it I comm", PITKIN coUNrv, COLORADO Filing ID: 42083791 Court Address: Review Clerk: vieky Spaulding-Geac rd 506 East Main Street Tel hone: 970 925-7635 Plaintiffs: BRUCE L. SMITH SMITH and BRUCE L. SMITH, TRUSTEE, THE SMITH TRUST DTD 1/15/04; et al., v. - neremiemee THE RELATED COMPANIES, LP, USE New York limited artnershi et al. Attorneys for Dejendants Intrawest Resorts, Inc.; Case 201 1 CV 168 Intrawest Brush Creek Development Company, Divisimr 3 Base Village Phase IA Development Playground Destination Properties, Inc. and Intrawest ULC Name: Richard K. Clark, Esq., No. 2753 Kristin M. Bronson, No. 28559 Nicole K. Gorham, No. 39186 Firm: Rothgerber Johnson Lyons LLP Address: 1200 17th Street, Suite 3000 Denver, Colorado 80202-5855 Tel: (303) 623-9000 Fax: (303) 623-9222 E--mail: kbr0nson@rothgerber.com MOTION TO DISMISS I Defendants Intrawest Resorts, Inc., Playground Destination Properties, Inc., Intrawest Brush Creek Development Company, LLC, Base Village Phase 1A Development, LLC and Intrawest ULC, through their undersigned counsel, Rothgerber Johnson Lyons LLP, hereby submit this Motion to Dismiss Plaintii}`s' Second Amended Complaint and Jury Demand, and as grounds therefor state as follows: zuoas19svs_1 Certzficate of Compliance Pursuant to Colo. R. Civ. P. 121 1-I counsel for the Intrawest Defendants and Partnership Defendants has conferred with counsel for Plaintiffs and was advised that Plaintiffs oppose the relief requested herein. The Intrawest and Partnership Defendants request a hearing on this Motion. . INTRODUCTION This lawsuit arises from the purchase and sale of condominium units ("Units") in a project known as Capitol Peak Lodge Condominium (the "Project") in the Town of Snowmass Village, Colorado (the "Town"). The Project is part of the Base Village Planned Unit Development ("Base Village Plaintiffs have sued multiple Defendants, including several Defendants which they into a group referred to as the "Intrawest Defendants." Among these Defendants, Plaintiffs have sued Intrawest Resorts, Inc. ("Intrawest Resorts"), Intrawest/Brush Creek Development Company, LLC ("Intrawest/Brush Creek"), Base Village Phase IA Development, LLC ("Base Village Phase Playground Destination Properties, Inc. ("Playground") and Iutrawest ULC (See Second Amended Complaint and Jury Demand ("Second Amended Complaint" or "2d Am. Cornpl.") and 48.) Collectively, Defendants Intrawest Resorts, ULC and Playground will be referred to as the "Intrawest Defendants." Intrawest/Brush Creek and Base Village Phase IA will be referred to collectively and separately as the . "Partnership Defendants." Intrawest/Brush Creek was the original owner of the Project and is the sole member of - Base Village Phase IA, the developer of the Project. In 2006, each Plaintiff entered into a Purchase and Sale Agreement with Base Village Phase IA for purchase of a Unit or Units in the Project. On or about March 2, 2007, prior to construction of the Units and prior to Plaintiffs closing on the Units, the entire Project was sold to a third party, Base Village Owner LLC and all the PSAs were assigned to BVO. Neither the Intrawe Defendants nor the Partnership Defendants had any continuing involvement with the Projectafter the sale to BVO. Years later, Plaintiffs bring this action alleging deficiencies with their Units. In filing this lawsuit, Plaintiffs attempt to capitalize on a ruling is ued by this Court under the Interstate Land Sales Full Disclosure Act or "Statute"), involving another project in the Base Village PUD (Keek, etal. v. Base Village Owner; LLC et al., No. 2009 CV 273) (the "Viceroy In the Viceroy Litigation, the plaintiffs rejected the allegedly non-conforming condominium units and sued for a reflmd of their deposit prior to closing and taking possession of the units. This clearly is not our case. Here, Plaintiffs accepted their Units, took title to them, lived in them for years before allegedly noticing that the Units were "substantially" different than what they had been promised. 2 2o0ss19s1s_1 Plaintiffs now seek to hold the Intrawest and Partnership Defendants liable for the way in which their Units were constructed even though these Defendants assigned all interest in the PSAs to BVO prior to construction commencing. Plaintiffs expressly consented to these assignments in the PSAs, agreeing not to continue to hold the assignors liable following the as ignments. Notwithstanding this, Plaintiffs have brought claims against the Intrawest and Partnership Defendants for matters outside their control. A against the Intrawest and Partnership Defendants, Plaintiffs have failed to state a claim upon which relief may be granted. Plaintiffs' claims must be dismissed for the following reasons: I. Plaintiffs' First and Third ILSA Claims must be dismissed because the PSAs are exempt from II..SA's anti-fraud provisions under the Improved Lot Exemption. II. Plaintiffs' First and Third H.SA Claims must also be dismissed on the separate ground that Plaintiffs have failed to allege bets sufficient to support a claim for fraud under 15 U.S.C. HI. Plaintiffs' Fifth Claim for Fraudulent Inducement against Base Village Phase lA must be dismissed because Plaintiffs have failed to allege facts sufficient to support a claim for fraud. IV. Plaintiffs' Sixth Claim for Breach of Contract against Base Village Phase 1A must be dismissed because Base Village Phase 1A assigned all of its interests in the PSAs to BVO and Plaintiffs agreed that Base Village Phase 1A would not be liable if such an assignment was made; the PSAs and Unit Plans negate any claim for breach of contract; and any repre entations regarding square footage ofthe Units in the PSAs were extinguished upon delivery and acceptance of a deed under the merger doctrine. V. Plaint:iffs' Seventh Claim must be dismissed because Plaintiffs have failed to plead facts to support violation of the Colorado Consumer Protection Act VI. All of Plaintiffs' claims against Intrawest ULC must be dismissed - because Plaintiffs have failed to plead any facts to support that ULC, a Canadian corporation, had any involvement with the Base Village Project at issue or any connection to the other Defendants related to the Project. 3 . VH. Altematively, if this- Court does not dismiss all of Plaintiff`s' claims against the Intrawest and Partnership Defendants, the claims of tho Plaintiffs who closed more than three years before this action was filed are barred by the applicable statute of limitations. VHI. Alternatively, if this Court does not dismi all of Plaintiff`s' claims against the Intrawe and Partnership Defendants, Plaintiffs' jury demand and request for consequential, punitive and treble damages should be stricken. FACTUAL BACKGROUND Intrawest and Partnership Defendants Intrawest/Brush Creek was the original applicant and owner of the multi--phase Base Village Project in Snowmass. (2d Am. Compl. at 1] 62.) Intrawest Resorts is the managing member of Intrawest/Brush Creek. (Id. at 1[ 45.) Base Village Phase 1A is wholly owned by Intrawest/Brush Creek and was the developer of the first re idential development phase of the`Project. (See id at1[ 46.) Playground is a corporation that acted as a real estate broker in the sale of the Units. (See id. at 1] 47.) Intrawest ULC is an unlimited liability company organized under the laws of Alberta, Canada with its principal place of business in British Columbia, Canada. (See id. at 1] 41.) BVPG Disclosure Regarding Square Footage Plaintiffs allege that on or about April 5, 2005, Playground sent a Base Village Purchasers Guide to each Plaintiff in connection with the purchase of their Units. (2d Am. Compl. at 1[ 75.) A ?copy of the BVPG is attached as Exh1`bit to Plainti&`s' Second Amended Complaint. Each BVPG stated an approximate square footage for the Units and expressly advised: "These are preliminary suite layouts only. The developer reserves the right to make changes to floorplans, project design, specifications, and features. Final dimensions, square footage, and floorplans may vary." (Ex. to 2d Am. Compl. . Execution of PSAs by Plaintiffs Between April 14 and June 6, 2006, each PlaintiH` entered into a standard Purchase and Sale Agreement with Base ViHage Phase 1A for the purchase of one or more condominium units in the Project (the (See 2d Am. Compl. at1]1] 4, 83.) A sample PSA is attached as Exhibit A to Plaintiifs' Second Amended Complaint. 