Marin Metro v. Colo Bondshares

24CA1092 Marin Metro v Colorado Bondshares 06-12-2025

COLORADO COURT OF APPEALS

Court of Appeals No. 24CA1092
Arapahoe County District Court No. 22CV30866
Honorable Ben L. Leutwyler III, Judge

Marin Metropolitan District, a quasi-municipal corporation and political
subdivision of the State of Colorado,

Plaintiff-Appellee,

v.

Colorado Bondshares – A Tax Exempt Fund and UMB Bank, N.A.,

Defendants-Appellants,

and

Century at Landmark, LLC,

Interested Party-Appellee.

JUDGMENT AFFIRMED

Division II
Opinion by JUDGE SCHUTZ
Fox and Harris, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced June 12, 2025

Anderson Notarianni McMahon LLC, Kimberly A. Bruetsch, Denver, Colorado,
for Plaintiff-Appellee

Kutak Rock LLP, Neil L. Arney, Thomas W. Snyder, Kathleen F. Guilfoyle,
Denver, Colorado, for Defendants-Appellants
Fox Rothschild LLP, Marsha M. Piccone, Patrick J. Casey, Risa B. Brown,
Denver, Colorado, for Interested Party-Appellee
¶1 This appeal arises from the latest lawsuit involving a special

district, owners of land within that district, the tax exempt fund

that purchased the bonds, and the bank that held the bond

proceeds in trust. See Landmark Towers Ass’n v. UMB Bank, N.A.,

2018 COA 100, ¶¶ 1-13 (Landmark).

¶2 In this case, Marin Metropolitan District (MMD), sought a

declaratory judgment holding that it could not be compelled to

impose a 2008 mill levy on approximately eleven acres of vacant

land (vacant land) owned by Century at Landmark, LLC (Century),

which is the only property that remains within MMD’s boundaries.

MMD named as defendants Colorado Bondshares — A Tax Exempt

Fund (Bondshares), which owns the bonds, and UMB Bank, N.A.

(UMB), which originally held the bond proceeds in trust.

Bondshares and UMB asserted various defenses and counterclaims

related to the enforceability of the bonds and mill levy. The suit

included Century as an interested third party.

¶3 The parties filed multiple motions for summary judgment. The

district court granted MMD’s motion in part and denied Bondshares

and UMB’s motions. The parties tried the remaining claims to the

court. After finding that the Century property derived no benefit

1
from the bond proceeds, the district court denied all of UMB and

Bondshares’ claims and entered judgment in favor of MMD.

¶4 Bondshares and UMB appeal the district court’s summary

judgment orders and its final judgment entered after the bench

trial. We affirm.

I. Background

¶5 Zachary Davidson developed property in the City of Greenwood

Village (Greenwood Village). By 2007, Davidson had constructed

two high-rise condominium towers (Landmark Towers) owned by

Landmark Towers Association, Inc. (Landmark), an entity which

Davidson controlled.

¶6 In 2007, Davidson, or one of his closely held development

entities, acquired the vacant land, which is adjacent to the

Landmark Towers. Davidson decided to form MMD to finance, own,

and manage the infrastructure necessary to develop the vacant

land. As a condition to obtaining Greenwood Village’s approval for

the formation of MMD, Davidson had to provide Greenwood Village

with a service plan that addressed the scope of the public

improvements to be built in the district, the amount of bonds that

2
would be required to fund the creation of those improvements, and

how those bonds would be repaid.

¶7 The service plan requirements created a problem for Davidson.

From the beginning, it was clear that, even once the vacant land

was fully developed and sold out, the properties on the vacant land

would not have a combined assessed value to provide sufficient

revenue to repay the bonds needed to fund the public

improvements. In short, a special district that included only the

vacant land was not financially viable.

¶8 So Davidson developed a fraudulent scheme. To gain

Greenwood Village’s approval for the formation of MMD, Davidson

included the Landmark Towers within MMD’s boundaries, thereby

providing a sufficient tax base to repay the bonds necessary to

develop the vacant land. Upon its inclusion in MMD, Landmark

Towers provided 90% of the assessed value of all of the property in

MMD, while the vacant land provided only 10%. But all of the

infrastructure proposed to be financed and operated by MMD was

located only on the vacant land. Based on the projected cash flows

created by the Landmark Towers, Greenwood Village authorized the

3
formation of MMD, including its authority to issue in excess of $30

million in bonds.

¶9 At the time MMD was formed, the individual condominiums at

Landmark Towers were in the process of being sold to the public.

As a condition to approve the service plan, Greenwood Village

required Davidson to notify these prospective purchasers of their

inclusion in MMD. Davidson failed to do so.

¶ 10 In 2008, MMD issued over $30 million in bonds to fund the

improvements. Bondshares purchased the bonds. MMD’s bond

resolution included a trust indenture stating that it would annually

impose a debt service mill levy on all taxable property within MMD

to generate the revenue necessary to satisfy the bonds and

associated interest. The proceeds from the sale of the bonds were

specially earmarked to fund the infrastructure improvements

contemplated by the MMD service plan.

¶ 11 UMB held the bond sale proceeds in trust. Davidson set up a

mechanism that allowed him to draw on the bond funds. He only

needed UMB’s approval for the reimbursements, not MMD’s. By the

end of 2008, Davidson had requested and received $8 million,

purportedly to fund construction of the infrastructure. However, no

4
improvements were ever built. Davidson misappropriated the bulk

of the $8 million for personal use.

