The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
August 1, 2019
2019COA120
No. 18CA1200, Filatov v. Turnage — Contracts — Right of First
Refusal — Computation of Time
A division of the court of appeals considers an issue of
contract interpretation involving a right of first refusal and
calculations of time. The division concludes that, under this
contract, the first day was excluded and the last day was included
when calculating the period for exercising the right of first refusal.
The division further concludes that where the contract provided
that the exercise period began “immediately following the delivery of
the notice,” the clock began running when the agent of the party
that held the right of first refusal received the required notice.
COLORADO COURT OF APPEALS 2019COA120
Court of Appeals No. 18CA1200
Eagle County District Court No. 16CV30439
Honorable Frederick W. Gannett, Judge
Anna Filatov,
Plaintiff-Appellant,
v.
Mark F. Turnage and Natalie F. Bocock Turnage,
Defendants-Appellees.
JUDGMENT REVERSED AND CASE
REMANDED WITH DIRECTIONS
Division I
Opinion by JUDGE GROVE
Hawthorne, J., concurs
Taubman, J., specially concurs
Announced August 1, 2019
Porterfield & Associates, LLC, Wendell B. Porterfield, Jr., Vail, Colorado, for
Plaintiff-Appellant
Range, LLP, Kevin C. Paul, Cynthia A. Coleman, Eric R. Jaworski, Denver,
Colorado, for Defendants-Appellees
¶1 Plaintiff, Anna Filatov, appeals the district court’s entry of
summary judgment in favor of defendants, Mark F. Turnage and
Natalie F. Bocock Turnage, which declared that they had timely
exercised their right of first refusal to purchase a condominium unit
in Vail. We reverse.
I. Background
¶2 Filatov entered into a contract to buy a condominium unit in
Vail. Under the terms of the condominium declaration, Filatov’s
purchase of the unit was subject to the Turnages’ right of first
refusal.
¶3 The condominium declaration required a unit owner who
received a bona fide offer from a prospective purchaser to give
written notice and a copy of the offer to the condominium board of
managers (the board). The board was, in turn, required to advise
the owners of other units in the same building of the offer in
accordance with the procedures outlined in the association’s
bylaws. To exercise the right of first refusal, an owner needed to
notify the seller in writing and make a matching down payment or
1
deposit “during the 20 day period immediately following the delivery
of the notice of the bona fide offer and copy thereof.”
¶4 The material facts are undisputed. On November 7, 2016, the
selling owners — who are not part of this appeal — properly notified
the board that they had accepted an offer to purchase their unit.
The next day, consistent with the procedure outlined in the
association’s bylaws, the board advised the remaining condominium
owners of the pending sale and their right of first refusal. The
board’s notice letter stated that November 8, 2016, was “the first
day of the twenty-day period in which an Owner may exercise the
Right of First Refusal,” and that an owner wishing to exercise the
option must do so by November 27, 2016.
¶5 On Friday, November 25, 2016, the Turnages notified the
condominium association of their intent to exercise the right of first
refusal. They deposited the required earnest money the following
Monday, November 28, 2016 — a day after the deadline that
appeared in the board’s notice letter.
¶6 Filatov sued both the Turnages and the sellers, seeking a
declaration that, because the Turnages deposited their earnest
2
money after the deadline, their attempt to exercise the right of first
refusal was ineffective. The sellers did not substantively participate
in the district court. After a period of discovery, Filatov and the
Turnages filed cross-motions for summary judgment.
¶7 Concluding that the Turnages had timely exercised their right
of first refusal, the district court granted the Turnages’ motion for
summary judgment and denied Filatov’s. The district court
observed that the board advised the Turnages of Filatov’s offer on
November 8. Then, citing the commonly accepted principle that, in
calculations of time, the first day of a fixed period is typically
excluded and the last day is included, the district court found that
“[t]wenty days from November 8th . . . is November 28th.”
Accordingly, the district court found that the Turnages’ option to
purchase the property did not expire until November 28, 2016 —
the date that they deposited the earnest money. Filatov appeals
that ruling.
3
II. Analysis
¶8 Filatov contends that the district court erred in granting
summary judgment for the Turnages because the earnest money
was not timely deposited with the seller. We agree.
