One chapter in Granby Ranch’s numerous litigation proceedings has closed. On July 30, Grand County District Court Judge Mary Hoak ruled to dismiss claims by the homeowner-run Granby Ranch Metropolitan District against several entities responsible for the development of Granby Ranch.

Plaintiff Granby Ranch Metropolitan District, also referred to as GRMD, argued that homeowners had suffered damages by the current owners and former lenders of Granby Ranch, who allegedly canceled a 2006 Lease Purchase Agreement that was amended in 2012. GRMD maintains the LPA would have eventually allowed Granby Ranch’s amenities – notably the ski resort and golf course – to pass from the developer’s hands into public ownership.

Judge Hoak’s latest ruling declared the “2020 Foreclosure extinguished the 2012 LPA” and quieted the title “free and clear of the 2012 LPA.”

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GRMD has sued: Headwaters Metropolitan District, the resort’s operating district; GR Terra, the current owner of Granby Ranch; former lenders, GP Granby Holdings (later to become Gray Jay Ventures), Redwood Capital Finance Co. and Granby Prentice.  

In her July 30 ruling, Judge Hoak stated that the LPA was legally moot. Here are the details of the case, who was involved and what effect the court’s dismissal has on homeowners, including the next steps for GRMD and the developers.

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History of the lawsuit

Granby Ranch is made up of several metro districts that help support the area’s infrastructure and amenities. These include GRMD and Headwaters Metro District. The two have most recently undergone legal battles, but in 2005 the districts became partners in an Amenity Fee Agreement.

This 2005 agreement stated that Headwaters would collect a one-time amenity fee of $10,000 from the purchase of each lot in the Granby Ranch Metro District. The fees would be placed into a pool, for Headwaters to finance the eventual purchase of the amenities. Headwaters could purchase the amenities once all fees they had been collected, or by December 2030, whichever came sooner. The 2012 LPA extended the term to 2062, according to court documents.

GRMD says the intent of the agreement was for Headwaters to pass the amenities to a public entity, such as the Town of Granby, or to GRMD. The town, another public entity, or GRMD would then operate the amenities on behalf of homeowners. This, GRMD argued to the court, would protect the ski resort, golf course, and other resort offerings for the enjoyment of the public, rather than allow them to be privately developed. The amenity fee also allowed homeowners to enjoy priority access and special discounts on skiing and golfing, according to the 2005 amenity fee agreement.

Headwaters also entered into an LPA with former resort owner, Granby Ranch Holdings. This LPA enforced the amenity fee agreement, according to GRMD’s lawsuit claims.

But as the years progressed, the resort experienced financial troubles by Granby Ranch Holdings. In 2020, Granby Ranch went into foreclosure, with the property going to the lender, Granby Prentice. Shortly afterwards, GP Granby Holdings took control of the ski and golf amenities. GP Holdings then issued a letter to homeowners, explaining the LPA and amenity fee agreement were terminated. GP Holdings said the agreement was not financially viable.

This is when litigation began.

According to GRMD’s claims, Headwaters had already collected approximately $6 million in fees, on more than 610 lots. Homeowners thought they would one day be the owners of the amenities.

GRMD sued Granby Prentice and GP Holdings, but Granby Ranch changed hands again in 2021. Now the current owners GR Terra are involved in the litigation. In January 2022, Jude Hoak ruled there were “potentially sound legal arguments to support” some of GRMD’s claims – that the LPA was a covenant running with the land and survived foreclosure. While Hoak dismissed some of the other claims, she allowed GRMD to pursue the lawsuit.

The claims

GRMD levied a number of claims against the defendants, which includes current and former developers.

GRMD first argued that the LPA was enforceable, despite foreclosure, because the document states that “all covenants, conditions and agreements herein contained shall be construed as covenants running with the land.”

GRMD filed suit against Headwaters, GR Terra and the lenders for breach of the enforceable contract. They also requested to be repaid for damages, including the approximate $6 million they claimed to have paid in amenity fees. GRMD also asserted in court that Headwaters had continued to collect fees through 2022, long after the foreclosure. 

Court records show that GRMD maintains they were a third party beneficiary to the LPA, and thus had the right to the eventual ownership of the ski resort and golf course. This was based on the 2003 Master IGA (intergovernmental agreement) between GRMD and Headwaters, among other metro districts. 