4 zuczs19a?zs_1 PSA Disclo ure Regarding Square Footage Each PSA executed by Plaintiffs stated an approximate square footage for the Unit and advised: "'I`hese are preliminary suite layouts only. The developer reserves the right to make changes to floorplans, project design, specifications, and features. Final dimensions, square footage, and floorplans may vary." (Ex. A to 2d Am. Comp]. (PSA) at Ex. A (Unit Plan).) The PSAs further expressly provided: Representations as to square footages contained within the Unit or other portions of the Project are approximate numbers only. Buyer aclmowledges and agree that square footage calculations may be made in a variety of marmers and so long as the Unit is constructed substantially in accordance with the Unit Plan reviewed by Buyer, Buyer shall neither have any right to rescind this Agreement nor to claim any breach hereof on account of alleged discrepancie in square footage calculations. (Id. at Addendum No. 1 PSA Disclosure Regarding Mill Levies The PSAs disclosed to Plaintiffs that the Units were included in special taxing districts, including the Base Village Metropolitan District No. 2 and the Snowmass Village General Improvement District (collectively, the "Metro Dist1icts"). The PSAs also disclosed that the Unit owners would be responsible for paying property taxes to cover the costs of constructing or purchasing the improvements for which the Metro Districts were responsible. Plaintiff; were warned that they may hee increased mill levies to service therelated debt. Plaintiffs were also advised that they should investigate this matter, including the "existing mill levies of such districts" and the "potential for increase in such mill levies." Specifically, the PSAs provide the following disclaimers: Taxg Districts IT IS THAT THE UNIT MAY BE INCLUDED ONE OR MORE SPECIAL TAXING DISTRICTS. SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO GENERAL OBLIGATION INDEBTEDNESS THAT IS PAID BY REVENUES PRODUCED FROM ANNUAL TAX LEVIES ON THE TAXABLE PROPERTY WITH SUCH DISTRICTS. PROPERTY OWNERS IN SUCH DISTRICTS MAY BE PLACED AT RISK FOR INCREASE MILL LEVIES IN 5 200ss19svs_1 EXCESS OF TAX BURDENS TO SUPPORT THE SERVICING OF SUCH DEBT WHERE CIRCUMSTANCES ARISE RESULTING IN THE INABILITY OF SUCH A DISTRICT TO - DISCHARGE SUCH INDEBTEDNESS WITHOUT SUCH AN INCREASE IN MILL LEVIES. BUYER SHOULD INVESTIGATE THE DEBT FINANCING REQUIREMENTS OF AUTHORIZED GENERAL OBLIGATION AND INDEBTEDNESS OF SUCH DISTRICTS, EXISTING MILL LEVIES OF SUCH DISTRICT SERVICING SUCH INDEBTEDNESS AND POTENTIAL FOR AN INCREASE IN SUCH MILL LEVIES. Base Village Metropglitan District No. 2 and Snowmass Village General Imgvement District In addition to the foregoing, the Project is located within the boundaries of the Base Village Metropolitan District No. 2 and the Snowmass General Improvement District (the "Snowmass Dist1icts"). Eligible electors and property owners within the boundaries of the Snowmass Districts previously authorized the Snowmass Districts to impose property tax levies and facilities fees and to issue bonds in amounts sufficient to construct or purchase certain improvements within the Town of Snowma Village. No additional eligible elector or property owner approvals are required prior to such imposition of property tax levies or the issuance of debt within previously approved amounts within the Project. Regardless of whether such person was a property owner as of the date initial authorization was given to impose property tax levies or issue the bonds, or become an owner thereafter, such property owner will be responsible for the payment of taxes and repayment of any such bond issued by the Snowmass Districts. (Ex. A to 2d Am. Compl. (PSA) at Addendum No. 1 6(a) and I Publicly Available Information About Expected Mill Levies On December 7 and 10, 2004, the Pitkin County District Court entered Orders approving Base Village Metropolitan Districts No. 2 and No. 1, respectively. (2d Am. Complattached to the Motion to Dismiss and Memorandum of Law in Support of Motion to Dismiss Second Amended Complaint Pursuant to C.R.C.P. 12 for Lack of Standing and/or Failure to State a Claim iiled by The Related Companies, L.P. and Related We tpac, LLC on January 9, 2012 (the "Related Memo") and incorporated fully herein.) 'I'hose Orders -- which were recorded with the Pitkin County Clerk and Recorder - refer to the Consolidated Service - Plan for the Metro Districts (the "Service Plan") approved by the Town on September 20, 2004. (Exattached to the Related Memo and incorporated firlly herein; see also 2d Am. Compl. at 1]1] 65, 68.) The Service Plan included a $38 million limit on the debt the Metro Districts may incur, a 49.5 mill maximum aggregate mill levy that may be imposed on properties in the Metro Districts (the "Mill Levy Cap"), and a sample computation of taxes a property owner could pay on a $1 million property, assuming a maximum 49.5 mill levy. (Ex. 3 (Service Plan) at 1]1] and Ex. E, attached to the Related Memo and incorporate fully herein.) The Service Plan became a matter of public record on its approval, and was thereafter available "for public inspection" in the otlice of the Town Clerk. See C.R.S. 32-1-306. On October 23, 2006, the Town approved an Amended and Restated Consolidated Service Plan for the Metro Districts (the "Arnended Service Plan"). (See 2d Am. Compl. at 1] 68.; Ex. 6 (Amended Service Plan) attached to the Related Memo and incorporate fully herein.) The Amended Service Plan, which is also part of the public record, includes the same 49.5 Mill Levy Cap, and increased the debt limit to $48.7 million. (Ex. 6 (Amended Service Plan) attached to the Related Memo at 1] V.C and Ex. E.) The current mill levy imposed on real property located within the boundaries ofthe Metro Districts, including the Units owned by Plaintiffs, is 49.5 mills. (See Am. Compl. at1] 103.) BVO Acquired the Project and Plaintiffs Closed on the Units On or about March 2, 2007, the Partnership Defendants sold the Project and conveyed by special warranty deed the land containing Capital Peak to BVO. (2d Am. Compl. at 1] 49.) As part ofthe sale of the Project, on or about March 2, 2007, BVO received an assignment of each of Plaintiffs' PSAs. (Id. at 1]1] 50, 91.) 'Ihe Intrawest and Partnership Defendants had no further involvement with the Project after the sale to BVO. (See generally 2d Am. Compl.) Between April 2008 and December 2008,?each Plaintiff closed on their Unit with BVO as the seller. (See 2d Am. Compl. at 1] 103.) For ease of reference, the closing dates for the various Plaintiffs are set forth in Ex. 2 attached to the Related Memo and incorporated fully herein. For nine ofthe Units, the closings occurred more than three years before this action was tiled. '1`hese units include tho contracted for or purchased by Plaintitis .TeHi?ey Ganeles Lori Berman and/or GBL, Silverman Family Trust and Martin Silverman; Helena Wilner and Robert K. Vahradian; Jerome P. White and Marianne White; Aspen Valley Real Estate, Pharris Family Trust, Gerald Nelson Pharris Trust, and/or Terese Koleto Pharris Trust; Vincent A. Darmali and Patti M. Darmali Trust; Marc A. Asselmeier, Michael W. Mitchell, Carol E. Assehneier and Nina D. Mitchell Living and Bruce Smith, Kathleen Smith and/or The Smith Trust DTD 1-15-04. (See Ex. 2.) LEGAL STANDARD Colo. R. Civ. P. l2(b)(5) is designed to "test the formal sutiiciency of the complaint." Coors Brewing Co. v. Floyd, 978 P.2d 663, 665 (Colo. 1999). A complaint may be if 7 zooss19s76_1 the plaintiff cannot prove facts that would entitle him or her to relief Id.; Pub. Serv. Co. of Colorado v. Van Wyk, 27 P.3d 377, 385-86 (Colo. 2001). Further, a complaint may be dismissed if the substantive law does not support the claims alleged. Denver Parents Ass 'n v. Denver Bd. of Education, 10 P.3d 662, 664 (Colo. App. 2000). When evaluating a motion to dismiss, the well-pleaded facts in the complaint are taken as true. Western Innovations, Inc. v. Sonitrol Corp., 187 P.3d 1155, 1158 (Colo. App. 2008); Denver Post Corp. v. Ritter, 255 P.3d 1083, 1088 (Colo. 2011). "However, the court is not required to accept as true legal conclusions couched as factual allegations." Western Innovations, Inc., 187 P.3d at 1158. When considering a motion to dismiss for failure to state a claim, a court may consider the facts alleged in the pleadings, as well as documents attached as exhibits or incorporated by reference and matters proper for judicial notice. Denver Post Corp., 255 P.3d at 1088 Walker v. Van Laningham, 148 P.3d 391, 397 (Colo. App. 2006) (judicial notice); Yadon v. Lowry, 126 P.3d 332, 335-36 (Colo. App. 2005) (documents attached to or referred to in complaint). The court may take judicial notice of matters of publicly recorded documents and the court's own records. C.R.E. 201(i); Prestige Homes, Inc. v. Legoufe, 658 P.2d 850, 853 (Colo. App. 1983); Walker, 148 P.3d at 397. LEGAL ARGUMENT . I. FIRST AND THIRD CLAIMS MUST BE DISMISSED BECAUSE THE PSAs ARE EXEMPT FROM ANTI-FRAUD PROVISIONS. A. ILSA and the Improved Lot Exemption. 1. The Purpose of ILSA is to Protect Consumers from the Fraudulent Sale of Undeveloped Land. ILSA, codified at 15 U.S.C. 1701 et. seq., is a federal statute which was enacted to prevent iiaud in the sale of unimproved land. Stein v. Paradigm Jlhrasol, LLC, 586 F.3d 849, 853 (11th Cir. 2009); Ackmann v. Merchants Mortgage Trust Corp., 645 P.2d 7, 15 (Colo. 1982). Congress enacted ILSA in response to "who1esale interstate land iiaud" during the 1960s, in which "unscrupulous promoters utilized a variety of schemes to unload undesirable realty," such as Florida swampland, onto unsuspecting and ill-informed investors and consumers. Sun v. Merryield Town CenterLP, 584 F. Supp. 2d 848, 853 (E.D. Va. 2008); Long v. Merrtfeld Town Center 611 F.3d 240, 244 (4th Cir. 2010); Bodansky v. On i the Park Condo, LLC, 635 F.3d 75, 79-80 (2d Cir. 2011). ILSA was not intended to insure buyers of luxury resort condominiums against nrarket risk, but has nonetheless become an "increasingly popular means of channeling buyer's remorse." Stein, 586 F.3d at 852. ILSA applies to "any developer or agent" who "directly or indirectly, make[s] use of any means or instruments of transportation or communication in interstate commerce, or of the mails" with respect to the sale or lease, or offer to sell or lease, any lot not exempt under the 8 20035l9376_1 Statute. 