¶ 12 In August 2009, MMD hired an independent engineer to

determine how much of the disbursed funds were eligible for public

expenses for tax purposes. The report eventually established that

some funds had been misappropriated and listed the expenses that

were potentially public expenditures.

¶ 13 Davidson’s company filed for bankruptcy in August 2009, and

Davidson personally filed for bankruptcy in early 2010. Late in

2012, Davidson was indicted for embezzlement and misuse of

public funds; he died by suicide shortly thereafter. UMB returned

the remaining bond proceeds it was holding (about $13 million) to

Bondshares. MMD imposed a mill levy on the property within the

district for six years, between 2008 and 2013. The district paid an

additional $13 million in principal and $11.5 million in interest to

Bondshares.

¶ 14 In 2011, Landmark sued MMD to prevent MMD from further

assessing the mill levy against the Landmark Towers

condominiums. After a bench trial in 2013, the trial court

permanently enjoined MMD from imposing the mill levy on the

5
condominiums. In 2018, a division of this court affirmed that

injunction in Landmark.

¶ 15 Century purchased the vacant land in 2016. At the time, the

injunction barring imposition of the mill levy was in full force and

effect. In 2021, Greenwood Village petitioned to exclude Landmark

Towers from MMD. The trial court granted the petition, and the

exclusion order took effect at the end of 2021. Thus, the vacant

land is the only property that remains part of MMD. MMD has no

funds with which to fund the public improvements contemplated by

MMD’s service plan and the bond indenture.

¶ 16 In 2020, Bondshares sent a letter to MMD’s counsel claiming

that MMD had an outstanding balance of approximately $18 million

that was “due and owing” under the trust indenture. The letter

asserted that MMD was still required to set a debt service mill levy

on the unimproved lot within the district to repay the bonds, and it

demanded MMD set a levy on the vacant land.

¶ 17 In 2022, MMD filed a complaint for the entry of a declaratory

judgment and injunctive relief to establish that Bondshares could

not compel MMD to impose a mill levy on the vacant land. Both

parties moved for summary judgment.

6
¶ 18 The district court determined that MMD was entitled to the

entry of judgment on its claim that Bondshares was barred by the

doctrine of issue preclusion from relitigating Landmark’s holding

that the mill levy was a special assessment rather than an ad

valorem tax. The court also determined that MMD’s claims were

not barred by section 11-57-204, C.R.S. 2024, or section 31-25-

538(2), C.R.S. 2024. The court denied the parties’ competing

motions that hinged on the issue of whether the vacant land

received a benefit from expenses paid with the bond proceeds

because there were factual disputes regarding that issue.

¶ 19 The parties proceeded to trial to determine if the vacant land

benefitted from any improvements and related expenditures funded

by the bond proceeds. After the trial was completed, the court

entered detailed factual findings and legal conclusions from which it

determined that the vacant land did not benefit from any of the

bond expenditures and, therefore, imposition of the mill levy against

the vacant land would violate Century’s due process rights. Based

on this conclusion, in concert with its previous summary judgment

rulings, the court entered judgment in favor of MMD and against

Bondshares and UMB on all claims. The order declared that the

7
bond resolution and trust indenture are void and unenforceable,

the bond debt is discharged, and enjoined Bondshares and UMD

from attempting to compel MMD to impose a mill levy against the

vacant land.

II. Analysis

A. The Nature of the Mill Levy

¶ 20 Bondshares and UMB argue that the district court erred when

it concluded that the mill levy was a special assessment rather than

an ad valorem tax. The court held that Bondshares and UMB were

precluded from relitigating this issue, which was resolved by

Landmark.

¶ 21 We perceive no error in the district court’s conclusion that

issue preclusion barred Bondshares and UMB from relitigating the

determination that the mill levy was not an ad valorem tax.

Moreover, even if issue preclusion did not bar relitigation of the

issue, we conclude on the merits that the mill levy was a special

assessment, not an ad valorem tax.

8
1. Issue Preclusion

a. Standard of Review and Applicable Law

¶ 22 “The purpose of issue preclusion is to ‘bar relitigation of an

issue.’” Madalena v. Zurich Am. Ins. Co., 2023 COA 32, ¶ 21

(quoting Villas at Highland Park Homeowners Ass’n v. Villas at

Highland Park, LLC, 2017 CO 53, ¶ 29). Thus, issue preclusion

prevents parties from relitigating an issue that has already been

decided in a prior court proceeding, provided certain conditions are

met. Sunny Acres Villa, Inc. v. Cooper, 25 P.3d 44, 47 (Colo. 2001).

¶ 23 Issue preclusion applies if

(1) the issue sought to be precluded is identical
to an issue actually determined in the prior
proceeding; (2) the party against whom [issue
preclusion] is asserted has been a party to or
is in privity with a party to the prior
proceeding; (3) there is a final judgment on the
merits in the prior proceeding; and (4) the
party against whom the doctrine is asserted
had a full and fair opportunity to litigate the
issue in the prior proceeding.

Id.

¶ 24 The application of “[i]ssue preclusion presents a question of

law that we review de novo.” Madalena, ¶ 25 (quoting Villas at

Highland Park Homeowners Ass’n, ¶ 26).

