, 841 P.2d 375 (Colo. App. 1992).
Parties related or married have burden of proving innocence and integrity. In a transaction between relatives or those connected in marriage, the parties thereto have the burden of establishing its innocence and integrity. Helm v. Brewster, 42 Colo. 25, 93 P. 1101 (1908); Chalupa v. Preston, 65 Colo. 400, 177 P. 965 (1918).
When a conveyance by an insolvent debtor to his wife is attacked by a creditor of the former at the time of such conveyance, the husband and wife are required to clearly establish that the transaction is honest, and that there is no intent to thereby hinder and defraud such creditor. First Nat'l Bank v. Kavanaugh, 7 Colo. App. 160, 43 P. 217 (1895); Helm v. Brewster, 42 Colo. 25 , 93 P. 1001 (1908); United States v. Morgan, 554 F. Supp. 582 (D. Colo. 1982 ); Harvey v. Harvey, 841 P.2d 375 (Colo. App. 1992); Erjavec v. Herrick, 827 P.2d 615 (Colo. App. 1992); U.S. v. Schaeffer, 245 B.R. 407 (D. Colo. 1999 ).
When transactions between spouses are challenged under this section, husband and wife bear the burden of establishing that the conveyance was honest, made in good faith for a valuable consideration, and without intent to hinder and defraud creditors in the collection of their judgment. Erjavec v. Herrick, 827 P.2d 615 (Colo. App. 1992).
Evidence sufficient to support the inference and conclusion that husband and wife possessed fraudulent intent to hinder or delay creditor where husband and wife admitted intention to transfer property in anticipation of an adverse outcome in litigation in favor of another creditor and the resulting depletion of husband's estate. Erjavec v. Herrick, 827 P.2d 615 (Colo. App. 1992).
Conveyances wife made with intent to hinder or defraud creditors. In re Weyand, 33 B.R. 553 (Bankr. D. Colo. 1983).
Defense of laches denied. Where, after a fraudulent conveyance of a boardinghouse to the wife by a husband, the business was run in the same manner as before, and the wife devoted no more time nor money in improving the property and business than she would have done had the title remained in her husband, the delay of a creditor of the husband in recovering judgment and in instituting a creditor's suit to set the conveyance aside is not prejudicial to either the husband or wife, and hence laches is no defense to the bill. Dubois v. Clark, 12 Colo. App. 220, 55 P. 750 (1898); Morgan v. King, 27 Colo. 539, 63 P. 416 (1900); Farris v. Wirt, 16 Colo. App. 1, 63 P. 946 (1901); Helm v. Brewster, 42 Colo. 25, 93 P. 1101 (1908).
38-10-118. Grant or assignment of trust.
Every grant or assignment of any existing trust in lands, goods, or things in action, unless the same is in writing and subscribed by the party making the same or by his agent lawfully authorized, shall be void.
Source: R.S. p. 340, § 18. G.L. § 1268. G.S. § 1527. R.S. 08: § 2672. C.L. § 5117. CSA: C. 71, § 18. CRS 53: § 59-1-18. C.R.S. 1963: § 59-1-18.
ANNOTATION
Law reviews. For article, "One Year Review of Contracts", see 38 Dicta 161 (1961). For article, "An Aspect of Estate Planning in Colorado: The Revocable Inter Vivos Trust", see 43 Den. L.J. 296 (1966).
An express trust was created by implication in fact, rather than theory of implied trust, in case where loyal minority members of local church sought to recover possession of church's property from seceding majority members. Bishop and Diocese of Colo. v. Mote, 716 P.2d 85 ( Colo. 1986 ), cert. denied, 479 U.S. 826, 107 S. Ct. 102, 93 L. Ed. 2d 52 (1986).
Applied in Hall v. Linn, 8 Colo. 264 , 5 P. 641 (1885); Henderson v. Greeley Nat'l Bank, 111 Colo. 365 , 142 P.2d 480 (1943).
38-10-119. Conveyances void against heirs.
Every conveyance, charge, instrument, or proceeding declared to be void by the provisions of this article as against creditors or purchasers shall be equally void against the heirs, successors, personal representatives, or assignees of such creditors or purchasers.
Source: R.S. p. 340, § 19. G.L. § 1269. G.S. § 1528. R.S. 08: § 2673. C.L. § 5118. CSA: C. 71, § 19. CRS 53: § 59-1-19. C.R.S. 1963: § 59-1-19.
ANNOTATION
Heir's claim accrued after mother's death. A claim to set aside conveyances on the grounds of undue influence did not accrue to the heirs until the mother's death, although the heirs had knowledge of the deed in question soon after it was executed; therefore, the heirs were under no duty to institute adjudication, or guardianship, or other proceedings during the mother's lifetime and their failure to institute legal proceedings during the mother's lifetime does not bar this action which was timely filed after her death. Gertge v. Gertge, 28 Colo. App. 246, 472 P.2d 188 (1970).
38-10-120. Intent, question of fact - want of consideration.
The question of fraudulent intent, in all cases arising under the provisions of this article, shall be deemed a question of fact and not of law; nor shall any conveyance or charge be adjudged fraudulent against creditors or purchasers solely on the ground that it was not founded on a valuable consideration.
Source: R.S. p. 340, § 20. G.L. § 1270. G.S. § 1529. R.S. 08: § 2674. C.L. § 5119. CSA: C. 71, § 20. CRS 53: § 59-1-20. C.R.S. 1963: § 59-1-20.
ANNOTATION
Section 38-10-114 unmodified by this section. This section unquestionably refers to other provisions of this article which pronounce certain transactions made with a fraudulent intent void, but it does not in any manner affect or modify the conclusive presumption of law declared by § 38-10-114. Ray v. Raymond, 8 Colo. 467, 9 P. 15 (1885).
Intention concluded from disclosed facts. The question of intention is only a conclusion or deduction from the facts as disclosed and, if the result of the transaction is fraud, the law supplies the intention or proceeds regardless of the intention. Knapp v. Day, 4 Colo. App. 21, 34 P. 1008 (1893); Wells v. Schuster-Hax Nat'l Bank, 23 Colo. 534, 48 P. 809 (1897).
Jury determines question of fraud. If there is any question of fraud, it is a question of fraud in fact to be determined by the jury, and not by the court. Sickman v. Abernathy, 14 Colo. 174, 23 P. 447 (1890).
Courts empowered to pronounce judgment of law. The courts are not deprived of the power to pronounce the judgment of the law in any case which the facts justify. Burr v. Clement, 9 Colo. 1, 9 P. 633 (1885); People ex rel. Wilson v. Court of Appeals, 28 Colo. 442, 65 P. 42 (1901).
One who alleges fraud must prove fraud he alleges. Sickman v. Abernathy, 14 Colo. 174, 23 P. 447 (1890).
In an action by a creditor of the grantor to set aside a conveyance on the ground that it was voluntary and that it was made with the intention to hinder, delay, and defraud existing creditors, it is incumbent upon the plaintiff to prove that the conveyance was purely voluntary, or that it was made with the intention to delay and defraud creditors. Homestead Mining Co. v. Reynolds, 30 Colo. 330, 70 P. 422 (1902).
Whether husband and wife met their burden of proving that they lacked the intent to delay, hinder, or defraud is a question of fact which the trial court is obligated to resolve by consideration of the facts and circumstances of each case. Erjavec v. Herrick, 827 P.2d 615 (Colo. App. 1992).
Applied in Thomas v. Mackey, 3 Colo. 390 (1870); Wilcoxen v. Morgan, 2 Colo. 473 (1875); Burshall v. Waggoner, 4 Colo. 256 (1878); Knox v. McFarran, 4 Colo. 586 (1879); Curran v. Rothschild, 14 Colo. App. 497, 60 P. 1111 (1900); Homestead Mining Co. v. Reynolds, 30 Colo. 330 , 70 P. 422 (1902); Eppich v. Blanchard, 58 Colo. 139 , 143 P. 1035 (1914); Love v. Olson, 645 P.2d 861 (Colo. App. 1982).
38-10-121. Purchaser with notice of fraud.
The provisions of this article shall not be construed in any manner to affect or impair the title of a purchaser for a valuable consideration, unless it appears that such purchaser had previous notice of the fraudulent intent of his immediate grantor or of the fraud rendering void the title of such grantor.
Source: R.S. p. 340, § 21. G.L. § 1271. G.S. § 1530. R.S. 08: § 2675. C.L. § 5120. CSA: C. 71, § 21. CRS 53: § 59-1-21. C.R.S. 1963: § 59-1-21.
ANNOTATION
Subsequent purchaser takes subject to prior vendee's rights. Under this section and § 38-10-114 where a sale of chattels is completed as between the parties thereto, but the possession temporarily remains with the vendor, a subsequent purchaser who has knowledge of the prior transaction takes subject to the rights of the prior vendee. McKee v. Bassick Mining Co., 8 Colo. 392, 8 P. 561 (1885).
The fact that consideration is given for the transfer constitutes no defense if the transferee has previous notice of the transferor's intent. Yetter Well Serv., Inc. v. Cimarron Oil Company, Inc., 841 P.2d 1068 (Colo. App. 1992).
Applied in Burdsall v. Waggoner, 4 Colo. 256 (1878); Welsh v. Noyes, 10 Colo. 133, 14 P. 317 (1887).
38-10-122. Construction of terms.
"Lands", as used in this article, means lands, tenements, and hereditaments; and "estate and interest in lands" includes every estate and interest, freehold and chattel, legal and equitable, present and future, vested and contingent in lands as defined in this section.
Source: R.S. p. 340, § 22. G.L. § 1272. G.S. § 1531. R.S. 08: § 2676. C.L. § 5121. CSA: C. 71, § 22. CRS 53: § 59-1-22. C.R.S. 1963: § 59-1-22.
38-10-123. Term conveyance, how construed.
"Conveyance", as used in this article, includes every instrument in writing, except a last will and testament, whatever may be its form and by whatever name it may be known in law, by which any estate or interest in lands is created, aliened, assigned, or surrendered.
Source: R.S. p. 341, § 23. G.L. § 1273. G.S. § 1532. R.S. 08: § 2677. C.L. § 5122. CSA: C. 71, § 23. CRS 53: § 59-1-23. C.R.S. 1963: § 59-1-23.
38-10-124. Credit agreements - required to be in writing.
-
As used in this section, unless the context otherwise requires:
-
"Credit agreement" means:
- A contract, promise, undertaking, offer, or commitment to lend, borrow, repay, or forbear repayment of money, to otherwise extend or receive credit, or to make any other financial accommodation;
- Any amendment of, cancellation of, waiver of, or substitution for any or all of the terms or provisions of any of the credit agreements defined in subparagraphs (I) and (III) of this paragraph (a); and
- Any representations and warranties made or omissions in connection with the negotiation, execution, administration, or performance of, or collection of sums due under, any of the credit agreements defined in subparagraphs (I) and (II) of this paragraph (a).
- "Creditor" means a financial institution which offers to extend, is asked to extend, or extends credit under a credit agreement with a debtor.
- "Debtor" means a person who or entity which obtains credit or seeks a credit agreement with a creditor or who owes money to a creditor.
- "Financial institution" means a bank, savings and loan association, savings bank, credit union, or mortgage or finance company.
-
"Credit agreement" means:
- Notwithstanding any statutory or case law to the contrary, including but not limited to section 38-10-112, no debtor or creditor may file or maintain an action or a claim relating to a credit agreement involving a principal amount in excess of twenty-five thousand dollars unless the credit agreement is in writing and is signed by the party against whom enforcement is sought.
- A credit agreement may not be implied under any circumstances, including, without limitation, from the relationship, fiduciary or otherwise, of the creditor and the debtor or from performance or partial performance by or on behalf of the creditor or debtor, or by promissory estoppel.
Source: L. 89: Entire section added, p. 1438, § 1, effective March 15. L. 2013: (1)(d) amended, (SB 13-154), ch. 282, p. 1489, § 71, effective July 1.
ANNOTATION
Law reviews. For article, "Limiting Lender Liability Through the Statute of Frauds", see 18 Colo. Law. 1725 (1989). For article, "Chapter 13 Bankruptcy as an Alternative to Chapter 7", see 18 Colo. Law. 2089 (1989). For comment, "Stemming the Tide of Lender Liability: Judicial and Legislative Reactions", see 67 Den. U. L. Rev. 453 (1990). For article, "The Colorado Credit Agreements Act and Its Impact on Lenders and Borrowers", see 36 Colo. Law. 31 (June 2007). For article, "Bad Boy Guaranties: Know What to Do When the Lender Comes for You", see 42 Colo. Law. 29 (Sept. 2013).
An agreement for the purchase of commercial paper is not a financial accommodation as that term is used in the definition of "credit agreement". Echo Acceptance Corp., 267 F.3d 1068 (10th Cir. 2001).
In a deficiency judgment action, settlement agreement was "credit agreement" for purposes of this section and was unenforceable because it was not reduced to writing. Pima Financial Serv. Corp. v. Selby, 820 P.2d 1124 (Colo. App. 1991).
A federally chartered bank is a bank for purposes of subsection (1)(d), and nothing indicates that the term "bank" is limited to state-chartered banks. The definition of "bank" in § 11-101-401 (5) does not apply to this section. To import that definition would be contrary to the obligation to apply this section broadly. Premier Farm Credit, PCA v. W-Cattle, LLC, 155 P.3d 504 (Colo. App. 2006).
A representation or promise made in connection with a credit agreement involving more than $25,000 is invalid unless it is in writing. As a matter of law, reliance placed on oral representations or promises cannot be reasonable or justifiable. Norwest Bank Lakewood v. GCC P'ship, 886 P.2d 299 (Colo. App. 1994).
Contract providing for financing in excess of $25,000 is a "credit agreement" for purposes of this section, and section applies to any agreement to extend credit regardless of the context in which the agreement was formed. Univex Int'l, Inc. v. Orix Credit Alliance, Inc., 902 P.2d 877 (Colo. App. 1995), aff'd, 914 P.2d 1355 ( Colo. 1996 ).
Any tort claim relating to an oral credit agreement involving a principal amount greater than $25,000 is barred by this section. Instead of encouraging tortious behavior by lenders, such an interpretation comports with intent of the general assembly that borrowers and lenders must be sure to reduce agreement to writing to ensure enforceability of any claims they may have in the future. Hewitt v. Pitkin County Bank & Trust Co., 931 P.2d 456 (Colo. App. 1995).
