Colorado construction defect statute of limitations
Colorado statute of limitations – construction defects lawsuit.
Stutheit & Gartland recently won a trial court decision which dismissed our engineer client from a construction defect lawsuit. The basis for dismissal was the lawsuit was file too late, in violation of the statute of limitations for construction defect lawsuits.
Our client engineer and all the contractors involved with construction of a mixed use housing and retail building were sued for negligent design, negligent installation, and negligent repair of the hvac systems. All defendants got out of the lawsuit for their original work. The court applied the Colorado statute of limitations, which says actions brought against engineers and other construction professionals must be commenced within two years after the construction defect claim arises. A claim “arises”at the time the claimant discovers or in the exercise of reasonable diligence should have discovered the physical manifestations of a defect in the improvement which ultimately causes the injury. A claimant who knows or should know about a defect cannot wait until the defect causes an injury before it files a lawsuit.
Almost two years after the building was finished, the owner demanded that the engineer and contractors fix what he realized was a problem. Based on our advice, our client had refused to participate in repairs. We were not being stubborn or belligerent, but we knew the property owner was litigious and hard to please. We did offer to have the engineer assess the problem if the owner would sign a new contract and pay for the assessment. The contractors did attempt to make repairs, for free. They ended up having to pay money to settle the lawsuit against them because their efforts at repair caused them to be subject to a new claim – for negligence in making the repairs. The statute of limitations for that claim did not start to run until after the repairs failed.
Some lessons from this case:
1) If you are a construction professional, don’t assume that providing free services or attempting to make repairs will make the problem go away. In fact, you may be opening a new statute of limitations. This is not to say you should disregard your obligation to do warranty work, if you are obligated by contract to give warranty repairs. But if an owner asks for your help long after a project is done, you must be careful.
2) If you are a property owner, don’t wait to see how bad the situation gets before you see a lawyer. Your statute of limitations clock begins ticking once you see the physical manifestation of a defect. A physical manifestation is a perceptible, and visible expression of something else (e.g., a fire is the physical manifestation of faulty wiring). You as an owner don’t get to wait to sue until you figure out whether or not the fire occurred because the wiring was faulty. The clock starts at the time of the fire. You don’t get to wait to see just how bad things may get. If you see one big crack in your wall, the time to sue is ticking past. You must sue within two years of the time you first notice signs of a problem. Also, never let the builder’s attempts at repair lull you into thinking the statute of limitations has stopped. It is still running.