Two women may proceed to sue a Mesa County landlord for their mother’s death in an apartment fire, after Colorado’s second-highest court ruled the wrongful death claims do not belong in the privately run arbitration system.

The owners of 3272 F Road in Clifton argued Deborah Wood’s rental agreement required her and her heirs to arbitrate “all disputes arising in connection with this lease.” Because Wood was only in her apartment at the time of her death thanks to the lease, they contended, arbitration was the sole way to resolve her daughters’ request for compensation.

Not so, said the Court of Appeals.

A three-judge panel ruled on Thursday that Wood’s death did not arise “in connection with” her lease. Instead, a Colorado law, the Premises Liability Act, governs personal injury claims against landowners.

“The PLA applies to the daughters’ claims not because of the existence of the lease or any terms in the lease,” wrote Judge David H. Yun in the Sept. 21 opinion, “but because the ‘injury’ (in this case, the death) occurred on the defendants’ property and resulted from the condition of or circumstances existing on that property.”

The attorney for property owners Steeland, LLC and Jaida McKeever said he intends to seek review from the state Supreme Court, as Colorado law does not require courts to hear personal injury claims when the landlord and the tenant have already agreed to arbitration.

“This matter arises out of the lease because it is the lease itself which creates the landlord/tenant relationship,” said lawyer Isaiah Quigley.

The appellate panel cautioned that it was not endorsing jury trials over arbitration in all cases involving a personal injury on someone’s property. Rather, in Wood’s case, any connection between the rental agreement and her wrongful death was “simply too attenuated” to be covered by the arbitration clause.

Case: Tolle v. Steeland, LLC

Decided: September 21, 2023

Jurisdiction: Mesa County

Ruling: 3-0

Judges: David H. Yun (author)

Jaclyn Casey Brown

Janice B. Davidson

A 2019 study found that hundreds of millions of consumer agreements contain arbitration clauses, reducing access to the court system in the event of injuries. Policymakers have begun to claw back the scope of mandatory arbitration, with President Joe Biden signing a federal law last year to restrict the forced arbitration of sexual assault and harassment claims in the workplace.

Reforms to arbitration agreements are needed, law professor David Horton argued in 2020, to “prevent private dispute resolution from becoming a black hole that swallows an ever-expanding swath of the civil justice system.”

In the case before the Court of Appeals, a fire broke out in Wood’s apartment in August 2020. Neighbors allegedly heard her screams, but by the time first responders found her, she had died of smoke inhalation. The cause of the fire appeared to be an air conditioning unit or possibly a lava lamp. There were allegedly no smoke detectors, sprinklers or alternate escape routes in the apartment.

Wood’s daughters, Faith Tolle and Grace Aragon, sued the apartment complex’s owners for wrongful death. The defendants, Steeland and McKeever, argued Wood’s lease required arbitration. Because the agreement committed the landlord to maintaining the premises in a safe condition and the plaintiffs were alleging the landlord failed to do so, the “entirety” of the lawsuit related to the lease.

In May 2022, then-District Court Judge Lance P. Timbreza decided the wrongful death claims fell outside of the mandatory arbitration clause.

“First, the arbitration clause makes no mention of death,” he noted. Moreover, the wrongful death claims were “too attenuated from the lease itself.”

Steeland and McKeever then turned to the Court of Appeals.

“I think the bottom line to all this analysis is: Are we even here if a lease doesn’t exist?” Quigley told the panel at oral arguments. “The lease explains why the decedent was on the property” at the time of her death.

Wood’s daughters countered that Colorado law requires property owners to protect those they invite onto their premises, and a landlord could not limit access to the courts through the terms of a lease. The appellate panel broadly agreed that the Premises Liability Act, not the lease, empowered the plaintiffs to sue for their mother’s wrongful death.

Damon Davis, the attorney for Wood’s daughters, said he was pleased with the outcome, adding that the panel’s decision also illustrated how landlords can, in fact, force arbitration of wrongful death claims.

“The court did not rule out arbitrating wrongful death or premises liability claims in all cases. However, if you want to arbitrate such claims you have to put it in the contract, and here the landlord did not do that,” he said.

The case is Tolle et al. v. Steeland, LLC et al.