To the extent that claims for fraudulent misrepresentation, promissory estoppel, unjust enrichment, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and outrageous conduct are based on alleged oral representations made in connection with draws or disbursements under a loan and a line of credit in excess of $25,000, they are precluded by this section because they constitute and relate to a credit agreement. Dalton v. Countrywide Home Loans, Inc., 828 F. Supp. 2d 1242 (D. Colo. 2011).
This section, requiring a signature, and not § 38-10-112 , controls in cases involving a credit agreement. Univex Int'l, Inc. v. Orix Credit Alliance, Inc., 902 P.2d 877 (Colo. App. 1995), aff'd on other grounds, 914 P.2d 1355 ( Colo. 1996 ).
The phrase "action or claim" in subsection (2) is not limited to claims for affirmative recovery. It is not intended to cover only claims for relief while excluding defenses to liability based on oral representations. Accordingly, this section applies to a claim of fraudulent inducement that seeks rescission of the transaction on which the creditor's claim is based. Premier Farm Credit, PCA v. W-Cattle, LLC, 155 P.3d 504 (Colo. App. 2006).
This section specifically precludes assertion of a promissory estoppel claim to enforce an unsigned credit agreement. Univex Int'l, Inc. v. Orix Credit Alliance, Inc., 902 P.2d 877 (Colo. App. 1995), aff'd, 914 P.2d 1355 ( Colo. 1996 ).
There is no basis to distinguish between promissory estoppel and equitable estoppel in this context, given that this section must be construed broadly to effectuate its purposes. Premier Farm Credit, PCA v. W-Cattle, LLC, 155 P.3d 504 (Colo. App. 2006).
Borrowers made co-makers their agents in executing future modifications of a note, in effect, by consenting to future modifications of the note in the original instrument. Modifications to note that were reduced to writing and executed by co-makers met the purpose and requirements of this section. Crown Life Ins. Co. v. Haag Ltd. P'ship, 929 P.2d 42 (Colo. App. 1996).
The terms "debtor" and "creditor" do not require a direct borrower-lender relationship under the credit agreement statute of frauds. The statute applies to a "credit agreement" that arose from oral representations made between lenders to the same borrower. Schoen v. Morris, 15 P.3d 1094 ( Colo. 2000 ); Lang v. Bank of Durango, 78 P.3d 1121 (Colo. App. 2003).
A mortgage broker does not fall under the definition of "financial institution". Fisher v. 1st Consumers Funding, Inc., 160 P.3d 321 (Colo. App. 2007); People v. Shifrin, 2014 COA 14 , 342 P.3d 506.
An e-mail qualifies as a writing for purposes of subsection (2). PayoutOne v. Coral Mortg. Bankers, 602 F. Supp. 2d 1219 (D. Colo. 2009).
Customer service representative's call note does not qualify as a writing because it does not indicate that there was any meeting of the minds between debtor and creditor about granting debtor a loan modification. Mayotte v. US Bank Nat'l Ass'n, 424 F. Supp. 3d 1077 (D. Colo. 2019).
Multiple emails may serve to satisfy the writing requirement. There is no indication the credit agreement statute of frauds requires that the requisite writing be a single document. PayoutOne v. Coral Mortg. Bankers, 602 F. Supp. 2d 1219 (D. Colo. 2009).
A party may not avoid the writing requirement in the credit agreement statute of frauds by arguing promissory estoppel. PayoutOne v. Coral Mortg. Bankers, 602 F. Supp. 2d 1219 (D. Colo. 2009).
A claim for unjust enrichment that arises from an oral assertion regarding a credit agreement is barred by the credit agreement statute of frauds. Legislative history and case law strongly disfavor any type of claim involving oral credit agreements, and the credit agreement statute of frauds expressly bars all claims relating to a credit agreement unless the credit agreement is in writing. Lang v. Bank of Durango, 78 P.3d 1121 (Colo. App. 2003).
Applied in McDonald v. Miller, 945 F. Supp. 2d 1201 (D. Colo. 2013), aff'd in part and rev'd in part on other grounds, 769 F.3d 1202 (10th Cir. 2014).
JOINT RIGHTS AND OBLIGATIONS
ARTICLE 11 JOINT TENANCY
Section
38-11-101. Personal property in joint tenancy - how created - vesting upon death.
- An estate in joint tenancy in personal property is created if, in the instrument evidencing ownership of such property, it is declared that the property is conveyed, transferred, bequeathed, or held in joint tenancy or as joint tenants, whether or not additional words are used relating to tenancy in common or survivorship. The abbreviation "JTWROS" and the phrase "as joint tenants with right of survivorship" or "in joint tenancy with right of survivorship" shall have the same meaning. Upon the death of any such joint tenants, the title to and ownership of such personal property passes immediately to and vests in the surviving joint tenant or tenants. Any grantor or transferor in any such instrument of conveyance or transfer may also be one of the grantees or transferees therein.
- Repealed.
- Any such instrument evidencing ownership executed prior to July 1, 1996, as amended in compliance with subsection (1) of this section shall be deemed to have created an estate in joint tenancy.
Source: L. 37: p. 792, § 1. CSA: C. 92, § 17. L. 39: p. 286, § 1. CRS 53: § 76-1-5. L. 59: p. 528, § 1. C.R.S. 1963: § 76-1-5. L. 96: Entire section amended, p. 661, § 14, effective July 1. L. 2002: (2) amended, p. 1361, § 13, effective July 1. L. 2003: (2) repealed, p. 2002, § 66, effective May 22.
Cross references: For joint tenancy in real property, see article 31 of this title; for joint tenancy in bank accounts, see § 11-105-105 and article 15 of title 15; for joint rights and obligations generally, see article 50 of title 13.
ANNOTATION
Law reviews. For article, "Joint Tenancy in Colorado", see 26 Dicta 313 (1949). For article, "Simple Devices for the Transfer of Assets Without Administration", see 27 Dicta 277 (1950). For article, "Ownership of Personal Property Accumulated During a Marriage", see 17 Colo. Law. 623 (1988).
Rights fixed and vested at creation of joint tenancy. The rights are fixed and vested in the joint tenants at the time of the creation of the joint tenancy under this section. Smith v. Greenburg, 121 Colo. 417 , 218 P.2d 514 (1950).
To create joint tenancy with survivorship rights, there must be specific language manifesting such intent; where the instrument is silent or ambiguous as to the nature of the joint estate created, it will be construed as creating a tenancy in common and not a joint tenancy, and, if legal relief is sought, the naked wording alone without meeting statutory requirements will be insufficient to create a joint tenancy. Chilson v. Reed, 154 Colo. 149 , 389 P.2d 87 (1964).
Where a husband, possessing corporate stock certificates issued in his name, indorses and delivers them to another with the request that new certificates be procured therefor naming his wife and himself as joint tenants with the right of survivorship and not as tenants in common, a joint tenancy was established. Eisenhardt v. Lowell, 105 Colo. 417 , 98 P.2d 1001 (1940).
Circumstances unnecessary for creation of joint tenancy in bank account. It is not necessary for a joint tenant donee to have knowledge of the creation of the account, to sign a signature card, or to deposit or withdraw funds from the account in order to establish a valid joint tenancy in a bank account. Estate of Barnhart, 194 Colo. 505 , 574 P.2d 500 (1978).
In order to set aside joint tenancy properly created, it is necessary to show that the joint tenancy was created purely for the convenience or a business necessity of the putative donor, and that no right of survivorship was intended. Estate of Barnhart v. Burkhardt, 38 Colo. App. 544, 563 P.2d 972 (1977), aff'd, 194 Colo. 505 , 574 P.2d 500 (1978).
Applied in Sacco v. Oxley, 402 F.2d 155 (10th Cir. 1968).
TENANTS AND LANDLORDS
ARTICLE 12 TENANTS AND LANDLORDS
Law reviews: For article, "The Effect of Zoning Violations on the Enforceability of Leases", see 19 Colo. Law. 2077 (1990).
Section
PART 1 SECURITY DEPOSITS - WRONGFUL WITHHOLDING
38-12-101. Legislative declaration.
This part 1 shall be liberally construed to implement the intent of the general assembly to ensure the proper administration of security deposits and late fees and protect the interests of tenants, mobile home owners, and landlords.
Source: L. 71: p. 592, § 1. C.R.S. 1963: § 58-1-26. L. 2021: Entire section amended, (SB 21-173), ch. 349, p. 2265, § 6, effective October 1.
ANNOTATION
Law reviews. For comment, "Colorado's Wrongful Withholding of Security Deposits Act: Three Litigious Shares in an Untested Law", see 49 Den. L.J. 453 (1973). For article, "The Colorado Security Deposit Act", see 50 U. Colo. L. Rev. 29 (1978).
Purpose. The security deposit act was passed to control the practices of landlords who withhold, without justification, their tenants' damage deposits. Houle v. Adams State Coll., 190 Colo. 406 , 547 P.2d 926 (1976).
38-12-102. Definitions.
As used in this part 1, unless the context otherwise requires:
- "Home owner" has the meaning set forth in section 38-12-201.5 (2).
- "Landlord" means a landlord, as defined in section 38-12-502 (5), or the management or landlord of a mobile home park, as defined in section 38-12-201.5 (3).
- "Late fee" means a monetary sum that a landlord charges a tenant or home owner as a result of the tenant's or home owner's failure to timely pay rent and that is determined pursuant to a rental agreement between the landlord and the tenant or home owner.
- "Normal wear and tear" means deterioration that occurs, based upon the use for which a rental unit or mobile home space, as defined in section 38-12-201.5 (7), is intended, without negligence, carelessness, accident, or abuse of the premises or equipment or chattels by the tenant or home owner or members of the tenant's or home owner's household, or their invitees or guests.
- "Rent subsidy provider" means a public or private entity, including a public housing authority, that provides ongoing financial assistance to a landlord for the purpose of subsidizing rent.
- "Security deposit" means any advance or deposit of money, regardless of its denomination, the primary function of which is to secure the performance of a rental agreement for a residential premises or any part of a residential premises.
- "Tenant" has the meaning set forth in section 38-12-502 (9).
Source: L. 71: p. 592, § 1. C.R.S. 1963: § 58-1-27. L. 2021: Entire section amended, (SB 21-173), ch. 349, p. 2265, § 7, effective October 1.
ANNOTATION
Law reviews. For comment, "Colorado's Wrongful Withholding of Security Deposits Act: Three Litigious Shares in an Untested Law", see 49 Den. L.J. 453 (1973). For article, "The Colorado Security Deposit Act", see 50 U. Colo. L. Rev. 29 (1978).
Landlord undefined. This section does not define the term landlord nor does it state what constitutes the landlord-tenant relationship. Houle v. Adams State Coll., 190 Colo. 406 , 547 P.2d 926 (1976).
The legislative intent does not expand the common-law definition of a landlord and a tenant. Houle v. Adams State Coll., 190 Colo. 406 , 547 P.2d 926 (1976).
College board of trustees is not landlord. Houle v. Adams State Coll., 190 Colo. 406 , 547 P.2d 926 (1976).
Dormitory student is not tenant. Houle v. Adams State Coll., 190 Colo. 406 , 547 P.2d 926 (1976).
"Residential premise". A furnished condominium unit containing complete sleeping and eating facilities and available for short-term rentals is a "residential premise" subject to the provisions of this act. Haan v. Mtn. Queen Condo. Ass'n, Inc., 717 P.2d 969 (Colo. App. 1985), rev'd on other grounds, 753 P.2d 1234 ( Colo. 1988 ).
The language adopted by the parties to a rental agreement to describe a payment made by the tenant to the landlord prior to occupancy is not dispositive of the question of whether the payment constitutes a "security deposit". Mtn. Queen Condo Ass'n v. Haan, 753 P.2d 1234 (Colo. 1988).
Applied in In re Quintana, 28 B.R. 269 (Bankr. D. Colo. 1983).
38-12-103. Return of security deposit.
- A landlord shall, within one month after the termination of a lease or surrender and acceptance of the premises, whichever occurs last, return to the tenant the full security deposit deposited with the landlord by the tenant, unless the lease agreement specifies a longer period of time, but not to exceed sixty days. No security deposit shall be retained to cover normal wear and tear. In the event that actual cause exists for retaining any portion of the security deposit, the landlord shall provide the tenant with a written statement listing the exact reasons for the retention of any portion of the security deposit. When the statement is delivered, it shall be accompanied by payment of the difference between any sum deposited and the amount retained. The landlord is deemed to have complied with this section by mailing said statement and any payment required to the last known address of the tenant. Nothing in this section shall preclude the landlord from retaining the security deposit for nonpayment of rent, abandonment of the premises, or nonpayment of utility charges, repair work, or cleaning contracted for by the tenant.
- The failure of a landlord to provide a written statement within the required time specified in subsection (1) of this section shall work a forfeiture of all his rights to withhold any portion of the security deposit under this section.
-
- The willful retention of a security deposit in violation of this section shall render a landlord liable for treble the amount of that portion of the security deposit wrongfully withheld from the tenant, together with reasonable attorney fees and court costs; except that the tenant has the obligation to give notice to the landlord of his intention to file legal proceedings a minimum of seven days prior to filing said action.
- In any court action brought by a tenant under this section, the landlord shall bear the burden of proving that his withholding of the security deposit or any portion of it was not wrongful.
-
Upon cessation of his interest in the dwelling unit, whether by sale, assignment, death, appointment of a receiver, or otherwise, the person in possession of the security deposit, including but not limited to the landlord, his agent, or his executor, shall, within a reasonable time:
- Transfer the funds, or any remainder after lawful deductions under subsection (1) of this section, to the landlord's successor in interest and notify the tenant by mail of such transfer and of the transferee's name and address; or
- Return the funds, or any remainder after lawful deductions under subsection (1) of this section, to the tenant.
- Upon compliance with subsection (4) of this section, the person in possession of the security deposit shall be relieved of further liability.
- Upon receipt of transferred funds under subsection (4)(a) of this section, the transferee, in relation to such funds, shall be deemed to have all of the rights and obligations of a landlord holding the funds as a security deposit.
- Any provision, whether oral or written, in or pertaining to a rental agreement whereby any provision of this section for the benefit of a tenant or members of his household is waived shall be deemed to be against public policy and shall be void.
Source: L. 71: p. 592, § 1. C.R.S. 1963: § 58-1-28. L. 76: (2) amended, p. 314, § 67, effective May 20.
