District Court, Boulder County, State of Colorado

1777 Sixth Street, Boulder, Colorado 80302

(303) 441-3726

DATE FILED: June 12, 2015

GOLDEN RUN ESTATES, et al.

Plaintiffs
vs.
TOWN OF ERIE,
Defendant

Attorney for Plaintiffs:

COURT USE ONLY

Robert Bruce

Attorney for Defendant: Andrew Nathan, Marni NathanKloster

Case Number: 14CV31112

Division 5
Hon. Andrew Hartman
Courtroom H

JURY TRIAL MINUTE ORDER

THIS MATTER comes before the Court for a jury trial. On June 8-11, 2015 the following
actions were taken in the above captioned case. The Clerk is directed to enter these
proceedings in the register of actions:
COURT REPORTER: Kirsten Thorngate
APPEARANCES:
Robert Bruce appears on behalf of Plaintiffs; Plaintiff Aaron Harber also appears. Carl
Oldham appears as corporate representative of Plaintiff Golden Run Estates, LLC.
Jay Nathan and Marni Nathan-Kloster appear on behalf of Defendant, Town of Erie. A.J.
Krieger appears as a representative of the town.
SWORN WITNESSES:
Gary Behlen
Corporal Haddox
Aaron Harber
A.J. Krieger
Carl Oldham
Martin Ostolthoff
Wendy Palmer
Jeff Rupert
PLAINTIFFS ADMITTED EXHIBITS:
1-11, 13-83
DEFENDANTS ADMITTED EXHIBITS:
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A-Z, AA-ZZ, AAA-ZZZ

Counsel are directed to e-file any exhibits offered or admitted into evidence during trial
in accordance with Chief Justice Directive 11-01 and Local Administrative Order 11-102
for inclusion in the record. The Court will file all direct trial documents.
MATTERS AT TRIAL:
Matters During Trial Monday, June 8, 2015
1. Seventeen jurors were selected for general voir dire.
2. A jury of six and one alternate was selected and sworn.
3. Outside of the presence of the jury, the Court orders the sequestration of all
witnesses. Defendant objects to Carl Oldham as corporate representative for
Plaintiff Golden Run Estates. Plaintiffs assert that he is general manager, a
member of the LLC, and corporate representative of Plaintiff Golden Run
Estates, and is thus entitled to be present. Plaintiff Aaron Harbor and Carl
Oldham as corporate representative for Plaintiff Golden Run Estates and A.J.
Krieger, as representative of Defendant, Town of Erie, will be permitted remain in
the courtroom.
4. Counsel makes opening statements.
5. Aaron Harber testifies.
Matters During Trial Tuesday, June 9, 2015
6. Outside of the presence of the jury, the Court hears argument on Plaintiffs claim
for damages arising out of Defendants enforcement of municipal code.
Defendant asks the Court to exclude any evidence relating to those alleged
damages. Defendant argues that the evidence is irrelevant and was not properly
plead in Plaintiffs complaint. Plaintiffs argue that the claim was properly plead
and that there is no prejudice or surprise relating to this claim.
7. The Court finds that, given the low standard necessary to satisfy notice pleading
requirements, Plaintiffs did provide sufficient notice to Defendant on this issue.
The Court also finds that this issue is part and parcel of Plaintiffs claims alleging
bad faith. Therefore the Court finds that the evidence is relevant, and as to any
prejudice, the Court believes that the evidence is equally prejudicial to both
parties. The Court therefore will not exclude this evidence and Defendants
motion in limine is denied. The jury may consider this evidence when determining
whether to award Plaintiffs damages on the breach of the duty of good faith and
fair dealing claim. Defendant may cross-examine on the existing Boulder County
enforcement actions against the property prior to the Town of Erie taking action
and can utilize those alleged violations to show the jury the complete picture and
put the violations in context. The Court will take up the issue of a specific
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damage instruction when it addresses the jury instructions with the parties later
during trial.
8. The parties agree that cross-examination of Plaintiffs witnesses will also contain
Defendants direct examination and waive any objection on the grounds of
outside the scope.
9. Aaron Harber continues to testify.
10. A.J. Krieger testifies.
Matters During Trial Wednesday, June 10, 2015
11. A.J. Krieger continues to testify.
12. Gary Behlen testifies. Defendant offers Mr. Behlen as an expert in property
development infrastructure analysis, the feasibility of Plaintiffs plan as it currently
exists, Plaintiffs compliance with the town of Eries codes, and Plaintiffs
damages arising therefrom. Plaintiffs do not object and the Court so qualifies Mr.
Behlen.
13. Martin Ostolthoff testifies. Defendant offers Mr. Ostolthoff as an expert in zoning,
development, the Town of Eries development code, Plaintiffs compliance with
that code and the towns ordinances, and Plaintiffs damages. Plaintiffs do not
object and the Court so qualifies Mr. Ostolthoff.
14. Corporal Haddox testifies.
15. Jeff Rupert testifies.
16. Carl Oldham testifies.
17. Plaintiff rests.
18. After the jury has been dismissed for the day, Defendant makes a motion for a
directed verdict on the following issues:
a. Plaintiffs claim for damages under contract law for money spent
remedying code violations
i. Defendant argues that the town is entitled to enforce its laws, that
Plaintiffs cannot obtain damages for the remediation of an admitted
municipal code violation, that a governmental entity may not
contract away its police powers, and that Plaintiffs claim is actually
a claim for harassment or malicious prosecution, which arises in
tort and therefore implicates governmental immunity. Plaintiff
argues that the claim arises in contract and that evidence already
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presented to the jury could lead a reasonable jury to conclude that