In turn, the defendants argued that individual homeowners had not paid the amenity fees; it was the seller of the property. In most cases, the seller was the developer, the defendants stated. Headwaters and GR Terra also reiterated that (although GRMD believed fees had been collected), fees were never appropriated, or set aside to specifically to pay for rent while leasing the amenities in 2021 or ensuing calendar years. 

The defendants also produced several agreements that superseded the 2003 IGA, thus making the LPA void. This included the 2006 Master IGA. 

“The LPA was terminated in its entirety through the foreclosure of the Leased Premises, or alternatively, through Gray Jay’s notice of termination, or alternatively, due to Headwaters failure to appropriate funds for rental payments for the 2021 calendar year or the ensuring (sic) calendar years,” GR Terra stated in court documents.

GRMD was represented by the law firm Burg Simpson. The defendants were represented by the law firm Husch Blackwell. Both firms filed motions for summary judgment, asking the court to rule based on the evidence they had presented. The ruling date was originally set for February 2023. Judge Hoak made a ruling on July 30, closing one chapter of the drawn-out, complicated case.  

The ruling

According to Judge Hoak, later documents voided the 2003 Master IGA’s agreement that Headwaters could purchase the amenities, then turn them over to a public entity or GRMD. No agreements written after the 2003 IGA proved that GRMD was a third-party beneficiary to the LPA.

“GRMD has not identified a single document actually requiring Headwaters to acquire title to the Amenities or actually requiring Headwaters to transfer the Amenities to GRMD if or when the title vested,” the court wrote in its July 30 ruling (emphasis the court’s).

Judge Hoak then described the two reasons the LPA terminated. First, the 2020 foreclosure rendered the agreement void. Second, Headwaters did not appropriate amenity fees as rental payments from 2021-23. The LPA states that the agreement terminates if fees aren’t appropriated. 

The next question: would GRMD appeal the case?

Moving forward

GRMD has held several board meetings after Judge Hoak’s ruling where they discussed the dismissal of their case.  Attorney David TeSelle, of Burg Simpson law firm, counseled the board members during an Aug. 10 meeting. 

According to TeSelle, the court “reversed its prior rulings on the motion to dismiss, where (Hoak) found that the district had standing to pursue the action.”

The board then voted unanimously that they would extend a formal settlement offer to Husch Blackwell. They wouldn’t appeal Hoak’s decision, which would cost more of the resident taxpayers’ money.

GRMD Board President Matt Girard stated he made the motion to send the settlement letter, “in the best interest of helping this community heal and move on from this litigation and a potential lengthy appeal process for both sides.” 

In their Aug. 14 settlement offer, the board wrote that they had previously reached out to defendants GR Terra and GRCO informally to settle the case; they were now extending a formal offer. In return for not appealing Judge Hoak’s decision, the board asked the defendants to voluntarily dismiss their counterclaims in the LPA lawsuit, as well as claims they had brought against GRMD in a separate lawsuit. 

The defendants rejected this settlement offer Aug. 23. In the counteroffer sent by Husch Blackwell, defendants stated that GRMD had already extended the same settlement offer on Aug. 9, which they had denied on Aug. 10. Husch Blackwell informed Sky-Hi News that the Aug. 9 offer was verbal; they say they rejected the offer via email, about two hours before the board meeting.

When they denied the second settlement offer, GR Terra and GRCO asked for reimbursement from GRMD in their counteroffer. This reimbursement was related to both lawsuits; in turn they would dismiss their claims and counterclaims with prejudice –  meaning GRMD could never file their claim again.  

GRMD rejected the counteroffer, asking to meet in person. GR Terra responded that arranging an in-person settlement meeting with GRMD would not be productive. GR Terra plans to pursue their counterclaims. GRMD is also determined to keep a dog in the fight – they voted to file a Notice to Appeal during their Sept. 15 meeting. The vote passed 2 to 1. Although this notice isn’t a formal appeal, it’s the first step in the process. 

On Nov. 2, counsel from both sides will meet to discuss the ongoing litigation. The disputes between developer and homeowners seem far from over – especially since the developers are involved in a second lawsuit with GRMD.