Three-day trial centers on Vail surgical center
June 27, 2013
VAIL — Arthrex and their landlord didn't have permission to build a surgical training center in the Vail Gateway building, says the president of Vail Gateway's homeowners board.
Arthrex's attorney says the association's rules weren't properly adopted or circulated, and even if they were, Arthrex is not violating them.
That's the crux of a lawsuit heard in a three-day court trial last week presided over by District Court Judge Mark Thompson. The lawsuit pits The Vail Gateway Condominium Association against TNG Holding and Melissa Greenauer, who owns the space Arthrex is in now.
The Gateway board, headed by attorney Charles Lipcon, asserts that Greenauer did not have the board's permission to remodel the space for Arthrex, a Florida-based company that trains surgeons using body parts from cadavers.
"The rules and regulations allow the board to review any changes to the space. The burden is on the owner to comply," Lipcon said.
Arthrex's attorneys say they had all the permission they needed, and are violating no condo association rules.
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"We're happy to follow the rules if they give them to us, and everyone follows the same rules. There are no rules. Even if there are rules there was no violation," said Eric Jonsen, attorney for Arthrex.
Arthrex's cadaver parts are provided by a medical specialty company. They use joints only, not entire cadavers, the company said.
"It has become known as the cadaver building," Lipcon said.
The frozen specimens are biologically and pathologically clean, and they're kept frozen until the surgeon is ready for them, says a memo from the town of Vail, responding to the condo owners' concerns.
When the surgeon is done, the specimen parts are refrozen, packaged in designated disposal bags, picked up by Stericycle and incinerated at their Dacono facility.
Arthrex has been doing this in Vail for years, as one of the companies leasing space from the Steadman Philippon Research Institute, and in hotels around town.
Lipcon said Greenauer had gotten written approval from the board on three separate previous occasions when she remodeled the space Arthrex is in now.
Lipcon says she didn't get board approval this time, and from the board's point of view that ignores the association's regulations.
Lipcon said the regulations say they cannot run a school in the Gateway building, and the board considers the Arthrex training facility a school. The regulations also say no noxious or offensive activity shall be carried that may become a nuisance or that becomes offensive or embarrassing, Lipcon said.
"They can do none of this without board approval," Lipcon said.
McNeill Property Management gave Arthrex a deposit form and collected a deposit of $5,000, Jonsen said. He argued that since the deposit was paid and accepted, the project had all the approvals it needed.
Jonsen said there was no evidence that the rules and regs were ever properly adopted.
"They were circulated, but on cross examination they couldn't come up with a date when the board adopted them," Jonsen said.
"They weren't properly adopted and then circulated," Jonsen said. "If they are going to hammer Arthrex over the rules and regulations, the rules and regulations should be properly adopted."
Lipcon countered that during the trial, former property manager Dan McNeill testified he had circulated those regulations.
"To say there are no rules and regulations is absurd," Lipcon said.
Two of three-member board
Lipcon and Katia Bates represent the residential owners on Vail Gateway's three-person board. Lipcon said he was re-elected to the board after the lawsuit was filed.
The commercial owners no longer have a representative on the board, after Jack Ryan sold his Vail Gateway property and resigned.
When developer Kevin Deighan converted the building to condominiums to be sold, the commercial owners gave up control of the board, Lipcon said. The composition of the board shifted from two commercial owners and one residential, to two residential owners and one commercial owner.
"We gave him his millions of dollars in exchange for control of the board," Lipcon said.
When reached by phone, Deighan said he is in Africa and couldn't talk.
Votes are weighted based on the number of square feet someone owns. Lipcon owns a 4,000-square-foot unit, so he could conceivably outvote up to two or three commercial owners.
Expenses are also assessed according to the number of square feet owned.
"If someone doesn't like a building, they can sell their space and go somewhere else," Lipcon said. "Condo docs, rules and regulations protect against mob rule."
Last week's trial lasted three days. It was scheduled for five days.
Lipcon said it was shorter than expected because Arthrex's attorneys did not call any witnesses.
"We didn't call a single witness because they have the burden of proof and we didn't think they met that burden," Jonsen said. "They did not put on a single witness to say there was an odor problem."
Jonsen and the rest of the Arthrex attorneys submitted a request to have the case dismissed.
At last year's Gateway homeowners meeting, owners voted overwhelmingly to abandon the lawsuit against Arthrex, as well as any appeal, according to an email circulated to owners. However, Lipcon said the item was not part of the agenda and could not be officially acted upon.
"These people can sit around and vote that the moon is made of green cheese, but it won't change anything. The moon will still be made of rock," Lipcon said. "At the end of the day it's not the owners that run the association, it's the board."
Thompson has previously ruled in Arthrex's favor, throwing one lawsuit the Gateway board brought against the town of Vail, and striking down a temporary restraining order that had blocked Arthrex from finishing construction of its training center in Vail's Gateway Plaza. Thompson pointed out that the space was formerly an OB/GYN office and medical office.
Thompson is expected to rule on this latest case in August.
Staff Writer Randy Wyrick can be reached at 970-748-2935, and email@example.com.