EFILED Document CO Pitkin County District Court 9th JD Filing Date: Jan 9 2012 4:45PM MST Filing ID: 41769786 Review Clerk: Vicky Spaulding-Goddard with her, either directly or through advertising, prior to her purchase of the product at issue).55 In sum, plaintiffs do not adequately allege that either Related or Related WestPac engaged in a deceptive trade practice, and the facts they concede (together with the public-record facts) make clear that they cannot so allege. Therefore, plaintiffs' CCPA claim against Related and Related WestPac should be dismissed with prejudice. B. Plaintiffs' CCPA Claim Against Related And Related WestPac Should Be Dismissed For The Separate Reason That They Have Not Alleged (And Cannot Allege) That The Conduct Of Which They Complain Had A Significant Impact On The Public Plaintiffs' CCPA claim against Related and Related WestPac fails for a second, independent reason: plaintiffs have not alleged (and cannot allege) that the practice by which they claim to have been harmed "significantly impacts the public as actual or potential consumers of [Related's or Related WestPac's] goods, services or property." Rhino 62 P.3d at 147 (such impact is an element of a CCPA claim). To the contrary, plaintiffs' allegations make clear that their purported claims arise precisely because of their status as a discrete group of individuals who signed a particular form of PSA with defendant Base Village Phase 1A Development Company, LLC ("Phase 1A Dev. which is not one ofthe "Related Defendants" - see Compl. il 47) between April 14, 2006 and March 2, 2007, and whose PSAS were assigned to BVO. (See Compl. 1111 50, 83, 91; fd. 1[ 4 and Exh. A). Because the possible universe of such people was small, finite and closed by the time any "Related Defendant" 55 We note in addition that the current version ofthe Complaint not only represents plaintiffs' third attempt to set forth their claims, but also comes in response to the motions to dismiss filed by various defendants (including all of the "Related Defendants") that pointed out- among other things - the pleading defects in plaintiffs' claims. One of the key defects highlighted in those motions was plaintiffs' failure to specify which defendant was allegedly responsible for any particular act or omission. (See Prior Memorandum at 9-12 and 20-21), Plaintiffs' current Complaint apparently represents the "best" they could do to remedy that defect. It is therefore apparent that the reason why plaintiffs have not included sufficient factual allegations to plead that Related or Related WestPac actually engaged in any deceptive trade practice vis ci vis any plaintiff is because they cannot do so. 41 became involved with the Project, the element of public impact is absent as a matter of law. Specifically, neither BVO nor any other "Related Defendant" is alleged ever to have communicated with any plaintiff prior to the time any of them signed a PSA. Rather, each plaintiff' contractual relationship with arose from the transaction between and Phase IA Dev. Co. pursuant to which the PSAS were assigned to BVO. Thus, from the beginning of the involvement of the "Related Defendants," plaintiffs dealt with them not as members of the public but as individuals who were already under contract to purchase Condo Units pursuant to a form of PSA prepared by Phase IA Dev. Co. To the extent that the conduct of any "Related Defendant" had an impact on plaintiffs, such impact resulted from this relationship. The class of individuals that had such a relationship with the "Related Defendants" - that is, those who contracted to purchase a Condo Unit from Phase 1A Dev. Co. pursuant to that company's form of PSA but ultimately purchased their Condo Units from BVO is too small and specialized for an impact on that class to constitute the kind of public impact required for a CCPA claim. Coiorado Cojjfee Bean, LLC v. Peaberrjy Coffee Inc., 251 P.3d 9 (Colo. App.), cert. denied, 2010 WL 4400079 (Colo. 2010), is directly on point in this regard. In that case, the defendant franchisor posted certain information on its website, received 500-635 inquiries in response to the posting, screened those inquiries based on financial ability and other factors, and ultimately sent "information to approximately 68 ofthe inquirers. 