ANNOTATION
Analysis
I. GENERAL CONSIDERATION.
Law reviews. For comment, "Colorado's Wrongful Withholding of Security Deposits Act: Three Litigious Shares in an Untested Law", see 49 Den. L.J. 453 (1973). For article, "The Colorado Security Deposit Act", see 50 U. Colo. L. Rev. 29 (1978).
Purpose of section. From a consideration of the language of the entire section, it is evident that the legislative purpose of this section is to assure that tenants will not be wrongfully deprived of their security deposits, and that if so deprived they will be entitled to adequate judicial relief. Ball v. Weller, 39 Colo. App. 14, 563 P.2d 371 (1977).
This section is designed to assist tenants in vindicating their legal rights and to equalize the disparity in power which exists between landlord and tenant in conflicts over relatively small sums. Martin v. Allen, 193 Colo. 395 , 566 P.2d 1075 (1977).
This section provides a court remedy against landlords who withhold security deposits willfully and wrongfully, and the tenant's attorney should be paid for the time necessary to prevail; absent reasonable attorneys' fees, the security deposit law would not be enforced. Mau v. E.P.H. Corp., 638 P.2d 777 (Colo. 1981).
Security deposit actually belongs to tenant; it is only security for the landlord. Turner v. Lyon, 189 Colo. 234 , 539 P.2d 1241 (1975).
Landlords not absolved from notice requirement. The last sentence in subsection (1) does not absolve landlords from the notice requirement; it merely permits them, upon proper notice, to apply deposits against unpaid rent. Heatherridge Mgt. Co. v. Benson, 192 Colo. 190 , 558 P.2d 435 (1976).
Justification for requiring tenants to notify landlords prior to claiming treble damages, attorneys' fees, and court costs is to give the landlord one last week to return the security deposit. Turner v. Lyon, 189 Colo. 234 , 539 P.2d 1241 (1975).
"Willful" defined. The term "willful" in subsection (3)(a) means "deliberate". Turner v. Lyon, 189 Colo. 234 , 539 P.2d 1241 (1975).
When retention "willful". If the landlord deliberately fails to return the security deposit during the additional seven-day period, the retention is logically "willful" under this section. Turner v. Lyon, 189 Colo. 234 , 539 P.2d 1241 (1975).
Wrongful withholding of deposit determined. Failure to return the deposit, coupled with failure to provide a tenant with statutorily mandated written statement of reasons for the retention, makes the withholding of a deposit wrongful. Martinez v. Steinbaum, 623 P.2d 49 (Colo. 1981).
Deposit not "wrongfully" held. Where respondent authorized petitioner in writing to retain that portion of his deposit equal to one month's rent, petitioner did not withhold that part of the deposit "wrongfully", within the contemplation of subsection (3)(a). Heatherridge Mgt. Co. v. Benson, 192 Colo. 190 , 558 P.2d 435 (1976).
Evidence of landlord's good faith. The discrepancy between the amount of a security deposit retained and the amount of actual damages proved by the landlord is important evidence of his good faith. Guzman v. McDonald, 194 Colo. 160 , 570 P.2d 532 (1977).
Tenant may not accelerate statutory time requirements. McAuliffe v. Rooney, 38 Colo. App. 137, 552 P.2d 1031 (1976).
Where the statutory notice was given within the one-month period allowed by subsection (1), and only nine days after the surrender of the key to the premises, and suit was commenced prior to the expiration of the additional seven-day period contemplated by the notice requirements of subsection (3)(a), award of treble damages is improper. McAuliffe v. Rooney, 38 Colo. App. 137, 552 P.2d 1031 (1976).
A restrictive endorsement, by which a landlord attempts to create a waiver of a tenant's right to legal recourse, is void under this section. Anderson v. Rosebrook, 737 P.2d 417 (Colo. 1987).
A tenant cannot be compelled to arbitrate a claim for violation of the wrongful withholding of security deposits act. The act creates a cause of action enforceable in Colorado courts; the enforceability of the statutory cause of action in a legal proceeding cannot be limited or waived by an arbitration agreement. Thus an arbitration provision that would waive this cause of action in favor of mandatory arbitration is unenforceable to the extent that it applies to an action brought under the act. Ingold v. AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 116 ( Colo. 2007 ).
Statute as basis for jurisdiction. Houle v. Adams State Coll., 190 Colo. 406 , 547 P.2d 926 (1976).
Applied in In re Quintana, 28 B.R. 269 (Bankr. D. Colo. 1983).
II. TREBLE DAMAGES AND ATTORNEYS' FEES.
Constitutionality of attorneys' fees provision. The legitimate aims of subsection (3)(a) supply a rational basis for the distinction between prevailing tenant-plaintiffs, who are entitled to attorneys' fees, and prevailing landlord-defendants, who are not, and therefore the provision is constitutional. Torres v. Portillos, 638 P.2d 274 (Colo. 1981).
Equality of opportunity to recover attorneys' fees is not a fundamental right, and therefore the rational relationship test, not the strict scrutiny test, is the appropriate standard for equal protection review. Torres v. Portillos, 638 P.2d 274 (Colo. 1981).
Entitlement to attorneys' fees. Tenants who are successful on appeal are entitled to an award of reasonable attorneys' fees. Martin v. Allen, 193 Colo. 395 , 566 P.2d 1075 (1977); Kirkland v. Allen, 678 P.2d 568 (Colo. App. 1984).
Attorneys' fees allowable include those incurred on appeal. Martinez v. Steinbaum, 623 P.2d 49 (Colo. 1981).
Attorney fees allowable include those incurred in resolving an issue as to the amount of reasonable attorney fees incurred in the underlying litigation and those incurred on appeal. Mau v. E.P.H. Corp., 638 P.2d 777 (Colo. 1981).
Rationale for award of attorney fees. The reason this section provides for an award of attorney fees is two-fold: (1) To insulate the award of damages from being substantially reduced by the fees; and (2) to encourage the private bar to enforce its provisions in actions which generally involve small amounts of money. Ball v. Weller, 39 Colo. App. 14, 563 P.2d 371 (1977); Torres v. Portillos, 638 P.2d 274 ( Colo. 1981 ).
Successful tenants are entitled to recover attorney fees for landlord's independent actions challenging rulings and fee awards in the underlying security deposit litigation. Mishkin v. Young, 198 P.3d 1269 (Colo. App. 2008).
Hearing to determine amount of attorneys' fees. When a successful plaintiff has requested attorneys' fees in his complaint, such an award is mandatory, and it becomes incumbent upon the trial court to hold a hearing to determine the amount of reasonable attorneys' fees to be awarded. Ball v. Weller, 39 Colo. App. 14, 563 P.2d 371 (1977); Kirkland v. Allen, 678 P.2d 568 (Colo. App. 1984).
Awarding fees without hearing error. The trial court erred in awarding attorneys' fees to respondent without a hearing on their reasonableness. Heatherridge Mgt. Co. v. Benson, 192 Colo. 190 , 558 P.2d 435 (1976).
Factors considered in determining of reasonable fee. If the fee requested is reasonable in light of community standards and the other criteria to be considered by the court, it is not appropriate for a court to take into consideration what a major client may pay the attorney on an hourly basis or the possible absence of overhead expenses comparable to those borne by lawyers in private practice. Mau v. E.P.H. Corp., 638 P.2d 777 (Colo. 1981).
When penalty provision attaches. If a landlord does not return a security deposit within the required time, the penalty provision of subsection (3)(a) attaches to that portion of the money wrongfully retained, plus attorneys' fees, and court costs. Turner v. Lyon, 189 Colo. 234 , 539 P.2d 1241 (1975); Kirkland v. Allen, 678 P.2d 568 (Colo. App. 1984).
Where landlord deliberately fails to return security deposit within the additional seven-day period following the tenant's notice to landlord of his intention to file legal proceedings, such retention is logically "willful" under subsection (3)(a) treble damages provisions. Kirkland v. Allen, 678 P.2d 568 (Colo. App. 1984).
The purpose of the seven-day notice provision in subsection (3)(a) is to give landlords one last week to avoid treble damages by returning the security deposit. Mishkin v. Young, 107 P.3d 393 (Colo. 2005).
A landlord may not avoid treble damages by accounting for a security deposit during the seven-day period established by subsection (3)(a). The seven-day period is beyond the statutory deadline of subsection (1) and, therefore, the landlord has already forfeited all rights to retain the deposit. Mishkin v. Young, 107 P.3d 393 (Colo. 2005).
Statutory liability of subsection (3)(a) may be offset by an award, if any, made to the landlord by counterclaim for damages caused by the tenant to the property, and the landlord has the burden of proving the claim by a preponderance of the evidence. Turner v. Lyon, 189 Colo. 234 , 539 P.2d 1241 (1975).
Treble damages action not "frivolous" merely because landlord wins. A treble damages action under subsection (3)(a) cannot be characterized as "frivolous" or "groundless", as used in § 13-17-101(3), merely because the landlord prevails on the merits of his defense. Torres v. Portillos, 638 P.2d 274 (Colo. 1981).
Prospective renter was not entitled to treble damages pursuant to this section since deposit paid for rental of condominium unit was not a security deposit but was instead prepayment of the entire rent for said unit. Mtn. Queen Condo. Ass'n v. Haan, 753 P.2d 1234 (Colo. 1988).
Statute of limitations. The treble damages provision of this section, being penal in nature, is governed by the one-year statute of limitations; however, the recovery of the actual security deposit and the award of attorneys' fees, being remedial in nature, are limited by the six-year statute of limitations. Carlson v. McCoy, 193 Colo. 391 , 566 P.2d 1073 (1977).
38-12-104. Return of security deposit - hazardous condition - gas appliance.
- Anytime service personnel from any organization providing gas service to a residential building become aware of any hazardous condition of a gas appliance, piping, or other gas equipment, such personnel shall inform the customer of record at the affected address in writing of the hazardous condition and take any further action provided for by the policies of such personnel's employer. Such written notification shall state the potential nature of the hazard as a fire hazard or a hazard to life, health, property, or public welfare and shall explain the possible cause of the hazard.
- If the resident of the residential building is a tenant, such tenant shall immediately inform the landlord of the property or the landlord's agent in writing of the existence of the hazard.
- The landlord shall then have seventy-two hours excluding a Saturday, Sunday, or a legal holiday after the actual receipt of the written notice of the hazardous condition to have the hazardous condition repaired by a professional. "Professional" for the purposes of this section means a person authorized by the state of Colorado or by a county or municipal government through license or certificate where such government authorization is required. Where no person with such government authorization is available, and where there are no local requirements for government authorization, a person who is otherwise qualified and who possesses insurance with a minimum of one hundred thousand dollars public liability and property damage coverage shall be deemed a professional for purposes of this section. Proof of such repairs shall be forwarded to the landlord or the landlord's agent. Such proof may also be used as an affirmative defense in any action to recover the security deposit, as provided for in this section.
- If the landlord does not have the repairs made within seventy-two hours excluding a Saturday, Sunday, or a legal holiday, and the condition of the building remains hazardous, the tenant may opt to vacate the premises. After the tenant vacates the premises, the lease or other rental agreement between the landlord and tenant becomes null and void, all rights and future obligations between the landlord and tenant pursuant to the lease or other rental agreement terminate, and the tenant may demand the immediate return of all or any portion of the security deposit held by the landlord to which the tenant is entitled. The landlord shall have seventy-two hours following the tenant's vacation of the premises to deliver to the tenant all of, or the appropriate portion of, the security deposit plus any rent rebate owed to the tenant for rent paid by the tenant for the period of time after the tenant has vacated. If the seventy-second hour falls on a Saturday, Sunday, or legal holiday, the security deposit must be delivered by noon on the next day that is not a Saturday, Sunday, or legal holiday. The tenant shall provide the landlord with a correct forwarding address. No security deposit shall be retained to cover normal wear and tear. In the event that actual cause exists for retaining any portion of the security deposit, the landlord shall provide the tenant with a written statement listing the exact reasons for the retention of any portion of the security deposit. When the statement is delivered, it shall be accompanied by payment of the difference between any sum deposited and the amount retained. The landlord is deemed to have complied with this section by mailing said statement and any payments required by this section to the forwarding address of the tenant. Nothing in this section shall preclude the landlord from withholding the security deposit for nonpayment of rent or for nonpayment of utility charges, repair work, or cleaning contracted for by the tenant. If the tenant does not receive the entire security deposit or a portion of the security deposit together with a written statement listing the exact reasons for the retention of any portion of the security deposit within the time period provided for in this section, the retention of the security deposit shall be deemed willful and wrongful and, notwithstanding the provisions of section 38-12-103 (3), shall entitle the tenant to twice the amount of the security deposit and to reasonable attorney fees.
Source: L. 91: Entire section added, p. 1691, § 1, effective July 1.
ANNOTATION
Section does not abrogate common law remedy of constructive eviction for hazardous condition caused by an unsafe gas appliance. Copeland v. Lincoln, 166 P.3d 245 (Colo. App. 2007).
38-12-105. Late fees charged to tenants and mobile home owners - maximum late fee amounts - prohibited acts - penalties - period to cure violations - remedies - unfair or deceptive trade practice.
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A landlord shall not take any of the following actions or direct any agent to take any of the following actions on the landlord's behalf:
- Charge a tenant or home owner a late fee unless a rent payment is late by at least seven calendar days;
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Charge a tenant or home owner a late fee in an amount that exceeds the greater of:
- Fifty dollars; or
- Five percent of the amount of the past due rent payment;
- Require a tenant or home owner to pay a late fee unless the late fee is disclosed in the rental agreement;
- Remove or exclude a tenant from a dwelling or initiate a court process for the removal or exclusion of a tenant from a dwelling because the tenant fails to pay one or more late fees to the landlord;
- Terminate a tenancy or other estate at will or a lease in a mobile home park because a tenant or home owner fails to pay one or more late fees to the landlord;
- Impose a late fee on a tenant or home owner for the late payment or nonpayment of any portion of the rent that a rent subsidy provider, rather than the tenant or home owner, is responsible for paying;
- Impose a late fee more than once for each late payment, except that a landlord may impose a late fee more than once for a late payment if the total amount of such late fees does not exceed the amount described in subsection (1)(b) of this section;
- Require a tenant or home owner to pay any amount of interest on a late fee;
- Recoup any amount of a late fee from a rent payment made to the landlord by a tenant or home owner; or
- Charge a tenant or home owner a late fee unless the landlord provided the tenant or home owner written notice of the late fee within one hundred eighty days after the date upon which the rent payment was due.
