July 21, 2018

Archives for March 6, 2014

Colorado Court of Appeals Kicks the Can as to Whether HPA Voids Limitations-of-Liability Clauses in Residential A/E Contracts Between Construction Professionals

Tim_GordonBy Timothy Gordon

Colorado’s Homeowner Protection Act (the “HPA”) protects homeowners by voiding any contractual provision that would result in the waiver of a homeowner’s rights under the Construction Defects Action Reform Act. C.R.S. § 13-20-806(7)(a). But some have argued that this same law should also void certain waivers and releases in agreements between construction professionals working on residential projects. Recently, the Colorado Court of Appeals was faced with, but did not decide, this issue.

The HPA provision in question provides as follows:

In order to preserve Colorado residential property owners’ legal rights and remedies, in any civil action or arbitration proceeding described in section 13-20-802.5 (1), any express waiver of, or limitation on, the legal rights, remedies, or damages provided by the “Construction Defect Action Reform Act”, this part 8, or provided by the “Colorado Consumer Protection Act”, article 1 of title 6, C.R.S., as described in this section, or on the ability to enforce such legal rights, remedies, or damages within the time provided by applicable statutes of limitation or repose are void as against public policy.

C.R.S. § 13-20-806(7)(a).

The reference to “section 13-20-802.5(1)” is to the definition of the word “Action”, which is defined as “a civil action or an arbitration proceeding for damages, indemnity, or contribution brought against a construction professional to assert a claim, counterclaim, cross-claim, or third party claim for damages or loss to, or the loss of use of, real or personal property or personal injury caused by a defect in the design or construction of an improvement to real property.” So the basic argument is that construction professionals who bring cross-claims or third party claims for indemnification against other construction professionals should be protected under C.R.S. § 13-20-806(7)(a).

In Taylor Morrison of Colorado, Inc. v. Bemas Construction, Inc., et al., 2014 COA 10, Taylor Morrison hired Terracon to perform certain geotechnical engineering and construction materials testing for a residential subdivision that Taylor Morrison was developing. After many homes were constructed, homeowners began complaining about cracks in the drywall. Taylor Morrison investigated the complaints and ended up spending significant amounts of money to remedy the defective conditions.

Taylor Morrison then sued Terracon to recover the money that it spent remedying the defects. Terracon’s contract with Taylor Morrison limited Terracon’s liability to $550,000, but Taylor Morrison was seeking more. So Taylor Morrison filed a motion with the trial court, asking the trial court to determine whether the HPA invalidated the limitation of liability in its contract with Terracon. The trial court ruled in favor of Terracon, holding that the HPA did not apply to invalidate a limitation of liability clause in a contract between it and Taylor Morrison because the HPA was meant to protect homeowners, not commercial entities. The Court of Appeals affirmed, but on different grounds. Specifically, the Court of Appeals held that the HPA could not apply retroactively to the contract between Terracon and Taylor Morrison. So the issue of whether the HPA would void a limitation of liability in an engineer’s agreement with a developer remains unresolved at the appellate level.

Consider the outstanding issue in light of the Court of Appeals’ decision in Mid Valley Real Estate Solutions V, LLC v. Hepworth-Pawlak Geotechnical, Inc., et al., 2013 COA 119. There, the Court of Appeals held that a bank holding title to residential property qualifies as a “homeowner” for purposes of the economic loss rule, and therefore may bring tort claims against construction professionals for construction defects. The Court’s reasoning in Mid Valley Real Estate Solutions is broad enough to include just about any person or entity holding title to residential property. So query the following:

  • Can developers who still hold title to homes that they have developed sue their own subcontractors and consultants in tort for alleged construction defects under Mid Valley Real Estate Solutions?
  • If so, are the developers bound by limitations of liability in their contracts with their subcontractors and consultants, or does the HPA void such limitations?
  • Finally, does it make sense to make a distinction between developers who still hold title to homes and developers who no longer hold title to homes when deciding whether or not the HPA applies?

Timothy Gordon represents construction and commercial real estate clients in complex disputes, and understands the interrelationship between the long-term real estate development, project construction, and property management. A thought leader in construction law, he currently authors Construction Law in Colorado, a blog that provides insight on key cases and developments relevant to construction law in Colorado, where this post originally appeared on February 21, 2014. He is the Co-Managing Editor of The Practitioner’s Guide to Colorado Construction Law, a three-volume treatise on construction law in Colorado.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Filing Fees Amended Along with Forms in Domestic, Probate, Seal My Case, and Other Categories

The Colorado State Judicial Branch continues to revise its JDF forms. In February and March 2014, forms were revised in the Adoption, Appeals, Domestic, Garnishment & Judgment, Probate, and Seal My Case categories, and the filing fees were also amended. Additionally, forms were added to the Seal My Case category regarding juvenile contacts with law enforcement that do not result in referrals to other agencies.

Forms are available here for download in PDF format. Forms are available as Word documents from the State Judicial website.

ADOPTION

  • JDF 526 – “Affidavit of Diligent Efforts” (R2/14)

APPEALS

  • JDF 126 – “Instructions to File a Small Claims or County Civil Appeal” (R2/14)

DOMESTIC

  • JDF 211 – “Motion to Reduce Payment for ODR Services and Supporting Financial Affidavit” (R3/14)
  • JDF 1804 – “Income Withholding for Support” (R2/14)

FEES

  • JDF 1 – “Filing Fees, Surcharges, and Costs in Colorado Courts” (R2/14)
  • JDF 205 – “Motion to File Without Payment of Filing Fee/Waive Other Costs Owed to the State and Supporting Affidavit” (R3/14)

GARNISHMENTS & JUDGMENTS

  • JDF 125 – “Order for Revival of Judgment” (R3/14)

PROBATE

  • JDF 998 – “Instructions for Completing Affidavit for Collection of Personal Property” (R2/14)
  • JDF 999 – “Collection of Personal Property by Affidavit” (R2/14)

SEAL MY CASE

  • JDF 301 – “Instructions to File an Expungement Juvenile ‘JD’ Case, Criminal ‘CR’ Case, or Municipal Case” (R3/14)
  • JDF 302 – “Petition for Expungement of Records” (R3/14)
  • JDF 303 – “Notice of Hearing on Petition for Expungement” (R3/14)
  • JDF 304 – “Order of Expungement of Records” (R3/14)
  • JDF 324 – “Petition for Expungement of Records for a Law Enforcement Contact Not Resulting in a Referral to Another Agency” (Added 3/14)
  • JDF 325 – “Notice of Hearing on Petition for Expungement of Records for a Law Enforcement Contact Not Resulting in a Referral to Another Agency” (Added 3/14)
  • JDF 326 – “Order of Expungement of Records for a Law Enforcement Contact Not Resulting in a Referral to Another Agency” (Added 3/14)

Click here for all of State Judicial’s JDF forms.

Colorado Court of Appeals: Announcement Sheet, 3/6/2014

On Thursday, March 6, 2014, the Colorado Court of Appeals issued no published opinion and 37 unpublished opinions.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.