FII Fl) Document I 1 Countv Dist; :ct Lourt 9th JD DISTRICT COURT, PITKIN COUNTY 1< mg Dare ian 10 2012 4 STATE OF COLORADO H1310 41799731 Aspen CO 81611 Phone (970) 925 7635 BRUCE SMITH, et al Plaintiffs THE RELATED COMPANIES LP et al Defendants Attorneys for Defendant Aspen Skiing Company LLC FOR COURT USE ONLY Herbert A Delap #1005 Chris Baumgartner #31144 Case NO 201 IC-V168 DUFFORD BROWN 1700 Broadway Suite 2100 Divlslon 3 Denver Colorado 80290-2101 Telephone. (303) 861->>8013 Facsimile. (303) 832-3804 mail: cde1ap@duffordbroWn.c0m cbaumgartner@duffordbrown.com DEFENDAN ASPEN SKIING COMPANY LLC Address: 506 Main Street viewifierlts MOTION TO DISMISS PURSUANT TO 9(b) Defendant Aspen Skiing Company, LLC, by its attorneys Herbert A. Delap and Chris G. Baumgartner of Dufford Brown, P.C., hereby submits its Motion to Dismiss the Second Amended Complaint pursuant to C.R.C.P. and states as follows: Certificate of Compliancewith 121, Section 1-15[8 Q. Co-counsel for Defendant Aspen Skiing Company, LLC has conferred with counsel for Plaintiffs regarding the substance of this Motion and Plaintiffs object to the relief requested. {O0460081.l} INTRODUCTION The gravamen of the Second Amended Complaint ('Complaint') is that the Plaintiffs entered into purchase agreements and took title to certain condominium units at Capitol Peak Lodge but that these conveyances should be rescinded because: the so-called 'Intrawest Defendants' and the 'Related Defendants' (defined at Conipl., 1l1[ 47 and 39, respectively) . allegedly failed to build the units to the square footage that was advertised, and the 'Intrawest Defendants' and the 'Related Defendants' allegedly fraudulently concealed that there could be increased Mill Levies applicable to the owners of the condominium units arising out ofthe construction ofthe development. Unlike the prior versions of Plaintiffs' complaint, the Second_ Amended Complaint has roughly divided its various countsbetween those against the 'Intrawest Defendants' and those against the 'Related Defendants,' as the condominium purchase agreements (along with the other aspects of the project development) were assigned from the original seller to a new company during construction and prior to the closings on the condominium unit purchases. (Compl., 111] 49, 90.) The three Counts against Aspen Skiing Company, LLC (listed as one of the so-called 'Intrawest Defendants') should be dismissed because there are no specific and particular allegations to connect Aspen Skiing Company, LLC to either the conduct of the Related Defendants or to the conduct of the 'lntrawest Defendants' who allegedly rnade the specific purported 'misrepresentations' concerning either: the square footage of the condominium units, or the potential Mill Levies. Without providing any specific, particular allegations of fact with respect to how Aspen Skiing Company, LLC could have been involved in the alleged misrepresentations, the Complaint's three Counts against Aspen Skiing Company should be 2 dismissed. The Complaint's three counts (Counts I, and VII) assert claims under the I Interstate Lands Sales Full Disclosure Act (Counts I and and under Colorado's Consumer Fraud Act (Count VII), but they fail to allege with particularity how Aspen Skiing Company is connected with the alleged misrepresentations. ARGUMEN I. Factual Allegations of the Complaint. The Complaint alleges that the Plaintiffs entered into individual contracts forthe purchase of their individual condominium units and that a form contract ('Contract') applicable to them all is attached thereto as Exhibit A. (Compl., 11] 4-31) The Contract sets forth that the Plaintiffs entered into agreements to purchase their condominium units from defendant Base Village Phase lA Development Company, LLC, and the Plaintiffs further allege that these contracts were subsequently assigned from that seller to Base Village Owner, LLC (after the development project was purchased by a new developer), which entity completed the construction of the condominium units and conveyed title to the condominium units to the Plaintiffs at the closings for those contracts. (Compl., '|l1l 82, 90, and at Ex. A thereto.) Plaintiffs allege that they entered into the contracts to purchase the condominium units in 2006 and that they received title to the units in 2008. (Compl., 82, l02.) The Complaint does not specifically allege that Defendant Aspen Skiing Company, LLC made any specific misrepresentation to any of the Plaintiffs regarding the square footage of the condominium units, but rather only alleges that the 'Intrawest Defendants' - referring to 6 different companies - made untrue statements overstating the square footage of the condominium units. (Compl., ll8-127; 172-78; l8 .) The Complaint does not specifically allege that {ou4aoos1.1} 3 Defendant Aspen Skiing Company, LLC did anything to conceal the possibility that bonds could be issued or that Mill Levies could affect the condominium unit properties, but rather only alleges that the 'Intrawest Defendants' concealed or failed to disclose the bonds and potential Mill Levies. (Comp1., 111] 134-147; 214-227; 231.) Moreover, although the Complaint alleges that the contracts