April 19, 2019

Colorado Court of Appeals: Statute of Repose Acts as Absolute Bar to Bringing Suit After its Expiration

The Colorado Court of Appeals issued its opinion in Sierra Pacific Industries, Inc. v. Bradbury on Thursday, September 8, 2016.

Construction Defect Action Reform Act—Summary Judgment—Statute of Repose.

Sierra Pacific Industries, Inc. hired Bradbury to install windows and doors on a condominium construction project. Bradbury began and completed this work in 2002.Sierra Pacific attended to leaks and water damage between 2004 and 2011, including two substantial retrofit repairs in 2005 and 2011. Bradbury did some repair work in 2004. Construction defect litigation resulted over the cost of the repairs.

In 2014 Sierra Pacific filed this indemnification action against Bradbury to recover losses incurred in the settlement of the defective construction case and damages for related contractual breaches. Bradbury filed for summary judgment under C.R.C.P. 56(b), asserting that the claims, brought nearly 10 years after Bradbury ceased repair efforts, were time barred by the six-year statute of limitation in Colorado’s Construction Defect Action Reform Act. The trial court granted Bradbury’s motion for summary judgment.

On appeal, Sierra Pacific argued it was error to find that its claims were barred by the six-year statute of repose because under C.R.S. § 13-80-104(1)(b), it was allowed to file claims against Bradbury within 90 days of settling the underlying case in 2014, notwithstanding the statute of repose. This exact argument was previously rejected by a division of the court of appeals and the court here rejected it for the same reasons. The court concluded that the settlement in the underlying case did not impact the application of the statue of repose.

Sierra Pacific also contended that summary judgment was inappropriate because there remains a dispute of material fact as to when the statute of repose expired. Sierra Pacific argued that even if the statute of repose was not tolled by the settlement, the period of repose did not commence until the improvements to the property were completed in 2011. C.R.S. §§ 13-80-104(1)(a) and (2) provide a statute of repose that expires six years after substantial completion of improvements to real property, unless it is extended two years because the underlying cause of action arose during the fifth or sixth year after such substantial completion. Sierra Pacific argued that “substantial completion” did not occur until the repairs were finished in 2011. The court reasoned that a subcontractor has substantially completed its role in the improvement at issue when it finishes working on the improvement, and the statute of repose commences upon substantial completion. Here, the project was substantially completed in 2002, or in no event later than 2004, when the last repairs by Bradbury were completed. Moreover, there is no tolling of the statute of repose based on another’s efforts to repair work.

Under the applicable statute of repose, Sierra Pacific’s claims against Bradbury were time barred, and the district court properly granted Bradbury’s motion for summary judgment. The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

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