9
¶ 25 Bondshares and UMB do not dispute that elements two, three,

or four were satisfied. Thus, we focus our analysis on the first

element.

b. The Parties’ Contentions

¶ 26 Bondshares and UMB argue that the issue they raised in the

district court regarding the mill levy is substantively different than

the issue they raised in the trial court in Landmark. Specifically,

they argue that in Landmark, the court determined that the levy

was a special assessment because the Landmark Towers were

included, without the residents’ knowledge, in the special district.

¶ 27 Now that the Landmark Towers property has been excluded

from the special district by court order, they argue, the levy is an ad

valorem tax as it relates to the vacant land. Bondshares and UMB

argue that Century purchased the vacant land knowing that it was

the sole remaining property in the special district and the

contemplated infrastructure was intended to benefit the vacant

land. They reason that the applicability of the mill levy to the

vacant land presents a different issue than Landmark decided.

10
c. Analysis

¶ 28 In applying the first element of issue preclusion to the facts of

this case, we conclude that the controlling question is whether the

decision in Landmark — that the mill levy is a special assessment,

rather than an ad valorem tax — resolves the same issue here. We

conclude it does.

¶ 29 The correct framing of the issue presented obviously dictates

the conclusion. Recognizing that reality, Bondshares and UMB

attempt to frame the issues in the two cases differently, arguing

that the issue decided by Landmark was whether the mill levy was a

special assessment as applied to the Landmark Towers property

while the question presented here was whether the mill levy was a

special assessment as applied to the vacant land.

¶ 30 But Bondshares and UMB’s attempt to reshape the issues

presented in both cases runs into multiple obstacles. First, the

division in Landmark concluded that “[t]he levy at issue in this case

funds purely local improvements directly and specifically benefiting

only the [vacant land]. It does not fund ‘the general expenses of

government.’ It is therefore a special assessment, not a tax.”

Landmark, ¶ 33 (footnote omitted) (quoting Bloom v. City of Fort

11
Collins, 784 P.2d 304, 307 (Colo. 1989)). No portion of Landmark

states that its conclusion that the mill levy is a special assessment

is limited only to the Landmark Towers property.

¶ 31 Second, Bondshares and UMB concede that the nature of the

mill levy must be assessed as of the time the mill levy was approved

by MMD. See Barber v. Ritter, 196 P.3d 238, 248 (Colo. 2008) (“To

determine whether a government mandated financial imposition is a

‘fee’ or a ‘tax,’ the dispositive criteria is the primary or dominant

purpose of such imposition at the time the enactment calling for its

collection is passed.” (citing Zelinger v. City & Cnty. of Denver, 724

P.2d 1356, 1358 (Colo. 1986))). And at that time, as the division in

Landmark concluded, the mill levy was not intended to generate any

revenue for constructing or operating improvements on the

Landmark Towers property.

¶ 32 Relatedly, Bondshares and UMB fail to cite any authority

holding that a mill levy, at the time of passage, may be a special

assessment as it relates to some portion of the property it is

intended to encumber but, at the same time, is an ad valorem tax

against other property in the district. MMD’s answer brief noted

the absence of any supporting authority on this central point. In

12
their reply brief, Bondshares and UMB acknowledge this void and,

even then, fail to cite any authority supporting their contention.

¶ 33 In the face of this void, Bondshares and UMB argue that

Landmark supports their position. Particularly, they note that

Landmark held that the “the formation of [MMD] . . . , and the

resulting levying of the Landmark [Towers] owners’ properties,

violated the Landmark [Towers] owners’ rights to due process.”

Landmark, ¶ 28. But the finding that the mill levy was a special

assessment that violated the Landmark Towers owners’ due process

rights does not support a conclusion that the levy was a special

assessment against Landmark Towers but an ad valorem tax on the

vacant land.

¶ 34 Bondshares and UMB next turn to the language in Landmark

stating that “the injunction doesn’t require [MMD] to impose taxes

on anyone or on any property. If [MMD] decides to impose a true

tax, it can exclude [Landmark Towers] from the District.” Id. at

¶ 48. Bondshares and UMB argue that this language supports

their contention that even though the levy is a special assessment

against the Landmark Towers property, it is an ad valorem tax

against the vacant land. But that’s not what the quoted language

13
says. Indeed, to the contrary, the use of the word “decides” and the

reference to excluding the Landmark Towers property suggests

something that could happen in the future. But MMD took no

further action to pass an ad valorem tax that would apply only to

the vacant land. Instead, Bondshares and UMB are trying to

unilaterally convert the mill levy from a special assessment into an

ad valorem tax without any subsequent enabling action being taken

by MMD. Neither Landmark nor any other authority cited by

Bondshares and UMB supports this position.

¶ 35 In sum, we conclude that Landmark’s holding that the mill

levy is a special assessment resolves the same issue presented here

— whether the mill levy is a special assessment or an ad valorem

tax. Thus, the first element of issue preclusion is satisfied, and

because the parties do not dispute the remaining elements, the

district court did not err by applying issue preclusion to preclude

Bondshares and UMB from now treating the mill levy as an ad

valorem tax.

¶ 36 Ad Valorem Taxes and Special Assessments

14
¶ 37 In addition, treatment of the levy as a special assessment

rather than an ad valorem tax is consistent with the general

principles applicable to such taxes.

¶ 38 “An ad valorem tax is a tax upon various classes of real and

personal property located within the territorial limits of the taxing

authority.” Bloom, 784 P.2d at 307. An ad valorem tax must be

uniformly imposed on real property within the boundaries of the

taxing authority. Landmark, ¶ 42. Similarly, under the Colorado

Constitution, “[e]ach property tax levy shall be uniform upon all real

and personal property not exempt from taxation under this article

located within the territorial limits of the authority levying the tax.”