A. Standard of Review
¶9 Summary judgment is a drastic remedy, appropriate only
where there are no disputed issues of material fact and the moving
party is entitled to judgment as a matter of law. C.R.C.P. 56(c);
Lombard v. Colo. Outdoor Educ. Ctr., Inc., 187 P.3d 565, 570 (Colo.
2008). We review a summary judgment ruling de novo. Gibbons v.
Ludlow,
2013 CO 49, ¶ 11. Similarly, interpretation of a covenant
is a question of law that we review de novo. Evergreen Highlands
Ass’n v. West,
73 P.3d 1, 3 (Colo. 2003).
B. Applicable Law
¶ 10 We must follow the dictates of plain English in interpreting a
covenant, and we will enforce as written a covenant that is clear on
its face. See Double D Manor, Inc. v. Evergreen Meadows
Homeowners’ Ass’n, 773 P.2d 1046, 1048 (Colo. 1989); Rossman v.
Seasons at Tiara Rado Assocs.,
943 P.2d 34, 36 (Colo. App. 1996).
“Extraneous evidence is only admissible to prove intent where there
4
is an ambiguity in the terms of the contract,” and absent any
ambiguity, “we will not look beyond the four corners of the
agreement in order to determine the meaning intended by the
parties.” USI Props. E., Inc. v. Simpson, 938 P.2d 168, 173 (Colo.
1997). Moreover, disagreement between the parties “regarding the
interpretation of the contract does not itself create an ambiguity in
the contract.”
Id.
¶ 11 A right of first refusal is tantamount to a preemptive option
“because a preemptive option does not give the optionee the power
to compel an unwilling owner to sell; it merely requires that when
and if the owner decides to sell, he offer the property first to the
person holding the preemptive right.” Sports Premiums, Inc. v.
Kaemmer,
42 Colo. App. 172, 176,
595 P.2d 696, 699 (1979).
Generally, the preemptive option creates a contractual obligation for
the property owner to offer the subject property to the holder of a
right of first refusal on the same terms and conditions as the third-
party offer made to the owner. Parry v. Walker,
657 P.2d 1000,
1002 (Colo. App. 1982); see also Stuart v. D’Ascenz,
22 P.3d 540,
541-42 (Colo. App. 2000). A right of first refusal is strictly
5
construed, Kaiser v. Bowlen, 200 P.3d 1098, 1103 (Colo. App.
2008), and “[s]trict compliance with the terms of the option is
required for its exercise.” Sports Premiums,
42 Colo. App. at 176,
595 P.2d at 699.
C. Application
1. Plain Language
¶ 12 The right of first refusal is established by the declaration, 1
which, in pertinent part, provides as follows:
If any owner of a condominium unit . . . wishes
to sell . . . such unit and receives a bona fide
offer therefor from a prospective purchaser
. . . , the remaining owners of units within the
same building shall be given written notice
thereof, together with a true copy of such offer.
Such notice and copy shall be given to the
Board of Managers for all of such owners.
Such remaining owners shall have the right to
purchase . . . such unit upon the same terms
and conditions as set forth in said offer
1 The record includes only portions of the condominium declaration.
The portions submitted by each party are formatted differently and
contain slightly different language. For example, the declaration
submitted by Filatov does not include the entire right of first refusal
section and the declaration submitted by the Turnages, although
inclusive of the entire relevant section, includes a typographical
error: “the remaining owner [sic] of units.” We nevertheless address
the issues raised because there is no indication that the
declarations in the record were not the governing agreements and,
in any event, the error identified above is immaterial to the issues
raised.
6
provided, however, that written notice of such
election to purchase . . . and a matching down
payment or deposit is given to the owner
during the 20 day period immediately following
delivery of the notice of the bona fide offer and
copy thereof. The method by which the Board
of Managers shall advise the other owners of
such bona fide offer . . . shall be provided in
the Association’s By-Laws.
¶ 13 This provision, together with the bylaws, contemplates the
following course of events when a selling owner receives a bona fide
offer:
• The owner provides written notice of the offer to “the
remaining owners of units within the same building.” The
seller need not notify each owner individually, however.
Rather, the notice “shall be given to the Board of Managers
for all of such owners.”
