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In re Goodman

Supreme Court of Colorado, En Banc

February 27, 2017

In Re Richard Goodman, Plaintiff
v.
Heritage Builders, Inc., and Ivan Rascon d/b/a American Landscape Company, Defendants and Heritage Builders, Inc., Cross-Claim Plaintiff Ivan Rascon d/b/a American Landscape Company, Cross-Claim Defendant and Heritage Builders, Inc., Third-Party Plaintiff
v.
Bluegreen, Inc.; Columbine Landscape Service Company, Inc.; CTL Thompson, Inc.; Loris and Associates, Inc.; S.D. Construction of Aspen, LLC and/or Scott Davis d/b/a S.D. Construction; Scott A. Lindenau, Architect, P.C. d/b/a Studio B Architects; Summit Roofing, Inc.; TJ Concrete Construction, Inc.; and Welch Excavating, Inc. Third-Party Defendants

         Original Proceeding Pursuant to C.A.R. 21 Pitkin County District Court Case No. 13CV30140 Honorable Christopher G. Seldin, Judge

          Attorneys for Defendant/Cross-Claim Plaintiff/Third-Party Plaintiff Heritage Builders, Inc.: Jaudon & Avery LLP David H. Yun Jared R. Ellis Nathan, Bremer, Dumm & Myers, P.C. Justin M. Curry Higgins, Hopkins, McLain & Roswell, LLC Sheri H. Roswell Bret Cogdill Jean Meyer

          Attorneys for Third-Party Defendant Scott A. Lindenau Architect P.C. d/b/a Studio B Architects: Hall & Evans, L.L.C. Benton J. Barton Elizabeth K. Olson

          Attorneys for Third-Party Defendant Bluegreen, Inc.: The Hustead Law Firm Patrick Q. Hustead Ryan A. Williams

          No appearance by or on behalf of Ivan Rascon, d/b/a American Landscape Company; TJ Concrete Construction, Inc.; Columbine Landscape Service Company, Inc.; CTL Thompson Inc.; Loris and Associates, Inc.; S.D. Construction of Aspen, LLC and/or Scott Davis d/b/a S.D. Construction; Summit Roofing, Inc.; Welch Excavating, Inc.; Scott Davis.

          RICE CHIEF JUSTICE

         ¶1 In this original proceeding, we consider whether the statute of repose in section 13-80-104(1)(a), C.R.S. (2016), bars a general contractor's third-party claims brought in response to a homeowner's claim for construction defects discovered in the fifth or sixth year following substantial completion of an improvement to real property. We hold that such claims are timely, irrespective of both the two-year statute of limitations in section 13-80-102, C.R.S. (2016), and the six-year statute of repose in section 13-80-104(1)(a), so long as they are brought at any time before the ninety-day timeframe outlined in section 13-80-104(1)(b)(II).[1]

         I. Facts and Procedural History

         ¶2 This case concerns the design and construction of a single-family residence in Pitkin County, Colorado. Heritage Builders, Inc. ("Heritage") was retained as the general contractor by the original owners of the property, Karen and Courtney Lord. Pitkin County issued a certificate of occupancy for the home in September 2006. In November 2011, Richard Goodman purchased the property from the Lords. Then, sometime between March and June 2012, Goodman discovered the alleged construction defects in the home. Goodman gave Heritage informal notice of his construction defect claims in July 2013. Three months later, on October 8, 2013, Goodman sent a formal notice of claim letter to Heritage pursuant to Colorado's Construction Defect Action Reform Act, sections 13-20-801 to -808, C.R.S. (2016). After receiving Goodman's letter, as relevant here, Heritage then sent a notice of claim letter to subcontractors Studio B Architects ("Studio B") and Bluegreen, Inc. ("Bluegreen") alleging design deficiencies at the residence. Then, on December 20, 2013, Goodman filed the lawsuit that is the subject of this dispute, asserting negligence against Heritage and some of its subcontractors for defects arising out of the original construction. In response, Heritage asserted cross-claims and filed a third-party complaint against numerous subcontractors, including Studio B and Bluegreen.

         ¶3 Studio B filed a motion for summary judgment on March 10, 2016, which Bluegreen later joined. In the motion, Studio B argued that Heritage's claims against them were barred by the six-year statute of repose contained in section 13-80-104(1)(a).[2]On May 20, 2016, the trial court issued an order entering summary judgment in favor of Studio B and Bluegreen. In doing so, the trial court reasoned that Heritage's claims against Studio B and Bluegreen arose at the earliest when Heritage received informal notice of the alleged defects in July 2013. Because this date was more than six years after the substantial completion of the home, the court concluded the statute of repose barred Heritage's claims against Studio B and Bluegreen. The trial court further concluded that section 13-80-104(2), an exception which effectively extends the statute of repose by one to two years when a cause of action arises during the fifth or sixth year after the completion of a home, did not apply. Heritage then petitioned this court for a rule to show cause as to why the trial court's order granting summary judgment should not be vacated. We issued an Order and Rule to Show Cause, staying the underlying proceedings.

         II. Original Jurisdiction

         ¶4 "Original relief pursuant to C.A.R. 21 is an extraordinary remedy that is limited both in purpose and availability." Dwyer v. State, 2015 CO 58, ¶ 4, 357 P.3d 185, 187. That said, we "generally elect to hear C.A.R. 21 cases that raise issues of first impression and that are of significant public importance." Id., 357 P.3d at 187-88. This case satisfies both criteria. We have never considered the impact of the six-year statute of repose in section 13-80-104(1)(a) on the timeliness of third-party claims in construction defect cases. Furthermore, this case presents an important question, as its resolution will have a significant impact on construction defect litigation throughout the state.

         III. Standard of Review

         ¶5 "Statutory interpretation involves only questions of law, " which this court reviews de novo. Smith v. Exec. Custom Homes, Inc., 2 ...


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