Seaman v. Heather Gardens Ass'n

546 P.3d 134

2023 COA 125

Thomas SEAMAN, Plaintiff-Appellant,

v.HEATHER GARDENS ASSOCIATION, a Colorado nonprofit corporation, Defendant-Appellee.

Court of Appeals Nos. 22CA2103 & 23CA0372

Colorado Court of Appeals, Div. VII.

Announced December 28, 2023

Arapahoe County District Court No. 22CV31637, Honorable Elizabeth Beebe Volz, Judge

Robinson Waters & O’Dorisio, P.C., Kimberly A. Bruetsch, Mike Lazar, Denver, Colorado, for Plaintiff-Appellant

The Hustead Law Firm, Patrick Q. Hustead, Aaron M. Bell, Jason J. Patel, Denver, Colorado, for Defendant-Appellee

Opinion by JUDGE BROWN

¶ 1 The legislature enacted the Colorado Common Interest Ownership Act (CCIOA), §§ 38-33.3-101 to -402, C.R.S. 2023, in part to "establish a clear, comprehensive, and uniform framework for the creation and operation of common interest communities." § 38-33.3-102(1)(a), C.R.S. 2023. Common interest communities are managed by unit owners’ associations organized under section 38-33.3-301, C.R.S. 2023.

¶ 2 Section 38-33.3-317, C.R.S. 2023, provides that unit owners are entitled to reasonable access to information about the operation, administration, and finances of their unit owners’ association. To that end, section 38-33.3-317(1) obligates an association to "maintain" eighteen categories of records—in addition to any records specifically defined in the association’s declaration or bylaws, or expressly required by section 38-33.3-209.4(2), C.R.S. 2023—"for purposes of document retention and production to owners." § 38-33.3-317(1)(a)-(p).

¶ 3 Plaintiff, Thomas Seaman, appeals the district court’s order dismissing his complaint against defendant, Heather Gardens Association (HGA).¹ Seaman sought an injunction compelling HGA to make certain bank statements available to him for examination under CCIOA.² He contends that the court erred by dismissing his complaint on the basis that section 38-33.3-317 does not require HGA to produce the bank statements.

¶ 4 Resolving Seaman’s contention requires us to determine, as a matter of first impression, whether bank statements may be "[d]etailed records of receipts and expenditures affecting the operation and administration of the association" under section 38-33.3-317(1)(a). Based on the plain language of the statute, we conclude that bank statements may constitute such records. We further conclude that records generated by a third party, such as a bank, may be records an association "maintain[s]" and must make available for examination and copying by a unit owner under section 38-33.3-317(2)(a). Consequently, we conclude that the district court erred by dismissing Seaman’s complaint under C.R.C.P. 12(b)(5). We reverse the judgment and remand for further proceedings.³

I. Background and Procedural History

¶ 5 HGA is a nonprofit corporation that manages Heather Gardens, an age-restricted senior living community. The parties agree that HGA is subject to CCIOA and that Seaman is a property owner and resident of Heather Gardens. See § 38-33.3-103(3), (31), C.R.S. 2023.

¶ 6 According to Seaman’s complaint, in April 2020, HGA applied for a loan under the Paycheck Protection Program (PPP) and received funds in the amount of $1,085,800. It opened a new account at KeyBank to hold and manage the PPP funds. And in July 2021, it applied for and received forgiveness of the PPP loan.

¶ 7 In June 2022, Seaman requested copies of HGA’s records including, as relevant here, bank statements for the KeyBank account in which it held the PPP funds. HGA provided Seaman with copies of balance sheets showing the PPP funds as an asset titled "Cash – Key Bank PPP Proceeds" with varying balances, but it declined to provide the bank statements, explaining that "[b]ank statements are not records of the association that must be kept or made available for inspection/copying by owners."

¶ 8 In August, Seaman filed a complaint in the district court seeking an injunction requiring HGA to produce the requested bank statements. HGA moved to dismiss under C.R.C.P. 12(b)(5), arguing that section 38-33.3-317 does not require it to maintain or produce bank statements for inspection and copying. It further argued that the statute does not require it to maintain and make available records created by a third party, such as a bank.

¶ 9 The district court granted the motion to dismiss, concluding that bank statements "[c]learly" are not "[d]etailed records of receipts and expenditures affecting the operation and administration of the association" under section 38-33.3-317(1)(a) and are not otherwise listed among the categories of records an association is required to maintain under subsection (1).⁴ The court acknowledged that the purpose of section 38-33.3-317 is "to provide owners with access to information about the operation of the association and how its funds are generated and spent," but it reasoned that Seaman had received sufficient records from HGA "related to the receipt of PPP funds, the amount of the funds received, the accounts in which the funds were held and when those funds were transferred from one account to another," and that HGA’s refusal to provide the bank statements did not "interfere with [Seaman’s] right to receive the relevant information."

