June 24, 2017

Colorado Supreme Court: CCIOA Permits Developer to Retain Right of Consent to Declaration Amendments

The Colorado Supreme Court issued its opinion in Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc. on Monday, June 5, 2017.

Colorado Common Interest Ownership Act—Declaration Amendments—Arbitration Agreements—Colorado Consumer Protection Act Claims.

This case concerned whether (1) the Colorado Common Interest Ownership Act, C.R.S. §§ 38-33.3-101 to -402, permits a developer–declarant to retain a right of consent to amendments to a provision of a common interest community’s declaration mandating arbitration of construction defect claims, and (2) the Colorado Consumer Protection Act, C.R.S. §§ 6-1-101 to -1121, precludes arbitration of claims asserted pursuant to that Act. Answering the first question in the affirmative and the second in the negative, the supreme court affirmed the court of appeals’ judgment requiring arbitration of the claims at issue and remanded the case for further proceedings consistent with this opinion.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: CGIA Does Not Apply to Claims by Metropolitan District Against Developers

The Colorado Court of Appeals issued its opinion in Tallman Gulch Metropolitan District v. Natureview Development, LLC on Thursday, May 18, 2017.

Colorado Governmental Immunity Act—Public Employee Immunity for Torts.

Richardson owned Natureview Development, LLC (Natureview) and platted and developed Tallman Gulch, a real estate development. In 2006, the Tallman Gulch Metropolitan District (the District) was formed to provide public improvements and services to its residents and taxpayers. Richardson was president of the District’s Board of Directors (Board). Tallman Gulch went into foreclosure, and despite being aware of the foreclosure proceedings, Richardson, acting as president of the District’s Board, signed off on the issuance of $4,214,000 in bonds to Natureview in exchange for the then-existing infrastructure improvements in Tallman Gulch. Ten days after the bonds were issued, the district court authorized the public trustee sale of Tallman Gulch, which was sold in 2011.

The District filed various claims against Natureview and Richardson, alleging it suffered an injury when it issued over $4 million in bonds to Natureview and Richardson, despite Tallman Gulch’s foreclosure status. The District argued that Richardson breached his fiduciary duty to the District as a Board member by approving issuance of bonds in a financially reckless manner and in bad faith, failing to disclose and consider the development’s financial and foreclosure status in making the bonds decision. Defendants moved to dismiss on various grounds. As relevant here, defendants argued that the court lacked subject matter jurisdiction over the claims against Richardson under CRCP 12(b)(1), asserting that the claims were based on Richardson’s actions as an officer of the District and were thus barred by the Colorado Governmental Immunity Act (CGIA). The court denied the motion to dismiss.

On appeal, defendants argued it was error to conclude the CGIA did not apply to the District’s claims against Richardson. Richardson argued that as a public employee he was immune under the CGIA with regard to the District’s tort claims against him. Here, the District, the public entity that employed Richardson, sued him for his malfeasance while in its employ. The plain language of the statute is unambiguous as to the immunity of the entity or employee when called upon to defend against tort claims, but it is silent as to suits brought by a public entity plaintiff. The CGIA clearly states that its purpose is to limit the liability of public entities in defending against tort claims, and thus to lessen the burden on taxpayers who provide funding for public entities. To prevent the District from recovering its loss by allowing Richardson to claim immunity as a public employee does not effectuate the purposes of the CGIA. The Court of Appeals concluded that the district court correctly concluded that the CGIA did not on its face apply to the District’s claims against Richardson.

The order was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Set-Off to Other Liable Parties Should be Applied to Jury Verdict before Contractual Limitation

The Colorado Court of Appeals issued its opinion in Taylor Morrison of Colorado, Inc. v. Terracon Consultants, Inc. on Thursday, May 18, 2017.

Contract—Limitation on Liability—Setoff—Jury Award—Statutory Costs—Prejudgment Interest—Post-Judgment Interest—Expert Testimony—Willful and Wanton—Settlement Statute—Costs.

