June 25, 2017

Colorado Court of Appeals: Senior Living Facilities Constitute “Residential Property” for CDARA Purposes

The Colorado Court of Appeals issued its opinion in Broomfield Senior Living Owner, LLC v. R.G. Brinkmann Co. on Thursday, March 9, 2017.

Senior Facility—Residential—Commercial—Breach of Contract—Construction Defect Action Reform Act—Homeowner Protection Act of 2007—Accrual—Statute of Limitations—Public Policy—Manifestation of a Defect.

Broomfield Senior Living Owner, LLC (Broomfield) brought claims against R.G. Brinkmann Company (Brinkmann) for breach of contract, negligence, negligence per se, negligent misrepresentation, and breach of express warranties in connection with Brinkmann’s construction of Broomfield’s facility. Brinkmann moved for summary judgment, raising both contractual limitations and statutory limitations defenses to all of Broomfield’s claims. The trial court granted Brinkmann’s motion for summary judgment, reasoning that the two-year statute of limitations applicable to civil claims had expired before Broomfield filed its complaint and that Broomfield had waived its rights to assert claims for repairs under the contract by failing to give Brinkmann timely notice of defects or adequate time to make repairs.

On appeal, Broomfield contended that the trial court erred in granting summary judgment and applying the accrual provisions of the contract rather than the accrual provision of the Construction Defect Action Reform Act (CDARA), titled the “Homeowner Protection Act of 2007” (HPA). Under the parties’ contract, the contractual limitations period expired independent of when the acts or failures to act were discovered, while CDARA links the accrual of construction defect claims to their discovery. The HPA renders a contract’s limitation or waiver of CDARA’s rights and remedies void as against public policy in cases involving claims arising from residential property. The Colorado Court of Appeals determined that the term “residential” is “unambiguous and means an improvement on a parcel that is used as a dwelling or for living purposes.” Here, the building is used as a home for senior residents. Accordingly, the senior facility is “residential property,” Broomfield is a “residential property owner,” and the HPA applies. As such, the contract’s terms limiting the accrual of claims are void as a matter of public policy, and the relevant statutory claims accrual periods apply, making Broomfield’s action timely.

Broomfield also contended that the trial court erred in precluding its breach of warranty claim based on its failure to give Brinkmann an opportunity to correct the defects. The court determined that genuine issues of material fact remain regarding whether Brinkmann received prompt notice of the defects and whether it had an adequate opportunity to correct its work.

Broomfield further argued that the trial court erred in concluding that its negligence claims were barred and that it failed to establish that Brinkmann performed design services. The court concluded that these claims were not barred and the parties offered conflicting design services evidence. Further, a genuine issue of fact remains concerning whether the alleged defects are patent or latent.

The judgment was reversed and the case was remanded.

Summary provided courtesy of The Colorado Lawyer.

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