under which the Plaintiffs purchased their condominium units were assigned to a new company unconnected with the so- called 'Intrawest Defendants," there are no allegations in the Complaint that connect Defendant Aspen Skiing Company, LLC with the alleged fraudulent conduct of the Related Defendants in connection with the square footage of the units or with the bonds and Mill Levies. II. Counts I, and VII, Sounding in Fraud and Misrepresentation, Must Be Dismissed Because They Are Not Pleaded with Particularity as Required by C.R.C.P. Counts I, and VII of the Complaint, which assert three statutory claims, are all based upon allegations of fraud, misrepresentations or concealment. (See Compl., at Counts I, VII.) A complaint for fraud must state with paiticularity the circumstances constituting hand. C.R.C.P. Wley v. Byrd, 408 P.2d 72, '74 (Colo. 1965). Because Rule 9(b) is substantially similar to the Federal Rule of Civil Procedure the decisions of the federal courts are highly persuasive. See Faris v. Rothenberg, 648 P.2d 1089, 1091 fn.l (Colo. 1982). The complaint should apprise a defendant of 'the time and place of the alleged fraudulent statement, the person who made the statements, and the persons to Whom the statements were made." See Daher v. G.D. Searle Co., 695 F. Supp. 436, 439-40 (D. Minn. 1988). 'In other words, the party must typically identify the 'who, what, where, When, and how' of the alleged {0046008 4 fraud." See BJC Health System v. Columbia Casualty Company, 478 F.3d 908, 917 (8th Cir. 2007). Furthermore, 'where plaintiff has brought fraud claims against more than one defendant, each defendant is entitled to know the particular allegations of fraud it allegedly committed. Common circumstances do not excuse a plaintiff from identifying which party allegedly perpetrated which specific acts _of fraud' Daber v. G.D. Searle Co., 695 F. Supp. 436, 440 (D. Minn. 1988). 'Because one ofthe main purposes of the rule [Rule 9] is to facilitate a defendant's ability to respond and to prepare a defense to charges of fraud, conclusory allegations that a defendant's conduct was fraudulent and deceptive are not sufficient to satisfy the rule.' Commercial Property Investments, Inc. v. Quality Inns Intern., Inc., 61 F.3d 639, 644 (8th Cir. 1995) (internal citations omitted). See also, BJC Health System v. Columbia Casualty Company, 478 .3d 908, 917 (8th Cir. 2007) (conclusory allegations are not sufficient to satisfy Federal Rule Mudlitz v. Mutual Service Ins. _Companies, 75 F.3d 391, 395 (8th Cir. 1996) (conclusory allegations of justifiable reliance and damages are not sufficient for fraud action). In addition, the principle has been stated that 'mere allegations of fraud, corruption, or conspiracy, averments to conditions of mind, or referrals to plans and schemes are too conclusional to satisfy the particularity requirement, no matter how many times such accusations are repeated' Monus v. Colorado Baseball 1993, Inc., 103 F.3d 145, 1996 WL 723338 at *6 (l0'h Cir. 1996) (unpub.), quoting v. Merrick, 881 F.2d 446, 449 (7th Cir. 1989). Under these standards, Counts I, and VII have failed to allege fraud with the required particularity and specificity as against Aspen Skiing Company, LLC. As set forth above, the Complaint fails to allege with particularity how Aspen Skiing Company, LLC is connected with {oo4s0os1.1} 5 the alleged misrepresentations concerning the square footage of the condominium units or the Mill Levies. In the absence of such particular allegations, the Counts against Aspen Skiing Company, LLC should be dismissed. See, eng., Stare Farm Mutual Auto. Ins. Co, v. Parrish, 899 P.2d 285, 289 (Colo. Ct. App., 1994). CONCLUSION For all the reasons stated above, Counts I, and VII of the Complaint should be dismissed for failing to allege fraud with particularity. WHEREFORE, Defendant Aspen Skiing Company, LLC respectfully requests an order dismissing- Counts I, and VII of the Complaint, and for other such relief as is just. DATED this 10th day of January, 2012. BROWN, P.C. Chris G. Baumgarmer Herbert A. Delap, #1005 Chris G. Baumgartner, #31144 And Eric P. Sparks Gould Ratner LLP 222 N. LaSalle Street, Fl. Chicago, IL 60601 Phone: 312-2366003 Fax: 3l2-236-3241 Attorneys for Defendant Aspen Skiing Company, LLC {004600Si.1} 6 CERTIFICATE OF SERVICE I hereby certify that on the 10th day of Janua1y, 2012, a tme and correct copy of the foregoing DEFENDANT ASPEN SKIING COMPANY, MOTION TO DISMISS PURSUANT TO C.R.C.P. 9(b) was served via LEXIS NEXIS FILE SERVE on the following: Matthew Conor Ferguson Chad James Schmit David D. Smith GARFIELD HECHT, P.C. 601 E. Hyman Aspen, CO 81611 Michael Joseph Reiser LAW OFFICEOF MICHAEL J. REISER 961 Ygnacio Valley Road Wahiut Creek, CA 94596 Bobbee J. Musgrave HOLME ROBERTS OWEN 1700 Lincoln Street, Suite 4100 Denver, CO 80203 on Bernhardt Patrick H. Pugh BALLARD SPAHR, LLP 1225 17th Street, Suite 2300 Denver, CO 80202 Wendy Fostvedt, Esq. FOSTVEDT LEGAL GROUP, LLC 533 E. Hopkins Ave., 3rd Fl. Aspen, CO 81611-1983 B. Joseph Krabacher Robert S. Hoover SHERMAN HOWARD, L.L.C. 201 N. Mill Street, Suite 201 Aspen, CO 81611 Carol .1 Kelfy Carol J. Kelly, Legal Assistant {00460081.'l}