251 P.3d at 24. The plaintiffs claimed that those packets contained false and misleading information; on this basis, they asserted (among other things) a CCPA claim. The lower court dismissed that claim on the ground that the defendants' alleged conduct lacked the requisite public impact. Id. The Court of Appeals affirmed, reasoning that because only the information packets (rather than the 42 Website itself) were alleged to contain false information, the only consumers "directly affected" were those that received the (68) information packets. 251 P.3d at 25 (emphasis in original). This was not a sufficient "public impact" to support a CCPA claim. Id. Similarly here, the only consumers that could possibly have been affected by the conduct of which the "Related Defendants" are now accused - namely, closing on the sales of Condo Units Without correcting or supplementing allegedly false or incomplete information contained in the form of PSA used by the "lntrawest Defendants" are those that entered into PSAS with Phase 1A Dev. Co. prior to the March 2007 assignment of those PSAS to BVO. The Complaint itself does not indicate how many PSAS for residential Condo Units in the Project were assigned to however, according to what the Complaint represents as the "standard that each plaintiff signed (see Compl. 1111 4-31), there could not have been more than 82. (See PSA at 1 Project will initially consist of three buildings, including up to 82 residential condominium units")). Thus, even if the alleged conduct ofthe "Related Defendants" had an impact on consumers other than the parties to the 30 PSAS at issue here, the mos! widespread that impact could possibly have been is the closing of up to 52 other transactions with parties who (like plaintiffs) were already under contract by the time any "Related Defendant" became involved. As in Colorado Cojjfee Bean, as a matter of law this is simply not a sufficiently "significant public impact" to support a CCPA claim. See Rhino 62 P.3d at 150 (alleged misrepresentation or failure to disclose in the context of a contractual relationship "is no more than a private dispute" and does not satisfy the "public impact" component of the 56 The Complaint makes some general allegations that the "Related Defendants" and the "Intrawest Defendants" alike made certain representations on their "websites" and in marketing materials. (See, ag., Compl. 111] 1 15-17). But not only do plaintiffs fail to indicate which defendant allegedly made which statement (making these allegations insufficient to support a fraud claim against any defendant- see supra at 39-40); plaintiffs do not in any event claim 43 As a result, regardless of whether plaintiffs have adequately alleged an unfair or deceptive trade practice, their CCPA claim should be dismissed as against Related and Related WestPac because they have not alleged (and cannot allege) that the conduct by which they claim to have been injured had the requisite "significant public impact." IV. IF ANY ASPECT OF THE COMPLAINT SURVIVES, ALL CLAIMS ASSOCIATED WITH NINE OF THE 30 CONDO UNITS AT ISSUE SHOULD BE DISMISSED AS BARRED BY THE STATUTE OF LIMITATIONS If any claims survive despite the flaws addressed above, the claims against Related and Related WestPac asserted by plaintiffs Bruce L. Smith Kathleen Smith and/or Bruce L. Smith Trustee, The Smith Trust dated 1f'l5!04; Jeffrey Ganeles Lori Berman andfor GBL, Aspen Valley Real Estate, Helena Willner and Robert K. Vahradian; Gerald Nelson Pharris and Terese Koleto Pharris, Trustees ofthe Gerald Nelson Pharris and Terese Koleto Pharris 1988 Family Declaration of Trust, Pharris Family Trust andx'or Gerald Nelson Pharris Trust, Gerald Pharris Trustee, and/or Terese Koleto Pharris Trust, Pharris Trustee; Silverman Family Trust, Martin Silverman Trustee and Martin Silverman; Marc A. Asselmeier, Michael W. Mitchell, Carol E. Asselmeier and Nina D. Mitchell Living Trust; Vincent A. Darmali and/or Patti M. Darmali Trust UTD December 15, 1997, Patti M. Darmali Trustee; and Jerome P. White and Marianne White (collectively, the "Time-Barred Plaintiffs") should be dismissed as barred by the applicable statute of limitations. According to the Complaint, those plaintiffs contracted for and purchased Capitol Peak Units 3406, 3303, 3203, to have entered into any transaction as a result of any such representation by any "Related Defendant." Rather, plaintiffs' CCPA claim against the "Related Defendants" alleges only that they failed to reveal the true facts concerning the size of plaintiffs' Condo Units, the Districts, and the bonds in the context ofthe contractual relationships that the "Related Defendants" inherited from the "lntrawest Defendants." (See Compl. 288-91). Plaintiffs do not allege that they suffered any injury as a result of anything contained in any website or marketing material disseminated by any "Related Defendant." 44 3308, 3304, 331 1, 3402, 3403 and 3407, respectively. (See Compl. 111] 4-6, 8, I0-13, 15). The closings for those Condo Units took place between April 4 and June 26, 2008, more than three years before plaintiffs commenced this lawsuit on June 29, 2011. (See Exh. 2; Complaint and Jury Demand filed June 29, 2011). No later than the date of such closing, each ofthe Time- Barred Plaintiffs knew or should have known both the actual size of their respective Condo Units and the relevant facts concerning their potential tax exposure. Since the three-year limitations period for their ILSA and CCPA claims (the only claims they assert against Related or Related WestPac) began to run on the date they could "in the exercise of reasonable diligence" have discovered those facts (see supra at 32), as to these plaintiffs that period began to run more than three years before this lawsuit was filed. Accordingly, by the time of that filing the limitations period had had already expired as to them. With respect to the size ofthe Condo Units, plaintiffs do not dispute that the Map contained the dimensions of each Condo Unit (as required by law). (See supra at 17-19). When plaintiffs closed on their purchases, the Map was not only recorded in their chain of title; it was also incorporated by reference in the deed each plaintiff received. (See supra at 18). Thus, as a matter of law each plaintiff was on notice of the contents of the Map - including the dimensions ofthe Condo Units - no later than the date of closing. (See supra at 18-19). Plaintiffs pointedly do not allege that the dimensions contained in the Map were incorrect, because they cannot so allege. Contrary to their mysterious assertion (see Compl. 1] 104), they would not have had to "hire an expert" to calculate the size of their Condo Units based on those dimensions; the calculation is a matter of simple mathematics. In the exercise of the "reasonable diligence" that both ILSA and the CCPA require, plaintiffs could and should 45 have performed that calculation, whether from the Map or by measuring the Condo Units themselves - particularly if (as they now claim) an alleged discrepancy of as little as 76 square feet (the discrepancy claimed by the Smith plaintiffs with respect to their home of over 1100 square feet - see Compl., Exh. F) was "material" to them." This information was within plaintiffs' control no later than the date they took title. For the Time-Barred Plaintiffs, that date is more than three years before this suit was commenced; accordingly, their ILSA and CCPA claims based on the size of their Condo Units are barred by the statute of limitations. The claims ofthe Time-Barred Plaintiffs with respect to the Districts fare no better. It is undisputed that before each of them closed and took title in 2008, the 2004 Orders approving the creation of the Districts had been duly recorded with the Pitkin County Clerk and Recorder. (See supra at 26; accord Compl. 1] 68 (acknowledging that "the two Court Orders . were recorded")). Those Orders expressly incorporate by reference the 2004 Service Plan - which, in turn, describes in detail the mill levies, their possible size and duration, and their potential impact on plaintiffs' real estate taxes. (See supra at 26-29, and Exhs. 4 and S). Even if the recorded Orders and filed Service Plan did not put plaintiffs on notice ofthe relevant facts before they closed (as we submit they did - see .supra at 26-29), as a matter of law each plaintiff was on such notice no later than the date of closing. (See supra at 28 and n.43). Again, for the Time-Barred Plaintiffs this was more than three years before they tiled suit; as a result, their ILSA and CCPA claims with respect to the Districts are barred by the statute of limitations. 