15 U.S.C. 1703. If applicable, the Statute utilizes disclosure as its primary tool to discourage fraud. Stein, 586 F.3d at 853; Sun Kyung Ahn, 584 F. Supp. 2d at 853. To that end, ILSA requires developers (who do not qualify for an exemption), to inform buyers through certain disclosures, prior to the purchase of subdivision lots, of facts which would enable a reasonably prudent individual to make an informed decision about purchasing the property. Paquin v. Four Seasons of Tennessee, Inc., 519 F.2d 1105, 1109 (5th Cir. 1975); Ackmann, 645 P.2d at 16. There are two key aspects of ILSA which apply to those subject to the Statute: (1) registration requirements, and (2) compliance with the and-fraud provisions. Only the anti-fraud provisions are at issue in this case.] Congress did not intend to subject all land sales to ILSA's disclosure requirements. ILSA contains more than 15 exemptions, which are applicable under circumstances where "the risk that a developer is attempting to sell essentially uninhabitable land to an unsuspecting buyer is so low" that ILSA's disclosure requirements are unnecessary to protect buyers. Sun Kyung Ahn, 584 .Supp.2d at 853-54; Long, 611 F.3d at 245; 15 U.S.C. 1702. Section l702(a) of ILSA lists the statutory exemptions from both the registration requirements L1_d the anti-fraud - provisions. 15 U.S.C. l702(a). One such exemption, at issue here, is the "Improved Lot Exemption. "1 5 U.S.C. l702(a)(2). Under the Improved Lot Exemption, ILSA is not applicable to the sale of land under a contract which obligates the seller to erect a building on the land within two years from the date ofthe contract. Specifically, l702(a)(2) provides that ILSA shall not apply to "the sale or lease of any improved land on which there is a residential, commercial, condominium, or industrial building, or the sale or lease of land under a contract obligating the seller or lessor to erect such a building thereon within a period of two years." 15 U.S.C. l702(a)(2) (emphasis added). 2. A Con tract "0bligates" a Seller to Build Within the Meaning ofthe Improved Lot Exemption When That Obligation Is Legally Enforceable and Not Subject to the Seller 's Unbridled Discretion. To determine whether a contract falls within the Improved Lot Exemption requires a look at both federal and state law. Stein, 586 F.3d at 854; Princeton Homes, Inc. v. Virone, 612 F.3d 1324, 1331 (1 Cir. 2010). Because ILSA is a federal statute, its interpretation is a matter of federal law and courts use principles of statutory interpretation hom federal decisions in construing the language of the Exemption. Stein, 586 F.3d at 854. However, a court must also look to state contract law to see what remedies a party would have if the seller had not completed construction ofthe building within the two--year period specified in the Exemption. Id.; see also I Markowitz v. Ne. Land Co., 906 F.2d 100, 105 (3d Cir. 1990). When interpreting a statute, a court must first look to the plain language of the tatute. Copeland v. MBNA America, NIA., 820 F. Supp. 537, 540 (D. Colo. 1993) ("The starting point in I It should be noted, while Plaintiffs have a discus 'on of the disclo ure requirements (see 2d Am. Cornpl. at 1|1] 51- 53, 192), such discussion is irrelevant because they have not asserted any claims against any Defendant based on alleged violation of those requirements. 20ors19sr6_1 9 statutory interpretation is the language of the statute itselfZ"); Quarles v. US ex rel. Bureau of Indian Ajairs, 372 .3d 1169, 1172 (10th Cir. 2004). Here, the term "obligating" is not defined in H.SA. Undefined terms of a statute are given their ordinary and common meaning. Perrin v. United States, 444 U.S. 37, 42 (1979); Quarles, 372 .3d at 1172. The ordinary meaning of the word "obligating" is "binding by legal or moral duty." Stein, 586 F.3d at 854. Accordingly, the Improved Lot Exemption applies when a contract imposes a legal duty on the seller to perform his or her promise to build within two years. See id. When determining whether such legal duty exists, courts have found the nature and extent ofthe duty a contract imposes is a matter of state contract law. Stein, 586 F.3d at 854; see also Norfolk Ry. Co. v. Am. Train Dispatches Ass 499 U.S. 117, 129 (1991). legal - duty, contractual or otherwise, i one that the law will require a party to perform, or to pay for not performing, by bringing to bear public force." Stein, 586 F.3d at 855. Federal courts interpreting the Improved Lot Exemption have found, consistent with the plain meaning of the text, that a contract "obligating" a seller to build is one that must place responsibility to build on the seller and must not allow nonperformance "at the seller's discretion." See Stein, 586 F.3d at 858. To this end, courts have found that a provision in a . contract, such as a force majeure clause, "cover[ing] events that may or may not happen, but whether they do is beyond the control of the Seller" is git an "opt-out provision," but rather is "limited in scope" and does not make the two year duty under the contract "illusory," thus defeating tl1e Exemption. Stein, 586 F.3d at 858; see also Pilato v. The Edge Investors, L.P., 609 F. Supp. 2d 1301, 1308 (S.D. Fla. 2009); see also Rodriguez v. Ba Eola, LLC, 404 Fed. Appx. 418, 2010 WL 4978260 at *2 (11th Cir. Dec. 8, 2010). Nor does such clause make the two--year duty subject to the seller's unbridled discretion because "events beyond a party's control are, by definition, not in its discretion." Stein, 586 F.3d at 858. One of the seminal cases dealing with the Improved Lot Exemption is the Eleventh Circuit case of Stein v. Paradigm Mirasol LLC. In that case, buyers entered into a contract to purchase a condominiumunit. The contract specified that time was ofthe essence and that the unit would be built within two years. However, the contract included a force majeure clause pemiitting delays caused by "acts of God, weather conditions, restrictions imposed by any govermnental agency, labor strikes, material shortages or other delays beyond the control of the Seller." 586 'F.3d at 856. The buyers asserted that the developer had failed to comply with ILSA. Id. at 853-54. In its defense, the developer contended that the contract fell within the Improved Lot Exemption. Id. at 857. The district court held that the contract'sforce majeure clause rendered the apparent obligation to complete construction in two years "i1lusory" because the scope ofthe clause extended delays beyond events that state contract law would recognize as establishing impossibility of performance. Id. 10 2o0zs19svs_1 The Eleventh Circuit in Stein reversed the district court and held in favor of the . developer. Id. at 858-59. In so doing, the court noted that the buyers failed to explain why the standard of legal impossibility should be used as the measure of obligation under the Improved Lot Exemption. Id. at 857. The Court went on to find force majeure clauses did not negate the Exemption. Id. at 858. In reaching this conclusion the Court explained that: This force majeure clause covers event that may or may not happen, but whether they do is 'beyond the control of the _Seller.' This type of clause is not an opt--out provision; it is limited in scope The clause does not make the two--ycar duty illusory. Nor does the clause make the two-year duty subject to the seller's discretion. Events beyond a party's control are, by definition, not in its discretion is an anti-fraud statute. Allowing for reasonable .delays caused by events beyond the seller's control does not promote or permit fraud. It does not transfomi the seller's obligation into an option. Even though the contract excuses delays beyond the seller's control it is still one 'obIigating' [the seller] to complete construction of the condominium within two years for purpose of [the Improved Lot Exemption]. Id. To provide further guidance on the Improved Lot Exemption, the U.S. Department of Housing and Urban Development which was, until recently, the federal agency responsible for promulgating ILSA rules and regulations, issued "Guidelines" explaining when a contract "obligates" the seller to build. 61 FR 13596-01 (Guidelines). The Guidelines generally instructed that a contract "obligating" a seller to build is one that must place responsibility to build on the seller 4 not tl1e buyer and "must not allow nonperformance by the seller at the seller's discretion" or "pennit the seller to breach virtually at will." 61 FR 13596-01 at 13603. The Guidelines further provided: Contract provisions which allow for nonperformance or for delays of construction completion beyond the two-year period are acceptable if such provisions are legally recognized as defenses to contract actions in the jurisdiction where the building is being erected. For example, provisions to allow time extensions for events or occurrences such as acts of God, casualty losses or . material shortages are generally permissible Although the factual circumstances upon which nonperformance or a delay in performance is based may vary &om transaction to transaction, as a general rule delay or nonperformance must be based on grounds cognizable in contract law such as impossibility or hustration and on events which are beyond the seller 's reasonable control. 