• Upon delivery of the notice, the board must advise the
remaining owners of the offer using the procedures outlined
in the association’s bylaws. The bylaws require the board to
“promptly give notice to the remaining owners” by regular
mail addressed to the registered addresses of the owners.
7
• The remaining owners have the right to purchase the unit
“upon the same terms and conditions as set forth in said
offer.”
• To exercise the right to purchase the unit, an owner must
give “written notice of such election to purchase . . . and a
matching down payment or deposit . . . to the owner during
the 20 day period immediately following delivery of the
notice of the bona fide offer and copy thereof.”
¶ 14 While the parties agree that these provisions are
unambiguous, they disagree as to how they should be interpreted.
Most importantly, they dispute which event — Filatov’s notice to the
board, or the board’s advisement to the owners — triggered the
start of the twenty-day clock. They also dispute whether, assuming
that Filatov’s notice to the board was the triggering event, the
Sunday expiration of that twenty-day deadline should have rolled
over to the following Monday. We address each contention in turn.
2. The Sellers’ Notice to the Board Started the Clock
¶ 15 The parties’ core disagreement is over which event started the
Turnages’ twenty-day clock. Filatov argues that the triggering event
8
was the sellers’ notice to the board, which was sent and received on
November 7, 2016. The Turnages maintain that the clock began to
run, at the earliest, on November 8, when the board advised them of
the pending offer. The district court agreed with the Turnages and,
noting that time calculation for an identified period typically
excludes the first day and includes the last day, concluded that
“[t]wenty days from November 8th . . . is November 28th.” Thus,
the district court ruled, the Turnages timely exercised the right of
first refusal by depositing the earnest money on November 28,
2016.
¶ 16 Strictly construing the declaration, as we must, see Kaiser,
200 P.3d at 1103, we hold that the seller’s notice to the board,
rather than the board’s letter to the remaining owners advising
them of that notice, triggered the twenty-day clock. We reach this
conclusion primarily because the declaration itself distinguishes the
seller’s notice “to the Board of Managers for all of such owners”
from the board’s advisement to the owners that it has a bona fide
offer in hand. It does so by employing different terminology,
“notice” and “advise,” to describe the two phases of the right of first
9
refusal process. See NFL Enters. LLC v. Comcast Cable Commc’ns,
LLC, 851 N.Y.S.2d 551, 557 (N.Y. App. Div. 2008) (“The use of
different terms in the same agreement strongly implies that the
terms are to be accorded different meanings.”). Once the seller
provides “notice” to the board, which accepts that notice “for all of
such owners,” the board must “advise the other owners of such
bona fide offer.” But the twenty-day clock is not tied to the board’s
advisement to the remaining owners. Instead, the declaration
provides that the right of first refusal must be exercised during the
twenty-day period immediately following delivery of the notice. The
declaration, then, is unambiguous: the period for exercising the
right of first refusal begins “immediately following delivery” of the
seller’s notice to the board.
¶ 17 Accordingly, the “notice” contemplated by the declaration was
complete upon delivery by the sellers of the written notice and a
true copy of Filatov’s offer to the board on November 7, 2016.
Under the plain language of the declaration, as well as settled
principles of contract interpretation, the day that the sellers
delivered the notice to the board was excluded from the period in
10
which the Turnages could exercise their right of first refusal. 2 See,
e.g., Buehner Schokbeton Co. v. Horn’s Crane Serv. Co., 500 P.2d
140, 141 (Colo. App. 1972) (not published pursuant to C.A.R. 35(f))
(“The general rule applied to the computation of time under this
type of contract provision is that the first day is excluded and the
last day is included in computing the time within which the act may
be performed.”); cf. § 2-4-108(1), C.R.S. 2018 (“In computing a
period of days, the first day is excluded and the last day is
included.”). The Turnages could, however, exercise their right of
first refusal at any point during the next twenty days, beginning on
November 8 and ending on November 27. The board’s November 8
letter to the Turnages (and all other eligible owners) accurately
reflected this, stating that “[t]he date of this letter is the first day of
the twenty-day period in which an Owner may exercise the Right of
First Refusal,” and that any eligible owner who wished to exercise
the right must do so by November 27, 2016.