- A provision of a lease of a landlord or person acting on behalf of a landlord that does not comply with the provisions of subsection (1) of this section is void and unenforceable. A tenant who is aggrieved by an action taken by a landlord or person acting on behalf of the landlord in violation of subsection (1) of this section may bring an action for injunctive relief pursuant to subsection (5) of this section.
- A landlord who violates subsection (1) of this section shall pay to an aggrieved tenant or home owner a penalty in the amount of fifty dollars for each violation.
- Except as described in subsection (3) of this section, and notwithstanding any other provision of this section to the contrary, a landlord who violates subsection (1) of this section has seven days to cure the violation, which seven days begins when the landlord receives written or electronic notice of the violation.
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If a landlord violates subsection (1) of this section and fails to timely cure the violation as described in subsection (4) of this section, a tenant or home owner may bring a civil action to seek one or more of the following remedies:
- Compensatory damages for injury or loss suffered;
- A penalty of at least one hundred fifty dollars but not more than one thousand dollars for each violation, payable to the tenant or home owner;
- Costs, including reasonable attorney fees to the prevailing party; and
- Other equitable relief the court finds appropriate.
- A tenant or home owner may raise an alleged violation of this section as an affirmative defense in a forcible entry and detainer proceeding.
- A late fee is distinct from rent, and a rental agreement may not classify a late fee as rent for the purposes of section 13-40-104 (1)(d).
Source: L. 2021: Entire section added, (SB 21-173), ch. 349, p. 2266, § 8, effective October 1.
PART 2 MOBILE HOME PARK ACT
38-12-200.1. Short title.
This part 2 shall be known and may be cited as the "Mobile Home Park Act".
Source: L. 85: Entire section added, p. 1198, § 1, effective June 6.
38-12-200.2. Legislative declaration.
The general assembly hereby declares that the purpose of this part 2 is to establish the relationship between the owner of a mobile home park and the owner of a mobile home situated in such park.
Source: L. 85: Entire section added, p. 1198, § 1, effective June 6.
ANNOTATION
Any error on part of trial court in finding mobile home park could have evicted caretaker from tenant's home was harmless where other evidence in record supports court's finding that landlord failed reasonably to accommodate tenant. Moreover, because this finding of the court related only to its conclusion to award punitive damages, it does not fatally infect court's liability determination. Boulder Meadows v. Saville, 2 P.3d 131 (Colo. App. 2000).
38-12-201. Application of part 2.
- This part 2 shall apply only to manufactured homes as defined in section 42-1-102 (106)(b), C.R.S.
- Repealed.
Source: L. 73: p. 641, § 1. C.R.S. 1963: § 58-2-1. L. 75: (1) amended, p. 1467, § 10, effective July 18. L. 81: (1) amended and (2) repealed, pp. 1813, 1817, §§ 1, 10, effective June 9. L. 89: (1) amended, p. 729, § 34, effective July 1. L. 94: (1) amended, p. 706, § 13, effective April 19. L. 95: (1) amended, p. 951, § 2, effective May 25.
ANNOTATION
Applied in Husar v. Larimer County Court, 629 P.2d 1104 (Colo. App. 1981).
38-12-201.3. Legislative declaration - increased availability of mobile home parks.
The general assembly hereby finds and declares that mobile homes, manufactured housing, and factory-built housing are important and effective ways to meet Colorado's affordable housing needs. The general assembly further finds and declares that, because of the unique aspects of mobile homes and mobile home park ownership, there is a need to protect mobile home owners from eviction with short notice so as to prevent mobile home owners from losing their shelter as well as any equity in their mobile homes. The general assembly encourages local governments to allow and protect mobile home parks in their jurisdictions and to enact plans to increase the number of mobile home parks in their jurisdictions. The general assembly further encourages local governments to provide incentives to mobile home park owners to attract additional mobile home parks and to increase the viability of current parks.
Source: L. 2005: Entire section added, p. 110, § 4, effective August 8. L. 2010: Entire section amended, (SB 10-156), ch. 343, p. 1584, § 1, effective July 1.
38-12-201.5. Definitions.
As used in this part 2 and in part 11 of this article 12, unless the context otherwise requires:
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"Entry fee" means any fee paid to or received from an owner of a mobile home park or an agent thereof except for:
- Rent;
- A security deposit to pay for actual damages to the premises or to secure rental payments;
- Fees charged by any governmental agency of the state, a county, a town, or a city;
- Utilities;
- Incidental reasonable charges for services actually performed by the mobile home park owner or the mobile home park owner's agent and agreed to in writing by the home owner; and
- Late fees.
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"Home owner" means any person or family of a person who owns a mobile home that is subject to a tenancy in a mobile home park under a rental agreement.
(2.5) "Late fee" has the meaning set forth in section 38-12-102 (3).
- "Management" or "landlord" means the owner or person responsible for operating and managing a mobile home park or an agent, employee, or representative authorized to act on the management's behalf in connection with matters relating to tenancy in the park.
- "Management visit" means an entry by management on a mobile home lot.
-
"Mobile home" means:
- A single-family dwelling that is built on a permanent chassis; is designed for long-term residential occupancy; contains complete electrical, plumbing, and sanitary facilities; is designed to be installed in a permanent or semipermanent manner with or without a permanent foundation; and is capable of being drawn over public highways as a unit or in sections by special permit; or
- A manufactured home, as defined in section 38-29-102 (6), if the manufactured home is situated in a mobile home park.
- "Mobile home park" or "park" means a parcel of land used for the continuous accommodation of five or more occupied mobile homes and operated for the pecuniary benefit of the owner of the parcel of land or the owner's agents, lessees, or assignees. "Mobile home park" does not include mobile home subdivisions or property zoned for manufactured home subdivisions.
- "Mobile home space", "space", "mobile home lot", or "lot" means a parcel of land within a mobile home park designated by the management to accommodate one mobile home and its accessory buildings and to which the required sewer and utility connections are provided by the park.
- "Premises" means a mobile home park and existing facilities and appurtenances of the park, including furniture and utilities where applicable, and grounds, areas, and existing facilities held out for the use of home owners generally or the use of which is promised to home owners.
- "Rent" means any money or other consideration to be paid to the management for the right of use, possession, and occupation of the premises.
- "Rental agreement" means an agreement, written or implied by law, between the management and a home owner establishing the terms and conditions of a tenancy, including reasonable rules and regulations promulgated by the park management. A lease is a rental agreement.
- "Resident" means an individual who resides in a mobile home that is located in a mobile home park, regardless of whether the individual is the home owner.
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"Retaliatory action" includes:
- Increasing rent or decreasing services in a selective or excessive manner, or in a nonuniform manner to the extent that the nonuniform increase or decrease is unrelated to a legitimate business purpose;
- Issuing mandatory fees in a selective or excessive manner, or in a nonuniform manner to the extent that the nonuniform issuance of the fees is unrelated to a legitimate business purpose;
- Issuing warnings, citations, or fines that are not lawful;
- Serving notices or threatening eviction when the notices or threats are not reasonably justified;
- Billing a home owner in a selective or excessive manner, or in a nonuniform manner to the extent that the nonuniform billing is unrelated to a legitimate business purpose, for an item or service for which the home owner has not previously been billed;
- Creating or modifying rules and regulations of the park that are not reasonably related to a legitimate purpose;
- Selectively enforcing rules or requirements of the park;
- Conducting management visits that are selective, nonuniform, or excessive; except that this subsection (12)(h) does not include management visits that are conducted for the purpose of providing notices that are required by law or by a rental agreement;
- Altering or refusing to renew an existing rental agreement;
- Surveilling a home owner who submits an oral or written complaint about a mobile home park to the management or to any federal, state, or local government agency; except that this subsection (12)(j) does not include routine, nonexcessive community inspections or documenting, photographing, or recording of violations of law, the rental agreement, or the rules and regulations of the park; or
- Reporting or publicizing damaging information about a home owner who submits an oral or written complaint about a mobile home park to the management or to any federal, state, or local government agency.
-
"Tenancy" means the right of a home owner to:
- Locate, maintain, and occupy a mobile home, including accessory structures for human habitation, on a space within a park;
- Make improvements to the space; and
- Use the services and facilities of the park.
Source: L. 81: Entire section added, p. 1813, § 2, effective June 9. L. 87: (1) R&RE, (1.5) added, (5), (7), and (9) amended, and (8) repealed, pp. 1310, 1315, §§ 2, 1, 15, effective May 8. L. 2010: (2) amended, (SB 10-156), ch. 343, p. 1584, § 2, effective July 1. L. 2019: IP amended, (HB 19-1309), ch. 281, p. 2629, § 5, effective May 23. L. 2020: Entire section R&RE, (HB 20-1196), ch. 195, p. 910, § 1, effective June 30. L. 2021: (1)(e) amended, (SB 21-266), ch. 423, p. 2805, § 36, effective July 2; IP, (1)(d), and (1)(e) amended and (1)(f) and (2.5) added, (SB 21-173), ch. 349, p. 2267, § 9, effective October 1.
Editor's note: Amendments to subsection (1)(e) by SB 21-173 and SB 21-266 were harmonized.
Cross references: For the legislative declaration in HB 19-1309, see section 1 of chapter 281, Session Laws of Colorado 2019.
38-12-202. Tenancy - notice to quit.
-
-
No tenancy or other lease or rental occupancy of space in a mobile home park shall commence without a written lease or rental agreement, and no tenancy in a mobile home park shall be terminated until a notice to quit has been served. Said notice to quit shall be in writing and in the form specified in section 13-40-107 (2), C.R.S. The property description required in section 13-40-107 (2), C.R.S., shall be deemed legally sufficient if it states:
- The name of the landlord or the mobile home park;
- The mailing address of the property;
- The location or space number upon which the mobile home is situate; and
- The county in which the mobile home is situate.
- Service of the notice to quit shall be as specified in section 13-40-108, C.R.S. Service by posting shall be deemed legally sufficient within the meaning of section 13-40-108, C.R.S., if the notice is affixed to the main entrance of the mobile home.
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- Except as otherwise provided in subsections (1)(c)(II) and (3) of this section, the management shall give a home owner at least ninety days after the date the notice is served or posted to sell the mobile home or remove it from the premises.
- If management terminates a tenancy on grounds described in section 38-12-203 (1)(f), the management shall give the home owner at least ten days after the date the notice is served or posted to sell the mobile home or remove it from the premises.
-
No tenancy or other lease or rental occupancy of space in a mobile home park shall commence without a written lease or rental agreement, and no tenancy in a mobile home park shall be terminated until a notice to quit has been served. Said notice to quit shall be in writing and in the form specified in section 13-40-107 (2), C.R.S. The property description required in section 13-40-107 (2), C.R.S., shall be deemed legally sufficient if it states:
- Repealed.
- In any notice provided by the management as required by this section, the management shall specify the reason for the termination, as described in section 38-12-203, of the tenancy that is the subject of the notice. If the management is terminating the tenancy because the mobile home or mobile home lot is out of compliance with local ordinances or state laws or rules relating to mobile homes and mobile home lots, as described in section 38-12-203 (1)(a), or out of compliance with written rules and regulations of the mobile home park, as described in section 38-12-203 (1)(c), the notice must include a statement advising the home owner that the home owner has a right to cure the noncompliance within ninety days after the date of service or posting of the notice to quit. This ninety-day period runs concurrently with the ninety-day period to sell the mobile home or remove it from the premises as set forth in subsection (1)(c)(I) of this section. Rent payment and other agreed tenant obligations remain in effect during this ninety-day period, and acceptance of rent by a landlord during this ninety-day period does not constitute a waiver of the landlord's right to terminate the tenancy for any noncompliance described in section 38-12-203 (1)(a) or (1)(c).
- Notwithstanding any other provision of this section, in any action to terminate a home owner's tenancy based on a violation described in section 38-12-203 (1)(a), the periods of time set forth in this section to provide home owners notice or a right to cure are superseded by any local ordinances, state laws or rules, or court orders that require a home owner's compliance within a shorter time period.
Source: L. 73: p. 641, § 1. C.R.S. 1963: § 58-2-2. L. 79: (1) amended, p. 1384, § 1, effective July 1. L. 81: IP(1)(a) R&RE, p. 1814, § 3, effective June 9. L. 87: (1)(c) and (1)(d) amended, p. 1311, § 3, effective May 8. L. 94: (1)(c) amended, p. 703, § 1, effective April 19. L. 96: (2) amended, p. 670, § 2, effective July 1. L. 99: (3) added, p. 65, § 1, effective August 4. L. 2000: (3) repealed, p. 148, § 2, effective July 1. L. 2010: Entire section amended, (SB 10-156), ch. 343, p. 1585, § 3, effective July 1. L. 2020: (1)(c) and (3) amended, (2) repealed, and (4) added, (HB 20-1196), ch. 195, p. 913, § 2, effective June 30.
Cross references: For the form specified for notice to terminate a tenancy, see § 13-40-107 (2).
ANNOTATION
Applied in Hurricane v. Kanover, Ltd., 651 P.2d 1218 (Colo. 1982).
38-12-202.5. Action for termination.
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The action for termination shall be commenced in the manner described in section 13-40-110, C.R.S. The property description shall be deemed legally sufficient and within the meaning of section 13-40-110, C.R.S., if it states:
- The name of the landlord or the mobile home park;
- The mailing address of the property;
- The location or space number upon which the mobile home is situate; and
- The county in which the mobile home is situate.
- Service of summons shall be as specified in section 13-40-112, C.R.S. Service by posting shall be deemed legally sufficient within the meaning of section 13-40-112, C.R.S., if the summons is affixed to the main entrance of the mobile home.
- Jurisdiction of courts in cases of forcible entry, forcible detainer, or unlawful detainer shall be as specified in section 13-40-109, C.R.S. Trial on the issue of possession shall be timely as specified in section 13-40-114, C.R.S., with no delay allowed for the determination of other issues or claims which may be severed at the discretion of the trial court.
- After commencement of the action and before judgment, any person not already a party to the action who is discovered to have a property interest in the mobile home shall be allowed to enter into a stipulation with the landlord and be bound thereby.
- The provisions of section 13-40-110.5 concerning suppression of court records apply to an action for termination.