1 1 zo0:ss19svs_1 61 FR 13596-01 at 13603 (emphasis added). The HUD Guidelines also provided that "contracts that directly or indirectly waive the buyer's right to specific performance are treated as lacking a realistic obligation to constr?uct." Id. While the Guidelines mention the defenses of impos ibility or Hustration, the contract provision need not include the term "impossibility" or "fi?ust:ration" or even satisfy those defenses. Rather, the relevant inquiry is whether the clause make the seller's two-year duty discretionary. See, Stein, 586 .3d at 857-58 ("irnpo sibility" is not the standard; question is whether clause makes two-year duty illusory by granting seller unbridled discretion); Bloom v. Home Devco/Tivoli Isles, LLC, 2009 WL 36594 at 5-6 (S.D. Fla. Jan. 6, 2009) (requiring the contract to reference "impossibility" would be a "hypertechnical" application of statute; events beyond the control of the seller satisfy the irnpos ibility defense). With respect to these HUD Guidelines, it must be noted that they are not published . regulations subject to the rigors of the Administrative Procedure Act, including public notice and comment, and, therefore, courts have found that they do not deserve firll Chevron deference. Stein, 586 F.3d at 858 fn. 7 (citing Reno v. Koray, 515 U.S. 50, 61 (1995) and Chevron USA. Inc. v. Natural Res. Def CounciL Ine., 467 U.S. 837 (1984)); Gentry v. Harborage Cottages- Stuart 654 F.3d 1247, 1256 m. 3 (11th Cir. 2011); Long, 611 F.3d at 246 (finding the HUD Guidelines are not binding, but are entitled to "sorne deference" in interpreting ILSA). Instead, a position set forth in the Guidelines is entitled to only as much deference as it merits based on the "thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." Skidmore v. Swat Co., 323 U.S. 134, 140 (U.S. 1944); SteinWith this in mind, federal coruts have noted that "little or no deference is due to the - [G]uidelines' position that any force majeure clause that goes beyond events amounting to legal defenses takes the contract out ofthe [Improved Lot Exemption]." Such an assertion is "inconsistent with the [G]uidelines' other position that remedies limitations do not take a contract out of the exemption unless they excuse nonperformance by the seller 'at the se1ler's discretion' or 'permit the seller to breach virtually at will."' Stein, 586 F.3d at 858 at fir. 7; but see Dalzell v. Trailhead Lodge at Mldhorse Meadows, LLC, 2010 WI. 3843464 at *2 (D. Colo. - 2010) (unpublished opinion incorrectly applying the same deference to the HUD Guidelines as "regulations" which they are not). Moreover, these Guidelines no longer apply to the interpretation of HJSA. HUD was recently divested of all regulatory authority over II.SA. Effective July 21, 201 1, enforcement of ILSA was transferred fiom HUD to a new Bureau of Consumer Financial Protection under the Department of Treasury. 76 Fed. Reg. 79486-01 (Dec. 21, 2011); see also Gentry, 654 .3d at 1256 fir 2. The CFPB was established by the Consumer Financial Protection Act of 2010 ("Dodd-Frank Act") and will now be responsible for enforcing ILSA. 76 Fed. Reg. 79486. The CFPB has published interim II.SA regulations (currently subject to public comment), which do not contain any comparable discussion relating to the Lot Exemption. See id. 12 2ooss19s?rs_1 B. The Improved Lot Exemption Applies in This Case. It is undisputed that the PSAs obligated the seller to complete construction of the Units within two years except for reasons "outside the seller's controI." Further, the PSAs expressly provide that if seller fails to complete the Units within two years, other than for reasons beyond the seller's control, the buyer shall be entitled to remedies set forth in the PSA, including specific performance. As such, the PSAs fall squarely within the Improved Lot Exemption. - Each PSA contains a "Completion" provision "Completion. Following satisfaction of the condition described in Section of the Agreement, Seller shall proceed with reasonable diligence to construct the Unit and shall, subject to the following sentence, complete such construction not later than 24 months after the date of this Agreement (the "0utside Completion Date Notwithstanding the foregoing, _Seller shall not be responsible for delays in construction resulting from causes beyond the Seller's reasonable control, such as unforeseen site conditions, - weather, strikes, disputes or war, riots and acts of God, and in the event of any such delays, the Outside Completion Date shall be extended by a period equal to the period of any such delays. . Notwithstanding anything contained herein to the contrary, y` Seller fails to complete the Unit _on or before the Outside Completion Date, other than for reasons beyond Seller's control, Seller shall be in default hereunder and Buyer shall be entitled to the remedies set forth in Section 8(b) of this Addendum. . (Ex. A 2d Am. Compl. (PSA) at Addendum No. 1 l(g) (emphasis added).) Section 8(b) of the PSA lists the remedies for a seller's default: . DEFAULT AND TERMINATION. In the event of a "Seller's I Default" prior to the Closing, Buyer, at his or her option, may I terminate this Agreement and have the Deposit retruired, (ii) specifically enforce this Agreement, or pursue any other I remedy available to Buyer at law or in equity. Upon termination of this Agreement by Buyer, Seller shall be released hom all further obligations hereunder, except as set forth in this Section "Seller's Defau1t" shall mean a failure by Seller to perform or observe any covenant or condition to be performed or observed by Seller rmder this Agreement that has not been cured by Seller 13 200ss19svs_1 within 20 days after receiving written notice of such failure irom Buyer. (Id. at Addendum No. 1 8(b) (emphasis added).) In addition, each PSA contains a "Termination Following Casualty" clause which provides: Termination Following Casualty. If casualty by iire or other cause occurring prior to Closing damages any portion or the Unit and/or the Project, then Seller shall have the right to terminate this Agreement by giving notice to Buyer. With any such notice, Seller shall cause the Depo it to be retumed to Buyer. Buyer acknowledges that Buyer shall have no other remedy because of such damage, and the parties shall be released from all other obligations under this Agreement. If after such a casualty Seller does not give Buyer notice of Seller's intent to terminate this . Agreement as provided above, Seller shall repair the damage and rebuild the damaged Unit as soon as reasonably practicable, and the Clo ing shall be delayed as necessary to allow the completion of such repair and rebuilding work. (Id. at Addendum No. In their Second Amended Complaint, Plaintiffs contend that the PSAs are not subject to the Improved Lot Exemption due to the "'I`errnination Following Casualty" clause. (2d Am. Compl. atm} 55-56.) The bases for Plainti&`s' contention are the HUD Guidelines (which provide that a "contract must not allow nonperformance by the seller at the seller's discretion" because such an obligation is "not an obligation in reality" and that a contract must not directly or indirectly waive the buyer's right to specific performance) and an unpublished opinion of the United States District Court for the District of Colorado, Dalzell v. Trailhead Lodge at Wldhorse Meadows, LLC, Slip Copy, 2010 WL 3843464 (D. Colo. 2010) ("Trailhead"). This argument fails for several reasons. First, at the time Plaintiffs' tiled their Second Amended Complaint, HUD had been divested of all authority over ILSA. 'I'he former HUD Guidelines are not binding authority. In addition, based on the plain language of ILSA and the PSAs, the "'I`ermination Following Casualty" clause does not_render the PSA two-year obligation illusory, lacking an obligation in reality or outside the Exemption. When interpreting a contract, such as the PSAs, the primary goal of a court is to determine and effectuate the intent and reasonable expectations of the parties. Copper Mountain, Inc. v. Industrial ?jvstems, Inc., 208 P.3d 692, 697 (Colo. 2009). In detennining the intent of the parties, courts give eH`ect to the plain and generally 14 z00ss19s1s_1 accepted meaning of the contractual language. Id. at 697; Allen v. Pacheco, 71 P.3d 375, 378 (Colo. 2003). Courts ascertain the meaning of the contract by examining "the entire instrument and not by viewing clauses or phrases in isolation. Copper Mountain, Inc., 208 P.3d at 697. Interpretation of a contract i a question of law for the court to decide. Id. at 696; Pepcol Mjfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1313 (Colo. 1984). Here, the "Tennination Following Casualty" clause should not be read in a vacuum or in isolation, but must be read in the context of the PSAs as a whole. Reading the PSAs as a whole, the contracts provide for completion ofthe Units within 24 months, excusing delay or nonperformance only for causes "beyond the seller's control." The "Completion" clause excuses delays "resulting from causes beyond the Seller's reasonable contr?ol," such a "unforeseen site condinons, weather, strikes, dispute or war, riots and acts of God." (Ex. A 2d Am. Compl. (PSA) at Addendum No. 1 The PSAs also provide that time if ofthe essence. (Id. at - - Similarly, the "Terrnination Following Casualty" clause excuses nonperformance "if casualty by fire or other cause damages any portion or the Unit and/or the Project." (Id. at Addendmn No. 1 This provision does not allow the seller unbridled discretion to abandon its obligation to build within two years. Rather, the seller may choose nonperformance only in those very limited circrunstances where performance is already excused by supervening impracticability -- that is, damage to, or destruction of] the unit. See Restatement (Second) of Contracts 261 (1981); Town of Fraser v. Davis, 644 P.2d 100, 101 (Colo. App. 1982). Thus, this provision does not allow the seller to breach virtually at will, is not an opt-out provision, and does not render the two--year duty illusory. Instead, it