Taylor Morrison of Colorado, Inc. (Taylor) was the developer of a residential subdivision. Taylor contracted with Terracon Consultants, Inc. (Terracon) to provide geotechnical engineering and construction materials testing services for the development of the subdivision. Taylor and Terracon agreed to cap Terracon’s total aggregate liability to Taylor at $550,000 (Limitation) for any and all damages or expenses arising out of its services or the contract. After homeowners notified Taylor about drywall cracks in their houses, Taylor investigated the complaints and then sued Terracon and other contractors for damages relating to those defects. After trial, the jury awarded Taylor $9,586,056 in damages, but also found that Terracon’s conduct was not willful and wanton. The court concluded that the Limitation includes costs and prejudgment interest and applied it to reduce the jury’s $9,586,056 damages award to $550,000. It also deducted the $592,500 settlement received from the other liable parties to arrive at zero dollars. The court found that neither party prevailed for purposes of awarding statutory interest and further concluded that neither Terracon’s deposit of $550,000 into the court registry nor its email to Taylor addressing a mutual dismissal constituted a statutory offer of settlement that would have allowed Terracon a costs and fees award.

On appeal, Taylor contended that the trial court erroneously deducted the setoff from the Limitation instead of deducting it from the jury damages verdict. The correct approach is to first apply the setoff against the jury verdict and then apply the contractual limitation against this reduced amount. Thus, Terracon’s liability according to the Limitation should have been a final judgment of $550,000 for Taylor.

Taylor next contended that the trial court erred when it concluded that the Limitation, by its terms, includes statutory costs and prejudgment interest. The pertinent contract language states that the Limitation applies to “any and all” expenses “including attorney and expert fees.” Thus, the Limitation’s language covers costs associated with interpreting and enforcing the contract.

Taylor further argued that the trial court erred in ruling that the Limitation does not include prejudgment interest within its cap on liability. The Limitation caps Terracon’s liability for “any and all injuries, damages, claims, losses, or expenses.” (Emphasis in original.) Because prejudgment interest is a form of damages, the Limitation also covers prejudgment interest. Taylor also asserted that post-judgment interest is not covered by the Limitation. The Court of Appeals agreed because post-judgment interest is not an element of compensatory damages.

Taylor next argued that the trial court’s exclusion of expert testimony concerning willful and wanton conduct was reversible error. Here, the court allowed the experts to testify about the factual conduct and opine on Terracon’s performance using characterizations within their expertise, but prevented testimony about legal concepts outside their expertise and whether a legal standard was met.

Terracon argued on cross-appeal that the trial court erred by not awarding it costs under Colorado’s settlement statute. Terracon’s deposit of $550,000 into the court registry pursuant to C.R.C.P. 67(a) was not a settlement offer because Taylor did not have the option to reject it. The statute requires both an offer and a rejection; thus the statute was not triggered, and Terracon is not entitled to costs. Further, Terracon’s email did not comply with C.R.S. § 13-17-202 because this alleged “settlement offer” contained nonmonetary conditions that extended the offer beyond the claims at issue. Therefore, there was no error in denying costs to Terracon.

The judgment was reversed as to the final award and the case was remanded with instructions. The judgment and orders were affirmed in all other respects.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Privity of Contract Must Exist for Breach of Warranty of Suitability Claim

The Colorado Supreme Court issued its opinion in Forest City Stapleton, Inc. v. Rogers on Monday, April 17, 2017.

Implied Warranty of Suitability—Privity of Contract—Implied Warranties.

The Colorado Supreme Court considered whether privity of contract is necessary for a home buyer to assert a claim for breach of the implied warranty of suitability against a developer. The court concluded that because breach of the implied warranty of suitability is a contract claim, privity of contract is required in such a case. Here, the home buyer was not in privity of contract with the developer and thus cannot pursue a claim against the developer for breach of the implied warranty of suitability. Accordingly, the court of appeals’ judgment was reversed and the case was remanded for further proceedings.

