DISTRICT COURT, COSTILLA COUNTY,

COLORADO
Court Address:
304 Main Street, PO Box 301, San Luis, CO 81152
Plaintiffs: Laura Barth and Elizabeth Wilson, on
behalf of themselves as directors and all other
members of Forbes Park Land Owners
Association, a nonprofit corporation
v.
Defendants: Marie Mercier, Donna Atkins,
Peyton Waters, Jr., and Gene Fix.

DATE FILED: October 2, 2015 2:17 PM

CASE NUMBER: 2013CV30028

COURT USE ONLY

Case No.: 2013CV30028
Division 3

Third Party Claimants: Marie Mercier, Donna

Atkins, and Peyton Waters, Jr.
Third-Party Defendants: John Doe 1, John Doe
2, Mary Doe 1, Mary Doe 2, and such other and
additional parties Doe, as may be identified and
whose true name is unknown
Forbes Park Land Owners Association, a
nonprofit corporation, an Indispensable Party
without Designation
Order: Denying in Part and Granting in Part Motion for Partial Summary
Judgment
THIS MATTER comes before the Court on Forbes Park Landowners Associations Motion for
Partial Summary Judgment and Forbes Park Landowners Associations Supplemental Arguments in Support of its
Amended Motion for Partial Summary Judgment regarding Indemnity. The Forbes Park Landowners
Association (FPLOA) moves for summary judgment on the third-party claimants indemnity claim
and on its counterclaim for unlawful distribution.
The Court denies the motion for summary judgment on the third-party claim for
indemnification, because any limitation on mandatory indemnification must be included in the
Articles of Incorporation and not the Bylaws. C.R.S. 7-129-103, 7-129-109(1).

The FPLOA also seeks summary judgment on its counterclaim against the third-party
claimants. This counterclaim seeks to hold the third-party claimantsMercier, Atkins, and Waters
personally liable for the funds distributed to former FPLOA President Gene Fix.
The FPLOA may indemnify or advance expenses to an officer, like Mr. Gene Fix, if
provided for by its bylaws, general or specific action of its board of directors or voting members, or contract.
C.R.S. 7-129-107(1)(c) (emphasis added). The FPLOAs Board of Directors may indemnify an
officer in two ways: (1) by the Board of Directors by a majority vote of a quorum consisting of
Directors who are not parties to such action, suit or proceeding, or (2) if such quorum is not
obtainable, or even if obtainable, a quorum of disinterested Directors so directs, by independent
legal counsel in written opinion. FPLOA Bylaws, art. XIII, 2. 1
First, it is undisputed that when the Board voted to indemnify Mr. Fix, the directors
presentnamely, Marie Mercier, Donna Atkins, Peyton Waters and Liz Wilson and Laura Barth
were all parties to this lawsuit. Minutes of Meeting at 1 (June 27, 2014). 2 Therefore, the Board did
not follow the first option.
Second, it is undisputed that the Board of Directors did not indemnify Mr. Fix by
independent legal counsel in written opinion. The third-party claimants do not produce any evidence
that independent legal counsel authorized the indemnification; instead, they rely on the first method
and argue that the vote was proper.
Because it is undisputed that the Board did not follow either of these procedures, the Bylaws
did not authorize the indemnification of Mr. Fix and the Boards action was improper.
But, the third-party claimants are not personally liable unless the FPLOA also establishes
that the director did not act [i]n good faith, [w]ith the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and [i]n a manner the director or officer
reasonably believes to be in the best interests of the nonprofit corporation. C.R.S. 7-128401(1)(a)-(c); see C.R.S. 7-128-403(1). The FPLOA has not shown that it is entitled to summary
judgment on this issue, and, so, the Court does not grant summary judgment on the third-party
claimants personal liability. 3
Finally, the Court does not award attorney fees and costs to FPLOA because, at this time,
the FPLOA is not a prevailing party for the purposes subsection 38-33.3-123(1)(c).

IT IS THEREFORE ORDERED that FPLOAs Motion for Partial

Summary Judgment on the Marie Mercier, Donna Atkins, and Peyton Waters, Jr.s
claim for indemnification is DENIED.

The Forbes Park Landowners Association Bylaws were filed by both parties. The FPLOA filed the Bylaws as Exhibit F
to Forbes Park Supplemental Arguments Support of Amended Motion for Partial Summary Judgment Regarding Indemnity no57 (filed
June 30, 2015). The third-party claimants filed the Bylaws as Exhibit A to Gene Fixs Affidavit (filed Apr. 10, 2015).
2 The minutes were attached as Ex. 2 to Aff. of Robert J. Vannerson (filed Mar. 20, 2015).
3 The Court notes that this ruling does not address FPLOAs remedy, if any, in seeking reimbursement from Mr. Fix as
may be distinct from personal liability.
1

IT IS FURTHER ORDERED that FPLOAs Motion for Partial Summary

Judgment on its Second Claim for Relief (Unlawful Distribution) is GRANTED
insofar as the Court concludes that the distribution was improper, but DENIED
insofar as the FPLOA has not established the third-party claimants personal liability.
Done this October 2, 2015.

Martin A. Gonzales
District Judge 12th Judicial