covers events, such as fires, that may or may not happen, but whether they do is beyond the cont1?ol of the Seller. See Stein, 586 F.3d at 858; Adams-Lgva, 2009 WL 1850267 at *4-5 (M.D. Fla. June 25, 2009) (casualty contingency clause does not render obligation illusory). Such events beyond a party's control are, by definition, not in its discretion. Stein, 586 F.3d at 858; see also Boatwright v. Carney Realty, Inc., 2009 WL 3615048, *12-13 n.28 (S.D. Ala. Oct. 29, 2009) (upholding force majeure clause); Pilato, 609 F. Supp. 2d at 1308 (same); Kamel v. Denco/Ure Oaks at Boca Raton, 2008 WL 4601715 (1 Cir. Oct. 16, 2008) (same). - Colorado recognizes impracticability, frustration and other causes beyond a seller's control as defenses to breach of contract. See CJI 4th 30:24 (affirmative defense of impossibility of performance); Town of Fraser, 644 P.2d at 101 (recognizing the defense of impossibility and finding "the essence of the defense is not impossibility, but rather impracticability which is - determined by whether 'an unanticipated circumstance has made performance of the promise vitally diff`erent from what should reasonably have been within the contemplation of both parties when they entered into the City of Littleton v. Employers Fire Ins. Co., 453 P.2d 810, 812 (1969) does not mean literal or strict impossibility but includes as well impracticability because of extreme and unreasonable dificulty, expense, injury or loss see also v. Phipps, 475 P.2d 646, 648 (Colo. App. 1970); Restatement 15 200ss19svs_1 (Second) of Contracts 266 (relied upon by Colorado courts). Even the HUD Guidelines on which Plaintiffs rely refer to "casualty losses" as among those circumstances outside the seller's control that excuse performance. 61 FR at 13603 (permitting clauses that allow delays based on "occurrences such as acts of God, casualty losses or `material Further, a remedies limitation does not and should not take a contract out of the Improved Lot Exemption unless it excuses nonperformance by the seller "at the seller's di cretion" or "per?mits the seller to breach virtually at will." See Stein, 586 F.3d at 858 at n. 7. Again, this is . not our case. Plaintiffs' reliance on the unpublished Trailhead opinion is misplaced. Not only is the court's opinion in Trailhead erroneously based on the "great deference" it provided to HUD Guidelines, but it is conuadicted by other published federal court cases interpreting the plain language of the Statute and public policy behind ILSA. See Stein, 586 F.3d at 858. ILSA is an anti-iiaud statute; allowing for reasonable delays or nonperformance caused by events beyond the seller's control does not promote or permit iiaud, and it does not transform a seller's obligadon into an elective option. Id.; see also Food Town Stores, Inc. v. EEOC, 708 .2d 920, 924 (4th Cir. 1983) statute must be interpreted to give it the single, most harmonious, comprehensive meaning possible in light of the legislative policy and Moreover, the facts in Trailhead are clearly di tingui hable from our case. In Trailhead, the buyers sought to rescind their contract to closing. 2010 WL 4932682 at In stark contrast, our case involves a situadon where construction was completed, Plainti&`s clo ed on and took title to their Units, and have been living in their Units for years. Nothing in the HUD Guideline or Trailhead supports the remedies Plaintiffs seek under these circumstances. Accordingly, based on the foregoing, Plaintiffs' First and Third Claims must be dismissed because the PSAs are exempt from ILSA. II. EVEN IF ILSA APPLIES, FIRST AND SECOND CLAIMS SHOULD BE DISMISSED ON SEPARATE GROUNDS PURSUANT TO C.R.C.P. Plaintiifs' First Claim must also be di an issed on the ground that Plaintiffs have failed to state a claim for ii?aud under 15 U.S.C. against the Intrawest and Partnership Defendants.2 A. H..SA Fraud Standard. Plaintiffs have brought claims under 15 U.S.C. Under these sections, ILSA prohibits any developer or agent directly or indirectly in comrection with a sale: 2 For purposes of this Motion only, we assume that Plaintiffs have adequately alleged that the Intrawest and Partnership Def dams qualify as "developer or agent" of the Project within the meaning of 15 U.S.C. l70l(5) and (6). We do not, however, concede, that they in fact fall within these statutory definitions. 16 20035l9376_l (A) To employ any device, scheme, or to defraud (B) To obtain money or property by means of any untrue statement of a material fact, or any omission to state a material fact necessary in order to make the statements made (in light of the circumstances in which _they were made and within the context of the overall offer and sale or lease) not misleading, with respect to any information - pertinent to the lot or subdivision 1703 or (C) To engage in any transaction, practice, or course of business which operates or would operate as fraud or deceit upon a purchaser In evaluating the &aud provisions under ILSA, Colorado courts have found "generally, naud consists of some deceittirl practice or williirl device resorted to for the purpose of inducing another, in reliance upon it, to surrender property or legal rights." Ivar v. Elk River Partners, LLC, 705 F. Supp. 2d 1220, 1237 (D. Colo. 2010); see also Dongelewicz v. First Eastern Bank, 80 .Supp.2d 339, 348 (M.D. Pa. 1999) (In other words, subparagraphs (A), (B), and (C) [of prohibit Plaintiffs have failed to plead facts sufficient to support &aud under ILSA. B. Plaintiffs' First Claim Fails to State a Claim for Relief Under 15 U.S.C. Plaintiffs' First Claim against the Intrawest and Partnership Defendants alleges violations of 15 U.S.C. l703(a)(2) with respect to the square footage of P1aintifts' Units. Under this claim, Plaintiffs specifically allege two types of iiaud - iiaud by misrepresentation ("Misrepresentation Claim") and fraudulent concealment ("Concealment Claim"). 1. Plaintmh Clash: Fails as a Matter of Law. In their Second Amended Complaint, Plaintiffs allege that thelntrawest and Partnership Defendants "misrepresented the square footage measurements of the Units prior to purchase knowing that ?'as built' and when measured according to industry standards and Colorado law, . the Units would measure smaller." (2d Am. Compl. at 1] 122.) 'I`he only documents Plaintiils rely on for such Misrepresentation Claim are the BVPG and the PSA. (2d Am. Compl. at 1] 172-175.) Plaintiffs allege that the BVPG and PSA were provided by the "Intrawest Defendants" to Plaintiffs and that the statements contained in the BVPG and the PSA relating to square footage measruements of the interiors ofthe Units were known to these Defendants to be 17 zo0ss19svs_1 substantially and materially larger than the actual interior square footage measurements ofthe Units as built. (2d Am. Compl. at 1] 172-175.) First and foremost, Misrepresentation Claim fails because the language of both the BVPG and the PSA make clear that no misrepresentations were made to Plaintiffs regarding the square footage of their Units. See Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 912 (Colo. 1996) ("When a document is unambiguous, it cannot be varied by extrinsic Each Plaintiffs PSA provides that any representations to square footage were "approximate" numbers only and expressly states: Representations as to square footages contained within the Unit or other portions of the Project are approximate numbers only. Buyer acknowledges and agrees that square footage calculations may be made in a variety of manners and so long as the Unit is constructed substantially in accordance with the Unit Plan reviewed by Buyer, Buyer shall neither have any right to rescind this Agreement nor to . claim any breach hereof on account of alleged discrepancies in square footage calculations. (Ex. A to 2d Am. Compl. (PSA) at Addendum No. 1 l(c) (emphasis added).), Thus, a far cry &om "misrepresenting" what the size ofthe actual Units would be, each and every Plaintiff was expressly told in the PSA that the square footage of the Unit actually delivered might differ &om the approximations contained in the PSA. Every Plaintiff "acknowledged" this and "agree[d]" that as long as the Unit was constructed substantially in accordance with the Unit Plan, they would have no right to pursue any claim based on alleged square footage discrepancies.3 Moreover, each Plaintiff] when they executed the PSA, agreed that the PSA "represents the entire agreement between the parties with respect to the subject matter hereof and all prior agreements, understandings and negotiations shall be deemed merged herein." (Ex. A to 2d Am. Compl. at Addendum No. 1 at Plaintiffs further agreed that 'Tno representations, warranties, promises or agreements, express or implied, shall exist between the parties except as stated [in the Accordingly, Plaintiffs expressly waived any right to rely on representations made outside the PSAs, including the BVPG. Notwithstanding this, even if the BVPG could be considered, it expressly states and advises Plaintiffs throughout the document that: '"I'hese are preliminary suite layouts only. '1`he 3 A noted in the Related Motion, while Plaintiffs attempt to bolster their iraudulent misrepresentation claim by adding a corrclu ory allegation that Defendants Base Village Phase lA and BVO "fail[ed] to construct the Units in substantial conformance with the Unit Plans" (2d Am. Compl. 