Defendants selective enforcement of the municipal codes was
punitive, retaliatory, and therefore in bad faith.
b. Plaintiffs claim for contract damages based on future losses
i. Defendant argues that the damages claimed are too speculative.
Defendant argues that Plaintiffs evidence has not shown with any
particularity how the damages were calculated and that therefore
the Court should enter a directed verdict on the issue of damages.
Plaintiffs argue that a reasonable jury could make a determination
of damages from the evidence presented at this point.
c. Plaintiffs right to bring a breach of contract claim under section 4(A) of the
pre-annexation agreement.
i. Defendant argues that Plaintiffs breach of contract claim under
section 4(A) of the Pre-Annexation Agreement must be resolved by
the Colorado Municipal Annexation Act, C.R.S. 3112116. Under
that Act, any action to withdraw an annexation ordinance must be
brought within 60 days of the ordinances effective date, after a
complaint is filed within 10 days of the effective date. Defendant
argues that the Act presents a jurisdictional bar to Plaintiffs breach
of contract claim. Plaintiffs argue that they are aggrieved not in the
annexation but in the frustration of the Pre-Annexation Agreements
remedy of disconnection, and therefore their claims are not barred.
Defendant further argues that section 15 of the Agreement states
that the contract is controlled by Colorado law in interpretation,
validity, performance, and enforcement, which grafts the
Annexation Acts procedural limitations onto section 4(A), meaning
Plaintiffs breach of contract claim is not properly before the Court.
19. The Court rules as follows:
a. The Court DENIES Defendants motion for directed verdict on Plaintiffs
damages. Viewing the evidence in the light most favorable to the nonmoving party, the Court finds that a reasonable jury could find, if it finds a
breach, that Plaintiffs suffered quantifiable and consequential damages.
The Court makes this finding based on the testimony of Mr. Harber and
the Pre-Annexation Agreements (exhibit 1) option purchase price of
$72,500,000, and the later increased option price. That the Town of Eries
representative testified that it never intended to purchase the property at
that price is a question of credibility for the jury to decide. The Court
further finds that Mr. Oldhams testimony was based on his personal
knowledge and experience as the manager of Plaintiff Golden Run

