When Can Non-Parties Enforce an Arbitration Agreement? Colorado Court Stands Firm on Fundamental Contract Law

A recent Colorado federal court decision highlights both the enforceability and limits of arbitration agreements and why the fine print matters when determining who can enforce arbitration. Crostarosa v. LAZ Parking Ltd. (USDC Colo. Jan. 23, 2026) produced a split result that underscores a critical principle—that arbitration is fundamentally a matter of consent and contract, and that consent doesn’t automatically extend to parties you never agreed to deal with. While Crostarosa centers on a silly unpaid parking ticket, the case offers important lessons about arbitration agreements, contract law and illuminates how courts must balance the strong federal policy favoring arbitration against basic Colorado contract law.

Background

LAZ Parking Ltd. provides parking management services all over the country, including Denver, Colorado. Parking Revenue Recovery Services (PRRS) enforces parking payments for facilities managed by LAZ, and it does so by using a video analytics system technology from Asura Technologies USA, Inc. In February 2022, Lucas Crostarosa parked without paying at a Denver parking lot managed by LAZ. A month later, PRRS sent him an $80 citation.

The parking lot featured multiple large red signs posted throughout the facility—at the entrance, at the exit, and near the payment kiosk. These signs were hard to miss—bright red backgrounds with white text, larger all-caps fonts for headers like “ARBITRATION,” and content organized into three paragraphs.

The signs stated three key terms:

1. “NO FREE PARKING ANY TIME” – “You must pay for parking within 10 minutes of entering this Lot.”
2. “PARKING ENFORCEMENT” – “This Lot’s rules and use limitations are strictly enforced by Parking Revenue Recovery Services, Inc. This Lot may be monitored by License Plate Recognition technology to ensure compliance with the rules. Vehicles failing to comply with Lot rules will be charged additional parking fees up to $150.00 and may be subject to towing or booting, to the extent permitted by law. Unpaid parking fees will be assigned for collection to a debt collector.”
3. “ARBITRATION” – “By parking on this Lot, you hereby agree that the sole remedy for an unresolved dispute is binding arbitration and specifically waive the right to a jury trial, class action and/or class arbitration.”

Notably, the signs explicitly identified PRRS as the entity enforcing the lot’s rules. The sign made no mention of LAZ or Asura.

Crostarosa sued all three companies but didn’t challenge the ticket itself—he sued them under the Driver’s Privacy Protection Act (DPPA), claiming the defendants illegally accessed his motor vehicle records to get his home address. LAZ, PRRS and Asura moved to compel arbitration arguing that by parking in the lot, Mr. Costarosa entered into a contract with defendants and that the contract included an arbitration agreement. The parking lot had large, conspicuous red signs stating that “by parking on this Lot, you hereby agree that the sole remedy for an unresolved dispute is binding arbitration.”

On January 23, 2026, Judge Nina Y. Wang of the U.S. District Court for the District of Colorado issued a nuanced and important ruling granted arbitration for one defendant while denying it for two others.

Who Contracted with Whom?

The court found—and the parties essentially agreed—that only Crostarosa and PRRS were parties to the contract. Reasoning that when Crostarosa drove into the lot and parked, he manifested his assent to the terms posted on the signs. By taking advantage of the parking space (consideration), he accepted the offer to park under the stated conditions. This created an “implied contract”—formed not by signatures or verbal agreement, but by conduct.

The contract was specifically with PRRS because the signs explicitly named PRRS as the entity enforcing the lot’s rules and stated that PRRS would be the one charging additional fees and pursuing collection. While LAZ owned and operated the lot, and Asura provided the technology, the court found the contractual relationship for enforcement purposes was between the driver and PRRS. This distinction proved critical. LAZ and Asura were, in legal terms, “non-signatories” or “non-parties” to the arbitration agreement. They weren’t named in the contract, and Crostarosa never directly agreed to anything with them by the act of parking.

