Court Opinion

ID: 4033233
Source: CourtListenerOpinion
Date Created: 2016-09-13 17:06:02.187577+00
Date Added: 2024-06-11T14:08:58.706503
License: Public Domain

COLORADO COURT OF APPEALS                                       2016COA132

Court of Appeals No. 15CA1652
City and County of Denver District Court No. 14CV34003
Honorable John W. Madden IV, Judge

Sierra Pacific Industries, Inc., a California corporation,

Plaintiff-Appellant,

v.

Jason Bradbury, d/b/a Bradbury Construction, Inc., a Colorado corporation,

Defendant-Appellee.

                             JUDGMENT AFFIRMED

                                  Division I
                          Opinion by JUDGE DAILEY
                        Taubman and Freyre, JJ., concur

                         Announced September 8, 2016

Perkins Coie, LLP, L. Norton Cutler, Daniel Graham, Denver, Colorado; Lehr,
Lemmon, Kirwin & Francis, LLP, Mark Kirwin, Ventura, California, for Plaintiff-
Appellant

The Hustead Law Firm, P.C., Patrick Q. Hustead, Ryan A. Williams, Denver,
Colorado, for Defendant-Appellee
¶1    In this construction defect dispute, plaintiff, Sierra Pacific

 Industries, Inc. (Sierra Pacific), appeals the district court’s entry of

 summary judgment in favor of defendant, Jason Bradbury, d/b/a

 Bradbury Construction, Inc. (Bradbury). We affirm.

                           I.     Background

¶2    Sierra Pacific was hired by a contractor, the Weitz Company I,

 Inc. (Weitz), to supply windows and doors for the construction of

 condominiums for the Ajax Lofts Condominium Association, Inc.

 (Ajax). Sierra Pacific, in turn, hired Bradbury to install the windows

 and doors; Bradbury began and completed its work in 2002.

¶3    On June 11, 2004, the City and County of Denver issued a

 certificate of occupancy for all units. Subsequently, however, the

 condominiums’ residents began complaining to Ajax about water

 infiltration. At Ajax’s direction, Weitz and Sierra Pacific attended to

 the reported leaks and water damage between 2004 and 2011,

 including two substantial retrofit repairs in January 2005 and

 March 2011; Bradbury participated in some repair efforts in 2004,

 but none thereafter.

¶4    In November 2011, Ajax filed suit against Weitz for the alleged

 defective construction. Weitz, in turn, filed suit against Sierra

                                     1
 Pacific for damages, costs, and expenses related to Ajax’s claims.

 Following the district court’s consolidation of the two cases

 (hereinafter, the underlying case), Ajax, Weitz, and Sierra Pacific

 reached a settlement on July 31, 2014.

¶5    On October 20, 2014, Sierra Pacific filed the present

 indemnification action against Bradbury to recover losses incurred

 in the settlement and damages for related contractual breaches.

 Bradbury filed a motion for summary judgment under C.R.C.P.

 56(b), asserting that Sierra Pacific’s claims, brought nearly ten

 years after Bradbury ceased repair efforts on the project, were time

 barred by the six-year statute of repose in Colorado’s Construction

 Defect Action Reform Act (CDARA), § 13-80-104, C.R.S. 2015.

¶6    Sierra Pacific responded that its claims were not barred by the

 statute of repose because (1) under section 13-80-104(1)(b)(II), its

 claims against Bradbury did not “arise” until after the underlying

 case was settled in 2014, after which Sierra Pacific had ninety days

 to file its complaint (which it did); and (2) even if the statute of

 repose was not tolled by the settlement, the period of repose did not

 commence until 2011, when the improvements to the property in

                                     2
 connection with Bradbury’s defective work were substantially

 completed.

¶7    Bradbury replied that (1) there is no settlement exception to

 the statute of repose; and (2) the statute of repose commenced, at

 the latest, upon its completion of work in 2004.

¶8    The district court concluded that

         both the 2005 and 2011 repairs constituted

           “improvement[s] to the real property,” § 13-80-104(1);

         “[s]ince Bradbury conducted repairs in 2004, [it] may

           have contributed to the 2005 retrofit,” but the 2011

           retrofit constituted a “separate effort”;

         “[t]herefore, the effective date of substantial completion in

           regard[] to Bradbury’s work is January 2005”;

         to toll the statute of repose that commenced in January

           2005, Sierra Pacific would have had to notify Bradbury of

           its claims within the requisite six-year period;

         “[i]t is undisputed that Bradbury did not have notice of

           [Sierra Pacific’s] claims within the requisite time period”;

           and

                                    3
          consequently, Sierra Pacific’s claims against Bradbury

              are barred by the six-year statute of repose.

