2026-09-10 · Colorado · Courts

In Colorado the duty to preserve evidence can begin with an incident report and a pattern of resident complaints — not with a demand letter and not with a lawsuit. The Colorado Supreme Court decided Terra Management Group, LLC v. Keaten, 2025 CO 40, on June 23, 2025, en banc, affirming without remand.¹

It is a landlord-tenant case, not an HOA case. It is also the most immediately useful ruling of the period for a Colorado community manager, because the facts that triggered the duty are facts an association generates every week.

The rule

“[A] court may sanction a party for the destruction of relevant evidence if the party knew or should have known that (1) litigation was pending or reasonably foreseeable and (2) the destroyed evidence was relevant to that litigation.”

“Reasonably foreseeable” is an objective, flexible, fact-specific standard. It requires “more than the mere existence of a potential claim or the distant possibility of a lawsuit” — it means litigation that is “imminent, likely, or reasonably anticipated.”

What made litigation foreseeable

The case arose from chemical and methamphetamine contamination at an apartment property, and the spoliation sanction concerned destruction of an evicted tenant's belongings. The division below had relied on a short list of facts, and it is the list that should interest a manager:

the property manager's own incident report — filled out in part to prepare for possible legal action;

the tenants' vocal and persistent complaints about chemical fumes;

the tenants' own preservation efforts, including photographs and residue testing; and

the absence of any signal that they would not sue.

The Supreme Court affirmed, finding any error harmless.

1. Terra Management Group, LLC v. Keaten, 2025 CO 40 (Colo. June 23, 2025) — opinion (source of the quoted standard and the foreseeability factors) ↩
2. Prairie Walk Condominium Association v. The American Insurance Company, No. 1:22-cv-00870-DDD-KAS (D. Colo. Aug. 6, 2025) — order denying Rule 11 sanctions ↩
3. New Hampshire Insurance Co. v. TSG Ski & Golf, LLC, No. 23-1248 (10th Cir. Feb. 24, 2025) — published opinion ↩