2 Giving the term its common and ordinary meaning, “following,” in
the present context, must mean “subsequent to” delivery of the
selling owner’s notice to the board. Merriam-Webster Dictionary,
https://perma.cc/5W4Y-V9SX.
11
¶ 18 Because they did not deposit their earnest money until
Monday, November 28, the Turnages did not meet this deadline.3
The untimeliness of their deposit, however, does not end our
inquiry because we still must address the Turnages’ other
arguments as to why it should be considered timely. We do so
below.
3. Adequacy of the Notice
¶ 19 The Turnages assert that a seller’s notice to the association
should not start the twenty-day clock because the board’s
advisement might not be sufficiently prompt, or might not come at
all, thereby effectively shortening or perhaps even eliminating as a
practical matter any opportunity for them to timely exercise their
right of first refusal. Interpreting the declaration to allow for such a
delay, the Turnages maintain, is contrary to its intent, which is “to
3 We are not persuaded otherwise by Sports Premiums, Inc. v.
Kaemmer, 42 Colo. App. 172,
595 P.2d 696 (Colo. App. 1979).
While Sports Premiums involved a virtually identical right of first
refusal appearing in a condominium declaration, the court was not
called upon to determine whether it was the seller’s notice or the
board’s advisement that started the clock.
12
give the unit owners an opportunity to purchase which is equal to
that of third parties.” Parry, 657 P.2d at 1002.
¶ 20 This argument misperceives the role of the board as defined by
the declaration — and as agreed to by the Turnages when they
purchased their existing unit. By stating that “[s]uch notice and
copy [of the offer] shall be given to the Board of Managers for all of
such owners” (emphasis added), the declaration designates the
board as the agent of those owners who are eligible to exercise a
right of first refusal. Far from rendering superfluous the
requirement that “the remaining owners of units within the same
building shall be given written notice . . . of such offer,” this
designation effectuates that mandate by creating an efficient and
predictable process for all owners — whether they are selling or
potentially buying those units — to follow. Indeed, employing the
board as an agent of the owners for this limited purpose confers a
substantial benefit on selling owners by providing a single point of
contact for delivery of the notice. And on the other side of the coin,
it also provides certainty for owners who are eligible to exercise the
13
right of first refusal by ensuring that the same deadline applies to
any of them who may wish to purchase the property.
¶ 21 Notice to an agent is notice to the principal. See Brown Grain
& Livestock, Inc. v. Union Pac. Res. Co., 878 P.2d 157, 158 (Colo.
App. 1994); see also Restatement (Third) of Agency § 5.02 (Am. Law
Inst. 2006). We thus reject the Turnages’ suggestion that a failure
on the part of the board to timely advise them of a pending offer
(which did not happen here in any event) would undermine the
purpose of the covenant. As the declaration makes clear, the
bylaws prescribe the method by which the board must advise the
eligible owners that an offer has been made. To the extent that
those owners are dissatisfied with the mechanism by which the
board advises them of an offer that would trigger the right of first
refusal, they are free to revise the bylaws in a way that ensures
punctual receipt of that information. They may also enact
provisions designed to ensure that the board, as it did here,
promptly transmits the information utilizing the method or methods
that the bylaws prescribe. For the purposes of this case, though,
concerns about the adequacy of the bylaws or the board’s
14
compliance with them involve issues of internal governance that
have no bearing on our interpretation of the plain language of the
declaration.
4. The Turnages Had An Opportunity to Purchase That Was
Equal to Filatov’s
¶ 22 We also reject the Turnages’ suggestion that strict compliance
with the twenty-day period for exercising the right of first refusal
deprived them of their right to have the same opportunity to
purchase the unit as Filatov (or any other third party). See Parry,
657 P.2d at 1002. The Turnages argue, for example, that the terms
of Filatov’s real estate contract — which rolled deadlines falling on a
weekend or holiday over to the next business day — should have
applied to their deposit of the earnest money. They also suggest
that the sellers “failed to afford the Turnages their [right of first
refusal]” because they first learned “from the seller[s’] representative
that they were to pay the earnest money to Land Title Guarantee
Corporation on the morning of Saturday, November 26, 2016, when
it was no longer possible to make the payment until Monday,
November 28, 2016.”
