Accetta v. Brooks Towers Residences Condo. Ass'n, Inc.

434 P.3d 600

In re Anthony T. ACCETTA, Plaintiff,

v.BROOKS TOWERS RESIDENCES CONDOMINIUM ASSOCIATION, INC., a Colorado Nonprofit Corporation; Mark Trenka, Marla Grant, Bill Clarke, Clay Courter, Robb Green, Alton Darby, Joan Foster, and Jeanne Root, in Their Capacities as Members of the Board of Directors of the Brooks Towers Residences Condominium Association, Inc., Defendants.

Supreme Court Case No. 18SA127

Supreme Court of Colorado.

February 11, 2019

Attorneys for Plaintiff: Podoll & Podoll, P.C., Robert C. Podoll, Greenwood Village, Colorado, Foley & Mansfield, PLLP, Dustin J. Priebe, Englewood, Colorado

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

En Banc

JUSTICE GABRIEL delivered the Opinion of the Court.

¶1 In this original proceeding pursuant to C.A.R. 21, we review the district court's order requiring plaintiff Anthony Accetta to join the approximately 500 individual unit owners in the Brooks Tower Residences ("Brooks Tower") as indispensable parties in the present action, rather than proceeding solely against defendants Brooks Towers Residences Condominium Association, Inc. and its board members (collectively, the "Association").

¶2 Accetta seeks, among other things, a declaratory judgment that would invalidate, as contrary to the Colorado Common Interest Ownership Act ("CCIOA"), sections 38-33.3-101 to - 402, C.R.S. (2018), the provision of the Amended and Restated Declaration of Covenants, Conditions and Restrictions of the Association (the "Declaration") that provides for ownership interests to be allocated in the sole discretion of the declarant of that Declaration (the "Declarant"). Accetta contends that this provision violates CCIOA's requirement that ownership interests be allocated by formula and has resulted in his paying association dues in excess of his fair share.

¶3 On the Association's motion to dismiss for failure to join indispensable parties, the district court concluded that all of the Brooks Tower unit owners are indispensable parties and must be joined. We issued a rule to show cause and now conclude that, because the Association can adequately represent the interests of the absent unit owners for purposes of Accetta's declaratory judgment claim in this case, Accetta need not join those absent owners. Accordingly, we make the rule to show cause absolute.

I. Facts and Procedural Background

¶4 Accetta and his wife own a condominium in Brooks Tower. Brooks Tower is comprised of 566 residential units, 13 commercial units, and 297 associated garage units.

¶5 All Brooks Tower unit owners are governed by the Declaration, which allocates condominium fees among the unit owners based on the "value" of each unit. As pertinent here, this value (1) "may or may not be the list price of the Unit as quoted to prospective third-party purchasers" as of the date of the declaration; (2) is determined "in Declarant's sole and arbitrary discretion"; (3) is to be used for the purpose of computing the unit owners' percentage interests in Brooks Tower's common elements; and (4) "shall be final and conclusive."

¶6 Accetta asserts that his unit has been allocated association dues that are over fifty percent higher than the dues allocated to comparable units and that this misallocation has resulted in hundreds of dollars in monthly overcharges. Accordingly, he filed the present action against the Association seeking, among other things, a declaratory judgment invalidating the portion of the Declaration allowing the Declarant to allocate values in its "sole and arbitrary discretion," rather than by way of a formula that allocates percentage ownership consistently among comparable units. Accetta specifically contends that the provision at issue violates CCIOA and is therefore "invalid or otherwise void and must be reformed to comply with the requirements of [CCIOA] and the obligation of good faith."¹

¶7 The Association moved to dismiss Accetta's complaint, arguing, in pertinent part, that he failed to join indispensable parties, namely, the individual unit owners in Brooks Tower. Specifically, the Association contended that, because the declaratory judgment that Accetta sought could affect the other unit owners' interests, he was required to join those owners pursuant to C.R.C.P. 19(a), C.R.C.P. 57(j), and section 13-51-115, C.R.S. (2018).

¶8 The district court ultimately denied the Association's motion to dismiss, but it agreed with the Association that Accetta was required to join all of the other unit owners before the case could proceed. The court reasoned that, because the other unit owners would be affected by any declaratory judgment concerning the legality of the pertinent provisions of the Declaration, Accetta was required to join them under C.R.C.P. 57(j).

