Dalzell v. RP Steamboat Springs, LLC
- Summarized by Lars Fuller , BakerHostetler
- 9 years 9 months ago
- Citation:
- Dalzell, et al. v. RP Steamboat Springs, LLC, et al., No. 13-1440 (10th Cir. Mar. 24, 2015)
- Tag(s):
-
- Ruling:
- The 10th Circuit, voting 2-1 (J. Lucero dissenting), affirmed the judgment of the U.S. District Court (D. Colo.) finding that developer of master-planned subdivision was not liable under the Interstate Land Sales Full Disclosure Act because the master developer neither directly nor indirectly sold the condominium units at issue. The 10th Circuit cited with approval 2013 case in which 4th Circuit reversed dismissal of bankruptcy trustee's suits against promoters of development who obtained dismissal at trial court because they were not sellers, and where 4th Circuit discussed absence of liability of non-sellers and non-promoters. Reviewing a mixed question of law and fact de novo, with a presumption of correctness to underlying factual findings, the Tenth Circuit analyzed the Land Sales Act, 15 USC 1701 et seq. statutory language in detail, and concluded that although defendant was a "developer" under the Act, it was not liable under section 1703(b)-(d) because it did not directly or indirectly sell or promote the sale of the condominium units. The court distinguished developer liability under the separate fraud provisions of the Act, but the complaint did not allege claims under the Land Sales Act's anti-fraud provisions. Judge Lucero dissented.
- Procedural context:
- Buyers of condo units filed action against parties, asserting that defendants qualified as "developers" under Land Sales Act, and that developers violated the Land Sales Act by failing to file a statement of record and failing to provide a property report when the buyers purchased their condos. Buyers asserted damages in amounts of their deposits after rescinding their contracts. Buyers entered into stipulation with other two defendants, and stipulated to submit claims against third defendant to court on stipulated facts and briefs. The district court ruled that although defendant qualified as "developer" under Land Sales Act, defendant was neither a direct nor indirect seller or promoter, and thus not liable. Buyers appealed to 10th Circuit.
- Facts:
- Defendant was formed to develop mixed-housing, master-planned subdivision in Steamboat Springs, Colorado. Defendant engaged two entities to assist in development and marketing, and hired listing agent for marketing and sales. In 2007, defendant assigned all rights, title, and interest in project to third party. Plaintiffs entered into contracts to purchase units prior to assignment. Defendant was not a signator to contracts, but was identified as the master developer. Buyers paid deposits ranging from $86,000 to $226,000. At time of contracts, no one had filed a statement of record with HUD, nor were the buyers provided a property report, as required by the Interstate Land Sales Full Disclosure Act (Land Sales Act), 15 USC 1701 et seq. Buyers subsequently rescinded their contracts under the Land Sales Act, but were unable to recover their deposits. Buyers sued multiple parties, including defendant, for return of their deposits.
- Judge(s):
- Lucero, Murphy, and McHugh
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