South Creek Associates v. Bixby & Associates, Inc.

VOLLACK, Justice,

dissenting:

I respectfully dissent from the majority’s holding that the public nature of PUD plan provisions precludes the need for any rec-ordation of the plan provisions in order to provide notice to subsequent purchasers. At 1033. I believe PUD plans are not legislative ordinances. The approval of PUD plans is a quasi-judicial act which does not provide to subsequent purchasers the notice contemplated by the recording statute.

I.

This case involves the effect of approved PUD plan provisions on the property rights of private parties. The PUD application *1036submitted by McStain Enterprises, Inc. (McStain) contained two sentences expressing McStain’s intent to allow the private school to use the South Creek Village Shopping Center parking lot. McStain conveyed title to the shopping center to South Creek Venture Company (South Creek Venture), which later conveyed title to the shopping center to South Creek Associates (South Creek). South Creek Venture’s conveyance to South Creek was by a recorded warranty deed which contained easements for automobile parking and automobile and pedestrian ingress and egress over various parking lots in the development. The deed did not grant to Bixby & Associates, Inc. (Bix-by), owner of the private school at the time, an easement or license to use the shopping center parking lot. Bixby now relies on the statements of intent in the PUD plan application to enforce what it did not receive in the warranty deed, namely an easement to use the South Creek Village parking lot. Since the PUD plan provisions were not recorded, South Creek took the shopping center property without notice of any claim by Bixby to use of the parking lot. I would hold that approved PUD plan provisions do not provide notice to subsequent purchasers where a third party attempts to enforce against the purchaser what is essentially an interest in property. The statements of intent in the PUD plan in this case were insufficient to convey to the private school an easement or license to use the shopping center parking lot.

II.

As the majority notes, previous cases arising under the recording act have involved private parties. At 1032. By contrast, PUDs were developed to advance the public interest. PUDs were generally developed to eliminate the drawbacks of rigid Euclidian zoning. Krasnowiecki, Planned Unit Development: A Challenge to Established Theory and Practice of Land Use Control, 114 U.Pa.L.Rev. 47 (1965). Municipalities have typically approved planned unit developments to reduce problems associated with growth and to achieve objectives sought by the city. Dillon Companies, Inc. v. City of Boulder, 183 Colo. 117, 122, 515 P.2d 627, 629 (1975); see also 2 Anderson, American Law of Zoning 3d § 11.14 (1986). PUDs allow municipalities to develop self-contained communities with residential areas conveniently near stores and services. Note, Exclusionary Use of the Planned Unit Development: Standards for Judicial Scrutiny, 8 Harv.C.R.-C.L.L.Rev. 384, 391 (1973). The PUD approval process is designed to promote the public interest by allowing municipalities to bargain with developers over the development’s characteristics. Id. at 393. A planning board can use its power under a PUD ordinance to negotiate a PUD plan that is profitable to the developer and beneficial to the community. Id. at 394. Boulder’s PUD ordinance is also designed to serve the public interest in these ways. Section 9-4-12(a), Boulder Rev. Code, states that

[t]he purpose of planned units is to allow flexibility and encourage innovation' in land use development, promote the most appropriate use of land, improve the design, character, and quality of new development, facilitate the adequate and economical provision of streets and utilities, and preserve the natural and scenic features of open space.

In my opinion the right which Bixby seeks to enforce in this case is different from typical PUD restrictions on land use designed to serve the public interest. Bix-by claims an interest in the shopping center parking lot in the form of an easement or license. Thus Bixby is attempting to secure an interest in land for its benefit. I would hold that Bixby cannot rely on the statement of intent in the PUD plan to acquire an easement to use the shopping center parking lot.

The majority holds that the PUD plan provisions are binding upon members of the public because the PUD plan approval was obtained pursuant to a PUD ordinance adopted as a valid exercise of Boulder’s police power through its zoning authority. At 1033. The majority further holds that the public nature of the PUD plan provisions precludes the need for any rec-ordation of the plan provisions in order to *1037provide notice to subsequent purchasers. Id. The majority gives the Board’s approval of the PUD the same notice effect that a legislative zoning enactment would have. In my opinion, the approval of a PUD plan by a city planning board involves a fundamentally different process than the legislative enactment of a zoning ordinance. The approval of PUD provisions, which is a quasi-judicial act, cannot provide notice to subsequent purchasers equivalent to the notice provided by a legislative zoning enactment.