Source: L. 79: Entire section added, p. 1385, § 2, effective July 1. L. 2020: (5) added, (HB 20-1009), ch. 37, p. 121, § 3, effective December 1.
38-12-203. Reasons for termination.
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The management of a mobile home park may terminate a tenancy only for one or more of the following reasons:
- Except in the case of a home owner who cures a noncompliance as described in section 38-12-202 (3), failure of the home owner to comply with local ordinances and state laws and rules relating to mobile homes and mobile home lots;
- Repealed.
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Except in the case of a home owner who cures a noncompliance as described in section 38-12-202 (3), failure of the home owner to comply with written rules and regulations of the mobile home park that are enforceable pursuant to section 38-12-214 (1), are necessary to prevent material damage to real or personal property or to the health or safety of one or more individuals, and were:
- Established by the management in the rental agreement at the inception of the tenancy;
- Amended after the inception of the tenancy with the consent of the home owner; or
- Amended after the inception of the tenancy without the consent of the home owner after providing sixty days' prior written notice to the home owner.
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- Condemnation or change of use of the mobile home park. When the owner of a mobile home park is formally notified by a notice of intent to acquire pursuant to section 38-1-121 (1) or other similar provision of law, or a complaint in a condemnation action from an appropriate governmental agency that the mobile home park, or any portion thereof, is to be acquired by the governmental agency or may be the subject of a condemnation proceeding, the landlord shall, within seventeen days, notify the home owners in writing of the terms of the notice of intent to acquire or complaint received by the landlord.
- If a landlord wants to change the use of a mobile home park, and the change of use has been approved by the local or state authority or does not require approval, and the change of use would result in the eviction of inhabited mobile homes, the landlord shall give the owner of each mobile home that is subject to the eviction a written notice of the landlord's intent to evict not less than twelve months before the change of use of the land, which notice must be mailed to each home owner.
- The making or causing to be made, with knowledge, of materially false or misleading statements on an application for tenancy;
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Conduct of the home owner or any lessee of the home owner or any guest, agent, invitee, or associate of the home owner or lessee of the home owner that:
- Occurs on the mobile home park premises and unreasonably endangers the life of the landlord, any home owner or lessee of the mobile home park, any person living in the park, or any guest, agent, invitee, or associate of the home owner or lessee of the home owner;
- Occurs on the mobile home park premises and constitutes willful, wanton, or malicious damage to or destruction of property of the landlord, any home owner or lessee of the mobile home park, any person living in the park, or any guest, agent, invitee, or associate of the home owner or lessee of the home owner;
- Occurs on the mobile home park premises, materially harms or threatens real or personal property or the health, safety, or welfare of one or more individuals or animals, including pet animals, as defined in section 35-80-102 (10), and constitutes a felony prohibited under article 3, 4, 6, 7, 9, 10, 12, or 18 of title 18; or
- Was the basis for an action that declared the mobile home or any of its contents a class 1 public nuisance under section 16-13-303.
- In an action pursuant to this part 2, the landlord shall have the burden of proving that the landlord complied with the relevant notice requirements and that the landlord provided the home owner with a statement of reasons for the termination. In addition to any other defenses a home owner may have, it shall be a defense that the landlord's allegations are false or that the reasons for termination are invalid.
Source: L. 73: p. 642, § 1. C.R.S. 1963: § 58-2-3. L. 79: (1)(d) amended, p. 1386, § 3, effective July 1. L. 81: (1)(c) amended, p. 1814, § 4, effective June 9. L. 84: (1)(c) amended, p. 976, § 1, effective July 1. L. 87: (1)(a), (1)(b), (1)(c), (1)(d), and (2) amended, p. 1311, § 4, effective May 8. L. 94: (1)(f) added, p. 703, § 2, effective April 19. L. 96: IP(1), (1)(a), (1)(c), and (2) amended, p. 671, § 3, effective July 1. L. 2010: (1)(c) and (1)(d) amended, (SB 10-156), ch. 343, p. 1586, § 4, effective July 1. L. 2020: IP(1), (1)(a), (1)(c), (1)(d)(II), (1)(e), (1)(f)(III), and (1)(f)(IV) amended and (1)(b) repealed, (HB 20-1196), ch. 195, p. 914, § 3, effective June 30.
ANNOTATION
Applied in Hurricane v. Kanover, Ltd., 651 P.2d 1218 ( Colo. 1982 ); Duhon v. Nelson, 126 P.3d 262 (Colo. App. 2005).
38-12-204. Nonpayment of rent - notice required for rent increase.
- Any tenancy or other estate at will or lease in a mobile home park may be terminated upon the landlord's written notice to the home owner requiring, in the alternative, payment of rent or the removal of the home owner's unit from the premises, within a period of not less than ten days after the date notice is served or posted, for failure to pay rent when due.
- Rent shall not be increased without sixty days' written notice to the home owner. In addition to the amount and the effective date of the rent increase, such written notice shall include the name, address, and telephone number of the mobile home park management, if such management is a principal owner, or owner of the mobile home park and, if the owner is other than a natural person, the name, address, and telephone number of the owner's chief executive officer or managing partner; except that such ownership information need not be given if it was disclosed in the rental agreement made pursuant to section 38-12-213.
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A landlord shall not increase rent more than one time in any twelve-month period of consecutive occupancy by the tenant, regardless of:
- Whether there is a written rental agreement for the tenancy;
- The length of the tenancy; and
- Whether the tenant's rental agreement is for a fixed tenancy, a month-to-month tenancy, or an indefinite term.
Source: L. 73: p. 642, § 1. C.R.S. 1963: § 58-2-4. L. 77: Entire section amended, p. 1708, § 1, effective July 7. L. 85: Entire section amended, p. 1199, § 1, effective July 1. L. 87: Entire section amended, p. 1312, § 5, effective May 8. L. 2019: (1) amended, (HB 19-1309), ch. 281, p. 2629, § 6, effective May 23. L. 2021: (3) added, (HB 21-1121), ch. 348, p. 2260, § 3, effective June 25.
Cross references: For the legislative declaration in HB 19-1309, see section 1 of chapter 281, Session Laws of Colorado 2019.
38-12-204.3. Notice required for termination.
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Where the tenancy of a mobile home owner is being terminated under section 38-12-202 or section 38-12-204, the landlord or mobile home park owner shall provide such mobile home owner with written notice as provided for in subsection (2) of this section. Service of such notice shall occur at the same time and in the same manner as service of:
- The notice to quit as provided in section 38-12-202 (1); or
- The notice of nonpayment of rent as provided in section 38-12-204 (1).
- The notice required under this section must be in at least ten-point type and must read as follows:
IMPORTANT NOTICE TO THE HOME OWNER:
This notice and the accompanying notice to quit/notice of nonpayment of rent are the first steps in the eviction process. Any dispute you may have regarding the grounds for eviction should be addressed with your landlord or the management of the mobile home park or in the courts if an eviction action is filed. Please be advised that the "Mobile Home Park Act", part 2 of article 12 of title 38, Colorado Revised Statutes, and the "Mobile Home Park Act Dispute Resolution and Enforcement Program" created in section 38-12-1104, Colorado Revised Statutes, may provide you with legal protection. NOTICE TO QUIT: In order to terminate a home owner's tenancy, the landlord or management of a mobile home park must serve to a home owner a notice to quit. The notice must be in writing and must contain certain information, including: o The grounds for the termination of the tenancy; o Whether or not the home owner has a right to cure under the "Mobile Home Park Act"; and o That the home owner has the option of mediation pursuant to section 38-12-216, Colorado Revised Statutes, of the "Mobile Home Park Act" and the option of filing a complaint through the "Mobile Home Park Act Dispute Resolution and Enforcement Program" created in section 38-12-1104, Colorado Revised Statutes. NOTICE OF NONPAYMENT OF RENT: In order to terminate a home owner's tenancy due to nonpayment of rent, the landlord or management of a mobile home park must serve to a home owner a notice of nonpayment of rent. The notice must be in writing and must require that the home owner either make payment of rent or sell the owner's unit or remove it from the premises within a period of not less than ten days after the date the notice is served or posted, for failure to pay rent when due. CURE PERIODS: If the home owner has a right to cure under the "Mobile Home Park Act", the landlord or management of a mobile home park cannot terminate a home owner's tenancy without first providing the home owner with a time period to cure the noncompliance. "Cure" refers to a home owner remedying, fixing, or otherwise correcting the situation or problem that made the tenancy subject to termination pursuant to sections 38-12-202, 38-12-203, or 38-12-204, Colorado Revised Statutes. COMMENCEMENT OF LEGAL ACTION TO TERMINATE THE TENANCY: After the last day of the applicable notice period required by section 38-12-202 (1)(c), Colorado Revised Statutes, a legal action may be commenced to take possession of the space leased by the home owner. In order to evict a home owner, the landlord or management of the mobile home park must prove: o The landlord or management complied with the notice requirements of the "Mobile Home Park Act"; o The landlord or management provided the home owner with a statement of reasons for termination of the tenancy; and o The reasons for termination of the tenancy are true and valid under the "Mobile Home Park Act". To defend against an eviction action, a home owner must appear in court. If the court rules in favor of the landlord or management of the mobile home park, the home owner has not less than thirty days from the time of the ruling to either remove or sell the mobile home and to vacate the premises. If the home owner wishes to extend such period beyond thirty days but not more than sixty days from the date of the ruling, the home owner shall prepay to the landlord an amount equal to a pro rata share of rent for each day following the expiration of the initial thirty-day period after the court's ruling that the mobile home owner will remain on the premises. All prepayments shall be paid no later than thirty days after the court ruling. This section does not preclude earlier removal by law enforcement officers of a mobile home or one or more mobile home owners or occupants from the mobile home park if a mobile home owner violates article 3, 4, 6, 7, 9, 10, 12, or 18 of title 18 or section 16-13-303, Colorado Revised Statutes.
Source: L. 2000: Entire section added, p. 146, § 1, effective July 1. L. 2010: (2) amended, (SB 10-156), ch. 343, p. 1587, § 5, effective July 1. L. 2019: (2) amended, (HB 19-1309), ch. 281, p. 2629, § 7, effective May 23. L. 2020: (2) amended, (HB 20-1196), ch. 195, p. 915, § 4, effective June 30.
Cross references: For the legislative declaration in HB 19-1309, see section 1 of chapter 281, Session Laws of Colorado 2019.
38-12-205. Termination prohibited.
A tenancy or other estate at will or lease in a mobile home park may not be terminated solely for the purpose of making the home owner's space in the park available for another mobile home or trailer coach.
Source: L. 73: p. 642, § 1. C.R.S. 1963: § 58-2-5. L. 87: Entire section amended, p. 1312, § 6, effective May 8.
38-12-206. Home owner meetings - assembly in common areas.
Home owners shall have the right to meet and establish a homeowners' association. Meetings of home owners or the homeowners' association relating to mobile home living and affairs in their park common area, community hall, or recreation hall, if such a facility or similar facility exists, shall not be subject to prohibition by the park management if the common area or hall is reserved according to the park rules and such meetings are held at reasonable hours and when the facility is not otherwise in use; except that no such meetings shall be held in the streets or thoroughfares of the mobile home park.
Source: L. 73: p. 642, § 1. C.R.S. 1963: § 58-2-6. L. 87: Entire section amended, p. 1313, § 7, effective May 8. L. 2005: Entire section amended, p. 109, § 1, effective August 8. L. 2010: Entire section amended, (SB 10-156), ch. 343, p. 1588, § 6, effective July 1.
38-12-207. Security deposits - legal process.
- The owner of a mobile home park or the owner's agents may charge a security deposit in an amount not greater than one month's rent.
- Legal process, other than eviction, shall be used for the collection of utility charges and incidental service charges other than those provided by the rental agreement.
- A security deposit remains the property of the home owner, and a landlord shall deposit each security deposit into a separate trust account to be administered by the landlord as a private trustee. For the purpose of preserving the corpus, the landlord shall not commingle the trust funds with other money; however, the landlord may keep the interest and profits earned from the corpus as compensation for administering the trust account.
Source: L. 73: p. 642, § 1. C.R.S. 1963: § 58-2-7. L. 81: (1) R&RE, p. 1815, § 5, effective June 9. L. 2020: (1) amended and (3) added, (HB 20-1196), ch. 195, p. 917, § 5, effective June 30.
38-12-208. Remedies.
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- Upon granting judgment for possession by the landlord in a forcible entry and detainer action, the court shall immediately issue a writ of restitution which the landlord shall take to the sheriff. In addition, if a money judgment has been requested in the complaint and if service was accomplished by personal service, the court shall determine and enter judgment for any amounts due to the landlord and shall calculate a pro rata daily rent amount that must be paid for the home to remain in the park. The court may rely upon information provided by the landlord or the landlord's attorney when determining the pro rata daily rent amount to be paid by the home owner. Upon receipt of the writ of restitution, the sheriff shall serve notice in accordance with the requirements of section 13-40-108, C.R.S., to the home owner of the court's decision and entry of judgment.
- The notice of judgment must state that, at a specified time not less than thirty days from the entry of judgment, which may be extended to not more than sixty days after the entry of judgment if the home owner has prepaid no later than thirty days after the court ruling to the landlord an amount equal to a pro rata share of rent for each day following the expiration of the initial thirty-day period after the court's ruling that the mobile home owner will remain on the premises, and in instances where the mobile home must be removed from the mobile home lot, the sheriff shall return to serve a writ of restitution and superintend the peaceful and orderly removal of the mobile home under that order of court. The notice of judgment must also advise the home owner, in instances where the mobile home must be removed from the mobile home lot, to prepare the mobile home for removal from the premises by removing the skirting, disconnecting utilities, attaching tires, and otherwise making the mobile home safe and ready for highway travel.
- Should the home owner fail to have the mobile home safe and ready for physical removal from the premises or should inclement weather or other unforeseen problems occur at the time specified in the notice of judgment, the landlord and the sheriff may, by written agreement, extend the time for the execution of the writ of restitution to allow time for the landlord to arrange to have the necessary work done or to permit the sheriff's execution of the writ of restitution at a time when weather or other conditions will make removal less hazardous to the mobile home.
- If the mobile home is not removed from the landlord's land on behalf of the mobile home owner within the time permitted by the writ of restitution, then the landlord and the sheriff shall have the right to take possession of the mobile home for the purposes of removal and storage. The liability of the landlord and the sheriff in such event shall be limited to gross negligence or willful and wanton disregard of the property rights of the home owner. The responsibility to prevent freezing and to prevent wind and weather damage to the mobile home lies exclusively with those persons who have a property interest in the mobile home; except that the landlord may take appropriate action to prevent freezing, to prevent wind and weather damage, and to prevent damage caused by vandals.