57 We note in addition that any claim that- even after they began actually living in their Condo Units - plaintiffs could not with "reasonable diligence" have discovered the alleged discrepancy between what they claim to have expected and what they received is directly at odds with any claim that this alleged discrepancy was "material." 46 V. IF ANY ASPECT OF THE COMPLAINT SURVIVES, JURY DEMAND AND REQUESTS FOR PUNITIVE, TREBLE ANDIOR CONSEQUENTIAL DAMAGES SHOULD BE STRICKEN If any claim of any plaintiff survives in whole or in part despite the flaws detailed above, then pursuant to C.R.C.P. 12(f): plaintiffs' jury demand should be stricken because they have waived any right to ajury trial; and plaintiffs' requests for consequential and/or treble damages should be stricken because they have waived any right to seek such damages. A. Plaintiffs' Jury Demand Should Be Stricken Because They Expressly Waived Any Right To A Jug Trial58 Plaintiffs' jury demand should be stricken because, both in the PSAS that fomi the central basis for their claims in this lawsuit and in the Declaration to which each plaintiff agreed by accepting a deed to a unit in the Project (see supra at 9), plaintiffs expressly and validly waived any right to demand a jury in any action against Related or Related Westpac. Specifically, in the PSAS each plaintiff agreed: By executing this Agreement, Buyer waives its right and covenants not to assert any constitutional right to trial byjury for any claims or disputes against any party described above and covenants and agrees that the waiver of jury trial described above shall be binding upon its successors and assigns and upon all persons asserting rights or disputes or otherwise acting on Buyer's behalf (PSA at A-1-8, The parties "described above" in the PSA are "Seller, its affiliates, or any design or construction contractors or consultants" (id) - a group that includes both Related 53 This argument presupposes - without conceding -that plaintiffs' claims would have been triable to ajury in the absence of such a waiver. As against Related and Related WestPac, plaintiffs seek primarily the equitable remedy of rescission. (See Compl. 208, 252result, the "basic thrust" of this action is equitable in nature and plaintiffs would not be entitled to a jury trial even if they had not specifically waived any such right. Carder, Inc. v. Cash, 97 P.3d 174, 187 (Colo. App. 2003) (party is entitled to a jury trial only the action is purely legal in nature"; "[W]here legal and equitable claims are joined in the complaint, the court must determine whether the basic thrust ofthe action is equitable or legal in nature"); Snow Basin, v. Boettcher Cc., Inc., 805 P.2d 1151, 1154 (Colo. App. 1991) ("even though a plaintiff seeks the recovery of money damages, it is not entitled to a jury trial if the essence ofthe action is equitable in nature"). 47 and Related WestPac (each of which is an affiliate of BVO, which is the "Seller" under the PSAS). (See supra at 8 and The Declaration contains nearly identical language." Each of these provisions is clear and unambiguous, and should therefore be enforced according to its plain meaning. See Fox v. I-10, Ltd, 957 P.2d 1013, 1022 (Colo. 1998) ("Where a contract is clear and unambiguous, courts must give effect to the plain and ordinary meaning of its terms"). That plain meaning results in a valid waiver of any right to demand a jury trial in this action. See Coforado Cojfee Bean., 251 P.3d at 27 (under Colorado law, the enforceability of a Waiver ofthe right to a jury trial is governed by "general contract interpretation principles"; contractual provision simply stating that a party "Waive[s] [its] rights to a jury trial" sufficed to effectuate such a Waiver). As a result, to the extent that any aspect of the