Colo. Const. art. X, § 3(1)(a).

¶ 39 In contrast, “[t]he essential characteristic of a special

assessment is that it must confer some special benefit to the

property assessed.” Bloom, 784 P.2d at 308. As the supreme court

explained,

The burden of the assessment falls on the
property owners because “the benefits they
receive from the particular improvements are
different from the benefits they enjoy in
common with other property owners.” Id. A
special assessment for a local improvement,
therefore, must specifically benefit or enhance

15
the value of the premises assessed “in an
amount at least equal to the burden
imposed.” [Reams v. City of Grand Junction,
676 P.2d 1189, 1194 (Colo. 1984)]; see
also Satter v. City of Littleton, 185 Colo. 90, 97,
522 P.2d 95, 98 (1974); Pomroy v. Board of
Public Waterworks, 55 Colo. 476, 479, 136 P.
78, 80 (1913). The funds generated by a
special assessment cannot be diverted to other
purposes, since the imposition of the
assessment “upon a particular class of
taxpayers can be justified only to the extent
that such taxes are equivalent to special
benefits conferred upon those
taxpayers.” Reams, 676 P.2d at 119.

Bloom, 784 P.2d at 308.

¶ 40 Bondshares and UMB’s urged interpretation of the mill levy

would run contrary to the fundamental requirement that an ad

valorem tax must be uniformly imposed against the same class of

properties within the taxing authority. Instead, enforcement of the

mill levy as they urge would have required the mill levy to be treated

as an unenforceable special assessment against the Landmark

Towers, but as an ad valorem tax against the vacant land. This did

not and could not happen based on the requirements of an ad

valorem tax. See Colo. Const. art. X, § 3(1)(a).

¶ 41 The subsequent order excluding the Landmark Towers from

MMD also confirms that the mill levy was not and could not be

16
treated as an ad valorem tax. Under section 32-1-503(1), C.R.S.

2024,

For the purpose of retiring the special district’s
outstanding indebtedness and the interest
thereon existing at the effective date of the
exclusion order, the special district shall
remain intact, and the excluded territory shall
be obligated to the same extent as all other
property within the special district but only for
that proportion of such outstanding
indebtedness and the interest thereon existing
immediately prior to the effective date of the
exclusion order.

¶ 42 Despite the requirements of section 32-1-503(1), the exclusion

order did not and could not provide that Landmark Towers

remained liable for repayment of any portion of the subject bonds.

Thus, the requirement that an ad valorem tax must be uniformly

imposed against all property within the district at the time the debt

was incurred could not be effectuated when the bonds and mill levy

were authorized and cannot be effectuated now.

¶ 43 For these reasons, the conclusion that the mill levy is a special

assessment, in addition to being dictated by issue preclusion, is

mandated by the controlling legal distinctions between an ad

valorem tax and a special assessment. The district court therefore

did not err by concluding that the mill levy was — at the time it was

17
imposed — a special assessment, and it remains a special

assessment now notwithstanding the subsequent exclusion of

Landmark Towers from MMD.

¶ 44 Recognizing the likelihood of this conclusion, Bondshares and

UMB alternatively claimed in the district court that the mill levy

should be treated as an enforceable special assessment against the

vacant land because the proceeds from the bonds provided the

vacant land with material benefits. We turn now to that argument.

B. Value to Century Property

¶ 45 Recall that the district court denied the parties’ motions for

summary judgment with respect to whether the special assessment

provided value to the vacant land because the resolution of this

issue required the court to resolve disputed issues of fact. Thus,

the central purpose of the trial was to resolve this dispute. After

hearing the evidence, the district court made detailed factual

findings and concluded that the mill levy provided no value to the

vacant land and was therefore an unenforceable special

assessment. Bondshares and UMB appeal that finding.

18
1. Standard of Review

¶ 46 We apply a mixed standard of review to orders entered after a

trial before a judge. Jehly v. Brown, 2014 COA 39, ¶ 8. We review

the district court’s factual findings for clear error. Id. A factual

finding is clearly erroneous only when it lacks any support in the

record. Cronk v. Bowers, 2023 COA 68M, ¶ 12. We review the

court’s legal conclusions de novo. See Frisco Lot 3, LLC v. Giberson

Ltd. P’ship, LLLP, 2024 COA 125, ¶ 66.

¶ 47 We agree with Bondshares and UMB that the ultimate

conclusion of whether a special assessment provides a sufficient

benefit to a parcel of property to be enforceable presents a question

of law. See State Farm Mut. Auto. Ins. Co. v. Johnson, 2017 CO 68,

¶ 12. But we also agree with MMD that the answer to that question

turns on the court’s assessment of the evidence related to fact-

intensive issues, which we review for clear error. Id.

2. The Parties’ Contentions

¶ 48 Bondshares and UMB argue that the district court improperly

concluded that private expenditures and soft costs cannot be

considered a benefit, and that benefits must continue indefinitely to

be compensable. Bondshares and UMB also argue that the court

19
erred by not giving appropriate weight to evidence that MMD, after

learning of Davidson’s fraudulent conduct, procured a study for tax

purposes to assess whether any of the $8 million paid to Davidson

or his affiliated entities could be treated as eligible public expenses

as opposed to private expenditures.