15
¶ 23 We are not persuaded by these arguments. With respect to
the contract, the Turnages were not a party, were not in privity with
the buyer or sellers, and were not third-party beneficiaries. And
surely, if the shoe were on the other foot, and the purchase and sale
agreement purported to shorten the twenty-day period for exercising
the right of first refusal, the Turnages would not argue that Filatov’s
contract should be read as derogating the rights afforded to them by
the condominium declaration.
¶ 24 The Turnages’ attempt to attribute their noncompliance with
the deadline to the sellers’ representative is equally unavailing.
Simply put, strict compliance with the terms of the right of first
refusal was incumbent on the party who intended to exercise that
right. Nothing in the record suggests that either Filatov or the
sellers (who are in any event not a party to this appeal) are in any
way at fault for the Turnages’ untimely deposit of the earnest
money.
16
III. Conclusion
¶ 25 We reverse the district court’s order granting summary
judgment for the Turnages, and remand with instructions to enter
judgment in Filatov’s favor.
JUDGE HAWTHORNE concurs.
JUDGE TAUBMAN specially concurs.
17
JUDGE TAUBMAN, specially concurring.
¶ 26 I agree with the majority that the twenty-day period for
defendants, Mark F. Turnage and Natalie F. Bocock Turnage, to
exercise their right of first refusal began with the date of the sellers’
notice to the board of condominium managers that they had
accepted an offer to purchase their condominium. Under the
circumstances presented here, I also agree with the majority and
plaintiff, Anna Filatov, that the Turnages did not timely exercise
that right.
¶ 27 I write separately to emphasize my view that the Turnages’
exercise of their right of first refusal was untimely because the
board promptly sent notice of the sellers’ intent to sell their
condominium, as was required by the bylaws. As I explain below, a
significant delay by the board in sending notice to the condominium
owners would not only violate the bylaws but would render invalid
the board’s notice to condominium members of their right of first
refusal.
¶ 28 As the majority explains, the condominium declaration here
requires the condominium board, on receipt of a notice that a
18
condominium owner has received a bona fide offer of intent to
purchase, to notify all other owners of the offer utilizing the
procedures set forth in the association’s bylaws. The bylaws, in
turn, provide that the condominium board must then “promptly
give notice to the remaining owners in the manner provided for
notice of meetings . . . .”
¶ 29 Here, the sellers’ notice to the board was sent and received on
November 7, 2016. The following day, November 8, the board sent
the notice to the condominium owners. Indeed, the Turnages
acknowledge that the sellers’ contract was emailed to the
condominium managers on a Monday evening and mailed to the
other condominium owners the next day. Thus, there can be no
question that the board promptly sent the notice to the other
condominium owners.
¶ 30 As noted, the condominium declaration affords other
condominium owners a twenty-day period to provide a written
notice of exercise of an owner’s election to purchase and a matching
down payment or deposit to the selling owner. The longer the
19
condominium board delays in providing notice, the less time
prospective buyers have to exercise their right of first refusal.
¶ 31 As a division of our court has held, “[c]ontracts should be
construed to give effect to the intent of the parties. The intent of
the parties should be determined from the entire contract, and
effect must be given to every provision if possible.” Lawrence St.
Partners, Ltd. v. Lawrence St. Venturers, 786 P.2d 508, 510 (Colo.
App. 1989).
¶ 32 It seems clear that the reason for the twenty-day period in the
declaration is to provide condominium owners a reasonable period
to assess whether the selling price of a condominium unit is
reasonable, and, if so, to enable interested condominium owners to
determine whether they have — or could obtain — funds for a down
payment or deposit and to otherwise obtain financing, if necessary,
for purchase of that condominium. If the condominium board
delays four or five days, for example, in sending other condominium
owners notice of a receipt of an offer to purchase, the other
condominium owners may have insufficient times to accomplish
these tasks.
20
¶ 33 Because the condominium board promptly sent notice to the
other condominium owners, I need not determine the precise period
in which I would consider notice sent by the board to be a violation
of the bylaws and of the declaration. Accordingly, with this
understanding, I concur with the majority’s opinion.
21
