Trent v. Lorenz

24CA2151 Trent v Lorenz 02-05-2026

COLORADO COURT OF APPEALS

Court of Appeals No. 24CA2151
Arapahoe County District Court No. 24CV31625
Honorable Thomas W. Henderson, Judge

Walter Trent, as Trustee of the Melungeon Trust, and Patricia Trent, as Trustee
of the Melungeon Trust,

Plaintiffs-Appellants,

v.

Wayne Lorenz,

Defendant-Appellee.

JUDGMENT REVERSED AND CASE
REMANDED WITH DIRECTIONS

Division IV
Opinion by JUDGE JOHNSON
Harris and Schock, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced February 5, 2026

Mulliken Weiner Berg & Jolivet P.C., Karl A. Berg, Jr., Olivia M. Urso, Colorado
Springs, Colorado, for Plaintiffs-Appellants

The Holt Group LLC, L. Tyrone Holt, Andrew J. King, Denver, Colorado, for
Defendant-Appellee
¶1 Plaintiffs, Walter and Patricia Trent (collectively, the Trents),

as trustees of the Melungeon Trust (the Trust), appeal the district

court’s grant of summary judgment in favor of defendant, Wayne

Lorenz (Lorenz). The Trents’ complaint alleged that Lorenz had

converted for his own use certain fees collected from the Trents that

were owed to the review committee of the Trents’ homeowner’s

association (the HOA).

¶2 On appeal, the Trents contend that the court erred by barring

their claims on issue preclusion grounds. We agree with the Trents

that issue preclusion does not bar their claims. Therefore, we

reverse the judgment and remand the case to the district court for

further proceedings consistent with this opinion.

I. Background

¶3 Lorenz is the president and sole shareholder of the

Stonebridge Corporation (Stonebridge), a custom homebuilder. In

May 2021, the Trust, through the Trents, contracted with

Stonebridge to construct a custom home in Denver. Pursuant to

the contract, Stonebridge acted as the general contractor and

construction manager. During the construction, Stonebridge

submitted periodic invoices to the Trents that the Trust paid.

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Disputes between Stonebridge and the Trust arose that resulted in

Stonebridge terminating the contract by letter in March 2023.

¶4 In December 2023, Stonebridge initiated an arbitration action

against the Trust for amounts allegedly owed by the Trust. The

Trust, in turn, counterclaimed that Stonebridge was not entitled to

certain costs.

¶5 On February 14, 2024, the arbitrator issued an interim award,

ruling that Stonebridge’s termination of the contract was justified

because the Trust had (1) stated its intent to withhold payments

from Stonebridge until certain conditions were met, which resulted

in the Trust’s anticipatory repudiation of the contract; and (2)

interfered with Stonebridge’s ability to perform under the contract,

leading to the project nearing a “standstill.” The arbitrator also

concluded that Stonebridge was “entitled to recover its costs, and

fee, for work performed” but that the Trust was “entitled to recover

any payments [it] made for charges which were improper or for

work performed which was defective.” Thus, both sides were

entitled to certain costs, which resulted in a net principal amount of

$87,059.74 awarded to Stonebridge. The arbitrator issued a final

award on April 3, 2024.

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¶6 After issuance of the interim award but before the final award,

the Trents received an email on March 25, 2024, from the

management company that handled matters on behalf of their HOA.

The email indicated that the Trents had failed to pay $11,000 in

“HOA DRC Submittal Fee[s]” (the HOA Fees). Stonebridge had

collected the HOA Fees as part of the contract and said that it had

paid them to the HOA in October 2021. The Trents paid the HOA

Fees to the HOA.

¶7 The Trents requested that Stonebridge repay them the

$11,000, but Stonebridge refused, contending that the amounts

had been paid. In support, Stonebridge pointed to an email it sent

the HOA in October 2021 that referenced three checks it had

purportedly delivered.

¶8 The Trust and the Trents initiated this action against Lorenz,

alleging civil theft and conversion of the HOA Fees. The district

court awarded summary judgment in favor of Lorenz, concluding

that issue preclusion barred the Trust and the Trents’ claims

because the arbitrator had already decided that Stonebridge was

entitled to the HOA Fees in its award. The Trents now appeal.

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II. Standard of Review and Applicable Law

¶9 We review a district court’s order granting a motion for

summary judgment de novo. Delsas v. Centex Home Equity Co.,

186 P.3d 141, 145 (Colo. App. 2008). Summary judgment may only

be granted if there is no genuine issue of material fact that would

affect the outcome of the case. Id.

¶ 10 Whether a district court properly applied issue preclusion is a

question of law that we review de novo. Vanderpool v. Loftness,

2012 COA 115, ¶ 17.

¶ 11 “Issue preclusion provides that when a court enters a final

decision on an issue previously litigated, the decision is conclusive

in a subsequent action involving the same parties or those in privity

with the original parties.” Concerning Application for Water Rts. of

Sedalia Water & Sanitation Dist., 2015 CO 8, ¶ 16. Four criteria

must be met for issue preclusion to apply: (1) the issue is identical

to an issue actually litigated and necessarily adjudicated in the

prior action; (2) the party against whom estoppel is sought was

either a party to the prior action or in privity with a previous party;

(3) a final judgment was entered on the merits in the prior

proceeding; and (4) the party against whom estoppel is sought had

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a full and fair opportunity to litigate the issues in the prior

proceeding. Id. The burden of establishing these elements is with

the party seeking preclusion of the issue. Bebo Constr. Co. v.