¶ 49 MMD responds that the district court’s determination that the

$8 million in expenditures provided no benefit to the vacant land is

predicated on a series of factual findings that are supported by the

record. In addition, MMD argues that the district court did not

conclude that soft costs and private expenditures can never result

in benefits that are reimbursable. Rather, MMD argues, the court

simply concluded that the soft costs and private expenditures in

this case provided no benefit to the vacant land. As to the report

concerning potential benefits for tax purposes, MMD argues that

the district court correctly concluded that whether an expenditure

qualifies as a public expenditure for MMD’s tax purposes sheds no

meaningful light on whether the same expenditures provided a

benefit to the vacant land.

¶ 50 We agree with MMD on both the factual and legal contentions.

20
3. Analysis

¶ 51 In support of its conclusion that the expenditures provided no

benefit to the vacant land, the district court made extensive factual

findings, including the following:

• “The evidence and testimony presented at trial demonstrates

that the [vacant land] has received no benefit from the 2008

Bonds.”

• [MMD’s] accountant, who served in that capacity from early

2009 to 2022, testified that “no actual public infrastructure

was built, despite the expenditure of funds, and no benefit was

conveyed to the [vacant land] by those expenditures.”

• A Bondshares representative who visited the vacant land

several times stated he was not aware of any improvements

that were built on the vacant land, saying, “I’ll be honest with

you, I still don’t know what was actually built.”

• “Design, engineering, architecture, and other ‘soft’ costs

incurred by Davidson did not enhance the value of the [vacant

land]. . . . [N]obody has located these design plans, and in any

event, they have no value today.”

21
¶ 52 Based on these findings, and many others, the district court

concluded that “no evidence has been presented that any actual

benefit has been conveyed to the [vacant land] from the expenditure

of bond funds by Davidson and/or [MMD].” There is a plethora of

record evidence to support this conclusion, and we therefore will

not disturb it.

¶ 53 We also reject Bondshares and MMD’s argument that the

audit for tax purposes has any bearing on the question of whether

expenditures made by Davidson or MMD provided any benefit to the

vacant land. We fail to see how a report assessing whether the

expenditures may be claimed as a “public expenditure” for tax

purposes informs the analysis of whether any of the expenditures

actually benefitted the vacant land. And Bondshares and UMB

provide no meaningful analysis to support their implicit contention

that the two assessments should be treated as interchangeable.

¶ 54 Finally, as illustrated by the court’s detailed factual findings, it

did not operate from an erroneous legal assumption that soft costs

and private expenditures can never qualify as a benefit to a special

district or the property located therein. Rather, the court found

22
only that the soft costs and private expenditures in this case have

not provided, and will not provide, any benefit to the vacant land.

¶ 55 We perceive no error in the district court’s conclusion that the

expenditures therefore did not provide a benefit to the vacant land

that would justify imposition of the mill levy. Recall that a special

assessment must not only provide a theoretical benefit to the taxed

property, but it must also provide a benefit that “specifically

benefit[s] or enhance[s] the value of the premises assessed ‘in an

amount at least equal to the burden imposed.’” Bloom, 784 P.2d at

308 (quoting Reams, 676 P.2d at 1194). Using this measure, we

perceive no error in the district court’s conclusion that the bonds

provided no benefit to the vacant land.

¶ 56 We also reject Bondshares and UMB’s argument that no due

process violation occurred even if the bonds provided no benefit to

the Century property because Century purchased the vacant land

with knowledge that the bond and mill levy resolution existed. In

making this argument, Bondshares and UMB draw on case law

developed in the context of a due process claim under the Takings

Clause of the Fifth Amendment. U.S. Const. amend. V (“[N]or shall

private property be taken for public use, without just

23
compensation.”). In that context, the supreme court has stated that

the “‘reasonable investment-backed expectations’ of the regulated

party is the dispositive factor in takings analysis when the regulated

party is ‘on notice’ of the extent of the government’s regulatory

authority over its property.” State Dep’t Health v. Mill, 887 P.2d

993, 1000 (Colo. 1994) (quoting Golden Pac. Bancorp v. United

States, 15 F.3d 1066, 1072 (Fed. Cir. 1994)). From there,

Bondshares and UMB assert that when Century purchased the

vacant land, the bonds and associated mill levy were public

knowledge, as was the fact that the vacant land was included in

MMD. Therefore, the argument continues, Century acquired the

vacant land with full notice that it was subject to the bonds and

mill levy and no due process violation occurred.

¶ 57 We reject these contentions for multiple reasons. First, MMD’s

claim that due process prohibited it from assessing the mill levy on

the vacant land was not based on the Takings Clause, or the case

law developed thereunder. Rather, the claim was based on

Colorado’s due process jurisprudence holding that a special

assessment cannot be imposed on property that does not receive a

commensurate benefit from the funds generated by the special

24
assessment. Bloom, 784 P.2d at 308. This analysis does not

depend upon whether the property owner had notice of the special

assessment prior to purchasing the subject property. Thus, UMB

and Bondshares’ argument is premised on a legal principle that

does not apply to this case.

¶ 58 Second, we disagree with the factual premise of the argument.