¶9     Accordingly, the district court granted Bradbury’s motion for

  summary judgment.

                             II.    Analysis

¶ 10   Sierra Pacific contends that the district court erred in finding

  that its claims were barred by the six-year statute of repose. We

  disagree.

¶ 11   We review de novo a district court’s order granting summary

  judgment. Mountain States Adjustment v. Cooke, 2016 COA 80,

  ¶ 11. Summary judgment is proper when there is no genuine issue

  as to any material fact and the moving party is entitled to judgment

  as a matter of law. Geiger v. Am. Standard Ins. Co. of Wis., 192 P.3d
480, 482 (Colo. App. 2008).

¶ 12   A district court’s ruling may be affirmed based on any grounds

  that are supported by the record. Rush Creek Sols., Inc. v. Ute

  Mountain Ute Tribe, 107 P.3d 402, 406 (Colo. App. 2004).

                                     4
                A.    The Statute of Repose Was Not Tolled
                Until the Settlement in the Underlying Case

¶ 13   A statute of limitations creates a time limit for a plaintiff to file

  suit in a civil case and is based on when a claim accrued; in

  contrast, a statute of repose bars any suit filed after a specific time,

  thereby acting as a “‘cutoff’ or absolute bar on a defendant’s

  liability, and it reflects a legislative judgment that a defendant

  should be free from liability after the legislatively prescribed period

  of time.” Lewis v. Taylor, 2016 CO 48, ¶ 43 (Gabriel, J., dissenting)

  (citing CTS Corp. v. Waldburger, 573 U.S. ___, ___, 134 S. Ct. 2175,

  2183 (2014)); see also Gleason v. Becker-Johnson Assocs., Inc., 916
P.2d 662, 664 (Colo. App. 1996) (“Unlike a statute of limitations, a

  statute of repose imposes an absolute bar to bringing suit after a

  set period of time, regardless of whether the claim has accrued or

  an injury has resulted. Thus, even though a statute of limitations

  may not bar an action, a statute of repose operates independently.”)

  (citation omitted).1

  1 “The chief difference between a statute of repose and a statute of
  limitation is that [the statute of repose] is not subject to any
  ‘discovery’ rule, but instead terminates any party’s right to bring an
  action at a date certain. . . . It is thus possible in a given action
  that the statute of repose will bar a claim even before it accrues.”

                                      5
¶ 14   “Section 13-80-104 . . . contains both a statute of limitations

  and a statute of repose that are applicable to suits against

  architects, contractors, builders or builder vendors, engineers,

  inspectors, and others involved in real property construction or

  improvements.” Thermo Dev., Inc. v. Cent. Masonry Corp., 195 P.3d
1166, 1167 (Colo. App. 2008). Section 13-80-104(1)(a) incorporates

  the two-year statute of limitations contained in section 13-80-

  102(1), C.R.S. 2015; and, subsections (1)(a) and (2) of section 13-

  80-104 provide a statute of repose which expires six years “after the

  substantial completion of the improvement to the real property,”

  unless it is extended two years because the underlying cause of

  action arose “during the fifth or sixth year after substantial

  completion of the improvement to real property.”2

¶ 15   Sierra Pacific asserts that, under section 13-80-104(1)(b), it

  was allowed to file claims against Bradbury within ninety days of

  Stephen A. Hess, 5A Colo. Prac., Handbook on Civil Litigation
  § 1:13 (2015 ed.).

  2 The text of section 13-80-104(1)(a) and (2), C.R.S. 2015, is set
  forth in Appendix A to this opinion.

                                     6
  settling the underlying case, notwithstanding the statute of repose.3

  But in Thermo, a division of this court rejected an identical

  argument; the division held that section 13-80-104(1)(b)’s

  settlement tolling provision applied only to the statute of limitations

  and not to the statute of repose. 195 P.3d at 1170.

¶ 16     Sierra Pacific posits that the Thermo division erroneously

  based its decision on “incomplete readings” of the statute and its

  legislative history. A review of the Thermo decision, however,

  discloses that it was based on an extensive analysis of the pertinent

  statutory language, legislative history, and policies underlying

  CDARA. We perceive no reason to depart from the division’s

  holding in Thermo.4

  3   The text of section 13-80-104(1)(b) is also set forth in Appendix A.

  4 Sierra Pacific posits that, although all of the speakers at the
  legislative hearings for section 13-80-104(1)(b) referenced only the
  statute of limitations, they must have meant, instead, both the
  statute of limitations and the statute of repose. Sierra Pacific
  premises its assertion on one speaker’s mistaken statement that the
  statute of limitations was six years, when, in reality, it was two
  years and a six-year period applied to the statute of repose. In our
  view, this isolated numerical mistake does not taint the effect of
  either his testimony or the testimony of the others that followed him
  — that is, that section 13-80-104(1)(b)’s tolling clause applied only
  to the statute of limitations. Hearings on H.B. 01-1166 before the
  House Business and Labor Comm., 63d Gen. Assemb., 1st Reg.