Complaint survives this motion, plaintiffs' jury demand should be stricken. B. Any Request By Plaintiffs For Consequential, Punitive AndfOr Treble Damages Should Be Stricken Because Plaintiffs Similarly Waived Any Right To Seek Such Damages The Court should also strike plaintiffs' requests for relief to the extent that plaintiffs seek consequential, punitive and!or treble damages because plaintiffs expressly waived any right to seek such damages. Specifically, in the PSAS each plaintiff agreed that "none of Seller, its affiliates, or any design or construction contractors or consultants shall be liable to Buyer for any consequential, incidental, punitive or indirect damages (including, but not limited to, lost profits) arising from, relating to, or otherwise in connection with any claims or dispute arising [under the 59 See Declaration at 59, 19.06 ("By accepting a deed to a Unit, each Owner waives its right and covenants not to assert any constitutional right to trial byjury for any Disputes against an Applicable Party and covenants and agrees that the waiver of jury trial described above shall be binding upon its successors and assigns and upon all Persons asserting rights or disputes or otherwise acting on such Owner's behalf1"). As discussed above, as affiliates of EVO Related and Related WestPac are "Applicable Parties" under the Declaration. (See supra at 3 and 48 and that "[t]his Waiver applies regardless ofthe form of action, Whether in contract, tort, or otherwise." (PSA at The Declaration, which became binding on plaintiffs at the time they accepted deeds for their Condo Units (see supra at 9), similarly provides: "no Applicable Party shall be liable to any Complaining Party for any consequential, incidental, punitive, or indirect damages (including, but not limited to, lost profits) arising from, relating to, or otherwise in connection with any Dispute." (See Declaration at 59, l9.06).60 On their CCPA claim, plaintiffs seek treble damages, damages for "the cost of increased assessments and taxes" and mysterious "other damages in an amount to be proven at trial." (See Compl. il 290). But the express terms of the PSAS and the Declaration preclude plaintiffs from seeking "damages" measured by anything other than the difference (if any) in value between what they claim they were promised and what they actually received; "consequential, incidental, . or indirect damages," or any form of "lost profits," are not available. Nor may plaintiffs maintain a claim for treble damages (as they seek on their CCPA claim - see fd), as such damages are a species of punitive damages and therefore were also waived. See Lexton-Ancfra Real Estate Fund 1972 v. Hefier, 826 P.2d 819, 822 (Colo. 1992) ("In Colorado, treble and punitive damages serve similar Perez v. Frank Oldsmobile, Inc., 223 F.3d 617, 624 (7th Cir. 2000) ("Treble damages are a form of punitive 6? Related and Related WestPac are covered by these provisions because they are affiliates of EVO, and this action constitutes a "Dispute" because it involves claims by owners of Condo Units against BVO and its affiliates. (See supra at and notes 9 and 59). As the parties ursuin such claims, plaintiffs are "Complaining Parties" as that 8 term is defined in the Declaration. (See Declaration at 58, l9.04) 61 "[T]he CCPA does not prohibit agreements waiving or modifying its terms." Adams Reload Co., Inc. v. Int Profitfissocs., Inc., 143 P.3d 1056, 1059 (Colo. App. 2006). 49 On their ILSA claims, plaintiffs do not seek punitive damages62 - which are unavailable under ILSA in any event. See Hadad v. Deltona Corp., 535 F. Supp. 1364, 1370-71 (D.N.J. 1982) (reasoning, based on both the language of ILSA and its history including in particular the fact that it is modeled on the securities laws, under which punitive damages are not available punitive damages are not available under ILSA), a]j"d, 725 F.2d 668 (3d Cir. 1983); see generally 32A Fed. Proc., L. Ed. 75:422 ("punitive damages are not available" under ILSA). Rather, plaintiffs primarily seek restitution as a corollary to the requested rescission of their PSAS, and seek unspecified damages ("in an amount to be determined at trial") in the alternative to such rescission. (Compl. 