- Reasonable removal and storage charges and the costs associated with preventing damage caused by wind, weather, or vandals can be paid by any party in interest. Those charges will run with the mobile home, and whoever ultimately claims the mobile home will owe that sum to the person who paid it.
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- Prior to the issuance of said writ of restitution, the court shall make a finding of fact based upon evidence or statements of counsel that there is or is not a security agreement on the mobile home being subjected to the writ of restitution. A written statement on the mobile home owner's application for tenancy with the landlord that there is no security agreement on the mobile home shall be prima facie evidence of the nonexistence of such security agreement.
- In those cases where the court finds there is a security agreement on the mobile home subject to the writ of restitution and where that holder of the security agreement can be identified with reasonable certainty, then, upon receipt of the writ of restitution, the plaintiff shall promptly inform the holder of such security agreement as to the location of the mobile home, the name of the landlord who obtained the writ of restitution, and the time when the mobile home will be subject to removal by the sheriff and the landlord.
- The remedies provided in part 1 of this article and article 40 of title 13, C.R.S., except as inconsistent with this part 2, shall be applicable to this part 2.
Source: L. 73: p. 643, § 1. C.R.S. 1963: § 58-2-8. L. 79: Entire section R&RE, p. 1386, § 4, effective July 1. L. 87: (1)(a) to (1)(d) amended, p. 1313, § 8, effective May 8. L. 91: (1)(d) and (1)(e) amended, p. 1695, § 3, effective July 1. L. 2010: (1)(a) and (1)(b) amended, (SB 10-156), ch. 343, p. 1589, § 7, effective July 1. L. 2019: (1)(b) amended, (HB 19-1309), ch. 281, p. 2630, § 8, effective May 23.
Cross references: (1) For security deposits to secure the performance of a rental agreement and the wrongful withholding of such, see §§ 38-12-101 to 38-12-104; for the general provisions for forcible entry and detainer, see §§ 13-40-101 to 13-40-123.
(2) For the legislative declaration in HB 19-1309, see section 1 of chapter 281, Session Laws of Colorado 2019.
38-12-209. Entry fees prohibited - security deposit - court costs.
- The owner of a mobile home park, or the agent of such owner, shall neither pay to nor receive from an owner or a seller of a mobile home an entry fee of any type as a condition of tenancy in a mobile home park.
- Repealed.
- The trial judge may award court costs and attorney fees in any court action brought pursuant to any provision of this part 2 to the prevailing party upon finding that the prevailing party undertook the court action and legal representation for a legally sufficient reason and not for a dilatory or unfounded cause.
- The management or a resident may bring a civil action for violation of the rental agreement or any provision of this part 2 in the appropriate court of the county in which the park is located. Either party may recover actual damages or the court may in its discretion award such equitable relief as it deems necessary, including the enjoining of either party from further violations.
Source: L. 75: Entire section added, p. 1414, § 1, effective July 1. L. 79: (1), IP(2), and (2)(b) amended and (3) added, p. 1387, § 5, effective July 1. L. 81: (2)(b) amended and (4) added, p. 1815, §§ 6, 7, effective June 9. L. 87: (2)(b) and (2)(e) amended, p. 1313, § 9, effective May 8. L. 2020: (2) repealed and (4) amended, (HB 20-1196), ch. 195, p. 917, § 6, effective June 30.
38-12-210. Closed parks prohibited.
- Neither the owner of a mobile home park nor the owner's agent may require as a condition of tenancy in a mobile home park that a prospective home owner has purchased a mobile home from any particular seller or from any one of a particular group of sellers.
- Such owner or agent shall not give any special preference in renting to a prospective home owner who has purchased a mobile home from a particular seller.
- A seller of mobile homes shall not require as a condition of sale that a purchaser locate in a particular mobile home park or in any one of a particular group of mobile home parks.
- The owner or operator of a mobile home park shall treat all persons equally in renting or leasing available space. Notwithstanding the foregoing, nothing in this subsection (4) shall be construed to preclude owners and operators of mobile home parks from providing housing for older persons as defined in section 24-34-502 (7)(b), C.R.S.
Source: L. 75: Entire section added, p. 1414, § 1, effective July 1. L. 81: (4) added, p. 1815, § 8, effective June 9. L. 87: (1) and (2) amended, p. 1314, § 10, effective May 8. L. 92: (4) amended, p. 1128, § 12, effective July 1. L. 2020: (1) amended, (HB 20-1196), ch. 195, p. 918, § 7, effective June 30.
38-12-211. Selling fees prohibited - "for sale" signs permitted.
- Neither the owner of a mobile home park nor the owner's agent may require payment of any type of selling fee or transfer fee by either a home owner in the park wishing to sell the home owner's mobile home to another party or by any party wishing to buy a mobile home from a home owner in the park as a condition of tenancy in a park for the prospective buyer.
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- This section does not prevent the owner of a mobile home park or the owner's agent from applying the normal park standards to prospective buyers before granting or denying tenancy or from charging a reasonable selling fee or transfer fee for services actually performed and agreed to in writing by a home owner.
- Nothing in this section shall be construed to affect the rent charged by a landlord to a home owner pursuant to a rental agreement.
- The owner of a mobile home may place a "for sale" sign on or in the owner's mobile home. The size, placement, and character of the sign is subject to reasonable rules and regulations of the mobile home park.
Source: L. 75: Entire section added, p. 1415, § 1, effective July 1. L. 79: Entire section amended, p. 1388, § 6, effective July 1. L. 87: Entire section amended, p. 1314, § 11, effective May 8. L. 2020: Entire section amended, (HB 20-1196), ch. 195, p. 918, § 8, effective June 30.
38-12-212. Certain types of landlord-seller agreements prohibited.
A seller of mobile homes shall not pay or offer cash or other consideration to the owner of a mobile home park or the park owner's agent for the purpose of reserving spaces or otherwise inducing acceptance of one or more mobile homes in a mobile home park.
Source: L. 75: Entire section added, p. 1415, § 1, effective July 1. L. 2020: Entire section amended, (HB 20-1196), ch. 195, p. 918, § 9, effective June 30.
38-12-212.3. Responsibilities of landlord - acts prohibited.
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Except as otherwise provided in this section:
- In any rental agreement, the landlord is deemed to covenant, warrant, and maintain, throughout the period of the tenancy described in the rental agreement, premises that are safe, clean, fit for human habitation and reasonable use, and accessible to people with disabilities;
- A landlord is responsible for and shall pay the cost of the maintenance and repair of any sewer lines, water lines, utility service lines, or related connections owned and provided by the landlord to the utility pedestal or pad space for a mobile home located in the park; and
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A landlord shall ensure that:
- All plumbing lines and other utility connections owned and provided by the landlord to the utility pedestal or pad space for each mobile home in the park have plumbing and utility connections that conformed to applicable law in effect at the time they were installed and are maintained in good working order;
- Each pad space is connected to a sewage disposal system approved under applicable law; and
- Running water and reasonable amounts of water are furnished at all times to each utility pedestal or pad space; except that a landlord need not satisfy the conditions described in this subsection (1)(a)(III)(C) if a mobile home is individually metered and the tenant occupying the mobile home fails to pay for water services; the local government in which the mobile home park is situated shuts off water service to a mobile home for any reason; weather conditions present a likelihood that water pipes will freeze, water pipes to a mobile home are wrapped in heated pipe tape, and the utility company has shut off electrical service to a mobile home for any reason or the heat tape malfunctions for any reason; running water is not available for any other reason outside the landlord's control to prevent through reasonable and timely maintenance; or the landlord is making repairs or improvements to the items described in subsection (1)(a)(II) of this section, the landlord has provided reasonable advance notice to the mobile home residents of a service disruption that is required in connection with the repairs or improvements, and the service disruption continues for no longer than twenty-four hours.
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If a landlord fails to maintain or repair the items described in subsection (1)(a)(II) of this section:
- The landlord is responsible for and shall pay the cost of repairing any damage to a mobile home or mobile home lot that results from the failure;
- The landlord is responsible for and shall pay the cost of providing alternative sources of potable water and maintaining portable toilets, which portable toilets are located reasonably near affected mobile homes in a manner that renders them accessible to people with disabilities, no later than twenty-four hours after the service disruption begins, unless conditions beyond the landlord's control prevent compliance with this subsection (1)(b)(II); and
- The landlord shall reimburse residents for any damages to their persons or property, for any loss of use of their property, and for any expenses that they reasonably incur as a result of the failure.
- A landlord shall give a minimum of forty-eight hours' notice to residents if water service will be disrupted for more than two hours for planned improvements, maintenance, or repairs. The landlord shall attempt to give a reasonable amount of notice to residents if water service will be disrupted for any other reasons unless conditions are such that providing the notice would result in property damage, health, or safety concerns or when conditions otherwise require emergency repair.
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Except as otherwise provided in this section:
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In addition to the responsibilities described in subsection (1)(a) of this section, a landlord is responsible for:
- Any accessory buildings or structures, including sheds and carports, that are owned by the landlord and provided for the use of the residents; and
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The premises, including:
- Maintaining all common areas in clean condition, good repair, and in compliance with applicable health and safety laws; keeping common areas and facilities generally available for use by park residents; and keeping common areas accessible to people with disabilities;
- Maintaining roads and other pavement owned by the landlord in a passable, safe condition that is sufficient to provide access for residents' vehicles, emergency vehicles, vans providing transportation services to persons who are elderly or disabled, and school buses, if applicable, which maintenance includes snow removal, ensuring adequate drainage, and maintaining pavement above water lines;
- Maintaining lot grades, regrading lots as necessary to prevent the accumulation of stagnant water and the detrimental effects of moving water, and taking reasonably necessary steps to maintain the integrity of the foundation of each mobile home's utility pedestal or pad space in order to prevent structural damage to the mobile home, except in circumstances where the need for such maintenance is caused by a resident's actions; and
- Maintaining trees on the premises in a manner that protects the safety of residents of the park and their property, including the preservation of healthy, mature trees that home owners reasonably expected to remain on the premises when they signed their rental agreements, so long as such preservation does not pose a safety risk to any person, property, or infrastructure.
- A landlord shall not require a resident to assume any of the responsibilities described in subsection (1) or (2) of this section as a condition of any home owner's tenancy in the park.
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Nothing in this section may be construed as:
- Limiting the liability of an individual for the cost of repairing any damage caused by the individual to the landlord's property or other property located in the park; or
- Restricting a landlord from requiring a home owner to comply with rules and regulations of the park that are enforceable pursuant to section 38-12-214 or with terms of the rental agreement and any covenants binding upon the landlord or home owner, including covenants running with the land that pertain to the cleanliness of the home owner's lot and routine lawn and yard maintenance, and excluding major landscaping projects.
- A landlord shall establish and maintain an emergency contact number, post the number in common areas of the park, and communicate the number to home owners in each rental agreement and each revision of the park rules and regulations. A home owner who uses the emergency contact number in a timely manner to report a problem with a condition described in subsection (1) or (2) of this section is deemed to have provided notice to the landlord of the problem.
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If a landlord fails to comply with the requirements of this section, a home owner of the park may file a complaint with the division of housing pursuant to the "Mobile Home Park Act Dispute Resolution and Enforcement Program" created in section 38-12-1104. If the division finds by a written determination that the landlord has violated this section, the division may:
- Impose penalties, as described in section 38-12-1105 (5);
- Issue an order to cease and desist, as described in section 38-12-1105 (6);
- Require the landlord to reduce the rent owed by a home owner on a prorated basis to reflect the home owner's loss of use of the mobile home space; or
- Require the landlord to compensate a home owner for housing expenses on a per diem basis if the home owner is displaced from the home owner's mobile home as a result of the landlord's violation.
Source: L. 91: Entire section added, p. 1679, § 1, effective April 19. L. 2010: (1)(a)(I) and (1)(b) amended and (1)(c) added, (SB 10-156), ch. 343, p. 1589, § 8, effective July 1. L. 2020: Entire section amended, (HB 20-1196), ch. 195, p. 919, § 10, effective June 30.
38-12-212.4. Required disclosure and notice of water usage and billing - responsibility for leaks.
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If the management charges home owners individually for water usage in the park, then, on or before January 31 of each year, the management shall provide to each home owner and post in a clearly visible location in at least one common area of the mobile home park the following information:
- The methodology by which the management calculates the amount charged to each home owner for water usage on the home owner's lot;
- The methodology by which the management calculates the amount charged to each home owner for water usage in common areas of the mobile home park; and
- The current residential water rate schedule of the water utility or municipal water service provider that supplies water to the park.
- If the management charges home owners for water usage in the park, whether individually or in an aggregate amount, the management shall provide to each home owner a monthly water bill that indicates the amount owed by the home owner, the total amount owed by all the residents in the mobile home park, and, if the management purchases the water from a provider, the total amount paid by the management to the provider.
- The management shall not charge a home owner for any costs in addition to the actual cost of water billed to the management.
- The management shall use a methodology that is reasonable, equitable, and consistent for billing home owners for any type of water usage.
- If the management learns of a leak in a water line inside the park, the management shall notify each home owner of the leak within twenty-four hours.
- The management shall not bill a home owner for any water usage that is caused by a leak in a water line inside the park.
Source: L. 2020: Entire section added, (HB 20-1196), ch. 195, p. 922, § 11, effective June 30.
38-12-212.5. Prohibition on retaliation.
- The management shall not take retaliatory action against a home owner who exercises any right conferred upon the home owner by this part 2, part 11 of this article 12, or any other provision of law.
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Except as described in subsection (3) of this section, in an action or administrative proceeding by or against a home owner, the management's action is presumed to be retaliatory if, within the one hundred twenty days preceding the management's action, the home owner:
- Complained or expressed an intention to complain to a governmental agency about a matter relating to the mobile home park;
- Submitted a complaint to the management about a violation described in this part 2;
- Organized or became a member of a tenants' association or similar organization; or
- Made any other effort to secure or enforce any of the rights or remedies provided by this part 2 or any other provision of law.
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The presumption of retaliatory action described in subsection (2) of this section does not apply to an action or administrative hearing where the management:
- Addresses nonpayment of rent by a home owner, as described in section 38-12-204; or
- Was notified by a peace officer or otherwise became aware that the mobile home that is the basis of the administrative hearing was being operated as an illegal drug laboratory, as defined in section 25-18.5-101 (8).