Century did not make its purchase knowing that the vacant land

alone would bear the burden of repaying the bonds, even though

the bonds provided no benefit to its property. Indeed, at the time of

the purchase, an injunction was in place prohibiting MMD from

imposing the mill levy. Moreover, the Landmark Towers property

remained in the district and the mill levy was passed based on the

assumption that the bonds would be repaid by imposing the mill

levy against both the vacant land and the Landmark Towers

property. Thus, the factual premise of Bondshares and UMB’s

takings argument is also unsupported.

¶ 59 We therefore reject Bondshares and UMB’s argument that the

district court’s due process ruling was wrong because Century

purchased the property with notice of the bonds and mill levy.

25
C. Statutes of Limitation

¶ 60 Bondshares and UMB argue that the district court erred by

rejecting their affirmative defense asserting that MMD’s claim for

declaratory relief was time barred under two different statutes. We

address each statute in turn.

1. Section 11-57-212, C.R.S. 2024

¶ 61 We review a district court’s statutory interpretation de novo.

Educhildren LLC v. Cnty. of Douglas Bd. of Equalization, 2023 CO

29, ¶ 27. In doing so, “[o]ur principal goal is to effectuate the

legislature’s intent. To do this, we ‘read a statutory scheme as a

whole, “giving consistent, harmonious, and sensible effect to all of

its parts,”’ and we ascribe plain and ordinary meaning to its terms.”

Id. (citations omitted). We must apply the statute as written and

may not add or subtract words. Nieto v. Clark’s Mkt., Inc., 2021 CO

48, ¶ 12.

¶ 62 Section 11-57-212 provides: “No legal or equitable action

brought with respect to any legislative acts or proceedings in

connection with the authorization or issuance of securities by a

public entity shall be commenced more than thirty days after the

authorization of such securities.”

26
¶ 63 The 2008 bond resolution that authorized the issuance of the

bonds incorporated the statute. Because section 11-57-212

requires that a challenge to the “authorization or issuance of

securities by a public entity” be brought within thirty days,

Bondshares and UMB argue that MMD’s claim for declaratory and

injunctive relief concerning the bond indenture and mill levy was

time barred. MMD counters that the declaratory judgment action

does not challenge the resolution authorizing the issuance of the

bonds, but rather challenges imposition of a mill levy on the vacant

land because the bonds and associated mill levy provided no value

to that property.

¶ 64 The district court concluded that the statute did not apply to

MMD’s claims. The court agreed that MMD did not challenge the

legislative acts or proceedings associated with the authorization or

issuance of the bonds. Rather, MMD sought declaratory relief to

determine whether it could be compelled to impose an

unconstitutional special assessment against the vacant land. While

acknowledging that MMD’s claim was “tangentially” related to the

issuance of the bonds, the court concluded that the claim fell

27
outside the reach of section 11-57-212. We agree with the district

court.

¶ 65 Landmark addressed the applicability of section 11-57-212 to

Bondshares and UMB’s assertion that Landmark’s claim in that

case was time barred. In rejecting the assertion, the division

reasoned as follows:

[T]he argument fails on the merits. The
statute applies, by its terms, to “the
authorization or issuance of securities.” § 11-
57-212. Landmark, however, challenges, on
constitutional grounds, the creation of [MMD]
to include the Landmark [Towers] and the
associated levies. We won’t expand the reach
of the statute beyond the plain meaning of its
language. See Denver Post Corp. v. Ritter, 255
P.3d 1083, 1089 (Colo. 2011) (if statutory
language is clear, we apply the statute as
written); Spahmer v. Gullette, 113 P.3d 158,
162 (Colo. 2005) (“We will not create an
addition to a statute that the plain language
does not suggest or demand.”).

Landmark, ¶ 22. We find this analysis persuasive.

¶ 66 Bondshares and UMB try to distinguish Landmark, reasoning

that the Landmark Towers owners were only challenging their

inclusion in the district. But, as the division in that case made

clear, it found section 11-57-212 not applicable because the

Landmark Towers owners were challenging “the creation of [MMD]

28
to include the Landmark [Towers] and the associated levies.” Id.

(emphasis added). And the Landmark division found the levy was

unenforceable against the Landmark Towers owners because the

levy was an unconstitutional special assessment. Id. at ¶ 33.

¶ 67 Here, MMD’s claim for declaratory relief was premised on the

contention that the levy was a special assessment that could not be

imposed on the vacant land because to do so would violate

Century’s due process rights. In evaluating whether MMD’s claim

fell within the reach of section 11-57-212, we see no material

distinction between the essence of MMD’s claim and the claim made

in Landmark.

¶ 68 The district court did not err by rejecting the argument that

section 11-57-212 barred MMD’s claims.

2. Section 31-25-538(2), C.R.S. 2024

¶ 69 Bondshares and UMB next argue that the district court erred

by concluding that section 31-25-538(2) did not bar MMD’s claims.

¶ 70 Section 31-25-538(2) provides that “[a]ny action brought with

respect to . . . levying of any assessments . . . taken under this part

5 shall be commenced within thirty days” of “issuing [the] bonds.”

§ 31-25-538(2). The district court held that the statute did not

29
apply because MMD’s claim was not brought under part 5 of title

31, article 25, which applies to “special improvement districts,” and

MMD is not a special improvement district. Moreover, the court

noted that MMD could not have been acting under part 5 because

the bond documents were completed before part 5 was amended to

allow special districts to establish a special improvement district.

¶ 71 On appeal, Bondshares and UMB assert that MMD cannot

have it both ways — that is, it cannot argue, on the one hand, that

the levy was a special assessment and also argue, on the other

hand that section 31-25-538(2) does not apply to its claim.