When an Arbitration is Enforceable

Judge Wang found that Crostarosa had indeed entered into a binding contract with PRRS simply by parking in the lot. The court emphasized that:

1. Conspicuous notice matters: The signs were large, red, used contrasting fonts, and were posted at entrances, exits, and payment kiosks. “A reasonable driver knows that when they park in a parking lot, they agree to an implied contract with the lot owner,” the court noted.
2. “I didn’t see it” doesn’t work: Crostarosa argued he didn’t see the signs because it was dark. The court rejected this, holding that “a party generally cannot avoid contractual obligations by claiming that he or she did not read the agreement.”
3. Broad language covers broad disputes: The arbitration clause referenced “an unresolved dispute,” not just parking payment disputes. The court found this language functionally equivalent to “all disputes” and therefore, found the arbitration agreement was broad enough to encompass the DPPA claim, which was directly connected to the parking enforcement process described in the contract.

Result: Crostarosa must arbitrate his claim against PRRS.

When an Arbitration Agreement is not Enforceable

Here’s where it gets interesting. LAZ Parking and Asura Technologies—the companies that manage the lot and provide the license plate recognition technology—tried to piggyback on PRRS’s arbitration agreement. They argued that because all the claims were “intertwined” and “inseparable,” Crostarosa should be equitably estopped from suing them in court while arbitrating against PRRS. Judge Wang said no, citing a crucial 2019 Colorado Supreme Court decision: Santich v. VCG Holding Corp.

What is Equitable Estoppel? In Colorado, equitable estoppel arises where one party induces another to detrimentally change position in reasonable reliance on that party’s actions through words, conduct, or silence.

The Santich Rule: Colorado law rejects a “special” form of equitable estoppel for arbitration agreements. To compel arbitration as a non-signatory, defendants must prove all four traditional elements of equitable estoppel:

1. The party against whom estoppel is asserted must know the relevant facts
2. That party must intend its conduct to be acted upon
3. The party claiming estoppel must be ignorant of the true facts
4. The party asserting estoppel must have detrimentally relied on the other party’s conduct

LAZ and Asura made no attempt to prove these elements—particularly detrimental reliance. The court acknowledged this might lead to “piecemeal litigation” with some claims in arbitration and others in court, but held that “policy reasons alone cannot replace necessary predicates for the application of equitable estoppel.”

Result: The lawsuit against LAZ and Asura proceeds in federal court.

Key Takeaways

This decision illustrates three critical principles:

For consumers: You can form binding contracts—including arbitration agreements—through conduct, not just signatures. When you see terms posted in a parking lot, store, or website, courts may hold you to them if they’re sufficiently conspicuous.

For businesses: If you’re not actually party to an arbitration agreement, you can’t automatically force arbitration just because your co-defendants can. The “intertwined claims” theory doesn’t work in Colorado without proving all elements of equitable estoppel.

For lawyers: State law matters. While some jurisdictions may recognize broader theories allowing non-signatories to enforce arbitration agreements, Colorado follows a strict approach post-Santich. The detrimental reliance element is particularly difficult for non-signatory defendants to establish.

What Happens Next?

Assuming all parties move forward, it would proceed on two parallel tracks: Crostarosa will arbitrate his DPPA claim against PRRS, while simultaneously litigating the identical claim against LAZ and Asura in federal court. In practice, the parties should agree on one forum for economical and judicial efficiency. The court stayed only the PRRS litigation pending arbitration and ordered the parties to confer about how to manage these parallel proceedings.

It’s an awkward result that may lead to inconsistent outcomes—an arbitrator could find a DPPA violation while a court could find none, or vice versa. But as Judge Wang made clear, that’s the consequence of Colorado’s strict approach to arbitration enforcement: only those who are actually parties to an arbitration agreement can enforce it, absent a clear showing of all equitable estoppel elements. In an era where arbitration clauses appear everywhere from employment contracts to parking lots, Crostarosa serves as a reminder that these agreements have limits—and that not every defendant gets to hide behind someone else’s arbitration clause.

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