There is no litmus-like test for identifying quasi-judicial action. Cherry Hills Resort v. Cherry Hills Village, 757 P.2d 622, 627 (Colo.1988). In Cherry Hills, 757 P.2d at 625, we stated that, “[qjuasi-judicial action ... generally involves a determination of the rights, duties, or obligations of specific individuals on the basis of the application of presently existing legal standards or policy considerations to past or present facts developed at a hearing conducted for the purpose of resolving the particular interests in question.” See also City and County of Denver v. Eggert, 647 P.2d 216, 222 (Colo.1982) (“Quasi-judicial action decides rights and liabilities based upon past or present facts.”). “Legislative action is usually reflective of some public policy relating to matters of a permanent or general character, is not normally restricted to identifiable persons or groups, and is usually prospective in nature.” Cherry Hills, 757 P.2d at 625; Eggert, 647 P.2d at 222.

We noted in Cherry Hills, 757 P.2d at 627, that the central focus of an inquiry to determine whether action is quasi-judicial or legislative “should be on the nature of the governmental decision and the process by which that decision is reached.” The existence of a legislative scheme mandating notice and hearing is not the predominant consideration in the present inquiry. Id. However, “[t]he existence of a statute or ordinance mandating [notice and hearing] is compelling proof that any decision under the legislative scheme is intended to be quasi-judicial in character.” Id. at 626.

We have consistently held that when a municipality amends a comprehensive zoning ordinance by approving a planned unit development application, it acts in a quasi-judicial manner. See maj. op. at 1032 n. 8; Sherman v. Colorado Springs Planning Comm’n, 763 P.2d 292, 296 (Colo.1988) (city council’s denial of applicant’s development plan was quasi-judicial action); Cherry Hills, 757 P.2d at 623 (city council’s approval of development plan for residential and resort hotel complex constituted quasi-judicial action); Snyder v. City of Lakewood, 189 Colo. 421, 425, 542 P.2d 371, 374 (1975) (by rezoning certain church property pursuant to statutory criteria City of Lakewood acted in quasi-judicial manner); Dillon Cos., Inc. v. City of Boulder, 183 Colo. 117, 119, 515 P.2d 627, 628 (1975)' (Boulder city council acted as adjudicative body by approving PUD plan application by passing ordinance).

The quasi-judicial proceedings established by the Boulder ordinance do not provide adequate notice to subsequent purchasers of interests in land claimed by private third parties pursuant to PUD plans. The PUD provisions of the Boulder ordinance require the city manager to post notice of a PUD plan application on the property for which the application is filed, Boulder Rev.Code § 9 — 4—2(d)(1), and send the notice to owners of property located within three-hundred feet of the boundaries of the land included within the application. Boulder Rev.Code § 9-4-2(d)(2). The city manager is directed by Boulder Revised Code section 9-4-3(a) to mail a written recommendation or decision and findings to the applicant, the appropriate approving agency or appeal body, and the owners of property to whom notice was mailed and who have requested notice. The words “to whom notice was mailed” appear to refer to section 9-4-2(d)(2), which directs the city manager to send notice of PUD plan applications to the owners of property located within three-hundred feet of the boundaries of the land included within the application. The section states that “[t]he purpose of [this] mailed notice is reasonably to inform surrounding property owners of an application for development review.” Boulder Rev.Code § 9-4-2(d)(2). Thus it is likely that, as happened in this case, subsequent *1038purchasers of property within a PUD will not have received notice of interests in land conveyed to private parties pursuant to the PUD plan. Under such circumstances it is unjust to hold subsequent purchasers of land within a PUD to the private conveyances effected by PUD plans. The same reasoning supports Professor Davis’s suggestion that, in the administrative law area, “when an agency is aware of the significance of its creativity in a particular adjudication and of the important impact on non-parties, it should consider the question whether notice and comment procedure is desirable in the circumstances.” 3 K. Davis, Administrative Law Treatise § 14.6 (1980).

The majority’s holding is also contrary to the purpose of the recording act, which is to provide subsequent purchasers with a reliable means for discovering encumbrances and liens on their property. The PUD plan approval procedures established by Boulder’s ordinance do not provide that kind of reliable notice to subsequent purchasers.

The majority contends that, taken to its extreme, South Creek’s argument suggests that a city could never enforce provisions of an unrecorded PUD against a subsequent purchaser no matter how essential to public safety and welfare those decisions might be. At 1033 n. 9. Boulder is not enforcing the PUD as a party in interest in this case. In this case Bixby is attempting to establish an interest in land for its own benefit and not in the interest of the public safety and welfare. Therefore this case has no bearing on the ability of municipalities and private parties to enforce unrecorded PUD plans which serve the public interest. Boulder could enforce the unrecorded PUD plan during the development of the plan by withholding building permits or denying a developer’s request for a variance. Boulder could enforce the unrecorded PUD plan after completion of the development by withholding variations from the original PUD. Boulder or a private party could enforce the unrecorded PUD plan if the action complained of undermined the public benefit promoted by the Board’s approval of the PUD plan. However, a private party should not be able to rely on an unrecorded PUD plan to establish for its benefit an interest in property, because such use of an unrecorded PUD plan does not serve the purpose of a PUD and undermines the objectives of the recording act. I would hold that the facts of this case distinguish it from a municipality’s or a private party’s attempt to enforce a PUD plan provision which furthers the public interest.

