The owners of Capitol Peak Lodge condominiums at Base Village in Snowmass have no standing to pursue litigation against most of the project’s developers, a judge ruled on Friday.
The individual owners — whose lawsuit contends they were sold smaller-than-advertised units — relinquished to their homeowners association the right to sue when they signed purchase agreements for the condos, Chief Judge James Boyd of the 9th Judicial District wrote. He granted several motions to dismiss for lack of standing.
The plaintiffs’ attorneys said they were unconcerned by the ruling and they will attempt to substitute the Capitol Peak Lodge Association for the individual owners.
About 60 plaintiffs — Boyd called the number of litigants “ill-defined” — in 2011 sued 11 defendants, including the Aspen Skiing Co., Intrawest, Related Cos. and Pat Smith, all former or current Base Village developers. Boyd denied the SkiCo’s motion to dismiss, ruling that the company could be found liable based on the conduct of its former development partners.
The property owners say their condos are 8 to 10 percent smaller than what was advertised, according to the lawsuit. They also say the developers failed to tell buyers about the Base Village Metropolitan District issuing $47.5 million in bonds, which resulted in property taxes for the units being 240 percent higher than for Snowmass real estate outside the development, the lawsuit says.
The litigation is similar to a suit brought by the buyers of 62 condos at the Viceroy in Snowmass Village. A judge in March 2011 ruled their contracts could be nixed and that they can get nearly $14 million in down payments returned because the condos were smaller than what was advertised.
In the current case, regarding the ability of the plaintiffs to sue, the lodge association has “the exclusive right” to pursue claims on behalf of individual owners, Boyd wrote, citing the purchase agreement.
The “buyer shall not be permitted [to pursue] such dispute or seek redress against the appropriate applicable party on its own behalf or on behalf of any other person,” a section of the purchase agreement reads.
One of the plaintiffs’ lawyers, Michael Reiser of Walnut Creek, Calif., said his side has three weeks to substitute the lodge association for the homeowners.
“The case is definitely alive and well,” he said. “We see it as a win for the plaintiffs, other than the procedural issue” of replacing the litigants.
Aspen attorneys Wendy Fostvedt and Matt Ferguson, who also represent plaintiffs, said Boyd’s ruling will result in the case being simplified. The ruling provides “the chance for all owners to be remedied,” Fostvedt said.
Ferguson dubbed Boyd’s ruling a “Pyrrhic victory” for the defendants, saying it was a small battle in the larger case that he believes his client — be it an individual owner or the lodging association — will win.
The units are smaller than what the developer represented, Ferguson said, adding that the people who bought the condos now can’t resell them because of “enormous” tax rates, undisclosed assessments and a metro district whose solvency is unclear.
But the defendants have filed several motions to dismiss, including some that remain pending, said Aspen attorney Joe Krabacher, who represents former developer Pat Smith.
“Even if they’re successful in substituting in the [lodge] association for the plaintiffs, there are a number of other grounds on which the case would be dismissed that the judge hasn’t ruled on yet,” Krabacher said.
The remaining motions say, among other things, that the defendants properly disclosed the condos’ dimensions to prospective buyers and also that some of the plaintiffs’ claims are outside the statute of limitations, he said.
A majority of the lodge association will have to vote to have the body substituted for the individual owners, Ferguson said.
And he brought up that Related Cos., the developer who bought back Base Village out of foreclosure, owns units in the Capitol Peak Lodge.
As a homeowner, Related, in theory, could vote against suing itself, Ferguson said.
Regardless, “we’re confident our clients have been injured,” he said.