Estates, and his observation of all proceedings regarding development of

the land at issue.
b. The Court DENIES Defendants motion for directed verdict on Plaintiffs
claims for damages arising out of the towns code enforcement actions.
The Court finds that this action is plead in contract, rather than tort, so it is
not subject to the Governmental Immunities Act. The Court finds, taking
the evidence in the light most favorable to Plaintiffs, that a reasonable jury
could find that the municipal code enforcement action was a violation of
the towns duty of good faith and fair dealing.
c. The Court DENIES IN PART and GRANTS IN PART Defendants motion
for a directed verdict on Plaintiffs right to bring a breach of contract claim
and seek contract damages under section 4(A) of the Pre-Annexation
Agreement.
i. The Courts hands are tied on the issue of revoking the annexation
based on the Municipal Annexation Act because Plaintiffs did not
timely lodge an objection and then file a petition with the district
court; this Court therefore has no jurisdiction on the annexation
revocation remedy requested by Plaintiffs. Plaintiffs had a remedy
under the Act, which would have been to file a petition with the
district court after objecting within 10 days to the annexation.
Plaintiffs did not do so.
ii. However, the Court finds that Plaintiffs have a remaining claim for
monetary damages based on the alleged breach of contract apart
from the remedy of revocation of annexation. The Act provides the
sole procedure for objections to annexation, but does not affect
enforcement of other contract rights. Town of Superior v. Midcities,
933 P.2d 596, 603 n. 10 (Colo. 1997); Geraines v. City of
Greenwood Village, 583 F.Supp. 830, 838 (D.Colo. 1984).
iii. The Court also finds that Plaintiffs still have a possible remedy of
disconnection by judicial decree under C.R.S. 31-12-703.
iv. The Court further finds that Plaintiffs admit that the Municipal
Annexation Act bars Plaintiffs third claim for relief, declaratory
judgment. Accordingly judgment is entered for Defendant on that
claim.
20. Off the record, the Court holds a jury instruction conference.

Matters During Trial Thursday, June 11, 2015

21. Outside of the presence of the jury, counsel puts the substance of the jury
instruction conference on the record. Defendant and Plaintiffs both tender
proposed verdict forms. The Court finds that the jury has heard enough evidence
to make a determination of damages, so does not find a need for special verdicts
on specific damages as offered in Defendants verdict form. The Court will give
the general verdict forms as presented by Plaintiffs to the jury. Counsel may
make argument during closing arguments on the issue of damages and the jury
will be guided by very detailed jury instructions on breach of contract and what
constitutes damages.
22. Defendant tenders additional instructions to the Court. The parties argue and the
Court rules as follows:
a. Defendant tenders an instruction on municipal code compliance. Plaintiffs
oppose the instruction, arguing that it is misleading, based on the state of
the evidence. The Court finds that the evidence shows the Town of Erie
has discretion in code enforcement and that there is evidence that the jury
could consider when determining whether the town acted in bad faith.
Therefore the Court finds the instruction is not congruent with the
evidence and could confuse jury. Accordingly the Court will not give the
jury instruction.
b. Defendant tenders an instruction on the affirmative defense of estoppel.
Plaintiff argues that estoppel is not an appropriate defense based on the
state of the evidence thus far. The Court finds that there is not sufficient
evidence for the jury to consider estoppel in this breach of contract case,
based on the record. Also, Defendants argument is directly contradicted
by 4(A) of the Pre-Annexation Agreement, which the Court finds to be
unambiguous as to Plaintiffs significant discretion and no time limit to
seek withdrawal of the petition for annexation. Also, the Court finds that
the general provisions of section 15 do not controvert the specific
provisions of 4(A) in the agreement. Therefore the Court will not give the
jury instruction.
c. Defendant tenders an instruction on the statute of limitations for attacking
the annexation. Plaintiffs argue that the Court has ruled that what
Defendant claims is a statute of limitation is actually a jurisdictional bar
under the Municipal Annexation Act, removing revocation of the
annexation as a remedy. The Court finds that the evidence does not
support giving this instruction. The Court also found that the jurisdictional
defect does not bar Plaintiffs from bringing breach of contract or breach of
implied covenants of good faith and fair dealing claims seeking monetary
damages. The Court finds that the Municipal Annexation Act only bars the
specific remedy of retroactively withdrawing the annexation petition, which