1| 268(a)), this allegation is belied by the fact that Plainti& closed escrow and took title, and in so doing accepted the a.s--built Units delivered to them - an admission that the units were, in fact, constructed in substantial conformance with Unit Plans. (See Ex. A to 2d Am. Compl. (PSA) at Addendum No. 1 Addendum No. 3. z00ss1sms_1 18 developer reserves the right to make changes to floorplans, project design, specification, and features. Final dimensions, square footage, and floorplans may vary." (Ex. to 2d Am. Compl. (BVPG) (emphasis added).) In sum, Plaintiff`s' allegations of misrepresentations are contradicted by the express terms ofthe PSA and BVPG, and should be dismissed with See Degirmenci v. Sapphire--Fort Lauderdale, LLP, 693 F. Supp. 2d 1325, 1341 (S.D. Fla. 2010) (dismissing fraud claim brought under ILSA "with prejudice" where the "plain language ofthe contract and other documents" "expressly contradict[ed] any claim of misrepresentation by the defendant"). Plaintiffs' Misrepresentation Claim fails on the further ground that Plaintiffs have alleged no facts supporting their conclusory allegations that at the time the PSAs were executed, the "Intrawest Defendants" knew that the Units as they would be constructed some time in the l'l1l111'6 by BVO would be "substantially smaller" than the approximations given to Plaintiffs in the PSAs and BVPG. (See 2d Am. Compl. 122, 173, 174, 175.) At the time the PSAs were executed in 2006, Plaintiffs' Units had not yet been constructed. (See id at1]1| 83 and 96 (referencing substantial completion of the units in 2007 after the Project had been sold to Prior to construction, the Project was sold to BVO and the PSAs assigned. (See td. at 1|1[ 49 and 50.) Plaintiffs' Second Amended Complaint is devoid of any factual support for their contention that the Intrawest and Partnership Defendants had knowledge that the Units would be constructed by BVO any larger or smaller than the approximations provided for in the PSA and BVPG. The Intrawest and Partnership Defendants had no ball" and had no way of knowing how BVO might construct the Units at some point in the fixture. Accordingly, Plaintiffs' Misrepresentation Claim should be dismissed. 2. Plalutzf? Concealment Gaim Fails as a Matter of Law. Plaintiffs' Concealment Claim is premised on unfounded allegations that prior to and at the time the PSAs were executed, the Intrawest and Partnership Defendants failed to disclose the method that they utilized to calculate the proposed square footage ofthe Units, failed to disclose that they were not using the method to measure the square footage ofthe Units that is set forth in the "draf`t" Capitol Peak Lodge Declaration of Covenants, Conditions and Restrictions ("Declaration"), and failed to disclose to Plaintiffs that they were not using the method to measure the square footage of the Units described in C.R.S. 38-33.3-202. (2d Am. Compl. at 1|1[ 123, 124, 125; see also First Cause of Action.) Plaintiff`s' Concealment Claim, like their Misrepresentation Claim, fail because it is negated by the express language ofthe documents and the agreements Plaintiffs made therein. Namely, the PSAs plainly provide: Buyer acknowledges and agrees that square footage calculations may be made in a variety of manners and so long as the Unit is constructed substantially in accordance with the Unit Plan reviewed by Buyer, Buyer shall neither have any right to rescind 19 z00ss1ss7s_1 this Agreement nor to claim any breach hereof on account of alleged discrepancies in square footage calculations. (Ex. A to 2d Am. Compl. (PSA) at Addendum No. 1 1(c) (emphasis added).) In executing the PSAs, Plainti&`s acknowledged and agreed that they were not being provided with the method of calculation and that calculations of square footage may be made in a "variety of marmers." Furthermore, nothing in the Declaration or C.R.S. (Colorado Common Interest Ownership Act require Defendants to disclose the method used to calculate square footage of a condominium unit in a common-interest-community prior to or at the time the PSAs are executed. (See generally C.R.S. and Ex 7 to the Related Memo (Declaration).) The Second Amended Complaint contains no facts to upport PlaintiHs' allegation that such an afiirmative duty exists under law or otherwise. (See generally 2d Am. Compl.) If Defendants had no duty to disclose, there can be no claim for fraudulent concealment. Poly racking Inc. v. Concentra Health Services, Inc., 93 P.3d 561, 564 (Colo. App. 2004) succeed on a claim for fraudulent concealment or nondisclosune, a plaintiff` must show that the defendant had a duty to disclose material Mallon Oil Co. v. Bowen/Edwards Associates, Inc., 965 P.2d 105, 111 (Colo. 1998). Accordingly, Plaintiff`s' Concealment Claim must be dismissed with prejudice for failure to tate a claim upon which relief may be granted. 3. Plaintzf? First Claun Should Be Dismissed Because Any in the PSAs Concerning Square Footage Were Extinguished at Closing Under the Doctrine of Merger. Under the doctrine of merger, all provisions regarding square footage in the PSA the "quantity" of real property being conveyed to Plaintiffs were extinguished and merged into each Plaintiffs deed at closing. See City of Westminster v. Skyline Dev. Co., 431 P.2d 26, 29 (Colo. 1967) ("a1l previous covenants which relate to or are connected with the title, possession, quantity or emblements ofthe land" are and by the delivery and acceptance of deed). No alleged "representations" in the PSAs conceming square footage survived the delivery of deeds to Plaint:iff`s at closing. The fact that Plaintiifs' First Claim arises under ILSA does not change this analysis. The effect ofthe merger doctrine on Plaintiff`s' claims is discussed in further detail in the Related Memo at II.A.3, which is incorporated fully herein. For this additional reason, Plaintiffs' First Claim should be dismissed with prejudice. provides: "Unit Boundaries: Except as provided by the declaration: If walls, floors, or ceilings are designated as boundaries of a unit, all lath, fiming, wallboard, plasterboard, plaster, paneling, tiles, wallpaper, paint, and finished flooring and any other material constituting any part ofthe finished surfaces thereof are a part of the unit, and all other portions ofthe walls, floors, or ceilings are a part of the common elements." 20 z00ss19s?is_1 C. Plaintiffs' Third Claim Fails to State a Claim for Relief Under 15 U.S.C. Plaintiffs' Third Claim alleges violations of 15 U.S.C. l703(a)(2) with respect to the Metropolitan and General District Bonds. This claim is similar to Plaintiffs' Fourth Claim asserted against "'I'he Related Defendants," which likewise alleges violations of 15 U.S.C. l703(a)(2) with respect to the Metropolitan and General District Bonds. The arguments, case law and documents referenced in the Related_ Motion at Section H.B in support of dismissal equally apply to the Intrawest and Partnership Defendants, and therefore are incorporated herein. Accordingly, Plaintiffs' 'l`hird Claim should be dismissed because (1) all the information Plaintiffs allege was concealed was, in fact, disclosed to them (Section (2) the PSAs and public records contradict and negate PlaintiiTs' claim for fraud under 15 U.S.C. l703(a)(2) (Section and (3) the claim is barred by the statute of limitations (Section H.B.5.). HI. FIFTH CLAHVI AGAINST BASE VILLAGE PHASE 1A MUST BE DISMISSED BECAUSE PLAINTIFFS HAVE FAILED T0 PLEAD FACTS TO SUPPORT FRAUD IN THE INDUCEMENT. Fraud in the inducement is predicated upon misrepresentations of fact outside the scope of any contractual obligations. Under Colorado law, the elements of a fraud in the inducement claim are: (1) A false representation of a material existing fact, or a representation as to a material exi ting fact made with a reckless disregard of its truth or falsity; or a concealment of a material existing fact, that in equity and good conscience should be disclosed; (2) knowledge on the part of the one making the representation that it is false; or utter indifference to its truth or falsity; or knowledge that he is concealing a material fact that in equity and good conscience he should disclose; (3) ignorance on the part of the one to whom representations are made or &om - whom such fact i concealed, ofthe falsity of the representation or ofthe existence ofthe fact concealed; (4) the representation or concealment is made or practiced with the intention that it shall be acted upon; and (5) action on the representation or concealment resulting in damage. Cartel Asset Management v. Ocwen Financial Corp., 249 Fed. Appx. 63, 83 (10th Cir. 2007) (citing Trimble v. City County of Denver, 697 P.2d 716, 724 (Colo. 1985)); see also Ice v. Benedict Nuclear Pharmaceuticals, Inc., 797 P.2d 757, 760 (Colo. App. 1990) (courts apply the same elements for fraudulent representation and fraudulent concealment in evaluating &aud in the inducement claims,). Here, Plaintiffs' common law hud in the inducement claim against Base Village Phase 1A is based on the same allegations upon which they premise their ILSA fraud claims. Namely, Plaintit`fs allege that Base Village Phase lA (1) "lmowingly failed to disclose and/or misrepresented the method of measurement utilized for computing the square footage of the Units as represented in the BVPG and the PSAs and the actual square footage ofthe Units proposed once measured according to the statutory requirements of the CCIOA and as deiined in - 21 20035l9376_l the draft Condominium Declaration of Covenants, Conditions and Restrictions for Capitol Peak Lodge Condornirriums" and (2) "lcnowingly failed to disclose material information with regard to the Metro District tax obligations, as