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Court Determines that Zoning Ordinances and Waterline Easement Survive Foreclosure Action Initiated by Private Lender in Douglas County, Colorado

On December 23, 2010, Douglas County District Court Judge Paul A. King ruled that certain zoning ordinances passed by the Town of Parker Town Council in June 2007 and a critical waterline easement granted to the Parker Water & Sanitation District in November 2008 survive
a foreclosure action initiated by a private lender in Douglas County, Colorado.

The Town’s ordinances govern the planned development of an approximately 2,750.5 acre-parcel known as the Hess Ranch Property located in Parker, Colorado. The District obtained the waterline easement in order to construct a 24-inch waterline through the Hess Ranch Property and Stroh Ranch Property, which is also located in Parker. The waterline, which was constructed by the District at a cost in excess of $1.2 million, serves the Douglas County Stadium, a church, the Double Angel Ball Park, an elementary school, and over 1,000 homes.

The Town and District initiated an action in the Douglas County District Court in January 2010 seeking declaratory judgments that the Town’s ordinances and the District’s easement survive a foreclosure action initiated by a private lender. The lender holds a deed of trust encumbering the Hess Ranch Property that predates both the Town’s ordinances and the District’s easement. The lender asserted that its foreclosure action would extinguish the Town’s zoning ordinances and the District’s waterline easement by operation of Colorado’s foreclosure statute, C.R.S § 38-38-501. The Town and the District, which were represented by Murray I. Weiner and Joseph L. Lambert of Mulliken Weiner Karsh Berg & Jolivet, P.C., contended that the Town’s zoning ordinances and the District’s waterline easement survive the lender’s foreclosure. The Court agreed with the Town and the District and concluded on summary judgment that the Town’s ordinances and the District’s easement survive the foreclosure.

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