- The management may rebut a presumption of retaliation with sufficient evidence of a nonretaliatory purpose.
- The rights and remedies provided by this section are available to home owners in addition to the anti-retaliation protection provided in section 38-12-1105 (13).
Source: L. 2020: Entire section added, (HB 20-1196), ch. 195, p. 922, § 11, effective June 30.
38-12-212.7. Landlord utilities account.
- Whenever a landlord contracts with a utility for service to be provided to a resident, the usage of which is to be measured by a master meter or other composite measurement device, such landlord shall remit to the utility all moneys collected from each resident as payment for the resident's share of the charges for such utility service within forty-five days of the landlord's receipt of payment.
- If a landlord fails to timely remit utility moneys collected from residents as required by subsection (1) of this section, such utility may, after written demand therefor is served upon the landlord, require the landlord to deposit an amount equal to the average daily charge for the usage of such utility service for the preceding twelve months multiplied by the sum of ninety.
- Any utility which prevails in an action brought to enforce the provisions of this section shall be entitled to an award of its reasonable attorney fees and court costs.
Source: L. 91: Entire section added, p. 1679, § 1, effective April 19.
38-12-213. Rental agreement - disclosure of terms in writing - prohibited provisions.
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The management shall adequately disclose the terms and conditions of a tenancy in writing in a rental agreement to any prospective home owner before the rental or occupancy of a mobile home space or lot. The disclosures must include:
- The term of the tenancy and the amount of rent therefor, subject to the requirements of subsection (4) of this section;
- The day rental payment is due and payable;
- The day when unpaid rent is considered in default for the purpose of establishing a late fee, which day may not be less than ten calendar days after the day rent is due and payable;
- The rules and regulations of the park then in effect;
- The name and mailing address where a manager's decision can be appealed; and
- All charges to the home owner other than rent, including late fees.
- Said rental agreement shall be signed by both the management and the home owner, and each party shall receive a copy thereof.
- The management and the home owner may include in a rental agreement terms and conditions not prohibited by this part 2.
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The terms of tenancy shall be specified in a written rental agreement subject to the following conditions:
- The standard rental agreement shall be for a month-to-month tenancy.
- Upon written request by the home owner to the landlord, the landlord shall allow a rental agreement for a fixed tenancy of not less than one year if the home owner is current on all rent payments and is not in violation of the terms of the then-current rental agreement; except that an initial rental agreement for a fixed tenancy may be for less than one year in order to ensure conformity with a standard anniversary date. A landlord shall not evict or otherwise penalize a home owner for requesting a rental agreement for a fixed period.
- A landlord may, in the landlord's discretion, allow a lease for a fixed period of longer than one year. In such circumstances, the requirements of paragraphs (a) and (b) of this subsection (4) shall not apply.
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A rental agreement may not include any provision:
- By which a home owner waives any rights created by this part 2 or part 11 of this article 12;
- That requires a home owner to agree to a possessory lien;
- That binds a home owner to arbitration in lieu of a civil trial; or
- That authorizes a third person to confess judgment on a claim that arises from the rental agreement, this part 2, or part 11 of this article 12.
- Any provision of a rental agreement that is prohibited by subsection (5) of this section is against public policy, unenforceable, and void.
Source: L. 81: Entire section added, p. 1815, § 9, effective June 9. L. 87: IP(1), (1)(f), (2), and (3) amended, p. 1314, § 12, effective May 8. L. 2005: (1)(a) amended and (4) added, p. 109, § 2, effective August 8. L. 2020: (5) and (6) added, (HB 20-1196), ch. 195, p. 924, § 12, effective June 30. L. 2021: (6) amended, (SB 21-266), ch. 423, p. 2806, § 37, effective July 2; IP(1), (1)(c), (1)(e), and (1)(f) amended, (SB 21-173), ch. 349, p. 2268, § 10, effective October 1.
38-12-214. Rules and regulations - amendments - notice - complaints.
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The management shall adopt written rules and regulations concerning home owners' use and occupancy of the premises. Except as otherwise provided in this section, such rules and regulations are enforceable against a home owner only if:
- Their purpose is to promote the safety or welfare of the home owners, protect and preserve the premises from abuse, or make a fair distribution of services and facilities held out for the home owners generally;
- They are reasonably related to a legitimate purpose, for which they are adopted;
- They are not arbitrary, capricious, unreasonable, retaliatory, or discriminatory in nature;
- They are sufficiently explicit in prohibition, direction, or limitation of each home owner's conduct to fairly inform each home owner of what the home owner must do or not do to comply; and
- They are established in the rental agreement at the inception of the tenancy, amended subsequently with the consent of the home owner, or, except as described in subsection (2) of this section, amended subsequently without the consent of the home owner after the management has provided written notice of the amendments to the home owner at least sixty days before the amendments become effective, and, if applicable, enforced in compliance with subsection (3) of this section.
- When a mobile home is owned by a person other than the owner of the mobile home park in which the mobile home is located, the mobile home is a separate unit of ownership, and rules and regulations that impose restrictions or requirements on that separate unit that are adopted after the home owner signs the rental agreement and without the consent of the home owner are presumed unreasonable. Nothing in this subsection (2) prohibits the management from requiring compliance with park rules and regulations at the time of sale or transfer to a new owner; except that, as used in this subsection (2), "transfer" does not include a transfer of ownership pursuant to death or divorce or a transfer of ownership to a new co-owner pursuant to marriage.
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- If the management provides each home owner written notice of the management's intent to add or amend any written rule or regulation as described in subsection (1)(e) of this section, a home owner may file a complaint challenging the rule, regulation, or amendment pursuant to section 38-12-1105 within sixty days after receiving the notice. If a home owner files such a complaint, and the new or amended rule or regulation will increase a cost to the home owner in an amount that equals or exceeds ten percent of the home owner's monthly rent obligation under the rental agreement, the management shall not enforce the rule, regulation, or amendment unless and until the parties reach an agreement concerning the rule, regulation, or amendment or the dispute resolution process concludes and the division of housing within the department of local affairs issues a written determination, pursuant to section 38-12-1105 (4), that the rule, regulation, or amendment does not constitute a violation of this part 2 and may be enforced. Notwithstanding any provision of part 11 of this article 12 to the contrary, as part of the complaint process described in section 38-12-1105, the management has the burden of establishing that the rule, regulation, or amendment satisfies the requirements described in subsection (1) of this section.
- Nothing in this section precludes a home owner from filing a complaint, pursuant to section 38-12-1105, concerning a rule or regulation at any time after the rule or regulation takes effect.
- Rules and regulations that concern recreational facilities may be amended at the reasonable discretion of the management.
Source: L. 81: Entire section added, p. 1816, § 9, effective June 9. L. 87: IP(1), (1)(a), and (1)(d) amended, p. 1315, § 13, effective May 8. L. 92: (1)(c) amended, p. 1128, § 13, effective July 1. L. 2020: Entire section amended, (HB 20-1196), ch. 195, p. 924, § 13, effective June 30.
38-12-215. New developments and parks - rental of sites to dealers authorized.
- The management of a new mobile home park or manufactured housing community development may require as a condition of leasing a mobile home site or manufactured home site for the first time such site is offered for lease that the prospective lessee has purchased a mobile home or manufactured home from a particular seller or from any one of a particular group of sellers.
- A licensed mobile home dealer or a manufactured home dealer may, by contract with the management of a new mobile home park or manufactured housing community development, be granted the exclusive right to first-time rental of one or more mobile home sites or manufactured home sites.
Source: L. 81: Entire section added, p. 1816, § 9, effective June 9.
38-12-216. Mediation, when permitted - court actions.
- In any controversy between the management and a home owner of a mobile home park arising out of the provisions of this part 2, except for the nonpayment of rent or in cases in which the health or safety of other home owners is in imminent danger, such controversy may be submitted to mediation by either party prior to the filing of a forcible entry and detainer lawsuit upon agreement of the parties.
- The agreement, if one is reached, shall be presented to the court as a stipulation. Either party to the mediation may terminate the mediation process at any time without prejudice.
- If either party subsequently violates the stipulation, the other party may apply immediately to the court for relief.
Source: L. 81: Entire section added, p. 1815, § 9, effective June 9; (2) amended, p. 2034, § 54, effective July 14. L. 87: (1) amended, p. 1315, § 14, effective May 8.
38-12-217. Notice of change of use - notice of sale or closure of park - opportunity for home owners to purchase - procedures - exemptions.
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Except as specified in subsection (12) of this section:
- A mobile home park owner shall notify the owners of all mobile homes in the park and the municipality in which the park is situated or, if none, the county in which the park is situated of the park owner's intent to change the use of the land comprising the park or to sell the park.
- If a mobile home park owner intends to change the use of the land comprising the mobile home park, the mobile home park owner shall give written notice to each home owner at least twelve months before the change in use will occur. The mobile home park owner shall mail the written notice to each home owner at the home owner's most recent address and shall post a copy of the notice in a conspicuous place on the mobile home or at the main point of entry to the lot.
- No earlier than thirty days after giving the notice required by this subsection (1) or subsection (2) of this section, a mobile home park owner may post information in a public space in the mobile home park describing the method for providing a signed writing to the mobile home park owner related to the opportunity to purchase. The posting may include standard forms related to the opportunity to purchase, including a form for providing notice that a home owner does not wish to participate in efforts to purchase a community. If, no earlier than thirty days after a mobile home park owner provides the notice required by this subsection (1) or subsection (2) of this section, at least fifty percent of the home owners who reside in the park provide signed writings to the mobile home park owner expressing no interest in purchasing the park, then the opportunity to purchase provided by subsection (4) of this section shall terminate even if the ninety-day period provided for in subsection (4)(a) of this section has not yet elapsed.
- A mobile home park owner shall not solicit or request a home owner's intention or a signed writing related to the opportunity to purchase during the initial thirty days after giving notice pursuant to this subsection (1) or subsection (2) of this section. At no time during the time period for considering an opportunity to purchase shall a mobile home park owner attempt to coerce or provide any financial or in-kind incentives to a home owner to influence the homeowner's decision. Any complaints alleging violation of this subsection (1) may be resolved under part 11 of this article 12.
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Notice - when required. In addition to the notice specified in subsection (1) of this section, and except as specified in subsection (12) of this section:
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A landlord shall give notice to each home owner in the mobile home park upon any of the following triggering events:
- The landlord lists the park for sale;
- The landlord intends to make a final, unconditional acceptance of an offer for the sale or transfer of the park; or
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The landlord receives:
- A notice of election and demand or lis pendens related to foreclosure of the park pursuant to part 1 of article 38 of this title 38; or
- Notice that a certificate of levy has been filed related to the park pursuant to section 13-56-101.
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Within fourteen days after the date on which any of the events described in subsection (2)(a) of this section occur, the landlord shall mail the notice required by this section by certified mail to:
- Each home owner, using the most recent address of the home owner, and shall post a copy of the notice in a conspicuous place on the mobile home or at the main point of entry to the lot;
- The municipality or, if the park is in an unincorporated area, the county within which the park is located;
- The division of housing in the department of local affairs; and
- Each home owners' association, residents' association, or similar body that represents the residents of the park.
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A landlord shall give notice to each home owner in the mobile home park upon any of the following triggering events:
- Contents of notice. The notice given pursuant to subsection (1) or (2) of this section must include notice of home owners' rights under subsections (4) to (9) of this section. If the triggering event involves a sale, the notice must also include a description of the property to be purchased and the price, terms, and conditions of an acceptable offer the landlord has received to sell the mobile home park or the price or terms and conditions for which the landlord intends to sell the park. The information regarding the proposed sale and the price, terms, and conditions of an acceptable offer may be shared for the purposes of evaluating or obtaining financing for the prospective transaction, but all persons who receive the information shall otherwise keep it confidential if the park owner or the park owner's agent so requests.
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Offer to purchase - who may submit - time limits.
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A group or association of home owners or their assignees have ninety days after the date that the landlord mails a notice under subsection (1) or (2) of this section to:
- Submit to the landlord a proposed purchase and sale agreement; and
- Obtain a binding commitment for any necessary financing or guarantees.
- Notwithstanding subsection (4)(a) of this section, if a foreclosure sale of the park is scheduled for less than ninety days after the landlord mails a notice under subsection (1) or (2) of this section, the opportunity granted by subsection (4)(a) of this section terminates on the date of the foreclosure sale.
- A group or association of home owners or their assignees has the opportunity granted by subsection (4)(a) of this section if the group or association of home owners or their assignees have the approval of at least fifty-one percent of the home owners in the park. The group or association of home owners or their assignees must submit to the landlord reasonable evidence that the home owners of at least fifty-one percent of the occupied homes in the park have approved the group or association purchasing the park.
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A group or association of home owners or their assignees have ninety days after the date that the landlord mails a notice under subsection (1) or (2) of this section to:
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Landlord's duty to consider offer. A landlord that receives an offer pursuant to this section shall not unreasonably refuse to:
- Provide documents, data, and other information in response to reasonable requests for information from a group or association of home owners or their assignees participating in the opportunity to purchase that would enable them to prepare an offer. The documents, data, and other information provided may be shared for the purposes of evaluating or obtaining financing for the prospective transaction, but all persons who receive the information shall otherwise keep it confidential if the park owner or the park owner's agent so requests.
- Negotiate in good faith with a group or association of home owners or their assignees; or
- Schedule a closing date for a purchase and sale agreement.
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Expiration of opportunity to purchase.
- If the ninety-day period provided for in subsection (4)(a) of this section elapses and a group or association of home owners or their assignees have not submitted a proposed purchase and sale agreement or obtained a binding financial commitment, the group's or association's opportunities provided by this section terminate.
- A landlord shall give a group or association of home owners or their assignees an additional ninety days after the ninety-day period provided by subsection (4)(a) of this section to close on the purchase of the mobile home park.
- Extension of time. The ninety-day periods described in subsections (4)(a) and (6)(b) of this section may be extended by written agreement between the landlord and the group or association of home owners or their assignees.
- Assignment of right to purchase. A group or association of home owners or their assignees that have the opportunity to purchase under subsection (4) of this section may assign their purchase right to a local or state government, tribal government, housing authority, or nonprofit with expertise related to housing, or to an agency of the state, for the purpose of continuing the use of the park.
