Breach of Contract Statute of Limitations
City and County of Denver v. Board of County Commissioners of Adams County.
January 29, 2024
The Supreme Court clarified when a breach of contract claim accrues (begins to run) for purposes of the applicable three-year statute of limitations. The Court held that a breach of contract claim accrues at the time the breach is, or in the exercise of reasonable diligence should have been, discovered. Because a division of the court of appeals applied an accrual rule based on when a plaintiff becomes aware of damages and possesses certainty of harm and incentive to sue, it erred. The division’s holding is inconsistent with the plain and ordinary meaning of the language of Colorado’s accrual statute (see CRS § 13-80-108(6), the relevant case law, and the public policy considerations that underpin statutes of limitations).
Here, Adams County learned no later than 1995 that the City and County of Denver breached the parties’ contract by using a noise-modeling system instead of a noise-monitoring system at Denver International Airport. It follows that the breach of contract claim Adams County brought in this case in 2018 accrued no later than 1995 and is barred by the statute of limitations. It is immaterial when Adams County became aware of the full extent of its damages and acquired certainty of harm.