GaNun v. Epic

23CA1667 GaNun v Epic 08-15-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1667

City and County of Denver District Court No. 22CV31893

Honorable Mark T. Bailey, Judge

Jennifer GaNun and Andrew Thomas,

Plaintiffs-Appellants,

v.

Epic on the Park Homeowners Association, Inc., a Colorado nonprofit

corporation,

Defendant-Appellee.

JUDGMENT AFFIRMED AND CASE

REMANDED WITH DIRECTIONS

Division I

Opinion by JUDGE J. JONES

Welling and Schock, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced August 15, 2024

Pat Mellen Law, LLC, Patricia Ann Mellen, Denver, Colorado, for Plaintiffs-

Appellants

Orten Cavanagh Holmes & Hunt, LLC, Jonah G. Hunt, Marcus T. Wile, Denver,

Colorado, for Defendant-Appellee

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¶ 1 Plaintiffs, Jennifer GaNun and Andrew Thomas, appeal the

district court’s judgment entered on jury’s verdicts in favor of

defendant, Epic on the Park Owners Association, Inc. (Epic). We

affirm and remand the case to the district court for a determination

of Epic’s reasonable attorney fees incurred on appeal.

I. Background

¶ 2 Plaintiffs own a condominium unit on property governed by

Epic, a homeowners association. They filed a complaint against

Epic asserting claims for breach of contract, breach of the

contractual covenant of good faith and fair dealing, and negligence.

The essence of their claims is that Epic breached the declarations

and bylaws of the condominium development and acted negligently

by failing to adequately fix problems with the roof of their unit.

These problems, plaintiffs allege, caused property damage to their

unit and personal injuries to Ms. GaNun.

¶ 3 A jury found in Epic’s favor on all three claims.

¶ 4 On appeal, plaintiffs contend that they are entitled to a new

trial because the district court erred by failing to define for the jury

certain terms in the instruction on one of Epic’s three affirmative

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defenses — that Epic’s conduct was a reasonable exercise of

business judgment. As a result, they say, that instruction and the

elemental instructions for each claim (which referenced the

affirmative defense) were “incomplete” and “misleading.”

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¶ 5 At Epic’s request, the district court instructed the jury on the

business judgment rule. Instruction No. 29 provided as follows:

The business judgment rule provides that the

good faith acts of directors of nonprofit

corporations which are within the powers of

the corporation and the exercise of honest

business judgment are valid, and courts are

not to interfere with or regulate the conduct of

directors in the reasonable and honest exercise

of their judgment and duties.

Each of the elemental instructions for plaintiffs’ three claims for

relief included the following provision:

On the other hand, if you find that all of these

statements have been proved, then you must

consider the defendant’s affirmative defense(s)

of plaintiffs’ own prior breach of contract,

failure to act in good faith, and that

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Plaintiffs’ opening brief also contended that the district court erred

by failing to include these definitions in the verdict forms. They

withdrew that contention in their reply brief, asserting that they

meant to refer to the elemental instructions for each claim. At oral

argument, plaintiffs’ counsel conceded that the issue whether the

court erred by failing to define certain terms for the jury is the only

issue before us.

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defendant’s actions or inactions were a

reasonable exercise of business judgment.

The court also instructed the jury that Epic had the burden of

proving each of its affirmative defenses by a preponderance of the

evidence.

II. Discussion

¶ 6 Plaintiffs now argue that the district court should have

included in the instructions definitions for three phrases used in

Instruction No. 29: (1) “good faith acts of directors of nonprofit

corporations”; (2) “within the powers of the corporation”; and (3)

“the exercise of honest business judgment.”

¶ 7 We conclude that plaintiffs didn’t preserve this argument for

appeal.

¶ 8 To preserve an argument concerning a jury instruction for

appeal, a party must timely assert that argument in the district

court and request a ruling on it. See Ajay Sports, Inc. v. Casazza,

1 P.3d 267, 276 (Colo. App. 2000) (party waived argument that

instruction was incomplete by failing to object to the instruction on

that basis at trial); Vikell Invs. Pac., Inc. v. Kip Hampden, Ltd., 946

P.2d 589, 596 (Colo. App. 1997) (“A general objection to an

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instruction is not sufficient to preserve a specific objection for

appeal. Instead, counsel must state the specific grounds of his or

her objections for consideration of the court, . . . and only the

grounds so specified shall be considered on appeal.”) (citation

omitted); see also C.R.C.P. 51 (only objections raised before the

court gives the instructions to the jury may be considered on

appeal).