Mattox & O’Brien, P.C., 990 P.2d 78, 85 (Colo. 1999).

III. Analysis

¶ 12 The Trents contend that the first element of issue

preclusion — that the issue was actually litigated and necessarily

adjudicated in the prior action — is not satisfied because the

arbitrator did not decide whether Lorenz stole the $11,000 that was

supposed to be paid to the HOA.

¶ 13 The Trust’s counterclaim in the arbitration alleged that

Stonebridge “invoiced [the Trust] for costs not necessarily incurred

in the proper performance of the work” and “failed and refused to

provide . . . documentation substantiating the entire cost of the

work invoiced by Stonebridge.” As part of the arbitration, Lorenz

submitted an expert report outlining the costs that Stonebridge had

invoiced the Trust. The district court noted that the report

“specifically references each of the three components of the

$11,000,” and that “the $5,000 amount invoiced by Stonebridge for

[the HOA Fees] should have only been $3,500, and therefore $1,500

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of the invoiced sum was ‘unsupported.’” The court then concluded

that, even though the arbitrator’s interim and final awards did not

specifically refer to the $11,000, the arbitrator noted that he had

addressed all pending claims and counterclaims. And the district

court concluded that, based on these facts, “all issues relating to

the $11,000 w[ere] litigated and adjudicated in the arbitration.”

¶ 14 The district court acknowledged, however, that “any claim

relating to whether Stonebridge (or Lorenz as Stonebridge’s agent)

actually paid the $11,000 (or some portion thereof) does not appear

to have been litigated at the arbitration.” But it concluded that the

Trust had a “full and fair opportunity to litigate this issue.” It

reasoned that the Trust’s counterclaim included review of ‘“costs

not necessarily incurred in the proper performance of the work,’

which [the Trust] recognized as including the HOA [Fees of]

$11,000.” (Emphasis added.)

¶ 15 We disagree with the district court’s reasoning because the

issues underlying the Trents’ current claims were neither “actually

litigated” nor “necessarily adjudicated” in the arbitration and, thus,

the claims are not barred by issue preclusion. We reach this

conclusion for two reasons.

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¶ 16 First, the Trents’ allegation that Stonebridge did not pay the

$11,000 HOA Fee was not “actually litigated” because the Trents

alleged that they did not have notice of their civil theft or conversion

claims until after issuance of the interim award. Therefore, whether

the Trents had an “opportunity” to litigate this issue is irrelevant.

Therefore, we conclude this issue was not “actually litigated” as part

of the arbitration. Bebo Constr. Co., 990 P.2d at 85.

¶ 17 The Trust’s counterclaim focused on whether the HOA Fees

were necessary costs in the “proper performance” of the work.

Because the HOA Fees were required to be submitted as part of the

construction of the home, the arbitrator correctly determined in the

interim award that Stonebridge was entitled to charge those

amounts to the Trust. In other words, they were necessary costs for

proper performance of the work.

¶ 18 But whether the cost was “properly” assessed is distinct from

the claims that the Trents now bring, which is whether Lorenz

converted that “properly” assessed cost by not paying the HOA Fees

to the HOA. As the Trents alleged in their complaint, they could not

have “actually litigated” the alleged misappropriation of the

“properly” charged HOA Fees because they did not know that such

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fees had not been paid until March 25, 2024, when they received an

email from a representative of the HOA indicating that the deposit

for the “DRC submittal” had not been paid. And the record

supports that the interim award had already been issued more than

a month earlier on February 14, 2024.

¶ 19 Second, a determination of whether Lorenz misappropriated

the $11,000 was not “necessary to a judgment” of whether

Stonebridge appropriately charged the Trents that amount as part

of the construction of the home. See Bebo Constr. Co., 990 P.2d at

85-86. “Even if not explicitly determined, an issue is nevertheless

considered to have been ‘actually’ determined for purposes of [issue

preclusion] if its resolution is necessarily implied in an actual

determination.” Reynolds v. Cotten, 2012 CO 27, ¶ 10. We

acknowledge that the Trust sought reimbursement for costs

charged that were not “proper.” But an arbitrator could determine,

as this arbitrator did, that the HOA Fees were proper costs without

determining whether Stonebridge improperly converted those

“proper” fees by retaining them based on the information disclosed

to the Trents in March 2024. See Rhino Fund, LLLP v. Hutchins,

215 P.3d 1186, 1195 (Colo. App. 2008) (an action will lie for the

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conversion of money where there is an obligation to return or

otherwise particularly treat specific money).

¶ 20 Because the issue of whether Stonebridge paid $11,000 to the

HOA or whether Lorenz stole that money from the Trents was not

actually litigated or necessarily adjudicated in the arbitration, we

conclude that the court erred by granting summary judgment in

favor of Stonebridge on the Trents’ claims of civil theft and

conversion.

IV. Conclusion

¶ 21 The judgment is reversed, and the case is remanded to the

district court to conduct further proceedings consistent with this

opinion.

JUDGE HARRIS and JUDGE SCHOCK concur.

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