¶9 Accetta petitioned this court for relief under C.A.R. 21, requesting that we issue a rule to show cause why the district court's ruling should not be vacated. We issued the requested rule, and we have had the benefit of full briefing and oral argument in this matter.

II. Analysis

¶10 We begin by discussing our jurisdiction to hear this matter and the applicable standard of review. We then consider the law applicable to the joinder questions presented, and we conclude that, because the Association can adequately represent the absent unit owners' interests for purposes of Accetta's declaratory judgment claim in this case, Accetta need not join those absent owners pursuant to C.R.C.P. 19(a), C.R.C.P. 57(j), and section 13-51-115.

A. Original Jurisdiction and Standard of Review

¶11 Exercise of our original jurisdiction under C.A.R. 21 is within our sole discretion. Fognani v. Young , 115 P.3d 1268, 1271 (Colo. 2005). An original proceeding under C.A.R. 21 is an extraordinary remedy that is limited in both its purpose and availability. Wesp v. Everson , 33 P.3d 191, 194 (Colo. 2001). We generally elect to hear C.A.R. 21 matters that raise issues of first impression and that are of significant public importance, and we have exercised our original jurisdiction to review novel questions of statutory interpretation. See Smith v. Jeppsen , 2012 CO 32, ¶ 6, 277 P.3d 224, 226.

¶12 The question that Accetta asks us to resolve here, which involves the construction and interplay of CCIOA and the rules and statutes concerning declaratory relief and the indispensable parties thereto, is one of first impression for this court. Moreover, the issue is one of significant public importance because (1) it potentially affects condominium litigation throughout the state of Colorado and (2) it implicates substantial issues of access to justice. Finally, appellate relief would likely be inadequate in this case because the significant expense of joining and serving some 500 other parties could render Accetta's pursuit of his claims cost prohibitive. See People v. Dist. Court , 953 P.2d 184, 187 (Colo. 1998) ("[O]riginal jurisdiction under C.A.R. 21 is appropriate ‘when appeal would not provide a plain, speedy, and adequate remedy.’ ") (quoting People v. Young , 814 P.2d 834, 838 (Colo. 1991) ).

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

¶14 Because the issue before us concerns the intersection of the appropriate legal standard for joinder and the legal effect of CCIOA, we review the district court's decision on this issue de novo. See State v. Medved , 2019 CO 1, ¶ 13, 433 P.3d 33 (noting that we review questions of law de novo).

B. Applicable Legal Principles

¶15 C.R.C.P. 19(a) requires a person properly subject to service of process in an action to be joined as a party in that action if:

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

¶16 C.R.C.P. 57(j) and section 13-51-115 apply similar joinder principles in the context of declaratory judgment actions. Those provisions require joinder of all persons "who have or claim any interest which would be affected by the declaration," and they state that "no declaration shall prejudice the rights of persons not parties to the proceeding." § 13-51-115 ; C.R.C.P. 57(j).

¶17 As the foregoing provisions make clear, merely having an interest in the outcome of an action is insufficient to require joinder. Gibbs Wire & Steel Co. v. Johnson , 255 F.R.D. 326, 329 (D. Conn. 2009). Rather, joinder is required when absent parties' ability to protect their interests would be impaired or impeded due to their absence, as, for example, when a requested declaratory judgment could prejudice their rights. § 13-51-115 ; C.R.C.P. 19(a) ; C.R.C.P. 57(j).

¶18 Although this court has yet to weigh in on the range of factors that courts should consider in determining whether joinder is required, a division of our court of appeals has observed that, in making such a determination, courts consider, among other things, whether the absent party's interests will be adequately represented based on the current posture of the case. Kowalchik v. Brohl , 2012 COA 49, ¶ 12 n.4, 411 P.3d 681, 686 n.4. Numerous federal courts have expressed the same view. See, e.g. , Ohio Valley Envtl. Coal. v. Bulen , 429 F.3d 493, 504–05 (4th Cir. 2005) (perceiving no abuse of discretion in the district court's determination that joinder was not required when the parties in the litigation were "capable of representing the interests of the [absent parties]"); Hooper v. Wolfe , 396 F.3d 744, 749 (6th Cir. 2005) ("When assessing prejudice, the court must consider whether the interests of an absent party are adequately represented by those already a party to the...