¶ 9 Plaintiffs’ counsel never asked the district court to define the

aforementioned phrases for the jury. Nor did any of her objections

to the business judgment rule instruction suggest that the court

define these or any other terms. Rather, counsel only objected

generally that there were unspecified “limitations” to the rule, the

Colorado Common Interest Ownership Act (CCIOA) somehow

affected the application of the rule, there hadn’t been a valid

exercise of business judgment as a matter of law, and the rule

didn’t apply because there was no “official decision” of Epic to

which it could apply. These objections to the instruction — which

went to whether defendants were even entitled to an instruction on

this affirmative defense — didn’t preserve the different objections

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plaintiffs now raise on appeal because they didn’t alert the district

court to those specific objections. Therefore, we don’t need to

address the merits of plaintiffs’ argument. See Est. of Stevenson v.

Hollywood Bar & Cafe, Inc., 832 P.2d 718, 721 n.5 (Colo. 1992)

(“Arguments never presented to, considered or ruled upon by a trial

court may not be raised for the first time on appeal.”); C.R.C.P. 51.

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¶ 10 In any event, plaintiffs can’t establish that any error was

prejudicial. See Moody v. Corsentino, 843 P.2d 1355, 1375 (Colo.

1993) (the party asserting reversible error has the burden of

establishing it); Poudre Valley Rural Elec. Ass’n v. City of Loveland,

807 P.2d 547, 557 (Colo. 1991) (same); Scholle v. Ehrichs, 2022

COA 87M, ¶ 78 (same; applying this principle to a challenge to a

jury instruction), aff’d in part and rev’d in part on other grounds,

2024 CO 22; see also C.R.C.P. 61 (“The court at every stage of the

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The trial transcript includes a mention of a business judgment

rule instruction proposed by plaintiffs’ counsel. But we haven’t

been able to locate that proposed instruction in the record. In any

event, plaintiffs’ counsel has conceded that the proposed

instruction didn’t define the terms plaintiffs now contend the court

should have defined for the jury or include language accomplishing

the same goal.

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proceeding must disregard any error or defect in the proceeding

which does not affect the substantial rights of the parties.”).

¶ 11 The verdict forms — which plaintiffs’ counsel helped

prepare — asked the jury to say “yes” or “no” to whether it found in

plaintiffs’ favor on each of their claims. They didn’t ask the jury to

say why it found against plaintiffs. There isn’t any way to know

whether the jury found against plaintiffs because it determined that

Epic proved its business judgment rule affirmative defense: it could

have found that plaintiffs failed to prove one of more elements of

their claims or that Epic had proved one or both of its other

affirmative defenses. Plaintiffs can’t meet their burden by asking us

to speculate. See Elk River Assocs. v. Huskin, 691 P.2d 1148, 1153

(Colo. App. 1984); Williams v. Chrysler Ins. Co., 928 P.2d 1375,

1378 (Colo. App. 1996) (“Prejudicial error in an instruction exists

when the record shows that a jury might have answered differently

if a proper instruction had been given.”) (emphasis added); cf.

Antolovich v. Brown Grp. Retail, Inc., 183 P.3d 582, 601-02 (Colo.

App. 2007) (any error in giving of trespass instruction was harmless

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because trespass was “an alternative theory of liability as to which

no additional damages were recoverable”).

III. Epic’s Attorney Fees

¶ 12 Epic requests an award of its attorney fees incurred on appeal

under section 38-33.3-123(1)(c), C.R.S. 2023, of CCIOA. We grant

its request. Plaintiffs’ claims were expressly premised on the

development’s declaration and bylaws. Because Epic has

successfully defended the judgment in its favor on those claims, it

is statutorily entitled to an award of its reasonable attorney fees

incurred on appeal. See Accetta v. Brooks Towers Residences

Condo. Ass’n, 2021 COA 147M2, ¶¶ 50-51. We exercise our

discretion under C.A.R. 39.1 to remand the case to the district

court for it to determine the reasonable amount of those fees.

IV. Disposition

¶ 13 The judgment is affirmed, and the case is remanded for the

district court to determine the reasonable amount of attorney fees

incurred by Epic on appeal.

JUDGE WELLING and JUDGE SCHOCK concur.