described herein." (See 2d Am. Compl. at 1] 256.) While cloaked as a separate common law fraud claim, Plaintiifs' Eaudulent inducement claim must be dismissed for the same reasons outlined in Sections and (C) of this Motion. In addition, Plaintiff`s' fraudulent inducement claim related to square footage must be dismissed on the further ground that it is based on alleged nonperformance of a promise or failure to fulfill an agreement to do something in the future, which is not sufficient to support a claim for Eaud. In Colorado, common law hand requires more than the mere nonperformance of a promise or the failure to firlfill an agreement to do something at a future time. Nelson v. Gas Research Institute, 121 P.3d 340, 343 (Colo. App. 2005); Distributors, Inc. v. BBC . Intern., Inc., 812 P.2d 659, 662 (Colo. App. 1990); State Bank v. States, 723 P.2d 159, 160 (Colo. App. 1986) ("Fraud cannot be predicated upon the mere non-performance of a promise or contractual obligation or upon failure to fulfill an agreement to do something at a future Thus, "[u]nless the speaker making the representations deliberately falsified his or her intention to induce reliance, statements of future events are not actionable." Nelson, 121 P.3d at 343; see also Brody v. Bock, 897 P.2d 769, 776 (Colo. 1995). A promise concerning a future act, when coupled with a present intention not to fulfill the promise, can be a misrepresentation which is actionable as fraud, but only where there is gf that the defendant had the gsent intention not to fulfill the promise. Nelson, 121 P.3d at 343; Stalos v. Booras, 528 P.2d 254, 256 (Colo. 1974); see also Kinsey v. Preeson, 746 P.2d 542 (Colo. 1987). Here, any alleged "representations" regarding square footage in the BVPG or PSA were tatements (or promise concerning a future act, i. construction ofthe Units. At the time the PSAs were entered into, none of Plaintiff`s' Units had even been constructed. (See 2d Am. Compl. at 1] 83.) It was not until after the PSAs were executed that the Units were actually constructed by a third party -- BVO -- to whom the Project was sold. (See id. at 1|1[ 49, 50, 83, 96.) Plaintiffs have alleged no facts to support that Base Village Phase 1A had a present intent not to fulfill any promise or "representation" it made regarding the square footage of the Units the time the PSAs were executed. (See generally 2d Am. Compl.). Accordingly, Plaintiff`s' fraudulent inducement claim related to square footage must be dismissed on this separate ground. IV. SIXTH CLAIM AGAINST BASE VILLAGE PHASE 1A MUST BE DISIVIISSED BECAUSE HAVE FAHJED TO PLEAD FACTS . SUPPORTING BREACH OF CONTRACT. - To recover for breach of contract, a plaintiff` must prove: (1) the existence of a contract; (2) performance by the p1aintif`f` or some justification for nonperformance; (3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff Saturn S?vstems, Inc. v. Militare, 252 P.3d 516, 529 (Colo. App. 2011). Plaintiff`s' Sixth Breach of Contract Claim should be dismissed pursuant to Rule l2(b)(5) on several grounds. 22 20035l9376_l A. Base Village Phase 1A Is Not Liable on the Contract Because It Assigned All the PSAs to BVO. Plaintiffs allege that Base Village Phase lA breached the PSA "by failing to construct the Units in substandal conformance with the Unit Plans."$ (2d Am. Compl. at 1] This claim mils because Ba Village Phase lA assigned the PSAs to BVO prior to construction of the Units. Each Plaintiff entered into a PSA with Base Village Phase lA between April 2006 and June 2006. (See 2d Am. Compl. at 1] 83.) Each PSA expressly provides for a right of assignability. Specilically, each PSA states: Seller may assign its rights and obligations under this Agreement at any time prior to Clo ing without Buyer's consent. Upon an assignment of its rights and obligations under this Agreement, and an assiunption of those rights and obligations by assignee, Seller shall be released of all obligations and liabilities hereunder. (Ex. A of 2d Am. Compl. at Addendum -No. 1 Pursuant to this assignability clause -- which Plaintiffs agreed to when they executed their PSA -- all the PSAs were assigned to BVO prior to construction ofthe Units. (2d Am. Compl. at 1] 50). Plaintiffs do not challenge the validity of such assignment. (See generally 2d Am. Compl.) It is well settled law that absent a proper bowing, the obligations incurred by an assignee may not be charged to the assignor. Fink v. Montgomery Elevator Co. of Colo., 421 P.2d 735, 738-39 (Colo. 1966). Here, both construction and closing on the Units occurred gig; Base Village Phase 1A assigned the PSAs to BVO. As such, under Colorado law and as expressly set forth in 9(b)(ii) of the PSA, Base Village Phase lA is not liable for any alleged breach related to how the Units were actually constructed. Accordingly, Plaintifm' breach of contract claim must be dismissed with prejudice. B. The PSAs and Unit Plan Expressly Negate PlaintitTs' Sixth Claim. Plaintii1`s' breach of contract claim mils on the separate ground that it is contradicted by the PSAs and Unit Plans. As discussed above, Plaintiffs' Sixth Claim i premised on the allegation that the Units were not constructed "in substantial conformance with the Unit Plans." (2d Am. Compl. at 1] 'I`he only deficiency Plaintiffs allege with respect to the Units is that "as constructed" the Units were substantially smaller in square footage than what was originally "promised." (See generalbw 2d Am. Compl.) These allegations are contradicted by the documents upon which rely in making such allegations. 5 It should be noted that Plaintiffs' Sixth Claim also states Plaintiff is eeking damages for "other breaches to be proven at trial." (2d Am. Compl. at Such allegations fail to meet the notice pleading standard under Colorado law (C.R.C.P. 8) and imply Plaintiffs seek to go on a fishing expedition during discovery to try to find . evidence or facts to support such "other" breaches to be proven at trial. 2003Sl9376_l 23 As discussed above, each PSA contains separate disclaimers warning Plaintiffs that all measurements are "approximate" and "may vary." The Unit Plans attached to the PSA likewise expressly provide: "'I`hese are preliminary layouts only. The developer reserves the right to make changes to floor plan project design, and features. Final dimensions, square footage and floorplans may vary." (Ex. A to 2d Am. Compl. at Ex. A ('Unit Plan).) In addition, under the PSAs, each Plaintiff acknowledged and g. that the square footage of the Unit actually delivered or as constructed might differ from the approximations that had been provided and may be calculated or determined using a variety of methods of calculation. (Id. at . Addendum No. 1 Such statements negate any claim that Base Village Phase 1A breached the contract by failing to construct the Units in substantial conformance with the Unit Plans. C. Any Representations Regarding Square Footage of the Units in the PSAs Were Extinguished Upon Delivery and Acceptance of a Deed Under the Merger Doctrine. As discussed in Section H.B.3 of this Motion above and Section H.A.3 ofthe Related Memo (incorporated fully herein), P1aintiffs' breach of contract claim must be dismissed for the additional reason that the merger doctrine precludes a claim for breach of the PSAs. V. SEVENTH CLAIM MUST BE DISMISSED BECAUSE PLAINTIFFS HAVE FAILED TO PLEAD FACTS SUPPORTING VIOLATION OF THE CCPA. To prove a private cause of action under the CCPA, a plaintiff must show: (1) that the defendant engaged in an unhir or deceptive trade practice; (2) that the challenged practice occurred in the course of defendant's business, vocation, or occupation; (3) that it significantly impacts the public as actual or potential consumers ofthe defendant's goods, services, or property; (4) that the plaintiff suffered injury in fact to a legally protected interest; and (5) that the challenged practice caused the plaintiffs injury. Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 146-47 (Colo. 2003). An actionable misrepresentation under the CCPA is a false statement that either induces the recipient to act or has the capacity to deceive the recipient that "is made either with knowledge of its untruth, or recklessly and willfirlly made without regard to its consequences, and with an intent to mislead and deceive the plaintiffs." Id. at 147. Plaintiffs' CCPA claim is predicated on the same allegations regarding alleged misrepresentation and concealment related to the square footage of the Units and the Metro Districts as discussed above, and must be dismissed for everal reasons. First, for the reasons discu sed in Section above, Plaintif'ts' CCPA Claim must be dismissed for failure state a claim for either fraud by misrepresentation or fraud by concealment against the Intrawest and Partnership Defendants. Second, for the reasons discussed in Section IH.B ofthe Related Memo (incorporated firlly herein), Plaintiffs' Seventh Claim should be 24 200ss19s1s_1 dismissed because Plaintiff`s cannot allege that any practice "signiHcantly impacted the public." Finally, for the reasons discussed in Section H.B.5 of the Related Memo (incorporated fully herein), to the extent Plaintiff`s' CCPA claim is based on alleged nondisclosure regarding the Metro Districts and related mill levies for which property owners in the Project would be responsible, P1aintiffs' CCPA claim is time-barred under the statute of limitations. See C.R.S. 6-1-115 (claim under CCPA subject to three-year statute of limitations). VI. CLAIMS AGAINST INTRAWEST (INCLUDING FIRST, THIRD, AND CLAIMS) MUST BE DISMISSED FOR FAILURE TO STATE A CLAIM AGAINST THIS FOREIGN ENTITY. Plaintiffs have brought three claims against Intrawest ULC. These include two claims for violation of H4SA's anti-fraud provisions (First and Second Claims) and one claim for violation of the CCPA (Seventh Claim). Plaintiifs' Second Amended Complaint against ULC rnust be dismissed because none of these claims are pled with the particularity required by C.RC.P. 9(b) and none plead facts sufficient to state a claim against ULC. Plaintiffs admit that ULC is a foreign Canadian corporation. (2d. Am. Compl. at 1I 41.) While Plaintiffs have named ULC in this lawsuit, Plaintiffs' Complaint lacks any factual support that ULC was at all involved in the Base Village Project in Colorado, or linked in any way to the other Defendants. Specifically, no factual allegations in Plaintiffs' Complaint directly link ULC to the Project at issue. As discussed above, the only two documents Plaintiffs rely on to support their &aud claims against what they refer to as the "Int1?awest Defendants" are the BVPG and PSA. Plaintif`fs admit that the BVPG was sent to them by Playground, not ULC. (2d Am. Compl. at 1[ 75.) Plaintiffs state in their Second Amended Complaint that Playground was a licensed real estate broker "employed by Defendants Intrawest Resorts and Ski Co," not ULC. (2d Am. Compl. at 1[ 47.) Plaintiffs further concede that the PSAs were entered into by Base Village Phase 1A, not ULC. (2d Am. Compl. at 1] 83.) Because Plaintiff`s have no factual support for ULC's direct involvement in the Project, they attempt to connect ULC to the other "Intrawest Defendants" with conclusory allegations that the ULC was "acting tl1rough" these other Defendants to "deii?aud" Plaintiffs. Such conclusory allegations must be disregarded for purposes of this motion to dismiss. Western Innovations, Inc. v. Sonitrol Corp., 187 P.3d 1155, 1158 (Colo. App. 2008) (when evaluating a motion to dismiss, "the court is not required to accept as true legal conclusions couched as factual Specifically, Plaintiff`s allege that ULC is the "controlling entity of Defendant Intrawest Resorts" and "acted as a developer, agent of developer and/or aider and abettor." (2d Am. Compl. at 1] 41.) Plaintifiis provide no facts to support this conclusory allegation that ULC was acting either as an "agent" or "controlling entity" for any ofthe other Defendants in connection with the Project. 25 zo0as19s1s_1 Plaintiffs also allege that ULC made certain representations or took certain actions, while "acting through" other entities. (See 2d. Am. Compl. at 1| 73 and Exhibit B, 1[ 74 and Exhibit C, 1] 75 and Exhibit D, and 1[ 79 and Exhibit G.) Once again, Plaintiffs provide no facts to support these conclusory allegations. (See generalbw 2d Am. Compl.) None of the documents referenced and attached to Plaintiffs' Second Amended Complaint were authored by ULC, refer to ULC, or support ULC's involvement in the Project or with the Defendants. (See Exhibits attached to 2d Am. Compl.) Because Plaintiffs have alleged no facts which support ULC's involvement, either directly or indirectly, in the Project or with the Defendants, all of PlaintiHs' claims against the ULC should be dismissed. VII. THE CLAIMS OF THOSE PLAINTIFFS WHO CLOSED MORE THAN THREE YEARS BEFORE THIS ACTION WAS FILED ARE BARRED BY APPLICABLE STATUTE OF LIMITATIONS. For the reasons set forth in`Section IV ofthe Related Memo (incorporated fully herein), all claims ofthe Plaintiffs who closed on their Units more than three years before this case was tiled are barred by the applicable statute of limitations because Plaintiffs had actual and constructive knowledge of the Metro Districts and the size of their Units no later than the dates when they closed. `Such knowledge triggered the nmning of the applicable statute of limitations. As more than three years elapsed between the closings on certain Units and the filing of this action, these Plaintiffs' claims are time-barred and subject to dismissal with prejudice. IF THE COURT DOES NOT DISMISS SECOND AMENDED COMPLAINT IN ITS ENTIRETY AGAINST INTRAWEST AND PARTNERSHIP DEFENDANTS, DEMAND FOR A JURY TRIAL AND REQUEST FOR CONSEQUENTIAL AND TREBLE DAMAGES SHOULD BE STRICKEN. P1aintiffs' jury demand and request for consequential and treble damages should be stricken pursuant to C.R.C.P. 12(i). A. Plaintiffs Jury Demand Should Be Stricken Becau They Expressly Waived Any Right to a Jury Trial. Under Colorado law, the right to a jury trial in a civil case is derived from C.R.C.P. 38. See Colorado Cojee Bean, LLC v. Peaberrjy Cojee Inc., 251 P.3d 9, 27 (Colo. App. 2010). Courts determine the enforceability of a jury trial waiver under general contract interpretation principles. Id. Written contracts that are complete, clear in their terms, and tree &om ambiguity . express the intention of the parties and are interpreted in accordance with the plain and ordinary meaning of their terms. Radiology Professional Corp. v. Trinidad Area Health Ass 577 P.2d 748, 750 (Colo. 1978). Colorado courts consistently uphold unambiguous contractual waivers of 26 200ss19s1s_1 the right to jury trial such as those contained in the PSAs. See Colorado Cofee Bean, LLC, 251 P.3d at 27-28. Here, 8(c) ofthe PSA provides: By executing this Agreement, Buyer waives its right and covenants not to assert any constitutional right to trial by jury 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 (Ex. A of 2d Am. Cornpl. (PSA) at Addendum No. 1 Under this section, Plaintiffs have clearly and unequivocally waived their right to a trial by jury. B. The Intrawest and Partnership Defendants Are Not Liable for Any Consequential or Punitive Damages (Inclu_ding Treble Damages Under the CCPA). In signing the PSAs, Plaintiffs also waived their right to pursue consequential and punitive damages, including statutory treble damages. Section 8(c) ofthe PSAs provides: Notwithstanding anything to the contrary set forth in this Agreement, none of Seller, its affiliates, or any design or construction contractors or consultants shall liable to Buyer for any consequential, incidental, punitive, or indirect damages (including, but not limited to, lost proiits) arising iirom, relating to, or otherwise in connection with any claim or dispute arising hereunder, even if such party or parties has been advised ofthe possibility of or could have foreseen such damages. This waiver . applies regardless ofthe form of action, whether in contract, tort or otherwise. This provision clearly bars consequential damages. It also clearly bars punitive damages, which include treble damages that are considered a form of punitive damages. See Lexton- Ancira Real Estate Furul 1972 v. Heller, 826 P.2d 819, 822 (Colo. 1992) (In Colorado, treble and punitive damage serve similar purposes.); see also Perez v. Frank Oldsmobile, Inc., 223 F.3d 617, 624 (7th Cir. 2000) ("Treble damages are a form of punitive Accordingly, Plaintiffs claims for consequential and punitive or treble damages should be stricken. 27 CERTIFICATE OF SERVICE I hereby certify that a on the 23rd day of January, 2012, a true and correct copy ofthe above and foregoing MOTION TO DISMISS was served electronically via Lexis Nexis File and Serve on: Michael J. Reiser, Esq. Herbert A. Delap, Esq. - Law Ofiice of Michael J. Reiser Chris G. Baumgartner, Esq. 961 Ygnacio Valley Road Duiford Brown, P.C. Walnut Creek, CA 94596 1700 Broadway, Suite 2100 Denver, CO 80290 Matthew C. Ferguson, Esq. Chad J. Schmit, Esq. Wendy C. Fostvedt, Esq. Garfield Hecht, P.C. Fostvedt Legal Group, LLC 601 East Hyman Avenue 533 E. Hopkins Avenue, 3rd Floor Aspen, CO 81611 Aspen, CO 81611 Jon Bernhardt, Esq. B. Joseph Krabacher, Esq. Patrick H. Pugh, Esq. Robert S. Hoover, Esq. Ballard Spahr LLP Sherman Howard, L.L.C. 1225 17th Street, Suite 2300 201 North Mill Street, Suite 201 Denver, CO 80202 Aspen, CO 81611 Bobbee J. Musgrave, Esq. Mark Waliish, Esq. BRYAN CAVE HRO Adrienne B. Koch, Esq. 1700 Lincoln Street, Suite 4100 Elan R. Dobbs, Esq. - Denver; CO 80203 Katsky Korins LLP 605 Third Avenue New York, NY 10168-003 Pursuant to C.R.C.P. 121 1-26, a dub executed signature is on file in the ojices of Rothgerber Johnson Lyons LLP s/ King Tracy M. King I 29 z00zs19s16_1 DISTRICT COURT, PITKIN COUNTY, COLORADO Court Address: 506 East Main Street Aspen, CO 81611 Tel hone: 970 925-7635 - Plaintiffs: BRUCE L. SMITH KATHLEEN SMITH . and Bauca L. smm, rausrsn, nm ONLY TRUST DTD 1/15/04; etal., . Case No. 2011 CV 168 Defendants: THE RELATED COMPANIES, LP, a Division: 3 New York limited partnership, et al. ORDER GRANTING DEFENDANTS INTRAWEST RESORTS, INC., PLAYGROUND DESTINATION PROPERTIES, INC., INTRAWEST BRUSH CREEK DEVELOPMENT COMPANY, LLC, BASE VILLAGE PHASE 1A DEVELOPMENT, LLC AND INTRAWEST MOTION TO DISMISS MATTER having come before the Court on the Motion of Defendants Intrawest Resorts, Inc., Playground Destination Properties, Inc., Intrawest Brush Creek Development Company, LLC, Base Village Phase 1A Developm t, LLC and Intrawest ULC to dismiss PlaintiiIs' Second Amended Complaint. Having reviewed the Motion and being fully advised in the premises, IT IS HEREBY ORDERED that the Motion to Dismiss is GRANTED. PlaintiiTs' Second Amended Complaint is dismissed with prejudice as against Defendants Intrawest . Resorts, Inc., Playground Destination Properties, Inc., Intrawest Brush Creek Development Company, LLC, Base Village Phase 1A Development, LLC, and Intrawest ULC. I Dated this day of 2012. BY THE COURT: District Court Iudge