                                       7
¶ 17    Consequently, we conclude that the settlement in the

  underlying case did not impact the application of the statute of

  repose with respect to Bradbury.

       B.   There Was No Genuine Issue of Material Fact Regarding
                  the Expiration of the Statute of Repose

¶ 18    We next consider and reject Sierra Pacific’s contention that

  summary judgment was inappropriate because there remains a

  genuine dispute of material fact as to when the statute of repose

  expired. Because of the manner in which we interpret the statute of

  repose provision and apply the “repair doctrine” to uncontested

  facts, we are able to determine, as a matter of law, when the statute

  of repose commenced and expired. See, e.g., Woodmoor

  Improvement Ass’n v. Prop. Tax Adm’r, 895 P.2d 1087, 1090 (Colo.

  App. 1994) (“Analysis of a statute of repose does not reach the issue

  of accrual of any cause of action. Unlike a statute of limitations

  that begins running upon accrual of the claim, a period contained

  in a statute of repose begins when a specific event occurs,

  Sess. (Mar. 6, 2001); House floor Debate on H.B. 01-1166 before the
  House Business and Labor Comm., 63d Gen. Assemb., 1st Reg.
  Sess. (Mar. 12, 2001); Hearings on H.B. 1166 before the Senate
  Business Affairs and Labor Comm., 63d Gen. Assemb., 1st Reg.
  Sess. (Mar. 21, 2001).

                                     8
  regardless of whether a cause of action has accrued or whether any

  injury has resulted.”).

¶ 19   Section 13-80-104(1)(a) states, as relevant here, that “in no

  case shall such an action be brought more than six years after the

  substantial completion of the improvement to the real property.”

  The statute of repose commences in this context, then, upon

  “substantial completion of the improvement to the real property.”

¶ 20   The parties agree that, for purposes of applying the statute of

  repose, “an improvement may be [to] a discrete component of an

  entire project.” Shaw Constr., LLC v. United Builder Servs., Inc.,

  2012 COA 24, ¶ 38. They disagree, however, about when

  “substantial completion of the improvement” occurred here. Sierra

  Pacific contends that it did not occur before 2011 because, as of

  that time, repairs “related to and connected with” Bradbury’s

  “improper installation work and flawed repair work” were still being

  made. In contrast, Bradbury contends that it could have occurred

  in 2002, when Bradbury initially finished its work, but in any event

                                    9
  no later than 2004, when it last made repairs. For the following

  reasons, we agree with Bradbury.5

¶ 21   Our prior decisions have recognized that, depending upon the

  circumstances, “substantial completion” of a project can occur by

  the time mechanics’ liens could be filed “after the completion of the

  building, structure, or other improvement,” May Dep’t Stores Co. v.

  Univ. Hills, Inc., 789 P.2d 434, 439 (Colo. App. 1989) (citation

  omitted), or, in the case of subcontractors working on the last

  building in a condominium complex, when a certificate of

  occupancy was issued, Shaw, ¶¶ 47-50.

¶ 22   But as the division in Shaw pointed out,

             CDARA does not define “substantial
             completion.” In 1986, an amendment removed
             the prior definition, “the degree of completion
             of an improvement to real property at which
             the owner can conveniently utilize the
             improvement for the purpose it was intended.”
             § 13-80-127, C.R.S. 1973; Ch. 114, sec. 1,
             § 13-80-104, 1986 Colo. Sess. Laws 697
             (repealing former § 13-80-127). The legislative
             history does not explain the reason for this
             deletion.

  Id. at ¶ 15.

  5 In doing so, we necessarily reject the district court’s conclusion
  that the statute of repose commenced in 2005.

                                    10
¶ 23   Determining how the phrase “substantial completion” should

  be applied involves a question of statutory interpretation, which we

  review de novo. See Trappers Lake Lodge & Resort, LLC v. Colo.

  Dep’t of Revenue, 179 P.3d 198, 199 (Colo. App. 2007).

¶ 24   When construing a statute, a court must not only ascertain

  and give effect to the intent of the General Assembly but also refrain

  from rendering a judgment that is inconsistent with that intent. Id.

