It has long been my belief that civil litigation has replaced horse racing as the sport of kings, and may be more expensive. A case decided in October by the Colorado Court of Appeals added further evidence in support of my belief.

The lawsuit at issue here involved a parking space in an open-air parking lot at a condominium development adjacent to the Keystone ski area, called Flying Dutchman. The plaintiff was a Missouri limited liability company, Far Horizons Farm LLC (Far Horizons), which owned a unit in the Flying Dutchman development. The defendant was the unit owners association for the development (Association). Per the condominium declaration for this development, Far Horizons was entitled to “the exclusive right to use one parking space,” as reasonably designated by the Association. When the Association failed to designate a parking space, Far Horizons sued, claiming a breach of the Flying Dutchman condominium declaration and a right to a court order requiring the Association to give it an exclusive-use parking space.

The District Court promptly decided Far Horizon’s claim for declaratory relief on a motion and ordered the Association to designate a parking space for its exclusive use. However, the parking space the Association designated was not acceptable to Far Horizons. That’s because, just beyond the back end of the parking space, there was a basketball hoop constructed on a pole. When Far Horizons objected, the Association moved the designated parking space one space over, so the basketball hoop and pole were next to, but not directly at the end of, the parking space.

But this led Far Horizons to argue to the District Court that the Association still had not complied with the court’s order because the parking space still was not “exclusive.” The court thereupon ordered the Association to do something that would make the parking space exclusive. (The Court of Appeals opinion doesn’t tell us how the Association responded.)

In the meantime, while all of this was going on, Far Horizons marched on with a separate claim in its lawsuit that the Association had violated the Flying Dutchman condominium declaration, constituting a violation of a convoluted Colorado statute called the Common Interest Ownership Act. This claim actually went to trial and a Summit County jury decided the Association had not violated the condominium declaration. So, although Far Horizons had prevailed on its claim for declaratory relief resulting in a District Court order requiring the Association to provide it with an “exclusive” parking space, Far Horizons lost on its claim for violation of the Common Interest Ownership Act that was tried to a jury.

The case then morphed into a dispute about attorney fees under the Common Interest Ownership Act. The statute calls for an award of attorney fees to a “prevailing party.” But this led to a disagreement about how a 2006 amendment to the Common Interest Ownership Act requires a court to determine the “prevailing party.” Should this be done one claim at a time, or just once, encompassing the totality of all claims in dispute?

Faced with this legal uncertainty, the District Court decided each party had prevailed on an issue in the case and awarded attorney fees to both parties, with a net result that the Association owed Far Horizons $13,851.30 in attorney fees. Far Horizons appealed this ruling to the Court of Appeals, arguing that the District Court should only have awarded attorney fees to one prevailing party — it — at the end of the case.

The Court of Appeals sided with Far Horizons and said the trial court erred by making an award of attorney fees to both parties. Thus, the case has been sent back to the trial court to determine a single prevailing party attorney fee award in Far Horizon’s favor, now to include attorney fees incurred in the appeal.

What happens next will mostly likely be a fight at the trial court about what would be a “reasonable” amount of attorney fees. Far Horizons will claim a six-figure amount. The Association will argue this whole dispute never should have happened, Far Horizons was unreasonable from the get-go, and the award of attorney fees in Far Horizon’s favor should reflect this fact.

Horse racing anyone?

Jim Flynn is a business columnist. He is of counsel with the Colorado Springs firm Flynn & Wright LLC. He can be contacted at moneylaw@jtflynn.com.

Money and the Law columnist Jim Flynn