¶ 72 At first blush, Bondshares and UMB’s consistency argument

seems persuasive. But it fails on closer examination.

¶ 73 Bondshares and UMB do not argue that MMD is, or ever was,

a special improvement district. Indeed, they concede that it has

always been a special district. And Bondshares and UMB also

concede that in 2008, when the mill levy was authorized, special

districts like MMD were not authorized to act with the powers of a

30
special improvement district.1 Not surprisingly then, none of the

paperwork related to the bonds make any reference to section 31-

25-538(2). That is because MMD had no authority to act as a

special improvement district and did not purport to do so.

¶ 74 Nevertheless, Bondshares and MMD argue that the district

court was bound to apply section 31-25-538(2) as if MMD had been

created as a special improvement district before the resolution

authorizing the mill levy was passed. As we understand its

argument, it reasons that because Landmark concluded in 2018

that the mill levy was and is a special assessment, we must now

assume that MMD properly imposed a special assessment under

section 31-25-538(2) when it issued the bonds. Alternatively, they

contend that indenture and mill levy resolutions should be deemed

subject to section 31-25-538(2) as of 2018, when the Landmark

decision became final. But Bondshares and UMB cite no authority

supporting these arguments, and we are aware of none.

1 In 2009, special districts were granted authority to form special

improvement districts within their boundaries by following certain
procedures. See § 32-1-1101.7, C.R.S. 2024; Ch. 81, sec. 2, § 32-1-
1101.7, 2009 Colo. Sess. Laws 298-99. The record contains no
evidence that MMD ever formed a special improvement district
within its boundaries.

31
¶ 75 Ironically, during the course of the Landmark litigation, the

defendants in that case — including UMB — argued that the court

should refuse to recognize the mill levy as a special assessment

because MMD had no authority to impose special assessments. In

rejecting this argument, the division reasoned:

Defendants also argue the levy couldn’t have
been a special assessment because, when
[MMD] was created, special districts didn’t
have statutory authority to impose special
assessments. But the fact [MMD] wasn’t
authorized to impose special assessments
doesn’t mean it didn’t do so. As discussed, the
nature of the levy is determined by its purpose
and characteristics. If the purpose and
characteristics of a levy show that it’s a special
assessment, then that’s what it is. In the end,
even if defendants are right about the state of
the law at the time of the election, that means
only that there’s another reason for declaring
the special assessment invalid.

¶ 76 Landmark, ¶ 33 n.7. Switching horses, Bondshares and UMB

now ask us to apply section 31-25-538(2) as though MMD was

acting within its authority to impose a special assessment.

¶ 77 Bondshares and UMB’s current position is the product of

misinterpreting or misapplying the reasoning of Landmark. That

decision did not conclude that the mill levy was a properly

authorized special assessment in 2008, or that it became a properly

32
authorized special assessment once Landmark was announced.

Rather, the division concluded that MMD had no authority to

impose the special assessment that it sought to impose, whether in

2008 or 2018.

¶ 78 In sum, MMD took no action in this case as a special

improvement district, and nothing about the decision in Landmark

transforms the invalid special assessment into a validly authorized

and adopted special assessment within the purview of section 31-

25-538(2). Thus, the district court properly concluded that the

statute did not bar MMD’s declaratory judgment claim.

D. Bondshares and UMB’s Counterclaims

1. Colorado Constitution Article XI, Section 6(1)

¶ 79 Bondshares and UMB argue that article XI, section 6(1) of the

Colorado Constitution precluded MMD’s claim that the mill levy

could not be assessed against the vacant land. They argue that the

bonds were a general obligation debt that could not be repealed

until the indebtedness was “fully paid or discharged.”

a. Standard of Review and Applicable Law

¶ 80 We review de novo the district court’s interpretation of the

Colorado Constitution. Qwest Corp. v. Colo. Div. of Prop. Tax’n,

33
2013 CO 39, ¶ 11. The relevant portion of the Colorado

Constitution provides, “No political subdivision of the state shall

contract any general obligation debt by loan . . . except by adoption

of a legislative measure which shall be irrepealable until the

indebtedness therein provided for shall have been fully paid or

discharged.” Colo. Const. art XI, § 6(1).

b. Analysis

¶ 81 As we have previously concluded, the mill levy was and is a

special assessment. A general obligation debt exists only when

specific circumstances are satisfied, including that “the obligation

requires use of revenue from a tax otherwise available for general

purposes.” Fischer v. City of Colorado Springs, 260 P.3d 331, 335

(Colo. App. 2010). Consistent with its status as a special

assessment, the mill levy was not available for general purposes.

¶ 82 In an effort to avoid this conclusion, Bondshares and UMB

return to their argument that, when adopted, even though it was

not a general obligation debt with respect to the Landmark Towers

property, it was a general obligation debt as applied to the vacant

land. But we reject this contention for the reasons previously

stated: a tax cannot qualify as a general obligation against some of

34
the taxing authority’s property at the time that it is adopted while

simultaneously qualifying as a special assessment against other

property within the jurisdiction. The mill levy, since adoption, was

and remains a special assessment.

¶ 83 Thus, the district court did not err by rejecting the argument

that MMD’s declaratory judgment claim was barred by article XI,

section 6(1).2

2. Unjust Enrichment

¶ 84 Finally, Bondshares and UMB argue that the district court

erred by rejecting their unjust enrichment claim.

