Judge: Condo association can keep fining landlord for allowing Aspen pot shop, wine cellar
A judge’s ruling last week delivered a blow to a landlord and his two tenants, a pot shop and a wine cellar, both of which face eviction because of new rules governing a downtown Aspen building.
For landlord Douglas Tomkins, District Court Judge John Neiley’s order means Aspenhof Condominium Association can continue to fine him $500 daily for not evicting his tenants Best Day Ever marijuana dispensary and Betula restaurant, which leases a unit to store wine.
For the tenants, it keeps their future in the 520 E. Cooper Ave. building — a mix of commercial and residential tenants — on shaky ground. Best Day Ever’s lease expires in April 2023, Betula’s in June 2023.
Neiley’s written order, which was issued Tuesday, concluded Aspenhof Condominium Association’s board of directors did not violate the Colorado Common Interest Ownership Act when they voted Aug. 31 to amend their building’s covenants to prohibit commercial uses including inventory storage and marijuana dispensaries.
“The amendment appears to be valid and enforceable under Colarado law,” said Neiley’s ruling.
Neiley’s decision came after a June 1 hearing where Tomkins argued for a preliminary injunction to stop Aspenhof from issuing daily fines because he won’t kick out the two tenants.
Tomkins initially sued Aspenhof in December, accusing the condo association of trying to retroactively enforce a ban. In March, Tomkins filed a motion for an injunction to stop the ensuing fines. Garfield & Hecht attorneys for Osiris LLC, the corporate name for Best Day Ever, also filed a court action supporting the injunction.
Aspenhof attorneys have argued that the fines are enforceable, as well as the evictions, because board members approved of the rule change.
The judge’s order does not mean the end for Tomkins’s lawsuit against the condo association. Two claims for interference with contractual relations and prospective business relations are pending before the court.
“What it says is that this case is going to proceed like any ordinary case,” said Denver attorney Peter Bornstein, who filed the suit for Tomkins in Pitkin County District Court. “And if these fines keep mounting like they have been, they are going to be part of our damages.”
The commercial and residential condominium building’s second floor includes units occupied by the Best Day Ever cannabis store and Betula restaurant. The ban doesn’t apply to the building’s basement level, part of which is occupied by a competing pot shop.
“These tenants’ activities have had a disproportionately negative impact on other unit owners’ use and enjoyment of their units, creating odors and noise, and crowding the common areas and elevator. In part to address negative impacts caused by Tomkins’ tenants, the unit owners approved an amended set of covenants in 2020,” argued Bill E. Kyriagis in a March 24 pleading contesting Tomkins’s motion for preliminary injunction. Kyriagis is with Otten, Johnson, Robinson, Neff & Ragonetti PC, the Denver firm that is representing the condo association.
The judge was not convinced by Bornstein’s contention that Aspenhof’s actions have constituted a “taking,” which is when the government wrongfully seizes or takes control of a private property without compensating the owner or receiving their consent.
Neieley’s order said when Tomkins took ownership of three units in the building, he was bound to the terms of the building’s covenants, “including the right to amend. This is a purely contractual relationship.”
As well, the judge said the condo association is not a governmental agency — which it would need to be to commit taking.
“Furthermore, the Amendment does not constitute a taking because there was not state or government action,” the order said, adding that the judge was not persuaded by the argument that the condo association acted in a quasi-governmental fashion when it adopted the ban.
There’s still a possibility that Aspenhof and Tomkins could settle their differences to end the litigation, said Bornstein, though he was reluctant to divulge much.
“There’s something in the works that I can’t talk about,” he said.
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