Summary provided courtesy of The Colorado Lawyer.

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.

Colorado Supreme Court: Third-Party Claims in Construction Defect Case Timely Under C.R.S. § 13-80-104(1)(b)(II)

The Colorado Supreme Court issued its opinion in In re Goodman v. Heritage Builders, Inc. on Monday, February 27, 2017.

Construction Defects—Statute of Repose—Statute of Limitations.

In this case, the Colorado Supreme Court considered the parameters for timeliness of third-party claims in construction defect cases. The court concluded that such claims are timely, irrespective of both the two-year statute of limitations in C.R.S. § 13-80-102 and the six-year statute of repose in C.R.S. § 13-80-104(1)(a), so long as they are brought at before the 90-day time frame outlined in C.R.S. § 13-80-104(1)(b)(II). Accordingly, the court made its rule to show cause absolute.

Summary provided courtesy of The Colorado Lawyer.

HB 17-1169: Giving Construction Professionals the Right to Cure Alleged Defects

On February 6, 2017, Rep. Timothy Leonard and Sen. Jack Tate introduced HB 17-1169, “Concerning a Construction Professional’s Statutory Right to Repair under the ‘Construction Defect Action Reform Act’.”

The bill clarifies that a construction professional has the right to receive notice from a prospective claimant concerning an alleged construction defect; to inspect the property; and then to elect to either repair the defect or tender an offer of settlement before the claimant can file a lawsuit seeking damages.

The bill was introduced in the House and assigned to the State, Veterans, and Military Affairs Committee. It is scheduled to be heard in committee on March 1, 2017, at 1:30 p.m.

SB 17-045: Requiring Equitable Allocation of Costs in Construction Defect Claims

On January 11, 2017, Sens. Angela Williams & Kevin Grantham and Reps. Cole Wist & Crisanta Duran introduced SB 17-045, “Concerning a Requirement for Equitable Allocation of the Costs of Defending a Construction Defect Claim.”

In a construction defect action in which more than one insurer has a duty to defend a party, the bill requires the court to apportion the costs of defense, including reasonable attorney fees, among all insurers with a duty to defend. An initial order apportioning costs must be made within 90 days after an insurer files its claim for contribution, and the court must make a final apportionment of costs after entry of a final judgment resolving all of the underlying claims against the insured. An insurer seeking contribution may also make a claim against an insured or additional insured who chose not to procure liability insurance for a period of time relevant to the underlying action. A claim for contribution may be assigned and does not affect any insurer’s duty to defend.

The bill was introduced in the Senate and assigned to the Business, Labor, & Technology Committee. It is scheduled for hearing in committee on February 2 at 2 p.m.

Colorado Court of Appeals: Attorney’s Prelitigation Statements Must Be Made in Good Faith to Qualify as Privileged

The Colorado Court of Appeals issued its opinion in Begley v. Ireson on Thursday, January 12, 2017.

Belinda Begley and Robert Hirsch, and their joint revocable trust (collectively, plaintiffs), purchased a property in Denver with the intent of demolishing the existing house and building a new house. Their architect’s plans were approved by the City & County of Denver, and plaintiffs contracted with a builder to begin demolition in anticipation of construction. The builder demolished the old house and began the shoring work for the new house. The neighbors, Ireson and Hoeckele, along with their attorney, Gibbs (collectively, defendants), made several threatening statements to the builder, which caused him to cease work and breach his contract with plaintiffs.

Plaintiffs filed a complaint against defendants, alleging intentional interference with a contract and intentional interference with prospective contractual relations. Several days later, defendants filed suit against plaintiffs, and moved to dismiss plaintiffs’ complaint under C.R.C.P. 12(b)(5) for failure to state a claim, arguing that their allegedly tortious statements were made in anticipation of litigation and were therefore protected. The district court apparently took judicial notice of defendants’ suit and granted their C.R.C.P. 12(b)(5) motion. Plaintiffs appealed.