is governed by C.R.S. 31-12-116. Therefore the Court will not give the
jury instruction.
d. Defendant tenders an instruction to the Court on the proper calculation of
damages. Defendant argues that future lost earnings damages must be
proven by a preponderance of the evidence and may not be proven on
speculation, guesses, or the mere estimates of witnesses. Plaintiffs argue
that the instruction will confuse the jury and is duplicative of other
instructions. The Court finds that the information contained in this
instruction is covered by other instructions that the jury will be given. The
Court also finds the proffered language inaccurately suggests a clear and
convincing standard, rather than a preponderance of the evidence
standard. Therefore the Court will not give the jury instruction.
e. Defendant tenders an instruction on the state of annexation law in
Colorado. Defendant argues that unless the jury has a sufficient
understanding of annexation law, Defendant cannot reasonably defend
against Plaintiffs bad faith claim. Plaintiffs argue that the record is well
developed on this topic and that the instruction would confuse the jury.
The Court finds that Defendant has had the opportunity to elicit testimony
about the reasons why the town acted in good faith and may make
arguments to that effect in closing. The Court further finds that
Defendants position that section 15 of the Pre-Annexation Agreement
somehow was intended to trump section 4(A) is not a proper reading of
the contract. Due to the structure of the contract and the sections
verbiage, the Court finds that section 15 is boilerplate. If Defendants
theory were accurate, the contract would have had to specifically state
that Colorado law controls when any provision of the contract conflicts with
Colorado law. Permitting this instruction would essentially revise the
contract, which, barring mutual mistake, would be an inappropriate action
for the Court to take at this time. Also, based on the evidence and
Defendants theory, the jury could find that Defendant attempted to use
section 15 as an ace up its sleeve to defeat section 4(A).This dovetails
with Plaintiffs claim for breach of the duty of good faith and fair dealing
and might even have raised other causes of action. Therefore the Court
will not give the jury instruction.
f. Defendants final two proposed instructions, that the Court will determine
disconnection by decree and that Plaintiffs claim no breach of section 4(B)
of the Pre-Annexation Agreement, are not opposed. Therefore the Court
will tender those instructions to the jury.
23. Counsel is reminded to file disputed jury instructions electronically after a verdict
is entered to preserve all rights on appeal.