III.

The statements of intent in the PUD plan provisions were insufficient to convey an interest in the parking lot to the private school because the PUD plan provisions were not recorded, and the language of the statements of intent was insufficient to convey an interest in property.

Bixby is precluded by Colorado’s recording statute from enforcing any interest it may have in the parking lot. Section 38-35-108, 16A C.R.S. (1982), provides that

[wjhen a deed or any other instrument in writing affecting title to real property has been recorded and such deed or other instrument contains a recitation of or reference to some other instrument purporting to affect title to said real property, such recitation or reference shall bind only the parties to the instrument and shall not be notice to any other person whatsoever unless the instrument mentioned or referred to in the recital is of record in the county where the real property is situated. Unless the same is so recorded, no person other than the parties to the instrument shall be required to make any inquiry or investigation concerning such recitation or reference.

The warranty deed which conveyed the shopping center property -to South Creek contained an exception for matters set forth in an exhibit entitled Exhibit A, which was attached to the deed. Exhibit A referred to the subdivision agreement, which in turn referred to the PUD plan. According to section 38-35-108 the PUD plan did not affect title to the shopping center property, and was not notice to South Creek *1039that Bixby possessed an easement to park on the property. Section 38-35-109, 16A C.R.S. (1982), in effect at all relevant times, provided that no document conveying, encumbering or affecting the title to real property “shall be valid as against any class of persons with any kind of rights, except between the parties thereto and such as have notice thereof, until the same is deposited with [the] county clerk and recorder.” These statutes ensure that those who perform title searches can rely on the documents located at the county clerk and recorder’s office to discover every enforceable conveyance of the property in question and all enforceable encumbrances on that property. Page v. Fees-Krey, Inc., 617 P.2d 1188, 1192-93 (Colo. 1980); McMurtrie v. Riddell, 9 Colo. 497, 500-501, 13 P. 181, 183 (1886). The majority opinion will force subsequent purchasers to engage in exhaustive searches to discover interests in their land transmitted to third parties as a result of the approval of PUD plan applications by city planning boards. In the present case Judge Van Cise described the PUD plan application as a “voluminous mass of documents.” South Creek Assocs. v. Bixby & Assocs., 753 P.2d 785, 790 (Colo.App.1987) (Van Cise, J., dissenting). Because South Creek had no notice of Bixby’s claimed interest in the shopping center property, and the documents purporting to create that interest were not recorded, Bixby should be prevented from enforcing its claimed right to use the parking lot.

In addition to the recording problem, the statement of intent in the PUD plan was insufficient to convey an easement over the South Creek parking lot to Bixby’s predecessor. “A plaintiff in a quiet title action ... bears the burden of establishing title in the property superior to that of the defendant.” Hutson v. Agricultural Ditch & Reservoir Co., 723 P.2d 736, 738 (Colo.1986). An easement is an interest in land. Wright v. Horse Creek Ranches, 697 P.2d 384, 387 (Colo.1985); DeReus v. Peck, 114 Colo. 107, 111, 162 P.2d 404, 406 (1945). Documents purporting to transfer an interest in real property require the formality of operative words of present conveyance which accurately identify the property conveyed. Hutson, 723 P.2d at 739; Harrison v. Everett, 135 Colo. 55, 60, 308 P.2d 216, 219 (1957); Lambert v. Murray, 52 Colo. 156, 166, 120 P. 415, 419 (1912). The language in the statement of intent in the PUD plan was insufficient to convey any interest in the South Creek property to the private school. The PUD plan merely stated that “the adjacent parking lot will be available for the mutual use of the school and the commercial facility,” and that “[t]he parking on the southeast portion of the site is intended for the mutual use of the school and the shopping center tenants.” As Judge Van Cise correctly noted in his dissent, these statements “reveal[] no present intent to convey. Neither the dominant nor servient tenement is described. And, the time during which the grant continues is not set forth.” South Creek Assocs., 753 P.2d at 789 (Van Cise, J., dissenting). The statements expressed McStain’s intended use of the property, but were not sufficient to convey to the owners of the private school an easement to use the shopping center parking lot. Cf. Lambert, 52 Colo, at 166, 120 P. at 419. The PUD plan granted at most a revocable license to the private school to use the parking lot. See Lehman v. Williamson, 35 Colo.App. 372, 375-76, 533 P.2d 63, 65 (1975).

The PUD plan provisions did not secure an easement for Bixby because they did not provide sufficient notice to South Creek of Bixby’s claimed interest in the land. Neither the PUD plan application nor the warranty were sufficient to convey an interest in the property to Bixby’s predeces-, sor. Bixby cannot enforce a nonexistent easement.

I respectfully dissent.