  To determine legislative intent, we look first to the language of the

  statute. Id. If the statute’s words are clear and unambiguous in

  import, we apply them as written. Id. If, however, the words are

  ambiguous or unclear, such that they “do not inexorably lead to a

  single result,” we may consider, among other things, the object

  sought to be attained and the consequences of a particular

  construction. Id. at 199-200 (quoting State v. Nieto, 993 P.2d 493,

  501 (Colo. 2000)). Ultimately, we must construe a statute to further

  the legislative intent represented by the entire statutory scheme.

  Id. at 200.

¶ 25   The words of section 13-80-104(1)(a) do not provide a clear

  answer to the issue presented here; consequently, we must turn

  elsewhere, such as to the object of the statute and the

                                    11
  consequences of alternative constructions, to discern legislative

  intent.

¶ 26   The purpose of section 13-80-104(1)(a) is to relieve those

  involved in the construction business of the prospect of potentially

  indefinite liability for their acts or omissions. See generally Edward

  H. Tricker, Erin L. Ebeler & Christopher R. Kortum, Applicability of

  Statutes of Repose to Indemnity and Contribution Claims and 50

  State Survey, 7 J. Am. C. Construction Law. 5 (Jan. 2013) (“[T]he

  purpose of a construction statute of repose is to prevent potentially

  limitless and perpetual liability. The nature of construction and

  construction claims makes statutes of repose especially appropriate

  in the context of construction.”); see also Gleason, 916 P.2d at 664

  (“[T]he limitation of actions under § 13-80-104(1)(a) is in derogation

  of the common law because, prior to the enactment of statutes of

  limitations relating to construction, builders and contractors were

  subject to potentially indefinite liability.”); Monson v. Paramount

  Homes, Inc., 515 S.E.2d 445, 449 (N.C. Ct. App. 1999) (noting that

  the purpose of a statute of repose, in a construction defect statute,

  is to prevent defendants from being subjected to “potential open-

  ended liability for an indefinite period of time”); Barnes v. J.W.

                                     12
  Bateson Co., 755 S.W.2d 518, 521 (Tex. App. 1988) (acknowledging

  that the statute of repose protects construction professionals within

  its purview from indefinite potential liability).

¶ 27   In Gordon v. Western Steel Co., 950 S.W.2d 743 (Tex. App.

  1997), the Texas Court of Appeals construed a provision

  substantially similar, in relevant part, to section 13-80-104.6 The

  court concluded that statute’s purpose was best served by

  commencing the period of repose when a party completed its own

  work with respect to a project:

             [W]here different subcontractors were
             responsible for the construction of different
             parts of a larger project, the statute of repose
             should be applied to each of those individual
             subcontractors when they have completed
             their respective improvements. . . .

             In most scenarios, the various improvements
             contained within a larger project will not
             stretch beyond several years, and the general
             contractors or beneficiaries ordinarily have
             opportunities to supervise or disapprove of the

  6 See Tex. Civ. Prac. & Rem. Code Ann. § 16.009(a) (West 2015) (“A
  claimant must bring suit for damages for a claim listed in
  Subsection (b) against a person who constructs or repairs an
  improvement to real property not later than 10 years after the
  substantial completion of the improvement in an action arising out
  of a defective or unsafe condition of the real property or a deficiency
  in the construction or repair of the improvement.”).

                                     13
            work along the way. Secondly, it is not overly
            burdensome to decipher when respective
            contractors substantially complete their
            improvements (e.g. when they submit their
            final bills and/or walk away from the
            project). . . . The legislature has . . .
            announced that persons in the construction
            business should not be liable for an
            improvement more than ten years after they
            have completed their contracted-for work and
            walked away. An alternate construction would
            undermine the purpose of the statute. Besides
            the “potentially limitless liability” a
            subcontractor might face in such a scenario,
            the supreme court has noted other difficulties
            created by allowing suit beyond ten years of
            substantial completion. See Trinity River Auth.
            v. URS Consultants, Inc., 889 S.W.2d 259, 264
            (Tex. 1994) (noting evidentiary difficulty of
            defending suit years after completion of an
            improvement because of faded memories, as
            well as increased possibilities of third-party
            neglect, abuse, poor maintenance,
            mishandling, improper modification, and/or
            unskilled repair).

            . . . Starting the statute of repose when each
            subcontractor finishes its improvement
            conforms with the legislative intent of
            preventing indefinite liability for those who
            construct or repair improvements to real
            property.

  Id. at 748-49.