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Independence of time limits and notice provisions.
- Each occurrence of a triggering event listed in subsection (1) or (2) of this section creates an independent, ninety-day opportunity to purchase for the group or association of home owners or their assignees. If a ninety-day opportunity to purchase is in effect and a new triggering event occurs, the ongoing ninety-day time period terminates and a new ninety-day time period begins on the latest date on which the landlord gives notice, as required by subsection (1) or (2) of this section, of the new triggering event.
- A notice required under this section is in addition to, and does not substitute for or affect, any other notice requirement under this part 2.
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A landlord shall not make a final, unconditional acceptance of any offer for the sale or transfer of the park until:
- The landlord has considered an offer made by a group or association of home owners or their assignees pursuant to subsections (4) and (5) of this section; or
- The applicable period for exercise of the opportunity to purchase has expired pursuant to subsection (6) of this section.
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Failure to complete transaction - affidavit of compliance. If the group or association of home owners or their assignees are not the successful purchaser of the park, the landlord shall provide evidence of compliance with this section by filing an affidavit of compliance with:
- The municipality or, if the park is in an unincorporated area, the county, within which the park is located; and
- The division of housing in the department of local affairs.
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Exemptions from notice requirement. Notwithstanding any provision to the contrary, a landlord is not required to give notice or extend an opportunity to purchase to a group or association of home owners or their assignees if the sale, transfer, or conveyance of the mobile home park is:
- To a spouse, a partner in a civil union, or a parent, sibling, aunt, uncle, first cousin, or legally recognized child of the landlord;
- To a trust the beneficiaries of which are the spouse, partner in a civil union, or legally recognized children of the landlord;
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- To a business entity or trust that the transferring business entity or trust controls, directly or indirectly.
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As used in this subsection (12)(c), "controls" means:
- Owns entirely as a subsidiary;
- Owns a majority interest in; or
- Owns as large an ownership interest as any other owner, with a minimum ownership interest of twenty-five percent.
- To a family member who is included within the line of intestate succession if the landlord dies intestate;
- Between joint tenants or tenants in common; or
- Pursuant to eminent domain.
- To qualify for an exemption under subsection (12) of this section, a transaction must not be made in bad faith, must be made for a legitimate business purpose or a legitimate familial purpose consistent with the exemptions listed in subsection (12) of this section, and must not be made for the primary purpose of avoiding the opportunity-to-purchase provisions set forth in this section.
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Triggering events not essential.
- A group or association of home owners or their assignees may submit an offer to purchase to a landlord at any time, even if none of the events listed in subsection (1) or (2) of this section has occurred.
- The landlord shall consider in good faith any offer made in accordance with subsection (14)(a) of this section.
- The department of local affairs and the office of administrative courts do not have the authority to issue injunctive relief in response to a complaint alleging a violation of this section or to delay a transfer or transaction involving the property, and filing an administrative complaint referencing this section shall not have the effect of doing so.
Source: L. 87: Entire section added, p. 1316, § 1, effective July 1. L. 2005: Entire section amended, p. 110, § 3, effective August 8. L. 2010: (1)(a) and (2) amended, (SB 10-156), ch. 343, p. 1590, § 9, effective July 1. L. 2020: Entire section R&RE, (HB 20-1201), ch. 196, p. 930, § 2, effective June 30.
Cross references: For the legislative declaration in HB 20-1201, see section 1 of chapter 196, Session Laws of Colorado 2020.
38-12-218. Mobile home owners - right to form a cooperative.
One or more members of a homeowners' association may, at any time, form a cooperative for the purposes of offering to purchase or finance a mobile home park. A home owner shall be a member of the homeowners' association in order to participate in the cooperative, and participation in the cooperative shall be voluntary.
Source: L. 2005: Entire section added, p. 110, § 4, effective August 8.
38-12-219. Home owners' and landlords' rights.
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Every home owner and landlord shall have the right to the following:
- Protection from abuse or disregard of state or local law by the landlord and home owners;
- Peaceful enjoyment of the home owner's mobile home space, free from unreasonable, arbitrary, or capricious rules and enforcement thereof; and
- Tenancy free from harassment or frivolous lawsuits by the landlord and homeowners.
Source: L. 2005: Entire section added, p. 110, § 4, effective August 8.
38-12-220. Private civil right of action.
A home owner in a park where the landlord has violated any provision of this article 12 has a private civil right of action against the landlord. In any such action, except as described in section 38-12-105 (4), the home owner is entitled to actual economic damages and reasonable attorney fees and costs if the home owner is successful in the action.
Source: L. 2005: Entire section added, p. 110, § 4, effective August 8. L. 2010: Entire section amended, (SB 10-156), ch. 343, p. 1591, § 10, effective July 1. L. 2021: Entire section amended, (SB 21-173), ch. 349, p. 2268, § 11, effective October 1.
38-12-221. Access by counties and municipalities.
Notwithstanding any other provision of law, upon a finding that the utilities in a park create a significant health or safety danger to park residents, the landlord of a mobile home park shall grant county or municipal officers or employees access to the mobile home park for the purposes of investigating or conducting a study related to such danger.
Source: L. 2010: Entire section added, (SB 10-156), ch. 343, p. 1591, § 11, effective July 1.
38-12-222. Home owners' right to privacy.
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The management shall respect the privacy of home owners. Except as otherwise provided by law, the management has no right of entry to a mobile home:
- Without first obtaining the written consent of the home owner;
- As described in subsection (2) of this section;
- In the case of an emergency; or
- When the mobile home has been abandoned.
- A home owner may revoke consent in writing at any time.
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The management shall respect the privacy of home owners. Except as otherwise provided by law, the management has no right of entry to a mobile home:
- Unless otherwise prohibited by law, the management has a right of entry to mobile home space to fulfill the duties described in section 38-12-212.3 and to ensure compliance with applicable codes, statutes, ordinances, and administrative rules; the rental agreement; and the rules and regulations of the park. A landlord shall not enter in a manner that interferes with a home owner's peaceful enjoyment of the mobile home space, as described in section 38-12-219 (1)(b), except in the case of an emergency.
- Except when posting notices that are required by law or by a rental agreement, the management shall make a reasonable effort to notify a home owner of the management's intention to enter the mobile home space at least forty-eight hours before entry.
Source: L. 2020: Entire section added, (HB 20-1196), ch. 195, p. 926, § 14, effective June 30.
PART 3 LOCAL CONTROL OF RENTS PROHIBITED
38-12-301. Control of rents by counties and municipalities prohibited - legislative declaration.
- The general assembly finds and declares that the imposition of rent control on private residential housing units is a matter of statewide concern; therefore, no county or municipality may enact any ordinance or resolution that would control rent on either private residential property or a private residential housing unit.
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For purposes of subsection (1) of this section, an ordinance or resolution that would control rent on either private residential property or a private residential housing unit shall not include:
- A voluntary agreement between a county or municipality and a permit applicant or property owner to limit rent on the property or unit or that is otherwise designed to provide affordable housing stock; or
- The placement on the title to the unit of a deed restriction that limits rent on the property or unit or that is otherwise designed to provide affordable housing stock pursuant to a voluntary agreement between a county or municipality and a permit applicant or property owner to place the deed restriction on the title.
- An agreement authorized pursuant to subsection (2) of this section may specify how long either private residential property or a private residential housing unit is subject to its terms, whether a subsequent property owner is subject to the agreement, and remedies for early termination agreed to by both the permit applicant or property owner and the county or municipality.
- Notwithstanding any other provision of this section, a county or municipality may not deny an application for a development permit as defined in section 29-20-103 (1), C.R.S., because an applicant for such a permit declines to enter into an agreement to limit rent on either private residential property or a private residential housing unit.
- This section is not intended to impair the right of any state agency, county, or municipality to manage and control any property in which it has an interest through a housing authority or similar agency.
Source: L. 81: Entire part added, p. 1818, § 1, effective June 23. L. 2010: Entire section amended, (HB 10-1017), ch. 208, p. 906, § 1, effective September 1.
Editor's note: Section 2 of chapter 208, Session Laws of Colorado 2010, provides that the act amending this section applies to agreements entered into before, on, or after September 1, 2010.
ANNOTATION
Law reviews. For article, "'Hang 'em High': Affordable Housing Covenants in Colorado (Part I)", see 48 Colo. Law. 45 (July 2019). For article, "Forever is an Awfully Long Time: Affordable Housing Covenants in Colorado (Part II)", see 48 Colo. Law. 44 (Aug.-Sept. 2019). For comment, "Let Cities Decide: End Colorado's Prohibition on Rent Regulation", see 92 U. Colo. L. Rev. 337 (2021).
Statute declaring rent control a matter of statewide importance preempted conflicting home rule town ordinance that mandated affordable housing mitigation. Lot Thirty-Four Venture, L.L.C. v. Town of Telluride, 976 P.2d 303 (Colo. App. 1998), aff'd, 3 P.3d 30 ( Colo. 2000 ).
Ordinance constituted rent control because options it imposes for constructing new employee housing or deed restricting housing are within commonly understood meaning of rent control. Rent control falls within an area of mixed state and local concern. Ordinance clearly conflicts with state prohibition on rent control contained in this section. Accordingly, ordinance invalid and section does not violate home rule amendment to constitution. Town of Telluride v. Lot Thirty-Four Venture, 3 P.3d 30 (Colo. 2000).
2010 amendments to this section apply retroactively and such retroactive application does not violate the constitutional prohibition against retrospective legislation. The general assembly clearly indicated that it intended that the amendments apply to agreements entered into before they took effect, the amendments clarified rather than changed existing law, and the amendments were remedial in nature. Meyerstein v. City of Aspen, 282 P.3d 456 (Colo. App. 2011).
38-12-302. Definitions.
As used in this part 3, unless the context otherwise requires:
- "Municipality" means a city or town and, in addition, means a city or town incorporated prior to July 3, 1877, whether or not reorganized, and any city, town, or city and county which has chosen to adopt a home rule charter pursuant to the provisions of article XX of the state constitution.
Source: L. 81: Entire part added, p. 1818, § 1, effective June 23.
PART 4 VICTIMS OF UNLAWFUL SEXUAL BEHAVIOR, STALKING, DOMESTIC VIOLENCE, AND DOMESTIC ABUSE
38-12-401. Definitions.
As used in this part 4, unless the context otherwise requires:
- "Application assistant" has the same meaning provided in section 24-30-2103 (4).
- "Domestic abuse" has the same meaning as provided in section 13-14-101 (2).
- "Domestic violence" has the same meaning as provided in section 18-6-800.3 (1).
- "Medical professional" means a person licensed to practice medicine pursuant to article 240 of title 12 or part 1 of article 255 of title 12.
- "Stalking" means the criminal offense described in section 18-3-602.
- "Unlawful sexual behavior" means the criminal offense described in section 16-22-102 (9).
Source: L. 2004: Entire part added, p. 528, § 1, effective August 4. L. 2017: Entire part amended, (HB 17-1035), ch. 276, p. 1513, § 1, effective June 1. L. 2019: (4) amended, (HB 19-1172), ch. 136, p. 1722, § 229, effective October 1. L. 2020: (4) amended, (HB 20-1183), ch. 157, p. 705, § 69, effective July 1.
38-12-402. Protection for victims of unlawful sexual behavior, stalking, or domestic violence.
- A landlord shall not include in a residential rental agreement or lease agreement for housing a provision authorizing the landlord to terminate the agreement or to impose a penalty on a residential tenant for calls made by the residential tenant for peace officer assistance or other emergency assistance in response to a situation involving domestic violence, domestic abuse, unlawful sexual behavior, or stalking. A residential tenant may not waive the residential tenant's right to call for police or other emergency assistance.
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- If a tenant to a residential rental agreement or lease agreement notifies the landlord in writing that he or she is the victim of unlawful sexual behavior, stalking, domestic violence, or domestic abuse and provides to the landlord evidence of unlawful sexual behavior, stalking, domestic violence, or domestic abuse victimization as described in subsection (2)(a.5) of this section, and the residential tenant seeks to vacate the premises due to fear of imminent danger for self or children because of the unlawful sexual behavior, stalking, domestic violence, or domestic abuse, then the residential tenant may terminate the residential rental agreement or lease agreement and vacate the premises without further obligation except as otherwise provided in subsection (2)(b) of this section.
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For the purposes of subsection (2)(a) of this section:
- To provide evidence that he or she is a victim of unlawful sexual behavior, domestic violence, or domestic abuse, a tenant may provide to his or her landlord a police report written within the prior sixty days, a valid protection order, or a written statement from a medical professional or application assistant who has examined or consulted with the victim, which written statement confirms such fact; and
- To provide evidence that he or she is a victim of stalking, a tenant may provide to his or her landlord a police report written within the prior sixty days, a valid protection order, or a written statement from an application assistant who has consulted with the victim, which written statement confirms such fact.
- If a tenant to a residential rental agreement or lease agreement terminates the residential rental agreement or lease agreement and vacates the premises pursuant to subsection (2)(a) of this section, then the tenant is responsible for one month's rent following vacation of the premises, which amount is due and payable to the landlord within ninety days after the tenant vacates the premises. The landlord is not obligated to refund the security deposit to the tenant until the tenant has paid the one month's rent pursuant to this section. Notwithstanding the provisions of section 38-12-103, the landlord and the tenant to a residential rental agreement or lease agreement may use any amounts owed to the other to offset costs for the one month's rent or the security deposit. The provisions of this subsection (2)(b) apply only if the landlord has experienced and documented damages equal to at least one month's rent as a result of the tenant's early termination of the agreement.
- Nothing in this part 4 authorizes the termination of tenancy and eviction of a residential tenant solely because the residential tenant is the victim of unlawful sexual behavior, stalking, domestic violence, or domestic abuse.
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- If a tenant to a residential rental agreement or lease agreement notifies the landlord that the tenant is a victim of unlawful sexual behavior, stalking, domestic violence, or domestic abuse, the landlord shall not disclose such fact to any person except with the consent of the victim or as the landlord may be required to do so by law.
- If a tenant to a residential rental agreement or lease agreement terminates his or her lease pursuant to this section because he or she is a victim of unlawful sexual behavior, stalking, domestic violence, or domestic abuse, and the tenant provides the landlord with a new address, the landlord shall not disclose such address to any person except with the consent of the victim or as the landlord may be required to do so by law.
Source: L. 2004: Entire part added, p. 528, § 1, effective A