II. Analysis

¶ 10 Seaman contends that the district court erred by concluding that bank statements are not, as a matter of law, "[d]etailed records of receipts and expenditures affecting the operation and administration of the association" under section 38-33.3-317(1)(a). We agree. We also conclude that, even though they are generated by a third party, bank statements may be "maintained by the association" such that they must be made available for examination and copying by a unit owner under section 38-33.3-317(2). Thus, we conclude that the court erred by dismissing Seaman’s complaint under C.R.C.P. 12(b)(5).

A. Standard of Review and Generally Applicable Law

¶ 11 We review de novo a district court’s judgment dismissing a complaint for failure to state a claim upon which relief can be granted under C.R.C.P. 12(b)(5). Nieto v. Clark's Mkt., Inc., 2021 CO 48, ¶ 11, 488 P.3d 1140. We accept as true the factual allegations in the complaint and, viewing them in the light most favorable to the plaintiff, determine whether the complaint states a plausible claim for relief. See id.; Warne v. Hall, 2016 CO 50, ¶¶ 9, 24, 373 P.3d 588.

[1–3] ¶ 12 We also review de novo issues of statutory construction. Nieto, ¶ 12. In doing so, our primary task is to give effect to the legislative intent as reflected in the plain and ordinary meanings of the words and phrases used. Carousel Farms Metro. Dist. v. Woodcrest Homes, Inc., 2019 CO 51, ¶ 40, 442 P.3d 402. We read the statute in the context of the entire statutory scheme, giving consistent and sensible effect to all its parts. Id.; see also §§ 2-4-101, -201, C.R.S. 2023; A.M. v. A.C., 2013 CO 16, ¶ 8, 296 P.3d 1026. And we avoid constructions that would render any words or phrases superfluous or lead to illogical or absurd results. Dep't of Revenue v. Agilent Techs., Inc., 2019 CO 41, ¶ 16, 441 P.3d 1012. When the language of a statute is clear, we enforce it as written. Elder v. Williams, 2020 CO 88, ¶ 18, 477 P.3d 694.

B. The Bank Statements May Be Detailed Records of Receipts and Expenditures Affecting the Operation and Administration of an Association

¶ 13 As noted, section 38-33.3-317(1) obligates an association to "maintain" eighteen categories of records "for purposes of document retention and production to owners." § 38-33.3-317(1)(a)-(p). Under section 38-33.3-317(2), "all records maintained by the association must be available for examination and copying by a unit owner or the owner’s authorized agent" in accordance with prescribed procedures. Furthermore, "the association may not condition the production of records upon the statement of a proper purpose." Id. [4] ¶ 14 Seaman contends that bank statements fall into one of the categories of records an association is required by statute to maintain and make available to him as a unit owner: "[d]etailed records of receipts and expenditures affecting the operation and administration of the association." § 38-33.3-317(1)(a). Based on the statute’s plain language, we agree that bank statements may constitute such records.

¶ 15 The relevant terms are not defined in CCIOA. But because they are words in common usage and "people of ordinary intelligence needn’t guess at [their] meaning," we consider their dictionary definitions. Butler v. Bd. of Cnty. Comm’rs, 2021 COA 32, ¶ 14, 491 P.3d 506; see Broomfield Senior Living Owner, LLC v. R.G. Brinkmann Co., 2017 COA 31, ¶ 18, 413 P.3d 219 (where a statute fails to define a term, we consider its common usage).

• A "record" is "the state or fact of being recorded" or "something that records." Merriam-Webster Dictionary, https://perma.cc/3H6V-QUWY. To "record" means "to set down in writing" or "furnish written evidence of." Id.; see Black’s Law Dictionary 1527 (11th ed. 2019) (A "record" is "[a] documentary account of past events" or "[i]nformation that is inscribed on a tangible medium or that, having been stored in an electronic or other medium, is retrievable in perceivable form.").

• "Detailed" means "marked by abundant detail or by thoroughness in treating small items or parts." Merriam-Webster Dictionary, https://perma.cc/3QN2-QVFE.

• A "receipt" is "a writing acknowledging the receiving of goods or money," "the act or process of receiving," or "something received." Merriam-Webster Dictionary, https://perma.cc/V287-RKCF; see Black’s Law Dictionary at 1521 ("Receipt" includes "[a] written acknowledgment that something has been received; esp., a piece of paper or an electronic notification that one has paid for something.").

• "Expenditure" is defined as "the act or process of expending" or "something expended," namely a "disbursement" or "expense." Merriam-Webster Dictionary, https://perma.cc/3MNA-5FRQ. "Expending" is further defined as "to pay out" o...