The Colorado Court of Appeals first noted that motions to dismiss under C.R.C.P. 12(b)(5) are viewed with disfavor. The district court had ruled that the plaintiffs’ complaint failed to state a claim because there was no allegation that the statements by Hoeckele, Ireson, and Gibbs caused the builder to breach his contract. The court of appeals found this was error. The complaint alleged with specificity several incidents in which Ireson, Hoeckele, and Gibbs interfered with the construction contract, and the court held that nothing more was required to survive the motion to dismiss. The court reversed the district court’s grant of defendants’ motion.

The district court next ruled that because Gibbs’ statements and communications to the builder were made while he was representing Ireson and Hoeckele and were “in anticipation and in furtherance of litigation,” they were absolutely privileged against the torts that plaintiffs alleged. The court of appeals again found that this ruling was in error. The court analyzed several state appellate court decisions, as well as section 586 of the Restatement (Second) of Torts, and determined that prelitigation statements must be made in good faith to be privileged. Because the district court made no finding as to whether Gibbs’ statements were made in good faith, the court of appeals reversed and remanded.

The court of appeals reversed the district court’s rulings and remanded for further proceedings.

Top Ten Programs and Homestudies of 2016: The Best of the Rest

The year is drawing to a close, which means that the compliance period is ending for a third of Colorado’s attorneys. Still missing some credits? Don’t worry, CBA-CLE has got you covered.

Today on Legal Connection we are featuring the Best of the Rest: the top programs and homestudies in the areas of law not previously covered, including construction law, disability law, agricultural law, water law, natural resources law, immigration law, and marijuana law. Although these practice areas are varied, the homestudies and programs featured below are top-notch. For practitioners in these areas of law, visit cle.cobar.org/Practice-Area to find more programs and homestudies in your area of practice, and visit cle.cobar.org/Books to search our selection of books.

Construction Law — Residential Construction Defect Law 2016: Intermediate to Advanced Class
The program will highlight significant construction defect liability, damages and insurance developments occurring over the past two years and described in the Fifth Edition of Residential Construction Law in Colorado (CLE in Colo., 2015) written by Ronald M. Sandgrund, Scott F. Sullan and Leslie A. Tuft. A copy of the book is included as part of the course materials. No written materials other than a list of cases and statutes discussed will be supplied. This program is an advance program and is not intended to provide a general overview of construction defect law or practice. Each Homestudy includes a PDF copy of the CLE book, Residential Construction Law in Colorado, 5th Edition. Order the Video OnDemand here, the CD homestudy here, and the MP3 here. Available for 3 general credits.

Immigration Law — Immigration Law 2016
Attend this program and you will receive practical training for representing individuals in immigration proceedings, including juveniles and survivors seeking asylum and other humanitarian relief. Topics covered include: Immigration Law 101, Special Immigrant Juvenile Status, U Visas, T Visas, and VAWA, Cancellation of Removal and Trial Advocacy Skills in Immigration Court, Asylum Law, and Model Asylum Hearing. Order the Video OnDemand here, the CD homestudy here, and the MP3 here. Available for 7 general credits.

Water Law — Water Law 101 in 2016
This is the eighth in a series of courses related to Colorado water law and administration. This particular course will introduce you to the basic legal framework governing Colorado water law, rights, and administration as of 2016. You will become familiar with court cases, matters and issues critical to your understanding of water and water law in Colorado. You will learn about Colorado’s different types of water rights, how they are administered, the role of the State and Division Engineers, and what is required for changes of water rights. Order the Video OnDemand here, the CD homestudy here, and the MP3 here. Available for 7 general credits.

Environmental Law — Colorado’s Future Energy Economy: Legal Landscape
Attend this program and hear perspectives of officials and leaders at national and state and federal government levels on the direction of Colorado’s energy industry. Plus, gain invaluable insights on such from environmentalists, the energy industry, academia, and private firm practitioners. Take advantage of this unique opportunity to learn about the latest developments in the legal landscape behind Colorado’s energy and natural resources industries. Attend this program and personally unravel the issues with the experts. AND, at the same time, you will sharpen your practice skills and expand your knowledge to better serve your clients! Order the Video OnDemand here, the CD homestudy here, and the MP3 here. Available for 7 general credits, including 1 ethics credit.