24. Plaintiffs inform the Court that they do not agree to allow the alternate juror to
deliberate. The Court will dismiss one juror as an alternate at the appropriate
time.
25. Wendy Palmer testifies.
26. Defendant rests.
27. Plaintiffs do not present rebuttal testimony.
28. At the close of evidence, and outside of the presence of the jury, Plaintiffs make
a motion for a directed verdict on their claim for disconnection by judicial decree.
Plaintiffs argue that the testimony has shown that all requirements of C.R.S. 3112-703 have been met. Defendant opposes the motion. The Court will hear
argument on this issue while the jury is in deliberations.
29. Defendant renews its motions for directed verdicts. Per prior rulings, the Court
denies the motions.
30. The Court reads the jury instructions to the jury.
31. Counsel makes closing statements.
32. As is this Courts practice, the Court selects one name at random to determine
which juror is the alternate. That juror is thanked for jury service and dismissed.
33. The jury begins deliberations at approximately 11:15 a.m.
34. While the jury deliberates, Plaintiff Harber makes argument on the motion for
disconnection by judicial decree. Plaintiff argues that all six requirements of the
statute have been met and that any improvements made by Defendant were
incidental and general to the town. Defendant argues that Plaintiff has not met
requirement (f) of C.R.S. 31-12-703 and did not plead the issue appropriately in
the complaint. Defendant also argues that Plaintiff has not met the threshold
requirement of filing a petition for a review hearing on disconnection. Defendant
further argues that disconnection is expressly prohibited if certain improvements
have been made to the property, which Defendant argues is the case here.
35. First, the Court finds that the Plaintiff has properly requested disconnection by
decree in the Complaint and in these proceedings. Next, the Court finds that
Plaintiff Harbers motion for disconnection by decree is properly before the Court.
Regarding the hearing requirement of C.R.S. 31-12-704, the Court notes that on
November 7, 2014, Plaintiff requested that a hearing be set and that Defendant
objected to holding a hearing on November 18, 2014, asserting many objections,
which included that Defendant needed time for discovery prior to the hearing.
Subsequently, Plaintiff filed a motion for partial summary judgment on this issue,
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which the Court denied, on the grounds that there were disputed factual issues to
be determined at trial. The Court and parties then proceeded in what the Court
views as a consolidation of the hearing under 704 and trial on the other three
claims. Therefore the Court finds that the request for disconnection by decree is
properly before the Court; the fact that a hearing did not occur within 60 days
cannot now be asserted as a defense by the Town of Erie due to its prior
objection to the hearing. Lastly, although Plaintiff did assert his right to the
hearing, he sought disconnection by decree as an alternative claim for relief at
trial. Procedurally, Town of Erie is thus estopped from asserting any failure to
proceed to hearing results in denial of Plaintiffs request.
36. Next, the Court finds that Plaintiff Harber has met his burden of showing that
disconnection is proper under C.R.S. 31-12-703 under longstanding Colorado
Supreme Court precedent on the issue. The Court further finds that Defendant
has not met his burden of proof on the affirmative defense of special
improvements under 704 based on binding case law that is squarely on point.
Therefore the Court GRANTS the motion for disconnection by judicial
decree and ORDERS that the property shall be disconnected from the Town
of Erie by decree of this Court. Plaintiff shall draft a proposed order on the
disconnection with proposed findings of fact and conclusions of law and file such
order with the Court by Friday, June 19, 2015, at 5:00 p.m. Plaintiff shall confer
with Defendant before filing the proposed order. This Order is effective on this
date, June 11, 2015.
37. The jury reaches a verdict at approximately 1:00 p.m.
VERDICT:
After deliberating for approximately 2 hours, the jury returns the following verdict, which
is accepted and entered:
The jury completed Special Verdict Form A and found for Plaintiffs. The jury
awarded Plaintiffs damages in the amount of $305,000.00. The jury did not answer
Special Verdict Form B (judgment for Defendant).
The jury answered Special Verdict Form C and found for Plaintiffs. The jury
awarded Plaintiffs damages in the amount of $57,500.00. The jury did not answer
Special Verdict Form D (judgment for Defendant).
NOW THEREFORE, JUDGMENT IN FAVOR OF PLAINTIFFS ON CLAIMS 1 and 2 IS
HEREBY ENTERED PURSUANT TO VERDICT BY THE JURY.
JUDGMENT IN FAVOR OF DEFENDANT IS ENTERED ON CLAIM 3 BY THE
COURT.
JUDGMENT IN FAVOR OF PLAINTIFF HARBER IS ENTERED ON CLAIM 4
BY THE COURT.
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JUROR QUESTIONS DURING TRIAL

Juror questions 1- 3 were tendered to the Court; the Court presented the
questions to Aaron Harber.
Juror questions 4 - 6 were tendered to the Court; the Court presented the
questions to A.J. Krieger.
Juror questions 7 and 8 were tendered to the Court; the Court presented the
questions to Wendy Palmer.
JUROR QUESTIONS DURING DELIBERATIONS
The jury asked one question during deliberations. The parties stipulated to an
answer and the Court answered as stipulated.
Judgment is entered as set forth in this Order and Jury Verdict Forms A and C.
Done this 12th day of June, 2015, nunc pro tunc June 11, 2015.

BY THE COURT:

Andrew Hartman
District Court Judge

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