¶ 28   Persuaded by this rationale, we conclude that a subcontractor

  has substantially completed its role in the improvement at issue

                                   14
  when it finishes working on the improvement. In this case, there is

  no factual dispute as to when that occurred: Bradbury finished its

  work on the windows and doors initially in 2002, and ultimately in

  2004. Thus, the statute of repose commenced, at the latest, in

  2004.

¶ 29   Sierra Pacific asserts that the statute of repose was tolled,

  however, while others worked to repair Bradbury’s “improper

  installation work and flawed repair work.”

¶ 30   In Smith v. Executive Custom Homes, Inc., 230 P.3d 1186 (Colo.

  2010), the supreme court held that “equitable tolling under the

  repair doctrine would be inconsistent with the CDARA” “because

  the General Assembly has already taken into account the need for

  extra time to complete repairs by allowing for statutory tolling while

  such repairs are made pursuant to the notice of claim procedure.”

  Id. at 1192. “The [statutory] repair doctrine,” the court said, “tolls a

  limitations period while a construction professional undertakes

  repair efforts intended to remedy the defect,” and “[t]olling

  continues until the date that the construction professional

  abandons its repair efforts, provided that the homeowner

  reasonably relied on the promises to repair and, as a result, did not

                                     15
  institute a legal action against the construction professional.” Id. at

  1191.7

¶ 31   Sierra Pacific’s attempt to toll the statute of repose based on

  its own efforts or promises, not Bradbury’s, is unavailing under

  Smith. Accord A & B Painting & Drywall, Inc. v. Superior Court, 30
Cal. Rptr. 2d 418, 420 (Cal. Ct. App. 1994) (“Repair by third parties

  does not involve reliance upon the defendant in any way and

  furnishes no basis for tolling.”); cf. Ocean Winds Corp. of Johns

  Island v. Lane, 556 S.E.2d 377, 380 (S.C. 2001) (“The legislature

  could not have intended that the date upon which a subcontractor

  . . . becomes free from liability with regard to a particular job hinges

  upon the diligence of the general contractor and/or developer in

  completing construction. To so hold would subject the

  subcontractor to ‘the economic and emotional burdens of litigation

  and liability for an indefinite period of time.’”) (citation omitted).

¶ 32   Again, there is no material issue of fact as to when Bradbury

  substantially completed its work on the improvement: that occurred

  7In Smith, the supreme court said that the statutory “repair”
  doctrine applies to the statutes of limitations and repose located in
  section 13-80-104. Smith v. Exec. Custom Homes, Inc., 230 P.3d
1186, 1192 (Colo. 2010).

                                      16
  in 2002. Nor is there any issue of material fact as to the length of

  time the statute of repose could have been tolled, as to Bradbury,

  pursuant to the repair doctrine: that was until 2004. Even

  commencing anew the six-year period of repose in 2004, that period

  would have expired long before Bradbury received notice of Sierra

  Pacific’s claims in 2014.

¶ 33   Because, under the applicable statute of repose, Sierra

  Pacific’s claims against Bradbury are time barred, the district court

  properly granted Bradbury’s motion for summary judgment.

                          III.     Conclusion

¶ 34   The judgment is affirmed.

¶ 35   JUDGE TAUBMAN and JUDGE FREYRE concur.

                                    17
                          APPENDIX A

Section 13-80-104, C.R.S. 2015, provides:

     (1)(a) Notwithstanding any statutory provision
     to the contrary, all actions against any
     architect, contractor, builder or builder
     vendor, engineer, or inspector performing or
     furnishing the design, planning, supervision,
     inspection, construction, or observation of
     construction of any improvement to real
     property shall be brought within the time
     provided in section 13-80-102 after the claim
     for relief arises, and not thereafter, but in no
     case shall such an action be brought more
     than six years after the substantial completion
     of the improvement to the real property, except
     as provided in subsection (2) of this section.

     (b)(I) Except as otherwise provided in
     subparagraph (II) of this paragraph (b), a claim
     for relief arises under this section at the time
     the claimant or the claimant’s predecessor in
     interest 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.

     (II) Notwithstanding the provisions of
     paragraph (a) of this subsection (1), all claims,
     including, but not limited to indemnity or
     contribution, by a claimant against a person
     who is or may be liable to the claimant for all
     or part of the claimant’s liability to a third
     person:

     (A) Arise at the time the third person’s claim
     against the claimant is settled or at the time

                            18
final judgment is entered on the third person’s
claim against the claimant, whichever comes
first; and

(B) Shall be brought within ninety days after
the claims arise, and not thereafter.

....

(2) In case any such cause of action arises
during the fifth or sixth year after substantial
completion of the improvement to real
property, said action shall be brought within
two years after the date upon which said cause
of action arises.

                      19