Natural Resources Law — Oil, Gas, and Mining: Current Legal Issues
This Oil, Gas and Mining Law program is the one to attend to get up to speed on energy issues currently affecting Colorado and the West. You will leave this seminar with a better understanding of the latest regarding pertinent litigation, regulations and solutions for quieting title, financing, and distressed companies. Taught by experts, this program will provide you with an opportunity to network with colleagues and experts, and to catch up on hot topics in the energy law arena. Order the Video OnDemand here, the CD homestudy here, and the MP3 here. Available for 9 general credits, including 1 ethics credit.

Disability Law — Social Security Disability: Advanced Practice
Your distinguished panel of Judges, ODAR and Colorado Disability Determination Services Officials, a vocational expert, and seasoned private firm SSDI practitioners will provide you with the latest information on: Changes, Statistics, and Findings of the Colorado Disability Determination Services Office, What’s Happening in Region 8 and at Headquarters – Office of Disability Adjudication and Review?, State of the Denver Regional Office of Disability Adjudication and Review, Attorney Fee Agreements and Fee Petitions, How-to’s of Vocational Expert Examination, Perspectives of the Appeals Council, Appeals Council and Federal District Court Arguments, Case Law and Rulings, and How to File in Federal Court and Win! Order the Video OnDemand here, the CD homestudy here, and the MP3 here. Available for 8 general credits.

Agricultural Law — Rural Land Transactions: Contract Issues
Whether you represent the buyer or seller of ranch land, cattle, timber or recreational ranches, farms or other rural lands, this program is for you! Attend and your faculty of seasoned real estate attorneys and brokers will guide you through the nuances of rural land transactions, and help you avoid mistakes and potential pitfalls. You will receive straightforward guidance on Buyer Entity Pros and Cons, Federal Grazing Permits, Water, Mineral and Wind Rights, Growing Crops, and much more. Order the Video OnDemand here, the CD homestudy here, and the MP3 here. Available for 4 general credits.

Marijuana Law — Enforcing Cannabis Contracts, Including the Use of Arbitration in the Cannabis Industry
A key fear in the cannabis industry is the extent to which cannabis-related contracts are enforceable. This goes beyond contracts for the sale of cannabis itself and may include any number of legal instruments that touch a cannabis business. Although a number of recent court decisions in the Colorado state and federal courts indicate a trend toward the enforcement of cannabis-related contracts, and these cases will be discussed, many doubts remain regarding the enforceability of cannabis-related contracts. Arbitration provides a unique forum for the resolution of cannabis-related disputes that may provide greater legal certainty and enforceability. This CLE presentation covers the nuts and bolts of arbitration law relevant to the enforcement of purportedly illegal contracts, and goes beyond to identify techniques counsel should consider when drafting arbitration clauses for cannabis businesses and their partners. Order the Video OnDemand here, the CD homestudy here, and the MP3 here. Available for 3 general credits.

Colorado Court of Appeals: Insurer Required to Pay Portion of Costs Regardless of Whether Coverage Existed

The Colorado Court of Appeals issued its opinion in Mt. Hawley Insurance Co. v. Casson Duncan Construction, Inc. on Thursday, November 3, 2016.

Insurance—Partial Summary Judgment.

A homeowners association (HOA) sued developer Mountain View Homes III (MVH III) and general contractor Casson Duncan Construction Inc. (Casson Duncan) on defective construction claims. In arbitration, MVH III’s insurer, Mt. Hawley Insurance Co. (Mt. Hawley), defended under a reservation of rights. The arbitration resulted in awards of damages and taxable costs to the HOA. Casson Duncan paid the costs award, for which it and MVH III were jointly liable, and thereafter sought contribution from MVH III and Mt. Hawley.