1111 209, 253, 300, and p. 49 C). To the extent that plaintiffs intended this as a request for consequential, indirect or incidental damages of the type they seek on their CCPA claim, they have not specified such damages with the particularity required under C.R.C.P. 9(b) (which requires such particularity as to all of the elements of any fraud claim). 63 But in all events, plaintiffs have waived any right to seek such damages.54 As a result, if any claim by any plaintiff against Related or Related WestPac survives this motion, the Court should order that no such plaintiff will in any event be entitled to (and should strike any request for) treble damages, lost profits, or consequential, incidental or indirect damages (including but not limited to damages based on alleged increased taxes or alleged 62 See Compl. at 208-10; ici 252-54; id. 1] 304 (making no mention of punitive damages, and making clear that treble damages are sought only with respect to the CCPA claim). 63 This rule applies to plaintiffs' ILSA claims because they sound in fraud. See Venezia v. 72th Div. Properties, LLC, 685 F. Supp.2d 752, 765 (MD. Tenn. 2010) (dismissing ILSA fraud claims for failure to satisfy Fed. R. Civ. P. Moran v. Beach Capital, LLC, 2011 WL 17637, 2 (MD. Fla. Jan. 4, 2011) (same); Garcia v. Santa Maria Resort, Inc., 528 F. Supp.2d 1283, 1294 (S.D. Fla. 2007) (same). 64 We do not now argue that this waiver impacts plaintiffs' ability to claim attorneys' fees or other related items pursuant to 15 U.S.C. 1709(c), inasmuch as those not only are direct, out-of-pocket costs, but also are also among the kinds of relief expressly contemplated by the Declaration - under which Related and Related WestPac will similarly be entitled to reimbursement for such items if they prevail. (See Declaration at 54, 17.02). 50 decreased resale value) as against those defendants. CONCLUSION The Court should dismiss with prejudice each of plaintiffs' claims against Related and Related WestPac. In the alternative, it should dismiss all of the claims asserted by the Time- Barred Plaintiffs, and should strike plaintiffs' jury demand and their requests for punitive, treble and/or consequential damaged with respect to any claims that survive this motion. Dated this 9th day of January, 2012. Respectfully Submitted, BRYAN CAVE HRO /s/Bobbee .1 Bobbee J. Musgrave, 12440 1700 Lincoln Street, Suite 4100 Denver, Colorado 80203 Phone: 303.861.7000 Facsimile: (303) 866-0200 KATSKY KORINS LLP Mark Wallish, admitted pro hac vice, Adrienne B. Koch, admitted pro hae vice, 1 Elan R. Dobbs, admitted _pro hae vice, 605 Third Avenue New York, NY 10158 Phone: 212-953-6000 Facsimile: 212-953-6899 Artorneysfor Defendanls The Related Companies, LP. and Related WestPac, LLC 51 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS SECOND AMENDED COMPLAINT PURSUANT TO C.R.C.P. 12 FOR LACK OF STANDING ANDXOR FAILURE TO STATE A CLAIM was served via LexisNexis File Serve this 9th day of January, 2012 addressed to the following counsel of record: Michael J. Reiser, Esq. Chad Schmit LAW OFFICES OF MICHAEL J. REISER Matthew C. Ferguson 961 Ygnacio Valley Road David D. Smith Walnut Creek, CA 94596 GARFIELD HECHT, P. C. verdicts@sbog1obal.net 601 East Hyman Avenue Aspen, CO 81611 PfUf"f`Uf5` csch1nit@garfieldhecht.co1n ferguson@garfieldheeht.com dsmith@garfie1dhecht.com Attorneys for Plaintiffs' Wendy C. Fostvedt Jon Bernhardt FOSTVEDT LEGAL GROUP, LLC Patrick H. Pugh 100 Elk Run Drive, Suite 129 601 East Hyman BALLARD SPAHR LLP Avenue 1225 17"' street, suite 2300 Basalt, CO 81621 Denver, CO 80202 wfostvedt@yaboo.c0m bernl1ardt@ba1lardspahr.com pughp@bal1ardspahr.co1n Attorneys for Plaintws Attorneys for Defendants Base Village Owner LLC and Refateci Westpac Rea! Estate LLC Herbert A. Delap B. Joseph Krabacher Chris G. Baumgartner Robert S. Hoover DUFF ORD BROWN, P.C. SHERMAN HOWARD, L.L.C. 1700 Boradway, Suite 2100 201 N. Mill Street, Suite 201 Denver, CO 80290-2101 Aspen, CO 81611 cdelap@duffordbroWn.com cbaumbartner@duffordbroWn.com Jkl' Cl-Com Attorneys for Defendant Aspen Skiing Company, LLC Attorneys for Dejendant Patrick Smith 52 Judy Wolff udy Wolff BRYAN CAVE HRO