2 Having reached this conclusion, we need not and do not address

MMD’s alternative argument that the bonds have been discharged
by virtue of the Landmark decision combined with the judgment
entered in this case. At oral argument, counsel for MMD
acknowledged that the entry of the district court’s declaratory order
stating that the bond resolution and trust indenture are void and
the debt was discharged was not necessary to resolve the question
of whether the mill levy could be imposed against the vacant land.
Bondshares and UMB did not directly appeal this declaration;
instead they contested the declaration only as it relates to the
enforcement of the mill levy against the vacant land. Having
rejected those contentions regarding the enforceability of the mill
levy on other grounds, we need not and do not reach the question of
whether the district court erred by declaring the bond resolution
and trust indenture void and the bond debt discharged.

35
¶ 85 Bondshares and UMB argue that, even if the mill levy is an

unenforceable special assessment, the bond proceeds unjustly

enriched MMD. Therefore, they contend, they should be allowed to

recover against MMD under a theory of unjust enrichment because

“it would be inequitable for the benefit to be retained without

payment of the value.”

a. Standard of Review

¶ 86 “Unjust enrichment claims require that courts make extensive

factual findings to determine whether a party has been unjustly

enriched. Because careful consideration of particular

circumstances is required in unjust enrichment claims, we [review]

trial court determinations for abuse of discretion.” Lewis v. Lewis,

189 P.3d 1134, 1140 (Colo. 2008) (citation omitted).

b. Analysis

¶ 87 We perceive no abuse of discretion in the district court’s

determination that MMD was not unjustly enriched.

¶ 88 As a starting point, all parties acknowledge the general

principle that equitable claims — such as unjust enrichment —

cannot be invoked to enforce a void contract with a governmental

entity. See Falcon Broadband, Inc. v. Banning Lewis Ranch Metro.

36
Dist. No. 1, 2018 COA 92, ¶¶ 47-48 (citing Normandy Ests. Metro.

Recreation Dist. v. Normandy Ests., Ltd., 553 P.2d 386, 388-89

(Colo. 1976)); Rocky Mountain Nat. Gas, LLC v. Colo. Mountain

Junior Coll. Dist., 2014 COA 118, ¶ 31 (“[W]here a contract is void

because it is not within a municipality’s power to make, the

municipality cannot be estopped to deny the validity of the

contract.”). But Bondshares and UMB rely on Normandy Estates to

argue that an unjust enrichment claim should be recognized under

the circumstances of this case. We conclude that their reliance on

Normandy Estates is misplaced.

¶ 89 In Normandy Estates, a special district approved and

disbursed bond proceeds to acquire an existing swimming pool and

the associated acreage, but the district did not pay the full

purchase price to the seller. 553 P.2d at 387-88. The special

district claimed the contract to purchase was not enforceable

because it had neglected to hold an election on the issue. Id.

¶ 90 The supreme court held that, although the contract was

invalid because the required election was not held, the seller was

nevertheless able to recover the land in question or the balance of

the purchase price because allowing the special district to keep the

37
land without paying the full, agreed-upon price would be unjust.

Id. at 389-90.

¶ 91 But the supreme court cautioned that the exception it was

recognizing was extremely narrow:

We note, however, that the recovery authorized
by this decision is a limited one. The party
dealing with the municipal entity must have
acted in good faith, and the contract must be
one not positively condemned by law, as
distinguished from one which is merely invalid
because of want of power to contract or
because statutory procedure was not followed
in its making. We hold, further, that there can
be no recovery where the property is no longer
in existence or identifiable, or where it cannot
be restored to the plaintiff without serious
damage to other property of the municipality.

Id. at 390 (citations omitted).

¶ 92 These conditions preclude the recognition of an unjust

enrichment claim in this case. The money is gone. MMD does not

retain any funds generated by the sale of the bonds. No

improvements were ever built on the vacant land. And we have

affirmed the district court’s findings that the portion of the bonds

that was paid out to Davidson or various vendors provided no

benefit to MMD or the vacant land. The remainder of the bond

proceeds were returned to MMD or used to reduce the interest and

38
principal of the bonds. Thus, the proceeds of the bonds are “no

longer in existence or identifiable.” Id.

¶ 93 Moreover, the district court concluded that the equities in this

case favor MMD:

[MMD] itself is a victim of Davidson’s self-
dealing and fraud. Bondshares is a
sophisticated institutional investor that
knowingly took on higher risk investment
opportunities; it knew that the Service Plan
wasn’t feasible; knew that Davidson was
exerting pressure to gain free use of the bond
proceeds, but simply left it up to UMB to deal
with that pressure; and, should have seen that
there were virtually no controls in place
regarding requests for payment by the District,
which were in fact requests for payment by
Davidson.

¶ 94 Given the district court’s detailed factual findings, which are

supported by the record, we cannot say that it abused its discretion

by rejecting Bondshares and UMB’s unjust enrichment claim.3

III. Disposition

¶ 95 The judgment is affirmed.

3 Given our disposition, we do not need to address Bondshares and

UMB’s argument that section 24-10-113(3), C.R.S. 2024, provides a
mechanism to collect the sums it asserts remain due on the bonds.
That statute provides a mechanism for a special district to impose a
mill levy to satisfy a judgment. It is not relevant here because no
judgment has been entered against MMD.

39
JUDGE FOX and JUDGE HARRIS concur.

40