Mt. Hawley initiated this action against MVH III, the HOA, and Casson Duncan, requesting a declaration that there was no coverage under its commercial general liability policies with MVH III for either the costs or damages awarded in the arbitration. Casson Duncan filed a counterclaim for declaratory and monetary relief against Mt. Hawley for payment of MVH III’s portion of the costs award. The parties filed cross-motions for summary judgment on coverage issues. The district court denied summary judgment on all but one issue: it determined that Mt. Hawley was, as a matter of law, responsible for paying MVH III’s portion of the cost award, regardless of whether it was also responsible for paying its portion of the damages award. This partial summary judgment ruling was certified as “final” for purposes of permitting appellate review.

On appeal, Mt. Hawley argued that the district court erred in granting partial summary judgment because Mt. Hawley’s responsibility for paying costs was inextricably linked to the question of whether the policies provided MVH III with coverage for the HOA’s claims, and because the coverage issues had not been determined, the costs issues could not be determined either. The court of appeals interpreted the policies to decide the issue. The insurance policies had standard “coverages” and “exclusions” sections and provided that the insurance company would pay “[a]ll costs taxed against the insured in the ‘suit,’” where “suit” clearly covered the arbitration proceeding. The obligation to pay costs was not linked to coverage but simply to the defense of the case. Because Mt. Hawley conducted MVH III’s defense in the arbitration proceedings, it was obligated to pay MVH III’s portion of taxable costs.

Mt. Hawley also argued that its reservation of rights letter superseded the policies’ costs provisions. A reservation of rights does not destroy the insured’s rights or create new rights in the insurer. The Colorado case law exception to this principle applies to defense costs, and defense costs are different from costs taxed against an insured.

Lastly, Mt. Hawley asserted that the court’s interpretation of the policies leads to absurd results. Mt. Hawley agreed in its policies to pay all costs taxed against MVH III in suits in which it defended MVH III. If Mt. Hawley wanted to avoid the result here, it could have changed the language in its policy regarding coverage of such costs.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Construction Defect Claims Filed Against Subcontractors were Time-Barred

The Colorado Court of Appeals issued its opinion in Sopris Lodging, LLC v. Schofeld Excavation, Inc. on Thursday, October 20, 2016.

Construction Defect—Summary Judgment—Time Bar.

TDC was the general contractor for construction of a hotel owned by Sopris Lodging (Sopris). On March 11, 2011, Sopris sent TDC a notice of claim regarding alleged construction defects at the hotel. On May 24, 2013, Sopris filed a complaint in district court asserting construction defect claims against one of the subcontractors of the hotel and against TDC’s individual principals, who had guaranteed TDC’s performance. On the same date, Sopris and TDC entered into an agreement to toll the statute of limitations for Sopris’s claims against TDC.

In 2014, TDC filed third-party claims against several subcontractors including Schofield and CEC for breach of contract, negligence, contribution, and indemnification. CEC and Schofield moved for summary judgment, asserting the claims were barred by the two-year statute of limitations in C.R.S. § 13-80-102. TDC did not dispute that the claims accrued on or before March 11, 2011 but argued C.R.S. § 13-80-104(1)(b)(II) tolled the statute of limitations for a defendant’s third-party clams until 90 days after a settlement or final judgment on the plaintiff’s claims against the defendant. The district court entered summary judgment in favor of CEC and Schofield.

On appeal, Sopris (standing in the shoes of TDC following a settlement and assignment of the third-party claims) argued it was error to find the claims time-barred. C.R.S. § 13-80-104(1)(b)(II) gives a contractor the option to bring indemnity or contribution claims against subcontractors in a separate lawsuit after the underlying claims are resolved and tolls the statute of limitations for such claims. But because TDC asserted third-party claims in the original construction defect litigation, the tolling section does not apply. Thus TDC’s third-party claims were time barred.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.